<PAGE>
- ---------------------
SEMI-ANNUAL
- ---------------------
REPORT
- ---------------------
California Tax-Free
Money Market
Mutual Fund
Money Market
Mutual Fund
Class A
JUNE 30, 1996
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS iii
MANAGER COMMENTS
California Tax-Free Money Market Mutual Fund 1
Money Market Mutual Fund 2
PORTFOLIOS OF INVESTMENTS
California Tax-Free Money Market Mutual Fund 4
Money Market Mutual Fund 20
STATEMENT OF ASSETS AND LIABILITIES 24
STATEMENT OF OPERATIONS 25
STATEMENTS OF CHANGES IN NET ASSETS 26
FINANCIAL HIGHLIGHTS 28
NOTES TO THE FINANCIAL STATEMENTS 30
LIST OF ABBREVIATIONS 35
STAGECOACH FUNDS:
-------------------------------------------------------------------------
- ARE NOT FDIC INSURED MONEY MARKET MUTUAL FUNDS
- ARE NOT GUARANTEED BY WELLS FARGO SEEK TO MAINTAIN A STABLE [NO FDIC]
BANK NET ASSET VALUE OF $1.00 PER
- ARE NOT DEPOSITS OR OBLIGATIONS SHARE, HOWEVER, THERE CAN BE
OF THE BANK NO ASSURANCE THAT THE FUNDS
- INVOLVE INVESTMENT RISK, WILL MEET THIS OBJECTIVE.
INCLUDING POSSIBLE LOSS OF YIELDS WILL VARY WITH MARKET
PRINCIPAL CONDITIONS.
---------------------
i
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
ii
<PAGE>
LETTER TO SHAREHOLDERS
- ------------------
TO OUR SHAREHOLDERS:
INFLATION CONCERNS MAY SPUR FED ACTION
The story of the financial markets for the first six months of 1996 was the
concern that "too much strength" in the economy would increase inflation and
force the Federal Reserve (the "Fed") to raise the federal funds target rate to
slow economic growth. While those concerns pushed long-term interest rates up
about a full percentage point since the end of 1995, sending 30-year Treasury
bonds over the 7.00% mark in June, money market mutual funds did not benefit
from increased yields.
In part, money market mutual fund yields remained relatively stable because the
Fed has not in fact raised rates. The federal funds discount rate establishes
the "floor" for interest rates throughout the economy and is one of the most
direct influences on money market yields. When this rate is increased, money
becomes more expensive to borrow, slowing economic activity. The Fed had lowered
interest rates several times over the past year, fueling to some extent the
stock market's strong performance over that time, but reducing returns for money
market funds.
Inflation is a valid concern for investors since inflation can erode the
long-term real return on an investment portfolio. There is not, however, a
consensus on how severe a problem inflation currently is. Certain signs that
usually indicate inflation, such as increased wages, lower unemployment and
stronger than expected economic growth, have not been validated by the
Department of Labor's Consumer Price Index, which continues to show inflation in
the acceptable 2 to 3.00% range. Nonetheless, most analysts now expect the Fed
to increase the federal funds target rate at least once, and possibly twice,
during the remainder of the year.
THE ROLE OF MONEY MARKET MUTUAL FUNDS
It may seem that the interests of money market and long-term mutual funds are
contrary, since an increase in interest rates can have a negative impact on both
the stock and bond markets, while increasing money market yields. It is
important to keep in mind, however, that these investments serve different ends.
Ideally, money market mutual funds are most suitable for short-term investments.
Money market funds are managed to provide current income and to maintain a net
asset value of one dollar per share. This reduces the possibility of loss of
principal and is intended to provide better yields than other short-term
alternatives. (There is, of course, no guarantee that they can achieve these
goals.)
Long-term funds, whether invested in equities or fixed-income securities,
increase the possibility of loss of principal, particularly in the short-term,
and are intended for investors with longer time horizons than money market
investors. Just as most investors have a variety
---------------------
iii
<PAGE>
LETTER TO SHAREHOLDERS
of needs and objectives, a balanced portfolio generally has a mixture of long-
and short-term investments.
A COMMITMENT TO INVESTMENT QUALITY
We believe a conservative, straightforward approach is the most effective long-
term investment strategy, and we offer a variety of Stagecoach Funds to meet a
broad range of investment goals. On the following pages you will find reports
from the investment adviser and portfolio managers of each of the Funds,
offering insight into individual fund performance and strategies, portfolio
holdings and other helpful information.
We appreciate your participation in the Stagecoach Funds. We will continue
working diligently to help you realize your financial goals.
STAGECOACH FAMILY OF FUNDS, AUGUST 1996
- ---------------------
iv
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
WHAT WAS THE SEVEN-DAY YIELD AS OF JUNE 30, 1996?
The seven-day yield as of the end of June was 2.68%. This is below the 1995
year-end seven-day yield of 3.81%.
WHY IS THE SEVEN-DAY YIELD LOWER THAN AT THE END OF 1995?
Yields on money market mutual funds tend to spike at year-end due to liquidity
pressures. Since market activity tends to slow down, money market instruments
are sold at a discount to attract buyers. This discount increases the Fund's
yield.
As for the more recent yields, they are most influenced by the rates set by the
Federal Reserve. Rates have not increased in some time.
WHAT DO YOU EXPECT TO HAVE HAPPEN FOR THE REMAINDER OF THIS YEAR?
The Fed appears to have adopted a neutral stance for the time being regarding
interest rates, despite the growing market consensus that an increase is likely.
Fed action depends on how it perceives the rate of inflation. Demand for
tax-free money market funds continues to be steady, which could help support
returns.
HOW DIRECT A RELATIONSHIP IS THERE BETWEEN INVESTOR CONFIDENCE IN A PARTICULAR
STATE'S ECONOMY AND THE RESALE VALUE OF ITS DEBT INSTRUMENTS? ARE EXTERNAL
FACTORS LIKE INFLATION MORE IMPORTANT?
Generally inflation has the largest impact on fixed-income performance. In
municipals, state income tax rates also have a large influence. For example,
even when California's economy was at its weakest, there was strong demand for
California tax-free money market funds due to the relatively high (9.3%) maximum
individual tax rate. If concerns develop that a state municipal issuer might
have trouble meeting its obligations, it could certainly affect the liquidity of
those securities.
WHAT'S THE CONSENSUS ON THE CALIFORNIA ECONOMY?
The California economy has rebounded from one of the worst recessions in its
history. Revenue receipts are actually above projections and this improvement
should continue.
THE ORANGE COUNTY BANKRUPTCY HAS FINALLY WORKED ITS WAY THROUGH THE COURTS. HOW
HAS THE INVESTMENT COMMUNITY REACTED TO THE RESOLUTION? WILL THERE CONTINUE TO
BE REPERCUSSIONS FOR NON-ORANGE COUNTY ISSUES?
In the municipal bond world, "penalties" are assessed through the market. Orange
County will pay a "penalty" in the form of higher interest costs for many years.
Even though the last two Orange County issues have come with muni bond
insurance, the issues have been forced to offer a higher rate than similar
insured paper in order to attract investors. Overall, the investment community
has been surprisingly forgiving of the County -- many predicted an all-out
boycott of the County's issues.
---------------------
1
<PAGE>
MONEY MARKET MUTUAL FUND -- CLASS A
WHAT WAS THE SEVEN-DAY YIELD AS OF JUNE 30, 1996?
The seven-day yield as of the end of June was 4.68%. This is below the 1995
year-end seven-day yield of 4.98%.
WHY IS THE SEVEN-DAY YIELD LOWER THAN AT THE END OF 1995?
