<PAGE>
- ---------------------
ANNUAL
- ---------------------
REPORT
- ---------------------
PRIME
- ---------------------
MONEY
- ---------------------
MARKET
- ---------------------
MUTUAL
- ---------------------
FUND
- ---------------------
MARCH 31, 1998
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
INVESTMENT ADVISER Q & A 3
PORTFOLIO OF INVESTMENTS 5
STAGECOACH PRIME MONEY MARKET MUTUAL FUND
Statement of Assets and Liabilities 9
Statement of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
Notes to Financial Statements 15
Independent Auditors' Report 23
PROXY VOTING RESULTS 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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THIS PAGE IS INTENTIONALLY LEFT BLANK --
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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.
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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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2
<PAGE>
STAGECOACH PRIME MONEY MARKET MUTUAL FUND
- --------------------
INVESTMENT ADVISER Q&A
PRIME MONEY MARKET MUTUAL FUND -- CLASS A
WHAT WERE THE SEVEN-DAY YIELDS AS OF MARCH 31, 1998?
The seven-day yield for the Prime Money Market Mutual Fund Class A shares was
5.14%.
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
---------------------
3
<PAGE>
STAGECOACH PRIME MONEY MARKET MUTUAL FUND
agreements. They are very liquid and offer good yield on an overnight
investment.
WHAT DO YOU EXPECT THE FEDERAL RESERVE'S NEXT ACTION TO BE?
We believe that the Fed is going to leave rates unchanged for awhile. We made a
strategy shift in early January and extended maturities slightly longer than our
benchmarks. The benchmark averages were 50 to 55 days; we extended ours to 60 to
70 days because we felt there was a sentiment change in the market. The market
sentiment shifted so that most people no longer expected the Fed to raise rates
and we wanted to lock in some yields.
WHAT TYPES OF INSTRUMENTS DO YOU BUY FOR THE PRIME MONEY MARKET MUTUAL FUND?
Commercial paper is the core investment, ranging from 40 to 50 percent of the
portfolio. It has a liquid market and ample supply is always available. Another
security we bought, particularly in the fourth quarter of 1997, was
floating-rate bonds based on three-month Treasury bills. These reset each week
based on the Treasury bill auction. We tend to have about 10% to 20% of the
portfolio in these or similar securities.
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.
- ---------------------
4
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
- -------------------------------------------------
PORTFOLIO OF INVESTMENTS - MARCH 31, 1998
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSITS - 13.55%
$25,000,000 Abbey National North America 5.55 % 01/26/99 $ 24,988,007
29,000,000 Bankers Trust 5.98 08/12/98 29,020,922
25,000,000 Bayerische Landesbank 5.78 07/27/98 24,992,274
45,000,000 Caisse Nationale De Credit 5.86 08/11/98 44,990,708
50,000,000 CC USA Inc++ 6.18 05/26/98 50,000,000
35,000,000 Commercial Bank of Detroit 6.18 05/27/98 34,991,600
30,000,000 Dresdner Bank 5.95 10/20/98 30,003,155
35,000,000 JP Morgan Corp 5.80 07/28/98 34,986,599
50,000,000 Societe Generale (Yankee) 5.60 01/13/99 49,985,613
35,000,000 Swiss Bank 5.64 03/12/99 34,978,194
--------------
TOTAL CERTIFICATES OF DEPOSITS $ 358,937,072
(Cost $358,937,072)
COMMERCIAL PAPER - 45.81%
$30,000,000 Bankers Trust 5.38 %(F) 09/11/98 $ 29,262,425
50,000,000 Bankers Trust 5.63 (F) 05/13/98 49,671,583
25,000,000 BTR Dunlop Finance Inc 5.38 (F) 08/13/98 24,499,361
50,000,000 Caisee National De Credit Agricole 5.94 (F) 06/23/98 49,971,328
40,000,000 Corporate Asset Funding Co Inc 5.56 (F) 05/04/98 39,796,133
25,000,000 Corporate Receivables Corp++ 5.48 (F) 04/28/98 24,897,250
50,000,000 Corporate Securitization Co 5.48 (F) 04/16/98 49,885,833
45,900,000 Corporate Securitization Co 5.56 (F) 04/07/98 45,857,466
46,000,000 Cregem North America 5.39 (F) 08/20/98 45,030,703
