<PAGE>
- ------------------
ANNUAL
- ------------------
REPORT
- ------------------
MONEY
- ------------------
MARKET
- ------------------
FUNDS
- ------------------
Prime
Money Market
Mutual Fund
Treasury
Money Market
Mutual Fund
SERVICE CLASS
SEPTEMBER 30, 1996
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS iii
INVESTMENT ADVISER COMMENTS
Prime Money Market Mutual Fund -- Service Class 1
Treasury Money Market Mutual Fund -- Service Class 1
PORTFOLIOS OF INVESTMENTS
Prime Money Market Mutual Fund 3
Treasury Money Market Mutual Fund 5
STAGECOACH FUNDS
Statement of Assets and Liabilities 8
Statements of Operations 9
Statements of Changes in Net Assets 10
Financial Highlights 12
Notes to Financial Statements 16
Independent Auditors' Report 22
Proxy Voting Results 23
LIST OF ABBREVIATIONS 24
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
<PAGE>
- ---------------------
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>
STAGECOACH MONEY MARKET MUTUAL FUNDS
- -------------------------
INVESTMENT ADVISER COMMENTS
PRIME MONEY MARKET MUTUAL FUND -- SERVICE CLASS
TREASURY MONEY MARKET MUTUAL FUND -- SERVICE CLASS
RETURNS:
The seven day effective yield as of September 30, 1996 for the service classes
of the Prime Money Market Mutual Fund and the Treasury Money Market Mutual Fund
was 5.22% and 5.02%, respectively.
ECONOMIC FACTORS:
The largest single factor to influence money market yields are changes in
short-term interest rates by the Federal Reserve. At the beginning of 1996, the
expectation was that the Fed would continue to reduce interest rates to help
spur the economy. This did not prove to be the case when several government
reports showed stronger than expected growth. Speculation quickly turned to the
possibility of the Fed raising rates instead.
The third quarter began with continued expectations that the economy would
strengthen due to strong employment gains and rising commodity prices. The
markets anticipated higher inflation and higher interest rates.
As the quarter ended, signs that the economy was slowing began to appear.
Initial jobless claims bottomed in late August and stayed in a slight upward
trend for the remainder of the quarter. Commodity prices ended the quarter
lower. The widely anticipated Federal Reserve meeting on September 24, however,
resulted in no change in policy and the equity and bond markets rallied sharply.
STRATEGIC COMMENT:
With signs of a slowing economy and the Fed's reluctance to raise interest
rates, floating rate securities using the Prime Rate as an index appear
attractive. Also, six month commercial paper has been offering values yielding
33 basis points above that of comparable Treasury Bills. For Funds investing
exclusively in Treasury securities, the Treasury Bill curve shows securities
with maturities of six months or longer offering the best value.
All holdings in the Funds are rated in the top four categories by national
credit rating agencies or are U.S. Treasury or Agency securities. These
securities meet with the approval of the Wells Fargo Credit Policy Committee.
