<PAGE>
PROSPECTUS
Prime Money Market Mutual Fund
Treasury Money Market Mutual Fund
Institutional Class
February 1, 1997
as Supplemented on October 20, 1997
PROSPECTUS
PROSPECTUS
STAGECOACH FUNDS --
PRIME MONEY MARKET MUTUAL FUND
TREASURY MONEY MARKET MUTUAL FUND
Institutional Class
<PAGE>
Stagecoach Funds, Inc. (the "Company") is an open-end management
investment company. This Prospectus contains information about Institutional
Class shares offered by two funds of the Stagecoach Family of Funds -- the
Prime Money Market Mutual and Treasury Money Market Mutual Funds (each, a
"Fund" and collectively, the "Funds").
The Prime Money Market Mutual Fund seeks to provide investors with
maximized current income to the extent consistent with preservation of capital
and maintenance of liquidity. The Treasury Money Market Mutual Fund seeks to
provide investors with current income and stability of principal.
An investment in a Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that a Fund will be able to maintain a
constant $1.00 net asset value per share.
Please read this Prospectus before investing and retain it for future reference.
It is designed to provide you with important information and to help you decide
if a Fund's goals match your own. A Statement of Additional Information ("SAI"),
dated February 1, 1997, containing additional information about the Funds has
been filed with the Securities and Exchange Commission ("SEC") and is
incorporated by reference into this Prospectus. The SAI is available without
charge by writing to Stagecoach Funds, Inc., c/o Stagecoach Shareholder
Services, Wells Fargo Bank, N.A., P.O. Box 7066, San Francisco, CA 94120-7066 or
by calling 1-800-260-5969. The SAI and other information is available on the
SEC's Web site (http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, WELLS FARGO BANK, N.A. ("WELLS FARGO BANK") OR ANY OF
ITS AFFILIATES. SUCH SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN A FUND INVOLVES
CERTAIN RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
WELLS FARGO BANK IS THE INVESTMENT ADVISER AND ADMINISTRATOR, AND
PROVIDES THE FUNDS WITH CERTAIN OTHER SERVICES FOR WHICH IT IS COMPENSATED.
STEPHENS INC. ("STEPHENS"), WHICH IS NOT AFFILIATED WITH WELLS FARGO BANK, IS
THE FUNDS' SPONSOR, CO-ADMINISTRATOR AND DISTRIBUTOR.
PROSPECTUS DATED FEBRUARY 1, 1997
AS SUPPLEMENTED ON OCTOBER 20, 1997
<PAGE>
Table of Contents
Prospectus Summary 1
Summary of Fund Expenses 3
Financial Highlights 5
How the Funds Work 8
The Funds and Management 13
Investing in the Funds 15
Exchanges 19
Dividend and Capital Gain Distributions 20
Management and Servicing Fees 21
Taxes 24
Prospectus Appendix -- Additional Investment Policies A-1
PROSPECTUS
<PAGE>
PROSPECTUS
Prospectus Summary
The Funds provide investors with a convenient way to invest in a
portfolio of securities selected and supervised by professional management. The
following provides summary information about the Funds. For more information,
please refer specifically to the identified Prospectus sections and generally to
the Prospectus and SAI.
Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?
A. The Prime Money Market Mutual Fund seeks to provide investors with
maximized current income to the extent consistent with preservation of capital
and maintenance of liquidity. The Fund pursues its objective by investing its
assets in a broad range of short-term, high quality U.S. dollar-denominated
money market instruments, which have remaining maturities not exceeding 397 days
(13 months), and in certain repurchase agreements.
The Treasury Money Market Mutual Fund seeks to provide investors with
current income and stability of principal. The Fund's fundamental policy is to
seek its objective by investing its assets only in obligations issued or
guaranteed by the U.S. Treasury and in notes and other instruments, including
repurchase agreements, collateralized or secured by such obligations.
Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE OF
INVESTMENT?
A. Investments in a Fund are not bank deposits or obligations of Wells
Fargo Bank and are not insured by the FDIC, nor are they insured or guaranteed
against loss of principal. Therefore, investors should be willing to accept some
risk with money invested in a Fund. Although each Fund seeks to maintain a
stable net asset value of $1.00 per share, there is no assurance that it will be
able to do so. A Fund may not achieve as high a level of current income as other
mutual funds that do not limit their investments to the high credit quality
instruments in which each Fund invests. As with all mutual funds, there can be
no assurance that either Fund will achieve its investment objective. See "How
the Funds Work -- Risk Factors" in this Prospectus and "Additional Investment
Activities" in the SAI for further information about Fund Investments and
related risks.
Q. WHO MANAGES MY INVESTMENTS?
A. Wells Fargo Bank, as each Fund's investment adviser, manages your
investments. Wells Fargo Bank also provides the Funds with administrative,
transfer agency, dividend disbursing agency, and custodial services. In
addition, Wells Fargo Bank is a shareholder servicing agent and selling agent
for the Funds. See "The Funds and Management" and "Management and Servicing
Fees" for further information.
<PAGE>
Q. HOW DO I INVEST?
A. Qualified investors may invest by purchasing Institutional Class
shares of the Funds at the net asset value per share without a sales charge
("NAV"). Qualified investors include certain customers of affiliate, franchise
or correspondent banks of Wells Fargo & Company and other selected institutions
("Institutions"). Customers may include individuals, trusts, partnerships and
corporations. Purchases are effected through the customer's account with the
Institution under the terms of the customer's account agreement with the
Institution. In addition, customers may invest in Institutional Class shares of
the Prime Money Market Mutual Fund through an Online Money Market Account with
Wells Fargo Bank. Certain of the features described in this Prospectus are not
available to investors purchasing shares through such an Account. Investors
wishing to purchase a Fund's Institutional Class shares should contact their
account representatives. The minimum initial purchase amount on Institutional
Class shares is $5 million and the minimum subsequent purchase amount on such
shares is $25,000. Investors in various fiduciary accounts and certain other
investors are not subject to minimum initial or subsequent purchase amount
requirements. See "Investing in the Funds" for additional information.
Q. HOW WILL I RECEIVE DIVIDEND AND ANY CAPITAL GAIN DISTRIBUTIONS?
A. Dividends are declared daily and distributed monthly and any capital
gains are distributed at least annually. All distributions are automatically
reinvested in additional Institutional Class shares of the Funds at NAV.
Shareholders may also elect to receive dividends in cash. See "Dividend and
Capital Gain Distributions" for additional information.
Q. HOW MAY I REDEEM SHARES?
A. You may redeem shares at NAV, without charge by the Company.
Institutional Class shares held by an Institution on behalf of its customers
must be redeemed under the terms of the customer's account agreement with the
Institution. Institutions are responsible for transmitting redemption requests
to the Company and crediting its customers' accounts. The Company reserves the
right to impose charges for wiring redemption proceeds. See "Investing in the
Funds -- Redemption of Institutional Class Shares."
<PAGE>
Summary of Fund Expenses
Institutional Class Shares
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
Prime Money Treasury Money Market
Market Mutual Fund Mutual Fund
<S> <C> <C>
Maximum Sales Charge on Purchases (as a percentage of
offering price)................................... None None
Maximum Sales Charge on Reinvested Distributions....... None None
Maximum Sales Charge on Redemptions.................... None None
Exchange Fees.......................................... None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Prime Money Treasury Money Market
Market Mutual Fund Mutual Fund
<S> <C> <C>
Management Fee (after waivers or reimbursements) /1/... 0.12% 0.12%
Rule 12b-1 Fee......................................... None None
Other Expenses (after waivers or reimbursements) /2/... 0.13% 0.13%
TOTAL FUND OPERATING EXPENSES (after waivers or
reimbursements) /3/............................... 0.25% 0.25%
</TABLE>
____________________
/1/ Management Fee (before waivers or reimbursements) would be 0.25%.
/2/ Other Expenses (before waivers or reimbursements) would be 0.33% and 0.32%,
respectively.
/3/ Total Fund Operating Expenses (before waivers or reimbursements) would be
0.58% and 0.57%, respectively.
Note: The table does not reflect any charges that may be imposed by Wells Fargo
Bank or another Institution directly on certain customer accounts in connection
with an investment in a Fund.
<PAGE>
Example of Expenses
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment in a Fund's Institutional Class shares, assuming
(A) a 5% annual return and (B) redemption at the end of
each time period indicated:
Prime Money Market Mutual Fund................................... $3 $8 $14 $32
Treasury Money Market Mutual Fund................................ $3 $8 $14 $32
</TABLE>
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Explanation of Tables
The purpose of the foregoing tables is to help a shareholder understand
the various costs and expenses that an investor in a Fund will pay directly or
indirectly.
