<PAGE>
STAGECOACH FUNDS -Registered Trademark-
Annual Report
TAX-FREE FUNDS
Arizona Tax-Free Fund
California Tax-Free Fund
California Tax-Free Income Fund
National Tax-Free Fund
Oregon Tax-Free Fund
June 30, 1999
<PAGE>
Tax-Free Funds TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS................................1
PERFORMANCE AT A GLANCE AND
INVESTMENT ADVISOR COMMENTARY
Arizona Tax-Free Fund.............................3
California Tax-Free Bond Fund.....................8
California Tax-Free Income Fund..................13
National Tax-Free Fund...........................18
Oregon Tax-Free Fund.............................23
PORTFOLIOS OF INVESTMENTS
Arizona Tax-Free Fund............................28
California Tax-Free Bond Fund....................31
California Tax-Free Income Fund..................55
National Tax-Free Fund...........................58
Oregon Tax-Free Fund.............................66
TAX-FREE FUNDS
Statements of Assets and Liabilities.............70
Statement of Operations..........................72
Statements of Changes in Net Assets..............74
Financial Highlights.............................78
Notes to Financial Statements....................96
INDEPENDENT AUDITOR'S REPORT........................109
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
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THIS PAGE IS INTENTIONALLY LEFT BLANK --
ii
<PAGE>
LETTER TO SHAREHOLDERS Tax-Free Funds
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DEAR VALUED SHAREHOLDER:
Thank you for investing in the Stagecoach Funds.
We are pleased to present this annual report to you for the period ended June
30, 1999. This report provides information about your investment, including
economic and market trends over the period, as well as a performance summary,
portfolio review and strategic outlook for each Fund.
Recent events in the U.S. economy may signal a turning point for domestic and
international markets. Concerned that strong domestic growth and low
unemployment could spark higher inflation, the Federal Reserve Board ("the Fed")
raised its target for the federal funds rate 25 basis points to 5 percent in
June. Fear of such a rate increase threw the Dow Jones Industrial Average (DJIA)
into a spin during May. However, when the Fed raised rates and announced it
would return to a neutral position in terms of the future direction of interest
rates, the news was well-received on Wall Street, and the stock and bond markets
responded positively.
Overall, a period of relative calm returned to global markets due to Asia's
improving economic condition. After a brief scare late last summer, U.S.
financial markets shook off any threats to domestic prosperity, with the DJIA
climbing 3,000 points from October 1998 through April 1999 to a record high of
11,000. Thanks to the combination of low unemployment, low inflation and strong
consumer spending, the nation's "Goldilock's" economy seemed just right -- at
least through most of the period.
Although higher interest rates typically help cool the nation's strong
economic growth, economies from Asia to Latin America are concerned about the
prospect of a tightening U.S. monetary policy. Higher interest rates translate
into higher bond yields, raising the debt service burden throughout emerging
markets. So while the health of the world's economies remains questionable,
signs of optimism are emerging.
Whatever the market conditions, we recommend that you continually review your
investment portfolio with your financial consultant to determine an appropriate
1
<PAGE>
Tax-Free Funds LETTER TO SHAREHOLDERS
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mix of investments to meet your ongoing needs. We appreciate your business and
strive to deliver personalized service along with an array of investment options
to help you achieve your financial goals. If you have any questions or need
information, please contact us at 1-800-552-9612.
Again, thank you for choosing the Stagecoach Funds.
Sincerely,
/s/ Michael J. Hogan
Michael J. Hogan
Executive Vice President,
Mutual Fund Group
Wells Fargo Bank, N.A.
/s/ R. Greg Feltus
R. Greg Feltus
Chairman and President of
Stagecoach Funds
<PAGE>
PERFORMANCE AT A GLANCE Arizona Tax-Free Fund
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ARIZONA TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURN (%) (as of June 30, 1999)(1)
- --------------------------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (3/2/92)
<S> <C> <C> <C>
CLASS A 0.66 5.44 5.76
CLASS B 0.00 4.40 4.71
INSTITUTIONAL CLASS 0.76 5.59 5.86
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (3/2/92)
<S> <C> <C> <C>
CLASS A (3.87) 4.48 5.10
CLASS B (4.74) 4.07 4.71
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR
<S> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 2.76 7.00
</TABLE>
GROWTH OF A $10,000 INVESTMENT(2)
- ----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH ARIZONA STAGECOACH ARIZONA LEHMAN BROTHERS
TAX-FREE FUND TAX-FREE FUND MUNICIPAL BOND
CLASS A SHARES INSTITUTIONAL CLASS SHARES INDEX (1)
<S> <C> <C> <C>
Inception $9,550 $10,000 $10,000
03/92 $9,522 $9,971 $10,004
04/92 $9,603 $10,056 $10,093
05/92 $9,717 $10,175 $10,212
06/92 $9,857 $10,322 $10,384
07/92 $9,896 $10,362 $10,695
08/92 $10,001 $10,472 $10,590
09/92 $10,110 $10,586 $10,659
10/92 $9,996 $10,467 $10,555
11/92 $10,193 $10,673 $10,744
12/92 $10,291 $10,776 $10,853
01/93 $10,456 $10,949 $10,979
02/93 $10,769 $11,276 $11,377
03/93 $10,601 $11,100 $11,256
04/93 $10,692 $11,196 $11,370
05/93 $10,737 $11,243 $11,433
06/93 $10,902 $11,416 $11,624
07/93 $10,869 $11,381 $11,639
08/93 $11,095 $11,618 $11,882
09/93 $11,253 $11,783 $12,017
10/93 $11,274 $11,806 $12,040
11/93 $11,195 $11,722 $11,934
12/93 $11,377 $11,913 $12,186
01/94 $11,507 $12,049 $12,325
02/94 $11,208 $11,736 $12,005
03/94 $10,954 $11,470 $11,517
04/94 $11,016 $11,535 $11,615
05/94 $11,089 $11,612 $11,716
06/94 $11,048 $11,568 $11,644
07/94 $11,206 $11,734 $11,857
08/94 $11,260 $11,790 $11,899
09/94 $11,148 $11,673 $11,724
10/94 $10,964 $11,480 $11,515
11/94 $10,800 $11,309 $11,307
12/94 $11,001 $11,519 $11,556
01/95 $11,247 $11,777 $11,886
02/95 $11,514 $12,057 $12,231
03/95 $11,607 $12,154 $12,372
04/95 $11,656 $12,205 $12,387
05/95 $11,904 $12,465 $12,782
06/95 $11,879 $12,439 $12,670
07/95 $11,998 $12,563 $12,790
08/95 $12,116 $12,686 $12,952
09/95 $12,159 $12,732 $13,034
10/95 $12,272 $12,854 $13,224
11/95 $12,409 $13,000 $13,443
12/95 $12,507 $13,106 $13,573
01/96 $12,602 $13,208 $13,676
02/96 $12,532 $13,137 $13,583
03/96 $12,326 $12,924 $13,409
04/96 $12,333 $12,922 $13,371
05/96 $12,284 $12,885 $13,366
06/96 $12,399 $13,006 $13,512
07/96 $12,553 $13,171 $13,633
08/96 $12,507 $13,112 $13,630
09/96 $12,610 $13,223 $13,821
10/96 $12,745 $13,379 $13,977
11/96 $12,988 $13,637 $14,233
12/96 $12,937 $13,586 $14,174
01/97 $12,978 $13,631 $14,200
02/97 $13,060 $13,719 $14,331
03/97 $12,885 $13,538 $14,140
04/97 $12,983 $13,630 $14,259
05/97 $13,159 $13,817 $14,475
06/97 $13,305 $13,986 $14,629
07/97 $13,704 $14,395 $15,035
08/97 $13,530 $14,214 $14,893
09/97 $13,702 $14,411 $15,071
10/97 $13,755 $14,482 $15,167
11/97 $13,837 $14,571 $15,257
12/97 $14,063 $14,798 $15,479
01/98 $14,179 $14,925 $15,639
02/98 $14,159 $14,905 $15,643
03/98 $14,132 $14,883 $15,657
04/98 $14,016 $14,762 $15,587
05/98 $14,262 $15,022 $15,833
06/98 $14,306 $15,069 $15,895
07/98 $14,324 $15,088 $15,935
08/98 $14,599 $15,379 $16,182
09/98 $14,791 $15,582 $16,384
10/98 $14,717 $15,504 $16,384
11/98 $14,766 $15,556 $16,441
12/98 $14,775 $15,566 $16,492
01/99 $14,963 $15,765 $16,689
02/99 $14,822 $15,617 $16,615
03/99 $14,865 $15,663 $16,638
04/99 $14,871 $15,677 $16,680
05/99 $14,726 $15,511 $16,818
06/99 $14,401 $15,183 $16,576
</TABLE>
3
<PAGE>
Arizona Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
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ARIZONA TAX-FREE FUND
The Stagecoach Arizona Tax-Free Fund (the "Fund") seeks to provide investors
with income exempt from federal income tax and Arizona personal income tax. The
Fund invests in high-quality Arizona municipal obligations. The Fund has the
ability to invest in municipal bonds with a wide range of maturities, allowing
for greater investment flexibility within the portfolio and the potential to
maximize income.
Steve Galiani is responsible for the day-to-day management of the Fund. Mr.
Galiani has 24 years of experience in the securities industry, and has managed
the Fund since December 1997. His value-oriented philosophy brings a unique
strategy to the Fund.
PERFORMANCE SUMMARY
The Arizona Tax-Free Fund's Class A share price decreased from $10.79 on June
30, 1998, to $10.22 on June 30, 1999. The Fund's Class A shares distributed
$0.46 per share in dividend income and $0.19 in capital gains during the period.
Keep in mind that past performance is not predictive of future trends and
distributions will vary based on Fund portfolio earnings.
The Fund's distribution rate for Class A shares was 4.33%. When measured
against a comparable taxable investment, the Fund's double tax-free yield is
generally higher. For example, an investor would need to earn a yield of 7.63%
from a taxable investment to match the Fund's 4.37% tax-free SEC yield, assuming
the maximum combined federal and Arizona state personal income tax bracket.
4
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INVESTMENT ADVISOR COMMENTARY Arizona Tax-Free Fund
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PORTFOLIO DATA (as of June 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 56%
NUMBER OF HOLDINGS 30
</TABLE>
FUND CHARACTERISTICS(3)
- ---------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY AA
WEIGHTED AVERAGE COUPON 5.53%
ESTIMATED WEIGHTED AVERAGE MATURITY 21.25 years
ESTIMATED DURATION 10.52 years
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS I
<S> <C> <C> <C>
NAV 10.22 9.86 10.23
DISTRIBUTION RATE 4.33% 3.81% 4.59%
SEC YIELD 4.37% 3.85% 4.63%
TAXABLE EQUIVALENT YIELD 7.63% 6.72% 8.08%
</TABLE>
The Arizona Tax-Free Fund reported a cumulative total return of 0.66% for
Class A shares, excluding sales charges, and a 0.76% return for Institutional
Class shares for the 12-month period ended June 30, 1999. The Fund
underperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 2.76% over the same period. While the Lehman Brothers Municipal Bond
Index represents municipal securities across the country, the Fund invests
primarily in Arizona municipal securities, which negatively affected the
performance of the Fund relative to its benchmark.
During the period, activity in the Fund was limited. The Fund added three
higher-yielding bonds to the portfolio, all of which were investment-grade
securities and were carefully researched prior to purchase.
CREDIT QUALITY
(as of June 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
A 12%
AA 29%
AAA 54%
BBB or below 4%
Cash Equivalents 1%
</TABLE>
PORTFOLIO REVIEW
During the 12-month period, interest rates rose and municipal bond prices
declined. The income from municipal bonds was sufficient to compensate for the
price declines that resulted from the rise in interest rates, thus generating a
modest positive return, as indicated by the Lehman Brothers Municipal Bond Index
total return of 2.76%.
5
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Arizona Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
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Later this year, we expect interest rates to decline from current levels. To
better position the Fund to benefit from such a change, we made some portfolio
adjustments from last quarter that resulted in extensions of the portfolio's
modified adjusted duration (from 10.10 to 10.52 years) and average maturity
(from 20.24 to 21.25 years). More than one-third of the Fund's portfolio
consists of discounted and/or non-callable bonds that have the potential to
rally strongly when interest rates are falling.
STRATEGIC OUTLOOK
Bonds suffered their second straight monthly loss during the second quarter of
1999 amid strong growth and the Federal Reserve Board's (the "Fed") policy
stance. The loss was only the third in the past decade for June, historically
the strongest time of the year for the bond market. Prospects for subdued,
historically low inflation and a "Y2K"-related slowdown in the economy eliminate
two of the main catalysts behind a sustained rise in interest rates. A
precautionary shift by investors to safer U.S. Treasury securities could open up
yield spreads between U.S. Treasury and corporate securities. Moreover, interest
rates could be pushed lower by the Fed's efforts to counter any associated Y2K
issues.
Looking ahead, we continue to seek opportunities to improve the Fund's current
yield. This is a slow process since quality spreads among Arizona bonds are
narrow and the prospective new issue supply remains light. Overall, our goal is
to add more bonds with solid current yield when we see opportunities to do so.
As always, our research will focus on credit quality, relative valuation and
sensitivity to interest rate movements in order to provide competitive tax-free
income.
Please remember that past performance is no guarantee of future results.
1 A portion of the performance shown for the Class A, Class B and Institutional
Class shares of the Arizona Tax-Free Fund reflects performance of a class of
shares of a predecessor fund. Complete historical information about the Fund
can be found in the Fund's prospectus and Statement of Additional Information.
6
<PAGE>
INVESTMENT ADVISOR COMMENTARY Arizona Tax-Free Fund
- ------------------------------------------------------------------------
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes maximum contingent deferred sales
charge for the corresponding time period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The Index does not incur expenses and is not available
directly for investment. Had this Index incurred operating expenses, its
performance would have been lower.
2 The returns for Class B shares of the Arizona Tax-Free Fund will vary from the
results shown due to different expenses and load structures.
The accompanying chart compares the performance of the Stagecoach Arizona
Tax-Free Fund Class A and Institutional Class shares since inception with the
Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
initial investment in Class A and Institutional Class shares and reflects all
operating expenses and, for Class A shares, assumes the maximum initial sales
charge of 4.50%. The Fund is a professionally managed mutual fund.
3 The formula used to calculate the SEC yield is described in the Fund's
statement of additional information and is designed to standardize the yield
calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market fund advertisements. SEC yields include the actual amount of interest
earned adjusted by any gain or loss realized from the return of principal,
less expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
42.72%. Any capital gains distribution may be taxable.
The average credit rating is compiled from ratings by Standard & Poor's
and/or Moody's Investor Service (together "rating agencies"). Standard &
Poor's is a trademark of McGraw-Hill Inc., and has been licensed. The Fund is
not sponsored, endorsed, sold or promoted by these rating agencies, and these
agencies make no representation regarding the advisability of investing in the
Fund.
7
<PAGE>
California Tax-Free Bond Fund PERFORMANCE AT A GLANCE
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CALIFORNIA TAX-FREE BOND FUND
AVERAGE ANNUAL TOTAL RETURN (%) (as of June 30, 1999)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
CLASS A 2.38 6.60 7.22
CLASS B 1.69 5.84 6.49
CLASS C 1.69 5.84 6.49
INSTITUTIONAL CLASS 2.46 6.62 7.23
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
CLASS A (2.23) 5.61 6.73
CLASS B (3.20) 5.52 6.49
CLASS C 0.71 5.84 6.49
INSTITUTIONAL CLASS N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 2.76 7.00 7.43
</TABLE>
GROWTH OF A $10,000 INVESTMENT(2)
- ----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH
CALIFORNIA CALIFORNIA LEHMAN BROTHERS
TAX-FREE BOND FUND TAX-FREE BOND FUND MUNICIPAL BOND
CLASS A SHARES INSTITUTIONAL CLASS SHARES INDEX (1)
<S> <C> <C> <C>
06/89 $9,550 $10,000 $10,000
07/89 $9,670 $10,125 $10,136
08/89 $9,531 $9,980 $10,037
09/89 $9,521 $9,970 $10,007
10/89 $9,653 $10,107 $10,129
11/89 $9,803 $10,265 $10,306
12/89 $9,860 $10,325 $10,390
01/90 $9,736 $10,195 $10,342
02/90 $9,890 $10,356 $10,434
03/90 $9,928 $10,396 $10,437
04/90 $9,792 $10,254 $10,362
05/90 $10,036 $10,509 $10,587
06/90 $10,134 $10,612 $10,681
07/90 $10,312 $10,798 $10,838
08/90 $10,014 $10,486 $10,680
09/90 $10,004 $10,476 $10,687
10/90 $10,175 $10,654 $10,880
11/90 $10,417 $10,908 $11,099
12/90 $10,499 $10,993 $11,148
01/91 $10,673 $11,175 $11,297
02/91 $10,734 $11,240 $11,396
03/91 $10,755 $11,262 $11,400
04/91 $10,921 $11,436 $11,552
05/91 $11,047 $11,567 $11,655
06/91 $11,012 $11,531 $11,643
07/91 $11,168 $11,694 $11,785
08/91 $11,303 $11,835 $11,940
09/91 $11,460 $12,000 $12,096
10/91 $11,553 $12,097 $12,205
11/91 $11,549 $12,093 $12,239
12/91 $11,719 $12,271 $12,502
01/92 $11,704 $12,256 $12,531
02/92 $11,777 $12,332 $12,534
03/92 $11,818 $12,375 $12,539
04/92 $11,925 $12,487 $12,651
05/92 $12,055 $12,623 $12,800
06/92 $12,275 $12,854 $13,015
07/92 $12,677 $13,274 $13,406
08/92 $12,503 $13,092 $13,274
09/92 $12,567 $13,160 $13,361
10/92 $12,323 $12,904 $13,230
11/92 $12,630 $13,225 $13,467
12/92 $12,775 $13,377 $13,604
01/93 $12,923 $13,532 $13,762
02/93 $13,401 $14,032 $14,260
03/93 $13,298 $13,924 $14,109
04/93 $13,452 $14,086 $14,251
05/93 $13,547 $14,186 $14,331
06/93 $13,802 $14,453 $14,570
07/93 $13,794 $14,444 $14,589
08/93 $14,136 $14,802 $14,893
09/93 $14,334 $15,010 $15,063
10/93 $14,362 $15,039 $15,091
11/93 $14,219 $14,889 $14,958
12/93 $14,434 $15,114 $15,274
01/94 $14,614 $15,302 $15,448
02/94 $14,327 $15,002 $15,048
03/94 $13,848 $14,500 $14,436
04/94 $13,826 $14,478 $14,558
05/94 $13,971 $14,629 $14,685
06/94 $13,936 $14,593 $14,595
07/94 $14,173 $14,841 $14,862
08/94 $14,229 $14,900 $14,914
09/94 $14,063 $14,726 $14,695
10/94 $13,857 $14,510 $14,434
11/94 $13,610 $14,251 $14,172
12/94 $13,809 $14,460 $14,484
01/95 $14,193 $14,861 $14,898
02/95 $14,537 $15,222 $15,331
03/95 $14,664 $15,355 $15,508
04/95 $14,668 $15,359 $15,526
05/95 $15,112 $15,824 $16,021
06/95 $14,906 $15,608 $15,881
07/95 $14,997 $15,704 $16,032
08/95 $15,192 $15,907 $16,235
09/95 $15,317 $16,039 $16,338
10/95 $15,595 $16,330 $16,576
11/95 $15,889 $16,637 $16,851
12/95 $16,073 $16,831 $17,012
01/96 $16,156 $16,917 $17,142
02/96 $16,011 $16,766 $17,025
03/96 $15,765 $16,508 $16,807
04/96 $15,696 $16,436 $16,760
05/96 $15,709 $16,449 $16,753
06/96 $15,892 $16,641 $16,936
07/96 $16,067 $16,824 $17,088
08/96 $16,079 $16,837 $17,085
09/96 $16,326 $17,095 $17,324
10/96 $16,503 $17,280 $17,520
11/96 $16,822 $17,615 $17,841
12/96 $16,722 $17,510 $17,766
01/97 $16,751 $17,540 $17,799
02/97 $16,913 $17,710 $17,963
03/97 $16,675 $17,461 $17,724
04/97 $16,825 $17,618 $17,873
05/97 $17,078 $17,882 $18,143
06/97 $17,226 $18,038 $18,337
07/97 $17,788 $18,627 $18,845
08/97 $17,583 $18,412 $18,668
09/97 $17,782 $18,620 $18,890
10/97 $17,892 $18,735 $19,011
11/97 $17,974 $18,821 $19,123
12/97 $18,221 $19,081 $19,402
01/98 $18,457 $19,329 $19,602
02/98 $18,458 $19,314 $19,608
03/98 $18,453 $19,322 $19,626
04/98 $18,369 $19,235 $19,537
05/98 $18,665 $19,546 $19,846
06/98 $18,736 $19,621 $19,923
07/98 $18,766 $19,653 $19,973
08/98 $19,085 $19,988 $20,283
09/98 $19,383 $20,302 $20,536
10/98 $19,375 $20,294 $20,536
11/98 $19,444 $20,366 $20,608
12/98 $19,463 $20,388 $20,672
01/99 $19,697 $20,634 $20,918
02/99 $19,605 $20,538 $20,826
03/99 $19,667 $20,605 $20,855
04/99 $19,681 $20,624 $20,907
05/99 $19,509 $20,445 $21,081
06/99 $19,181 $20,104 $20,777
</TABLE>
8
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Bond Fund
- ------------------------------------------------------------------------
CALIFORNIA TAX-FREE BOND FUND
The Stagecoach California Tax-Free Bond Fund (the "Fund") seeks to provide
investors with a high level of income exempt from federal income tax and
California personal income tax, while preserving capital, by investing in
medium- to long-term investment-grade municipal securities. The Fund is managed
with a total return strategy that balances reasonable risk with competitive
income and capital preservation.
Steve Galiani is responsible for the day-to-day management of the Fund. Mr.
Galiani has 24 years of experience in the securities industry. His
value-oriented philosophy brings a unique strategy to the Fund.
PERFORMANCE SUMMARY
The California Tax-Free Bond Fund's Class A share net asset value decreased
from $11.38 on June 30, 1998, to $11.00 on June 30, 1999. The Fund's Class A
shares distributed $0.51 per share in dividend income and $0.15 in capital gains
during the period. Keep in mind that past performance is not predictive of
future trends and distributions will vary based on Fund portfolio earnings.
The Fund's distribution rate for Class A shares was 4.40%. When measured
against a comparable taxable investment, the Fund's double tax-free yield was
generally higher. For example, an investor would need to earn a yield of 7.34%
from a taxable investment to match the Fund's 4.02% tax-free SEC yield, assuming
the maximum combined federal and California state personal income tax bracket.