---------------------
1
<PAGE>
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- ---------------------
2
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 13.29%
$60,000,000 American Express Centurion Bank 5.38 % 10/11/96 $ 60,000,000
30,000,000 Deutsche Bank (Yankee) 6.11 07/11/97 30,000,000
30,000,000 Societe Generale (Yankee) 6.09 07/30/97 30,000,000
20,000,000 Union Bank of California 5.60 03/25/97 20,000,000
50,000,000 Union Bank of California 6.00 04/04/97 50,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT $ 190,000,000
COMMERCIAL PAPER - 57.96%
$25,000,000 Asset Securitization Cooperative Corp++ 5.37 %* 10/15/96 $ 24,947,792
60,000,000 Associates Corp of North America 5.38 * 10/16/96 59,865,500
50,000,000 Budget Funding Corp 5.27 * 10/01/96 50,000,000
50,000,000 CIT Group Holdings Inc 5.35 * 10/09/96 49,940,556
60,000,000 Canadian Wheat Board 5.59 * 03/14/97 58,472,067
50,000,000 Ciesco LP++ 5.26 * 10/01/96 50,000,000
50,000,000 Corporate Receivables Corp++ 5.35 * 10/15/96 49,895,972
60,000,000 Ford Motor Credit Corp 5.37 * 10/11/96 59,910,500
50,000,000 General Electric Capital Corp 5.30 * 10/25/96 49,823,333
35,000,000 Goldman Sachs & Co 5.50 * 02/24/97 34,219,306
40,706,000 Greenwich Funding Corp++ 5.45 * 10/23/96 40,570,426
30,000,000 IBM Credit Corp 5.34 * 10/16/96 29,933,250
30,000,000 IBM Credit Corp 5.35 * 10/21/96 29,910,833
36,800,000 National Rural Utilties Cooperative Finance
Corp 5.27 * 10/02/96 36,794,613
40,000,000 Preferred Receivables Funding Corp++ 5.37 * 10/21/96 39,880,667
30,000,000 RTZ America Inc 5.34 * 10/22/96 29,906,550
60,000,000 Smithkline Beecham Corp 5.35 * 10/22/96 59,812,925
45,000,000 Sony Capital Corp++ 5.32 * 10/25/96 44,840,400
30,000,000 WCP Funding Corp++ 5.38 * 10/23/96 29,901,367
TOTAL COMMERCIAL PAPER $ 828,626,057
</TABLE>
---------------------
3
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CORPORATE MEDIUM-TERM NOTES - 2.45%
$35,000,000 Merrill Lynch & Co 6.06 % 10/25/96 $ 35,000,000
SHORT-TERM FEDERAL AGENCIES - 8.03%
$40,000,000 Federal Home Loan Bank 5.28 % 01/08/97 $ 39,419,200
25,900,000 Federal Home Loan Bank 5.22 01/13/97 25,509,428
50,000,000 Federal National Mortgage Assoc 5.17 10/11/96 49,928,194
--------------
TOTAL SHORT-TERM FEDERAL AGENCIES $ 114,856,822
VARIABLE- AND FLOATING-RATE NOTES - 6.64%
$45,000,000 Bayerische Landesbank 5.87 % 10/30/96 $ 45,000,000
50,000,000 PNC Bank Corp 5.00 07/02/97 49,969,890
--------------
TOTAL VARIABLE- AND FLOATING-RATE NOTES $ 94,969,890
REPURCHASE AGREEMENTS - 11.64%
$166,369,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 10/01/96 $ 166,369,000
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $1,429,821,769)**(Note 1) 100.01% $1,429,821,769
Other Assets and Liabilities (0.01) (201,929)
------ --------------
TOTAL NET ASSETS 100.00% $1,429,619,840
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* 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.
- ------------------------
4
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY NOTES - 13.49%
$50,000,000 U.S. Treasury Notes 5.63 % 06/30/97 $ 49,932,442
85,000,000 U.S. Treasury Notes 6.50 05/15/97 85,381,508
65,000,000 U.S. Treasury Notes 6.63 03/31/97 65,318,438
60,000,000 U.S. Treasury Notes 6.75 02/28/97 60,290,876
--------------
TOTAL U.S. TREASURY NOTES $ 260,923,264
U.S. TREASURY BILLS - 39.62%
$275,000,000 U.S. Treasury Bills 4.78 %* 10/03/96 $ 274,927,194
300,000,000 U.S. Treasury Bills 4.78 * 10/10/96 299,616,750
100,000,000 U.S. Treasury Bills 5.00 * 11/14/96 99,384,000
50,000,000 U.S. Treasury Bills 5.29 * 03/06/97 48,889,583
45,000,000 U.S. Treasury Bills 5.35 * 04/03/97 43,773,525
--------------
TOTAL U.S. TREASURY BILLS $ 766,591,052
REPURCHASE AGREEMENTS - 47.08%
$225,975,000 Goldman Sachs & Co Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.20 10/01/96 $ 225,975,000
230,000,000 HSBC Securities Inc Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.70 10/01/96 230,000,000
225,000,000 JP Morgan Securities Inc Tri-Party Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 5.70 10/01/96 225,000,000
