<PAGE>
- ------------------
ANNUAL
- ------------------
REPORT
- ------------------
MONEY
- ------------------
MARKET
- ------------------
FUNDS
- ------------------
California Tax-Free
Money Market
Mutual Fund
Government
Money Market
Mutual Fund
Money Market
Mutual Fund
National Tax-Free
Money Market
Mutual Fund
Treasury
Money Market
Mutual Fund
MARCH 31, 1997
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER Q & A
Government Money Market Mutual Fund -- Class A 2
Money Market Mutual Fund -- Class A 2
Treasury Money Market Mutual Fund -- Class A 2
California Tax-Free Money Market Mutual Fund -- Class A 3
National Tax-Free Money Market Mutual Fund -- Class A 3
PORTFOLIOS OF INVESTMENTS
California Tax-Free Money Market Mutual Fund 5
Government Money Market Mutual Fund 18
Money Market Mutual Fund 20
Treasury Money Market Mutual Fund 24
STAGECOACH FUNDS
Statement of Assets and Liabilities 26
Statements of Operations 28
Statements of Changes in Net Assets 31
Financial Highlights 36
Notes to Financial Statements 44
Independent Auditors' Report 57
MASTER INVESTMENT TRUST PORTFOLIO OF INVESTMENTS
Master Investment Trust Tax-Free Money Market Master Portfolio 58
MASTER INVESTMENT TRUST
Statement of Assets and Liabilities 64
Statements of Operations 65
Statements of Changes in Net Assets 66
Notes to Financial Statements 67
Independent Auditors' Report 69
LIST OF ABBREVIATIONS 70
STAGECOACH FUNDS:
--------------------------------------------------------------------------
- - ARE NOT FDIC INSURED
- - ARE NOT GUARANTEED BY WELLS FARGO BANK [NO FDIC]
- - ARE NOT DEPOSITS OR OBLIGATIONS OF WELLS FARGO
BANK
- - INVOLVE INVESTMENT RISK, INCLUDING POSSIBLE LOSS
OF PRINCIPAL
---------------------
i
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
ii
<PAGE>
LETTER TO SHAREHOLDERS
- ------------------
TO OUR SHAREHOLDERS:
Welcome to the 1997 Stagecoach Funds Annual Report.
This Report, dated March 31, 1997, comes to you six months after the previous
Annual Report dated September 30, 1996. As we explained in the Shareholder
Letter at that time, for administrative reasons, the Stagecoach Funds have
shifted their financial year-end to March 31. This change does not otherwise
affect the operation, nor does it affect the investment objectives, of the
Funds.
The recently completed reporting period saw market volatility and the long-
expected increase in the federal funds target rate. After months of debate on
the rate of economic growth and the potential for increased rates of inflation,
the Federal Reserve Board acted in March to raise rates by 0.25%. The Fed's
action capped a six month period which showed only modest total return for the
fixed-income market.
The equity market, as measured by the Standard & Poor's 500 Index, fell 7.20% in
March from its January high. While this environment offered some challenges, we
feel that much of the "bad news" has been greatly exaggerated. For example, the
S&P 500 Index still enjoyed a 1997 year-to-date return through March 31 of
2.69%. The positive return for the six-month period ended March 31, 1997 was
11.24%. The news is similar concerning the further market correction that
occurred after the reporting period. As of early May, the market had recouped
much of its March and April losses.
Of course, equity issues do not rise and fall in unison. Large company stocks
have fared well recently as investor dollars sought their greater security and
reduced volatility. Various sectors such as technology and finance stocks have
fluctuated acutely in recent months. Value stocks have outperformed growth
stocks, in contrast to recent years.
It is all too easy to be confused by such a variety of returns and apparently
conflicting information. That's why it is so important to truly understand the
investment philosophies and long-range goals that govern your Fund. We have
always felt that the more you understand your investment, the less likely you
are to be unduly concerned with short-term developments.
The following pages discuss what factors have affected the returns for the
Stagecoach Funds during the reporting period. These commentaries were written
for you -- our shareholders -- as part of the Stagecoach Funds commitment to
education, information and service as we help you meet your financial goals.
STAGECOACH FUNDS
MAY 1997
---------------------
1
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
- --------------------
INVESTMENT ADVISER Q&A
GOVERNMENT MONEY MARKET MUTUAL FUND -- CLASS A
MONEY MARKET MUTUAL FUND -- CLASS A
TREASURY MONEY MARKET MUTUAL FUND -- CLASS A
WHAT WERE THE SEVEN-DAY CURRENT YIELDS AS OF MARCH 31, 1997?
Seven-day current yields for the Funds for the period ended March 31, 1997 and
for the period ended September 30, 1996, are as follows:
<TABLE>
<CAPTION>
MARCH 31, SEPT. 30,
FUND 1997 1996
<S> <C> <C>
- ----------------------------------------------------
Money Market Mutual Fund 4.78% 4.86%
Treasury MMMF 4.98% 4.80%
Government MMMF 4.77% 4.64%
</TABLE>
THE FEDERAL FUNDS TARGET RATE, SET BY THE FEDERAL RESERVE, IS THE GREATEST
INFLUENCE ON MONEY MARKET YIELDS. THE RATE REMAINED UNCHANGED UNTIL MARCH, YET
MONEY MARKET YIELDS FLUCTUATED. WHY?
There are a number of reasons. If the economy is expected to grow rapidly, rates
usually move higher in anticipation of a Fed rate hike. Cash flows into money
market mutual funds are another important factor. The dynamics of supply and
demand can drive yields higher or drag them lower, particularly for variable
rate securities. It is important to keep an eye on the general trend in yields
rather than draw conclusions based on a single-day "snap shot" of current
yields. The Wall Street Journal's Market Diary section, for example, publishes a
useful graph tracking interest rates for investors interested in following this
sort of information.
WHAT DOES "WEIGHTED AVERAGE MATURITY" TELL US ABOUT THE FUNDS? HOW HAS IT
CHANGED DURING THE SIX-MONTH PERIOD?
Weighted average maturity is a measure of the average length of time before
securities in a portfolio mature on a dollar for dollar basis. It is one of the
measures of a Fund's sensitivity to interest rate changes. Funds with longer
maturities generally are more sensitive to interest rate fluctuations.
Typically, for a money market mutual fund, within a very narrow range, managers
will increase maturity to lock in higher rates or shorten maturity if they
anticipate higher rates being available soon. Market forces may also make one
range relatively more attractive than another. For the most part, the weighted
average maturities for these funds have been fairly steady and in the
short-to-intermediate range of 45 to 60 days.
SINCE THE FEDERAL RESERVE RAISED THE FEDERAL FUNDS TARGET RATE IN MARCH, DO YOU
EXPECT FURTHER ACTION?
The Federal Reserve has rarely effected only a single increase when changing
monetary policy, so additional increases are likely. However, the federal funds
target rate is relatively high compared to the Consumer Price Index (the prime
measure of inflation), so we believe that substantial increases are unlikely.
- ---------------------
2
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
- --------------------
INVESTMENT ADVISER Q&A
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND -- CLASS A
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND -- CLASS A
WHAT WERE THE SEVEN-DAY CURRENT YIELDS AS OF MARCH 31, 1997?
Seven day current yields for the Funds for the period ended March 31, 1997 and
for the period ended September 30, 1996, are as follows:
<TABLE>
<CAPTION>
MARCH 31, SEPT. 30,
FUND 1997 1996
<S> <C> <C>
- ----------------------------------------------------
California Tax-Free MMMF 2.67% 2.97%
National Tax-Free MMMF 2.58% 3.00%
</TABLE>
WHY ARE THE YIELDS LOWER NOW THAN IN SEPTEMBER?
To some extent, it is an anomaly that yields are lower now than in September.
Yields change daily as notes are sold on the open market. Late summer and early
fall 1996 was a particularly volatile period with yields rising and falling
within a fifty basis point (or 0.50%) range. September 30 happened to be one of
the peaks. It is important to keep an eye on the general trend in yields rather
than draw conclusions based on a single-day "snap shot" of current yields. The
Wall Street Journal's Market Diary section, for example, publishes a useful
graph tracking interest rates for investors interested in following this sort of
information.
THE FEDERAL FUNDS TARGET RATE, SET BY THE FEDERAL RESERVE, IS THE GREATEST
INFLUENCE ON MONEY MARKET YIELDS. THE RATE REMAINED UNCHANGED UNTIL MARCH, YET
MONEY MARKET YIELDS FLUCTUATED. WHY?
There are a number of reasons. If the economy is expected to grow rapidly, rates
usually move higher in anticipation of a Fed rate hike. Cash flows into money
market mutual funds are another important factor. The dynamics of supply and
demand can drive yields higher or drag them lower, particularly for variable
rate securities which tend to play a substantial role in the portfolios of all
tax-free money market funds. Looking ahead, the June-July "note season" usually
provides the short-term municipal marketplace with the heaviest supply of the
year. We expect that the bulk of note buying for the California Tax-Free Money
Market Mutual Fund will be completed during this period.
WHAT DOES "WEIGHTED AVERAGE MATURITY" TELL US ABOUT THE FUNDS? HOW HAS IT
CHANGED DURING THE PERIOD?
Weighted average maturity is a measure of the average length of time before
securities in a portfolio mature on a dollar for dollar basis. It is one of the
measures of a Fund's sensitivity to interest rate changes. Funds with longer
---------------------
3
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
maturities generally are more sensitive to interest rate fluctuations.
Typically, for a money market mutual fund, within a very narrow range managers
will increase maturity to lock in higher rates or shorten maturity if they
anticipate higher rates being available soon. Market forces may also make one
range relatively more attractive than another. For the most part, the weighted
average maturities for these Funds have been fairly steady and in the
short-to-intermediate range of 45 to 60 days.
SINCE THE FEDERAL RESERVE RAISED THE FEDERAL FUNDS TARGET RATE IN MARCH, DO YOU
EXPECT FURTHER ACTION?
The Federal Reserve has rarely effected only a single increase when changing
monetary policy, so additional increases are likely. However, the federal funds
target rate is relatively high compared to the Consumer Price Index (the prime
measure of inflation), so we believe that substantial increases are unlikely.
- ---------------------
4
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1997
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 100.03%
$11,800,000 ABAG Finance Authority for Nonprofit Corp CA
Lucile Salter Packard Project V/R AMBAC
Insured 3.20 % 08/01/23 $ 11,800,000
900,000 Anaheim CA COP Police Facilities V/R 3.20 08/01/08 900,000
5,000,000 Anaheim CA Housing Revenue V/R LOC - Citibank 3.35 12/01/23 5,000,000
4,500,000 Barstow CA MFHR Desert Vista Apartments V/R LOC
- Federal Home Loan Bank of San Francisco 3.25 12/01/20 4,500,000
3,700,000 Big Bear Lake CA Industrial Revenue Southwest
Gas Corp V/R AMT Series A LOC - Union Bank of
Switzerland 3.30 12/01/28 3,700,000
10,500,000 California HFFA V/R Nonprofit Corp Catholic
Healthcare MBIA Insured 3.20 07/01/12 10,500,000
1,400,000 California Pollution Control Finance Authority
Revenue V/R 3.40 12/01/12 1,400,000
2,400,000 California State CDA Revenue Series A 3.30 05/15/25 2,400,000
4,700,000 California State Eagle Trust Private Placement
Co V/R 3.51 09/01/03 4,700,000
1,000,000 California State GO CP 3.40 05/20/97 1,000,000
15,385,000 California State GO TOB Multiple LOC's 3.51 11/01/24 15,385,000
1,500,000 California State Health Facility Revenue Series
B AMBAC Insured 3.60 07/01/12 1,500,000
2,000,000 California State HFA Home Mortgage Revenue V/R
MBIA Insured 3.51 08/01/10 2,000,000
4,700,000 California State HFFA Catholic Healthcare
Series C V/R 3.20 07/01/20 4,700,000
8,700,000 California State HFFA Catholic West Hospital
Series B V/R MBIA Insured 3.20 07/01/05 8,700,000
3,100,000 California State HFFA Childrens Hospital V/R
MBIA Insured 3.20 11/01/21 3,100,000
15,600,000 California State HFFA Kaiser Permanente V/R 3.35 05/01/28 15,600,000
</TABLE>
---------------------
5
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$13,400,000 California State HFFA Memorial Health Services
V/R 3.40 % 10/01/24 $ 13,400,000
4,300,000 California State HFFA N. T. Enloe Memorial
Hospital V/R LOC - Bank of America 3.10 01/01/16 4,300,000
11,000,000 California State HFFA Revenue Catholic
Healthcare West Series C V/R MBIA Insured 3.20 07/01/11 11,000,000
300,000 California State HFFA Revenue Catholic
Healthcare West V/R MBIA Insured 3.20 07/01/09 300,000
3,300,000 California State HFFA Revenue Catholic
Healthcare West V/R Series B MBIA Insured 3.20 07/01/16 3,300,000
1,100,000 California State HFFA Santa Barbara Cottage V/R
LOC - Credit Suisse 3.30 09/01/15 1,100,000
2,800,000 California State HFFA St Joseph Health Center
Series A V/R 3.65 07/01/13 2,800,000
1,400,000 California State HFFA St Joseph's Health
Systems Series B V/R 3.60 07/01/09 1,400,000
4,150,000 California State HFFA St. Joseph's Health
Systems 3.60 07/01/13 4,150,000
4,750,000 California State Housing Finance Agency Revenue 3.40 08/01/26 4,750,000
1,700,000 California State IDA Merrills Packing Inc V/R
LOC - Bank of Tokyo Ltd 3.50 12/01/18 1,700,000
2,000,000 California State PCFA Chevron Project V/R 3.70 06/15/05 1,996,300
10,200,000 California State PCFA Pacific Gas & Electric
V/R Series A 3.35 12/01/16 10,200,000
1,500,000 California State PCFA Resources Recovery
Revenue V/R LOC - Banque Nationale de Paris 3.70 09/01/18 1,500,000
1,000,000 California State PCFA Sanger Project Series
90-A V/R LOC - Credit Suisse 3.30 09/01/20 1,000,000
1,600,000 California State PCFA Solid Waste Disposal
Revenue Colmac Energy Project Series B V/R
AMT LOC - Swiss Bank 3.30 12/01/16 1,600,000
</TABLE>
- ------------------------
6
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 8,000,000 California State PCFA Solid Waste Disposal
Revenue Colmac Energy Project V/R Series A
LOC - Swiss Bank 3.30 % 12/01/16 $ 8,000,000
3,000,000 California State PCFA Solid Waste Disposal
Revenue Shell Oil Co Martinez Project Series
A V/R AMT 3.60 10/01/24 3,000,000
3,275,000 California State PCFA Solid Waste Disposal
Revenue Taormina Industries Project AMT
Multiple LOC's 3.50 08/01/14 3,275,000
1,700,000 California State PCFA Southern California
Edison V/R 3.55 02/28/08 1,700,000
1,400,000 California State PCFA Southern California
Edison V/R Series C 3.55 02/28/08 1,400,000
1,100,000 California State PCFA Southern California
Edison V/R Series D 3.55 02/28/08 1,100,000
900,000 California State PCFA V/R Shell Oil Co Project
Series B 3.65 10/01/11 900,000
3,000,000 California State PCR Pacific Gas & Electric 3.60 11/01/26 3,000,000
3,000,000 California State PCR Pacific Gas & Electric
Series 1996E 3.15 05/08/97 3,000,000
5,000,000 California State PCR Pacific Gas & Electric
Series 1996E 3.30 05/08/97 5,000,000
4,100,000 California State RAN 3.40 06/30/97 4,100,000
44,225,000 California State RAN 4.50 06/30/97 44,296,866
3,000,000 California State Revenue Anticipation Notes
Series C-2 3.45 06/30/97 3,000,000
78,600,000 California State School Cash Reserve Projects
Authority Series A 4.75 07/02/97 78,812,060
12,000,000 California Statewide CDA Apartment Development
Revenue V/R Series A-2 FNMA Collateralized 3.30 05/15/25 12,000,000
15,100,000 California Statewide CDA Apartment Development
Revenue V/R Series A-4 FNMA Collateralized 3.30 05/15/05 15,100,000
