<PAGE>
- ---------------------
ANNUAL
- ---------------------
REPORT
- ---------------------
EQUITY
- ---------------------
FUNDS
- ---------------------
Aggressive Growth Fund
Balanced Fund
Corporate Stock Fund
Diversified Income Fund
Equity Value Fund
Growth and Income Fund
Small Cap Fund
SEPTEMBER 30, 1996
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS iii
INVESTMENT ADVISER COMMENTS
Aggressive Growth Fund 1
Balanced Fund 5
Corporate Stock Fund 9
Diversified Income Fund 13
Equity Value Fund 17
Growth and Income Fund 21
Small Cap Fund 25
PORTFOLIOS OF INVESTMENTS
Master Investment Trust Capital Appreciation Master Portfolio 29
Balanced Fund 36
Master Investment Trust Corporate Stock Master Portfolio 42
Diversified Income Fund 57
Equity Value Fund 62
Growth and Income Fund 67
Master Investment Trust Small Cap Master Portfolio 73
STAGECOACH FUNDS
Statement of Assets and Liabilities 80
Statements of Operations 82
Statements of Changes in Net Assets 85
Financial Highlights 90
Notes to Financial Statements 98
Independent Auditors' Report 113
Proxy Voting Results 114
Federal Income Tax Information 115
MASTER INVESTMENT TRUST
Statement of Assets and Liabilities 116
Statement of Operations 117
Statements of Changes in Net Assets 118
Notes to Financial Statements 119
Independent Auditors' Report 122
LIST OF ABBREVIATIONS 123
STAGECOACH FUNDS:
-------------------------------------------------------------------------
- - ARE NOT FDIC INSURED
- - ARE NOT GUARANTEED BY WELLS FARGO BANK [NO FDIC]
- - ARE NOT DEPOSITS OR OBLIGATIONS OF WELLS FARGO
BANK
- - INVOLVE INVESTMENT RISK, INCLUDING POSSIBLE LOSS
OF PRINCIPAL
---------------------
i
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ii
<PAGE>
LETTER TO SHAREHOLDERS
- ------------------
TO OUR SHAREHOLDERS:
The Annual Report is one of the most important documents you, as a shareholder,
will receive during the year, one that can deepen your understanding of your
investment. While the prospectus details the investment policies of a Fund, the
Annual Report shows the results of those policies for the most recent reporting
period. The Annual Report tells shareholders which securities were purchased,
what the overall returns for the Funds have been and provides the portfolio
managers' views on what shaped, and continues to shape, the investment
environment.
The Stagecoach Funds Annual Report has undergone a number of changes, some of
which are the result of the September 6, 1996 merger of Pacifica Funds Trust and
Stagecoach Funds, Inc. Perhaps the most noticeable change is that this Report is
dated September 30, 1996.
Previously, Stagecoach Annual Reports were dated December 31 each year and the
Semi-Annual Reports were dated June 30. We are changing the schedule, however,
so that Annual Reports will now be dated March 31 and Semi-Annual Reports will
be dated September 30. THIS CHANGE HAS BEEN MADE FOR OPERATIONAL AND
ADMINISTRATIVE REASONS. THERE HAS BEEN NO CHANGE TO THE INVESTMENT POLICIES OR
PRACTICES OF THE FUNDS RELATED TO THIS CHANGE IN THE FISCAL YEAR-END.
In order to accomplish this change, we are providing you with this Annual Report
containing audited Financial Statements now and will provide you with another
Annual Report for the six months ended March 31, 1997.
Another noticeable change in the Annual Report is that the Funds are now
separated into categories so that the Equity, Income, Tax-Free, Asset Allocation
and Money Market Mutual Funds are grouped together in their own Reports. This
change was made in part because of the introduction of several new Stagecoach
Funds, some of which were introduced as part of the Pacifica Funds merger. We
believe that by segregating Funds into their investment groups, we have produced
an easier-to-read report with fewer extraneous details not relevant to your
investment.
Special mention should be made of the fact that this is the first Stagecoach
Annual Report that most former Pacifica shareholders will receive. We want to
thank you for your patience through our many changes. We here at Stagecoach
Funds are excited about the opportunity to help you succeed in meeting your
investment goals.
STAGECOACH FUNDS
OCTOBER 1996
---------------------
iii
<PAGE>
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iv
<PAGE>
AGGRESSIVE GROWTH FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 15.34% for Class A shares. The return for Class B shares for the
same period was 14.77%. The one year total returns from October 1, 1995 to
September 30, 1996 were 13.36% and 12.60%, respectively. These return figures
are exclusive of sales charges. The Aggressive Growth Fund invests in the
Capital Appreciation Master Portfolio.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The equity market enjoyed a somewhat slower continuation of the growth begun in
1995. Like last year, the principal spark was strong corporate earnings growth
and the confidence that inflation would be held in check. Poor returns on the
bond market also helped spur investment into equities, adding momentum to the
rally, particularly in January.
After experiencing overall growth throughout most of 1996, however, stock
prices, especially those of high growth companies in the technology and health
care sectors, suffered the sharpest broad-based decline the market has
experienced in nearly six years. The sell-off which precipitated this decline
was spurred by government reports that suggested inflationary pressures were
growing and an increase in interest rates was possible, and by several
disappointing reports which suggested that corporate earnings growth would not
be strong enough to justify the current stock prices. In particular, smaller
companies with lower earnings expectations for the coming year felt the brunt of
the market correction.
There was a general market recovery in August and September, but emerging growth
stocks did not rebound as much as the larger, more established companies. Issues
such as Intel, Microsoft and First Data benefited as investors returning to the
equity markets sought companies with long-term track records, stable earnings
growth, and trading liquidity.
STRATEGIC COMMENT:
It appears that the economy will likely show steady, modest growth over the next
months. We believe that interest rates most likely will stay in a narrow range,
inflation should remain stable, and corporate earnings should improve in the
coming quarters.
Despite reaching record levels, the equity markets still present many attractive
opportunities. We remain optimistic about the long-term prospects for technology
stocks, and we are heavily weighted in the networking, software and data storage
sectors. We also believe that health care remains an attractive sector. We have
recently added Nokia, Paging Network, Medic Computer Systems, and The Money
Store to the Fund's portfolio.
---------------------
1
<PAGE>
AGGRESSIVE GROWTH FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR INCEPTION
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 8.25% 18.20% 24.21%
- --------------------------------------------------------------------------------------
Without Sales Charge 13.36% 20.04% 25.76%
- --------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR INCEPTION
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
With Contingent Deferred Sales Charge(1) 9.60% 18.95% 21.89%
- --------------------------------------------------------------------------------------
Without Contingent Deferred Sales Charge 12.60% 19.18% 22.09%
- --------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Aggressive Growth Fund is a feeder fund of the Capital Appreciation Master
Portfolio which in turn invests in individual securities. In this case, the
Capital Appreciation Master Portfolio was created by existing assets of the
Overland Express Strategic Growth Fund (the "Predecessor Fund"). Performance
figures for the Class A and Class B shares reflect the performance of the Class
A and Class D shares of the Predecessor Fund, respectively, for periods prior to
March 5, 1996 when the Aggressive Growth Fund commenced operations. References
to the investment policy of the Fund are understood to be references to the
Master Portfolio. The Class A and D shares of the Predecessor Fund commenced
operations on January 20, 1993 and July 1, 1993, respectively.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without this reduction, the Fund's returns would have been lower.
- ---------------------
2
<PAGE>
AGGRESSIVE GROWTH FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH AGGRESSIVE GROWTH CLASS A
SHARES S 500 INDEX
<S> <C> <C>
Inception $9,550 $10,000
Jan-93 $9,569 $10,084
Feb-93 $9,789 $10,221
Mar-93 $10,305 $10,437
Apr-93 $10,219 $10,184
May-93 $11,242 $10,457
Jun-93 $11,355 $10,488
Jul-93 $11,384 $10,445
Aug-93 $12,140 $10,842
Sep-93 $12,918 $10,759
Oct-93 $12,928 $10,981
Nov-93 $12,507 $10,876
Dec-93 $13,042 $11,008
Jan-94 $13,724 $11,382
Feb-94 $13,743 $11,073
Mar-94 $12,419 $10,591
Apr-94 $12,518 $10,726
May-94 $12,508 $10,902
Jun-94 $11,609 $10,635
Jul-94 $11,915 $10,984
Aug-94 $13,042 $11,435
Sep-94 $13,002 $11,155
Oct-94 $13,625 $11,406
Nov-94 $13,279 $10,990
Dec-94 $13,593 $11,153
Jan-95 $13,388 $11,442
Feb-95 $14,135 $11,888
Mar-95 $14,841 $12,238
Apr-95 $15,076 $12,598
May-95 $15,546 $13,101
Jun-95 $17,449 $13,405
Jul-95 $19,055 $13,849
Aug-95 $19,228 $13,884
Sep-95 $19,709 $14,469
Oct-95 $19,085 $14,418
Nov-95 $19,510 $15,050
Dec-95 $19,372 $15,340
Jan-96 $19,682 $15,861
Feb-96 $20,592 $16,009
Mar-96 $20,661 $16,163
Apr-96 $23,368 $16,400
May-96 $24,324 $16,822
Jun-96 $22,516 $16,886
Jul-96 $19,533 $16,139
Aug-96 $20,719 $16,480
Sep-96 $22,343 $17,406
</TABLE>
THE RETURN FOR CLASS B SHARES OF THE AGGRESSIVE GROWTH FUND WILL VARY FROM THE
RESULTS SHOWN DUE TO DIFFERENT EXPENSES AND LOAD STRUCTURES.
The accompanying chart compares the performance of the Stagecoach Aggressive
Growth Fund Class A shares since the inception of the Predecessor Fund with the
S&P 500 Index. The chart assumes a hypothetical $10,000 initial investment in
the Fund and reflects all operating expenses and assumes the maximum initial
sales charge of 4.5%. The S&P 500 Index is an unmanaged index of 500 widely held
common stocks representing, among others, industrial, financial, utility and
transportation companies listed or traded on national exchanges or
over-the-counter markets. Please note that the Fund is a professionally managed
mutual fund. The Index presented here is not managed, does not incur expenses
and is not available directly for investment. Had this Index incurred operating
expenses, its performance would have been lower.
---------------------
3
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- ---------------------
4
<PAGE>
BALANCED FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 6.69% for Class A shares. The return for Class B shares for the same
period was 5.02%. The one year total returns from October 1, 1995 to September
30, 1996 were 10.51% and 8.59% respectively. These return figures are exclusive
of sales charges.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996. The year-to-date return for the Lehman Brothers 20-year U.S. Treasury Bond
Index was down 6.23% through September 30, 1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The allocation for the Fund's portfolio at the end of the September was 62% in
equities, with the balance in intermediate bonds and only a small portion in
cash. Under normal market conditions, the permitted range of equity investment
is a minimum of 30% of the Fund's assets with a maximum of 70%.
The Fund benefited from the overall growth in the equity market which continued
the rally of 1995 at a slower pace. Corporate earnings growth, the flow of money
into the equities market and slowed inflation all helped fuel the gain. As 1996
progressed, however, inflation concerns were revived by a U.S. economy some felt
was too strong and the outlook regarding corporate earnings grew less certain.
In July, these factors combined to trigger one of the biggest market corrections
in recent years.
The fixed-income markets have not enjoyed the robust returns earned last year.
Hope for continued Federal Reserve easing of interest rates was quickly replaced
by fears of Fed tightening. While no increase was forthcoming, speculation that
a rate hike was coming was enough to depress the market, particularly for
longer-term bonds. By the end of the third quarter, some of the early losses
were recovered.
STRATEGIC COMMENT:
Thus far this year, the Fund has shied away from more volatile growth stocks in
favor of large companies with solid earnings. Over the course of the previous
quarter we trimmed back the stock position by eliminating some smaller
capitalization issues in economically sensitive industries. Many of these stocks
were affected by the July correction and rebounded slowly. The Fund favored more
defensive positions in larger financial and technology stocks such as Bankers
Trust, IBM and Seagate Technology. These stocks performed well.
The Fund's fixed-income portfolio is conservatively positioned. The emphasis is
currently on mortgage-backed and yield-advantaged corporate bonds with a short
to intermediate weighted maturity and less interest rate sensitivity. The third
quarter of 1996 was a better period for bonds than the first half of the year,
although concerns that the economy is growing too quickly and that interest
rates will rise are still with us.
---------------------
5
<PAGE>
BALANCED FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 5.52% 6.09% 9.31% 9.77%
- -----------------------------------------------------------------------------------------
Without Sales Charge 10.51% 7.74% 10.32% 10.58%
- -----------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURN 1 YEAR 3 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
With Contingent Deferred Sales
Charge(1) 5.59% 6.29% 9.30% 9.62%
- ---------------------------------------------------------------------------------------
Without Contingent Deferred Sales
Charge 8.59% 6.59% 9.30% 9.62%
- ---------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Stagecoach Balanced Fund commenced operations on September 6, 1996 as the
successor to the Pacifica Balanced Fund (7/90 to 9/96). The Pacifica Fund
commenced operations in July of 1990. Historical performance has been calculated
using returns produced by this Predecessor Fund for the applicable period. Class
A performance reflects the Pacifica Balanced Fund Class A performance. Class B
performance also reflects such performance but has been adjusted to reflect
Class B share expense levels in effect as of September 6, 1996.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without this reduction, the Fund's returns would have been lower.
- ---------------------
6
<PAGE>
BALANCED FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS GOVT/CORP BOND
STAGECOACH BALANCED CLASS A SHARES S & P 500 INDEX INDEX
<S> <C> <C> <C>
Inception $9,550 $10,000 $10,000
Jul-90 $9,588 $9,968 $10,124
Aug-90 $9,225 $9,067 $9,977
Sep-90 $9,073 $8,626 $10,060
Oct-90 $9,073 $8,589 $10,193
Nov-90 $9,470 $9,144 $10,415
Dec-90 $9,688 $9,399 $10,572
Jan-91 $9,914 $9,808 $10,691
Feb-91 $10,298 $10,510 $10,783
Mar-91 $10,475 $10,764 $10,857
Apr-91 $10,455 $10,790 $10,982
May-91 $10,674 $11,255 $11,032
Jun-91 $10,385 $10,740 $11,020
Jul-91 $10,697 $11,240 $11,158
Aug-91 $10,938 $11,506 $11,415
Sep-91 $10,958 $11,314 $11,653
Oct-91 $11,070 $11,466 $11,757
Nov-91 $10,725 $11,004 $11,874
Dec-91 $11,483 $12,262 $12,275
Jan-92 $11,535 $12,034 $12,093
Feb-92 $11,702 $12,190 $12,157
Mar-92 $11,566 $11,953 $12,090
Apr-92 $11,786 $12,304 $12,163
May-92 $11,754 $12,364 $12,399
Jun-92 $11,661 $12,180 $12,580
Jul-92 $11,990 $12,678 $12,902
Aug-92 $11,767 $12,418 $13,017
Sep-92 $11,948 $12,564 $13,195
Oct-92 $11,969 $12,607 $12,993
Nov-92 $12,268 $13,037 $12,981
Dec-92 $12,493 $13,197 $13,205
Jan-93 $12,855 $13,307 $13,493
Feb-93 $13,064 $13,488 $13,773
Mar-93 $13,404 $13,773 $13,820
Apr-93 $13,305 $13,440 $13,926
May-93 $13,548 $13,800 $13,919
Jun-93 $13,759 $13,840 $14,235
Jul-93 $13,871 $13,784 $14,327
Aug-93 $14,340 $14,307 $14,656
Sep-93 $14,317 $14,198 $14,707
Oct-93 $14,509 $14,491 $14,768
Nov-93 $14,430 $14,353 $14,601
Dec-93 $14,831 $14,527 $14,665
Jan-94 $15,282 $15,021 $14,885
Feb-94 $15,062 $14,613 $14,560
Mar-94 $14,495 $13,976 $14,204
Apr-94 $14,446 $14,155 $14,086
May-94 $14,508 $14,387 $14,059
Jun-94 $14,335 $14,035 $14,027
Jul-94 $14,609 $14,496 $14,307
Aug-94 $14,919 $15,090 $14,313
Sep-94 $14,646 $14,721 $14,148
Oct-94 $14,596 $15,052 $14,133
Nov-94 $14,232 $14,504 $14,107
Dec-94 $14,267 $14,719 $14,201
Jan-95 $14,214 $15,100 $14,473
Feb-95 $14,652 $15,688 $14,809
Mar-95 $14,865 $16,150 $14,908
Apr-95 $15,066 $16,625 $15,115
May-95 $15,509 $17,289 $15,749
Jun-95 $15,604 $17,690 $15,875
Jul-95 $15,902 $18,276 $15,813
Aug-95 $15,970 $18,322 $16,015
Sep-95 $16,202 $19,095 $16,179
Oct-95 $16,065 $19,026 $16,416
Nov-95 $16,585 $19,861 $16,687
Dec-95 $16,782 $20,243 $16,933
Jan-96 $17,004 $20,932 $17,038
Feb-96 $16,990 $21,126 $16,676
Mar-96 $17,267 $21,329 $16,536
Apr-96 $17,462 $21,643 $16,422
May-96 $17,727 $22,199 $16,394
Jun-96 $17,728 $22,283 $16,614
Jul-96 $17,195 $21,298 $16,652
Aug-96 $17,433 $21,748 $16,611
Sep-96 $17,905 $22,970 $16,710
</TABLE>
THE RETURN FOR CLASS B SHARES OF THE BALANCED FUND WILL VARY FROM THE RESULTS
SHOWN DUE TO DIFFERENT EXPENSES AND LOAD STRUCTURES.
The accompanying chart compares the performance of the Stagecoach Balanced Fund
Class A shares since the inception of the Predecessor Pacifica Fund (the
"Predecessor Fund") with the S&P 500 Index and the Lehman Brothers
Government/Corporate Bond Index. The chart assumes a hypothetical $10,000
initial investment in the Fund. For Class A shares the chart reflects the
operating expenses and the performance of the Predecessor Fund and assumes the
maximum initial sales charge of 4.5%. The S&P 500 Index is an unmanaged index of
500 widely held common stocks representing, among others, industrial, financial,
utility and transportation companies listed or traded on national exchanges or
over-the-counter markets. The Lehman Brothers Government/Corporate Bond Index is
an unmanaged index. Please note that the Fund is a professionally managed mutual
fund. The indices presented here are not managed, do not incur expenses and are
not available directly for investment. Had these indices incurred operating
expenses, their performance would have been lower.
---------------------
7
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- ---------------------
8
<PAGE>
CORPORATE STOCK FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 12.60%. The one year total return from October 1, 1995 to September
30, 1996 was 19.06%. This Fund has no sales charge.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The equity market continued its gain begun in 1995, albeit at a slower pace.
Thanks largely to record inflows into the equity market and some strong earnings
reports, particularly early in the year, the Fund benefited from the rise in
stock prices. Unlike 1995, however, there has been some volatility and there are
some question marks.
In July, a government report indicating strength in the job market combined with
disappointing earnings reports for a number of companies to drive down stock
prices in a broad-based correction. The jobs report was a concern because high
employment often adds to inflationary pressure. The weaker-than-expected
earnings reports suggested that stocks were priced higher than their value in
terms of what future dividends would warrant. The result was a drop in the S&P
500 Index for the month of 4.42%.
The market rebounded slowly in August, increasing 2.11%, and finished with a
strong September, which saw the return on the S&P 500 Index climb 5.63%. The
overall third quarter return was 3.09%; the Index is up 13.50% for 1996.
INDUSTRY SECTOR BREAKDOWN FOR
S&P 500 AS OF SEPTEMBER 30, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Basic Industries 8%
Capital Goods -
Tech 14%
Capital Goods 3%
Consumer Goods 19%
Consumer Cyclical 9%
Consumer Staple 9%
Credit Cyclical 4%
Utilities 11%
Transportation 1%
Finance 13%
Energy 9%
</TABLE>
STRATEGIC COMMENT:
Despite the volatility, the equities market has performed relatively well. The
single biggest concern, in our opinion, is whether or not earnings will continue
to grow and justify the high price-to-earnings ratio for the market. If earnings
do not improve, we expect a slowdown for the final quarter of 1996.
---------------------
9
<PAGE>
CORPORATE STOCK FUND
- ---------------------
PERFORMANCE AT A GLANCE
PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Average Annual Total Returns 19.06% 16.20% 14.05% 13.54% 14.28%
- -----------------------------------------------------------------------------------------
</TABLE>
This Fund has no sales charge. Past performance is not predictive of future
results. The investment return and net asset value of shares of the Fund will
fluctuate with market conditions so that shares of the Fund, when redeemed, may
have a greater or lesser net asset value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Corporate Stock Fund commenced operations on January 1, 1992 as successor to
the Corporate Stock Fund of the Wells Fargo Investment Trust for Retirement
Programs. The Predecessor Fund's date of inception was January 25, 1984. The
performance figures shown include the performance of the Predecessor Fund which
had the same investment objectives and strategies.
The Fund seeks to achieve its investment objective by investing all of its
assets in the Master Investment Trust Corporate Stock Master Portfolio, which
has an identical investment objective as the Fund. Prior to April 29, 1996 the
Fund invested directly in a portfolio of securities and not in the Master
Investment Trust Corporate Stock Master Portfolio. References to the investment
policies of the Fund are understood to be references to the investment policies
of the Master Portfolio.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without this reduction, the Fund's returns would have been lower.
The S&P 500 Index is an unmanaged index of stocks comprised of 500 industrial,
financial, utility and transportation companies, among others. "Standard &
Poor's", "S&P", Standard & Poor's 500" and "500" are trademarks of McGraw-Hill,
Inc. The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's.
Standard & Poor's makes no representation regarding the advisability of
investing in the Fund.
- ---------------------
10
<PAGE>
CORPORATE STOCK FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH CORPORATE STOCK
FUND S 500 INDEX
<S> <C> <C>
Jan-84 $10,000 $10,000
Feb-84 $10,000 $9,648
Mar-84 $10,000 $9,815
Apr-84 $10,000 $9,908
May-84 $10,000 $9,360
Jun-84 $10,000 $9,563
Jul-84 $10,000 $9,444
Aug-84 $10,000 $10,488
Sep-84 $10,430 $10,490
Oct-84 $10,450 $10,531
Nov-84 $10,330 $10,413
Dec-84 $10,560 $10,687
Jan-85 $11,270 $11,520
Feb-85 $11,440 $11,661
Mar-85 $11,490 $11,668
Apr-85 $11,420 $11,657
May-85 $12,090 $12,331
Jun-85 $12,260 $12,524
Jul-85 $12,220 $12,506
Aug-85 $12,100 $12,399
Sep-85 $11,080 $12,011
Oct-85 $12,200 $12,566
Nov-85 $13,020 $13,428
Dec-85 $13,640 $14,078
Jan-86 $13,680 $14,156
Feb-86 $14,680 $15,214
Mar-86 $15,410 $16,063
Apr-86 $15,200 $15,882
May-86 $16,000 $16,727
Jun-86 $16,250 $17,010
Jul-86 $15,340 $16,059
Aug-86 $16,470 $17,249
Sep-86 $15,230 $15,823
Oct-86 $15,970 $16,736
Nov-86 $15,960 $17,143
Dec-86 $15,930 $16,705
Jan-87 $17,910 $18,955
Feb-87 $18,590 $19,704
Mar-87 $19,040 $20,272
Apr-87 $18,820 $20,092
May-87 $18,990 $20,266
Jun-87 $19,920 $21,290
Jul-87 $20,860 $22,368
Aug-87 $21,630 $23,203
Sep-87 $21,150 $22,694
Oct-87 $16,650 $17,807
Nov-87 $15,310 $16,339
Dec-87 $16,440 $17,582
Jan-88 $17,110 $18,322
Feb-88 $17,880 $19,176
Mar-88 $17,320 $18,583
Apr-88 $17,490 $18,789
May-88 $17,620 $18,952
Jun-88 $18,400 $19,821
Jul-88 $18,310 $19,746
Aug-88 $17,690 $19,076
Sep-88 $18,420 $19,889
Oct-88 $18,900 $20,442
Nov-88 $18,630 $20,151
Dec-88 $18,930 $20,503
Jan-89 $20,280 $22,004
Feb-89 $19,770 $21,456
Mar-89 $20,200 $21,956
Apr-89 $21,220 $23,096
May-89 $22,040 $24,031
Jun-89 $21,910 $23,894
Jul-89 $23,820 $26,052
Aug-89 $24,250 $26,561
Sep-89 $24,130 $26,453
Oct-89 $23,560 $25,839
Nov-89 $24,020 $26,366
Dec-89 $24,570 $26,999
Jan-90 $22,920 $25,186
Feb-90 $23,190 $25,511
Mar-90 $23,790 $26,187
Apr-90 $23,180 $25,533
May-90 $25,400 $28,023
Jun-90 $25,210 $27,834
Jul-90 $25,120 $27,745
Aug-90 $22,840 $25,237
Sep-90 $21,730 $24,008
Oct-90 $21,620 $23,906
Nov-90 $22,980 $25,451
Dec-90 $23,600 $26,161
Jan-91 $24,590 $27,300
Feb-91 $26,310 $29,252
Mar-91 $26,900 $29,961
Apr-91 $26,940 $30,032
May-91 $28,040 $31,327
Jun-91 $26,760 $29,892
Jul-91 $27,970 $31,286
Aug-91 $28,600 $32,027
Sep-91 $28,110 $31,491
Oct-91 $28,460 $31,914
Nov-91 $27,310 $30,628
Dec-91 $30,380 $34,131
Jan-92 $29,790 $33,495
Feb-92 $30,150 $33,929
Mar-92 $29,549 $33,269
Apr-92 $30,383 $34,246
May-92 $30,503 $34,414
Jun-92 $30,035 $33,902
Jul-92 $31,228 $35,287
Aug-92 $30,571 $34,564
Sep-92 $30,902 $34,970
Oct-92 $30,984 $35,091
Nov-92 $32,009 $36,286
Dec-92 $32,383 $36,731
Jan-93 $32,620 $37,038
Feb-93 $33,043 $37,543
Mar-93 $33,704 $38,335
Apr-93 $32,876 $37,409
May-93 $33,715 $38,409
Jun-93 $33,785 $38,522
Jul-93 $33,618 $38,367
Aug-93 $34,857 $39,823
Sep-93 $34,565 $39,517
Oct-93 $35,244 $40,335
Nov-93 $34,878 $39,951
Dec-93 $35,268 $40,434
Jan-94 $36,433 $41,808
Feb-94 $35,428 $40,674
Mar-94 $33,865 $38,900
Apr-94 $34,273 $39,399
May-94 $34,799 $40,045
Jun-94 $33,934 $39,064
Jul-94 $35,013 $40,347
Aug-94 $36,405 $42,001
Sep-94 $35,501 $40,974
Oct-94 $36,260 $41,895
Nov-94 $34,926 $40,369
Dec-94 $35,415 $40,968
Jan-95 $36,294 $42,029
Feb-95 $37,680 $43,666
Mar-95 $38,754 $44,952
Apr-95 $39,852 $46,275
May-95 $41,402 $48,121
Jun-95 $42,319 $49,238
Jul-95 $43,683 $50,870
Aug-95 $43,762 $50,997
Sep-95 $45,552 $53,148
Oct-95 $45,370 $52,958
Nov-95 $47,298 $55,281
Dec-95 $48,162 $56,345
Jan-96 $49,754 $58,261
Feb-96 $50,184 $58,803
Mar-96 $50,627 $59,368
Apr-96 $51,327 $60,240
May-96 $52,585 $61,788
Jun-96 $52,747 $62,023
Jul-96 $50,385 $59,282
Aug-96 $51,391 $60,533
Sep-96 $54,232 $63,935
</TABLE>
The accompanying chart compares the performance of the Stagecoach Corporate
Stock Fund since inception of the Predecessor Fund with the S&P 500 Index. The
charts assumes a hypothetical $10,000 initial investment in the Fund and
reflects all operating expenses. The S&P 500 Index is an unmanaged index of 500
widely held common stocks representing, among others, industrial, financial,
utility and transportation companies listed or traded on national exchanges or
over-the-counter markets. Please note that the Fund is a professionally managed
mutual fund. The Index presented here is not managed, does not incur expenses
and is not available directly for investment. Had this Index incurred operating
expenses, its performance would have been lower.
