<PAGE>
- ------------------
ANNUAL
- ------------------
REPORT
- ------------------
Money Market
Mutual Fund
CLASS S
MARCH 31, 1998
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER Q & A
Money Market Mutual Fund -- Class S 4
PORTFOLIO OF INVESTMENTS
Money Market Mutual Fund 7
STAGECOACH MONEY MARKET MUTUAL FUND
Statement of Assets and Liabilities 13
Statement of Operations 14
Statements of Changes in Net Assets 15
Financial Highlights 16
Notes to Financial Statements 18
Independent Auditors' Report 25
LIST OF ABBREVIATIONS 26
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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<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.
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3
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUND -- CLASS S
- --------------------
INVESTMENT ADVISER Q&A
MONEY MARKET MUTUAL FUND -- CLASS S
WHAT WAS THE SEVEN-DAY YIELD AS OF MARCH 31, 1998?
The seven-day yield for the Money Market Mutual Fund -- Class S was 4.26%.
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
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.
- ---------------------
4
<PAGE>
STAGECOACH MONEY MARKET MUTUAL FUND -- CLASS S
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 MONEY MARKET MUTUAL FUND?
Commercial paper is the core investment, ranging from 40 to 60 percent of the
portfolio. It has a liquid market and ample supply is always available. Another
security we bought, particularly in the fourth quarter of 1997, was
floating-rate bonds based on three-month Treasury bills. These reset each week
based on the Treasury bill auction. We tend to have about 10% to 20% of the
portfolio in these or similar securities.
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 FUND?
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.
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<PAGE>
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 - 14.17%
$19,000,000 Abbey National North America 5.55 % 01/26/99 $ 18,990,886
60,000,000 American Express Co 5.56 04/28/98 60,000,000
22,000,000 Bank of New York 5.85 08/20/98 21,987,373
40,000,000 Bankers Trust 5.70 04/03/98 39,988,296
40,000,000 Bayerische Landesbank 5.78 07/27/98 39,987,639
80,000,000 Caisse Nationale De Credit 5.86 08/11/98 79,977,038
140,000,000 Canadian Imperial Bank 5.52 04/09/98 140,000,000
20,000,000 Canadian Imperial Bank 5.94 10/21/98 19,999,592
50,000,000 CC USA Inc++ 6.26 04/15/98 50,000,000
30,000,000 Harris Bankcorp Inc 5.54 05/26/98 29,999,053
45,000,000 Huntington National Bank 5.88 08/10/98 44,968,371
65,000,000 JP Morgan Corp 5.80 07/28/98 64,975,113
100,000,000 Key National Bank 6.13 04/01/98 100,000,000
33,000,000 National Westminster Bank 5.79 07/27/98 33,001,372
142,000,000 Societe Generale (Yankee) 5.60 01/13/99 141,959,141
50,000,000 Societe Generale (Yankee) 5.91 10/15/98 49,976,097
50,000,000 Societe Generale (Yankee) 5.97 09/15/98 49,976,111
100,000,000 Swiss Bank 5.64 03/12/99 99,937,698
--------------
TOTAL CERTIFICATES OF DEPOSITS $1,085,723,780
(Cost $1,085,723,780)
COMMERCIAL PAPER - 51.92%
$95,300,000 Abbey National North America 5.36 %(F) 08/12/98 $ 93,412,848
100,000,000 American Express Corp 5.57 (F) 07/28/98 98,174,278
54,000,000 Asset Securitization Cooperative Corp++ 5.53 (F) 04/14/98 53,892,165