3,200,000 California Statewide CDA Barton Hospital V/R
LOC - Banque Nationale de Paris 3.25 12/01/09 3,200,000
</TABLE>
---------------------
7
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$14,500,000 California Statewide CDA Revenue COP V/R Kaiser
Foundation Hospitals 3.35 % 12/01/15 $ 14,500,000
1,000,000 California Statewide CDA Revenue DV Industries
V/R AMT Series A LOC - Bank of Tokyo Ltd 3.50 08/01/19 1,000,000
3,800,000 California Statewide CDA St Joseph Health
System V/R 3.40 07/01/08 3,800,000
9,700,000 Chula Vista CA IDR San Diego Gas & Electric V/R 3.45 12/01/27 9,700,000
5,000,000 Chula Vista CA Industrial Development Revenue
San Diego Gas & Electric 3.40 05/07/97 5,000,000
5,000,000 Chula Vista CA Industrial Development Revenue
San Diego Gas & Electric 3.55 06/26/97 5,000,000
2,000,000 Chula Vista CA Industrial Development Revenue
San Diego Gas & Electric Series B 3.60 12/01/21 2,000,000
3,240,000 Chula Vista CA MFHR V/R Series A 3.40 03/01/05 3,240,000
5,000,000 Chula Vista Industrial Development Revenue San
Diego Gas & Electric 3.50 06/24/97 5,000,000
5,100,000 Colton CA RDFA Las Palomas Associates Project
V/R LOC - Bank of America 3.20 11/01/15 5,100,000
745,000 Contra Costa County CA MFHR El Cerrito Royale
V/R LOC - Bank of America 3.25 12/01/17 745,000
2,500,000 Contra Costa County CA MFHR Park Regency
Apartment V/R LOC - Bank of America 3.60 08/01/32 2,500,000
7,000,000 Contra Costa County CA TRAN 4.50 07/03/97 7,010,288
18,000,000 Eagle Trust V/R Series 94 MBIA Insured 3.51 09/01/03 18,000,000
2,500,000 East Bay CA MUD CP 3.45 05/22/97 2,500,000
2,000,000 East Bay CA MUD CP 3.45 05/30/97 2,000,000
23,285,000 Eastern Municipal Water District CA Revenue
Series B V/R FGIC Insured 3.20 07/01/20 23,285,000
4,400,000 Escondido CA CDA V/R AMT LOC - Bank of America 3.25 10/01/16 4,400,000
1,500,000 Escondido CA MFHR Morning View Terrace V/R LOC
- Bank of America 3.20 02/15/07 1,500,000
</TABLE>
- ------------------------
8
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 250,000 Farfield CA IDA Herman G Rowland Project V/R
LOC - Bank of America 2.90 % 04/01/05 $ 250,000
18,300,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue Series B V/R LOC -
Morgan Guaranty Trust 3.20 01/02/35 18,300,000
18,000,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue Series C V/R LOC -
Credit Suisse 3.20 01/02/35 18,000,000
7,500,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue V/R LOC - Banque
National de Paris 3.25 01/02/35 7,500,000
3,900,000 Foothill / Eastern CA Transportation Corridor
Toll Road Development Series D V/R LOC -
Industrial Bank of Japan Ltd 3.30 01/02/35 3,900,000
1,500,000 Fowler CA IDA Bee Sweet Citrus Inc V/R AMT LOC
- Bank of America 3.50 12/01/05 1,500,000
2,300,000 Fremont CA MFHR V/R Creekside Village
Apartments LOC - National Westminster Bank
Plc 3.20 09/01/07 2,300,000
6,800,000 Fresno City CA TRAN Series A 4.75 09/29/97 6,833,903
6,800,000 Fullerton CA IDA Sunclipse Inc V/R LOC - Bank
of America 3.35 07/01/15 6,800,000
8,000,000 Hayward CA MFHR V/R FGIC Insured 3.20 08/01/14 8,000,000
10,000,000 Irvine CA Development Revenue V/R 3.30 09/02/11 10,000,000
1,200,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank Plc 3.70 09/02/15 1,200,000
4,800,000 Irvine CA Public Facilities & Infrastructure
Authority Lease Revenue V/R Capital
Improvement Project 3.30 11/01/10 4,800,000
3,350,000 Irvine Ranch CA Water District LOC - Bank of
America 3.55 05/01/09 3,350,000
3,300,000 Irvine Ranch CA Water District LOC - National
Westminster Bank Plc 3.70 08/01/16 3,300,000
1,200,000 Irvine Ranch CA Water District V/R 3.70 10/01/05 1,200,000
</TABLE>
---------------------
9
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,000,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 3.70 % 10/01/00 $ 2,000,000
2,000,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 3.70 10/01/10 2,000,000
900,000 Kern CO COP Public Facilities Project Series D
V/R 3.20 08/01/06 900,000
10,000,000 Kern County CA TRANS Series A 4.50 10/02/97 10,046,427
200,000 Lancaster CA HFA MFHR Westwood Park Apartments
V/R LOC - Bank of America 3.20 12/01/07 200,000
4,000,000 Livermore MFHR V/R 3.20 07/15/18 4,000,000
3,000,000 Long Beach CA Harbor Department Revenue Series
A 3.25 04/08/97 3,000,000
5,000,000 Long Beach CA Harbor Department Revenue Series
A 3.25 05/08/97 5,000,000
5,900,000 Long Beach CA Harbor Department Revenue Series
A 3.30 05/12/97 5,900,000
3,000,000 Long Beach CA Harbor Development Revenue Series
A 3.40 05/07/97 3,000,000
22,600,000 Long Beach CA Health Facilities Memorial Health
Services 3.30 10/01/16 22,600,000
24,275,000 Los Angeles CA Community Development
Multifamily Housing Revenue 3.20 04/01/09 24,275,000
3,700,000 Los Angeles CA MFHA Malibu Meadows Project
Series A V/R LOC - Sumitomo Bank Ltd 3.55 12/01/15 3,700,000
2,515,000 Los Angeles CA MFHR Canyon Apartments Series C
V/R LOC - Swiss Bank 3.35 12/01/10 2,515,000
1,800,000 Los Angeles CA MFHR Masselin Manor V/R LOC -
Bank of America 3.25 07/01/15 1,800,000
1,000,000 Los Angeles CA MFHR Poinsettia Apartments
Series A V/R LOC - Dai-Ichi Kangyo Bank Ltd 3.65 07/01/19 1,000,000
500,000 Los Angeles CA MFHR V/R 3.20 07/01/14 500,000
2,200,000 Los Angeles CA MFHR V/R AMT LOC - Federal Home
Loan Bank of San Francisco 3.75 08/01/26 2,200,000
10,600,000 Los Angeles CA MFHR V/R Series K 3.10 07/01/10 10,600,000
</TABLE>
- ------------------------
10
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$27,700,000 Los Angeles CA Pension Obligation V/R Series B
AMBAC Insured 3.20 % 06/30/07 $ 27,700,000
6,300,000 Los Angeles CA Pension Obligation V/R Series C
AMBAC Insured 3.20 06/30/07 6,300,000
50,570,000 Los Angeles CA TRAN Series A 4.50 06/30/97 50,646,342
1,400,000 Los Angeles County CA HFA MFHR Harbor Cove
Project V/R LOC - Citibank 3.25 10/01/06 1,400,000
9,800,000 Los Angeles County CA HFA MFHR Park Sierra V/R
AMT LOC - Citibank 3.35 12/01/08 9,800,000
4,100,000 Los Angeles County CA HFA MFHR Sand Canyon
Ranch Project V/R LOC - Citibank 3.25 11/01/06 4,100,000
500,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.20 12/01/06 500,000
500,000 Los Angeles County CA IDA Walter & Howard V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.20 12/01/06 500,000
33,400,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
V/R Series A 3.20 07/01/20 33,400,000
10,400,000 Los Angeles County CA pension Obligation V/R
Series A AMBAC Insured 3.20 06/30/07 10,400,000
24,350,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue V/R FGIC Insured 3.20 07/01/12 24,350,000
1,000,000 Metropolitan Water District of Southern CA
Waterworks Revenue CP 4.00 07/01/97 1,001,601
5,400,000 Modesto CA MFHR Westdale Commons Apartments V/R
LOC - Federal Home Loan Bank of San Francisco 3.10 12/01/15 5,400,000
5,000,000 Monterey County CA Regional Waste Management
Authority Revenue 7.88 (F) 12/01/17 5,236,297
3,100,000 Monterey CA Peninsula Water Management District
Wastewater Reclamation Project V/R LOC -
Sumitomo Bank Ltd 3.20 07/01/22 3,100,000
</TABLE>
---------------------
11
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 6,100,000 Monterey CA Regional Waste Management Authority
Revenue Series A V/R LOC - Dai-Ichi Kangyo
Bank Ltd 3.45 % 04/01/15 $ 6,100,000
16,500,000 Monterey County CA Financing Authority Water
Reclamation Projects V/R AMT LOC - Dai-Ichi
Bank Ltd 3.45 09/01/36 16,500,000
6,400,000 Moorpark CA MFHR Le Club Apartments V/R LOC -
Citibank 3.25 11/01/15 6,400,000
22,300,000 Northern California State Public Power Revenue
Geothermal Project 3A AMBAC Insured 3.20 07/01/05 22,300,000
8,775,000 Oakland CA Port Revenue Series A 7.25 (F) 11/01/16 8,977,418
2,800,000 Ontario CA MFHR Park Centre Apartments V/R LOC
- Bank of New York 3.20 08/01/07 2,800,000
1,360,000 Ontario CA MFHR Vineyard Village Apartments V/R
LOC - Industrial Bank of Japan Ltd 3.30 12/01/05 1,360,000
2,249,000 Orange County CA HFA Harbor Pointe Apartment
V/R Issue D LOC - Citibank 3.35 12/01/06 2,249,000
4,200,000 Orange County CA HFA Monarch Bay Apartments V/R
LOC - Mitsubishi Bank Ltd 3.35 10/01/07 4,200,000
700,000 Orange County CA HFA Niguel Summit Apartment
V/R LOC - Bank of America 3.30 11/01/09 700,000
5,400,000 Orange County CA HFA Seaside Meadow Apartments
Series C LOC - Bank of America 3.20 08/01/08 5,400,000
13,300,000 Orange County CA HFA The Lakes Apartments V/R
LOC - Citibank 3.30 12/01/06 13,300,000
1,700,000 Orange County CA HFA Vintage Wood Apartments
V/R LOC - Mitsubishi Bank Ltd 3.25 11/01/08 1,700,000
6,800,000 Orange County CA Housing Authority - Costa
Partners V/R 3.40 12/01/09 6,800,000
5,000,000 Orange County CA Improvement Bond V/R Multiple
LOC's 3.80 09/02/18 5,000,000
</TABLE>
- ------------------------
12
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$24,600,000 Orange County CA Sanitation District Multiple
Credit Enhancements 3.20 % 08/01/13 $ 24,600,000
1,000,000 Orange County CA Sanitation District V/R
Multiple Credit Enhancements 3.70 08/01/16 1,000,000
4,000,000 Regents of the University of California Series
A 3.00 04/18/97 4,000,000
4,000,000 Regents of the University of California Series
A 3.30 04/07/97 4,000,000
10,000,000 Regents of the University of California Series
A 3.40 04/11/97 10,000,000
5,000,000 Regents of the University of California Series
A 3.40 06/30/97 5,000,000
3,000,000 Riverside County CA Transportation Commission
Series A 3.35 05/07/97 3,000,000
6,250,000 Riverside County CA Transportation Commission
Series A 3.45 05/22/97 6,250,000
1,000,000 Sacramento CA MFHR River Oaks Apartments V/R
Series E 3.45 09/15/07 1,000,000
27,100,000 Sacramento County CA Administration Center &
Courthouse Project V/R LOC - Union Bank of
Switzerland 3.20 06/01/20 27,100,000
9,620,000 Sacramento County CA EDFA Series A 4.00 11/27/97 9,650,291
6,000,000 Sacramento County CA MUD Series A 3.45 06/26/97 6,000,000
5,000,000 Sacramento County CA MUD Series H 3.25 04/07/97 5,000,000
5,000,000 Sacramento County CA MUD Series H 3.35 05/22/97 5,000,000
5,900,000 Sacramento County CA Series C V/R LOC -
Dai-Ichi Kangyo Bank Ltd 3.45 04/15/07 5,900,000
15,000,000 Sacramento County CA Tax & Revenue Anticipation
Notes 4.50 09/30/97 15,063,742
1,270,000 San Bernardino County CA IDA Transamerican
Plastics V/R LOC - National Westminster Bank
Plc 3.45 12/01/06 1,270,000
4,925,000 San Bernardino County CA MFHR V/R Series A LOC
- Federal Home Loan Bank of San Francisco 3.40 05/01/17 4,925,000
</TABLE>
---------------------
13
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 400,000 San Bernardino County CA MFHR Western
Properties Project II V/R LOC - Bank of
America 3.00 % 05/01/05 $ 400,000
700,000 San Bernardino County CA MFHR Western
Properties Project III V/R LOC - Bank of
America 3.00 08/01/05 700,000
100,000 San Bernardino County CA MFHR Western
Properties Project IV V/R LOC - Bank of
America 3.00 08/01/05 100,000
1,900,000 San Bernardino County CA MFHR Woodview
Apartments V/R LOC - Bank of America 3.35 04/01/07 1,900,000
19,000,000 San Bernardino County CA TRAN 4.50 06/30/97 19,031,622
2,635,000 San Diego CA MFHR Flora Apartments Series A V/R
AMT LOC - Swiss Bank 3.35 06/01/05 2,635,000
3,020,000 San Diego CA MFHR La Cima Apartments V/R LOC -
Citibank 3.25 12/01/08 3,020,000
200,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 3.35 04/01/07 200,000
3,500,000 San Diego CA Multi Family Apartments V/R LOC -
Bank of America 3.25 10/01/15 3,500,000
4,200,000 San Diego County CA CP 3.10 04/04/97 4,200,000
3,970,000 San Diego County CA CP 3.40 05/22/97 3,970,000
5,000,000 San Diego County CA CP 3.45 06/24/97 5,000,000
13,835,000 San Francisco CA City & County Finance
Authority Revenue 3.30 09/01/06 13,835,000
9,400,000 San Francisco CA MFHR Bayside Village
Apartments V/R LOC - Industrial Bank of Japan
Ltd 3.40 12/01/05 9,400,000
14,700,000 San Francisco CA MFHR Fillmore Center
Apartments V/R LOC - Bank of Nova Scotia 3.25 12/01/17 14,700,000
3,000,000 San Francisco CA MFHR Fillmore Center
Apartments V/R LOC - Bank of Nova Scotia 3.35 12/01/17 3,000,000
12,000,000 San Francisco CA MFHR Fillmore Center
Apartments V/R LOC - Citibank 3.25 12/01/17 12,000,000
</TABLE>
- ------------------------
14
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,000,000 San Francisco CA MFHR Fillmore Center
Apartments V/R LOC - Citibank 3.35 % 12/01/17 $ 3,000,000
8,050,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 3.25 06/01/06 8,050,000
11,440,000 San Francisco CA RDFA MFHR Rincon Center V/R
LOC - Citibank 3.25 12/01/06 11,440,000
10,000,000 San Joaquin County CA TRAN 4.50 01/15/98 10,065,250
7,300,000 San Jose - Santa Clara CA Water Financing
Authority Sewer Revenue Series B V/R FGIC
Insured 3.20 11/15/20 7,300,000
1,500,000 San Jose CA Multifamily Housing Revenue V/R 3.30 03/01/32 1,500,000
2,200,000 San Leandro CA MFHR Haas Avenue Apartments V/R
LOC - Bank of America 3.20 10/01/07 2,200,000
5,100,000 Santa Clara CA Electric Revenue V/R Series 85A
LOC - National Westminster Bank Plc 3.30 07/01/10 5,100,000
1,300,000 Santa Clara CA Electric Revenue V/R Series 85B
LOC - National Westminster Bank Plc 3.30 07/01/10 1,300,000
5,100,000 Santa Clara CA Electric Revenue V/R Series 85C
LOC - National Westminster Bank Plc 3.30 07/01/10 5,100,000
3,000,000 Santa Clara County CA Taso & Revenue
Anticipation Notes 4.50 08/01/97 3,005,470
4,875,000 Simi Valley CA MFHR Creekside Village
Apartments V/R LOC - Bank of America 3.20 07/01/23 4,875,000
13,300,000 Southeast CA Revenue Recovery Facility Series A 3.45 12/01/18 13,300,000
15,170,000 Southern California Public Power Authority
Revenue Paloverde Project AMBAC Insured 3.20 07/01/17 15,170,000
2,000,000 Southern California State PCR Edison Series C 3.40 06/24/97 2,000,000
2,000,000 Southern California State PCR Edison Series C 3.45 06/27/97 2,000,000
</TABLE>
---------------------
15
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$13,300,000 Southern California State Public Power
Authority Palo Verde Project Series B AMBAC
Insured 3.20 % 07/01/09 $ 13,300,000
20,200,000 Southern California State Public Power
Authority Southern Transmission Project V/R
LOC - Swiss Bank 3.20 07/01/19 20,200,000
18,000,000 Southern California Waterworks Revenue Series A
AMBAC Insured 3.20 06/01/23 18,000,000
4,000,000 State of California GO CP Multiple Credit
Enhancements 3.10 04/04/97 4,000,000
3,000,000 State of California GO CP Multiple Credit
Enhancements 3.45 05/14/97 3,000,000
4,200,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 3.00 05/01/15 4,200,000
1,000,000 Turlock CA COP Irrigation Project V/R Series A 3.20 01/01/26 1,000,000
3,200,000 Tustin CA Improvement Bond V/R 3.70 09/02/13 3,200,000
6,390,000 Union City CA Skylark V/R LOC - Sumitomo Bank
Ltd 3.60 11/01/07 6,390,000
4,400,000 Union City CA V/R LOC - Sumitomo Bank Ltd 3.60 10/01/07 4,400,000
2,300,000 Upland CA HFA MFHR Upland Village Green Project
V/R LOC - Bank of Tokyo Ltd 3.35 09/01/10 2,300,000
4,200,000 Vacaville CA MFHR Western Properties Sycamores
Project V/R LOC - Bank of America 3.00 04/01/05 4,200,000
5,700,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 3.00 04/01/07 5,700,000
1,500,000 West Covina CA RDA COP V/R Barranca LOC -
Citibank 3.25 09/01/05 1,500,000
3,000,000 West Riverside CA Regional Waterworks Authority
Revenue V/R 3.70 04/01/28 3,000,000
--------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $1,384,782,877
</TABLE>
- ------------------------
16
<PAGE>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $1,384,782,877)* (Note 1) 100.03% $1,384,782,877
Other Assets and Liabilities, Net (0.03) (472,569)
------ --------------
TOTAL NET ASSETS 100.00% $1,384,310,308
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A
DEMAND FEATURE WHICH REDUCES THE REMAINING MATURITY.