---------------------
11
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
12
<PAGE>
DIVERSIFIED INCOME FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 12.35% for Class A shares. The return for Class B shares for the
same period was 11.76%. The one year total returns from October 1, 1995 to
September 30, 1996 were 19.41% and 18.65%, respectively. These return figures
are exclusive of sales charge.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The equity market has continued to show solid gains but it also has shown
increased volatility, mixing strong months with flat months through the first
half of 1996. In each case, uncertainty about inflation and corporate earnings
drove the market. When the news was good--when inflation seemed to be in check
and corporate earnings met expectations--stock prices rose. When the economy
seemed too strong and inflationary pressures grew, or when earnings reports were
disappointing, the market went into retreat.
The volatility continued during the third quarter, with a correction in July,
followed by good returns in August and September. Overall, the market was up
year-to-date as of September 30, 1996, 13.50% as measured by the S&P 500 Index.
Growth stocks have been the overall leaders for the year. They also have been
among the most volatile. Cyclical stocks have shown vulnerability recently,
particularly during the July correction when disappointing earnings reports sent
prices tumbling.
STRATEGIC COMMENT:
While the Fund emphasizes stocks that pay consistent dividends, which would
eliminate many small growth stocks from consideration, we are still looking to
identify companies that are likely to show earnings growth. A recent purchase
along these lines was Lockheed Martin, the dominant company in the defense
industry. Defense has been a slow growth sector recently, but Lockheed, through
its acquisition activity, margin improvement and participation in a broad array
of projects, has shown the potential for sustained double digit earnings growth
for the next several years. Free cash flow for Lockheed for the next five years
should be close to $10 billion, which will allow for significant debt paydown
and share repurchase.
We believe that as long as the economy can continue to grow at a moderate pace,
and inflation does not accelerate, the stock market should continue to do well.
While valuations are high in certain segments, we believe we will be able to
find many companies that show a significant upside. We will respond to the
likelihood of slowing corporate profit growth for 1997 by focusing on companies
with strong market shares and solid management teams that we believe will be
able to maintain or exceed earning expectations.
---------------------
13
<PAGE>
DIVERSIFIED INCOME FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR INCEPTION
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 14.02% 12.88% 13.24%
- --------------------------------------------------------------------------------------
Without Sales Charge 19.41% 14.63% 14.59%
- --------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR INCEPTION
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------
With Contingent Deferred Sales Charge(1) 15.66% 22.62%
- --------------------------------------------------------------------------------------
Without Contingent Deferred Sales Charge 18.65% 23.60%
- --------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Class A and Class B shares commenced operations on November 18, 1992 and
January 1, 1995, respectively.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without this reduction, the Fund's returns would have been lower.
- ---------------------
14
<PAGE>
DIVERSIFIED INCOME FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH DIVERSIFIED INCOME CLASS A
SHARES S 500 INDEX
<S> <C> <C>
Inception $9,550 $10,000
Nov-92 $9,636 $10,000
Dec-92 $9,847 $10,123
Jan-93 $9,952 $10,207
Feb-93 $9,962 $10,346
Mar-93 $10,213 $10,565
Apr-93 $10,068 $10,309
May-93 $10,357 $10,585
Jun-93 $10,370 $10,616
Jul-93 $10,419 $10,574
Aug-93 $10,835 $10,975
Sep-93 $10,747 $10,891
Oct-93 $11,089 $11,116
Nov-93 $10,884 $11,010
Dec-93 $11,062 $11,143
Jan-94 $11,421 $11,522
Feb-94 $11,211 $11,209
Mar-94 $10,708 $10,720
Apr-94 $10,849 $10,858
May-94 $11,050 $11,036
Jun-94 $10,862 $10,766
Jul-94 $11,207 $11,119
Aug-94 $11,602 $11,575
Sep-94 $11,392 $11,292
Oct-94 $11,351 $11,546
Nov-94 $10,943 $11,125
Dec-94 $11,070 $11,290
Jan-95 $11,142 $11,583
Feb-95 $11,616 $12,034
Mar-95 $11,960 $12,388
Apr-95 $12,249 $12,753
May-95 $12,570 $13,262
Jun-95 $12,690 $13,569
Jul-95 $12,993 $14,019
Aug-95 $13,087 $14,054
Sep-95 $13,558 $14,647
Oct-95 $13,411 $14,595
Nov-95 $14,115 $15,235
Dec-95 $14,410 $15,528
Jan-96 $14,734 $16,056
Feb-96 $15,015 $16,205
Mar-96 $15,296 $16,361
Apr-96 $15,557 $16,602
May-96 $15,817 $17,028
Jun-96 $15,774 $17,093
Jul-96 $14,932 $16,337
Aug-96 $15,457 $16,682
Sep-96 $16,190 $17,620
</TABLE>
THE RETURN FOR CLASS B SHARES OF THE DIVERSIFIED INCOME FUND WILL VARY FROM THE
RESULTS SHOWN DUE TO DIFFERENT EXPENSES AND LOAD STRUCTURES.
The accompanying chart compares the performance of the Stagecoach Diversified
Income Fund Class A shares since inception with the S&P 500 Index. The chart
assumes a hypothetical $10,000 initial investment in the Fund and reflects all
operating expenses and assumes the maximum initial sales charge of 4.5%. The S&P
500 Index is an unmanaged index of 500 widely held common stocks representing,
among others, industrial, financial, utility and transportation companies listed
or traded on national exchanges or over-the-counter markets. Please note that
the Fund is a professionally managed mutual fund. The Index presented here is
not managed, does not incur expenses and is not available directly for
investment. Had this Index incurred operating expenses, its performance would
have been lower.
---------------------
15
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
16
<PAGE>
EQUITY VALUE FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 10.71% for Class A shares. The return for Class B shares for the
same period was 8.51%. The one year total returns from October 1, 1995 to
September 30 1996 were 14.27% and 11.86%, respectively. These return figures are
exclusive of sales charges.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The equity market has continued to show solid gains but it has also shown
increased volatility, mixing strong months with flat months through the first
half of 1996. In each case, uncertainty about inflation and corporate earnings
drove the market. When the news was good -- when inflation seemed to be in check
and corporate earnings met expectations -- stock prices rose. When the economy
seemed too strong and inflationary pressures grew, or when earnings reports were
disappointing, the market went into retreat. The stock market experienced a
correction of nearly 10% in July, as measured by the S&P 500 Index, but bounced
back to new highs by the end of September.
This volatility provided us with opportunities to practice our discipline --
purchasing inexpensive stocks with sound fundamentals and strong management
teams. During the July correction, which affected technology stocks in
particular, we took advantage of lower stock prices by selectively increasing
our investment in the technology sector.
STRATEGIC COMMENT:
We continue to emphasize the financial sector where, despite concerns over
interest rate volatility, our investments have provided relatively strong
returns and still show attractive price-to-earnings ratios. Performance of the
economically sensitive commodity and consumer stocks will most likely be
lackluster until the economy shows signs of faster growth.
The outlook for the balance of this year is mixed; certain segments of the
economy are operating near full capacity, while other signs point toward an
eventual slowdown. We continue to look for stocks with attractive valuations
where expected earnings growth is well above the rate expected for the overall
market. Investments in such companies should continue to provide attractive
returns with relatively low risk in this period of economic uncertainty.
We remain convinced that investors who purchase the stocks of undervalued
companies with shareholder-oriented management will be rewarded.
---------------------
17
<PAGE>
EQUITY VALUE FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 9.09% 11.00% 13.38% 11.89%
- ---------------------------------------------------------------------------------------
Without Sales Charge 14.27% 12.71% 14.42% 12.71%
- ---------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
With Contingent Deferred Sales
Charge(1) 8.86% 11.10% 13.29% 11.67%
- ---------------------------------------------------------------------------------------
Without Contingent Deferred Sales
Charge 11.86% 11.37% 13.29% 11.67%
- ---------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Stagecoach Equity Value Fund commenced operations on September 6, 1996 as
the successor to the Pacifica Equity Value Fund (7/90 to 9/96). The Pacifica
Fund commenced operations in July of 1992. Historical performance has been
calculated using returns produced by the Pacifica Fund for the applicable
period. Class A performance reflects Pacifica Equity Value Fund Class A. Class B
performance also reflects such performance but has been adjusted to reflect
Class B share expense levels in effect as of September 6, 1996.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without this reduction, the Fund's returns would have been lower.
- ---------------------
18
<PAGE>
EQUITY VALUE FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH EQUITY VALUE CLASS A
SHARES S 500 INDEX
<S> <C> <C>
Inception $9,550 $10,000
Jul-90 $9,502 $9,968
Aug-90 $8,471 $9,067
Sep-90 $8,098 $8,626
Oct-90 $8,013 $8,589
Nov-90 $8,589 $9,144
Dec-90 $8,887 $9,399
Jan-91 $9,149 $9,808
Feb-91 $9,732 $10,510
Mar-91 $10,013 $10,764
Apr-91 $9,906 $10,790
May-91 $10,218 $11,255
Jun-91 $9,730 $10,740
Jul-91 $10,151 $11,240
Aug-91 $10,396 $11,506
Sep-91 $10,289 $11,314
Oct-91 $10,357 $11,466
Nov-91 $9,727 $11,004
Dec-91 $10,736 $12,262
Jan-92 $10,887 $12,034
Feb-92 $11,089 $12,190
Mar-92 $10,947 $11,953
Apr-92 $11,211 $12,304
May-92 $11,079 $12,364
Jun-92 $10,867 $12,180
Jul-92 $11,193 $12,678
Aug-92 $10,816 $12,418
Sep-92 $10,990 $12,564
Oct-92 $11,123 $12,607
Nov-92 $11,604 $13,037
Dec-92 $11,867 $13,197
Jan-93 $12,310 $13,307
Feb-93 $12,511 $13,488
Mar-93 $12,996 $13,773
Apr-93 $12,784 $13,440
May-93 $13,208 $13,800
Jun-93 $13,367 $13,840
Jul-93 $13,516 $13,784
Aug-93 $14,144 $14,307
Sep-93 $14,091 $14,198
Oct-93 $14,327 $14,491
Nov-93 $14,284 $14,353
Dec-93 $14,931 $14,527
Jan-94 $15,572 $15,021
Feb-94 $15,414 $14,613
Mar-94 $14,743 $13,976
Apr-94 $14,804 $14,155
May-94 $14,950 $14,387
Jun-94 $14,640 $14,035
Jul-94 $14,957 $14,496
Aug-94 $15,433 $15,090
Sep-94 $15,147 $14,721
Oct-94 $15,061 $15,052
Nov-94 $14,522 $14,504
Dec-94 $14,676 $14,719
Jan-95 $14,518 $15,100
Feb-95 $15,082 $15,688
Mar-95 $15,475 $16,150
Apr-95 $15,897 $16,625
May-95 $16,385 $17,289
Jun-95 $16,491 $17,690
Jul-95 $17,167 $18,276
Aug-95 $17,233 $18,322
Sep-95 $17,658 $19,095
Oct-95 $17,272 $19,026
Nov-95 $18,031 $19,861
Dec-95 $18,227 $20,243
Jan-96 $18,561 $20,932
Feb-96 $18,797 $21,126
Mar-96 $19,299 $21,329
Apr-96 $19,689 $21,643
May-96 $19,982 $22,199
Jun-96 $19,815 $22,283
Jul-96 $18,933 $21,298
Aug-96 $19,395 $21,748
Sep-96 $20,178 $22,970
</TABLE>
THE RETURN FOR CLASS B SHARES OF THE EQUITY VALUE FUND WILL VARY FROM THE
RESULTS SHOWN DUE TO DIFFERENT EXPENSES AND LOAD STRUCTURES.
The accompanying chart compares the performance of the Stagecoach Equity Value
Fund since the inception of the Predecessor Pacifica Fund (the "Predecessor
Fund") with the S&P 500 Index. The chart assumes a hypothetical $10,000 initial
investment in the Fund. For Class A shares the chart reflects the operating
expenses and the performance of the Predecessor Funds and assumes the maximum
initial sales charge of 4.5%. The S&P 500 Index is an unmanaged index of 500
widely held common stocks representing, among others, industrial, financial,
utility and transportation companies listed or traded on national exchanges or
over-the-counter markets. Please note that the Fund is a professionally managed
mutual fund. The Index presented here is not managed, does not incur expenses
and is not available directly for investment. Had this Index incurred operating
expenses, its performance would have been lower.
---------------------
19
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
20
<PAGE>
GROWTH AND INCOME FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the fiscal period from January 1, 1996 to September
30, 1996 of 12.45% for Class A shares. The return for Class B shares for the
same period was 11.89%. The one year total returns from October 1, 1995 to
September 30, 1996 were 14.67% and 13.90%, respectively. These return figures
are exclusive of sales charges.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The equity market has been volatile throughout 1996, particularly in the third
quarter which began with the largest market downturn in the last six years, as
measured by the S&P 500 Index, then rebounded with consecutive strong months.
Overall, the market, as measured by the S&P 500 Index, is up 13.50% for the
year. There has been substantial variance in the returns from different economic
sectors.
Consumer industries including such companies as Monsanto, Gillette, and
Smithkline Beecham have performed well recently as consumer confidence and
spending increased with the growing economy. JC Penney, Colgate Palmolive, and
Baxter International were among the consumer stocks added to the portfolio
recently. The energy sector also performed well as oil prices increased to the
benefit of large integrated oil companies and oil service stocks. Technology
stocks, which included Intel, Cisco Systems and Hewlett Packard, suffered during
the month of July, but rebounded to new highs. The Fund's investment in the
financial sector contributed to the Fund's recent underperformance as fear of
rising interest rates drove down these rate-sensitive stocks. Nevertheless,
significant earnings growth potential continues to exist in this sector,
warranting continued patience.
STRATEGIC COMMENT:
We believe that the earnings related volatility experienced during the third
quarter should not be repeated during the fourth quarter. However, our addition
of steady growth consumer companies to the Fund's portfolio is meant to promote
portfolio stability throughout the year. We believe that corporate earnings, in
general, should meet or beat expectations. We expect the economy to continue
modest, probably non-inflationary, growth. The potential for the Federal Reserve
to increase the federal funds target rate appears to have declined. We continue
to emphasize quality earnings growth companies where management has a
significant stake in their stock's performance.
---------------------
21
<PAGE>
GROWTH AND INCOME FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR 3 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 9.52% 12.67% 12.91% 13.48%
- ---------------------------------------------------------------------------------------
Without Sales Charge 14.67% 14.42% 13.96% 14.32%
- ---------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR INCEPTION
<S> <C> <C>
- -------------------------------------------------------------------------------------
With Contingent Deferred Sales Charge(1) 10.90% 22.06%
- -------------------------------------------------------------------------------------
Without Contingent Deferred Sales Charge 13.90% 23.04%
- -------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Growth and Income Fund commenced operations on January 1, 1992 as successor
to the Select Stock Fund of the Wells Fargo Investment Trust for Retirement
Programs. The Predecessor Fund's date of inception was August 2, 1990. The
performance figures shown include the performance of the Predecessor Fund which
had the same investment objectives and strategies. Certain of the investment
restrictions of the Stagecoach Growth and Income Fund differ somewhat from those
of the Predecessor Fund.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without these reductions, the Fund's returns would have been lower.
- ---------------------
22
<PAGE>
GROWTH AND INCOME FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH GROWTH AND INCOME CLASS A
SHARES S 500 INDEX
<S> <C> <C>
Inception $9,550 $10,000
Aug-90 $9,607 $9,096
Sep-90 $9,626 $8,653
Oct-90 $9,674 $8,617
Nov-90 $9,712 $9,174
Dec-90 $9,827 $9,429
Jan-91 $10,199 $9,840
Feb-91 $10,581 $10,543
Mar-91 $10,706 $10,799
Apr-91 $10,744 $10,824
May-91 $11,183 $11,291
Jun-91 $10,639 $10,774
Jul-91 $11,183 $11,276
Aug-91 $11,460 $11,543
Sep-91 $11,345 $11,350
Oct-91 $11,546 $11,503
Nov-91 $11,049 $11,039
Dec-91 $12,262 $12,302
Jan-92 $12,205 $12,073
Feb-92 $12,434 $12,229
Mar-92 $12,189 $11,991
Apr-92 $12,516 $12,343
May-92 $12,680 $12,404
Jun-92 $12,377 $12,219
Jul-92 $12,966 $12,718
Aug-92 $12,715 $12,458
Sep-92 $12,904 $12,604
Oct-92 $13,146 $12,648
Nov-92 $13,641 $13,079
Dec-92 $13,911 $13,239
Jan-93 $14,262 $13,350
Feb-93 $13,961 $13,532
Mar-93 $14,238 $13,817
Apr-93 $13,896 $13,483
May-93 $14,218 $13,844
Jun-93 $13,952 $13,885
Jul-93 $13,851 $13,829
Aug-93 $14,559 $14,353
Sep-93 $14,555 $14,243
Oct-93 $15,052 $14,538
Nov-93 $14,697 $14,399
Dec-93 $15,086 $14,573
Jan-94 $15,669 $15,069
Feb-94 $15,423 $14,660
Mar-94 $14,540 $14,021
Apr-94 $14,715 $14,201
May-94 $14,705 $14,434
Jun-94 $14,371 $14,080
Jul-94 $14,814 $14,542
Aug-94 $15,288 $15,138
Sep-94 $15,096 $14,768
Oct-94 $15,220 $15,100
Nov-94 $14,755 $14,550
Dec-94 $15,041 $14,766
Jan-95 $15,116 $15,149
Feb-95 $15,841 $15,738
Mar-95 $16,179 $16,202
Apr-95 $16,414 $16,679
May-95 $17,174 $17,344
Jun-95 $17,588 $17,747
Jul-95 $18,103 $18,335
Aug-95 $18,383 $18,381
Sep-95 $19,014 $19,156
Oct-95 $18,421 $19,088
Nov-95 $19,154 $19,925
Dec-95 $19,388 $20,309
Jan-96 $19,815 $20,999
Feb-96 $20,579 $21,194
Mar-96 $20,625 $21,398
Apr-96 $21,356 $21,712
May-96 $21,918 $22,270
Jun-96 $21,442 $22,355
Jul-96 $20,113 $21,367
Aug-96 $20,737 $21,818
Sep-96 $21,803 $23,044
</TABLE>
THE RETURN FOR CLASS B SHARES OF THE GROWTH AND INCOME FUND WILL VARY FROM THE
RESULTS SHOWN DUE TO DIFFERENT EXPENSES AND LOAD STRUCTURES.
The accompanying chart compares the performance of the Stagecoach Growth and
Income Fund Class A shares since the inception of the Predecessor Fund with the
S&P 500 Index. The chart assumes a hypothetical $10,000 initial investment in
the Fund and reflects all operating expenses and assumes the maximum initial
sales charge of 4.5%. The S&P 500 Index is an unmanaged index of 500 widely held
common stocks representing, among others, industrial, financial, utility and
transportation companies listed or traded on national exchanges or
over-the-counter markets. Please note that the Fund is a professionally managed
mutual fund. The Index presented here is not managed, does not incur expenses
and is not directly available for investment. Had this Index incurred operating
expenses, its performance would have been lower.
---------------------
23
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
24
<PAGE>
SMALL CAP FUND
- -------------------------
INVESTMENT ADVISER COMMENTS
RETURNS:
The Fund posted a return for the financial year from January 1, 1996 to
September 30, 1996 of 22.81% for Class A shares. The return for Class B shares
for the same period was 22.39%. The one year total returns from October 1, 1995
to September 30, 1996 were 36.08% and 35.39%, respectively. These return figures
are exclusive of sales charges.
BENCHMARKS:
The year-to-date return for the S&P 500 Index was 13.50% through September 30,
1996.
ECONOMIC FACTORS INFLUENCING PERFORMANCE:
The Small Cap Fund was first offered for sale on September 16, 1996. The
discussion regarding returns and economic factors before that date includes the
performance of the predecessor to the Fund -- the Small Capitalization Growth
Fund for BRP Employment Retirement Plans -- an unregistered bank collective
investment fund.
After experiencing overall growth throughout most of 1996, stock prices --
especially those of high growth companies in the technology and health care
sectors -- were affected by the sharpest broad-based market decline experienced
in nearly six years. The sell-off that precipitated this decline was sparked by
investor concern over a potential rise in interest rates and the possibility
that corporate earnings growth would not be strong enough to justify stock
prices. In particular, smaller companies with lower earnings expectations for
the coming year felt the brunt of the market correction.
There was a general market recovery in August and September, but emerging growth
stocks did not rebound as much as the larger, more established companies.
STRATEGIC COMMENT:
It appears that the economy likely will show steady, modest growth over the next
months. We believe that interest rates most likely will stay in a narrow range,
inflation should remain stable, and corporate earnings should improve in the
coming quarters.
Despite reaching record levels, the equity markets still present many attractive
opportunities for growth. We remain optimistic about the long-term prospects for
technology stocks, and we are heavily weighted in the networking, software and
data storage sectors. We also believe that health care remains an attractive
sector. Significant portfolio holdings include Envoy Corp., Orthodontic Centers
of America, Inc., and Genesis Health Ventures.
---------------------
25
<PAGE>
SMALL CAP FUND
- ---------------------
PERFORMANCE AT A GLANCE
CLASS A SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR INCEPTION
<S> <C> <C>
- -------------------------------------------------------------------------------------
With Maximum 4.5% Sales Charge 29.94% 47.00%
- -------------------------------------------------------------------------------------
Without Sales Charge 36.08% 50.56%
- -------------------------------------------------------------------------------------
</TABLE>
CLASS B SHARE PERFORMANCE AS OF 9/30/96
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
AVERAGE ANNUAL TOTAL RETURNS 1 YEAR INCEPTION
<S> <C> <C>
- --------------------------------------------------------------------------------------
With Contingent Deferred Sales Charge(1) 32.39% 48.96%
- --------------------------------------------------------------------------------------
Without Contingent Deferred Sales Charge 35.39% 49.68%
- --------------------------------------------------------------------------------------
(1)Assumes redemption on 9/30/96.
</TABLE>
Past performance is not predictive of future results. The investment return and
net asset value of shares of the Fund will fluctuate with market conditions so
that shares of the Fund, when redeemed, may have a greater or lesser net asset
value than when originally purchased.
Average annual total returns for the indicated periods represent the average
annual increase in the value of an investment over the periods assuming
reinvestment of dividends and capital gain distributions at net asset value.
The Stagecoach Small Cap Fund invests in a master portfolio which in turn
invests in individual securities. References to the investment policies of the
Fund are understood to be references to the investment policies of the Master
Portfolio.
The Small Cap Fund commenced operation on 9/16/96 as successor to the Small
Capitalization Growth Fund for BRP Employment Plans, an unregistered bank
collective investment Fund (the "Predecessor Fund"). Inception date of the
Predecessor Fund was 11/94.
Performance figures shown for periods prior to 9/16/96 represent the performance
of the Predecessor Fund which has the same investment objective and strategies
as the Small Cap Fund. Performance figures also reflect expense differences
between the Predecessor Fund and those of the Class A and B shares in effect as
of the inception date of 9/16/96.
The Fund's manager has voluntarily waived portions of its fees or has reimbursed
expenses to the Fund, which has reduced operating expenses for shareholders.
Without these reductions, the Fund's returns would have been lower.
- ---------------------
26
<PAGE>
SMALL CAP FUND
- --------------------------
GROWTH OF A $10,000 INVESTMENT
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH SMALL CAP CLASS A STAGECOACH SMALL CAP CLASS B
SHARES S 500 INDEX SHARES
<S> <C> <C> <C>
Inception $9,550 $10,000 $10,000
Nov-94 $9,674 $9,636 $10,120
Dec-94 $10,075 $9,779 $10,540
Jan-95 $10,104 $10,032 $10,560
Feb-95 $10,658 $10,423 $11,130
Mar-95 $11,221 $10,730 $11,720
Apr-95 $11,536 $11,046 $12,040
May-95 $11,785 $11,486 $12,300
Jun-95 $13,026 $11,753 $13,580
Jul-95 $14,449 $12,142 $15,060
Aug-95 $14,478 $12,173 $15,080
Sep-95 $15,376 $12,686 $16,000
Oct-95 $14,898 $12,641 $15,500
Nov-95 $16,311 $13,195 $16,960
Dec-95 $17,037 $13,449 $17,700
Jan-96 $17,371 $13,907 $18,040
Feb-96 $18,374 $14,036 $19,080
Mar-96 $19,215 $14,171 $19,940
Apr-96 $21,774 $14,379 $22,580
May-96 $23,455 $14,748 $24,300
Jun-96 $21,688 $14,805 $22,460
Jul-96 $18,508 $14,150 $19,160
Aug-96 $20,485 $14,449 $21,200
Sep-96 $21,386 $15,261 $21,663
</TABLE>
The accompanying chart compares the performance of Class A and Class B shares of
the Stagecoach Small Cap Fund since the inception of the Predecessor Fund with
the S&P 500 Index. The chart assumes a hypothetical $10,000 initial investment
in the Fund and reflects all operating expenses. For Class A shares the chart
assumes the maximum initial sales charge of 4.5%. For Class B shares the chart
assumes payment of the contingent deferred sales charge that would be applicable
if shares of the Fund were purchased in November of 1994 and redeemed on
September 30, 1996. The S&P 500 Index is an unmanaged index of 500 widely held
common stocks representing, among others, industrial, financial, utility and
transportation companies listed or traded on national exchanges or
over-the-counter markets. Please note that the Fund is a professionally managed
mutual fund. The Index presented here is not managed, does not incur expenses
and is not directly available for investment. Had this Index incurred operating
expenses, its performance would have been lower.