100,000,000 Associates Corp of North America 5.55 (F) 04/23/98 99,660,833
198,000,000 Bankers Trust New York Corp 5.37 (F) 08/17/98 193,924,170
70,000,000 Bankers Trust New York Corp 5.43 (F) 09/11/98 68,278,992
50,000,000 Bayerische Landesbank 5.53 (F) 03/23/99 49,961,155
33,500,000 Caisee National De Credit Agricole 5.94 (F) 06/23/98 33,480,789
50,000,000 Commercial Credit Co 5.44 (F) 04/17/98 49,879,111
100,000,000 Corporate Asset Funding Corp++ 5.44 (F) 04/17/98 99,758,222
40,000,000 Corporate Asset Funding Corp++ 5.50 (F) 06/16/98 39,535,556
</TABLE>
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7
<PAGE>
MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$50,000,000 Corporate Asset Funding Corp++ 5.52 %(F) 05/12/98 $ 49,685,667
40,000,000 Corporate Receivables Corp++ 5.44 (F) 04/16/98 39,909,333
50,000,000 Corporate Receivables Corp++ 5.48 (F) 04/21/98 49,847,778
75,000,000 Corporate Receivables Corp++ 5.50 (F) 06/12/98 74,175,000
75,000,000 Cregem North America 5.49 (F) 06/25/98 74,027,813
50,000,000 CXC Inc++ 5.48 (F) 04/21/98 49,847,778
57,000,000 Eiger Capital Corp++ 5.48 (F) 04/14/98 56,887,203
44,735,000 Falcon Asset Securitization Corp 5.52 (F) 05/11/98 44,460,625
37,270,000 Falcon Asset Securitization Corp++ 5.54 (F) 04/22/98 37,149,556
110,786,000 Fleet Funding Group++ 5.53 (F) 04/30/98 110,292,479
150,000,000 Ford Motor Corp 5.48 (F) 04/17/98 149,634,667
40,000,000 Ford Motor Corp 5.48 (F) 04/08/98 39,957,378
50,000,000 General Electric Capital Corp 5.47 (F) 07/15/98 49,202,292
99,000,000 General Electric Capital Corp 5.47 (F) 07/08/98 97,525,835
25,000,000 General Electric Capital Corp 5.49 (F) 04/07/98 24,977,125
100,000,000 General Electric Capital Corp 5.56 (F) 06/12/98 98,888,000
65,000,000 General Motors Acceptance Corp 5.53 (F) 04/22/98 64,790,321
100,000,000 General Motors Acceptance Corp 5.54 (F) 04/16/98 99,769,167
125,000,000 General Motors Acceptance Corp 5.54 (F) 04/14/98 124,749,931
70,000,000 Goldman Sachs & Co 5.69 (F) 04/17/98 69,822,978
165,000,000 Greenwich Asset Funding Inc++ 5.54 (F) 05/05/98 164,136,683
75,000,000 Merrill Lynch & Co 5.46 (F) 05/13/98 74,522,250
125,000,000 Merrill Lynch & Co 5.55 (F) 04/23/98 124,576,042
150,000,000 Morgan Stanley Group 5.48 (F) 04/22/98 149,520,500
155,000,000 Morgan Stanley Group 5.49 (F) 04/21/98 154,527,250
33,000,000 NationsBank Corp 5.43 (F) 04/23/98 32,890,495
26,950,000 Prefco Corp++ 5.48 (F) 04/16/98 26,888,464
60,350,000 Prefco Corp++ 5.49 (F) 04/06/98 60,303,983
25,000,000 Prudential Funding Corp 5.45 (F) 04/08/98 24,973,507
100,000,000 Prudential Funding Corp 5.55 (F) 04/07/98 99,907,500
51,207,000 Receivables Capital Corp++ 5.49 (F) 04/13/98 51,113,291
132,800,000 Sheffield Receivables Corp++ 5.55 (F) 04/28/98 132,247,220
85,000,000 Sigma Finance Inc++ 5.37 (F) 08/19/98 83,224,917
50,000,000 Sigma Finance Inc++ 5.47 (F) 05/05/98 49,741,694
49,000,000 Toronto Dominion Holdings Inc 5.53 (F) 04/13/98 48,909,677
120,000,000 Transamerica Corp 5.53 (F) 04/20/98 119,649,767
45,636,000 Variable Funding Corp++ 5.50 (F) 06/18/98 45,092,171
</TABLE>
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8
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MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$25,000,000 WCP Funding Corp++ 5.45 %(F) 04/15/98 $ 24,947,014
50,000,000 WCP Funding Corp++ 5.48 (F) 04/24/98 49,824,944
