<PAGE>
- ------------------
ANNUAL
- ------------------
REPORT
- ------------------
MONEY
- ------------------
MARKET
- ------------------
FUNDS
- ------------------
National
Tax-Free
Money Market
Mutual Fund
Prime
Money Market
Mutual Fund
Treasury
Money Market
Mutual Fund
INSTITUTIONAL CLASS
MARCH 31, 1998
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER Q & A
National Tax-Free Money Market Mutual Fund -- Institutional Class 3
Prime Money Market Mutual Fund -- Institutional Class 5
Treasury Money Market Mutual Fund -- Institutional Class 5
PORTFOLIOS OF INVESTMENTS
National Tax-Free Money Market Mutual Fund 7
Prime Money Market Mutual Fund 11
Treasury Money Market Mutual Fund 14
STAGECOACH FUNDS
Statement of Assets and Liabilities 16
Statement of Operations 17
Statements of Changes in Net Assets 18
Financial Highlights 20
Notes to Financial Statements 26
Independent Auditors' Report 37
PROXY VOTING RESULTS 39
LIST OF ABBREVIATIONS 41
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
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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
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND -- INSTITUTIONAL CLASS
WHAT WAS THE SEVEN-DAY YIELD AS OF MARCH 31, 1998?
The seven-day yield for the National Tax-Free Money Market Mutual Fund
Institutional Class as of March 31, 1998 was 3.13%.
THE FEDERAL RESERVE BOARD RAISED THE FEDERAL FUNDS TARGET RATE BEFORE THE
BEGINNING OF THE PERIOD AND HAS KEPT IT STEADY SINCE THEN. HOW DID THIS AFFECT
THE FUNDS?
While changes in the federal funds target rate do have some influence on the
Funds, tax-exempt money markets are not as directly influenced by Fed policy as
taxable money markets instruments. The tax-exempt money market is very seasonal
in nature and is driven by cash flows into and out of money market funds. For
instance, in April there usually is a gathering of cash in money market funds
which is then dispersed over the first two weeks as people pay their taxes. The
demand for extremely short-term instruments creates pressure on the supply,
causing yields to spike. By the second or third week of May, yields usually come
back down. This is a very consistent pattern that is repeated year after year.
There is a similar effect around June 30 when a large number of notes mature in
a two-day period. That brings a great deal of cash into the market. There is a
new phenomenon appearing in September when money market redemptions increase as
parents pay for school tuition. Fed action on interest rates can have an impact,
of course, but it needs to be more extreme to have a pronounced effect. For
example, in the last quarter of 1994 the Fed tightened rates by about 1.50% in a
short period. That extreme action certainly affected tax-free money market
yields. But in March 1997, the Fed tightened rates by only 0.25%, so the impact
on tax-exempt money market yields was much less significant.
DO GENERAL ECONOMIC TRENDS AFFECT YIELDS?
If you step behind the scenes of the money market and see what drives the cash
flows, you will find that confidence in the economy helps drive yields. There is
also a "wealth effect." As people reach higher tax brackets, they seek out tax-
exempt vehicles.
WHAT DO YOU LOOK FOR WHEN BUYING HOLDINGS FOR THE FUND?
We have very rigid investment parameters. Our primary focus is to provide a high
level of liquidity, and since outflows can be unpredictable, we try to maintain
5% to 7% of assets in extremely liquid instruments. We use "daily floaters" for
this purpose, which are the most liquid money market security in the tax-exempt
sector. Their coupon resets on a daily basis based on supply and demand, they
sell for face value, they settle for cash and there is a continuous market for
them.
---------------------
3
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
We also stress maintaining a high degree of quality. We buy top-tier credits or
credits enhanced by top-tier banks and insurance companies. "Enhanced" means
backed by an irrevocable letter of credit (LOC) issued by a bank. The bank
handles all the debt service and guarantees payment of the debt to the holder.
If the issuer defaults, that's between the bank and the issuer, not the issuer
and the holder. What we are really buying with enhanced credit is the LOC
exposure. Until recently, nearly two-thirds of LOC writers for municipal credits
were Japanese banks. Since the Asian crisis, considerable credit deterioration
has taken place and many Japanese banks have been put on credit watch.
Consequently, we have sold many credits backed by Japanese banks. We gave up
yield to avoid risks we believed were too high.
IS THE MUNICIPAL MONEY MARKET EFFICIENT OR DO DISPARITIES IN PRICE OCCUR BETWEEN
SIMILAR SECURITIES?