25,000,000 Falcon Asset Securitization Corp++ 5.49 (F) 04/03/98 24,992,375
25,000,000 General Electric Capital Corp 5.60 (F) 08/14/98 24,475,000
50,000,000 General Electric Capital Corp 5.62 (F) 08/17/98 48,970,750
35,000,000 General Electric Capital Corp 5.62 (F) 08/10/98 34,284,231
35,000,000 General Motors Acceptance Corp 5.53 (F) 04/22/98 34,887,096
25,000,000 General Motors Acceptance Corp 5.54 (F) 04/15/98 24,946,139
50,000,000 Goldman Sachs & Co 5.52 (F) 05/06/98 49,731,667
80,000,000 Greenwich Asset Funding Inc++ 5.54 (F) 05/05/98 79,581,422
50,000,000 Merrill Lynch & Co 5.51 (F) 07/15/98 49,202,292
25,000,000 Merrill Lynch & Co 5.55 (F) 04/23/98 24,915,208
</TABLE>
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5
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$45,000,000 Morgan Stanley Group Inc 5.49 %(F) 04/21/98 $ 44,862,750
60,000,000 Morgan Stanley Group Inc 5.69 (F) 04/17/98 59,848,267
25,000,000 NationsBank 5.43 (F) 04/23/98 24,917,042
100,000,000 Prudential Funding Corp 5.47 (F) 04/20/98 99,711,306
20,000,000 Prudential Funding Corp 5.55 (F) 04/07/98 19,981,500
50,446,000 Receivables Capital Corp++ 5.53 (F) 05/06/98 50,174,783
30,000,000 Receivables Capital Corp++ 5.55 (F) 04/14/98 29,939,875
25,000,000 Sheffield Receivables Corp++ 5.55 (F) 04/28/98 24,895,938
35,000,000 Sigma Finance Inc++ 5.38 (F) 08/20/98 34,261,121
17,000,000 WCP Funding Inc++ 5.48 (F) 04/07/98 16,984,473
53,936,000 Windmill Funding Corp++ 5.47 (F) 06/25/98 53,234,307
--------------
TOTAL COMMERCIAL PAPER $1,213,669,624
(Cost $1,213,669,624)
CORPORATE BONDS - 15.15%
$41,000,000 Australia & New Zealand Bank Group 5.52 % 07/28/98 $ 40,992,648
50,000,000 CIT Group Holdings 5.57 01/27/99 49,960,000
10,500,000 Comerica Bank 5.97 10/27/98 10,497,702
25,000,000 Huntington National Bank 5.77 12/09/98 24,996,375
15,000,000 IBM Credit Corp 6.12 12/15/98 15,024,374
25,000,000 IBM Credit Corp 5.77 11/16/98 25,000,000
60,000,000 Morgan Stanley Corp Inc 5.71 01/08/99 59,977,200
40,000,000 NationsBank 5.83 12/22/98 39,976,000
35,000,000 Sigma Finance Inc++ 6.00 09/15/98 35,000,000
50,000,000 Sigma Finance Inc++ 5.75 10/15/98 50,000,000
50,000,000 Societe Generale 5.65 08/03/98 49,980,590
--------------
TOTAL CORPORATE BONDS $ 401,404,889
(Cost $401,404,889)
</TABLE>
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6
<PAGE>
PRIME MONEY MARKET MUTUAL FUND
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
VARIABLE AND FLOATING RATE BONDS - 10.94%
$30,000,000 American Express Co 5.79 % 12/21/98 $ 30,000,000
20,000,000 American Express Co 5.66 05/08/98 20,000,000
20,000,000 Beta Finance Inc++ 5.81 11/30/98 20,000,000
45,000,000 FCC National Bank 5.60 06/11/98 44,965,242
60,000,000 Ford Motor Corp 5.79 01/07/99 60,000,000
50,000,000 Ford Motor Corp 5.70 12/23/98 49,985,500
50,000,000 Key National Bank 5.78 12/15/98 49,995,200
15,000,000 Morgan Guaranty Trust 5.96 06/22/98 14,994,956
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 289,940,898
(Cost $289,940,898)
REPURCHASE AGREEMENTS - 14.19%
$270,904,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.90 % 04/01/98 $ 270,904,000
105,102,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.88 04/01/98 105,102,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 376,006,000
(Cost $376,006,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $2,639,958,483)* (Note 1) 99.64% $2,639,958,483
Other Assets and Liabilities, Net 0.36% 9,536,546
------ --------------
TOTAL NET ASSETS 100.00% $2,649,495,029
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
++ REPRESENTS COMMERCIAL PAPER SOLD WITHIN TERMS OF PRIVATE PLACEMENT
MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION 4(2) OF THE
SECURITIES ACT OF 1933, THAT MAY BE RESOLD TO QUALIFIED INSTITUTIONAL
BUYERS. THIS SECURITY WAS DEEMED LIQUID BY THE INVESTMENT ADVISER IN
ACCORDANCE WITH PROCEDURES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
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7
<PAGE>
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8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 1998
<TABLE>
<CAPTION>
PRIME
