STAGECOACH FUNDS INC /AK/, 485APOS, 1997-10-15

STAGECOACH FUNDS INC /AK/
485APOS, 1997-10-15

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<PAGE>

As filed with the Securities and Exchange Commission
on October 15, 1997
Registration No. 33-42927; 811-6419

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
[X]

Post-Effective Amendment No.35

And

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]

Amendment No. 36 [X]
(Check appropriate box or boxes)
______________________________

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

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

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

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

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

[_] 75 days after filing pursuant [_] on ___________pursuant
to Rule 485(a)(2), or to Rule 485(a)(2)

<PAGE>

If appropriate, check the following box:

[_] this post-effective amendment designates a new effective date for a
previously filed-effective amendment.
<PAGE>

EXPLANATORY NOTE
----------------

This Post-Effective Amendment to the Registration Statement (the
"Amendment") of Stagecoach Funds, Inc. (the "Company") is being filed to
register the "Plain English" Prospectuses and related Statements of
Additional Information ("SAI")for the following of the Company's funds:
Asset Allocation, Index Allocation, U.S. Government Allocation (the
Allocation Funds Prospectus and SAI); Equity Index; Strategic Growth,
Balanced, Diversified Income, Equity Value, Growth, Small Cap (the
Equity Funds Prospectus and SAI); Intermediate Bond, Short-Term Government-
Corporate Income, Short-Term U.S. Government Income, U.S. Government Income,
Variable Rate Government (the Income Funds Prospectus and SAI); International
Equity; Money Market Mutual, California Tax-Free Money Market Mutual,
Government Money Market Mutual, National Tax-Free Money Market Mutual,
Treasury Money Market Mutual (the Money Market Funds Prospectus and SAI);
Arizona Tax-Free, California Tax-Free Bond, California Tax-Free Income,
National Tax-Free, Oregon Tax-Free, Short-Term Municipal Income (the Tax-Free
Income Funds Prospectus and SAI). The Amendment does not affect the
Registration Statement for the Company's other prospectuses or SAIs and does
not relate to any of the Funds' other prospectuses or SAIs.

The Equity Index, Strategic Growth, Growth, and U.S Government Income
Funds are currently known as the Corporate Stock, Aggressive Growth,
Growth and Income, and Ginnie Mae Funds, respectively. The new names are
expected to be in effect on December 15, 1997, the anticipated effective
date of the Prospectuses and SAIs filed herewith.

<PAGE>

STAGECOACH FUNDS, INC.
----------------------
Cross Reference Sheet
---------------------

Form N-1A Item Number
- ---------------------

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

1 Cover Page
2 Summary of Fund Expenses
3 How To Read the Financial Highlights
Summary of Fund Expenses
4 Summary Information
General Risk Considerations
Fundamental and Non-Fundamental Investement Policies
Organization and Management of the Funds
5 Summary of Fund Expenses
6 Organization and Management of the Funds
A Choice of Share Classes
Additional Services and Policies
7 A Choice of Share Classes
Reduced Sales Charges
Your Account
Additional Services and Policies
8 A Choice of Share Classes
Reduced Sales Charges
Your Account
Additional Services and Policies
9 Not Applicable

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

10 Cover Page
11 Table of Contents
12 General
13 Investment Restrictions
Additional Permitted Investment Activities
Risk Factors
SAI Appendix
14 Management
15 Management
16 Management
Distribution Plans
Servicing Plans and Agreements
Fund Expenses
Independent Auditors
17 Portfolio Transactions
18 Capital Stock; Other
19 Determination of Net Asset Value
Additional Purchase and Redemption Information
20 Federal Income Taxes

<PAGE>

21 Management of the Company
22 Performance Calculations
23 Financial Information

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

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

<PAGE>

Allocation Funds Prospectus/Plain English (OCtober 8,1997)-1

Please read this Prospectus and keep it for future reference. It is designed to
provide you with important information and to help you decide if the Fund's goal
matches your own.

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"), BARCLAYS GLOBAL
INVESTORS, N.A., OR ANY OF THEIR 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.

STAGECOACH
ALLOCATION FUNDS PROSPECTUS

Asset Allocation Fund
Index Allocation Fund
U.S. Government Allocation Fund

Class A, Class B and Class C

DECEMBER 15, 1997

Investment Advisor and Administrator
Wells Fargo Bank

Investment Sub-Advisor
Barclays Global Fund Advisors

Distributor and Co-Administrator
Stephens Inc.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8,1997)-2

FOR YOUR INFORMATION

What is a prospectus? - A prospectus provides you with the information you need
in order to make an informed investment decision. It states how a Fund operates
and invests its assets.

What is different about this Prospectus? - We have rewritten our Prospectus in
"Plain English" to make it easier to read and understand. We have also grouped
some of the most important Fund information together.

How is the Fund information organized? - After important summary information and
the expense fee table, each Fund's investment objectives and financial
highlights are presented. The icons below tell you where various types of
information can be found.

What else do I need to understand these Funds? Each Fund has a "Statement of
Additional Information" that continues and supplements the disclosures made in
this Prospectus. You may also want to review the most recent Annual or Semi-
Annual Report. You can order copies without charge by calling 1 800-222-8222.

(icon) Investment Objectives and Policies: What is the Fund trying to achieve?
How do we intend to invest your money? What makes it different from the other
Funds offered in this Prospectus? Look for the check-mark icon to find out.

(icon) Portfolio Holdings: A quick summary of a Fund's key permitted investments
and practices.

(icon) Important Risk Factors: What are some of the key risk factors particular
to this Fund? Use this information together with the "General Risk
Considerations" on page ___ when considering whether this Fund is right for you.

(icon) Additional Fund Facts: Provides additional key information for each Fund.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8,1997)-3

SUMMARY INFORMATION

Summary of Stagecoach Allocation Funds: The Funds described in this Prospectus
pursue a strategy of allocating and reallocating investments among various asset
classes to capture returns and reduce risk. Each Fund is an open-end management
investment company.

Should you consider investing in these Funds? Yes, if:
. you are looking for the diversification asset allocation strategy provides;
. you are willing to accept the risks of investing, including the risk that
share
. prices may fluctuate significantly.

Key Information:

Dividends: We have a quarterly dividend policy for the Asset Allocation and
Index Allocation Funds. Dividends for the U.S. Government Allocation Fund are
declared daily and paid monthly.

Key Terms: An "asset class" is a broad category of investments such as "bonds"
or "equities". "Allocation" refers to the division of investments among two or
more asset classes. The Allocation Funds offered in this prospectus are managed
by a computer "model" that recommends the allocation of assets according to a
Fund's investment objectives and risk tolerance.

Who are "We"?: In this Prospectus, "We" means the Stagecoach Funds including
others, such as an Investment Advisor, we hired to perform certain functions.
"Organization and Management of The Funds" in this Prospectus and the Statements
of Additional Information provide details on the various roles and who performs
them.

Who are "You"?: In this Prospectus, "You" means the shareholder.

Italics: Throughout this Prospectus, words will appear in italicized print. This
means that the word is defined in the Glossary beginning on page ___.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8,1997)-4

HOW TO READ THE FINANCIAL HIGHLIGHTS

After each Fund's Investment Objective and Investment Policies, charts are
provided showing important financial information derived from the Asset
Allocation and U.S. Government Allocation Funds' Financial Highlights for the
fiscal period ended March 31, 1997 and from the Index Allocation Fund's
Financial Highlights for the period ended December 31, 1997. The statements were
audited by KPMG Peat Marwick LLP. Other auditors audited statements prior to
January 1, 1992. Here is an explanation of some terms that will help you
interpret these charts.

NET ASSET VALUE (NAV)--The value of one share of a class of a Fund, excluding
any sales charge. See the Glossary for a fuller definition.

NET INVESTMENT INCOME--When we receive dividend or interest payments from an
investment or earn trading profits, we deduct management fees, administrative
and other expenses and then record the result as net investment income. The
number in the financial highlights is the net investment income of a class
divided by the average number of outstanding shares of that class. The amount
distributed to shareholders is listed under the heading "Less Distributions-
Dividends From Net Investment Income."

NET REALIZED AND UNREALIZED CAPITAL GAINS--We buy and sell investments
frequently. The profit on an investment sold for more than its purchase price is
a realized capital gain while any loss is a realized capital loss. An unrealized
gain or loss occurs when an investment gains or loses value but is not sold. The
number in this category is the total gains or losses of a class divided by the
average number of outstanding fund shares for that class. The amount of capital
gain or loss per share that was passed on to shareholders is listed under the
heading "Less Distributions-Distributions From Net Realized Gains."

NET ASSETS--The value of the investments in a Fund's portfolio that are
attributable to a particular class of the Fund.

RATIO OF EXPENSES TO AVERAGE NET ASSETS--This ratio reflects the amount paid by
a Fund to cover the costs of its daily operations, and includes advisory,
administrative and other operating expenses. It is expressed as a percentage of
the average daily net assets of a class.

RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS--This ratio is the
result of dividing net investment income (or loss) by average net assets.

PORTFOLIO TURNOVER--Portfolio turnover reflects the trading activity in the
Fund's portfolio and is expressed as a percentage of a Fund's investment
portfolio. For example, a Fund with a 50% portfolio turnover has sold and bought
half of its investment portfolio during the given period.

AVERAGE COMMISSION RATE PAID-- The average brokerage commission paid by a Fund
when it buys or sells shares of securities. The rate is expressed on a per share
basis and the amount paid may vary depending upon trading practices or other
conditions.

TOTAL RETURN--The annual return on an investment that includes any appreciation
or decline in value and all dividends and interest.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997) - 5

Summary Of Fund Expenses

The purpose of the Summary of Expenses is to help you understand the various
costs and expenses that a shareholder in a Fund will pay directly or indirectly.
These tables do not reflect any charges that may be imposed by Wells Fargo bank
or another institution in connection with an investment in a Fund. Long-term
shareholders of the Funds that asses 12b1 fees could pay more than the economic
equivalent of the maximum front-end sales charges applicable to mutual funds
sold by members of the National Association of Securities Dealers, Inc.

SHAREHOLDER TRANSACTION EXPENSES
FOR CLASS A SHARES

<TABLE>
<CAPTION>
Asset Index U.S. Government
Allocation Fund Allocation Fund Allocation Fund
--------------- --------------- ---------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)................. 4.50% 4.50% 4.50%
Maximum Sales Charge on
Reinvested Distributions........... None None None
Maximum Sales Charge on
Redemptions........................ None None None
Exchange Fees......................... None None None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES/1/
FOR CLASS A SHARES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

Asset Index U.S. Government
Allocation Fund Allocation Fund Allocation Fund
--------------- --------------- ---------------
<S>................................... <C> <C> <C>
Management Fee........................ 0.37% .70% 0.50%
Rule 12b-1 Fee........................ 0.05% .25% 0.05%
Other Expenses (after waivers or
reimbursements)/2/................... 0.48% .36% 0.57%
---- ---- ----
TOTAL FUND OPERATING
EXPENSES (after waivers or
reimbursements)/2/............... 0.90% 1.31% 1.12%
==== ==== ====
</TABLE>

_________________
/1/ Annual Fund Operating Expenses summarize expenses charged at the Fund and
Master Portfolio levels. Other mutual funds may invest in the Master
Portfolios and such other funds' expenses and, correspondingly, investment
returns may differ from those of the Funds.
/2/ Absent waivers or reimbursements, the percentages shown above under, "Other
Expenses" and "Total Fund Operating Expenses" would be 0.65% and 1.20%,
respectively, for Class A shares of the U.S. Government Allocation Fund.

<TABLE>
<CAPTION>
EXAMPLE OF EXPENSES --
CLASS A SHARES 1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment in Class A shares of a Fund,
assuming (A) a 5% annual return and (B)
redemption at the end of each time period
indicated:

Asset Allocation Fund............................ $54 $72 $ 93 $151
Index Allocation Fund................................. $58 $85 $114 $196
U.S. Government Allocation Fund.................. $56 $79 $104 $175
</TABLE>

SHAREHOLDER TRANSACTION EXPENSES
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997) - 6

FOR CLASS B SHARES

<TABLE>
<CAPTION>
ASSET INDEX U.S. GOVERNMENT
ALLOCATION FUND ALLOCATION FUND ALLOCATION FUND
--------------- --------------- ---------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)................................ None None None
Maximum Sales Charge on
Reinvested Dividends............................... None None None
Maximum Sales Charge Imposed on
Redemptions........................................ 5.00% 5.00% 5.00%
Exchange Fees......................................... None None None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES/1/
FOR CLASS B SHARES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

ASSET INDEX U.S. GOVERNMENT
ALLOCATION FUND ALLOCATION FUND ALLOCATION FUND
--------------- --------------- ---------------
<S> <C> <C> <C>
Management Fee........................................ 0.37% 0.70% 0.50%
Rule 12b-1 Fee........................................ 0.70% 0.75% 0.70%
Other Expenses (after waivers or
reimbursements)/2/.................................... 0.07% 0.65% 0.72%
------ ------ ------
TOTAL FUND OPERATING
EXPENSES (after waivers or
reimbursements)/2/................................ 1.14% 2.10% 1.92%
====== ====== ======
</TABLE>
___________________

/1/ Annual Fund Operating Expenses summarize expenses charged at the Fund and
Master Portfolio levels. Other mutual funds may invest in the Master
Portfolios and such other funds' expenses and, correspondingly, investment
returns may differ from those of the Funds.
/2/ Absent waivers and reimbursements, "Other Expenses" and "Total Fund
Operating Expenses" would be 0.49% and 1.56%, respectively, for Class B
shares of the Asset Allocation Fund and 1.01% and 2.21%, respectively, for
Class B shares of the U.S. Government Allocation Fund.

SHAREHOLDER TRANSACTION EXPENSES
INDEX ALLOCATION CLASS C SHARES

<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchase (as a percentage
of offering price).................................................. None
Maximum Sales Charge on Reinvested Dividends........................... None
Maximum Sales Charge Imposed on Redemptions
Redemption during year 1............................................ 1.00%
Redemption after year 1............................................. 0.00%
Exchange Fees.......................................................... None
</TABLE>
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997)-7

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

Management Fee................................................... 0.70%
Rule 12b-1 Fee................................................... 0.75%
Other Expenses (after waivers or reimbursements)/1/.............. 0.60%
-----
TOTAL FUND OPERATING EXPENSES (after waivers or
reimbursements)/2/.............................................. 2.05%
=====

_________________________
/1/ Other Expenses (before waivers or reimbursements) would be 0.75%.
/2/ Total Fund Operating Expenses (before waivers or reimbursements) would be
2.20%.

EXAMPLE OF EXPENSES

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

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class C Shares...................... $31 $64 $110 $238
</TABLE>

You would pay the following expenses on a $1,000 investment in the Fund's Class
C shares, assuming a 5% annual return and no redemption:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class C Shares...................... $21 $64 $110 $238
</TABLE>

<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997)-8

Asset Allocation Fund

Portfolio Manager: Proprietary Investment Model
- ------------------

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Asset Allocation Fund seeks over the long-term a high level of total
return, including net realized and unrealized capital gains and net investment
income, consistent with reasonable risk.

INVESTMENT POLICIES

We allocate and reallocate assets among common stocks, U.S. Treasury bonds
and money market instruments. This strategy is based on the premise that asset
classes are at times undervalued or overvalued in comparison to one another and
that investing in undervalued asset classes offers better long-term, risk-
adjusted returns.

PORTFOLIO HOLDINGS

The asset classes we invest in are composed as follows:

. Stock Investments--We invest in common stocks that comprise the S&P 500
Index. We do not individually select common stocks on the basis of
traditional investment analysis. Instead, stock investments are made
according to a weighted formula intended to match the total return of the S&P
500 Index as closely as possible;
. Bond Investments--We invest in U.S. Treasury Bonds with maturities greater
than 20 years. We generally maintain an average maturity of between 22 and 28
years for the bond portion of the portfolio; and
. Money Market Investments--We invest this portion of the portfolio in high-
quality money market instruments, including U.S. Government obligations,
obligations of foreign and domestic banks, short-term corporate debt
instruments and repurchase agreements.

In addition, under normal market conditions, we may invest:

. In call and put options on stock indexes, stock index futures, options on
stock index futures, interest rate and interest rate futures contracts as a
substitute for a comparable market position in stocks;
. In interest rate and index swaps; and
. No more that 25% of total assets in foreign obligations permitted as money
market investments.

We manage the allocation based on the assumption that the "normal"
allocation is 60% stocks and 40% bonds. This is not a "target" allocation but a
measure of risk tolerance. This is in contrast to the normal allocation for the
Index Allocation Fund, which is generally a more aggressive Fund.

We are not required to keep a minimum investment in any of the three asset
classes, nor are we prohibited from investing substantially all of our assets in
a single class. The allocation may shift at any time. As part of our investment
strategy, we may invest varying portion of our assets in money market
instruments. In addition, we may temporarily hold assets in cash or in money
market instruments, including U.S. Government obligations, repurchase agreements
and other short-term investments, to maintain liquidity or when we believe it is
in the best interest of shareholders to do so. The Fund is a diversified
portfolio.

RISK FACTORS

For general information on risk, please see page ___.

We may incur a higher than average portfolio turnover ratio due to
allocation shifts recommended by the model. Foreign obligations may entail
additional risks. The value of investments in options on stock indexes is
affected by price level movements for a particular index, rather than price
movements for an individual issue.
<PAGE>

Allocation Funds Propectus/Plain English (October 8, 1997)-9

ADDITIONAL FEATURES

Barclays Global Funds Advisor, as the Sub-Advisor, uses a proprietary
investment model that analyzes extensive financial data from numerous sources
and recommends a portfolio allocation. The model incorporates assumptions about
expected risks and returns and investor attitudes about risk. The model is run
daily and recommendations are made in 5% increments. No person is primarily
responsible for recommending either the asset mix or the mix of securities
within a class. The model is not designed to profit from short-term market
changes. Instead, it is designed for investors with investment horizons of three
to five years.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997)-10

<TABLE>
<CAPTION>
Six Months Nine Months
ASSET ALLOCATION - A Ended Ended Year Ended Year Ended Year Ended Year Ended
FINANCIAL HIGHLIGHTS March 31, Sept 30, Dec 31, Dec 31, Dec 31, Dec 31,
1997 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $21.24 $20.74 $16.73 $18.80 $17.89 $17.65
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.41 0.57 0.74 0.77 0.77 0.87
Net realized and unrealized gain (loss) on 0.65 0.50 4.07 (1.31) 1.88 0.31
investments
TOTAL FROM INVESTMENT OPERATIONS 1.06 1.07 4.81 (0.54) 2.65 1.18
LESS DISTRIBUTIONS:
Dividends from net investment income (0.41) (0.57) (0.74) (0.77) (0.77) (0.87)
Distributions from net realized gain (1.59) 0.00 (0.06) (0.76) (0.97) (0.07)
TOTAL FROM DISTRIBUTIONS: (2.00) (0.57) (0.80) (1.53) (1.74) (0.94)
NET ASSET VALUE, END OF PERIOD $20.30 $21.24 $20.74 $16.73 $18.80 $17.89

TOTAL RETURN (NOT ANNUALIZED) 4.94% 5.14% 29.18% (2.82%) 15.00% 7.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $1,041,622 $1,057,346 $1,077,935 $896,943 $1,048,667 $542,226

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Ratios of expenses to average net assets .92% .90% 0.84% .84% .86% .95%
Ratio of net investment income to average net assets 3.91% 3.53% 3.81% 4.30% 4.20% 5.22%
Portfolio turnover n/a 1% 15% 49% 40% 5%
Average commission rate paid (2) n/a $.0320 n/a n/a n/a n/a
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses n/a n/a n/a n/a n/a .97%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses n/a n/a n/a n/a n/a 5.20%

Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Dec 31, Dec. 31, Dec 31, Dec 31, Dec 31, Dec. 31
1991/2/ 1990/1/ 1989/1/ 1988/1/ 1987/1/ 1986/1/2/
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.45 $13.42 $12.00 $10.93 $10.07 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.92 0.91 0.93 0.72 0.72 0.07
Net realized and unrealized gain (loss) on 2.28 0.12 0.49 0.35 0.14 0.00
investments
TOTAL FROM INVESTMENT OPERATIONS 3.20 1.03 1.42 1.07 0.86 0.07
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gain 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL FROM DISTRIBUTIONS: 0.00 0.00 0.00 0.00 0.00 0.00
NET ASSET VALUE, END OF PERIOD $17.65 $14.45 $13.42 $12.00 $10.93 $10.07

TOTAL RETURN (NOT ANNUALIZED) 22.13% 7.68% 11.83% 9.79% 8.54% 0.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $367,251 $261,881 $229,211 $172,326 $111,025 $1,600

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Ratios of expenses to average net assets 0.95% 0.96% 1.02% 1.00% 1.04% 0%
Ratio of net investment income to average net assets 5.88% 6.59% 7.35% 6.23% 6.79% 0.29%
Portfolio turnover 25% 88% 117% 94% 81% 0%
Average commission rate paid (2) n/a n/a n/a n/a n/a n/a
- ----------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses --- --- --- --- --- ---
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses --- --- --- --- --- ---

</TABLE>

/1/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Asset Allocation Fund of
the Wells Fargo Investment Trust for Retirement Programs which was
reorganized into the Asset Allocation Fund on January 2, 1992.
/2/ The Fund commenced operations on November 13, 1986.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997) - 11

ASSET ALLOCATION FUND
FOR A CLASS B SHARE OUTSTANDING

<TABLE>
<CAPTION>
PERIOD NINE MONTHS
ASSET ALLOCATION - B ENDED ENDED YEAR ENDED
FINANCIAL HIGHLIGHTS MARCH 31, SEPT 30, DEC 31,
1997 1996 1995
------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.84 $ 12.50 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.19 0.28 0.22
Net realized and unrealized gain (loss) on investments 0.41 0.34 2.53
TOTAL FROM INVESTMENT OPERATIONS 0.60 0.62 2.75
LESS DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.28) (0.22)
Distributions from net realized gain (0.96) 0.00 (0.03)
TOTAL FROM DISTRIBUTIONS: (1.15) (0.28) (0.25)
NET ASSET VALUE, END OF PERIOD $ 12.29 $ 12.84 $ 12.50

TOTAL RETURN (NOT ANNUALIZED) 4.62% 4.96% 27.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $89,252 $63,443 $26,271
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED) 1.53% 1.14% 1.53%
Ratios of expenses to average net assets
Ratio of net investment income to average net assets 3.30% 3.37% 2.71%
Portfolio turnover n/a 1% 15%
Average commission rate paid (2) n/a 0.0320 n/a
- ------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 1.58% 1.56% 1.76%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 3.25% 2.95% 2.48%
</TABLE>

_________________________

/1/ The Fund changed its fiscal year end from December 31 to September 30.
/2/ Class B shares commenced operations on January 1, 1995.
/3/ Ratio includes income and expenses charged to the Master Portfolio.
/4/ Represents portfolio activity for the Fund's stand-alone period only. The
portfolio turnover and average commission rates for the Asset Allocation
Master Portfolio for the period from April 28, 1996 to September 30, 1996
were 28% and $0.0261, respectively.
/5/ For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for security
trades on which commissions are charges if the Fund invests more than 10%
of the value of its average net assets in equity securities on which
commissions are charged on trades. This amount may vary from period to
period and fund to fund depending on the mix of trades executed in various
markets where trading practices and commission rate structures may differ.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8, 1997) - 12

Index Allocation Fund

Portfolio Manager: Proprietary Investment Model
- ------------------

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Index Allocation Fund seeks to earn over the long-term a high level of
total return, that is, income and capital appreciation combined, consistent with
the assumption of reasonable risk, by pursuing an "asset allocation" strategy
whereby its investments are allocated, based on changes in market conditions,
among three asset classes--common stocks in the S&P Index, U.S. Treasury Bonds
and money market instruments.

INVESTMENT POLICIES

We allocate and reallocate assets among common stocks, U.S. Treasury bonds
and money market instruments. This strategy is based on the premise that, from
time to time, certain asset classes are more attractive long-term investments
than others and that timely shifts based on the relative over or under-valuation
of these classes can produce superior investment returns.

PORTFOLIO HOLDINGS

We invest in the following asset classes:
. Stock Investments--We invest in common stocks representative of the S&P 500
Index. We do not individually select common stock on the basis of
traditional investment analysis. Instead stock investments are made
according to a weighted formula intend to match the total return of the S&P
500 Index as closely as possible;
. Bond Investments--We invest in U.S. Treasury Bonds representative of the
Lehman Brothers 20+ Bond Index. Bonds on this Index will have maturities of
20 years or more; and
. Money Market Investments--We invest this portion of the portfolio in high-
quality money market instruments, including U.S. Government obligations,
obligations of foreign and domestic banks, short-term corporate debt
instruments and repurchase agreements.