50,000,000 WCP Funding Corp++ 5.50 (F) 06/11/98 49,457,639
101,185,000 Windmill Funding Corp++ 5.50 (F) 04/03/98 101,154,080
25,141,000 Windmill Funding Corp++ 5.55 (F) 04/16/98 25,082,861
--------------
TOTAL COMMERCIAL PAPER $3,978,250,994
(Cost $3,978,250,994)
CORPORATE BONDS - 10.85%
$60,000,000 Bank of America 5.60 % 01/12/99 $ 60,000,000
100,000,000 Beta Finance Inc++ 5.78 10/02/98 100,000,000
78,000,000 CIT Group Holdings Inc 5.57 01/27/99 77,937,600
19,000,000 Huntington National Bank 5.77 12/09/98 18,997,245
50,000,000 IBM Credit Corp 5.77 11/16/98 50,000,000
105,000,000 Key National Bank 5.90 09/17/98 104,971,267
100,000,000 Morgan Guaranty Trust 5.71 01/08/99 99,962,000
160,000,000 NationsBank Corp 5.83 12/22/98 159,904,000
140,000,000 NationsBank Corp 5.83 12/29/98 139,892,864
20,000,000 Sigma Finance Inc 5.95 11/20/98 20,000,000
--------------
TOTAL CORPORATE BONDS $ 831,664,976
(Cost $831,664,976)
VARIABLE AND FLOATING RATE BONDS - 19.97%
$50,000,000 Abbey National North America 5.65 % 04/15/98 $ 49,975,800
30,000,000 American Express Co 5.79 12/15/98 30,000,000
33,000,000 Bank of America N.A. 5.65 04/16/98 32,984,028
20,000,000 Beta Finance Inc 5.81 11/30/98 20,000,000
100,000,000 CIT Group Holdings Inc 5.57 02/10/99 99,951,340
52,000,000 CIT Group Holdings Inc 5.60 05/22/98 51,964,853
50,000,000 Comerica Bank 5.63 09/17/98 49,977,950
50,000,000 Comerica Inc 5.64 07/13/98 49,982,965
97,000,000 Comerica Inc 5.77 12/14/98 96,981,667
75,000,000 FCC National Bank 5.60 06/11/98 74,988,452
</TABLE>
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9
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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 (CONTINUED)
$40,000,000 Ford Motor Credit Co 5.79 % 01/07/99 $ 40,000,000
60,000,000 Huntington National Bank 5.64 08/28/98 59,991,259
100,000,000 International Business Machines 5.55 02/22/99 99,936,220
50,000,000 JP Morgan Co 5.99 12/16/98 50,000,000
74,000,000 Key Bank 5.55 02/24/99 73,949,680
50,000,000 Key Bank 5.78 12/15/98 49,995,200
90,000,000 Morgan Guaranty Trust 5.96 06/22/98 89,969,736
100,000,000 Northern Trust Corp 5.60 07/30/98 99,951,200
150,000,000 Royal Bank of Canada 5.54 02/09/99 149,898,000
45,000,000 Sigma Finance Inc 5.84 11/05/98 45,000,000
65,000,000 Sigma Finance Inc 6.00 09/15/98 65,000,000
50,000,000 Societe Generale 5.65 08/03/98 49,980,590
100,000,000 Walt Disney Co 5.61 02/10/99 99,973,750
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $1,530,452,690
(Cost $1,530,452,690)
REPURCHASE AGREEMENTS - 2.88%
$60,939,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.90 04/01/98 $ 60,939,000
159,932,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.88 04/01/98 159,932,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 220,871,000
(Cost $220,871,000)
</TABLE>
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10
<PAGE>
MONEY MARKET MUTUAL FUND
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $7,646,963,440)* (Note 1) 99.79% $7,646,963,440
Other Assets and Liabilities, Net 0.21 15,793,396
------ --------------
TOTAL NET ASSETS 100.00% $7,662,756,836
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
++ REPRESENTS COMMERCIAL PAPER SOLD WITHIN TERMS OF PRIVATE PLACEMENT
MEMORANDUM, EXEMPT FROM REGISTRATION UNDER 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.