Money market yields are most influenced by the federal funds target rate which
is set by the Fed. In late January, the Fed lowered the target rate from 5.50%
to 5.25% in response to a stagnant economy and low inflation. This was the last
in a series of rate cuts which had the affect of dragging down money market
rates over the last year. During the second quarter a different story emerged as
the U.S. economy heated up, led by strengths in employment, the housing sector
and auto sales. This increased speculation that the Fed would reverse its recent
direction and raise rates during 1996. That has not yet occurred.
Investors interested in tracking yields in the money market sector would find
the 3-month London Interbank Offered Rate (LIBOR) a helpful indication of
interest rates along with the federal funds target rate. At the end of 1995, the
federal funds target rate was at 5.50% and 3-month LIBOR was at 5.62%. As of
June 30, 1996 the federal funds target rate was at 5.25% and 3-month LIBOR was
at 5.53%.
WHAT DO YOU EXPECT TO HAPPEN TO RATES FOR THE REST OF 1996?
We expect the Fed to tighten monetary policy in the third quarter by raising the
federal funds target rate in response to continued strength in the economy and
fears of inflation. If this occurs, money market rates would increase.
WHAT WILL YOUR STRATEGY BE IN RESPONSE?
With this current outlook on interest rates, the Fund has shortened its average
maturity from 70 days in the first quarter to approximately 50 days at the end
of the first half of the year. If rates increase, we may extend maturity again
to lock in the higher yields.
HOW DIRECT IS THE LINK BETWEEN CHANGES IN THE FEDERAL FUNDS TARGET RATE AND THE
YIELDS ON MONEY MARKET INSTRUMENTS?
The federal funds target rate is the single biggest determinant of money market
rates. This impact occurs in two ways: first, changes in the federal funds
target rate have a direct effect on money market yields. Second, money market
yields increase as expectations for a higher federal funds rate increase.
- ---------------------
2
<PAGE>
MONEY MARKET MUTUAL FUND -- CLASS A
DURING PERIODS OF GENERALLY LOWER RATES, DOES THE FUND GO "SHOPPING" FOR THE
BEST DEALS? HOW DOES IT SELECT INVESTMENTS?
Regardless of the level of interest rates, the Fund is always looking for the
best deals without compromising credit quality, whether they may be found in
commercial or government paper. The Fund monitors the relative values of both
sectors continually and seizes opportunities as they present themselves. Over a
period of time, the "best deals" can be in either sector.
---------------------
3
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
- -----------------------------------------
PORTFOLIO OF INVESTMENTS - 6/30/96
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + - 103.68%
$ 1,300,000 ABAG Finance Authority for Nonprofit Corp CA
Lucile Salter Packard Project V/R AMBAC
Insured 3.25% 08/01/23 $ 1,300,000
10,000,000 Alameda County CA TRAN LOC - Union Bank of
Switzerland 4.75 07/25/96 10,005,128
5,000,000 Anaheim CA Housing Revenue V/R LOC - Citibank 3.20 12/01/23 5,000,000
18,600,000 Anaheim CA Public Improvement V/R COP LOC -
Industrial Bank of Japan Ltd 3.10 08/01/19 18,600,000
4,500,000 Barstow CA MFHR Desert Vista Apartments V/R LOC
- Federal Home Loan Bank of San Francisco 3.05 12/01/20 4,500,000
5,325,000 Bell Garden CA RDFA Central City Project
Prerefunded 8.00 07/01/19 5,431,500
3,700,000 Big Bear Lake CA Industrial Revenue Southwest
Gas Corp V/R AMT Series A LOC - Union Bank of
Switzerland 3.30 12/01/28 3,700,000
8,000,000 Brea & Olinda CA USD Brea High School
Prerefunded 7.70 08/01/18 8,185,400
4,400,000 California State GO CP 3.40 10/08/96 4,400,000
1,900,000 California State GO CP 3.50 09/24/96 1,900,000
5,200,000 California State GO CP 3.50 10/09/96 5,200,000
1,000,000 California State GO CP 3.55 10/18/96 1,000,000
14,900,000 California State GO TOB Multiple LOC's 3.39 11/01/24 14,900,000
5,000,000 California State GO V/R MBIA Insured 3.30 09/01/03 5,000,000
6,285,000 California State HFA Home Mortgage Revenue V/R 3.60 08/01/17 6,285,000
2,000,000 California State HFA Home Mortgage Revenue V/R
MBIA Insured 3.40 08/01/10 2,000,000
2,500,000 California State HFA Revenue Home Mortgage
Series E V/R AMT 4.60 08/01/27 2,500,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
4
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 3,400,000 California State HFFA Catholic Healthcare
Series C V/R 3.00% 07/01/20 $ 3,400,000
3,000,000 California State HFFA Catholic West Hospital
Series B V/R MBIA Insured 3.00 07/01/05 3,000,000
5,100,000 California State HFFA Childrens Hospital V/R
MBIA Insured 3.00 11/01/21 5,100,000
15,600,000 California State HFFA Kaiser Permanente V/R 3.00 05/01/28 15,600,000
13,400,000 California State HFFA Memorial Health Services
V/R 3.00 10/01/24 13,400,000
4,400,000 California State HFFA N. T. Enloe Memorial
Hospital V/R LOC - Bank of America 3.15 01/01/16 4,400,000
4,000,000 California State HFFA Revenue Catholic
Healthcare West Series C V/R MBIA Insured 3.00 07/01/11 4,000,000
300,000 California State HFFA Revenue Catholic
Healthcare West V/R MBIA Insured 3.00 07/01/09 300,000
3,300,000 California State HFFA Revenue Catholic
Healthcare West V/R Series B MBIA Insured 3.00 07/01/16 3,300,000
1,100,000 California State HFFA Santa Barbara Cottage V/R
LOC - Credit Suisse 3.00 09/01/15 1,100,000
1,500,000 California State HFFA St Joseph Health Center
Series A V/R 3.00 07/01/13 1,500,000
1,915,000 California State IDA Merrills Packing Inc V/R
LOC - Bank of Tokyo Ltd 3.40 12/01/18 1,915,000
4,000,000 California State PCFA 3.35 07/31/96 4,000,000
5,000,000 California State PCFA 3.35 08/08/96 5,000,000
2,000,000 California State PCFA 3.35 10/11/96 2,000,000
5,000,000 California State PCFA 3.35 11/15/96 5,000,000
2,500,000 California State PCFA 3.40 07/25/96 2,500,000
2,000,000 California State PCFA 3.45 11/13/96 2,000,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
5
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 2,000,000 California State PCFA Chevron Project V/R 4.25% 06/15/05 $ 1,996,300
6,250,000 California State PCFA Pacific Gas & Electric CP
LOC - Swiss Bank 3.25 08/15/96 6,250,000
2,000,000 California State PCFA Pacific Gas & Electric CP
LOC - Swiss Bank 3.30 08/08/96 2,000,000
7,000,000 California State PCFA Pacific Gas & Electric CP
LOC - Swiss Bank 3.30 08/15/96 7,000,000
1,800,000 California State PCFA Pacific Gas & Electric CP
LOC - Swiss Bank 3.40 07/31/96 1,800,000
3,000,000 California State PCFA Pacific Gas & Electric