In addition, under normal market conditions, we invest:
. at least 65% of assets in stocks representative of the S&P Index, the
Lehman Brothers 20+ Bond Index or a combination of both;
. in call and put options on stock indexes, stock index futures, options on
stock index futures, interest rate and interest rate futures contracts as a
substitute for a comparable market position in stocks;
. in interest rate and index swaps; and
. no more that 25% of total assets in obligations of foreign banks permitted
as money market investments.

We manage the allocation based on the assumption that the "normal"
allocation is 100% stocks and no bonds. This is not a "target" allocation but a
measure of our risk tolerance. This is in contrast to the normal allocation for
the Asset Allocation Fund, which is generally a more conservative Fund. The Fund
is a diversified portfolio.

We are not required to keep a minimum investment in any of the three asset
classes, nor are we prohibited from investing substantially all of our assets in
a single class. The asset allocation may shift at any time. As part of our
investment strategy, we may invest varying portion of our assets in money market
instruments. In addition, we may temporarily hold assets in cash or in money
market instruments, including U.S. Government obligations, repurchase agreements
and other short-term investments, to maintain liquidity or when we believe it is
in the best interest of shareholders to do so.

RISK FACTORS

For general information on risk, please see page ___.
<PAGE>

Allocation Funds Prospectus/Plain English (October 8,1997) - 13

We may incur a higher than average portfolio turnover ratio due to
allocation shifts recommended by the model. Foreign obligations may entail
additional risks. Investments in options on stock indexes depend on movements in
the market in general, or price level movements for a particular index, rather
than price movements for an individual issue.

ADDITIONAL FEATURES

Allocations Funds Prospectus/Plain English (October 8, 1997)- 14

INDEX ALLOCATION FUND
FOR A CLASS A SHARE OUTSTANDING

<TABLE>
<CAPTION>
(UNAUDITED)
6 MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 13.99 $ 13.76 $ 10.67 $ 11.90 $ 11.45
Income from investment operations:
Net investment income....................................... 0.18 0.29 0.28 0.31 0.30
Net realized and unrealized gain (loss) on
investments................................................. 1.70 2.02 3.42 (0.39) 1.12
------- ------- ------- ------- --------
Total from investment operations............................ 1.88 2.31 3.70 (0.08) 1.42
Less distributions:
Dividends from net investment income........................ (0.18) (0.29) (0.28) (0.31) (0.30)
Distributions from net realized gain........................ 0.00 (1.79) (0.33) (0.84) (0.67)
Total from distributions.................................... (0.18) (2.08) (0.61) (1.15) (0.97)
------- ------- ------- ------- --------
Net asset value, end of period.............................. $ 15.69 $ 13.99 $ 13.76 $ 10.67 $ 11.90
======= ======= ======= ======= ========
Total return (not annualized)/2/............................ 13.52% 17.04% 34.71% (0.68%) 12.54%
Ratios/supplemental data:
Net assets, end of period (000)............................. $ 72,691 $60,353 $52,007 $40,308 $ 53,124
Number of shares outstanding (000).......................... 4,633 4,313 3,778 3,779 4,465
Ratios to average net assets (annualized):
Ratio of expenses to average net assets..................... 1.29% 1.31% 1.30% 1.30% 1.36%
Ratio of net investment income to
average net assets......................................... 2.49% 2.06% 2.07% 2.41% 2.64%
Portfolio turnover.......................................... 36% 67% 47% 50% 53%
Average commission rate paid/3/............................. $ 0.0341 $0.0227 N/A N/A N/A
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses..................... 1.35% 1.44% 1.35% 1.38% 1.47%
Ratio of net investment income to average
net assets prior to waived fees and
reimbursed expenses........................................ 2.43% 1.93% 2.02% 2.33% 2.53%

<CAPTION>
Year Year Year Year Period
Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1992 1991 1990 1989 1988/1/
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 11.95 $ 10.31 $ 10.39 $ 10.17 $ 10.00
Income from investment operations:
Net investment income....................................... 0.47 0.57 0.63 0.67 0.28
Net realized and unrealized gain (loss) on
investments................................................. 0.36 1.51 0.10 0.33 0.18
------- ------- ------- ------- -------
Total from investment operations............................ 0.83 2.08 0.73 1.00 0.46
Less distributions:
Dividends from net investment income........................ (0.63) (0.44) (0.61) (0.63) (0.27)
Distributions from net realized gain........................ (0.70) 0.00 (0.20) (0.15) (0.02)
Total from distributions.................................... (1.33) (0.44) (0.81) (0.78) (0.29)
------- ------- ------- -------- -------
Net asset value, end of period.............................. $ 11.45 $ 11.95 $ 10.31 $ 10.39 $ 10.17
======= ======= ======= ======== =======
Total return (not annualized)/2/............................ 7.44% 20.69% 7.08% 10.23% 4.60%
Ratios/supplemental data:
Net assets, end of period (000)............................. $41,165 $38,663 $27,689 $ 23,814 $13,220
Number of shares outstanding (000).......................... 3,596 3,235 2,686 2,293 1,300
Ratios to average net assets (annualized):
Ratio of expenses to average net assets..................... 1.25% 1.38% 1.59% 1.76% 1.76
Ratio of net investment income to
average net assets......................................... 4.08% 5.23% 6.01% 6.44% 4.69%
Portfolio turnover.......................................... 38% 18% 94% 62% 200%
Average commission rate paid/3/............................. N/A N/A N/A N/A N/A
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses..................... 1.71% 1.56% 1.74% 2.37% 3.02%
Ratio of net investment income to average
net assets prior to waived fees and
reimbursed expenses........................................ 3.62% 5.05% 5.86% N/A N/A
</TABLE>
______________________________
<PAGE>

Allocation Funds Prospectus/Plain English(October 8,1997)-15

INDEX ALLOCATION FUND
FOR A CLASS C SHARE OUTSTANDING

<TABLE>
<CAPTION>
(UNAUDITED)
6 MONTHS YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC.31, DEC.31, DEC.31 DEC.31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $17.42 $17.10 $13.26 $14.75 $15.00
Income from investment operations:
Net investment income.................................. 0.15 0.22 0.20 0.25 0.07
Net realized and unrealized gain (loss) on investments. 2.12 2.54 4.24 (0.45) 0.61
---- ---- ---- ------ ----
Total from investment operations....................... 2.27 2.76 4.44 (0.20) 0.68
Less distributions:
Dividends from net investment income................... (0.15) (0.22) (0.20) (0.25) (0.10)
Distributions from net realized gain................... 0.00 (2.22) (0.40) (1.04) (0.83)
Total from distributions............................... (0.15) (2.44) (0.60) (1.29) (0.93)
------ ------ ------ ------
Net asset value, end of period......................... $19.54 $17.42 $17.10 $13.26 $14.75
====== ====== ====== ====== ======
Total Return (not annualized)/2/....................... 13.08% 16.37% 33.72% (1.38)% 4.56%
Ratios/supplemental data:
Net assets end of period (000)......................... $33,278 $24,655 $16,075 $9,798 $8,996
Number of shares outstanding (000)..................... 1,703 1,415 940 739 610
Ratios to average net assets (annualized):
Ratio of expenses to average net assets................ 2.04% 2.05% 2.05% 2.01% 0.96%
Ratio of net investment income to average net assets... 1.75% 1.35% 1.30% 1.75% 0.53%
Portfolio turnover..................................... 36% 67% 47% 50% 53%
Average commission rate paid/3/ $ 0.0341 $0.0227 N/A N/A N/A
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses........................ 2.11% 2.20% 2.17% 2.20% 1.12%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses........ 1.68% 1.20% 1.18% 1.56% 0.37%
</TABLE>

_______________________________________
/1/ The Class A shares of the Index Allocation Fund commenced operations as the
shares of the Overland Asset Allocation Fund on April 7, 1988. The Class C
shares of the Fund commenced operations as the Class D shares of the
Overland Asset Allocation Fund on July 1, 1993. The predecessor portfolio
changed its name to "Index Allocation Fund" in February of 1997.
/2/ Total returns do not include any sales charges.
/3/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.

<PAGE>

Allocation Funds Prospectus(October 8, 1997)-16

U.S. Government Allocation Fund

Portfolio Manager: Proprietary Investment Model
- -----------------

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The U.S. Government Allocation Fund seeks over the long-term a high
level of total return, including net realized and unrealized capital gains and
net investment income, consistent with reasonable risk.

INVESTMENT POLICIES

We allocate and reallocate assets among long-term U.S. Treasury bonds,
intermediate-term U.S. Treasury notes, and short-term money market instruments.
This strategy is based on the premise that asset classes are at times
undervalued or overvalued in comparison to one another and that investing in
undervalued asset classes offers better long-term, risk-adjusted returns.

PORTFOLIO HOLDINGS

The asset classes we invest in are composed as follows:
. Long-Term Investments-- We invest in U.S. Treasury bonds with maturities
greater than 20 years. We generally maintain an average maturity of between
22 and 28 years for this portion of the portfolio;
. Intermediate-Term Investments--We invest in U.S. Treasury notes with
maturities ranging from 5 to 7 years. We generally maintain an average
maturity of approximately 6 years for this portion of the portfolio;
. Short-Term Investments--We invest this portion of the portfolio in high-
quality money market instruments, including U.S. Government obligations,
obligations of foreign and domestic banks, short-term corporate debt
instruments and repurchase agreements.

In addition, under normal market conditions, we invest:
. At least 65% of total assets in U.S. Government obligations; and
. No more that 25% of total assets in foreign obligations permitted as money
market investments.

As long as we meet the requirement to keep 65% of assets in U.S.
Government obligations, we are not required to keep a minimum investment in any
of the three asset classes, nor are we prohibited from investing substantially
all of our assets in a single class. The allocation may shift at any time. As
part of our investment strategy, we may invest varying portion of our assets in
money market instruments. In addition, we may temporarily hold assets in cash or
in money market instruments, including U.S. Government obligations, repurchase
agreements and other short-term investments, to maintain liquidity or when we
believe it is in the best interest of shareholders to do so. The Fund is a
diversified portfolio.

RISK FACTORS

For general information on risk, please see page ___.

We may incur a higher than average portfolio turnover ratio due to
allocation shifts recommended by the model. Foreign obligations may entail
additional risks.

ADDITIONAL FEATURES
<PAGE>

Allocation Funds Prospectus(October 8, 1997)- 17

Allocation Funds Prospectus (October 8, 1997)-18

<TABLE>
<CAPTION>
Six Months Nine Months
US GOVERNMENT ALLOCATION A Ended Ended
FINANCIAL HIGHLIGHTS March 31, Sept 30 Year Ended Year Ended Year Ended Year Ended Year Ended
1997 1996 1995 1994 1993 1992 Dec 31,1994
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.48 $ 14.98 $ 13.76 $ 15.71 $ 15.41 $ 15.41 13.14
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.42 0.59 0.79 0.87 0.96 0.87 .094
Net realized and unrealized gain (0.16) (0.50) 1.22 (1.95) 1.69 0.04 1.33
(loss) on investments
TOTAL FROM INVESTMENT OPERATIONS 0.26 0.09 2.01 (1.08) 2.65 0.91 2.27
LESS DISTRIBUTIONS:
Dividends from net investment income (0.42) (0.59) (0.79) (0.87) (0.96) (0.87) 0.0
Distributions from net realized gain 0.00 0.00 0.00 0.00 (1.39) (0.04) 0.00
TOTAL FROM DISTRIBUTIONS: (0.42) (0.59) (0.79) (0.87) (2.35) (0.91) 0.00
NET ASSET VALUE, END OF PERIOD $ 14.32 $ 14.48 $ 14.98 $ 13.76 $ 15.71 $ 15.41 $ 15.41

TOTAL RETURN (NOT ANNUALIZED) 1.75% 0.69% 14.91% (6.99%) 17.46% 6.30% 17.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $86,930 $98,741 $135,577 $140,066 $283,206 $127,504 $ 30,098
RATIOS TO AVERAGE NET ASSETS 1.00% 1.12% 1.04% 1.01% 0.99% 1.00% 1.01%
(ANNUALIZED)
Ratios of expenses to average net
assets
Ratio of net investment income to 5.70% 5.45% 5.41% 5.94% 5.92% 6.06% 6.77%
average net assets
Portfolio turnover n/a 31% 292% 112% 150% 33% 147%
Average commission rate paid (2) n/a n/a n/a n/a n/a n/a
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.31% 1.20% 1.07% 1.08% 1.02% 1.08% N/A
prior to waived fees and reimbursed
expenses
Ratio of net investment income to 5.39% 5.37% 5.38% 5.87% 5.89% 5.98% N/A
average net assets prior to waived
fees and reimbursed expenses
</TABLE>

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

<TABLE>
<CAPTION>
Year Year Year Period
US GOVERNMENT ALLOCATION A Ended Ended Ended Ended
FINANCIAL HIGHLIGHTS Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1990/1/ 1989/3/ 1988/1/ 1987/1.2/
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.49 $ 11.05 $ 10.34 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.92 0.93 0.87 0.64
Net realized and unrealized gain
(loss) on investments (0.27) 0.51 (0.16) (0.30)
-------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.65 1.44 0.71 0.34
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from net realized gain 0.00 0.00 0.00 0.00
-------- -------- -------- --------
TOTAL FROM DISTRIBUTIONS: 0.00 0.00 0.00 0.00
NET ASSET VALUE, END OF PERIOD $ 13.14 $ 12.49 $ 11.05 $ 10.34
======== ======== ======== ========
TOTAL RETURN (NOT ANNUALIZED) 5.20% 13.03% 6.87% 3.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $19,777 $14,367 $10,330 $ 7,469
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED)
Ratios of expenses to average net
assets 1.03% 1.05% 0.99% 0.99%
Ratio of net investment income to
average net assets 7.34% 7.90% 8.04% 6.33%
Portfolio turnover 558% 17% 42% 21%
Average commission rate paid (2) -- -- -- --
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets n/a n/a n/a n/a
prior to waived fees and reimbursed
expenses
Ratio of net investment income to n/a n/a n/a n/a
average net assets prior to waived
fees and reimbursed expenses
</TABLE>

- ----------------------
/1/ The Fund changed its fiscal year end from December 31 to September 30.
/2/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Fixed Income Strategy
Fund of the Trust which was reorganized into the U.S. Government Allocation
Fund on January 2, 1992.
/3/ Ratio includes income and expenses charged to the Master Portfolio.
/4/ Represents portfolio activity for the Fund's stand-alone period only. The
portfolio turnover rate for the U.S. Government Allocation Master Portfolio
for the period from April 28, 1996 to September 30, 1996 was 87%
/5/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Fixed Income Strategy
Fund of the Trust which was reorganized into the U.S. Government Allocation
Fund on January 2, 1992.

<PAGE>

Allocation Funds Prospectus (October 8, 1997) - 19

U.S. GOVERNMENT ALLOCATION FUND
FOR A CLASS B SHARE OUTSTANDING

<TABLE>
<CAPTION>
Period Nine Months
US GOVERNMENT ALLOCATION B Ended Ended Year Ended
FINANCIAL HIGHLIGHTS March 31, Sept 30, Dec 31,
1997 1996 1995
---------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.54 $10.91 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.27 0.36 0.49
Net realized and unrealized gain (loss) on
investments (0.12) (0.37) 0.91
TOTAL FROM INVESTMENT OPERATIONS 0.15 (0.01) 1.40
LESS DISTRIBUTIONS:
Dividends from net investment income (0.27) (0.36) (0.49)
Distributions from net realized gain 0.00 0.00 0.00
TOTAL FROM DISTRIBUTIONS: (0.27) (0.36) (0.49)
NET ASSET VALUE, END OF PERIOD $10.42 $10.54 $10.91

TOTAL RETURN (NOT ANNUALIZED) 1.42% 0.11% 14.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $7,221 $6,406 $4,077
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED) 1.61% 1.92% 1.65%
Ratios of expenses to average net assets
Ratio of net investment income to average net assets 5.12% 4.60% 4.31%
Portfolio turnover n/a 31% 292%
Average commission rate paid (2) n/a n/a n/a
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 2.28% 2.21% 2.36%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.45% 4.31% 3.60%
</TABLE>

_________________________

/1/ The financial information for the fiscal periods prior to, and
including, 1991 is based on the financial information for the Fixed
Income Strategy Fund of the Trust which was reorganized into the U.S.
Government Allocation Fund on January 2, 1992.
/2/ The Fund commenced operations on March 31, 1987.
<PAGE>

Allocation funds Prospectus (October 8, 1997)-20

GENERAL RISK CONSIDERATIONS

Understanding the risks involved in mutual fund investing will help you make an
informed decision that takes into account your tolerance and preferences. Some
risks are common to all the Stagecoach Funds. Chief among these risks is the
following:

. Unlike bank deposits such as CD's or savings accounts, mutual funds are NOT
INSURED BY THE FDIC.
. We CANNOT GUARANTEE that we will meet our investment objectives.
. We do not guarantee the performance of a Fund, nor can we assure you that
the market value of your investment will not decline. We will not "make
good" any investment loss you may suffer, nor can anyone we contract with
to perform certain functions, such as selling agents or investment
advisors, offer or promise to make good any such losses.
. Share prices--and therefore the value of your investment--WILL INCREASE AND
DECREASE with changes in the value of the underlying securities and other
investments. This is referred to as volatility.
. Investing in any mutual fund, including the most conservative, INVOLVES
RISK, INCLUDING THE POSSIBLE LOSS OF ANY MONEY YOU INVEST.
. No single Fund, by itself, constitutes a complete investment plan.

Some of our mutual funds invest in securities that involve particular kinds of
risk.

. Funds that invest in equities are subject to EQUITY MARKET RISK, which is
the risk that stock prices will fluctuate and can decline and reduce the
value of the portfolio. Certain types of stock and certain stocks selected
for a Fund's portfolio may underperform or decline in value more than the
overall market. As of the date of this Prospectus, the equity market, as
measured by the S&P 500 Index and other commonly used indexes, is trading
at or close to record levels. There can be no guarantee that these
performance levels will continue.
. Funds that invest in debt instruments, such as notes and bonds, are subject
to CREDIT RISK and INTEREST-RATE RISK. Credit risk is the chance that an
issuer of a security will be unable to make interest payments or repay
principal. Changes in the financial strength of an issuer or changes in the
credit rating of a security may affect its value. Interest-rate risk is the
possibility that interest rates may increase and reduce the resale value of
securities in a Fund's portfolio. Debt instruments with longer maturities
are generally more sensitive to interest rate changes than those with
shorter maturities. Changes in market interest rates do not affect the rate
payable on debt instruments held in a Fund, unless the instrument has
adjustable or variable rate features. Changes in market interest rates may
also extend or shorten the duration of certain types of instruments, such
as asset-backed securities, thereby affecting their value and the return on
your investment.
. Funds that invest in SMALLER COMPANIES, FOREIGN COMPANIES (including
investments made through American Depository Receipts and similar
instruments), and in EMERGING MARKETS are subject to additional risks,
including less liquidity and greater volatility. A Fund's investment in
foreign and emerging markets may also be subject to special risks
associated with international trade, including currency, political,
regulatory and diplomatic risk.

We may invest a portion of our assets in U.S. Government obligations. It is
important to recognize that the U.S. Government does not guarantee the market
value or current yield of those obligations. Not all U.S. Government obligations
are backed by the full faith and credit of the U.S. Treasury, and the U.S.
Government's guarantee does not extend to the Fund itself.

We may also use certain derivative instruments such as options or futures
contracts. The term "derivatives" covers a wide number of investments, but in
general it refers to any financial instrument whose value is derived, at least
in part, from the price of another security or a specified index, asset or rate.
Some derivatives may be more sensitive to interest rate changes or market moves,
and some may be susceptible to changes in yields or values due to their
structure or contract terms.
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-21

What follows is a general list of the types of risks that may affect a given
Fund and a table showing some of the additional investment practices that each
Fund may use. Additional information about these practices is available in the
Statement of Additional Information.

Credit Risk--The risk that the issuer of a debt security will be unable to make
interest payments or repay principal on schedule. If an issuer does default, the
affected security could lose all of its value, or be renegotiated at a lower
interest rate. Affected securities might also lose liquidity. Credit risk also
includes the risk that a party in a transaction may not be able to complete the
transaction as agreed.

Currency Risk--The risk that a change in the exchange rate between U.S. dollars
and a foreign currency may reduce the value of investment made in a security
denominated in that foreign currency.

Diplomatic Risk--The risk that an adverse change in the diplomatic relations
between the United States and another country might reduce the value or
liquidity of investments in either country.

Experience Risk--The risk presented by a new or innovative security. The risk is
that insufficient experience exists to forecast how the security's value might
be affected by various economic conditions.

Information Risk--The risk that information about a security is either
unavailable, incomplete or is inaccurate.

Interest Rate Risk--The risk that changes in interest rates can reduce the value
of an existing security. Generally, when interest rates increase, the value of a
debt security decreases. The effect is usually more pronounced for securities
with longer dates to maturity.

Liquidity Risk--The risk that a security cannot be sold, or cannot be sold
without adversely affecting the price.

Market Risk--The risk that the value of stock, bond or other security will
reduced by market activity. This is the basic risk associated with all
securities investments.

Political Risk--The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.

Regulatory Risk--The risk that changes in government regulations will adversely
affect the value of a security. Also the risk that an insufficiently regulated
market might permit inappropriate trading practices.
<PAGE>

<TABLE>
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
A I U
S N S
S D
E E G
T X O
V
This table lists some of the additional investment practices E
of the Funds, including some not disclosed in the Investment A A R
Objectives and Investment Policies sections of the L L N
Prospectus. THE RISKS INDICATED AFTER THE DESCRIPTION OF THe L L M
PRACTICE ARE NOT THE ONLY POTENTIAL RISKS ASSOCIATED WITH O O E
THAT PRACTICE, BUT ARE AMONG THE MORE PROMINENT. Market risk C C N
is assumed for each. See the Investment Objectives and A A T
Policies or the Statements of Additional Information for T T
limits on these practices. N N
- ----------------------------------------------------------------------------------
INVESTMENT PRACTICE/RISK
- ----------------------------------------------------------------------------------
Floating and Variable Rate Debt Instruments with interest
rates that are adjusted either on a schedule or when an x x x
index or benchmark changes. Interest Rate and Credit Risk
- ----------------------------------------------------------------------------------
Repurchase Agreements--A transaction in which the seller of
a security agrees to buy back a security at an agreed upon x x x
time and price, usually with interest. Credit Risk
- ----------------------------------------------------------------------------------
Other Mutual Funds--The temporary investment in shares of an
unaffiliated investment company. x x x
- ----------------------------------------------------------------------------------
Foreign Securities--Securities in a non-U.S. company or debt
of a foreign government in the form of an American Depositor
Receipt or similar instrument. Information, Political, x x x
Regulatory, Diplomatic and Currency Risk.
- ----------------------------------------------------------------------------------
Options--The right or obligation to deliver or receive a
security depending on the security's price or the
performance of an index or benchmark. Credit, Information
and Liquidity Risk
Stock Index Futures. x x
Options on Stock Index Futures x x
Index Swaps x x x
Interest rate futures x x x
Interest Rate Futures Options x x x
Interest Rate Swaps x x x
- ----------------------------------------------------------------------------------
Loans of Securities--The practice of loaning securities to
brokers dealers and financial institutions to increase
return on those securities. Loans may be made in accordance x x x
with existing investment objectives. Credit Risk.
- ----------------------------------------------------------------------------------
Borrowing Policies--The ability to borrow an equivalent of
20% (10% for Index Allocation) of total assets from banks
for temporary purposes to meet shareholder redemptions. x x x
Borrowing may be secured by a pledge of up to 20% (10% for
Index Allocation) of the securities and investments may not
be purchased if borrowing exceeds 5% of assets. Credit Risk
- ----------------------------------------------------------------------------------
Illiquid Securities--As defined in the Glossary, illiquid 15 15 15
securities are limited to the percentage indicated for each
Fund.
- ----------------------------------------------------------------------------------
</TABLE>

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Fund remains within the parameters of
its objective.