---------------------
27
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
28
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 83.61%
ADVERTISING - 1.63%
67,500 HA-LO Industries Inc+ $ 940,000 $ 1,957,500
37,000 Outdoor Systems Inc+ 1,333,813 1,739,000
------------ --------------
$ 2,273,813 $ 3,696,500
BASIC INDUSTRIES - 1.54%
60,000 Gibraltar Steel Corp+ $ 1,121,875 $ 1,350,000
75,000 Olympic Steel Inc+ 1,685,790 2,015,625
120,000 Quadrax Corp+ 290,184 138,750
------------ --------------
$ 3,097,849 $ 3,504,375
BIOTECHNOLOGY - 3.45%
82,500 Anesta Corp+ $ 1,143,979 $ 1,165,313
67,500 Aronex Pharmaceuticals Inc+ 805,034 615,938
90,000 Genzyme Corp - General Division+ 2,406,188 2,295,000
45,000 Genzyme Corp - Tissue Repair+ 680,834 472,500
45,000 Liposome Co Inc+ 613,603 849,375
50,000 Nabi Inc 576,600 593,750
55,000 Neurex Corp+ 1,032,750 1,051,875
70,000 Palomar Medical Tech Inc+ 790,970 630,000
60,000 Seragen Inc+ 414,940 157,500
------------ --------------
$ 8,464,898 $ 7,831,251
COMMERCIAL SERVICES - 2.31%
88,400 AMRE Inc+ $ 1,536,277 $ 1,226,550
30,000 HFS Inc+ 1,837,450 2,006,250
44,000 Snyder Communications Inc+ 859,720 847,000
35,000 Staffmark Inc+ 468,223 490,000
75,000 Stericycle Inc+ 693,542 684,375
31,000 Work Recovery Inc+ 135,313 7,750
------------ --------------
$ 5,530,525 $ 5,261,925
</TABLE>
---------------------
29
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER SOFTWARE - 14.85%
65,000 Accom Inc+ $ 552,594 $ 130,000
35,000 Claremont Technology Group Inc+ 885,950 1,260,000
39,000 E*Trade Group Inc+ 421,748 514,313
135,000 Envoy Corp+ 2,249,908 5,231,250
48,000 First Data Corp 3,259,165 3,918,000
80,000 GT Interactive Software+ 1,636,250 1,820,000
110,000 Inference Corp Class A+ 2,149,438 1,952,500
60,000 LifeRate Systems Inc+ 482,292 270,000
75,000 Macromedia Inc+ 2,355,718 1,556,250
27,000 Microsoft Corp+ 2,439,328 3,560,625
100,000 Optika Imaging Systems Inc+ 577,209 787,500
94,500 Oracle Systems Corp+ 2,994,318 4,022,156
60,000 Premenos Tech Corp+ 1,177,896 1,215,000
73,615 Pure Atria Corp+ 2,504,114 2,778,966
9,000 Remedy Corp+ 409,518 720,000
70,000 Summit Medical System Inc+ 1,520,938 980,000
50,000 Technomax Technologies Limited+ 1,064,884 868,750
27,000 Visio Corp+ 987,875 1,228,500
20,000 Whittman Hart Inc+ $ 583,000 $ 945,000
------------ --------------
$ 28,252,143 $ 33,758,810
COMPUTER SYSTEMS - 10.05%
80,000 Adaptec Inc+ $ 2,886,533 $ 4,800,000
88,500 Cisco Systems Inc+ 3,082,438 5,492,531
10,000 International Network Services+ 160,000 360,000
212,000 Komag Inc+ 5,150,740 4,452,000
71,200 Lexmark International Group Inc Class A+ 1,354,873 1,450,700
65,000 Silicon Storage Technology Inc+ 1,026,470 641,875
60,000 Solectron Corp+ 2,372,110 2,940,000
50,000 Xylan Corp+ 2,313,560 2,712,500
------------ --------------
$ 18,346,724 $ 22,849,606
</TABLE>
- ------------------------
30
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRICAL EQUIPMENT - 1.76%
10,000 BMC Industries Inc $ 297,045 $ 286,250
65,000 Interlink Electronics Inc+ 344,375 422,500
70,000 Nokia Corp ADR Class A 2,988,162 3,097,500
60,000 Power (R F) Products Inc+ 404,163 187,500
------------ --------------
$ 4,033,745 $ 3,993,750
ENERGY & RELATED - 5.11%
30,000 Ashland Inc $ 1,251,570 $ 1,192,500
40,000 Comstock Resources Inc+ 420,000 445,000
65,000 Ensco International Inc+ 1,703,179 2,112,500
96,000 Global Industries Ltd+ 874,788 1,524,000
32,400 J Ray McDermott SA+ 700,762 943,650
25,000 Parker Drilling Co+ 143,750 159,375
50,000 Reading & Bates Corp+ 1,201,500 1,356,250
40,000 Transocean Offshore Inc 1,923,476 2,450,000
80,000 Veritas Digicon Inc+ 749,391 1,440,000
------------ --------------
$ 8,968,416 $ 11,623,275
ENTERTAINMENT & LEISURE - 3.23%
25,000 Circus Circus Entertainment Inc+ $ 1,008,288 $ 884,375
40,000 Family Golf Centers Inc+ 600,000 1,160,000
60,000 Mikohn Gaming Corp+ 559,486 532,500
60,000 Mirage Resorts Inc+ 1,019,660 1,537,500
64,000 Platinum Entertainment Inc+ 823,125 976,000
90,000 Regal Cinemas Inc+ 2,738,245 2,250,000
------------ --------------
$ 6,748,804 $ 7,340,375
ENVIRONMENTAL CONTROL - 1.43%
60,000 Allied Waste Industries Inc+ $ 604,675 $ 555,000
55,000 Molten Metal Technology Inc+ 1,248,970 1,760,000
30,000 U.S.A. Waste Services Inc+ 597,090 945,000
------------ --------------
$ 2,450,735 $ 3,260,000
</TABLE>
---------------------
31
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
FINANCE & RELATED - 4.17%
100,000 Capital One Financial Corp $ 2,838,382 $ 3,000,000
66,300 Medallion Financial Corp+ 784,073 961,350
85,000 Money Store Inc 1,966,859 2,252,500
15,000 NHP Inc+ 187,500 281,250
40,000 Student Loan Marketing Assoc 3,109,712 2,985,000
------------ --------------
$ 8,886,526 $ 9,480,100
FOOD & RELATED - 1.26%
61,500 NuCo2 Inc+ $ 1,053,613 $ 1,276,125
60,000 Whole Foods Market Inc+ 1,395,812 1,590,000
------------ --------------
$ 2,449,425 $ 2,866,125
HEALTHCARE & RELATED - 7.38%
125,000 Genesis Health Ventures Inc+ $ 2,881,291 $ 3,515,625
120,000 Healthsouth Corp+ 3,386,674 4,605,000
50,000 Medic Computer Systems Inc+ 1,606,246 1,818,750
110,000 Renal Treatment Centers+ 1,801,050 3,657,500
40,000 RISCORP Inc Class A+ 863,646 695,000
76,000 Vivra Inc+ 2,311,792 2,479,500
------------ --------------
$ 12,850,699 $ 16,771,375
INFORMATION SERVICES - 0.41%
55,000 NETCOM On-Line Communication Services Inc+ $ 1,320,626 $ 941,875
MANUFACTURING PROCESSING - 0.56%
46,400 Intertape Polymer Group Inc $ 826,150 $ 1,038,200
10,000 Lydall Inc+ 156,378 243,750
------------ --------------
$ 982,528 $ 1,281,950
MATERIAL MANUFACTURING - 0.31%
73,000 Landec Corp+ $ 973,813 $ 711,750
</TABLE>
- ------------------------
32
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MEDICAL EQUIPMENT & SUPPLIES - 3.40%
19,000 Arterial Vascular Engineering Inc+ $ 494,625 $ 508,250
50,000 Bioject Medical Technologies+ 229,063 50,000
83,000 Cardiovascular Dynamics Inc+ 1,019,264 1,265,750
115,000 Endosonics Corp+ 1,415,547 1,610,000
100,000 General Surgical Innovations Inc+ 1,436,875 1,100,000
32,000 Innovasive Devices Inc+ 403,745 304,000
37,500 Life Med Sciences Inc+ 292,188 262,500
5,000 NeoPath Inc+ 123,000 96,250
76,300 Ultrafem Inc+ 1,039,820 1,764,438
50,000 Urologix Inc+ 738,034 768,750
------------ --------------
$ 7,192,161 $ 7,729,938
PUBLISHING & MEDIA - 0.44%
55,000 Mecklermedia Corp+ $ 1,084,375 $ 990,000
RETAIL & RELATED - 4.54%
6,500 Abercrombie & Fitch Co+ $ 104,000 $ 149,500
35,000 Baby Superstore Inc+ 639,331 726,250
55,000 Corporate Express Inc+ 1,557,063 2,138,125
32,500 Deckers Outdoor Corp+ 272,500 292,500
65,000 Eagle Hardware & Garden+ 1,586,094 1,755,000
45,000 Mail Boxes Etc+ 877,500 1,018,125
55,000 Micro Warehouse Inc+ 1,604,791 1,416,250
71,500 North Face Inc+ 1,313,811 2,019,875
40,000 Tag Heuer International SA ADR+ 782,000 800,000
------------ --------------
$ 8,737,090 $ 10,315,625
SEMICONDUCTORS - 2.15%
70,000 Chips & Technologies Inc+ $ 965,065 $ 953,750
83,500 IKOS Systems Inc+ 1,190,827 1,659,563
18,000 Intel Corp 904,125 1,717,875
35,000 OnTrak Systems Inc+ 809,729 525,000
------------ --------------
$ 3,869,746 $ 4,856,188
</TABLE>
---------------------
33
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS - 11.30%
23,000 Amati Communications Corp+ $ 487,025 $ 506,000
10,000 AML Communications Inc+ 166,384 162,500
30,000 Andrew Corp+ 1,378,188 1,496,250
40,000 Ascend Communication Inc+ 2,109,331 2,645,000
45,000 Cascade Communications Corp+ 2,025,344 3,667,500
35,000 Charter Communication International Inc+ 298,750 192,500
90,000 ECI Telecommunications Ltd+ 2,201,501 1,890,000
70,000 EIS International Inc+ 1,492,246 980,000
100,000 Farallon Communications+ 1,432,695 1,050,000
40,000 Intermedia Communications Inc+ 1,122,688 1,170,000
16,000 LCC International Inc Class A+ 256,000 298,000
110,000 LCI International Inc+ 1,227,724 3,465,000
30,000 Lightbridge Inc+ 328,125 348,750
128,000 NEXTEL Communications Class A+ 2,296,875 2,368,000
110,000 Paging Network Inc+ 2,188,620 2,200,000
37,500 TresCom International Inc+ 498,750 487,500
35,000 U.S. Robotics Corp+ 2,311,090 2,261,873
30,000 Winstar Communications Inc+ 945,321 498,750
------------ --------------
$ 22,766,657 $ 25,687,623
TRANSPORTATION - 2.33%
55,000 Atlas Air Inc+ $ 2,810,391 $ 2,351,250
40,000 Landair Services Inc+ 666,866 430,000
75,000 Mesa Airlines Inc+ 1,076,025 684,375
60,000 Trico Marine Services Inc+ 1,326,570 1,830,000
------------ --------------
$ 5,879,852 $ 5,295,625
TOTAL COMMON STOCKS $165,161,150 $ 190,048,041
WARRANTS - 2.19%
84,000 Intel Corp expires 3/14/1998+ $ 4,767,000
100,000 Viacom Inc Class E expires 07/07/1999+ 206,250
--------------
TOTAL WARRANTS $ 4,973,250
(Cost $2,722,959)
</TABLE>
- ------------------------
34
<PAGE>
MASTER INVESTMENT TRUST CAPITAL APPRECIATION MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS - 0.28%
$ 240,000 First Financial Management Corp 5.00 % 12/15/99 $ 461,700
100,000 Genesis Health Ventures Inc 6.00 11/30/03 183,875
--------------
TOTAL CONVERTIBLE CORPORATE BONDS 645,575
(Cost $345,000)
SHORT-TERM INSTRUMENTS - 16.08%
U.S. TREASURY BILLS - 11.31%
$26,000,000 U.S. Treasury Bill 4.98 %* 12/19/96 $ 25,717,900
REPURCHASE AGREEMENTS - 4.77%
$10,846,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 10/01/96 $ 10,846,000
--------------
TOTAL SHORT-TERM INSTRUMENTS 36,563,900
(Cost $36,567,393)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $204,796,502)**(Notes 1 and 3) 102.16% $ 232,230,766
Other Assets and Liabilities, Net (2.16) (4,918,609)
------ --------------
TOTAL NET ASSETS 100.00% $ 227,312,157
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 41,195,178
Gross Unrealized Depreciation (13,760,914)
------------
NET UNREALIZED APPRECIATION $ 27,434,264
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
35
<PAGE>
BALANCED FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 59.89%
AEROSPACE - 1.61%
30,000 Rockwell International Corp $ 1,570,383 $ 1,691,250
AUTOMOBILE & RELATED - 5.11%
70,000 Dana Corp $ 2,319,700 $ 2,117,500
50,000 Ford Motor Co 1,488,375 1,562,500
35,000 General Motors Corp 1,382,515 1,680,000
------------ --------------
$ 5,190,590 $ 5,360,000
BASIC INDUSTRIES - 1.25%
80,000 Crompton & Knowles Corp $ 1,085,680 $ 1,310,000
BUILDING MATERIALS & SERVICES - 4.40%
80,000 Masco Corp $ 2,461,624 $ 2,400,000
10,000 Texas Industries Inc 530,286 598,750
25,000 Willamette Industries Inc 1,482,500 1,625,000
------------ --------------
$ 4,474,410 $ 4,623,750
COMPUTER SOFTWARE - 0.20%
10,000 BancTec Inc+ $ 165,600 $ 208,750
COMPUTER SYSTEMS - 3.02%
17,000 International Business Machines Corp $ 1,724,820 $ 2,116,500
50,000 Komag Inc+ 1,019,736 1,050,000
------------ --------------
$ 2,744,556 $ 3,166,500
CONGLOMERATES - 1.91%
22,000 General Electric Co $ 918,436 $ 2,002,000
</TABLE>
- ------------------------
36
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRICAL EQUIPMENT - 3.32%
75,000 Lexmark International Group Inc Class A+ $ 1,540,482 $ 1,528,125
35,000 Seagate Technology Inc+ 1,182,704 1,955,625
------------ --------------
$ 2,723,186 $ 3,483,750
ENERGY & RELATED - 5.25%
12,000 Atlantic Richfield Corp $ 1,417,555 $ 1,530,000
5,000 Mobil Corp 426,878 578,750
10,000 Royal Dutch Petroleum Co ADR (Netherlands) 1,154,982 1,561,250
20,000 Texaco Inc 1,443,172 1,840,000
------------ --------------
$ 4,442,587 $ 5,510,000
FINANCE & RELATED - 11.05%
35,800 American Bankers Insurance Group $ 831,325 $ 1,785,525
26,100 BankAmerica Corp 1,197,321 2,143,463
25,000 Bankers Trust N Y Corp 1,901,233 1,965,625
10,400 Chase Manhattan Bank 358,200 833,300
35,925 Fremont General Corp 509,931 1,059,788
20,000 NationsBank 1,207,791 1,737,500
29,400 Providian Corp 896,770 1,264,200
16,500 Travelers Inc 363,350 810,563
------------ --------------
$ 7,265,921 $ 11,599,964
FOOD & RELATED - 4.79%
25,000 American Home Products Corp $ 1,249,565 $ 1,593,750
126,000 Archer-Daniels-Midland Co 2,325,600 2,425,500
11,200 Philip Morris Co Inc 627,548 1,005,200
------------ --------------
$ 4,202,713 $ 5,024,450
HEALTHCARE - 2.35%
35,000 Aetna Inc $ 2,455,618 $ 2,463,125
MACHINERY - 1.33%
70,000 United Dominion Industries $ 1,684,599 $ 1,400,000
</TABLE>
---------------------
37
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MEDICAL EQUIPMENT & SUPPLIES - 1.34%
30,000 Baxter International Inc $ 981,068 $ 1,402,500
MISCELLANEOUS - 1.43%
40,000 Lancaster Colony Corp $ 1,521,249 $ 1,500,000
PHARMACEUTICALS - 1.77%
13,000 Bristol-Myers Squibb Co $ 766,374 $ 1,252,874
15,000 Pharmacia and Upjohn Inc 397,019 618,750
------------ --------------
$ 1,163,393 $ 1,871,624
RETAIL & RELATED - 4.01%
60,000 Price/Costco Inc+ $ 908,955 $ 1,230,000
70,000 Rite Aid Corp 2,071,881 2,537,500
10,000 Springs Industries Inc Class A 475,800 445,000
------------ --------------
$ 3,456,636 $ 4,212,500
TELECOMMUNICATIONS - 0.92%
25,000 GTE Corp $ 827,406 $ 962,500
UTILITIES - 4.83%
50,000 Cinergy Corp $ 1,454,486 $ 1,543,750
65,000 Illinova Corp 1,755,605 1,722,500
80,000 Southern Co 1,925,532 1,810,000
------------ --------------
$ 5,135,623 $ 5,076,250
TOTAL COMMON STOCKS $ 52,009,654 $ 62,868,913
</TABLE>
- ------------------------
38
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CORPORATE BONDS & NOTES - 8.34%
BANK & FINANCE - 3.79%
$ 1,000,000 Associates Corp of North America 6.32 % 02/28/00 987,500
2,000,000 General Motors Acceptance Corp 6.88 07/15/01 1,992,500
1,000,000 Societe Generale 7.40 06/01/06 1,001,250
--------------
$ 3,981,250
INDUSTRIALS - 1.75%
$ 1,500,000 BP America Inc 9.38 % 11/01/00 1,636,875
200,000 ITT Corp 7.25 11/15/96 200,310
--------------
$ 1,837,185
FOREIGN GOVERNMENT - 2.80%
$ 1,500,000 Ontario, Province of 7.75 % 06/04/02 1,563,750
1,500,000 Quebec, Province of (Yankee) 7.13 02/09/24 1,372,500
--------------
$ 2,936,250
TOTAL CORPORATE BONDS & NOTES $ 8,754,685
(Cost $8,710,379)
REAL ESTATE MORTGAGE INVESTMENT CONDUITS - 1.05%
$ 584,222 FNMA #190526 6.00 % 01/01/01 564,867
549,362 FNMA #190588 6.50 01/01/09 535,283
--------------
TOTAL REAL ESTATE MORTGAGE INVESTMENT CONDUITS $ 1,100,150
(Cost $1,145,380)
U.S. GOVERNMENT AGENCY SECURITIES - 11.91%
FEDERAL HOME LOAN MORTGAGE ASSOCIATION - 0.72%
$ 162,178 FHLMC #220009 8.25 % 08/01/01 164,053
136,489 FHLMC #303407 8.50 12/01/02 140,199
249,522 FHLMC #291786 8.50 01/01/09 258,333
174,943 FHLMC #546103 10.50 08/01/19 191,618
--------------
$ 754,203
</TABLE>
---------------------
39
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.99%
$ 5,970,353 FNMA #426993 7.50 % 07/01/26 $ 5,899,425
107,275 FNMA #083785 8.00 08/01/18 109,287
259,605 FNMA #057843 8.00 06/01/08 264,473
8,668 FNMA #075336 9.50 02/01/09 9,321
--------------
$ 6,282,506
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.20%
$ 1,013,532 GNMA #423225 6.50 % 04/15/26 947,328
1,488,778 GNMA #426993 7.00 05/15/26 1,433,411
1,747,578 GNMA #403934 9.00 08/15/24 1,838,767
1,182,982 GNMA #376200 9.00 06/15/25 1,241,753
--------------
$ 5,461,259
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 12,497,968
(Cost $13,557,500)
U.S. TREASURY SECURITIES - 15.23%
U.S. TREASURY BONDS - 2.75%
$ 1,500,000 U.S. Treasury Bonds 6.25 % 08/15/23 1,355,145
1,500,000 U.S. Treasury Bonds 7.25 05/15/16 1,532,084
--------------
$ 2,887,229
U.S. TREASURY NOTES - 12.48%
$ 5,000,000 U.S. Treasury Notes 6.25 % 02/15/03 4,916,700
5,000,000 U.S. Treasury Notes 6.38 01/15/99 5,024,100
3,000,000 U.S. Treasury Notes 7.50 02/15/05 3,155,490
--------------
$ 13,096,290
TOTAL U.S. TREASURY SECURITIES $ 15,983,519
(Cost $14,906,031)
</TABLE>
- ------------------------
40
<PAGE>
BALANCED FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.68%
REPURCHASE AGREEMENTS - 0.68%
$ 720,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 10/01/96 720,000
--------------
TOTAL SHORT-TERM INTSTRUMENTS $ 720,000
(Cost $720,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $91,048,944)* (Notes 1 and 3) 97.10% $ 101,925,235
Other Assets and Liabilities 2.90 3,043,207
------ --------------
TOTAL NET ASSETS 100.00% $ 104,968,442
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 11,836,582
Gross Unrealized Depreciation (960,291)
------------
NET UNREALIZED APPRECIATION $ 10,876,291
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
41
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 99.69%
11,823 3Com Corp+ $ 548,172 $ 710,119
55,258 Abbott Laboratories 1,036,989 2,721,457
9,434 Advanced Micro Devices+ 193,931 139,152
10,586 Aetna Inc 837,385 744,990
7,623 Ahmanson (H F) & Co 148,824 213,444
7,892 Air Products & Chemicals Inc 214,850 459,709
35,363 Airtouch Communications+ 565,288 976,903
1,984 Alberto-Culver Co Class B 35,915 86,056
17,888 Albertson's Inc 220,631 753,532
16,030 Alcan Aluminium Ltd 306,856 480,900
9,060 Alco Standard Corp 212,144 451,868
3,200 Alexander & Alexander Services 82,893 53,200
12,398 Allegheny Teledyne Inc 218,155 280,505
4,650 Allergan Inc 123,275 177,281
20,078 Allied Signal Inc 477,697 1,322,638
31,556 Allstate Corp 689,758 1,554,133
13,490 Alltel Corp 416,449 376,034
12,294 Aluminum Co of America 357,148 725,346
5,903 ALZA Corp+ 161,760 158,643
8,560 Amdahl Corp+ 131,063 80,785
6,553 Amerada Hess Corp 255,496 346,490
12,058 American Brands Inc 366,412 509,451
13,282 American Electric Power Inc 388,914 539,581
33,572 American Express Corp 910,211 1,552,705
14,446 American General Corp 300,906 545,337
5,350 American Greetings Corp Class A 99,766 153,144
45,082 American Home Products Corp 1,208,467 2,873,978
33,245 American International Group Inc 1,101,648 3,349,434
10,540 American Stores Co 182,963 421,600
38,952 Ameritech Corp 1,053,941 2,049,849
18,700 Amgen Inc+ 675,727 1,180,438
35,290 Amoco Corp 1,550,473 2,487,945
15,395 AMP Inc 422,108 596,556
6,399 AMR Corp+ 427,937 509,520
</TABLE>
- ------------------------
42
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
4,240 Andrew Corp+ $ 19,606 $ 211,470
35,172 Anheuser-Busch Inc 678,581 1,323,347
7,744 Aon Corp 420,962 420,112
8,870 Apple Computer Inc 337,408 196,803
12,752 Applied Materials Inc+ 352,212 352,274
38,732 Archer-Daniels-Midland Co 334,138 745,591
7,563 Armco Inc+ 67,028 34,034
2,577 Armstrong World Industries Inc 94,494 160,740
3,037 ASARCO Inc 76,480 80,860
4,550 Ashland Inc 164,508 180,863
114,728 AT & T Corp 4,219,429 5,994,538
11,420 Atlantic Richfield Corp 1,028,961 1,456,050
3,300 Autodesk Inc 66,257 85,388
20,608 Automatic Data Processing 328,651 899,024
3,800 Avery Dennison Corp 82,180 210,900
9,508 Avon Products Inc 180,451 471,835
10,171 Baker Hughes Inc 211,561 308,944
2,191 Ball Corp 71,009 53,680
3,385 Bally Entertainment Corp+ 40,160 96,049
10,485 Baltimore Gas & Electric Co 221,276 273,921
31,558 Banc One Corp 845,070 1,293,878
10,825 Bank of Boston Corp 363,336 626,497
27,274 Bank of New York Inc 473,843 801,174
25,506 BankAmerica Corp 910,154 2,094,680
5,617 Bankers Trust N Y Corp 286,700 441,637
4,112 Bard (C R) Inc 92,810 127,986
13,422 Barnett Banks Inc 252,432 452,993
25,357 Barrick Gold Corp 755,838 637,095
16,008 Battle Mountain Gold Co 136,443 124,062
4,068 Bausch & Lomb Inc 121,023 149,499
19,250 Baxter International Inc 451,179 899,938
13,239 Bay Networks Inc+ 633,763 360,763
9,016 Becton Dickinson & Co 150,890 398,958
31,078 Bell Atlantic Corp 1,268,742 1,860,795
70,608 BellSouth Corp 1,599,287 2,612,496
3,744 Bemis Co Inc 47,414 126,828
3,806 Beneficial Corp 111,226 218,845
</TABLE>
---------------------
43
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
7,921 Bethlehem Steel Corp+ $ 124,749 $ 79,210
7,019 Beverly Enterprises+ 87,648 76,332
8,250 Biomet Inc+ 78,252 135,094
6,176 Black & Decker Corp 132,370 256,304
7,394 Block (H & R) Inc 151,155 219,972
11,222 Boatmen's Bancshares Inc 316,982 627,029
24,669 Boeing Co 824,762 2,331,221
3,454 Boise Cascade Corp 127,543 117,436
12,463 Boston Scientific Corp+ 305,205 716,623
2,052 Briggs & Stratton Corp 38,349 91,058
35,549 Bristol-Myers Squibb Co 1,804,712 3,426,035
4,958 Brown-Forman Corp Class B 106,322 193,982
15,058 Browning-Ferris Industries Inc 416,314 376,450
6,869 Brunswick Corp 126,150 164,856
10,736 Burlington Northern Santa Fe 397,367 905,850
8,948 Burlington Resources Inc 406,319 397,068
5,421 Cabletron Systems Inc+ 293,418 370,661
2,844 Caliber System Inc 115,153 45,860
17,614 Campbell Soup Co 414,833 1,373,892
10,800 Carolina Power & Light Co 252,839 372,600
5,154 Case Corp 228,221 251,258
13,706 Caterpillar Inc 369,050 1,033,090
2,054 Centex Corp 39,474 67,012
14,842 Central & South West Corp 294,570 385,892
4,796 Ceridian Corp+ 132,938 239,800
6,798 Champion International Corp 227,553 311,858
7,406 Charming Shoppes Inc+ 93,828 44,436
30,980 Chase Manhattan Bank 1,057,786 2,482,273
46,346 Chevron Corp 1,438,302 2,902,418
51,820 Chrysler Corp 816,995 1,483,348
12,448 Chubb Corp 308,452 572,608
5,449 CIGNA Corp 348,214 653,199
2,492 Cincinnati Milacron Inc 55,762 47,037
11,171 Cinergy Corp 236,314 344,905
7,000 Circuit City Stores Inc 102,497 252,875
45,942 Cisco Systems Inc+ 1,093,373 2,851,275
34,066 Citicorp 1,244,010 3,087,231
</TABLE>
- ------------------------
44
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,686 Clorox Co $ 133,752 $ 353,395
7,482 Coastal Corp 183,756 308,633
176,652 Coca-Cola Co 1,830,604 8,987,171
10,373 Colgate-Palmolive Co 379,136 901,154
3,898 Columbia Gas System Inc+ 162,585 218,288
31,800 Columbia HCA Healthcare Corp 1,158,062 1,808,625
17,014 Comcast Corp Class A 376,842 261,590
8,255 Comerica Inc 309,329 425,133
3,150 Community Psychiatric Centers+ 76,507 29,531
19,035 Compaq Computer Corp+ 281,685 1,220,619
25,713 Computer Associates International Inc+ 215,729 1,536,352
5,386 Computer Sciences Corp+ 190,926 414,049
17,245 ConAgra Inc 375,766 849,316
5,750 Conrail Inc 167,932 416,156
16,764 Consolidated Edison Co 411,153 465,201
3,138 Consolidated Freightways 87,596 76,881
6,599 Consolidated Natural Gas Co 262,932 353,871
7,644 Cooper Industries Inc 277,985 330,603
6,050 Cooper Tire & Rubber Co 75,412 130,831
2,759 Coors (Adolph) Co Class B 56,617 60,526
15,699 CoreStates Financial Corp 453,680 678,982
16,372 Corning Inc 392,181 638,508
10,328 CPC International Inc 319,663 773,309
2,144 Crane Co 38,873 95,140
8,951 Crown Cork & Seal Co 248,955 412,865
15,010 CSX Corp 319,578 758,005
17,531 CUC International Inc+ 506,756 699,049
2,884 Cummins Engine Co Inc 98,104 113,558
6,693 Cyprus Amax Minerals 176,210 143,900
7,200 Dana Corp 149,512 217,800
11,402 Darden Restaurants Inc 73,575 98,342
2,740 Data General Corp+ 65,481 38,360
15,342 Dayton-Hudson Corp 284,697 506,286
11,683 Dean Witter Discover & Co 394,984 642,565
18,291 Deere & Co 289,499 768,222
6,397 Dell Computer Corp+ 432,768 497,367
5,584 Delta Air Lines Inc 381,156 402,048
</TABLE>
---------------------
45
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
5,896 Deluxe Corp $ 209,338 $ 222,574
10,865 Digital Equipment Corp+ 1,079,811 388,424
8,018 Dillard Department Stores Inc Class A 182,486 258,581
48,094 Disney (Walt) Co 1,596,173 3,047,957
12,640 Dominion Resources Inc 402,755 477,160
10,954 Donnelley (R R) & Sons Co 239,746 353,267
8,104 Dover Corp 136,861 386,966
17,389 Dow Chemical Co 932,211 1,395,467
6,895 Dow Jones & Co Inc 268,759 255,115
12,939 Dresser Industries Inc 223,903 384,935