LOC - Morgan Guaranty Trust 3.55 09/09/96 3,000,000
4,800,000 California State PCFA Pacific Gas & Electric
LOC - Morgan Guaranty Trust 3.60 07/25/96 4,800,000
2,500,000 California State PCFA Pacific Gas & Electric
V/R Series A 3.45 12/01/16 2,500,000
3,000,000 California State PCFA Pacific Gas & Electric
V/R Series F 3.40 11/01/26 3,000,000
2,000,000 California State PCFA Resources Recovery
Revenue V/R LOC - Banque Nationale de Paris 3.75 09/01/18 2,000,000
1,000,000 California State PCFA Revenue San Diego Gas &
Electric V/R 4.00 12/01/08 1,000,000
1,000,000 California State PCFA Sanger Project Series
90-A V/R LOC - Credit Suisse 3.30 09/01/20 1,000,000
1,600,000 California State PCFA Solid Waste Disposal
Revenue Colmac Energy Project Series B V/R
AMT LOC - Swiss Bank 3.30 12/01/16 1,600,000
8,000,000 California State PCFA Solid Waste Disposal
Revenue Colmac Energy Project V/R Series A
LOC - Swiss Bank 3.30 12/01/16 8,000,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
6
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 3,400,000 California State PCFA Solid Waste Disposal
Revenue Taormina Industries Project AMT
Multiple LOC's 3.65% 08/01/14 $ 3,400,000
2,500,000 California State PCFA Southern California
Edison 3.45 07/31/96 2,500,000
1,000,000 California State PCFA Southern California
Edison 3.55 10/22/96 1,000,000
1,400,000 California State PCFA Southern California
Edison V/R 3.45 02/28/08 1,400,000
2,800,000 California State PCFA Southern California
Edison V/R Series C 3.45 02/28/08 2,800,000
6,000,000 California State PCFA V/R San Diego Gas &
Electric Co V/R Series A 3.95 12/01/07 6,000,000
2,000,000 California State PCFA V/R Shell Oil Co Project
Series B 3.00 10/01/11 2,000,000
20,000,000 California State School Cash Reserve Program
Pool Series A MBIA Insured 4.75 07/03/96 20,000,950
25,000,000 California State School Cash Reserve Program
Pool Series B MBIA Insured 4.50 12/20/96 25,081,739
30,000,000 California State School Cash Reserve Projects
Authority Series A 4.75 07/02/97 30,259,200
12,000,000 California Statewide CDA Apartment Development
Revenue V/R Series A-2 FNMA Collateralized 3.15 05/15/25 12,000,000
15,100,000 California Statewide CDA Apartment Development
Revenue V/R Series A-4 FNMA Collateralized 3.25 05/15/05 15,100,000
3,700,000 California Statewide CDA Barton Hospital V/R
LOC - Banque Nationale de Paris 3.55 12/01/09 3,700,000
1,100,000 California Statewide CDA Revenue DV Industries
V/R AMT Series A LOC - Bank of Tokyo Ltd 3.40 08/01/19 1,100,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
7
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 3,800,000 California Statewide CDA St Joseph Health
System V/R 3.00% 07/01/08 $ 3,800,000
640,000 California Statewide CDA V/R AMT LOC - Bank of
Tokyo Ltd 3.40 05/01/12 640,000
600,000 California Statewide IDA APM Inc Project Class
A V/R LOC - Bank of Tokyo Ltd 3.40 06/01/04 600,000
5,000,000 Chula Vista CA IDR San Diego Gas & Electric 3.20 07/18/96 5,000,000
5,000,000 Chula Vista CA IDR San Diego Gas & Electric 3.25 07/30/96 5,000,000
5,000,000 Chula Vista CA IDR San Diego Gas & Electric 3.65 09/11/96 5,000,000
9,700,000 Chula Vista CA IDR San Diego Gas & Electric V/R 3.35 12/01/27 9,700,000
3,240,000 Chula Vista CA MFHR V/R Series A 3.25 03/01/05 3,240,000
2,500,000 Colton CA RDFA MFHR V/R LOC - Federal Home Loan
Bank of San Francisco 3.15 05/01/10 2,500,000
745,000 Contra Costa County CA MFHR El Cerrito Royale
V/R LOC - Bank of America 3.40 12/01/17 745,000
2,500,000 Contra Costa County CA MFHR Park Regency
Apartment V/R LOC - Bank of America 3.60 08/01/32 2,500,000
7,000,000 Contra Costa County CA TRAN 4.50 07/03/97 7,040,600
18,000,000 Eagle Trust V/R Series 94 MBIA Insured 3.39 09/01/03 18,000,000
2,500,000 East Bay CA MUD CP LOC - West Deutsche
Landesbank 3.55 10/31/96 2,500,000
12,970,000 Eastern Municipal Water District CA Revenue
Series B V/R FGIC Insured 3.00 07/01/20 12,970,000
3,000,000 Emeryville CA PFA Revenue RDA 8.10 02/01/17 3,133,922
250,000 Farfield CA IDA Herman G Rowland Project V/R
LOC - Bank of America 3.40 04/01/05 250,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
8
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 8,300,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue Series B V/R LOC -
Morgan Guaranty Trust 3.00% 01/02/35 $ 8,300,000
16,900,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue Series C V/R LOC -
Credit Suisse 3.10 01/02/35 16,900,000
3,400,000 Foothill / Eastern CA Transportation Corridor
Toll Road Development Series D V/R LOC -
Industrial Bank of Japan Ltd 3.15 01/02/35 3,400,000
1,500,000 Fowler CA IDA Bee Sweet Citrus Inc V/R AMT LOC
- Bank of America 3.40 12/01/05 1,500,000
6,800,000 Fullerton CA IDA Sunclipse Inc V/R LOC - Bank
of America 3.25 07/01/15 6,800,000
8,000,000 Hayward CA MFHR V/R FGIC Insured 3.00 08/01/14 8,000,000
2,700,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank Plc 3.30 09/02/15 2,700,000
700,000 Irvine Ranch CA Water District V/R 3.40 11/15/13 700,000
5,300,000 Irvine Ranch CA Water District V/R LOC - Bank
of America 3.30 04/01/33 5,300,000
3,600,000 Irvine Ranch CA Water District V/R LOC -
Commerzbank AG 3.30 01/01/21 3,600,000
4,100,000 Irvine Ranch CA Water District V/R LOC -
Dai-Ichi Kangyo Bank Ltd 3.50 09/02/20 4,100,000
1,700,000 Irvine Ranch CA Water District V/R LOC - Morgan
Guaranty Trust 3.50 08/01/16 1,700,000
4,000,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 3.30 10/01/00 4,000,000
3,000,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 3.30 10/01/05 3,000,000
1,000,000 Kern CO COP Public Facilities Project Series D
V/R 3.00 08/01/06 1,000,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
9
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 200,000 Lancaster CA HFA MFHR Westwood Park Apartments
V/R LOC - Bank of America 2.90% 12/01/07 $ 200,000
4,000,000 Livermore CA MFHR V/R 3.10 07/15/18 4,000,000
5,000,000 Long Beach CA General Revenue 3.60 09/10/96 5,000,000
8,500,000 Long Beach CA General Revenue 3.65 08/07/96 8,500,000
5,900,000 Long Beach CA Harbor Revenue CP LOC - Canadian
Imperial Bank of Commerce 3.55 09/23/96 5,900,000
2,000,000 Long Beach CA Harbor Revenue CP LOC - Canadian
Imperial Bank of Commerce 3.60 09/24/96 2,000,000
22,600,000 Long Beach CA Health Facilities Memorial Health
Services 3.00 10/01/16 22,600,000
1,475,000 Los Angeles CA Metropolitan Transportation
Authority Sales Tax Revenue Series A 7.60 07/01/12 1,504,500
3,700,000 Los Angeles CA MFHA Malibu Meadows Project
Series A V/R LOC - Sumitomo Bank Ltd 3.20 12/01/15 3,700,000
2,515,000 Los Angeles CA MFHR Canyon Aparments Series C
