<PAGE>
STAGECOACH FUNDS(R)
Stagecoach
Equity Funds
Prospectus
<TABLE>
<S> <C>
Balanced Fund Please read this Prospectus and keep it for future reference. It is designed to
provide you with important information and to help you decide if a Fund's goals
Diversified Equity Income Fund match your own.
Equity Index Fund
Equity Value Fund These securities have not been approved or disapproved by the Securities and
Exchange Commission ("SEC"), nor has the SEC passed upon the accuracy or
Growth Fund adequacy of this Prospectus. Any representation to the contrary is a criminal
offense.
International Equity Fund
Fund shares are NOT deposits or other obligations of, or issued, endorsed or
Small Cap Fund guaranteed by, Wells Fargo Bank, N.A. ("Wells Fargo Bank"), or any of its
affiliates. Fund shares are NOT insured or guaranteed by the Federal Deposit
Strategic Growth Fund Insurance Corporation ("FDIC"), or any governmental agency. AN INVESTMENT IN A
FUND INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Class A, Class B and Class C
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
OVERVIEW
This section contains OBJECTIVES AND PRINCIPAL STRATEGIES 4
important summary SUMMARY OF IMPORTANT RISKS 6
information about PERFORMANCE HISTORY 8
the Funds.
THE FUNDS BALANCED FUND 22
DIVERSIFIED EQUITY INCOME FUND 26
This section contains EQUITY INDEX FUND 30
important information EQUITY VALUE FUND 34
about the individual Funds. GROWTH FUND 38
INTERNATIONAL EQUITY FUND 42
SMALL CAP FUND 46
STRATEGIC GROWTH FUND 50
GENERAL INVESTMENTS RISKS 54
ORGANIZATION AND MANAGEMENT
OF THE FUNDS 58
YOUR ACCOUNT A CHOICE OF SHARE CLASSES 61
REDUCED SALES CHARGES 65
Turn to this section for EXCHANGES 69
information on how to YOUR ACCOUNT 70
open and maintain your HOW TO BUY SHARES 71
account, including how to SELLING SHARES 72
buy, sell and exchange ADDITIONAL SERVICES AND
Fund shares. OTHER INFORMATION 78
GLOSSARY 84
</TABLE>
<PAGE>
STAGECOACH EQUITY FUNDS OVERVIEW
FUND OBJECTIVE
BALANCED FUND Seeks to provide investors with both capital
appreciation and current income.
DIVERSIFIED EQUITY Seeks to earn current income and a growing stream of
INCOME FUND income over time, consistent with the preservation of
capital.
EQUITY INDEX FUND Seeks to approximate the total rate of return of
substantially all common stocks comprising the S&P 500
Index.
EQUITY VALUE FUND Seeks to provide investors with above-average capital
appreciation.
GROWTH FUND Seeks to earn current income and achieve long-term
capital appreciation.
INTERNATIONAL EQUITY Seeks to earn total return, with an emphasis on capital
FUND appreciation, over the long term.
SMALL CAP FUND Seeks above-average long-term capital appreciation in
order to provide investors with a rate of total return
exceeding that of the Russell 2000 Index, before fees
and expenses, over 3 to 5 years.
STRATEGIC GROWTH Seeks to provide investors with an above-average level
FUND of long-term capital appreciation for investors willing
to assume above-average risk.
4 Stagecoach Equity Funds Prospectus
<PAGE>
PRINCIPAL STRATEGY
We invest between 30% and 70% of our assets in equity securities, and the
remainder in fixed-income securities. We buy equity securities that we believe
are undervalued, and fixed-income securities of at least investment-grade
quality.
We invest in income-producing equity securities that generally exhibit above-
average financial strength, a strong position in their industry, a history of
profit growth, and relatively high dividends.
We invest in substantially all of the common stocks included in the S&P 500
Index and attempt to achieve at least a 95% correlation between the performance
of the S&P 500 Index and our investment results before expenses, regardless of
market conditions.
We invest in equity securities that we believe are undervalued in relation to
the overall stock markets. Dividends are a secondary consideration when
selecting stocks.
We invest in equity securities of domestic and foreign companies whose market
capitalization falls within the range of the Russell 1000 Index, which is
considered a mid- to large-capitalization index. We buy stocks of companies that
have a strong earnings growth trend and above-average prospects for future
growth, or are undervalued, or have above-average dividend yields.
We invest in equity securities of companies located or operating in developed
foreign countries and emerging markets of the world. We apply a fundamentals-
driven, value-oriented analysis to identify companies that we believe have
above-average potential for long-term growth.
We invest in equity securities of domestic and foreign companies whose market
capitalization falls within the range of the Russell 2000 Index, which is
considered a small capitalization index. We buy stocks that we believe have
above-average prospects for capital growth, and that are involved in new or
innovative products, services and processes.
We invest in equity securities of companies that are expected to have strong
growth in revenues, earnings and assets, and that are selected from different
industry groups. We buy acquisition candidates, established growth companies,
growth companies at initial public offering, and other mid-cap growth
companies.
Stagecoach Equity Funds Prospectus 5
<PAGE>
SUMMARY OF IMPORTANT RISKS
This section summarizes important risks that are common to all of the Funds
described in this Prospectus, and important risks that relate specifically to
particular Funds. Both are important to your investment choice. Additional
information about these and other risks is included in the individual Fund
Descriptions later in this Prospectus and under General Investment Risks
beginning on page 54. An investment in a fund is not a deposit of Wells Fargo
Bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
COMMON RISKS FOR THE FUNDS
EQUITY SECURITIES
The Funds invest in equity securities, which are subject to equity market risk.