We believe the market is very effectively priced. All the major wirehouses
process municipal paper and they all monitor the prices at which others are
buying and selling it. As a practical matter, the need to stay invested, remain
liquid and manage cash flows limits a fund manager's ability to pick and choose
investments. You would not want to have uninvested assets simply because you
were holding out for an investment that might provide a single extra basis point
in yield. At times, however, certain types of instruments are a bit out of
favor. For example, at tax time, most fund managers are looking for short-term
investments for liquidity. This might make some longer-term instruments, such as
weekly resets or notes, more attractively priced as sellers try to entice
buyers. When this occurs, it may provide an opportunity to expand core holdings
to push up yields as long as there is sufficient liquidity for cash flows. A
manager needs a good gauge on expected outflows to achieve a balance between
yield and liquidity needs.
IS THERE ANYTHING YOU WANT TO SAY TO THE SHAREHOLDERS SO THAT THEY UNDERSTAND
THEIR INVESTMENT BETTER?
Yes. It is easy to compare yields between money market funds, but it is less
easy to compare relative quality. We sell paper that we feel no longer meets our
Fund's high quality standards. However, every time we sell such paper, there is
a buyer willing to add it to his or her portfolio. We work hard to maintain the
liquidity and credit quality shareholders deserve in a money market fund.
- ---------------------
4
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUNDS
- --------------------
INVESTMENT ADVISER Q&A
PRIME MONEY MARKET MUTUAL FUND -- INSTITUTIONAL CLASS
TREASURY MONEY MARKET MUTUAL FUND -- INSTITUTIONAL CLASS
WHAT WERE THE SEVEN-DAY YIELDS AS OF MARCH 31, 1998?
The seven-day yield for the Prime Money Market Mutual Fund Institutional Class
as of March 31, 1998 was 5.54%. The seven day yield as of March 31, 1998 for the
Treasury Money Market Mutual Fund Institutional Class was 5.33%.
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
---------------------
5
<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 notes 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
FUND.
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.
- ---------------------
6
<PAGE>
NATIONAL TAX-FREE 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>
MUNICIPAL SECURITIES - 99.04%
ARIZONA - 5.26%
$ 975,000 Chandler AZ Industrial Development V/R Project
LOC - Citibank N.A. 3.75 % 12/01/02 $ 975,000
5,000,000 Maricopa AZ PCR Public Service Co 3.25 05/01/98 5,000,000
--------------
$ 5,975,000
CALIFORNIA - 0.53%
$ 500,000 California HFFA V/R FSA Insured 3.70 % 07/01/22 $ 500,000
100,000 California Statewide CDA COP 3.75 06/01/26 100,000
--------------
$ 600,000
COLORADO - 1.85%
$ 1,600,000 Colorado State Student Loan Obligation Bond
Authority Series A 3.75 % 03/01/24 $ 1,600,000
500,000 Douglas County CO Multifamily Revenue Project 3.75 07/01/06 500,000
--------------
$ 2,100,000
FLORIDA - 13.64%
$ 2,000,000 Indian River County FL Hospital Series 1990 3.75 % 04/07/98 $ 2,000,000
1,000,000 Indian River County FL Hospital Service Revenue 3.20 05/04/98 1,000,000
3,000,000 Jacksonville FL Electric Authority GO 3.70 04/07/98 3,000,000
6,500,000 Palm Beach FL Hospital Service Revenue 3.55 06/04/98 6,500,000
3,000,000 Sunshine State FL PCR Series A 3.75 04/07/98 3,000,000
--------------
$ 15,500,000
</TABLE>
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7
<PAGE>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
GEORGIA - 4.40%
$ 3,195,000 Georgia State Municipal Electric Authority
Series A 3.45 % 08/03/98 $ 3,195,000
1,800,000 Georgia State Power Revenue Project 3.20 05/04/98 1,800,000
--------------
$ 4,995,000
KANSAS - 1.29%
$ 1,470,000 Topeka KS Multifamily Housing Project 3.45 % 01/01/09 $ 1,470,000
KENTUCKY - 2.91%
$ 3,300,000 Kentucky Higher Educational Student Loan Corp
Series A 3.75 % 06/01/26 $ 3,300,000
LOUISIANA - 1.32%
$ 1,500,000 New Orleans Aviation Board Revenue MBIA Insured 3.75 % 08/05/15 $ 1,500,000
MAINE - 0.88%
$ 1,000,000 Maine Educational Loan Marketing Corp Student
Loan Revenue Series A 3.75 % 05/01/32 $ 1,000,000
MARYLAND - 8.36%
$ 6,500,000 Anarundle MD Hospital Services Revenue Series A 3.45 % 04/07/98 $ 6,500,000
3,000,000 Baltimore MD USD Revenue Project 3.40 04/09/98 3,000,000
--------------
$ 9,500,000
MASSACHUSETTS - 4.40%
$ 5,000,000 Massachusetts State Water Revenue Project 3.25 % 05/06/98 $ 5,000,000
MISSISSIPPI - 1.14%
$ 1,300,000 Mississippi Business Finance Corp Solid Waste