V/R LOC - Swiss Bank 2.85 12/01/10 2,515,000
1,800,000 Los Angeles CA MFHR Masselin Manor V/R LOC -
Bank of America 3.05 07/01/15 1,800,000
1,000,000 Los Angeles CA MFHR Poinsettia Apartments
Series A V/R LOC - Dai-Ichi Kangyo Bank Ltd 3.20 07/01/19 1,000,000
500,000 Los Angeles CA MFHR V/R 3.10 07/01/14 500,000
2,200,000 Los Angeles CA MFHR V/R AMT LOC - Federal Home
Loan Bank of San Francisco 3.75 08/01/26 2,200,000
500,000 Los Angeles CA MFHR V/R Series K 3.10 07/01/10 500,000
3,600,000 Los Angeles CA Pension Obligation V/R Series B
AMBAC Insured 3.00 06/30/07 3,600,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
10
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 4,000,000 Los Angeles CA Pension Obligation V/R Series C
AMBAC Insured 3.25% 06/30/07 $ 4,000,000
5,000,000 Los Angeles CA TRAN Series A 4.50 06/30/97 5,031,200
3,000,000 Los Angeles CA Wastewater Revenue CP 3.40 08/27/96 3,000,000
1,500,000 Los Angeles County CA HFA MFHR Harbor Cove
Project V/R LOC - Citibank 3.20 10/01/06 1,500,000
9,800,000 Los Angeles County CA HFA MFHR Park Sierra V/R
AMT LOC - Citibank 3.15 12/01/08 9,800,000
4,100,000 Los Angeles County CA HFA MFHR Sand Canyon
Ranch Project V/R LOC - Citibank 3.00 11/01/06 4,100,000
500,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.20 12/01/06 500,000
500,000 Los Angeles County CA IDA Walter & Howard V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.20 12/01/06 500,000
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.00 08/09/96 1,000,000
2,100,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.30 07/11/96 2,100,000
9,500,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.35 08/29/96 9,500,000
4,400,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.45 09/19/96 4,400,000
5,300,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.50 09/17/96 5,300,000
6,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.50 09/18/96 6,000,000
2,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.55 08/14/96 2,000,000
7,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.55 08/23/96 7,000,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
11
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 3,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.60% 07/23/96 $ 2,999,699
9,700,000 Los Angeles CA Metropolitan Transportation
Authority Sales Tax Revenue CP 3.60 09/19/96 9,700,000
6,600,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.60 10/24/96 6,600,000
8,400,000 Los Angeles County CA Metropolitan
Transportation Authority CP 3.65 08/20/96 8,400,000
10,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP 4.00 02/27/97 10,039,311
4,500,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.40 12/01/06 4,500,000
21,100,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
V/R Series A 3.00 07/01/20 21,100,000
1,900,000 Los Angeles County CA MFHR Series 84B V/R LOC -
Citibank 4.16 09/01/96 1,900,000
5,400,000 Los Angeles County CA pension Obligation V/R
Series A AMBAC Insured 3.47 06/30/07 5,400,000
15,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue V/R FGIC Insured 3.10 07/01/12 15,000,000
10,000,000 Marin County CA TRAN AMT LOC - Sanwa Bank 4.50 10/29/96 10,021,527
2,800,000 Metropolitan Water District of Southern CA
Waterworks Revenue CP 3.35 08/28/96 2,800,000
2,100,000 Metropolitan Water District of Southern CA
Waterworks Revenue CP 3.55 08/08/96 2,100,000
2,500,000 Metropolitan Water District of Southern CA
Waterworks Revenue CP 3.55 10/31/96 2,500,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
12
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 5,400,000 Modesto CA MFHR Westdale Commons Apartments V/R
LOC - Federal Home Loan Bank of San Francisco 3.30% 12/01/15 $ 5,400,000
3,100,000 Monterey CA Peninsula Water Management District
Wastewater Reclamation Project V/R LOC -
Sumitomo Bank Ltd 3.55 07/01/22 3,100,000
5,300,000 Monterey CA Regional Waste Management Authority
Revenue Series A V/R LOC - Dai-Ichi Kangyo
Bank Ltd 3.35 04/01/15 5,300,000
8,500,000 Monterey County CA Financing Authority Water
Reclamation Projects V/R AMT LOC - Dai-Ichi
Bank Ltd 3.35 09/01/36 8,500,000
2,700,000 Moorpark CA MFHR Le Club Apartments V/R LOC -
Citibank 3.05 11/01/15 2,700,000
5,000,000 Northern California State Public Power Revenue
Geothermeal Project 3A AMBAC Insured 3.15 07/01/05 5,000,000
2,800,000 Ontario CA MFHR Park Centre Apartments V/R LOC
- Bank of New York 2.90 08/01/07 2,800,000
1,360,000 Ontario CA MFHR Vineyard Village Apartments V/R
LOC - Industrial Bank of Japan Ltd 3.20 12/01/05 1,360,000
2,249,000 Orange County CA HFA Harbor Pointe Apartment
V/R Issue D LOC - Citibank 3.10 12/01/06 2,249,000
4,200,000 Orange County CA HFA Monarch Bay Apartments V/R
LOC - Mitsubishi Bank Ltd 3.35 10/01/07 4,200,000
700,000 Orange County CA HFA Niguel Summit Apartment
V/R LOC - Bank of America 3.20 11/01/09 700,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
13
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$13,300,000 Orange County CA HFA The Lakes Apartments V/R
LOC - Citibank 3.15% 12/01/06 $ 13,300,000
1,700,000 Orange County CA HFA Vintage Wood Apartments
V/R LOC - Mitsubishi Bank Ltd 3.00 11/01/08 1,700,000
1,100,000 Orange County CA Office & Courthouse Projects
V/R LOC - Dai-Ichi Kangyo Bank 3.50 12/01/15 1,100,000
3,000,000 Orange County CA Sanitation District Multiple
Credit Enhancments 3.00 08/01/13 3,000,000
2,700,000 Orange County CA Sanitation District V/R FGIC
Insured 3.40 08/01/17 2,700,000
2,675,000 Orange County CA Sanitation Districts 1,2,3
Joint Facility Project Prerefunded 7.10 08/01/01 2,715,393
2,000,000 Orange County CA Water District CP LOC - Union
Bank of Switzerland 3.45 10/23/96 2,000,000
1,500,000 Orange County CA Water District CP LOC - Union
Bank of Switzerland 3.50 08/13/96 1,500,000
1,000,000 Pico Rivera CA Redevelopment Agency COP
Crossroads Plaza Project V/R 3.05 12/01/10 1,000,000
5,000,000 Sacramento CA City USD TRAN 4.00 11/29/96 5,007,343
1,000,000 Sacramento CA MFHR River Oaks Apartments V/R
Series E 3.35 09/15/07 1,000,000
9,000,000 Sacramento CA MUD Electric Development Revenue
Series R 7.13 02/01/13 9,379,525
2,500,000 Sacramento CA MUD LOC - Bayerische Landesbank 3.30 07/12/96 2,500,000
6,000,000 Sacramento CA MUD LOC - Bayerische Landesbank 3.45 10/29/96 6,000,000
17,100,000 Sacramento County CA Administration Center &
Courthouse Project V/R LOC - Union Bank of
Switzerland 3.10 06/01/20 17,100,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
14
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 5,900,000 Sacramento County CA Series C V/R LOC -
Dai-Ichi Kangyo Bank Ltd 3.35% 04/15/07 $ 5,900,000