The Investment Objectives described for each Fund are fundamental and cannot
be changed without approval by vote of a majority of shareholders.
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-23

In addition to the general risks discussed above, you should carefully
consider and evaluate any special risks that may apply to investing in a
particular Fund. See the "Important Risk Factors" in the summary for each
Fund. You should also see the Statements of Additional Information for
additional discussion involving risk and investment practices.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -24

A CHOICE OF SHARE CLASSES

After choosing a Fund, your next most important choice is which share class to
buy. The Funds offered in this Prospectus are two of the available share
classes:
. CLASS A SHARES - with a front-end sales charge, volume reductions and lower
on-going expenses than Class B shares.
. CLASS B SHARES - with a contingent deferred sales charge (CDSC) that
diminishes over time, and higher on-going expenses.
. CLASS C SHARES - with a 1.00% contingent deferred sales charge (CDSC) on
redemptions made within one year of purchase, and higher on-going expenses.

The choice between Class A and Class B shares is largely a matter of preference.
You should consider, among other things, the different fees and sales loads
assessed on each share class and the length of time you anticipate holding your
investment. If you prefer to pay sales charges up front, wish to avoid higher
on-going expenses, or, more importantly, you think you may qualify for volume
discounts based on the amount of your investment, then Class A shares may be the
choice for you.

You may prefer to see "every dollar working" from the moment you invest. You may
also like the possibility of avoiding any contingent deferred sales charge. If
so, then consider Class B shares. Please note that Class B shares convert to
Class A shares after six years to avoid the continued higher on-going expenses
assessed against Class B shares.

Class C shares are available for the Index Allocation Fund only. They are
similar to Class B shares, with some important differences. Unlike Class B
shares, Class C shares do not convert to Class A shares. The higher on-going
expenses will be assessed as long as you hold the shares. The choice between
Class B and C shares may depend on how long you intend holding Fund shares
before redeeming them.

Please see the expenses listed for each Fund and the following load tables
before making your decision. You should also review the "Reduced Sales Charges"
and "Class B Reductions and Sales Charge Waivers" below. You may wish to discuss
this choice with your financial consultant.

CLASS A SHARE SCHEDULE

If you choose to buy Class A shares, you will pay the Public Offering Price
(POP) which is the Net Asset Value (NAV) plus the applicable sales charge. Since
sales charges are reduced for Class A share purchases above certain dollar
amounts, known as "breakpoint levels", the POP is lower for these purchases.

Class A shares for the Funds in this Prospectus have the following charge
schedule:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount of Purchase Front-end Sales Charge as % of Front-end Sales Charge as % of Dealer Allowance as % Of Public
Public Offering Price Net Amount Invested Offering Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.00% 4.17% 3.55%
- ------------------------------------------------------------------------------------------------------------------------------------
$100,000 to $249,000 3.50% 3.63% 3.125%
- ------------------------------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.00%
- ------------------------------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- ------------------------------------------------------------------------------------------------------------------------------------
$1,000,000 and over 0.00%/1/ 0.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

/1/ We will assess Class A share purchases of $1,000,000 or more a 1.00% CDSC
if they are redeemed within one year from the date of purchase. Charges are
based on the lower of the NAV on the date of purchase or the date of
redemption.

Please note that Class A shares of other Funds listed in other prospectuses have
different loads and breakpoints levels.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -25

CLASS B SHARE CDSC SCHEDULE

If you choose Class B shares, you buy them at NAV and agree that if you redeem
your shares within six years of the purchase date, you will pay a contingent
deferred sales charge (CDSC) based on how long you have held your shares.
Certain exceptions apply (see "Class B Reductions and Sales Charge Waivers").
The CDSC schedule is as follows:

<TABLE>
<CAPTION>
Redemptions Within: 1 Year 2 Years 3 Years 4 Years 5 Years 6 Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CDSC 5.00% 4.00% 3.00% 3.00% 2.00% 1.00%
</TABLE>

The CDSC percentage you pay is based on the lower of the NAV on the date of the
original purchase, or the NAV on the date of redemption. The distributor pays
sales commissions of up to 4.00% of the purchase price of Class B shares to
selling agents at the time of the sale.

We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. After shares are held for
six years, the CDSC expires and the B shares are converted to A shares to reduce
your future on-going expenses.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) - 26

REDUCED SALES CHARGES

Generally, we offer more sales charge reductions for Class A shares than for
Class B and C, particularly if you intend to invest greater amounts. You should
consider whether you are eligible for any of these potential reductions when you
are deciding which share class to buy.

CLASS A SHARE REDUCTIONS:
. You pay no sales charges on Fund shares you buy with REINVESTED
DISTRIBUTIONS.
. You pay a lower sales charge if you are investing an amount over a
BREAKPOINT LEVEL. See the "Class A Share Schedule" above.
. By signing a LETTER OF INTENT (LOI), you pay a lower sales charge now in
exchange for promising to invest an amount over a specified breakpoint
within the next 13 months. We will hold in escrow shares equal to
approximately 5% of the amount you intend to buy. If you do not invest the
amount specified in the LOI before the expiration date, we will redeem
enough escrowed shares to pay the difference between the reduced sales load
you paid and the sales load you should have paid. Otherwise, we will
release the escrowed shares when you have invested the agreed amount.
. RIGHTS OF ACCUMULATION (ROA) allow you to combine the amount you invest
with the total NAV of shares you own in other Stagecoach front-end load
Funds in order to reach breakpoint levels for a reduced load. We give you a
discount on the entire amount of the investment that puts you over the
breakpoint level.
. If you are REINVESTING THE PROCEEDS OF A STAGECOACH FUND REDEMPTION for
shares on which you have already paid a front-end sales charge, you have
120 days to reinvest the proceeds of that redemption with no sales charge
into a Fund that charges the same or a lower front-end sales charge. If you
use such a redemption to purchase shares of a Fund with a higher front-end
sales charge, you will have to pay the difference between the lower and
higher charge.
. You may reinvest into a Stagecoach Fund with no sales charge A REQUIRED
DISTRIBUTION from a pension, retirement, benefits, or similar plan for
which Wells Fargo acts as trustee provided the distribution occurred within
the last 30 days.

If you believe you should receive any of these reductions, it is up to you to
ask the selling agent or the shareholder serving agent for the reduction and to
provide appropriate proof of eligibility.

You, or your fiduciary or trustee, may also tell us to extend volume discounts,
including the reductions offered for rights of accumulation and letters of
intent, to include purchases made by:
. a family unit, consisting of a husband and wife and children under the age
of twenty-one or single trust estate;
. a trustee or fiduciary purchasing for a single fiduciary relationship; or
. the members of a "qualified group" which consists of a "Company" (as
defined in the 1940 Act), and related parties of such a "Company", which
has been in existence for at least six months and which has a primary
purpose other than acquiring Fund shares at a discount.

Call-out: "How a Letter of Intent Can Save You Money!" - If you plan to invest,
for example, $100,000 in a Stagecoach Fund in installments over the next year,
by signing a letter of intent you would pay only a 3.50% sales load on the
entire purchase. Otherwise, you might pay 5.25% on the first $50,000, then 4.50%
on the next $49,999!

CLASS B AND C SHARE CDSC REDUCTIONS:
. You pay no CDSC on Funds shares you purchase with REINVESTED DISTRIBUTIONS.
. We waive the CDSC for all redemptions made because of SCHEDULED OR
MANDATORY DISTRIBUTIONS for certain retirement plans. (See your retirement
plan disclosure for details.)
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -27

. We waive the CDSC for redemptions made in the event of the SHAREHOLDER'S
DEATH OR FOR A DISABILITY SUFFERED AFTER PURCHASING SHARES. ("Disability"
is defined by the Internal Revenue Code of 1986.)
. We waive the CDSC for redemptions made at the COMPANY'S DIRECTION in order
to, for example, complete a merger or close an account whose value has
fallen below the minimum balance.

WAIVERS FOR CERTAIN PARTIES:

. The spouses of any of the above, as well as the grandparents, parents,
siblings, children, grandchildren, aunts, uncles, nieces, nephews, fathers-
in-law, mothers-in-law, brothers-in-law and sisters-in-law of either the
spouse or the current or retired employee, director or officer.

You may also buy Class A Fund shares at NAV if they are to be included in
certain retirement, benefits, pension or investment wrap accounts with whom the
Company has reached an agreement, or through an omnibus account maintained with
a Fund by a broker/dealer. (See the Statements of Additional Information for
full list of applicable omnibus account types.)

We reserve the right to enter into agreements that reduce or eliminate sales
charges for groups or classes of shareholders, or for Fund shares included in
other investment plans such as "wrap accounts". If you own Fund shares as part
of another account or package such as an IRA or a sweep account, you must read
the disclosure statements governing that account. These disclosures may
supersede the terms and conditions discussed here.

SPECIAL NOTICE

If you owned Class B shares prior to MARCH 3, 1997 they are subject to a CDSC if
they are redeemed within four years of purchase. For as long as you hold Class B
shares of such a Fund, any new Class B shares of that Fund that you acquire will
also be subject to a CDSC if redeemed within four years. The CDSC schedule for
these shares is below:

The above schedule does not apply for shares of another Fund purchased after
February 28, 1997. If you exchange Class B shares for Class B shares of another
Fund, you will retain the above CDSC schedule on your exchanged shares, but
additional purchases of the newly purchased Fund will age at the higher CDSC
schedule.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -28

YOUR ACCOUNT

This section tells you how to open an account and how to buy, sell or exchange
shares once your account is open.

You can buy Fund shares:
. By opening an account directly with the Fund (simply complete and return a
Stagecoach Funds application with proper payment);
. Through a brokerage account with an approved selling agent; or
. Through certain retirement, benefits and pension plans, or through certain
packaged investment products (please see the providers of the plan for
instructions).

Minimum Investments:
. $1,000.00 per Fund minimum initial investment, or
. $100.00 per Fund minimum initial investment if you use the AutoSaver
option.
. $100.00 per Fund for all investments after your first.
. We may waive the minimum for Funds you purchase through certain retirement,
benefit and pension plans, through certain packaged investment products, or
for certain classes of shareholders as permitted by the Securities and
Exchange Commission. Check the specific disclosure statements and
applications for the program through which you intend to invest.

Important Information:
. Read this prospectus carefully. Discuss any questions you have with your
selling agent. You may also ask for copies of the Statements of Additional
Information. Copies are available free of charge from your financial
consultant or by calling 1-800 222-8222.
. We process requests to buy or sell shares at 1:00 PM Pacific Time on every
business day. Any request we receive in proper form before 1:00 PM PT is
processed the same business day. Requests we receive after 1:00 PM PT are
processed at 1:00 PM PT the next business day.
. It is the nature of a mutual fund investment that the price you pay to
purchase shares or the price you receive when you redeem shares is not
determined until after a request has been received in proper form.
. We determine the Net Asset Value (NAV) of each class of the Fund's shares
each business day as of the close of the New York Stock Exchange. We
determine the NAV by subtracting the Fund class's liabilities from its
total assets, and then dividing the result by the total number of
outstanding shares of that class. See the Statements of Additional
Information for further disclosure.
. You may have to complete additional paperwork for certain types of account
registrations, such as a Trust. Please speak to Investor Services (1 800-
222-8222) if you are investing directly with the Company, or speak to your
selling agent if you are buying shares through a brokerage account.
. Once an account has been opened, you can add additional Funds under the
same registration without requiring a new application.

HOW TO BUY SHARES - Lay out note: Converted into table

The following section explains how you can buy shares directly from the Company.
For Funds held through brokerage and other types of accounts, please consult
your selling agent.

By Mail:

If you are buying shares for the first time:
. Complete a Stagecoach Funds application. Be sure to indicate the Fund name
and the share class into which you intend to invest.
. Enclose a check for at least $1,000.00 made out in the full name and share
class of the Fund. For example, "Stagecoach Asset Allocation Fund, Class
B".
. You may start your account with $100.00 if you elect the AutoSaver option
on the application.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -29

If you are buying additional shares:
. Make a check payable to the full name and share class of your Fund for at
least $100.00. Be sure to write your account number on the check as well.
. Enclose the payment stub/card from your statement if available.

In Table on left: Stagecoach Funds, P.O. Box 7066, San Francisco, CA 94120-9201.

By Wire:

Initial Purchase:
. If you do not currently have an account, complete a Stagecoach Funds
application. Be sure to indicate the Fund name and the share class into
which you intend to invest.
. Mail the completed application to: Stagecoach Funds, P.O. Box 7066, San
Francisco, CA 94120-9201.
. You may also fax the completed application (with original to follow) to: 1-
415-546-9538.

Subsequent Purchases:
. Instruct your wiring bank to transmit at least $100.00 according to the
instructions given to the left. Be sure to have the wiring bank include
your current account number and the name your account is registered in:

In Table on left:
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 Share Class)
Account Name: (Registration Name Indicated on Application)

By Phone:

If you are buying shares for the first time:
. You can only make your first purchase of a Fund by phone if you already
have an existing Stagecoach Account.
. Call Investor Services and instruct the representative to either:
. transfer at least $1,000.00 from a linked settlement account, or
. exchange at least $1,000.00 worth of shares from an existing
Stagecoach Fund. Please see "EXCHANGES" for special rules.

If you are buying additional shares:
. Call Investor Services and instruct the representative to either:
. transfer at least $100.00 from a linked settlement account, or
. exchange at least $100.00 worth of shares from another Stagecoach
Fund.

In Table on left: 1 800-222-8222

We will process all requests to buy shares at the first NAV calculated after the
request and proper payment are received.

SELLING SHARES - Lay out note: converted into tables

The following section explains how you can sell shares by mail or by telephone
held directly by the Company. For Funds held through brokerage and other types
of accounts, please consult your selling agent.

By Mail:
<PAGE>

Allocatio Funds Prospectus (October 8, 1997) -30

. Write a letter stating your account registration, your account number, the
Fund you wish to redeem and the dollar amount ($100.00 or more) of the
redemption you wish to receive (or write "Full Redemption").
. Make sure all the account owners sign the request.
. You may request that redemption proceeds be sent to you by check, by ACH
transfer into a bank account, or by wire ($5000.00 minimum). Please call
Investor Services regarding requirements for linking bank accounts or for
wiring funds. We reserve the right to charge a fee for wiring funds
although it is not currently our practice to do so.
. Signature Guarantees are required for mailed redemption requests over
$5000.00. You can get a signature guarantee at financial institutions such
as a bank or brokerage house. We do not accept notarized signatures.

Mail to: Stagecoach Funds, PO Box 7066, San Francisco, CA 94120-9201.

By Phone:
. Call Investor Services to request a redemption of at least $100.00. Be
prepared to provide your account number and Taxpayer Identification Number.
. Unless you have instructed us otherwise, only one account owner needs to
call in redemption requests.
. You may request that redemption proceeds be sent to you by check, by
transfer into a ACH-linked bank account, or by wire ($5000.00 minimum).
Please call Investor Services regarding requirements for linking bank
accounts or for wiring funds. We reserve the right to charge a fee for
wiring funds although it is not currently our practice to do so.
. Telephone privileges are automatically made available to you unless you
specifically decline them on your application or subsequently in writing.
. Phone privileges allow us to accept transaction instructions by anyone
representing themselves as the shareholder and who provides reasonable
confirmation of their identity, such as providing the Taxpayer
Identification Number on the account.

Call: 1-800-222-8222

General Notes for Selling Shares:
. We will process redemption requests we receive in proper form before 1:00
P.M. Pacific Time at the NAV determined on the same business day.
. We determine the NAV each day as of the close of the New York Stock
Exchange.
. Your redemptions of Class B and Class C shares, and Class A shares where
applicable, are net of any applicable CDSC.
. If you purchased shares through a packaged investment product or retirement
plan, read the disclosure governing selling shares provided by the product
or plan. There maybe special requirements that supercede the disclosures in
this Prospectus.
. We reserve the right to delay payment of a redemption for up to ten days so
that we may be reasonably certain that investments made by check have been
collected. Payments of redemptions may also be delayed under extraordinary
circumstances or as permitted by the SEC in order to protect remaining
shareholders. Payments of redemptions may also be delayed up to seven days
under normal circumstances, although it is not our policy to delay such
payments.
. Generally, we pay redemption requests in cash, unless the redemption
request is for more than $250,000 or 1% of the net assets of the Fund by a
single shareholder over any ninety-day period. If a request for a
redemption is over these limits it may be to the detriment of existing
shareholders. Therefore, we may pay the redemption in part or in whole in
securities of equal value.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -31

EXCHANGES

. You will need to read the Prospectus for the Fund into which you wish to
exchange.
. Every exchange involves selling Fund shares and that sale may produce a
capital gain or loss for federal income tax purposes.
. If you exchange between Class A shares, you will have to pay any difference
between a load you have already paid and the load you are subject to in the
new Fund (less the difference between any load already paid under the
maximum 3% load schedule and the maximum 4.5% schedule).
. If you are making an initial investment into a new Fund through an
exchange, you must exchange at least the minimum first purchase amount of
the Fund you are redeeming, unless your balance has fallen below that
amount due to market conditions.
. Any exchange between Funds you already own must meet the minimum redemption
and subsequent purchase amounts for the Funds involved.
. If you are exchanging from a higher-load Fund to a lower or no-load Fund,
then back to the higher load, it is up to you to inform the Company that
you have already paid the higher load.
. Exchanges between Class B shares, between Class C shares or between either
Class B or Class C shares and a Stagecoach Money Market Fund will not
trigger the CDSC. The new shares will continue to age according to their
original schedule while in the new Fund and will be charged the CDSC
applicable to the original shares upon redemption. This also applies to
exchanges of Class A shares that are subject to a CDSC.
. Exchanges from any share Class to a Money Market Fund can only be re-
exchanged for the original share Class.
. In order to discourage market timing and excessive transaction expenses
that must be borne by other shareholders, we reserve the right to limit or
reject exchange orders. Generally, we will notify you 60 days in advance of
any changes in your exchange privileges.
. You may make exchanges between like share Classes, or between A, B or C
share Classes and a Money Fund. You may not make exchanges between Class A
shares of a non-Money Market Fund and Class B or Class C shares
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -32

ADDITIONAL SERVICES AND POLICIES

AUTOMATIC PROGRAMS:

These programs help you conveniently purchase or redeem shares each month:
. AUTOSAVER PLAN - you need only specify an amount of at least $100.00 and a
day of the month. We will automatically transfer that amount from your
linked bank account each month to purchase additional shares. We will
transfer the amount on or about the day you specify, or on or about the
20/th/ of each month if you have not specified a day. Please call Investor
Services at 1-800-222-8222 if you wish to change or add linked accounts.
. SYSTEMATIC WITHDRAWAL PROGRAM - Stagecoach will automatically redeem enough
shares to equal a specified dollar amount of at least $100.00 on or about
the 5th business day prior to the end of each month and either send you the
proceeds by check or transfer it into your linked bank account. In order to
set up a Systematic Withdrawal Program, you :
. must have a Fund account valued at $10,000.00 or more;
. you must have distributions reinvested; and
. you may not simultaneously participate in an AutoSaver Plan.

It generally takes about 10 days to set up either plan once we have received
your instructions. We automatically cancel your program if the linked account
you specified is closed.

DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS

You may choose to do any of the following:
. AUTOMATIC REINVESTMENT OPTION - Lets you buy new shares of the same class
of the Fund that generated the distributions. The new shares are purchased
at NAV generally on the day the income is paid. This option is
automatically assigned to your account unless you specify another plan.
. FUND PURCHASE PLAN - Uses your distributions to buy shares at NAV of
another Stagecoach Fund of the same share class or a Money Fund. You must
have already satisfied the minimum investment requirements of the Fund into
which your distributions are being transferred in order to participate.
. AUTOMATIC CLEARING HOUSE OPTION - Deposits your dividends and capital gains
into any bank account you link to your Fund account if it is part of the
ACH system. If your specified bank account is closed, we will reinvest your
distributions.
. CHECK PAYMENT OPTION - Allows you to receive checks for distributions
mailed to your address of record or to another name and address which you
have specified in written, signature guaranteed instructions. If checks
remain uncashed for six months or are undeliverable by the Post Office, we
will reinvest the distributions at the earliest date possible.

Call Out - "Two Things to Keep In Mind About Distributions" -- Remember,
distributions have the effect of reducing the NAV per share by the amount
distributed. Also, distributions on new shares shortly after purchase would be
in effect a return of capital, although the distribution may still be taxable to
you.

TAXES

We will pass on to you net investment income and net short-term capital gains
earned by a Fund as dividend distributions. These are taxable to you as ordinary
income. Corporate shareholders may be able to exclude a portion of dividend
income from their taxable income.

Long-term capital gains earned by a Fund will be passed on to you as capital
gains and will be taxable to you as long-term capital gains. In general,
distributions are taxable when paid. However, distributions declared in October,
November and December and distributed by the following January will be taxable
as if they were paid on December 31.
<PAGE>

Allocation Funds Prospectus (October 8, 1997) -33

Your redemptions will ordinarily result in a taxable capital gain or loss,
depending on the amount you receive for your shares and the amount you paid for
them. Foreign shareholders may be subject to different tax treatment, including
withholding. In certain circumstances, U.S. residents may also be subject to tax
withholding.

Additional details about the tax consequences of investing are available to you
in the Statements of Additional Information. The discussion of taxes is only a
summary based on laws in effect as of the date of this Prospectus and is not a
substitute for careful tax planning.

SPECIAL NOTICES:

SHARE CLASS: This prospectus contains information about Class A and Class B
shares. Some of the Funds may offer additional share classes with different
expenses and returns than those described here. Call Stephens Inc. at 1-800-643-
9691 for information on these or other investment options in the Funds.

CONVERSION OF CLASS B SHARES - We will convert Class B shares into Class A
shares at the month end following the six-year anniversary of their original
purchase. This is done to avoid the higher on-going 12b-1 fees assessed Class B
shares. The conversion is done at NAV and, since it is unlikely that Class A and
Class B shares of the same Fund will have the same NAV on a given date, the
conversion is on a dollar-value basis, not a share-for-share basis.

MINIMUM ACCOUNT VALUE - Due to the expense involved in maintaining low-balance
accounts, we reserve the right to close accounts that have fallen below the
$1,000.00 minimum balance due to redemptions (as opposed to market conditions).
You will be given an opportunity to make additional investments to prevent
account closure before any action is taken.

STATEMENTS - We mail statements after any account activity, including
transactions, dividends or capital gains, and at year-end. We do not send
statements for Funds held in brokerage, retirement or other similar accounts.
You must check with the administrators of these accounts for statement policies.
The Fund will also send any necessary tax reporting documents in January, and
will send Annual and Semi-Annual Reports each year.

DEALER CONCESSIONS AND 12B-1 FEES - Stephens Inc. as the Fund's distributor,
will pay the portion of the Class A share sales charge shown as the Dealer
Allowance to the selling agent, if any. Stephens also compensates selling agents
for the sale of Class B shares and is reimbursed through Rule 12b-1 fees and
contingent deferred sales charges. Selling agents may receive different
compensation for sales of Class A and Class B shares of the same Fund. Each Fund
may participate in joint distribution activities with other Stagecoach Funds.
The cost of these activities is generally split among the Funds. Funds with
higher assets levels pay a higher proportion of these costs.

STATEMENTS OF ADDITIONAL INFORMATION- Additional information about some of the
topics discussed in this Prospectus as well as details about return
calculations, distribution plans, servicing plans, tax issues and other
important issues are available in the Statement of Additional Information for
each Fund. The Statement of Additional Information should be read along with
this Prospectus and may be obtained free of charge by calling Investor Services
at 1 800-222-8222.

GLASS-STEAGALL ACT - Morrison & Foerster LLP, counsel to Funds and special
counsel to Wells Fargo Bank, has advised us and Wells Fargo Bank that Wells
Fargo Bank and its affiliates may perform the services contemplated by the
Advisory Contracts and detailed in this Prospectus and the Statements of
Additional Information without violation of the Glass-Steagall Act. Counsel has
pointed out that future judicial or administrative decisions, or future federal
or state laws may prevent these entities from continuing in their roles.

Allocation Funds Prospectus (October 8, 1997)-34

entitled to one vote for each share owned and fractional votes for each
fractional share owned. For a detailed description of voting rights, see the
"Capital Stock" section of the SAI.
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-35

ORGANIZATION AND MANAGEMENT OF THE FUNDS

A number of different companies and divisions perform the various tasks that are
required for a mutual fund company. This section will show you how the Funds are
organized, who performs which of the various roles and what compensation they
receive. Further information is available in the Statements of Additional
Information for each Fund.

ABOUT STAGECOACH

Each Fund is one of [25] of Stagecoach Funds, Inc. Stagecoach was organized on
September 9, 1991 as a Maryland Corporation.