Disposal Revenue Project B 3.80 % 07/01/22 $ 1,300,000
</TABLE>
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8
<PAGE>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
MISSOURI - 0.88%
$ 1,000,000 Missouri Higher Educational Loan Authority
Student Loan Revenue Series B 3.80 % 06/01/20 $ 1,000,000
NEW HAMPSHIRE - 0.88%
$ 1,000,000 New Hampshire Business Finance Authority
Revenue Project 3.80 % 05/01/21 $ 1,000,000
NEW JERSEY - 5.28%
$ 5,000,000 New Jersey State Turnpike Revenue Series A 3.40 % 05/21/98 $ 5,000,000
1,000,000 New Jersey State Turnpike Revenue Series D 3.15 01/01/18 1,000,000
--------------
$ 6,000,000
NEW YORK - 0.18%
$ 200,000 New York NY Municipal Assistance Corp 3.50 % 07/01/08 $ 200,000
NORTH CAROLINA - 3.35%
$ 3,800,000 North Carolina State Airport Revenue Series A 3.45 % 08/03/98 $ 3,800,000
OHIO - 0.88%
$ 1,000,000 Ohio State Air Quality Development Authority
Revenue 3.20 % 05/04/98 $ 1,000,000
PENNSYLVANIA - 0.88%
$ 1,000,000 Delaware Valley PA Regional Finance Authority 3.65 % 08/01/16 $ 1,000,000
PUERTO RICO - 4.40%
$ 5,000,000 Commonwealth of Puerto Rico Highway &
Transportation Authority Series A 3.20 % 07/01/28 $ 5,000,000
</TABLE>
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9
<PAGE>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
TEXAS - 16.52%
$ 800,000 Austin TX Tax & Revenue Anticipation 3.70 % 04/09/98 $ 800,064
1,000,000 Gulf Coast TX Health Service Revenue Project 3.25 04/14/98 1,000,000
3,500,000 Gulf Coast TX HFA Revenue Series A 3.50 08/07/98 3,500,000
5,000,000 Houston TX Tax & Revenue Anticipation 3.20 05/06/98 5,000,000
1,000,000 San Antonio TX Tax & RAN Series A 3.70 04/09/98 1,000,080
3,500,000 Texas A&M University Educational Revenue
Project 3.40 05/21/98 3,500,000
3,960,000 Texas State Tendered Optional Certificates 3.78 10/01/06 3,960,000
--------------
$ 18,760,144
UTAH - 12.77%
$ 5,000,000 Intermountain UT Power Agency Series A 3.25 % 05/01/98 $ 5,000,000
5,000,000 Intermountain UT Power Agency Series A 3.35 05/01/98 5,000,000
4,500,000 Utah State Pollution Control Revenue Series A 3.20 05/04/98 4,500,000
--------------
$ 14,500,000
WISCONSIN - 7.04%
$ 8,000,000 Wisconsin State Municipal Electric Authority 3.25 % 05/01/98 $ 8,000,000
--------------
TOTAL MUNICIPAL SECURITIES $ 112,500,144
(Cost $112,500,144)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $112,500,144)* (Note 1) 99.04% $ 112,500,144
Other Assets and Liabilities, Net 0.96% 1,094,988
------ --------------
TOTAL NET ASSETS 100.00% $ 113,595,132
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</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.
- ------------------------
10
<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>
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11
<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>
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12
<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.
---------------------
13
<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>
- ------------------------
14
<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.
---------------------
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 1998
<TABLE>
<CAPTION>
NATIONAL
TAX-FREE PRIME TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
MUTUAL FUND MUTUAL FUND MUTUAL FUND
<S> <C> <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) $112,500,144 $2,639,958,483 $2,142,408,622
Cash 1,088,648 1,230 2,857
Receivables:
Interest 533,676 21,314,070 9,868,046
Organization expenses, net of
amortization 22,979 34,145 63,038
Prepaid expenses 8,873 57,996 84,842
TOTAL ASSETS 114,154,320 2,661,365,924 2,152,427,405
LIABILITIES
Payables:
Distribution to shareholders 402,697 10,665,703 8,397,184
Due to sponsor and distributor (Note
2) 24,669 286,616 250,453
Due to adviser (Note 2) 38,664 757,682 920,731
Other 93,158 160,894 163,859
TOTAL LIABILITIES 559,188 11,870,895 9,732,227
TOTAL NET ASSETS $113,595,132 $2,649,495,029 $2,142,695,178
NET ASSETS CONSIST OF:
Paid-in capital $113,605,821 $2,649,429,789 $2,142,662,386
Undistributed net realized gain(loss)
on investments (10,689) 65,240 32,792
TOTAL NET ASSETS $113,595,132 $2,649,495,029 $2,142,695,178
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 59,292,823 $ 592,316,876 $ 381,593,557
Shares outstanding - Class A 59,296,795 592,415,777 381,625,486
Net asset value and offering price per
share - Class A $ 1.00 $ 1.00 $ 1.00
Net assets - Administrative Class N/A $ 600,974,628 $ 176,942,422
Shares outstanding - Administrative
Class N/A 600,910,010 176,927,656
Net asset value and offering price per