Shareholder Transaction Expenses are charges incurred when a shareholder
buys or sells Fund shares. Institutional Class shares are sold with no
shareholder transaction expenses imposed by the Company. However, the Company
reserves the right to impose a charge for wiring redemption proceeds.
Annual Fund Operating Expenses are based on applicable contract amounts
and amounts incurred during the prior fiscal year restated to reflect voluntary
fee waivers and expense reimbursements expected to reduce expenses during the
current year. Wells Fargo Bank 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, 0.25% of the Prime Money Market Mutual Fund's or Treasury
Money Market Mutual Fund's average daily net assets through August 31, 1997. Any
waivers or reimbursements will reduce a Fund's total expenses. There can be no
assurance that waivers or reimbursements will continue after that time. For more
complete descriptions of the various costs and expenses you can expect to incur
as an investor in the Funds, please see "Investing in the Funds -- How to Buy
Shares" and "Management and Servicing Fees."
Example of Expenses is a hypothetical illustration of the expenses
associated with a $1,000 investment over stated periods, based on the expenses
in the above tables and an assumed annual rate of return of 5%. The rate of
return should not be considered an indication of actual or expected performance
of a Fund nor a representation of past or future expenses; actual expenses and
returns may be greater or lesser than those shown.
<PAGE>
Financial Highlights
The following information has been derived from the Financial Highlights
in the Funds' financial statements for the year ended September 30, 1996. This
information is provided to assist you in evaluating the historical performance
of each Fund. Except as set forth below, the Funds' financial statements were
audited by KPMG Peat Marwick LLP. The financial information for all periods
prior to October 1, 1995, was audited by other auditors to the predecessor. On
September 6, 1996, the Institutional Class shares of certain portfolios of
Pacifica Funds Trust were reorganized as the Institutional Class shares of the
Prime Money Market Mutual and Treasury Money Market Mutual Funds. The financial
statements and the report thereon for the year ended September 30, 1996 are
incorporated by reference into the SAI. This information should be read in
conjunction with the Funds' 1996 financial statements and the notes thereto. The
SAI for the Funds has been incorporated by reference into this Prospectus.
<PAGE>
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<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND /1/
Institutional Shares /2/ Service Shares
----------------------------------------------------------------------------
Year Period Year Period
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30, Year Ended Mar. 31,
----------------------------
1996 1995 1995 1994/3/ 1994 1993 1992
--------- --------- --------- --------- -------- -------- --------
<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
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Income from Investment Operations:
Net Investment Income................................ 0.05 0.01 0.05 0.02 0.03 0.03 0.05
Net realized and unrealized gain on investments...... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- -------- -------- --------
Total from Investment Operations................. 0.05 0.01 0.05 0.02 0.03 0.03 0.05
Less Distributions:
Dividends from net investment income................. (0.05) (0.01) (0.05) (0.02) (0.03) (0.03) (0.05)
Distributions from net realized gain................. 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- -------- -------- --------
Total From Distributions......................... (0.05) (0.01) (0.05) (0.02) (0.03) (0.03) (0.05)
--------- --------- --------- --------- -------- -------- --------
Net Asset Value, end of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ======== ======== ========
Total Return (not annualized)......................... 5.39% 5.65% 5.60% 3.71%/4/ 3.00% 3.32% 6.22%
Ratios/Supplemental Data:
Net Assets, end of period (000s)..................... $423,959 $30,606 $614,101 $565,305 $527,599 $468,479 $528,397
Ratios to average net assets (annualized):
Ratio of expenses to average net assets.............. 0.25% 0.26% 0.41% 0.41% 0.41% 0.41% 0.43%
Ratio of net investment income to average net assets. 5.33% 5.67% 5.47% 3.67% 2.96% 3.27% 5.09%
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses................ 0.60% 0.69% 0.68% 0.89% 0.89% 0.89% 0.91%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses........................................... 4.98% 5.24% 5.20% 3.19% 2.48% 2.79% 4.61%
<CAPTION>
Service Shares
---------------------------------------------------
Year Ended Mar. 31,
---------------------------------------------------
1991 1990 1989 1988 1987
-------- -------- -------- -------- --------
<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.............................. 0.07 0.08 0.08 0.06 0.06
Net realized and unrealized gain on investments.... 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total from Investment Operations................. 0.07 0.08 0.08 0.06 0.06
Less Distributions:
Dividends from net investment income............... (0.07) (0.08) (0.08) (0.06) (0.06)
Distributions from net realized gain............... 0.00 0.00 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total From Distributions............................. (0.07) (0.08) (0.08) (0.06) (0.06)
-------- -------- -------- -------- --------
Net Asset Value, end of period..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return (not annualized)........................ 7.72% 8.82% 7.88% 6.50% 5.97%
Ratios/Supplemental Data:
Net Assets, end of period (000s)................... $543,834 $493,641 $496,675 $628,987 $407,815
Ratios to average net assets (annualized):
Ratio of expenses to average net assets............ 0.47% 0.54% 0.56% 0.58% 0.68%
Ratio of net investment income to average net
assets........................................... 7.38% 7.96% 7.58% 6.38% 5.81%
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses............... 0.94% 0.90% 0.80% 0.93% 0.93%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses.......................................... 6.91% 7.59% 7.24% 6.03% 5.56%
</TABLE>
________________
/1/ The Fund operated as Pacific American Liquid Assets, Inc. from commencement
of operations on April 30, 1981 until it was reorganized as a portfolio of
Pacific American Fund on October 1, 1985. On October 1, 1994, the Fund was
reorganized as the Pacific American Money Market Portfolio, a portfolio of
Pacifica Funds Trust. In July 1995, the Fund was renamed the Market Fund,
and on September 6, 1996, the Fund was reorganized as the Prime Money
Market Mutual Fund of the Company. Effective August 11, 1995, existing Fund
shares were classified as Service shares and the Fund began offering both
Service and Institutional shares to investors. Effective October 1, 1995,
the Fund also began offering Investor shares to investors. 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 & Company on April 1, 1996, FICM was renamed Wells Fargo
Investment Management, Inc.
/2/ Financial data for the period ended September 30, 1995 and the year ended
September 30, 1996 are for Institutional shares only, which were initially
offered on August 11, 1995. Financial data for all other periods are for
Service shares only.
/3/ The Fund changed its fiscal year-end from March 31 to September 30.
/4/ Annualized.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND /1/
Institutional Shares /2/ Service Shares
------------------------ -------------------------------------------------
Year Period Year Period
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30, Year Ended Mar. 31,
----------------------------
1996 1995 1995 1994/3/ 1994 1993
--------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income 0.05 0.01 0.05 0.02 0.03 0.03
Net realized and unrealized gain on investment 0.00 0.00 0.00 0.00 0.00 0.00
Total from Investment Operations 0.05 0.01 0.05 0.02 0.03 0.03
Less Distributions:
Dividends from net investment income (0.05) (0.01) (0.05) (0.02) (0.03) (0.03)
Distributions from net realized gain 0.00 0.00 0.00 0.00 0.00 0.00
Total From Distributions (0.05) (0.01) (0.05) (0.02) (0.03) (0.03)
Net Asset Value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total Return (not annualized) 5.26% 5.51%/4/ 5.42% 3.75%/4/ 2.81% 3.13%
Ratios/Supplemental Data:
Net Assets, end of year (000s) $540,689 $36,443 $1,001,707 $690,630 $854,950 $614,237
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.25% 0.26% 0.42% 0.43% 0.43% 0.43%
Ratio of net investment income to average net
assets 5.21% 5.42% 5.32% 3.72% 2.77% 3.04% 4.73%
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 0.59% 0.69% 0.66% 0.90% 0.90% 0.91%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.87% 4.99% 5.08% 3.25% 2.30% 2.56%
<CAPTION>
Service Shares
-------------------------------------------------------------
Year Ended Mar. 31,
-------------------------------------------------------------
1992 1991 1990 1989 1988 1987
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income 0.05 0.07 0.08 0.07 0.06 0.06
Net realized and unrealized gain on investment 0.00 0.00 0.00 0.00 0.00 0.00
Total from Investment Operations 0.05 0.07 0.08 0.07 0.06 0.06
Less Distributions:
Dividends from net investment income (0.05) (0.07) (0.08) (0.07) (0.06) (0.06)
Distributions from net realized gain 0.00 0.00 0.00 0.00 0.00 0.00
Total From Distributions (0.05) (0.07) (0.08) (0.07) (0.06) (0.06)
Net Asset Value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return (not annualized) 5.03% 7.42% 8.58% 7.63% 6.20% 5.64%
Ratios/Supplemental Data:
Net Assets, end of year (000s) $281,343 $118,623 $98,398 $90,672 $101,066 $134,375
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.45% 0.48% 0.56% 0.63% 0.69% 0.69%
Ratio of net investment income to average net
assets 5.21% 7.10% 7.73% 7.36% 6.12% 5.50%
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 0.93% 0.94% [0.97%] [0.98%] [1.05%] [0.94%]
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.25% 6.64% 7.32% 7.01% 5.76% 5.25%
</TABLE>
______________________
/1/ Prior to August 1, 1990, the Fund was known as the Short-Term Government
Fund, which commenced operations on October 1, 1985, and invested in obligations
issued or guaranteed by agencies and instrumentalities of the U.S. Government.