This is the risk that stock prices will fluctuate and can decline and reduce the
value of a Fund's portfolio. Certain types of stock and certain individual
stocks selected for a Fund's portfolio may underperform or decline in value more
than the overall market. As of the date of this Prospectus, the equity markets,
as measured by the S&P 500 Index and other commonly used indexes, are trading at
or close to record levels. There can be no guarantee that these levels will
continue. The Funds that invest in smaller companies, in foreign companies
(including investments made through American Depositary Receipts and similar
instruments), and in emerging markets are subject to additional risks, including
less liquidity and greater price volatility. A Fund's investment in foreign
companies and emerging markets are also subject to special risks associated with
international investing, including currency, political, regulatory and
diplomatic risks.
FIXED INCOME SECURITIES
The Funds may invest in debt instruments, such as notes and bonds, which are
subject to credit risk and interest rate risk. Credit risk is the possibility
that an issuer of an instrument will be unable to make interest payments or
repay principal. Changes in the financial strength of an issuer or changes in
the credit rating of a security may affect its value. Interest rate risk is the
risk that interest rates may increase, which will reduce the resale value of
instruments in a Fund's portfolio. Debt instruments with longer maturities are
generally more sensitive to interest rate changes than those with shorter
maturities. Changes in market interest rates do not affect the rate payable on
debt instruments held in a Fund, unless the instrument has adjustable or
variable rate features, which can reduce interest rate risk. Changes in market
interest rates may also extend or shorten the duration of certain types of
instruments, such as asset-backed securities, thereby affecting their value and
the return on your investment.
6 Stagecoach Equity Funds Prospectus
<PAGE>
FUND SPECIFIC RISKS
BALANCED FUND Because stock and bond markets often move in opposite
directions, this Fund's balanced objective should
reduce the volatility associated with investing in a
single market. There is no guarantee, however, that
market cycles will move in opposition to one another or
that a balanced investment program will successfully
reduce volatility.
DIVERSIFIED EQUITY Stocks selected for their high dividend yields may be
INCOME FUND more sensitive to interest rate changes than other
stocks. Also, stocks of the smaller and medium-sized
companies purchased for this Fund may be more volatile
and less liquid than larger company stocks.
EQUITY INDEX We attempt to match as closely as possible the
FUND performance of the S&P 500 Index. Therefore, during
periods when the S&P 500 Index is losing value, your
investment will also lose value.
EQUITY VALUE There is no guarantee that securities selected as
FUND "under-valued" will perform as expected. Stocks of
smaller, medium-sized and foreign companies purchased
using the value approach may be more volatile and less
liquid than other comparable securities.
GROWTH FUND The Fund is primarily subject to the equity market
risks described in the Common Risks section above.
Dividend-producing large company stocks have
experienced unprecedented appreciation in recent years.
There is no guarantee such performance levels will
continue.
INTERNATIONAL Foreign company stocks involve special risks, including
EQUITY FUND generally higher commission rates, political, social
and monetary or diplomatic developments that could
effect U.S. investments in foreign countries. Emerging
market countries may experience increased political
instability, and are often dependent on international
trade, making them more vulnerable to events in other
countries. They may have less developed financial
systems and volatile currencies and may be more
sensitive than more mature markets to a variety of
economic factors. Emerging market securities may also
be less liquid than securities of more developed
countries, which may make them more difficult to sell,
particularly during a market downturn. Additionally,
dispositions of foreign securities and dividends and
interest payable on those securities may be subject to
foreign taxes.
SMALL CAP FUND These Funds may invest in companies that pay low or no
AND STRATEGIC dividends, have smaller market capitalizations, have
GROWTH FUND less market liquidity, have no or relatively short
operating histories, or are newly public companies.
Some of these companies have aggressive capital
structures, including high debt levels, or are involved
in rapidly growing or changing industries and/or new
technologies. Because the Fund may invest in such
aggressive securities, share prices may rise and fall
more than the share prices of other funds. In addition,
our active trading investment strategy may result in a
higher-than-average portfolio turnover ratio, increased
trading expenses, and higher short-term capital gains.
Stagecoach Equity Funds Prospectus 7
<PAGE>
PERFORMANCE HISTORY
The Information on the following pages shows you how each Fund has performed and
illustrates the variability of a Fund's returns over time. Each Fund's average
annual returns for one-, five- and ten-year periods are compared to the
performance of an appropriate broad-based index.
The Funds' shares are sold subject to sales load that are not included in the
performance calculations. If these charges were included, performance shown
would be lower.
Please remember that past performance is no guarantee of future results.