The accompanying notes are an integral part of these financial statements.
---------------------
17
<PAGE>
GOVERNMENT MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1997
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM FEDERAL AGENCIES - 41.11%
$ 5,000,000 Federal Farm Credit Bank 5.31 %(F) 09/02/97 $ 4,999,812
6,000,000 Federal Farm Credit Bank 5.53 (F) 11/07/97 5,998,458
5,000,000 Federal Home Loan Bank 5.25 (F) 07/23/97 4,917,604
5,000,000 Federal Home Loan Bank 5.26 (F) 07/25/97 4,915,986
4,000,000 Federal National Mortgage Corp 5.34 (F) 08/07/97 3,924,053
--------------
TOTAL SHORT-TERM FEDERAL AGENCIES $ 24,755,913
U.S. TREASURY NOTES - 18.39%
$ 4,000,000 U.S. Treasury Notes 5.88 % 07/31/97 $ 4,006,302
2,000,000 U.S. Treasury Notes 7.88 01/15/98 2,029,261
5,000,000 U.S. Treasury Notes 8.50 07/15/97 5,043,257
--------------
TOTAL U.S. TREASURY NOTES $ 11,078,820
VARIABLE AND FLOATING RATE BONDS - 11.62%
$ 7,000,000 Federal National Mortgage Assoc 5.61 % 08/01/97 $ 6,999,103
REPURCHASE AGREEMENTS - 28.96%
$ 8,280,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.50 04/01/97 $ 8,280,000
9,160,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.30 04/01/97 9,160,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 17,440,000
</TABLE>
- ------------------------
18
<PAGE>
GOVERNMENT MONEY MARKET MUTUAL FUND
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $60,273,836)* (Note 1) 100.08% $ 60,273,836
Other Assets and Liabilities, Net (0.08) (49,917)
------ --------------
TOTAL NET ASSETS 100.00% $ 60,223,919
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
---------------------
19
<PAGE>
MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1997
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSITS - 11.40%
$50,000,000 Barclays Bank Plc 5.79 % 01/16/98 $ 49,995,212
100,000,000 Canadian Imperial Holdings Inc 5.32 04/22/97 99,998,293
54,000,000 Commerzbank Finance Inc 5.39 05/30/97 53,999,521
100,000,000 Commerzbank Finance Inc 5.80 01/15/98 100,022,745
7,000,000 Societe Generale (Yankee) 5.72 10/20/97 7,004,260
50,000,000 Societe Generale (Yankee) 5.74 10/27/97 50,013,640
50,000,000 Societe Generale (Yankee) 5.79 01/13/98 49,990,425
100,000,000 Societe Generale (Yankee) 5.81 01/13/98 99,990,425
100,000,000 Union Bank of California 5.50 04/28/97 100,000,000
--------------
TOTAL CERTIFICATES OF DEPOSITS $ 611,014,521
COMMERCIAL PAPER - 65.34%
$75,000,000 Abbey National North America 5.46 %(F) 04/02/97 $ 74,988,625
100,000,000 ABN-Ambro North America Finance Inc 5.34 (F) 04/08/97 99,896,167
50,000,000 ABN-Ambro North America Finance Inc 5.35 (F) 04/15/97 49,895,972
50,000,000 ABN-Ambro North America Finance Inc 5.50 (F) 12/08/97 48,082,639
60,000,000 American Express Corp 5.32 (F) 05/12/97 59,636,467
50,000,000 American Express Corp 5.35 (F) 09/19/97 48,729,375
20,000,000 ANZ Delaware Inc 5.31 (F) 04/03/97 19,994,100
50,000,000 Asset Securitization Cooperative Corp++ 5.27 (F) 05/19/97 49,648,667
75,000,000 Asset Securitization Cooperative Corp++ 5.31 (F) 04/10/97 74,900,438
27,000,000 Asset Securitization Cooperative Corp++ 5.35 (F) 04/15/97 26,943,825
30,000,000 Asset Securitization Cooperative Corp++ 5.40 (F) 04/16/97 29,932,500
75,000,000 Bankers Trust New York Corp 5.35 (F) 08/15/97 73,484,167
40,000,000 Bankers Trust New York Corp 5.47 (F) 11/25/97 38,553,489
42,045,000 Barclays US Funding Corp 5.62 (F) 04/11/97 41,979,363
25,000,000 Cargill Inc 5.29 (F) 05/13/97 24,845,708
40,000,000 CC USA Inc++ 5.28 (F) 04/21/97 39,882,667
25,000,000 Ciesco LP++ 5.27 (F) 04/14/97 24,952,424
35,000,000 Ciesco LP++ 5.30 (F) 05/12/97 34,788,736
50,000,000 Ciesco LP++ 5.33 (F) 05/22/97 49,622,458
100,000,000 CIT Group Holdings Inc 5.26 (F) 04/22/97 99,693,167
80,000,000 CIT Group Holdings Inc 5.55 (F) 04/03/97 79,975,333
</TABLE>
- ------------------------
20
<PAGE>
MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$50,000,000 CIT Group Holdings Inc 5.60 %(F) 12/23/97 $ 49,951,530
40,000,000 Corporate Asset Funding Co Inc++ 5.30 (F) 05/15/97 39,740,889
20,000,000 Corporate Asset Funding Co Inc++ 5.59 (F) 04/29/97 19,913,044
40,000,000 Corporate Asset Funding Co Inc++ 5.60 (F) 05/06/97 39,782,222
45,000,000 Corporate Receivables Corp++ 5.34 (F) 04/08/97 44,953,275
75,000,000 Corporate Receivables Corp++ 5.34 (F) 04/14/97 74,855,375
40,000,000 Corporate Receivables Corp++ 5.35 (F) 04/03/97 39,988,178
50,000,000 Corporate Receivables Corp++ 5.60 (F) 05/06/97 49,727,778
50,000,000 Du Pont Corp 5.29 (F) 05/07/97 49,735,500
50,000,000 Du Pont Corp 5.29 (F) 05/12/97 49,698,764
17,000,000 Du Pont Corp 5.30 (F) 05/06/97 16,912,403
75,000,000 Ford Motor Credit Corp 5.28 (F) 04/18/97 74,813,000
150,000,000 Ford Motor Credit Corp 5.34 (F) 05/01/97 149,332,500
75,000,000 General Electric Capital Corp 5.33 (F) 04/28/97 74,700,188
100,000,000 General Electric Capital Corp 5.33 (F) 05/05/97 99,496,611
32,000,000 Glaxo Holdings Plc 5.27 (F) 05/27/97 31,737,671
20,000,000 Glaxo Holdings Plc 5.35 (F) 04/17/97 19,952,444
75,000,000 Goldman Sachs & Co 5.30 (F) 04/07/97 74,933,750
100,000,000 Goldman Sachs & Co 5.55 (F) 04/04/97 99,953,750
66,356,000 Greenwich Asset Funding Inc++ 5.35 (F) 04/28/97 66,089,747
35,081,000 Greenwich Asset Funding Inc++ 5.36 (F) 04/07/97 35,049,661
20,000,000 Greenwich Asset Funding Inc++ 5.38 (F) 05/30/97 19,823,656
50,000,000 Household Finance Corp 5.46 (F) 05/28/97 50,000,000
125,000,000 Merrill Lynch & Co 5.30 (F) 05/14/97 124,208,681
50,000,000 Merrill Lynch & Co 5.33 (F) 04/04/97 49,977,792
70,000,000 Merrill Lynch & Co 6.75 (F) 04/01/97 70,000,000
100,000,000 National Australia Funding Inc 5.34 (F) 04/16/97 99,777,500
29,375,000 Prefco Corp 5.34 (F) 05/13/97 29,191,994
45,000,000 Preferred Receivables Funding Corp 5.46 (F) 04/21/97 44,863,500
51,274,000 Receivables Capital Corp++ 5.35 (F) 05/13/97 50,953,965
70,000,000 Receivables Capital Corp++ 5.36 (F) 04/15/97 69,854,089
25,000,000 Riverwoods Funding Corp 5.25 (F) 04/25/97 24,912,500
35,000,000 Riverwoods Funding Corp 5.34 (F) 04/16/97 34,922,125
46,000,000 RTZ America Inc++ 5.27 (F) 04/14/97 45,912,459
50,000,000 RTZ America Inc++ 5.29 (F) 04/09/97 49,941,222
50,000,000 RTZ America Inc++ 5.29 (F) 04/18/97 49,875,097
58,400,000 Sheffield Receivables Corp++ 5.33 (F) 04/10/97 58,322,182
</TABLE>
---------------------
21
<PAGE>
MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$50,000,000 Sweden (Kingdom of) 5.44 %(F) 11/28/97 $ 48,179,111
47,000,000 Transamerica Corp 5.32 (F) 04/01/97 47,000,000
100,000,000 Unifunding Corp 5.34 (F) 05/09/97 99,436,333
100,000,000 Walt Disney Co 5.35 (F) 07/07/97 98,558,472
18,000,000 WCP Funding Inc++ 5.35 (F) 04/14/97 17,965,225
25,000,000 WCP Funding Inc++ 5.35 (F) 04/15/97 24,947,983
--------------
TOTAL COMMERCIAL PAPER $3,500,368,453
CORPORATE SHORT-TERM NOTES - 7.09%
$100,000,000 Bankers Trust New York Corp 5.60 % 11/07/97 $ 99,932,310
100,000,000 Commercial Bank of Detroit 5.34 02/05/98 99,932,370
95,000,000 FCC National Bank 5.62 02/20/98 94,954,068
85,000,000 First Bank N.A. 5.39 03/06/98 84,960,050
--------------
TOTAL CORPORATE SHORT-TERM NOTES $ 379,778,798
SHORT-TERM FEDERAL AGENCIES - 1.87%
$100,000,000 Federal National Mortgage Assoc 5.56 % 11/21/97 $ 99,951,600
VARIABLE AND FLOATING RATE BONDS - 7.87%
$50,000,000 Abbey National North America 5.32 % 05/21/97 $ 49,993,024
50,000,000 Abbey National North America 5.43 07/17/97 49,965,650
50,000,000 American Express Co 5.41 01/09/98 50,000,000
47,000,000 Federal Home Loan Bank 5.58 08/08/97 46,968,298
125,000,000 PNC Funding Corp 5.34 05/15/97 124,907,600
100,000,000 Sony Capital Corp 5.51 09/04/97 100,000,000
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 421,834,572
U.S. TREASURY BILLS - 1.87%
$100,000,000 U.S. Treasury Bills 4.98 %(F) 04/03/97 $ 99,971,181
</TABLE>
- ------------------------
22
<PAGE>
MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 4.93%
$149,693,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.50 % 04/01/97 $ 149,693,000
33,761,000 HSBC Securities Inc Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 6.37 04/01/97 33,761,000
56,309,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.30 04/01/97 56,309,000
24,466,000 Morgan Stanley & Co Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 6.20 04/01/97 24,466,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 264,229,000
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $5,377,148,125)* (Note 1) 100.37% $5,377,148,125
Other Assets and Liabilities, Net (0.37) (19,887,547)
------ --------------
TOTAL NET ASSETS 100.00% $5,357,260,578
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
++ THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933.
