<PAGE>
- ------------------
ANNUAL
- ------------------
REPORT
- ------------------
MONEY
- ------------------
MARKET
- ------------------
FUNDS
- ------------------
Prime
Money Market
Mutual Fund
Treasury
Money Market
Mutual Fund
ADMINISTRATIVE CLASS
MARCH 31, 1998
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER Q & A
Prime Money Market Mutual Fund -- Administrative Class 3
Treasury Money Market Mutual Fund -- Administrative Class 3
PORTFOLIOS OF INVESTMENTS
Prime Money Market Mutual Fund 5
Treasury Money Market Mutual Fund 8
STAGECOACH FUNDS
Statement of Assets and Liabilities 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 14
Notes to Financial Statements 20
Independent Auditors' Report 29
PROXY VOTING RESULTS 31
LIST OF ABBREVIATIONS 33
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:
Thank you for your investment with the Stagecoach Funds.
The Annual and Semi-Annual Reports provide us with an opportunity to speak
directly to you. This year, we are pleased to announce strong returns in the
investment markets and a continued commitment to improving the Stagecoach Funds
to better serve you.
A review of three key indexes shows that returns for the period from April 1,
1997 through March 31, 1998 have been strong. Equities, as measured by the S&P
500 Index, returned 47.96%. Bonds, as measured by the Lehman Brothers Long
Government Bond Index, returned 20.71%. Money market funds, as measured by the
IBC/Donoghue Money Market Average, returned 4.89%.
Among the key drivers of these returns were strong corporate earnings, high
investor confidence and a positive inflation picture. The Federal Open Market
Committee of the Federal Reserve Board raised the federal funds target rate by
0.25% before the beginning of the reporting period. This was interpreted by
investors as a sign that the Fed was going to remain vigilant against inflation,
and long-term interest rates declined as a result, boosting the bond market. The
U.S. economy had been growing at a steady pace and inflationary pressures have
remained in check.
There is no guarantee that this positive environment will continue unabated,
although we remain optimistic about the long-term investment picture. We believe
that an understanding of the historical returns for the various asset classes,
as well as a realistic appraisal of the risks involved in investing, can help
you earn the financial growth you need to meet your goals. We are confident that
a carefully considered long-term plan can help you through short-term
uncertainty.
Our goal is to present a Family of Funds able to meet the increasingly
sophisticated needs of our investors. We are committed to reviewing the
investment options we offer shareholders. Stagecoach Funds has introduced the
Corporate Bond Fund and the Strategic Income Fund. We have also proposed the
consolidation of two Funds with similar investment objectives, the Intermediate
Bond and the Short-Intermediate U.S. Government Income Funds. These changes
follow the consolidation of the Overland Express and Stagecoach Fund families
and the introduction of our new "Plain English" prospectus and represent part of
our ongoing effort to meet your needs.
---------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
The following pages provide commentary from the Portfolio Managers designed to
give you a clearer understanding of the returns earned over the period, the
investment policies pursued and what you can expect from your Funds. Please
discuss any questions you may have with your financial consultant.
We look forward to learning how we can better serve you in the future.
STAGECOACH FUNDS
MAY 1998
THE "S&P 500 INDEX" IS A TRADEMARK OF STANDARD AND POOR'S CORPORATION. THE S&P
500 INDEX IS AN UNMANAGED INDEX OF 500 WIDELY HELD COMMON STOCKS REPRESENTING,
AMONG OTHERS, INDUSTRIAL, FINANCIAL, UTILITY AND TRANSPORTATION COMPANIES LISTED
OR TRADED ON NATIONAL EXCHANGES OR OVER-THE-COUNTER MARKETS. THE LEHMAN BROTHERS
LONG GOVERNMENT BOND INDEX IS AN UNMANAGED INDEX COMPOSED OF U.S. TREASURY BONDS
WITH 20-YEAR OR LONGER MATURITIES. THE IBC/DONOGHUE MONEY MARKET AVERAGE IS AN
AVERAGE OF 700 TAXABLE MONEY MARKET FUNDS.
- ---------------------
2
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
- --------------------
INVESTMENT ADVISER Q&A
PRIME MONEY MARKET MUTUAL FUND -- ADMINISTRATIVE CLASS
TREASURY MONEY MARKET MUTUAL FUND -- ADMINISTRATIVE CLASS
WHAT WERE THE SEVEN-DAY YIELDS AS OF MARCH 31, 1998?
The seven-day yield for the Prime Money Market Mutual Fund -- Administrative
Class was 5.39% as of March 31, 1998. The seven-day yield for the Treasury Money
Market Mutual Fund -- Administrative Class was 5.18%.
WHAT WERE SOME OF THE IMPORTANT FACTORS SHAPING RETURNS?
One key factor was the positive economy -- low inflation, plentiful jobs, and
good wage growth. Prior to the beginning of the period, the Federal Reserve
Board saw signs of inflationary pressure building and raised the federal funds
target rate to relieve this pressure. Taxable money market rates are very
sensitive to Fed policy. Securities which mature in one year or less tend to
react to and anticipate Fed policy. Longer-term securities, on the other hand,
tend to be influenced by inflation expectations. The only really negative news
was the Asian currency crisis, and any long-term effects it may have remain to
be seen.
HOW DID ASIA AFFECT THE MONEY MARKET?
Foreign central banks, mainly in Asia, initially sold their short-term Treasury
holdings in order to create the liquidity they desperately needed. That had an
initial negative impact on our market in terms of rates rising because of excess
supply. Foreign bank selling has settled down, but we are still seeing the
effect in terms of reduced demand for exports by those countries. It is possible
that this could have a slight cooling effect on domestic economic growth and may
keep rates low. In combination, these factors could have a big effect on our
market.
We have foreign exposure in U.S. dollar denominated instruments, but no foreign
currency exposure. We have an approved list of foreign issuers that is
constantly monitored by the credit group within Wells Capital Management. We
monitor all the names on the list, including banks, commercial issuers, finance
companies and insurers. Outside ratings are taken into consideration, but we
also assign our own ratings internally. We conduct our own independent research
and arrive at our own assessment. Our credit group also puts maturity
restrictions on certain foreign issuers if they believe it is warranted.