BALANCED FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
Best Qtr.: Worst Qtr.:
Q2 '97 Q3 '98
9.01% -5.74%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Balanced Fund's year-to-date performance for the quarter ended March 31,
1999 was -0.19%.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-----------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- --------------------------------------------------------------------------
BALANCED FUND 1 YEAR 5 YEARS INCEPTION
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Incept. 7/2/90) 3.69 9.88 11.32
- --------------------------------------------------------------------------
Class B (Incept. 9/6/96) 3.86 10.07 11.26
- --------------------------------------------------------------------------
S&P 500/1/ LB Gov/Corp/2/ 21.35/3/ 17.33/3/ 14.91/4/
- --------------------------------------------------------------------------
</TABLE>
1. S&P 500 is a registered trademark of Standard and Poors.
2. Lehman Brothers Government/Corporate Bond Index.
3. Composite Benchmark of the S&P 500 and LB Gov/Corp. Bond Index.
4. Composite Benchmark calculated for Class A only.
8 Stagecoach Equity Funds Prospectus
<PAGE>
DIVERSIFIED EQUITY INCOME FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
Best Qtr.: Worst Qtr.:
Q2 '97 Q3 '98
13.61% -10.63%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Diversified Equity Income Fund's year-to-date performance for the quarter
ended March 31, 1999 was -0.94%.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- -----------------------------------------------------------------------------
DIVERSIFIED EQUITY INCOME FUND 1 year 5 years Inception
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Incept. 11/18/92) -0.57 13.72 13.79
- -----------------------------------------------------------------------------
Class B (Incept. 1/1/95) -0.40 14.03 14.10
- -----------------------------------------------------------------------------
S&P 500/1/ 28.58 24.06 21.53/2/
- -----------------------------------------------------------------------------
</TABLE>
1. S&P 500 is a registered trademark of Standard and Poors.
2. Benchmark calculated for Class A shares only.
Stagecoach Equity Funds Prospectus 9
<PAGE>
PERFORMANCE HISTORY
EQUITY INDEX FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
Best Qtr.: Worst Qtr.:
Q4 '98 Q3 '90
21.00% -13.80%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Equity Index Fund's year to-date performance for the quarter ended March
31, 1999 was 4.77%.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- -----------------------------------------------------------------------------
EQUITY INDEX FUND 1 YEAR 5 YEARS 10 YEAR
(OR INCEPTION)
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Incept. 1/25/84) 21.92 21.72 17.41
- -----------------------------------------------------------------------------
Class B (Incept. 2/17/98) 21.72 21.95 17.22
- -----------------------------------------------------------------------------
S&P 500/1/ 28.58 24.06 19.21/2/
- -----------------------------------------------------------------------------
</TABLE>
1. S&P 500 is a registered trademark of Standard and Poors.
2. Benchmark calculated for Class A shares only.
10 Stagecoach Equity Funds Prospectus
<PAGE>
EQUITY VALUE FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
Best Qtr.: Worst Qtr.:
Q2 '97 Q3 '90
15.19% -15.20%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Equity Value Fund's year-to-date performance for the quarter ended March
31, 1999 was -3.32%.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- -----------------------------------------------------------------------------
EQUITY VALUE FUND 1 year 5 years Inception
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Incept. 7/2/90) 1.08 14.74 14.28
- -----------------------------------------------------------------------------
Class B (Incept. 6/6/96) 1.11 14.99 14.23
- -----------------------------------------------------------------------------
Class C (Incept. 4/1/98) 4.92 15.20 14.22
- -----------------------------------------------------------------------------
S&P 500/1/ 28.58 24.06 18.62/2/
- ------------------------------------------------------------------------------
</TABLE>
1. S&P 500 is a registered trademark of Standard and Poors.
2. Benchmark calculated for Class A shares only.
Stagecoach Equity Funds Prospectus 11
<PAGE>
PERFORMANCE HISTORY
GROWTH FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
Best Qtr.: Worst Qtr.:
Q2 '97 Q3 '98
13.78% -10.70%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Growth Fund's year-to-date performance for the quarter ended March 31,
1999 was 5.26%.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
GROWTH FUND 1 YEAR 5 YEARS INCEPTION
- ---------------------------------------------------------------------------
Class A (Incept. 8/2/90) 22.37 17.91 16.45
- ---------------------------------------------------------------------------
Class B (Incept. 1/1/95) 23.29 18.27 16.47
- ---------------------------------------------------------------------------
S&P 500/1/ 28.58 24.06 18.87/2/
- ---------------------------------------------------------------------------
</TABLE>
1. S&P 500 is a registered trademark of Standard and Poors.
2. Benchmark calculated for Class A shares only.
12 Stagecoach Equity Funds Prospectus
<PAGE>
INTERNATIONAL EQUITY FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
BEST QTR.: Worst Qtr.:
Q1 '98 Q3 '98
14.27% -17.89%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The International Equity Fund's year-to-date performance for the quarter
ended March 31, 1999 was 3.03%.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- ---------------------------------------------------------------------------
<S> <C> <C>
INTERNATIONAL EQUITY FUND 1 year Inception
- ---------------------------------------------------------------------------
Class A (Incept. 9/24/97) 9.89 5.00
- ---------------------------------------------------------------------------
Class B (Incept. 10.34 5.72
- ---------------------------------------------------------------------------
Class C (Incept. 4/1/98) 10.34 8.82
- ---------------------------------------------------------------------------
MSCI/EAFE Index/1/ 20.00 8.39/2/
- ---------------------------------------------------------------------------
</TABLE>
1. Morgan Stanley Capital International/Europe, Asia, Far East Index.
2. Benchmark calculated for Class A shares only.
Stagecoach Equity Funds Prospectus 13
<PAGE>
PERFORMANCE HISTORY
SMALL CAP FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
BEST QTR.: WORST QTR.:
Q2 '97 Q3 '98
24.71% -26.35%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Small Cap Fund's year-to-date performance for the quarter ended March 31,
1999 was 1.99%.