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 the Company. Effective August 11, 1995, existing Fund
shares were classified as Service shares and the Fund began offering both
Service and Institutional shares to investors. Effective October 1, 1995, the
Fund also began offering Investor shares to investors. 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 &
Company on April 1, 1996, FICM was renamed Wells Fargo Investment Management,
Inc.
/2/ Financial Data for the period ended September 30, 1995 and the year ended
September 30, 1996 are for Institutional shares only, which were initially
offered on August 11, 1995. Financial Data for all other periods are for Service
shares only.
/3/ The Fund changed its fiscal year-end from March 31 to September 30.
/4/ Annualized.
<PAGE>
How the Funds Work
Investment Objectives and Policies
Set forth below is a description of the investment objectives and
related policies of the Funds. Each Fund seeks to maintain a net asset value of
$1.00 per share. Their assets consist only of obligations with remaining
maturities (as defined by the SEC) of 397 days (13 months) or less at the date
of acquisition, and the dollar-weighted average maturity of each Fund's
investments is 90 days or less. There can be no assurance that each Fund's
investment objective will be achieved or that either Fund will be able to
maintain a net asset value of $1.00 per share. A more complete description of
the Funds' investments and investment activities is contained in "Prospectus
Appendix -- Additional Investment Policies" and in the SAI.
The Prime Money Market Mutual Fund seeks to provide investors with
maximized current income to the extent consistent with the preservation of
capital and maintenance of liquidity. The Fund pursues its objective by
investing in a broad range of short-term, high quality U.S. dollar-denominated
money market instruments, which have remaining maturities not exceeding 397 days
(13 months), and in certain repurchase agreements.
The Treasury Money Market Mutual Fund seeks to provide investors with
current income and stability of principal. The Fund's fundamental policy is to
invest only in obligations issued or guaranteed by the U.S. Treasury and in
notes and other instruments, including repurchase agreements, collateralized or
secured by such obligations.
The Funds' investment objectives and fundamental policies may not be
changed without the vote of a majority of the outstanding shares of the
particular Fund.
All securities acquired by the Funds will be U.S. Government obligations
(see below) or "First Tier Eligible Securities" as defined under Rule 2a7 of the
Investment Company Act of 1940 (the "1940 Act"). First Tier Eligible Securities
generally consist of instruments that are either rated at the time of purchase
in the highest rating category by one or more unaffiliated nationally recognized
statistical rating organizations <Dh> ("NRSROs") or issued by issuers with such
ratings. The Appendix to the SAI includes a description of the applicable
ratings. Unrated instruments purchased by the Fund will be of comparable quality
as determined by the adviser pursuant to guidelines approved by the Board of
Directors.
U.S. Treasury and U.S. Government Obligations. The Treasury Money Market
Mutual Fund may invest only in obligations issued or guaranteed by the U.S.
Treasury such as bills, notes, bonds and certificates of indebtedness, and in
notes and repurchase agreements collateralized or secured by such obligations.
These obligations may also
<PAGE>
include U.S. Treasury STRIPS (U.S. Treasury securities that have been separated
into their component parts of principal and interest payments and recorded as
such in the Federal Reserve book-entry record keeping system). The Prime Money
Market Mutual Fund may invest in U.S. Treasury obligations, as well as in
obligations of agencies and instrumentalities of the U.S. Government ("U.S.
Government obligations"). U.S. Government obligations in which the Fund may
invest include securities issued or guaranteed as to principal and interest by
the U.S. Government and supported by the full faith and credit of the U.S.
Treasury. U.S. Treasury obligations differ mainly in the length of their
maturity. Treasury bills, the most frequently issued marketable government
securities, have a maturity of up to one year and are issued on a discount
basis. U.S. Government obligations also include securities issued or guaranteed
by federal agencies or instrumentalities, including government-sponsored
enterprises. Some obligations of agencies or instrumentalities of the U.S.
Government are supported by the full faith and credit of the United States or
U.S. Treasury guarantees; others, by the right of the issuer or guarantor to
borrow from the U.S. Treasury; still others, by the discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, only by the credit of the agency or instrumentality
issuing the obligation. In the case of obligations not backed by the full faith
and credit of the United States, the investor must look principally to the
agency or instrumentality issuing or guaranteeing the obligation for ultimate
repayment, which agency or instrumentality may be privately owned. There can be
no assurance that the U.S. Government will provide financial support to its
agencies or instrumentalities where it is not obligated to do so. As a general
matter, the value of debt instruments, including U.S. Government obligations,
declines when market interest rates increase and rises when market interest
rates decrease. Certain types of U.S. Government obligations are subject to
fluctuations in yield or value due to their structure or contract terms.
The Prime Money Market Mutual Fund may also purchase "stripped
securities" such as TIGRs or CATs, which are interests in U.S. Treasury
obligations offered by broker-dealers and other financial institutions that
represent ownership in either the future interest payments or the future
principal payments on the U.S. Treasury obligations. Stripped securities are
issued at a discount to their "face value" and may exhibit greater price
volatility than ordinary debt securities because of the manner in which their
principal and interest are paid to investors.
In addition to the types of instruments described above, the Prime Money
Market Mutual Fund may purchase U.S. dollar-denominated bank obligations such as
time deposits, certificates of deposit, bankers' acceptances, bank notes and
deposit notes issued by domestic and foreign banks. Time deposits are non-
negotiable deposits maintained at a banking institution for a specified period
of time normally at a stated interest rate. Certificates of deposit are
certificates evidencing the obligation of a bank to repay funds deposited with
it for a specified period of time. Bankers acceptances
<PAGE>
are negotiable deposits or bills of exchange, normally drawn by an importer or
exporter to pay for specific merchandise, which are "accepted" by a bank
(meaning, in effect, that the bank unconditionally agrees to pay the face value
of the instrument at maturity). Bank notes usually represent senior debt of the
bank.
The Prime Money Market Mutual Fund may also purchase commercial paper,
short-term notes, medium-term notes and bonds issued by domestic and foreign
corporations that meet the Fund's maturity limitations. Certain types of
commercial paper are issued only in private placements and may be subject to
restrictions on resale and are therefore less liquid.
The Prime Money Market Mutual Fund may also invest in U.S. dollar
denominated obligations issued or guaranteed by foreign governments or any of
their political subdivisions, agencies or instrumentalities. Such obligations
include debt obligations of supranational entities. Supranational entities
include international organizations designated or supported by governmental
entities to promote economic reconstruction or development and international
banking institutions and related government agencies. Examples of these include
the International Bank for Reconstruction and Development (the "World Bank"),
the Asian Development Bank and the InterAmerican Development Bank.
The Prime Money Market Mutual Fund may purchase asset-backed securities,
which are securities backed by mortgages, installment sales contracts, credit-
card receivables or other assets. The average life of asset-backed securities
varies with the maturities of the underlying instruments, and the average life
of a mortgage-backed instrument, in particular, is likely to be substantially
less than the original maturity of the mortgage pools underlying the securities
as the result of mortgage prepayments. For this and other reasons, an asset-
backed security's stated maturity may be shortened, and the securities' total
return may be difficult to predict precisely. Such difficulties are not,
however, expected to have a significant effect on the Fund since the remaining
maturity of any asset-backed security acquired will be thirteen months or less.
Asset-backed securities purchased by the Fund may include collateralized
mortgage obligations issued by private companies.
The Funds may attempt to increase yields by trading to take advantage of
short-term market variations which may result in high portfolio turnover, which
should not adversely affect the Funds since they do not ordinarily pay brokerage
commissions on the purchase of short-term debt obligations.
A more complete description of the Funds' investments and investment
activities is contained in "Prospectus Appendix -- Additional Investment
Policies" and in the SAI.