9
<PAGE>
California Tax-Free Bond Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
PORTFOLIO DATA (as of June 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 17%
NUMBER OF HOLDINGS 374
</TABLE>
FUND CHARACTERISTICS(3)
- ---------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY AA+
WEIGHTED AVERAGE COUPON 5.24%
ESTIMATED WEIGHTED AVERAGE MATURITY 15.15 years
ESTIMATED DURATION 8.87 years
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
<S> <C> <C> <C> <C>
NAV 11.00 11.22 11.22 11.03
DISTRIBUTION RATE 4.40% 3.90% 3.88% 4.66%
SEC YIELD 4.02% 3.51% 3.49% 4.27%
TAXABLE EQUIVALENT
YIELD 7.34% 6.41% 6.37% 7.79%
</TABLE>
The California Tax-Free Bond Fund reported a cumulative total return of 2.38%
for Class A shares, excluding sales charge, and a 2.46% return for Institutional
Class shares for the 12-month period ended June 30, 1999. The Fund
underperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 2.76% during the same period. Although the Fund underperformed its
benchmark, performance was positively influenced by the strength of the
California economy.
CREDIT QUALITY
(as of June 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 77%
AA 8%
A 10%
BBB or below 4%
Cash Equivalents 1%
</TABLE>
PORTFOLIO REVIEW
At the end of the period on June 30, 1999, the Fund had 77% of its portfolio
allocated to AAA-rated bonds. With a focus late in the period on increasing the
Fund's current return, five higher-yielding bonds were added to the portfolio.
All were carefully researched prior to purchase, and were either
investment-grade rated securities, or non-rated bonds of comparable quality.
During the 12-month period, interest rates rose and municipal bond prices
declined. The income from municipal bonds was sufficient to compensate for the
price declines that resulted from the rise in rates, thus generating a modest
positive return during the second
10
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Bond Fund
- ------------------------------------------------------------------------
quarter of 1999 for municipal bonds in general, as indicated by the Lehman
Brothers Municipal Bond Index total return of 2.76%.
STRATEGIC OUTLOOK
During the period, bonds suffered their second straight monthly loss in June
1999 amid strong growth and the Federal Reserve Board's (the "Fed") policy
stance. The loss was only the third in the past decade for June, historically
the strongest time of the year for the bond market. Prospects for subdued,
historically low inflation and a "Y2K"-related slowdown in the economy eliminate
two of the main catalysts behind a sustained rise in interest rates. A
precautionary shift by investors to safer Treasury securities could open up
yield spreads between Treasury and corporate securities. Moreover, interest
rates could be pushed lower by the Fed's efforts to counter any associated Y2K
issues.
Later this year, we expect interest rates may decline from current levels. To
better position the Fund to benefit from such a change, we made a number of
portfolio adjustments from earlier in the period that resulted in extensions of
the porfolio's modified adjusted duration (from 8.36 years to 8.87 years) and
average maturity (from 14.78 years to 15.15 years). In implementing these
portfolio adjustments, we took advantage of the recent decline in municipal bond
prices by executing a number of bond swaps that realized capital losses, thus
reducing the Fund's potential capital gain payout for the year.
Going forward, a primary focus will continue to be the improvement of the
Fund's current yield. We also will look for situations that allow the Fund to
take advantage of relative value discrepancies in the marketplace.
Please remember that past performance is no guarantee of future results.
1 A portion of the performance shown for the Class A, Class B, Class C and
Institutional Class shares of the California Tax-Free Bond Fund reflects
performance of a class of shares of a predecessor fund. Complete historical
information about the Fund can be found in the Fund's prospectus and Statement
of Additional Information.
11
<PAGE>
California Tax-Free Bond Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%. Class B and
Class C share performance including sales charge assumes maximum contingent
deferred sales charge for the corresponding period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The returns for Class B and Class C shares of the California Tax-Free Bond
Fund will vary from the results shown due to different expenses and load
structures.
The accompanying chart compares the performance of the Stagecoach California
Tax-Free Bond Fund Class A and Institutional Class shares for the past 10
years with the Lehman Brothers Municipal Bond Index. The chart assumes a
hypothetical $10,000 initial investment in Class A and Institutional Class
shares and reflects all operating expenses and, for Class A shares, assumes
the maximum initial sales charge of 4.50%. The Fund is a professionally
managed mutual fund.
3 The formula used to calculate the SEC yield is described in the Fund's
statement of additional information and is designed to standardize the yield
calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market fund advertisements. SEC yields include the actual amount of interest
earned adjusted by any gain or loss realized from the return of principal,
less expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distribution may be taxable.
The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc., and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies, and these
agencies make no representation regarding the advisability of investing in the
Fund.
12
<PAGE>
PERFORMANCE AT A GLANCE California Tax-Free Income Fund
- ------------------------------------------------------------------------
CALIFORNIA TAX-FREE INCOME FUND
AVERAGE ANNUAL TOTAL RETURN (%) (as of June 30, 1999)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (11/18/92)
<S> <C> <C> <C>
CLASS A 2.84 4.58 4.44
INSTITUTIONAL CLASS 2.96 4.61 4.46
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (11/18/92)
<S> <C> <C> <C>
CLASS A (0.22) 3.95 3.96
INSTITUTIONAL CLASS N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR
<S> <C> <C> <C>
LEHMAN BROTHERS 3-YEAR MUNICIPAL BOND INDEX 3.65 5.10
</TABLE>
GROWTH OF A $10,000 INVESTMENT(2)
- ----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH
CALIFORNIA CALIFORNIA LEHMAN BROTHERS
TAX-FREE INCOME FUND TAX-FREE INCOME FUND 3-YEAR MUNICIPAL
CLASS A SHARES INSTITUTIONAL CLASS SHARES BOND INDEX (1)
<S> <C> <C> <C>
Inception $9,700 $10,000
11/92 $9,708 $10,008 $10,000
12/92 $9,782 $10,084 $10,070
01/93 $9,871 $10,176 $10,130
02/93 $10,077 $10,389 $10,206
03/93 $9,994 $10,303 $10,367
04/93 $10,047 $10,358 $10,336
05/93 $10,062 $10,373 $10,395
06/93 $10,153 $10,467 $10,424
07/93 $10,128 $10,441 $10,490
08/93 $10,270 $10,587 $10,496
09/93 $10,351 $10,671 $10,593
10/93 $10,373 $10,693 $10,640
11/93 $10,343 $10,663 $10,662
12/93 $10,477 $10,801 $10,648
01/94 $10,551 $10,877 $10,760
02/94 $10,400 $10,722 $10,847
03/94 $10,283 $10,601 $10,746
04/94 $10,317 $10,636 $10,616
05/94 $10,353 $10,674 $10,679
06/94 $10,337 $10,657 $10,729
07/94 $10,435 $10,758 $10,732
08/94 $10,451 $10,774 $10,821
09/94 $10,414 $10,736 $10,860
10/94 $10,377 $10,698 $10,833
11/94 $10,308 $10,626 $10,807
12/94 $10,361 $10,681 $10,788
01/95 $10,478 $10,802 $10,834
02/95 $10,624 $10,953 $10,924
03/95 $10,714 $11,045 $11,039
04/95 $10,734 $11,066 $11,138
05/95 $10,886 $11,223 $11,176
06/95 $10,889 $11,226 $11,347
07/95 $10,984 $11,324 $11,374
08/95 $11,062 $11,404 $11,494
09/95 $11,107 $11,451 $11,584
10/95 $11,173 $11,518 $11,617
11/95 $11,251 $11,599 $11,673
12/95 $11,308 $11,658 $11,747
01/96 $11,399 $11,752 $11,796
02/96 $11,389 $11,741 $11,888
03/96 $11,315 $11,665 $11,890
04/96 $11,318 $11,668 $11,861
05/96 $11,315 $11,665 $11,876
06/96 $11,371 $11,723 $11,886
07/96 $11,452 $11,806 $11,957
08/96 $11,460 $11,815 $12,023
09/96 $11,535 $11,893 $12,042
10/96 $11,625 $11,975 $12,115
11/96 $11,752 $12,121 $12,200
12/96 $11,743 $12,111 $12,314
01/97 $11,795 $12,154 $12,321
02/97 $11,852 $12,213 $12,375
03/97 $11,763 $12,131 $12,435
04/97 $11,811 $12,170 $12,371
05/97 $11,920 $12,296 $12,424
06/97 $11,990 $12,369 $12,526
07/97 $12,156 $12,531 $12,600
08/97 $12,127 $12,500 $12,750
09/97 $12,199 $12,575 $12,724
10/97 $12,240 $12,619 $12,815
11/97 $12,264 $12,644 $12,872
12/97 $12,345 $12,728 $12,910
01/98 $12,456 $12,846 $12,997
02/98 $12,468 $12,858 $13,083
03/98 $12,459 $12,848 $13,111
04/98 $12,426 $12,813 $13,132
05/98 $12,537 $12,929 $13,113
06/98 $12,575 $12,969 $13,235
07/98 $12,629 $13,025 $13,280
08/98 $12,799 $13,204 $13,328
09/98 $12,947 $13,346 $13,457
10/98 $12,964 $13,377 $13,543
11/98 $13,002 $13,416 $13,608
12/98 $13,018 $13,431 $13,641
01/99 $13,147 $13,565 $13,674
02/99 $13,109 $13,526 $13,798
03/99 $13,138 $13,569 $13,813
04/99 $13,143 $13,561 $13,826
05/99 $13,094 $13,509 $13,869
06/99 $12,931 $13,352 $13,849
</TABLE>
13
<PAGE>
California Tax-Free Income Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
CALIFORNIA TAX-FREE INCOME FUND
The Stagecoach California Tax-Free Income Fund (the "Fund") seeks to provide
investors with a high level of income exempt from federal income tax and
California personal income tax, while preserving capital. The Fund invests in
short and intermediate-term California municipal securities. This policy enables
the Fund to take advantage of short-term interest rate fluctuations, as we seek
to provide a consistent level of tax-free income while limiting the price
volatility usually found in a fund with a longer duration.
Laura Milner manages the day-to-day management of the California Tax-Free
Income Fund. Ms. Milner has 18 years of experience in the securities industry
with an expertise in short and long-term municipal securities. She is a member
of the California Chapter of the National Federation of Municipal Analysts.
PERFORMANCE SUMMARY
The California Tax-Free Income Fund's Class A share net asset value decreased
from $10.44 on June 30, 1998, to $10.23 on June 30, 1999. The Fund's Class A
shares distributed $0.39 per share in dividend income and $0.12 in capital gains
during the period. Keep in mind that past performance is not predictive of
future trends, and distributions will vary based on Fund portfolio earnings and
market fluctuations.
The Fund's distribution rate for Class A shares was 3.61%. When measured
against a comparable taxable investment, the Fund's double tax-free yield is
generally higher. For example, an investor would need to earn a yield of 6.46%
from a taxable investment to match the Fund's 3.54% tax-free SEC yield, assuming
the maximum combined federal and California state personal income tax bracket.
14
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Income Fund
- ------------------------------------------------------------------------
PORTFOLIO DATA (as of June 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 68%
NUMBER OF HOLDINGS 34
</TABLE>
FUND CHARACTERISTICS(3)
- ---------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY AA
WEIGHTED AVERAGE COUPON 5.82%
ESTIMATED WEIGHTED AVERAGE MATURITY 5.31 years
ESTIMATED DURATION 3.94 years
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS I
<S> <C> <C>
NAV 10.23 10.07
DISTRIBUTION RATE 3.61% 3.78%
SEC YIELD 3.54% 3.70%
TAXABLE EQUIVALENT YIELD 6.46% 6.75%
</TABLE>
The California Tax-Free Income Fund reported a cumulative total return of
2.84% for Class A shares, excluding sales charges, and a 2.96% return for
Institutional Class shares for the 12-month period ended June 30, 1999. The Fund
underperformed its benchmark, the Lehman Brothers 3-Year Municipal Bond Index,
which returned 3.65% over the same period. The Fund's performance can be
attributed to the Fund's duration, which was positioned longer than its
benchmark for most of the period. The majority of the Fund's holdings mature
between 3 and 10 years--the section of the yield curve that experienced the
largest rise in yields during the period.
CREDIT QUALITY
(as of June 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 49%
AA 18%
A 24%
Cash Equivalents 7%
SP1 2%
</TABLE>
PORTFOLIO REVIEW
Early in the period, the percentage of AAA-rated bonds in the portfolio was
slightly decreased. As of June 30, 1999, 49% of the portfolio was held in AAA-
rated bonds, compared to 50% on June 30, 1998. When the economy started to slow
due to global economic concerns, spreads remained narrow. However, with the
global crisis behind us and the U.S. economy continuing to show signs of
strength, the Fund's duration was shortened from 4.42 years earlier in the
period to 3.94 years. The Federal Reserve Board (the "Fed") raised interest
15
<PAGE>
California Tax-Free Income Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
rates slightly at the end of the period, and then announced a return to a
neutral bias in terms of interest rate movement.
In response to these factors, we searched for bonds that would enhance yield
and performance. Most of the Fund's top 10 holdings are bonds that we felt were
either unusually attractive on a valuation basis, very high yielding, or a
combination of the two.
STRATEGIC OUTLOOK
Municipal bond yields rose significantly during the first half of 1999--more
than 60 basis points on bonds maturing between three years and 10 years.
Interest rates rose during the period as continued U.S. economic strength, and
foreign economic recovery made further interest rates cuts by the Fed unlikely.
The California economy remains robust, and the Fund continues to look for
opportunities to buy A-rated paper due to our confidence in the local economy.
The average rating of the Fund's current holdings is AA. If the domestic economy
continues to strengthen, there is a risk of further interest rate increase, in
which case the Fund will maintain a more neutral duration position.
1 Performance shown for the Institutional Class shares for periods prior to
September 6, 1996, reflects the performance and expenses of the Fund's Class A
shares.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 3.00%.
The Lehman Brothers 3-year Municipal Bond Index is an unmanaged index composed
of municipal bonds with an approximate maturity of three years. The Index does
not incur expenses and is not available directly for investment. Had this
Index incurred operating expenses, its performance would have been lower.
16
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Income Fund
- ------------------------------------------------------------------------
2 The accompanying chart compares the performance of the Stagecoach California
Tax-Free Income Fund Class A and Institutional Class shares since inception
with the Lehman Brothers 3-Year Municipal Bond Index. The chart assumes a
hypothetical $10,000 initial investment in Class A and Class I shares and
reflects all operating expenses and assumes, for Class A shares, the maximum
initial sales charge of 3.00%. The Fund is a professionally managed mutual
fund.
3 The formula used to calculate the SEC yield is described in the Fund's
Statement of Additional Information and is designed to standardize the yield
calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market funds advertisements. SEC yields include the actual amount of interest
earned adjusted by any gain or loss realized from the return of principal,
less expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distribution may be taxable.
The average credit rating is compiled from ratings by Standard & Poor's
and/or Moody's Investor Service (together "rating agencies"). Standard &
Poor's is a trademark of McGraw-Hill Inc., and has been licensed. The Fund is
not sponsored, endorsed, sold or promoted by these rating agencies, and these
agencies make no representation regarding the advisability of investing in the
Fund.
17
<PAGE>
National Tax-Free Fund PERFORMANCE AT A GLANCE
- ------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURN (%) (as of June 30, 1999)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (1/15/93)
<S> <C> <C> <C>
CLASS A 1.03 5.68 5.18
CLASS B 0.35 4.60 4.16
CLASS C 0.35 4.57 4.14
INSTITUTIONAL CLASS 1.02 5.69 5.19
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
1-YEAR 5-YEAR (1/15/93)
<S> <C> <C> <C>
CLASS A (3.50) 4.71 4.42
CLASS B (4.53) 4.26 4.16
CLASS C (0.62) 4.57 4.14
INSTITUTIONAL CLASS N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR
<S> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 2.76 7.00
</TABLE>
GROWTH OF A $10,000 INVESTMENT(2)
- ----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH
NATIONAL NATIONAL LEHMAN BROTHERS
TAX-FREE FUND TAX-FREE FUND MUNICIPAL BOND
CLASS A SHARES INSTITUTIONAL CLASS SHARES INDEX (1)
<S> <C> <C> <C>
Inception $9,550 $10,000 $10,000
02/93 $9,807 $10,269 $10,362
03/93 $9,646 $10,101 $10,252
04/93 $9,734 $10,193 $10,356
05/93 $9,753 $10,212 $10,414
06/93 $9,922 $10,389 $10,588
07/93 $9,887 $10,353 $10,601
08/93 $10,089 $10,564 $10,822
09/93 $10,235 $10,717 $10,945
10/93 $10,224 $10,705 $10,966
11/93 $10,168 $10,647 $10,870
12/93 $10,342 $10,829 $11,099
01/94 $10,464 $10,957 $11,225
02/94 $10,195 $10,675 $10,935
03/94 $9,909 $10,376 $10,490
04/94 $9,967 $10,436 $10,579
05/94 $10,050 $10,524 $10,671
06/94 $10,017 $10,489 $10,606
07/94 $10,151 $10,629 $10,800
08/94 $10,182 $10,662 $10,838
09/94 $10,039 $10,512 $10,678
10/94 $9,884 $10,350 $10,488
11/94 $9,711 $10,168 $10,298
12/94 $9,894 $10,360 $10,525
01/95 $10,107 $10,583 $10,826
02/95 $10,362 $10,850 $11,141
03/95 $10,463 $10,956 $11,269
04/95 $10,487 $10,981 $11,282
05/95 $10,751 $11,257 $11,642
06/95 $10,726 $11,231 $11,540
07/95 $10,835 $11,346 $11,649
08/95 $10,940 $11,456 $11,797
09/95 $10,980 $11,498 $11,872
10/95 $11,107 $11,645 $12,045
11/95 $11,243 $11,817 $12,244
12/95 $11,331 $11,933 $12,362
01/96 $11,434 $12,057 $12,456
02/96 $11,367 $12,009 $12,371
03/96 $11,201 $11,866 $12,213
04/96 $11,179 $11,866 $12,179
05/96 $11,152 $11,853 $12,174
06/96 $11,219 $11,964 $12,307
07/96 $11,361 $12,140 $12,417
08/96 $11,324 $12,125 $12,415
09/96 $11,434 $12,253 $12,589
10/96 $11,554 $12,412 $12,731
11/96 $11,775 $12,669 $12,964
12/96 $11,702 $12,615 $12,909
01/97 $11,730 $12,681 $12,934
02/97 $11,842 $12,825 $13,053
03/97 $11,658 $12,642 $12,879
04/97 $11,746 $12,765 $12,988
05/97 $11,922 $12,977 $13,184
06/97 $12,062 $13,163 $13,325
07/97 $12,406 $13,557 $13,694
08/97 $12,253 $13,425 $13,565
09/97 $12,416 $13,620 $13,727
10/97 $12,468 $13,704 $13,814
11/97 $12,527 $13,794 $13,896
12/97 $12,751 $14,081 $14,099
01/98 $12,875 $14,255 $14,244
02/98 $12,865 $14,271 $14,248
03/98 $12,875 $14,309 $14,261
04/98 $12,836 $14,286 $14,197
05/98 $13,017 $14,517 $14,421
06/98 $13,067 $14,611 $14,477
07/98 $13,098 $14,668 $14,514
08/98 $13,286 $14,907 $14,739
09/98 $13,420 $15,096 $14,923
10/98 $13,375 $15,068 $14,923
11/98 $13,441 $15,172 $14,975
12/98 $13,487 $15,254 $15,021
01/99 $13,633 $15,460 $15,200
02/99 $13,556 $15,392 $15,133
03/99 $13,585 $15,457 $15,155
04/99 $13,591 $15,507 $15,192
05/99 $13,481 $15,402 $15,319
06/99 $13,202 $15,115 $15,098
</TABLE>
18
<PAGE>
INVESTMENT ADVISOR COMMENTARY National Tax-Free Fund
- ------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
The Stagecoach National Tax-Free Fund (the "Fund") seeks to provide investors
with income exempt from federal income tax. The Fund invests in a broad range of
municipal obligations. Investment quality, maturity, sensitivity to interest
rate movements and duration are carefully reviewed in order to provide
competitive tax-free income.
Steve Galiani manages the National Tax-Free Fund, and has 24 years of
experience in the securities industry, and has managed the Fund since December
1997. He has been managing mutual fund portfolios since 1981. Mr. Galiani's
value-oriented philosophy brings a unique strategy to the Fund.
PERFORMANCE SUMMARY
The National Tax-Free Fund's Class A share net asset value decreased from
$15.97 on June 30, 1998, to $15.39 on June 30, 1999. The Fund's Class A shares
distributed $0.76 per share in dividend income and no capital gains during the
period. Keep in mind that past performance is not predictive of future trends,
and distributions will vary based on the Fund's portfolio earnings.
The Fund's distribution rate for Class A shares was 4.80%. When measured
against a comparable taxable investment, the Fund's double tax-free yield was
generally higher. For example, an investor would need to earn a yield of 7.73%
from a taxable investment to match the Fund's 4.67% tax-free SEC yield, assuming
the maximum combined federal and California state personal income tax bracket.
19
<PAGE>
National Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
PORTFOLIO DATA (as of June 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 90%
NUMBER OF HOLDINGS 66
</TABLE>
FUND CHARACTERISTICS(3)
- ---------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY AA-
WEIGHTED AVERAGE COUPON 4.79%
ESTIMATED WEIGHTED AVERAGE MATURITY 22.44 years
ESTIMATED DURATION 10.95 years
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS I
<S> <C> <C> <C> <C>
NAV 15.39 10.15 10.15 15.38
DISTRIBUTION RATE 4.80% 4.42% 4.42% 5.08%
SEC YIELD 4.67% 4.28% 4.29% 4.95%
TAXABLE EQUIVALENT
YIELD 7.73% 7.09% 7.10% 8.20%
</TABLE>
The National Tax-Free Fund reported a return of 1.03% for Class A shares,
excluding sales charges, and a 1.02% return for Institutional Class shares for
the 12-month period ended June 30, 1999. The Fund generated positive returns,
but underperformed its benchmark, the Lehman Brothers Municipal Bond Index
return of 2.76%.
The Fund's underperformance was a result of the longer adjusted duration and
average maturity of the Fund's portfolio, which caused the Fund to suffer a
greater price decline than that of the Index.
CREDIT QUALITY
(as of June 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 49%
AA 8%
A 6%
BBB or below 36%
Cash Equivalents 1%
</TABLE>
PORTFOLIO REVIEW
The Fund offers high credit quality, with 57% of the portfolio invested in
bonds rated AA or better. Late in the period, activity in the Fund was limited.
With a primary focus on seeking opportunities to increase the Fund's current
return, four higher-yielding bonds were added to the portfolio, all of which
were carefully and thoroughly researched prior to purchase, and were either
lower investment grade rated securities or non-rated bonds of comparable
quality.
During the 12-month period, interest rates rose about 30 basis points on
municipal bonds with maturities
20
<PAGE>
INVESTMENT ADVISOR COMMENTARY National Tax-Free Fund
- ------------------------------------------------------------------------
beyond 10 years. The income from municipal bonds was sufficient to compensate
for the price declines that resulted from the rise in rates, thus generating a
small positive return.
STRATEGIC OUTLOOK
During the period, bonds suffered their second straight monthly loss in June
1999 amid strong growth and the Federal Reserve Board's (the "Fed") policy
stance. The loss was only the third in the past decade for June, historically
the strongest time of the year for the bond market. Prospects for subdued,
historically low inflation and a "Y2K"-related slowdown in the economy eliminate
two of the main catalysts behind a sustained rise in interest rates. A
precautionary shift by investors to safer U.S. Treasury securities could open up
yield spreads between them and corporate securities. Moreover, interest rates
could be pushed lower by the Fed's efforts to counter any associated Y2K issues.