THE YIELD CURVE, WHICH ILLUSTRATES THE YIELDS FOR VARYING MATURITY LENGTHS, HAS
BEEN RELATIVELY FLAT. DOES THAT OFFER SOME CHALLENGES?
Yes, it does. We buy securities with maturities as long as a year. But during
the period, three, six, nine and twelve month securities traded at a very narrow
---------------------
3
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
spread. We were not getting rewarded for extending maturity towards the long
end; at least not as much as we might have with a steeper curve. To get extra
yield, we have used repurchase agreements. They are very liquid and offer good
yield on an overnight investment.
WHAT DO YOU EXPECT THE FEDERAL RESERVE'S NEXT ACTION TO BE?
We believe that the Fed is going to leave rates unchanged for awhile. We made a
strategy shift in early January and extended maturities slightly longer than our
benchmarks. The benchmark averages were 50 to 55 days; we extended ours to 60 to
70 days because we felt there was a sentiment change in the market. The market
sentiment shifted so that most people no longer expected the Fed to raise rates
and we wanted to lock in some yields.
WHAT TYPES OF INSTRUMENTS DO YOU BUY FOR THE PRIME MONEY MARKET MUTUAL FUND?
Commercial paper is the core investment, ranging from 40 to 50 percent of the
portfolio. It has a liquid market and ample supply is always available. Another
security we bought, particularly in the fourth quarter of 1997, was
floating-rate bonds based on three-month Treasury bills. These reset each week
based on the Treasury bill auction. We tend to have about 10% to 20% of the
portfolio in these or similar securities.
EXPLAIN HOW YOU USE REPURCHASE AGREEMENTS IN THE TREASURY MONEY MARKET MUTUAL
FUNDS.
Repurchase agreements add yield while maintaining high quality. All the
repurchase agreements in our Funds are backed by Treasury Securities by a margin
of 2%, so for every dollar we put into a repurchase agreement, we have
collateral of $1.02.
IS THE CURRENT ENVIRONMENT OF LOW INFLATION, GOOD ECONOMIC GROWTH AND A
FLATTENING YIELD CURVE ATYPICAL?
This is a highly unusual period, one which we likely have not seen since the
early sixties. The one wild card is Asia. It's widely thought that we have not
seen the full effects of the current Asian crisis, but the implications are that
it will not have a lasting negative effect on this environment. If Asia
continues to be weak or even if the problems accelerate, it is likely that our
economy is strong enough to continue to perform well.
IS THERE ANYTHING YOU WOULD LIKE SHAREHOLDERS TO UNDERSTAND ABOUT THE FUNDS?
This environment is a challenge. Often managers are tempted to increase yield by
taking on a little more risk. We resist the temptation because our first
commitment is to quality and risk reduction. We monitor the portfolios each day
and run scenarios to see if changes in rates and cash flow might cause the
portfolio to become overextended. It is an active and ongoing process.
- ---------------------
4
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1998
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSITS - 13.55%
$25,000,000 Abbey National North America 5.55 % 01/26/99 $ 24,988,007
29,000,000 Bankers Trust 5.98 08/12/98 29,020,922
25,000,000 Bayerische Landesbank 5.78 07/27/98 24,992,274
45,000,000 Caisse Nationale De Credit 5.86 08/11/98 44,990,708
50,000,000 CC USA Inc++ 6.18 05/26/98 50,000,000
35,000,000 Commercial Bank of Detroit 6.18 05/27/98 34,991,600
30,000,000 Dresdner Bank 5.95 10/20/98 30,003,155
35,000,000 JP Morgan Corp 5.80 07/28/98 34,986,599
50,000,000 Societe Generale (Yankee) 5.60 01/13/99 49,985,613
35,000,000 Swiss Bank 5.64 03/12/99 34,978,194
--------------
TOTAL CERTIFICATES OF DEPOSITS $ 358,937,072
(Cost $358,937,072)
COMMERCIAL PAPER - 45.81%
$30,000,000 Bankers Trust 5.38 %(F) 09/11/98 $ 29,262,425
50,000,000 Bankers Trust 5.63 (F) 05/13/98 49,671,583
25,000,000 BTR Dunlop Finance Inc 5.38 (F) 08/13/98 24,499,361
50,000,000 Caisee National De Credit Agricole 5.94 (F) 06/23/98 49,971,328
40,000,000 Corporate Asset Funding Co Inc 5.56 (F) 05/04/98 39,796,133
25,000,000 Corporate Receivables Corp++ 5.48 (F) 04/28/98 24,897,250
50,000,000 Corporate Securitization Co 5.48 (F) 04/16/98 49,885,833
45,900,000 Corporate Securitization Co 5.56 (F) 04/07/98 45,857,466
46,000,000 Cregem North America 5.39 (F) 08/20/98 45,030,703
25,000,000 Falcon Asset Securitization Corp++ 5.49 (F) 04/03/98 24,992,375
25,000,000 General Electric Capital Corp 5.60 (F) 08/14/98 24,475,000
50,000,000 General Electric Capital Corp 5.62 (F) 08/17/98 48,970,750
35,000,000 General Electric Capital Corp 5.62 (F) 08/10/98 34,284,231
35,000,000 General Motors Acceptance Corp 5.53 (F) 04/22/98 34,887,096
25,000,000 General Motors Acceptance Corp 5.54 (F) 04/15/98 24,946,139
50,000,000 Goldman Sachs & Co 5.52 (F) 05/06/98 49,731,667
80,000,000 Greenwich Asset Funding Inc++ 5.54 (F) 05/05/98 79,581,422
50,000,000 Merrill Lynch & Co 5.51 (F) 07/15/98 49,202,292
25,000,000 Merrill Lynch & Co 5.55 (F) 04/23/98 24,915,208
</TABLE>
---------------------
5
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$45,000,000 Morgan Stanley Group Inc 5.49 %(F) 04/21/98 $ 44,862,750