<PAGE>
Risk Factors
Investments in the Funds are not bank deposits or obligations of Wells
Fargo Bank and are not insured by the FDIC, nor are they insured or guaranteed
against loss of principal. Therefore, investors should be willing to accept some
risk with money invested in a Fund. Although each Fund seeks to maintain a
stable net asset value of $1.00 per share, there is no assurance that it will be
able to do so. The Funds may not achieve as high a level of current income as
other mutual funds that do not limit their investment to the high credit quality
instruments in which the Funds invest. As with all mutual funds, there can be no
assurance that each Fund will achieve its investment objective.
The Funds, under the 1940 Act, must comply with certain investment
criteria designed to provide liquidity, reduce risk, and allow the Funds to each
maintain a stable net asset value of $1.00 per share. Each Fund's dollar-
weighted average portfolio maturity must not exceed 90 days. Any security that a
Fund purchases must have a remaining maturity of not more than 397 days. In
addition, a Fund purchase must present minimal credit risks and be of the
highest quality (i.e., be rated in the top rating category by the requisite
NRSROs or, if unrated, determined to be of comparable quality to such rated
securities by Wells Fargo Bank, as the Funds' investment adviser, under
guidelines adopted by the Company's Board of Directors).
The portfolio debt instruments of the Funds are subject to credit and
interest-rate risk. Credit risk is the risk that issuers of the debt instruments
in which the Funds invest may default on the payment of principal and/or
interest. Interest-rate risk is the risk that increases in market interest rates
may adversely affect the value of the debt instruments in which the Funds invest
and hence the value of your investment in a Fund.
Each Fund seeks to reduce risk by investing its assets in securities of
various issuers. As such, each Fund is considered to be diversified for purposes
of the 1940 Act. In addition, the Funds emphasize safety of principal and high
credit quality. In particular, the internal investment policies of Wells Fargo
Bank, the Funds' investment adviser, prohibit the purchase for a Fund of many
types of floating-rate derivative securities that are considered potentially
volatile. The following types of derivative securities ARE NOT permitted
investments for either Fund:
-- capped floaters (on which interest is not paid when market rates move
above a certain level);
-- leveraged floaters (whose interest rate reset provisions are based on
a formula that magnifies changes in interest rates);
-- range floaters (which do not pay any interest if market interest
rates move outside of a specified range);
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-- dual index floaters (whose interest rate reset provisions are tied to
more than one index so that a change in the relationship between these indices
may result in the value of the instrument falling below face value); and
-- inverse floaters (which reset in the opposite direction of their
index).
Additionally, neither Fund may invest in securities whose interest rate
reset provisions are tied to an index that materially lags short-term interest
rates, such as Cost of Funds Index floaters. The Funds may invest only in
floating-rate securities that bear interest at a rate that resets quarterly or
more frequently and which resets based on changes in standard money market rate
indices such as U.S. Treasury bills, London Interbank Offered Rate or LIBOR, the
prime rate, published commercial paper rates, federal funds rates, Public
Securities Associates floaters or JJ Kenney index floaters.
The Treasury Money Market Mutual Fund restricts its investment to U.S.
Treasury obligations that meet all of the standards described above. Obligations
issued or guaranteed by the U.S. Treasury have historically involved little risk
of loss of principal if held to maturity. However, due to fluctuations in
interest rates, the market value of such obligations may vary during the period
a shareholder owns shares of the Fund. It should be noted that neither the
United States, nor any agency or instrumentality thereof, has guaranteed,
sponsored or approved the Fund or its shares.
Since the Prime Money Market Mutual Fund may purchase U.S. dollar-
denominated securities issued by foreign issuers, the Fund may be subject to
investment risks that are different in some respects from those incurred by a
fund that invests exclusively in debt obligations of domestic issuers. Such
potential risks include future political and economic developments, the possible
imposition of withholding taxes on interest income payable on the securities by
the particular country in which the issuer is located, the possible seizure or
nationalization of foreign deposits, the possible establishment of exchange
controls or the adoption of other foreign governmental restrictions that might
adversely affect the payment of principal and interest on these securities. In
addition, foreign banks and other issuers are not necessarily subject to the
same regulatory requirements that apply to domestic issuers (such as reserve
requirements, loan limitations, examinations, accounting, auditing and
recordkeeping requirements, and public availability of information), and the
Fund may experience difficulties in obtaining or enforcing a judgment against a
foreign issuer. Absent any unusual market conditions, the Fund will not invest
more than 25% of its total assets in securities issued by foreign issuers.
Generally, securities in which the Funds invest will not earn as high a
yield as securities of longer maturity and/or of lesser quality that are more
subject to market volatility. Each Fund attempts to maintain the value of its
shares at a constant $1.00 per share, although there can be no assurance that a
Fund will always be able to do so.
<PAGE>
See "Prospectus Appendix -- Additional Investment Policies" and the SAI for
further information about investment policies and risks.
Performance
Fund performance may be advertised from time to time in terms of current
yield, effective yield or average annual total return. Performance figures are
based on historical results and are not intended to indicate future performance.
Performance figures are calculated separately for each class of shares of a
Fund.
Yield refers to the income generated by an investment in a class of a
Fund's shares over a specified period (usually 7 days), expressed as an annual
percentage rate. Effective yield is calculated similarly but assumes
reinvestment of the income earned by a class of a Fund. Because of the effects
of compounding, effective yields are slightly higher than yields.
Average annual total return of Institutional Class shares is based on
the overall dollar or percentage change of an investment in such shares and
assumes the investment is at NAV and all dividends and any capital-gain
distributions attributable to a class are also reinvested at NAV in shares of
the class.
In addition to presenting these standardized performance calculations,
at times, the Funds may also present non-standard performance figures, such as
yields and effective yields for a 30-day period or, in sales literature,
distribution rates. Because of the differences in the fees and/or expenses borne
by shares of each class of the Funds, the performance figures on one class of
shares can be expected, at any given time, to vary from the performance figures
for other classes of the Funds.
Additional performance information is contained in the SAI under
"Performance Calculations" and in the Annual Report, which are available upon
request without charge by calling the Company at 1-800-260-5969 or by writing
the Company at the address shown on the inside front cover of the Prospectus.
The Funds And Management
The Funds
The Funds are two funds in the Stagecoach Family of Funds. The Company
was organized as a Maryland corporation on September 9, 1991 and currently
offers shares of twenty-three other funds. Most of the Company's funds are
authorized to issue multiple classes of shares, one class generally subject to a
front-end sales charge and, in some cases, a class subject to a contingent-
deferred sales charge, that are offered to retail investors. Certain of the
Company's funds also are authorized to issue other classes of
<PAGE>
shares, which are sold primarily to institutional investors at NAV. Each class
of shares represents an equal proportionate interest in a Fund with other shares
of the same class. Shareholders of each class bear their pro rata portion of a
Fund's operating expenses except for certain class-specific expenses that are
allocated to a particular class and, accordingly, may affect performance. For
information on another fund or a class of shares, please call Stagecoach
Shareholder Services at 1-800-260-5969 or write the Company at the address shown
on the inside front cover of the Prospectus.
The Company's Board of Directors supervises the Funds' activities and
monitors their contractual arrangements with various service providers. Although
the Company is not required to hold annual shareholder meetings, special
meetings may be required for purposes such as electing or removing Directors,
approving advisory contracts and distribution plans, and changing a fund's
investment objective or fundamental investment policies. All shares of the
Company have equal voting rights and are voted in the aggregate, rather than by
fund or class, unless otherwise required by law (such as when the voting matter
affects only one fund or class). A Fund shareholder of record is entitled to one
vote for each share owned and fractional votes for fractional shares owned. See
"Management" in the SAI for more information on the Company's Directors and
Officers. A more detailed description of the voting rights and attributes of the
shares is contained under "Capital Stock" in the SAI.
Management
Wells Fargo Bank serves as each Fund's investment adviser,
administrator, custodian, transfer agent and dividend disbursing agent (the
"Transfer Agent"). In addition, Wells Fargo Bank serves as a shareholder
servicing agent and selling agent of the Funds. Wells Fargo Bank, one of the
largest banks in the United States, was founded in 1852 and is the oldest bank
in the western United States. As of December 31, 1996, Wells Fargo Bank and its
affiliates provided investment advisory services for approximately $54 billion
of assets of individuals, trusts, estates and institutions. Wells Fargo Bank
also serves as investment adviser to other separately managed funds (or the
master portfolio in which a fund may invest) of the Company, and as investment
adviser or sub-adviser to separately managed funds of five other registered,
open-end, management investment companies. Wells Fargo Bank, a wholly owned
subsidiary of Wells Fargo & Company, is located at 420 Montgomery Street, San
Francisco, California 94104.