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET
MUTUAL FUND
<S> <C>
- -----------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value and
cost $7,646,963,440
Cash 1,403
Receivables:
Interest 52,294,908
Organization expenses, net of
amortization 9,756
Prepaid expenses 156,171
TOTAL ASSETS 7,699,425,678
LIABILITIES
Payables:
Distribution to shareholders 30,656,423
Due to sponsor and distributor (Note
2) 1,647,650
Due to adviser (Note 2) 4,330,327
Other 34,442
TOTAL LIABILITIES 36,668,842
TOTAL NET ASSETS $7,662,756,836
NET ASSETS CONSIST OF:
Paid-in capital $7,663,269,004
Undistributed net realized gain (loss)
on investments (512,168)
TOTAL NET ASSETS $7,662,756,836
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $6,711,584,408
Shares outstanding - Class A 6,711,334,214
Net asset value and offering price per
share - Class A $ 1.00
Net assets - Class S $ 951,172,428
Shares outstanding - Class S 951,143,769
Net asset value and offering price per
share - Class S $ 1.00
- -----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
13
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
MONEY MARKET
MUTUAL FUND
<S> <C>
- ---------------------------------------------------------
INVESTMENT INCOME
Interest $357,173,870
TOTAL INVESTMENT INCOME 357,173,870
EXPENSES (NOTE 2)
Advisory fees 24,931,846
Administration fees 3,861,514
Custody fees 1,049,145
Shareholder servicing fees 18,315,799
Portfolio accounting fees 1,314,350
Transfer agency fees 6,246,988
Distribution fees 7,438,602
Organization costs 56,578
Legal and audit fees 241,368
Registration fees 294,439
Directors' fees 4,880
Shareholder reports 249,999
Other 120,689
TOTAL EXPENSES 64,126,197
Less:
Waived fees and reimbursed expenses (11,417,518)
Net Expenses 52,708,679
NET INVESTMENT INCOME 304,465,191
Net realized gain on sale of
investments 495,081
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $304,960,272
- ---------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
14
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
------------------------------------------------------
FOR THE NINE
FOR THE FOR THE SIX MONTHS ENDED
YEAR ENDED MONTHS ENDED SEPT. 30, 1996
MARCH 31, 1998 MARCH 31, 1997 (1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 304,465,191 $ 113,510,355 $ 132,402,988
Net realized gain on sale of
investments 495,081 215,989 740,929
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 304,960,272 113,726,344 133,143,917
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (267,569,450) (98,818,921) (113,221,991)
INSTITUTIONAL CLASS (188,647)(2) (276,412) (62,154)
CLASS S (36,707,094) (14,415,022) (19,122,485)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 4,063,160,668 1,566,360,081 2,061,107,506
Reinvestment of dividends - Class A 255,837,441 93,188,135 111,610,934
Cost of shares redeemed - Class A (2,247,997,951) (819,490,109) (1,266,041,632)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 2,071,000,158 840,058,107 906,676,808
Proceeds from shares sold -
Institutional Class 2,301,111(2) 2,187,477 19,474,700
Reinvestment of dividends -
Institutional Class 215,236(2) 279,884 0
Cost of shares redeemed -
Institutional Class (11,839,183)(2) (11,728,408) (882,494)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (9,322,836)(2) (9,261,047) 18,592,206
Proceeds from shares sold - Class S 1,708,294,353 813,386,639 1,063,771,625
Reinvestment of dividends - Class S 35,725,155 14,334,388 19,240,628
Cost of shares redeemed - Class S (1,500,695,653) (819,204,427) (1,002,807,161)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS S 243,323,855 8,516,600 80,205,092
INCREASE IN NET ASSETS 2,305,496,258 839,529,649 1,006,211,393
NET ASSETS:
Beginning net assets 5,357,260,578 4,517,730,929 3,511,519,536
ENDING NET ASSETS $ 7,662,756,836 $5,357,260,578 $ 4,517,730,929
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $194,880,059 FOR CLASS A AND
$19,474,700 FOR THE INSTITUTIONAL CLASS, AS A RESULT OF THE PACIFICA MONEY
MARKET FUND AND PACIFICA ASSET PRESERVATION FUND MERGERS. SEE NOTE 1.
(2) THE INSTITUTIONAL CLASS SHARES CEASED OPERATIONS ON SEPTEMBER 29, 1997.
The accompanying notes are an integral part of these financial statements.