MONEY MARKET
MUTUAL FUND
<S> <C>
- -----------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market value and
cost
(includes repurchase agreements of
$376,006,000) $2,639,958,483
Cash 1,230
Receivables:
Interest 21,314,070
Organization expenses, net of
amortization 34,145
Prepaid expenses 57,996
TOTAL ASSETS 2,661,365,924
LIABILITIES
Payables:
Distribution to shareholders 10,665,703
Due to sponsor and distributor (Note
2) 286,616
Due to adviser (Note 2) 757,682
Other 160,894
TOTAL LIABILITIES 11,870,895
TOTAL NET ASSETS
$2,649,495,029
NET ASSETS CONSIST OF:
Paid-in capital $2,649,429,789
Undistributed net realized gain on
investments 65,240
TOTAL NET ASSETS $2,649,495,029
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 592,316,876
Shares outstanding - Class A 592,415,777
Net asset value and offering price per
share - Class A $ 1.00
Net assets - Administrative Class $ 600,974,628
Shares outstanding - Administrative
Class 600,910,010
Net asset value and offering price per
share - Administrative Class $ 1.00
Net assets - Institutional Class $ 802,510,816
Shares outstanding - Institutional Class 802,563,568
Net asset value and offering price per
share - Institutional Class $ 1.00
Net assets - Service Class $ 653,692,709
Shares outstanding - Service Class 653,788,414
Net asset value and offering price per
share - Service Class $ 1.00
- -----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
---------------------
9
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
PRIME MONEY
MARKET
MUTUAL FUND
<S> <C>
- --------------------------------------------------------
INVESTMENT INCOME
Interest $95,926,455
TOTAL INVESTMENT INCOME 95,926,455
EXPENSES (NOTE 2)
Advisory fees 4,202,664
Administration fees 1,047,654
Custody fees 280,730
Shareholder servicing fees 2,433,830
Portfolio accounting fees 384,510
Transfer agency fees 853,431
Distribution fees 174,857
Organization costs 97,091
Legal and audit fees 72,103
Registration fees 264,729
Directors' fees 4,972
Shareholder reports 80,089
Other 64,582
TOTAL EXPENSES 9,961,242
Less:
Waived fees and reimbursed expenses (3,092,776)
Net Expenses 6,868,466
NET INVESTMENT INCOME 89,057,989
Net realized gain on sale of investments 205,613
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $89,263,602
- --------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------------------------
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
----------------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (1) MARCH 31, 1997 SEPT. 30, 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 89,057,989 $ 38,285,335 $ 70,756,951
Net realized gain (loss) on sale of
investments 205,613 (39,213) 0
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 89,263,602 38,246,122 70,756,951
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (17,766,272) (7,008,067) (14,569,914)
ADMINISTRATIVE CLASS (11,412,448)(2) N/A N/A
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
INSTITUTIONAL CLASS 0 0 (29,352)
SERVICE CLASS 0 0 (56,259)
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 -
Institutional Class 2,512,557,623 1,593,666,413 5,079,644,286
Reinvestment of dividends -
Institutional Class 8,027,719 1,847,923 176,187
Cost of shares redeemed - Institutional
Class (2,256,346,296) (1,481,265,875) (4,686,437,789)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS
- INSTITUTIONAL CLASS 264,239,046 114,248,461 393,382,684
Proceeds from shares sold - Service
Class 2,169,506,716 1,211,666,872 2,007,890,215
Reinvestment of dividends - Service
Class 1,912,601 90,409 117,361
Cost of shares redeemed - Service Class (2,143,905,641) (1,326,393,380) (1,881,188,708)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE TRANSACTIONS
- SERVICE CLASS 27,513,676 (114,636,099) 126,818,868
INCREASE (DECREASE) IN NET ASSETS 1,208,151,212 11,723,977 785,016,452
NET ASSETS:
Beginning net assets 1,441,343,817 1,429,619,840 644,603,388
ENDING NET ASSETS $2,649,495,029 $1,441,343,817 $1,429,619,840
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE OVERLAND EXPRESS MONEY
MARKET FUND. SEE NOTE 1.