RULE 144A UNDER THAT ACT PERMITS THESE SECURITIES TO BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL
BUYERS. THESE SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER
IN ACCORDANCE WITH PRODECURES APPROVED BY THE FUND'S BOARD OF
DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
---------------------
23
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1997
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 58.94%
U.S. TREASURY BILLS - 33.69%
$215,000,000 U.S. Treasury Bills 4.94 %(F) 04/17/97 $ 214,501,267
195,000,000 U.S. Treasury Bills 4.98 (F) 04/03/97 194,942,419
75,000,000 U.S. Treasury Bills 5.14 (F) 05/01/97 74,685,000
30,000,000 U.S. Treasury Bills 5.18 (F) 05/15/97 29,817,400
100,000,000 U.S. Treasury Bills 5.20 (F) 05/29/97 99,184,778
--------------
$ 613,130,864
U.S. TREASURY NOTES - 25.25%
$29,600,000 U.S. Treasury Notes 5.50 % 09/30/97 $ 29,608,025
50,000,000 U.S. Treasury Notes 5.63 06/30/97 49,955,366
183,900,000 U.S. Treasury Notes 5.88 07/31/97 184,193,206
135,000,000 U.S. Treasury Notes 6.50 05/15/97 135,144,139
59,850,000 U.S. Treasury Notes 7.88 01/15/98 60,773,240
--------------
$ 459,673,976
TOTAL U.S. TREASURY SECURITIES $1,072,804,840
(Cost $1,072,804,840)
</TABLE>
- ------------------------
24
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 41.17%
$172,575,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.50 04/01/97 $ 172,575,000
187,452,000 HSBC Securities Inc Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 6.37 04/01/97 187,452,000
232,766,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.30 04/01/97 232,766,000
156,530,000 Morgan Stanley & Co Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 6.20 04/01/97 156,530,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 749,323,000
(Cost $749,323,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $1,822,127,840)* (Note 1) 100.11% $1,822,127,840
Other Assets and Liabilities, Net (0.11) (1,936,332)
------ --------------
TOTAL NET ASSETS 100.00% $1,820,191,508
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
---------------------
25
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - MARCH 31, 1997
<TABLE>
<CAPTION>
CALIFORNIA GOVERNMENT
TAX-FREE MONEY
MONEY MARKET MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- ---------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) (includes repurchase
agreements of $749,323,000 for the
Treasury Money Market Mutual Fund
and $17,440,000 for the Government
Money Market Mutual Fund) $1,384,782,877 $60,273,836
Cash 106,300 2,886
Receivables:
Interest 13,024,774 297,472
Due from administrator (Note 2) 0 0
Organization expenses, net of
amortization 0 0
Prepaid expenses 2,237 15,576
TOTAL ASSETS 1,397,916,188 60,589,770
LIABILITIES
Payables:
Investment securities purchased 7,526,025 0
Distribution to shareholders 3,028,864 206,632
Due to sponsor and distributor (Note
2) 572,275 25,277
Due to WFB (Note 2) 2,370,467 81,593
Other 108,249 52,349
TOTAL LIABILITIES 13,605,880 365,851
TOTAL NET ASSETS
$1,384,310,308 $60,223,919
NET ASSETS CONSIST OF:
Paid-in capital $1,384,390,810 $60,224,644
Undistributed net realized gain (loss)
on investments (80,502) (725)
TOTAL NET ASSETS $1,384,310,308 $60,223,919
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE
PER SHARE
Net assets - Class A $1,384,310,308 $60,223,919
Shares outstanding - Class A 1,384,390,810 60,225,858
Net asset value and offering price per
share - Class A $ 1.00 $ 1.00
Net assets - Class E N/A N/A
Shares outstanding - Class E N/A N/A
Net asset value and offering price per
share - Class E N/A N/A
Net assets - Institutional Class N/A N/A
Shares outstanding - Institutional Class N/A N/A
Net asset value and offering price per
share - Institutional Class N/A N/A
Net assets - Class S/Service Class N/A N/A
Shares outstanding - Class S/Service
Class N/A N/A
Net asset value and offering price per
share - Class S/Service Class N/A N/A
INVESTMENT AT COST $1,384,782,877 $60,273,836
- ---------------------------------------------------------------------------
</TABLE>
(1) INVESTMENT IN CORRESPONDING MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
- ------------------------
26
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - MARCH 31, 1997
<TABLE>
<CAPTION>
NATIONAL
TAX-FREE
MONEY MONEY TREASURY
MARKET MARKET MONEY MARKET
MUTUAL FUND MUTUAL FUND MUTUAL FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) (includes repurchase
agreements of $749,323,000 for the
Treasury Money Market Mutual Fund
and $17,440,000 for the Government
Money Market Mutual Fund) $5,377,148,125 $35,192,166(1) $1,822,127,840
Cash 1,209 0 1,484
Receivables:
Interest 13,485,487 57,311 6,944,677
Due from administrator (Note 2) 0 23,117 0
Organization expenses, net of
amortization 22,529 31,779 114,138
Prepaid expenses 239,896 29,512 446,262
TOTAL ASSETS 5,390,897,246 35,333,885 1,829,634,401
LIABILITIES
Payables:
Investment securities purchased 0 0 0
Distribution to shareholders 19,498,486 49,003 6,609,856
Due to sponsor and distributor (Note
2) 2,651,988 1,659 512,522
Due to WFB (Note 2) 11,158,762 0 1,919,921
Other 327,432 29,849 400,594
TOTAL LIABILITIES 33,636,668 80,511 9,442,893
TOTAL NET ASSETS
$5,357,260,578 $35,253,374 $1,820,191,508
NET ASSETS CONSIST OF:
Paid-in capital $5,358,875,881 $35,253,811 $1,820,190,491
Undistributed net realized gain (loss)
on investments (1,615,303) (437) 1,017
TOTAL NET ASSETS $5,357,260,578 $35,253,374 $1,820,191,508
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE
PER SHARE
Net assets - Class A $4,640,147,686 $35,253,374 $ 66,486,164
Shares outstanding - Class A 4,640,420,884 35,253,345 66,507,745
Net asset value and offering price per
share - Class A $ 1.00 $ 1.00 $ 1.00
Net assets - Class E N/A N/A $ 820,657,027
Shares outstanding - Class E N/A N/A 820,657,027
Net asset value and offering price per
share - Class E N/A N/A $ 1.00
Net assets - Institutional Class $ 9,331,703 N/A $ 449,647,328
Shares outstanding - Institutional Class 9,322,837 N/A 449,775,318
Net asset value and offering price per
share - Institutional Class $ 1.00 N/A $ 1.00
Net assets - Class S/Service Class 707,781,189 N/A $ 483,400,989
Shares outstanding - Class S/Service
Class 707,819,915 N/A 483,415,134
Net asset value and offering price per
share - Class S/Service Class $ 1.00 N/A $ 1.00
INVESTMENT AT COST $5,377,148,125 N/A $1,822,127,840
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) INVESTMENT IN CORRESPONDING MASTER PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
---------------------
27
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY
MARKET MUTUAL FUND
---------------------------
FOR THE
FOR THE SIX NINE
MONTHS MONTHS
ENDED ENDED
MARCH 31, SEPT. 30,
1997 1996
<S> <C> <C>
- ------------------------------------------------------------------------
INVESTMENT INCOME
Interest $21,483,461 $27,459,147
Expenses allocated from Master
Portfolio N/A N/A
TOTAL INVESTMENT INCOME 21,483,461 27,459,147
EXPENSES (NOTE 2)
Advisory fees 3,191,125 4,099,437
Administration fees 253,836 245,966
Custody fees 110,366 142,536
Shareholder servicing fees 1,914,675 2,459,662
Portfolio accounting fees 158,263 210,019
Transfer agency fees 474,046 577,203
Distribution fees 191,879 260,016
Amortization of organization expenses 1,262 3,866
Legal and audit fees 45,052 85,001
Registration fees 129,318 39,452
Directors' fees 2,490 3,743
Shareholder reports 57,121 149,729
Other 49,351 98,014
TOTAL EXPENSES 6,578,784 8,374,644
Less:
Waived fees and reimbursed expenses (2,430,083) (3,045,388)
Net Expenses 4,148,701 5,329,256
NET INVESTMENT INCOME 17,334,760 22,129,891
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments (20,256) 39,647
NET GAIN (LOSS) ON INVESTMENTS (20,256) 39,647
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $17,314,504 $22,169,538
- ------------------------------------------------------------------------
</TABLE>
(1) THE FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(2) ALLOCATED FROM THE MASTER PORTFOLIO
The accompanying notes are an integral part of these financial statements.
- ---------------------
28
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NATIONAL TAX-FREE
GOVERNMENT MONEY MARKET MONEY MARKET MUTUAL
MUTUAL FUND FUND (1)
------------------------- MONEY MARKET MUTUAL FUND --------------------
FOR THE ----------------------------- FOR THE FOR THE
SIX SIX PERIOD
MONTHS FOR THE FOR THE SIX FOR THE NINE MONTHS ENDED
ENDED YEAR ENDED MONTHS ENDED MONTHS ENDED ENDED SEPT.
MARCH 31, SEPT. 30, MARCH 31, SEPT. 30, MARCH 30,
1997 1996 1997 1996 31, 1997 1996
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $1,575,611 $5,083,015 $134,418,916 $157,416,270 $224,687 $49,902
Expenses allocated from Master
Portfolio N/A N/A N/A N/A (17,629) (4,331)
TOTAL INVESTMENT INCOME 1,575,611 5,083,015 134,418,916 157,416,270 207,058 45,571
EXPENSES (NOTE 2)
Advisory fees 73,834 274,640 9,835,346 11,593,678 0 0
Administration fees 15,761 147,235 980,282 872,577 3,744 731
Custody fees 4,931 19,745 414,360 489,652 0 0
Shareholder servicing fees 73,835 155,369 7,194,978 8,436,247 16,881 3,657
Portfolio accounting fees 31,435 31,849 522,389 625,939 0 0
Transfer agency fees 23,660 14,841 1,687,292 1,927,196 6,752 1,463
Distribution fees 14,766 29,161 3,097,961 4,067,866 3,377 731
Amortization of organization
expenses 1,824 0 8,108 12,191 4,382 8,272
Legal and audit fees 16,800 28,746 261,415 388,102 11,556 8,702
Registration fees 7,331 14,681 328,411 242,858 21,162 16,283
Directors' fees 6,300 6,861 2,490 3,743 2,290 2,288
Shareholder reports 8,400 11,878 124,483 187,179 14,616 5,967
Other 13,382 7,405 54,331 50,607 939 673
TOTAL EXPENSES 292,259 742,411 24,511,846 28,897,835 85,699 48,767
Less:
Waived fees and reimbursed expenses (70,801) (28,486) (3,603,285) (3,884,553) (60,237) (43,763)
Net Expenses 221,458 713,925 20,908,561 25,013,282 25,462 5,004
NET INVESTMENT INCOME 1,354,153 4,369,090 113,510,355 132,402,988 181,596 40,567
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments (794) 69 215,989 740,929 0 (437)(2)
NET GAIN (LOSS) ON INVESTMENTS (794) 69 215,989 740,929 0 (437)
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $1,353,359 $4,369,159 $113,726,344 $133,143,917 $181,596 $40,130
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(2) ALLOCATED FROM THE MASTER PORTFOLIO
The accompanying notes are an integral part of these financial statements.
---------------------
29
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL
FUND
----------------------------
FOR THE SIX
MONTHS FOR THE
ENDED YEAR ENDED
MARCH 31, SEPT. 30,
1997 1996
<S> <C> <C>
- -------------------------------------------------------------------------
INVESTMENT INCOME
Interest $48,772,796 $105,450,049
Expenses allocated from Master
Portfolio N/A N/A
TOTAL INVESTMENT INCOME 48,772,796 105,450,049
EXPENSES (NOTE 2)
Advisory fees 2,270,318 4,516,348
Administration fees 483,198 1,745,759
Custody fees 151,657 252,183
Shareholder servicing fees 1,345,644 4,608,283
Portfolio accounting fees 212,691 0
Transfer agency fees 285,007 82,755
Distribution fees 60,389 13,064
Amortization of organization expenses 12,694 7,954
Legal and audit fees 16,408 47,635
Registration fees 209,163 218,636
Directors' fees 6,201 2,910
Shareholder reports 8,269 12,326
Other 6,682 63,074
TOTAL EXPENSES 5,068,321 11,570,927
Less:
Waived fees and reimbursed expenses (1,401,326) (4,051,564)
Net Expenses 3,666,995 7,519,363
NET INVESTMENT INCOME 45,105,801 97,930,686
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 1,017 39,272
NET GAIN (LOSS) ON INVESTMENTS 1,017 39,272
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS $45,106,818 $ 97,969,958
- -------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ---------------------
30
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
----------------------------------------------------
FOR THE SIX FOR THE NINE FOR THE
MONTHS ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 1997 SEPT. 30, 1996 DEC. 31, 1995
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 17,334,760 $ 22,129,891 $ 31,001,060
Net realized gain (loss) on sale of
investments (20,256) 39,647 (20,985)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 17,314,504 22,169,538 30,980,075
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (17,334,760) (22,129,891) (31,001,060)
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
In excess of net investment income
CLASS A 0 0 0
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
From realized gain on sale of
investments
CLASS A 0 0 0
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 991,867,267 856,726,858 743,403,372
Reinvestment of dividends - Class A 16,764,042 22,241,153 29,943,332
Cost of shares redeemed - Class A (785,731,636) (748,580,464) (612,067,361)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 222,899,673 130,387,547 161,279,343
Proceeds from shares sold - Class E N/A N/A N/A
Reinvestment of dividends - Class E N/A N/A N/A
Cost of shares redeemed - Class E N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E N/A N/A N/A
Proceeds from shares sold -
Institutional Class N/A N/A N/A
Reinvestment of dividends -
Institutional Class N/A N/A N/A
Cost of shares redeemed -
Institutional Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A N/A N/A
Proceeds from shares sold - Class
S/Service Class N/A N/A N/A
Reinvestment of dividends - Class
S/Service Class N/A N/A N/A
Cost of shares redeemed - Class
S/Service Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S/SERVICE CLASS N/A N/A N/A
INCREASE (DECREASE) IN NET ASSETS 222,879,417 130,427,194 161,258,358
NET ASSETS:
Beginning net assets 1,161,430,891 1,031,003,697 869,745,339
ENDING NET ASSETS $1,384,310,308 $1,161,430,891 $1,031,003,697
- -------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
31
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET MUTUAL FUND
-------------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 1,354,153 $ 4,369,090 $ 6,495,283
Net realized gain (loss) on sale of
investments (794) 69 454,418
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 1,353,359 4,369,159 6,949,701
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,354,153) (4,369,090) (6,949,701)
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
In excess of net investment income
CLASS A 0 (1,214) 0
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
From realized gain on sale of
investments
CLASS A 0 0 0
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS N/A N/A N/A
CLASS S/SERVICE CLASS N/A N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 133,575,235 1,617,283,570 4,140,356,138
Reinvestment of dividends - Class A 636,690 1,166,154 1,587,592
Cost of shares redeemed - Class A (139,023,174) (1,662,781,053) (4,226,851,391)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (4,811,249) (44,331,329) (84,907,661)
Proceeds from shares sold - Class E N/A N/A N/A
Reinvestment of dividends - Class E N/A N/A N/A
Cost of shares redeemed - Class E N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E N/A N/A N/A
Proceeds from shares sold -
Institutional Class N/A N/A N/A
Reinvestment of dividends -
Institutional Class N/A N/A N/A
Cost of shares redeemed -
Institutional Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A N/A N/A
Proceeds from shares sold - Class
S/Service Class N/A N/A N/A
Reinvestment of dividends - Class
S/Service Class N/A N/A N/A
Cost of shares redeemed - Class
S/Service Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S/SERVICE CLASS N/A N/A N/A
INCREASE (DECREASE) IN NET ASSETS (4,812,043) (44,332,474) (84,907,661)
NET ASSETS:
Beginning net assets 65,035,962 109,368,436 194,276,097
ENDING NET ASSETS $ 60,223,919 $ 65,035,962 $ 109,368,436
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $194,880,059 FOR CLASS A AND
$19,474,700 FOR THE INSTITUTIONAL CLASS, AS A RESULT OF THE PACIFICA MONEY
MARKET FUND AND PACIFICA ASSET PRESERVATION FUND MERGERS. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
- ---------------------
32
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NATIONAL
TAX-FREE
MONEY MARKET
MUTUAL FUND
MONEY MARKET MUTUAL FUND ------------
-------------------------------------------------------
FOR THE NINE FOR THE SIX
FOR THE SIX MONTHS ENDED FOR THE MONTHS ENDED
MONTHS ENDED SEPT. 30, YEAR ENDED MARCH 31,
MARCH 31, 1997 1996 (1) DEC. 31, 1995 1997
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 113,510,355 $ 132,402,988 $ 163,787,562 $ 181,596
Net realized gain (loss) on sale of
investments 215,989 740,929 (1,181,926) 0
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 113,726,344 133,143,917 162,605,636 181,596
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (98,818,921) (113,221,991) (150,704,682) (181,596)
CLASS E N/A N/A N/A N/A
INSTITUTIONAL CLASS (276,412) (62,154) 0 N/A
CLASS S/SERVICE CLASS (14,415,022) (19,122,485) (13,082,880) N/A