Later this year we expect interest rates may decline from current levels. To
better position the Fund to benefit from such a change, we made a number of
portfolio adjustments from last quarter that resulted in extensions of the
portfolio's modified adjusted duration (from 10.11 years to 10.95 years) and
average maturity (from 21.81 years to 22.44 years). At June 30, 1999, more than
one-third of the portfolio consisted of discounted and/or non-callable bonds
that have the potential to rally strongly when interest rates are falling.
Going forward, we will continue to seek opportunities to improve the Fund's
current yield. We will also look for situations that allow the Fund to take
advantage of relative value discrepancies in the marketplace. In either case, we
will seek to maintain the Fund's tax efficiency by avoiding the realization of
capital gains.
Please remember that past performance is no guarantee of future results.
1 A portion of the performance for the Class A, Class B, Class C and
Institutional Class shares of the National Tax-Free Fund reflects performance
of a class of shares of a predecessor fund. Complete historical information
about the Fund can be found in the Fund's prospectus and Statement of
Additional Information.
21
<PAGE>
National Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%. Class B and
Class C share performance with sales charge assumes maximum contingent
deferred sales charge for the corresponding period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The returns for Class B and Class C shares of the National Tax-Free Fund will
vary from the results shown due to different expenses and load structures.
The accompanying chart compares the performance of the Stagecoach National
Tax-Free Fund Class A and Institutional Class shares since inception with the
Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
initial investment in Class A and Class I shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%. The Fund is a professionally managed mutual fund.
3 The formula used to calculate the SEC yield is described in the Fund's
Statement of Additional Information and is designed to standardize the yield
calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market fund advertisements. SEC yields include the actual amount of interest
earned adjusted by any gain or loss realized from the return of principal,
less expenses and the maximum offering price calculated on a 30-day month-end
basis.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the federal income tax rate of 39.60%. Any
capital gains distribution may be taxable.
The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc., and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies, and these
agencies make no representation regarding the advisability of investing in the
Fund.
22
<PAGE>
PERFORMANCE AT A GLANCE Oregon Tax-Free Fund
- ------------------------------------------------------------------------
OREGON TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURN (%) (as of June 30, 1999)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
CLASS A 1.57 5.89 6.29
CLASS B 0.63 4.99 5.48
INSTITUTIONAL CLASS 1.62 5.98 6.34
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
CLASS A (2.98) 4.92 5.80
CLASS B (4.28) 4.66 5.48
INSTITUTIONAL CLASS N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 2.76 7.00 7.43
</TABLE>
GROWTH OF A $10,000 INVESTMENT(2)
- ----------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STAGECOACH STAGECOACH
OREGON OREGON LEHMAN BROTHERS
TAX-FREE FUND TAX-FREE FUND MUNICIPAL BOND
CLASS A SHARES INSTITUTIONAL CLASS SHARES INDEX (1)
<S> <C> <C> <C>
06/89 $9,550 $10,000 $10,000
07/89 $9,635 $10,089 $10,136
08/89 $9,602 $10,054 $10,037
09/89 $9,539 $9,989 $10,007
10/89 $9,667 $10,123 $10,129
11/89 $9,821 $10,284 $10,306
12/89 $9,832 $10,295 $10,390
01/90 $9,754 $10,213 $10,342
02/90 $9,864 $10,329 $10,434
03/90 $9,827 $10,290 $10,437
04/90 $9,747 $10,207 $10,362
05/90 $9,945 $10,414 $10,587
06/90 $10,042 $10,515 $10,681
07/90 $10,198 $10,679 $10,838
08/90 $10,018 $10,490 $10,680
09/90 $10,061 $10,535 $10,687
10/90 $10,187 $10,667 $10,880
11/90 $10,355 $10,843 $11,099
12/90 $10,424 $10,915 $11,148
01/91 $10,544 $11,041 $11,297
02/91 $10,656 $11,158 $11,396
03/91 $10,694 $11,198 $11,400
04/91 $10,795 $11,303 $11,552
05/91 $10,898 $11,412 $11,655
06/91 $10,872 $11,384 $11,643
07/91 $11,037 $11,557 $11,785
08/91 $11,148 $11,673 $11,940
09/91 $11,260 $11,790 $12,096
10/91 $11,341 $11,876 $12,205
11/91 $11,311 $11,844 $12,239
12/91 $11,526 $12,069 $12,502
01/92 $11,539 $12,082 $12,531
02/92 $11,577 $12,122 $12,534
03/92 $11,586 $12,132 $12,539
04/92 $11,686 $12,236 $12,651
05/92 $11,819 $12,376 $12,800
06/92 $11,998 $12,563 $13,015
07/92 $12,386 $12,970 $13,406
08/92 $12,223 $12,799 $13,274
09/92 $12,246 $12,823 $13,361
10/92 $12,060 $12,629 $13,230
11/92 $12,323 $12,904 $13,467
12/92 $12,451 $13,038 $13,604
01/93 $12,553 $13,145 $13,762
02/93 $12,951 $13,561 $14,260
03/93 $12,801 $13,404 $14,109
04/93 $12,942 $13,551 $14,251
05/93 $13,043 $13,658 $14,331
06/93 $13,272 $13,897 $14,570
07/93 $13,291 $13,917 $14,589
08/93 $13,603 $14,244 $14,893
09/93 $13,785 $14,435 $15,063
10/93 $13,782 $14,431 $15,091
11/93 $13,742 $14,389 $14,958
12/93 $13,993 $14,652 $15,274
01/94 $14,149 $14,816 $15,448
02/94 $13,823 $14,475 $15,048
03/94 $13,250 $13,874 $14,436
04/94 $13,186 $13,807 $14,558
05/94 $13,347 $13,976 $14,685
06/94 $13,208 $13,831 $14,595
07/94 $13,453 $14,087 $14,862
08/94 $13,500 $14,136 $14,914
09/94 $13,259 $13,884 $14,695
10/94 $12,943 $13,552 $14,434
11/94 $12,680 $13,278 $14,172
12/94 $13,085 $13,702 $14,484
01/95 $13,515 $14,152 $14,898
02/95 $13,894 $14,548 $15,331
03/95 $13,988 $14,647 $15,508
04/95 $13,995 $14,654 $15,526
05/95 $14,404 $15,083 $16,021
06/95 $14,259 $14,930 $15,881
07/95 $14,348 $15,024 $16,032
08/95 $14,476 $15,158 $16,235
09/95 $14,579 $15,266 $16,338
10/95 $14,780 $15,476 $16,576
11/95 $15,026 $15,733 $16,851
12/95 $15,158 $15,873 $17,012
01/96 $15,202 $15,919 $17,142
02/96 $15,123 $15,839 $17,025
03/96 $14,922 $15,629 $16,087
04/96 $14,862 $15,568 $16,760
05/96 $14,878 $15,585 $16,753
06/96 $15,019 $15,725 $16,936
07/96 $15,161 $15,886 $17,088
08/96 $15,155 $15,873 $17,085
09/96 $15,328 $16,066 $17,324
10/96 $15,467 $16,214 $17,520
11/96 $15,765 $16,520 $17,841
12/96 $15,659 $16,421 $17,766
01/97 $15,693 $16,459 $17,799
02/97 $15,819 $16,595 $17,963
03/97 $15,581 $16,337 $17,724
04/97 $15,709 $16,474 $17,873
05/97 $15,908 $16,686 $18,143
06/97 $16,054 $16,842 $18,337
07/97 $16,544 $17,369 $18,845
08/97 $16,385 $17,195 $18,668
09/97 $16,571 $17,403 $18,890
10/97 $16,667 $17,497 $19,011
11/97 $16,745 $17,591 $19,123
12/97 $17,005 $17,869 $19,402
01/98 $17,182 $18,048 $19,602
02/98 $17,139 $18,003 $19,608
03/98 $17,110 $17,984 $19,626
04/98 $17,009 $17,868 $19,537
05/98 $17,256 $18,129 $19,846
06/98 $17,309 $18,195 $19,923
07/98 $17,348 $18,237 $19,973
08/98 $17,636 $18,530 $20,283
09/98 $17,865 $18,771 $20,536
10/98 $17,809 $18,713 $20,536
11/98 $17,881 $18,801 $20,608
12/98 $17,930 $18,842 $20,672
01/99 $18,169 $19,093 $20,918
02/99 $18,015 $18,944 $20,826
03/99 $18,029 $18,959 $20,855
04/99 $18,078 $19,012 $20,907
05/99 $17,937 $18,853 $21,081
06/99 $17,581 $18,491 $20,777
</TABLE>
23
<PAGE>
Oregon Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
OREGON TAX-FREE FUND
The Stagecoach Oregon Tax-Free Fund (the "Fund") seeks to provide investors
with a high level of income exempt from federal income tax and Oregon personal
income tax. The Fund invests in high-quality Oregon municipal obligations. The
Fund has the ability to invest in municipal bonds with a wide range of
maturities, allowing for greater investment flexibility within the portfolio,
and the potential to maximize income.
Steve Galiani manages the Oregon Tax-Free Fund, and has 24 years of experience
in the securities industry, and has managed the Fund since December 1997. He has
been managing mutual fund portfolios since 1981. Mr. Galiani's value-oriented
philosophy brings a unique strategy to the Fund.
PERFORMANCE SUMMARY
The Oregon Tax-Free Fund's Class A share net asset value decreased from $16.82
on June 30, 1998, to $16.10 on June 30, 1999. The Fund's Class A shares
distributed $0.75 per share in dividend income and $0.25 in capital gains during
the period. Keep in mind that past performance is not predictive of future
trends, and distributions will vary based on the Fund's portfolio earnings.
The Fund's distribution rate for Class A shares was 4.50%. When measured
against a comparable taxable investment, the Fund's double tax-free yield was
generally higher. For example, an investor would need to earn a yield of 8.02%
from a taxable investment to match the Fund's 4.41% tax-free SEC yield, assuming
the maximum combined federal and Oregon state personal income tax bracket.
24
<PAGE>
INVESTMENT ADVISOR COMMENTARY Oregon Tax-Free Fund
- ------------------------------------------------------------------------
PORTFOLIO DATA (as of June 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
PORTFOLIO TURNOVER 54%
NUMBER OF HOLDINGS 42
</TABLE>
FUND CHARACTERISTICS(3)
- ---------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY AA-
WEIGHTED AVERAGE COUPON 5.23%
ESTIMATED WEIGHTED AVERAGE MATURITY 18.62 years
ESTIMATED DURATION 9.63 years
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS I
<S> <C> <C> <C>
NAV 16.10 9.86 16.10
DISTRIBUTION RATE 4.50% 3.86% 4.76%
SEC YIELD 4.41% 3.76% 4.66%
TAXABLE EQUIVALENT YIELD 8.02% 6.84% 8.48%
</TABLE>
The Fund reported a cumulative total return of 1.57% for Class A shares,
excluding sales charges, and a 1.62% return for Institutional Class shares for
the 12-month period ended June 30, 1999. The Fund generated positive total
return during the period, but underperformed its benchmark, the Lehman Brothers
Municipal Bond Index return of 2.76%.
The Fund's underperformance was a result of the longer adjusted duration and
average maturity of the Fund's portfolio, which caused the Fund to suffer a
greater price decline than that of the Index.
CREDIT QUALITY
(as of June 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 42%
AA 27%
A 11%
BBB or below 20%
</TABLE>
PORTFOLIO REVIEW
With 69% of the portfolio invested in bonds rated AA or above, the portfolio's
overall credit quality is very high. With a primary focus on seeking
opportunities to increase the Fund's current return, five higher-yielding bonds
were added to the portfolio, four of which carried coupons of 6.00% or higher.
All were carefully researched prior to purchase, and were either lower
investment grade rated securities or non-rated bonds of comparable quality.
During the 12-month period, interest rates rose and municipal bond prices
declined. The income from municipal bonds was sufficient to compensate for the
25
<PAGE>
Oregon Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
price declines that resulted from the rise in rates, thus generating a modest
positive return, as indicated by the Lehman Brothers Municipal Bond Index total
return of 2.76%.
STRATEGIC OUTLOOK
During the period, bonds suffered their second straight monthly loss in June
amid strong growth and the Federal Reserve Board's (the "Fed") policy stance.
The loss was only the third in the past decade for June, historically the
strongest time of the year for the bond market. Prospects for subdued,
historically low inflation and a "Y2K"-related slowdown in the economy eliminate
two of the main catalysts behind a sustained rise in interest rates. A
precautionary shift by investors to safer Treasury securities could open up
yield spreads between them and corporate securities. Moreover, interest rates
could be pushed lower by the Fed's efforts to counter any associated Y2K issues.
Later this year, we expect interest rates may decline from current levels. To
better position the Fund to benefit from such a change, we made a number of
portfolio adjustments from last quarter that resulted in extensions of the
portfolio's modified adjusted duration (from 8.94 years to 9.63 years) and
average maturity (from 17.15 years to 18.62 years). At June 30, 1999, more than
25 percent of the portfolio consisted of discounted and/or non-callable bonds
that have the potential to rally strongly when interest rates are falling. In
executing these changes, we were careful to minimize the realization of capital
gains that could result in taxable income for shareholders.
Going forward, we will continue to seek opportunities to improve the Fund's
current yield. We will also look for situations that allow the Fund to take
advantage of relative value discrepancies in the marketplace.
Past performance is no guarantee of future results.
1 A portion of the performance for the Class A, Class B and Institutional Class
shares of the Oregon Tax-Free Fund reflects performance of a class of shares
of a predecessor fund. Complete historical information about the Fund can be
found in the Fund's prospectus and Statement of Additional Information.
26
<PAGE>
INVESTMENT ADVISOR COMMENTARY Oregon Tax-Free Fund
- ------------------------------------------------------------------------
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes maximum contingent deferred sales
charge for the corresponding period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The returns for Class B shares of the Oregon Tax-Free Fund will vary from the
results shown due to different expenses and load structures.
The accompanying chart compares the performance of the Stagecoach Oregon
Tax-Free Fund Class A and Institutional Class shares for the past 10 years
with the Lehman Brothers Municipal Bond Index. The chart assumes a
hypothetical $10,000 initial investment in Class A and Institutional Class
shares and reflects all operating expenses and, for Class A shares, assumes
the maximum initial sales charge of 4.50%. The Fund is a professionally
managed mutual fund.
3 The formula used to calculate the SEC yield is described in the Fund's
Statement of Additional Information and is designed to standardize the yield
calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market fund advertisements. SEC yields include the actual amount of interest
earned adjusted by any gain or loss realized from the return of principal,
less expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.04%. Any capital gains distribution may be taxable.
The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc., and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies, and these
agencies make no representation regarding the advisability of investing in the
Fund.
27
<PAGE>
Arizona Tax-Free Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 99.20%
ARIZONA - 91.69%
$ 1,000,000 Arizona HFA Revenue 4.75 % 10/01/30 $ 883,750
170,000 Bullhead City AZ Special Assessment Parkway
Improvement District 6.10 01/01/03 178,500
500,000 Chandler AZ Street & Highway User Revenue 6.00 07/01/11 539,825
110,000 Glendale AZ Improvement District #59 6.00 01/01/01 112,791
175,000 Glendale AZ Improvement District #59 6.00 01/01/02 181,608
500,000 Maricopa County AZ Hospital Revenue 5.30 04/01/29 468,800
500,000 Maricopa County AZ IDA Health Facilities
Revenue 5.00 07/01/16 446,875
750,000 Maricopa County AZ IDA Health Facilities
Revenue 5.25 11/15/37 711,563
570,000 Maricopa County AZ IDA Multifamily Housing
Revenue GNMA Collateralized 5.50 12/20/37 555,203
500,000 Maricopa County AZ IDA Multifamily Housing
Revenue MBIA Insured 5.15 07/01/29 480,280
250,000 Maricopa County AZ IDA Multifamily Housing
Revenue MBIA Insured 5.30 07/01/28 244,298
500,000 Maricopa County AZ USD Phoenix Elementary MBIA
Insured 6.00 07/01/08 541,860
1,000,000 Mesa AZ GO FGIC Insured 6.50 07/01/09 1,127,496
500,000 Mohave County AZ IDA Baptist Hospital Revenue
MBIA Insured 5.70 09/01/15 516,255
750,000 Navajo County AZ PCR Series A 5.88 08/15/28 758,438
250,000 Page AZ Municipal Property Revenue 4.63 07/01/19 225,893
750,000 Phoenix AZ Civic Improvement Corporation AMT
Lien 5.00 07/01/14 713,438
1,000,000 Phoenix AZ GO Series A 6.25 07/01/16 1,107,840
900,000 Phoenix AZ IDA Hospital Revenue Refunded Series
B 5.65 12/01/12 942,750
500,000 Phoenix AZ Referendum Series B 4.50 07/01/20 438,710
500,000 Pima County AZ IDA 5.20 05/01/31 470,570
750,000 Pima County AZ IDA 5.50 03/01/28 735,323
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 Arizona Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 500,000 Pima County AZ IDA Multifamily Housing Revenue
Project GNMA Collateralized 5.13 % 12/20/18 $ 477,660
550,000 Tempe AZ Series A 4.00 07/01/18 457,875
500,000 Tucson AZ Street & Highway Revenue Series C
FGIC Insured 7.00 07/01/11 589,710
500,000 Tucson AZ Street & Highway Revenue Series C
FGIC Insured 7.00 07/01/12 595,110
500,000 Yavapai County AZ IDA Revenue 5.45 06/01/33 495,000
--------------
$ 14,997,421
GUAM - 4.41%
$ 700,000 Guam Housing Single Family Mortgage Backed
Series A 5.75 % 09/01/31 $ 721,217
PUERTO RICO - 3.10%
$ 500,000 Puerto Rico Public Finance Corporation 5.38 % 06/01/18 $ 507,500
--------------
TOTAL MUNICIPAL BONDS $ 16,226,138
(Cost $16,509,660)
</TABLE>
29
<PAGE>
Arizona Tax-Free Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.16%
26,123 Stagecoach National Tax-Free Money Market
Trust+X+
(Cost $26,123) $ 26,123
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $16,535,783)* (Notes 1 and 3) 99.36% $ 16,252,261
Other Assets and Liabilities, Net 0.64 105,193
------ --------------
TOTAL NET ASSETS 100.00% $ 16,357,454
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 177,708
Gross Unrealized Depreciation (461,230)
--------------
NET UNREALIZED DEPRECIATION $ (283,522)
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Housing 23%
Education 3%
Public Improvements 24%
Hospital 16%
General Obligations 17%
Health 10%
Other 7%
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 98.51%
$ 1,000,000 ABAG Finance Authority For Nonprofit
Corporation 5.38 % 02/15/19 $ 967,500
2,000,000 ABAG Finance Authority for Nonprofit
Corporation CA Stanford University Hospital 5.50 11/01/13 2,120,100
1,000,000 ABAG Financing Authority for Nonprofit
Corporations COP 5.13 07/01/13 971,250
675,000 Alameda Corridor Transportation Authority CA
Revenue Series A 5.00 10/01/19 645,921
1,500,000 Alameda Corridor Transportation Authority CA
Revenue Series A 5.13 10/01/18 1,462,500
2,000,000 Alameda County CA COP Medical Center Project 5.00 06/01/23 1,890,700
2,500,000 Anaheim CA PFA Tax Allocation Revenue
Redevelopment Project Series A MBIA Insured 5.25 02/01/18 2,476,275
3,620,000 Antioch CA PFA Water Revenue Water Treatment
Plant Project MBIA Insured 5.63 07/01/14 3,712,600
1,330,000 Arcadia CA USD Capital Appreciation Series A
MBIA Insured (zero coupon) 4.64 # 09/01/06 958,345
1,000,000 Baldwin Park CA PFA Revenue San Gabriel River
Tax Allocation MBIA Insured 5.00 08/01/21 951,200
1,000,000 Bellevue CA USD COP MBIA Insured (zero coupon) 5.83 # 09/01/19 846,510
810,000 Benicia CA USD Series B FGIC Insured 5.13 08/01/12 813,710
2,545,000 Bonita CA USD COP MBIA Insured 5.63 05/01/10 2,661,001
1,000,000 Brea CA PFA Lease Revenue MBIA Insured 4.75 07/01/18 925,500