(2) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
---------------------
11
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1)
----------------------------------
CLASS A
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (2) 1996 (3)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.02 0.05
Net realized and unrealized gain
(loss) on investments 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02) (0.05)
Distributions from net realized gain 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.05)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.24% 2.49% 5.09%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $592,317 $277,044 $264,900
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets 0.61% 0.55% 0.55%
Ratio of net investment income to
average net assets 5.11% 4.95% 5.06%
- ----------------------------------------------------------------------------
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses 0.83% 0.75% 0.68%
Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses 4.89% 4.75% 4.93%
- ----------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. PRIOR TO APRIL 1,
1996, FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(4) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
The accompanying notes are an integral part of these financial statements.
- ---------------------
12
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1) (CONT.)
----------------------------------------------------------------------------------------------
ADMIN.
CLASS INSTITUTIONAL CLASS SERVICE CLASS
---------- ---------------------------------------------- ----------------------------------
PERIOD SIX MONTHS PERIOD SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MARCH 31, MARCH 31, SEPT. 30,
1998 (4) 1998 1997 (2) 1996 1995 (5) 1998 1997 (2) 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.02 0.05 0.03 0.05 0.01 0.05 0.03 0.05
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.02 0.05 0.03 0.05 0.01 0.05 0.03 0.05
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.02) (0.05) (0.03) (0.05) (0.01) (0.05) (0.03) (0.05)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.02) (0.05) (0.03) (0.05) (0.01) (0.05) (0.03) (0.05)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 1.57% 5.58% 2.64% 5.39% 5.65% 5.37% 2.54% 5.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $600,975 $802,511 $538,195 $423,959 $30,606 $653,693 $626,105 $740,760
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.40% 0.25% 0.25% 0.25% 0.26% 0.45% 0.45% 0.45%
Ratio of net investment
income to average net
assets 5.34% 5.46% 5.25% 5.33% 5.67% 5.24% 5.04% 5.14%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.55% 0.41% 0.38% 0.60% 0.69% 0.65% 0.60% 0.62%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.19% 5.30% 5.12% 4.98% 5.24% 5.04% 4.89% 4.97%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. PRIOR TO APRIL 1,
1996, FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE CLASS A SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(4) THE ADMINISTRATIVE CLASS SHARES COMMENCED OPERATIONS ON DECEMBER 15,
1997.
(5) THE INSTITUTIONAL CLASS SHARES COMMENCED OPERATIONS ON AUGUST 11,
1995.
The accompanying notes are an integral part of these financial statements.
---------------------
13
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND (1)
(CONT.)
----------------------------------
SERVICE CLASS (CONT.)