60,000,000 Morgan Stanley Group Inc 5.69 (F) 04/17/98 59,848,267
25,000,000 NationsBank 5.43 (F) 04/23/98 24,917,042
100,000,000 Prudential Funding Corp 5.47 (F) 04/20/98 99,711,306
20,000,000 Prudential Funding Corp 5.55 (F) 04/07/98 19,981,500
50,446,000 Receivables Capital Corp++ 5.53 (F) 05/06/98 50,174,783
30,000,000 Receivables Capital Corp++ 5.55 (F) 04/14/98 29,939,875
25,000,000 Sheffield Receivables Corp++ 5.55 (F) 04/28/98 24,895,938
35,000,000 Sigma Finance Inc++ 5.38 (F) 08/20/98 34,261,121
17,000,000 WCP Funding Inc++ 5.48 (F) 04/07/98 16,984,473
53,936,000 Windmill Funding Corp++ 5.47 (F) 06/25/98 53,234,307
--------------
TOTAL COMMERCIAL PAPER $1,213,669,624
(Cost $1,213,669,624)
CORPORATE BONDS - 15.15%
$41,000,000 Australia & New Zealand Bank Group 5.52 % 07/28/98 $ 40,992,648
50,000,000 CIT Group Holdings 5.57 01/27/99 49,960,000
10,500,000 Comerica Bank 5.97 10/27/98 10,497,702
25,000,000 Huntington National Bank 5.77 12/09/98 24,996,375
15,000,000 IBM Credit Corp 6.12 12/15/98 15,024,374
25,000,000 IBM Credit Corp 5.77 11/16/98 25,000,000
60,000,000 Morgan Stanley Corp Inc 5.71 01/08/99 59,977,200
40,000,000 NationsBank 5.83 12/22/98 39,976,000
35,000,000 Sigma Finance Inc++ 6.00 09/15/98 35,000,000
50,000,000 Sigma Finance Inc++ 5.75 10/15/98 50,000,000
50,000,000 Societe Generale 5.65 08/03/98 49,980,590
--------------
TOTAL CORPORATE BONDS $ 401,404,889
(Cost $401,404,889)
</TABLE>
- ------------------------
6
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
VARIABLE AND FLOATING RATE BONDS - 10.94%
$30,000,000 American Express Co 5.79 % 12/21/98 $ 30,000,000
20,000,000 American Express Co 5.66 05/08/98 20,000,000
20,000,000 Beta Finance Inc++ 5.81 11/30/98 20,000,000
45,000,000 FCC National Bank 5.60 06/11/98 44,965,242
60,000,000 Ford Motor Corp 5.79 01/07/99 60,000,000
50,000,000 Ford Motor Corp 5.70 12/23/98 49,985,500
50,000,000 Key National Bank 5.78 12/15/98 49,995,200
15,000,000 Morgan Guaranty Trust 5.96 06/22/98 14,994,956
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 289,940,898
(Cost $289,940,898)
REPURCHASE AGREEMENTS - 14.19%
$270,904,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.90 % 04/01/98 $ 270,904,000
105,102,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.88 04/01/98 105,102,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 376,006,000
(Cost $376,006,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $2,639,958,483)* (Note 1) 99.64% $2,639,958,483
Other Assets and Liabilities, Net 0.36% 9,536,546
------ --------------
TOTAL NET ASSETS 100.00% $2,649,495,029
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
++ REPRESENTS COMMERCIAL PAPER SOLD WITHIN TERMS OF PRIVATE PLACEMENT
MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION 4(2) OF THE
SECURITIES ACT OF 1933, THAT MAY BE RESOLD TO QUALIFIED INSTITUTIONAL
BUYERS. THIS SECURITY WAS DEEMED LIQUID BY THE INVESTMENT ADVISER IN
ACCORDANCE WITH PROCEDURES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
---------------------
7
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1998
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 54.26%
U.S. TREASURY BILLS - 23.13%
$50,000,000 U.S. Treasury Bills 5.16 %(F) 04/30/98 $ 49,786,528
272,000,000 U.S. Treasury Bills 5.32 (F) 04/16/98 271,390,355
175,000,000 U.S. Treasury Bills 5.32 (F) 04/23/98 174,432,507
--------------
$ 495,609,390
U.S. TREASURY NOTES - 31.13%
$27,000,000 U.S. Treasury Notes 4.75 % 08/31/98 $ 26,904,291
81,470,000 U.S. Treasury Notes 5.13 04/30/98 81,409,642
34,750,000 U.S. Treasury Notes 5.13 06/30/98 34,690,136
8,500,000 U.S. Treasury Notes 5.88 04/30/98 8,502,407
75,000,000 U.S. Treasury Notes 6.00 09/30/98 75,193,892
123,800,000 U.S. Treasury Notes 6.13 05/15/98 123,850,564
75,520,000 U.S. Treasury Notes 6.13 08/31/98 75,637,808
44,640,000 U.S. Treasury Notes 6.38 01/15/99 44,987,255
14,340,000 U.S. Treasury Notes 7.13 10/15/98 14,448,818
29,750,000 U.S. Treasury Notes 7.88 04/15/98 29,769,743
100,625,000 U.S. Treasury Notes 8.25 07/15/98 101,404,019
49,775,000 U.S. Treasury Notes 6.25 03/31/99 50,142,657
--------------
$ 666,941,232
TOTAL U.S. TREASURY SECURITIES $1,162,550,622
(Cost $1,162,550,622)
</TABLE>
- ------------------------
8
<PAGE>
TREASURY MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 45.73%
$64,665,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.90 04/01/98 $ 64,665,000
310,024,000 HSBC Securities Inc Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 5.85 04/01/98 310,024,000
215,434,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.88 04/01/98 215,434,000
389,735,000 Morgan Stanley & Co Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 5.90 04/01/98 389,735,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 979,858,000
(Cost $979,858,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $2,142,408,622)* (Note 1) 99.99% $2,142,408,622
Other Assets and Liabilities, Net 0.01% 286,556
------ --------------
TOTAL NET ASSETS 100.00% $2,142,695,178
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</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.