In excess of net investment income
CLASS A 0 0 0 0
CLASS E N/A N/A N/A N/A
INSTITUTIONAL CLASS 0 0 0 N/A
CLASS S/SERVICE CLASS 0 0 0 N/A
From realized gain on sale of
investments
CLASS A 0 0 0 0
CLASS E N/A N/A N/A N/A
INSTITUTIONAL CLASS 0 0 0 N/A
CLASS S/SERVICE CLASS 0 0 0 N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 1,566,360,081 2,061,107,506 2,284,498,553 54,084,381
Reinvestment of dividends - Class A 93,188,135 111,610,934 146,963,258 141,020
Cost of shares redeemed - Class A (819,490,109) (1,266,041,632) (1,881,800,747) (23,947,189)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 840,058,107 906,676,808 549,661,064 30,278,212
Proceeds from shares sold - Class E N/A N/A N/A N/A
Reinvestment of dividends - Class E N/A N/A N/A N/A
Cost of shares redeemed - Class E N/A N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E N/A N/A N/A N/A
Proceeds from shares sold -
Institutional Class 2,187,477 19,474,700 0 N/A
Reinvestment of dividends -
Institutional Class 279,884 0 0 N/A
Cost of shares redeemed -
Institutional Class (11,728,408) (882,494) 0 N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (9,261,047) 18,592,206 0 N/A
Proceeds from shares sold - Class
S/Service Class 813,386,639 1,063,771,625 1,211,993,101 N/A
Reinvestment of dividends - Class
S/Service Class 14,334,388 19,240,628 10,735,965 N/A
Cost of shares redeemed - Class
S/Service Class (819,204,427) (1,002,807,161) (603,630,843) N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S/SERVICE CLASS 8,516,600 80,205,092 619,098,223 N/A
INCREASE (DECREASE) IN NET ASSETS 839,529,649 1,006,211,393 1,167,577,361 30,278,212
NET ASSETS:
Beginning net assets 4,517,730,929 3,511,519,536 2,343,942,175 4,975,162
ENDING NET ASSETS $ 5,357,260,578 $ 4,517,730,929 $ 3,511,519,536 $ 35,253,374
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
FROM APRIL 2,
(COMMENCEMENT
OF OPERATIONS)
TO SEPT. 30,
1996
<S> <C>
- -------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 40,567
Net realized gain (loss) on sale of
investments (437)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 40,130
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (40,567)
CLASS E N/A
INSTITUTIONAL CLASS N/A
CLASS S/SERVICE CLASS N/A
In excess of net investment income
CLASS A 0
CLASS E N/A
INSTITUTIONAL CLASS N/A
CLASS S/SERVICE CLASS N/A
From realized gain on sale of
investments
CLASS A 0
CLASS E N/A
INSTITUTIONAL CLASS N/A
CLASS S/SERVICE CLASS N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 14,242,313
Reinvestment of dividends - Class A 30,552
Cost of shares redeemed - Class A (9,297,266)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 4,975,599
Proceeds from shares sold - Class E N/A
Reinvestment of dividends - Class E N/A
Cost of shares redeemed - Class E N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E N/A
Proceeds from shares sold -
Institutional Class N/A
Reinvestment of dividends -
Institutional Class N/A
Cost of shares redeemed -
Institutional Class N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS N/A
Proceeds from shares sold - Class
S/Service Class N/A
Reinvestment of dividends - Class
S/Service Class N/A
Cost of shares redeemed - Class
S/Service Class N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S/SERVICE CLASS N/A
INCREASE (DECREASE) IN NET ASSETS 4,975,162
NET ASSETS:
Beginning net assets 0
ENDING NET ASSETS $ 4,975,162
- -----------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $194,880,059 FOR CLASS A AND
$19,474,700 FOR THE INSTITUTIONAL CLASS, AS A RESULT OF THE PACIFICA MONEY
MARKET FUND AND PACIFICA ASSET PRESERVATION FUND MERGERS. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
---------------------
33
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
--------------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 45,105,801 $ 97,930,686 $ 49,027,757
Net realized gain (loss) on sale of
investments 1,017 39,272 0
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 45,106,818 97,969,958 49,027,757
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,327,300) (2,763,079) 0
CLASS E (905,615) 0 0
INSTITUTIONAL CLASS (12,730,969) (62,003,165) (265,033)
CLASS S/SERVICE CLASS (30,141,918) (33,164,442) (48,762,724)
In excess of net investment income
CLASS A 0 (293) 0
CLASS E 0 0 0
INSTITUTIONAL CLASS 0 (14,701) 0
CLASS S/SERVICE CLASS 0 (4,695) 0
From realized gain on sale of
investments
CLASS A (1,075) 0 0
CLASS E 0 0 0
INSTITUTIONAL CLASS (12,378) 0 0
CLASS S/SERVICE CLASS (25,819) 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 101,803,141 265,329,368 0
Reinvestment of dividends - Class A 117,496 303,969 0
Cost of shares redeemed - Class A (89,139,342) (211,928,115) 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 12,781,295 53,705,222 0
Proceeds from shares sold - Class E 892,833,080 0 0
Reinvestment of dividends - Class E 0 0 0
Cost of shares redeemed - Class E (72,176,053) 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E 820,657,027 0 0
Proceeds from shares sold -
Institutional Class 998,327,768 4,920,884,222 120,817,000
Reinvestment of dividends -
Institutional Class 978,929 1,018,863 0
Cost of shares redeemed -
Institutional Class (1,090,336,130) (4,417,665,197) (84,374,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (91,029,433) 504,237,888 36,443,000
Proceeds from shares sold - Class
S/Service Class 2,043,006,993 3,893,787,080 20,388,947,721
Reinvestment of dividends - Class
S/Service Class 348,407 227,942 0
Cost of shares redeemed - Class
S/Service Class (2,900,254,375) (3,555,407,931) (20,077,871,000)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S/SERVICE CLASS (856,898,975) 338,607,091 311,076,721
INCREASE (DECREASE) IN NET ASSETS (114,528,342) 896,569,784 347,519,721
NET ASSETS:
Beginning net assets 1,934,719,850 1,038,150,066 690,630,345
ENDING NET ASSETS $ 1,820,191,508 $ 1,934,719,850 $ 1,038,150,066
- -----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ---------------------
34
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
---------------------
35
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY
MARKET MUTUAL FUND
------------------------------------------
SIX NINE
MONTHS MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPT. 30, DEC. 31, DEC. 31,
1997 1996 (2) 1995 1994
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01 0.02 0.03 0.02
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.01 0.02 0.03 0.02
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.02) (0.03) (0.02)
Distributions from net realized gain 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.01) (0.02) (0.03) (0.02)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 1.36% 2.04% 3.23% 2.28%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $1,384,310 $1,161,431 $1,031,004 $869,745
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.65% 0.65% 0.65% 0.62%
Ratio of net investment income to average
net assets 2.72% 2.69% 3.18% 2.26%
- ------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.03% 1.02% 1.01% 1.08%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 2.34% 2.32% 2.82% 1.80%
- ------------------------------------------------------------------------------------------
</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. PRIOR TO APRIL 1, 1996,
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
- ---------------------
36
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE
MONEY GOVERNMENT MONEY MARKET
MARKET MUTUAL FUND MUTUAL FUND (1)
(CONT.) ------------------------------------------
-------------------- SIX
YEAR YEAR MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, MARCH 31, SEPT. 30, SEPT. 30, SEPT. 30,
1993 1992 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.02 0.03 0.02 0.05 0.05 0.03
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.02 0.03 0.02 0.05 0.05 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.03) (0.02) (0.05) (0.05) (0.03)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 (0.00) 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.02) (0.03) (0.02) (0.05) (0.05) (0.03)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 1.89% 2.81% 2.32% 4.75% 5.22% 3.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $793,420 $572,906 $60,224 $65,036 $109,368 $194,276
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.55% 0.28% 0.75% 0.77% 0.79% 0.77%
Ratio of net investment
income to average net
assets 1.88% 2.41% 4.62% 4.74% 5.08% 3.07%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.06% 1.03% 1.00% 0.80% 0.81% 0.79%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 1.37% 1.66% 4.37% 4.71% 5.06% 3.05%
- ----------------------------------------------------------------------------------------------
</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. PRIOR TO APRIL 1, 1996,
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
---------------------
37
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL
FUND
GOVERNMENT --------------------
MONEY MARKET
MUTUAL FUND (1) CLASS A
(CONT.) --------------------
-------------------- SIX NINE
YEAR YEAR MONTHS MONTHS
ENDED ENDED ENDED ENDED
SEPT. 30, SEPT. 30, MARCH 31, SEPT. 30,
1993 1992 1997 1996 (2)
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.04 0.02 0.03
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.04 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.04) (0.02) (0.03)
Distributions from net realized gain 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.03) (0.04) (0.02) (0.03)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 2.77% 3.99% 2.36% 3.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $188,934 $184,705 $4,640,148 $3,799,908
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.83% 0.82% 0.75% 0.75%
Ratio of net investment income to average
net assets 2.73% 3.85% 4.71% 4.66%
- -----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 0.84% 0.82% 0.90% 0.88%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 2.72% 3.85% 4.56% 4.53%
- -----------------------------------------------------------------------------------------
</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. PRIOR TO APRIL 1, 1996,
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE FUND COMMENCED OPERATIONS ON JULY 1, 1992.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON SEPTEMBER 6,
1996.
The accompanying notes are an integral part of these financial statements.
- ---------------------
38
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND (CONT.)
----------------------------------------------------------------
CLASS A (CONT.) INSTITUTIONAL CLASS
------------------------------------------ --------------------
SIX SIX
YEAR YEAR YEAR MONTHS MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, MARCH 31, SEPT. 30,
1995 1994 1993 1992 (3) 1997 1996 (4)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.05 0.04 0.03 0.02 0.02 0.00
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.05 0.04 0.03 0.02 0.02 0.00
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.04) (0.03) (0.02) (0.02) (0.00)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.05) (0.04) (0.03) (0.02) (0.02) (0.00)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 5.34% 3.74% 2.70% 1.50% 2.38% 0.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $2,892,621 $2,343,942 $317,474 $236,269 $9,332 $18,592
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.75% 0.69% 0.58% 0.20% 0.73% 0.74%
Ratio of net investment
income to average net
assets 5.13% 4.12% 2.67% 2.98% 4.71% 5.03%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.83% 0.89% 1.00% 0.94% 0.82% 0.77%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.05% 3.92% 2.25% 2.24% 4.62% 5.00%
- ----------------------------------------------------------------------------------------------
</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. PRIOR TO APRIL 1, 1996,
FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE FUND COMMENCED OPERATIONS ON JULY 1, 1992.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON SEPTEMBER 6,
1996.
The accompanying notes are an integral part of these financial statements.
---------------------
39
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
(CONT.)
-------------------------------
CLASS S
-------------------------------
SIX NINE
MONTHS MONTHS PERIOD
ENDED ENDED ENDED
MARCH 31, SEPT. 30, DEC. 31,
1997 1996 (2) 1995 (3)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.03 0.03
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.02 0.03 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.02) (0.03) (0.03)
Distributions from net realized gain 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.02) (0.03) (0.03)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 2.02% 3.03% 2.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $707,781 $699,231 $618,899
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.43% 1.42% 1.43%
Ratio of net investment income to average net assets 4.02% 3.98% 4.40%
- ----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.56% 1.55% 1.53%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 3.89% 3.85% 4.30%
- ----------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. IN CONNECTION
WITH THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON
APRIL 1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT,
INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
(4) THE FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
(7) THIS RATIO INCLUDES INCOME AND EXPENSES CHARGED TO THE MASTER
PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
- ---------------------
40
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND (1)
NATIONAL TAX-FREE MONEY ---------------------------------------
MARKET
MUTUAL FUND CLASS A
------------------------ ------------------------ CLASS E
SIX SIX ---------
MONTHS PERIOD MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPT. 30, MARCH 31, SEPT. 30, MARCH 31,
1997 1996 (4) 1997 1996 (5) 1997 (6)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.01 0.01 0.02 0.05 0.00
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.01 0.01 0.02 0.05 0.00
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.01) (0.01) (0.02) (0.05) 0.00
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.01) (0.01) (0.02) (0.05) 0.00
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 1.36% 1.51% 2.42% 4.95% 0.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $35,253 $4,975 $66,486 $53,706 $820,657
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.64%(7) 0.62%(7) 0.55% 0.55% 0.65%
Ratio of net investment
income to average net
assets 2.68%(7) 2.71%(7) 4.81% 4.96% 4.86%
- ---------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.58%(7) 3.56%(7) 0.75% 0.67% 0.88%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 1.74%(7) (0.23)%(7) 4.61% 4.84% 4.63%
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. IN CONNECTION
WITH THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON
APRIL 1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT,
INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
(4) THE FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
(7) THIS RATIO INCLUDES INCOME AND EXPENSES CHARGED TO THE MASTER
PORTFOLIO.
The accompanying notes are an integral part of these financial statements.
---------------------
41
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL
FUND (1) (CONT.)
-------------------------------
INSTITUTIONAL CLASS
-------------------------------
SIX
MONTHS YEAR PERIOD
ENDED ENDED ENDED
MARCH 31, SEPT. 30, SEPT. 30,
1997 1996 1995 (2)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.05 0.01
Net realized and unrealized gain (loss) on
investments 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.05 0.01
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.05) (0.01)
Distributions from net realized gain 0.00 0.00 0.00
--------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.03) (0.05) (0.01)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
--------- --------- ---------
--------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 2.58% 5.26% 5.51%**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $449,647 $540,689 $36,443
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.25% 0.25% 0.26%
Ratio of net investment income to average net assets 5.11% 5.21% 5.42%
- ----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.39% 0.59% 0.69%
Ratio of net investment income (loss) to average net
assets prior to waived fees and reimbursed expenses 4.97% 4.87% 4.99%
- ----------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. IN CONNECTION
WITH THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON
APRIL 1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT,
INC.
(2) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
- ---------------------
42
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND (1) (CONT.)
