STAGECOACH FUNDS INC /AK/
497, 1998-12-31
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                              STAGECOACH FUNDS, INC.

    Balanced Fund, Diversified Equity Income Fund, Equity Value Fund, Growth
    Fund, International Equity Fund, Small Cap Fund and Strategic Growth Fund

                         Class A, Class B and Class C

                  SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
          STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 1998




                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 64, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.


<PAGE>


                                STAGECOACH FUNDS, INC.

                                 Equity Index Fund

                                 Class A and Class B

                        SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
                 STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 33, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.




<PAGE>


                             STAGECOACH FUNDS, INC.

    Money Market Fund, California Tax-Free Money Market Fund, Government
    Money Market Fund, National Tax-Free Money Market Fund, Treasury Plus
    Money Market Fund and 100% Treasury Money Market Fund

                                     Class A

                    SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
            STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 42, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.



<PAGE>


                             STAGECOACH FUNDS, INC.

                             Prime Money Market Fund

                                     Class A

                    SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
            STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 28, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.





<PAGE>


                             STAGECOACH FUNDS, INC.

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

                          Class A, Class B and Class C

                    SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
            STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 1, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 45, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.



<PAGE>


                             STAGECOACH FUNDS, INC.

                               Corporate Bond Fund
                 Short-Intermediate U.S. Government Income Fund
                              Strategic Income Fund
                           U.S. Government Income Fund
                          Variable Rate Government Fund

                          Class A, Class B and Class C

                    SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
           STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 15, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 48, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.



<PAGE>


                             STAGECOACH FUNDS, INC.

                              Arizona Tax-Free Fund
                          California Tax-Free Bond Fund
                         California Tax-Free Income Fund
                             National Tax-Free Fund
                              Oregon Tax-Free Fund

                          Class A, Class B and Class C

                    SUPPLEMENT DATED DECEMBER 31, 1998 TO THE
           STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 15, 1998



                  Under  the  heading   "Additional   Purchase  and   Redemption
         Information,"  at page 58, the statement of additional  information  is
         supplemented as follows:

                  Investors in Norwest Advantage Funds.  Class A shareholders of
         the Norwest  Advantage  Funds who redeem  shares at net asset value may
         use  the  redemption  proceeds  to  purchase  Class  A  shares  of  the
         Stagecoach  Funds  at net  asset  value  (without  a sales  charge).  A
         reciprocal  sales load waiver is available to the Class A  shareholders
         of Stagecoach Funds, who may use redemption  proceeds to purchase Class
         A shares of the Norwest Advantage Funds at net asset value.



<PAGE>

                      [MORRISON & FOERSTER LLP LETTERHEAD]


                                December 31, 1998


                                                    Writer's Direct Dial Number
                                                           (202) 887-1537
Via EDGAR

Securities and Exchange Commission
450 Fifth Street,  NW
Washington, DC  20549

              Re:    Stagecoach Funds, Inc.
                     Registration Nos. 33-42927; 811-6419

Ladies and Gentlemen:

         In connection with the registration of Stagecoach Funds, Inc. under the
Investment  Company Act of 1940,  and the issuance of securities by it under the
Securities  Act  of  1933,  and  pursuant  to  17  C.F.R.  230.497(e),   we  are
transmitting  herewith  for filing a supplement  dated  December 31, 1998 to the
Statements of Additional Information dated August 1, 1998 for the Class A shares
of the Stagecoach  Equity Funds,  Equity Index Fund,  Money Market Funds,  Prime
Money  Market  Fund and  Allocation  Funds,  and the  Statements  of  Additional
Information  dated  November  15, 1998 for the Class A shares of the  Stagecoach
Income Funds and Tax-Free Income Funds.

         This  supplement  is  being  filed  to  provide  additional  disclosure
regarding net asset value purchases for the Class A shares of the Funds.

         If you have any questions, please contact the undersigned at the number
indicated above.

                                                     Very truly yours,

                                                     /s/ Janis E. Fonda

                                                     Janis E. Fonda



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