8,282 DSC Communications Corp+ 87,866 207,050
10,352 DTE Energy Co 230,714 289,856
14,546 Duke Power Co 382,376 678,207
12,032 Dun & Bradstreet Corp 655,033 717,408
39,811 DuPont (E I) de Nemours 1,673,685 3,513,321
1,464 Eastern Enterprises 40,702 55,266
5,606 Eastman Chemical Co 229,912 327,250
24,275 Eastman Kodak Co 960,724 1,905,588
5,488 Eaton Corp 187,054 331,338
4,371 Echlin Inc 83,323 137,140
9,100 Echo Bay Mines Ltd 127,981 80,194
4,600 Ecolab Inc 67,006 155,250
31,012 Edison International 547,937 554,340
3,426 EG & G Inc 64,709 61,240
16,283 EMC Corp+ 354,004 368,403
15,932 Emerson Electric Co 677,520 1,435,872
10,172 Engelhard Corp 86,577 233,956
17,832 Enron Corp 292,908 726,654
4,929 Enserch Corp 99,268 102,893
16,184 Entergy Corp 365,316 436,968
88,036 Exxon Corp 4,177,954 7,328,997
4,078 Federal Express Corp+ 243,756 323,182
12,650 Federal Home Loan Mortgage Corp 594,105 1,238,119
77,500 Federal National Mortgage Assoc 743,308 2,702,813
14,553 Federated Department Stores Inc+ 395,680 487,526
7,487 Fifth Third Bancorp 436,486 435,182
10,048 First Bank System Inc 525,095 671,960
</TABLE>
- ------------------------
46
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
22,494 First Chicago NBD Corp $ 500,716 $ 1,017,854
15,813 First Data Corp 905,129 1,290,736
19,927 First Union Corp 651,392 1,330,127
18,604 Fleet Financial Group Inc 528,680 827,878
2,446 Fleetwood Enterprises Inc 40,942 75,215
2,650 Fleming Co Inc 79,714 46,044
5,926 Fluor Corp 160,159 364,449
2,667 FMC Corp+ 95,210 181,023
83,936 Ford Motor Co 1,930,114 2,623,000
2,832 Foster Wheeler Corp 65,292 123,900
13,037 FPL Group Inc 430,649 563,850
13,819 Freeport McMoRan Copper & Gold Inc Class B 378,597 431,844
5,419 Fruit of the Loom Inc Class A+ 146,408 167,989
9,949 Gannett Co Inc 447,714 700,161
20,484 Gap Inc 205,927 591,476
4,528 General Dynamics Corp 103,247 311,866
117,078 General Electric Co 3,671,499 10,654,098
9,789 General Instrument Corp+ 265,773 242,278
11,302 General Mills Inc 347,996 682,358
53,632 General Motors Corp 2,228,255 2,574,336
5,600 General Re Corp 405,933 793,800
3,368 General Signal Corp 91,071 148,192
8,687 Genuine Parts Co 232,746 380,056
6,435 Georgia-Pacific Corp 313,191 509,169
4,300 Giant Food Inc Class A 97,738 146,200
2,450 Giddings & Lewis Inc 54,550 29,094
31,608 Gillette Co 478,417 2,279,727
4,150 Golden West Financial 110,145 242,256
3,732 Goodrich (B F) Co 90,611 168,407
10,976 Goodyear Tire & Rubber Co 309,488 506,268
8,527 GPU Inc 257,245 262,205
3,592 Grainger (W W) Inc 119,680 252,338
2,743 Great Atlantic & Pacific Tea Co 98,636 70,975
4,600 Great Lakes Chemical Corp 254,736 262,200
9,788 Great Western Financial Corp 185,612 259,382
9,701 Green Tree Financial Inc 328,777 380,764
68,531 GTE Corp 1,902,495 2,638,444
</TABLE>
---------------------
47
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
8,129 Halliburton Co $ 268,114 $ 419,660
5,026 Harcourt General Inc 120,083 277,687
2,200 Harland (John H) Co 53,487 66,000
3,366 Harnischfeger Industries Inc 81,458 127,067
7,312 Harrah's Entertainment Inc+ 51,456 136,186
2,758 Harris Corp 97,719 179,615
6,155 Hasbro Inc 113,065 228,504
26,289 Heinz (H J) Co 500,063 887,254
1,800 Helmerich & Payne Inc 44,183 78,525
7,706 Hercules Inc 145,850 421,904
10,922 Hershey Foods Corp 178,936 548,831
72,392 Hewlett Packard Co 1,108,164 3,529,110
8,671 HFS Inc+ 571,802 579,873
14,008 Hilton Hotels Corp 174,476 397,477
33,940 Home Depot Inc 643,884 1,930,338
10,490 Homestake Mining Co 164,095 153,416
9,004 Honeywell Inc 204,923 568,378
6,900 Household International Inc 191,166 567,525
18,688 Houston Industries Inc 334,450 413,472
11,628 Humana Inc+ 325,081 235,467
8,714 Illinois Tool Works Inc 228,654 628,497
11,938 Inco Ltd 294,149 367,094
7,734 Ingersoll-Rand Co 165,311 367,365
3,500 Inland Steel Industries Inc 96,637 62,563
58,260 Intel Corp 743,396 5,560,189
3,298 Intergraph Corp+ 75,324 36,278
37,534 International Business Machines Corp 4,701,917 4,672,983
7,863 International Flavors & Fragrances 165,822 343,023
21,131 International Paper Co 579,197 898,068
5,600 Interpublic Group Cos Inc 190,599 264,600
8,269 ITT Corp+ 219,897 360,735
8,369 ITT Hartford Group Inc 212,454 493,771
8,369 ITT Industries Inc 95,876 201,902
6,108 James River Corp 178,279 168,734
5,103 Jefferson-Pilot Corp 96,915 264,080
94,398 Johnson & Johnson 1,525,915 4,837,898
2,917 Johnson Controls Inc 99,990 218,775
</TABLE>
- ------------------------
48
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,800 Jostens Inc $ 72,467 $ 58,450
34,260 K Mart Corp 650,828 351,165
2,327 Kaufman & Broad Home Corp 29,501 30,251
15,135 Kellogg Co 554,136 1,042,423
3,583 Kerr-McGee Corp 140,583 218,115
16,472 KeyCorp 526,959 724,768
19,994 Kimberly-Clark Corp 621,787 1,761,971
2,700 King World Productions+ 61,725 99,563
6,876 Knight-Ridder Inc 183,538 254,412
8,870 Kroger Co+ 134,941 396,933
22,364 Laidlaw Inc Class B 200,672 246,004
38,774 Lilly (Eli) & Co 1,091,228 2,500,923
19,285 Limited Inc 406,108 368,826
7,380 Lincoln National Corp 235,164 323,798
5,192 Liz Claiborne Inc 155,353 193,402
14,117 Lockheed Martin Corp 483,461 1,272,295
8,126 Loews Corp 453,949 628,749
1,395 Longs Drug Stores Corp 49,059 60,683
2,453 Louisiana Land & Exploration Co 92,917 129,089
7,712 Louisiana-Pacific Corp 114,549 175,448
12,210 Lowe's Co Inc 157,404 499,084
9,202 LSI Logic Corp+ 334,196 213,947
1,634 Luby's Cafeterias Inc 31,203 39,216
5,254 Mallinckrodt Group Inc 107,440 218,698
4,501 Manor Care Inc 73,417 172,726
9,004 Marriott International 230,703 496,346
5,150 Marsh & McLennan Companies Inc 377,390 500,194
11,386 Masco Corp 339,536 341,580
19,651 Mattel Inc 198,335 508,470
17,710 May Co Department Stores Co 389,531 861,149
7,468 Maytag Corp 162,010 145,626
15,875 MBNA Corp 146,023 551,656
3,934 McDermott International Inc 93,772 85,565
49,666 McDonald's Corp 812,932 2,352,927
15,226 McDonnell Douglas Corp 195,883 799,365
7,116 McGraw-Hill Inc 233,074 303,320
48,942 MCI Communications 696,348 1,254,139
</TABLE>
---------------------
49
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,759 Mead Corp $ 126,366 $ 220,371
17,004 Medtronic Inc 219,424 1,090,382
9,254 Mellon Bank Corp 315,365 548,300
7,424 Melville Corp 286,336 327,584
2,662 Mercantile Stores Co Inc 110,421 143,748
86,237 Merck & Co Inc 2,347,539 6,068,929
1,996 Meredith Corp 34,497 98,553
11,913 Merrill Lynch & Co Inc 277,254 781,791
4,114 MGIC Investment Corp 257,711 277,181
14,794 Micron Technology Inc 283,229 451,217
42,568 Microsoft Corp+ 2,440,196 5,613,655
3,200 Millipore Corp 60,361 126,400
29,713 Minnesota Mining & Manufacturing Co 1,076,619 2,076,196
27,940 Mobil Corp 1,508,516 3,234,055
41,790 Monsanto Co 421,729 1,525,335
7,200 Moore Corp Ltd 175,797 132,300
13,228 Morgan (J P) & Co Inc 649,272 1,175,639
10,848 Morgan Stanley Group 539,111 539,688
10,056 Morton International Inc 157,704 399,726
41,972 Motorola Inc 907,928 2,166,805
595 NACCO Industries Inc Class A 22,972 28,411
4,750 Nalco Chemical Co 130,592 172,188
15,720 National City Corp 485,419 662,205
9,701 National Semiconductor+ 131,158 195,233
3,427 National Service Industries Inc 87,135 119,945
21,009 NationsBank 862,084 1,825,157
5,397 Navistar International Corp+ 176,884 45,875
6,953 New York Times Co Class A 215,942 234,664
11,300 Newell Co 180,887 339,000
7,082 Newmont Mining Corp 183,174 334,625
10,267 Niagara Mohawk Power Corp 178,464 82,136
3,600 NICOR Inc 74,500 121,500
10,200 Nike Inc Class B 159,875 1,239,300
9,900 NorAm Energy Corp 182,825 147,263
5,750 Nordstrom Inc 180,376 218,500
8,955 Norfolk Southern Corp 366,805 818,263
4,833 Northern States Power Co 174,170 225,339
</TABLE>
- ------------------------
50
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
18,287 Northern Telecom Ltd $ 476,270 $ 1,056,074
4,058 Northrop Grumman Corp 166,620 325,655
26,327 Norwest Corp 472,425 1,076,116
24,968 Novell Inc+ 601,579 274,648
6,226 Nucor Corp 112,358 315,970
31,020 NYNEX Corp 1,117,671 1,349,370
22,676 Occidental Petroleum Corp 633,454 530,052
10,860 Ohio Edison Co 223,570 210,413
1,960 ONEOK Inc 32,832 53,900
46,400 Oracle Systems Corp+ 259,805 1,974,900
7,472 Oryx Energy Co+ 198,205 132,628
1,429 Outboard Marine Corp 41,404 21,971
3,693 Owens Corning Fiberglass Corp 93,143 136,179
2,785 PACCAR Inc 92,334 152,479
5,893 Pacific Enterprises 241,493 178,263
29,548 Pacific Gas & Electric Co 727,353 642,669
30,372 Pacific Telesis Group 619,383 1,021,259
20,850 PacifiCorp 399,621 430,031
8,250 Pall Corp 96,925 233,063
10,712 Panenergy Corp 252,122 370,903
5,303 Parker Hannifin Corp 114,962 222,726
15,818 PECO Energy Co 351,871 375,678
15,938 Penney (J C) Co Inc 447,398 862,644
3,267 Pennzoil Co 217,724 172,743
2,494 Peoples Energy Corp 57,576 84,796
4,400 Pep Boys-Manny Moe & Jack 75,087 156,750
111,228 Pepsico Inc 1,148,693 3,142,191
3,071 Perkin-Elmer Corp 102,753 177,734
45,560 Pfizer Inc 1,090,210 3,604,935
36,167 Pharmacia and Upjohn Inc 1,125,799 1,491,889
4,720 Phelps Dodge Corp 136,312 302,670
58,588 Philip Morris Co Inc 2,272,768 5,258,273
18,619 Phillips Petroleum Co 368,445 795,962
5,928 Pioneer Hi Bred International Inc 224,247 358,644
10,676 Pitney Bowes Inc 261,650 561,825
17,063 Placer Dome Inc 265,542 403,113
24,257 PNC Bank Corp 634,800 809,577
</TABLE>
---------------------
51
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,209 Polaroid Corp $ 111,857 $ 141,196
2,071 Potlatch Corp 73,527 80,251
11,276 PP & L Resources Inc 291,461 246,663
13,170 PPG Industries Inc 320,483 716,119
10,894 Praxair Inc 189,117 468,442
13,984 Price/Costco Inc+ 270,845 286,672
48,606 Procter & Gamble Co 1,567,427 4,739,085
6,640 Providian Corp 159,298 285,520
17,371 Public Services Enterprise Group 467,604 464,674
1,938 Pulte Corp 31,111 49,661
9,580 Quaker Oats Co 229,680 350,868
7,570 Ralston-Purina Group 285,130 518,545
3,200 Raychem Corp 137,568 240,000
16,776 Raytheon Co 349,873 933,165
4,004 Reebok International Ltd 89,743 139,139
3,936 Republic New York Corp 231,102 272,076
4,520 Reynolds Metals Co 202,104 231,085
5,938 Rite Aid Corp 114,150 215,253
15,474 Rockwell International Corp 419,983 872,347
4,709 Rohm & Haas Co 196,562 308,440
6,039 Rowan Co Inc+ 50,096 112,476
38,046 Royal Dutch Petroleum Co 2,559,095 5,939,932
10,804 Rubbermaid Inc 207,744 264,698
2,770 Russell Corp 58,324 89,333
3,900 Ryan's Family Steak House+ 34,638 29,738
5,656 Ryder System Inc 150,251 167,559
8,966 SAFECO Corp 160,219 313,810
4,100 Safety-Kleen Corp 106,229 67,650
7,468 Salomon Inc 269,834 340,728
6,411 Santa Fe Energy Resources Inc+ 39,779 91,357
9,483 Santa Fe Pacific Gold Corp 164,562 118,538
34,376 Sara Lee Corp 535,646 1,228,942
43,216 SBC Communication Inc 1,056,314 2,079,770
26,136 Schering-Plough Corp 480,521 1,607,364
17,331 Schlumberger Ltd 826,186 1,464,470
5,496 Scientific-Atlanta Inc 34,139 87,249
7,466 Seagate Technology Inc+ 393,802 417,163
</TABLE>
- ------------------------
52
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
26,524 Seagram Co Ltd $ 548,115 $ 991,335
27,791 Sears Roebuck & Co 570,090 1,243,647
16,702 Service Corp International 191,010 505,236
1,662 Shared Medical System Corp 47,469 94,734
6,086 Sherwin Williams Co 115,074 282,238
2,952 Shoney's Inc+ 26,349 26,937
3,512 Sigma-Aldrich Corp 134,320 200,184
12,246 Silicon Graphics Inc+ 399,726 270,943
4,359 Snap-On Inc 98,931 140,033
6,110 Sonat Inc 118,841 270,368
47,582 Southern Co 676,430 1,076,543
10,274 Southwest Airlines Co 293,854 235,018
1,465 Springs Industries Inc Class A 49,682 65,193
30,500 Sprint Corp 937,747 1,185,688
5,722 St Jude Medical Inc+ 130,026 231,026
5,906 St Paul Co Inc 167,114 327,783
6,310 Stanley Works 109,910 177,469
7,141 Stone Container Corp 157,517 111,578
3,550 Stride Rite Corp 56,185 31,950
5,307 Sun Co Inc 170,516 122,061
13,000 Sun Microsystems Inc+ 185,194 807,625
15,800 SunTrust Banks Inc 216,716 647,800
4,852 Super Value Inc 128,611 133,430
12,942 Sysco Corp 181,624 435,175
8,418 Tandem Computers Inc+ 190,307 90,494
4,259 Tandy Corp 177,554 171,957
2,357 Tektronix Inc 73,337 96,342
46,388 Tele-Communication Inc Class A+ 619,032 692,921
6,264 Tellabs Inc+ 299,623 442,395
3,896 Temple-Inland Inc 131,169 205,514
15,010 Tenet Healthcare Corp+ 233,840 333,973
12,114 Tenneco Inc 563,407 607,214
18,792 Texaco Inc 901,656 1,728,864
13,460 Texas Instruments Inc 372,817 741,983
16,012 Texas Utilities Co 563,722 634,476
5,696 Textron Inc 196,169 484,160
2,880 Thomas & Betts Corp 82,671 118,080
</TABLE>
---------------------
53
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
27,912 Time Warner Inc $ 700,894 $ 1,078,101
7,452 Times Mirror Co Class A 190,013 331,614
2,288 Timken Co 67,918 89,804
5,160 TJX Companies Inc 104,315 185,115
5,100 Torchmark Corp 158,708 233,963
19,450 Toys R Us Inc+ 428,915 566,481
4,665 Transamerica Corp 193,384 325,967
34,037 Travelers Inc 719,462 1,672,068
4,361 Tribune Co 181,179 340,158
2,074 Trinova Corp 57,925 65,331
4,568 TRW Inc 238,763 424,824
4,400 Tupperware Corp+ 66,171 215,600
10,846 Tyco International Inc 258,626 467,734
10,948 U.S. Bancorp 271,097 432,446
2,457 U.S. Life Corp 46,896 73,710
33,632 U.S. West Inc 664,556 1,000,552
33,632 U.S. West Media Group+ 450,612 567,540
15,294 Unicom Corp 519,932 384,262
11,365 Unilever NV 800,045 1,791,408
4,882 Union Camp Corp 201,562 238,608
9,229 Union Carbide Corp 124,363 421,073
7,300 Union Electric Co 248,562 269,188
17,210 Union Pacific Corp 776,320 1,260,633
12,273 Unisys Corp+ 312,986 75,172
12,965 United Healthcare Corp 606,343 539,668
4,450 United States Surgical 406,116 189,125
8,678 United Technologies Corp 457,425 1,042,445
17,560 Unocal Corp 372,517 632,160
5,227 UNUM Corp 296,683 335,181
4,510 USAir Group Inc+ 141,517 74,415
8,025 USF & G Corp 236,576 148,463
13,340 UST Inc 196,300 395,198
20,422 USX - Marathon Group 488,163 441,626
5,990 USX - US Steel Group 163,089 170,715
4,466 VF Corp 175,532 268,518
25,211 Viacom Inc Class B+ 865,338 894,991
11,993 Wachovia Corp 470,937 593,654
</TABLE>
- ------------------------
54
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
162,814 Wal Mart Stores Inc $ 2,208,761 $ 4,294,219
17,480 Walgreen Co 210,833 646,760
19,236 Warner Lambert Co 459,784 1,269,576
6,818 Wells Fargo & Co 556,692 1,772,680
9,159 Wendy's International Inc 120,791 196,919
3,801 Western Atlas Inc+ 109,984 236,612
29,567 Westinghouse Electric Corp 752,074 550,685
7,189 Westvaco Corp 143,629 212,974
14,062 Weyerhaeuser Co 456,620 648,610
5,254 Whirlpool Corp 209,330 265,984
7,538 Whitman Corp 90,688 174,316
3,936 Willamette Industries Inc 269,485 257,808
7,328 Williams Co Inc 149,048 373,728
10,836 Winn-Dixie Stores Inc 175,205 377,906
35,036 WMX Technologies Inc 921,797 1,151,809
9,498 Woolworth Corp+ 241,610 195,896
27,534 WorldCom Inc+ 632,154 588,539
6,475 Worthington Industries Inc 75,359 129,500
8,210 Wrigley (Wm) Jr Co 131,057 494,653
22,932 Xerox Corp 563,824 1,229,675
1,985 Yellow Corp+ 63,459 25,805
------------ --------------
TOTAL COMMON STOCKS $199,593,172 $ 369,118,709
</TABLE>
---------------------
55
<PAGE>
MASTER INVESTMENT TRUST CORPORATE STOCK MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.48%
$ 34,000 U.S. Treasury Bills 4.78 %* 10/03/96 $ 33,986
311,000 U.S. Treasury Bills 4.75 * 10/24/96 310,011
41,000 U.S. Treasury Bills 4.97 * 11/07/96 40,787
711,000 U.S. Treasury Bills 5.00 * 11/14/96 706,702
180,000 U.S. Treasury Bills 5.05 * 12/15/96 178,391
530,000 U.S. Treasury Bills 5.08 * 12/12/96 524,763
--------------
TOTAL SHORT-TERM INSTRUMENTS $ 1,794,640
(Cost $1,794,478)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $201,387,650)**(Notes 1 and 3) 100.17% $ 370,913,349
Other Assets and Liabilities, Net (0.17) (639,551)
------ --------------
TOTAL NET ASSETS 100.00% $ 370,273,798
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $176,940,547
Gross Unrealized Depreciation (7,414,848)
------------
NET UNREALIZED APPRECIATION $169,525,699
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
56
<PAGE>
DIVERSIFIED INCOME FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 90.36%
AEROSPACE - 2.38%
40,000 Lockheed Martin Corp $ 3,388,172 $ 3,605,000
AUTOMOBILE & RELATED - 10.26%
140,000 Dana Corp $ 3,915,915 $ 4,235,000
165,000 Ford Motor Co 4,931,780 5,156,250
100,000 Genuine Parts Co 4,444,058 4,375,000
40,000 Goodrich (B F) Co 1,500,050 1,805,000
------------ --------------
$ 14,791,803 $ 15,571,250
BASIC INDUSTRIES - 3.74%
55,000 Louisiana-Pacific Corp $ 1,337,905 $ 1,251,250
30,000 Olin Corp 2,113,126 2,520,000
30,000 Phelps Dodge Corp 1,806,775 1,923,750
------------ --------------
$ 5,257,806 $ 5,695,000
BUILDING MATERIALS & SERVICES - 2.57%
130,000 Masco Corp $ 3,901,853 $ 3,900,000
COMPUTER SYSTEMS - 2.63%
32,000 International Business Machines Corp $ 3,066,470 $ 3,984,000
CONGLOMERATES - 2.10%
35,000 General Electric Co $ 1,884,452 $ 3,185,000
ELECTRICAL EQUIPMENT - 5.67%
60,000 AMP Inc $ 2,346,550 $ 2,325,000
155,000 Lexmark International Group Inc Class A+ 2,720,970 3,158,125
22,000 Texas Instruments Inc 1,120,260 1,212,750
35,000 Tecumseh Products Co Class A 1,840,000 1,898,750
------------ --------------
$ 8,027,780 $ 8,594,625
</TABLE>
---------------------
57
<PAGE>
DIVERSIFIED INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ENERGY & RELATED - 9.94%
35,000 Atlantic Richfield Corp $ 3,932,155 $ 4,462,500
45,000 El Paso Natural Gas Co 1,518,182 1,980,000
90,000 McDermott International Inc 1,642,760 1,957,500
11,500 Royal Dutch Petroleum Co 1,158,636 1,795,438
35,000 Sonat Inc 1,026,551 1,548,750
110,000 Ultramar Corp 2,868,428 3,327,500
------------ --------------
$ 12,146,712 $ 15,071,688
FINANCE & RELATED - 14.78%
25,000 Advanta Corp+ $ 925,000 $ 1,043,750
44,000 Bankers Trust N Y Corp 2,967,748 3,459,500
150,000 Block (H & R) Inc 5,029,718 4,462,500
120,000 Hanson Finance PLC 1,746,400 1,485,000
75,000 Household International Inc 3,659,960 6,168,750
290,000 Mercury Financial Corp 3,579,524 3,480,000
30,000 Loews Corp 2,266,399 2,321,250
------------ --------------
$ 20,174,749 $ 22,420,750
FOOD & RELATED - 3.68%
64,500 Heinz (H J) Co $ 1,851,428 $ 2,176,875
38,000 Philip Morris Co Inc 2,835,475 3,410,500
------------ --------------
$ 4,686,903 $ 5,587,375
HEALTHCARE - 1.62%
35,000 Aetna Inc $ 2,539,550 $ 2,463,125
MANUFACTURING PROCESSING - 1.85%
140,000 United Dominion Industries $ 3,148,926 $ 2,800,000
MEDICAL EQUIPMENT & SUPPLIES - 2.77%
90,000 Baxter International Inc $ 3,831,950 $ 4,207,500
</TABLE>
- ------------------------
58
<PAGE>
DIVERSIFIED INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS - 3.42%
40,000 American Home Products Corp $ 1,289,524 $ 2,550,000
40,000 Warner Lambert Co 2,026,600 2,640,000
------------ --------------
$ 3,316,124 $ 5,190,000
PUBLISHING & MEDIA - 2.69%
100,000 Readers Digest Association Class A $ 4,294,008 $ 4,087,500
REAL ESTATE INVESTMENT TRUSTS - 3.16%
50,000 American Health Properties Inc $ 1,061,212 $ 1,093,750
35,000 Evans Withycombe Residential Inc 736,343 765,625
20,000 Post Properties Inc 626,600 732,500
45,000 Smith (Chars E) Residential Realty Inc 1,107,347 1,085,624
38,000 Spieker Properties Inc 865,065 1,116,250
------------ --------------
$ 4,396,567 $ 4,793,749
RETAIL & RELATED - 5.00%
130,000 Rite Aid Corp $ 4,035,038 $ 4,712,500
75,000 Lancaster Colony Corp 2,779,525 2,868,750
------------ --------------
$ 6,814,563 $ 7,581,250
TELECOMMUNICATIONS - 4.10%
140,000 Alltel Corp $ 3,888,349 $ 3,902,500
60,000 GTE Corp 2,084,501 2,310,000
------------ --------------
$ 5,972,850 $ 6,212,500
TRANSPORTATION - 2.66%
55,000 Union Pacific Corp $ 3,608,605 $ 4,028,750
</TABLE>
---------------------
59
<PAGE>
DIVERSIFIED INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
UTILITIES - 5.34%
48,000 Duke Power Co $ 2,117,458 $ 2,238,000
130,000 Illinova Corp 3,454,728 3,445,000
70,000 Royal PTT Nederland ADR 2,498,815 2,415,000
------------ --------------
$ 8,071,001 $ 8,098,000
TOTAL COMMON STOCKS $123,320,844 $ 137,077,062
PREFERRED CONVERTIBLE STOCKS - 1.54%
55,000 Browning-Ferris Industries Inc expires 06/30/1998+ $ 1,896,080 $ 1,567,500
40,000 First Chicago NBD Corp expires 02/15/1997+ 730,167 765,000
------------ --------------
TOTAL PREFERRED CONVERTIBLE STOCKS $ 2,626,247 $ 2,332,500
</TABLE>
- ------------------------
60
<PAGE>
DIVERSIFIED INCOME FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 12.89%
U.S. TREASURY BILLS - 7.93%
$12,165,000 U.S. Treasury Bill 4.98 %* 12/19/96 $ 12,033,010
REPURCHASE AGREEMENTS - 4.96%
$ 7,521,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 10/01/96 $ 7,521,000
--------------
TOTAL SHORT-TERM INSTRUMENTS $ 19,554,010
(Cost $19,554,565)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $145,501,656)** (Notes 1 and 3) 104.79% $ 158,963,572
Other Assets and Liabilities, Net (4.79) (7,270,937)
------ --------------
TOTAL NET ASSETS 100.00% $ 151,692,635
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 16,553,099
Gross Unrealized Depreciation (3,091,183)
------------
NET UNREALIZED APPRECIATION $ 13,461,916
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
61
<PAGE>
EQUITY VALUE FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 97.53%
AEROSPACE - 0.50%
20,000 Rockwell International Corp $ 1,022,566 $ 1,127,500
AUTOMOBILE & RELATED - 7.20%
250,000 Dana Corp $ 8,134,234 $ 7,562,500
200,000 Ford Motor Co 5,957,750 6,250,000
50,000 General Motors Corp 1,693,054 2,400,000
------------ --------------
$ 15,785,038 $ 16,212,500
BASIC INDUSTRIES - 1.31%
180,000 Crompton & Knowles Corp $ 2,541,282 $ 2,947,500
BUILDING MATERIALS & SERVICES - 6.04%
220,000 Masco Corp $ 6,961,060 $ 6,600,000
30,000 Texas Industries Inc 1,205,324 1,796,250
80,000 Willamette Industries Inc 4,660,421 5,200,000
------------ --------------
$ 12,826,805 $ 13,596,250
COMPUTER SOFTWARE - 1.07%
115,000 BancTec Inc+ $ 1,830,758 $ 2,400,625
COMPUTER SYSTEMS - 5.67%
62,000 International Business Machines Corp $ 6,099,576 $ 7,719,000
240,000 Komag Inc+ 4,881,708 5,040,000
------------ --------------
$ 10,981,284 $ 12,759,000
CONGLOMERATES - 2.83%
70,000 General Electric Co $ 2,790,021 $ 6,370,000
</TABLE>
- ------------------------
62
<PAGE>
EQUITY VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRICAL EQUIPMENT - 6.66%
270,000 Lexmark International Group Inc Class A+ $ 5,411,711 $ 5,501,250
125,000 Seagate Technology Inc+ 3,710,785 6,984,375
90,000 Technitrol Inc 1,864,047 2,497,500
------------ --------------
$ 10,986,543 $ 14,983,125
ENERGY & RELATED - 8.28%
25,000 Atlantic Richfield Corp $ 2,953,240 $ 3,187,500
60,000 Exxon Corp 4,121,284 4,995,000
30,000 Mobil Corp 2,118,677 3,472,500
30,000 Royal Dutch Petroleum Co ADR (Netherlands) 3,005,277 4,683,750
24,890 Texaco Inc 1,571,829 2,289,880
------------ --------------
$ 13,770,307 $ 18,628,630
FINANCE & RELATED - 17.28%
90,300 American Bankers Insurance Group $ 2,146,794 $ 4,503,713
85,000 BankAmerica Corp 3,650,510 6,980,625
30,000 Bankers Trust N Y Corp 2,314,137 2,358,750
27,040 Chase Manhattan Bank 930,320 2,166,580
150,000 Edwards A G & Sons Inc 3,872,426 4,368,750
40,000 First Union Corp 1,969,173 2,670,000
92,550 Fremont General Corp 1,306,814 2,730,225
60,000 NationsBank 3,354,162 5,212,500
68,000 Providian Corp 2,058,634 2,924,000
41,900 Republic New York Corp 1,744,592 2,896,338