1,485,000 Brea CA PFA Water Revenue FGIC Insured 4.75 07/01/18 1,374,368
1,300,000 Burbank Glendale Pasadena Airport Authority CA
Airport Revenue AMBAC Insured 6.40 06/01/10 1,363,921
1,250,000 Cabrillo CA Community College District Series A
FSA Insured 4.75 08/01/23 1,128,750
</TABLE>
31
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Calaveras CA USD FSA Insured 5.13 % 08/01/18 $ 975,520
1,000,000 California Educational Facilities Authority 5.00 09/01/23 951,540
350,000 California Educational Facilities Authority 6.00 10/01/14 361,507
820,000 California Educational Facilities Authority
Revenue Chapman College Refunding Pending 7.30 01/01/02 865,920
1,000,000 California Educational Facilities Authority
Revenue Claremont Colleges Pooled Facilities 6.38 05/01/22 1,056,310
1,000,000 California Educational Facilities Authority
Revenue Pomona College GO 5.60 12/01/14 1,025,000
1,000,000 California Educational Facilities Authority
Revenue University of San Francisco MBIA
Insured 5.60 10/01/10 1,057,710
7,500,000 California Educational Facilities Authority
Revenue California Institute of Technology 4.50 10/01/27 6,487,500
1,660,000 California Educational Facilities Authority
Revenue Claremont University Center 5.00 03/01/17 1,559,678
50,000 California Educational Facilities Authority
Revenue Pomona College 6.13 02/15/08 52,664
1,500,000 California Educational Facilities Authority
Revenue Pooled College and University Project
Series C 5.13 03/01/15 1,482,900
1,110,000 California Educational Facilities Authority
Revenue Refunded Mills College MBIA Insured 5.00 09/01/12 1,102,197
1,000,000 California Educational Facilities Authority
Revenue Refunded University of San Diego
AMBAC Insured 4.75 10/01/15 942,400
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 5,000,000 California State DWR Central Valley Project
Revenue Series J 6.00 % 12/01/07 $ 5,487,750
1,830,000 California State DWR Central Valley Project
Revenue Series L 5.75 12/01/13 1,901,956
1,500,000 California State DWR Central Valley Project
Revenue Series O 5.00 12/01/12 1,489,365
3,235,000 California State DWR Central Valley Project
Series O 4.75 12/01/17 3,005,315
1,910,000 California State GO Eagles II Series 6 (zero
coupon) 5.12 # 04/01/10 1,109,901
3,000,000 California State GO MBIA Insured 6.00 10/01/10 3,273,090
1,000,000 California State GO Unlimited 4.75 09/01/11 977,010
260,000 California State HFA Home Mortgage Revenue AMT
Series B Multiple Credit Enhancements 8.00 08/01/29 265,416
480,000 California State HFA Home Mortgage Revenue AMT
Series D Multiple Credit Enhancements 7.75 08/01/10 494,621
215,000 California State HFA Home Mortgage Revenue AMT
Series G Multiple Credit Enhancements 8.15 08/01/19 216,677
1,380,000 California State HFA Home Mortgage Revenue
Series A Multiple Credit Enhancements 7.35 08/01/11 1,431,736
355,000 California State HFA Home Mortgage Revenue
Series B Multiple Credit Enhancements 7.25 08/01/10 367,258
45,000 California State HFA Home Mortgage Revenue
Series F Multiple Credit Enhancements 7.75 08/01/08 45,286
140,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 146,059
500,000 California State HFA Multi-Unit Home Rental
Mortgage Revenue Series B-II 6.70 08/01/15 531,565
</TABLE>
33
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 California State HFA Multi-Unit Home Rental
Mortgage Revenue Series C-II AMT 6.85 % 08/01/15 $ 526,585
2,825,000 California State HFA Multi-Unit Rental Housing
Revenue Series A AMT 5.50 08/01/15 2,785,196
1,000,000 California State HFA Single Family Mortgage 4.80 08/01/12 958,950
1,000,000 California State HFFA Gould Medical Foundation
Escrowed to Maturity 7.25 04/01/10 1,039,100
1,250,000 California State HFFA Gould Medical Foundation
Escrowed to Maturity 7.30 04/01/20 1,308,500
2,000,000 California State HFFA Revenue Catholic
Healthcare West AMBAC Insured 5.75 07/01/15 2,092,580
1,000,000 California State HFFA Revenue Insured Health
Facilities Valleycare Series State Insured 6.50 05/01/05 1,066,940
1,500,000 California State HFFA Revenue Kaiser Permanente
Series A 6.25 03/01/21 1,553,280
2,000,000 California State HFFA Revenue Scripps Memorial
Hospital MBIA Insured 6.40 10/01/12 2,147,080
2,000,000 California State HFFA Revenue Scripps Research
Institute 6.63 07/01/14 2,154,960
1,750,000 California State HFFA Revenue Small Insured
Health Facilities Series A 6.75 03/01/20 1,853,058
3,500,000 California State HFFA San Diego Hospital
Association MBIA Insured 6.20 08/01/12 3,718,295
1,795,000 California State HFFA Scripps Memorial Hospital
Series A MBIA Insured 6.25 10/01/13 1,895,035
1,000,000 California State Maritime Infrastructure
Authority Revenue Port of San Diego Project
AMBAC Insured 5.25 11/01/15 992,180
2,500,000 California State PCFA Pacific Gas & Electric Co
AMT 6.35 06/01/09 2,679,050
1,445,000 California State PCFA Pacific Gas & Electric Co
AMT 6.63 06/01/09 1,536,714
</TABLE>
34
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California State PCFA San Diego Gas & Electric
Co AMT 6.80 % 06/01/15 $ 1,164,420
5,000,000 California State Prerefunded 4.50 12/01/21 4,387,500
1,000,000 California State Prerefunded 4.75 09/01/12 974,800
1,000,000 California State Prerefunded 5.00 10/01/11 998,750
2,190,000 California State Prerefunded 5.75 03/01/15 2,353,527
1,500,000 California State Public Works Board Lease
Revenue California State University Project
Series A 5.38 10/01/17 1,506,120
1,000,000 California State Public Works Board Lease
Revenue Community Colleges 6.63 09/01/07 1,073,010
1,000,000 California State Public Works Board Lease
Revenue Department of Corrections AMBAC
Insured 5.25 01/01/21 983,550
3,000,000 California State Public Works Board Lease
Revenue Department of Corrections AMBAC
Insured 6.40 11/01/10 3,344,340
4,000,000 California State Public Works Board Lease
Revenue Department of Corrections Series A 5.40 01/01/09 4,143,720
2,000,000 California State Public Works Board Lease
Revenue Department of Corrections Series A
AMBAC Insured 5.50 01/01/15 2,035,480
5,000,000 California State Universities & Colleges
Revenue HSG System FGIC Insured 5.80 11/01/17 5,262,850
165,000 California State Various Purpose GO 5.75 03/01/15 172,722
1,250,000 California State Water Department Reserve
Center Series U 5.13 12/01/15 1,235,388
3,000,000 California Statewide CDA Internext Group 5.38 04/01/17 2,884,290
1,500,000 California Statewide CDA Lease Revenue Oakland
Convention Centers Project AMBAC Insured 5.50 10/01/14 1,521,585
2,750,000 California Statewide CDA Lease Revenue Oakland
Convention Centers Project AMBAC Insured 6.00 10/01/10 2,910,078
</TABLE>
35
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.20 % 01/01/11 $ 1,009,700
1,750,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/12 1,775,655
1,590,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/13 1,608,905
1,500,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/14 1,513,710
500,000 California Statewide CDA Revenue COP Health
Facilities Barton Memorial Hospital LOC -
Banque Nationale de Paris 6.40 12/01/05 527,820
3,310,000 California Statewide CDA Revenue COP Hospital
Cedars Sinai Medical Center 6.50 08/01/12 3,617,830
1,500,000 California Statewide CDA Revenue COP Sutter
Health Obligated Group AMBAC Insured 6.00 08/15/09 1,585,695
5,000,000 California Statewide CDA Revenue Sherman Oaks 5.00 08/01/18 4,774,450
1,935,000 California Statewide CDA Water Revenue Series A 6.00 07/01/10 2,048,991
2,500,000 Calleguas Las Virgines CA PFA FSA Insured 5.00 11/01/23 2,362,175
2,980,000 Calleguas Las Virgines CA PFA Las Virgenes
Municipal Water District FSA Insured 5.00 11/01/17 2,872,064
1,500,000 Campbell CA USD FGIC Insured 5.00 08/01/17 1,454,640
3,100,000 Capistrano CA Unified PFA Special Tax Revenue
AMBAC Insured 5.25 09/01/09 3,208,500
200,000 Capitol Area Development Authority Sacramento
CA Lease Revenue Series A MBIA Insured 6.50 04/01/12 214,196
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 3,840,000 Cathedral City CA PFA Revenue Tax Allocation
Redevelopment Projects Series A MBIA Insured 5.25 % 08/01/13 $ 3,882,893
1,800,000 Chino Basin CA Regional Financial Authority
Revenue Municipal Water District Sewer
Systems Project AMBAC insured 6.00 08/01/16 1,921,320
7,500,000 Chino CA Electric Water Facility Authority
Certificates Series A 5.20 10/01/15 7,473,675
400,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/07 421,080
735,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/08 766,215
820,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/10 854,391
570,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 591,472
2,000,000 Coachella CA Water Revenue COP FSA Insured 6.10 03/01/22 2,100,180
2,500,000 Colton CA PFA Tax Allocation Series A MBIA
Insured 5.00 08/01/18 2,401,650
270,000 Contra Costa County CA Home Mortgage Revenue
AMT Escrowed to Maturity 7.75 05/01/22 343,896
2,755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 2,916,856
4,000,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A FGIC Insured 5.50 03/01/08 4,149,960
3,655,000 Contra Costa County CA Water District Revenue
Series G MBIA Insured 5.75 10/01/14 3,856,025
1,045,000 Contra Costa County California PFA Lease
Revenue Refunded Various Capital Facility
Series A MBIA Insured 5.13 08/01/17 1,028,520
</TABLE>
37
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,000,000 Corona CA Community Facility District MBIA
Insured 4.70 % 09/01/20 $ 3,630,120
2,000,000 Corona CA Community Facility District Special
Tax Number 90-1-A MBIA Insured 4.40 09/01/11 1,880,380
1,505,000 Corona CA PFA Water Revenue FGIC Insured 4.75 09/01/18 1,392,230
1,075,000 Cotati CA Facilities Financing Authority Tax
Allocation Series A 5.60 09/01/12 1,085,825
1,250,000 Cucamonga County CA Water District COP
Refinancing Facilities FGIC Insured 6.30 09/01/12 1,319,363
15,000 Culver City CA RDFA AMBAC Insured 6.75 11/01/15 15,416
1,000,000 Cupertino CA LTFS Partnership Series B 6.25 07/01/10 1,054,380
2,000,000 Duarte CA Certificates Series A 5.25 04/01/19 1,875,720
1,355,000 Duarte CA COP City of Hope National Medical
Center 6.13 04/01/13 1,464,972
1,500,000 East Bay CA MUD Wastewater Treatment System
Revenue AMBAC Insured 6.00 06/01/09 1,584,345
7,480,000 East Bay CA MUD Wastewater Treatment System
Revenue FGIC Insured 5.00 06/01/16 7,254,254
1,500,000 East Bay CA Regional Park District 5.00 09/01/20 1,430,175
2,000,000 East Stockton California Water District COP
Series A AMBAC Insured 4.75 04/01/17 1,850,160
2,785,000 Elk Grove CA USD Special Tax MBIA Insured (zero
coupon) 5.52 # 12/01/15 1,140,235
5,000,000 Elsinore Valley CA Municipal Water District COP
Series A FGIC Insured 5.75 07/01/19 5,215,650
1,000,000 Elsinore Valley CA Municipal Water District COP
Series A FGIC Insured 6.00 07/01/12 1,093,420
1,215,000 Emeryville CA PFA Lease Revenue Series A 5.00 05/01/18 1,167,518
500,000 Emeryville CA PFA Revenue Special Assessment
District Refinancing 5.75 09/02/14 500,145
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,250,000 Emeryville CA PFA Revenue Special Assessment
District Refinancing 5.90 % 09/02/21 $ 1,250,350
2,475,000 Emeryville CA PFA Revenue MBIA Insured 5.00 09/01/19 2,368,625
2,455,000 Emeryville CA PFA Revenue Unrefunded Balance
Redevelopment 6.35 05/01/10 2,581,973
1,725,000 Escondido CA PFA Lease Revenue Center for the
Arts AMBAC Insured 5.80 09/01/09 1,836,780
2,000,000 Escondido CA PFA Lease Revenue Center for the
Arts AMBAC Insured 6.00 09/01/18 2,134,060
2,000,000 Escondido CA PFA Lease Revenue Escondido Civic
Center Project Series B AMBAC Insured 6.13 09/01/11 2,153,100
4,330,000 Escondido CA USD Series A FGIC Insured 5.13 09/01/15 4,279,772
1,410,000 Fairfield CA PFA CGIC Insured 5.20 08/01/08 1,444,291
1,000,000 Folsom Cordova CA USD COP 1998 FSA Insured 5.13 03/01/18 975,790
3,000,000 Fontana CA USD Convertible Series C FGIC
Insured 6.15 05/01/20 3,222,540
1,000,000 Foothill CA De Anza Community College Connie
Lee Insured 5.25 09/01/21 983,240
1,270,000 Fremont CA USD Alameda County Series E FGIC
Insured 5.90 09/01/15 1,391,056
3,940,000 Fremont CA USD Alameda County Series F MBIA
Insured 5.88 08/01/16 4,322,338
3,800,000 Fresno CA Conference Center 5.00 04/01/13 3,754,058
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 1,065,800
2,000,000 Fresno CA Joint Powers Financing Authority
Street Light Acquisition Project Series A 5.50 08/01/12 2,036,340
1,000,000 Fresno CA Sewer Revenue Series A MBIA Insured 5.00 09/01/15 974,870
2,000,000 Fresno CA USD Series A MBIA Insured 5.70 08/01/15 2,061,320
</TABLE>
39
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 3,000,000 Fresno CA Water System Revenue FGIC Insured 6.00 % 06/01/16 $ 3,247,500
1,250,000 Fresno County CA Solid Waste Revenue American
Avenue Landfill Project MBIA Insured 5.75 05/15/14 1,307,825
1,500,000 Glendale CA RDFA Tax Allocation Revenue AMBAC
Insured 5.50 12/01/09 1,562,895
1,000,000 Glendale CA RDFA Tax Allocation Revenue AMBAC
Insured 5.50 12/01/11 1,031,330
1,000,000 Glendale CA USD Series A 5.75 09/01/17 1,045,650
1,650,000 Hayward CA COP Civic Center Project MBIA
Insured 5.50 08/01/17 1,671,384
575,000 Huntington Beach CA PFA Revenue Bond 6.55 08/01/01 588,771
2,800,000 Huntington Beach CA PFA Revenue Bond 7.00 08/01/10 2,924,404
1,000,000 Indian Wells CA RDFA Tax Allocation Whitewater
Project MBIA Insured 6.00 12/01/14 1,058,760
1,000,000 Indian Wells CA Redevelopment Agency Tax
Allocation MBIA Insured 5.38 12/01/15 1,009,130
500,000 Industry CA Urban Development Agency Project 3 6.60 11/01/02 534,545
500,000 Industry CA Urban Development Agency Project 3 6.70 11/01/03 534,700
1,280,000 Industry CA Urban Development Agency Project 3 6.85 11/01/04 1,371,584
435,000 Inglewood CA Redevelopment Agency Tax
Allocation Series A AMBAC Insured 5.25 05/01/17 436,427
1,350,000 Jackson CA COP Water System Acquisition Project 6.80 09/01/23 1,451,925
270,000 Jamul-Dulzura CA USD Series C 6.40 08/01/16 288,209
2,000,000 Jurupa CA Community Services Special Tax 4.75 09/01/18 1,850,000
2,000,000 Kern CA High School District MBIA Insured 5.60 08/01/12 2,103,380
</TABLE>
40
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,075,000 La Habra CA COP FSA Insured 4.80 % 09/01/22 $ 975,724
1,240,000 La Habra CA COP Series B 4.80 09/01/19 1,151,985
1,400,000 La Quinta CA Redevelopment Agency Tax
Allocation 5.13 09/01/18 1,365,602
1,185,000 La Verne CA COP Capital Improvements Projects 5.70 06/01/15 1,193,508
1,000,000 Lancaster CA School District COP FSA Insured 4.90 04/01/10 992,910
1,000,000 Lancaster CA School District COP FSA Insured 5.13 04/01/14 995,090
1,425,000 Long Beach CA Civic Center Project Series A
MBIA Insured 5.00 10/01/17 1,373,515
3,000,000 Long Beach CA Finance Authority Revenue 6.00 11/01/08 3,285,240
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 1,091,190
1,000,000 Long Beach CA Water Revenue 6.13 05/01/19 1,092,610
2,900,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 5.50 05/15/08 3,034,125
1,000,000 Los Angeles CA Community College District COP
Series A FGIC Insured 5.90 08/15/07 1,058,450
1,000,000 Los Angeles CA Community College District COP
Series A FGIC Insured 6.00 08/15/08 1,057,130
4,695,000 Los Angeles CA DW&P Electric Plant Revenue 5.70 09/01/11 4,898,904
200,000 Los Angeles CA DW&P Electric Plant Revenue 6.38 02/01/20 211,262
2,000,000 Los Angeles CA DW&P Electric Plant Revenue
Second Issue 5.75 08/15/11 2,077,960
3,000,000 Los Angeles CA DW&P Waterworks Revenue 5.70 04/15/09 3,129,240
2,775,000 Los Angeles CA Harbor Revenue Series B AMT 6.50 08/01/13 2,968,362
340,000 Los Angeles CA Municipal Improvement
Corporation Lease Revenue Central Library
Project Series A 6.30 06/01/16 360,431
</TABLE>
41
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 60,000 Los Angeles CA SFMR Series A AMT Multiple
Credit Enhancements 7.55 % 12/01/23 $ 61,762
5,000,000 Los Angeles CA USD 5.00 07/01/21 4,756,650
2,000,000 Los Angeles CA USD COP Francisco Bravo Medical
Hospital 6.60 06/01/05 2,147,580
2,800,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.40 10/01/09 2,897,188
2,200,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.50 10/01/10 2,290,860
1,950,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.50 10/01/16 1,974,161
1,200,000 Los Angeles CA USD Series A 6.00 07/01/13 1,313,112
1,410,000 Los Angeles CA USD Series B FGIC Insured 5.00 07/01/17 1,359,564
2,070,000 Los Angeles CA Wastewater System Revenue
Refunded Series A MBIA Insured 4.90 12/01/10 2,063,728
1,000,000 Los Angeles CA Wastewater System Revenue Series
A MBIA Insured 4.75 06/01/18 926,250
1,300,000 Los Angeles CA Wastewater System Revenue Series
A MBIA Insured 5.70 06/01/13 1,357,148
1,000,000 Los Angeles CA Wastewater System Revenue Series
C MBIA Insured 5.50 06/01/13 1,028,620
4,370,000 Los Angeles County CA Metropolitan
Transportation Authority 4.75 07/01/16 4,092,855
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority 4.75 07/01/19 923,750
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority Revenue Series A 5.00 07/01/09 1,012,470
1,975,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series A 5.50 07/01/13 2,022,025
</TABLE>
42
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,500,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series A AMBAC Insured 5.50 % 07/01/17 $ 2,528,125
480,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series B FGIC Insured 6.50 07/01/15 507,110
2,400,000 Los Angeles County CA Metropolitan
Transportation Authority Series A AMBAC
Insured 5.00 07/01/12 2,383,392
1,370,000 Madera CA RDFA Tax Allocation Revenue FGIC
Insured 5.75 09/01/11 1,444,281
1,000,000 Manteca CA Financing Authority Tax Allocation
Revenue MBIA Insured 5.05 10/01/18 966,400
1,000,000 Marin CA Emergency Radio Authority 4.75 08/15/18 925,180
2,000,000 Menlo Park CA CDA Tax Allocation Revenue MBIA
Insured 5.38 06/01/16 2,013,580
805,000 Merced County CA COP Revenue 6.00 10/01/12 859,177
1,000,000 Metropolitan Water District Southern CA Water
Works Revenue 5.75 07/01/13 1,047,130
2,000,000 Metropolitan Water District Southern CA Water
Works Revenue MBIA Insured 5.75 07/01/15 2,085,880
5,000,000 Metropolitan Water District Southern California
Waterworks Revenue Series A 5.00 07/01/16 4,848,850
2,000,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 7.00 09/01/14 2,209,180
2,370,000 Midpeninsula Regulation Open Space District
(zero coupon) 5.56 # 09/01/17 875,928
2,490,000 Midpeninsula Regulation Open Space District
(zero coupon) 5.58 # 09/01/18 867,914
1,000,000 Modesto CA Irrigation District Financing
Authority Revenue Refunded Domestic Water
Project Series D AMBAC Insured 5.00 09/01/16 969,540
</TABLE>
43
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,780,000 Modesto CA PFA Lease Revenue AMBAC Insured 5.00 % 09/01/16 $ 2,695,321
9,000,000 Modesto CA PFA Lease Revenue Capital
Improvements and Refinancing Project 5.00 09/01/29 8,440,839
3,545,000 Monrovia CA Redevelopment Agency Tax Allocation
Project Area 1B AMBAC Insured 5.13 05/01/17 3,469,314
2,835,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation MBIA Insured 5.50 08/01/13 2,910,780