----------------------------------------------------------------
SERVICE CLASS
----------------------------------------------------------------
SIX SIX
MONTHS YEAR YEAR MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPT. 30, SEPT. 30, SEPT. 30, MARCH 31, MARCH 31,
1997 1996 1995 1994 (3) 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.02 0.05 0.05 0.02 0.03 0.03
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.02 0.05 0.05 0.02 0.03 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.05) (0.05) (0.02) (0.03) (0.03)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.02) (0.05) (0.05) (0.02) (0.03) (0.03)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 2.47% 5.03% 5.42% 3.75%** 2.81% 3.13%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $483,401 $1,340,325 $1,001,707 $690,630 $654,950 $614,237
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.45% 0.45% 0.42% 0.43% 0.43% 0.43%
Ratio of net investment
income to average net
assets 4.91% 4.98% 5.32% 3.72% 2.77% 3.04%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.61% 0.60% 0.66% 0.90% 0.90% 0.91%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.75% 4.83% 5.08% 3.25% 2.30% 2.56%
- ----------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A FUND OF STAGECOACH
FUNDS, INC. PRIOR TO APRIL 1, 1996, FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") SERVED AS THE FUND'S ADVISER. IN CONNECTION
WITH THE MERGER OF FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON
APRIL 1, 1996, FICM WAS RENAMED WELLS FARGO INVESTMENT MANAGEMENT,
INC.
(2) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
---------------------
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "1940 Act"), as an open-end series management
investment company. The Company commenced operations on January 1, 1992, and
currently offers the following nineteen separate diversified funds: the
Aggressive Growth, Asset Allocation, Balanced, Corporate Stock, Diversified
Income, Equity Value, Ginnie Mae, Growth and Income, Government Money Market
Mutual, Intermediate Bond, Money Market Mutual, Money Market Trust, National
Tax-Free, National Tax-Free Money Market Mutual, Prime Money Market Mutual,
Short-Intermediate U.S. Government Income, Small Cap, Treasury Money Market
Mutual, and U.S. Government Allocation Funds; and five non-diversified funds:
the Arizona Tax-Free, California Tax-Free Bond, California Tax-Free Income,
California Tax-Free Money Market Mutual, and Oregon Tax-Free Funds. These
financial statements represent the California Tax-Free Money Market Mutual,
Government Money Market Mutual, Money Market Mutual, National Tax-Free Money
Market Mutual, and Treasury Money Market Mutual Funds (the "Funds").
The Company changed its fiscal year-end from September 30 to March 31.
At a special shareholders meeting on July 16, 1996, the Shareholders of Pacifica
Funds Trust ("Pacifica") approved a plan of reorganization providing for the
transfer of the assets and liabilities of each Pacifica portfolio to a
corresponding fund of the Company in exchange for shares of designated classes
of the corresponding Stagecoach Fund. As a result of this reorganization,
effective September 6, 1996, the Stagecoach Treasury Money Market Mutual and
Government Money Market Mutual Funds were established to acquire all of the
assets and assume all of the liabilities of the Pacifica Treasury Money Market
and Government Money Market Funds, respectively (collectively, the "Predecessor
Funds"). Additionally, the Stagecoach Money Market Mutual Fund acquired all of
the assets and assumed all of the liabilities of the Pacifica Money Market and
Asset Preservation Funds. These acquisitions were accomplished in separate
exchanges for shares of the respective Fund. All performance and financial data
for the Government Money Market Mutual and Treasury Money Market Mutual Funds
prior to September 6, 1996 refers to the Predecessor Funds.
The Money Market Mutual Fund offers Class A, Institutional Class, and Class S
shares and the Treasury Money Market Mutual Fund offers Class A, Class E,
Institutional Class, and Service Class shares. The Treasury Money Market Mutual
Fund commenced offering the Class E shares on March 24, 1997. The
- ---------------------
44
<PAGE>
NOTES TO FINANCIAL STATEMENTS
California Tax-Free Money Market Mutual, Government Money Market Mutual, and
National Tax-Free Money Market Mutual Funds offer only one class of shares. The
four classes of shares differ principally in the applicable distribution,
shareholder servicing and transfer agency fees. Shareholders of each class also
bear certain expenses that pertain to that particular class. All shareholders
bear the common expenses of the Fund and earn income from the portfolio pro rata
based on the average daily net assets of each class, without distinction between
share classes. Dividends are determined separately for each class based on
income and expenses allocable to each class. Gains are allocated to each class
pro rata based upon net assets of each class on the date of distribution. No
class has preferential dividend rights. Differences in per share dividend rates
generally result from the relative weightings of pro rata income and gain
allocations and from differences in separate class expenses, including
distribution, shareholder servicing and transfer agency fees.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT POLICY AND SECURITY VALUATION
The National Tax-Free Money Market Mutual Fund invests only in interests of the
Tax-Free Money Market Master Portfolio (the "Master Portfolio") of Master
Investment Trust (the "Trust"). The Master Portfolio has the same investment
objective as the Fund. The value of the Fund's investment in its corresponding
Master Portfolio reflects the Fund's interest in the net assets of the
corresponding Master Portfolio (32.44%) at March 31, 1997.
Each Fund, or related Master Portfolio, invests in securities with remaining
maturities not exceeding 397 days (thirteen months), including obligations of
the U.S. government, bankers acceptances, commercial paper and certain floating-
and variable-rate instruments. Certain of these floating- and variable-rate
instruments may carry a demand feature that would permit the holder to tender
them back to the issuer at par value prior to maturity.
Each Fund, or related Master Portfolio, uses the amortized cost method to value
its portfolio securities and seeks to maintain a constant net asset value of
$1.00 per share; however, there can be no assurance that the Funds will meet
this goal. The amortized cost method involves
---------------------
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
valuing a security at its cost plus accretion of discount or minus amortization
of premium over the period until maturity, which approximates market value.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded no later than one business day after trade
date. Interest income is accrued daily. Realized gains or losses are reported on
the basis of identified cost of securities delivered. Bond discounts and
premiums are accreted or amortized as required by the Internal Revenue Code.
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in each Fund's and the Master
Portfolio's (in this paragraph, the "Funds") Portfolio of Investments. The Funds
may participate in pooled repurchase agreement transactions with other funds
advised by Wells Fargo Bank, N.A. ("WFB"). The repurchase agreement must be
fully collateralized based on values that are marked to market daily. The
collateral may be held by an agent bank under a tri-party agreement. It is the
custodian's responsibility to value collateral daily and to take action to
obtain additional collateral as necessary to maintain market value equal to or
greater than the resale price. The repurchase agreements held in the Funds at
March 31, 1997, were collateralized by U.S. government obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from each Fund's net investment income are declared daily and
distributed monthly to shareholders of the Funds. Any distributions to
shareholders from net realized capital gains are declared and distributed
annually.
FEDERAL INCOME TAXES
Each Fund of the Company is treated as a separate entity for federal income tax
purposes. It is the policy of each Fund of the Company to continue to qualify as
a regulated investment company by complying with the provisions applicable to
regulated investment companies, as defined in the Internal Revenue Code, and to
make distributions of substantially all of its investment company taxable income
and any net realized capital gains (after reduction for capital loss
carryforwards) sufficient to relieve it from all, or substantially all, federal
income taxes. Accordingly, no provision for federal income taxes was required at
December 31, 1996.
The California Tax-Free Money Market Mutual Fund had capital loss carryforwards
at December 31, 1996 of $34,884 that will expire in the year 2002 and $20,985
that will expire in the year 2003. The Money Market Mutual Fund had capital loss
carryforwards at December 31, 1996 of $305,788 that will expire in the year 2003
and $701,461 that will expire in the year 2004. The National Tax-Free Money
Market Fund had a
- ---------------------
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS
capital loss carryforward at December 31, 1996 of $437 that will expire in the
year 2004. Any loss carryforwards from Pacifica are included in the
corresponding Stagecoach Fund's carryforwards as shown above. The Board of
Directors intends to offset net capital gains with each capital loss
carryforward until each carryforward has been fully utilized or expires. No
capital gain distribution shall be made until the capital loss carryforward has
been fully utilized or has expired.
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains (losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may differ
from the year in which the income and realized gains (losses) were recorded by
the Fund. The differences between the income and gains distributed on a book
versus tax basis, if any, are shown as excess distributions of net investment
income and net realized gain on the sale of investments in the accompanying
Statements of Changes in Net Assets. The amount of distributions from net
investment income and net realized capital gains are determined in accordance
with federal income tax regulations, which may differ from generally accepted
accounting principles. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent that these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal tax-basis treatment; temporary differences do not require
reclassifications.
ORGANIZATION EXPENSES
The Funds have been charged for expenses incurred in connection with the
organization and initial registration of the Funds and/or classes of shares.
Such expenses are being amortized by each Fund on a straight-line basis over 60
months from the date the Fund and/or class commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of each Fund
(other than the National Tax-Free Money Market Mutual Fund) with WFB. Pursuant
to the contracts, WFB has agreed to furnish to the Funds investment guidance and
policy direction in connection with daily portfolio management. Under such
contracts, WFB is entitled to be paid monthly advisory fees at the annual rate
of 0.50% of the average daily net assets of the California Tax-Free Money Market
Mutual Fund, 0.25% of the Government Money Market Mutual and Treasury Money
Market Mutual Funds' average daily net assets, and 0.40% of the average daily
net assets of the Money Market Mutual Fund.
For the period from October 1, 1995 to March 31, 1996, the Government Money
Market Mutual and Treasury Money Market Mutual Funds were advised by First
Interstate Capital Management, Inc. ("FICM"). Pursuant to the advisory
con-
---------------------
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
tracts, the Funds paid an advisory fee at an annual rate of 0.30% of the first
$500 million of each Fund's average daily net assets, 0.25% of the next $500
million, and 0.20% of each Fund's average daily net assets in excess of $1
billion. On April 1, 1996, First Interstate Bancorp ("FIB") was merged with and
into Wells Fargo & Company ("Wells Fargo"); and FICM and First Interstate Bank
of California ("FICAL") became indirect, wholly-owned subsidiaries of Wells
Fargo. In connection with this merger, FICM changed its name to Wells Fargo
Investment Management, Inc ("WFIM"). For the period from April 1, 1996 to
September 5, 1996, such advisory fees were paid to WFIM.
The National Tax-Free Money Market Mutual Fund does not directly retain an
investment adviser because the Fund invests all of its assets in a Master
Portfolio of the Trust which, in turn, retains WFB as investment adviser.
The Company has entered into contracts with WFB on behalf of the Funds whereby
WFB is responsible for providing custody and portfolio accounting services for
the Funds. For providing custody services, WFB is entitled to be compensated at
an annual rate of 0.0167% of the average daily net assets of each Fund. For
portfolio accounting services, WFB is entitled to a monthly base fee of $2,000
plus 0.07% of the first $50 million of each Fund's average daily net assets,
0.045% of the next $50 million, and 0.02% of the Fund's average daily net assets
in excess of $100 million. WFB will not be entitled to compensation for its
custodial services to the National Tax-Free Money Market Mutual Fund so long as
it is entitled to compensation for providing advisory services to the Master
Portfolio.
For the period from October 1, 1995 to March 31, 1996, FICAL served as the
custodian for the Government Money Market Mutual and Treasury Money Market
Mutual Funds. Pursuant to the contracts, the Funds paid a custodian fee based on
net assets and certain transaction charges. For the period from April 1, 1996 to
September 5, 1996, such custodian fees were paid to WFB.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB has agreed to act as transfer agent for the Funds. Under the transfer agency
contract, WFB is entitled to receive transfer agency fees at an annual rate of
0.10% of the average daily net assets of the California Tax-Free Money Market
Mutual, Government Money Market Mutual and National Tax-Free Money Market Mutual
Funds and the Class A shares of the Money Market Mutual and Treasury Money
Market Mutual Funds and 0.02% of the average daily net assets of the Class E,
Institutional Class, and Service Class shares of the Treasury Money Market
Mutual Fund, and the Institutional Class and Class S shares of the Money Market
Mutual Fund. Prior to February 1, 1997, under the contracts with the California
Tax-Free Money Market Mutual, Money Market Mutual, and National Tax-Free Money
Market Mutual Funds, WFB was entitled to be paid a per account fee plus other
- ---------------------
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS
related costs with a minimum monthly fee of $3,000 per Fund unless net assets of
the Fund were under $20 million. For as long as the net assets remained under
$20 million, a Fund would not be charged any transfer agency fees by WFB. Prior
to February 1, 1997, under the contracts with the Funds WFB was entitled to be
paid transfer agency fees at an annual rate of 0.07% of average daily net assets
of the Government Money Market Mutual Fund and Class A shares of the Treasury
Money Market Mutual Fund, and 0.04% and 0.02% of the Treasury Money Market
Mutual Fund's average daily net assets attributable to Service Class and
Institutional Class shares, respectively.
The transfer agency fees of the Funds for the six months ended March 31, 1997,
were as follows:
<TABLE>
<CAPTION>
TRANSFER TRANSFER
TRANSFER TRANSFER AGENCY FEES AGENCY FEES
AGENCY FEES AGENCY FEES INSTITUTIONAL CLASS S/
FUND CLASS A CLASS E CLASS SERVICE CLASS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Money Market Mutual Fund $1,442,326 N/A $ 2,633 $242,333
Treasury Money Market Mutual Fund 22,176 $3,729 49,802 209,300
</TABLE>
Transfer agency fees for the California Tax-Free Money Market Mutual, Government
Money Market Mutual and National Tax-Free Money Market Mutual Funds for the
periods ended March 31, 1997 and September 30, 1996 are disclosed in the
Statements of Operations.
For the period from October 1, 1995 to September 5, 1996, the Government Money
Market Mutual and Treasury Money Market Mutual Funds retained Furman Selz LLC
("Furman Selz") to perform transfer agency related services.
The Company has entered into contracts on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder services for the Funds. WFB is entitled to
be compensated for these services based on an annual rate of average daily net
assets not to exceed 0.30% for the California Tax-Free Money Market Mutual Fund
and Class A shares of the Money Market Mutual Fund, 0.25% for the Government
Money Market Mutual Fund, National Tax-Free Money Market Mutual Fund, Class A
and Class E shares of the Treasury Money Market Mutual Fund, and Institutional
Class and Class S shares of the Money Market Mutual Fund, and 0.20% for the
Service Class shares of the Treasury Money Market Mutual Fund.
---------------------
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The shareholder servicing fees of the Funds for the six months ended March 31,
1997, were as follows:
<TABLE>
<CAPTION>
SHAREHOLDER
SHAREHOLDER SERVICING
SHAREHOLDER SERVICING FEES
SERVICING SHAREHOLDER FEES CLASS S/
FEES SERVICING INSTITUTIONAL SERVICE
FUND CLASS A FEES CLASS E CLASS CLASS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Money Market Mutual Fund $ 6,287,325 N/A $14,717 $ 892,936
Treasury Money Market
Mutual Fund 68,907 $46,608 N/A 1,230,129
</TABLE>
Shareholder servicing fees of the Funds for the periods ended September 30,
1996, were as follows:
<TABLE>
<CAPTION>
SHAREHOLDER
SHAREHOLDER SERVICING
SHAREHOLDER SERVICING FEES
SERVICING FEES CLASS S/
FEES INSTITUTIONAL SERVICE
FUND CLASS A CLASS CLASS
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Money Market Mutual Fund* $7,257,001 $ 2,443 $1,176,803
Treasury Money Market Mutual Fund** 153,899 1,432,124 3,022,260
</TABLE>
* INFORMATION PRESENTED IS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
** INFORMATION PRESENTED IS FOR THE YEAR ENDED SEPTEMBER 30, 1996.
Shareholder servicing fees for the California Tax-Free Money Market Mutual,
Government Money Market Mutual and National Tax-Free Money Market Mutual Funds
for the periods ended March 31, 1997 and September 30, 1996 are disclosed in the
Statements of Operations.