---------------------
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 1998
<TABLE>
<CAPTION>
PRIME TREASURY
MONEY MARKET MONEY MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- ------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value and
cost (includes repurchase agreements
of $376,006,000 for the Prime Money
Market Mutual Fund and $979,858,000
for the Treasury Money Market Mutual
Fund) $2,639,958,483 $2,142,408,622
Cash 1,230 2,857
Receivables:
Interest 21,314,070 9,868,046
Organization expenses, net of
amortization 34,145 63,038
Prepaid expenses 57,996 84,842
TOTAL ASSETS 2,661,365,924 2,152,427,405
LIABILITIES
Payables:
Distribution to shareholders 10,665,703 8,397,184
Due to sponsor and distributor (Note
2) 286,616 250,453
Due to adviser (Note 2) 757,682 920,731
Other 160,894 163,859
TOTAL LIABILITIES 11,870,895 9,732,227
TOTAL NET ASSETS
$2,649,495,029 $2,142,695,178
NET ASSETS CONSIST OF:
Paid-in capital $2,649,429,789 $2,142,662,386
Undistributed net realized gain on
investments 65,240 32,792
TOTAL NET ASSETS $2,649,495,029 $2,142,695,178
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 592,316,876 $ 381,593,557
Shares outstanding - Class A 592,415,777 381,625,486
Net asset value and offering price per
share - Class A $ 1.00 $ 1.00
Net assets - Administrative Class $ 600,974,628 $ 176,942,422
Shares outstanding - Administrative
Class 600,910,010 176,927,656
Net asset value and offering price per
share - Administrative Class $ 1.00 $ 1.00
Net assets - Class E N/A $ 715,554,329
Shares outstanding - Class E N/A 715,543,643
Net asset value and offering price per
share - Class E N/A $ 1.00
Net assets - Institutional Class $ 802,510,816 $ 501,493,743
Shares outstanding - Institutional Class 802,563,568 501,621,987
Net asset value and offering price per
share - Institutional Class $ 1.00 $ 1.00
Net assets - Service Class $ 653,692,709 $ 367,111,127
Shares outstanding - Service Class 653,788,414 367,119,468
Net asset value and offering price per
share - Service Class $ 1.00 $ 1.00
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
10
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
PRIME TREASURY
MONEY MARKET MONEY MARKET
MUTUAL FUND MUTUAL FUND
<S> <C> <C>
- -------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 95,926,455 $101,243,245
TOTAL INVESTMENT INCOME 95,926,455 101,243,245
EXPENSES (NOTE 2)
Advisory fees 4,202,664 4,584,749
Administration fees 1,047,654 1,133,896
Custody fees 280,730 306,262
Shareholder servicing fees 2,433,830 3,397,289
Portfolio accounting fees 384,510 430,278
Transfer agency fees 853,431 1,014,143
Distribution fees 174,857 961,527
Organization costs 97,091 134,532
Legal and audit fees 72,103 68,980
Registration fees 264,729 285,055
Directors' fees 4,972 4,689
Shareholder reports 80,089 37,494
Other 64,582 32,393
TOTAL EXPENSES 9,961,242 12,391,287
Less:
Waived fees and reimbursed expenses (3,092,776) (3,403,022)
Net Expenses 6,868,466 8,988,265
NET INVESTMENT INCOME 89,057,989 92,254,980
Net realized gain on sale of investments 205,613 104,070
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 89,263,602 $ 92,359,050
- -------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
-------------------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (1) MARCH 31, 1997 SEPT. 30, 1996
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 89,057,989 $ 38,285,335 $ 70,756,951
Net realized gain (loss) on sale of
investments 205,613 (39,213) 0
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 89,263,602 38,246,122 70,756,951
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (17,766,272) (7,008,067) (14,569,914)
ADMINISTRATIVE CLASS (11,412,448)(2) N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS (30,624,015) (13,890,812) (21,372,473)
SERVICE CLASS (29,255,254) (17,386,456) (34,814,564)
In excess of net investment income
CLASS A 0 0 (17,515)
ADMINISTRATIVE CLASS 0(2) N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS 0 0 (29,352)
SERVICE CLASS 0 0 (56,259)
From net realized gain on sale of
investments
CLASS A 0 0 0
ADMINISTRATIVE CLASS 0(2) N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS 0 0 0
SERVICE CLASS 0 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 2,095,338,042 332,738,149 831,565,415
Reinvestment of dividends - Class A 3,165,358 240,495 916,433
Cost of shares redeemed - Class A (1,783,218,311) (320,827,816) (567,563,822)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 315,285,089 12,150,828 264,918,026
Proceeds from shares sold -
Administrative Class 1,388,222,454(2) N/A N/A
Reinvestment of dividends -
Administrative Class 9,420,477(2) N/A N/A
Cost of shares redeemed -
Administrative Class (796,735,143)(2) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - ADMINISTRATIVE CLASS 600,907,788(2) N/A N/A
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 2,512,557,623 1,593,666,413 5,079,644,286
Reinvestment of dividends -
Institutional Class 8,027,719 1,847,923 176,187
Cost of shares redeemed -
Institutional Class (2,256,346,296) (1,481,265,875) (4,686,437,789)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 264,239,046 114,248,461 393,382,684
Proceeds from shares sold - Service
Class 2,169,506,716 1,211,666,872 2,007,890,215
Reinvestment of dividends - Service
Class 1,912,601 90,409 117,361
Cost of shares redeemed - Service
Class (2,143,905,641) (1,326,393,380) (1,881,188,708)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - SERVICE CLASS 27,513,676 (114,636,099) 126,818,868
INCREASE (DECREASE) IN NET ASSETS 1,208,151,212 11,723,977 785,016,452
NET ASSETS:
Beginning net assets 1,441,343,817 1,429,619,840 644,603,388
ENDING NET ASSETS $ 2,649,495,029 $ 1,441,343,817 $ 1,429,619,840
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS MONEY
MARKET FUND. SEE NOTE 1.
(2) THIS CLASS COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(3) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS U.S.