2. Performance shown for periods prior to September 6, 1996 reflects performance
of the shares of the Small Capitalization Growth Fund for BRP Employment
Retirement Plans (an unregistered bank collective investment fund), a
predecessor portfolio with the same investment objective and policies as the
Stagecoach Small Cap Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- ---------------------------------------------------------------------------
<S> <C> <C>
SMALL CAP FUND 1 year Inception
- ---------------------------------------------------------------------------
Class A (Incept. 9/16/96) -10.91 19.97
- ---------------------------------------------------------------------------
Class B (Incept. 9/16/96) -10.97 20.49
- ---------------------------------------------------------------------------
Class C (Incept. 12/15/97) -6.66 20.74
- ---------------------------------------------------------------------------
Russell 2000 Index -2.55 14.50/1/
- ---------------------------------------------------------------------------
</TABLE>
1. Benchmark calculated for Class A shares only.
14 Stagecoach Equity Funds Prospectus.
<PAGE>
STRATEGIC GROWTH FUND CLASS A SHARES
CALENDAR YEAR RETURNS/1/
[GRAPH APPEARS HERE]
BEST QTR.: WORST QTR.:
Q3 '97 Q3 '95
23.11% -23.52%
1. Returns do not reflect sales charges. If they did, returns would be lower.
The Strategic Growth Fund's year-to-date performance for the quarter ended
March 31, 1999 was 1.08%.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------------------------------
FOR THE PERIODS ENDED 12/31/98
- ---------------------------------------------------------------------------
STRATEGIC GROWTH FUND 1 year 5 years Inception
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Incept. 1/20/93) -3.08 11.34 15.32
- ---------------------------------------------------------------------------
Class B (Incept. 12/15/97) -3.40 11.49 15.23
- ---------------------------------------------------------------------------
Class C (Incept. 7/1/93) 0.56 11.73 15.30
- ---------------------------------------------------------------------------
S&P 500/1/ 28.58 24.06 21.78/2/
- ---------------------------------------------------------------------------
</TABLE>
1. S&P is a registered trademark of Standard and Poors.
2. Benchmark calculated for Class A shares only.
Stagecoach Equity Funds Prospectus 15
<PAGE>
EQUITY FUNDS Summary of Expenses
These tables are intended to help you understand the various costs and expenses
you will pay as a shareholder in a Fund.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED FUND DIVERSIFIED EQUITY EQUITY INDEX
INCOME FUND FUND
-----------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load)
imposed on purchases (as a
percentage of offering price) 5.25% None 5.25% None 4.50% None
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
as a percentage of the lower of the NAV
at purchase or the NAV at redemption None 5.00% None 5.00% None 5.00%
- ---------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUNS ASSETS)
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCED FUND DIVERSIFIED EQUITY EQUITY INDEX
INCOME FUND FUND
-----------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT FEE 0.60% 0.60% 0.50% 0.50% 0.25% 0.25%
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution (12b-1)fee 0.10% 0.75% 0.05% 0.70% 0.00% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.63% 0.74% 0.65% 0.66% 0.52% 0.58%
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES/1/ 1.33% 2.09% 1.20% 1.86% 0.77% 1.58%
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS FEES
- ---------------------------------------------------------------------------------------------------------------------------------
EQUITY VALUE FUND GROWTH FUND INTERNATIONAL EQUITY FUND
-----------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load)
imposed on purchases (as a
percentage of offering price) 5.25% None None 5.25% None 5.25% None
- ---------------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
as a percentage of the lower of the NAV at
purchase or the NAV at redemption None 5.00% 1.00% None 5.00% None 5.00%
- ---------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- ---------------------------------------------------------------------------------------------------------------------------------
EQUITY VALUE FUND GROWTH FUND INTERNATIONAL EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS A CLASS B
- ---------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT FEE 0.50% 0.50% 0.50% 0.50% 0.50% 1.00% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------------
Distribution (12b-1) fee 0.10% 0.75% 0.75% 0.05% 0.70% 0.10% 0.75%
- ---------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.58% 0.58% 0.58% 0.58% 0.59% 0.96% 0.95%
=================================================================================================================================
TOTAL ANNUAL FUND OPERATING EXPENSES/1/ 1.18% 1.83% 1.63% 1.13% 1.79% 2.06% 2.70%
=================================================================================================================================
</TABLE>
1. The actual expenses incurred by the Funds will be lower than the contract
amounts shown above as a result of voluntary fee waivers. The Funds' actual
expenses, after waivers, are as follows: Balanced Fund Class A 1.28%, Class B
1.93%; Diversified Equity Income Fund Class A 1.20%, Class B 1.88%; Equity
Index Fund Class A 71%, Class B 1.45%; Equity Value Fund Class A 1.18%, Class
B 1.83%, Class C 1.83%; Growth Fund Class A 1.12%, Class B 1.79%;
International Equity Fund Class A 1.75%, Class B 2.40%, Class C 2.40%; Small
Cap Fund Class A 1.36%, Class B 2.11%, Class C 2.11%; and Strategic Growth
Fund Class A 1.29%, Class B 2.01%, Class C 2.01%.