230,000,000 Morgan Stanley Tri-Party Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.65 10/01/96 230,000,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 910,975,000
</TABLE>
---------------------
5
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,938,489,316)**(Note 1) 100.19% $1,938,489,316
Other Assets and Liabilities (0.19) (3,769,466)
------ --------------
TOTAL NET ASSETS 100.00% $1,934,719,850
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* YIELD TO MATURITY.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
- ------------------------
6
<PAGE>
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---------------------
7
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRIME TREASURY
MONEY MARKET MONEY MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- ------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities at market value (see
cost below) (includes repurchase
agreements of $166,369,000 and
$910,975,000 for the Prime Money
Market Mutual Fund and the Treasury
Money Market Mutual Fund,
respectively) $1,429,821,769 $1,938,489,316
Cash 13,677 326,756
Receivables:
Interest 5,621,871 3,300,542
Organizational expenses, net of
amortization 54,635 100,861
Prepaid expenses and other assets 144,338 365,634
TOTAL ASSETS 1,435,656,290 1,942,583,109
LIABILITIES
Payables:
Distribution to shareholders 4,873,989 6,295,662
Due to sponsor and distributor 169,776 238,016
Due to advisor (Note 2) 707,411 931,799
Other 285,274 397,782
TOTAL LIABILITIES 6,036,450 7,863,259
TOTAL NET ASSETS
$1,429,619,840 $1,934,719,850
NET ASSETS CONSIST OF:
Paid-in capital - Class A $ 264,918,026 $ 53,705,222
Paid-in capital - Service Class 740,919,438 1,340,314,198
Paid-in capital - Institutional Class 423,988,590 540,680,847
Undistributed (overdistributed) net
investment income (103,126) (19,689)
Undistributed net realized gain (loss)
on investments (103,088) 39,272
TOTAL NET ASSETS $1,429,619,840 $1,934,719,850
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 264,900,283 $ 53,705,675
Shares outstanding - Class A 264,985,203 53,726,206
Net asset value and offering price per
share - Class A $ 1.00 $ 1.00
Net Assets - Service Class $ 740,760,320 $1,340,325,184
Shares outstanding - Service Class 740,919,438 1,340,314,198
Net asset value and offering price per
share - Service Class $ 1.00 $ 1.00
Net Assets - Institutional Class $ 423,959,237 $ 540,688,991
Shares outstanding - Institutional Class 424,081,756 540,804,906
Net asset value and offering price per
share -
Institutional Class $ 1.00 $ 1.00
INVESTMENT AT COST $1,429,821,769 $1,938,489,316
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
8
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRIME TREASURY
MONEY MONEY
MARKET MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- ------------------------------------------------------------------------
INVESTMENT INCOME
Interest $76,400,197 $105,450,049
TOTAL INVESTMENT INCOME 76,400,197 105,450,049
EXPENSES (NOTE 2)
Advisory fees 3,399,237 4,516,348
Administration fees 1,230,872 1,745,759
Custody fees 159,830 252,183
Shareholder servicing fees 3,335,692 4,608,283
Portfolio accounting fees 20,916 0
Transfer agency fees 43,131 82,755
Distribution fees 62,301 13,064
Amortization of organizational
expenses 0 7,954
Legal and audit fees 39,536 47,635
Registration fees 134,969 218,636
Directors' fees 2,912 2,910
Shareholder reports 0 12,326
Other 115,064 63,074
TOTAL EXPENSES 8,544,460 11,570,927
Less:
Waived and reimbursed fees (Note 2) (2,901,214) (4,051,564)
Net expenses 5,643,246 7,519,363
NET INVESTMENT INCOME 70,756,951 97,930,686
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 0 39,272
NET GAIN (LOSS) ON INVESTMENTS 0 39,272
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $70,756,951 $97,969,958
- ------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
9
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME MONEY MARKET
MUTUAL FUND
-----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C>
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 70,756,951 $ 31,628,024
Net realized gain (loss) on sale of
investments 0 0