Subsequent to its acquisition by Wells Fargo & Company on April 1, 1996,
Wells Fargo Investment Management, Inc. ("WFIM") (formerly, First Interstate
Capital Management, Inc.) served as investment adviser to the predecessor
portfolios. WFIM, a wholly-owned subsidiary of Wells Fargo Bank, has changed its
name to Wells Capital Management Incorporated and is located at 444 Market
Street, San Francisco, California 94111. Prior to March 18, 1994, the
predecessor portfolios' investment adviser was San
<PAGE>
Diego Financial Capital Management, Inc., which was acquired by First Interstate
Bancorp through its merger with San Diego Financial Corporation.
Morrison & Foerster LLP, counsel to the Company and special counsel to
Wells Fargo Bank, has advised the Company and Wells Fargo Bank that Wells Fargo
Bank and its affiliates may perform the services contemplated by the Advisory
Contracts and this Prospectus without violation of the Glass-Steagall Act. Such
counsel has pointed out, however, that there are no controlling judicial or
administrative interpretations or decisions and that future judicial or
administrative interpretations of, or decisions relating to, present federal or
state statutes, including the Glass-Steagall Act, and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as future changes in such statutes, regulations and judicial or
administrative decisions or interpretations, could prevent such entities from
continuing to perform, in whole or in part, such services. If any such entity
were prohibited from performing any such services, it is expected that new
agreements would be proposed or entered into with another entity or entities
qualified to perform such services.
Investing in the Funds
Institutional Class shares may be purchased on any day the Funds are
open for business (a "Business Day"). The Funds are open Monday through Friday
and are closed on weekends and federal bank holidays. On any day the trading
markets for both U.S. government securities and money market instruments close
early, the Funds will close early. On these days, the NAV calculation time and
the purchase and redemption cut-off times discussed below may be earlier than
12:00 Noon.
The Company or Stephens may make the Prospectus available in an
electronic format. Upon receipt of a request from an investor or the investor's
representative, the Company or Stephens will transmit or cause to be transmitted
promptly, without charge, a paper copy of the electronic Prospectus.
Share Value
The value of a share of each class is its NAV. Wells Fargo Bank calculates the
NAV of each class of the Funds as of 12:00 Noon and 1:00 p.m. (Pacific time) on
each Business Day. The NAV per share of each class of shares of a Fund is
computed by dividing the value of a Fund's assets allocable to a particular
class, less the liabilities charged to that class by the total number of
outstanding shares of that class. All expenses are accrued daily and taken into
account for the purpose of determining the NAV. As noted above, the Funds seek
to maintain a constant $1.00 NAV share price, although there is no assurance
that they will be able to do so.
<PAGE>
Each Fund's NAV is calculated on the basis of the amortized-cost method.
This valuation method is based on the receipt of a steady rate of payment on
portfolio instruments from the date of purchase until maturity rather than
actual changes in market value. The Company's Board of Directors believes that
this valuation method accurately reflects fair value.
Purchase of Institutional Class Shares
Institutional Class shares of the Funds are sold at NAV (without a sales
charge) on a continuous basis primarily to certain customers ("Customers") of
affiliate, franchise or correspondent banks of Wells Fargo & Company and other
selected institutions (previously defined as Institutions). Customers may
include individuals, trusts, partnerships and corporations. Share purchases are
effected through a Customer's account at an Institution under the terms of the
Customer's account agreement with the Institution, and confirmations of share
purchases and redemptions are sent by the Funds to the Institution involved. The
minimum initial purchase amount on Institutional Class shares is $5 million and
the minimum subsequent purchase amount on such shares is $25,000. Investors in
various fiduciary accounts and certain other investors are not subject to
minimum initial or subsequent purchase amount requirements.
Customers of Wells Fargo Bank also may invest in the Institutional Class shares
of the Prime Money Market Mutual Fund through an Online Money Market Account (an
"Account") established with the Bank. Investments through an Account are
governed by the terms and conditions of the Account, which are set forth in a
separate Disclosure Statement provided by Wells Fargo Bank to each
Accountholder. In light of the automated sweep and custodial account structure
of investments through an Account, certain of the features described in this
Prospectus are not available to investors purchasing shares through an Account.
Specifically, shares of a Fund purchased through an Account may be redeemed only
through an Account, and the dividend and distribution options and exchange
privileges described in this Prospectus are not available with respect to shares
purchased through an Account. Potential Accountholders should refer to the
Disclosure Statement for more information regarding the Account, including
information about fees and expenses.
Institutions (or their nominees), acting on behalf of their Customers,
normally are the holders of record of Institutional Class shares. Customers'
beneficial ownership of Institutional Class shares is reflected in the account
statements provided by Institutions to their Customers. The exercise of voting
rights and the delivery to Customers of shareholder communications from the
Funds is governed by the Customers' account agreements with an Institution.
Investors wishing to purchase Institutional Class shares of the Funds should
contact their account representatives.
Institutional Class shares of the Funds are sold at the NAV per share
next determined after a purchase order has become effective. Purchase orders
placed by an Institution must be received by the Company by 12:00 Noon (Pacific
time) on any Business Day. Payment for such shares may be made by Institutions
in federal funds or other funds immediately available to the custodian no later
than 1:00 p.m. (Pacific time) on that Business Day.
Institutions are responsible for transmitting orders for purchases by
their Customers and delivering required funds on a timely basis. If funds are
not received within the periods described above, the order will be canceled,
notice thereof will be given, and the Institution will be responsible for any
loss to a Fund or its shareholders.
Institutions may charge certain account fees depending on the type of
account the investor has established with the Institution. In addition, an
Institution may receive fees from the Funds with respect to the investments of
its Customers as described under "Management and Servicing Fees." Payment for
Institutional Class shares of a Fund may,
<PAGE>
in the discretion of the investment adviser, be made in the form of securities
that are permissible investments for the Fund. For further information see
"Additional Purchase and Redemption Information" in the SAI.
The Company reserves the right to reject any purchase order or to
suspend sales at any time. Payment for orders that are not received will be
returned after prompt inquiry. The issuance of Institutional Class shares is
recorded on the Company's books, and share certificates are not issued.
Wire Instructions Direct Purchases by Institutions
1. Complete an Account Application.
2. Instruct the wiring bank to transmit the specified amount in federal
funds to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000587
Attention: Stagecoach Funds (Name of Fund and designate Institutional Class)
Account Name(s): Name(s) in which to be registered
Account Number: (if investing into an existing account)
3. A completed Account Application should be sent by telefacsimile, with
the original subsequently mailed, to the following address immediately after the
funds are wired and must be received and accepted by the Transfer Agent before
an account can be opened:
Wells Fargo Bank, N.A.
Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-781-4082
4. Share purchases are effected at the NAV next determined after the
Account Application is received and accepted.
Statements and Reports
Institutions (or their nominees) typically send investors a confirmation
or statement of the account after every month in which there has been a
transaction that affects their share balance or the Fund account registration.
Every January, you will be provided a statement with tax information for the
previous year to assist you in tax return preparation. At least twice a year,
shareholders receive financial statements.
<PAGE>
Redemption of Institutional Class Shares
Redemption requests are effected at the NAV per share next determined
after receipt of a redemption request in good order by the Company.
Institutional Class shares held by an Institution on behalf of its Customers
must be redeemed in accordance with instructions and limitations pertaining to
the Customer's accounts at the Institution. Institutions are responsible for
transmitting redemption requests to the Company and crediting its Customers'
accounts with the redemption proceeds on a timely basis. The redemption proceeds
for Institutional Class shares of the Funds normally are wired to the redeeming
Institution the following Business Day after receipt of the request by the
Company. The Company reserves the right to delay the wiring of redemption
proceeds for up to seven days after it receives a redemption order if, in the
judgment of the investment adviser, an earlier payment could adversely affect
the Funds or unless the SEC permits a longer period under extraordinary
circumstances. Such extraordinary circumstances could include a period during
which an emergency exists as a result of which (a) disposal by the Funds of
securities owned by them is not reasonably practicable or (b) it is not
reasonably practicable for the Funds to fairly determine the value of their net
assets, or a period during which the SEC by order permits deferral of
redemptions for the protection of security holders of a Fund.