---------------------
15
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
----------------------------------------------
CLASS A
----------------------------------------------
NINE
SIX MONTHS MONTHS
YEAR ENDED ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30, DEC. 31,
1998 1997 (1) 1996 (2) 1995
<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 0.02 0.03 0.05
Net realized gain (loss) on investments 0.00 0.00 0.00 0.00
---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02 0.03 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02) (0.03) (0.05)
Distributions from net realized gain 0.00 0.00 0.00 0.00
---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.03) (0.05)
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.07% 2.36% 3.55% 5.34%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $6,711,584 $4,640,148 $3,799,908 $2,892,621
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average
net assets 4.95% 4.71% 4.66% 5.13%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 0.93% 0.90% 0.88% 0.83%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 4.77% 4.56% 4.53% 5.05%
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS SHARES CEASED OPERATIONS ON SEPTEMBER 29,
1997.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON SEPTEMBER 6,
1996.
(5) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
The accompanying notes are an integral part of these financial statements.
- ---------------------
16
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND (CONT.)
----------------------------------------------------------------------------------------------
CLASS S
INSTITUTIONAL CLASS ----------------------------------
CLASS A (CONT.) ---------------------------------- NINE
---------------------- PERIOD SIX MONTHS PERIOD SIX MONTHS MONTHS
YEAR ENDED YEAR ENDED ENDED ENDED ENDED YEAR ENDED ENDED ENDED
DEC. 31, DEC. 31, SEPT. 29, MARCH 31, SEPT. 30, MARCH 31, MARCH 31, SEPT. 30,
1994 1993 1997 (3) 1997 (1) 1996 (4) 1998 1997 (1) 1996 (2)
<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 0.04 0.03 0.02 0.02 0.00 0.04 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 0.04 0.03 0.02 0.02 0.00 0.04 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.04) (0.03) (0.02) (0.02) 0.00 (0.04) (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 (0.04) (0.03) (0.02) (0.02) 0.00 (0.04) (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) 3.74% 2.70% 2.48% 2.38% 0.29% 4.37% 2.02% 3.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $2,343,942 $317,474 $0 $9,332 $18,592 $951,172 $707,781 $699,231
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.69% 0.58% 0.73% 0.73% 0.74% 1.42% 1.43% 1.42%
Ratio of net investment
income to average net
assets 4.12% 2.67% 4.94% 4.71% 5.03% 4.28% 4.02% 3.98%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.89% 1.00% 1.14% 0.82% 0.77% 1.62% 1.56% 1.55%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 3.92% 2.25% 4.53% 4.62% 5.00% 4.08% 3.89% 3.85%
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD
ENDED
DEC. 31,
1995 (5)
<S> <C>
- ---------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00
----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.03
Net realized gain (loss)
on investments 0.00
----------
TOTAL FROM INVESTMENT
OPERATIONS 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.03)
Distributions from net
realized gain 0.00
----------
TOTAL FROM DISTRIBUTIONS (0.03)
----------
NET ASSET VALUE, END OF
PERIOD $1.00
----------
----------
TOTAL RETURN (NOT
ANNUALIZED) 2.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $618,899
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.43%
Ratio of net investment
income to average net
assets 4.40%
- --------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.53%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.30%
- -------------------------------------------------------------------------
</TABLE>
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
(3) THE INSTITUTIONAL CLASS SHARES CEASED OPERATIONS ON SEPTEMBER 29,
1997.
(4) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON SEPTEMBER 6,
1996.
(5) THE CLASS S SHARES COMMENCED OPERATIONS ON MAY 25, 1995.
The accompanying notes are an integral part of these financial statements.
---------------------
17
<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 Money Market Mutual Fund (the "Fund"), a diversified
series of the Company.
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 Money Market Mutual Fund acquired
all of the assets and assumed all of the liabilities of the Pacifica Money
Market and Asset Preservation Funds. These acquisitions were accomplished in
separate exchanges for shares of the Fund.
The Fund offers Class A and Class S shares. The Fund's Institutional Class
shareholders redeemed all of their shares and the Class ceased operations on
September 29, 1997. The separate classes of shares differ principally in the
applicable sales charges (if any), distribution fees, shareholder servicing fees
and transfer agency fees. Shareholders of each class also bear certain expenses
that pertain to that particular class. All shareholders bear the common expenses
of the Fund and earn income from the portfolio pro rata based on the average
daily net assets of each class, without distinction between share classes.