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 70,756,951 31,628,024
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (14,569,914) 0
SERVICE CLASS (34,814,564) (31,328,215)
INSTITUTIONAL CLASS (21,372,473) (299,809)
In excess of net investment income
CLASS A (17,515) 0
SERVICE CLASS (56,259) 0
INSTITUTIONAL CLASS (29,352) 0
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 831,565,415 0
Reinvestment of dividends - Class A 916,433 0
Cost of shares redeemed - Class A (567,563,822) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - CLASS A 264,918,026 0
Proceeds from shares sold - Service
Class 2,007,890,215 8,252,511,223
Reinvestment of dividends - Service
Class 117,361 0
Cost of shares redeemed - Service
Class (1,881,188,708) (8,203,819,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - SERVICE CLASS 126,818,868 48,692,223
Proceeds from shares sold -
Institutional Class 5,079,644,286 104,661,000
Reinvestment of dividends -
Institutional Class 176,187 0
Cost of shares redeemed -
Institutional Class (4,686,437,789) (74,055,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - INSTITUTIONAL
CLASS 393,382,684 30,606,000
INCREASE (DECREASE) IN NET ASSETS 785,016,452 79,298,223
NET ASSETS:
Beginning net assets 644,603,388 565,305,165
ENDING NET ASSETS $ 1,429,619,840 $ 644,603,388
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ---------------------
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
MUTUAL FUND
------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C>
- ---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 97,930,686 $ 49,027,757
Net realized gain (loss) on sale of
investments 39,272 0
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 97,969,958 49,027,757
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (2,763,079) 0
SERVICE CLASS (33,164,442) (48,762,724)
INSTITUTIONAL CLASS (62,003,165) (265,033)
In excess of net investment income
CLASS A (293) 0
SERVICE CLASS (4,695) 0
INSTITUTIONAL CLASS (14,701) 0
CAPITAL SHARES TRANSACTIONS:
Proceeds from shares sold - Class A 265,329,368 0
Reinvestment of dividends - Class A 303,969 0
Cost of shares redeemed - Class A (211,928,115) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - CLASS A 53,705,222 0
Proceeds from shares sold - Service
Class 3,893,787,080 20,388,947,721
Reinvestment of dividends - Service
Class 227,942 0
Cost of shares redeemed - Service
Class (3,555,407,931) (20,077,871,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - SERVICE CLASS 338,607,091 311,076,721
Proceeds from shares sold -
Institutional Class 4,920,884,222 120,817,000
Reinvestment of dividends -
Institutional Class 1,018,863 0
Cost of shares redeemed -
Institutional Class (4,417,665,197) (84,374,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS - INSTITUTIONAL
CLASS 504,237,888 36,443,000
INCREASE (DECREASE) IN NET ASSETS 896,569,784 347,519,721
NET ASSETS:
Beginning net assets 1,038,150,066 690,630,345
ENDING NET ASSETS $ 1,934,719,850 $ 1,038,150,066
- ---------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
11
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL
FUND (1)
-------------------------------
CLASS A SERVICE CLASS
--------- --------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.05) (0.05)
Distributions from net realized gain 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.05) (0.05) (0.05)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 5.09% 5.19% 5.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $264,900 $740,760 $614,101
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.55% 0.45% 0.41%
Ratio of net investment income to average net assets 5.06% 5.14% 5.47%
- -----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.68% 0.62% 0.68%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.93% 4.97% 5.20%
- -----------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994 WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS COMMENCED OPERATIONS ON AUGUST 11, 1995.
- ---------------------
12
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1) (CONT.)
---------------------------------------------------------------------------
SERVICE CLASS (CONT.)