The Board of Directors of Stagecoach supervises the Funds' activities and
approves the selection of various companies hired to manage the Funds'
operation. Some of these service providers are described in the diagram below.
If the Board believes that it is in the best interests of the shareholders it
may make a change in one of these companies.

We do not hold annual shareholder meetings. We may hold special shareholder
meetings to ask shareholders to vote on items such as electing or removing board
members, amending fundamental investment strategies or policies or considering,
where applicable, matters affecting a Master Portfolio.

SHAREHOLDERS

FINANCIAL SERVICES FIRMS AND
THEIR REPRESENTATIVES

Advise current and prospective
shareholders on their Fund investments
<TABLE>
<CAPTION>
DISTRIBUTOR ADMINISTRATOR TRANSFER and SHAREHOLDER
& CO-ADMINISTRATOR DINIDEND PAYING SERVICING AGENTS
<S> <C> <C> <C>
Stephens Inc. Wells Fargo Bank Wells Fargo Bank Various Agents
111 Center St. 525 Market St. 525 Market St
Little Rock, AR San Francisco, CA San Francisco, CA

Markets the Funds Manages the Funds' Maintains records of Provide services to
and distributes shares business activities shares and supervises customers.
the paying of dividends.

<CAPTION>
INVESTMENT ADVISOR CUSTODIAN
<C> <C>
Wells Fargo Bank Wells Fargo Bank
444 Market St. 525 Market St.
San Francisco, CA San Francisco, CA

Manage Funds' investment Provides safekeeping for
activities the Funds' assets

INVESTMENT SUB-ADVISOR

Barclay's Global Fund Advisors
45 Freemont Street
San Francisco CA

Manage Funds' investment
activities
</TABLE>
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-36

BOARD OF DIRECTORS

Supervise the Funds' activities
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-37

In the following sections, the percentages shown are the percentages of the
average daily net assets of each Fund class paid on an annual basis for the
services described. The Statement of Additional Information has more detailed
information about the Investment Advisor and the other functions described here.

THE INVESTMENT ADVISOR

Wells Fargo Bank is the advisor for each of the Funds. Wells Fargo, founded in
1852, is the oldest bank in the Western United States and is one of the largest
banks in the United States. Wells Fargo Bank is a wholly owned subsidiary of
Wells & Fargo and CO., a national bank holding company. As of July 1, 1997 Wells
Fargo Bank and its affiliates managed over $57 billion in assets. The Funds
paid Wells Fargo the following for these advisory services for the fiscal year
ended March 31, 1997:

Asset Allocation Fund .34%

US Government Allocation Fund .60%

THE ADMINISTRATOR

Wells Fargo Bank is the administrator of the Funds. Wells Fargo is paid .04%
for these services.

THE DISTRIBUTOR AND CO-ADMINISTRATOR

Stephens Inc. is the Funds distributor and Co-Administrator. Stephen's receives
.02% for its role as Co-Administrator and receives all loads, CDSCs and
distribution plans fees. It uses a portion of these amounts to compensate
selling agents for their role in marketing the Fund shares.

SHAREHOLDER SERVICING PLAN

We have Shareholder Servicing Plans for each Fund class. We have agreements
with various shareholder servicing agents to process purchase and redemption
requests, and to service shareholder accounts, among other services.

For these services we pay as follows:

<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Asset Allocation Fund .25% .25%

US Government Allocation Fund .25% .25%
</TABLE>

DISTRIBUTION PLAN

We have adopted a distribution plan for the Funds. For Class A shares, these
plans are used to defray all or part of the cost of preparing prospectuses and
promotional materials. For Class B, these plans are used to pay for
distribution-related services. The fees paid under these plans are as follows :

<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
Asset Allocation Fund .10% .75%
</TABLE>
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-38

<TABLE>
<S> <C> <C>
US Government Allocation Fund .10% .75%
</TABLE>

<PAGE>

Allocation Funds Prospectus (October 8, 1997)-39

GLOSSARY

ACH--Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.

American Depository Receipts-Receipts for non-U.S. company stocks. The stocks
underlying ADRs are typically held in bank vaults. The ADR's owner is entitled
to any capital gains or dividends. ADRs are one way of owning equity in foreign
companies

Business Day-Any day the New York Stock Exchange is open is a business day for
the Fund.

Capital Appreciation-The increase in the value of a share. See also "total
return".

Capitalization--When referring to the size of a company, capitalization means
the total number of a company's outstanding shares of stock multiplied by their
price per share. This is an accepted method of determining a company's size and
is sometimes referred to as "market capitalization".

Capital Structure--Refers to how a company has raised money to operate. Can
include borrowing or selling stock.

Convertible Debt Securities-Bonds or notes that are exchangeable for common
stock at a set price on a set date or at the election of the holder.

Current Income--Earnings in the form of dividends or interest as opposed to
capital growth. See also "Total Return".

Derivatives- Securities whose values are derived in part from the value of
another security or index. An example is a stock option.

Distributions-Dividends and/or capital gains paid by a Fund on its shares.

Diversified--A diversified fund, as defined by the Investment Company Act, is
one that has a policy of investing in cash, Government securities and no more
than 5% of its total assets in a single issuer. These policies must apply to 75%
of the Fund's total assets.

Dollar-Denominated--Securities issued by foreign banks, companies or governments
in U.S. dollars.

Duration--A measure of a security's or portfolio's sensitivity to changes in
interest rates. Duration is usually expressed in years, with longer durations
typically more sensitive to interest rate changes than shorter durations.

FDIC- The Federal Deposit Insurance Corporation. This is the company that
provides federally sponsored insurance covering bank deposits such as savings
accounts and CDs. FDIC insurance does not apply to mutual funds.

Illiquid Security--A security which can not be easily sold, or can not be sold
without negatively affecting the price.

Investment Grade-A type of bond rated in the top four investment categories by
a nationally recognized ratings organization. Generally these are bonds whose
issuers are considered to have a strong ability to pay interest and repay
principal, although some investment grade bonds may have some speculative
characteristics.

Initial public offering- The first time a company's stock is offered for sale to
the public.
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-40

Liquidity-The ability to quickly sell a security without affecting the price.

Market Timing-The belief that by guessing correctly, an investor can profit by
selling out of the market when prices are high and buying when prices are low.

Moody's-One of the largest nationally recognized ratings organizations.

Nationally Recognized Ratings Organization (NRRO)-A company that examines the
ability of a bond issuer to meet its obligations and which rates the bonds
accordingly.

Net Asset Value (NAV)-The value of a single fund share. It is determined by
adding together all of a fund's assets, subtracting expenses and other
liabilities, then dividing by the total number of shares. The NAV is calculated
separately for each class of the Fund, and is determined as of the close of
regular trading on each business day the New York Stock Exchange is open,
typically 1:00 p.m. Pacific Time.

Non-Diversified--Any fund that does not have a policy as described under
"diversified" in this glossary.

Options-An option is the right to buy or sell a security based on an agreed
upon price for an agreed upon time. For example, an option may give the holder
of a stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options can also be based
on the movement of an index such as the S&P 500.

Public Offering Price (POP)-the NAV with the sales load added.

Selling Agent-a person who has an agreement with the Fund's distributor that
allows them to sell Fund shares.

Senior Securities-a security that has a priority claim to a company's assets.
For example, a bondholder has the right to receive a share of a company's assets
before a common stock holder does in the event of a company's liquidation.

Shareholder Servicing Agent-anyone appointed by the Fund to maintain
shareholder accounts and records, assist and provide information to shareholders
or perform similar functions.

Signature Guarantee-A guarantee given by a financial institution that has
verified the identity of the maker of the signature.

S&P-One of the largest nationally recognized ratings organizations. Standard
and Poor's also publishes various indexes or lists of companies representative
of sectors of the US economy.

Statement of Additional Information-A document that supplements and continues
the disclosures made in the prospectus.

Taxpayer Identification Number-Usually the social security number for an
individual or the Employer Identification Number for a corporation.

Total return-The total value of capital growth and the value of all
distributions, assuming that distributions were used to purchase additional
shares of the Fund.

Turnover Ratio-The percentage of the securities held in a Fund's portfolio,
other than short-term securities, that were bought or sold within a year.

U.S. Government obligations--Obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

Warrants The right to buy a stock at a set price for a set time.
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-41
<PAGE>

Allocation Funds Prospectus (October 8, 1997)-42

[Back cover]

You may wish to review the following documents:

Statement of Additional Information--supplements and continues the disclosures
made by this Prospectus.

Annual/Semi-Annual Report--provides certain financial information for the most
recent reporting period and each Fund's portfolio of investments.

These are available free of charge by calling 1-800-222-8222 or from
Stagecoach Funds
PO Box 7066
San Francisco, CA 94120-7066
<PAGE>

STAGECOACH FUNDS, INC.
----------------------
Cross Reference Sheet
---------------------

Form N-1A Item Number
- ---------------------

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

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

<PAGE>

21 Management of the Company
22 Performance Calculations
23 Financial Information

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

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

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-1

Please read this Prospectus and keep it for future reference. It is designed to
provide you with important information and to help you decide if the Fund's goal
matches your own.

FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY, WELLS FARGO BANK, N.A. ("WELLS FARGO BANK"), BARCLAYS GLOBAL
INVESTORS, N.A., OR ANY OF THEIR 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 THE FUND INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.

STAGECOACH
EQUITY INDEX FUND
PROSPECTUS

Class A

December 15, 1997

Investment Advisor and Administrator
Wells Fargo Bank

Investment Sub-Advisor
Barclays Global Fund Advisors

Distributor and Co-Administrator
Stephens Inc.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-2

FOR YOUR INFORMATION

What is a prospectus? - A prospectus provides you with the information you need
in order to make an informed investment decision. It states how a Fund operates
and invests its assets.

What else do I need to understand these Funds? - Each Fund has a "Statement of
Additional Information" that continues and supplements the disclosures made in
this Prospectus. You may also want to review the most recent Annual or Semi-
Annual Report. You can order copies without charge by calling 1 800-222-8222.

(icon) Portfolio Holdings: A quick summary of a Fund's key permitted investments
and practices.

(icon) Additional Fund Facts: Provides additional key information for each Fund.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-3

KEY INFORMATION

Summary of the Stagecoach Equity Index Fund: The Fund described in this
Prospectus seeks to approximate the total rate of return of substantially all
the common stocks comprising the S&P 500 Index. The Fund is an open-end
management investment company.

Should you consider investing in these Funds? Yes, if:
. you are looking to add equity investments to your portfolio;
. you are interested in adding an index investment to your portfolio;
. you have an investment horizon of at least three to five years; and
. you are willing to accept the risks of equity investing, including the risk
that share prices may fluctuate significantly.

You should NOT consider investing in these Funds if:
. you are looking for FDIC coverage or guaranteed rates of return;
. you are unwilling or unable to accept that you may lose money on your
investment;
. you are unwilling to accept the risks involved in the securities markets;
. you are looking for an actively managed equity fund; and
. you are seeking monthly dividend income.

Who are "We"?: In this Prospectus, "We" means the Stagecoach Funds and includes
functions such as Investment Advisor that we may have hired others to perform.
"Organization and Management of The Funds" in this Prospectus and the Statements
of Additional Information provide details on the various roles and who performs
them.

Who are "You"?: In this Prospectus, "You" means the shareholder.

Key Terms: "Index Funds" are mutual funds that attempt to match the total return
of a particular index or list of securities. Index Funds are not "actively
managed" in that individual securities are not analyzed by traditional methods.

Dividends: We pay dividends, if any, quarterly.

Italics: Throughout this Prospectus, words will appear in italicized print. This
means that the word is defined in the Glossary beginning on page ___.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-4

HOW TO READ THE FINANCIAL HIGHLIGHTS

After each Fund's Investment Objective and Investment Policies, charts are
provided showing important financial information derived from the Fund's
Financial Highlights for the fiscal period ended March 31, 1997. The statements
were audited by KPMG Peat Marwick LLP. Other auditors audited statements for
periods prior to January 1, 1992. Here is an explanation of some terms that
will help you interpret these charts.

NET ASSET VALUE (NAV)--The value of one share of a class of a Fund, excluding
any sales charge. See the Glossary for a fuller definition.

NET ASSETS--The value of the investments in a Fund's portfolio that are
attributable to a particular class of the Fund.

RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS--This ratio is the
result of dividing net investment income (or loss) by average net assets.

TOTAL RETURN--The annual return on an investment that includes any appreciation
or decline in value and all dividends and interest.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-5

Summary of Fund Expenses

SHAREHOLDER TRANSACTION EXPENSES
CLASS A SHARES

CORPORATE
STOCK FUND/1/
-------------
Maximum Sales Charge Imposed on
Purchase (as a percentage of
offering price).................... None
Maximum Sales Charge on
Reinvested Dividends............... None
Maximum Sales Charge Imposed on
Redemptions........................ None
Exchange Fees....................... None

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

CORPORATE
STOCK FUND/1,2/
--------------
Management Fee..................... 0.47%
Rule 12b-1 Fee..................... 0.05%
Other Expenses (after
waivers or
reimbursements)/3/................ 0.49%
-----
TOTAL FUND OPERATING
EXPENSES
(after waivers or
reimbursements)/4/................ 1.01%
=====

__________________

/1/
/2/ Summarizes expenses charged at the Master Portfolio level as well as at
the Fund level.
/3/ Other Expenses (before waivers or reimbursements) would be 1.00%, 0.67%,
0.56%, 0.71%, 0.50%, 0.66% and 1.00% for such shares of the Aggressive
Growth, Balanced, Corporate Stock, Diversified Income, Equity Value, Growth
and Income and Small Cap Funds, respectively.
/4/ Total Fund Operating Expenses (before waivers or reimbursements) would be
1.08%, for such shares of the Equity Index Fund

EXAMPLE OF EXPENSES

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
You would pay the following
expenses on a $1,000
investment in Class A shares
of the following Funds,
assuming a 5% annual return
and redemption at the end of
each time period indicated:

Equity Index Fund.......... $ 10 $32 $56 $124

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-6

Equity Index Fund

Managers: Model Driven
- ---------

CLASS A SHARE ANNUAL RETURNS (Bar graph)

INVESTMENT OBJECTIVE

The Equity Index Fund seeks to approximate to the extent practicable
the total rate of return of substantially all common stocks comprising the
Standard & Poor's 500 Composite Stock Index (the "S&P 500").

INVESTMENT POLICIES

In attempting to approximate the total rate of return of the S&P 500,
we use a statistical process known as "sampling." We select and hold a relative
sample of the common stocks listed on the S&P Index and attempt to achieve a 95%
correlation between the price and total return performance of the S&P Index and
our investment results, before expenses. This correlation is sought regardless
of market conditions.

A precise duplication of the performance of the S&P 500 would mean
that the net asset value of Fund shares, including dividends and capital gains,
would increase or decrease in exact proportion to changes in the S&P 500. Such a
100% correlation is not feasible. Our ability to track the performance of the
S&P 500 may be affected by, among other things, transaction costs and
shareholder purchases and redepmtions. We will regularly monitor the performance
and composition of the S&P 500 and adjust the portfolio as necessary in order to
achieve the 95% correlation.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. in a diversified portfolio of common stocks designed to provide a relative
sample of the stocks listed on the S&P 500;
. in stock index futures and options on stock indexes as a substitute for a
comparable position in the underlying securities; and
. in interest-rate futures contracts, options on interest rate swaps and index
swaps.

ADDITIONAL RISK FACTORS

For general information on risk, please see page ___.

The our investment objective is to match as closely as possible the total return
of the S&P 500; therefore, during periods when the S&P 500 Index is loosing
value, your investment will also loose value.

ADDITIONAL INFORMATION

The Standard & Poors 500 Index is an index of 500 widely held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets. It
is one of the most widely used benchmarks of U.S. equity performance.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-7

EQUITY INDEX FUND
FOR A SHARE OUTSTANDING

<TABLE>
<CAPTION>
PERIOD PERIOD YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPT. 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1997/6/ 1996/1/ 1995 1994 1993 1992
------------- --------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ................... 46.24 $ 41.45 $ 31.42 $ 33.00 $ 31.40 $ 30.38
Income from investment
operations:
Net investment income......... .25 0.42 0.59 0.63 0.59 0.62
(loss)
Net realized and unrealized
gain (loss) on 4.61 4.79 10.65 (0.50) 2.19 1.35
investments ............... -------- ---------- -------- -------- -------- --------
Total from investment
operations................... 4.86 5.21 11.24 0.13 2.78 1.97
Less distributions:
Dividends from net
investment income............ (.25) (0.42) (0.59) (0.63) (0.59) (0.62)
Distributions from net
realized gain ............... (1.25) 0.00 (0.62) (1.08) (0.59) (0.33)
-------- ---------- -------- -------- -------- --------
Total from distributions...... (1.50) (0.42) (1.21) (1.71) (1.18) (0.95)
Net asset value, end of
period ...................... 49.60 $ 46.24 $ 41.45 $ 31.42 $ 33.00 $ 31.40
======== ========== ======== ======== ======== ========
Total return (not
annualized).................. 10.63% 12.60% 35.99% 0.42% 8.91% 6.59%
Ratios/supplemental data:
Net assets, end of period
(000)........................ $406,739 $ 370,439 $327,208 $236,265 $258,327 $230,457
Ratios to average net
assets (annualized):
Ratio of expenses to
average net
assets...................... .97% 1.01%/3/ 0.96% 0.97% 0.97% 0.93%
Ratio of net investment income
(loss) to
average net assets.......... 1.02% 1.28%/3/ 1.59% 1.92% 1.81% 2.05%
Portfolio turnover............ n/a 1%/4/ 6% 7% 5% 4%
Average commission rate
paid/5/...................... n/a $0.0248/4/ -- -- -- --
Ratio of expenses to
average net assets
prior to waived fees and
reimbursed
expenses.................... 1.07% 1.08%/3/ 1.00% 1.00% 0.99% 1.00%
Ratio of net investment
income to average
net assets prior to
waived fees and
reimbursed expenses......... .92% 1.21%/3/ 1.55% 1.89% 1.79% 1.98%
</TABLE>

________________________
/1/ The fund changed its fiscal year end from December 31 to September 30.
/2/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Equity Index Fund of the
Wells Fargo Investment Trust for Retirement
Programs which was reorganized into the Equity Index Fund on January 1,
1992.
/3/ Ratio includes income and expenses allocated from the Master Portfolio.
/4/ Represents portfolio activity for the Fund's stand alone period only. The
portfolio turnover and average commission rates for the Corporate Stock
Master Portfolio for the period from April 28, 1996 to September 30, 1996
were 3% and $0.0265, respectively./
/5/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
/6/ The fund changed its fiscal year end from September 30 to March 31

CORPORATE STOCK FUND
For a Share Outstanding
<TABLE>
<CAPTION>
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1991/2/ 1990/1/ 1989/1/ 1988/1/ 1987/1/ 1986/1/
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginnning of period........ $23.60 $24.57 $18.93 $16.44 $15.93 $13.65
Income from investmewnt operations:
Net investment income (loss)................. 0.62 0.64 0.60 0.57 0.45 0.43
Net realized and unrealized gain (loss)
on investments............................. 6.16 (1.61) 5.04 1.92 0.06 1.85
---- ------ ---- ---- ---- ----
Total from investment operations............. 6.78 (0.97) 5.64 2.49 0.51 2.28
Less distributions:
Dividends from net
investment income.......................... 0.00
Distributions from net realized gain......... 0.00 0.00 0.00 0.00 0.00 0.00
Total from distributions..................... 0.00 0.00 0.00 0.00 0.00 0.00
Net asset value, end of period............... $30.38 $23.60 $24.57 $18.93 $16.44 $15.93
====== ====== ====== ====== ====== ======
Total return (not annualized)................ 28.72% (3.95)% 29.79% 15.15% 3.20% 16.70%
Rations/supplemental data:
Net assets, end of period (000).............. $204,926 $151,742 $153,126 $115,119 $119,155 $33,667
Ratios of average net assets (annualized):
Ratio of expenses to average net assets...... 0.97% 0.97% 1.04% 1.02% 1.05% 1.02%
Ratio of net investments income loss to
average net assest......................... 2.30% 2.71% 2.69% 3.17% 2.43% 2.75%
Portfolio turnover........................... 4% 6% 6% 3% 12% 15%
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses................................... N/A N/A N/A N/A N/A N/A
Ratio of net investment income to average
net assets prior to waived fees and
reimbursed expenses........................ N/A N/A N/A N/A N/A N/A

- ----------------------------------
</TABLE>

/1/ The financial information for the fiscal period prior to, and including,
1991 is based on the financial information for the Corporate Stock Fund of
the Wells Fargo Investment Trust for Retirement Programs which commenced
operations on January 25, 1984 and was reorganized into the Corporate Stock
Fund on January 1, 1992.
/2/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Equity Index Fund of the
Wells Fargo Investment Trust for Retirement Programs which was reorganized
into the Equity Index Fund on January 1, 1992.

<PAGE>

Equity Index Fund Prospectus (October 9, 1997) -8

GENERAL RISK CONSIDERATIONS

. Unlike bank deposits such as CD's or savings accounts, mutual funds are NOT
INSURED BY THE FDIC.
. We CANNOT GUARANTEE that we will meet our investment objectives.
. We do not guarantee the performance of a Fund, nor can we assure you that the
market value of your investment will not decline. We will not "make good"
any investment loss you may suffer, nor can anyone we contract with to
perform certain functions such as selling agents or investment advisors,
offer or promise to make good any such losses.
. Share prices--and therefore the value of your investment--WILL INCREASE AND
DECREASE with changes in the value of the underlying securities and other
investments. This is referred to as volatility.
. Investing in any mutual fund, including the most conservative, involve RISK,
INCLUDING THE POSSIBLE LOSS OF ANY MONEY YOU INVEST.
. No single Fund, by itself, constitutes a complete investment plan.

Some mutual funds invest in securities that involve particular kinds of risk.

We may also use certain DERIVATIVE instruments such as stock index futures and
options on stock index futres. The term "derivatives" covers a wide number of
investments, but in general it refers to any financial instrument whose value is
derived, at least in part, from the price of another security or a specified
index, asset or rate. Some derivatives may be more sensitive to interest rate
changes or market moves, and some may be susceptible to changes in yields or
values due to their structure or contract terms.

What follows is a general list of the types of risks applicable to the Fund's
investments and a table showing some of the additional investment practices that
the Fund may use. Additional information about these practices is available in
the Statement of Additional Information.

Experience Risk--The risk presented by a new or innovative security. The risk is
that insufficient experience exists to predict how the security's value might be
affected by various economic conditions.

Information Risk--The risk that information about a security is either
unavailable or is inaccurate.

Liquidity Risk--The risk that a security cannot be sold, or cannot be sold
without adversely affecting the price.

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-9

Market Risk--The risk that the value of stock, bond or other security will
reduced by market activity. This is the basic risk associated with all
securities investments.

Political Risk--The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.

Regulatory Risk--The risk that changes in government regulations will adversely
affect the value of a security. Also the risk that an insufficiently regulated
market might be permit inappropriate trading practices.

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-10

<TABLE>
- ----------------------------------------------
<S> <C>
C
O
R
P
A
This table lists some of the additional R
investment practices of the Funds, A
including some not disclosed in the T
Investment Objectives and Investment E
Policies section of the Prospectus.
THE RISKS INDICATED AFTER THE S
DESCRIPTION OF THE PRACTICE ARE NOT T
THE ONLY POTENTIAL RISKS ASSOCIATED O
WITH THAT PRACTICE, BUT ARE AMONG THE C
MORE PROMINENT. Market risk is assumed K
for each. See the Investment
Objectives and Policies or the
Statements of Additional Information
for limits on these practices.
- ----------------------------------------------
INVESTMENT PRACTICE/RISK
- ----------------------------------------------
Other Mutual Funds--The temporary
investment in shares of an x
unaffiliated investment company.
- ----------------------------------------------
Options--The right or obligation to
deliver or receive a security
depending on the security's price or
the performance of an index or
benchmark. Credit, Information and
Liquidity Risk
Stock Index Futures.
Options on Stock Index Futures x
Index Swaps x
Interest rate futures x
Interest Rate Futures Options x
Interest Rate Swaps x
- ----------------------------------------------
Privately Issued Securities--Securities
that are not publicly traded but which x
may be resold in accordance with Rule
144A of the Securities Act of 1933.
Liquidity Risk
- ----------------------------------------------
Loans of Securities--The practice of
loaning securities to brokers dealers
and financial institutions to increase x
return on those securities. Loans may be
made in accordance with existing
investment objectives. Credit Risk.
- ----------------------------------------------
Policies--The ability to
borrow an equivalent of 20% of total
assets from banks for temporary x
purposes to meet shareholder
redemptions. Borrowing may be secured
by a pledge of up to 20% of the
securities and investments may not be
purchased if borrowing exceeds 5% of
assets. Credit Risk
- ----------------------------------------------
Illiquid Securities--As defined in the 15
Glossary, illiquid securities are
limited to the percentage indicated
for each Fund.
- ----------------------------------------------
</TABLE>

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for the Fund remains within the parameters of its
objective.