With respect to shareholders who do not have a relationship with an
Institution, shares of the Funds may be redeemed by writing or calling the Funds
directly at the address or phone number shown on the first page of the
Prospectus. When Institutional Class shares are redeemed directly from the
Funds, the Company ordinarily send the proceeds by check to the shareholder at
the address of record on the next Business Day unless payment by wire is
requested. The Company may take up to seven days to make payment, although this
will not be the customary practice. Also, if the New York Stock Exchange is
closed (or when trading is restricted) for any reason other than the customary
weekend or holiday closing or if an emergency condition as determined by the SEC
merits such action, the Funds may suspend redemptions or postpone payment dates.
To be accepted by a Fund, a letter requesting redemption must include:
(i) the Fund's name and account registration from which the Institutional Class
shares are being redeemed; (ii) the account number; (iii) the amount to be
redeemed; (iv) the signatures of all registered owners; and (v) a signature
guarantee by any eligible guarantor institution. An "eligible guarantor
institution" includes a commercial bank that is an FDIC member, a trust company,
a member firm of a domestic stock exchange, a savings association, or a credit
union that is authorized by its charter to provide a signature guarantee.
Signature guarantees by notaries public are not acceptable. Further
documentation may be requested from corporations, administrators, executors,
personal representatives, trustees or custodians.
<PAGE>
All redemptions of Institutional Class shares of the Funds are made in
cash, except that the commitment to redeem Institutional Class shares in cash
extends only to redemption requests made by each Fund shareholder during any 90-
day period of up to the lesser of $250,000 or 1% of the NAV of the Funds at the
beginning of such period. This commitment is irrevocable without the prior
approval of the SEC. In the case of redemption requests by shareholders in
excess of such amounts, the Board of Directors reserves the right to have the
Funds make payment, in whole or in part, in securities or other assets, in case
of an emergency or any time a cash distribution would impair the liquidity of
the Funds to the detriment of the existing shareholders. In this event, the
securities would be valued in the same manner as the securities of the Funds are
valued. If the recipient were to sell such securities, the investors would incur
brokerage charges.
Redemptions by Telephone
Telephone exchange or redemption privileges authorize the Transfer Agent
to act on telephone instructions from any person representing himself or herself
to be the shareholder of record and reasonably believed by the Transfer Agent to
be genuine. The Company requires the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Company
and the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Company nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be genuine.
Exchanges
The Funds offer a convenient way to exchange Institutional Class shares
in one Fund for Institutional Class shares in another fund of the Company.
Before engaging in an exchange transaction, an investor should read carefully
the Prospectus describing the fund into which the exchange will occur, which is
available without charge and can be obtained by writing or by calling the
Company at the address or phone number listed on the first page of the
Prospectus. A shareholder may not exchange Institutional Class shares of one
fund for Institutional Class shares of another fund if Institutional Class
shares of both funds are not qualified for sale in the state of the
shareholder's residence. The Company may terminate or amend the terms of the
exchange privilege at any time.
Exchange transactions are effected through a Customer's account at an
Institution under the terms of the Customer's account agreement with the
Institution, and confirmations of share exchanges are sent by a Fund to the
Institution involved.
<PAGE>
Institutions (or their nominees), acting on behalf of their Customers, normally
are the holders of record of Institutional Class shares. Institutions are
responsible for transmitting orders for exchanges to the Company on a timely
basis. Investors should receive written confirmation of the exchange from the
Institution within a few days of the completion of the transaction. In addition,
customers' exchange transactions are generally reflected in the account
statements provided by Institutions to their Customers. Investors wishing to
exchange Institutional Class shares of a Fund for Institutional Class shares of
another fund should contact their account representatives. Investors with
questions may call the Company at 1-800-260-5969.
A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges are made at the NAV of the respective funds next determined following
receipt of the request by the Company in good order.
To exchange Institutional Class shares, or if you have questions, simply
call the Company at 1-800-260-5969. A shareholder of record should be prepared
to give the telephone representative the following information: (i) the account
number, social security or taxpayer identification number and account
registration; (ii) the name of the fund from and the fund into which the
transfer is to occur; and (iii) the dollar or share amount of the exchange. The
conversation may be recorded to protect shareholders and the Company. Telephone
exchanges are available unless the shareholder of record has declined the
privilege on the Purchase Application.
In addition, Institutional Class shares of the Funds may be exchanged
for each of the Funds' Class A shares in connection with the distribution of
assets held in a qualified trust, agency or custodial account maintained with
the trust department of a Wells Fargo Bank or another bank, trust company or
thrift institution, or in other cases where Institutional Class shares are not
held in such qualified accounts. Similarly, Class A shares may be exchanged for
the Fund's Institutional Class shares if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made at the
respective NAVs of the Institutional Class shares next determined after the
exchange request is received by the Company.
Dividend and Capital Gain
Distributions
Dividends from net investment income of the Funds are declared daily
payable to Institutional Class shareholders of record as of 12:00 p.m. (Pacific
time). Institutional Class shareholders begin earning dividends on the Business
Day the investment is effected and continue to earn dividends through the day
before the date that the shares
<PAGE>
are redeemed. Dividends for a Saturday, Sunday or Holiday are declared payable
to shareholders of record as of the preceding Business Day. The Funds declare
and distribute any capital gains at least annually. Expenses, such as state
securities registration fees and transfer agent fees, that are attributable to a
particular class may affect the relative dividends and/or capital-gain
distributions of a class of shares.
Dividends declared in a month generally are distributed on the last
Business Day of the each month. Dividends and any capital-gain distributions are
automatically invested in additional whole and fractional shares unless the
shareholder has elected to receive distributions in cash.
Management and Servicing Fees
Investment Adviser
Subject to the overall supervision of the Company's Board of Directors,
Wells Fargo Bank, as the Funds' investment adviser, provides investment guidance
and policy direction in connection with the management of the Funds' assets.
Wells Fargo Bank also furnishes the Board of Directors with periodic reports on
the Funds' investment strategies and performance. For these services, Wells
Fargo Bank is entitled to receive monthly investment advisory fees at the annual
rate of 0.25% of the average daily net assets of each Fund. From time to time,
Wells Fargo Bank may waive such fees in whole or in part. Any such waiver will
reduce the expenses of the Funds and, accordingly, have a favorable impact on
the Funds' performance. From time to time, the Funds, consistent with their
investment objective, policies and restrictions, may invest in securities of
entities with which Wells Fargo Bank has a lending relationship. For the fiscal
year ended September 30, 1996, the Prime Money Market Mutual and Treasury Money
Market Mutual Funds paid advisory fees at the annual rates of 0.14% and 0.13%,
respectively, of their average daily net assets. For periods prior to September
6, 1996, these amounts includes advisory fee paid by the predecessor portfolios
to Wells Fargo Investment Management, Inc.
Custodian and Transfer and Dividend Disbursing Agent
Wells Fargo Bank also serves as the Funds' custodian and transfer and
dividend disbursing agent. Under the Custody Agreement with Wells Fargo Bank, a
Fund may, at times, borrow money from Wells Fargo Bank as needed to satisfy
temporary liquidity needs. Wells Fargo Bank charges interest on such overdrafts
at a rate determined pursuant to the Custody Agreement. Wells Fargo Bank
performs its custodial and transfer and dividend disbursing agency services at
525 Market Street, San Francisco, California 94105.
<PAGE>
Institutions and Shareholder Servicing Agents
The Funds have entered into a Shareholder Servicing Agreement on behalf
of Institutional Class shares with Wells Fargo Bank and may enter into similar
agreements with other Institutions ("Shareholder Servicing Agents"). Under such
agreements, Shareholder Servicing Agents (including Wells Fargo Bank) agree, as
agents for their customers, to provide shareholder administrative and liaison
services with respect to Fund shares, which include, without limitation,
aggregating and transmitting shareholders orders for purchases, exchanges and
redemptions; maintaining shareholder accounts and records; exchanges and
redemptions; and providing such other related services as the Company or a
shareholder may reasonably request. For these services, a Shareholder Servicing
Agent is entitled to receive a fee at the annual rate of up to 0.25% of the
average daily net assets attributable to the Institutional Class shares owned of
record or beneficially by investors with whom the Shareholder Servicing Agent
maintains a servicing relationship. In no case shall payments exceed any maximum
amount that may be deemed applicable under applicable laws, regulations or
rules, including the Conduct Rules of the NASD ("NASD Rules").
A Shareholder Servicing Agent may impose certain conditions on its
customers, subject to the terms of this Prospectus, in addition to or different
from those imposed by a Fund, such as requiring a minimum initial investment or
payment of a separate fee for additional services. Each Shareholder Servicing
Agent has agreed to disclose any fees it may directly charge its customers who
are shareholders of a Fund and to notify them in writing at least 30 days before
it imposes any transaction fees.