----------------------------------------------------- INSTITUTIONAL CLASS
SIX --------------------
MONTHS YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 30, MARCH 31, MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30,
1994 (2) 1994 1993 1992 1991 1996 1995 (3)
<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 0.03 0.03 0.05 0.07 0.05 0.01
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 0.03 0.03 0.05 0.07 0.05 0.01
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.03) (0.03) (0.05) (0.07) (0.05) (0.01)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.02) (0.03) (0.03) (0.05) (0.07) (0.05) (0.01)
--------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 3.71%** 3.00% 3.32% 5.22% 7.72% 5.39% 5.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $565,305 $527,599 $468,479 $528,397 $543,834 $423,959 $30,606
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.41% 0.41% 0.41% 0.43% 0.47% 0.25% 0.26%
Ratio of net investment
income to average net
assets 3.67% 2.96% 3.27% 5.09% 7.38% 5.33% 5.67%
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.89% 0.89% 0.89% 0.91% 0.94% 0.60% 0.69%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 3.19% 2.48% 2.79% 4.61% 6.91% 4.98% 5.24%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994 WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS COMMENCED OPERATIONS ON AUGUST 11, 1995.
---------------------
13
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL
FUND (1)
-------------------------------
CLASS A SERVICE CLASS
--------- --------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.05 0.05
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.05) (0.05)
Distributions from net realized gain 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.05) (0.05) (0.05)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 4.95% 5.03% 5.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $53,706 $1,340,325 $1,001,707
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.55% 0.45% 0.42%
Ratio of net investment income to average net assets 4.96% 4.98% 5.32%
- -----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.67% 0.60% 0.66%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.84% 4.83% 5.08%
- -----------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS "PACIFIC AMERICAN LIQUID ASSETS, INC." THROUGH
OCTOBER 1, 1994 WHEN IT WAS REORGANIZED AS THE "PACIFIC AMERICAN MONEY
MARKET PORTFOLIO", A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS COMMENCED OPERATIONS ON AUGUST 11, 1995.
- ---------------------
14
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL
FUND (1) (CONT.)
---------------------------------------------------------------------------
SERVICE CLASS (CONT.) INSTITUTIONAL CLASS
----------------------------------------------------- --------------------
PERIOD YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
SEPT. 30, MARCH 31, MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30,
1994 (3) 1994 1993 1992 1991 1996 1995 (2)
<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 0.03 0.03 0.05 0.07 0.05 0.01
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 0.03 0.03 0.05 0.07 0.05 0.01
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.03) (0.03) (0.05) (0.07) (0.05) (0.01)
Distributions from net
realized gain (0.00) 0.00 0.00 (0.00) (0.00) 0.00 0.00
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.02) (0.03) (0.03) (0.05) (0.07) (0.05) (0.01)
--------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 3.75%** 2.81% 3.13% 5.03% 7.42% 5.26% 5.51%**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $690,630 $654,950 $614,237 $281,343 $118,623 $540,689 $36,443
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.43% 0.43% 0.43% 0.45% 0.48% 0.25% 0.26%
Ratio of net investment
income to average net
assets 3.72% 2.77% 3.04% 4.73% 7.10% 5.21% 5.42%
- ---------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.90% 0.90% 0.91% 0.93% 0.94% 0.59% 0.69%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 3.25% 2.30% 2.56% 4.25% 6.64% 4.87% 4.99%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS "PACIFIC AMERICAN LIQUID ASSETS, INC." THROUGH
OCTOBER 1, 1994 WHEN IT WAS REORGANIZED AS THE "PACIFIC AMERICAN MONEY
MARKET PORTFOLIO", A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS COMMENCED OPERATIONS ON AUGUST 11, 1995.
---------------------
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------
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, 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 Prime Money Market Mutual and Treasury Money
Market Mutual 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 Stagecoach Funds, Inc. in exchange for shares of
designated classes of the corresponding Stagecoach fund. As a result of this
reorganization, effective September 6, 1996, the Stagecoach Prime Money Market
Mutual and Treasury Money Market Mutual Funds were established to acquire all of
the assets and assume all of the liabilities of the Pacifica Prime Money Market
and Treasury Money Market Funds, respectively (collectively, the "Predecessor
Funds"). These acquisitions were accomplished in separate tax-free exchanges for
shares of the respective Fund. All performance and financial data prior to
September 6, 1996 refers to the Predecessor Funds.
The Funds offer Class A, Institutional Class, and Service Class Shares. The
three classes of shares differ principally in the applicable 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 separately 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
- ---------------------
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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
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.