Dividends are determined separately for each class based on income and expenses
allocable to each class. Realized gains are allocated to each class pro rata
based on the net assets of each class on the date of distribution. No class has
preferential dividend rights. Differences in per share dividend rates generally
result from the relative weightings of pro rata income and realized gain and
loss allocations and from differences in separate class expenses, including
distribution, shareholder servicing and transfer agency fees.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported
- ---------------------
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
SECURITY VALUATION
The Fund invests only in securities with remaining maturities not exceeding 397
days (thirteen months). Certain floating-and variable-rate instruments in the
portfolio 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 Fund uses the amortized cost method to value its 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 Fund seeks to maintain a constant net asset value
of $1.00 per share, although there is no assurance that it will be able to do
so.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Interest income is
accrued daily. Realized gains or losses are reported on the basis of identified
cost of securities delivered. Bond discounts are accreted and premiums are
amortized under provisions of the Internal Revenue Code of 1986, as amended (the
"Code").
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in the Fund's Portfolio of
Investments. The Fund 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 Fund 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
The 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
---------------------
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 Fund had a net capital loss carryforward at March 31, 1998 of $512,168 that
will expire in the year 2003. These figures include any loss carryforwards from
Pacifica. 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
the 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 Fund and its
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 the Fund commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into an advisory contract on behalf of the Fund with
WFB. Pursuant to the contract, WFB has agreed to provide the Fund with daily
portfolio management. Under the contract, WFB is entitled to be paid a monthly
advisory fee at an annual rate of 0.40% of the Fund's average daily net assets.
The Company has entered into a contract on behalf of the Fund with WFB, whereby
WFB is responsible for providing custody and portfolio accounting services for
the Fund. Pursuant to the contract, 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 the Fund. For portfolio accounting services, WFB
is entitled to a monthly base fee of $2,000 plus an annual fee of 0.07% of the
first $50 million of the Fund's average daily net assets, 0.045% of the
- ---------------------
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
next $50 million, and 0.02% of the Fund's average daily net assets in excess of
$100 million.
The Company has entered into a contract on behalf of the Fund with WFB, whereby
WFB provides transfer agency services for the Fund. Under the transfer agency
contract, WFB is entitled to receive transfer agency fees at an annual rate of
0.10% of the average daily net assets of the Class A and Class S shares of the
Fund and was entitled to receive 0.02% of the average daily net assets of the
Institutional Class shares of the Fund.
The transfer agency fees paid on behalf of the Fund for the year ended March 31,
1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS CLASS S
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
Money Market Mutual Fund $5,389,338 $769* $856,881
</TABLE>
* REPRESENTS THE PERIOD FROM APRIL 1, 1997 TO SEPTEMBER 29, 1997.
The Company has entered into a contract on behalf of the Fund with WFB, whereby
WFB has agreed to provide shareholder services for the Fund. Pursuant to the
contract, 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 Fund,
0.25% of the average daily net assets of the Class S shares of the Fund and was
entitled to receive 0.25% of the average daily net assets of the Institutional
Class shares of the Fund.
Shareholder servicing fees paid on behalf of the Fund for the year ended March
31, 1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS CLASS S
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
Money Market Mutual Fund $16,168,012 $9,612* $2,138,175
</TABLE>
* REPRESENTS THE PERIOD FROM APRIL 1, 1997 TO SEPTEMBER 29, 1997.
The Company has entered into administration agreements on behalf of the Fund
whereby WFB as administrator and Stephens Inc. ("Stephens") as co-administrator
provide the 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 the 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 the Fund's average daily net assets.
The Company has adopted separate Distribution Plans for Class A and Class S
shares of the Fund pursuant to Rule 12b-1 under the 1940 Act (each, a "Plan").
The Plan for Class A shares of the Fund provides that the Fund may defray all or
part of the cost of preparing, printing and distributing prospectuses and other
promotional materials by paying for costs incurred on an annual
---------------------
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
basis of up to 0.05% of the average daily net assets attributable to the Class A
shares of the Fund.