16 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS FEES
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY SMALL CAP FUND STRATEGIC GROWTH FUND
FUND
----------------------------------------------------------------------------------
CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load)
imposed on purchases (as a
percentage of offering price) None 5.25% None None 5.25% None None
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
as a percentage of the lower of the NAV at
purchase or the NAV at redemption 1.00% None 5.00% 1.00% None 5.00% 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY SMALL CAP FUND STRATEGIC GROWTH FUND
FUND
----------------------------------------------------------------------------------
CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT FEE 1.00% 0.60% 0.60% 0.60% 0.50% 0.50% 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution (12b-1) fee 0.75% 0.10% 0.75% 0.75% 0.10% 0.75% 0.75%
- ------------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.91% 0.79% 0.78% 1.36% 0.69% 0.76% 0.76%
====================================================================================================================================
TOTAL ANNUAL FUND OPERATING EXPENSES/1/ 2.66% 1.49% 2.13% 2.71% 1.29% 2.01% 2.01%
====================================================================================================================================
</TABLE>
Stagecoach Equity Funds Prospectus 17
<PAGE>
EQUITY FUNDS Summary of Expenses (continued)
- --------------------------------------------------------------------------------
EXAMPLE OF EXPENSES--These examples are intended to help you compare the cost of
investing in a Fund with the cost of investing in other mutual funds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
You would pay the following
expenses on a $10,000 investment
assuming a 5% annual return and Balanced Fund Diversified Equity Equity Index Equity Value Fund Growth Fund
that you redeem your shares at Income Fund Fund
the end of each period. -------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS C CLASS A CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 653 $ 712 $ 641 $ 689 $ 525 $ 661 $ 639 $ 686 $ 186 $ 634 $ 682
- ------------------------------------------------------------------------------------------------------------------------------------
3 years $ 924 $ 955 $ 886 $ 885 $ 685 $ 799 $ 880 $ 876 $ 576 $ 865 $ 863
- ------------------------------------------------------------------------------------------------------------------------------------
5 years $1216 $1324 $1150 $1206 $ 859 $1060 $1140 $1190 $ 990 $1115 $1170
- ------------------------------------------------------------------------------------------------------------------------------------
10 years $2042 $2038 $1903 $1841 $1361 $1454 $1882 $1814 $2148 $1827 $1765
- ------------------------------------------------------------------------------------------------------------------------------------
You would pay the following
expenses on a $10,000 investment
assuming a 5% annual return and Balanced Fund Diversified Equity Equity Index Equity Value Fund Growth Fund
that you do not redeem your Income Fund Fund
shares at the end of each period. -------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS C CLASS A CLASS B
- ------------------------------------------------------------------------------------------------------------------------------------
1 YEAR $ 653 $ 212 $ 641 $ 189 $ 525 $ 161 $ 639 $ 186 $ 286 $ 634 $ 182
- ------------------------------------------------------------------------------------------------------------------------------------
3 YEARS $ 924 $ 655 $ 886 $ 585 $ 685 $ 499 $ 880 $ 576 $ 576 $ 865 $ 563
- ------------------------------------------------------------------------------------------------------------------------------------
5 YEARS $1216 $1124 $1150 $1006 $ 859 $ 860 $1140 $ 990 $ 990 $1115 $ 970
- ------------------------------------------------------------------------------------------------------------------------------------
10 YEARS $2042 $2038 $1903 $1841 $1361 $1454 $1882 $1814 $2148 $1827 $1765
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
18 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
You would pay the following
expenses on a $10,000 investment
assuming a 5% annual return and International Equity Small Cap Fund Strategic Growth Fund
that you redeem your shares at Fund
the end of each period. ---------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 723 $ 773 $ 369 $ 669 $ 716 $ 374 $ 649 $ 704 $ 304
- -------------------------------------------------------------------------------------------------------------------------------
3 years $1137 $1138 $ 826 $ 971 $ 967 $ 841 $ 913 $ 930 $ 630
- -------------------------------------------------------------------------------------------------------------------------------
5 years $1575 $1630 $1410 $1295 $1344 $1435 $1195 $1283 $1083
- -------------------------------------------------------------------------------------------------------------------------------
10 years $2769 $2725 $2993 $2211 $2141 $3041 $2000 $1973 $2338
- -------------------------------------------------------------------------------------------------------------------------------
You would pay the following
expenses on a $10,000 investment
assuming a 5% annual return and International Equity Small Cap Fund Strategic Growth Fund
that you do not redeem your Fund
shares at the end of each period. ----------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------------------------------------------------------
1 YEAR $ 723 $ 273 $ 269 $ 669 $ 216 $ 274 $ 649 $ 204 $ 204
- -------------------------------------------------------------------------------------------------------------------------------
3 YEARS $1137 $ 838 $ 826 $ 971 $ 667 $ 841 $ 913 $ 630 $ 630
- -------------------------------------------------------------------------------------------------------------------------------
5 YEARS $1575 $1430 $1410 $1295 $1144 $1435 $1195 $1083 $1083
- -------------------------------------------------------------------------------------------------------------------------------
10 YEARS $2789 $2725 $2993 $2211 $2141 $3041 $2000 $1973 $2338
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Stagecoach Equity Funds Prospectus 19
<PAGE>
The summary information on the previous pages is designed to provide you with an
overview of each Fund. The sections that follow provide more detailed
information about the investments and management of each Fund. Words appearing
in italicized print and highlighted in color appear in the glossary.