The Investment Objectives described for each Fund are fundamental and cannot be
changed without approval by vote of a majority of shareholders.

See the "Important Risk Factors" in the summary for each Fund. You should also
see the Statement of Additional Information for additional discussion involving
risk and investment practices.

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-11

YOUR ACCOUNT

Shares of the Equity Index Fund are available at Net Asset Value without sales
charge. This section tells you how to open an account and how to buy, sell or
exchange shares once your account is open.

Minimum Investments:
. $1,000.00 minimum initial investments, or
. $100.00 minimum initial investment if you use the AutoSaver option.
. $100.00 for all investments after your first.
. We may waive the minimum for Fund shares you purchase through certain
retirement, benefit and pension plans, through certain packaged investment
products, or for certain classes of shareholders as permitted by the
Securities and Exchange Commission. Check the specific disclosure
statements and applications for the program through which you intend to
invest.

Important Information:

. Read this prospectus carefully. Discuss any questions you have with your
selling agent or with Investor Services. You may also ask for copies of the
Statements of Additional Information (SAI).
. We process requests to buy or sell shares at 1:00 PM Pacific Standard Time
on every business day. Any request we receive before 1:00 PM PST is
processed the same business day. Requests we receive after 1:00 PM PST are
processed at 1:00 PM PST the next business day.
. It is the nature of a mutual fund investment that the price you pay to
purchase shares or the price you receive when you redeem shares is not
determined until after a request has been received in proper form.
. We determine the Net Asset Value (NAV) of the Fund's shares each business
day as of the close of the New York Stock Exchange. We determine the NAV by
subtracting the Fund liabilities from its total assets, and then dividing
the result by the total number of outstanding shares. See the SAI for
additional information.
. You may have to complete additional paperwork for certain types of account
registrations, such as a Trust. Please speak to Investor Services (1 800-
222-8222) if you are investing directly with the Company, or speak to your
selling agent if you are buying shares through a brokerage account.
. Once an account has been opened, you can add additional Funds under the same
registration without requiring a new application.

HOW TO BUY SHARES - Lay out note: Converted into table

The following section explains how you can buy shares directly from the Company.
For Fund shares held through brokerage and other types of account, please
consult your selling agent.

By Mail:

If you are buying shares for the first time:
. Complete a Stagecoach Funds application. Be sure to indicate the Fund name
and the share class into which you intend to invest.
. Enclose a check for at least $1,000.00 made out in the full name and share
class of the Fund. For example, "Stagecoach Equity Index Fund".
. You may start your account with $100.00 if you elect the AutoSaver option on
the application.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-12

In Table on left: Stagecoach Funds, P.O. Box 7066, San Francisco, CA 94120-9201.

By Wire:

Subsequent Purchases:

. Instruct your wiring bank to transmit at least $100.00 according to the
instructions given to the left. Be sure to have the wiring bank include
your current account number and the name your account is registered in:

By Phone:

If you are buying shares for the first time:
. You can only make your first purchase of the Fund by phone if you already
have an existing Stagecoach Account.
. Call Investor Services and instruct the representative to either:
. transfer at least $1,000.00 from a linked settlement acc
account, or
. exchange at least $1,000.00 worth of shares from an
existing Stagecoach Fund. Please see "EXCHANGES" for
special rules.

If you are buying additional shares:
. Call Investor Services and instruct the representative to either:
. transfer at least $100.00 from a linked settlement
account, or
. exchange at least $100.00 worth of shares from another
Stagecoach Fund.

In Table on left: 1 800-222-8222

We will process all requests to buy shares at the first NAV caluclated after the
request and proper payment are received.

SELLING SHARES - Lay out note: converted into tables

The following section explains how you can sell shares that you bought directly
from the Company. If you bought shares through a brokerage or other type of
account, please see the person who sold you the shares.

By Mail:
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-13

. Write a letter stating your account registration, your account number, the
Fund you wish to redeem and the dollar amount ($100.00 or more) of the
redemption you wish to receive (or write "Full Redemption").
. Make sure all the account owners sign the request.
. You may request that redemption proceeds be sent to you by check, by ACH
transfer into a bank account, or by wire ($5000.00 minimum). Please call
Investor Services regarding requirements for linking bank accounts or for
wiring funds. We reserve the right to charge a fee for wiring funds
although it is not currently our practice to do so.
. Signature Guarantees are required for mailed redemption requests over
$5000.00. You can get a signature guarantees at financial institutions such
as a bank or brokerage house. We do not accept notarized signatures.

Mail to: Stagecoach Funds, P.O. Box 7066, San Francisco, CA 94120-9201.

By Phone:
. Call Investor Services to request a redemption of at least $100.00. Be
prepared to provide your account number and Taxpayer Identification Number.
. Unless you have instructed us otherwise, only one account owner needs to
call in redemption requests .
. You may request that redemption proceeds be sent to you by check, by
transfer into a linked bank account, or by wire ($5000.00 minimum). Please
call Investor Services regarding requirements for linking bank accounts or
for wiring funds. We reserve the right to charge a fee for wiring funds
although it is not currently our practice to do so.
. Telephone privileges are automatically made available to you unless you
specifically decline them on your application or subsequently in writing.
. Phone privileges allow us to accept transaction instructions by anyone
representing themselves as the shareholder and who provides reasonable
confirmation of their identity, such as providing the Taxpayer
Identification Number on the account.

Call: 1-800-222-8222

Through Your Selling Agent:
. You may request to sell shares through your selling agent (for example, a
broker) or through a packaged investment product or retirement plan. You
must check with your selling agent to determine any special procedures,
rules or regulations they may have in place governing such transactions.
. Generally speaking, transaction minimums and transaction times still apply.

General Notes for Selling Shares:
. We will process redemption requests we receive in proper form before 1:00
P.M. Pacific Time at the NAV determined on the same business day.
. We determine the NAV each day as of the close of the New York Stock
Exchange.
. We reserve the right to delay payment of a redemption for up to ten days so
that we maybe reasonably certain that investments made by check have been
collected. Payments of redemptions may also be delayed under extraordinary
circumstances or as permitted by the SEC in order to protect remaining
shareholders. Payments of redemptions may also be delayed up to seven days
under normal circumstances, although it is not our policy to delay such
payments.
. Generally, we pay redemption requests in cash, unless the redemption request
is for more than $250,000 or 1% of the net assets of the Fund by a single
shareholder over any ninety-day period. If a request for a redemption is
over these limits it may be to the detriment of existing shareholders.
Therefore, we may pay the redemption in part or in whole in securities of
equal value.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-14

EXCHANGES

You may make exchanges between Stagecoach Funds by phone, in writing or through
a selling agent. You should keep several important factors in mind when you want
to make an exchange:

. You will need to read the Prospectus for the Fund into which you wish to
exchange.
. Every exchange is both a redemption and a purchase. The redemption may
produce a capital gain or loss for federal income tax purposes.

. Since shares of the Equity Index Fund are sold at NAV, exchanges into other
Stagecoach Funds that charge a front-end load will be processed at the
Public Offering Price of the new Fund (less the difference between any load
already paid under the maximum 3% load schedule and the maximum 4.5%
schedule).

. You must exchange at least the minimum first purchase amount of the Fund
you are redeeming, unless your balance has fallen below that amount due to
market conditions. (If you are exchanging from a Money Fund to a load Fund,
the $1,000.00 minimum applies.)

. If you have previously exchanged from a front-end charging Stagecoach Fund
into the Equity Index Fund, and are now exchanging back into the load fund,
it is up to you to inform the Company that you have already paid the load.

. In order to discourage market timing and excessive transaction expenses
that must be borne by other shareholders, we reserve the right to limit or
reject exchange orders. Generally, we will notify you 60 days in advance of
any changes in your exchange privileges.

. You may make exchanges between like share Classes, or between any share
Class and a Money Fund. You may not make exchanges between Class A shares
of a non-Money Fund and Class B shares
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-15

ADDITIONAL SERVICES AND POLICIES

AUTOMATIC PROGRAMS:

These programs help you conveniently purchase or redeem shares each month:

. AUTOSAVER - you need only specify an amount of at least $100.00 and a day
of the month. We will automatically transfer that amount from your linked
bank account each month to purchase additional shares. We will transfer the
amount on or about the day you specify, or on or about the 20/th/ of each
month if you have not specified a day. Please call Investor Services at 1-
800-222-8222 if you wish to change or add linked accounts.

. SYSTEMATIC WITHDRAWAL PROGRAM - Stagecoach will automatically redeem enough
shares to equal a specified dollar amount of at least $100.00 on or about
the 5th business day prior to the end of each month and either send you the
proceeds by check or transfer it into your linked bank account. In order to
set up a Systematic Withdrawal Program, you:

. must have a Fund account valued at $10,000.00 or more;
. you must have dividends reinvested; and
. you may not be simultaneously participating in an AutoSaver.

It generally takes about 10 days to set up either plan once we have received
your instructions. We automatically cancel your program if the linked account
you specified is closed.

DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS

You may choose to do any of the following:

. FUND PURCHASE PLAN - Uses your distributions to buy shares at NAV of
another Stagecoach Fund of the same share class or a Money Fund. You must
have already satisfied the minimum investment requirements of the Fund into
which your distributions are being transferred in order to participate.

. AUTOMATIC CLEARING HOUSE OPTION - Deposits your dividends and capital gains
into any bank account you link to your Fund account if it is part of the
ACH system. If your specified bank account is closed, we will reinvest your
distributions.

. CHECK PAYMENT OPTION - Allows you to receive checks for distributions
mailed to your address of record or to another name and address which you
have specified in written, signature guaranteed instructions. If checks
remain uncashed for six months or are undeliverable by the Post Office, we
will reinvest the distributions at the earliest date possible.

TAXES

We will pass on to you net investment income and net short-term capital gains
earned by the Fund as dividend distributions. These are taxable to you as
ordinary income. Corporate shareholders may be able to exclude a portion of
dividend income their taxable income.

Long-term capital gains earned by the Fund will be passed on to you as capital
gains and will be taxable to you as long-term capital gains. In general,
distributions are taxable when paid. However, distributions declared in October,
November and December and distributed by the following January will be taxable
as if they were paid on December 31.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-16

SPECIAL NOTICES:

MINIMUM ACCOUNT VALUE - Due to the expense involved in maintaining low-balance
accounts, we reserve the right to close accounts that have fallen below the
$.,000.00 minimum balance due to redemptions (as opposed to market conditions).
You will be given an opportunity to make additional investments to prevent
account closure before any action is taken.

STATEMENTS - We mail statements after any account activity, including
transactions, dividends or capital gains, and at year-end. We do not send
statements for Funds held in brokerage, retirement or other types of accounts.
You must check with the administrators of these accounts for statement policies.
The Fund will also send any necessary tax reporting in January, and will send
Annual and Semi-Annual Reports each year.

DEALER CONCESSIONS AND 12B-1 FEES - Stephens Inc. as the Fund's distributor,
compensates selling agents for the sale of Fund shares and is reimbursed through
Rule 12b-1 fees.

STATEMENTS OF ADDITIONAL INFORMATION- Additional information about some of the
topics discussed in this Prospectus as well as details about return
calculations, distribution plans, servicing plans, tax issues and other
important issues are available in the Statement of Additional Information for
the Fund. The Statement of Additional Information should be read along with the
Prospectus and may be obtained free of charge by calling Investor Services at 1-
800-222-8222.

GLASS-STEAGALL ACT - Morrison & Foerster LLP, counsel to the Funds and special
counsel to Wells Fargo Bank, has advised us and Wells Fargo Bank that Wells
Fargo Bank and its affiliates may perform the services contemplated by the
Advisory Contracts and detailed in this Prospectus and the Statement of
Additional Information without violation of the Glass-Steagall Act. Counsel has
pointed out that future judicial or administrative decisions, or future federal
or state laws may prevent these entities from continuing in their roles.

VOTING RIGHTS--All shares of the Funds have equal voting rights and are voted in
the aggregate, rather than by series or class, unless the matter affects only
one series or class. A Fund's shareholder of record is entitled to one vote for
each share owned and fractional votes for each fractional share owned. For a
detailed description of voting rights, see the "Capital Stock" section of the
SAI.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-17

ORGANIZATION AND MANAGEMENT OF THE FUNDS

A number of different companies and divisions perform the various tasks that are
required for a mutual fund company. This section shows how the Funds are
organized, who performs which of the various roles and what compensation they
receive. Further information is available in the Statement of Additional
Information for the Fund.

ABOUT STAGECOACH

The Fund is one of 31 of Stagecoach Funds, Inc. Stagecoach was organized on
September 9, 1991 as a Maryland Corporation.

SHAREHOLDERS

FINANCIAL SERVICES FIRMS AND
THEIR REPRESENTATIVES

Advise current and prospective
shareholders on their Fund investments

<TABLE>
<CAPTION>
DISTRIBUTOR ADMINISTRATOR TRANSFER and SHAREHOLDER
& CO-ADMINISTRATOR DIVIDEND DISBURSING SERVICING AGENT
AGENT
<S> <C> <C> <C>
Stephens Inc. Wells Fargo Bank Wells Fargo Bank Various Agents
111 Center St. 525 Market St. 525 Market St.
Little Rock, AR San Francisco, CA San Francisco, CA

Markets the Funds Manages the Funds' Maintains records of Provide services to
distributes shares, business activities shares and supervises customers
and manages the Funds' the paying of
business activities dividends
</TABLE>

INVESTMENT ADVISOR CUSTODIAN

Wells Fargo Bank Barclays Global Investors, NA
525 Market St. 45 Fremont Street
San Francisco, CA San Francisco, CA

Manages the Funds' investment Provides safekeeping for
activities the Funds' assets

INVESTMENT SUB-ADVISOR

Barclay's Global Fund Advisors
45 Fremont Street
San Francisco CA

Manages the Funds' investment
activities

BOARD OF DIRECTORS
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-18

Supervises the Funds' activities
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-19

In the following sections, the percentages shown are the percentages of the
average daily net assets of the Fund class paid on an annual basis for the
services described. The Statement of Additional Information has more detailed
information about the Investment Advisor and the other service providers and
plans described here.

THE INVESTMENT ADVISOR

Wells Fargo Bank is the advisor for the Fund. Wells Fargo Bank, founded in
1852, is the oldest bank in the Western United States and is one of the largest
banks in the United States. Wells Fargo Bank is a wholly owned subsidiary of
Wells & Fargo and Co., a national bank holding company. As of August 1, 1997
Wells Fargo Bank and its affiliates managed over $57 billion in assets. The
Fund paid Wells Fargo the following for advisory services for the fiscal period
ended March 31, 1997:

Equity Index Fund .34%

THE ADMINISTRATOR

Wells Fargo Bank is the administrator of the Fund. Wells Fargo is paid .04% for
this service.

THE DISTRIBUTOR AND CO-ADMINISTRATOR

Stephens Inc. is the Fund's distributor and co-administrator. Stephens receives
.02% for its role as co-administrator. Stephens also receives all loads, CDSCs
and distribution plan fees. It uses a portion of these amounts to compensate
selling agents for their role in marketing the Fund's shares.

SHAREHOLDER SERVICING PLAN

We have Shareholder Servicing Plans for the Fund. We have agreements with
various shareholder servicing agents to process purchase and redemption
requests, to service shareholder accounts, and to provide other related
services.

For these services we pay as follows:

Equity Index Fund .30%

DISTRIBUTION PLAN

We have adopted a distribution plan for the Fund. The plan is used to defray
all or part of the cost of preparing and distributing prospectuses and
promotional materials.. The fee paid under this plan is as follows:

Equity Index Fund .05%

<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-20

GLOSSARY

ACH--Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank that allows banks to process checks, transfer funds and perform
other tasks.

American Depository Receipts -Receipts for non-U.S. company stocks. The stocks
underlying ADRs are typically held in bank vaults. The ADR's owner is entitled
to any capital gains or dividends. ADRs are one way of owning equity in foreign
companies

Business Day - Any day the New York Stock Exchange is open is a business day for
the Fund.

Capital Appreciation - The increase in the value of a share. See also "total
return".

Capitalization - When referring to the size of a company, capitalization means
the total number of a company's outstanding shares of stock multiplied by their
price per share. This is an accepted method of determining a company's size and
is sometimes referred to as "market capitalization".

Capital Structure--Refers to how a company has raised money to operate. Can
include borrowing or selling stock.

Convertible Debt Securities-Bonds or notes that are exchangeable for common
stock at a set price on a set date or at the election of the holder.

Current Income--Earnings in the form of dividends or interest as opposed to
capital growth. See also "Total Return".

Derivatives- Securities whose values are derived in part from the value of
another security or index. An example is a stock option.

Distributions - Dividends and/or capital gains paid by a Fund on its shares.

Dollar-Denominated--Securities issued by foreign banks, companies or governments
in U.S. dollars.

Emerging Markets - Markets associated with a country that is considered by the
International Finance Corporation to have an "emerging" stock market.

Illiquid Security--A security which can not be easily sold, or can not be sold
without negatively affecting the price.

Liquidity -The ability to quickly sell a security without affecting the price.

Market Timing - The belief that by guessing correctly, an investor can profit by
selling out of the market when prices are high and buying when prices are low.

Equity Index Fund Prospectus (October 9, 1997)-21

NAV is calculated separately for each class of the Fund, and is determined as of
the close of regular trading on each business day the New York Stock Exchange is
open, typically 1:00 p.m. Pacific Time.

Non-Diversified--Any fund that does not have a policy as described under
"diversified" in this glossary.

Options - An option is the right to buy or sell a security based on an agreed
upon price for an agreed upon time. For example, an option may give the holder
of a stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options can also be based
on the movement of an index such as the S&P 500.

Public Offering Price (POP) - the NAV with the sales load added.

Selling Agent - a person who has an agreement with the Fund's distributor that
allows them to sell Fund shares.

Senior Securities - a security that has a priority claim to a company's assets.
For example, a bondholder has the right to receive a share of a company's assets
before a common stock holder does in the event of a company's liquidation.

Shareholder Servicing Agent - anyone appointed by the Fund to maintain
shareholder accounts and records, assist and provide information to shareholders
or perform similar functions.

Signature Guarantee- A guarantee given by a financial institution that has
verified the identity of the maker of the signature.

Statement of Additional Information - A document that supplements and continues
the disclosures made in the prospectus.

Taxpayer Identification Number - Usually the social security number for an
individual or the Employer Identification Number for a corporation.

Total return - The total value of capital growth and the value of all
distributions, assuming that distributions were used to purchase additional
shares of the Fund.

Turnover Ratio - The percentage of the securities held in a Fund's portfolio,
other than short-term securities, that were bought or sold within a year.

U.S. Government obligations--Obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
<PAGE>

Equity Index Fund Prospectus (October 9, 1997)-22

[Back cover]

You may wish to review the following documents:

Statement of Additional Information--supplements and continues the disclosures
made by this Prospectus.

Annual/Semi-Annual Report--provides certain financial information for the most
recent reporting period and each Fund's portfolio of investments.

These are available free of charge by calling 1-800-222-8222 or from
Stagecoach Funds
PO Box 7066
San Francisco, CA 94.20-7066
<PAGE>

STAGECOACH FUNDS, INC.
----------------------
Cross Reference Sheet
---------------------

Form N-1A Item Number
- ---------------------

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

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

<PAGE>

21 Management of the Company
22 Performance Calculations
23 Financial Information

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

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

<PAGE>

Plain English Equity Prospectus (October 8, 1997) 1

Please read this Prospectus and keep 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.

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.

STAGECOACH
EQUITY FUNDS PROSPECTUS

Strategic Growth Fund
Balanced Fund
Diversified Income Fund
Equity Value Fund
Growth Fund
Small Cap Fund

Class A, Class B and Class C

December 15, 1997

Investment Advisor and Administrator
Wells Fargo Bank

Distributor and Co-Administrator
Stephens Inc.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 2

FOR YOUR INFORMATION

What is a prospectus? - A prospectus provides you with the information you need
in order to make an informed investment decision. It states how a Fund operates
and invests its assets.

(icon) Portfolio Holdings: A quick summary of a Fund's key permitted investments
and practices.

(icon) Additional Fund Facts: Provides additional key information for each Fund.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 3

KEY INFORMATION

Summary of Stagecoach Equity Funds: The Funds described in this Prospectus
invest primarily in equity securities except as indicated. As described, they
may seek long-term capital appreciation, total return, current income or a
combination of these objectives. Each Fund is an open-end management investment
company.

Should you consider investing in these Funds? Yes, if:
. you are looking to add equity investments to your portfolio;
. you have an investment horizon of at least three to five years; and
. you are willing to accept the risks of equity investing, including the risk
that share prices may fluctuate significantly.

You should NOT consider investing in these Funds if:
. you are looking for FDIC insurance coverage or guaranteed rates of return;
. you are unwilling or unable to accept that you may lose money on your
investment;
. you are unwilling to accept the risks involved in the securities markets;
and
. you are seeking monthly dividend income.

Who are "You"?: In this Prospectus, "You" means the shareholder.

Dividends: We pay dividends, if any, quarterly for the Funds listed in this
Prospectus except for the Small Cap and Strategic Growth Funds, which pay annual
dividends.

Italics: Throughout this Prospectus, words will appear in italicized print. This
means that the word is defined in the Glossary beginning on page ___.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 3

HOW TO READ THE FINANCIAL HIGHLIGHTS

After each Fund's Investment Objective and Investment Policies, charts are
provided showing important financial information derived from the Funds'
Financial Highlights for the fiscal period ended March 31, 1997. The statements
were audited by KPMG Peat Marwick LLP. Other auditors audited statements for the
Equity Value and Balanced Funds for periods prior to October 1, 1995 and for the
Growth Fund prior to January 1, 1992. Here is an explanation of some terms that
will help you interpret these charts.

NET ASSET VALUE (NAV)--The value of one share of a class of a Fund, excluding
any sales charge. See the Glossary for a fuller definition.

NET ASSETS--The value of the investments in a Fund's portfolio that are
attributable to a particular class of the Fund.

RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS--This ratio is the
result of dividing net investment income (or loss) by average net assets.

AVERAGE COMMISSION RATE PAID--The average brokerage commission paid by a Fund
when it buys or sells shares of securities. The rate is expressed on a per share
basis and the amount paid may vary depending upon trading practices or other
conditions.