1,230,000 National City CA CDA Tax Allocation Downtown
Redevelopment Project Series B AMT AMBAC
Insured 6.63 08/01/12 1,335,928
1,405,000 Natomas CA USD FGIC Insured 5.10 09/01/13 1,403,145
1,945,000 Natomas CA USD FGIC Insured 5.20 09/01/14 1,948,968
2,060,000 Natomas CA USD FGIC Insured 5.25 09/01/15 2,062,451
2,000,000 Natomas CA USD FGIC Insured 5.25 09/01/16 1,995,120
720,000 Natomas CA USD Series A MBIA Insured 5.75 09/01/12 759,038
2,200,000 Nevada County CA Solid Waste Revenue 6.50 10/01/06 2,346,300
1,000,000 North City West CA School Facility Authority
Special Tax Refunded Series B FSA Insured 5.75 09/01/15 1,043,750
570,000 Northern California Power Agency Multiple
Capital Facilities Revenue Series A MBIA
Insured 6.50 08/01/12 611,582
430,000 Northern California Power Agency Multiple
Capital Facilities Revenue Series A MBIA
Insured. 6.50 08/01/12 467,449
7,000,000 Northern California Transmission Revenue
Project A MBIA Insured 5.50 05/01/14 7,179,760
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 1,056,611
4,280,000 Northridge CA Water District Revenue AMBAC
Insured 5.25 02/01/14 4,315,652
1,000,000 Nuview CA USD COP 7.25 02/01/16 1,047,940
</TABLE>
44
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,465,000 Oakland CA FGIC Insured 6.00 % 06/15/12 $ 1,546,410
1,560,000 Olivenhain CA Water District COP FGIC Insured 5.13 06/01/19 1,517,162
1,500,000 Ontario CA RDFA Revenue Project One MBIA
Insured 6.00 08/01/15 1,599,555
800,000 Orange County CA Local Transportation Authority
Sales Tax Revenue First Series Measure M 6.00 02/15/09 868,304
4,400,000 Orange County CA Local Transportation Authority
Sales Tax Revenue MBIA Insured 6.00 02/15/08 4,792,128
1,000,000 Orange County CA Water District Series A 5.50 08/15/10 1,028,980
1,250,000 Palm Desert CA Financing Authority Tax
Allocation MBIA Insured 5.00 10/01/16 1,211,800
1,000,000 Palm Springs CA COP Refunded Multiple Capital
Facilities Project AMBAC Insured 5.75 04/01/17 1,044,150
1,000,000 Palmdale CA Water District Revenue COP FGIC
Insured 5.00 10/01/18 960,430
165,000 Parlier CA Redevelopment Agency Tax Allocation 6.95 08/01/23 175,228
1,075,000 Parlier CA Redevelopment Agency Tax Allocation
Series A 6.95 08/01/23 1,180,802
1,795,000 Pinole CA Redevelopment Agency Tax Allocation
Refunded 5.00 08/01/17 1,730,560
1,000,000 Pittsburgh CA PFA Revenue 5.25 06/01/17 992,960
3,285,000 Pittsburgh CA Redevelopment Agency Tax
Allocation Series A AMBAC Insured 5.00 08/01/13 3,244,824
2,200,000 Placer County CA COP Juvenile Detention
Facility MBIA Insured 5.00 07/01/18 2,113,738
3,000,000 Pomona CA PFA Revenue 5.00 05/01/29 2,810,730
1,000,000 Port of Oakland CA Special Facilities Revenue
Series A Industrial Bank of Japan Limited 6.70 01/01/07 1,064,440
</TABLE>
45
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 3,380,000 Port of Oakland CA Special Facilities Revenue
Series A Industrial Bank of Japan Limited 6.80 % 01/01/19 $ 3,605,142
4,000,000 Poway CA USD Special Tax Community Facility
MBIA Insured 4.75 10/01/14 3,823,120
1,000,000 Rancho CA Water District Financing Authority
Revenue AMBAC Insured 5.00 08/15/14 982,050
1,325,000 Redding CA Joint Powers Financing Authority
Wastewater Revenue Series A FGIC Insured 6.00 12/01/11 1,405,454
1,100,000 Richmond CA Joint Powers Financing Authority
Lease and Gas Tax Revenue Series A 5.25 05/15/13 1,090,001
2,000,000 Richmond CA RDA Tax Allocation Harbour
Redevelopment Project Series A 4.75 07/01/23 1,806,380
1,500,000 Riverside CA Asset Leasing Revenue Hospital
Project Series B 5.00 06/01/19 1,436,250
1,000,000 Riverside CA Redevelopment Agency Tax 4.75 08/01/17 929,760
1,055,000 Riverside CA Sewer Revenue FGIC Insured 5.00 08/01/10 1,061,678
5,750,000 Riverside County CA Asset Leasing Corp Revenue
Riverside County Hospital Project A 6.38 06/01/09 6,116,563
1,045,000 Riverside County CA PFA Special Tax Revenue
Series A MBIA Insured 5.25 09/01/10 1,070,080
1,000,000 Riverside County CA PFA Special Tax Revenue
Series A MBIA Insured 5.25 09/01/13 1,011,250
170,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 182,298
1,000,000 Rocklin CA USD Community Facility District
Special Tax MBIA Insured 5.75 09/01/18 1,040,540
1,000,000 Roseville CA COP AMBAC Insured 5.25 02/01/17 993,040
1,335,000 Roseville CA Joint USD Capital Appreciation
Series A (zero coupon) 4.79 # 08/01/06 955,633
</TABLE>
46
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Sacramento CA Airport Commission International
Airport Revenue AMBAC Insured 6.00 % 07/01/16 $ 1,103,720
800,000 Sacramento CA Airport Revenue Series A FGIC
Insured- 6.00 07/01/12 833,352
1,200,000 Sacramento CA Airport Revenue Series A FGIC
Insured. 6.00 07/01/12 1,269,924
1,500,000 Sacramento CA Area Flood Control Authority
Special Assessment FGIC Insured 5.38 10/01/15 1,513,395
5,000 Sacramento CA Financing Authority Revenue
Prerefunded 6.70 11/01/11 5,287
1,000,000 Sacramento CA Light Rail Transportation Project 6.00 07/01/12 1,039,510
1,900,000 Sacramento CA Light Rail Transportation Project 6.75 07/01/07 2,011,625
2,500,000 Sacramento CA MUD Electric Revenue MBIA Insured 6.25 08/15/10 2,769,625
2,400,000 Sacramento CA MUD Electric Revenue Series E
MBIA Insured 5.70 05/15/12 2,504,760
1,000,000 Sacramento CA MUD Electric Revenue Series L 5.00 07/01/12 993,080
7,475,000 Sacramento CA MUD Electric Revenue Series L 5.10 07/01/14 7,419,162
50,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 52,777
200,000 Sacramento CA MUD Revenue Series C FGIC Insured 5.75 11/15/08 210,750
300,000 Sacramento CA MUD Series C FGIC Insured 5.75 11/15/08 315,000
115,000 Sacramento CA Redevelopment Agency Tax
Allocation MBIA Insured 6.50 11/01/13 120,438
2,000,000 Sacramento County CA Main Detention Facility
MBIA Insured 5.75 06/01/15 2,086,740
380,000 San Bernardino County CA West Valley Detention
Center MBIA Insured 6.50 11/01/12 409,594
</TABLE>
47
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 200,000 San Bernardino County CA Transportation
Authority Sales Tax Revenue FGIC Insured 6.00 % 03/01/10 $ 213,144
1,775,000 San Bernardino County CA Transportation
Authority Series A FSA Insured 4.88 03/01/10 1,766,107
4,000,000 San Buenaventura CA COP AMBAC Insured 6.00 01/01/12 4,230,000
2,700,000 San Diego CA Housing Authority Revenue 5.45 08/20/40 2,611,332
8,195,000 San Diego CA PFA Sewer Revenue FGIC Insured 5.00 05/15/15 7,991,354
1,000,000 San Diego CA Public Safety Commission Project
GO 5.50 04/01/08 1,054,720
1,000,000 San Diego CA Public Safety Commission Project
GO 6.50 07/15/07 1,127,180
2,500,000 San Diego CA USD (zero coupon) 5.42 # 07/01/16 1,009,375
1,000,000 San Diego California Public Financing Authority 4.75 05/15/17 930,220
2,095,000 San Diego County CA CTFS Downtown Courthouse 4.50 05/01/23 1,823,467
4,500,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 04/01/08 4,734,765
3,950,000 San Elijo Joint Powers Authority San Diego
County CA Water PCR Facility FGIC Insured 5.38 03/01/13 4,015,017
2,250,000 San Francisco CA BART Sales Tax Revenue FGIC
Insured 5.50 07/01/15 2,283,660
700,000 San Francisco CA City & County RDFA Tax
Allocation Capital (zero coupon) 4.87 # 08/01/08 452,382
1,940,000 San Francisco CA City & County Refunded Series
1 FGIC Insured 5.20 06/15/15 1,933,346
</TABLE>
48
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,250,000 San Francisco CA State Building Authority Civic
Center Complex Series A AMBAC Insured 5.25 % 12/01/21 $ 1,228,963
6,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road (zero coupon) 4.53 # 01/15/05 4,684,620
1,345,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road (zero coupon) 4.73 # 01/15/07 945,817
4,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road 4.96 01/01/10 4,065,000
7,500,000 San Jose CA Redevelopment Agency 4.75 08/01/23 6,744,675
13,080,000 San Jose CA Redevelopment Agency Tax Allocation 4.75 08/01/30 11,592,281
1,000,000 San Mateo CA Flood Control District COP Colma
Creek Flood Control Zone MBIA Insured 5.25 08/01/17 992,940
1,130,000 San Mateo CA Sewer Revenue FSA Insured 5.50 08/01/14 1,156,092
2,000,000 San Mateo County CA Joint Powers Authority 4.75 07/15/18 1,850,820
1,500,000 San Mateo County CA Joint Powers Authority
Series A FSA Insured 5.00 07/15/18 1,442,835
6,000,000 Santa Ana CA Financing Authority Revenue
Refunded South Harbor Boulevard Series A 5.00 09/01/19 5,742,120
4,010,000 Santa Clara CA RDFA Tax Allocation Bayshore
North Project AMBAC Insured 5.75 07/01/14 4,200,395
3,000,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 05/15/12 3,206,250
1,185,000 Santa Clara County CA District Sales Tax
Revenue Series A 5.25 06/01/17 1,169,915
1,000,000 Santa Clara County CA Financing Authority Lease
Revenue Series A AMBAC Insured 4.85 11/15/10 992,650
</TABLE>
49
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,305,000 Santa Cruz County CA Housing Authority 5.50 % 07/20/40 $ 2,226,353
3,000,000 Santa Fe Springs CA Community Development
Common Tax Allocation Series A MBIA Insured 5.00 09/01/17 2,891,940
1,575,000 Santa Fe Springs CA Community Development
Common Tax Allocation Series A MBIA Insured 5.13 09/01/16 1,549,091
1,750,000 Santa Maria CA RDFA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 1,783,285
1,195,000 Santa Rosa CA High School District FGIC Insured 5.90 05/01/13 1,273,727
2,575,000 Santa Rosa CA Wastewater Revenue FGIC insured 4.90 09/01/11 2,548,375
3,450,000 Santa Rosa CA Wastewater Treatment Plant FGIC
Insured 4.75 09/01/16 3,229,718
1,000,000 Saratoga CA USD Series A FGIC Insured 5.38 09/01/17 1,065,930
1,000,000 Shasta CA Joint Powers Financing Authority
Lease Revenue Courthouse Improvement Project
MBIA Insured 5.00 06/01/18 960,840
1,000,000 Sonoma Valley CA USD FSA Insured 6.00 07/15/21 1,052,690
1,100,000 South County CA Regional Wastewater Authority
Revenue Capital Improvement FGIC Insured 4.75 08/01/18 1,017,819
5,720,000 South County CA Regional Wastewater Authority
Revenue Capital Improvement FGIC Insured 5.75 08/01/10 5,975,507
1,000,000 Southern CA Public Power Project Revenue 6.75 07/01/11 1,148,270
530,000 Southern California State SFMR Series A AMT
GNMA Collateralized 7.63 10/01/22 542,068
280,000 Southern California State SFMR Series A AMT
GNMA Collateralized 7.63 10/01/23 290,248
550,000 Southern California State SFMR Series A AMT
GNMA/FNMA Collateralized 6.75 09/01/22 570,972
</TABLE>
50
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 555,000 Southern California State SFMR Series A AMT
GNMA/FNMA Collateralized 7.35 % 09/01/24 $ 573,520
2,000,000 Stanislaus County CA Capital Improvement
Program Series A MBIA Insured 5.25 05/01/14 2,009,980
1,600,000 Stanislaus County CA COP Capital Improvement
Project AMBAC Insured 5.25 05/01/18 1,575,312
2,720,000 Stanislaus County CA COP Capital Improvement
Project Series A MBIA Insured 5.00 05/01/10 2,731,832
20,000 Stockton CA SFMR Government Agency
Collateralized 7.50 02/01/23 21,731
5,690,000 Sulphur Springs CA USD Series A MBIA Insured
(zero coupon) 5.26 # 09/01/13 2,729,322
1,465,000 Sunnyvale CA Elementary School District Series
A 5.70 09/01/20 1,500,438
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials Series B AMT
MBIA Insured 6.00 10/01/08 1,054,180
1,000,000 Temecula CA Community Services Recreational
Center Project 7.13 10/01/12 1,080,330
1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 09/01/14 1,056,090
1,640,000 Temple City CA USD Series A FGIC Insured 5.10 08/01/19 1,599,640
1,000,000 Three Valleys CA Municipal Water District COP
FGIC Insured 5.00 11/01/14 981,880
2,000,000 Three Valleys CA Municipal Water District
Revenue COP FGIC Insured 5.25 11/01/10 2,049,200
1,000,000 Torrance CA COP AMBAC Insured 5.50 04/01/11 1,032,940
1,900,000 Torrance CA COP AMBAC Insured 5.50 04/01/12 1,961,104
2,705,000 Torrance CA COP AMBAC Insured 5.75 04/01/16 2,840,845
1,100,000 Travis CA USD COP AMBAC Insured 5.40 09/01/19 1,099,450
1,000,000 Truckee-Donner Public Utility District COP
Water System Improvement Project 5.50 11/15/16 1,016,240
</TABLE>
51
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,250,000 Twentynine Palms CA Water District COP 7.00 % 08/01/17 $ 2,385,383
1,000,000 Union City CA Community RDFA Tax Allocation
Revenue Community Redevelopment Project AMBAC
Insured 5.65 10/01/14 1,032,580
1,645,000 University of California Revenue Housing System
Series A AMBAC Insured 5.50 11/01/11 1,695,913
3,400,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 3,467,116
1,000,000 University of California Revenue Multiple
Purpose Projects AMBAC Insured 4.75 09/01/15 942,600
1,000,000 University of California Revenue Refunded
Multiple Purpose Projects Series E MBIA
Insured 5.13 09/01/20 969,160
3,200,000 University of California Revenue Seismic Safety
Project MBIA Insured 5.50 11/01/10 3,313,088
990,000 Upland CA HFA Revenue Issue A 7.85 07/01/20 1,018,334
1,000,000 Upland CA Redevelopment Agency Tax Allocation 4.85 09/01/23 916,120
1,000,000 Vacaville CA PFA Tax Allocation Redevelopment
Project MBIA Insured 6.35 09/01/22 1,039,140
3,275,000 Vallejo CA Revenue Water Improvement Project
FSA Insured 5.70 05/01/16 3,406,459
2,000,000 Ventura CA COP Public Facilities 5.75 12/01/06 2,127,480
2,000,000 Ventura CA COP Public Facilities Corporation IV 5.75 12/01/07 2,123,340
1,305,000 Vista CA Community Redevelopment Project Area B
Tax Allocation 5.10 09/01/18 1,269,047
1,135,000 Walnut Valley CA USD Series C FGIC Insured 5.75 08/01/15 1,188,515
1,125,000 West Hollywood CA COP MBIA Insured 5.10 02/01/17 1,098,034
</TABLE>
52
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,170,000 West Sacramento CA Financing Authority Revenue
Water System Improvement Project FGIC Insured 5.50 % 08/01/15 $ 1,190,732
1,740,000 Westland California Water District 4.88 03/01/21 1,607,273
1,200,000 Westminster CA Redevelopment Agency AMT 6.50 08/01/10 1,242,336
1,000,000 Whittier CA Educational Facilities Revenue
Whittier College Connie Lee Insured 5.40 12/01/18 1,002,990
1,000,000 Yolo County CA HFA Mortgage Revenue AMT FHA
Collateralized 7.20 08/01/33 1,067,590
1,040,000 Yolo County CA Library Special Tax Community
Facilities 6.25 12/01/22 1,106,830
--------------
TOTAL CALIFORNIA MUNICIPAL BONDS $ 676,940,253
(Cost $656,466,465)
</TABLE>
53
<PAGE>
California Tax-Free Bond Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.02%
6,993,302 Stagecoach California Tax-Free Money Market Trust+X+ $ 6,993,302
(Cost $6,993,302)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $663,459,767)* (Notes 1 and 3) 99.53% $ 683,933,555
Other Assets and Liabilities, Net 0.47 3,214,893
------ --------------
TOTAL NET ASSETS 100.00% $ 687,148,448
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 25,774,299
Gross Unrealized Depreciation (5,300,511)
--------------
NET UNREALIZED APPRECIATION $ 20,473,788
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Housing 4%
Education 17%
Public Improvements 33%
Hospital 5%
Sewer 4%
Health 1%
Water 14%
Airport 1%
Sales Tax 11%
Other 10%
</TABLE>
The accompanying notes are an integral part of these financial statements.
54
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Income Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 92.07%
$ 1,105,000 California ABAG Finance Authority 5.00 % 07/01/08 $ 1,096,713
1,100,000 California ABAG Finance Authority For Nonprofit
Corporation 5.00 07/01/07 1,100,000
2,000,000 California State AMT Veterans Bonds Series B 4.95 12/01/07 2,004,460
1,000,000 California State Prerefunded 6.00 05/01/20 1,089,510
1,250,000 California State Public Works Board Lease
Revenue 5.25 11/01/08 1,289,063
2,060,000 California Statewide Community Development
Authority Revenue Connie Lee Insured 5.25 07/01/05 2,136,611
250,000 Carlsbad CA USD COP Phase III 6.70 11/01/99 252,680
2,000,000 Central Valley Finance Authority Revenue MBIA
Insured 5.25 07/01/10 2,052,500
2,000,000 Contra Costa County CA COP MBIA Insured 5.25 11/01/10 2,050,000
1,000,000 Contra Costa County CA Tax and Revenue
Anticipation Notes Series A 4.00 09/29/00 1,003,980
685,000 Foster City CA PFA Revenue Community
Development 5.40 09/01/01 702,276
1,000,000 Industry CA Urban Development Agency FSA
Insured 4.70 05/01/04 1,012,140
1,000,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 6.00 05/15/05 1,082,500
2,000,000 Los Angeles CA Department Of Water And Power 6.10 02/01/09 2,099,460
1,460,000 Los Angeles CA DW&P Revenue Project 9.00 10/15/03 1,725,881
2,500,000 Los Angeles CA Harbor Department Revenue AMT
Series B 5.00 08/01/02 2,554,800
1,300,000 Los Angeles CA Waste Water System Revenue
Series A MBIA Insured 8.50 06/01/03 1,493,661
1,000,000 Los Angeles CA Waste Water System Revenue
Series D FGIC Insured 8.70 11/01/03 1,172,140
500,000 Morgan Hill CA RDFA Tax Allocation Ojo De Agua
Community Development Project 5.60 03/01/00 504,155
</TABLE>
55
<PAGE>
California Tax-Free Income Fund PORTFOLIO OF INVESTMENTS - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 Northern CA Power Agency Revenue 6.54 % 08/01/25 $ 2,165,000
1,500,000 Orange County CA Local Transportation Authority 5.50 02/15/08 1,580,625
2,500,000 Rancho CA Water District Financing Authority
Revenue 4.70 08/15/21 2,515,350
300,000 Sacramento CA Light Rail Transportation Project 6.30 07/01/00 308,307
835,000 Sacramento CA Workers Compensation Program 5.75 06/01/03 852,460
500,000 San Diego CA Transportation Authority COP Bus
Acquistion Project 6.60 12/01/01 510,410
1,090,000 San Francisco CA City & County International
Airport Revenue MBIA Insured 8.00 05/01/05 1,275,867
1,150,000 San Francisco CA City & County International
Revenue AMT MBIA Insured 8.00 05/01/05 1,346,098
500,000 Santa Monica CA Wastewater Enterprise Revenue
Hyperion Project 12.00 01/01/01 556,690
1,000,000 South Orange County CA PFA Special Tax Revenue
Series C FGIC Insured 5.75 08/15/05 1,072,500
2,000,000 Southern California Rapid Transit District
Certificates Participation MBIA Insured 7.50 07/01/05 2,140,820
1,100,000 Southern California State Public Power
Authority 6.75 07/01/00 1,135,541
2,000,000 Southern California State Public Power
Authority Project 6.88 07/01/03 2,088,340
1,000,000 University of California Research Facility
Series B 6.50 09/01/03 1,079,169
--------------
TOTAL CALIFORNIA MUNICIPAL BONDS $ 45,049,707
(Cost $45,104,103)
</TABLE>
56
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 California Tax-Free Income Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 9.21%
4,506,829 Stagecoach California Tax-Free Money Market Trust+X+ $ 4,506,829
(Cost $4,506,829)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $49,610,932)* (Notes 1 and 3) 101.28% $ 49,556,536
Other Assets and Liabilities, Net (1.28) (625,305 )
------ --------------
TOTAL NET ASSETS 100.00% $ 48,931,231
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 422,742
Gross Unrealized Depreciation (477,138)
--------------
NET UNREALIZED DEPRECIATION $ (54,396)
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Housing 4%
Education 4%
Public Improvements 16%
Hospital 9%
General Obligations 16%
Sewer 1%
Water 18%
Airport 8%
Sales Tax 8%
Other 16%
</TABLE>
The accompanying notes are an integral part of these financial statements.