Important information you should look for:
INVESTMENT OBJECTIVE AND INVESTMENT POLICIES
What is the Fund trying to achieve? How do we intend to invest your money? What
makes a Fund different from the other Funds offered in this Prospectus?
PERMITTED INVESTMENTS
A summary of the Fund's key permitted investments and practices.
IMPORTANT RISK FACTORS
What are key risk factors for the Fund? This will include the factors described
in "General Investment Risks" together with any special risk factors for the
Fund.
FINANCIAL HIGHLIGHTS
Provides important financial information about each class of shares of the Fund.
20 Stagecoach Equity Funds Prospectus
<PAGE>
This page intentionally left blank
<PAGE>
BALANCED FUND
INVESTMENT OBJECTIVE
The Balanced Fund seeks to provide investors with both capital appreciation and
current income resulting in a high total investment return consistent with
prudent investment risk and a balanced investment approach.
INVESTMENT POLICIES
We pursue a balanced and diversified investment approach by investing generally
between 30% and 70% of our assets in equity securities and the remainder in
fixed-income securities. By actively managing both the equity and fixed-income
portion of the Fund's portfolio and the allocation mix, we hope to achieve a
high total return, including both distributions and growth in share values. We
invest the equity portion of our portfolio in equity securities that are trading
at low price-to-earnings ratios, as measured against the stock market as a whole
or against the individual stock's own price history. In addition we look at
price-to-book and price-to-cash flow ratios of companies for indications of
attractive valuation. We invest the fixed-income portion of our portfolio in
investment grade or better corporate bonds, commercial paper, and mortgage-
backed and asset-backed securities based on their relatively greater stability
of income and principal.
PERMITTED INVESTMENTS
Under normal market conditions, we invest:
. between 30% and 70% of our assets in equity securities, with the remainder
invested in debt securities.
Under normal market conditions we invest the equity portion of the Fund's
portfolio in:
. primarily in common stocks of both large, well-established companies and
smaller companies with market capitalization exceeding $50 million at the
time of purchase; and
. in foreign companies through American Depositary Receipts and similar
instruments, up to 25% of total assets.
Under normal market conditions we invest the fixed-income portion of the Fund's
portfolio in:
. commercial paper rated "A-2" (S&P) or "Prime-2" (Moody's) or better;
. corporate debt securities rated "BBB" (S&P) or "Baa" (Moody's) or better;
and
. mortgage-backed and asset-backed securities rated "AA" (S&P) or "Aa"
(Moody's) or better.
22 Stagecoach Equity Funds Prospectus
<PAGE>
We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make short-term investments, either to maintain liquidity or for
short-term defensive purposes when we believe it is in the best interests of
shareholders to do so. During such periods, the Fund may not achieve its
objective of long-term capital appreciation.
IMPORTANT RISK FACTORS
There is no guarantee, that the Fund's balanced investment program will
successfully reduce volatility.
Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage-backed securities are subject to prepayment risk, which can
lower the rate of return on such securities.
You should consider the Summary of Important Risks on page 6, the General
Investment Risks beginning on page 54, and the specific risks listed above. They
are all important to your investment choice.
PORTFOLIO MANAGERS
. REX WARDLAW, CFA
Has managed the Balanced Fund since February 1997, and has been with Wells
Fargo/Wells Capital Management since 1986. Since 1993, Mr. Wardlaw has
managed investment funds, pension assets, and private accounts for Wells
Fargo Bank/Wells Capital Management. Prior to 1993 he was an investment
analyst specializing in several equity market sectors, including utilities,
transportation, basic industries and capital goods. Mr. Wardlaw leads the
Value Equity Investment Team, managing portfolios and directing the
research effort. He has over ten years of investment management experience.
. SCOTT SMITH, CFA
Has co-managed the Balanced Fund since February 1998, and has been with
Wells Fargo/Wells Capital Management since 1987. Mr. Smith is a liquidity
management specialist and has ten years of experience as a taxable money
market portfolio specialist.
. GREGG GIBONEY, CFA
Has co-managed the Balanced Fund since August 1998, and has been with Wells
Fargo/Wells Capital Management as a member of the Value Equity Team
providing security analysis and portfolio management since 1996. Mr.
Giboney was with First Interstate Capital Management prior to 1996 in
various capacities, including fixed-income trading, derivatives management,
equity analysis, stable value asset management and as a portfolio manager
for personal, institutional and trust accounts.
Stagecoach Equity Funds Prospectus 23
<PAGE>
BALANCED FUND Financial Highlights
See "Historical Fund Information" on page 81.