For the period from October 1, 1995 to September 5, 1996, various banks, trust
companies, broker-dealers or other financial organizations (collectively,
"Service Organizations") also provided administrative services for the
Government Money Market Mutual and Treasury Money Market Mutual Funds, such as
maintaining shareholder accounts and records. The Funds paid fees to Service
Organizations in amounts up to an annual rate of 0.25% of the average daily net
assets of the Funds' shares owned by shareholders with whom the Service
Organization had a servicing relationship.
Subject to the overall supervision of the Company's Board of Directors, WFB as
administrator and Stephens Inc. ("Stephens") as co-administrator provide each
Fund with supervisory, administrative and distribution services. For these
administrative services, WFB and Stephens are entitled to receive monthly fees
at the annual rates of 0.04% and 0.02%, respectively, of each Fund's average
daily net assets. Prior to February 1, 1997, Stephens provided substantially the
same services as sole administrator to the Funds. Under the previous agreements,
Stephens was entitled to receive a monthly fee at the annual rate of 0.03% of
the average daily net assets of the California Tax-Free Money Market Mutual
- ---------------------
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS
and Money Market Mutual Funds and 0.05% of the average daily net assets of the
Government Money Market Mutual, National Tax-Free Money Market Mutual, and
Treasury Money Market Mutual Funds.
For the period from October 1, 1995 to September 5, 1996 for the Government
Money Market Mutual Fund and for the period from April 15, 1996 to September 5,
1996 for the Treasury Money Market Mutual Fund, Furman Selz provided
administrative services for the operation of the Funds. As compensation for such
services, each Fund paid Furman Selz an annual fee, payable monthly, of up to
0.15% of the average daily net assets of the Fund. For the period from October
1, 1995 to April 15, 1996, The Dreyfus Corporation ("Dreyfus") provided
administrative services for the operation of the Treasury Money Market Mutual
Fund. As compensation for such services, the Fund paid Dreyfus an annual fee,
payable monthly, of up to 0.10% of the average daily net assets of the Fund.
The Company has adopted Distribution Plans pursuant to Rule 12b-1 under the 1940
Act for Class A shares of the Funds, Class E shares of the Treasury Money Market
Mutual Fund and Class S shares of the Money Market Mutual Fund. The Distribution
Plan for the Class A shares of the Funds provides that the Funds may defray all
or part of the cost of preparing, printing and distributing prospectuses and
other promotional materials by paying on an annual basis up to 0.05% of the
average net assets attributable to the California Tax-Free Money Market Mutual,
Government Money Market Mutual and National Tax-Free Money Market Mutual Funds
and the Class A shares of the Money Market Mutual and Treasury Money Market
Mutual Funds. Each Fund may participate in joint distribution activities with
any of the other funds, in which event, expenses reimbursed out of the assets of
one Fund may be attributable, in part, to the distribution-related activities of
another fund. Generally, the expenses attributable to joint distribution
activities are allocated among all of the funds in proportion to their relative
net asset sizes.
The separate Class S Distribution Plan for the Money Market Mutual Fund provides
that the Fund may pay, as compensation for distribution-related services, a
monthly fee at an annual rate of up to 0.75% of the Fund's average daily net
assets attributable to Class S shares. Distribution fees for the periods listed
below for the Money Market Mutual Fund were as follows:
<TABLE>
<CAPTION>
DISTRIBUTION DISTRIBUTION
FEES FEES
PERIOD CLASS A CLASS S
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
For the Six Months Ended March 31, 1997 $419,154 $2,678,807
For the Nine Months Ended September 30, 1996 480,748 3,587,118
</TABLE>
---------------------
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The separate Class E Distribution Plan for the Treasury Money Market Mutual Fund
provides that the Fund may pay, as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.25% of the Fund's average
daily net assets attributable to Class E shares. Distribution fees for the
Treasury Money Market Mutual Fund for the six months ended March 31, 1997, were
as follows:
<TABLE>
<CAPTION>
DISTRIBUTION DISTRIBUTION
FEES FEES
FUND CLASS A CLASS E
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
Treasury Money Market Mutual Fund $13,781 $46,608
</TABLE>
For the period from October 1, 1995 to September 5, 1996, the Government Money
Market Mutual and Treasury Money Market Mutual Funds had adopted Distribution
Plans pursuant to Rule 12b-1 under the 1940 Act. For the Treasury Money Market
Mutual Fund, the Plan was for the Class A shares only. The Plans provided for
payments by each Fund not to exceed 0.25% of the average daily net assets of the
Government Money Market Mutual Fund, and 0.05% of the average daily net assets
of the Class A shares of the Treasury Money Market Mutual Fund.
FEES WAIVED
The following amounts of fees and expenses were waived or reimbursed for the six
months ended March 31, 1997:
<TABLE>
<CAPTION>
EXPENSES
REIMBURSED FEES WAIVED
FUND BY STEPHENS BY WFB
<S> <C> <C>
- -------------------------------------------------------------------------
California Tax-Free Money Market Mutual
Fund $ 0 $ 2,430,083
Government Money Market Mutual Fund 0 70,801
Money Market Mutual Fund 0 3,603,285
National Tax-Free Money Market Mutual
Fund 12,021 48,216
Treasury Money Market Mutual Fund 0 1,401,326
</TABLE>
The following amounts of fees were waived for the periods ended September 30,
1996:
<TABLE>
<CAPTION>
FEES WAIVED
BY FURMAN FEES WAIVED FEES WAIVED
FUND SELZ BY FIB BY WFB
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------
California Tax-Free Money Market Mutual
Fund* N/A N/A $3,045,388
Government Money Market Mutual Fund** $27,056 $ 0 1,430
Money Market Mutual Fund* N/A N/A 3,884,553
National Tax-Free Money Market Mutual
Fund*** N/A N/A 5,594
Treasury Money Market Mutual Fund** 0 2,173,591 1,877,973
</TABLE>
* INFORMATION PRESENTED IS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996.
** INFORMATION PRESENTED IS FOR THE YEAR ENDED SEPTEMBER 30, 1996.
*** INFORMATION PRESENTED IS FOR THE PERIOD FROM APRIL 2, 1996 (COMMENCEMENT OF
OPERATIONS) TO SEPTEMBER 30, 1996.
- ---------------------
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS
For the period from April 2, 1996 (commencement of operations) to September 30,
1996, Stephens reimbursed $38,169 in expenses for the National Tax-Free Money
Market Mutual Fund. Fee waivers and reimbursements continue at the discretion of
WFB and Stephens, respectively.
WFB and Stephens have agreed to reimburse all or a portion of their respective
fees charged to, or expenses paid by, each such Fund to ensure that total Fund
operating expenses do not exceed, on an annual basis, 0.75% of the Government
Money Market Mutual Fund's average daily net assets, 0.73% of the Institutional
Class shares of the Money Market Mutual Fund's average daily net assets, and
0.55%, 0.25%, and 0.45% of the Class A, Institutional Class, and Service Class
shares, respectively, of the Treasury Money Market Mutual Fund's average daily
net assets through August 31, 1997.
Certain officers and directors of the Company are also officers of Stephens. At
March 31, 1997, Stephens owned 57,195 shares of the California Tax-Free Money
Market Mutual, 25 shares of the Government Money Market Mutual, 11,996 shares of
the Money Market Mutual, 101 shares of the National Tax-Free Money Market Mutual
and 76 shares of the Treasury Money Market Mutual Funds.
---------------------
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. CAPITAL SHARE TRANSACTIONS
As of March 31, 1997, there were 91 billion shares of $0.001 par value capital
stock authorized by the Company. At March 31, 1997, the California Tax-Free
Money Market Mutual Fund was authorized to issue 10 billion shares, the
Government Money Market Mutual and National Tax-Free Money Market Funds were
each authorized to issue 5 billion shares, the Money Market Mutual Fund was
authorized to issue 10 billion Class A shares, 5 billion Class E shares, 5
billion Institutional Class shares and 5 billion Class S shares, and the
Treasury Money Market Mutual Fund was authorized to issue 5 billion Class A, 5
billion Class E, 5 billion Institutional Class, and 5 billion Service Class
shares of $0.001 par value capital stock. Capital share transactions for the
Funds were as follows:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
-----------------------------------------------
FOR THE SIX FOR THE NINE FOR THE
MONTHS ENDED MONTHS ENDED YEAR ENDED DEC.
MARCH 31, 1997 SEPT. 30, 1996 31, 1995
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 991,867,267 856,726,858 743,403,372
Shares issued in reinvestment of
dividends -- Class A 16,764,042 22,241,153 29,943,332
Shares redeemed -- Class A (785,731,636) (748,580,464) (612,067,361)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 222,899,673 130,387,547 161,279,343
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET MUTUAL FUND
------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 133,575,235 1,617,283,570 4,140,356,138
Shares issued in reinvestment of
dividends -- Class A 636,690 1,166,154 1,587,592
Shares redeemed -- Class A (139,023,174) (1,662,781,053) (4,226,851,391)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (4,811,249) (44,331,329) (84,907,661)
</TABLE>
- ---------------------
54
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
------------------------------------------------
FOR THE NINE
FOR THE SIX MONTHS ENDED FOR THE
MONTHS ENDED SEPT. 30, YEAR ENDED
MARCH 31, 1997 1996 (1) DEC. 31, 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 1,566,357,293 2,061,102,906 2,284,460,229
Shares issued in reinvestment of
dividends -- Class A 93,188,134 111,610,934 146,963,258
Shares redeemed -- Class A (819,490,109) (1,266,036,895) (1,881,762,423)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 840,055,318 906,676,945 549,661,064
Shares sold -- Institutional Class 2,187,477 19,474,700 N/A
Shares issued in reinvestment of
dividends -- Institutional Class 279,884 0 N/A
Shares redeemed -- Institutional Class (11,728,407) (890,817) N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (9,261,046) 18,583,883 N/A
Shares sold -- Class S 813,386,639 1,063,771,625 1,211,984,821
Shares issued in reinvestment of
dividends -- Class S 14,334,388 19,240,628 10,735,964
Shares redeemed -- Class S (819,204,427) (1,002,807,161) (603,622,562)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS S 8,516,600 80,205,092 619,098,223
</TABLE>
(1) "SHARES SOLD" INCLUDES 194,882,553 FOR CLASS A AND 19,474,700 FOR THE
INSTITUTIONAL CLASS, AS A RESULT OF THE PACIFICA MONEY MARKET FUND AND
PACIFICA ASSET PRESERVATION FUND MERGERS.
<TABLE>
<CAPTION>
NATIONAL TAX-FREE MONEY
MARKET MUTUAL FUND
------------------------------
FROM APRIL 2,
1996
FOR THE SIX (COMMENCEMENT
MONTHS ENDED OF OPERATIONS)
MARCH 31, TO SEPT. 30,
1997 1996
<S> <C> <C>
- ------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 54,084,381 14,242,847
Shares issued in reinvestment of
dividends -- Class A 141,020 30,552
Shares redeemed -- Class A (23,947,189) (9,298,266)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 30,278,212 4,975,133
</TABLE>
---------------------
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
---------------------------------------------------
FOR THE SIX FOR THE FOR THE
MONTHS ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 SEPT. 30, 1996 SEPT. 30, 1995
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 101,803,385 265,329,368 N/A
Shares issued in reinvestment of
dividends -- Class A 117,496 303,969 N/A
Shares redeemed -- Class A (89,139,342) (211,928,115) N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 12,781,539 53,705,222 N/A
Shares sold -- Class E 892,833,080 N/A N/A
Shares issued in reinvestment of
dividends -- Class E 0 N/A N/A
Shares redeemed -- Class E (72,176,053) N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS E 820,657,027 N/A N/A
Shares sold -- Institutional Class 998,327,613 4,920,884,222 120,817,000
Shares issued in reinvestment of
dividends -- Institutional Class 978,929 1,018,863 0
Shares redeemed -- Institutional Class (1,090,336,130) (4,417,665,197) (84,374,000)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (91,029,588) 504,237,888 36,443,000
Shares sold -- Service Class 2,043,006,904 3,893,787,080 20,388,947,721
Shares issued in reinvestment of
dividends -- Service Class 348,407 227,942 0
Shares redeemed -- Service Class (2,900,254,375) (3,555,407,931) (20,077,871,000)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- SERVICE CLASS (856,899,064) 338,607,091 311,076,721
</TABLE>
- ---------------------
56
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
STAGECOACH FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the California Tax-Free Money Market Mutual
Fund, Government Money Market Mutual Fund, Money Market Mutual Fund, and
Treasury Money Market Mutual Fund, and the statement of assets and liabilities
of the National Tax-Free Money Market Mutual Fund (five of the funds comprising
Stagecoach Funds, Inc.) as of March 31, 1997, and the related statements of
operations of the California Tax-Free Money Market Mutual Fund and Money Market
Mutual Fund for the six months ended March 31, 1997, and the nine months ended
September 30, 1996, the Government Money Market Mutual Fund and Treasury Money
Market Mutual Fund for the six months ended March 31, 1997, and the year ended
September 30, 1996, and the National Tax-Free Money Market Mutual Fund for the
six months ended March 31, 1997, and the period from April 2, 1996 (commencement
of operations) to September 30, 1996, the statements of changes in net assets of
the California Tax-Free Money Market Mutual Fund and Money Market Mutual Fund
for the six months ended March 31, 1997, the nine months ended September 30,
1996, and the year ended December 31, 1995, the Government Money Market Mutual
Fund and Treasury Money Market Mutual Fund for the six months ended March 31,
1997, and the year ended September 30, 1996, and the National Tax-Free Money
Market Mutual Fund for the six months ended March 31, 1997, and the period from
April 2, 1996 (commencement of operations) to September 30, 1996, and financial
highlights for the periods indicated herein. These financial statements and
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. For the Government Money Market Mutual
Fund and Treasury Money Market Mutual Fund, all years or periods indicated in
the accompanying financial statements and financial highlights ending prior to
October 1, 1995, were audited by other auditors whose reports dated November 15,
1995, November 22, 1994, and May 4, 1994, expressed unqualified opinions on this
information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Stagecoach Funds, Inc. as of March 31, 1997, the
results of their operations, the changes in their net assets and their financial
highlights for the periods indicated herein, except as noted above, in
conformity with generally accepted accounting principles.