57
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 101.69%
ALABAMA - 2.97%
$ 2,000,000 Alabama Public School & College Authority 4.25 % 11/01/18 $ 1,680,000
ALASKA - 0.18%
$ 100,000 Valdez AK Marine Term Revenue Pipelines
Incorporated Series A 5.85 % 08/01/25 $ 100,875
CALIFORNIA - 3.35%
$ 20,000 California State Prefunded 6.00 % 02/01/01 $ 20,614
1,000,000 California Statewide CDA Internext Group 5.38 04/01/17 961,430
1,000,000 California Student Education Loan Marketing
Corporation 5.88 01/01/18 913,010
--------------
$ 1,895,054
COLORADO - 3.40%
$ 2,000,000 Colorado Health Facility Authority Revenue 5.75 % 09/15/22 $ 1,918,100
CONNECTICUT - 0.07%
$ 40,000 Connecticut State HFA Series B4 7.30 % 11/15/03 $ 41,300
DISTRICT OF COLUMBIA - 5.43%
$ 3,500,000 Washington DC Convention Center Authority 4.75 % 10/01/28 $ 3,066,875
FLORIDA - 0.21%
$ 115,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 % 03/01/13 $ 119,888
GEORGIA - 3.22%
$ 2,000,000 Baldwin County GA Hospital 5.38 % 12/01/28 $ 1,818,000
</TABLE>
58
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
IDAHO - 3.98%
$ 1,250,000 Idaho Health Facilities Authority Revenue 5.45 % 07/15/23 $ 1,217,188
995,000 Idaho State HFA SFMR Series C-2 AMT 6.35 07/01/15 1,031,039
--------------
$ 2,248,227
ILLINOIS - 15.83%
$ 200,000 Chicago IL O'Hare International Airport Revenue
Series A 6.75 % 01/01/06 $ 221,736
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 528,750
1,435,000 Cook County Illinois Cons School District 9.00 12/01/17 2,037,284
1,000,000 Illinois Development FHA Revenue Series A FHA
Insured 5.75 07/01/18 1,002,010
5,000,000 Illinois Development Finance Authority
Retirement Housing Revenue (zero coupon) 6.35 # 07/15/23 1,112,500
5,000,000 Illinois Development Finance Authority
Retirement Housing Revenue (zero coupon) 6.34 # 07/15/25 981,250
1,000,000 Illinois Development Finance Authority Revenue
Community Rehabilitation Providers Series A 5.70 07/01/19 977,640
1,120,000 Illinois Development Finance Authority Revenue
Community Rehabilitation Providers Series C 5.65 07/01/19 1,063,306
1,000,000 Illinois HFFA Revenue Edward Hospital Series A 5.75 02/15/09 1,019,590
--------------
$ 8,944,066
</TABLE>
59
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
IOWA - 3.07%
$ 1,425,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA
Collateralized 6.95 % 07/01/24 $ 1,488,185
235,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA
Collateralized 7.45 07/01/23 246,322
--------------
$ 1,734,507
KENTUCKY - 0.24%
$ 130,000 Kentucky State Housing Corporation Revenue FHA
Insured 6.50 % 07/01/17 $ 135,677
LOUISIANA - 4.03%
$ 2,000,000 Louisiana Local Government Environment
Facilities 5.25 % 12/01/18 $ 1,949,860
310,000 Louisiana State PFA Student Loan Revenue AMT
FSA Insured 6.85 01/01/09 324,942
--------------
$ 2,274,802
MARYLAND - 2.58%
$ 1,500,000 Maryland State Economic Development Corporation
Student Housing Revenue 5.75 % 06/01/31 $ 1,456,875
MASSACHUSETTS - 3.58%
$ 1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 % 11/15/21 $ 1,071,350
1,000,000 Massachusetts State HFA Revenue Carlitas
Christi Obligation Group A 5.75 07/01/28 951,410
--------------
$ 2,022,760
</TABLE>
60
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MINNESOTA - 1.09%
$ 250,000 Minneapolis MN Community Development Agency
Series 7-A 5.50 % 06/01/12 $ 252,185
350,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 364,903
--------------
$ 617,088
MONTANA - 1.65%
$ 1,000,000 Lewis & Clark County MT Environmental Revenue 5.60 % 01/01/27 $ 933,750
NEBRASKA - 1.76%
$ 990,000 Nebraska Finance Authority Single Family
Housing Series B GNMA/ FNMA/FHLMC
Collateralized 5.85 % 09/01/28 $ 994,950
NEVADA - 0.90%
$ 500,000 Reno NV Hospital Revenue 5.63 % 05/15/23 $ 505,175
NEW JERSEY - 2.36%
$ 1,250,000 New Jersey State MFHR FHA Collateralized 7.00 % 05/01/30 $ 1,335,613
NEW YORK - 0.47%
$ 250,000 New York NY FGIC Series E 6.00 % 08/01/12 $ 266,133
NORTH CAROLINA - 1.66%
$ 1,000,000 North Carolina Eastern Municipal Power Agency 5.75 % 01/01/26 $ 939,330
</TABLE>
61
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA - 2.09%
$ 200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A FNMA Collateralized 7.13 % 07/01/21 $ 206,056
490,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 511,815
445,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 462,030
--------------
$ 1,179,901
OREGON - 7.72%
$ 2,500,000 Klamath Falls OR Electric Utility Revenue 6.00 % 01/01/25 $ 2,436,350
1,000,000 Oregon State Health Housing Educational &
Cutural Facilities Authority 5.25 10/01/16 945,270
1,000,000 Tri-county Metropolitan Transportation District
Revenue Series One 5.40 06/01/19 982,500
--------------
$ 4,364,120
PENNSYLVANIA - 4.73%
$ 2,250,000 Chester County PA Health & Education Facilities 5.38 % 05/15/27 $ 2,123,438
500,000 Pennsylvania State Higher EDFA Student Loan
Revenue Series D AMT AMBAC Insured 7.05 10/01/16 546,875
--------------
$ 2,670,313
TENNESSEE - 1.79%
$ 1,000,000 Shelby County TN Health Educational & Housing
Facility Series A 6.00 % 07/01/28 $ 1,011,730
</TABLE>
62
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
TEXAS - 5.37%
$ 250,000 Decatur TX Indeptness School District 6.13 % 08/01/25 $ 266,128
270,000 El Paso County CO USD 6.15 12/15/08 296,206
250,000 El Paso TX GO 7.00 08/15/06 283,593
1,000,000 Gulf Coast Texas Waste Disposal 5.50 09/01/17 966,350
125,000 Port Arthur TX MBIA Insured 8.50 02/15/03 141,874
2,000,000 Texas Municipal Power Agency Revenue (zero
coupon) 5.56 # 09/01/17 739,180
325,000 Travis County TX HFC Residential Mortgage
Revenue Series A GNMA/ FNMA Collateralized 7.00 12/01/11 342,180
--------------
$ 3,035,511
UTAH - 3.47%
$ 250,000 Salt Lake City UT RDA Neighborhood Tax Revenue 6.50 % 10/01/01 $ 261,585
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 527,080
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,164,009
5,000 Utah State HFA SFMR Series D-2 AMT FHA
Collateralized 6.45 01/01/11 5,220
--------------
$ 1,957,894
VIRGINIA - 3.38%
$ 2,000,000 Pocahontas VA Parkway Associates 5.50 % 08/15/28 $ 1,911,000
WASHINGTON - 11.11%
$ 500,000 Clark County WA Sewer Revenue 6.00 % 12/01/06 $ 539,270
2,000,000 Grant County WA Public Hospital District 5.15 12/01/23 1,826,359
100,000 Island County WA USD South Whidbey AMBAC
Insured 6.75 12/01/07 113,296
100,000 South Columbian Basin WA Irrigation District
Revenue 6.00 12/01/02 105,582
</TABLE>
63
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 1,250,000 University of Washington Educational and
Research Properties Lease Revenue 4225
Roosevelt Project Series A 5.38 % 06/01/29 $ 1,179,687
1,100,000 Vancouver WA HFA Revenue 5.65 03/01/31 1,044,350
1,420,000 Washington State SFMR Series E AMT GNMA/FNMA
Collateralized 7.10 07/01/22 1,469,316
--------------
$ 6,277,860
TOTAL MUNICIPAL BONDS $ 57,457,374
(Cost $58,799,561)
</TABLE>
64
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.67%
944,903 Stagecoach National Tax-Free Money Market Trust+X+ $ 944,903
(Cost $944,903)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $59,744,464)* (Notes 1 and 3) 103.36% $ 58,402,277
Other Assets and Liabilities, Net (3.36) (1,897,229 )
------ --------------
TOTAL NET ASSETS 100.00% $ 56,505,048
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 671,669
Gross Unrealized Depreciation (2,013,856)
--------------
NET UNREALIZED DEPRECIATION $ (1,342,187)
--------------
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
65
<PAGE>
Oregon Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 99.10%
GUAM - 3.77%
$ 1,500,000 Guam Housing Single Family Mortgage Backed
Series A 5.75 % 09/01/31 $ 1,545,465
OREGON - 91.32%
$ 1,000,000 Benton County OR Hospital Revenue 5.13 % 10/01/28 $ 927,500
1,100,000 Chemeketa OR Community College District FGIC
Insured 6.00 06/01/06 1,186,064
1,000,000 Chemeketa OR Community College District Series
B 5.60 06/01/14 1,042,260
250,000 Chemeketa OR Community College MBIA Insured 6.50 07/01/07 271,708
495,000 Clackamas County OR HFFA Jennings Lodge Project
GNMA FHA Credit Support 7.50 10/20/31 514,904
1,000,000 Clackamas County OR HFFA Odd Fellows Home
Series A 5.88 09/15/21 980,970
300,000 Clackamas County OR HFFA Sisters of Providence
Series A 6.38 10/01/05 318,177
2,070,000 Columbia County Oregon School District (zero
coupon) 5.44 # 06/01/15 881,758
1,750,000 Emerald Peoples OR Utility District 7.35 11/01/07 2,049,460
1,000,000 Eugene OR Electric Utility Revenue 5.05 08/01/22 954,120
845,000 Eugene OR Public Safety Facilities 6.00 06/01/06 910,597
1,490,000 Hillsboro OR Hospital Healthcare Facility 5.48 10/01/12 1,510,488
500,000 Josephine County OR USD FGIC 5.75 06/01/07 532,315
1,750,000 Klamath Falls OR Electric Utility Revenue 6.00 01/01/25 1,705,445
1,000,000 Linn & Benton OR School District GO 5.35 06/01/08 1,035,240
1,000,000 Medford OR Hospital Facilities Authority
Revenue Asante Health Services Series A MBIA
Insured 5.25 08/15/13 1,001,250
1,500,000 Oregon Health Sciences University Revenue (zero
coupon) 5.48 # 07/01/21 457,500
750,000 Oregon State Board of Higher Education GO
Series C 5.95 08/01/26 811,890
</TABLE>
66
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 Oregon Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 500,000 Oregon State Department Administrative Services
COP Series A 5.80 05/01/24 $ 535,690
595,000 Oregon State Economic Development Revenue 6.35 08/01/25 614,843
480,000 Oregon State GO 7.25 07/01/07 557,688
175,000 Oregon State GO 9.00 10/01/05 216,416
1,500,000 Oregon State Health Housing 6.13 04/15/29 1,413,750
1,715,000 Oregon State Health Housing Educational &
Cultural Facilities Cedarwest Housing Project
Series A 4.75 01/01/30 1,691,419
1,650,000 Oregon State Health Housing Educational &
Cutural Facilities Authority 5.25 10/01/16 1,559,696
3,000,000 Oregon State Housing & Community Services
Revenue Series B 5.45 07/01/29 2,906,250
750,000 Oregon State Housing & Community Services
Revenue Series F 5.50 07/01/28 732,165
2,000,000 Oregon State Veterans Welfare Series 77 5.30 10/01/29 1,956,420
1,000,000 Port St Helens OR Pollution Control Revenue
Project Portland General Electric Company
Series A 5.25 08/01/14 971,320
930,000 Portland OR GO Series A 4.88 06/01/18 873,038
1,000,000 Portland OR Housing Authority Revenue 5.10 01/01/27 945,000
1,000,000 South Fork Oregon Water Board Revenue Series B
FSA Insured 6.00 02/01/14 1,069,450
1,000,000 Washington County OR Housing Authority Revenue 6.13 07/01/29 970,000
575,000 Washington County OR School District No. 088 J
Sherwood FSA Insured 6.10 06/01/12 619,114
</TABLE>
67
<PAGE>
Oregon Tax-Free Fund PORTFOLIO OF INVESTMENTS- JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 Washington County OR Unified Sewer Agency
Revenue FGIC Insured 5.50 10/01/13 $ 2,064,600
550,000 Western Lane OR HFFA Revenue Sisters of St.
Joseph Peace Services MBIA Insured 5.63 08/01/07 580,949
--------------
$ 37,369,454
PUERTO RICO - 4.01%
$ 40,000 Commonwealth of Puerto Rico Aqueduct & Sewer
Revenue 10.25 % 07/01/09 $ 51,981
295,000 Commonwealth of Puerto Rico MFHR LOC -
Government Development Bank of Puerto Rico 7.50 04/01/22 304,073
1,000,000 Commonwealth of Puerto Rico Public Financing
Corporation Series A 5.38 06/01/15 1,025,109
250,000 Commonwealth of Puerto Rico SFMR Series B GNMA
Insured 7.50 10/15/12 259,408
--------------
$ 1,640,571
TOTAL MUNICIPAL BONDS $ 40,555,490
(Cost $40,711,702)
</TABLE>
68
<PAGE>
PORTFOLIO OF INVESTMENTS - JUNE 30, 1999 Oregon Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.90%
776,179 Stagecoach National Tax-Free Money Market
Trust+X+ $ 776,179
(Cost $776,179)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $41,487,881)* (Notes 1 and 3) 101.00% $ 41,331,669
Other Assets and Liabilities, Net (1.00) (409,561 )
------ --------------
TOTAL NET ASSETS 100.00% $ 40,922,108
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 536,094
Gross Unrealized Depreciation (692,306)
--------------
NET UNREALIZED DEPRECIATION ($ 156,212)
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Housing 30%
Education 20%
Public Improvements 11%
Hospital 14%
Sewer 5%
Health 3%
Water 3%
Other 14%
</TABLE>
The accompanying notes are an integral part of these financial statements.
69
<PAGE>
Tax-Free Funds STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA
TAX-FREE
FUND
<S> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $16,252,261
Cash 4,384
RECEIVABLES:
Interest 315,945
Fund shares sold 19,687
Investment securities sold 0
Organization expenses, net of
amortization 0
Prepaid expenses 0
TOTAL ASSETS 16,592,277
LIABILITIES
Payables:
Investment securities purchased 0
Distribution to shareholders 61,293
Fund shares redeemed 68,645
Due to distributor (Note 2) 1,596
Due to adviser (Note 2) 7,079
Other 96,210
TOTAL LIABILITIES 234,823
TOTAL NET ASSETS
$16,357,454
NET ASSETS CONSIST OF:
Paid-in capital $16,484,253
Undistributed net realized gain (loss)
on investments 156,723
Net unrealized appreciation
(depreciation) of investments (283,522)
TOTAL NET ASSETS $16,357,454
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 5,219,346
Shares outstanding - Class A 510,687
Net asset value per share - Class A $ 10.22
Maximum offering price per share - Class
A $ 10.70(1)
Net assets - Class B $ 1,582,359
Shares outstanding - Class B 160,500
Net asset value and offering price per
share - Class B $ 9.86
Net assets - Class C N/A
Shares outstanding - Class C N/A
Net asset value and offering price per
share - Class C N/A
Net assets - Institutional Class $ 9,555,749
Shares outstanding - Institutional Class 934,526
Net asset value and offering price per
share - Institutional Class $ 10.23
INVESTMENT AT COST (NOTE 3) $16,535,783
- --------------------------------------------------------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
The accompanying notes are an integral part of these financial statements.
70
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1999 Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
BOND FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $683,933,555 $ 49,556,536 $ 58,402,277 $ 41,331,669
Cash 4,037 4,575 4,355 4,619
RECEIVABLES:
Interest 10,831,701 794,137 871,889 603,246
Fund shares sold 3,394,078 112,409 112,267 293,450
Investment securities sold 8,511,226 0 0 0
Organization expenses, net of
amortization 0 0 0 5,511
Prepaid expenses 17,043 0 6,599 24
TOTAL ASSETS 706,691,640 50,467,657 59,397,387 42,238,519
LIABILITIES
Payables:
Investment securities purchased 14,558,623 1,003,560 2,441,320 969,990
Distribution to shareholders 2,489,443 151,366 223,231 150,314
Fund shares redeemed 1,448,547 245,050 12,255 89,275
Due to distributor (Note 2) 442,214 1,642 20,918 10,079
Due to adviser (Note 2) 375,943 21,124 27,908 17,904
Other 228,422 113,684 166,707 78,849
TOTAL LIABILITIES 19,543,192 1,536,426 2,892,339 1,316,411
TOTAL NET ASSETS
$687,148,448 $ 48,931,231 $ 56,505,048 $ 40,922,108
NET ASSETS CONSIST OF:
Paid-in capital $664,793,149 $ 48,674,070 $ 57,796,937 $ 41,047,963
Undistributed net realized gain (loss)
on investments 1,881,511 311,557 50,298 30,357
Net unrealized appreciation
(depreciation) of investments 20,473,788 (54,396) (1,342,187) (156,212)
TOTAL NET ASSETS $687,148,448 $ 48,931,231 $ 56,505,048 $ 40,922,108
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $461,573,867 $ 41,298,719 $ 35,645,143 $ 24,923,758
Shares outstanding - Class A 41,945,490 4,035,987 2,316,327 1,547,850
Net asset value per share - Class A $ 11.00 $ 10.23 $ 15.39 $ 16.10
Maximum offering price per share - Class
A $ 11.52(1) $ 10.55(2) $ 16.12(1) $ 16.86(1)
Net assets - Class B $129,698,522 N/A $ 4,051,090 $ 10,095,205
Shares outstanding - Class B 11,563,226 N/A 399,102 1,023,443
Net asset value and offering price per
share - Class B $ 11.22 N/A $ 10.15 $ 9.86
Net assets - Class C $ 22,250,626 N/A $ 8,922,651 N/A
Shares outstanding - Class C 1,983,446 N/A 878,872 N/A
Net asset value and offering price per
share - Class C $ 11.22 N/A $ 10.15 N/A
Net assets - Institutional Class $ 73,625,433 $ 7,632,512 $ 7,886,164 $ 5,903,145
Shares outstanding - Institutional Class 6,674,441 758,046 512,646 366,692
Net asset value and offering price per
share - Institutional Class $ 11.03 $ 10.07 $ 15.38 $ 16.10
INVESTMENT AT COST (NOTE 3) $663,459,767 $ 49,610,932 $ 59,744,464 $ 41,487,881
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
The accompanying notes are an integral part of these financial statements.
71
<PAGE>
Tax-Free Funds STATEMENT OF OPERATIONS - FOR THE YEAR ENDED JUNE 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA
TAX-FREE
FUND
<S> <C>
INVESTMENT INCOME
Interest $ 897,957
TOTAL INVESTMENT INCOME 897,957
EXPENSES (NOTE 2)
Advisory fees 86,871
Administration fees 14,351
Custody fees 2,971
Shareholder servicing fees 43,653
Portfolio accounting fees 36,452
Transfer agency fees 16,372
Distribution fees 12,286
Organization costs 0
Legal and audit fees 44,121
Registration fees 19,528
Directors' fees 1,359
Shareholder reports 10,638
Other 3,826
TOTAL EXPENSES 292,428
Less:
Waived fees and reimbursed expenses (149,443)
Net Expenses 142,985
NET INVESTMENT INCOME (LOSS) 754,972
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 165,623
Net change in unrealized appreciation
(depreciation) of investments (777,937)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (612,314)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 142,658
- ------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
72
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED JUNE 30, 1999 Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
BOND FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 36,660,551 $ 2,502,985 $ 3,231,284 $ 2,155,674
TOTAL INVESTMENT INCOME 36,660,551 2,502,985 3,231,284 2,155,674
EXPENSES (NOTE 2)
Advisory fees 3,493,739 274,263 286,151 208,124
Administration fees 569,825 45,036 47,231 34,149
Custody fees 120,388 10,397 9,734 7,044
Shareholder servicing fees 2,051,792 161,552 144,081 104,600
Portfolio accounting fees 202,079 61,815 62,739 53,525
Transfer agency fees 919,990 72,185 73,658 53,577
Distribution fees 935,632 0 91,289 62,314
Organization costs 0 0 0 2,533
Legal and audit fees 44,777 80,838 41,225 58,656
Registration fees 157,920 7,142 50,713 18,361
Directors' fees 1,286 2,279 1,622 1,706
Shareholder reports 68,486 40,625 17,774 15,000
Other 69,714 30,088 6,978 7,391
TOTAL EXPENSES 8,635,628 786,220 833,195 626,980
Less:
Waived fees and reimbursed expenses (2,341,215) (368,597) (306,980) (277,197)
Net Expenses 6,294,413 417,623 526,215 349,783
NET INVESTMENT INCOME (LOSS) 30,366,138 2,085,362 2,705,069 1,805,891
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 2,704,577 622,402 751,491 189,904
Net change in unrealized appreciation
(depreciation) of investments (17,269,155) (878,441) (2,867,053) (1,393,782)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (14,564,578) (256,039) (2,115,562) (1,203,878)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 15,801,560 $ 1,829,323 $ 589,507 $ 602,013
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
73
<PAGE>
Tax-Free Funds STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND
-------------------------------------------
FOR THE
THREE
FOR THE MONTHS FOR THE
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 754,972 $ 198,657 $ 864,395
Net realized gain (loss) on sale of
investments 165,623 127,076 425,355
Net change in unrealized appreciation
(depreciation) of investments (777,937) (107,342) 543,222
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 142,658 218,391 1,832,972
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (233,455) (58,125) (241,375)
CLASS B (59,487) (14,122) (29,604)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (462,030) (126,410) (593,416)
From net realized gain on sale of
investments
CLASS A (97,543) 0 (99,458)
CLASS B (29,680) 0 (21,224)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (191,837) 0 (238,712)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 647,835 153,082 473,873
Reinvestment of dividends - Class A 293,582 46,249 265,218
Cost of shares redeemed - Class A (811,959) (290,952) (1,192,150)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 129,458 (91,621) (453,059)
Proceeds from shares sold - Class B 144,233 268,310 1,453,702
Reinvestment of dividends - Class B 73,077 9,208 39,432
Cost of shares redeemed - Class B (231,481) (142,881) (127,727)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B (14,171) 134,637 1,365,407
Proceeds from shares sold - Class C N/A N/A N/A
Reinvestment of dividends - Class C N/A N/A N/A
Cost of shares redeemed - Class C N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A N/A N/A
Proceeds from shares sold -
Institutional Class 1,304,525 162,455 1,272,595
Reinvestment of dividends -
Institutional Class 16,058 1,396 10,674
Cost of shares redeemed -
Institutional Class (2,208,523) (1,206,926) (4,037,264)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (887,940) (1,043,075) (2,753,995)
INCREASE (DECREASE) IN NET ASSETS (1,704,027) (980,325) (1,232,464)
NET ASSETS:
Beginning net assets 18,061,481 19,041,806 20,274,270
ENDING NET ASSETS $16,357,454 $18,061,481 $19,041,806
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $275,906,280 FOR CLASS A SHARES,
$72,298,980 FOR CLASS B SHARES AND $80,613,090 FOR INSTITUTIONAL CLASS
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA
TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
74
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME
FUND
CALIFORNIA TAX-FREE BOND FUND -----------------------------
---------------------------------------------- FOR THE
THREE
FOR THE FOR THE SIX FOR THE MONTHS
YEAR ENDED MONTHS ENDED YEAR ENDED FOR THE ENDED
JUNE 30, JUNE 30, DECEMBER 31, YEAR ENDED JUNE 30,
1999 1998 1997 (1) JUNE 30, 1999 1998
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 30,366,138 $ 15,466,102 $ 12,378,782 $ 2,085,362 $ 587,499
Net realized gain (loss) on sale of
investments 2,704,577 7,346,974 1,877,019 622,402 18,369
Net change in unrealized appreciation
(depreciation) of investments (17,269,155) (4,290,607) 34,032,101 (878,441) (42,012)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 15,801,560 18,522,469 48,287,902 1,829,323 563,856
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (21,777,566) (11,682,363) (11,799,980) (1,776,173) (521,049)
CLASS B (4,443,330) (1,761,231) (141,890)(2) N/A N/A
CLASS C (542,049) (140,621) (247,997) N/A N/A
INSTITUTIONAL CLASS (3,603,193) (1,881,887) (188,915)(2) (309,189) (66,450)
From net realized gain on sale of
investments
CLASS A (6,286,449) 0 (1,345,647) (542,011) 0
CLASS B (1,503,850) 0 0(2) N/A N/A
CLASS C (163,585) 0 (36,342) N/A N/A
INSTITUTIONAL CLASS (1,005,446) 0 0(2) (97,377) 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 47,645,429 30,091,476 286,472,490 4,881,920 2,175,218
Reinvestment of dividends - Class A 19,237,556 6,863,798 6,671,789 2,120,491 464,836
Cost of shares redeemed - Class A (89,510,989) (49,367,498) (49,748,321) (19,138,662) (7,462,370)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (22,628,004) (12,412,224) 243,395,958 (12,136,251) (4,822,316)
Proceeds from shares sold - Class B 43,726,476 26,245,794 75,031,948(2) N/A N/A
Reinvestment of dividends - Class B 4,875,202 1,294,047 1,436(2) N/A N/A
Cost of shares redeemed - Class B (14,057,410) (5,915,208) (468,649)(2) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 34,544,268 21,624,633 74,564,735(2) N/A N/A
Proceeds from shares sold - Class C 16,190,204 2,905,277 1,299,532 N/A N/A
Reinvestment of dividends - Class C 530,761 65,436 133,685 N/A N/A
Cost of shares redeemed - Class C (1,948,559) (612,517) (2,250,658) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C 14,772,406 2,358,196 (817,441) N/A N/A
Proceeds from shares sold -
Institutional Class 14,893,157 11,031,568 80,818,091(2) 1,894,102 875,011
Reinvestment of dividends -
Institutional Class 1,797,154 188,998 611(2) 159,068 18,829
Cost of shares redeemed -
Institutional Class (23,036,974) (13,124,832) (1,090,971)(2) (1,818,652) (399,668)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (6,346,663) (1,904,266) 79,727,731(2) 234,518 494,172
INCREASE (DECREASE) IN NET ASSETS (3,181,901) 12,722,706 431,398,114 (12,797,160) (4,351,787)
NET ASSETS:
Beginning net assets 690,330,349 677,607,643 246,209,529 61,728,391 66,080,178
ENDING NET ASSETS $687,148,448 $690,330,349 $677,607,643 $ 48,931,231 $61,728,391
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE
YEAR ENDED
MARCH 31,
1998
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 2,700,180
Net realized gain (loss) on sale of
investments 525,212
Net change in unrealized appreciation
(depreciation) of investments 896,098
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,121,490
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (2,439,178)
CLASS B N/A
CLASS C N/A
INSTITUTIONAL CLASS (261,002)
From net realized gain on sale of
investments
CLASS A (226,771)
CLASS B N/A
CLASS C N/A
INSTITUTIONAL CLASS (23,115)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 19,705,630
Reinvestment of dividends - Class A 2,375,541
Cost of shares redeemed - Class A (31,777,362)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (9,696,191)
Proceeds from shares sold - Class B N/A
Reinvestment of dividends - Class B N/A
Cost of shares redeemed - Class B N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B N/A
Proceeds from shares sold - Class C N/A
Reinvestment of dividends - Class C N/A
Cost of shares redeemed - Class C N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A
Proceeds from shares sold -
Institutional Class 1,040,195
Reinvestment of dividends -
Institutional Class 87,332
Cost of shares redeemed -
Institutional Class (1,230,497)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (102,970)
INCREASE (DECREASE) IN NET ASSETS (8,627,737)
NET ASSETS:
Beginning net assets 74,707,915
ENDING NET ASSETS $ 66,080,178
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0
- -----------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $275,906,280 FOR CLASS A SHARES,
$72,298,980 FOR CLASS B SHARES AND $80,613,090 FOR INSTITUTIONAL CLASS
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA
TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
75
<PAGE>
Tax-Free Funds STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND
-------------------------------------------
FOR THE
THREE
FOR THE MONTHS FOR THE
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 1998 (1)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 2,705,069 $ 671,375 $ 1,223,735
Net realized gain (loss) on sale of
investments 751,491 (63,205) (633,882)
Net change in unrealized appreciation
(depreciation) of investments (2,867,053) 244,959 1,310,218
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 589,507 853,129 1,900,071
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,823,895) (489,020) (746,374)
CLASS B (113,579) (16,592) (23,330)
CLASS C (290,886) (76,695) (95,551)(2)
INSTITUTIONAL CLASS (476,709) (89,068) (358,480)
From net realized gain on sale of
investments
CLASS A 0 0 (18,814)
CLASS B 0 0 (3,377)
CLASS C 0 0 0(2)
INSTITUTIONAL CLASS 0 0 (30,309)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 3,871,825 243,714 39,883,662
Reinvestment of dividends - Class A 968,214 242,152 375,942
Cost of shares redeemed - Class A (8,691,870) (2,111,170) (3,464,028)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (3,851,831) (1,625,304) 36,795,576
Proceeds from shares sold - Class B 2,723,746 592,961 1,173,456
Reinvestment of dividends - Class B 91,033 10,434 20,658
Cost of shares redeemed - Class B (452,529) (98,879) (613)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 2,362,250 504,516 1,193,501
Proceeds from shares sold - Class C 3,563,453 4,329 8,974,820(2)
Reinvestment of dividends - Class C 138,205 27,703 28,180(2)
Cost of shares redeemed - Class C (1,788,439) (350,171) (647,934)(2)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C 1,913,219 (318,139) 8,355,066(2)
Proceeds from shares sold -
Institutional Class 8,566,438 439,548 2,720,368
Reinvestment of dividends -
Institutional Class 160,729 37,915 133,806
Cost of shares redeemed -
Institutional Class (8,199,931) (458,684) (2,912,585)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 527,236 18,779 (58,411)
INCREASE (DECREASE) IN NET ASSETS (1,164,688) (1,238,394) 46,909,568
NET ASSETS:
Beginning net assets 57,669,736 58,908,130 11,998,562
ENDING NET ASSETS $56,505,048 $57,669,736 $58,908,130
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $37,681,717 FOR CLASS A SHARES AND
$8,939,165 FOR CLASS C SHARES AS A RESULT OF THE CONSOLIDATION OF THE
OVERLAND MUNICIPAL INCOME FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
76
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND
-------------------------------------------
FOR THE
THREE
FOR THE MONTHS FOR THE
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 1,805,891 $ 429,810 $ 1,729,188
Net realized gain (loss) on sale of
investments 189,904 100,122 600,687
Net change in unrealized appreciation
(depreciation) of investments (1,393,782) (61,124) 1,227,645
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 602,013 468,808 3,557,520
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (1,197,210) (303,983) (1,311,235)
CLASS B (301,568) (42,790) (43,691)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (307,113) (83,037) (374,262)
From net realized gain on sale of
investments
CLASS A (413,064) 0 (475,455)
CLASS B (126,475) 0 (29,182)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (109,685) 0 (128,424)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 1,368,772 948,349 2,372,220
Reinvestment of dividends - Class A 1,298,287 218,677 1,381,033
Cost of shares redeemed - Class A (4,274,901) (1,356,107) (7,505,296)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (1,607,842) (189,081) (3,752,043)
Proceeds from shares sold - Class B 4,533,417 2,271,463 3,439,482
Reinvestment of dividends - Class B 351,827 26,167 54,270
Cost of shares redeemed - Class B (300,137) (121,481) (6,373)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 4,585,107 2,176,149 3,487,379
Proceeds from shares sold - Class C N/A N/A N/A
Reinvestment of dividends - Class C N/A N/A N/A
Cost of shares redeemed - Class C N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A N/A N/A
Proceeds from shares sold -
Institutional Class 862,300 339,055 895,262
Reinvestment of dividends -
Institutional Class 146,566 23,882 119,243
Cost of shares redeemed -
Institutional Class (2,145,612) (688,847) (1,808,127)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (1,136,746) (325,910) (793,622)
INCREASE (DECREASE) IN NET ASSETS (12,583) 1,700,156 136,985
NET ASSETS:
Beginning net assets 40,934,691 39,234,535 39,097,550
ENDING NET ASSETS $40,922,108 $40,934,691 $39,234,535
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
77
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE
FUND (1)
CLASS A
----------------------
THREE
MONTHS
YEAR ENDED ENDED
JUNE 30, JUNE 30,
1999 1998 (2)
<S> <C> <C>
- ----------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.79 $10.77
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.46 0.12
Net realized and unrealized gain
(loss) on investments (0.38) 0.02
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.08 0.14
LESS DISTRIBUTIONS:
Dividends from net investment income (0.46) (0.12)
Distributions from net realized gain (0.19) 0.00
---------- ----------
TOTAL FROM DISTRIBUTIONS (0.65) (0.12)
---------- ----------
NET ASSET VALUE, END OF PERIOD $10.22 $10.79
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 0.66% 1.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $5,219 $5,383
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets 0.77% 0.73%
Ratio of net investment income to
average net assets 4.28% 4.31%
Portfolio turnover 56% 14%
- ----------------------------------------------------------------
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses 1.61% 1.68%
Ratio of net investment income (loss) to
average net assets prior to waived
fees and reimbursed expenses 3.44% 3.36%
- ----------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
78
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
CLASS A (CONT.)