share - Administrative Class N/A $ 1.00 $ 1.00
Net assets - Class E N/A N/A $ 715,554,329
Shares outstanding - Class E N/A N/A 715,543,643
Net asset value and offering price per
share - Class E N/A N/A $ 1.00
Net assets - Institutional Class $ 54,302,309 $ 802,510,816 $ 501,493,743
Shares outstanding - Institutional Class 54,309,026 802,563,568 501,621,987
Net asset value and offering price per
share - Institutional Class $ 1.00 $ 1.00 $ 1.00
Net assets - Service Class N/A $ 653,692,709 $ 367,111,127
Shares outstanding - Service Class N/A 653,788,414 367,119,468
Net asset value and offering price per
share - Service Class N/A $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
16
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
NATIONAL
TAX-FREE
MONEY PRIME
MARKET MONEY TREASURY
MUTUAL MARKET MONEY MARKET
FUND (1) MUTUAL FUND MUTUAL FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $2,591,806 $95,926,455 $101,243,245
TOTAL INVESTMENT INCOME 2,591,806 95,926,455 101,243,245
EXPENSES (NOTE 2)
Advisory fees 222,621 4,202,664 4,584,749
Administration fees 47,644 1,047,654 1,133,896
Custody fees 12,409 280,730 306,262
Shareholder servicing fees 93,068 2,433,830 3,397,289
Portfolio accounting fees 43,882 384,510 430,278
Transfer agency fees 44,716 853,431 1,014,143
Distribution fees 18,612 174,857 961,527
Organization costs 14,777 97,091 134,532
Legal and audit fees 31,022 72,103 68,980
Registration fees 42,944 264,729 285,055
Directors' fees 4,562 4,972 4,689
Shareholder reports 37,281 80,089 37,494
Other 5,431 64,582 32,393
TOTAL EXPENSES 618,969 9,961,242 12,391,287
Less:
Waived fees and reimbursed expenses (245,072) (3,092,776) (3,403,022)
Net Expenses 373,897 6,868,466 8,988,265
NET INVESTMENT INCOME 2,217,909 89,057,989 92,254,980
Net realized gain (loss) on sale of
investments (10,252) 205,613 104,070
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $2,207,657 $89,263,602 $ 92,359,050
- ----------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES AMOUNTS ALLOCATED FROM THE MASTER PORTFOLIO PRIOR TO DECEMBER 15,
1997. SEE NOTE 1.
The accompanying notes are an integral part of these financial statements.
---------------------
17
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
-------------------------------------------------------------
FROM APRIL 2, 1996
FOR THE FOR THE SIX (COMMENCEMENT
YEAR ENDED MONTHS ENDED OF OPERATIONS)
MARCH 31, 1998 (1) MARCH 31, 1997 TO SEPT. 30, 1996
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 2,217,909 $ 181,596 $ 40,567
Net realized gain (loss) on sale of
investments (10,252) 0 (437)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,207,657 181,596 40,130
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,076,631) (181,596) (40,567)
ADMINISTRATIVE CLASS N/A N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS (1,141,278)(2) N/A N/A
SERVICE CLASS N/A N/A N/A
In excess of net investment income
CLASS A 0 0 0
ADMINISTRATIVE CLASS N/A N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS 0(2) N/A N/A
SERVICE CLASS N/A N/A N/A
From net realized gain on sale of
investments
CLASS A 0 0 0
ADMINISTRATIVE CLASS N/A N/A N/A
CLASS E N/A N/A N/A
INSTITUTIONAL CLASS 0(2) N/A N/A
SERVICE CLASS N/A N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 243,931,011 54,084,381 14,242,313
Reinvestment of dividends - Class A 999,129 141,020 30,552
Cost of shares redeemed - Class A (220,887,156) (23,947,189) (9,297,266)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 24,042,984 30,278,212 4,975,599
Proceeds from shares sold -
Administrative Class N/A N/A N/A
Reinvestment of dividends -
Administrative Class N/A N/A N/A
Cost of shares redeemed -
Administrative Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - ADMINISTRATIVE CLASS N/A 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 436,296,534(2) N/A N/A
Reinvestment of dividends -
Institutional Class 226,125(2) N/A N/A
Cost of shares redeemed -
Institutional Class (382,213,633)(2) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 54,309,026(2) N/A N/A
Proceeds from shares sold - Service
Class N/A N/A N/A
Reinvestment of dividends - Service
Class N/A N/A N/A
Cost of shares redeemed - Service
Class N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - SERVICE CLASS N/A N/A N/A
INCREASE (DECREASE) IN NET ASSETS 78,341,758 30,278,212 4,975,162
NET ASSETS:
Beginning net assets 35,253,374 4,975,162 0
ENDING NET ASSETS $ 113,595,132 $ 35,253,374 $ 4,975,162
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS
NATIONAL TAX-FREE INSTITUTIONAL 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 MONEY
MARKET FUND. SEE NOTE 1.