TOTAL RETURN--The annual return on an investment that includes any appreciation
or decline in value and all dividends and interest.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 5

Summary of Fund Expenses

SHAREHOLDER TRANSACTION EXPENSES
CLASS A SHARES

STRATEGIC DIVERSIFIED EQUITY SMALL
GROWTH BALANCED INCOME VALUE GROWTH CAP
FUND/1/ FUND FUND FUND FUND FUND/1/
----------- --------- ------------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchase (as a percentage of
offering price)................ 5.25% 5.25% 5.25% 5.25% 5.25% 5.25%
Maximum Sales Charge on
Reinvested Dividends........... None None None None None None
Maximum Sales Charge Imposed on
Redemptions.................... None None None None None None
Exchange Fees.................... None None None None None None
</TABLE>

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

<TABLE>
<CAPTION>
SMALL
STRATEGIC BALANCED DIVERSIFIED EQUITY GROWTH CAP
GROWTH FUND/1,2/ FUND INCOME FUND VALUE FUND FUND FUND/1,2/
----------------- --------- ------------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Management Fee............................ 0.50% 0.60% 0.50% 0.50% 0.50% 0.60%
Rule 12b-1 Fee............................ 0.10% 0.10% 0.05% 0.10% 0.05% 0.10%
Other Expenses (after waivers or
reimbursements)/3/...................... 0.79% 0.35% 0.55% 0.45% 0.63% 0.30%
---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING EXPENSES
(after waivers or reimbursements)/4/.... 1.39% 1.05% 1.10% 1.05% 1.18% 1.00%
==== ==== ==== ==== ==== ====
</TABLE>

_________________________

/1/ Other mutual funds may invest in the Capital Appreciation and Small Cap
Master Portfolios. Such other funds' expenses and, accordingly, their
investment returns may differ from those of the corresponding Funds.
/2/ Summarizes expenses charged at the Master Portfolio level as well as at the
Fund level.
/3/ Other Expenses (before waivers or reimbursements) would be 1.00%, 0.67%,
0.71%, 0.50%, 0.66% and 1.00% for such shares of the Strategic Growth
Balanced, Diversified Income, Equity Value, Growth and Small Cap Funds,
respectively.
/4/ Total Fund Operating Expenses (before waivers or reimbursements) would be
1.60%, 1.37%, 1.26%, 1.10%, 1.19% and 1.70% for such shares of the
Strategic Growth, Balanced, Diversified Income, Equity Value, Growth and
Small Cap Funds, respectively.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 6

EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following
expenses on a $1,000 investment in
Class A shares of the following
Funds, assuming a 5% annual return
and redemption at the end of each
time period indicated:

Strategic Growth Fund............... $66 $94 $125 $211
Balanced Fund....................... $63 $84 $107 $174
Diversified Income Fund............. $63 $86 $110 $179
Equity Value Fund................... $63 $84 $107 $174
Growth Fund......................... $64 $88 $114 $188
Small Cap Fund...................... $62 $83 $105 $169
</TABLE>

SUMMARY OF FUND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES
CLASS C SHARES

<TABLE>
<CAPTION>
Small Aggressive
Cap Growth
Fund Fund
------ ----------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchase (as a percentage of offering price)..... None None
Maximum Sales Charge on Reinvested Dividends..................................... None None
Maximum Sales Charge Imposed on Redemptions
Redemption during year 1....................................................... 1.00% 1.00%
Redemption after year 1........................................................ 0.00% 0.00%
Redemption Fees................................................................ None None
Exchange Fees.................................................................... None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES /1/

(as a percentage of average net assets)

<TABLE>
<CAPTION>
Small Aggressive
Cap Growth
Fund Fund
------ ----------
<S> <C> <C>
Management Fee................................................................... 0.60% 0.50%
Rule 12b-1 Fee................................................................... 0.75% 0.75%
Other Expenses (after waivers or reimbursements)/2/.............................. 0.75% 0.75%
---- ----
TOTAL FUND OPERATING EXPENSES (after waivers or reimbursements)/3/............... 2.10% 2.00%
==== ====
</TABLE>

- ------------------------
/1/ Includes expenses charged to the Fund and the Master Portfolio.
/2/ Other Expenses (before waivers or reimbursements) would be 1.54% for the
Small Cap Fund.
/3/ Total Fund Operating Expenses (before waivers or reimbursements) would be
2.89% for the Small Cap Fund.

EXAMPLE OF EXPENSES

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

1 Year 3 Year 5 Year 10 Year
------ ------ ------ -------
<S> <C> <C> <C> <C>
Small Cap Fund........................... $31 $66 $113 $243
Aggressive Growth........................ $31 $63 $108 $233
</TABLE>

You would pay the following expenses on a $1,000 investment in Class C shares of
a Fund, assuming a 5% annual return and no redemption:

1 Year 3 Year 5 Year 10 Year
------ ------ ------ -------
<S> <C> <C> <C> <C>
Small Cap Fund........................... $21 $66 $113 $243
Aggressive Growth........................ $21 $63 $108 $233
</TABLE>
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 7

SHAREHOLDER TRANSACTION EXPENSES
CLASS B SHARES

<TABLE>
<CAPTION>
SMALL
AGGRESSIVE BALANCED DIVERSIFIED EQUITY VALUE GROWTH AND CAP
GROWTH FUND/1/ FUND INCOME FUND FUND INCOME FUND FUND/1/
--------------- --------- ------------ ------------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed on
Purchase (as a
percentage of offering price)........ None None None None None None
Maximum Sales Charge on Reinvested
Dividends............................. None None None None None None
Maximum Sales Charge................... 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Imposed on Redemptions
Exchange Fees.......................... None None None None None None
</TABLE>

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

<TABLE>
<CAPTION>
SMALL
AGGRESSIVE BALANCED DIVERSIFIED EQUITY VALUE GROWTH AND CAP
GROWTH FUND/1,2/ FUND INCOME FUND FUND INCOME FUND FUND/1,2/
---------------- -------- ----------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Management Fee................... 0.50% 0.60% 0.50% 0.50% 0.50% 0.60%
Rule 12b-1 Fee................... 0.75% 0.75% 0.70% 0.75% 0.70% 0.75%
Other Expenses (after waivers or
reimbursements)/3/............. 0.79% 0.35% 0.54% 0.45% 0.63% 0.30%
---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING
EXPENSES (after waivers or
reimbursements)/4/............. 2.04% 1.70% 1.74% 1.70% 1.83% 1.65%
==== ==== ==== ==== ==== ====
</TABLE>

/1/ Other mutual funds may invest in the Capital Appreciation and Small Cap
Master Portfolios. Such other funds' expenses and, accordingly, investment
returns may differ from those of the corresponding Funds.
/2/ Summarizes expenses charged at the Master Portfolio level as well as at the
Fund level.
/3/ Other Expenses (before waivers or reimbursements) would be 1.00%, 0.47%,
0.88%, 0.47%, 0.83% and 1.00% for Class B shares of the Aggressive Growth,
Balanced, Diversified Income, Equity Value, Growth and Small Cap Funds,
respectively.
/4/ Total Fund Operating Expenses (before waivers or reimbursements) would be
2.25%, 1.82%, 2.08%, 1.72%, 2.03% and 2.35% for Class B shares of the
Aggressive Growth, Balanced, Diversified Income, Equity Value, Growth and
Small Cap Funds, respectively.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 8

EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment in Class B shares of the
following Funds, assuming (A) a 5% annual
return and (B) redemption at the end of each
time period indicated:

Aggressive Growth............................ $71 $94 $130 $205
Balanced Fund................................ $67 $84 $112 $168
Diversified Income Fund...................... $68 $85 $114 $173
Equity Value Fund............................ $67 $84 $112 $168
Growth Fund.................................. $69 $88 $119 $182
Small Cap Fund............................... $68 $85 $115 $173

You would pay the following expenses on a
$1,000 investment in Class B shares of a
Fund, assuming a 5% annual return and no
redemption: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Aggressive Growth............................ $21 $64 $110 $205
Balanced Fund................................ $17 $54 $ 92 $168
Diversified Income Fund...................... $18 $55 $ 94 $173
Equity Value Fund............................ $17 $54 $ 92 $168
Growth Fund.................................. $19 $58 $ 99 $182
Small Cap Fund............................... $18 $55 $ 95 $173
</TABLE>
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 9

Strategic Growth Fund

Managers: Jon Hickman (since 1/93)
- ---------
Steve Enos (since 9/96)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Strategic Growth Fund seeks to provide investors with an above-average
level of long-term capital appreciation.

INVESTMENT POLICIES

We seek an above-average level of capital appreciation for investors
willing to assume above-average risk by actively managing a broadly diversified
equity portfolio of companies expected to have strong growth in revenues,
earnings and assets. We select a range of companies from different industry
groups, with the majority of our holdings consisting of established growth
companies, turnaround or acquisition candidates, or attractive larger
capitalization companies.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. in at least 20 common stock issues spread across a number of different
industry groups;
. at least 65% of our assets in common stocks and securities which are
convertible into common stocks that we believe have better-than-average
prospects to increase in value;
. up to 40% of our assets in initial public offerings, and/or small and newer
equity issues;
. more than 50% of our assets in companies whose market capitalization at the
time we buy their stock is within the capitalization range of the companies
listed on the Russell MidCap Index. (As of July, 1997 this range was from
$1.1 billion to $8 billion. The range is expected to change frequently);
. up to 15% of our portfolio in emerging markets;
. up to 15% of our assets in call and put options for certain securities; and

We may invest in preferred stock or investment-grade debt securities that
are convertible into common stock, and in money market instruments to maintain
liquidity, to meet expected redemption requests or as a defensive measure when
we believe that the basic investment strategy is not in the best interest of
shareholders. Generally, these defensive investments are temporary and will not
exceed 30% of total assets.

IMPORTANT RISK FACTORS

For general information on risk, please see page ___.

In addition to these general risks, there are particular risks that this Fund
may present. Because we may invest in companies that:
. pay low or no dividends;
. have smaller market capitalizations;
. have less market liquidity;
. have no or relatively short operating histories or are newly public;
. have aggressive capital structures, including high debt levels; or
. are involved in rapidly growing or changing industries and/or new
technologies,
the Fund's share price may rise and fall more than the share prices of other
funds. Investments in foreign and emerging markets may also present special
risks, including currency, political, diplomatic, regulatory
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 10

and liquidity risks. In addition, our active trading investment strategy may
result in a higher-than-average portfolio turnover ratio, increased trading
expenses, and short-term capital gains that pass through to the Fund's
shareholders.

ADDITIONAL FUND FACTS

We have an annual dividend policy. You should not invest in the Fund if you are
seeking current income.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 11

FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period is as follows:

<TABLE>
<CAPTION>
STRATEGIC
GROWTH FUND /1/
-----------------------------------------------
Class A
-------------------------------------------
Six Months Six Months Nine Months
Ended Ended Ended
Sept 30, March, 31 Sept. 30,
1997 1997/3/ 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.40 $ 17.75
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.07) (0.05)
Net realized and unrealized gain (loss) on investments (3.61) 1.70
TOTAL FROM INVESTMENT OPERATIONS (3.68) 1.65
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain 0.00 0.00
TOTAL FROM DISTRIBUTIONS 0.00 0.00
NET ASSET VALUE, END OF PERIOD $ 15.72 $ 19.40

TOTAL RETURN (NOT ANNUALIZED) (18.97)% 9.85%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $ 29,122 $26,902

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.26% /2/ 1.23% /2/
Ratio of net investment income(loss) to average net
assets (0.97)%/2/ (0.79)%/2/
Portfolio turnover N/A N/A
Average commission rate paid (9) N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 1.38% /2/ 1.60% /2/
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses (1.09)%/2/ (1.16)%/2/
</TABLE>

/1/ The Fund commenced operations on March 5, 1996.
/2/ This ratio includes income and expenses allocated from the Master Portfolio.
/3/ The Fund changed its fiscal year end to March 31.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 12

FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period is as follows:

<TABLE>
<CAPTION>
STRATEGIC
GROWTH FUND /1/
--------------------------------------------------------
Class B
--------------------------------------------------------
(Unaudited)
Six Months Six Months Period
Ended Ended Ended
Sept 30 March, 31 Sept. 30,
1997 1997 /3/ 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 23.86 $ 21.90
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.15) (0.10)
Net realized and unrealized gain (loss) on investments (4.45) 2.06
TOTAL FROM INVESTMENT OPERATIONS (4.60) 1.96
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain 0.00 0.00
TOTAL FROM DISTRIBUTIONS 0.00 0.00
NET ASSET VALUE, END OF PERIOD $ 19.26 $ 23.86

TOTAL RETURN (NOT ANNUALIZED) (19.28)% 9.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $ 14,509 $14,544

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.94% /2/ 1.91% /2/
Ratio of net investment income (loss)to average net assets (1.65)%/2/ (1.45)%/2/
Portfolio turnover N/A N/A
Average commission rate paid N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 2.04% /2/ 2.29% /2/
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses (1.75)%/2/ (1.83)%/2/
</TABLE>

/1/ The Fund commenced operations on March 5, 1996.
/2/ This ratio includes income and expenses allocated from the Master Portfolio.
/3/ The Fund changed its fiscal year end to March 31.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 13

Balanced Fund

Portfolio Managers: Rex Wardlaw (since 2/97)
- -------------------
Tamyra Thomas (since 9/96)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Balanced Fund seeks to provide investors with both capital
appreciation and current income resulting in a high total investment return
consistent with prudent investment risk and a balanced investment approach.

INVESTMENT POLICIES

We pursue a balanced and diversified investment approach by investing
generally between 30% and 70% of our assets in common stocks and the remainder
in fixed-income securities. By actively managing both the equity and fixed-
income portfolios and the allocation mix, we hope to achieve a high total
return, including share Growth distributions. We invest the equity portion of
our portfolio according to the same value strategy discussed in the Equity Value
Fund section on page ___ of this Prospectus. We invest the fixed-income portion
of our portfolio in corporate bonds, commercial paper, and mortgage-backed and
asset-backed securities based on their relatively greater stability of income
and principal.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. between 30% and 70% of our assets in common stocks, with the remainder
invested in fixed-income securities.

The equity portion of the portfolio, under normal market conditions, is invested
in:
. both large, well-established companies and smaller companies with market
capitalization exceeding $50 million; and
. in foreign companies through American Depository Receipts and similar
instruments, up to 25% of total assets.

We invest the fixed-income portion of our portfolio in:
. commercial paper rated "A-2" (S&P) or "Prime-2" (Moody's) or better;
. corporate debt securities rated "BBB" (S&P) or "Baa" (Moody's) or better;
. mortgage-backed and asset-backed securities rated "AA" (S&P) or "Aa"
(Moody's) or better.

We may also invest in zero-coupon bonds.

IMPORTANT RISK FACTORS

For general information on risk, please see page ___.

Historically, stock and bond markets have often had different cycles, with one
asset class rising when the other is falling. A balanced objective attempts to
reduce the volatility associated with investing in a single
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 14

market. There is no guarantee, however, that market cycles will move in
opposition to one another or that a balanced investment program will
successfully reduce volatility. Also, stocks of smaller and medium-sized
companies may be more volatile than larger company stocks. Investments in
foreign markets may also present special risks, including currency, political,
diplomatic, regulatory and liquidity risks.

ADDITIONAL FUND FACTS

Tamyra Thomas is the manager of the income portion of the Fund, Rex Wardlaw is
the manager of the equity portion. They jointly determine the portfolio's asset
allocation.
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 15

<TABLE>
<CAPTION>
BALANCED FUND /1/
------------------------------------------------------------------------------
Class A
------------------------------------------------------------------------------
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
March 31, Sept. 30, Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.46 $ 11.84 $ 11.67 $ 12.71 $ 11.18 $ 10.80
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.19 0.36 0.46 0.43 0.44 0.42
Net realized and unrealized gain (loss) on 0.74 0.89 0.68 (0.13) 1.72 0.53
investments
TOTAL FROM INVESTMENT OPERATIONS 0.93 1.25 1.14 0.30 2.16 0.95
LESS DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.35) (0.47) (0.46) (0.43) (0.43)
Distributions from net realized gain (0.19) (1.28) (0.50) (0.88) (0.20) (0.14)
TOTAL FROM DISTRIBUTIONS (0.38) (1.63) (0.97) (1.34) (0.63) (0.57)
NET ASSET VALUE, END OF PERIOD $ 12.01 $ 11.46 $ 11.84 $ 11.67 $ 12.71 $ 11.18

TOTAL RETURN (NOT ANNUALIZED) 8.15 % 10.51 % 10.62 % 2.30 % 19.83 % 9.03 %
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $31,632 $32,640 $89,034 $108,290 $104,434 $65,226
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.05 % 1.31 % 1.03 % 1.09 % 1.01 % 1.02 %
Ratio of net investment income to average net
assets 3.20% 2.98% 4.05% 3.55% 3.62% 3.76%
Portfolio turnover 43% 131% 90% 35% 60% 49%
Average commission rate paid/3/ $0.0802 $0.0603 N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 1.30 % 1.48 % 1.05 % 1.11 % 1.06 % 1.10 %
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 2.95 % 2.81 % 4.03 % 3.53 % 3.57 % 3.68 %
</TABLE>

FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period is as follows:
- --------------------------------------------------------------------------------
/1/ The Fund operated as a series of Pacifica Funds Trust from its commencement
of operations until it was reorganized as a series of Stagecoach Funds,
Inc. on September 6, 1996. In conjunction with the reorganization,
existing Investor Shares were converted into Class A shares of the Fund.
Prior to April 1, 1996, the Fund was advised by First Interstate Capital
Management, Inc. ("FICM") In connection with the merger of First
Interstate Bancorp into Wells Fargo & Co. on April 1, 1996, FICM was
renamed Wells Fargo Investment Management, Inc.
/2/ The Class B shares commenced operations on September 6, 1996.
/3/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 16

FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period is as follows:

<TABLE>
<CAPTION>
BALANCED FUND/1/
------------------------------------------------------
Class B
------------------------------------------------------

Period Six Months Year
Ended Ended Ended
Sept. 30, March 31, Sept. 30,
1997 1997 1996/2/
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.24 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) * 0.08 0.00
Net realized and unrealized gain (loss) on investments * 0.72 0.24
TOTAL FROM INVESTMENT OPERATIONS 0.80 0.24
LESS DISTRIBUTIONS:
Dividends from net investment income (0.08) 0.00
Distributions from net realized gain (0.17) 0.00
TOTAL FROM DISTRIBUTIONS (0.25) 0.00
NET ASSET VALUE, END OF PERIOD $ 10.79 $ 10.24

TOTAL RETURN (NOT ANNUALIZED) 7.84% 2.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $ 297 $ 2

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.70% 0.00%
Ratio of net investment income to average net
assets 2.48% 3.09%
Portfolio turnover 43% 131%
Average commission rate paid /3/ $0.0802 $ 0.0603
- -----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 7.85% 0.66%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses (3.67)% 2.43%
</TABLE>

/1/ The Fund operated as a series of Pacifica Funds Trust from its commencement
of operations until it was reorganized as a series of Stagecoach Funds,
Inc. on September 6, 1996. In conjunction with the reorganization, existing
Investor Shares were converted into Class A shares of the Fund. Prior to
April 1, 1996, the Fund was advised by First Interstate Capital Management,
Inc. ("FICM") In connection with the merger of First Interstate Bancorp
into Wells Fargo & Co. on April 1, 1996, FICM was renamed Wells Fargo
Investment Management, Inc.
/2/ The Class B shares commenced operations on September 6, 1996.
/3/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 17

Diversified Income Fund

Portfolio Managers: Allen Wisniewski (since 11/92)
- -------------------
Rex Wardlaw (since 2/97)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Diversified Income Fund seeks to earn current income and a growing
stream of income over time, consistent with the preservation of capital.

INVESTMENT POLICIES

We actively manage a diversified portfolio of income-producing equity
and fixed-income securities. In selecting stocks we emphasize dividend histories
and trends. We also look for companies that have a strong earnings growth trend
and that we believe have above-average prospects for future earnings growth. We
also look for stocks that are trading at low price-to-earnings ratios, as
measured against either the stock market as a whole or against a particular
stock's own price history.
We may also invest in:
. U.S. Government obligations;
. a broad range of debt instruments including bonds and other debt
obligations of domestic corporations;
. U.S. dollar-denominated debt instruments of foreign issuers, including
foreign governments and companies; and
. various asset-backed securities.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. at least 50% of our total assets in equity securities;
. at least 90% of our equity portfolio in issues of companies with market
capitalization of greater than $1 billion;
. up to 25% of our assets in foreign companies through American Depository
Receipts and similar instruments;
. up to 15% of our assets in emerging markets;
. most of our debt portfolio in companies and government entities located
within the United States;
. all of our nonconvertible debt portfolio in instruments rated at the time
of acquisition in the four highest credit categories by one or more
nationally recognized ratings organizations, or in unrated instruments
determined by Wells Fargo Bank as being of comparable quality; and
. no more than 20% of our debt portfolio invested in instruments rated at the
time of purchase in the lowest of these four rating categories.

We may also invest in the stocks of medium- to smaller-size companies that we
believe have the potential to produce high levels of future earnings growth, and
that we believe are undervalued. We may temporarily hold assets in cash or in
money market instruments, including U.S. Government obligations, shares of other
mutual funds and repurchase agreements, or make other short-term investments,
either to maintain liquidity or for short-term defensive purposes when we
believe it is in the best interest of shareholders to do so.

IMPORTANT RISK FACTORS

For general information on risk, please see page ______.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 18

Stocks selected for their high dividend yields may be more sensitive to changes
in interest rates than other stocks. Also, stocks of smaller and medium-sized
companies selected for their earnings growth potential may be more volatile than
larger company stocks. Investments in foreign and emerging markets may also
present special risks, including currency, political, diplomatic, regulatory and
liquidity risks.

ADDITIONAL FUND FACTS

We have a quarterly dividend policy. You should not invest in the Fund if you
are looking for monthly income, nor should you invest if you are looking for
higher than average levels of capital growth.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 19

FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period is as follows:

<TABLE>
<CAPTION>
DIVERSIFIED INCOME FUND
----------------------------------------------------------------------------
Class A
----------------------------------------------------------------------------
Six Months Nine Month
Ended Ended Year Ended Year Ended Year Ended Period Ended
March 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997/3/ 1996/1/ 1995 1994 1993 1992/2/
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.73 $ 13.34 $ 10.76 $ 11.08 $ 10.29 $ 10.00

INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.14 0.25 0.35 0.33 0.30 0.02
Net realized and unrealized gain
(loss) on investments 0.64 1.39 2.86 (0.32) 0.96 0.29
TOTAL FROM INVESTMENT OPERATIONS 0.78 1.64 3.21 0.01 1.26 0.31
LESS DISTRIBUTIONS:
Dividends from net investment income (0.14) (0.25) (0.35) (0.33) (0.30) (0.02)
Distributions from net realized gain (0.85) 0.00 (0.28) 0.00 (0.17) 0.00
TOTAL FROM DISTRIBUTIONS (0.99) (0.25) (0.63) (0.33) (0.47) (0.02)
NET ASSET VALUE, END OF PERIOD $ 14.52 $ 14.73 $ 13.34 $ 10.76 $ 11.08 $ 10.29

TOTAL RETURN (NOT ANNUALIZED) 5.25% 12.35% 30.17% 0.08% 12.33% 3.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $154,502 $134,648 $79,977 $45,178 $26,704 $ 1,379

RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.10% 1.10% 1.10% 1.06% 0.46% 0.00%
Ratio of net investment income to average net
assets 1.91% 2.57% 3.02% 3.16% 3.51% 4.09%
Portfolio turnover 33% 43% 70% 62% 46% 1%
Average commission rate paid /3/ $ 0.0780 $ 0.0793 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 1.17% 1.26% 1.31% 1.34% 1.66% 3.49%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 1.84% 2.41% 2.81% 2.88% 2.31% 0.60%

* Per share data based upon average monthly shares
outstanding
</TABLE>

/1/ The Fund changed its fiscal year end from December 31 to September 30.
/2/ The Fund commenced operations on November 18, 1992.
/3/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
/4/ The Fund changed its fiscal year end to March31
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 20

DIVERSIFIED INCOME FUND
FOR A CLASS B SHARE OUTSTANDING

<TABLE>
<CAPTION>
DIVERSIFIED
INCOME FUND
-------------------------------------------------------------------
Class B
--------------------------------------

Ended Ended Year
Ended
March Sept. 30, Dec. 31,
31,
1997/3/ 1996 /1/ 1995
1996 1995
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>

NET ASSET VALUE, BEGINNING OF PERIOD $ 13.79 $ 12.49 $ 10.00

INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.17 0.20
Net realized and unrealized gain 0.60 1.30 2.75
(loss) on investments
TOTAL FROM INVESTMENT OPERATIONS 0.68 1.47 2.95
LESS DISTRIBUTIONS:
Dividends from net investment income (0.08) (0.17) (0.20)
Distributions from net realized gain (0.79) 0.00 (0.26)
TOTAL FROM DISTRIBUTIONS (0.87) (0.17) (0.46)

NET ASSET VALUE, END OF PERIOD $ 13.60 $ 13.79 $ 12.49

TOTAL RETURN (NOT ANNUALIZED) 4.91% 11.76% 29.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $32,632 $17,045 $ 5,339
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net 1.74% 1.74% 1.73%
assets
Ratio of net investment income to
average net
assets 1.29% 2.01% 2.40%
Portfolio turnover 33% 43% 70%
N/A
Average commission rate paid /2/ $0.0780 $0.0793
- ---------------------------------------------------------------------------------
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses 1.87% 2.08% 2.57%
Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses 1.16% 1.67% 1.56%
</TABLE>

/1/ The Fund changed its fiscal year end from December 31 to September 30.

/2/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.

/3/ The Fund changed its fiscal year end to March 31.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 21

Equity Value Fund

Portfolio Managers: Allen Wisniewski (since 9/96)
- -------------------
Rex Wardlaw (since 1/97)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Equity Value Fund seeks to provide investors with long-term capital
appreciation.