----------------------------------------------------------
FOUR
SIX MONTHS MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1998 1997 (3) 1996 1995 (4) 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.44 $10.45 $10.71 $10.68 $10.48
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.46 0.24 0.48 0.17 0.51
Net realized and
unrealized gain (loss)
on investments 0.53 (0.01) (0.09) 0.06 0.23
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.99 0.23 0.39 0.23 0.74
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.46) (0.24) (0.48) (0.20) (0.53)
Distributions from net
realized gain (0.20) 0.00 (0.17) 0.00 (0.01)
---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.66) (0.24) (0.65) (0.20) (0.54)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.77 $10.44 $10.45 $10.71 $10.68
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 9.67% 2.18% 3.60% 6.55%** 7.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $5,467 $5,744 $7,331 $24,622 $24,581
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.64% 0.60% 0.78% 0.45% 0.40%
Ratio of net investment
income to average net
assets 4.32% 4.54% 4.45% 4.73% 4.89%
Portfolio turnover 127% 77% 42% 62% 14%
- ----------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.77% 1.58% 1.46% 1.35% 1.13%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.19% 3.56% 3.77% 3.83% 4.16%
- ----------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
79
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
CLASS B
----------------------------------
THREE
MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 (2) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.40 $10.39 $10.07
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.37 0.09 0.37
Net realized and unrealized gain (loss) on investments (0.35) 0.01 0.51
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.02 0.10 0.88
LESS DISTRIBUTIONS:
Dividends from net investment income (0.37) (0.09) (0.37)
Distributions from net realized gain (0.19) 0.00 (0.19)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.56) (0.09) (0.56)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $9.86 $10.40 $10.39
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 0.00% 1.00% 8.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $1,582 $1,683 $1,546
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.49% 1.45% 1.37%
Ratio of net investment income to average net assets 3.57% 3.59% 3.49%
Portfolio turnover 56% 14% 127%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 2.95% 2.62% 3.26%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 2.11% 2.42% 1.60%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
80
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
INSTITUTIONAL CLASS
CLASS B (CONT.) ----------------------------------------------------------
---------------------- THREE
SIX MONTHS PERIOD MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, JUNE 30, JUNE 30, MARCH 31, MARCH 31, SEPT. 30,
1997 (3) 1996 (4) 1999 1998 (2) 1998 1997 (3) 1996 (5)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.07 $10.00 $10.79 $10.78 $10.44 $10.44 $10.71
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.11 0.01 0.47 0.12 0.49 0.25 0.49
Net realized and
unrealized gain (loss)
on investments (0.00) 0.07 (0.37) 0.01 0.54 0.00 (0.10)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.11 0.08 0.10 0.13 1.03 0.25 0.39
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.11) (0.01) (0.47) (0.12) (0.49) (0.25) (0.49)
Distributions from net
realized gain 0.00 0.00 (0.19) 0.00 (0.20) 0.00 (0.17)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.11) (0.01) (0.66) (0.12) (0.69) (0.25) (0.66)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.07 $10.07 $10.23 $10.79 $10.78 $10.44 $10.44
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.90% 0.76% 0.76% 1.19% 9.99% 2.38% 3.74%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $182 $20 $9,556 $10,995 $12,029 $14,349 $15,577
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.30% 1.16% 0.72% 0.68% 0.44% 0.40% 0.48%
Ratio of net investment
income to average net
assets 3.83% 3.59% 4.33% 4.36% 4.52% 4.73% 4.63%
Portfolio turnover 77% 42% 56% 14% 127% 77% 42%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.96% 1.81% 1.46% 1.55% 1.55% 1.50% 1.20%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 2.17% 2.94% 3.59% 3.49% 3.41% 3.63% 3.91%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
81
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1)
CLASS A
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, DEC. 31,
1999 1998 (2) 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.38 $11.32 $10.97
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.51 0.26 0.54
Net realized and unrealized gain (loss) on investments (0.23) 0.06 0.42
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.28 0.32 0.96
LESS DISTRIBUTIONS:
Dividends from net investment income (0.51) (0.26) (0.54)
Distributions from net realized gain (0.15) 0.00 (0.07)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.66) (0.26) (0.61)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.00 $11.38 $11.32
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 2.38% 2.86% 9.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $461,574 $499,720 $509,844
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.77% 0.75% 0.74%
Ratio of net investment income to average net assets 4.45% 4.63% 4.84%
Portfolio turnover 17% 15% 12%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.10% 1.11% 0.89%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 4.12% 4.27% 4.69%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES)
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
82
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1) (CONT.)
CLASS B
CLASS A (CONT.) ----------------------------------
---------------------------------- SIX MONTHS PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, JUNE 30, JUNE 30, DEC. 31,
1996 1995 1994 1999 1998 (2) 1997 (3)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $11.34 $10.67 $12.00 $11.60 $11.54 $11.51
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.57 0.63 0.67 0.44 0.23 0.02
Net realized and
unrealized gain (loss)
on investments (0.13) 1.08 (1.18) (0.23) 0.06 0.03
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.44 1.71 (0.51) 0.21 0.29 0.05
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.57) (0.63) (0.67) (0.44) (0.23) (0.02)
Distributions from net
realized gain (0.24) (0.41) (0.15) (0.15) 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.81) (1.04) (0.82) (0.59) (0.23) (0.02)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.97 $11.34 $10.67 $11.22 $11.60 $11.54
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 4.03% 16.38% (4.32)% 1.69% 2.49% 0.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $239,703 $268,352 $273,105 $129,699 $99,784 $77,792
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.71% 0.58% 0.50% 1.47% 1.45% 1.44%
Ratio of net investment
income to average net
assets 5.08% 5.59% 5.87% 3.74% 3.90% 3.95%
Portfolio turnover 19% 38% 4% 17% 15% 12%
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.82% 0.78% 0.95% 1.84% 1.82% 1.76%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.97% 5.39% 5.42% 3.37% 3.53% 3.63%
- ----------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES)
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
83
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1)
(CONT.)
CLASS C (2)
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, DEC. 31,
1999 1998 (3) 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.60 $11.54 $11.19
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.44 0.23 0.47
Net realized and unrealized gain (loss) on investments (0.23) 0.06 0.42
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.21 0.29 0.89
LESS DISTRIBUTIONS:
Dividends from net investment income (0.44) (0.23) (0.47)
Distributions from net realized gain (0.15) 0.00 (0.07)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.59) (0.23) (0.54)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.22 $11.60 $11.54
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 1.69% 2.49% 8.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $22,251 $8,249 $5,860
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.47% 1.45% 1.48%
Ratio of net investment income to average net assets 3.71% 3.90% 4.19%
Portfolio turnover 17% 15% 12%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.81% 1.78% 1.63%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.37% 3.57% 4.04%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES)
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D AND WAS RENAMED
AS CLASS C IN CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS
FUNDS, INC. AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
84
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1) (CONT.)
INSTITUTIONAL CLASS
CLASS C (2) (CONT.) ----------------------------------
---------------------------------- SIX MONTHS PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, JUNE 30, JUNE 30, DEC. 31,
1996 1995 1994 1999 1998 (3) 1997 (4)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $11.57 $10.88 $12.24 $11.40 $11.35 $11.32
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.49 0.56 0.60 0.52 0.26 0.03
Net realized and
unrealized gain (loss)
on investments (0.13) 1.10 (1.20) (0.22) 0.05 0.03
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.36 1.66 (0.60) 0.30 0.31 0.06
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.49) (0.56) (0.60) (0.52) (0.26) (0.03)
Distributions from net
realized gain (0.25) (0.41) (0.16) (0.15) 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.74) (0.97) (0.76) (0.67) (0.26) (0.03)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $11.19 $11.57 $10.88 $11.03 $11.40 $11.35
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 3.24% 15.58% (5.00)% 2.46% 2.80% 0.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $6,506 $7,063 $7,346 $73,625 $82,577 $84,113
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.46% 1.30% 1.20% 0.72% 0.69% 0.63%
Ratio of net investment
income to average net
assets 4.33% 4.87% 5.15% 4.50% 4.69% 4.79%
Portfolio turnover 19% 38% 4% 17% 15% 12%
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.59% 1.57% 1.82% 1.01% 0.98% 0.92%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.20% 4.60% 4.53% 4.21% 4.40% 4.50%
- ----------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES)
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D AND WAS RENAMED
AS CLASS C IN CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS
FUNDS, INC. AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
85
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND
CLASS A
----------------------------------
THREE
MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 (1) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.44 $10.44 $10.27
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.39 0.10 0.39
Net realized and unrealized gain (loss) on investments (0.09) 0.00 0.20
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.30 0.10 0.59
LESS DISTRIBUTIONS:
Dividends from net investment income (0.39) (0.10) (0.39)
Distributions from net realized gain (0.12) 0.00 (0.03)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.51) (0.10) (0.42)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.23 $10.44 $10.44
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 2.84% 0.93% 5.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $41,299 $54,169 $59,011
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.75% 0.75% 0.68%
Ratio of net investment income to average net assets 3.70% 3.72% 3.78%
Portfolio turnover 68% 2% 88%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.42% 1.44% 1.29%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.03% 3.03% 3.17%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
86
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND (CONT.)
CLASS A (CONT.) INSTITUTIONAL CLASS
---------------------------------------------- ----------------------------------
NINE THREE
SIX MONTHS MONTHS MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, DEC. 31, DEC. 31, JUNE 30, JUNE 30, MARCH 31,
1997 (2) 1996 (3) 1995 1994 1999 1998 (1) 1998
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.26 $10.35 $9.84 $10.36 $10.27 $10.27 $10.11
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.19 0.29 0.38 0.40 0.39 0.10 0.39
Net realized and
unrealized gain (loss)
on investments 0.01 (0.09) 0.51 (0.52) (0.08) 0.00 0.19
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.20 0.20 0.89 (0.12) 0.31 0.10 0.58
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.19) (0.29) (0.38) (0.40) (0.39) (0.10) (0.39)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 (0.12) 0.00 (0.03)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) (0.29) (0.38) (0.40) (0.51) (0.10) (0.42)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.27 $10.26 $10.35 $9.84 $10.07 $10.27 $10.27
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.97% 2.01% 9.14% (1.10)% 2.96% 0.94% 5.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $67,647 $82,359 $77,965 $48,998 $7,633 $7,559 $7,069
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.65% 0.65% 0.65% 0.16% 0.70% 0.70% 0.62%
Ratio of net investment
income to average net
assets 3.73% 3.83% 3.70% 4.03% 3.75% 3.77% 3.84%
Portfolio turnover 14% 48% 31% 33% 68% 2% 88%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.18% 1.14% 1.22% 1.21% 1.30% 1.40% 1.17%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.20% 3.34% 3.13% 2.98% 3.15% 3.07% 3.29%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
87
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE
INCOME FUND (CONT.)
INSTITUTIONAL CLASS
(CONT.)
----------------------
SIX MONTHS PERIOD
ENDED ENDED
MARCH 31, SEPT. 30,
1997 (2) 1996 (5)
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.10 $10.06
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.19 0.02
Net realized and unrealized gain (loss) on investments 0.01 0.04
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.20 0.06
LESS DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.02)
Distributions from net realized gain 0.00 0.00
---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) (0.02)
---------- ----------
NET ASSET VALUE, END OF PERIOD $10.11 $10.10
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 2.00% 0.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $7,061 $10,066
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.60% 0.55%
Ratio of net investment income to average net assets 3.73% 3.06%
Portfolio turnover 14% 48%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 1.05% 0.92%
Ratio of net investment income (loss) to average net assets prior to
waived fees and reimbursed expenses 3.28% 2.69%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
88
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1)
CLASS A
----------------------------------------------------------------------------------
THREE FOUR
MONTHS SIX MONTHS MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1999 1998 (3) 1998 1997 (2) 1996 1995 (4) 1995
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $15.97 $15.92 $15.17 $15.24 $15.34 $15.28 $14.98
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.76 0.19 0.75 0.37 0.72 0.24 0.68
Net realized and
unrealized gain (loss)
on investments (0.58) 0.05 0.81 (0.07) (0.10) 0.08 0.32
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.18 0.24 1.56 0.30 0.62 0.32 1.00
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.76) (0.19) (0.75) (0.37) (0.72) (0.26) (0.70)
Distributions from net
realized gain 0.00 0.00 (0.06) 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.76) (0.19) (0.81) (0.37) (0.72) (0.26) (0.70)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $15.39 $15.97 $15.92 $15.17 $15.24 $15.34 $15.28
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.03% 1.50% 10.44% 1.95% 4.03% 6.53%** 6.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $35,645 $40,820 $42,316 $4,526 $4,827 $14,305 $14,458
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.81% 0.81% 0.71% 0.35% 0.42% 0.35% 0.35%
Ratio of net investment
income to average net
assets 4.73% 4.72% 4.69% 4.81% 4.69% 4.65% 4.59%
Portfolio turnover 90% 30% 78% 86% 73% 86% 23%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.27% 1.37% 1.61% 2.11% 1.42% 1.85% 1.51%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.27% 4.16% 3.79% 3.05% 3.69% 3.15% 3.43%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
89
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1)
CLASS B
----------------------------------
THREE
MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 (2) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.54 $10.50 $10.01
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.44 0.11 0.42
Net realized and unrealized gain (loss) on investments (0.39) 0.04 0.53
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.15 0.95
LESS DISTRIBUTIONS:
Dividends from net investment income (0.44) (0.11) (0.42)
Distributions from net realized gain 0.00 0.00 (0.04)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.44) (0.11) (0.46)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.15 $10.54 $10.50
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 0.35% 1.41% 9.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $4,051 $1,841 $1,330
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.41% 1.41% 1.26%
Ratio of net investment income to average net assets 4.12% 4.05% 3.88%
Portfolio turnover 90% 30% 78%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 2.52% 2.71% 5.74%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.01% 2.75% (0.60)%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
90
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1) (CONT.)
CLASS C INSTITUTIONAL CLASS
CLASS B (CONT.) ---------------------------------- ----------------------
---------------------- THREE THREE
SIX MONTHS PERIOD MONTHS PERIOD MONTHS
ENDED ENDED YEAR ENDED ENDED ENDED YEAR ENDED ENDED
MARCH 31, SEPT. 30, JUNE 30, JUNE 30, MARCH 31, JUNE 30, JUNE 30,
1997 (3) 1996 (4) 1999 1998 (2) 1998 (5) 1999 1998 (2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.06 $10.00 $10.54 $10.51 $10.48 $15.97 $15.92
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.06 0.00 0.44 0.11 0.13 0.77 0.19
Net realized and
unrealized gain (loss)
on investments (0.05) 0.06 (0.39) 0.03 0.03 (0.59) 0.05
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.01 0.06 0.05 0.14 0.16 0.18 0.24
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.06) 0.00 (0.44) (0.11) (0.13) (0.77) (0.19)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.06) 0.00 (0.44) (0.11) (0.13) (0.77) (0.19)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.01 $10.06 $10.15 $10.54 $10.51 $15.38 $15.97
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 0.10% 0.60% 0.35% 1.32% 1.49% 1.02% 1.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $119 $0 $8,923 $7,312 $7,608 $7,886 $7,696
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.10% 0.00% 1.41% 1.41% 1.40% 0.76% 0.76%
Ratio of net investment
income to average net
assets 3.80% 1.83% 4.13% 4.12% 4.09% 4.78% 4.76%
Portfolio turnover 86% 73% 90% 30% 78% 90% 30%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 13.74% 0.00% 2.00% 2.10% 2.28% 1.33% 1.35%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses (8.84)% 1.83% 3.54% 3.43% 3.21% 4.21% 4.17%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
91
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1)
INSTITUTIONAL CLASS (CONT.)
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (4) 1996 (6)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $15.17 $15.24 $15.34
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.76 0.37 0.71
Net realized and unrealized gain (loss) on investments 0.81 (0.07) (0.10)
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.57 0.30 0.61
LESS DISTRIBUTIONS:
Dividends from net investment income (0.76) (0.37) (0.71)
Distributions from net realized gain (0.06) 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.82) (0.37) (0.71)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $15.92 $15.17 $15.24
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 10.51% 1.95% 4.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $7,654 $7,354 $7,132
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.42% 0.35% 0.36%
Ratio of net investment income to average net assets 4.82% 4.82% 4.66%
Portfolio turnover 78% 86% 73%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.92% 2.03% 1.45%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.32% 3.14% 3.57%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
(6) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
92
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (2)
CLASS A
----------------------------------------------------------------------------------
THREE FOUR
MONTHS SIX MONTHS MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1999 1998 (3) 1998 1997 (4) 1996 1995 (5) 1995
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $16.82 $16.81 $16.29 $16.42 $16.38 $16.47 $16.17
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.75 0.18 0.76 0.37 0.79 0.28 0.82
Net realized and
unrealized gain (loss)
on investments (0.47) 0.01 0.81 (0.10) 0.04 (0.08) 0.39
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.28 0.19 1.57 0.27 0.83 0.20 1.21
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.75) (0.18) (0.76) (0.37) (0.79) (0.29) (0.87)
Distributions from net
realized gain (0.25) 0.00 (0.29) (0.03) 0.00 0.00 (0.04)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (1.00) (0.18) (1.05) (0.40) (0.79) (0.29) (0.91)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $16.10 $16.82 $16.81 $16.29 $16.42 $16.38 $16.47
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.57% 1.16% 9.81% 1.65% 5.03% 3.67%** 7.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $24,924 $27,665 $27,837 $30,635 $33,676 $50,077 $52,245
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.67% 0.67% 0.62% 0.60% 0.85% 0.70% 0.70%
Ratio of net investment
income to average net
assets 4.44% 4.41% 4.54% 4.52% 4.87% 5.01% 5.19%
Portfolio turnover 54% 24% 82% 90% 27% 57% 15%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.32% 1.29% 1.36% 1.31% 1.15% 1.01% 0.90%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.79% 3.79% 3.80% 3.81% 4.57% 4.70% 4.99%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
(6) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
93
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (1) (CONT.)
CLASS B
----------------------------------
THREE
MONTHS
YEAR ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 (2) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.31 $10.30 $10.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.37 0.09 0.39
Net realized and unrealized gain (loss) on investments (0.29) 0.01 0.47
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.08 0.10 0.86
LESS DISTRIBUTIONS:
Dividends from net investment income (0.37) (0.09) (0.39)
Distributions from net realized gain (0.16) 0.00 (0.17)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.53) (0.09) (0.56)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $9.86 $10.31 $10.30
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 0.63% 0.98% 8.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $10,095 $5,956 $3,762
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.51% 1.51% 1.43%
Ratio of net investment income to average net assets 3.59% 3.48% 3.56%
Portfolio turnover 54% 24% 82%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 2.14% 2.10% 2.39%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 2.96% 2.89% 2.60%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
94
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (1) (CONT.)