(4) 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.
- ---------------------
18
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
----------------------------------------------------------------
FOR THE FOR THE SIX FOR THE
YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 1998 (3) 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
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
-----------------------------------------------------------------
FOR THE FOR THE SIX FOR THE
YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 1998 (4) 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
NATIONAL TAX-FREE INSTITUTIONAL 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 MONEY
MARKET FUND. SEE NOTE 1.
(4) 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.
---------------------
19
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
------------------------------------------------
CLASS A INSTITUTIONAL
----------------------------------- CLASS
SIX ---------
YEAR MONTHS PERIOD PERIOD
ENDED ENDED ENDED ENDED
MARCH 31, MARCH 31, SEPT. 30, MARCH 31,
1998 1997 (2) 1996 (3) 1998 (4)
<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 0.01 0.01 0.01
Net realized gain (loss) on
investments 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.01 0.01 0.01
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.03) (0.01) (0.01) (0.01)
Distributions from net
realized gain 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
TOTAL FROM DISTRIBUTIONS (0.03) (0.01) (0.01) (0.01)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
--------- --------- --------- ---------
--------- --------- --------- ---------
TOTAL RETURN (NOT ANNUALIZED) 2.93% 1.36% 1.51% 0.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $59,293 $35,253 $4,975 $54,302
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average
net assets 0.70%(8) 0.64%(8) 0.62%(8) 0.30%
Ratio of net investment income
to average net assets 2.87%(8) 2.68%(8) 2.71%(8) 3.05%
- ------------------------------------------------------------------------------------
Ratio of expenses to average net
assets prior to waived fees
and reimbursed expenses 1.13%(8) 1.58%(8) 3.56%(8) 0.52%
Ratio of net investment income
to average net assets prior to
waived fees and reimbursed
expenses 2.44%(8) 1.74%(8) (0.23)%(8) 2.83%
- ------------------------------------------------------------------------------------
</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 FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(7) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(8) THIS RATIO INCLUDES AND EXPENSES CHARGED TO THE MASTER PORTFOLIO PRIOR
TO DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
- ---------------------
20
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1)
----------------------------------------------------------------------------------------------
ADMIN.
CLASS A CLASS INSTITUTIONAL CLASS
---------------------------------- ---------- ----------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED
MARCH 31, MARCH 31, SEPT. 30, MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30,
1998 1997 (2) 1996 (5) 1998 (6) 1998 1997 (2) 1996 1995 (7)
<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 0.05 0.02 0.05 0.02 0.05 0.03 0.05 0.01
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 0.05 0.02 0.05 0.02 0.05 0.03 0.05 0.01
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.02) (0.05) (0.02) (0.05) (0.03) (0.05) (0.01)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.05) (0.02) (0.05) (0.03) (0.05) (0.01)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
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) 5.24% 2.49% 5.09% 1.57% 5.58% 2.64% 5.39% 5.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $592,317 $277,044 $264,900 $600,975 $802,511 $538,195 $423,959 $30,606
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.61% 0.55% 0.55% 0.40% 0.25% 0.25% 0.25% 0.26%
Ratio of net investment
income to average net
assets 5.11% 4.95% 5.06% 5.34% 5.46% 5.25% 5.33% 5.67%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.83% 0.75% 0.68% 0.55% 0.41% 0.38% 0.60% 0.69%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.89% 4.75% 4.93% 5.19% 5.30% 5.12% 4.98% 5.24%
- ----------------------------------------------------------------------------------------------------------------------------
</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 FUND COMMENCED OPERATIONS ON APRIL 2, 1996.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(7) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(8) THIS RATIO INCLUDES AND EXPENSES CHARGED TO THE MASTER PORTFOLIO PRIOR
TO DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
---------------------
21
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET
MUTUAL FUND (1) (CONT.)
----------------------------------
SERVICE CLASS
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (3) 1996
<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 0.03 0.05
Net realized gain (loss) on investments 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.03 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.03) (0.05)
Distributions from net realized gain 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.03) (0.05)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.37% 2.54% 5.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $653,693 $626,105 $740,760
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.45% 0.45% 0.45%
Ratio of net investment income to average net assets 5.24% 5.04% 5.14%
- --------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.65% 0.60% 0.62%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 5.04% 4.89% 4.97%
- --------------------------------------------------------------------------------------------
</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 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.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
The accompanying notes are an integral part of these financial statements.
- ---------------------
22
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
PRIME MONEY MARKET MUTUAL FUND (2)
MUTUAL FUND (1) (CONT.) ----------------------------------------------
---------------------------------- ADMIN.