9,900,000 Sacramento County CA TRAN 4.75 10/04/96 9,934,753
1,380,000 San Bernardino County CA IDA Transamerican
Plastics V/R LOC - National Westminster Bank
Plc 3.20 12/01/06 1,380,000
4,925,000 San Bernardino County CA MFHR V/R Series A LOC
- Federal Home Loan Bank of San Francisco 3.20 05/01/17 4,925,000
400,000 San Bernardino County CA MFHR Western
Properties Project II V/R LOC - Bank of
America 3.10 05/01/05 400,000
700,000 San Bernardino County CA MFHR Western
Properties Project III V/R LOC - Bank of
America 3.10 08/01/05 700,000
100,000 San Bernardino County CA MFHR Western
Properties Project IV V/R LOC - Bank of
America 3.10 08/01/05 100,000
1,900,000 San Bernardino County CA MFHR Woodview
Apartments V/R LOC - Bank of America 3.10 04/01/07 1,900,000
14,000,000 San Bernardino County CA TRAN 4.50 06/30/97 14,084,000
20,300,000 San Bernardino County CA TRAN Multiple LOC's 4.50 07/05/96 20,301,130
4,900,000 San Bernardino County CA Transportation
Authority Sales Tax Revenue V/R Series A LOC
- Toronto Dominion Bank 2.95 03/01/10 4,900,000
2,000,000 San Diego CA Local Government TRAN LOC -
Mitsubishi 4.75 10/18/96 2,008,296
2,635,000 San Diego CA MFHR Flora Aparments Series A V/R
AMT LOC - Swiss Bank 2.85 06/01/05 2,635,000
3,220,000 San Diego CA MFHR La Cima Apartments V/R LOC -
Citibank 3.05 12/01/08 3,220,000
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
15
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 4,000,000 San Diego CA MFHR Los Serano V/R LOC - Citibank 2.90% 02/01/09 $ 4,000,000
200,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 3.10 04/01/07 200,000
3,500,000 San Diego CA Multi Family Apartments V/R LOC -
Bank of America 3.20 10/01/15 3,500,000
8,300,000 San Diego CA Regional Sales Tax Revenue CP
Multiple LOC's 3.40 10/10/96 8,300,000
8,800,000 San Diego CA Regional Sales Tax Revenue CP
Multiple LOC's 3.45 10/07/96 8,800,000
5,400,000 San Diego CA Regional Sales Tax Revenue CP
Multiple LOC's 3.50 09/20/96 5,400,000
9,000,000 San Diego CA Regional Sales Tax Revenue CP
Multiple LOC's 3.70 08/22/96 9,000,000
5,000,000 San Diego County CA TRAN Multiple LOC's 4.50 09/30/96 5,007,476
9,400,000 San Francisco CA MFHR Bayside Village
Apartments V/R LOC - Industrial Bank of Japan
Ltd 3.40 12/01/05 9,400,000
14,700,000 San Francisco CA MFHR Filmore Center Apartments
V/R LOC - Bank of Nova Scotia 3.05 12/01/17 14,700,000
3,000,000 San Francisco CA MFHR Filmore Center Apartments
V/R LOC - Bank of Nova Scotia 3.15 12/01/17 3,000,000
12,000,000 San Francisco CA MFHR Filmore Center Apartments
V/R LOC - Citibank 3.00 12/01/17 12,000,000
3,000,000 San Francisco CA MFHR Filmore Center Apartments
V/R LOC - Citibank 3.15 12/01/17 3,000,000
8,050,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 3.00 06/01/06 8,050,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
16
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$11,690,000 San Francisco CA RDFA MFHR Rincon Center V/R
LOC - Citibank 3.00% 12/01/06 $ 11,690,000
1,000,000 San Joaquin County CA COP MBIA Insured 4.00 11/15/96 1,002,366
1,800,000 San Jose - Santa Clara CA Water Financing
Authority Sewer Revenue Series B V/R FGIC
Insured 3.15 11/15/20 1,800,000
2,200,000 San Leandro CA MFHR Haas Avenue Apartments V/R
LOC - Bank of America 2.90 10/01/07 2,200,000
835,000 San Mateo County CA COP V/R LOC - Swiss Bank 3.30 07/01/98 835,000
5,300,000 Santa Clara CA Electric Revenue V/R Series 85A
LOC - National Westminster Bank Plc 3.20 07/01/10 5,300,000
1,300,000 Santa Clara CA Electric Revenue V/R Series 85B
LOC - National Westminster Bank Plc 3.20 07/01/10 1,300,000
5,300,000 Santa Clara CA Electric Revenue V/R Series 85C
LOC - National Westminster Bank Plc 3.20 07/01/10 5,300,000
2,500,000 Santa Clara County CA HFA Lincoln Pajaro
Apartments Series 85A LOC - Sumitomo Bank 3.40 01/01/97 2,500,000
9,200,000 Santa Clara County CA MFHR Grove Garden
Apartments V/R LOC - Citibank 3.00 03/01/17 9,200,000
4,875,000 Simi Valley CA MFHR Creekside Village
Apartments V/R LOC - Bank of America 2.90 07/01/23 4,875,000
2,500,000 Southern California State Metropolitan Water
District CP 3.40 09/24/96 2,500,000
7,000,000 Southern California State Public Power
Authority Hydroelectric Revenue Hoover
Updating Project Prerefunded 8.13 10/01/17 7,219,921
</TABLE>
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
17
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 7,000,000 Southern California State Public Power
Authority Palo Verde Project Series B AMBAC
Insured 3.10% 07/01/09 $ 7,000,000
24,400,000 Southern California State Public Power
Authority Southern Transmission Project V/R
LOC - Swiss Bank 3.10 07/01/19 24,400,000
745,000 Southern California State SFMR GNMA
Collateralized 3.35 02/17/17 745,000
4,200,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 3.10 05/01/15 4,200,000
1,000,000 Turlock CA COP Irrigation Project V/R Series A 3.10 01/01/26 1,000,000
6,390,000 Union City CA Skylark V/R LOC - Sumitomo Bank
Ltd 3.20 11/01/07 6,390,000
4,400,000 Union City CA V/R LOC - Sumitomo Bank Ltd 3.20 10/01/07 4,400,000
4,600,000 University of California Housing Revenue
Prerefunded 7.60 11/01/18 4,758,142
1,445,000 University of California Revenue AMBAC Insured 4.00 09/01/96 1,446,919
1,000,000 University of California State Housing Systems
Revenue Series W AMBAC Insured 7.80 11/01/18 1,035,276
2,300,000 Upland CA HFA MFHR Upland Village Green Project
V/R LOC - Bank of Tokyo Ltd 3.50 09/01/10 2,300,000
4,200,000 Vacaville CA MFHR Western Properties Sycamores
Project V/R LOC - Bank of America 3.10 04/01/05 4,200,000
3,000,000 Visalia CA Convention Center Expansion Project
COP V/R LOC - Mitsubishi Bank Ltd 3.50 12/01/15 3,000,000
</TABLE>
- ---------------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
- ---------------------------
18
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES + (CONTINUED)
$ 5,700,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 3.10% 04/01/07 $ 5,700,000
1,000,000 West Basin CA Municipal Water District COP
Escrowed to Maturity 5.90 08/01/96 1,014,437
4,000,000 Whittier CA EDFA Revenue Whittier College
Series A Prerefunded 7.00 12/01/09 4,051,979
--------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $1,147,061,932
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $1,147,061,932)* (Note 1) 103.68% $1,147,061,932
Other Assets and Liabilities, Net (3.68) (40,710,335)
------ --------------
TOTAL NET ASSETS 100.00% $1,106,351,597
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
- -------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE
REMAINING MATURITY.