INSTITUTIONAL CLASS
CLASS B (CONT.) ----------------------------------------------------------
---------------------- THREE
SIX MONTHS PERIOD MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, JUNE 30, JUNE 30, MARCH 31, MARCH 31, SEPT. 30,
1997 (3) 1996 (4) 1999 1998 (2) 1998 1997 (3) 1996 (5)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.07 $10.00 $16.82 $16.81 $16.28 $16.42 $16.38
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.17 0.00 0.76 0.19 0.79 0.39 0.72
Net realized and
unrealized gain (loss)
on investments (0.05) 0.07 (0.47) 0.01 0.82 (0.11) 0.04
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.12 0.07 0.29 0.20 1.61 0.28 0.76
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.17) 0.00 (0.76) (0.19) (0.79) (0.39) (0.72)
Distributions from net
realized gain (0.02) 0.00 (0.25) 0.00 (0.29) (0.03) 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) 0.00 (1.01) (0.19) (1.08) (0.42) (0.72)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.00 $10.07 $16.10 $16.82 $16.81 $16.28 $16.42
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.17% 0.70% 1.62% 1.18% 10.08% 1.69% 5.13%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $287 $0 $5,903 $7,314 $7,635 $8,175 $8,512
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.30% 0.00% 0.62% 0.62% 0.43% 0.40% 0.63%
Ratio of net investment
income to average net
assets 3.23% 1.83% 4.49% 4.46% 4.72% 4.72% 4.41%
Portfolio turnover 90% 27% 54% 24% 82% 90% 27%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.15% 0.00% 1.32% 1.26% 1.27% 1.24% 0.93%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 2.38% 1.83% 3.79% 3.82% 3.88% 3.88% 4.11%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
95
<PAGE>
Tax-Free Funds 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 is currently comprised of thirty-one separate series. These financial
statements represent the Arizona Tax-Free, California Tax-Free Bond, California
Tax-Free Income, National Tax-Free, and Oregon Tax-Free Funds (each, a "Fund",
collectively, the "Funds"), each, Fund is a non-diversified series of the
Company.
Effective at the close of business on December 12, 1997, the funds of Overland
Express Funds, Inc. were consolidated into the Company in a tax-free exchange
for shares of designated classes of the corresponding Stagecoach fund. Also, at
the close of business on December 12, 1997, funds structured as a "feeder" fund
in a "master-feeder" structure were restructured to invest directly in a
portfolio of securities, rather than to invest in a portfolio of securities
through a "master" portfolio. Effective on September 6, 1996, the Pacifica Funds
Trust was consolidated into the Company in a tax-free exchange for shares of
designated classes of the corresponding Stagecoach fund.
The Arizona Tax-Free and Oregon Tax-Free Funds offer Class A, Class B, and
Institutional Class shares. The California Tax-Free Bond and National Tax-Free
Funds offer Class A, Class B, Class C and Institutional Class shares. The
California Tax-Free Income Fund offers Class A and Institutional 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 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
96
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
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
All securities are valued at the close of each business day. Securities for
which the primary market is a nationally recognized securities or commodities
exchange or the National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market are valued at the last reported sales price on the
day of valuation. Debt securities are generally traded in the over-the-counter
market and are valued at a price deemed best to reflect fair value as quoted by
dealers who make markets in those securities or by an independent pricing
source. U.S. Government obligations are valued at the last reported bid price.
In the absence of any sale of such securities on the valuation date and in the
case of other securities, excluding money market instruments maturing in 60 days
or less, the valuations are based on latest quoted bid prices. Debt securities
maturing in 60 days or less are valued at amortized cost. 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. Securities for which quotations are not readily available are
valued at fair value as determined by policies set by the Company's Board of
Directors.
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").
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared
daily and distributed monthly. Any distributions to shareholders from net
realized capital gains are declared and distributed annually.
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It
is the policy of each Fund of the Company to continue to qualify as a regulated
investment company by complying with the provisions applicable to regulated
investment companies, as defined in the Code, and to make distributions of
97
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
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 June 30, 1999. Based on the
Oregon Tax Free Fund's tax year end of December 31, 1998, the Fund had the
following estimated net capital loss carryforward at June 30, 1999:
<TABLE>
<CAPTION>
YEAR CAPITAL LOSS
FUND EXPIRES CARRYFORWARDS
- ---------------------------------------------------------------------------
<S> <C> <C>
Oregon Tax-Free Fund 2007 17,385
</TABLE>
Any loss carryforward from Pacifica and Overland are included in the Fund's
carryforward as shown above. The Company's Board of Directors intends to offset
net capital gains with the capital loss carryforward, and no capital gain
distribution shall be made until the 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 a
Fund. The differences between the income or gains distributed on a book versus
tax basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of Changes
in Net Assets. The amount of distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent that these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassifications.
ORGANIZATION COSTS
Certain costs incurred in connection with the organization of the Funds and
their initial registration with the Securities and Exchange Commission and with
the various states are amortized on a straight-line basis over 60 months from
the date each Fund commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into an advisory contract on behalf of the Funds with
Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB has agreed to
provide the Funds with daily portfolio management. Under the contract, WFB is
entitled to be paid a monthly advisory fee at an annual rate of 0.50% of the
average daily net assets of each Fund.
98
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
On August 1, 1998, Wells Capital Management Incorporated ("WCM"), a wholly
owned subsidiary of WFB, began acting as investment sub-advisor to the Funds.
WCM is entitled to receive from WFB, as compensation for its sub-advisory
services to the Funds, a monthly fee at the annual rate of 0.15% of the Funds'
average daily net assets up to $400 million, 0.125% for the next $400 million
and 0.10% of the Fund's average daily net assets in excess of $800 million.
WCM's minimum annual fee is $120,000 for each Fund. This minimum annual fee does
not increase the advisory fees paid by the Funds to WFB.
On June 4, 1999, the Company entered into contracts on behalf of each Fund
with Norwest Bank Minnesota, N.A. ("Norwest Bank"), whereby Norwest Bank is
responsible for providing custody services for the Funds. Pursuant to the
contracts, Norwest Bank is entitled to a monthly fee for custody services at an
annual rate of 0.0167% of the average daily net assets of each Fund and to an
additional fixed fee for certain funds. Prior June 4, 1999, WFB performed the
above services for the same fees.
The Company has entered into contracts on behalf of each Fund with WFB,
whereby WFB is responsible portfolio accounting services for the Funds. For
portfolio accounting services, WFB is entitled to a monthly base fee from each
Fund of $2,000 plus an annual fee of 0.07% of the first $50 million of each
Fund's average daily net assets, 0.045% of the next $50 million, and 0.02% of
each Fund's average daily net assets in excess of $100 million.
The Company entered into a contract on behalf of the Funds with WFB, whereby
WFB provides transfer agency services for the Funds. Under the transfer agency
contract, WFB is entitled to receive transfer agency fees at the following
annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE DAILY NET ASSETS
------------------------------------------------
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund 0.14 0.14 N/A 0.06
California Tax-Free Bond Fund 0.14 0.14 0.14 0.06
California Tax-Free Income Fund 0.14 N/A N/A 0.06
National Tax-Free Fund 0.14 0.14 0.14 0.06
Oregon Tax-Free Fund 0.14 0.14 N/A 0.06
</TABLE>
99
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
The transfer agency fees paid on behalf of the Funds for the year ended June
30, 1999 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 7,635 $ 2,337 N/A $ 6,400
California Tax-Free Bond
Fund 685,327 166,233 $ 20,365 48,065
California Tax-Free Income
Fund 67,242 N/A N/A 4,943
National Tax-Free Fund 53,965 3,852 9,857 5,984
Oregon Tax-Free Fund 37,740 11,731 N/A 4,106
</TABLE>
The Company entered into contracts on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder services for the Funds. Pursuant to the
contracts, WFB is entitled to receive shareholder servicing fees at the
following annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE DAILY NET ASSETS
------------------------------------------------
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund 0.25 0.25 N/A 0.25
California Tax-Free Bond Fund 0.30 0.30 0.25 0.25
California Tax-Free Income Fund 0.30 N/A N/A 0.25
National Tax-Free Fund 0.25 0.25 0.25 0.25
Oregon Tax-Free Fund 0.25 0.25 N/A 0.25
</TABLE>
The shareholder servicing fees paid on behalf of the Funds for the year ended
June 30, 1999 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 13,378 $ 4,095 N/A $ 26,180
California Tax-Free Bond Fund 1,461,806 354,479 $ 36,171 199,336
California Tax-Free Income
Fund 141,367 N/A N/A 20,185
National Tax-Free Fund 95,264 6,794 17,396 24,627
Oregon Tax-Free Fund 66,854 20,771 N/A 16,975
</TABLE>
On March 25, 1999, the Company entered into an Administration Agreement with
WFB on behalf of the Funds. Under the Administration Agreement, WFB acts as sole
Administrator of the Funds and is entitled to receive monthly fees at an annual
rate of 0.15% of the average daily net assets of the Funds. Prior to March 25,
1999, the Company had entered into administration agreements on behalf of the
Funds whereby WFB as administrator and Stephens Inc. ("Stephens") as
co-administrator provided the Funds with administrative services. For these
services, WFB and Stephens were entitled to receive monthly fees at the annual
rates of 0.03% and 0.04%, respectively, of each Fund's average daily net assets.
100
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
The Company adopted separate Distribution Plans for the Class A, Class B, and
Class C shares of the Funds pursuant to Rule 12b-1 under the 1940 Act (each, a
"Plan"). The Plan for the Class A shares of the Arizona Tax-Free, National
Tax-Free and Oregon Tax-Free Funds provides that each such 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 its Class A shares. The Plan for Class A shares of the
California Tax-Free Income and California Tax-Free Bond Funds provides that the
Funds 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 basis of up to 0.05% of the average daily net assets attributable to the
California Tax-Free Income's Class A shares and up to the greater of $100,000 or
0.05% of the California Tax-Free Bond's Class A shares.
The Plan for the Class B shares of the Arizona Tax-Free, National Tax-Free and
Oregon Tax-Free Funds provides that each such Fund may pay to Stephens, as
compensation for distribution-related services or as reimbursement for
distribution-related expenses, up to 0.75% of the average daily net assets
attributable to the Class B shares. The Plan for Class B shares of California
Tax-Free Bond Fund provides that the Fund may pay to Stephens, as compensation
for distribution-related services or as reimbursement for distribution-related
expenses, up to 0.70% of the average daily net assets attributable to the Class
B shares.
The Plan for Class C shares of the California Tax-Free Bond and National
Tax-Free Funds provides that the Funds may pay to Stephens, as compensation for
distribution-related services or as reimbursement for distribution-related
expenses, up to 0.75% of the average daily net assets attributable to the Class
C shares.
Each Fund may participate in joint distribution activities with other Funds,
in which event, expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses of joint distribution activities are allocated among the
Funds in proportion to their relative net asset sizes.
The distribution fees paid on behalf of the Funds for the year ended June 30,
1999 were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Arizona Tax-Free Fund $ 0 $ 12,286 N/A
California Tax-Free Bond Fund 0 827,118 $ 108,514
California Tax-Free Income Fund 0 N/A N/A
National Tax-Free Fund 18,717 20,383 52,189
Oregon Tax-Free Fund 0 62,314 N/A
</TABLE>
101
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
The registration fees paid on behalf of the Funds for the year ended June 30,
1999 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 5,355 $ 11,613 N/A $ 2,560
California Tax-Free Bond
Fund 45,875 68,603 $ 3,420 40,022
California Tax-Free Income
Fund 4,108 N/A N/A 3,034
National Tax-Free Fund 7,650 16,319 3,956 22,788
Oregon Tax-Free Fund 4,753 7,901 N/A 5,707
</TABLE>
WAIVED FEES AND REIMBURSED EXPENSES
The following amounts of fees and expenses were waived or reimbursed for the
year ended June 30, 1999:
<TABLE>
<CAPTION>
EXPENSES REIMBURSED BY FEES WAIVED
FUND STEPHENS BY WFB
- --------------------------------------------------------------------------
<S> <C> <C>
Arizona Tax-Free Fund $ 4,600 $ 144,843
California Tax-Free Bond Fund 0 2,341,215
California Tax-Free Income Fund 1,043 367,554
National Tax-Free Fund 0 306,980
Oregon Tax-Free Fund 0 277,197
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens.
Certain officers and one director of the Company are also officers of
Stephens. As of June 30, 1999, Stephens owned 8 shares of the Arizona Tax-Free
Fund, 9,514 shares of the California Tax-Free Bond Fund, 12,914 shares of the
California Tax-Free Income Fund, 10,736 shares of the National Tax-Free Fund and
6 shares of the Oregon Tax-Free Fund.
Stephens has retained $3,214,365 as sales charges from the proceeds of Class A
shares sold, $3,082,002 as proceeds from Class B shares redeemed by the Company
and $91,663 as proceeds from Class C shares redeemed by the Company for the year
ended June 30, 1999. Wells Fargo Securities Inc., a subsidiary of WFB, received
$2,732,550 as sales charges from the proceeds of Class A shares sold, $551,942
as proceeds from Class B shares redeemed by the Company and $0 as proceeds from
Class C shares redeemed by the Company for the year ended June 30, 1999.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date), for each Fund
for the year ended June 30, 1999 were as follows:
102
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
AGGREGATE PURCHASES AND SALES
<TABLE>
<CAPTION>
PURCHASES AT SALES
FUND COST PROCEEDS
- -------------------------------------------------------------------------
<S> <C> <C>
Arizona Tax-Free Fund $ 9,622,787 $ 10,438,401
California Tax-Free Bond Fund 125,794,842 113,494,845
California Tax-Free Income Fund 36,645,920 47,975,236
National Tax-Free Fund 55,598,648 51,242,599
Oregon Tax-Free Fund 23,339,064 22,287,220
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
As of June 30, 1999, there were over 242 billion shares of $0.001 par value
capital stock authorized by the Company. As of June 30, 1999, each Fund was
authorized to issue 500 million shares of $0.001 par value capital stock for
each class of shares.
Capital share transactions for the Funds were as follows:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND
------------------------------------
FOR THE
FOR THE THREE
YEAR MONTHS FOR THE
ENDED ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 1998
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 60,592 14,261 43,843
Shares issued in reinvestment of
dividends -- Class A 27,319 4,309 24,687
Shares redeemed -- Class A (76,307) (27,105) (110,898)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 11,604 (8,535) (42,368)
Shares sold -- Class B 14,067 25,915 139,190
Shares issued in reinvestment of
dividends -- Class B 7,044 889 3,792
Shares redeemed -- Class B (22,372) (13,840) (12,211)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B (1,261) 12,964 130,771
Shares sold -- Institutional Class 121,329 15,084 116,767
Shares issued in reinvestment of
dividends -- Institutional Class 1,497 130 991
Shares redeemed -- Institutional
Class (207,137) (112,704) (375,960)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (84,311) (97,490) (258,202)
</TABLE>
103
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
-----------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED SIX MONTHS YEAR ENDED
JUNE 30, JUNE 30, DECEMBER 31,
1999 1998 1997 (1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 4,192,958 2,646,915 27,081,868
Shares issued in reinvestment of
dividends -- Class A 1,682,888 604,957 601,099
Shares redeemed -- Class A (7,857,450) (4,347,657) (4,493,270)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (1,981,604) (1,095,785) 23,189,697
Shares sold -- Class B(2) 3,748,414 2,264,459 6,780,297
Shares issued in reinvestment of
dividends -- Class B(2) 418,683 111,908 125
Shares redeemed -- Class B(2) (1,209,247) (510,735) (40,678)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B(2) 2,957,850 1,865,632 6,739,744
Shares sold -- Class C 1,394,343 250,882 114,726
Shares issued in reinvestment of
dividends -- Class C 45,685 5,659 11,817
Shares redeemed -- Class C (167,903) (52,825) (200,314)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS C 1,272,125 203,716 (73,771)
Shares sold -- Institutional Class(2) 1,297,153 968,464 7,506,033
Shares issued in reinvestment of
dividends -- Institutional Class(2) 156,818 16,617 54
Shares redeemed -- Institutional
Class(2) (2,020,715) (1,153,845) (96,138)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS(2) (566,744) (168,764) 7,409,949
</TABLE>
(1) "SHARES SOLD" INCLUDES 26,130,006 FOR CLASS A SHARES, 6,543,148 FOR CLASS B
SHARES AND 7,487,949 FOR INSTITUTIONAL CLASS SHARES AS A RESULT OF THE
CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
104
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND
-----------------------------------------
FOR THE
FOR THE THREE
YEAR ENDED MONTHS ENDED FOR THE
JUNE 30, JUNE 30, YEAR ENDED
1999 1998 MARCH 31, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 464,420 208,631 1,890,485
Shares issued in reinvestment of
dividends -- Class A 201,790 44,610 228,242
Shares redeemed -- Class A (1,820,898) (715,645) (3,052,403)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (1,154,688) (462,404) (933,676)
Shares sold -- Institutional Class 183,590 85,189 101,348
Shares issued in reinvestment of
dividends -- Institutional Class 15,379 1,837 8,519
Shares redeemed -- Institutional Class (177,118) (39,041) (120,343)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS 21,851 47,985 (10,476)
</TABLE>
105
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND
-----------------------------------------
FOR THE
FOR THE THREE FOR THE
YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, JUNE 30, MARCH 31,
1999 1998 1998 (1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 242,041 15,392 2,553,367
Shares issued in reinvestment of
dividends -- Class A 60,522 15,229 23,740
Shares redeemed -- Class A (541,662) (132,609) (218,009)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (239,099) (101,988) 2,359,098
Shares sold -- Class B 258,830 56,596 112,758
Shares issued in reinvestment of
dividends -- Class B 8,649 995 1,979
Shares redeemed -- Class B (43,134) (9,437) (59)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 224,345 48,154 114,678
Shares sold -- Class C(2) 341,053 412 782,874
Shares issued in reinvestment of
dividends -- Class C(2) 13,146 2,640 2,672
Shares redeemed -- Class C(2) (169,046) (33,407) (61,472)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS C(2) 185,153 (30,355) 724,074
Shares sold -- Institutional Class 534,090 27,553 172,762
Shares issued in reinvestment of
dividends -- Institutional Class 10,051 2,385 8,516
Shares redeemed -- Institutional Class (513,465) (28,822) (185,287)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS 30,676 1,116 (4,009)
</TABLE>
(1) "SHARES SOLD" INCLUDES 2,415,150 FOR CLASS A SHARES AND 779,496 FOR CLASS C
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND MUNICIPAL INCOME
FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
106
<PAGE>
NOTES TO FINANCIAL STATEMENTS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND
-----------------------------------------
FOR THE
FOR THE THREE
YEAR ENDED MONTHS ENDED FOR THE
JUNE 30, JUNE 30, YEAR ENDED
1999 1998 MARCH 31, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 81,285 56,463 140,558
Shares issued in reinvestment of
dividends -- Class A 77,202 13,045 82,429
Shares redeemed -- Class A (254,935) (80,855) (448,209)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (96,448) (11,347) (225,222)
Shares sold -- Class B 440,990 221,819 331,842
Shares issued in reinvestment of
dividends -- Class B 34,192 2,548 5,330
Shares redeemed -- Class B (29,617) (11,758) (615)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B (445,565) 212,609 336,557
Shares sold -- Institutional Class 51,084 20,167 53,185
Shares issued in reinvestment of
dividends -- Institutional Class 8,705 1,426 7,122
Shares redeemed -- Institutional Class (127,946) (40,976) (108,163)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (68,157) (19,383) (47,856)
</TABLE>
5. SUBSEQUENT EVENTS
On March 25, 1999, the Board of Directors of the Company approved the
reorganization of the Funds into new portfolios of Wells Fargo Funds Trust. The
reorganization is part of a larger plan to consolidate the Company with the
Norwest Advantage Funds following last November's merger of Wells Fargo &
Company and Norwest Corporation. The Company will present the reorganization to
Company's shareholders for their approval at a special shareholders' meeting
that is planned for August 1999.
On June 3, 1999, WFB and Forum Accounting Services ("Forum") entered into an
agreement, whereby Forum performs certain fund accounting services for WFB with
respect to each Fund and Class thereof. A monthly per fund fee of $5,000 and an
additional monthly fee for each additional Class of any Fund above one of $1,000
is charged to the Fund. In addition to the per fund fees, a basis point fee of
0.0025% of the average annual daily net assets of each Fund is
107
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
also charged to each Fund. The Company, on behalf of the applicable Fund,
reimburses Forum for all out-of-pocket and ancillary expenses reasonably
incurred in providing the services described in the Fund Accounting Agreement.
On July 17, 1999, Boston Financial Data Services ("BFDS") replaced WFB as the
transfer agent for the Company. Under the transfer agency contract, BFDS is
entitled to receive, on a monthly basis, transfer agency fees based on the
number of accounts and transactions for each Fund. WFB will continue to provide
sub-transfer agency services to the Funds.
108
<PAGE>
INDEPENDENT AUDITORS' REPORT Tax-Free Funds
- ------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Stagecoach Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the Arizona Tax-Free Fund,
California Tax-Free Bond Fund, California Tax-Free Income Fund, National
Tax-Free Fund, and Oregon Tax-Free Fund (five of the funds comprising Stagecoach
Funds, Inc.) as of June 30, 1999, and the related statements of operations for
the year ended June 30, 1999, the statements of changes in net assets for the
year ended June 30, 1999, the three months ended June 30, 1998, and the year
ended March 31, 1998, for all funds except the California Tax-Free Bond Fund
which is for the year ended June 30, 1999, the six months ended June 30, 1998,
and the year ended December 31, 1997, and financial highlights for the periods
indicated herein. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. For the Arizona Tax-Free Fund, National Tax-Free Fund and Oregon
Tax-Free Fund, all years or periods indicated in the accompanying financial
highlights ending prior to October 1, 1995, were audited by other auditors whose
report dated November 3, 1995, expressed an unqualified opinion on this
information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required 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 June
30, 1999, by correspondence with the custodian and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Stagecoach Funds, Inc. as of June 30, 1999, the
results of their operations, the changes in their net assets, and their
financial highlights for the periods indicated herein, except as noted above, in
conformity with generally accepted accounting principles.
/s/ KPMG LLP
San Francisco, California
July 26, 1999
109
<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
CTF -- Common Trust Fund
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRN -- Floating Rate Notes
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
LLC -- Limited Liability Corporation
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
MTN -- Medium Term Note
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PLC -- Private Placement
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>
110
<PAGE>
Wells Fargo Bank, N.A. provides investment advisory services, shareholder
services and/or certain other services for the Stagecoach Funds. Wells
Capital Management Incorporated ("WCM") provides investment sub-advisory
services for certain Stagecoach Funds. The Funds are distributed by STEPHENS
INC., Member NYSE/SIPC. Wells Fargo Bank, N.A. and WCM are not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Stagecoach Funds. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. For a prospectus containing
more complete information, including charges and expenses, call
1-800-260-5969. Read the prospectus carefully before you invest or send
money.
STAGECOACH FUNDS-Registered Trademark-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
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