SERVICE CLASS (CONT.) CLASS A CLASS
---------------------------------- ---------------------------------- ----------
SIX MONTHS SIX MONTHS PERIOD
YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED ENDED
SEPT. 30, SEPT. 30, MARCH 31, MARCH 31, MARCH 31, SEPT. 30, MARCH 31,
1995 1994 (4) 1994 1998 1997 (3) 1996 (5) 1998 (6)
<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 0.03 0.05 0.02 0.05 0.02
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 0.03 0.05 0.02 0.05 0.02
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.02) (0.03) (0.05) (0.02) (0.05) (0.02)
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) (0.03) (0.05) (0.02) (0.05) (0.02)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 5.60% 3.71%** 3.00% 5.06% 2.42% 4.95% 1.52%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $614,101 $565,305 $527,599 $381,594 $66,486 $53,706 $176,942
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.41% 0.41% 0.41% 0.62% 0.55% 0.55% 0.40%
Ratio of net investment
income to average net
assets 5.47% 3.67% 2.96% 4.93% 4.81% 4.96% 5.17%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.68% 0.89% 0.89% 0.85% 0.75% 0.67% 0.56%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.20% 3.19% 2.48% 4.70% 4.61% 4.84% 5.01%
- ----------------------------------------------------------------------------------------------------------------
</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 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.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
(5) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(6) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
The accompanying notes are an integral part of these financial statements.
---------------------
23
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND (1)
----------------------------------------------
CLASS E INSTITUTIONAL CLASS
---------------------- ----------------------
PERIOD SIX MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1998 1997 (2) 1998 1997 (3)
<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 0.05 0.00 0.05 0.03
Net realized gain (loss) on investments 0.00 0.00 0.00 0.00
---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.00 0.05 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) 0.00 (0.05) (0.03)
Distributions from net realized gain 0.00 0.00 0.00 0.00
---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) 0.00 (0.05) (0.03)
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 4.99% 0.11% 5.41% 2.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $715,554 $820,657 $501,494 $449,647
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.65% 0.65% 0.25% 0.25%
Ratio of net investment income to average
net assets 4.87% 4.86% 5.28% 5.11%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 0.84% 0.88% 0.40% 0.39%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 4.68% 4.63% 5.13% 4.97%
- ----------------------------------------------------------------------------------------------
</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 CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
- ---------------------
24
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND (1) (CONT.)
----------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
(CONT.) SERVICE CLASS
---------------------- ----------------------------------------------------------------------
PERIOD SIX MONTHS SIX MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
SEPT. 30, SEPT. 30, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, SEPT. 30, MARCH 31,
1996 1995 (4) 1998 1997 (3) 1996 1995 1994 (5) 1994
<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 0.05 0.01 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 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.05 0.01 0.05 0.02 0.05 0.05 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.01) (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 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.01) (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 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 5.26% 5.51%** 5.20% 2.47% 5.03% 5.42% 3.75%** 2.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $540,689 $36,443 $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 0.25% 0.26% 0.45% 0.45% 0.45% 0.42% 0.43% 0.43%
Ratio of net investment
income to average net
assets 5.21% 5.42% 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 0.59% 0.69% 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% 4.99% 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 CLASS E SHARES COMMENCED OPERATIONS ON MARCH 24, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
---------------------
25
<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 National Tax-Free Money Market Mutual, 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 National Tax-Free Money Market Mutual, 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 National Tax-Free
Institutional Money Market, Overland Money Market and Overland U.S. Treasury
Money Market Funds, respectively. Shares issued by the Stagecoach National
Tax-Free Money Market Mutual Fund, Stagecoach Prime Money Market Mutual and
Stagecoach Treasury Money Market Mutual Fund in exchange for shares of the
Overland National Tax-Free Institutional Money Market Fund, Overland Money
Market Fund and Overland U.S. Treasury Money Market Fund were 65,805,624 (valued
at $65,798,792), 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 NATIONAL OVERLAND U.S.