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPT. 30, SEPT. 30, MARCH 31,
1995 1994 (2) 1994
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.02 0.03
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02) (0.03)
Distributions from net realized gain 0.00 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.05) (0.02) (0.03)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 5.60% 3.71%** 3.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $614,101 $565,305 $527,599
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.41% 0.41% 0.41%
Ratio of net investment income to average net assets 5.47% 3.67% 2.96%
- --------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.68% 0.89% 0.89%
Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 5.20% 3.19% 2.48%
- --------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND OPERATED AS PACIFIC AMERICAN LIQUID ASSETS, INC. THROUGH
OCTOBER 1, 1994, WHEN IT WAS REORGANIZED AS THE PACIFIC AMERICAN MONEY
MARKET PORTFOLIO, A PORTFOLIO OF PACIFICA FUNDS TRUST. IN JULY 1995,
THE FUND WAS RENAMED THE PACIFICA PRIME MONEY MARKET FUND, AND ON
SEPTEMBER 6, 1996, THE FUND WAS REORGANIZED AS A SERIES OF STAGECOACH
FUNDS, INC. IN CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION,
WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES. PRIOR TO APRIL 1,
1996, FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") SERVED AS THE
FUND'S ADVISER. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED
WELLS FARGO INVESTMENT MANAGEMENT, INC.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO SEPTEMBER 30.
The accompanying notes are an integral part of these financial statements.
- ---------------------
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on January 1,
1992, and currently offers thirty-three separate series. These financial
statements represent the Prime Money Market Mutual Fund (the "Fund"), 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, the
Fund acquired all of the assets and assumed all of the liabilities of the
Overland Money Market Fund. The Fund issued 1,403,141,528 shares, valued at
$1,403,123,759, to the Overland Money Market Fund. At the date of the
Consolidation, the components of net assets for each Fund were as follows:
<TABLE>
<CAPTION>
STAGECOACH PRIME
OVERLAND MONEY
DECEMBER 12, 1997 MONEY MARKET FUND MARKET MUTUAL FUND
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Paid-in Capital $ 1,403,141,571 $ 1,219,800,227
Undistributed Net Realized Gain (Loss) (17,812) (14,666)
----------------- ---------------------
Total Net Assets $ 1,403,123,759 $ 1,219,785,561
----------------- ---------------------
----------------- ---------------------
</TABLE>
The combined net assets for the Fund immediately after the Consolidation were
$2,622,909,320. The acquisition was accomplished in a tax-free exchange for
shares of the 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 Fund was
established to acquire all of the assets and assume all of the liabilities of
the Pacifica Prime Money Market Fund (the "Predecessor Fund"). This acquisition
was accomplished in a tax-free exchange
---------------------
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
for shares of the Fund. All performance and financial data for periods prior to
September 6, 1996 refers to the Predecessor Fund.
The Fund offers Class A, Administrative Class, Institutional Class, and Service
Class shares. The separate classes of shares differ principally in the
applicable sales charges (if any), distribution fees, shareholder servicing fees
and transfer agency fees. Shareholders of each class also bear certain expenses
that pertain to that particular class. All shareholders bear the common expenses
of the Fund and earn income from the portfolio pro rata based on the average
daily net assets of each class, without distinction between share classes.
Dividends are determined separately for each class based on income and expenses
allocable to each class. Realized gains are allocated to each class pro rata
based on the net assets of each class on the date of distribution. No class has
preferential dividend rights. Differences in per share dividend rates generally
result from the relative weightings of pro rata income and realized gain and
loss allocations and from differences in separate class expenses, including
distribution, shareholder servicing and transfer agency fees.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
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
- ---------------------
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 in 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 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.
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
perma-
---------------------
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
nent 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 0.25% 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 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 Service Class shares of
the Fund and 0.02% of the average daily net assets of the Administrative Class
and Institutional Class shares of the Fund. 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 Fund.
The transfer agency fees paid on behalf of the Fund for the year ended March 31,
1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL SERVICE
FUND CLASS A CLASS* CLASS CLASS
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $349,687 $50,565 $104,088 $349,091
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998.
- ---------------------
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 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 Fund. Prior to
September 1, 1997, WFB was entitled to receive shareholder servicing fees at an
annual rate of 0.25% of the average daily net assets of the Class A shares of
the Fund.
Shareholder servicing fees paid on behalf of the Fund for the year ended March
31, 1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE SERVICE
FUND CLASS A CLASS* CLASS
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $996,870 $320,205 $1,116,755
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998.
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 a Distribution Plan for Class A shares of the Fund
pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Plan for Class A
shares of the Fund provides that the 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.
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.