TREASURY MONEY MARKET FUND. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
- ---------------------
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
-------------------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (3) MARCH 31, 1997 SEPT. 30, 1996
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 92,254,980 $ 45,105,801 $ 97,930,686
Net realized gain (loss) on sale of
investments 104,070 1,017 39,272
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 92,359,050 45,106,818 97,969,958
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (7,909,738) (1,327,300) (2,763,079)
ADMINISTRATIVE CLASS (2,844,289)(2) N/A N/A
CLASS E (35,555,799) (905,615) N/A
INSTITUTIONAL CLASS (25,427,944) (12,730,969) (62,003,165)
SERVICE CLASS (20,517,210) (30,141,918) (33,164,442)
In excess of net investment income
CLASS A 0 0 (293)
ADMINISTRATIVE CLASS 0(2) N/A N/A
CLASS E 0 0 N/A
INSTITUTIONAL CLASS 0 0 (14,701)
SERVICE CLASS 0 0 (4,695)
From net realized gain on sale of
investments
CLASS A (1,806) (1,075) 0
ADMINISTRATIVE CLASS 0(2) N/A N/A
CLASS E (30,443) 0 N/A
INSTITUTIONAL CLASS (24,671) (12,378) 0
SERVICE CLASS (15,375) (25,819) 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 1,005,876,144 101,803,141 265,329,368
Reinvestment of dividends - Class A 1,522,843 117,496 303,969
Cost of shares redeemed - Class A (692,285,990) (89,139,342) (211,928,115)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 315,112,997 12,781,295 53,705,222
Proceeds from shares sold -
Administrative Class 267,085,382(2) N/A N/A
Reinvestment of dividends -
Administrative Class 2,351,192(2) N/A N/A
Cost of shares redeemed -
Administrative Class (92,509,640)(2) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - ADMINISTRATIVE CLASS 176,926,934(2) N/A N/A
Proceeds from shares sold - Class E 1,732,685,997 892,833,080 N/A
Reinvestment of dividends - Class E 0 0 N/A
Cost of shares redeemed - Class E (1,837,801,845) (72,176,053) N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS E (105,115,848) 820,657,027 N/A
Proceeds from shares sold -
Institutional Class 1,810,109,209 998,327,768 4,920,884,222
Reinvestment of dividends -
Institutional Class 3,525,822 978,929 1,018,863
Cost of shares redeemed -
Institutional Class (1,761,790,304) (1,090,336,130) (4,417,665,197)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 51,844,727 (91,029,433) 504,237,888
Proceeds from shares sold - Service
Class 2,944,938,309 2,043,006,993 3,893,787,080
Reinvestment of dividends - Service
Class 1,738,759 348,407 227,942
Cost of shares redeemed - Service
Class (3,062,973,983) (2,900,254,375) (3,555,407,931)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - SERVICE CLASS (116,296,915) (856,898,975) 338,607,091
INCREASE (DECREASE) IN NET ASSETS 322,503,670 (114,528,342) 896,569,784
NET ASSETS:
Beginning net assets 1,820,191,508 1,934,719,850 1,038,150,066
ENDING NET ASSETS $ 2,142,695,178 $ 1,820,191,508 $ 1,934,719,850
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS MONEY
MARKET FUND. SEE NOTE 1.
(2) THIS CLASS COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(3) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS U.S.
TREASURY MONEY MARKET FUND. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
---------------------
13
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1)
----------------------------------
CLASS A
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (2) 1996 (3)
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.02 0.05
Net realized gain (loss) on investments 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02) (0.05)
Distributions from net realized gain 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.05)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.24% 2.49% 5.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $592,317 $277,044 $264,900
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.61% 0.55% 0.55%
Ratio of net investment income to average net assets 5.11% 4.95% 5.06%
- --------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.83% 0.75% 0.68%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 4.89% 4.75% 4.93%
- --------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. 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 SEPTEMBER 30 TO MARCH 31.
(3) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(4) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
The accompanying notes are an integral part of these financial statements.
- ---------------------
14
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1) (CONT.)
----------------------------------------------------------------------------------------------
ADMIN.
CLASS INSTITUTIONAL CLASS SERVICE CLASS
---------- ---------------------------------------------- ----------------------------------
PERIOD SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MARCH 31, MARCH 31, SEPT. 30,
1998 (4) 1998 1997 (2) 1996 1995 (5) 1998 1997 (2) 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.02 0.05 0.03 0.05 0.01 0.05 0.03 0.05
Net realized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.02 0.05 0.03 0.05 0.01 0.05 0.03 0.05
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.05) (0.03) (0.05) (0.01) (0.05) (0.03) (0.05)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.02) (0.05) (0.03) (0.05) (0.01) (0.05) (0.03) (0.05)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 1.57% 5.58% 2.64% 5.39% 5.65% 5.37% 2.54% 5.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $600,975 $802,511 $538,195 $423,959 $30,606 $653,693 $626,105 $740,760
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.40% 0.25% 0.25% 0.25% 0.26% 0.45% 0.45% 0.45%
Ratio of net investment
income to average net
assets 5.34% 5.46% 5.25% 5.33% 5.67% 5.24% 5.04% 5.14%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.55% 0.41% 0.38% 0.60% 0.69% 0.65% 0.60% 0.62%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.19% 5.30% 5.12% 4.98% 5.24% 5.04% 4.89% 4.97%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. 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 SEPTEMBER 30 TO MARCH 31.
(3) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(4) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
The accompanying notes are an integral part of these financial statements.
---------------------
15
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET
MUTUAL FUND (1) (CONT.)
----------------------------------
SERVICE CLASS (CONT.)
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPT. 30, SEPT. 30, MARCH 31,
1995 1994 (2) 1994
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.02 0.03
Net realized gain (loss) on investments 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02) (0.03)
Distributions from net realized gain 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.03)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.60% 3.71%** 3.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $614,101 $565,305 $527,599
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.41% 0.41% 0.41%
Ratio of net investment income to average net assets 5.47% 3.67% 2.96%
- --------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.68% 0.89% 0.89%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 5.20% 3.19% 2.48%
- --------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITES. 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.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(7) THE CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
The accompanying notes are an integral part of these financial statements.
- ---------------------
16
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
MUTUAL FUND (3)
---------------------------------------------------------------------------------------
CLASS A ADMIN. INSTITUTIONAL
----------------------------------- CLASS CLASS E CLASS
SIX --------- ---------------------- ---------
YEAR MONTHS YEAR PERIOD YEAR PERIOD YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, SEPT. 30, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1998 1997 (4) 1996 (5) 1998 (6) 1998 1997 (7) 1998
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.05 0.02 0.05 0.02 0.05 0.00 0.05
Net realized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 0.05 0.02 0.05 0.02 0.05 0.00 0.05
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.02) (0.05) (0.02) (0.05) 0.00 (0.05)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.05) (0.02) (0.05) 0.00 (0.05)
--------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (NOT
ANNUALIZED) 5.06% 2.42% 4.95% 1.52% 4.99% 0.11% 5.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $381,594 $66,486 $53,706 $176,942 $715,554 $820,657 $501,494
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.62% 0.55% 0.55% 0.40% 0.65% 0.65% 0.25%
Ratio of net investment
income to average net
assets 4.93% 4.81% 4.96% 5.17% 4.87% 4.86% 5.28%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.85% 0.75% 0.67% 0.56% 0.84% 0.88% 0.40%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.70% 4.61% 4.84% 5.01% 4.68% 4.63% 5.13%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. 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 MARCH 31 TO SEPTEMBER 30.