Administrator and Co-Administrator
Subject to the overall supervision of the Company's Board of Directors,
Wells Fargo Bank as administrator and Stephens as co-administrator, provide the
Funds with administrative services, including general supervision of each Fund's
operation, coordination of the other services provided to each Fund, compilation
of information for reports to the SEC and the state securities commissions,
preparation of proxy statements and shareholder reports, and general supervision
of data compilation in connection with preparing periodic reports to the
Company's Directors and officers. Wells Fargo Bank and Stephens also furnish
office space and certain facilities to conduct the Funds' business, and Stephens
compensates the Company's Directors and officers who are affiliated with
Stephens. For these administrative services, Wells Fargo Bank and Stephens are
entitled to receive a monthly fee at the annual rate of 0.04% and 0.02%,
respectively, of the Fund's average daily net assets. Wells Fargo Bank and
Stephens may delegate certain of their respective administrative duties to sub-
administrators.
Stephens previously provided substantially the same services as sole
administrator to the Funds. For the year ended September 30, 1996, the Prime
Money Market Mutual and Treasury Money Market Mutual Funds paid administrative
fees at the annual rate of 0.09%
<PAGE>
of each Fund's average daily net assets. For the period prior to September 6,
1996, this includes amounts paid to The Dreyfus Corporation and Furman Selz LLC
by the predecessor portfolios.
Sponsor and Distributor
Stephens is the Company's sponsor and co-administrator and distributes
each Fund's shares. Stephens is a full service broker/dealer and investment
advisory firm located at 111 Center Street, Little Rock, Arkansas 72201.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years. Additionally, they have been providing
discretionary portfolio management services since 1983. Stephens currently
manages investment portfolios for pension and profit-sharing plans, individual
investors, foundations, insurance companies and university endowments.
Stephens, as the principal underwriter of the Funds within the meaning
of the 1940 Act, has entered into a Distribution Agreement with the Company
under which Stephens acts as agent for each Fund for the sale of its shares and
may enter into selling agreements with other agents ("Selling Agents") that wish
to make available shares of the Funds to their respective customers.
Stephens has established a non-cash compensation program, pursuant to
which broker/dealers or financial institutions that sell shares of the Company's
funds may earn additional compensation in the form of trips to sales seminars or
vacation destinations, tickets to sporting events, theater or other
entertainment, opportunities to participate in golf or other outings and gift
certificates for meals or merchandise.
Financial institutions acting as Shareholder Servicing Agents or Selling
Agents, or in certain other capacities, may be required to register as dealers
pursuant to applicable state securities laws which may differ from federal law
and any interpretations expressed herein.
Fund Expenses
From time to time, Wells Fargo Bank and Stephens may waive their
respective fees in whole or in part and reimburse expenses payable to others.
Any such waivers or reimbursements will reduce the Fund's expenses, and,
accordingly, have a favorable impact on the Fund's performance. Except for the
expenses borne by Wells Fargo Bank and Stephens, each fund of the Company bears
all costs of its operations, including its pro rata portion of the Company
expenses such as fees and expenses of its independent auditors and legal
counsel, compensation of the Company's directors who are not affiliated with the
adviser, administrator or any of their affiliates; advisory, transfer agency,
custody and administration fees, and any extraordinary expenses. Expenses
attributable to each fund or class are charged against the assets of the class.
General expenses of the Company are allocated among all of the funds of the
Company in a manner proportionate to the net assets of each fund, on a
transactional basis, or on such other basis as the Company's Board of Directors
deems equitable.
<PAGE>
Taxes
Distributions from a Fund's net investment income and net short-term
capital gains, if any, are designated as dividend distributions and taxable to
the Fund's shareholders as ordinary income. Distributions from a Fund's net
long-term capital gains, if any, are designated as capital gain distributions
and taxable to the Fund's shareholders as long-term capital gains. In general,
your distributions will be taxable when paid, whether you take such
distributions in cash or have them automatically reinvested in additional Fund
shares. However, distributions declared in October, November, and December and
distributed by the following January will be taxable as if they were paid by
December 31.
Foreign shareholders may be subject to different tax treatment,
including withholding taxes. See "Federal Income Taxes -- Foreign Shareholders"
in your SAI. In certain circumstances, U.S. residents may also be subject to
withholding taxes. See "Federal Income Taxes -- Backup Withholding" in your SAI.
The foregoing discussion regarding taxes is based on tax laws which were
in effect as of the date of this Prospectus and summarizes only some of the
important federal tax considerations generally affecting the Funds and their
shareholders. It is not intended as a substitute for careful tax planning; you
should consult your tax advisor with respect to your specific tax situation as
well as with respect to foreign, state and local taxes. Further federal tax
considerations are discussed in your SAI.
<PAGE>
A-
PROSPECTUS
A-
PROSPECTUS
Prospectus Appendix --
Additional Investment Policies
Fund Investments
Treasury Money Market Mutual Fund
The Treasury Money Market Mutual Fund may invest in the following:
(i) obligations issued or guaranteed by the U.S. Treasury such as
bills, notes, bonds and certificates of Indebtedness, and in notes and
repurchase agreements collateralized or secured by such obligations (see below);
(ii) certain repurchase agreements ("repurchase agreements") (discussed
below);
(iii) certain floating- and variable-rate instruments ("variable-rate
instruments);
(iv) securities purchased on a "when-issued" basis and securities
purchased or sold on a "forward-commitment" basis or "delayed-settlement" basis"
(discussed below);
(v) certain securities issued by other investment companies.
Prime Money Market Mutual Fund
The Prime Money Market Mutual Fund may invest in the following:
(i) obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, including government-sponsored enterprises,
including U.S. Treasury obligations ("U.S. Government obligations") (discussed
below);
(ii) certain repurchase agreements ("repurchase agreements") (discussed
below);
(iii) certain floating- and variable-rate instruments ("variable-rate
instruments");
(iv) securities purchased on a "when-issued" basis and securities
purchased or sold on a "forward commitment" basis or "delayed settlement" basis"
(discussed below);
(v) certain securities issued by other investment companies;
(vi) negotiable certificates of deposit, fixed time deposits, bankers'
acceptances or other short-term obligations of U.S. banks (including foreign
branches) that have more than $1 billion in total assets at the time of
investment and are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the FDIC ("bank
instruments");
<PAGE>
(vii) commercial paper rated at the date of purchase Prime1 by Moody's
Investors Service, Inc. ("Moody's") or "A-1-" or "A-1" by Standard & Poor's
Corporation ("S&P") ("rated commercial paper");
(viii) commercial paper unrated at the date of purchase but secured by a
letter of credit from a U.S. bank that meets the above criteria for investment;
(ix) short-term, U.S. dollar-denominated obligations of U.S. branches
of foreign banks that at the time of investment have more than $10 billion, or
the equivalent in other currencies, in total assets ("foreign bank obligations")
(discussed below).
(x) mortgage-backed securities (discussed below); and
(xi) certain other asset-backed securities (discussed below).
U.S. Government Obligations
The Funds may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government Obligations").
Payment of principal and interest on U.S. Government Obligations (i) may be
backed by the full faith and credit of the United States (as with U.S. Treasury
bills and GNMA certificates) or (ii) may be backed solely by the issuing or
guaranteeing agency or instrumentality itself (as with FNMA notes). In the
latter case investors must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the U.S.
Government will provide financial support to its agencies or instrumentalities
where it is not obligated to do so. In addition, U.S. Government Obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government Obligations, declines when market interest rates increase and rises
when market interest rates decrease. Certain types of U.S. Government
Obligations are subject to fluctuations in yield or value due to their structure
or contract terms.
Repurchase Agreements
The Funds may enter into repurchase transactions in which the seller of
a security to a Fund agrees to repurchase that security from such Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, often overnight or a few days, although it may extend over a number of
months. A Fund may enter into repurchase agreements only with respect to
securities that could otherwise be purchased by the Fund, and all repurchase
transactions must be collateralized. A Fund may incur a loss on a repurchase
transaction if the seller defaults and the value of the underlying collateral
declines or is otherwise limited or if receipt of the security or collateral is
delayed. The Funds may participate in pooled repurchase agreement transactions
with other funds advised by Wells Fargo Bank. See "Additional Permitted
Investment Activities" in the SAI for additional information.