42,300 Travelers Inc 607,005 2,077,987
------------ --------------
$ 23,954,567 $ 38,889,468
FOOD & RELATED - 6.21%
60,000 American Home Products Corp $ 3,040,764 $ 3,825,000
346,500 Archer-Daniels-Midland Co 6,403,820 6,670,125
38,700 Philip Morris Co Inc 2,113,537 3,473,325
------------ --------------
$ 11,558,121 $ 13,968,450
</TABLE>
---------------------
63
<PAGE>
EQUITY VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTHCARE - 2.66%
85,000 Aetna Inc $ 6,031,560 $ 5,981,875
MACHINERY - 1.78%
200,000 United Dominion Industries $ 4,520,550 $ 4,000,000
MANUFACTURING PROCESSING - 2.87%
40,000 Johnson Controls Inc $ 2,360,389 $ 3,000,000
197,300 Owens-Illinois Inc+ 1,951,269 3,452,750
------------ --------------
$ 4,311,658 $ 6,452,750
MEDICAL EQUIPMENT & SUPPLIES - 1.66%
80,000 Baxter International Inc $ 2,679,095 $ 3,740,000
MISCELLANEOUS - 2.50%
150,000 Lancaster Colony Corp $ 5,636,866 $ 5,625,000
PHARMACEUTICALS - 2.80%
40,000 Bristol-Myers Squibb Co $ 2,389,411 $ 3,855,000
60,000 Pharmacia and Upjohn Inc 1,588,076 2,475,000
------------ --------------
$ 3,977,487 $ 6,330,000
RETAIL & RELATED - 8.21%
250,000 Price/Costco Inc+ $ 3,676,250 $ 5,125,000
220,000 Rite Aid Corp 6,553,900 7,975,000
120,000 Sears Roebuck & Co 4,336,868 5,370,000
------------ --------------
$ 14,567,018 $ 18,470,000
REAL ESTATE INVESTMENT TRUST - 0.48%
50,000 Evans Withycombe Residential Inc $ 1,047,750 $ 1,093,750
</TABLE>
- ------------------------
64
<PAGE>
EQUITY VALUE FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS - 3.03%
100,000 GTE Corp $ 3,309,623 $ 3,850,000
100,000 U.S. West Inc 2,465,683 2,975,000
------------ --------------
$ 5,775,306 $ 6,825,000
TRANSPORTATION - 2.25%
70,000 Conrail Inc $ 5,011,580 $ 5,066,250
UTILITIES - 6.24%
100,000 Cinergy Corp $ 2,838,307 $ 3,087,500
200,000 Illinova Corp 5,380,141 5,300,000
250,000 Southern Co 5,843,251 5,656,250
------------ --------------
$ 14,061,699 $ 14,043,750
TOTAL COMMON STOCKS $175,667,861 $ 219,511,423
</TABLE>
---------------------
65
<PAGE>
EQUITY VALUE FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 2.58%
REPURCHASE AGREEMENTS
$ 5,800,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 % 10/01/96 $ 5,800,000
--------------
TOTAL SHORT-TERM INSTRUMENTS
(Cost $5,800,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $181,467,861)*(Notes 1 and 3) 100.11% $ 225,311,423
Other Assets and Liabilities (0.11) (238,855)
------ --------------
TOTAL NET ASSETS 100.00% $ 225,072,568
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME PRODUCING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 45,625,601
Gross Unrealized Depreciation (1,782,039)
------------
NET UNREALIZED APPRECIATION $ 43,843,562
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
66
<PAGE>
GROWTH AND INCOME FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 97.12%
ADVERTISING - 2.07%
126,600 Omnicom Group $ 3,398,779 $ 5,918,550
AEROSPACE - 0.09%
3,000 Boeing Co $ 209,550 $ 283,500
AUTOMOBILE & RELATED - 0.16%
1,400 General Motors Corp $ 78,576 $ 67,200
6,800 General Motors Corp Class H 249,048 392,700
------------ --------------
$ 327,624 $ 459,900
BASIC INDUSTRIES - 6.87%
5,600 Air Products & Chemicals Inc $ 252,304 $ 326,200
82,300 Aluminum Co of America 4,979,342 4,855,700
126,500 Case Corp 6,504,064 6,166,875
227,600 Monsanto Co 5,307,494 8,307,400
------------ --------------
$ 17,043,204 $ 19,656,175
COMMERCIAL SERVICES - 4.15%
161,100 CUC International Inc+ $ 5,484,657 $ 6,423,863
179,400 Service Corp International 3,660,866 5,426,850
------------ --------------
$ 9,145,523 $ 11,850,713
COMPUTER SOFTWARE - 4.12%
6,200 Automatic Data Processing $ 164,360 $ 270,475
100,200 First Data Corp 7,108,711 8,178,825
3,600 Microsoft Corp+ 279,963 474,750
67,100 Oracle Systems Corp+ 2,270,868 2,855,944
------------ --------------
$ 9,823,902 $ 11,779,994
</TABLE>
---------------------
67
<PAGE>
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER SYSTEMS - 8.41%
77,100 Cisco Systems Inc+ $ 2,740,191 $ 4,785,019
37,036 Danka Business Systems Plc 1,087,588 1,472,181
79,500 Hewlett Packard Co 3,223,087 3,875,625
263,900 Komag Inc+ 7,544,983 5,541,900
320,508 Reynolds & Reynolds Co Class A 7,362,715 8,373,272
------------ --------------
$ 21,958,564 $ 24,047,997
CONSUMER GOODS - 4.91%
86,200 Gillette Co $ 4,699,326 $ 6,217,175
286,500 Mattel Inc 6,962,429 7,413,188
4,000 Procter & Gamble Co 257,446 390,000
------------ --------------
$ 11,919,201 $ 14,020,363
CONGLOMERATES - 0.16%
4,900 General Electric Co $ 255,300 $ 445,900
ELECTRICAL EQUIPMENT - 0.14%
11,000 NIPSCO Industries Inc $ 333,508 $ 393,250
ENERGY & RELATED - 9.36%
4,000 Amoco Corp $ 238,775 $ 282,000
100,900 Anadarko Petroleum Corp 4,952,184 5,637,788
10,000 Ashland Inc 414,015 397,500
31,800 Mobil Corp 2,959,758 3,680,850
163,500 Reading & Bates Corp+ 3,282,760 4,434,938
5,600 Schlumberger Ltd 391,467 473,200
112,800 Sonat Inc 3,522,823 4,991,400
27,600 Texaco Inc 1,914,586 2,539,200
4,500 Tosco Corp 139,638 246,938
134,800 Ultramar Corp 4,047,611 4,077,700
------------ --------------
$ 21,863,617 $ 26,761,514
</TABLE>
- ------------------------
68
<PAGE>
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ENTERTAINMENT & LEISURE - 1.30%
2,500 Disney (Walt) Co $ 122,438 $ 158,438
182,500 La Quinta Inns Inc 3,459,006 3,558,750
------------ --------------
$ 3,581,444 $ 3,717,188
FINANCE & RELATED - 12.66%
35,500 American International Group Inc $ 3,267,696 $ 3,576,625
14,000 Bank of New York Inc 221,138 411,250
57,300 Citicorp 2,859,800 5,192,813
64,900 Federal Home Loan Mortgage Corp 5,520,651 6,352,088
5,600 Federal National Mortgage Assoc 107,503 195,300
78,600 Household International Inc 2,910,032 6,464,850
131,800 MBNA Corp 3,084,949 4,580,050
5,800 Mellon Bank Corp 201,183 343,650
75,000 Money Store Inc 1,754,063 1,987,500
305,800 Schwab (Charles) Corp 6,787,350 7,071,625
------------ --------------
$ 26,714,365 $ 36,175,751
FOOD & RELATED - 5.69%
8,000 Albertson's Inc $ 244,280 $ 337,000
11,000 Coca-Cola Co 270,215 559,625
51,800 Colgate-Palmolive Co 4,434,722 4,500,125
6,000 CPC International Inc 410,885 449,250
7,500 McDonald's Corp 225,889 355,313
62,099 Philip Morris Co Inc 4,640,740 5,573,385
126,000 Ralcorp Holdings Inc+ 2,989,019 2,614,500
50,000 Seagram Co Ltd 1,916,500 1,868,750
------------ --------------
$ 15,132,250 $ 16,257,948
HEALTHCARE - 3.29%
62,000 Aetna Inc $ 4,248,096 $ 4,363,250
7,000 Columbia HCA Healthcare Corp 269,346 398,125
208,900 Tenet Healthcare Corp+ 4,398,678 4,648,025
------------ --------------
$ 8,916,120 $ 9,409,400
</TABLE>
---------------------
69
<PAGE>
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MANUFACTURING PROCESSING - 9.02%
84,100 Allied Signal Inc $ 3,446,740 $ 5,540,088
223,500 Danaher Corp 7,472,945 9,247,313
87,200 Harsco Corp 4,263,256 5,493,600
75,200 Potash Corp of Saskatchewan Inc 5,293,543 5,499,000
------------ --------------
$ 20,476,484 $ 25,780,001
MEDICAL EQUIPMENT & SUPPLIES - 2.97%
6,900 Abbott Laboratories $ 233,541 $ 339,825
165,800 Baxter International Inc 7,414,123 7,751,150
6,000 Medtronic Inc 316,741 384,750
------------ --------------
$ 7,964,405 $ 8,475,725
PHARMACEUTICALS - 3.91%
76,900 Astra AB ADR Class A $ 3,449,227 $ 3,210,575
6,500 Merck & Co Inc 247,132 457,438
80,000 Pharmacia and UpJohn Inc 3,200,000 3,300,000
69,100 Smithkline Beecham Plc 3,443,859 4,206,463
------------ --------------
$ 10,340,218 $ 11,174,476
PUBLISHING & MEDIA - 0.78%
50,000 Time Warner Inc $ 1,877,750 $ 1,931,250
4,000 Tribune Co 243,338 312,000
------------ --------------
$ 2,121,088 $ 2,243,250
REAL ESTATE INVESTMENT TRUSTS - 1.03%
100,000 Spieker Properties Inc $ 2,929,145 $ 2,937,500
RETAIL & WHOLESALE - 3.70%
55,750 Circuit City Stores Inc $ 2,007,785 $ 2,013,969
35,000 Federated Department Stores Inc+ 1,151,675 1,172,500
6,000 Home Depot Inc 264,475 341,250
7,000 May Co Department Stores Co 295,624 340,375
80,000 Penney (J C) Co Inc 4,382,930 4,330,000
</TABLE>
- ------------------------
70
<PAGE>
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
23,000 Price/Costco Inc+ $ 390,500 $ 471,500
6,000 Sherwin Williams Co 196,502 278,250
46,000 Wal Mart Stores Inc 1,176,680 1,213,250
11,000 Walgreen Co 327,270 407,000
------------ --------------
$ 10,193,441 $ 10,568,094
SEMICONDUCTORS - 2.21%
66,300 Intel Corp $ 3,054,402 $ 6,327,506
TELECOMMUNICATIONS - 10.12%
210,200 Airtouch Communications+ $ 6,384,914 $ 5,806,775
182,700 Alltel Corp 4,668,120 5,092,763
5,000 AT & T Corp 255,500 261,250
490,500 Ericson Telefonaktiebolaget L M Class B 10,341,438 12,446,438
5,500 SBC Communication Inc 232,000 264,688
170,000 U.S. West Inc 5,087,740 5,057,500
------------ --------------
$ 26,969,712 $ 28,929,414
TOTAL COMMON STOCKS $234,671,846 $ 277,614,109
PREFERRED STOCKS - 1.55%
CONVERTIBLES - 1.14%
170,000 First Chicago NBD Corp expires 02/15/1997+ $ 3,056,134 $ 3,251,250
TELECOMMUNICATIONS - 0.41%
41,300 Airtouch Communications Inc $ 1,185,104 $ 1,177,050
------------ --------------
TOTAL PREFERRED STOCKS $ 4,241,238 $ 4,428,300
</TABLE>
---------------------
71
<PAGE>
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS - 0.36%
$ 900,000 HFS Inc 4.75 % 03/01/03 $ 1,037,250
(Cost $910,313)
SHORT-TERM INSTRUMENTS - 17.65%
REPURCHASE AGREEMENTS - 2.25%
$ 6,438,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 % 10/01/96 $ 6,438,000
SHORT-TERM FEDERAL AGENCIES - 5.95%
$17,000,000 Federal Home Loan Mortgage Corp 5.65 %* 10/01/96 $ 16,997,332
U.S. TREASURY BILLS - 9.45%
$27,295,000 U.S. Treasury Bill 4.98 %* 12/19/96 $ 26,998,840
--------------
TOTAL SHORT-TERM INSTRUMENTS $ 50,434,172
(Cost $50,427,022)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $290,250,419)** (Notes 1 and 3) 116.68% $ 333,513,831
Other Assets and Liabilities, Net (16.68) (47,676,052)
------ --------------
TOTAL NET ASSETS 100.00% $ 285,837,779
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 47,675,259
Gross Unrealized Depreciation (4,411,846)
------------
NET UNREALIZED APPRECIATION $ 43,263,413
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
72
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 88.61%
ADVERTISING - 3.55%
22,500 HA-LO Industries inc+ $ 646,875 $ 652,500
6,000 Outdoor Systems Inc+ 250,500 282,000
------------ --------------
$ 897,375 $ 934,500
BASIC INDUSTRIES - 1.72%
15,000 Gibraltar Steel Corp+ $ 331,875 $ 337,500
100,000 Quadrax Corp+ 146,875 115,625
------------ --------------
$ 478,750 $ 453,125
BIOTECHNOLOGY - 3.62%
10,000 Anesta Corp+ $ 135,000 $ 141,250
10,000 Aronex Pharmaceuticals Inc+ 103,750 91,250
20,000 Neurex Corp+ 340,000 382,500
35,000 Neurobiological Technologies+ 196,875 157,227
20,000 Palomar Medical Tech Inc+ 173,750 180,000
------------ --------------
$ 949,375 $ 952,227
COMMERCIAL SERVICES - 1.82%
8,000 Learning Tree International Inc+ $ 240,000 $ 296,000
20,000 Stericycle Inc+ 187,500 182,500
------------ --------------
$ 427,500 $ 478,500
COMPUTER SOFTWARE - 17.92%
8,500 Bell & Howell Co+ $ 256,063 $ 269,875
20,000 E*Trade Group Inc+ 194,165 263,750
20,000 Envoy Corp+ 675,000 775,000
20,000 GT Interactive Software+ 410,000 455,000
15,000 Imnet Systems Inc+ 352,500 292,500
25,000 Inference Corp Class A+ 421,250 443,750
25,000 Intelligroup Inc+ 270,566 337,500
20,000 Mercury Interactive Corp+ 277,500 277,500
</TABLE>
---------------------
73
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
30,000 Optika Imaging Systems Inc+ $ 230,625 $ 236,250
15,000 Premenos Tech Corp+ 285,000 303,750
7,723 Pure Atria Corp+ 264,995 291,543
20,000 Summit Medical System Inc+ 260,000 280,000
20,000 Vanstar Corp+ 420,000 485,000
------------ --------------
$ 4,317,664 $ 4,711,418
COMPUTER SYSTEMS - 4.24%
15,000 3D Systems Corp+ $ 191,250 $ 210,000
20,000 Cylink Corp+ 287,500 287,500
25,000 Mylex Corp+ 444,554 393,750
5,000 VeriFone Inc+ 234,375 223,750
------------ --------------
$ 1,157,679 $ 1,115,000
ELECTRICAL EQUIPMENT - 2.00%
11,200 BMC Industries Inc $ 320,600 $ 320,600
31,500 Interlink Electronics Inc+ 216,563 204,750
------------ --------------
$ 537,163 $ 525,350
ENERGY & RELATED - 3.47%
10,000 3-D Geophysical Inc+ $ 92,500 $ 82,500
10,000 KCS Energy 335,000 356,250
20,000 Marine Drilling Co Inc+ 187,500 192,500
20,000 Pride Petroleum Services Inc 301,250 282,500
------------ --------------
$ 916,250 $ 913,750
ENTERTAINMENT & LEISURE - 4.31%
20,000 Family Golf Centers Inc+ $ 670,000 $ 580,000
20,000 Mikohn Gaming Corp+ 180,000 177,500
15,000 Regal Cinemas Inc+ 380,000 375,000
------------ --------------
$ 1,230,000 $ 1,132,500
</TABLE>
- ------------------------
74
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
FINANCE & RELATED - 5.36%
25,000 Applied Graphics Technologies+ $ 400,000 $ 371,875
6,000 IMC Mortgage Co+ 204,000 192,000
15,000 Medallion Financial Corp+ 195,000 217,500
25,000 NHP Inc+ 475,000 468,750
5,000 Redwood Trust Inc 160,000 160,000
------------ --------------
$ 1,434,000 $ 1,410,125
FOOD & RELATED - 1.18%
15,000 NuCo2 Inc+ $ 326,250 $ 311,250
HEALTHCARE & RELATED - 11.14%
15,000 Enterprises Systems Inc+ $ 371,250 $ 386,250
15,000 Fresenius USA Inc+ 378,750 387,810
20,000 Genesis Health Ventures Inc+ 527,500 562,500
10,000 Medicis Pharmaceutical Corp Class A+ 450,000 482,500
30,000 Orthodontic Centers of America Inc+ 637,500 611,250
15,000 Renal Treatment Centers+ 493,125 498,750
------------ --------------
$ 2,858,125 $ 2,929,060
MANUFACTURING PROCESSING - 3.49%
10,000 Applied Biometrics Inc+ $ 160,000 $ 151,250
5,000 Century Aluminum Co 74,375 73,750
30,000 Cima Labs Inc+ 213,750 243,750
20,000 Microlog Corp+ 127,500 135,000
20,000 Mobile Telecommunication Technologies Corp+ 287,500 315,000
------------ --------------
$ 863,125 $ 918,750
MEDICAL EQUIPMENT & SUPPLIES - 4.95%
25,000 Cardiovascular Dynamics Inc+ $ 387,500 $ 381,250
23,800 Endosonics Corp+ 330,225 333,200
11,000 General Surgical Innovations Inc+ 105,188 121,000
13,000 Innovasive Devices Inc+ 134,875 123,500
</TABLE>
---------------------
75
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
10,000 Nitinol Medical Technologies Inc+ $ 110,000 $ 112,500
15,000 Urologix Inc+ 217,498 230,624
------------ --------------
$ 1,285,286 $ 1,302,074
MISCELLANEOUS STOCKS - 3.59%
9,000 Carriage Services Inc+ $ 168,750 $ 173,250
10,000 Equity Corp International+ 320,000 317,500
20,000 Mail Boxes Etc+ 385,000 452,500
------------ --------------
$ 873,750 $ 943,250
RETAIL & RELATED - 3.08%
5,000 American Residential Services+ $ 75,000 $ 96,250
30,000 Paul Harris Stores Inc+ 244,063 300,000
22,000 Renter's Choice Inc+ 407,000 412,500
------------ --------------
$ 726,063 $ 808,750
SEMICONDUCTORS - 0.98%
15,000 ESS Technology Inc+ $ 251,250 $ 256,875
SHELTER & RELATED - 2.61%
19,000 American Homestar Corp+ $ 456,000 $ 461,938
14,000 LSI Industries Inc 227,500 224,000
------------ --------------
$ 683,500 $ 685,938
TELECOMMUNICATIONS - 8.44%
20,000 Accom Inc+ $ 32,500 $ 40,000
7,000 Aspect Telecommunications Corp+ 397,250 435,750
10,000 ATC Communication Group Inc+ 188,750 175,000
10,000 EIS International Inc+ 157,500 140,000
15,000 Farallon Communications+ 150,000 157,500
15,000 Intermedia Communications Inc+ 468,750 438,750
15,000 Inter-Tel Inc+ 337,500 303,750
</TABLE>
- ------------------------
76
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
15,000 TresCom International Inc+ $ 187,500 $ 195,000
20,000 Winstar Communications Inc+ 382,500 332,500
------------ --------------
$ 2,302,250 $ 2,218,250
TRANSPORTATION - 1.14%
7,000 Atlas Air Inc+ $ 292,750 $ 299,250
------------ --------------
TOTAL COMMON STOCKS $ 22,808,105 $ 23,299,942
</TABLE>
---------------------
77
<PAGE>
MASTER INVESTMENT TRUST SMALL CAP MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 11.54%
U.S. TREASURY BILLS - 7.52%
$ 2,000,000 U.S. Treasury Bill 4.98 * % 12/19/96 $ 1,978,300
REPURCHASE AGREEMENTS - 4.02%
$ 1,057,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.20 10/01/96 $ 1,057,000
--------------
TOTAL SHORT-TERM INSTRUMENTS $ 3,035,300
(Cost $3,034,507)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $25,842,612)** (Notes 1 and 3) 100.15% $ 26,335,242
Other Assets and Liabilities, Net (0.15) (38,980 )
------ --------------
TOTAL NET ASSETS 100.00% $ 26,296,262
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,106,145
Gross Unrealized Depreciation (613,515)
------------
NET UNREALIZED APPRECIATION $ 492,630
------------
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
78
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
---------------------
79
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH BALANCED
FUND FUND
- -------------------------------------------------------------------------
<S> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $41,480,239(3) $101,925,235
Cash 0 0
Receivables:
Dividends and Interest 0 584,699
Fund shares sold 83,902 1,786
Investment securities sold 0 2,903,434
Due from management company 13,839 0
Organizational expenses, net of
amortization 0 0
Prepaid expenses 0 33,790
TOTAL ASSETS 41,577,980 105,448,944
LIABILITIES
Cash overdraft due to custodian (Note 2) 0 10,433
Payables:
Investment securities purchased 0 0
Distribution to shareholders 0 238,889
Fund shares redeemed 2,500 30,153
Due to sponsor and distributor (Note
2) 17,605 13,563
Due to advisor (Note 2) 0 130,513
Other 112,229 56,951
TOTAL LIABILITIES 132,334 480,502
TOTAL NET ASSETS
$41,445,646 $104,968,442
NET ASSETS CONSIST OF:
Paid-in capital - Class A(1) $26,388,690 $ 24,696,983
Paid-in capital - Class B 14,438,721 1,549
Paid-in capital - Institutional Class N/A 69,033,461
Undistributed (overdistributed) net
investment income (131,231) 137,124
Undistributed net realized gain (loss)
on investments (3,001,798) 223,034
Net unrealized appreciation
(depreciation) of investments 3,751,264 10,876,291
TOTAL NET ASSETS $41,445,646 $104,968,442
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A(1) $26,902,003 $ 32,639,957
Shares outstanding - Class A(1) 1,386,498 2,847,645
Net asset value per share - Class A(1) $ 19.40 $ 11.46
Maximum offering price per share - Class
A(1) $ 20.31(2) $ 12.00(2)
Net Assets - Class B $14,543,643 $ 1,549
Shares outstanding - Class B 609,633 151
Net asset value and offering price per
share - Class B $ 23.86 $ 10.24
Net Assets - Institutional Class N/A $ 72,326,936
Shares outstanding - Institutional Class N/A 6,314,555
Net asset value and offering price per
share - Institutional Class N/A $ 11.45
INVESTMENT AT COST (NOTE 3) N/A $ 91,048,944
- -------------------------------------------------------------------------
</TABLE>
(1) INCLUDES FUNDS WITH A SINGLE CLASS.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(3) INVESTMENT IN MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
- ------------------------
80
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
CORPORATE DIVERSIFIED EQUITY GROWTH AND
STOCK INCOME VALUE INCOME SMALL CAP
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $370,264,538(3) $158,963,572 $225,311,423 $333,513,831 $24,662,106(3)
Cash 0 54 39,864 0 0
Receivables:
Dividends and Interest 1,684,242 542,195 364,508 309,127 0
Fund shares sold 8,664 378,673 7,741 173,818 4,775
Investment securities sold 0 0 0 4,385,128
Due from management company 0 0 0 0 0
Organizational expenses, net of
amortization 0 25,015 0 9,735 45,031
Prepaid expenses 14,424 6,430 45,319 5,442 0
TOTAL ASSETS 371,971,868 159,915,939 225,768,855 338,397,081 24,711,912
LIABILITIES
Cash overdraft due to custodian (Note 2) 0 0 0 2,436 0
Payables:
Investment securities purchased 0 7,168,237 0 51,932,268 4,775
Distribution to shareholders 1,208,599 806,304 166,602 242,641 0
Fund shares redeemed 0 0 148,801 0 0
Due to sponsor and distributor (Note
2) 147,051 51,607 38,246 97,040 45,873
Due to advisor (Note 2) 62,989 121,804 294,270 166,042 1,333
Other 113,968 75,352 48,368 118,875 10,461
TOTAL LIABILITIES 1,532,607 8,223,304 696,287 52,559,302 62,442
TOTAL NET ASSETS
$370,439,261 $151,692,635 $225,072,568 $285,837,779 $24,649,470
NET ASSETS CONSIST OF:
Paid-in capital - Class A(1) $192,017,808 $113,225,641 $ 20,273,901 $216,154,746 $ 94,136
Paid-in capital - Class B N/A 15,687,077 26 12,568,503 25
Paid-in capital - Institutional Class N/A N/A 161,141,441 14,208,642 24,048,421
Undistributed (overdistributed) net
investment income 0 0 (17,078) (7,901) (12,636)
Undistributed net realized gain (loss)
on investments 8,896,306 9,318,001 (169,284) (349,624) 58,619
Net unrealized appreciation
(depreciation) of investments 169,525,147 13,461,916 43,843,562 43,263,413 460,905
TOTAL NET ASSETS $370,439,261 $151,692,635 $225,072,568 $285,837,779 $24,649,470
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A(1) $370,439,261 $134,647,796 $ 18,452,741 $254,497,616 $ 95,955
Shares outstanding - Class A(1) 8,011,379 9,139,730 1,458,095 14,211,339 4,273
Net asset value per share - Class A(1) $ 46.24 $ 14.73 $ 12.66 $ 17.91 $ 22.45
Maximum offering price per share - Class
A(1) $ 46.24 $ 15.42(2) $ 13.26(2) $ 18.75(2) $ 23.51(2)
Net Assets - Class B N/A $ 17,044,839 $ 26 $ 12,832,438 $ 25
Shares outstanding - Class B N/A 1,235,771 3 1,007,362 1
Net asset value and offering price per
share - Class B N/A $ 13.79 $ 10.34 $ 12.74 $ 22.46
Net Assets - Institutional Class N/A N/A $206,619,801 $ 18,507,725 $24,553,490
Shares outstanding - Institutional Class N/A N/A 16,330,360 880,888 1,093,769
Net asset value and offering price per
share - Institutional Class N/A N/A $ 12.65 $ 21.01 $ 22.45
INVESTMENT AT COST (NOTE 3) N/A $145,501,656 $181,467,861 $290,250,419 N/A
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES FUNDS WITH A SINGLE CLASS.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(3) INVESTMENT IN MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
---------------------
81
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH BALANCED
FUND (1) FUND
------------ -----------
FOR THE FOR THE
PERIOD ENDED YEAR ENDED
SEPT. 30, SEPT. 30,
1996 1996
- -------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 5)
Dividends $ 14,025 $ 1,695,289
Interest 44,025 3,615,714
Expenses allocated from Master
Portfolio (72,743) N/A
TOTAL INVESTMENT INCOME (LOSS) (14,693) 5,311,003
EXPENSES (NOTE 2)
Advisory 0 754,931
Administration fees 3,829 182,083
Custody fees 0 25,343
Shareholder servicing fees 31,915 88,471
Portfolio accounting fees 0 38,371
Transfer agency fees 0 131,243
Distribution fees 40,854 82,632
Amortization of organization expenses 0 4,329
Legal and audit fees 19,508 27,484
Registration fees 22,951 19,213
Directors' fees 2,869 6,640
Shareholder reports 43,033 63,759
Other 521 99,377
TOTAL EXPENSES 165,480 1,523,876
Less:
Waived and reimbursed fees (Note 2) (48,942) (209,580)
Net expenses 116,538 1,314,296
NET INVESTMENT INCOME (LOSS) (131,231) 3,996,707
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain (loss) on sale of
investments (3,001,798)(3) 11,895,904
Net change in unrealized appreciation
(depreciation) of investments 3,751,264(3) 3,445,959
NET GAIN (LOSS) ON INVESTMENTS 749,466 15,341,863
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $ 618,235 $19,338,570
- -------------------------------------------------------------------------
</TABLE>
(1) THIS FUND COMMENCED OPERATIONS ON MARCH 5, 1996.