---------------------------
19
<PAGE>
MONEY MARKET MUTUAL FUND (UNAUDITED)
- -----------------------------------------
PORTFOLIO OF INVESTMENTS - 6/30/96
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER - 63.26%
$50,000,000 Abbey National North America 5.30 % 08/09/96 $ 49,712,917
30,000,000 ABN Amro North American Finance Corp Inc 5.27 09/03/96 29,718,933
40,000,000 ANZ Delaware Inc 5.29 07/16/96 39,911,833
50,000,000 ANZ Delaware Inc 5.29 08/13/96 49,684,069
50,000,000 Asset Securitization Cooperative Corp++ 5.30 07/23/96 49,838,056
50,000,000 Asset Securitization Cooperative Corp++ 5.40 09/25/96 49,355,000
25,000,000 Associates Corp of North America 5.38 09/05/96 24,753,417
50,000,000 Associates Corp of North America 5.39 09/11/96 49,461,000
50,000,000 Bank of New York Co Inc 5.27 08/20/96 49,634,028
50,000,000 Bank of New York Co Inc 5.40 09/24/96 49,362,500
50,000,000 Bank of Nova Scotia 5.29 08/01/96 49,772,236
50,000,000 Bank of Nova Scotia 5.38 09/18/96 49,409,694
50,000,000 Beta Finance Corp 5.33 07/16/96 49,888,958
50,000,000 Canadian Imperial Holdings Inc 5.27 07/02/96 49,992,681
100,000,000 Canadian Imperial Holdings Inc 5.28 07/30/96 99,574,667
30,000,000 Ciesco LP++ 5.27 08/08/96 29,833,117
50,000,000 Ciesco LP++ 5.39 09/10/96 49,468,486
50,000,000 Commerzbank US Finance Inc 5.42 09/24/96 49,360,139
100,000,000 Corporate Receivables Corp++ 5.32 07/11/96 99,852,222
50,000,000 Daimler-Benz North America Corp 5.28 07/31/96 49,780,000
50,000,000 Daimler-Benz North America Corp 5.28 08/14/96 49,677,333
25,000,000 Daimler-Benz North America Corp 5.28 08/20/96 24,816,667
50,000,000 Den Danske Co Inc 5.05 07/31/96 49,789,583
50,000,000 Ford Motor Credit 5.29 08/01/96 49,772,236
150,000,000 General Electric Capital Corp 5.32 07/10/96 149,800,500
50,000,000 Glaxo Wellcome Plc++ 5.28 07/26/96 49,816,667
22,841,000 Greenwich Funding Corp++ 5.28 08/19/96 22,676,849
29,912,000 Greenwich Funding Corp++ 5.28 08/23/96 29,679,484
50,687,000 Greenwich Funding Corp++ 5.42 09/19/96 50,076,503
50,000,000 Greenwich Funding Corp++ 5.42 09/23/96 49,367,667
50,000,000 Household Finance Corp 5.37 09/26/96 49,351,125
50,000,000 Household Finance Corp 5.45 05/28/97 50,000,000
100,000,000 Morgan (J P) & Co 5.27 07/03/96 99,970,722
</TABLE>
- ------------------------
20
<PAGE>
MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$50,000,000 National Australia Funding Inc 5.25 % 07/09/96 $ 49,941,667
50,000,000 National Australia Funding Inc 5.30 08/06/96 49,735,000
100,000,000 National Rural Utilities Cooperative Finance
Corp 5.27 08/02/96 99,531,111
23,000,000 National Rural Utilities Cooperative Finance
Corp 5.28 07/18/96 22,942,653
40,000,000 National Rural Utilities Cooperative Finance
Corp 5.30 08/15/96 39,735,000
50,000,000 New Center Asset Funding Corp 5.21 07/25/96 49,826,333
50,000,000 New Center Asset Funding Corp 5.29 07/16/96 49,889,792
50,000,000 New Center Asset Funding Corp 5.28 08/21/96 49,626,000
30,000,000 Sony Capital Corp++ 5.32 08/02/96 29,858,133
50,000,000 Transamerica Finance Corp 5.40 09/19/96 49,400,000
25,500,000 U.S. Borax & Chemical Corp++ 5.28 08/22/96 25,305,520
50,000,000 Walt Disney Co Inc++ 5.20 07/18/96 49,877,222
40,100,000 WCP Funding Corp 5.30 07/18/96 39,999,639
50,000,000 WCP Funding Corp++ 5.40 09/12/96 49,452,500
50,000,000 WCP Funding Corp++ 5.41 09/17/96 49,413,917
--------------
TOTAL COMMERCIAL PAPER $2,447,693,776
SHORT-TERM FEDERAL AGENCIES - 5.16%
$50,000,000 Federal Home Loan Bank 4.95 % 07/18/96 $ 49,883,125
50,000,000 Federal Home Loan Mortgage Corp 5.27 07/24/96 49,831,653
50,000,000 Federal Home Loan Mortgage Corp 5.27 07/15/96 49,897,333
50,000,000 Federal National Mortgage Assoc 5.28 07/26/96 49,816,667
--------------
TOTAL SHORT-TERM FEDERAL AGENCIES $ 199,428,778
</TABLE>
---------------------
21
<PAGE>
MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSITS - 1.29%
$50,000,000 Banque Nationale de Paris (Yankee) 5.41 % 07/17/96 $ 50,000,000
VARIABLE AND FLOATING RATE BONDS - 17.18%
$50,000,000 Abbey National North America 5.35 % 05/21/97 $ 49,954,795
30,000,000 Chemical Banking Corp 5.69 08/19/96 30,008,405
50,000,000 Comerica Inc 5.39 10/30/96 49,970,920
100,000,000 Comerica Inc 5.52 11/08/96 99,941,840
135,000,000 FCC National Bank 5.27 10/31/96 134,934,903
25,000,000 Household Finance Corp 5.68 09/16/96 25,004,772
100,000,000 International Business Machines Credit Corp 5.38 11/06/96 99,913,570
50,000,000 PNC Bank Corp 5.51 09/03/96 49,979,850
125,000,000 PNC Funding Corp 5.40 05/15/97 124,907,600
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 664,616,655
U.S. TREASURY BILLS - 9.13%
$ 5,000,000 U.S. Treasury Bills 5.32 %(F) 11/14/96 $ 4,911,978
260,000,000 U.S. Treasury Bills 5.46 (F) 02/06/97 252,399,000
100,000,000 U.S. Treasury Bills 5.53 (F) 04/03/97 96,022,917
--------------
TOTAL U.S. TREASURY BILLS $ 353,333,895
REPURCHASE AGREEMENTS - 4.41%
$170,767,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.30 07/03/96 $ 170,767,000
</TABLE>
- ------------------------
22
<PAGE>
MONEY MARKET MUTUAL FUND (UNAUDITED)
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $3,885,840,104)* (Note 1) 100.43% $3,885,840,104
Other Assets and Liabilities, Net (0.43) (16,673,649)
------ --------------
TOTAL NET ASSETS 100.00% $3,869,166,455
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
++ THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933.
RULE 144A UNDER THAT ACT PERMITS THESE SECURITIES TO BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL
BUYERS. THESE SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER
IN ACCORDANCE WITH PROCEDURES APPROVED BY THE FUND'S BOARD OF
DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
---------------------
23
<PAGE>
STATEMENT OF ASSETS & LIABILITIES (UNAUDITED) - JUNE 30, 1996
<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE
MONEY MONEY
MARKET MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- ------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $1,147,061,932 $3,885,840,104
Cash 9,999,294 51,239
Receivables:
Interest 9,902,962 5,144,173
Organization expenses, net of
amortization 2,560 34,797
Prepaid expenses 61,836 166,636
TOTAL ASSETS 1,167,028,584 3,891,236,949
LIABILITIES
Payables:
Investment securities purchased 56,415,000 0
Distribution to shareholders 2,332,108 14,406,715
Due to sponsor and distributor (Note
2) 382,587 1,142,244
Due to adviser (Note 2) 1,483,284 6,251,937
Other 64,008 269,598
TOTAL LIABILITIES 60,676,987 22,070,494
TOTAL NET ASSETS
$1,106,351,597 $3,869,166,455
NET ASSETS CONSIST OF:
Paid-in capital - Class A(1) $1,106,396,518 $3,244,085,190
Paid-in capital - Class S N/A 625,675,394
Undistributed net realized gain (loss)
on investments (44,921) (594,129)
TOTAL NET ASSETS $1,106,351,597 $3,869,166,455
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE
Net assets - Class A(1) $1,106,351,597 $3,243,575,292
Shares outstanding - Class A(1) 1,106,396,518 3,244,085,190
Net asset value per share - Class A(1) $ 1.00 $ 1.00
Net assets - Class S N/A $ 625,591,163
Shares outstanding - Class S N/A 625,675,394
Net asset value per share - Class S N/A $ 1.00
INVESTMENTS AT COST (NOTE 3) $1,147,061,932 $3,885,840,104
- ------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES FUNDS WITH A SINGLE CLASS.