(3) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITES. 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.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(7) THE CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
The accompanying notes are an integral part of these financial statements.
---------------------
17
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
MUTUAL FUND (1)
----------------------------------
INSTITUTIONAL CLASS (CONT.)
----------------------------------
SIX MONTHS PERIOD
ENDED YEAR ENDED ENDED
MARCH 31, SEPT. 30, SEPT. 30,
1997 (2) 1996 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 0.03 0.05 0.01
Net realized 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 to average net assets
prior to waived fees and reimbursed expenses 4.97% 4.87% 4.99%
- --------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITES. 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 SEPTEMBER 30 TO MARCH 31.
(3) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
- ---------------------
18
<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 MONTHS SIX MONTHS
YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, SEPT. 30, MARCH 31,
1998 1997 (2) 1996 1995 1994 (4) 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 0.05 0.02 0.05 0.05 0.02 0.03
Net realized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.05 0.02 0.05 0.05 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.02) (0.05) (0.05) (0.02) (0.03)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.05) (0.05) (0.02) (0.03)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 5.20% 2.47% 5.03% 5.42% 3.75%** 2.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $367,111 $483,401 $1,340,325 $1,001,707 $690,630 $654,950
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.45% 0.45% 0.45% 0.42% 0.43% 0.43%
Ratio of net investment
income to average net
assets 5.07% 4.91% 4.98% 5.32% 3.72% 2.77%
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.65% 0.61% 0.60% 0.66% 0.90% 0.90%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.87% 4.75% 4.83% 5.08% 3.25% 2.30%
- ----------------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS A PORTFOLIO OF PACIFIC AMERICAN FUNDS THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN U.S.
TREASURY PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA TREASURY MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITES. 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 SEPTEMBER 30 TO MARCH 31.
(3) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
---------------------
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on January 1,
1992, and currently offers thirty-three separate series. These financial
statements represent the Prime Money Market Mutual and Treasury Money Market
Mutual Funds (each, a "Fund", collectively, the "Funds"), each a diversified
series of the Company.
At a meeting held on July 23, 1997, the Boards of Directors of Overland Express
Funds, Inc. ("Overland") and the Company approved a consolidation agreement
providing for the transfer of the assets and liabilities of each Overland fund
to a corresponding fund of the Company in exchange for shares of designated
classes of the corresponding Stagecoach fund (the "Consolidation"). The
Consolidation was subsequently approved by Overland shareholders. As a result of
this Consolidation, effective at the close of business on December 12, 1997,
Stagecoach Prime Money Market Mutual and Stagecoach Treasury Money Market Mutual
Funds acquired all of the assets and assumed all of the liabilities of the
Overland Money Market and Overland U.S. Treasury Money Market Funds,
respectively. Shares issued by the Stagecoach Prime Money Market Mutual and
Stagecoach Treasury Money Market Mutual Funds in exchange for shares of the
Overland Money Market Fund and Overland U.S. Treasury Money Market Fund were
1,403,141,528 (valued at $1,403,123,759) and 560,525,071 (valued at
$560,521,708), respectively. At the date of the Consolidation, the components of
net assets for each Overland and Stagecoach fund were as follows:
<TABLE>
<CAPTION>
OVERLAND OVERLAND U.S. TREASURY
DECEMBER 12, 1997 MONEY MARKET FUND MONEY MARKET FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
Paid-in Capital $ 1,403,141,571 $ 560,521,708
Undistributed Net Realized Gain (Loss) (17,812) 0
----------------------- -----------------------
Total Net Assets $ 1,403,123,759 $ 560,521,708
----------------------- -----------------------
----------------------- -----------------------
<CAPTION>
STAGECOACH PRIME STAGECOACH TREASURY
MONEY MARKET MUTUAL MONEY MARKET MUTUAL
DECEMBER 12, 1997 FUND FUND
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
Paid-in Capital $ 1,219,800,227 $ 1,654,279,032
Undistributed Net Realized Gain (Loss) (14,666) 0
----------------------- -----------------------
Total Net Assets $ 1,219,785,561 $ 1,654,279,032
----------------------- -----------------------
----------------------- -----------------------
</TABLE>
- ---------------------
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The combined net assets immediately after the Consolidation were $2,622,909,320
for the Stagecoach Prime Money Market Mutual Fund and $2,214,800,740 for the
Stagecoach Treasury Money Market Mutual Fund. All acquisitions were accomplished
in separate tax-free exchanges for shares of the respective Fund.
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 Prime Money Market Mutual and
Treasury Money Market Mutual Funds were established to acquire all of the assets
and assume all of the liabilities of the Pacifica Prime Money Market and
Treasury Money Market Funds, respectively (collectively, the "Predecessor
Funds"). These acquisitions were accomplished in separate tax-free exchanges for
shares of the respective Fund. All performance and financial data for periods
prior to September 6, 1996 refers to the Predecessor Funds.
Each of the Funds offers Class A, Administrative Class, Institutional Class, and
Service Class Shares. The Treasury Money Market Mutual Fund also offers Class E
shares. The separate classes of shares differ principally in the applicable
sales charges (if any), distribution fees, shareholder servicing fees 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. Realized gains are allocated to each class pro rata based on the
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 realized gain and loss
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 ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, 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.
---------------------
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SECURITY VALUATION
The Funds invest only in securities with remaining maturities not exceeding 397
days (thirteen months). Certain floating-and variable-rate instruments in the
portfolios may have maturities in excess of 397 days, but carry a demand feature
that permits the holder to tender the instruments back to the issuer at par
value prior to maturity.