(2) THIS FUND COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
(3) INCLUDES ALLOCATIONS FROM THE MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
- ---------------------
82
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CORPORATE STOCK FUND DIVERSIFIED INCOME FUND
--------------------------- --------------------------- EQUITY
VALUE FUND
FOR THE FOR THE -----------
NINE NINE
MONTHS FOR THE MONTHS FOR THE FOR THE
ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED
SEPT. 30, DEC. 31, SEPT. 30, DEC. 31, SEPT. 30,
1996 1995 1996 1995 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 5)
Dividends $ 5,960,380 $ 7,225,361 $ 2,795,209 $ 2,254,175 $ 5,487,475
Interest 94,378 110,982 274,618 319,781 555,570
Expenses allocated from Master
Portfolio (738,290) N/A N/A N/A N/A
TOTAL INVESTMENT INCOME (LOSS) 5,316,468 7,336,343 3,069,827 2,573,956 6,043,045
EXPENSES (NOTE 2)
Advisory 538,107 1,398,439 415,025 312,512 1,378,145
Administration fees 79,533 92,555 24,902 18,751 334,341
Custody fees 0 0 17,679 15,053 48,252
Shareholder servicing fees 793,396 861,478 249,015 187,508 67,531
Portfolio accounting fees 0 0 63,818 64,466 38,482
Transfer agency fees 339,133 152,625 93,582 54,528 90,763
Distribution fees 132,039 137,173 87,741 58,167 58,241
Amortization of organization expenses 0 0 10,843 14,838 0
Legal and audit fees 27,525 38,305 26,620 29,184 38,837
Registration fees 47,031 51,775 33,691 36,323 24,182
Directors' fees 3,743 5,000 3,743 5,000 6,638
Shareholder reports 149,729 121,465 56,149 27,946 38,489
Other 8,573 8,938 27,436 25,031 78,096
TOTAL EXPENSES 2,118,809 2,867,753 1,110,244 849,307 2,201,997
Less:
Waived and reimbursed fees (Note 2) (185,544) (108,638) (148,222) (146,911) (102,285)
Net expenses 1,933,265 2,759,115 962,022 702,396 2,099,712
NET INVESTMENT INCOME (LOSS) 3,383,203 4,577,228 2,107,805 1,871,560 3,943,333
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 7,781,779(3) 6,005,161 7,772,450 3,545,900 27,944,178
Net change in unrealized appreciation
(depreciation) of investments 30,469,349(3) 76,552,587 2,900,227 10,976,829 17,614,459
NET GAIN (LOSS) ON INVESTMENTS 38,251,128 82,557,748 10,672,677 14,522,729 45,558,637
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $41,634,331 $87,134,976 $12,780,482 $16,394,289 $49,501,970
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THIS FUND COMMENCED OPERATIONS ON MARCH 5, 1996.
(2) THIS FUND COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
(3) INCLUDES ALLOCATIONS FROM THE MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
---------------------
83
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SMALL
GROWTH AND INCOME FUND CAP
--------------------------- FUND (2)
--------
FOR THE
NINE FOR THE
MONTHS FOR THE PERIOD
ENDED YEAR ENDED ENDED
SEPT. 30, DEC. 31, SEPT.
1996 1995 30, 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME (NOTE 5)
Dividends $ 2,354,260 $ 3,116,428 $ 374
Interest 571,670 513,058 4,319
Expenses allocated from Master
Portfolio N/A N/A (9,948)
TOTAL INVESTMENT INCOME (LOSS) 2,925,930 3,629,486 (5,255)
EXPENSES (NOTE 2)
Advisory 799,899 754,149 0
Administration fees 51,193 45,249 492
Custody fees 33,248 34,105 0
Shareholder servicing fees 457,088 452,488 2,460
Portfolio accounting fees 76,649 91,666 0
Transfer agency fees 217,737 160,168 689
Distribution fees 116,855 87,549 2
Amortization of organization expenses 1,960 1,739 348
Legal and audit fees 19,966 30,527 2,664
Registration fees 36,888 46,748 1,230
Directors' fees 3,630 2,813 205
Shareholder reports 108,869 61,164 820
Other 110,106 43,866 286
TOTAL EXPENSES 2,034,088 1,812,231 9,196
Less:
Waived and reimbursed fees (Note 2) (15,737) (18,527) (1,815)
Net expenses 2,018,351 1,793,704 7,381
NET INVESTMENT INCOME (LOSS) 907,579 1,835,782 (12,636)
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 14,694,253 9,354,459 58,619(3)
Net change in unrealized appreciation
(depreciation) of investments 10,252,699 25,841,652 460,905(3)
NET GAIN (LOSS) ON INVESTMENTS 24,946,952 35,196,111 519,524
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $25,854,531 $37,031,893 $506,888
- -------------------------------------------------------------------------------------
</TABLE>
(1) THIS FUND COMMENCED OPERATIONS ON MARCH 5, 1996.
(2) THIS FUND COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
(3) INCLUDES ALLOCATIONS FROM THE MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
- ---------------------
84
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH FUND
-----------
FROM MARCH
5, 1996
(COMMENCEMENT
OF
OPERATIONS)
TO
SEPT. 30,
1996
- --------------------------------------------------------
<S> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ (131,231)
Net realized gain (loss) on sale of
investments (3,001,798)
Net change in unrealized appreciation
(depreciation) of investments 3,751,264
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 618,235
NET EQUALIZATION CREDITS (DEBITS) 0
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A 0
CLASS B 0
INSTITUTIONAL CLASS N/A
In excess of net investment income
CLASS A 0
CLASS B 0
INSTITUTIONAL CLASS N/A
From net realized gain on sales of
investments
CLASS A 0
CLASS B 0
INSTITUTIONAL CLASS N/A
In excess of net realized gain on sale
of investments
CLASS A 0
CLASS B 0
INSTITUTIONAL CLASS N/A
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 30,688,418
Reinvestment of dividends - Class A 0
Cost of shares redeemed - Class A (4,299,728)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 26,388,690
Proceeds from shares sold - Class B 15,306,682
Reinvestment of dividends - Class B 0
Cost of shares redeemed - Class B (867,961)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 14,438,721
Proceeds from shares sold -
Institutional Class N/A
Reinvestment of dividends -
Institutional Class N/A
Cost of shares redeemed -
Institutional Class N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A
INCREASE (DECREASE) IN NET ASSETS 41,445,646
NET ASSETS:
Beginning net assets 0
ENDING NET ASSETS $41,445,646
- --------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
85
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED FUND
-----------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30,
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 3,996,707 $ 3,914,845
Net realized gain (loss) on sale of
investments 11,895,904 38,123
Net change in unrealized appreciation
(depreciation) of investments 3,445,959 5,217,447
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 19,338,570 9,170,415
NET EQUALIZATION CREDITS (DEBITS) 0 (110,805)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,030,389) (3,890,856)
CLASS B 0 0
INSTITUTIONAL CLASS (2,871,649) 0
In excess of net investment income
CLASS A 0 0
CLASS B 0 0
INSTITUTIONAL CLASS (23,043) 0
From net realized gain on sales of
investments
CLASS A (3,380,108) (4,373,450)
CLASS B 0 0
INSTITUTIONAL CLASS (8,265,228) 0
In excess of net realized gain on sale
of investments
CLASS A 0 0
CLASS B 0 0
INSTITUTIONAL CLASS 0 0
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 15,479,177 12,865,491
Reinvestment of dividends - Class A 4,242,084 7,817,760
Cost of shares redeemed - Class A (76,589,659) (40,734,756)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (56,868,398) (20,051,505)
Proceeds from shares sold - Class B 1,549 0
Reinvestment of dividends - Class B 0 0
Cost of shares redeemed - Class B 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 1,549 0
Proceeds from shares sold -
Institutional Class 115,568,034 0
Reinvestment of dividends -
Institutional Class 10,566,690 0
Cost of shares redeemed -
Institutional Class (57,101,263) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 69,033,461 0
INCREASE (DECREASE) IN NET ASSETS 15,934,765 (19,256,201)
NET ASSETS:
Beginning net assets 89,033,677 108,289,878
ENDING NET ASSETS $104,968,442 $ 89,033,677
- --------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ---------------------
86
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CORPORATE STOCK FUND
----------------------------------------------
FOR THE NINE FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 3,383,203 $ 4,577,228 $ 4,803,450
Net realized gain (loss) on sale of
investments 7,781,779 6,005,161 8,380,262
Net change in unrealized appreciation
(depreciation) of investments 30,469,349 76,552,587 (12,258,997)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 41,634,331 87,134,976 924,715
NET EQUALIZATION CREDITS (DEBITS) 0 0 0
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (3,383,203) (4,577,228) (4,801,337)
CLASS B N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
In excess of net investment income
CLASS A 0 0 0
CLASS B N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
From net realized gain on sales of
investments
CLASS A 0 (4,890,634) (8,103,675)
CLASS B N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
In excess of net realized gain on sale
of investments
CLASS A 0 0 0
CLASS B N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 50,105,623 42,931,593 40,412,415
Reinvestment of dividends - Class A 3,297,986 17,597,071 3,563,379
Cost of shares redeemed - Class A (48,423,346) (47,253,329) (54,056,667)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 4,980,263 13,275,335 (10,080,873)
Proceeds from shares sold - Class B N/A N/A N/A
Reinvestment of dividends - Class B N/A N/A N/A
Cost of shares redeemed - Class B N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B N/A N/A N/A
Proceeds from shares sold -
Institutional Class N/A N/A N/A
Reinvestment of dividends -
Institutional Class N/A N/A N/A
Cost of shares redeemed -
Institutional Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A N/A N/A
INCREASE (DECREASE) IN NET ASSETS 43,231,391 90,942,449 (22,061,170)
NET ASSETS:
Beginning net assets 327,207,870 236,265,421 258,326,591
ENDING NET ASSETS $370,439,261 $327,207,870 $236,265,421
- -------------------------------------------------------------------------------------------
<CAPTION>
DIVERSIFIED INCOME FUND
----------------------------------------------
FOR THE NINE FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 2,107,805 $ 1,871,560 $ 1,214,151
Net realized gain (loss) on sale of
investments 7,772,450 3,545,900 (273,760)
Net change in unrealized appreciation
(depreciation) of investments 2,900,227 10,976,829 (1,076,102)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 12,780,482 16,394,289 (135,711)
NET EQUALIZATION CREDITS (DEBITS) 0 0 0
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,963,354) (1,819,692) (1,214,150)
CLASS B (144,451) (51,868) 0
INSTITUTIONAL CLASS N/A N/A N/A
In excess of net investment income
CLASS A 0 0 0
CLASS B 0 0 0
INSTITUTIONAL CLASS N/A N/A N/A
From net realized gain on sales of
investments
CLASS A 0 (1,621,942) 0
CLASS B 0 (104,647) 0
INSTITUTIONAL CLASS N/A N/A N/A
In excess of net realized gain on sale
of investments
CLASS A 0 0 0
CLASS B 0 0 0
INSTITUTIONAL CLASS N/A N/A N/A
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 67,375,546 36,625,693 32,526,614
Reinvestment of dividends - Class A 1,611,353 3,084,339 1,367,156
Cost of shares redeemed - Class A (24,014,045) (17,324,191) (14,069,676)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 44,972,854 22,385,841 19,824,094
Proceeds from shares sold - Class B 11,955,056 5,158,139 0
Reinvestment of dividends - Class B 90,711 122,225 0
Cost of shares redeemed - Class B (1,314,702) (324,353) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 10,731,065 4,956,011 0
Proceeds from shares sold -
Institutional Class N/A N/A N/A
Reinvestment of dividends -
Institutional Class N/A N/A N/A
Cost of shares redeemed -
Institutional Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A N/A N/A
INCREASE (DECREASE) IN NET ASSETS 66,376,596 40,137,992 18,474,233
NET ASSETS:
Beginning net assets 85,316,039 45,178,047 26,703,814
ENDING NET ASSETS $151,692,635 $ 85,316,039 $ 45,178,047
- -------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
87
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY VALUE FUND
-------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30,
1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 3,943,333 $ 3,267,649
Net realized gain (loss) on sale of
investments 27,944,178 8,515,659
Net change in unrealized appreciation
(depreciation) of investments 17,614,459 13,330,878
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 49,501,970 25,114,186
NET EQUALIZATION CREDITS (DEBITS) 0 (68,961)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (271,396) 0
CLASS B 0 0
INSTITUTIONAL CLASS (3,536,140) (3,267,649)
In excess of net investment income
CLASS A 0 0
CLASS B 0 0
INSTITUTIONAL CLASS (152,875) (118,088)
From net realized gain on sales of
investments
CLASS A (3,065,374) 0
CLASS B 0 0
INSTITUTIONAL CLASS (33,389,091) (8,515,659)
In excess of net realized gain on sale
of investments
CLASS A 0 0
CLASS B 0 0
INSTITUTIONAL CLASS 0 (1,098,738)
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 65,541,864 0
Reinvestment of dividends - Class A 3,103,800 0
Cost of shares redeemed - Class A (184,207,991) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (115,562,327) 0
Proceeds from shares sold - Class B 26 0
Reinvestment of dividends - Class B 0 0
Cost of shares redeemed - Class B 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 26 0
Proceeds from shares sold -
Institutional Class 190,586,130 98,056,766
Reinvestment of dividends -
Institutional Class 32,111,369 10,889,321
Cost of shares redeemed -
Institutional Class (61,556,058) (119,436,631)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 161,141,441 (10,490,544)
INCREASE (DECREASE) IN NET ASSETS 54,666,234 1,554,547
NET ASSETS:
Beginning net assets 170,406,334 168,851,787
ENDING NET ASSETS $ 225,072,568 $ 170,406,334
- ----------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $628,555 FOR CLASS A AND $17,334,017
FOR THE INSTITUTIONAL CLASS, AS A RESULT OF THE MERGER OF THE PACIFICA
GROWTH FUND. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
- ---------------------
88
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL CAP
FUND
-----------
SEPT. 16,
GROWTH AND INCOME FUND 1996
---------------------------------------------- (COMMENCEMENT
OF
FOR THE NINE FOR THE FOR THE OPERATIONS)
MONTHS ENDED YEAR ENDED YEAR ENDED TO
SEPT. 30, DEC. 31, DEC. 31, SEPT. 30,
1996 (1) 1995 1994 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 907,579 $ 1,835,782 $ 1,780,057 $ (12,636)
Net realized gain (loss) on sale of
investments 14,694,253 9,354,459 3,087,861 58,619
Net change in unrealized appreciation
(depreciation) of investments 10,252,699 25,841,652 (5,394,205) 460,905
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 25,854,531 37,031,893 (526,287) 506,888
NET EQUALIZATION CREDITS (DEBITS) 0 0 0 0
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (902,578) (1,827,656) (1,780,057) 0
CLASS B 0 (8,126) 0 0
INSTITUTIONAL CLASS (11,005) 0 0 0
In excess of net investment income
CLASS A 0 0 0 0
CLASS B 0 0 0 0
INSTITUTIONAL CLASS 0 0 0 0
From net realized gain on sales of
investments
CLASS A (14,220,794) (6,952,008) (3,087,861) 0
CLASS B (490,320) (179,310) 0 0
INSTITUTIONAL CLASS 0 0 0 0
In excess of net realized gain on sale
of investments
CLASS A (2,238,898) 0 0 0
CLASS B (358,700) 0 0 0
INSTITUTIONAL CLASS 0 0 0 0
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 92,986,116 61,077,854 41,116,188 94,136
Reinvestment of dividends - Class A 17,197,210 11,706,310 2,095,312 0
Cost of shares redeemed - Class A (40,873,885) (35,699,783) (36,528,266) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 69,309,441 37,084,381 6,683,234 94,136
Proceeds from shares sold - Class B 8,483,020 4,557,982 0 25
Reinvestment of dividends - Class B 848,356 184,612 0 0
Cost of shares redeemed - Class B (1,258,949) (246,518) 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 8,072,427 4,496,076 0 25
Proceeds from shares sold -
Institutional Class 17,995,025 0 0 24,103,344
Reinvestment of dividends -
Institutional Class 0 0 0 0
Cost of shares redeemed -
Institutional Class (341,372) 0 0 (54,923)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 17,653,653 0 0 24,048,421
INCREASE (DECREASE) IN NET ASSETS 102,667,757 69,645,250 1,289,029 24,649,470
NET ASSETS:
Beginning net assets 183,170,022 113,524,772 112,235,743 0
ENDING NET ASSETS $285,837,779 $183,170,022 $113,524,772 $24,649,470
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
89
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH
FUND (1)
-------------------------
CLASS A CLASS B
--------- ----------
PERIOD PERIOD
ENDED ENDED
SEPT. 30, SEPT. 30,
1996 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $17.75 $21.90
--------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.05) (0.10)
Net realized and unrealized gain (loss) on investments 1.70 2.06
--------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.65 1.96
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain 0.00 0.00
--------- ----------
TOTAL FROM DISTRIBUTIONS 0.00 0.00
--------- ----------
NET ASSET VALUE, END OF PERIOD $19.40 $23.86
--------- ----------
--------- ----------
TOTAL RETURN (NOT ANNUALIZED) 9.85% 9.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $26,902 $14,544
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.23%(5) 1.91%(5)
Ratio of net investment income (loss) to average net assets (0.79)%(5) (1.45)%(5)
Portfolio turnover N/A N/A
Average commission rate paid(4) N/A N/A
- ------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees
and reimbursed expenses 1.60%(5) 2.29%(5)
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses (1.16)%(5) (1.83)%(5)
- ------------------------------------------------------------------------------------------
</TABLE>
* PER SHARE DATA BASED UPON AVERAGE MONTHLY SHARES OUTSTANDING.
(1) THE FUND COMMENCED OPERATIONS ON MARCH 5, 1996.
(2) THE FUND OPERATED AS A SERIES OF PACIFICA FUNDS TRUST FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
REORGANIZATION, EXISTING INVESTOR SHARES WERE CONVERTED INTO CLASS A
SHARES OF THE FUND. PRIOR TO APRIL 1, 1996, THE FUND WAS ADVISED BY
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM"). IN CONNECTION WITH
THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL
1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT, INC.
(3) THE CLASS B SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
- ---------------------
90
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
BALANCED FUND (2)
---------------------------------------------------------------------------
INST.
CLASS A CLASS B CLASS
----------------------------------------------------- --------- ---------
YEAR YEAR YEAR YEAR YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1995 1994 1993 1992 1996 (3) 1996
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $11.84 $11.67 $12.71 $11.18 $10.80 $10.00 $11.84
--------- --------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.36 0.46* 0.43* 0.44* 0.42* 0.00 0.40
Net realized and
unrealized gain (loss)
on investments 0.89 0.68* (0.13)* 1.72* 0.53* 0.24 0.89
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.25 1.14 0.30 2.16 0.95 0.24 1.29
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.35) (0.47) (0.46) (0.43) (0.43) 0.00 (0.40)
Distributions from net
realized gain (1.28) (0.50) (0.88) (0.20) (0.14) 0.00 (1.28)
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (1.63) (0.97) (1.34) (0.63) (0.57) 0.00 (1.68)
--------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $11.46 $11.84 $11.67 $12.71 $11.18 $10.24 $11.45
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 10.51% 10.62% 2.30% 19.83% 9.03% 2.40% 10.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $32,640 $89,034 $108,290 $104,434 $65,226 $2 $72,327
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.31% 1.03% 1.09% 1.01% 1.02% 0.00% 0.94%
Ratio of net investment
income (loss) to average
net assets 2.98% 4.05% 3.55% 3.62% 3.76% 3.09% 3.29%
Portfolio turnover 131% 90% 35% 60% 49% 131% 131%
Average commission rate
paid(4) $0.0603 -- -- -- -- $0.0603 $0.0603
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.48% 1.05% 1.11% 1.06% 1.10% 0.66% 1.11%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 2.81% 4.03% 3.53% 3.57% 3.68% 2.43% 3.12%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* PER SHARE DATA BASED UPON AVERAGE MONTHLY SHARES OUTSTANDING.
(1) THE FUND COMMENCED OPERATIONS ON MARCH 5, 1996.
(2) THE FUND OPERATED AS A SERIES OF PACIFICA FUNDS TRUST FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
REORGANIZATION, EXISTING INVESTOR SHARES WERE CONVERTED INTO CLASS A
SHARES OF THE FUND. PRIOR TO APRIL 1, 1996, THE FUND WAS ADVISED BY
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM"). IN CONNECTION WITH
THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL
1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT, INC.
(3) THE CLASS B SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
---------------------
91
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CORPORATE STOCK FUND
-------------------------------
NINE
MONTHS YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 (1) 1995 1994
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $41.45 $31.42 $33.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.42 0.59 0.63
Net realized and unrealized gain (loss) on investments 4.79 10.65 (0.50)
--------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 5.21 11.24 0.13
LESS DISTRIBUTIONS:
Dividends from net investment income (0.42) (0.59) (0.63)
Distributions from net realized gain 0.00 (0.62) (1.08)
--------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.42) (1.21) (1.71)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $46.24 $41.45 $31.42
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 12.60% 35.99% 0.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $370,439 $327,208 $236,265
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.01%(3) 0.96% 0.97%
Ratio of net investment income (loss) to average net
assets 1.28%(3) 1.59% 1.92%
Portfolio turnover 1%(5) 6% 7%
Average commission rate paid(4) $0.0248(5) -- --
- -----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.08%(5) 1.00% 1.00%
Ratio of net investment income (loss) to average net
assets prior to waived fees and reimbursed expenses 1.21%(5) 1.55% 1.89%
- -----------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(2) THE FUND COMMENCED OPERATIONS ON NOVEMBER 18, 1992.
(3) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) PORTFOLIO ACTIVITY REFLECTS ACTIVITY FOR STAND-ALONE PERIOD ONLY. SEE
NOTE 7.