INVESTMENT POLICIES

We seek long-term capital appreciation by investing in a diversified
portfolio composed primarily of equity securities that we believe are selling
for less than their intrinsic or true value and that generally exhibit the
following characteristics: above-average financial strength, a strong position
in their industry and a history of steady profit growth. We use both
quantitative and qualitative analysis to identify possible investments.
Dividends are a secondary consideration when selecting stock. We may purchase
particular stocks when we believe that a history of strong dividends may
increase their market value.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. primarily in common stocks of both large, well-established companies and
smaller companies with market capitalizations exceeding $50 million;
. in debt instruments that may be converted into the common stock of both U.S.
and foreign companies; and
. up to 25% of our assets in foreign companies through American Depository
Receipts and similar instruments.

We may also purchase convertible securities with the same characteristics as
common stock, as well as in preferred stock and warrants. We may temporarily
hold assets in cash or in money market instruments, including U.S. Government
obligations, shares of other mutual funds and repurchase agreements, or make
short-term investments, either to maintain liquidity or for short-term defensive
purposes when we believe it is in the best interests of shareholders.

IMPORTANT RISK FACTORS:

For general risk information, please see page _____.

Stocks of smaller and medium-sized companies may be more volatile than larger
company stocks. Investments in foreign markets may also present special risks,
including currency, political, diplomatic, regulatory and liquidity risks.

ADDITIONAL FUND FACTS: Our strategy of buying attractive stocks which appear to
be selling for less than their intrinsic value is commonly known as a "value"
strategy.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 22

EQUITY VALUE FUND/1/
FOR A CLASS A SHARE OUTSTANDING

<TABLE>
<CAPTION>
PERIOD
ENDED
YEAR ENDED SEPTEMBER 30, SEPT. 30,
------------------------
SIX MONTHS 1996 1995 1994 1993 1992 1991 1990/2/
---------- -------- --------- --------- --------- --------- ------ ---------
ENDED
MARCH 31,
1997
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value -- beginning of period.... $ 12.66 $ 13.27 $ 12.36 $ 13.17 $ 10.73 $ 10.45 $ 8.48 $ 10.00
Income from investment operations:
Net investment income(loss)............... 0.08 0.20 0.24/3/ 0.20/3/ 0.21/3/ 0.20/3/ 0.28 0.08
Net realized and unrealized gain
(loss) on investments)................... 1.89 1.60 1.63/3/ 0.74/3/ 2.75/3/ 0.49/3/ 1.98 (1.60)

------- ------- -------- -------- -------- -------- ------- ------
Total from investment operations.......... 1.97 1.80 1.87 0.94 2.96 0.69 2.26 (1.52)
------- ------- -------- -------- -------- -------- ------- ------
Less Distributions:
Dividends from net investment
income................................... (0.08) (0.19) (0.25) (0.21) (0.23) (0.22) (0.29) --
Distributions from net realized gain...... (0.12) (2.22) (0.71) (1.54) (0.29) (0.19) -- --
------- ------- -------- -------- -------- -------- ------- ------
Total from distributions.................. (0.20) (2.41) (0.96) (1.75) (0.52) (0.41) (0.29) --
------- ------- -------- -------- -------- -------- ------- ------
Net asset value -- end of period.......... $ 14.43 $ 12.66 $ 13.27 $ 12.36 $ 13.17 $ 10.73 $ 10.45 $ 8.48
======= ======= ======== ======== ======== ======== ======= =======
Total return (not annualized)............. 15.63% 14.27% 16.58% 7.49% 28.22% 6.81% 27.05% (15.20)%

Ratios/supplemental data:
Net assets, end of period (000)........... $20,798 $18,453 $170,406 $168,852 $140,551 $ 92,915 $68,412 $26,100
Ratios to average net assets
(annualized):
Ratio of expenses to average
net assets............................... 1.05% 1.18% 0.96% 0.99% 0.98% 1.02% 0.98% 0.91%

Ratio of net investment income (loss)
to average net assets.................... 1.14% 1.73% 1.97% 1.60% 1.73% 1.86% 2.69% 3.38%

Portfolio turnover rate................... 45% 91% 75% 41% 82% 78% 36% 21%

Average commission rate paid/4/........... $0.0800 $0.0558 -- -- -- -- -- --
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses................................. 1.12% 1.22% 0.98% 1.01% 0.99% 1.02% 1.11% 1.86%

Ratio of net investment income (loss)
to average net assets prior to waived
fees and reimbursed expenses............. 1.07% 1.69% 1.95% 1.58% 1.72% 1.86% 2.56% 2.43%
</TABLE>
_________________________

/1/ The Fund operated as a series of Pacifica Funds Trust
from its commencement of operations until it was
reorganized as a series of the Company on September 6,
1996. In connection with the reorganization, existing
Investor Shares were converted into Class A shares of
the Fund. Prior to April 1, 1996, the Fund was advised
by First Interstate Capital Management, Inc. ("FICM").
In connection with the merger of First Interstate
Bancorp into Wells Fargo & Company on April 1, 1996,
FICM was renamed Wells Fargo Investment Management,
Inc.

/2/ The predecessor fund commenced operations on July 2,
1990.

/3/ Per share data are based upon average monthly shares
outstanding.

/4/ For fiscal years beginning on or after September 1,
1995, a fund is required to disclose its average
commission rate per share for security trades on which
commissions are charged. This amount may vary from
period to period and fund to fund depending on the mix
of trades executed in various markets where trading
practices and commission rate structures may differ.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 23

EQUITY VALUE FUND
FOR A CLASS B SHARE OUTSTANDING

<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
MARCH 31, SEPT. 30,
1997 1996/1/
---------- ---------
<S> <C> <C>
Net asset value, beginning of period......................................... $ 10.34 $ 10.00
Income from investment operations:
Net investment income (loss)................................................. 0.01 0.00
Net realized and unrealized gain (loss) on investments....................... 1.57 0.34
-------- --------
Total from investment operations............................................. 1.58 0.34
Less distributions:
Dividends from net investment income......................................... (0.01) 0.00
Distributions from net realized gain......................................... (0.10) 0.00
-------- --------
Total from distributions..................................................... (0.11) 0.00
-------- --------
Net asset value, end of period............................................... $ 11.81 $ 10.34
======== ========
Total return (not annualized)................................................ 15.31% 3.40%
Ratios/supplemental data:
Net assets, end of period (000).............................................. $ 2,542 $ 0
Ratios to average net assets (annualized):
Ratio of expenses to average net assets...................................... 1.70% 0.00%
Ratio of net investment income (loss) to average net assets.................. 0.34% 1.83%
Portfolio turnover........................................................... 45% 91%
Average commission rate paid/2/.............................................. $ 0.0800 $ 0.0558
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses................................................ 2.19% 0.00%
Ratio of net investment income to average net assets prior to
waived fees and reimbursed expenses......................................... (0.15)% 1.83%
</TABLE>

_________________________

/1/ Class B shares of the Fund commenced operations on September 6, 1996.

/2/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may vary
from period to period and fund to fund depending on the mix of trades
executed in various markets where trading practices and commission
rate structures may differ.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 24

Growth Fund

Portfolio Managers: Brian Mulligan (since 10/95)
- -------------------
Kerri Hill (since 2/97)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE
The Growth Fund seeks to earn current income and achieve long-term capital
appreciation by investing primarily in common stocks and preferred stocks and
debt securities that are convertible into common stocks.

INVESTMENT POLICIES

We actively manage a diversified portfolio of common stock and other
equities. In selecting stocks, we emphasize past and potential future dividends.
We look for companies that have a strong earnings growth trend that we believe
have above-average prospects for future growth, and that have historically paid
above-average dividends. We especially look for common stocks that are trading
at low price-to-earnings ratios, as measured against either the stock market as
a whole or against the stock's own price history.

We may also invest in the stocks of medium- to smaller-size companies that
we believe have the potential to produce high levels of future earnings growth
or when we believe the stock is undervalued.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:
. at least 65% of our total assets in equity securities, including common and
preferred stock, and securities convertible into common stocks;

. at least 65% of our total assets in income producing securities;

. up to 50% of our assets in smaller- and medium-sized companies, with the
remainder in larger companies;

. up to 25% of our assets in American Depository Receipts and similar
instruments; and

. up to 15% of our assets in emerging markets.

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make short-term investments, either to maintain
liquidity or for short-term defensive purposes when we believe it is in the best
interest of shareholders to do so.

IMPORTANT RISK FACTORS

Please see the general risks section beginning on page ____.

Smaller and medium-sized companies selected for their earnings growth potential
may be more volatile than larger company stocks. Investments in foreign and
emerging markets may also present special risks, including currency, political,
diplomatic, regulatory and liquidity risks.

ADDITIONAL FUND FACTS

We have a quarterly dividend policy. This Fund would not be suitable for
investors requiring monthly income.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 25
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 26

GROWTH FUND
FOR A CLASS A SHARE OUTSTANDING

<TABLE>
<CAPTION>
PERIOD PERIOD YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MAR. 31, SEPT. 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1997/5/ 1996/1/ 1995 1994 1993 1992 1991/2/ 1990/3/
----------- ------------ ----------- ------------ ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................... $ 17.91 $ 17.26 $ 14.10 $ 14.75 $ 13.88 $ 12.84 $ 10.29 $ 10.00
Income from investment
operations:
Net investment income
(loss)...................... 0.06 0.07 0.19 0.22 0.23 0.27 0.41 0.26
Net realized and unrealized
gain (loss) on investments.. 1.34 2.00 3.87 (0.27) 0.93 1.44 2.14 0.03
--------- -------- --------- --------- --------- ------- -------- --------
Total from investment
Operations................. 1.40 2.07 4.06 (0.05) 1.16 1.71 2.55 0.29
Less Distributions:
Dividends from net
investment income.......... (0.06) (0.07) (0.19) (0.22) (0.23) (0.27) 0.00 0.00
Distributions from net
realized gain.............. (0.05) (1.35) (0.71) (0.38) (0.06) (0.40) 0.00 0.00
--------- -------- --------- --------- --------- ------- -------- --------
Total distributions.......... (0.11) (1.42) (0.90) (0.60) (0.29) (0.67) 0.00 0.00
Net asset value, end of
period..................... $ 19.20 $ 17.91 $ 17.26 $ 14.10 $ 14.75 $ 13.88 $ 12.84 $ 10.29
========= ======== ========= ========= ========= ======= ======== ========
Total return (not
annualized)................. 7.86% 12.45% 28.90% (0.29)% 8.44% 13.45% 24.77% 2.90%
Ratios/supplemental data:
Net assets, end of period.... $ 283,4 $254,498 $ 178,48 $ 113,525 $ 112,23 $44,883 $ 10,323 $ 430
(000)....................... 68 8 6
Ratios to average net
assets (annualized):
Ratio of expenses to
average net assets......... 1.14% 1.18% 1.18% 1.11% 0.93% 0.42% 0.05% 0.00%
Ratio of net investment
income to average net
assets...................... 0.65% 0.56% 1.23% 1.51% 1.72% 2.31% 3.50% 2.51%
Portfolio turnover........... 40% 83% 100% 71% 55% 80% 13% 0%
Average commission rate
paid/4/.................... $ 0.0799 $ 0.0702 -- -- -- -- -- --
Ratio of expenses to
average net assets
prior to waived fees and
reimbursed expenses......... N/A 1.19% 1.21% 1.15% 1.11% 1.10% 1.16% N/A
Ratio of net investment
income to average net
assets prior to waived
fees and
reimbursed expenses......... N/A 0.55% 1.20% 1.47% 1.54% 1.63% 2.39% N/A
</TABLE>

.............................
/1/ The Fund changed its fiscal year end from December 31 to September 30.
/2/ The financial information for the fiscal periods prior to, and including,
1991 is based on the financial information for the Select Stock Fund of the
Wells Fargo Investment Trust for Retirement Programs which was reorganized
into the Growth Stock Fund on January 2, 1992.
/3/ The Fund commenced operations on August 2, 1990.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 27

/4/ For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for security
trades on which commissions are charged. This amount may vary from period
to period and fund to fund depending on the mix of trades executed in
various markets where trading practices and commission rate structures may
differ.
/5/ The Fund changed its fiscal year end to March 31
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 28

GROWTH FUND
FOR A CLASS B SHARE OUTSTANDING

<TABLE>
<CAPTION>
PERIOD PERIOD YEAR
ENDED ENDED ENDED
MAR. 31, SEPT. 30, DEC. 31,
1997/3/ 1996/1/ 1995
---------- ----------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period................................................... $ 12.74 $ 12.29 $10.00
Income from investment operations:
Net investment income (loss)........................................................... 0.00 (0.01) 0.05
Net realized and unrealized gain (loss) on investments................................. 0.94 1.42 2.79
------- -------- ------
Total from investment operations....................................................... 0.94 1.41 2.84
Less Distributions:
Dividends from net investment income................................................... 0.00 0.00 (0.05)
Distributions from net realized gain (loss)............................................ (0.04) (0.96) (0.50)
------- -------- ------
Total from distributions............................................................... (0.04) (0.96) (0.55)
Net asset value, end of period......................................................... $ 13.64 $ 12.74 $12.29
======= ======== ======
Total return (not annualized).......................................................... 7.36% 11.89% 28.47%
Ratios/supplemental data:
Net assets, end of period (000)........................................................ $23,010 $ 12,832 $4,682
Ratios to average net assets (annualized):
Ratio of expenses to average net assets................................................ 1.86% 1.93% 1.87%
Ratio of net investment income to average net assets................................... (0.06)% (0.12)% 0.43%
Portfolio turnover..................................................................... 40% 83% 100%
Average commission rate paid/2/........................................................ $0.0799 $ 0.0702 ---
Ratio of expenses to average net assets prior to waived fees and reimbursed expenses... 1.89% 2.03% 2.21%
Ratio of net investment income to average net assets prior to waived fees and
reimbursed expenses................................................................... (0.09)% (0.22)% 0.09%
</TABLE>

_____________________________

/1/ The Fund changed its fiscal year end from December 31 to
September 30.

/2/ For fiscal years beginning on or after September 1, 1995, a fund
is required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix
of trades executed in various markets where trading practices and
commission rate structures may differ.

/3/ The Fund changed its fiscal year end to March 31
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 29

Small Cap Fund

Portfolio Managers: Jon Hickman (since 9/96)
- -------------------
Steve Enos (since 9/96)
Kenneth Lee (since 6/97)

CLASS A SHARE ANNUAL RETURNS (Bar graph with caption) Returns for other share
classes may vary due to different fees and expenses.

INVESTMENT OBJECTIVE

The Small Cap Fund seeks above-average, long-term capital appreciation in
order to provide investors with a rate of total return exceeding that of the
Russell 2000 Index, before fees and expenses, over a time horizon of three to
five years.

INVESTMENT POLICIES

We actively manage a diversified portfolio of the common stock of growth-
oriented smaller companies. We define smaller companies as those whose market
capitalizations fall within the range of the Russell 2000 Index. As of July
1997, that range was between $171.1 million and $1.1billion. This range is
expected to change frequently and we may sometimes invest in companies whose
market capitalizations are smaller or larger than the range. We will, however,
sell the stock of companies whose market capitalization grow above $2 billion.

We invest in the common stock of domestic and foreign companies we believe
have above-average prospects for capital growth, and that are involved in new
or innovative products, services and processes.

PORTFOLIO HOLDINGS

Under normal market conditions, we invest:

. in an actively managed, broadly-diversified portfolio of growth-oriented
common stocks;

. in at least 20 common stock issues spread across multiple industry groups and
sectors of the economy;

. no more than 40% of our assets in initial public offerings or recent start-ups
and newer issues;

. no more than 25% of our assets in foreign companies through American
Depository Receipts or similar issues; and

. up to 15% of our portfolio in emerging markets;

We may invest in preferred stock or investment-grade debt securities that
are convertible into common stock, and in money market instruments to maintain
liquidity, to meet expected redemption requests or as a temporary defensive
measure when we believe that the basic investment strategy is not in the best
interest of shareholders. Generally, these defensive investments are temporary
and will not exceed 35% of total assets.

IMPORTANT RISK FACTORS

Please see the general risks section beginning on page ____.

This Fund is designed for investors willing to assume above-average risk. We may
invest in companies that:

. pay low or no dividends;

. have smaller market capitalizations;

. have less market liquidity;
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 30

. have no or relatively short operating histories, or are newly public companies
or are initial public offerings;

. have aggressive capital structures including high debt levels; and

. are involved in rapidly growing or changing industries and/or new
technologies.

Because we invest in such aggressive securities, share prices may rise and fall
more than the share prices of other funds. In addition, our active trading
investment strategy may result in higher-than-average portfolio turnover ratio,
increased trading expenses, and short-term capital gains.

ADDITIONAL FUND FACTS

We have an annual dividend policy. You should not invest in the Fund if you are
looking for monthly income.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 31

SMALL CAP FUND
FOR A SHARE OUTSTANDING

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Class A Share Class B Share
- ----------------------------------------------------------------------------------------------------------------------------------
Period Period Period Period
Ended Ended Ended Ended
March 31, Sept 30, March 31, Sept 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................................... $ 22.45 $ 22.01 $ 22.46 $ 22.02
Income from investment operations:
Net investment income (loss)............................................ (0.01) 0.00 (0.04) 0.00
Net realized and unrealized gain (loss) on investments.................. (3.46) 0.44 (3.49) 0.44
------- ------- ------- -------
Total from investment operations........................................ (3.47) 0.44 (3.53) 0.44
Less distributions:
Dividends from net investment income.................................... 0.00 0.00 0.00 0.00
Distributions from net realized gain.................................... 0.00 0.00 0.00 0.00
------- ------- ------- -------
Total from distributions................................................ 0.00 0.00 0.00 0.00
------- ------- ------- -------
Net asset value, end of period.......................................... $ 18.98 $ 22.45 $ 18.93 $ 22.46
======= ======= ======= =======
Total return (not annualized)........................................... (15.46%) 2.00% (15.72%) 2.00%
Ratios/supplemental data:
Net assets, end of period (000)......................................... $ 3,107 $ 96 $ 1,905 $ 0
Ratios to average net assets (annualized):
Ratio of expenses to average net assets................................. 1.10%/2/ 1.03%/2/ 1.75%/2/ 0.00%
Ratio of net investment income (loss) to average net assets............. (0.23)%/2/ (0.59)%/2/ (0.85)%/2/ 0.00%
Portfolio turnover...................................................... N/A/3/ N/A/3/ N/A/3/ N/A/3/
Average commission rate paid/4/......................................... N/A/3/ N/A/3/ N/A/3/ N/A/3/
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses........................................... 2.80%/2/ 38.54%/2/ 3.55%/2/ 0.00%
Ratio of net investment income to average net assets prior to
waived fees and reimbursed expenses.................................... (1.93%) (38.10)%/2/ (2.65%)/2/ 0.00%
</TABLE>

_________________________

/1/ The Fund commenced operations on September 16, 1996.

/2/ Ratio includes income and expenses allocated from the Master
Portfolio.

/3/ The portfolio turnover and average commission rates for the Small
Cap Master Portfolio during the period were 10% and $0.0800,
respectively.

/4/ For fiscal years beginning on or after September 1, 1995, a fund
is required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix
of trades executed in various markets where trading practices and
commission rate structures may differ.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 32

GENERAL RISK CONSIDERATIONS

. Unlike bank deposits such as CD's or savings accounts, mutual funds are NOT
INSURED BY THE FDIC.

. We CANNOT GUARANTEE that we will meet our investment objectives.

. We do not guarantee the performance of a Fund, nor can we assure you that the
market value of your investment will not decline. We will not "make good" any
investment loss you may suffer, nor can anyone we contract with to perform
certain functions, such as selling agents or investment advisors, offer or
promise to make good any such losses.

. Share prices--and therefore the value of your investment--WILL INCREASE AND
DECREASE with changes in the value of the underlying securities and other
investments. This is referred to as volatility.

. Investing in any mutual fund, including the most conservative, involves RISK,
INCLUDING THE POSSIBLE LOSS OF ANY MONEY YOU INVEST.

. No single Fund, by itself, constitutes a complete investment plan.

Some of our mutual funds invest in securities that involve particular kinds of
risk.

. Funds that invest in debt instruments, such as notes and bonds, are subject to
CREDIT RISK and INTEREST-RATE RISK. Credit risk is the chance that an issuer
of a security will be unable to make interest payments or repay principal.
Changes in the financial strength of an issuer or changes in the credit rating
of a security may affect its value. Interest-rate risk is the possibility that
interest rates may increase and reduce the resale value of securities in a
Fund's portfolio. Debt instruments with longer maturities are generally more
sensitive to interest rate changes than those with shorter maturities. Changes
in market interest rates do not affect the rate payable on debt instruments
held in a Fund, unless the instrument has adjustable or variable rate
features. Changes in market interest rates may also extend or shorten the
duration of certain types of instruments, such as asset-backed securities,
thereby affecting their value and the return on your investment.

. Funds that invest in SMALLER COMPANIES, FOREIGN COMPANIES (including
investments made through American Depository Receipts and similar
instruments), and in EMERGING MARKETS are subject to additional risks,
including less liquidity and greater volatility. A Fund's investment in
foreign and emerging markets may also be subject to special risks associated
with international trade, including currency, political, regulatory and
diplomatic risk.

We may also use certain DERIVATIVE instruments such as options or futures
contracts. The term "derivatives" covers a wide number of investments, but in
general it refers to any financial instrument whose value is derived, at least
in part, from the price of another security or a specified index, asset or rate.
Some derivatives may be more sensitive to interest rate changes or market moves,
and some may be susceptible to changes in yields or values due to their
structure or contract terms.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 33

Currency Risk--The risk that a change in the exchange rate between U.S. dollars
and a foreign currency may reduce the value of investment made in a security
denominated in that foreign currency.

Diplomatic Risk--The risk that an adverse change in the diplomatic relations
between the United States and another country might reduce the value or
liquidity of investments in either country.

Information Risk--The risk that information about a security is either
unavailable, incomplete or is inaccurate.

Liquidity Risk--The risk that a security cannot be sold, or cannot be sold
without adversely affecting the price.

Market Risk--The risk that the value of stock, bond or other security will
reduced by market activity. This is the basic risk associated with all
securities investments.

Political Risk--The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.

Plain English Equity Prospectus (Sept 22, 1997) 34

<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A B D E G S
G A I Q R M
G L V U O A
R A E I W L
E N R T T L
S C S Y H
S E I C
This table lists some of the additional investment practices of the I D F V & A
Funds, including some not disclosed in the Investment Objectives V I A P
and Investment Policies sections of the Prospectus. THE RISKS E E L I
INDICATED AFTER THE DESCRIPTION OF THE PRACTICE ARE NOT THE ONLY D U N
POTENTIAL RISKS ASSOCIATED WITH THAT PRACTICE, BUT ARE AMONG THE E C
MORE PROMINENT. Market risk is assumed for each. See the O
Investment Objectives and Policies or the Statements of Additional M
Information for limits on these practices. E
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE/RISK
- -----------------------------------------------------------------------------------------------------------------
Floating and Variable Rate Debt - Instruments with interest rates
that are adjusted either on a schedule or when an index or x x x x x x
benchmark changes. Interest Rate and Credit Risk
- -----------------------------------------------------------------------------------------------------------------
Inverse Floating Debt - Instruments that have interest rates that
reset inversely to current market rates. Interest Rate, Credit and x x
Experience Risk
- -----------------------------------------------------------------------------------------------------------------
Repurchase Agreements--A transaction in which the seller of a
security agrees to buy back a security at an agreed upon time and x x x x x x
price, usually with interest. Credit Risk
- -----------------------------------------------------------------------------------------------------------------
Other Mutual Funds--The temporary investment in shares of an
unaffiliated investment company. x x x x x x
- -----------------------------------------------------------------------------------------------------------------
Foreign Securities--Securities issued by a non-U.S. company or
debt of a foreign government in the form of an American
Depository Receipt or similar instrument. Information, Political, x x x x x x
Regulatory, Diplomatic and Currency Risk.
- -----------------------------------------------------------------------------------------------------------------
Emerging Markets--Investments in companies located or operating
in countries considered developing or to have "emerging" stock
markets. Generally, these investments have the same type of risks x x x x
as Foreign Securities but to a higher degree. Information, Political,
Regulatory, Diplomatic and Currency Risk.
- -----------------------------------------------------------------------------------------------------------------
Options--The right or obligation to receive or deliver a security or
cash payment depending on the security's price or the performance
of an index or benchmark. Credit, Information and Liquidity Risk
OPTIONS ON SPECIFIC SECURITIES x x x x
OPTIONS ON A STOCK INDEX x
STOCK INDEX FUTURES to protect liquidity and portfolio value. x x
- -----------------------------------------------------------------------------------------------------------------
Privately Issued Securities--Securities that are not publicly traded
but which may be resold in accordance with Rule 144A of the x x x x x x
Securities Act of 1933. Liquidity Risk
- -----------------------------------------------------------------------------------------------------------------
Loans of Securities--The practice of loaning securities to brokers
dealers and financial institutions to increase return on those x x x x x x
securities. Loans may be made in accordance with existing
investment objectives. (Loans from the Small Cap Fund may not
exceed 33 1/3% of assets). Credit Risk.
- -----------------------------------------------------------------------------------------------------------------
Borrowing Policies--The ability to borrow an equivalent of 10% of
total assets from banks for temporary purposes to meet shareholder x x x x x x
redemptions. Borrowing may be secured by a pledge of up to 10%
of the securities and investments may not be purchased if borrowing
exceeds 5% of assets. Credit Risk
- -----------------------------------------------------------------------------------------------------------------
Illiquid Securities--As defined in the Glossary, illiquid securities 15 15 10 15 10 15
are limited to the percentage indicated for each Fund.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 35

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Fund remains within the parameters of its
objective.