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 entered
into and
---------------------
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
held in the Funds at September 30, 1996, were collateralized by U.S. government
obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions 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 of 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.
ORGANIZATION EXPENSES
The Funds have been charged for expenses incurred in connection with the
organization and initial registration of the Fund and/or Class of shares. Such
expenses are being amortized by each Fund on a straight-line 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 such contracts, WFB is entitled to be
paid monthly advisory fees at the annual percentage rate of 0.25% of each Fund's
average daily net assets.
For the period from October 1, 1995 to March 31, 1996, the 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 0.30% of the
first $500 million, 0.25% of the next $500 million, and 0.20% in excess of $1
billion of each Fund's average daily net assets. On April 1, 1996, First
Interstate Bancorp ("FIB") was merged with and into Wells Fargo & 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
("WFIM"). For the period from April 1, 1996 to September 5, 1996, such advisory
fees were paid to WFIM.
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
- ---------------------
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
net assets, 0.045% of the next $50 million, and 0.02% of the net assets over
$100 million.
For the period from October 1, 1995 to March 31, 1996, FICAL served as the
custodian for the Funds. Pursuant to the contracts, the Funds paid a custodian
fee based on net assets and certain transaction charges. For the period from
April 1, 1996 to September 5, 1996, such custodian fees were paid to WFB.
The Company has entered into contracts 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 transfer agency fees at an
annual rate of 0.07% of the average daily net assets attributable to the class A
shares, 0.04% of the average daily net assets attributable to Service Class
shares, and 0.02% of the average daily net assets attributable to Institutional
Class Shares.
For the period from October 1, 1995 to September 5, 1996, the Funds retained
Furman Selz LLC ("Furman Selz") to perform transfer agency services.
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 0.25% of
average daily net assets attributable to Class A and Institutional Class shares
of the Funds and 0.20% of the average daily net assets attributable to the
Service Class shares of the Funds. The servicing fees of the Funds for the year
ended September 30, 1996 were as follows:
<TABLE>
<CAPTION>
SERVICING
SERVICING FEES SERVICING FEES
FEES SERVICE INSTITUTIONAL
FUND CLASS A CLASS CLASS
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund 801,388 1,652,003 882,301
Treasury Money Market Mutual Fund 153,899 3,022,260 1,432,124
</TABLE>
FEES WAIVED
Payment of the following fees were waived for the year ended September 30, 1996.
<TABLE>
<CAPTION>
FEES WAIVED FEES WAIVED
FUND BY FIB BY WFB
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund 1,553,968 1,347,246
Treasury Money Market Mutual Fund 2,173,591 1,877,973
</TABLE>
Fee waivers continue at the discretion of WFB. WFB and Stephens have each 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, 0.55%, 0.45%, or 0.25% of the average daily net
assets attributable to Class A, Service Class, and Institutional Class shares of
each Fund, respectively, through August 31, 1997.
---------------------
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 agreed to pay
Stephens a monthly fee at the annual rate of 0.05% of each Fund's average daily
net assets.
For the period from October 1, 1995 to April 15, 1996, The Dreyfus Corporation
("Dreyfus") provided administrative services for the operation of the Funds. As
compensation for such services, each Fund paid Dreyfus an annual fee payable
monthly equal to 0.10% of the average daily net assets of each Fund. From April
15, 1996 to September 5, 1996, Furman Selz provided administrative services for
the operation of the 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 the Fund.
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 average daily net assets attributable to
the Class A shares of the Funds. 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 period from October 1, 1995 to September 5, 1996, the Funds had adopted
Distribution Plans pursuant to Rule 12b-1 under the 1940 Act. The Plans provided
for payments by each Fund equal to 0.05% of the average daily net assets of the
Class A shares of the Funds.
Certain officers and directors of the Company are also officers of Stephens. At
September 30, 1996, Stephens owned three shares of the Prime Money Market Mutual
Fund and one share of the Treasury Money Market Mutual Fund.