The accompanying notes are an integral part of the financial statements.
- ------------------------
24
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED) - FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE
MONEY MONEY
MARKET MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- -------------------------------------------------------------------------
INVESTMENT INCOME
Interest $17,782,943 $100,300,880
TOTAL INVESTMENT INCOME 17,782,943 100,300,880
EXPENSES (NOTE 2):
Advisory fees 2,659,068 7,415,037
Administration fees 159,544 559,179
Custody 92,542 313,308
Shareholder servicing fees 1,595,441 5,406,545
Portfolio accounting fees 136,945 401,469
Transfer agency fees 383,400 1,280,180
Distribution fees 159,544 2,626,794
Amortization of organization expenses 2,568 8,098
Legal and audit fees 56,588 256,134
Registration fees 14,316 115,863
Directors' fees 2,486 2,486
Shareholder reports 99,455 124,337
Other 65,338 54,056
TOTAL EXPENSES 5,427,235 18,563,486
Less:
Waived and reimbursed fees (Note 2) (1,970,456) (2,544,521)
Net Expenses 3,456,779 16,018,965
NET INVESTMENT INCOME 14,326,164 84,281,915
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 54,972 673,179
NET GAIN ON INVESTMENTS 54,972 673,179
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $14,381,136 $ 84,955,094
- -------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
---------------------
25
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
MUTUAL FUND
---------------------------------
(UNAUDITED)
FOR THE
SIX MONTHS FOR THE
ENDED YEAR ENDED
JUNE 30, 1996 DEC. 31, 1995
<S> <C> <C>
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 14,326,164 $ 31,001,060
Net realized gain (loss) on sale of
investments 54,972 (20,985)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 14,381,136 30,980,075
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A(1) (14,326,164) (31,001,060)
CLASS S N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A(1) 563,469,351 743,403,372
Reinvestment of dividends - Class A(1) 14,815,854 29,943,332
Cost of shares redeemed - Class A(1) (502,992,277) (612,067,361)
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS - CLASS
A(1) 75,292,928 161,279,343
Proceeds from shares sold - Class S N/A N/A
Reinvestment of dividends - Class S N/A N/A
Cost of shares redeemed - Class S N/A N/A
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS - CLASS
S N/A N/A
INCREASE (DECREASE) IN NET ASSETS 75,347,900 161,258,358
NET ASSETS:
Beginning net assets 1,031,003,697 869,745,339
ENDING NET ASSETS $1,106,351,597 $1,031,003,697
SHARES ISSUED AND REDEEMED:
Shares sold - Class A(1) 563,469,352 743,403,372
Shares issued in reinvestment of
dividends - Class A(1) 14,815,854 29,943,332
Shares redeemed - Class A(1) (502,992,277) (612,067,361)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A(1) 75,292,929 161,279,343
Shares sold - Class S N/A N/A
Shares issued in reinvestment of
dividends - Class S N/A N/A
Shares redeemed - Class S N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS S N/A N/A
- ------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES FUNDS WITH A SINGLE CLASS.
(2) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
The accompanying notes are an integral part of the financial statements.
- ---------------------
26
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
---------------------------------
(UNAUDITED)
FOR THE FOR THE
SIX MONTHS PERIOD ENDED
ENDED DEC. 31,
JUNE 30, 1996 1995(2)
<S> <C> <C>
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 84,281,915 $ 163,787,562
Net realized gain (loss) on sale of
investments 673,179 (1,181,926)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 84,955,094 162,605,636
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A(1) (71,967,159) (150,704,682)
CLASS S (12,314,756) (13,082,880)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A(1) 1,175,124,787 2,284,498,553
Reinvestment of dividends - Class A(1) 72,497,732 146,963,258
Cost of shares redeemed - Class A(1) (897,225,951) (1,881,800,747)
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS - CLASS
A(1) 350,396,568 549,661,064
Proceeds from shares sold - Class S 668,176,820 1,211,993,101
Reinvestment of dividends - Class S 12,737,246 10,735,965
Cost of shares redeemed - Class S (674,336,894) (603,630,843)
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS - CLASS
S 6,577,172 619,098,223
INCREASE (DECREASE) IN NET ASSETS 357,646,919 1,167,577,361
NET ASSETS:
Beginning net assets 3,511,519,536 2,343,942,175
ENDING NET ASSETS $3,869,166,455 $3,511,519,536
SHARES ISSUED AND REDEEMED:
Shares sold - Class A(1) 1,175,124,789 2,284,460,229
Shares issued in reinvestment of
dividends - Class A(1) 72,497,732 146,963,258
Shares redeemed - Class A(1) (897,225,951) (1,881,762,423)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A(1) 350,396,570 549,661,064
Shares sold - Class S 668,178,820 1,211,984,821
Shares issued in reinvestment of
dividends - Class S 12,737,245 10,735,964
Shares redeemed - Class S (674,336,894) (603,622,562)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS S 6,579,171 619,098,223
- ------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES FUNDS WITH A SINGLE CLASS.
(2) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
The accompanying notes are an integral part of the financial statements.
---------------------
27
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
----------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.01 0.03 0.02 0.02 0.03
Net realized and unrealized gain
(loss) on investments 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.01 0.03 0.02 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.03) (0.02) (0.02) (0.03)
Distributions from net realized gain 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.01) (0.03) (0.02) (0.02) (0.03)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 1.35% 3.23% 2.28% 1.89% 2.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $1,106,352 $1,031,004 $869,745 $793,420 $572,906
Number of shares outstanding, end of
period (000) 1,106,397 1,031,104 869,824 793,426 572,907
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets(1) 0.65% 0.65% 0.62% 0.55% 0.28%
Ratio of net investment income to
average net assets(2) 2.69% 3.18% 2.26% 1.88% 2.41%
- --------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 0.98% 1.01% 1.08% 1.06% 1.03%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses 2.36% 2.82% 1.80% 1.37% 1.66%
- --------------------------------------------------------------------------------------------------
</TABLE>
(3) THE FUND COMMENCED OPERATIONS ON JULY 1, 1992.
(4) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
- ---------------------
28
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
----------------------------------------------------------------------------------
CLASS A CLASS S
---------------------------------------------------------- ----------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR YEAR YEAR PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31,
1996 1995 1994 1993 1992(3) 1996 1995(4)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.02 0.05 0.04 0.03 0.02 0.02 0.03
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.02 0.05 0.04 0.03 0.02 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.05) (0.04) (0.03) (0.02) (0.02) (0.03)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.02) (0.05) (0.04) (0.03) (0.02) (0.02) (0.03)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 2.34% 5.34% 3.74% 2.70% 1.50% 1.99% 2.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $3,243,575 $2,892,621 $2,343,942 $317,474 $236,269 $625,591 $618,899
Number of shares
outstanding, end of
period (000) 3,244,085 2,893,689 2,344,028 317,474 236,270 625,675 619,098
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.75% 0.75% 0.69% 0.58% 0.20% 1.43% 1.43%
Ratio of net investment
income to average net
assets(2) 4.64% 5.13% 4.12% 2.67% 2.98% 3.97% 4.40%
- ----------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 0.84% 0.83% 0.89% 1.00% 0.94% 1.44% 1.53%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.55% 5.05% 3.92% 2.25% 2.24% 3.98% 4.30%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(3) THE FUND COMMENCED OPERATIONS ON JULY 1, 1992.