The Funds use the amortized cost method to value their portfolio securities. 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. The Funds seek to maintain a constant net asset value
of $1.00 per share, although there is no assurance that they will be able to do
so.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Interest income is
accrued daily. Realized gains or losses are reported on the basis of identified
cost of securities delivered. Bond discounts are accreted and premiums are
amortized under provisions of the Internal Revenue Code of 1986, as amended (the
"Code").
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in each Fund's Portfolio of
Investments. The Funds may participate in pooled repurchase agreement
transactions with other funds advised by Wells Fargo Bank, N.A. ("WFB"). The
repurchase agreements 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 by the Funds are collateralized by instruments such as U.S.
Treasury or federal agency obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared daily
and distributed monthly. Any distributions to shareholders from net realized
capital gains are declared and distributed annually.
FEDERAL INCOME TAXES
Each Fund 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 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.
- ---------------------
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Accordingly, no provision for federal income taxes was required at March 31,
1998.
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 a
Fund. The differences between the income or gains distributed on a book versus
tax basis are shown as excess distributions of net investment income and net
realized gain on sales 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 GAAP. 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 COSTS
Certain costs incurred in connection with the organization of the Funds and
their initial registration with the Securities and Exchange Commission and with
the various states are amortized on a straight-line basis over 60 months from
the date each Fund commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the Funds
with WFB. Pursuant to the contracts, WFB has agreed to provide the Funds with
daily portfolio management. Under the contracts, WFB is entitled to be paid a
monthly advisory fee at an annual rate of 0.25% of the average daily net assets
of each Fund.
The Company has entered into contracts on behalf of each Fund with WFB, whereby
WFB is responsible for providing custody and portfolio accounting services for
the Funds. Pursuant to the contracts, WFB is entitled to certain transaction
charges plus a monthly fee for custody services 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 from each Fund of $2,000 plus an annual
fee of 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 each Fund's average daily net
assets in excess of $100 million.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB provides transfer agency services 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 Class A and Service Class shares of
the Funds and the Class E shares of the Treasury Money Market Mutual Fund, and
0.02% of the average daily net assets of the Administrative Class shares
---------------------
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
and Institutional Class shares of the Funds. Prior to September 1, 1997, WFB was
entitled to receive transfer agency fees at an annual rate of 0.02% of the
average daily net assets of the Service Class shares of the Funds and the Class
E shares of the Treasury Money Market Mutual Fund.
The transfer agency fees paid on behalf of the Funds for the year ended March
31, 1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL SERVICE
FUND CLASS A CLASS* CLASS E CLASS CLASS
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $349,687 $ 50,565 N/A $ 104,088 $349,091
Treasury Money Market Mutual Fund 159,995 11,006 $480,215 96,351 266,576
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998.
The Company has entered into contracts on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder services for the Funds. Pursuant to the
contracts, WFB is entitled to receive shareholder servicing fees at an annual
rate of 0.30% of the average daily net assets of the Class A shares of the Funds
and the Class E shares of the Treasury Money Market Mutual Fund, 0.15% of the
average daily net assets of the Administrative Class shares and 0.20% of the
average daily net assets of the Service Class shares of the Funds. Prior to
September 1, 1997, WFB was entitled to receive shareholder servicing fees at an
annual rate of 0.25% of the average daily net assets of the Class A shares of
the Funds and the Class E shares of the Treasury Money Market Mutual Fund.
The shareholder servicing fees paid on behalf of the Funds for the year ended
March 31, 1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE SERVICE
FUND CLASS A CLASS* CLASS E CLASS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $996,870 $ 320,205 N/A $1,116,755
Treasury Money Market Mutual Fund 466,221 82,533 $2,037,737 810,798
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998.
The Company has entered into administration agreements on behalf of the Funds
whereby WFB as administrator and Stephens Inc. ("Stephens") as co-administrator
provide each Fund with administration services. For these services, WFB and
Stephens are entitled to receive monthly fees at the annual rates of 0.03% and
0.04%, respectively, of each Fund's average daily net assets. Prior to February
1, 1998, WFB and Stephens were entitled to receive monthly fees at the annual
rates of 0.04% and 0.02%, respectively, of each Fund's average daily net assets.
- ---------------------
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Company has adopted separate Distribution Plans for Class A shares of the
Funds and Class E shares of the Treasury Money Market Mutual Fund pursuant to
Rule 12b-1 under the 1940 Act (each, a "Plan"). The Plan for the Class A shares
of the Funds provides that each Fund may pay to Stephens, as compensation for
distribution-related services or as reimbursement for distribution-related
expenses, up to 0.05% of the average daily net assets attributable to the Class
A shares.
Under the Plan for Class E shares of the Treasury Money Market Mutual Fund, the
Fund may pay, as compensation for distribution-related services or as
reimbursement for distribution-related expenses, a monthly fee at an annual rate
of up to 0.10% of the average daily net assets attributable to its Class E
shares. Prior to September 1, 1997, the Fund paid, for distribution-related
services, a monthly fee at an annual rate of up to 0.25% of the average daily
net assets attributable to its Class E shares.
Each Fund may participate in joint distribution activities with other Funds, in
which event, expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses of joint distribution activities are allocated among the
Funds in proportion to their relative net asset sizes.
For the year ended March 31, 1998, the Treasury Money Market Mutual Fund paid
distribution fees of $79,998 and $881,529 for the Class A and Class E shares,
respectively. Distribution fees for the Class A shares of the Prime Money Market
Mutual Fund for the year ended March 31, 1998, are disclosed in the Statement of
Operations.
The registration fees paid on behalf of the Funds for the year ended March 31,
1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL SERVICE
FUND CLASS A CLASS* CLASS E CLASS CLASS
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $61,386 $ 31,206 N/A $ 88,630 $83,507
Treasury Money Market Mutual Fund 44,590 16,000 $68,794 66,740 88,931
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998.
---------------------
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees and reimbursed expenses on the Statement of
Operations for the year ended March 31, 1998, were waived by WFB. Waived fees
and reimbursed expenses continue at the discretion of WFB and Stephens. WFB and
Stephens agreed to waive or reimburse all or a portion of their respective fees
charged to, or expenses paid by, each Fund to ensure that the total Fund
operating expenses did not exceed, on an annual basis, 0.55%, 0.25%, and 0.45%
of the average daily net assets of the Class A, Institutional Class, and Service
Class shares of each Fund, respectively, through August 31, 1997.