The Investment Objectives described for each Fund are fundamental and cannot be
changed without approval by vote of a majority of shareholders.

In addition to the general risks discussed above, you should carefully consider
and evaluate any special risks that may apply to investing in a particular Fund.
See the "Important Risk Factors" in the summary for each Fund. You should also
see the Statements of Additional Information for additional discussion involving
risk and investment practices.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 36

A CHOICE OF SHARE CLASSES

After choosing a Fund, your next most important choice is which share class to
buy. The Funds offered in this Prospectus are available in the following share
classes:

. CLASS A SHARES - with a front-end sales charge, volume reductions and lower
on-going expenses than Class B shares.

. CLASS B SHARES - with a contingent deferred sales charge (CDSC) that
diminishes over time, and higher on-going expenses.

. CLASS C SHARES - with a 1.00% contingent deferred sales charge (CDSC) on
redemptions made within one year of purchase, and higher on-going expenses.

The choice between share classes is largely a matter of preference. You should
consider, among other things, the different fees and sales loads assessed on
each share class and the length of time you anticipate holding your investment.
If you prefer to pay sales charges up front, wish to avoid higher on-going
expenses, or, more importantly, you think you may qualify for volume discounts
based on the amount of your investment, then Class A shares may be the choice
for you.

Class C shares are available for the Aggressive Growth and Small Cap Funds only.
They are similar to Class B shares, with some important differences. Unlike
Class B shares, Class C shares do not convert to Class A shares. The higher on-
going expenses will be assessed as long as you hold the shares. The choice
between Class B and C shares may depend on how long you intend holding Fund
shares before redeeming them.

CLASS A SHARE SCHEDULE

Class A shares listed in this Prospectus have the following charge schedule:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Amount of Purchase Front-end Sales Charge Front-end Sales Charge Dealer Allowance as %
as % of Public Offering as % of Net Amount Of Public Offering Price
Price Invested
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.25% 5.54% 4.75%
- -------------------------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.50% 4.71% 3.75%
- -------------------------------------------------------------------------------------------------------------------------------
$100,000 to $249,000 3.50% 3.63% 2.75%
- -------------------------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.00%
- -------------------------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- -------------------------------------------------------------------------------------------------------------------------------
$1,000,000 and over 0.00%/1/ 0.00% 1.00%

- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

/1/ We will assess Class A share purchases of $1,000,000 or more a 1.00% CDSC if
they are redeemed within one year from the date of purchase. Charges are based
on the lower of the NAV on the date of purchase or the date of redemption.
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 37

Please note that Class A shares of other Funds listed in other prospectuses have
different loads and breakpoints levels.

CLASS B SHARE CDSC SCHEDULE

Plain English Equity Prospectus (Sept 22, 1997) 38

REDUCED SALES CHARGES

CLASS A SHARE REDUCTIONS:
. You pay no sales charges on Fund shares you buy with REINVESTED DISTRIBUTIONS.

. You pay a lower sales charge if you are investing an amount over a BREAKPOINT
LEVEL. See the "Class A Share Schedule" above.

. By signing a LETTER OF INTENT (LOI), you pay a lower sales charge now in
exchange for promising to invest an amount over a specified breakpoint within
the next 13 months. We will hold in escrow shares equal to approximately 5% of
the amount you intend to buy. If you do not invest the amount specified in the
LOI before the expiration date, we will redeem enough escrowed shares to pay
the difference between the reduced sales load you paid and the sales load you
should have paid. Otherwise, we will release the escrowed shares when you have
invested the agreed amount.

. RIGHTS OF ACCUMULATION (ROA) allow you to combine the amount you invest with
the total NAV of shares you own in other Stagecoach front-end load Funds in
order to reach breakpoint levels for a reduced load. We give you a discount on
the entire amount of the investment that puts you over the breakpoint level.

. If you are REINVESTING THE PROCEEDS OF A STAGECOACH FUND REDEMPTION for shares
on which you have already paid a front-end sales charge, you have 120 days to
reinvest the proceeds of that redemption with no sales charge into a Fund that
charges the same or a lower front-end sales charge. If you use such a
redemption to purchase shares of a Fund with a higher front-end sales charge,
you will have to pay the difference between the lower and higher charge.

. You may reinvest into a Stagecoach Fund with no sales charge A REQUIRED
DISTRIBUTION from a pension, retirement, benefits, or similar plan for which
Wells Fargo acts as trustee provided the distribution occurred within the last
30 days.

If you believe you should receive any of these reductions, it is up to you to
ask the selling agent or the shareholder serving agent for the reduction and to
provide appropriate proof of eligibility.

You, or your fiduciary or trustee, may also tell us to extend volume discounts,
including the reductions offered for rights of accumulation and letters of
intent, to include purchases made by:

. a family unit, consisting of a husband and wife and children under the age of
twenty-one or single trust estate;

. a trustee or fiduciary purchasing for a single fiduciary relationship; or

. the members of a "qualified group" which consists of a "Company" (as defined
in the 1940 Act), and related parties of such a "Company", which has been in
existence for at least six months and which has a primary purpose other than
acquiring Fund shares at a discount.

CLASS B AND C SHARE CDSC REDUCTIONS:
. You pay no CDSC on Funds shares you purchase with REINVESTED DISTRIBUTIONS.

. We waive the CDSC for all redemptions made because of SCHEDULED OR MANDATORY
DISTRIBUTIONS for certain retirement plans. (See your retirement plan
disclosure for details.)
<PAGE>

Plain English Equity Prospectus (Sept 22, 1997) 39

. We waive the CDSC for redemptions made in the event of the SHAREHOLDER'S DEATH
OR FOR A DISABILITY SUFFERED AFTER PURCHASING SHARES. ("Disability" is defined
by the Internal Revenue Code of 1986.)

. We waive the CDSC for redemptions made at the COMPANY'S DIRECTION in order to,
for example, complete a merger or close an account whose value has fallen
below the minimum balance.

WAIVERS FOR CERTAIN PARTIES:

. The Stagecoach Funds and its affiliates;

. Wells Fargo Bank and its affiliates;

. Stephens and its affiliates; and

. Broker-Dealers who act as Selling Agents.

. The spouses of any of the above, as well as the grandparents, parents,
siblings, children, grandchildren, aunts, uncles, nieces, nephews, fathers-in-
law, mothers-in-law, brothers-in-law and sisters-in-law of either the spouse
or the current or retired employee, director or officer.

SPECIAL NOTICE

If you owned Class A shares of a Fund on FEBRUARY 28, 1997, and you have owned
Class A shares continuously since that date, you may make additional investments
into that Fund according to the following sales load schedules:

Amount of Purchase Front-end Sales Charge Front-end Sales Charge Dealer Allowance as % Of
as % of Offering Price as % of Net Amount Offering Price.
Invested.
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
- -----------------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.00% 4.17% 3.55%
- -----------------------------------------------------------------------------------------------------------------------
$100,000 to $249,999 3.50% 3.63% 3.125%
- -----------------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.00%
- -----------------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- -----------------------------------------------------------------------------------------------------------------------
$1,000,000 and over 0.001 0.00% 1.00%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

/1/ We will charge a 1.00% CDSC on Class A share purchases of $1,000,000 or more
if they are redeemed within one year of their purchase. Charges are based on the
lower of the NAV on the day of purchase or the day of redemption.

Class B shares you purchased prior to March 3, 1997 are subject to a CDSC if
they are redeemed within four years of purchase. For as long as you hold Class B
shares of such a Fund, any new Class B shares of that Fund that you acquire will
also be subject to a CDSC if redeemed within four years. The CDSC schedule for
these shares is below:

Plan English Equity Prospectus (October 8, 1997) 40

The above schedules do not apply for shares of another Fund purchased after
February 28, 1997. If you exchange Class B shares for Class B shares of another
Fund, you will retain the above CDSC schedule on your exchanged shares, but
additional purchases of the newly purchased Fund will age at the higher CDSC
schedule.
<PAGE>

Plan English Equity Prospectus (October 8, 1997) 41

YOUR ACCOUNT

This section tells you how to open an account and how to buy, sell or exchange
shares once your account is open.

You can buy Fund shares:

. By opening an account directly with the fund (simply complete and return A
Stagecoach Funds application with proper payment);
. Through a brokerage account with an approved selling agent; or
. Through certain retirement, benefits and pension plans, or through certain
packaged investment products (please see the providers of the plan for
instructions).

Minimum Investments:

. $1,000.00 per Fund minimum initial investment, or
. $100.00 per Fund minimum initial investment if you use the AutoSaver
option.
. $100.00 per Fund for all investments after your first.
. We may waive the minimum for Funds you purchase through certain retirement,
benefit and pension plans, through certain packaged investment products, or
for certain classes of shareholders as permitted by the Securities and
Exchange Commission. Check the specific disclosure statements and
applications for the program through which you intend to invest.

Important Information:

. Read this prospectus carefully. Discuss any questions you have with your
selling agent. You may also ask for copies of the Statements of Additional
Information. Copies are available free of charge from your financial
consultant or by calling 1-800 222-8222.
. We process requests to buy or sell shares at 1:00 PM Pacific Time on every
business day. Any request we receive in proper form before 1:00 PM PT is
processed the same business day. Requests we receive after 1:00 PM PT are
processed at 1:00 PM PT the next business day.
. It is the nature of a mutual fund investment that the price you pay to
purchase shares or the price you receive when you redeem shares is not
determined until after a request has been received in proper form.
. We determine the Net Asset Value (NAV) of each class of the Fund's shares
each business day as of the close of the New York Stock Exchange. We
determine the NAV by subtracting the Fund class's liabilities from its
total assets, and then dividing the result by the total number of
outstanding shares of that class. See the Statements of Additional
Information for further disclosure.
. You may have to complete additional paperwork for certain types of account
registrations, such as a Trust. Please speak to Investor Services (1 800-
222-8222) if you are investing directly with the Company, or speak to your
selling agent if you are buying shares through a brokerage account.
. Once an account has been opened, you can add additional Funds under the
same registration without requiring a new application.

HOW TO BUY SHARES - Lay out note: Converted into table

The following section explains how you can buy shares directly from the Company.
For Funds held through brokerage and other types of accounts, please consult
your selling agent.

By Mail:

If you are buying shares for the first time:
. Complete a Stagecoach Funds application. Be sure to indicate the Fund name
and the share class into which you intend to invest.
. Enclose a check for at least $1,000.00 made out in the full name and share
class of the Fund. For example, "Stagecoach Strategic Growth Fund, Class
B".
. You may start your account with $100.00 if you elect the AutoSaver option
on the application.
<PAGE>

Plan English Equity Prospectus (October 8, 1997) 42

In Table on left: Stagecoach Funds, P.O. Box 7066, San Francisco, CA 94120-9201.

By Wire:

Initial Purchase:
. If you do not currently have an account, complete a Stagecoach Funds
application. You must wire at least $1000.00. Be sure to indicate the Fund
name and the share class into which you intend to invest.
. Mail the completed application to: Stagecoach Funds, P.O. Box 7066, San
Francisco, CA 94120-9201.
. You may also fax the completed application (with original to follow) to: 1-
415-546-0280.

By Phone:

In Table on left: 1 800-222-8222

We will process all requests to buy shares at the first NAV calculated after the
request and proper payment are received.

SELLING SHARES - Lay out note: converted into tables

By Mail:
<PAGE>

Plan English Equity Prospectus (October 8, 1997) 43

Mail to: Stagecoach Funds, PO Box 7066, San Francisco, CA 94120-9201.

Call: 1-800-222-8222

Plan English Equity Prospectus (October 8, 1997) 44

EXCHANGES

. You will need to read the Prospectus for the Fund into which you wish to
exchange.
. Every exchange involves selling Fund shares and that sale may produce a
capital gain or loss for federal income tax purposes.
. If you exchange between Class A shares, you will have to pay any difference
between a load you have already paid and the load you are subject to in the
new Fund (less the difference between any load already paid under the
maximum 3% load schedule and the maximum 4.5% schedule).
. If you are making an initial investment into a new Fund through an
exchange, you must exchange at least the minimum first purchase amount of
the Fund you are redeeming, unless your balance has fallen below that
amount due to market conditions.
. Any exchange between Funds you already own must meet the minimum redemption
and subsequent purchase amounts for the Funds involved.
. If you are exchanging from a higher-load Fund to a lower or no-load Fund,
then back to the higher load, it is up to you to inform the Company that
you have already paid the higher load.
. Exchanges between Class B shares, between Class C shares or between either
Class B or Class C shares and a Stagecoach Money Market Fund will not
trigger the CDSC. The new shares will continue to age according to their
original schedule while in the new Fund and will be charged the CDSC
applicable to the original shares upon redemption. This also applies to
exchanges of Class A shares that are subject to a CDSC.
. Exchanges from any share Class to a Money Market Fund can only be re-
exchanged for the original share Class.
. In order to discourage market timing and excessive transaction expenses
that must be borne by other shareholders, we reserve the right to limit or
reject exchange orders. Generally, we will notify you 60 days in advance of
any changes in your exchange privileges.
. You may make exchanges between like share Classes, or between A, B or C
share Classes and a Money Market Fund. You may not make exchanges between
Class A shares of a non-Money Market Fund and Class B or Class C shares
<PAGE>

Plain English Equity Prospectus (October 8, 1997) 45

ADDITIONAL SERVICES AND POLICIES

AUTOMATIC PROGRAMS:

These programs help you conveniently purchase or redeem shares each month:
. AUTOSAVER PLAN - you need only specify an amount of at least $100.00 and a
day of the month. We will automatically transfer that amount from your
linked bank account each month to purchase additional shares. We will
transfer the amount on or about the day you specify, or on or about the
20/th/ of each month if you have not specified a day. Please call Investor
Services at 1-800-222-8222 if you wish to change or add linked accounts.
. SYSTEMATIC WITHDRAWAL PROGRAM - Stagecoach will automatically redeem enough
shares to equal a specified dollar amount of at least $100.00 on or about
the 5th business day prior to the end of each month and either send you the
proceeds by check or transfer it into your linked bank account. In order to
set up a Systematic Withdrawal Program, you :
. must have a Fund account valued at $10,000.00 or more;
. must have distributions reinvested; and
. may not simultaneously participate in an AutoSaver Plan.

It generally takes about 10 days to set up either plan once we have received
your instructions. We automatically cancel your program if the linked account
you specified is closed.

DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS

You may choose to do any of the following:
. AUTOMATIC REINVESTMENT OPTION - Lets you buy new shares of the same class
of the Fund that generated the distributions. The new shares are purchased
at NAV generally on the day the income is paid. This option is
automatically assigned to your account unless you specify another plan.
. FUND PURCHASE PLAN - Uses your distributions to buy shares at NAV of
another Stagecoach Fund of the same share class or a Money Market Fund. You
must have already satisfied the minimum investment requirements of the Fund
into which your distributions are being transferred in order to
participate.
. AUTOMATIC CLEARING HOUSE OPTION - Deposits your dividends and capital gains
into any bank account you link to your Fund account if it is part of the
ACH system. If your specified bank account is closed, we will reinvest your
distributions.
. CHECK PAYMENT OPTION - Allows you to receive checks for distributions
mailed to your address of record or to another name and address which you
have specified in written, signature guaranteed instructions. If checks
remain uncashed for six months or are undeliverable by the Post Office, we
will reinvest the distributions at the earliest date possible .

Call Out - "Two Things to Keep In Mind About Distributions" - Remember,
distributions have the effect of reducing the NAV per share by the amount
distributed. Also, distributions on new shares shortly after purchase would be
in effect a return of capital, although the distribution may still be taxable to
you.

TAXES

Plan English Equity Prospectus (October 8, 1997) 46

SPECIAL NOTICES:

DEALER CONCESSIONS AND 12B-1 FEES - Stephens Inc. as the Fund's distributor,
will pay the portion of the Class A share sales charge shown as the Dealer
Allowance to the selling agent, if any. Stephens also compensates selling agents
for the sale of Class B shares and is reimbursed through Rule 12b-1 fees and
contingent deferred sales charges. Selling agents may receive different
compensation for sales of Class A and Class B shares of the same Fund. Each
Fund may participate in joint distribution activities with other Stagecoach
Funds. The cost of these activities is generally split among the Funds. Funds
with higher assets levels pay a higher proportion of these costs.

GLASS-STEAGALL ACT - Morrison & Foerster LLP, counsel to the Funds and special
counsel to Wells Fargo Bank, has advised us and Wells Fargo Bank that Wells
Fargo Bank and its affiliates may perform the services contemplated by the
Advisory Contracts and detailed in this Prospectus and the Statements of
Additional Information without violation of the Glass-Steagall Act. Counsel has
pointed out that future judicial or administrative decisions, or future federal
or state laws may prevent these entities from continuing in their roles.

Plan English Equity Prospectus (October 8, 1997) 47

entitled to one vote for each share owned and fractional votes for each
fractional share owned. For a detailed description of voting rights, see the
"Capital Stock" section of the SAI.
<PAGE>

Plan English Equity Prospectus (October 8, 1997) 48

ORGANIZATION AND MANAGEMENT OF THE FUNDS

ABOUT STAGECOACH

Each Fund is one of 31 of the Stagecoach Funds. Inc. Stagecoach was organized
on September 9, 1991 as a Maryland Corporation.

SHAREHOLDERS

FINANCIAL SERVICES FIRMS AND
THEIR REPRESENTATIVES

Advise current and prospective
shareholders on their Fund investments

<TABLE>
<CAPTION>
DISTRIBUTOR ADMINISTRATOR TRANSFER and SHAREHOLDER
& CO-ADMINISTRATOR DIVIDEND DISBURSING SERVICING
AGENTS AGENTS
<S> <C> <C> <C>
Stephens Inc. Wells Fargo Bank Wells Fargo Bank Various Agents
111 Center St. 525 Market St. 525 Market St.
Little Rock, AR San Francisco, CA San Francisco, CA

Markets the Funds, Manages the Funds' Maintains records of Provide services to
distributes shares, business activities shares and supervises customers
and manages the Funds' the paying of dividends
business activities

<CAPTION>
INVESTMENT ADVISOR CUSTODIAN
<C> <C>
Wells Fargo Bank Wells Fargo Bank
525 Market St. 525 Market St.
San Francisco, CA San Francisco, CA

Manage the Funds' investment Provides safekeeping for
activities the Funds' assets
</TABLE>

BOARD OF DIRECTORS

Supervises the Funds' activities
<PAGE>

Plan English Equity Prospectus (October 8, 1997) 49

In the following sections, the percentages shown are the percentages of the
average daily net assets of each Fund class paid on an annual basis for the
services described. The Statement of Additional Information for each fund has
more detailed information about the Investment Advisor and the other service
providers and plans described here.

THE INVESTMENT ADVISOR

Wells Fargo Bank is the advisor for each of the Funds. Wells Fargo Bank,
founded in 1852, is the oldest bank in the Western United States and is one of
the largest banks in the United States. Wells Fargo Bank is a wholly owned
subsidiary of Wells & Fargo and Co., a national bank holding company. As of
August 1, 1997 Wells Fargo Bank and its affiliates managed over $57 billion in
assets. The Funds paid Wells Fargo the following for advisory services for the
fiscal period ended March 31, 1997:

Strategic Growth Fund* .34%

Balanced Fund .60%

Diversified Income Fund .50%

Equity Value Fund .59%

Growth Fund .50%

Small Cap Fund* .60%

*Prior to December 15, 1997, the Strategic Growth Fund and the Small Cap Fund
each invested all of its assets in a master portfolio with the same investment
objective. The management fee shown was charged and paid by the master
portfolio.

THE ADMINISTRATOR

Wells Fargo Bank is the administrator of the Funds. Wells Fargo is paid .04%
for these services.

THE DISTRIBUTOR AND CO-ADMINISTRATOR

Stephens Inc. is the Funds' distributor and co-administrator. Stephens receives
.02% for its role as co-administrator. Stephens also receives all loads, CDSCs
and distribution plan fees. It uses a portion of these amounts to compensate
selling agents for their role in marketing the Funds' shares.

SHAREHOLDER SERVICING PLAN

We have Shareholder Servicing Plans for each Fund class. We have agreements
with various shareholder servicing agents to process purchase and redemption
requests, to service shareholder accounts, and to provide other related
services.

For these services we pay as follows:

CLASS A CLASS B

Strategic Growth Fund .25% .25%

Balanced Fund .25% .25%

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Plan English Equity Prospectus (October 8, 1997) 50

Diversified Income Fund .30% .30%

Equity Value Fund .25% .25%

Growth Fund .30% .30%

Small Cap Fund .25% .25%

DISTRIBUTION PLAN

We have adopted distribution plans for each class of the Funds. For the Class A
shares of the Diversified Income and Growth & Income Funds, these plans are used
to defray all or part of the cost of preparing and distributing prospectuses and
promotional materials. For Class A shares of the Aggressive Growth, the
Balanced, Equity Value and Small Cap Fund, and the Class B shares of each fund,
these plans are used to pay for distribution-related services. The fees paid
under these plans are as follows:

CLASS A CLASS B

Strategic Growth Fund .10% .75%

Balanced Fund .10% .75%

Diversified Income Fund .05% .70%

Equity Value Fund .10% .75%

Growth Fund .05% .70%

Small Cap Fund .10% .75%
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Plain English Equity Prospectus (October 8, 1997) 51

PORTFOLIO MANAGERS - The following is a list of portfolio managers identified
within the various Funds' summaries. More detailed biographical information is
available in the Statements of Additional Information.

JON R. HICKMAN
MANAGING DIRECTOR OF AGGRESSIVE EQUITY
Member of Wells Fargo Equity Strategy Committee
Over 16 years of experience, he has been with Wells Fargo since 1986.

STEVE ENOS, CFA, PORTFOLIO MANAGER
Member of the Wells Fargo Growth Stock Team, Security Analysts of San Francisco
With Wells Fargo since 1993 after working for Dolan Capital Management from 1991
to 1993.

TAMRYA D. THOMAS, CFA
MANAGING DIRECTOR AND CHIEF FIXED INCOME OFFICER
Chief Fixed Income Strategies and Chair of the Fixed Income Policy Committee.
With Wells Fargo since 1988.

BRIAN MULLIGAN, CFA
Vice-President and Manager of San Francisco Investment Office
With Wells Fargo since 1986.

KENNETH LEE,
With Wells Fargo since 1993. Was with Wells Fargo Nikko and Dean Witter prior to
1993

CHRIS GREEN
Joined Wells Fargo in 1997. Worked for Hambrecht & Quist from 1994 -97 and for
GB Capital Management for two years prior to that. Worked for Wood Island
Associates prior to GB Capital.

KELLI HILL
With Wells Fargo since 1987

REX WARDLAW, CFA
With Wells Fargo since 1986

ALLEN WISNIEWSKI, CFA, SENIOR PORTFOLIO MANAGER
Member of Los Angeles Society of Financial Analysts.
With Wells Fargo since 1987.
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Plan English Equity Prospectus (October 8, 1997) 52

GLOSSARY

ACH--Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.

American Depository Receipts -Receipts for non-U.S. company stocks. The stocks
underlying ADRs are typically held in bank vaults. The ADR's owner is entitled
to any capital gains or dividends. ADRs are one way of owning equity in foreign
companies

Business Day - Any day the New York Stock Exchange is open is a business day for
the Fund.

Capital Appreciation, Capital Growth - The increase in the value of a share. See
also "total return".