TAX-FREE TREASURY
INSTITUTIONAL OVERLAND MONEY MONEY MARKET
DECEMBER 12, 1997 MONEY MARKET FUND MARKET FUND FUND
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Paid-in Capital $ 65,805,143 $ 1,403,141,571 $ 560,521,708
Undistributed Net Realized Gain (Loss) (6,351) (17,812) 0
----------------- --------------- -------------
Total Net Assets $ 65,798,792 $ 1,403,123,759 $ 560,521,708
----------------- --------------- -------------
----------------- --------------- -------------
</TABLE>
- ---------------------
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH STAGECOACH
NATIONAL TAX-FREE PRIME MONEY TREASURY MONEY
MONEY MARKET MARKET MUTUAL MARKET MUTUAL
DECEMBER 12, 1997 MUTUAL FUND FUND FUND
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Paid-in Capital $ 43,950,770 $ 1,219,800,227 $ 1,654,279,032
Undistributed Net Realized Gain (Loss) (437) (14,666) 0
----------------- --------------- ---------------
Total Net Assets $ 43,950,333 $ 1,219,785,561 $ 1,654,279,032
----------------- --------------- ---------------
----------------- --------------- ---------------
</TABLE>
The combined net assets immediately after the Consolidation were $109,749,125
for Stagecoach National Tax-Free Money Market Mutual Fund, $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 the time of the Consolidation, the National Tax-Free Money Market Mutual
Fund, structured as a "feeder" Fund in a "master-feeder" structure, was
restructured to invest directly in a portfolio of securities, rather than to
invest in portfolio securities through a "master" portfolio (the "Master
Portfolio"). The Master Portfolio distributed all of its assets and liabilities
in-kind to its interestholders and wound up its affairs (the "Dissolution"). The
Dissolution occurred at the close of business on December 12, 1997. For the
period from April 1, 1997 to December 12, 1997, the Master Portfolio allocated
$827,118 of interest income and $43,474 of net expenses to the National Tax-Free
Money Market Mutual 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 exchanges for shares
of the respective Fund. All performance and financial data for the Prime Money
Market Mutual and Treasury Money Market Mutual Funds for periods prior to
September 6, 1996 refers to the Predecessor Funds.
The National Tax-Free Money Market Mutual Fund offers Class A and Institutional
Class shares. The Prime Money Market Mutual and Treasury Money Market Mutual
Funds offer 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
---------------------
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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.
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
- ---------------------
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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. Accordingly, no
provision for federal income taxes was required at March 31, 1998. The National
Tax-Free Money Market Mutual Fund had net capital loss carryforwards at March
31, 1998 as follows:
<TABLE>
<CAPTION>
YEAR CAPITAL LOSS
FUND EXPIRES CARRYFORWARDS
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
National Tax-Free Money Market Mutual Fund 2003 $6,351
2004 437
2006 3,901
</TABLE>
Any loss carryforwards from Overland are included in the Fund's carryforwards as
shown above. The Company's Board of Directors intends to offset net capital
gains with each capital loss carryforward, and no capital gain distribution
shall be made until each such carryforward has been fully utilized or expires.
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
---------------------
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 percentage rate of 0.30% of the average daily
net assets of the National Tax-Free Money Market Mutual Fund and 0.25% of the
average daily net assets of the Prime Money Market Mutual and Treasury Money
Market Mutual Funds.
Prior to December 15, 1997, the National Tax-Free Money Market Mutual Fund did
not directly retain an investment adviser because the Fund invested all of its
assets in a separate Master Portfolio which, in turn, retained WFB as investment
adviser. Advisory fees were charged to the Master Portfolio at the same rate as
listed above.
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. Prior to December 15, 1997, WFB was entitled
to compensation for its custodial and portfolio accounting services to the
Master Portfolio at the same rates as listed above.
The Company has entered into a contract on behalf of the Funds with WFB, whereby
WFB provides transfer agency
- ---------------------
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 shares of the Funds, 0.10% of the average daily net assets
of the Service Class shares of the Prime Money Market Mutual and Treasury Money
Market Mutual Funds and the Class E shares of the Treasury Money Market Mutual
Fund, and 0.02% of the average daily net assets of the Institutional Class
shares of the Funds and the Administrative Class shares of the Prime Money
Market Mutual and Treasury Money Market Mutual 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 Prime
Money Market Mutual and Treasury Money Market Mutual 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>
- -----------------------------------------------------------------------------------------------------
National Tax-Free Money Market Mutual Fund $ 37,227 N/A N/A $ 7,489* N/A
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 Prime
Money Market Mutual and Treasury Money Market Mutual Funds and the Class E
shares of the Treasury Money Market Mutual Fund, 0.25% of average daily net
assets of the Class A shares of the National Tax-Free 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 Prime
Money Market Mutual and Treasury Money Market Mutual 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 and Class E shares
of the Treasury Money Market Mutual Fund and the Class A shares of Prime Money
Market Mutual Fund.
---------------------
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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>
- ----------------------------------------------------------------------------------------------
National Tax-Free Money Market Mutual Fund $ 93,068 N/A N/A N/A
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.
The Company has adopted separate Distribution Plans for Class A shares of the
Funds and the 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 to Stephens, 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.
- ---------------------
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 National Tax-Free
Money Market Mutual and Prime Money Market Mutual Funds 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>
- ------------------------------------------------------------------------------------------------
National Tax-Free Money Market Mutual
Fund $ 35,322 N/A N/A $ 7,622* N/A
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.