(4) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
---------------------
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -----------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The California Tax-Free Money Market Mutual and the Money Market Mutual Funds
(the "Funds") are two series of Stagecoach Funds, Inc. (the "Company"), which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end investment company. The Company commenced operations on
January 1, 1992, and consists of ten separate diversified funds: the Aggressive
Growth, Asset Allocation, Corporate Stock, Diversified Income, Ginnie Mae,
Growth and Income, Money Market Mutual, National Tax-Free Money Market Mutual,
Short-Intermediate U.S. Government Income and U.S. Government Allocation Funds;
and three non-diversified funds: the California Tax-Free Bond, California
Tax-Free Income and California Tax-Free Money Market Mutual Funds. The Company
formerly offered the Variable Rate Government Fund, which was combined into the
Short-Intermediate U.S. Government Fund in August of 1995. These financial
statements represent the California Tax-Free Money Market Mutual and the Money
Market Mutual Funds.
The following significant accounting policies are consistently followed by the
Funds in the preparation of their 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 securities with remaining maturities not exceeding 397 days
(thirteen months), including obligations of the U.S. government, bankers
acceptances, commercial paper and certain floating- and variable-rate
instruments. Certain of these floating- and variable-rate instruments may carry
a demand feature that would permit the holder to tender them back to the issuer
at par value prior to maturity.
Each Fund uses the amortized cost method to value its portfolio securities and
seeks to maintain a constant net asset value of $1.00 per share; however, there
can be no assurance that the Funds will meet this goal. The amortized cost
method involves valuing a security at its cost plus accretion of discount or
minus amortized premium over the period until maturity, which approximates
market value.
- ---------------------
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Interest income is accrued daily. Realized gains
or losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are accreted or amortized as required by the
Internal Revenue Code.
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 Portfolio of
Investments. The Funds' adviser pools the Funds' cash and invests in repurchase
agreements entered into by the Funds. The repurchase agreement must be fully
collateralized based on values that are marked to market daily. The collateral
is held by an agent bank. It is the adviser's responsibility to value collateral
daily and to obtain additional collateral as necessary to maintain market value
equal to or greater than the resale price. The repurchase agreements held in the
Funds at June 30, 1996, were collateralized by U.S. government obligations. The
repurchase agreements were entered into on June 28, 1996.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Funds are declared
daily and distributed monthly. Any distributions to shareholders from net
realized capital gains are declared and distributed annually.
FEDERAL INCOME TAXES
Each Fund's policy is to comply with the requirements of the Internal Revenue
Code that are applicable to regulated investment companies and to distribute
substantially all a Fund's net investment income and any net realized capital
gains to its shareholders. Therefore, no federal or state income tax provision
is required. As of December 31, 1995, the California Tax-Free Money Market
Mutual Fund had capital loss carryforwards of $148 that will expire in the year
2001, $73,261 that will expire in the year 2002 and $20,985 which will expire in
the year 2003. The Money Market Mutual Fund had a capital loss carryforward of
$85,382 that will expire in the year 2002 and $1,181,926 which will expire in
the year 2003. The Board intends to offset net capital gains with each capital
loss carryforward until each carryforward has been fully utilized or expires. No
capital gain distribution shall be made until the capital loss carryforward has
been fully utilized or has expired.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator and distributor, has
charged the Funds for expenses incurred in connection with the organization and
initial registration, including Class S shares of the Money Market Mutual Fund.
Such expenses are being amortized by
---------------------
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
each Fund on a straightline basis over 60 months from the date the Fund or share
classes commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of each Fund
with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contracts, WFB has agreed
to furnish to the Funds investment guidance and policy direction in connection
with daily portfolio management. Under the contracts with the California
Tax-Free Money Market Mutual and the Money Market Mutual Funds, WFB is entitled
to be paid monthly advisory fees at the annual rates of 0.50% and 0.40% of the
average daily net assets of the respective funds.
The Company has entered into contracts on behalf of the Funds with WFB, whereby
WFB is responsible for providing custody and fund accounting services for the
Funds. For providing custody services, WFB is entitled to be compensated at an
annual rate of 0.0167% of the average daily net assets of each Fund. For
portfolio accounting services, WFB is entitled to a monthly a base fee of $2,000
plus 0.07% of the first $50 million of each Fund's average daily net assets,
0.045% of the next $50 million, and 0.02% of the net assets over $100 million.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB has agreed to provide transfer agency services for the Funds. Under the
transfer agency agreement, WFB is entitled to be paid a per account fee plus
other related costs with a minimum monthly fee of $3,000 per Fund unless net
assets of the Fund are under $20 million. For as long as the net assets remain
under $20 million, a Fund will not be charged any transfer agency fees by WFB.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder services for the Funds. WFB is entitled to
be compensated for these services based on an annual rate not to exceed 0.30% of
the California Tax-Free Money Market Mutual Fund and Class A shares of the Money
Market Mutual Fund's average daily net assets.
FEES WAIVED
Payment of the following fees were waived by WFB for the six months ended June
30, 1996.
<TABLE>
<CAPTION>
FEES WAIVED
FUND BY WFB
<S> <C>
- -----------------------------------------------
California Tax-Free Money Market
Mutual Fund $ 1,970,456
Money Market Mutual Fund 2,544,521
</TABLE>
Fee waivers continue at the discretion of WFB.
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
receiving supervisory and administrative services, each Fund has
- ---------------------
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
agreed to pay Stephens a monthly fee at the annual rate of 0.03% of each Fund's
average daily net assets.
The Company has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the
"Plan"), whereby 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 California Tax-Free Money Market Mutual
Fund's average daily net assets and up to 0.05% of the average daily net assets
attributable to the Class A shares of the Money Market Mutual Fund. Each Fund
may participate in joint distribution activities with any of the other funds, in
which event, expenses reimbursed out of the assets of one Fund may be
attributable, in part, to the distribution-related activities of another fund.
Generally, the expenses attributable to joint distribution activities are
allocated among all of the funds in proportion to their relative net asset
sizes.
For the six months ended June 30, 1996 the Money Market Mutual Fund paid
Stephens $305,808 in distribution fees for the Class A shares.
Certain officers and directors of the Company are also officers of Stephens. At
June 30, 1996, Stephens owned 55,934 shares of the California Tax-Free Money
Market Mutual Fund and 11,162 shares of the Money Market Mutual Fund.
3. CAPITAL SHARES TRANSACTIONS
As of June 30, 1996, there were 10 billion shares of $.001 par value capital
stock authorized by the Company. At June 30, 1996, each Fund was authorized to
issue 3 billion shares of $.001 par value capital stock. Transactions in capital
shares for the six months ended June 30, 1996 are disclosed in detail in the
Statements of Changes in Net Assets.
---------------------
33
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
34
<PAGE>
LIST OF ABBREVIATIONS
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corp
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 Co
CGY -- Capital Guaranty Corp
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Co
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 Corp
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corp
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Assoc
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 Assoc
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
---------------------
35
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
36
<PAGE>
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.
SC0524 (8/96)
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<S> <C>
BULK RATE
U.S. POSTAGE
STAGECOACH FUNDS-REGISTERED TRADEMARK- PAID
P.O. Box 7066 PERMIT NO 1933
San Francisco, CA 94120-7066 FULLERTON CA
DATED MATERIAL
PLEASE EXPEDITE
</TABLE>
[LOGO]
-C- 1995 Stagecoach Funds