- ---------------------
92
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
DIVERSIFIED INCOME FUND
-----------------------------------------------------
CLASS A
CORPORATE STOCK FUND (CONT.) -----------------------------------------------------
------------------------------- NINE
YEAR YEAR YEAR MONTHS YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, SEPT. 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1993 1992 1991 1996 (1) 1995 1994 1993 1992 (2)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $31.40 $30.38 $23.60 $13.34 $10.76 $11.08 $10.29 $10.00
--------- --------- --------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.59 0.62 0.62 0.25 0.35 0.33 0.30 0.02
Net realized and
unrealized gain (loss)
on investments 2.19 1.35 6.16 1.39 2.86 (0.32) 0.96 0.29
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 2.78 1.97 6.78 1.64 3.21 0.01 1.26 0.31
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.59) (0.62) 0.00 (0.25) (0.35) (0.33) (0.30) (0.02)
Distributions from net
realized gain (0.59) (0.33) 0.00 0.00 (0.28) 0.00 (0.17) 0.00
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (1.18) (0.95) 0.00 (0.25) (0.63) (0.33) (0.47) (0.02)
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $33.00 $31.40 $30.38 $14.73 $13.34 $10.76 $11.08 $10.29
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 8.91% 6.59% 28.72% 12.35% 30.17% 0.08% 12.33% 3.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $258,327 $230,457 $204,926 $134,648 $79,977 $45,178 $26,704 $1,379
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.97% 0.93% 0.97% 1.10% 1.10% 1.06% 0.46% 0.00%
Ratio of net investment
income (loss) to average
net assets 1.81% 2.05% 2.30% 2.57% 3.02% 3.16% 3.51% 4.09%
Portfolio turnover 5% 4% 4% 43% 70% 62% 46% 1%
Average commission rate
paid(4) -- -- -- $0.0793 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.99% 1.00% N/A 1.26% 1.31% 1.34% 1.66% 3.49%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 1.79% 1.98% N/A 2.41% 2.81% 2.88% 2.31% 0.60%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(2) THE FUND COMMENCED OPERATIONS ON NOVEMBER 18, 1992.
(3) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) PORTFOLIO ACTIVITY REFLECTS ACTIVITY FOR STAND-ALONE PERIOD ONLY. SEE
NOTE 7.
---------------------
93
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
DIVERSIFIED INCOME
FUND (CONT.)
-------------------- EQUITY VALUE FUND(1)
CLASS B --------------------
-------------------- CLASS A
NINE --------------------
MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
SEPT. 30, DEC. 31, SEPT. 30, SEPT. 30,
1996 (2) 1995 1996 1995
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $12.49 $10.00 $13.27 $12.36
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.17 0.20 0.20 0.24*
Net realized and unrealized gain (loss) on
investments 1.30 2.75 1.60 1.63*
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 1.47 2.95 1.80 1.87
LESS DISTRIBUTIONS:
Dividends from net investment income (0.17) (0.20) (0.19) (0.25)
Distributions from net realized gain 0.00 (0.26) (2.22) (0.71)
--------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.17) (0.46) (2.41) (0.96)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $13.79 $12.49 $12.66 $13.27
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 11.76% 29.64% 14.27% 16.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $17,045 $5,339 $18,453 $170,406
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.74% 1.73% 1.18% 0.96%
Ratio of net investment income (loss) to
average net assets 2.01% 2.40% 1.73% 1.97%
Portfolio turnover 43% 70% 91% 75%
Average commission rate paid(4) $0.0793 -- $0.0558 --
- ------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 2.08% 2.57% 1.22% 0.98%
Ratio of net investment income (loss) to
average net assets prior to waived fees and
reimbursed expenses 1.67% 1.57% 1.69% 1.95%
- ------------------------------------------------------------------------------------------
</TABLE>
* PER SHARE DATA BASED UPON AVERAGE MONTHLY SHARES OUTSTANDING.
(1) THE FUND OPERATED AS A SERIES OF PACIFICA FUNDS TRUST FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
REORGANIZATION, EXISTING INVESTOR SHARES WERE CONVERTED INTO CLASS A
SHARES OF THE FUND. PRIOR TO APRIL 1, 1996, THE FUND WAS ADVISED BY
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM"). IN CONNECTION WITH
THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL
1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE CLASS B SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
- ---------------------
94
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
GROWTH AND INCOME
FUND
EQUITY VALUE FUND (1) (CONT.) --------------------
-----------------------------------------------------
INST. CLASS A
CLASS A (CONT.) CLASS B CLASS --------------------
------------------------------- --------- --------- NINE
YEAR YEAR YEAR PERIOD YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30, DEC. 31,
1994 1993 1992 1996 (3) 1996 1996 (2) 1995
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $13.17 $10.73 $10.45 $10.00 $13.27 $17.26 $14.10
--------- --------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.20* 0.21* 0.20* 0.00 0.22 0.07 0.19
Net realized and
unrealized gain (loss)
on investments 0.74* 2.75* 0.49* 0.34 1.61 2.00 3.87
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.94 2.96 0.69 0.34 1.83 2.07 4.06
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.21) (0.23) (0.22) 0.00 (0.23) (0.07) (0.19)
Distributions from net
realized gain (1.54) (0.29) (0.19) 0.00 (2.22) (1.35) (0.71)
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (1.75) (0.52) (0.41) 0.00 (2.45) (1.42) (0.90)
--------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $12.36 $13.17 $10.73 $10.34 $12.65 $17.91 $17.26
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 7.49% 28.22% 6.81% 3.40% 14.58% 12.45% 28.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $168,852 $140,551 $92,915 $0 $206,620 $254,498 $178,488
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.99% 0.98% 1.02% 0.00% 0.87% 1.18% 1.18%
Ratio of net investment
income (loss) to average
net assets 1.60% 1.73% 1.86% 1.83% 1.69% 0.56% 1.23%
Portfolio turnover 41% 82% 78% 91% 91% 83% 100%
Average commission rate
paid(4) -- -- -- $0.0558 $0.0558 $0.0702 --
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.01% 0.99% 1.02% 0.00% 0.92% 1.19% 1.21%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 1.58% 1.72% 1.86% 1.83% 1.64% 0.55% 1.20%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* PER SHARE DATA BASED UPON AVERAGE MONTHLY SHARES OUTSTANDING.
(1) THE FUND OPERATED AS A SERIES OF PACIFICA FUNDS TRUST FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
REORGANIZATION, EXISTING INVESTOR SHARES WERE CONVERTED INTO CLASS A
SHARES OF THE FUND. PRIOR TO APRIL 1, 1996, THE FUND WAS ADVISED BY
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM"). IN CONNECTION WITH
THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL
1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE CLASS B SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
---------------------
95
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND (CONT.)
------------------------------------------
CLASS A (CONT.)
------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $14.75 $13.88 $12.84 $10.29
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.22 0.23 0.27 0.41
Net realized and unrealized gain (loss) on
investments (0.27) 0.93 1.44 2.14
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS (0.05) 1.16 1.71 2.55
LESS DISTRIBUTIONS:
Dividends from net investment income (0.22) (0.23) (0.27) 0.00
Distributions from net realized gain (0.38) (0.06) (0.40) 0.00
--------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.60) (0.29) (0.67) 0.00
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $14.10 $14.75 $13.88 $12.84
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) (0.29)% 8.44% 13.45% 24.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $113,525 $112,236 $44,883 $10,323
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.11% 0.93% 0.42% 0.05%
Ratio of net investment income (loss) to
average net assets 1.51% 1.72% 2.31% 3.50%
Portfolio turnover 71% 55% 80% 13%
Average commission rate paid(4) -- -- -- --
- ------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.15% 1.11% 1.10% 1.16%
Ratio of net investment income (loss) to
average net assets prior to waived fees and
reimbursed expenses 1.47% 1.54% 1.63% 2.39%
- ------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
(2) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
- ---------------------
96
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND (CONT.)
------------------------------------------ SMALL CAP FUND (1)
------------------------------------------
CLASS B INST. INST.
-------------------------- CLASS CLASS A CLASS B CLASS
---------- ---------- ---------- ----------
NINE
MONTHS PERIOD PERIOD PERIOD PERIOD
ENDED YEAR ENDED ENDED ENDED ENDED ENDED
SEPT. 30, DEC. 31, SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 (2) 1995 1996 (3) 1996 1996 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $12.29 $10.00 $20.03 $22.01 $22.02 $22.01
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) (0.01) 0.05 0.02 0.00 0.00 0.00
Net realized and
unrealized gain (loss)
on investments 1.42 2.79 0.97 0.44 0.44 0.44
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 1.41 2.84 0.99 0.44 0.44 0.44
LESS DISTRIBUTIONS:
Dividends from net
investment income 0.00 (0.05) (0.01) 0.00 0.00 0.00
Distributions from net
realized gain (0.96) (0.50) 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.96) (0.55) (0.01) 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $12.74 $12.29 $21.01 $22.45 $22.46 $22.45
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 11.89% 28.47% 3.41% 2.00% 2.00% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $12,832 $4,682 $18,508 $96 $0 $24,553
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.93% 1.87% 0.96% 1.03%(5) 0.00% 1.60%(5)
Ratio of net investment
income (loss) to average
net assets (0.12)% 0.43% 1.27% (0.59)%(5) 0.00% (1.15)%(5)
Portfolio turnover 83% 100% 83% N/A N/A N/A
Average commission rate
paid(4) $0.0702 -- $0.0702 N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.03% 2.21% 0.96% 38.54%(5) 0.00% 1.63%(5)
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses (0.22)% 0.09% 1.27% (38.10)%(5) 0.00% (1.18)%(5)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
(2) THE FUND CHANGED ITS FISCAL YEAR FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
(5) THIS RATIO INCLUDES INCOME AND EXPENSES ALLOCATED FROM THE MASTER
PORTFOLIO.
---------------------
97
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
investment company. The Company commenced operations on January 1, 1992, at
which time the merger described in Note 6 was consummated, and currently offers
the following nineteen separate diversified Funds: the Aggressive Growth, Asset
Allocation, Balanced, Corporate Stock, Diversified Income, Equity Value, Ginnie
Mae, Growth and Income, Government Money Market Mutual, Intermediate Bond, Money
Market Mutual, Money Market Trust, National Tax-Free, National Tax-Free Money
Market Mutual, Prime Money Market Mutual, Short-Intermediate U.S. Government
Income, Small Cap, Treasury Money Market Mutual, and U.S. Government Allocation
Funds; and five non-diversified funds: the Arizona Tax-Free, California Tax-Free
Bond, California Tax-Free Income, California Tax-Free Money Market Mutual, and
Oregon Tax-Free Funds. These financial statements represent the Aggressive
Growth, Balanced, Corporate Stock, Diversified Income, Equity Value, Growth and
Income, and Small Cap Funds (the "Funds").
At a special shareholders meeting on July 16, 1996, the Shareholders of Pacifica
Funds Trust ("Pacifica") approved a plan of reorganization providing for the
transfer of the assets and liabilities of each Pacifica portfolio to a
corresponding fund of the Company in exchange for shares of designated classes
of the corresponding Stagecoach fund. As a result of this reorganization,
effective September 6, 1996, the Stagecoach Balanced and Equity Value Funds were
established to acquire all of the assets and assume all of the liabilities of
the Pacifica Balanced and Equity Value Funds, respectively. Additionally, the
Stagecoach Growth and Income Fund acquired all of the assets and assumed all of
the liabilities of the Pacifica Growth Fund. These acquisitions were
accomplished in separate exchanges for shares of the respective Fund.
Each of the funds presented in this book, with the exception of the Aggressive
Growth, Corporate Stock, and Diversified Income Funds, offers Class A, Class B,
and Institutional Class shares. The Aggressive Growth and Diversified Income
Funds offer Class A and Class B shares, and the Corporate Stock Fund offers only
one class of shares. The three classes of shares differ principally in the
applicable sales charges, shareholder servicing fees and distribution fees.
Shareholders of each class also bear certain expenses that pertain to that
particular class. All shareholders bear the common expenses of the Fund and earn
income from the portfolio pro rata based on the average daily net assets of each
class, without distinction between share classes. Dividends are determined
sepa-
- ---------------------
98
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
rately for each class based on income and expenses allocable to each class.
Gains are allocated to each class pro rata based upon net assets of each class
on the date of distribution. No class has preferential dividend rights.
Differences in per share dividend rates generally result from the relative
weightings of pro rata income and gain allocations and from differences in
separate class expenses, including distribution and service fees.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT POLICY AND SECURITY VALUATION
The Funds invest in a range of securities, generally including money market
instruments, equities, and U.S. government securities.
Investments in securities for which the primary market is a national securities
exchange or the NASDAQ National Market System are valued at the last reported
sales price on the day of valuation. U.S. government obligations are valued at
the reported bid prices. In the absence of any sale of such securities on the
valuation date and in the case of other securities, excluding debt securities
maturing in 60 days or less, the valuations are based on latest quoted bid
prices. Debt securities maturing in 60 days or less are valued at amortized
cost. Securities for which quotations are not readily available are valued at
fair value as determined by procedures set by the Company's Board of Directors.
The Aggressive Growth Fund, Small Cap Fund, and, as of April 28, 1996, the
Corporate Stock Fund invest only in interests of the Capital Appreciation Master
Portfolio, Small Cap Master Portfolio, and Corporate Stock Master Portfolio (the
"Master Portfolios"), respectively, of Master Investment Trust ("MIT") an
open-end, series investment company. Each Master Portfolio has the same
investment objective as the Fund that invests in such Master Portfolio. The
value of each Fund's investment in its corresponding Master Portfolio reflects
that Fund's interest in the net assets of that Master Portfolio (18.27%, 93.79%,
and 99.99%) for the Aggressive Growth Fund, Small Cap Fund, and Corporate Stock
Fund, respectively, at September 30, 1996. The Master Portfolios' investments
include equities and fixed income securities. Except for debt obligations with
remaining maturities of 60 days or less, which are valued at amortized cost,
assets are valued at
---------------------
99
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
current market prices, or if such prices are not readily available, at fair
value as determined by procedures approved by the Trust's Board of Trustees.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the ex-dividend
date, and interest income is accrued daily. Realized gains or losses are
reported on the basis of identified cost of securities delivered. Bond discounts
are accreted and premiums are amortized as required by the Internal Revenue
Code.
The Balanced and Equity Value Funds had permanent book/tax differences primarily
attributable to equalization credits. To reflect reclassifications arising from
permanent book/tax differences for the year ended September 30, 1995,
accumulated undistributed net investment income was credited $152,314,
accumulated undistributed net realized gains was charged $41,509 and paid-in-
capital was charged $110,805 for the Balanced Fund. For the Equity Value Fund,
accumulated net investment income was credited $187,049, accumulated
undistributed net realized gains was charged $118,088 and paid-in-capital was
charged $68,961. Effective October 1, 1996, the Funds no longer use equalization
accounting.
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in each Fund's and Master
Portfolio's (in this paragraph, the "Funds") Portfolio of Investments. The
adviser to the Funds pools the Fund's cash and invests in repurchase agreements
entered into by the Funds. The repurchase agreements must be fully
collateralized based on values that are marked to market daily. The collateral
may be held by an agent bank under a tri-party agreement. It is the adviser's
responsibility to value collateral daily and to obtain additional collateral as
necessary to maintain market value equal to or greater than the resale price.
The repurchase agreements held in the Funds at September 30, 1996, are
collateralized by U.S. Government obligations. The repurchase agreements were
entered into on September 30, 1996.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income of the Funds are
declared and distributed quarterly. Any dividends to shareholders from net
realized capital gains are declared and distributed annually.
FEDERAL INCOME TAXES
The Company's policy with respect to each Fund is to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute substantially all of each Fund's net
investment income and any net realized
- ---------------------
100
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
capital gain to its shareholders. Therefore, no federal or state income tax
provision is required.
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains (losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may differ
from the year in which the income and realized gains (losses) were recorded by
the Fund. The differences between the income and gains distributed on a book
versus tax basis are shown as excess distributions of net investment income and
net realized gain on the sale of investments in the accompanying Statements of
Changes in Net Assets.
ORGANIZATION EXPENSES
The Funds have been charged for expenses incurred in connection with the
organization and initial registration of the Fund and/or Class. These expenses
are being amortized by the Funds on a straightline basis over 60 months from the
date each Fund and/or Class commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the Funds
(other than the Aggressive Growth, Corporate Stock, and Small Cap Funds) with
Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contracts, WFB furnishes to the
Funds investment guidance and policy direction in connection with daily
portfolio management. Under the contracts with the Diversified Income and Equity
Value Funds, WFB is entitled to be paid by each Fund a monthly advisory fee at
an annual rate of 0.50% of such Fund's average daily net assets. Under the
contract with the Balanced Fund, WFB is entitled to be paid by the Fund a
monthly advisory fee at an annual rate of 0.60% of such Fund's average daily net
assets. Under the contract with the Growth and Income Fund, WFB is entitled to
be paid by the Fund a monthly advisory fee at an annual rate of 0.50% of such
Fund's average daily net assets up to $250 million, 0.40% of average daily net
assets of the next $250 million, and 0.30% in excess of $500 million.
For the period from October 1, 1995 to March 31, 1996, the Balanced and Equity
Value Funds were advised by First Interstate Capital Management ("FICM").
Pursuant to the advisory contracts, the Funds paid an advisory fee at an annual
rate of 0.60%. On April 1, 1996, First Interstate Bancorp ("FIB") was merged
with and into Wells Fargo and Company ("Wells Fargo") and FICM and First
Interstate Bank of California ("FICAL") became indirect wholly-owned
subsidiaries of Wells Fargo. In connection with this merger, FICM changed its
name to Wells Fargo Investment Management, Inc. For the period from April 1,
1996 to September 5, 1996, such advisory fees were paid to Wells Fargo
Investment Management, Inc.
The Aggressive Growth, Corporate Stock, and Small Cap Funds do not directly
retain an investment adviser because each such Fund invests all of its
---------------------
101
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
assets in a Master Portfolio of MIT which, in turn, retains WFB as investment
adviser. Prior to April 28, 1996, and its conversion to a "feeder" fund in a
master/feeder structure the Corporate Stock Fund retained WFB as investment
adviser. For these services, WFB was entitled to be paid by the Fund a monthly
advisory fee at the annual rate of 0.50% of such Fund's average daily net assets
up to $250 million, 0.40% of the next $250 million and 0.30% of the average
daily net assets in excess of $500 million.
For the period from January 1, 1996 to April 28, 1996, the Corporate Stock Fund
retained Barclays Global Fund Advisors ("BGFA") as sub-adviser. Pursuant to a
sub-advisory contract with the Corporate Stock Fund and subject to the overall
supervision of WFB, the investment adviser, BGFA was responsible for day-to-day
portfolio management of the Fund. BGFA was entitled to receive from WFB as
compensation for its sub-advisory services monthly fees at the annual rate of
0.08% of the average daily net assets of the Corporate Stock Fund. BGFA was also
entitled to receive from WFB annual fees of $40,000 for its services for the
Corporate Stock Fund.
BGFA currently acts as sub-adviser to the Master Portfolio in which the
Corporate Stock Fund invests. BGFA is an indirect subsidiary of Barclays Bank
and is located at 45 Fremont Street, San Francisco, California 94105. BGFA was
formed by the reorganization of Wells Fargo Nikko Investment Advisors ("WFNIA"),
a former affiliate of Wells Fargo & Company. Prior to January 1, 1996, WFNIA
acted as sub-adviser to the Fund and was entitled to receive the same fees as
BGFA for its sub-advisory services.
The Company has entered into contracts with WFB on behalf of all of the Funds
except the Corporate Stock Fund, whereby WFB is responsible for providing
custody and portfolio accounting services for the Funds. WFB is entitled to
certain transaction charges plus an annual fee for custody services at an annual
rate of 0.0167% of the average daily net assets of the respective Funds. For
portfolio accounting services, WFB is entitled to a monthly base fee from each
Fund of $2,000 plus an annual fee of 0.07% of the first $50 million of average
daily net assets, 0.045% of the next $50 million, and 0.02% of the average daily
net assets over $100 million.
Barclays Global Investors, N.A. ("BGI") currently acts as custodian to the
Corporate Stock Fund. BGI is an affiliate of BGFA. BGI will not be entitled to
compensation for its custodial services to the Fund so long as BGFA is entitled
to receive compensation for providing sub-advisory services to the Master
Portfolio in which the Fund invests. Prior to January 1, 1996, BGI, which was
then known as Wells Fargo Institutional Trust Company N.A., was an affiliate of
WFB and served as custodian to the Fund.
For the period from October 1, 1995 to March 31, 1996, FICAL served as the
custodian for the Balanced and Equity Value Funds. Pursuant to the contracts,
the Funds paid a custodian fee based on net assets and certain transaction
- ---------------------
102
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
charges. For the period from April 1, 1996 to September 5, 1996, such custodian
fees were paid to Wells Fargo.
The Company has entered into contracts on behalf of the Funds with WFB, whereby
WFB has agreed to act as transfer agent for the Funds. Under the transfer agency
contracts with the Aggressive Growth, Corporate Stock, Diversified Income,
Growth and Income, and Small Cap Funds, WFB is paid a per account fee plus other
related costs with a minimum monthly fee of $3,000 per Fund, unless net assets
of the respective Fund are under $20 million. For as long as the assets remain
under $20 million a Fund will not be charged any transfer agent fees by WFB.
Under the contracts with the Balanced and Equity Value Funds, WFB is entitled to
be paid a fee at the annual rate of 0.07% of the average daily net assets of
each Fund.
For the period from October 1, 1995 to September 5, 1996, the Balanced and
Equity Value Funds retained Furman Selz LLC ("Furman Selz") to provide personnel
and facilities to perform shareholders servicing, transfer agency related
services and fund accounting.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder servicing to the Funds. Pursuant to the
contract, WFB is entitled to an annual fee for providing shareholder servicing
of 0.30% of the average daily net assets of the Corporate Stock Fund, 0.30% of
the average daily net assets attributable to the Class A and B shares of the
Diversified Income and Growth and Income Funds, 0.25% of the average daily net
assets attributable to the Class A and Class B shares of the Aggressive Growth,
Balanced, Equity Value, and Small Cap Funds, and 0.25% of the average daily net
assets attributable to the Class I shares of the Balanced, Equity Value, Growth
and Income, and Small Cap Funds.
For the period from October 1, 1995 to September 5, 1996, various banks, trust
companies, broker-dealers or other financial organizations (collectively,
"Service Organizations") also provided administrative services for the Balanced
and Equity Value Funds, such as maintaining shareholder accounts and records.
The Funds paid fees to Service Organizations in amounts up to an annual rate of
0.25% of the daily net assets of the Fund's shares owned by shareholders with
whom the Service Organization had a servicing relationship. During that period,
FIB was the only service organization to receive payments.
---------------------
103
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
The servicing fees of the Funds for the period ended September 30, 1996 were as
follows:
<TABLE>
<CAPTION>
SERVICING
SERVICING SERVICING FEES
FEES FEES INSTITUTIONAL
FUND CLASS A CLASS B CLASS
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Growth Fund*** $ 31,915 N/A N/A
Balanced Fund* 76,743 $ 0 $ 11,728
Equity Value Fund* 36,350 0 31,181
Growth and Income Fund** 454,351 1,242 1,495
Small Cap Fund**** 2,460 N/A N/A
</TABLE>
* INFORMATION PRESENTED IS FOR THE YEAR ENDED SEPTEMBER 30, 1996.
** INFORMATION PRESENTED IS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
*** INFORMATION PRESENTED IS FOR THE PERIOD FROM MARCH 5, 1996 (COMMENCEMENT OF
OPERATIONS) TO SEPTEMBER 30, 1996.
**** INFORMATION PRESENTED IS FOR THE PERIOD FROM SEPTEMBER 16, 1996
(COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
The Company has entered into administration and distribution agreements on
behalf of the Funds with Stephens. Under the agreements, Stephens has agreed to
provide supervisory, administrative and distribution services to the Funds. For
providing supervisory and administrative services, Stephens is entitled to
receive a monthly fee at the annual rate of 0.03% of the average daily net
assets of the Aggressive Growth, Corporate Stock, Diversified Income, and Growth
and Income Funds, and 0.05% of the average daily net assets of the Balanced,
Equity Value, and Small Cap Funds.
For the period from October 1, 1995 to September 5, 1996, Furman Selz provided
administrative services for the operation of the Balanced and Equity Value
Funds. As compensation for such services, each Fund paid Furman Selz an annual
fee payable monthly equal to 0.15% of the average daily net assets of each Fund.
The Company has adopted a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act for the Corporate Stock Fund. The Company has also adopted separate
Distribution Plans, pursuant to Rule 12b-1, for Class A and Class B shares of
the multi-class funds.
The Distribution Plan for the Corporate Stock Fund and the Distribution Plan for
each of the Class A shares of the Diversified Income and Growth and Income Funds
provides that each Fund may defray all or part of the cost of preparing,
printing and distributing prospectuses and other promotional materials by paying
on an annual basis up to 0.05% of the average daily net assets attributable to
the Class A shares or the shares of the Corporate Stock Fund for costs incurred.
The separate Distribution Plan for each of the Class A shares of the Aggressive
Growth, Balanced, Equity Value, and Small Cap Funds provides that each Fund may
defray all or part of the cost of preparing, printing and
distribut-
- ---------------------
104
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
ing prospectuses and other promotional materials by paying on an annual basis up
to 0.10% of the Class A shares' average daily net assets for costs incurred.
Each of these Funds may participate in joint distribution activities with other
funds, in which event, expenses reimbursed out of the assets of one of the Funds
may be attributable, in part, to the distribution-related activities of another
Fund. Generally, the expenses attributable to joint distribution activities will
be allocated among the Funds in proportion to their relative net asset sizes.
For the period from October 1, 1995 to September 5, 1996, the Balanced and
Equity Value Funds had adopted a non-compensatory Distribution Plan and
Agreement (the "Plan") for the Class A shares. The Plan provided for payments by
each Fund for actual expenses incurred, not to exceed 0.50% of the average net
assets of the Class A shares of the Fund. Pacifica Funds Distributor Inc., an
affiliate of Furman Selz, acted as Distributor during such period.
The Class B Distribution Plan for the Diversified Income and Growth and Income
Funds provides that the Funds may pay, as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.70% of each Fund's average
daily net assets attributable to Class B shares. The Aggressive Growth,
Balanced, Equity Value, and Small Cap Funds may pay up to 0.75% of the average
daily net assets attributable to Class B shares as compensation for
distribution-related services provided on behalf of its Class B shares.
The Distribution Plan expenses for Class A and Class B shares of the Funds for
the period ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
DISTRIBUTION DISTRIBUTION
FEES FEES
FUND CLASS A CLASS B
- ---------------------------------------------------------------------------
<S> <C> <C>
Aggressive Growth Fund*** $ 8,442 $ 32,412
Balanced Fund* 82,632 0
Diversified Income Fund** 37,946 49,795
Equity Value Fund* 58,241 0
Growth and Income Fund** 73,360 43,495
Small Cap Fund**** 2 0
</TABLE>
* INFORMATION PRESENTED IS FOR THE YEAR ENDED SEPTEMBER 30, 1996.
** INFORMATION PRESENTED IS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
*** INFORMATION PRESENTED IS FOR THE PERIOD FROM MARCH 5, 1996 (COMMENCEMENT OF
OPERATIONS) TO SEPTEMBER 30, 1996.
**** INFORMATION PRESENTED IS FOR THE PERIOD FROM SEPTEMBER 16, 1996
(COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
For the year ended December 31, 1995, the Diversified Income Fund paid
distribution fees of $43,182 and $14,985 for Class A and B shares, respectively,
and the Growth and Income Fund paid distribution fees of $74,482 and $13,067 for
Class A and B shares, respectively.
---------------------
105
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
FEES WAIVED AND REIMBURSED EXPENSES
The following amounts of fees were waived for the period ended September 30,
1996:
<TABLE>
<CAPTION>
FEES
WAIVED BY FEES FEES
FURMAN WAIVED BY WAIVED BY
FUND SELZ FICM WFB
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Growth Fund*** N/A N/A $ 22,403
Balanced Fund* 51,374 4,608 153,598
Corporate Stock Fund** N/A N/A 185,544
Diversified Income Fund** N/A N/A 148,222
Equity Value Fund* 94,068 0 8,217
Growth and Income Fund** N/A N/A 15,737
Small Cap Fund**** N/A N/A 1,815
</TABLE>
* INFORMATION PRESENTED IS FOR THE YEAR ENDED SEPTEMBER 30, 1996.