WAIVED FEES AND REIMBURSED EXPENSES
With the exception of the National Tax-Free Money Market Mutual Fund, the
amounts shown as waived fees and reimbursed expenses on the Statement of
Operations for the year ended March 31, 1998, were waived by WFB. Stephens
reimbursed $2,382 and WFB waived $242,690 of the expenses and fees,
respectively, for the National Tax-Free Money Market Mutual Fund. 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, respectively, of the Prime Money Market Mutual and Treasury Money
Market Mutual Funds, through August 31, 1997.
Certain officers and one director of the Company are also officers of Stephens.
As of March 31, 1998, Stephens owned 209 shares of the National Tax-Free Money
Market Mutual Fund, 1,514,061 shares of the Prime Money Market Mutual Fund and
138,913 shares of the Treasury Money Market Mutual Fund.
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, the National Tax-
Free Money Market Mutual Fund was authorized to issue 5 billion and 3 billion
shares of $0.001 par value stock for the Class A and Institutional Class shares,
respectively. The Prime Money Market Mutual and Treasury Money Market
---------------------
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Mutual Funds each were 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. The Prime Money Market Mutual and Treasury Money Market Mutual
Funds each were authorized to issue 1 billion shares of $0.001 par value capital
stock for Administrative Class shares.
Capital share transactions for the Funds were as follows:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND
------------------------------------------------------
FROM APRIL 2, 1996
FOR THE FOR THE SIX (COMMENCEMENT OF
YEAR ENDED MONTHS ENDED OPERATIONS)
MARCH 31, 1998 (2) MARCH 31, 1997 TO SEPT. 30, 1996
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 243,931,477 54,084,381 14,242,847
Shares issued in reinvestment of dividends -- Class A 999,129 141,020 30,552
Shares redeemed -- Class A (220,887,156) (23,947,189) (9,298,266)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING -- CLASS A 24,043,450 30,278,212 4,975,133
Shares sold -- Institutional Class (1) 436,296,534 N/A N/A
Shares issued in reinvestment of dividends --
Institutional Class (1) 226,125 N/A N/A
Shares redeemed -- Institutional Class (1) (382,213,633) N/A N/A
NET INCREASE (DECREASE) IN SHARES OUTSTANDING --
INSTITUTIONAL CLASS (1) 54,309,026 N/A N/A
</TABLE>
(1) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(2) "SHARES SOLD" INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE
STAGECOACH NATIONAL TAX-FREE MONEY MARKET MUTUAL AND OVERLAND NATIONAL
TAX-FREE INSTITUTIONAL MONEY MARKET FUNDS. SEE NOTE 1.
- ---------------------
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
--------------------------------------------------
FOR THE YEAR
ENDED FOR THE SIX FOR THE YEAR
MARCH 31, MONTHS ENDED ENDED
1998 (4) 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
(3) 1,388,224,676 N/A N/A
Shares issued in reinvestment of
dividends -- Administrative Class
(3) 9,420,477 N/A N/A
Shares redeemed -- Administrative
Class (3) (796,735,143) N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- ADMINISTRATIVE CLASS (3) 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>
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(4) "SHARES SOLD" INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE
STAGECOACH PRIME MONEY MARKET MUTUAL AND OVERLAND MONEY MARKET FUNDS. SEE
NOTE 1.
---------------------
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
TREASURY MONEY MARKET MUTUAL FUND
--------------------------------------------------
FOR THE
YEAR ENDED FOR THE FOR THE YEAR
MARCH 31, SIX MONTHS ENDED ENDED
1998 (5) 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 (3) 267,085,382 N/A N/A
Shares issued in reinvestment of
dividends -- Administrative
Class (3) 2,351,192 N/A N/A
Shares redeemed -- Administrative
Class (3) (92,508,918 ) N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- ADMINISTRATIVE CLASS (3) 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>
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(5) "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.
- ---------------------
36
<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 National Tax-Free Money Market Mutual Fund,
Prime Money Market Mutual Fund and Treasury Money Market Mutual Fund (three 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 of the National Tax-Free Money Market Mutual Fund for the
year ended March 31, 1998, the six months ended March 31, 1997, and the period
from April 2, 1996 (commencement of operations) to September 30, 1996, and the
Prime Money Market Mutual Fund and Treasury Money Market Mutual Fund 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. For the Prime Money Market Mutual Fund and Treasury Money Market Mutual
Fund, 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.
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
MAY 1, 1998
---------------------
37
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
38
<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>
NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
- -----------------------------------
46,078,038 0 2,504,754
</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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<PAGE>
Wells Fargo provides investment advisory services, shareholder services, and
certain other services for the Stagecoach Funds. The Funds are sponsored and
distributed by STEPHENS INC., Member NYSE/SIPC. Wells Fargo is not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Stagecoach Funds. If this report
is used for promotional purposes, distribution of the report must be accompanied
or preceded by a current prospectus. For a prospectus containing more complete
information, including charges and expenses, call 1-800-260-5969. Read the
prospectus carefully before you invest or send money.
SC MMI 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