---------------------
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The registration fees paid on behalf of the Fund for the year ended March 31,
1998, were as follows:
<TABLE>
<CAPTION>
ADMINISTRATIVE INSTITUTIONAL SERVICE
FUND CLASS A CLASS* CLASS CLASS
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
Prime Money Market Mutual Fund $61,386 $31,206 $88,630 $83,507
</TABLE>
* REPRESENTS THE PERIOD FROM DECEMBER 15, 1997 TO MARCH 31, 1998
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 waive or 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, 0.55%, 0.25%, and 0.45%
of the average daily net assets of the Fund's Class A, Institutional Class, and
Service Class of shares, respectively, through August 31, 1997.
Certain officers and one director of the Company are also officers of Stephens.
As of March 31, 1998, Stephens owned 1,514,061 shares of the 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 Fund was
authorized to issue 5 billion shares of $0.001 par value capital stock for each
class of shares, with the exception of the Administrative Class shares. The Fund
was authorized to issue 1 billion shares of $0.001 par value capital stock for
the Administrative Class shares.
- ---------------------
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Capital share transactions for the Fund were as follows:
<TABLE>
<CAPTION>
PRIME MONEY MARKET MUTUAL FUND
-------------------------------------------------
FOR THE
YEAR ENDED FOR THE SIX FOR THE
MARCH 31, MONTHS ENDED YEAR ENDED
1998 (1) MARCH 31, 1997 SEPT. 30, 1996
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 2,095,335,772 332,735,076 831,632,592
Shares issued in reinvestment of
dividends -- Class A 3,165,358 240,495 916,433
Shares redeemed -- Class A (1,783,218,311) (320,827,816) (567,563,822)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 315,282,819 12,147,755 264,985,203
Shares sold -- Administrative Class (2) 1,388,224,676 N/A N/A
Shares issued in reinvestment of
dividends -- Administrative Class (2) 9,420,477 N/A N/A
Shares redeemed -- Administrative
Class (2) (796,735,143) N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- ADMINISTRATIVE CLASS (2) 600,910,010 N/A N/A
Shares sold -- Institutional Class 2,512,557,618 1,593,660,723 5,079,737,453
Shares issued in reinvestment of
dividends -- Institutional Class 8,027,719 1,847,923 176,187
Shares redeemed -- Institutional Class (2,256,346,296) (1,481,265,875) (4,686,437,789)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS 264,239,041 114,242,771 393,475,851
Shares sold -- Service Class 2,169,506,710 1,211,658,277 2,007,890,215
Shares issued in reinvestment of
dividends -- Service Class 1,912,601 90,409 117,361
Shares redeemed -- Service Class (2,143,905,641) (1,326,393,380) (1,881,188,709)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- SERVICE CLASS 27,513,670 (114,644,694) 126,818,867
</TABLE>
(1) "SHARES SOLD" INCLUDES AMOUNTS RELATED TO THE CONSOLIDATION OF THE
STAGECOACH PRIME MONEY MARKET MUTUAL AND OVERLAND MONEY MARKET FUNDS. SEE
NOTE 1.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
---------------------
21
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
22
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
STAGECOACH FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Prime Money Market Mutual Fund (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 year ended September 30, 1996, and financial highlights for the
periods indicated herein. These financial statements and financial highlights
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. All years or periods indicated in the accompanying financial
highlights ending prior to October 1, 1995, were audited by other auditors whose
reports dated November 15, 1995 and May 4, 1994, expressed unqualified opinions
on this information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1998, by correspondence with the custodian and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Prime 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, except as noted above, in
conformity with generally accepted accounting principles.
[SIG]
[KPMG Peat Marwick LLP]
SAN FRANCISCO, CALIFORNIA
MAY 1, 1998
---------------------
23
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
- ---------------------
24
<PAGE>
STAGECOACH FUNDS
- -----------------------------------------
SHAREHOLDERS' MEETING AND PROXY VOTING RESULTS
The following proposal was passed by the required majority of shareholders of
the indicated Predecessor Fund at a Special Shareholders' meeting held on
November 20, 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>
---------------------
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>
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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 PMMR AR (5/98)
<TABLE>
<S> <C>
STAGECOACH
FUNDS-REGISTERED TRADEMARK-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
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[LOGO]
-C- 1998 Stagecoach Funds