- --------------------------------------------------------------------------------
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information for periods subsequence to September 30, 1995 which, along with
their report and the Fund's financial statements, is available upon request in
the Fund's annual report.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON JULY 2, 1990
-----------------------------------------------------------------------
SEPT.30, MAR.31, MAR.31, SEPT 30, SEPT 30, SEPT 30,
FOR THE PERIOD ENDED: 1998/1/ 1998 1997/2/ 1996/1/ 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.28 $12.01 $11.46 $11.84 $11.67 $12.71
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.17 0.38 0.19 0.36 0.464 0.434
Net realized and unrealized gain (loss)
on investments (1.05) 2.76 0.74 0.89 0.68 (0.13)/4/
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.88) 3.14 0.93 1.25 1.14 0.30
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.17) (0.38) (0.19) (0.35) (0.47) (0.46)
Distributions from net realized gain 0.00 (1.49) (0.19) (1.28) (0.50) (0.88)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from distributions (0.17) (1.87) (0.38) (1.63) (0.97) (1.34)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.23 $13.28 $12.01 $11.46 $11.84 $11.67
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (6.63)% 27.49% 8.15% 10.51% 10.62% 2.30%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $30,833 $34,952 $31,632 $32,640 $89,034 $108,290
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.28% 1.12% 1.05% 1.31% 1.03% 1.09%
Ratio of net investment income to
average net assets 2.66% 2.91% 3.20% 2.98% 4.05% 3.55%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 32% 67% 43% 131% 90% 35%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.33% 1.40% 1.30% 1.48% 1.05% 1.11%
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees and
reimburse expenses (loss) 2.61% 2.63% 2.95% 2.81% 4.03% 3.53%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 30.
/2/ The Fund changed its fiscal year-end from September 30 to March 31.
24 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES -- COMMENCED
ON SEPTEMBER 6, 1996
---------------------------------------------------------------------
SEPT 30, MAR.31, SEPT 30, SEPT 30,
FOR THE PERIOD ENDED: 1998/1/ 1997 1997/2/ 1996
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.00 $10.79 $10.24 $10.00
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations: 0.11 0.19 0.08 0.00
Net investment income
Net realized and unrealized gain (loss) (0.94) 2.55 0.72 0.24
on investments
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.83) 2.74 0.80 0.24
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.11) (0.19) (0.08) 0.00
Distributions from net realized gain 0.00 (1.34) (0.17) 0.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total from distributions (0.11) (1.53) (0.25) 0.00
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.06 $12.00 $10.79 $10.24
- ----------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (6.92%) 26.64% 7.84% 2.40%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $10,516 $9,145 $297 $2
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.93% 1.82% 1.70% 0.00%
Ratio of net investment income to 2.02% 2.15% 2.48% 3.09%
average net assets
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 32% 67% 43% 131%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 2.09% 2.29% 7.85% 0.66%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets prior to waived fees and
reimburse expenses (loss) 1.86% 1.68% (3.67)% 2.43%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/3/ The Fund changed its Investment Advisor during this fiscal year.
/4/ Per share data are based upon average monthly shares outstanding.
Stagecoach Equity Funds Prospectus 25
<PAGE>
DIVERSIFIED EQUITY INCOME FUND
- ---------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Diversified Equity Income Fund seeks to earn current income and a growing
stream of income over time, consistent with the preservation of capital.
INVESTMENT POLICIES
We actively manage a diversified portfolio of income-producing equity
securities. In selecting stocks we emphasize histories and trends. We also look
for equity securities that we believe are selling for less than their intrinsic
or true and that generally exhibit the following characteristics: above average
financial strength, a strong position in their industry, a history of profit
growth, and relatively high dividends.
We may also invest in the following income producing debt securities:
. U.S. Government obligations;
. a broad range of debt instruments, including bonds and other debt
obligations of domestic corporations;
. U.S. dollar-denominated debt instruments of foreign issuers, including
foreign government and companies; and
. various asset-backed securities.
PERMITTED INVESTMENTS
Under normal market conditions, we may invest:
. at least 65% of our total assets in income-producing equity securities;
. at least 90% of our equity portfolio in issues of companies with market
capitalization that falls within the range of the Russell 1000 Index (as of
March 31, 1999, this range was from $20 million to $452 billion. The range
is expected to change frequently);
. up to 25% of our total assets in foreign companies through American
Depositary Receipts and similar instruments;
. most of our debt portfolio in companies and government entities located
within the United States;
. generally all of our debt portfolio in instruments rated at the time of
acquisition in the four highest credit categories by one or more
nationally recognized ratings organizations, or in unrated instruments
determined by Wells Fargo Bank to be of comparable quality; and
. up to 20% of our nonconvertible debt portfolio in instruments rated at the
time of purchase in the highest four credit categories.
26 Stagecoach Equity Funds Prospectus
<PAGE>
We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make other short-term investments, either to maintain liquidity
or for short-term defensive purposes when we believe it is in the best interests
of shareholders to do so. During such periods, the Fund may not achieve its
objective of long-term preservation of capital.
IMPORTANT RISK FACTORS
Stocks selected for their high dividend yields may be more sensitive to interest
rate changes than other stocks. Also, stocks of the smaller and medium-sized
companies purchased for this Fund may be more volatile and less liquid than
larger company stocks.
You should consider the Summary of Important Risks on page 6, the General
Investment Risks beginning on page 54 and the specific risks listed above. They
are all important to your investment choice.
PORTFOLIO MANAGERS
. ALLEN WISNIEWSKI,CFA
Has managed the Diversified Equity Income Fund since November 1992, and has
been with Wells Fargo/Wells Capital Management since 1987. Mr. Wisniewski
has over ten years of equity and balanced portfolio investment management
experience.
. REX WARDLAW, CFA
Has co-managed the Diversified Equity Income Fund since February 1997, and
has been with Wells Fargo/Wells Capital Management since 1986. Since 1993,
Mr. Wardlaw has managed investment funds, pension assets, and private
accounts for Wells Fargo Bank/Wells Capital Management. Prior to 1993 he
was an investment analyst specializing in several equity market sectors,
including utilities, transportation, basic industries and capital goods.