Certain officers and one director of the Company are also officers of Stephens.
As of March 31, 1998, Stephens owned 1,514,061 shares of the Prime Money Market
Mutual Fund and 138,913 shares of the Treasury Money Market Mutual Fund.
- ---------------------
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. CAPITAL SHARE TRANSACTIONS
As of March 31, 1998, there were over 108 billion shares of $0.001 par value
capital stock authorized by the Company. As of March 31, 1998, each Fund was
authorized to issue 5 billion shares of $0.001 par value capital stock for each
class of shares, with the exception of the Administrative Class shares. Each
Fund was authorized to issue 1 billion shares of $0.001 par value capital stock
for the Administrative Class shares. Capital share transactions for the Funds
were as follows:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
-----------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (1) MARCH 31, 1997 SEPT. 30, 1996
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 2,095,335,772 332,735,076 831,632,592
Shares issued in reinvestment of dividends --
Class A 3,165,358 240,495 916,433
Shares redeemed -- Class A (1,783,218,311) (320,827,816) (567,563,822)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
CLASS A 315,282,819 12,147,755 264,985,203
Shares sold -- Administrative Class (2) 1,388,224,676 N/A N/A
Shares issued in reinvestment of dividends --
Administrative Class (2) 9,420,477 N/A N/A
Shares redeemed -- Administrative Class (2) (796,735,143) N/A N/A
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
ADMINISTRATIVE CLASS (2) 600,910,010 N/A N/A
Shares sold -- Institutional Class 2,512,557,618 1,593,660,723 5,079,737,453
Shares issued in reinvestment of dividends --
Institutional Class 8,027,719 1,847,923 176,187
Shares redeemed -- Institutional Class (2,256,346,296) (1,481,265,875) (4,686,437,789)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS 264,239,041 114,242,771 393,475,851
Shares sold -- Service Class 2,169,506,710 1,211,658,277 2,007,890,215
Shares issued in reinvestment of dividends --
Service Class 1,912,601 90,409 117,361
Shares redeemed -- Service Class (2,143,905,641) (1,326,393,380) (1,881,188,709)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
SERVICE CLASS 27,513,670 (114,644,694) 126,818,867
</TABLE>
(1) "SHARES SOLD" INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE
STAGECOACH PRIME MONEY MARKET MUTUAL AND OVERLAND MONEY MARKET FUNDS. SEE
NOTE 1.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
---------------------
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
-----------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (3) MARCH 31, 1997 SEPT. 30, 1996
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 1,005,879,507 101,803,385 265,329,368
Shares issued in reinvestment of dividends --
Class A 1,522,843 117,496 303,969
Shares redeemed -- Class A (692,284,609 ) (89,139,342) (211,928,115)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
CLASS A 315,117,741 12,781,539 53,705,222
Shares sold -- Administrative Class (2) 267,085,382 N/A N/A
Shares issued in reinvestment of dividends --
Administrative Class (2) 2,351,192 N/A N/A
Shares redeemed -- Administrative Class (2) (92,508,918 ) N/A N/A
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
ADMINISTRATIVE CLASS (2) 176,927,656 N/A N/A
Shares sold -- Class E 1,732,685,998 892,833,080 N/A
Shares issued in reinvestment of dividends --
Class E 0 0 N/A
Shares redeemed -- Class E (1,837,799,382) (72,176,053) N/A
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
CLASS E (105,113,384 ) 820,657,027 N/A
Shares sold -- Institutional Class 1,810,109,209 998,327,613 4,920,884,222
Shares issued in reinvestment of dividends --
Institutional Class 3,525,822 978,929 1,018,863
Shares redeemed -- Institutional Class (1,761,788,362) (1,090,336,130) (4,417,665,197)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS 51,846,669 (91,029,588) 504,237,888
Shares sold -- Service Class 2,944,938,308 2,043,006,904 3,893,787,080
Shares issued in reinvestment of dividends --
Service Class 1,738,759 348,407 227,942
Shares redeemed -- Service Class (3,062,972,733) (2,900,254,375) (3,555,407,931)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
SERVICE CLASS (116,295,666 ) (856,899,064) 338,607,091
</TABLE>
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(3) "SHARES SOLD" INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE
STAGECOACH TREASURY MONEY MARKET MUTUAL AND OVERLAND U.S. TREASURY MONEY MARKET
FUNDS. SEE NOTE 1.
- ---------------------
28
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
STAGECOACH FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Prime Money Market Mutual Fund and Treasury
Money Market Mutual Fund (two of the funds comprising Stagecoach Funds, Inc.) as
of March 31, 1998, and the related statement of operations for the year then
ended, the statements of changes in net assets for the year ended March 31,
1998, the six months ended March 31, 1997, and the year ended 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. All years or periods
indicated in the accompanying financial highlights ending prior to October 1,
1995, were audited by other auditors whose reports dated November 15, 1995, and
May 4, 1994, expressed unqualified opinions on this information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1998, 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, 1998, 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 1, 1998
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<PAGE>
STAGECOACH FUNDS
- -----------------------------------------
SHAREHOLDERS' MEETING AND PROXY VOTING RESULTS
The following proposal was passed by the required majority of shareholders of
the indicated Predecessor Funds at Special Shareholders' meetings held on
November 20, (as adjourned to) November 26, 1997, for the purpose of voting on
the proposal.
To approve a proposed Agreement and Plan of Consolidation providing for the
transfer of the assets and stated liabilities of specific Overland portfolios to
corresponding investment portfolios of Stagecoach Funds, Inc., in exchange for
shares of equal value of designated classes of the Stagecoach Funds.
MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -----------------------------------
762,058,656 14,169,803 38,749,594
</TABLE>
U.S. TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -----------------------------------
263,531,114 19,173,338 11,758,105
</TABLE>
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<PAGE>
LIST OF ABBREVIATIONS
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
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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.
SC MMAC ANR (5/98)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
</TABLE>
[LOGO]
-C- 1998 Stagecoach Funds