** INFORMATION PRESENTED IS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
*** INFORMATION PRESENTED IS FOR THE PERIOD FROM MARCH 5, 1996 (COMMENCEMENT OF
OPERATIONS) TO SEPTEMBER 30, 1996.
**** INFORMATION PRESENTED IS FOR THE PERIOD FROM SEPTEMBER 16, 1996
(COMMENCEMENT OF OPERATIONS) TO SEPTEMBER 30, 1996.
All amounts shown as waived and reimbursed fees on the Statements of Operations
for the year ended December 31, 1995 were waived by WFB.
For the period from March 5, 1996 (commencement of operations) to September 30,
1996, Stephens has reimbursed $26,539 for expenses in the Aggressive Growth
Fund. Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens, respectively. WFB and Stephens have agreed to waive or reimburse all
or a portion of their respective fees charged to, or expenses paid by, each Fund
to ensure that the total fund operating expenses do not exceed, on an annual
basis, 1.13% of the average net assets of the Institutional Class of the Growth
and Income Fund, 1.05%, 1.70%, or 0.95% of the average daily net assets of the
Class A, Class B, and Institutional Class shares, respectively, of the Balanced
or Equity Value Funds, through August 31, 1997.
Certain officers and directors of the Company are also officers of Stephens. As
of September 30, 1996, Stephens owned five shares of the Aggressive Growth,
three shares of the Balanced, 11,551 shares of the Diversified Income, three
shares of the Equity Value, 106 shares of the Growth and Income and four shares
of the Small Cap Funds.
Stephens has retained $2,252,478 as sales charges from the proceeds of Class A
shares sold and $306,643 from the proceeds of Class B shares redeemed by the
Company for the period ended September 30, 1996. Wells Fargo Securities Inc., a
subsidiary of Wells Fargo & Co., received $1,780,263 as sales charges from the
proceeds of Class A shares sold and $306,643 from the proceeds of Class B shares
redeemed by the Company for the period ended September 30, 1996.
- ---------------------
106
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities, for each
Fund were as follows:
<TABLE>
<CAPTION>
FOR THE
PERIOD
FOR THE NINE MONTHS ENDED
ENDED SEPT. 30,
FOR THE YEAR ENDED SEPT. 30, 1996 1996
SEPT. 30, 1996 --------------------- ---------
---------------------- DIVERSIFIED GROWTH AND CORPORATE
AGGREGATE PURCHASES BALANCED EQUITY INCOME INCOME STOCK
AND SALES OF: FUND VALUE FUND FUND FUND FUND (1)
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT
OBLIGATIONS:
Purchases at cost $39,863,143 $ 0 $ 0 $ 0 $ 0
Sales proceeds 43,358,012 0 0 0 0
OTHER SECURITIES:
Purchases at cost 114,497,840 202,946,951 93,185,092 231,664,067 8,044,148
Sales proceeds 110,062,872 196,641,410 45,827,045 169,078,296 4,235,518
</TABLE>
(1) THE PERIOD REPORTED IS FROM JANUARY 1, 1996 TO APRIL 28, 1996, BEFORE THE
FUND WAS CONVERTED TO A "MASTER/FEEDER" STRUCTURE. SEE NOTE 7.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DEC. 31, 1995
-----------------------------------
DIVERSIFIED
AGGREGATE PURCHASES CORPORATE INCOME GROWTH AND
AND SALES OF: STOCK FUND FUND INCOME FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 0 $ 0 $ 0
Sales proceeds 0 0 0
OTHER SECURITIES:
Purchases at cost 16,072,363 64,777,860 117,111,717
Sales proceeds 16,077,985 40,584,769 142,979,376
</TABLE>
---------------------
107
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
4. CAPITAL SHARES TRANSACTIONS
As of September 30, 1996, there were 49 billion shares of $0.001 par value
capital stock authorized by the Company. At September 30, 1996, each Fund (with
the exception of the Aggressive Growth Fund) was authorized to issue 100 million
shares of $0.001 par value capital stock for each class of shares. The
Aggressive Growth Fund was authorized to issue 150 million shares of $0.001 par
value capital stock for each class of shares. Transactions in capital shares
were as follows:
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH FUND BALANCED FUND
----------- ----------------------
FROM MARCH 5,
1996
(COMMENCEMENT
OF OPERATIONS) FOR THE FOR THE
TO YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 1,615,653 1,412,249 1,142,667
Shares issued in reinvestment of
dividends -- Class A 0 371,899 717,293
Shares redeemed -- Class A (229,155) (6,456,262) (3,620,385)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 1,386,498 (4,672,114) (1,760,425)
Shares sold -- Class B 648,214 151 0
Shares issued in reinvestment of
dividends -- Class B 0 0 0
Shares redeemed -- Class B (38,581) 0 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 609,633 151 0
Shares sold -- Institutional Class N/A 10,145,092 0
Shares issued in reinvestment of
dividends -- Institutional Class N/A 925,429 0
Shares redeemed -- Institutional Class N/A (4,755,966) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS N/A 6,314,555 0
</TABLE>
<TABLE>
<CAPTION>
CORPORATE STOCK FUND
---------------------------------
FOR THE
NINE FOR THE FOR THE
MONTHS YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold 1,149,288 1,167,520 1,236,832
Shares issued in reinvestment of
dividends 76,212 505,005 111,768
Shares redeemed (1,107,285) (1,299,326) (1,655,852)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING 118,215 373,199 (307,252)
</TABLE>
- ---------------------
108
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
DIVERSIFIED INCOME FUND
---------------------------------
FOR THE
NINE FOR THE FOR THE
MONTHS YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 4,715,976 2,981,021 2,942,632
Shares issued in reinvestment of
dividends -- Class A 115,316 244,288 124,853
Shares redeemed -- Class A (1,685,966) (1,429,340) (1,279,735)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 3,145,325 1,795,969 1,787,750
Shares sold -- Class B 901,549 446,270 0
Shares issued in reinvestment of
dividends -- Class B 6,895 9,860 0
Shares redeemed -- Class B (100,188) (28,616) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 808,256 427,514 0
</TABLE>
<TABLE>
<CAPTION>
EQUITY VALUE FUND
-----------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPT. 30, SEPT. 30,
1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 2,375,877 0
Shares issued in reinvestment of dividends -- Class
A 248,462 0
Shares redeemed -- Class A (14,009,327) 0
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
CLASS A (11,384,988) 0
Shares sold -- Class B 3 0
Shares issued in reinvestment of dividends -- Class
B 0 0
Shares redeemed -- Class B 0 0
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
CLASS B 3 0
Shares sold -- Institutional Class 18,333,654 8,141,771
Shares issued in reinvestment of dividends --
Institutional Class 2,574,515 969,487
Shares redeemed -- Institutional Class (4,577,809) (9,924,924)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS 16,330,360 (813,666)
</TABLE>
---------------------
109
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
-----------------------------------
FOR THE
NINE
MONTHS FOR THE FOR THE
ENDED YEAR ENDED YEAR ENDED
SEPT. 30, DEC. 31, DEC. 31,
1996 (1) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 5,108,374 3,775,466 2,805,058
Shares issued in reinvestment of
dividends -- Class A 1,005,634 726,595 145,120
Shares redeemed -- Class A (2,246,108) (2,208,631) (2,509,634)
NET INCREASE IN SHARES OUTSTANDING --
CLASS A 3,867,900 2,293,430 440,544
Shares sold -- Class B 653,910 386,746 0
Shares issued in reinvestment of
dividends -- Class B 69,929 14,982 0
Shares redeemed -- Class B (97,407) (20,798) 0
NET INCREASE IN SHARES OUTSTANDING --
CLASS B 626,432 380,930 0
Shares sold -- Institutional Class 897,195 N/A N/A
Shares issued in reinvestment of
dividends -- Institutional Class 0 N/A N/A
Shares redeemed -- Institutional
Class (16,307) N/A N/A
NET INCREASE IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS 880,888 N/A N/A
</TABLE>
(1) "SHARES SOLD" INCLUDES 36,809 FOR CLASS A AND 865,446 FOR THE INSTITUTIONAL
CLASS, AS A RESULT OF THE MERGER OF THE PACIFICA GROWTH FUND.
<TABLE>
<CAPTION>
SMALL CAP FUND
----------------------
SEPT. 16, 1996
(COMMENCEMENT OF
OPERATIONS)
TO SEPT. 30, 1996
- ------------------------------------------------------------------------------------
<S> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 4,273
Shares issued in reinvestment of dividends -- Class A 0
Shares redeemed -- Class A 0
NET INCREASE IN SHARES OUTSTANDING -- CLASS A 4,273
Shares sold -- Class B 1
Shares issued in reinvestment of dividends -- Class B 0
Shares redeemed -- Class B 0
NET INCREASE IN SHARES OUTSTANDING -- CLASS B 1
Shares sold -- Institutional Class 1,096,256
Shares issued in reinvestment of dividends --
Institutional Class 0
Shares redeemed -- Institutional Class (2,487)
NET INCREASE IN SHARES OUTSTANDING -- INSTITUTIONAL CLASS 1,093,769
</TABLE>
- ---------------------
110
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
5. INCOME AND EXPENSE ALLOCATIONS
For the period from April 28, 1996 (commencement of operations as a feeder fund)
to September 30, 1996, the Corporate Stock Fund received allocations of income
and expenses from its corresponding Master Portfolio. The detail of allocated
income and expenses for the stand-alone period of the Fund and the feeder period
of the Fund is as follows:
<TABLE>
<CAPTION>
STAND-ALONE PERIOD FEEDER PERIOD
-------------------- -------------------------------
FUND INTEREST DIVIDENDS INTEREST DIVIDENDS EXPENSES
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Corporate Stock $ 47,196 $2,248,983 $ 47,182 $3,711,397 $ 738,290
</TABLE>
6. REORGANIZATION OF WELLS FARGO INVESTMENT TRUST FOR RETIREMENT PROGRAMS
At special meetings held on December 31, 1991, unitholders owning a majority of
the outstanding units of each of the Wells Fargo Investment Trust for Retirement
Programs Funds (the "Trust") as of the close of business on November 8, 1991,
approved an Agreement and Plan of Reorganization (the "Agreement") among the
Trust, for itself and on behalf of each of the six funds comprising the Trust
(each a "Predecessor Fund"); the Company, a Maryland corporation ("Stagecoach");
Stephens, and Wells Fargo in its capacity as the Trustee of the Trust, and in
its individual capacity.
The Agreement provided, among other things, for the transfer of the assets of
each Predecessor Fund to a corresponding series of the Company (each a
"Stagecoach Fund"). The Agreement provided that in consideration thereof, each
Stagecoach Fund would assume certain identified liabilities of the corresponding
Predecessor Fund and would deliver to the corresponding Predecessor Fund the
number of full and fractional shares of common stock of the Stagecoach Fund
having an aggregate net asset value equivalent to the aggregate net asset value
of the assets transferred to the Stagecoach Fund by the corresponding
Predecessor Fund (collectively, the "Reorganization").
On January 1, 1992, the Reorganizations closed, and each Predecessor Fund made a
pro rata liquidating distribution to its unitholders of the shares of the
corresponding Stagecoach Fund it had received.
All of the expenses connected with the Reorganizations were paid by Wells Fargo
or Stephens.
All information contained in this Annual Report which reflects financial data on
the Corporate Stock and Growth and Income Funds for periods prior to 1992 refers
to the corresponding Predecessor Funds.
---------------------
111
<PAGE>
STAGECOACH EQUITY FUNDS -- SEPTEMBER 30, 1996
7. REORGANIZATION OF THE CORPORATE STOCK FUND INTO A MASTER/FEEDER STRUCTURE
At special meetings of shareholders held between December 5, 1995 and December
19, 1995, shareholders of the Corporate Stock Fund approved a reorganization of
the Fund into a "master-feeder" structure, pursuant to which the Fund invests
all of its assets in the Corporate Stock Master Portfolio of Master Investment
Trust. On the conversion date the Fund transferred its investments to the Master
Portfolio in exchange for interests in the Master Portfolio. The Fund then
became a "feeder" fund. This reorganization was effected in April 1996.
8. REORGANIZATION OF SMALL CAP FUND
The Small Cap Master Portfolio is the successor to certain assets of the Small
Capitalization Growth Fund for Employee 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 Small Cap Fund's operations,
the assets of the Collective Investment Fund were purchased by the Small Cap
Master Portfolio and the Collective Investment Fund redeemed all of its
outstanding interests and ceased operating as a trust. The Small Cap Master
Portfolio manages its investments in a manner identical in all material respects
to the operation of the Collective Investment Fund.
- ---------------------
112
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
STAGECOACH FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Balanced Fund, Diversified Income Fund,
Equity Value Fund and Growth and Income Fund and the statement of assets and
liabilities of the Aggressive Growth Fund, Corporate Stock Fund, and Small Cap
Fund (seven of the funds comprising Stagecoach Funds, Inc.) as of September 30,
1996, and the related statements of operations of the Balanced Fund and Equity
Value Fund for the year ended September 30, 1996, the Corporate Stock Fund,
Diversified Income Fund and Growth and Income Fund for the nine months ended
September 30, 1996, and the year ended December 31, 1995, the Aggressive Growth
Fund for the period from March 5, 1996 (commencement of operations) to September
30, 1996, and the Small Cap Fund for the period from September 16, 1996
(commencement of operations) to September 30, 1996, the statements of changes in
net assets of the Balanced Fund and Equity Value Fund for the year ended
September 30, 1996, the Corporate Stock Fund, Diversified Income Fund and Growth
and Income Fund for the nine months ended September 30, 1996, and each of the
years in the two year period ended December 31, 1995, the Aggressive Growth Fund
for the period from March 5, 1996 (commencement of operations) to September 30,
1996, and the Small Cap Fund for the period from September 16, 1996
(commencement of operations) to September 30, 1996, and financial highlights for
the periods indicated herein. These financial statements and financial
highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. For the Balanced Fund and Equity Value
Fund, all years or periods indicated in the accompanying financial statements
and financial highlights ending prior to October 1, 1995, were audited by other
auditors whose reports dated November 15, 1995 and November 22, 1994, expressed
unqualified opinions on this information. For the Corporate Stock Fund and
Growth and Income Fund, all periods indicated in the accompanying financial
highlights ending prior to January 1, 1992 were audited by other auditors whose
report dated February 19, 1992, expressed an unqualified opinion on this
information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
September 30, 1996, by examination and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Stagecoach Funds, Inc. as of September 30, 1996,
the results of their operations, the changes in their net assets and their
financial highlights for the periods indicated herein, except as noted above, in
conformity with generally accepted accounting principles.
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
NOVEMBER 15, 1996
---------------------
113
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
CAPITAL CORPORATE
APPRECIATION STOCK SMALL CAP
MASTER MASTER MASTER
PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see cost
below) $232,230,766 $370,913,349 $ 26,335,242
Cash 0 3,089 1,876
RECEIVABLES:
Dividends and interest 17,058 711,102 4,205
Fund shares sold 393,033 8,664 89,500
Investment securities sold 626,491 490,199 1,069,064
Other 113,219 0 5,480
TOTAL ASSETS $233,380,567 $372,126,403 $ 27,505,367
LIABILITIES
Cash overdraft due to custodian (Note 2) 33 0 0
Payables:
Investment securities purchased 5,763,137 0 1,198,731
Distribution to beneficial interest
holders 0 1,684,242 0
Fund shares redeemed 207,797 0 0
Due to Advisor (Note 2) 86,867 144,065 7,301
Other 10,576 24,298 3,073
TOTAL LIABILITIES 6,068,410 1,852,605 1,209,105
TOTAL NET ASSETS $227,312,157 $370,273,798 $ 26,296,262
INVESTMENTS AT COST $204,796,502 $201,387,650 $ 25,842,612
- -------------------------------------------------------------------------------------------
</TABLE>
(1) THIS MASTER PORTFOLIO COMMENCED OPERATIONS ON FEBRUARY 20, 1996.
(2) THIS MASTER PORTFOLIO COMMENCED OPERATIONS ON APRIL 28, 1996.
(3) THIS MASTER PORTFOLIO COMMENCED OPERATIONS ON SEPTEMBER 16, 1996.
The accompanying notes are an integral part of these financial statements.
- ------------------------
116
<PAGE>
STATEMENT OF OPERATIONS - FOR THE PERIODS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
SMALL
CAPITAL CORPORATE CAP
APPRECIATION STOCK MASTER
MASTER MASTER PORTFOLIO
PORTFOLIO PORTFOLIO --------
----------- -----------
FROM
FROM FEB. FROM APRIL SEPT.
20, 1996 28, 1996 16, 1996
(COMMENCEMENT (COMMENCEMENT (COMMENCEMENT
OF OF OF
OPERATIONS) OPERATIONS) OPERATIONS)
TO TO TO
SEPT. 30, SEPT. 30, SEPT.
1996 1996 30, 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 107,095 $ 3,711,397 $ 390
Interest 336,186 46,269 4,504
TOTAL INVESTMENT INCOME 443,281 3,757,666 4,894
EXPENSES (NOTE 2)
Advisory fees 453,282 710,941 6,129
Custody fees 22,025 0 375
Portfolio accounting fees 58,849 0 797
Legal and audit fees 6,093 27,349 2,664
Other 15,232 0 410
TOTAL EXPENSES 555,481 738,290 10,375
NET INVESTMENT INCOME (LOSS) (112,200) 3,019,376 (5,481)
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 750,785 3,905,323 60,298
Net change in unrealized appreciation
(depreciation) of investments 12,970,872 14,221,384 492,630
NET GAIN (LOSS) ON INVESTMENTS 13,721,657 18,126,707 552,928
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $13,609,457 $21,146,083 $547,447
- -------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
117
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAPITAL
APPRECIATION CORPORATE SMALL CAP
MASTER STOCK MASTER MASTER
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
FROM FEB. FROM APRIL FROM SEPT.
20, 1996 28, 1996 16, 1996
(COMMENCEMENT (COMMENCEMENT (COMMENCEMENT
OF OF OF
OPERATIONS) OPERATIONS) OPERATIONS)
TO TO TO
SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1996
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
OPERATIONS:
Net investment income (loss) $ (112,200) $ 3,019,376 $ (5,481)
Net realized gain (loss) on sale of
investments 750,785 3,905,323 60,298
Net change in unrealized appreciation
(depreciation) of investments 12,970,872 14,221,384 492,630
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 13,609,457 21,146,083 547,447
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM BENEFICIAL INTERESTS
TRANSACTIONS 213,702,700 349,127,715(1) 25,748,815
INCREASE (DECREASE) IN
NET ASSETS 227,312,157 370,273,798 26,296,262
NET ASSETS:
ENDING NET ASSETS $227,312,157 $370,273,798 $ 26,296,262
- -------------------------------------------------------------------------------------------
</TABLE>
(1) "NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM BENEFICIAL INTERESTS
TRANSACTIONS" INCLUDES $197,709,375 AS A RESULT OF THE CONVERSION FROM
STAND-ALONE TO "MASTER-FEEDER" STRUCTURE.
- ---------------------
118
<PAGE>
'
MASTER INVESTMENT TRUST -- SEPTEMBER 30, 1996
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Corporate Stock Master Portfolio, Capital Appreciation Master Portfolio and
Small Cap Master Portfolio (the "Master Portfolios") are three series of Master
Investment Trust (the "Trust"), a business trust organized under the laws of
Delaware on August 14, 1991. The Trust is registered as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Declaration of Trust permits the issuance of beneficial interests ("interests").
The Trust currently issues nine series of investment portfolios: the Asset
Allocation, Capital Appreciation, Cash Investment Trust, Corporate Stock,
Tax-Free Money Market, Short-Term Government-Corporate Income, Short-Term
Municipal Income, Small Cap and U.S. Government Allocation Master Portfolios.
The following significant accounting policies are consistently followed by the
Trust's management in the preparation of its financial statements, and such
policies are in conformity with generally accepted accounting principles for
investment companies. These financial statements represent only the Capital
Appreciation, Corporate Stock and Small Cap Master Portfolios.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT POLICY AND SECURITY VALUATION
Each Master Portfolio's investments include equities, fixed-, variable- and
floating-rate instruments. Investments in securities for which the primary
market is a national securities exchange or the Nasdaq National Market System
are valued at the last reported sales price on the day of valuation. U.S.
government obligations are valued at the stated mean between the last reported
bid and ask prices. Securities not listed on an exchange or national securities
market, or securities in which there were no transactions, excluding debt
securities maturing in 60 days or less, are valued at the most recent bid
prices, or if such prices are not readily available, at fair value as determined
in accordance with procedures adopted by the Board of Trustees. Debt securities
maturing in 60 days or less are valued at amortized cost, which approximates
market value.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Dividend income is
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MASTER INVESTMENT TRUST -- SEPTEMBER 30, 1996
recognized on the ex-dividend date, interest income is accrued daily. Realized
gains and losses are reported on the basis of identified cost of securities
delivered. Bond discounts and premiums are amortized as required by the Internal
Revenue Code.
FEDERAL INCOME TAXES
Each Master Portfolio intends to qualify for federal income tax purposes as a
partnership. Management of each Master Portfolio therefore believes that it will
not be subject to any federal or state income tax on its income and net capital
gains (if any). However, each investor in a Master Portfolio will be taxed on
its distributive share of the partnership's income for purposes of determining
its federal and state income tax liabilities. The determination of such share
will be made in accordance with the Internal Revenue Code of 1986, as amended
("Code"), and the regulations promulgated thereunder.
It is intended that the Master Portfolios' assets, income, gain/loss and
allocations will be managed in such a way that a regulated investment company
investing in the Master Portfolio will be able to satisfy the requirements of
Subchapter M of the Code, assuming that the investment company invests all of
its assets in the Master Portfolio.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into separate advisory contracts with WFB on behalf of
each Master Portfolio. Pursuant to the contracts, WFB furnishes investment
guidance and policy direction in connection with the daily portfolio management
of each Master Portfolio. Under the contract with the Capital Appreciation and
Small Cap Master Portfolios, WFB is entitled to receive a monthly advisory fee
at an annual rate of 0.50% and 0.60%, respectively, of the average daily net
assets. WFB is also entitled to receive from the Corporate Stock Master
Portfolio a monthly advisory fee at an annual rate of 0.50% of the first $250
million, 0.40% of the next $250 million and 0.30% of the average daily net
assets exceeding $500 million.
The Corporate Stock Master Portfolio currently retains Barclays Global Fund
Advisors ("BGFA") as sub-adviser. Pursuant to a sub-advisory contract with the
Corporate Stock Master Portfolio and subject to the overall supervision of WFB,
the investment adviser, BGFA is responsible for day-to-day portfolio management
of the Fund. BGFA is entitled to receive from WFB as compensation for its
sub-advisory services monthly fees at the annual rate of 0.08% of the average
daily net assets of the Corporate Stock Master Portfolio. BGFA is also entitled
to receive from WFB annual fees of $40,000 for its services for the Corporate
Stock Master Portfolio.
BGFA is an indirect subsidiary of Barclays Bank and is located at 45 Fremont
Street, San Francisco, California 94105. BGFA was formed by the reorganization
of Wells Fargo Nikko Investment Advisors ("WFNIA"), a former affiliate of Wells
Fargo & Company.
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MASTER INVESTMENT TRUST -- SEPTEMBER 30, 1996
The Trust has also entered into a contract with WFB whereby WFB has agreed to
provide custody services for the Capital Appreciation and Small Cap Master
Portfolios. For providing these services, WFB is entitled to be compensated for
custody services based on a rate of 0.0167% of the average daily net assets of
each Master Portfolio.
Barclays Global Investors, N.A. ("BGI") currently acts as custodian to the
Corporate Stock Master Portfolio. BGI is an affiliate of BGFA. BGI will not be
entitled to compensation for its custodial services to the Master Portfolio so
long as BGFA is entitled to receive compensation for providing sub-advisory
services to the Master Portfolio.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments exclusive of securities with maturities of
one year or less at purchase date for the Capital Appreciation, Corporate Stock
and Small Cap Master Portfolios, for the periods ended September 30, 1996, were
as follows:
<TABLE>
<CAPTION>
CAPITAL CORPORATE
APPRECIATION STOCK SMALL CAP
AGGREGATE PURCHASES MASTER MASTER MASTER
AND SALES OF: PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3)
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 0 $ 0 $ 0
Sales proceeds 0 0 0
OTHER LONG-TERM SECURITIES:
Purchases at cost 275,739,804 10,695,172 24,996,255
Sales proceeds 108,264,147 9,837,007 2,248,448
</TABLE>
(1) THE PERIOD REPORTED IS FROM COMMENCEMENT OF OPERATIONS, FEBRUARY 20, 1996,
TO SEPTEMBER 30, 1996.
(2) THE PERIOD REPORTED IS FROM COMMENCEMENT OF OPERATIONS, APRIL 28, 1996, TO
SEPTEMBER 30, 1996.
(3) THE PERIOD REPORTED IS FROM COMMENCEMENT OF OPERATIONS, SEPTEMBER 16, 1996,
TO SEPTEMBER 30, 1996.
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rates, excluding securities with maturities of one year
or less at purchase date, and average commission rate paid for each Master
Portfolio for the periods ended September 30, 1996 are as follows:
<TABLE>
<CAPTION>
CAPITAL
APPRECIATION CORPORATE SMALL CAP
MASTER STOCK MASTER MASTER
PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- -------------
FROM
FROM FEB. 20, FROM APRIL SEPTEMBER 16,
1996 28, 1996 1996
(INCEPTION) (INCEPTION) (INCEPTION)
TO SEPTEMBER TO SEPTEMBER TO SEPTEMBER
30, 1996 30, 1996 30, 1996
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Portfolio Turnover 75% 3% 10%
Average Commission Rate Paid $0.0785 $0.0265 $0.0800
</TABLE>
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INDEPENDENT AUDITORS' REPORT
TO THE UNITHOLDERS AND BOARD OF TRUSTEES
MASTER INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Capital Appreciation Master Portfolio,
Corporate Stock Master Portfolio, and Small Cap Master Portfolio (three of the
master portfolios comprising Master Investment Trust) as of September 30, 1996,
and the related statements of operations and changes in net assets, and
financial highlights for the period from February 20, 1996 (commencement of
operations) to September 30, 1996 for the Capital Appreciation Master Portfolio,
from April 28, 1996 (commencement of operations) to September 30, 1996, for the
Corporate Stock Master Portfolio, and from September 16, 1996 (commencement of
operations) to September 30, 1996, for the Small Cap Master Portfolio. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
September 30, 1996, by examination and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned master portfolios of Master Investment Trust as of
September 30, 1996, the results of their operations, the changes in their net
assets and their financial highlights for the periods indicated herein in
conformity with generally accepted accounting principles.
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
NOVEMBER 15, 1996
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<PAGE>
LIST OF ABBREVIATIONS
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
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Wells Fargo provides investment advisory services, shareholder services, and
certain other services for the Stagecoach Funds. The Funds are sponsored and
distributed by STEPHENS INC., Member NYSE/SIPC. Wells Fargo is not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Stagecoach Funds. If this report
is used for promotional purposes, distribution of the report must be accompanied
or preceded by a current prospectus. For a prospectus containing more complete
information, including charges and expenses, call 1-800-222-8222. Read the
prospectus carefully before you invest or send money.
SC 0551 (11/96)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
</TABLE>
[LOGO]
-C- 1996 Stagecoach Funds
<PAGE>