Under the Plan for Class S shares of the 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 0.75% of
the average daily net assets attributable to its Class S shares.
The 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.
Distribution fees paid on behalf of the Fund for the year ended March 31, 1998
were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS S
<S> <C> <C>
- ----------------------------------------------------------------
Money Market Mutual Fund $1,024,078 $6,414,524
</TABLE>
The registration fees paid on behalf of the Fund for the year ended March 31,
1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS CLASS S
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Money Market Mutual Fund $210,548 $13,891* $70,000
</TABLE>
* REPRESENTS THE PERIOD FROM APRIL 1, 1997 TO SEPTEMBER 29, 1997.
WAIVED FEES AND REIMBURSED EXPENSES
The amount shown as waived fees and reimbursed expenses on the Statement of
Operations for the year ended March 31, 1998, was waived by WFB. Waived fees and
reimbursed expenses continue at the discretion of WFB and Stephens. WFB and
Stephens agreed to reimburse all or a portion of their respective fees charged
to, or expenses paid by, the Fund to ensure that the total Fund operating
expenses did not exceed, on an annual basis, 0.73% of the average daily net
assets of the Institutional Class shares of the Fund, through August 31, 1997.
Certain officers and one director of the Company are also officers of Stephens.
As of March 31, 1998, Stephens owned 13,820 shares of the Fund.
- ---------------------
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. CAPITAL SHARE TRANSACTIONS
As of March 31,1998, there were over 108 billion shares of $0.001 par value
capital stock authorized by the Company. As of March 31, 1998, the Fund was
authorized to issue 10 billion Class A shares and 5 billion Class S shares of
$0.001 par value capital stock.
Capital share transactions for the Fund were as follows:
<TABLE>
<CAPTION>
MONEY MARKET MUTUAL FUND
---------------------------------------------------
FOR THE FOR THE SIX FOR THE NINE
YEAR ENDED MONTHS ENDED MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997 SEPT. 30, 1996 (1)
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 4,063,073,840 1,566,357,293 2,061,102,906
Shares issued in reinvestment of
dividends -- Class A 255,837,441 93,188,134 111,610,934
Shares redeemed -- Class A (2,247,997,951) (819,490,109) (1,266,036,895)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 2,070,913,330 840,055,318 906,676,945
Shares sold -- Institutional Class 2,301,110(2) 2,187,477 19,474,700
Shares issued in reinvestment of
dividends -- Institutional Class 215,236(2) 279,884 0
Shares redeemed -- Institutional Class (11,839,183 (2) (11,728,407) (890,817)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (9,322,837 (2) (9,261,046) 18,583,883
Shares sold -- Class S 1,708,294,353 813,386,639 1,063,771,625
Shares issued in reinvestment of
dividends -- Class S 35,725,154 14,334,388 19,240,628
Shares redeemed -- Class S (1,500,695,653) (819,204,427) (1,002,807,161)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS S 243,323,854 8,516,600 80,205,092
</TABLE>
(1) "SHARES SOLD" INCLUDES 194,882,553 FOR CLASS A AND 19,474,700 FOR THE
INSTITUTIONAL CLASS, AS A RESULT OF THE PACIFICA MONEY MARKET FUND AND
PACIFICA ASSET PRESERVATION FUND MERGERS.
(2) REPRESENTS THE PERIOD FROM APRIL 1, 1997 TO SEPTEMBER 29, 1997.
---------------------
23
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
24
<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 Money Market Mutual Fund (one of the funds
comprising Stagecoach Funds, Inc.) as of March 31, 1998, and the related
statement of operations for the year then ended, the statements of changes in
net assets for the year ended March 31, 1998, the six months ended March 31,
1997, and the nine months 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.
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 the
Money Market Mutual Fund of Stagecoach Funds, Inc. as of March 31, 1998, the
results of its operations, the changes in its net assets and its financial
highlights for the periods indicated herein in conformity with generally
accepted accounting principles.
[SIG]
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
MAY 1, 1998
---------------------
25
<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>
- ---------------------
26
<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 1-800-222-8222. Read the
prospectus carefully before you invest or send money.
SC MMS ANR (5/98)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
</TABLE>
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-C- 1998 Stagecoach Funds