[SIG]
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
MAY 9, 1997
---------------------
57
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1997
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 98.73%
ALABAMA - 1.75%
$ 1,100,000 County of Decatur AL IDA Waste Disposal V/R
Amoco Chemical Co Project 3.90 % 05/01/25 $ 1,100,000
800,000 McIntosh AL PCR Geigy Corp Project 3.85 07/01/04 800,000
--------------
$ 1,900,000
ARIZONA - 1.75%
$ 1,400,000 Maricopa AZ IDA Hospital Facilities Revenue V/R
MBIA Insured 3.85 % 12/01/08 $ 1,400,000
500,000 Maricopa County AZ PCR Public Service Co Series
B 3.80 05/01/29 500,000
--------------
$ 1,900,000
CALIFORNIA - 1.38%
$ 300,000 California State PCFA Southern California
Edison V/R Series A 3.55 % 02/28/08 $ 300,000
200,000 California Statewide CDA COP 3.70 06/01/26 200,000
1,000,000 Irvine CA Development Revenue V/R 3.70 09/02/21 1,000,000
--------------
$ 1,500,000
COLORADO - 1.47%
$ 1,000,000 Colorado State HFFA North Colorado Medical
Center 3.45 % 05/15/20 $ 1,000,000
600,000 Colorado State Student Loan Obligation Bond
Authority Series A 3.45 07/01/00 600,000
--------------
$ 1,600,000
</TABLE>
- ------------------------
58
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
FLORIDA - 11.52%
$ 3,000,000 Jacksonville Florida Electric Authority CP 3.30 % 05/07/97 $ 3,000,000
3,000,000 Florida State Government Financing Authority 3.20 04/08/97 3,000,000
2,000,000 Indian River County FL Hospital Series 1990 3.35 05/07/97 2,000,000
3,000,000 Sarasota County FL PCR Series B 3.55 05/20/97 3,000,000
1,000,000 University Athletic Association Inc - Florida
Improvement Revenue V/R 3.70 12/01/20 1,000,000
500,000 Volusia County FL HFFA V/R 3.80 09/01/20 500,000
--------------
$ 12,500,000
GEORGIA - 9.49%
$ 2,500,000 Burke County GA PCR Power Corp Series A 3.35 % 01/01/19 $ 2,500,000
1,000,000 Fulton County GA Residential Care Facility V/R
- Lenbrook Square Foundation 3.80 01/01/18 1,000,000
2,000,000 Georgia State Municipal Electric Authority CP
Multiple LOC's 3.45 04/11/97 2,000,000
4,800,000 Hapeville GA Development Authority IDA V/R
Hapeville Hotel Ltd LOC - Swiss Bank 4.00 11/01/15 4,800,000
--------------
$ 10,300,000
IDAHO - 0.65%
$ 700,000 Power County ID PCR FMC Corp Project 3.85 % 12/01/10 $ 700,000
KANSAS - 2.03%
$ 2,200,000 Burlington KS PCR Kansas City Power & Light CP
LOC - Societe Generale 3.35 % 05/12/97 $ 2,200,000
LOUISIANA - 2.40%
$ 1,000,000 Louisiana Public Facility Authority Revenue -
Kenner Hotel LTP 4.00 % 12/01/15 $ 1,000,000
1,600,000 New Orleans Aviation Board Revenue MBIA Insured 3.40 08/05/15 1,600,000
--------------
$ 2,600,000
</TABLE>
---------------------
59
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
MASSACHUSETTS - 4.06%
$ 2,400,000 Massachusetts State HFFA Revenue V/R Asset
Program LOC - Credit Suiss 3.25 % 01/01/19 $ 2,400,000
2,000,000 Massachusetts State IDA Resources Recovery V/R
Ogden Haver 3.35 12/01/11 2,000,000
--------------
$ 4,400,000
MICHIGAN - 2.12%
$ 1,300,000 Delta County MI EDA Mead Escanaba Paper Series
C 4.00 % 12/01/23 $ 1,300,000
1,000,000 Midland MI Economic Development Corp Limited
Obligation Revenue Dow Chemical Co V/R
Project B 4.00 12/01/15 1,000,000
--------------
$ 2,300,000
MISSISSIPPI - 2.86%
$ 3,100,000 Jackson County MS PCR Chevron Project 3.80 % 06/01/23 $ 3,100,000
MISSOURI - 3.60%
$ 500,000 Kansas City MO IDA Hospital Revenue V/R MBIA
Insured 3.85 % 10/15/15 $ 500,000
3,400,000 Missouri State Health & Educational Facilities
Revenue V/R St Francis Medical Center LOC -
Credit Local De France 3.80 06/01/26 3,400,000
--------------
$ 3,900,000
NEW JERSEY - 4.06%
$ 3,400,000 New Jersey Economic Development Authority El
Dorado Series B 3.80 % 05/01/03 $ 3,400,000
1,000,000 New Jersey State Turnpike Revenue Series D 3.20 01/01/18 1,000,000
--------------
$ 4,400,000
</TABLE>
- ------------------------
60
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
NEW MEXICO - 5.07%
$ 1,700,000 Albuquerque NM Airport Revenue Project AMBAC
Insured 3.35 % 07/01/14 $ 1,700,000
3,800,000 Farmington NM PCR V/R Arizona Public Services
Co. Series B 3.85 09/01/24 3,800,000
--------------
$ 5,500,000
NEW YORK - 3.69%
$ 2,000,000 New York NY Assistance Corp LOC - Series B 3.35 % 04/01/23 $ 2,000,000
2,000,000 New York NY Series B GO MBIA Insured 4.00 08/15/23 2,000,000
--------------
$ 4,000,000
NORTH CAROLINA - 3.04%
$ 3,300,000 Charlotte NC Airport Revenue V/R Series A MBIA
Insured 3.35 % 07/01/16 $ 3,300,000
OHIO - 0.92%
$ 1,000,000 Ohio State Air Quality Development Authority
Revenue V/R - Cincinnati Gas & Electric
Series B 3.80 % 09/01/30 $ 1,000,000
PENNSYLVANIA - 6.45%
$ 3,000,000 Delaware County PA PCR Philadelphia Electric Co 3.15 % 04/08/97 $ 3,000,000
3,000,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue V/R Series A 3.50 12/01/25 3,000,000
1,000,000 Schuylkill County PA Industrial Development
Authority Resource Recovery Revenue A/R 3.85 12/01/11 1,000,000
--------------
$ 7,000,000
</TABLE>
---------------------
61
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
SOUTH CAROLINA - 1.11%
$ 1,200,000 Charlestown County SC Industrial Revenue V/R
Massey Coal Terminal Corporation 3.85 % 01/01/07 $ 1,200,000
TEXAS - 7.19%
$ 100,000 Brazos River Authority Texas PCR V/R Texas
Utilities Electric Co LOC - Bank of
Switzerland 3.85 % 06/01/30 $ 100,000
4,500,000 Guadalupe-Blanco River Authority Texas PCR
Central Power & Light Co V/R LOC - ABN Amro
of North America 3.85 11/01/15 4,500,000
2,200,000 Sabine TX River Authority PCR AMBAC Insured 3.85 03/01/26 2,200,000
1,000,000 South Texas Higher Education Authority V/R 3.45 06/01/25 1,000,000
--------------
$ 7,800,000
UTAH - 1.66%
$ 400,000 Salt Lake City UT Airport Revenue Series A AMT
LOC - Credit Suisse 3.45 % 06/01/98 $ 400,000
1,400,000 Utah State Intermountain Power Agency CP LOC -
Swiss Bank 3.00 04/18/97 1,400,000
--------------
$ 1,800,000
VIRGINIA - 5.62%
$ 3,600,000 Peninsula Ports Authority Revenue Port
Facilities Shell Coal & Terminal Co 3.75 % 12/01/05 $ 3,600,000
2,500,000 Virginia State Housing Development Authority
V/R Series A 3.55 09/01/17 2,500,000
--------------
$ 6,100,000
</TABLE>
- ------------------------
62
<PAGE>
MASTER INVESTMENT TRUST TAX-FREE MONEY MARKET MASTER PORTFOLIO
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
WASHINGTON - 6.08%
$ 3,100,000 Washington State Health Care Facility V/R 3.85 % 10/01/05 $ 3,100,000
500,000 Washington State MFHR Inglenook Court Project
LOC - Bank of America 3.90 07/01/25 500,000
3,000,000 Washington State Public Power Supply Project
Series A 3.40 07/01/17 3,000,000
--------------
$ 6,600,000
WYOMING - 8.76%
$ 2,900,000 Lincoln County WY PCR Exxon Project 3.90 % 11/01/14 $ 2,900,000
1,600,000 Platte County WY PCR V/R LOC - Societe Generale 4.00 07/01/14 1,600,000
2,500,000 Sweetwater County WY PCR Pacific Corp Project
LOC - Canadian Imperial Bank 3.30 05/13/97 2,500,000
1,000,000 Sweetwater County WY PCR V/R Pacific Corp
Project LOC - Canadian Imperial Bank 3.75 01/01/14 1,000,000
1,500,000 Uinta County WY PCR Chevron USA Inc Project V/R 3.80 08/15/20 1,500,000
--------------
$ 9,500,000
TOTAL SHORT-TERM INSTRUMENTS $ 107,100,000
(Cost $107,100,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $107,100,000)* (Note 1) 98.73% $ 107,100,000
Other Assets and Liabilities, Net 1.27 1,375,489
------ --------------
TOTAL NET ASSETS 100.00% $ 108,475,489
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A
DEMAND FEATURE WHICH REDUCES THE REMAINING MATURITY.
The accompanying notes are an integral part of these financial statements.
---------------------
63
<PAGE>
STATEMENT OF ASSETS & LIABILITIES - MARCH 31, 1997
<TABLE>
<CAPTION>
TAX-FREE
MONEY MARKET
MASTER
PORTFOLIO
<S> <C>
- ---------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $107,100,000
Cash 251,799
Receivables:
Interest 331,672
Investment in securities sold 1,000,000
Organization expenses, net of
amortization 3,090
Prepaid expenses 3,568
TOTAL ASSETS 108,690,129
LIABILITIES
Payables:
Distribution to beneficial interest
holders 183,723
Due to sponsor and distributor (Note
2) 4,840
Due to adviser (Note 2) 17,995
Other 8,082
TOTAL LIABILITIES 214,640
TOTAL NET ASSETS
$108,475,489
INVESTMENT AT COST $107,100,000
- ---------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
64
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET MASTER
PORTFOLIO
-----------------------------
FOR THE FROM APRIL 2,
SIX 1996
MONTHS (COMMENCEMENT
ENDED OF OPERATIONS)
MARCH 31, TO SEPTEMBER
1997 30, 1996
<S> <C> <C>
- --------------------------------------------------------------------------
INVESTMENT INCOME
Interest $1,431,931 $ 1,012,391
TOTAL INVESTMENT INCOME 1,431,931 1,012,391
EXPENSES (NOTE 2)
Advisory fees 127,389 87,691
Amortization of organization expenses 484 1,266
Legal and audit fees 9,442 9,119
Other 414 494
TOTAL EXPENSES 137,729 98,570
Less:
Waived fees and reimbursed expenses (25,379) (10,704)
Net Expenses 112,350 87,866
NET INVESTMENT INCOME 1,319,581 924,525
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 0 (6,788)
NET GAIN (LOSS) ON INVESTMENTS 0 (6,788)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,319,581 $ 917,737
- --------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
65
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET MASTER
PORTFOLIO
-------------------------------
FROM APRIL 2,
1996
FOR THE SIX (COMMENCEMENT
MONTHS ENDED OF OPERATIONS)
MARCH 31, TO SEPTEMBER
1997 30, 1996
<S> <C> <C>
- ----------------------------------------------------------------------------
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 1,319,581 $ 924,525
Net realized gain (loss) on sale of
investments 0 (6,788)
NET INCREASE IN NET ASSETS RESULTING
FROM
OPERATIONS 1,319,581 917,737
NET INCREASE IN NET ASSETS RESULTING
FROM
BENEFICIAL INTEREST TRANSACTIONS 26,740,549 79,497,622
INCREASE IN NET ASSETS 28,060,130 80,415,359
NET ASSETS:
Beginning net assets 80,415,359 0
ENDING NET ASSETS $108,475,489 $ 80,415,359
- ----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ---------------------
66
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Tax-Free Money Market Master Portfolio (the "Master Portfolio") is one
series of Master Investment Trust (the "Trust"), a business trust organized
under the laws of Delaware on August 14, 1991. The Trust is registered as an
investment company under the Investment Company Act of 1940 (the "1940 Act").
The Declaration of Trust permits the issuance of beneficial interests
("interests"). The Trust currently issues nine series of investment portfolios:
the Asset Allocation, Capital Appreciation, Cash Investment Trust, Corporate
Stock, Short-Term Government-Corporate Income, Short-Term Municipal Income,
Small Cap, Tax-Free Money Market and U.S. Government Allocation Master
Portfolios.
The following significant accounting policies are consistently followed by the
Trust in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies. These financial statements represent only the Tax-Free Money Market
Master Portfolio.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT POLICY AND SECURITY VALUATION
The Master Portfolio invests in securities with remaining maturities not
exceeding 397 days (thirteen months), including floating- and variable-rate
instruments. Certain of these floating- and variable-rate instruments may carry
a demand feature that would permit the holder to tender them back to the issuer
at par value prior to maturity.
The Master Portfolio uses the amortized cost method to value its portfolio
securities and seeks to maintain a constant net asset value of $1.00 per share;
however, there can be no assurance that the Master Portfolio will meet this
goal. The amortized cost method involves valuing a security at its cost plus
accretion of discount or minus amortization of premium over the period until
maturity, which approximates market value.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded no later than one business day after trade
date. Interest income is accrued daily. Realized gains and losses are reported
on the basis of identified cost of securities delivered. Bond discounts and
premiums are accreted or amortized as required by the Internal Revenue Code.
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAXES
The Master Portfolio intends to qualify for federal income tax purposes as a
partnership. Management of the Master Portfolio therefore believes that it will
not be subject to any federal or state income tax on its income and net capital
gains (if any). However, each investor in the Master Portfolio will be taxed on
its distributive share of the partnership's income for purposes of determining
its federal and state income tax liabilities. The determination of such share
will be made in accordance with the Internal Revenue Code of 1986, as amended
("Code"), and the regulations promulgated thereunder.
It is intended that the Master Portfolio's assets, income, gain/loss and
allocations will be managed in such a way that a regulated investment company
investing in the Master Portfolio will be able to satisfy the requirements of
Subchapter M of the Code, assuming that the investment company invests all of
its assets in the Master Portfolio.
ORGANIZATION EXPENSES
The Master Portfolio has been charged for expenses incurred in connection with
the organization and initial registration of the Master Portfolio. Such expenses
are being amortized by the Master Portfolio on a straight-line basis over 60
months from the date the Master Portfolio commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an advisory contract with Wells Fargo Bank, N.A.
("WFB") on behalf of the Master Portfolio. Pursuant to the contract, WFB
furnishes investment guidance and policy direction in connection with daily
portfolio management of the Master Portfolio. Under the contract with the Master
Portfolio, WFB is entitled to receive a monthly advisory fee at an annual rate
of 0.30% of the Master Portfolio's average daily net assets.
The Trust has also entered into a contract with WFB whereby WFB has agreed to
provide custody services for the Master Portfolio. For providing these services,
WFB is entitled to be compensated for custody services based on a rate of
0.0167% of the average daily net assets of the Master Portfolio.
All amounts shown as waived fees and reimbursed expenses on the Statements of
Operations were waived and/or reimbursed by WFB.
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INDEPENDENT AUDITORS' REPORT
TO THE UNITHOLDERS AND BOARD OF TRUSTEES
MASTER INVESTMENT TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Tax-Free Money Market Master Portfolio (one
of the master portfolios comprising Master Investment Trust) as of March 31,
1997, and the related statements of operations and changes in net assets for the
six months ended March 31, 1997, and for the period from April 2, 1996
(commencement of operations) to September 30, 1996. These financial statements
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 1997, by correspondence with
the custodian and other appropriate audit procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Tax-Free Money Market
Master Portfolio of Master Investment Trust as of March 31, 1997, the results of
its operations and the changes in its net assets for the periods indicated
herein in conformity with generally accepted accounting principles.
[SIG]
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
MAY 9, 1997
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LIST OF ABBREVIATIONS
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAN -- Revenue Anticipation Notes
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
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Wells Fargo provides investment advisory services, shareholder services, and
certain other services for the Stagecoach Funds. The Funds are sponsored and
distributed by STEPHENS INC., Member NYSE/SIPC. Wells Fargo is not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Stagecoach Funds. If this report
is used for promotional purposes, distribution of the report must be accompanied
or preceded by a current prospectus. For a prospectus containing more complete
information, including charges and expenses, call 1-800-260-5969. Read the
prospectus carefully before you invest or send money.
SCF 081 (5/97)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
</TABLE>
[LOGO]
-C- 1997 Stagecoach Funds