3. CAPITAL SHARES TRANSACTIONS
As of September 30, 1996, there were 49 billion shares of $.001 par value
capital stock authorized by the Company. At September 30, 1996, each Fund was
authorized to issue 3 billion of each class of its shares of $.001 par value
capital stock. Transactions in capital shares were as follows:
- ---------------------
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 831,632,592 0
Shares issued in reinvestment of dividends -- Class A 916,433 0
Shares redeemed -- Class A (567,563,822) 0
NET INCREASE IN SHARES OUTSTANDING -- CLASS A 264,985,203 0
Shares sold -- Service Class 2,007,890,215 8,252,511,223
Shares issued in reinvestment of dividends -- Service
Class 117,361 0
Shares redeemed -- Service Class (1,881,188,709) (8,203,819,000)
NET INCREASE IN SHARES OUTSTANDING -- SERVICE CLASS 126,818,867 48,692,223
Shares sold -- Institutional Class 5,079,737,453 104,661,000
Shares issued in reinvestment of dividends --
Institutional Class 176,187 0
Shares redeemed -- Institutional Class (4,686,437,789) (74,055,000)
NET INCREASE IN SHARES OUTSTANDING -- INSTITUTIONAL CLASS 393,475,851 30,606,000
</TABLE>
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
MUTUAL 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 265,329,368 0
Shares issued in reinvestment of dividends --
Class A 303,969 0
Shares redeemed -- Class A (211,928,115) 0
NET INCREASE IN SHARES OUTSTANDING -- CLASS A 53,705,222 0
Shares sold -- Service Class 3,893,787,080 20,388,947,721
Shares issued in reinvestment of dividends --
Service Class 227,942 0
Shares redeemed -- Service Class (3,555,407,931) (20,077,871,000)
NET INCREASE IN SHARES OUTSTANDING -- SERVICE
CLASS 338,607,091 311,076,721
Shares sold -- Institutional Class 4,920,884,222 120,817,000
Shares issued in reinvestment of dividends --
Institutional Class 1,018,863 0
Shares redeemed -- Institutional Class (4,417,665,197) (84,374,000)
NET INCREASE IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS 504,237,888 36,443,000
</TABLE>
---------------------
21
<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 Prime Money Market Mutual Fund and Treasury
Money Market Mutual Fund (two of the funds comprising Stagecoach Funds, Inc.) as
of September 30, 1996, and the related statements of operations and changes in
net assets, and financial highlights for the year then ended. 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. 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 May 4, 1994 expressed unqualified opinions 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 year then ended in conformity with generally
accepted accounting principles.
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
NOVEMBER 15, 1996
- ---------------------
22
<PAGE>
- -----------------
PROXY VOTING RESULTS
PROPOSAL 1.
To ratify and approve an interim investment advisory agreement on behalf of the
Pacifica Portfolio, between Pacifica and Wells Fargo Investment Management, Inc.
(formerly known as First Interstate Capital Management, Inc. ("FICM"), the terms
of which are substantially identical to the previous advisory agreement between
Pacifica and FICM (the fee rates are unchanged), and the receipt of investment
advisory fees by WFIM for the period from April 1, 1996 forward.
PACIFICA PRIME MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -------------------------------------
678,924,247 2,134,814 6,110,434
</TABLE>
PACIFICA TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -------------------------------------
1,292,542,000 6,398,033 3,315,460
</TABLE>
PROPOSAL 2.
To approve the Agreement and Plan of Reorganization attached to the combined
proxy statement/prospectus for the meeting providing for the transfer of the
assets and liabilities of Pacifica Prime Money Market and Treasury Money Market
Funds to corresponding Prime Money Market Mutual and Treasury Money Market
Mutual Funds of Stagecoach Funds, Inc., in exchange for shares of the designated
classes of Stagecoach Funds.
PACIFICA PRIME MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -------------------------------------
677,404,903 1,970,854 7,790,777
</TABLE>
PACIFICA TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -------------------------------------
1,287,849,248 11,199,119 3,207,125
</TABLE>
---------------------
23
<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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24
<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.
SC0561 (11/96)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
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[LOGO]
-C- 1996 Stagecoach Funds