<PAGE>
Floating- and Variable-Rate Instruments
The Funds may purchase debt instruments with interest rates that are
periodically adjusted at specified intervals or whenever a benchmark rate or
index changes. These adjustments generally limit the increase or decrease in the
amount of interest received on the debt instruments. The floating- and variable-
rate instruments that the Funds may purchase include certificates of
participation in such instruments. Floating- and variable-rate instruments are
subject to interest-rate risk and credit risk. See "Additional Permitted
Investment Activities" in the SAI for additional information.
Forward-Commitments, When-Issued Purchases and Delayed-Delivery Transactions
Each Fund may purchase securities on a "when-issued" basis and may
purchase or sell securities on a "forward-commitment" basis. The Funds may also
purchase or sell securities on a "delayed-settlement" basis. When-issued and
forward-commitment transactions, which involve a commitment by a Fund to
purchase or sell particular securities with payment and delivery taking place at
a future date (perhaps one or two months later), permit the Funds to lock in a
price or yield on a security it owns or intends to purchase, regardless of
future changes in interest rates. Delayed settlement describes settlement of a
securities transaction in the secondary market that will occur sometime in the
future. When-issued, forward-commitment and delayed-settlement transactions
involve the risk, however, that the yield or price obtained in a transaction may
be less favorable than the yield or price available in the market when the
securities delivery takes place. A Fund's forward commitments, when-issued
purchases and delayed settlements are not expected to exceed 25% of the value of
the Fund's total assets absent unusual market conditions. The Funds do not
intend to engage in these transactions for speculative purposes but only in
furtherance of their investment objectives.
Other Investment Companies
The Funds may invest up to 10% of their assets in shares of other open-
end investment companies that invest exclusively in the high-quality, short-term
money market instruments in which the Funds may invest. The Treasury Money
Market Mutual Fund may only invest in shares of other investment companies that
are structured to seek an investment objective that is similar to the Fund's
investment objective. The investment companies can be expected to charge
management fees and other operating expenses that would be in addition to those
charged to a Fund; however, the Funds' adviser has undertaken to waive its
advisory fees with respect to that portion of the Fund's assets so
<PAGE>
invested. The Funds may invest in shares of other open-end investment companies
up to the limits prescribed by the 1940 Act.
Foreign Obligations
The Prime Money Market Mutual Fund may invest up to 25% of its assets in
high-quality, short-term (thirteen months or less) debt obligations of foreign
branches of U.S. banks or U.S. branches of foreign banks that are denominated in
and pay interest in U.S. dollars. The Prime Money Market Mutual Fund may also
invest in U.S. dollar-denominated obligations issued or guaranteed by foreign
governments or any of their political subdivisions, agencies or
instrumentalities. Such obligations include debt obligations of supranational
entities. Supranational entities include international organizations designated
or supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies.
Investments in foreign obligations involve certain considerations that
are not typically associated with investing in domestic obligations. There may
be less publicly available information about a foreign issuer than about a
domestic issuer. Foreign issuers also are not subject to the same uniform
accounting, auditing and financial reporting standards or governmental
supervision as domestic issuers. In addition, with respect to certain foreign
countries, taxes may be withheld at the source under foreign tax laws, and there
is a possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments that could adversely affect investments
in, the liquidity of, and the ability to enforce contractual obligations with
respect to, securities of issuers located in those countries.
Mortgage-Backed And Other Asset-Backed Securities
The Prime Money Market Mutual Fund may purchase asset-backed securities,
which are securities backed by mortgages, installment sales contracts, credit
card receivables or other assets. The average life of asset-backed securities
varies with the maturities of the underlying instruments, and the average life
of a mortgage-backed instrument, in particular, is likely to be substantially
less than the original maturity of the mortgage pools underlying the securities
as the result of mortgage prepayments. For this and other reasons, an asset-
backed security's stated maturity may be shortened, and the securities' total
return may be difficult to predict precisely. Such difficulties are not,
however, expected to have a significant effect on the Fund since the remaining
maturity of any asset-backed security acquired will be 397 days or less. Asset-
backed securities purchased by the Fund may include collateralized mortgage
obligations ("CMOs") issued by private companies.
<PAGE>
Illiquid Securities
The Funds may invest in securities not registered under the 1933 Act and
other securities subject to legal or other restrictions on resale. Because such
securities may be less liquid than other investments, they may be difficult to
sell promptly at an acceptable price. Delay or difficulty in selling securities
may result in a loss or be costly to a Fund.
Investment Policies and Restrictions
Each Fund's investment objective, as set forth under "How the Funds Work
- -- Investment Objectives and Policies", is fundamental; that is, it may not be
changed without approval by the vote of the holders of a majority of the Fund's
outstanding voting securities, as described under "Capital Stock" in the SAI. In
addition, any fundamental investment policy may not be changed without such
shareholder approval. If the Company's Board of Directors determines, however,
that a Fund's investment objective could best be achieved by a substantive
change in a nonfundamental investment policy or strategy, the Company's Board
may make such change without shareholder approval and will disclose any such
material changes in the then-current prospectus.
Fundamental Investment Policies
As matters of fundamental policy, each Fund may: (i) borrow from banks
up to 20% of the current value of its net assets only for temporary purposes in
order to meet redemptions, and these borrowings may be secured by the pledge of
up to 10% of the current value of its net assets (but investments may not be
purchased by a Fund while any such outstanding borrowing in excess of 5% of its
net assets exists); and (ii) not invest more than 25% of its assets (i.e.,
concentrate) in any particular industry, excluding, U.S. Government obligations
and, with respect to the Prime Money Market Mutual Fund, the obligations of U.S.
banks and certain U.S. branches of foreign banks.
These investment restrictions are applied at the time investment
securities are purchased. As a matter of nonfundamental policy, the Funds may
make loans of portfolio securities or other assets, although neither Fund
intends to do so during the current fiscal year.
Non-Fundamental Investment Policies
As a matter of nonfundamental policy, neither Fund may: (i) purchase
securities of any issuer (except for U.S. Government obligations, for certain
temporary purposes and for certain guarantees and unconditional puts) if as a
result more than 5% of the value of its total assets would be invested in the
securities of such issuer, except that a Fund may invest up to 25% of its assets
in the highest-rated obligations of any one issuer for a period of up to three
business days, or if a Fund would own more than 10% of the outstanding voting
securities of such issuer; and (ii) invest more than 10% of the current
<PAGE>
value of its net assets in securities that are illiquid by virtue of the absence
of a readily available market or legal or contractual restrictions on resale or
that have maturities of more than seven days. With respect to item (i), it may
be possible that the Company would own more than 10% of the outstanding voting
securities of an issuer. Also, as a matter of non-fundamental policy and in
accordance with the current regulations of the SEC, the Prime Money Market
Mutual Fund intends to limit its investments in the obligations of any one non-
U.S. governmental issuer to not more than 5% of its total assets at the time of
purchase, provided that the Fund may invest up to 25% of its assets in the
obligations of one non-U.S. governmental issuer for a period of up to three
business days. For purposes of item (ii), repurchase agreements that do not
provide for payment to the Funds within seven days after notice are subject to
this 10% limit, unless the Company's Board of Directors or the Funds' investment
adviser, pursuant to guidelines adopted by the Board of Directors, determines
that a liquid trading market exists.
Illiquid securities shall not include (a) securities eligible for resale
pursuant to Rule 144A Securities Act of 1933 (the "1933 Act") Act that have been
determined to be liquid by the adviser, pursuant to guidelines established by
the Company's Board of Directors, and (b) commercial paper sold under Section
4(2) of the 1933 Act that (i) is not traded flat or in default as to interest or
principal and (ii) is rated in one of the two highest categories by at least two
NRSROs and the adviser, pursuant to guidelines established by the Company's
Board of Directors, has determined the commercial paper to be liquid; or (iii)
is rated in one of the two highest categories by one NRSRO and the adviser,
pursuant to guidelines established by the Company's Board of Directors, has
determined that the commercial paper is of equivalent quality and is liquid, if
by any reason thereof the value of its aggregate investment in such classes of
securities will exceed 10% of its total assets.
<PAGE>
Advised by WELLS FARGO BANK, N.A.
Sponsored/Distributed by
Stephens Inc., Member NYSE/SIPC
NOT FDIC INSURED
P.O. Box 7066
San Francisco, CA 94120-7066
STAGECOACH MONEY MARKET MUTUAL FUNDS:
- -- are NOT FDIC insured
- -- are NOT deposits or obligations of Wells Fargo Bank
- -- are NOT guaranteed by Wells Fargo Bank
- -- involve investment risk, including possible loss of principal -- seek to
maintain a stable net asset value of $1.00 per share, however, there can be no
assurance that either fund will meet this goal. Yields and returns will vary
with market conditions.