Mr. Wardlaw leads the Value Equity Investment Team, managing portfolios and
directing the research effort. He has over ten years of investment
management experience.
Stagecoach Equity Funds Prospectus 27
<PAGE>
DIVERSIFIED EQUITY INCOME FUND Financial Highlights
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON NOVEMBER 18, 1992
--------------------------------------------------------------------
SEPT.30, MARCH 31, MARCH 31, SEPT. 30, DEC. 31, DEC.31,
FOR THE PERIOD ENDED: 1998/1/ 1998 1997/2/ 1996/3/ 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.97 $ 14.52 $ 14.73 $ 13.34 $ 10.76 $ 11.08
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.16 0.28 0.14 0.25 0.35 0.33
Net realized and unrealized gain (loss)
on investments (2.58) 5.15 0.64 1.39 2.86 (0.32)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.42) 5.43 0.78 1.64 3.21 0.01
- -----------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.16) (0.28) (0.14) (0.25) (0.35) (0.33)
Distributions from net realized gain 0.00 (0.70) (0.85) 0.00 (0.28) 0.00
- -----------------------------------------------------------------------------------------------------------------------
Total from distributions (0.16) (0.98) (0.99) (0.25) (0.63) (0.33)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.39 $ 18.97 $ 14.52 $ 14.73 $ 13.34 $ 10.76
- -----------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (12.78)% 38.15% 5.25% 12.35% 30.17% 0.08%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $170,744 $223,540 $154,502 $134,648 $ 79,977 $ 45,178
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.17% 1.12% 1.10% 1.10% 1.10% 1.06%
Ratio of net investment income to average
net assets 1.74% 1.67% 1.91% 2.57% 3.02% 3.16%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover 29% 59% 33% 43% 70% 62%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets
prior to waived fees and reimbursed expenses 1.17% 1.19% 1.17% 1.26% 1.31% 1.34%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees and
reimbursed expenses 1.74% 1.60% 1.84% 2.41% 2.81% 2.88%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 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.
28 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
CLASS B SHARES -- COMMENCED
ON JANUARY 1, 1995
- --------------------------------------------------------------------
SEPT 30, MAR 31, MAR 31, SEPT 30, DEC 31,
1998 1998 1997/1/ 1996/2/ 1995
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 17.77 $ 13.60 $ 13.79 $ 12.49 $10.00
- --------------------------------------------------------------------
0.09 0.15 0.08 0.17 0.20
- --------------------------------------------------------------------
(2.42) 4.82 0.60 1.30 2.75
- --------------------------------------------------------------------
(2.33) 4.97 0.68 1.47 2.95
- --------------------------------------------------------------------
(0.09) (0.15) (0.08) (0.17) (0.20)
- --------------------------------------------------------------------
$ 15.35 $ 17.77 $ 13.60 $ 13.79 $12.49
- --------------------------------------------------------------------
(13.12)% 37.29% 4.91% 11.76% 29.64%
- --------------------------------------------------------------------
$61,396 $ 71,736 $32,632 $17,045 $5,339
- --------------------------------------------------------------------
1.86% 1.77% 1.74% 1.74% 1.73%
- --------------------------------------------------------------------
1.07% 1.02% 1.29% 2.01% 2.40%
- --------------------------------------------------------------------
29% 59% 33% 43% 70%
- --------------------------------------------------------------------
1.86% 1.83% 1.87% 2.08% 2.57%
- --------------------------------------------------------------------
1.07% 0.96% 1.16% 1.67% 1.56%
- --------------------------------------------------------------------
</TABLE>
Stagecoach Equity Funds Prospectus 29
<PAGE>
EQUITY INDEX FUND
INVESTMENT OBJECTIVE
The Equity Index Fund seeks to approximate to the extent practicable the total
rate of return of substantially all common stocks comprising the Standard &
Poor's 500 Composite Stock Index (the "S&P 500 Index").
INVESTMENT POLICIES
We invest in substantially all of the common stocks listed on the S&P 500 Index
and attempt to achieve a 95% correlation between the performance of the S&P 500
Index and our investment results, before expenses. This correlation is sought
regardless of market conditions.
A precise duplication of the performance of the S&P 500 Index would mean that
the net asset value of Fund shares, including dividends and capital gains, would
increase or decrease in exact proportion to changes in the S&P 500 Index. Such a
100% correlation is not feasible. Our ability to track the performance of the
S&P 500 Index may be affected by, among other things, transaction costs and
shareholder purchases and redemptions. We will regularly monitor the performance
and composition of the S&P 500 Index and adjust the Fund's portfolio as
necessary in order to achieve the 95% correlation.
PERMITTED INVESTMENTS
Under normal market conditions, we invest:
. in a diversified portfolio of common stocks designed to provide a relative
sample of the stocks listed on the S&P 500 Index;
. in stock index futures and options on stock indexes as a substitute for a
comparable position in the underlying securities; and
. in interest-rate futures contracts, options on interest rate swaps and
index swaps.
We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make other short-term investments, either to maintain liquidity
or for short-term defensive purposes when we believe it is in the best interests
of shareholders to do so. During such periods, the Fund may not achieve its
objective.
30 Stagecoach Equity Funds Prospectus
<PAGE>
IMPORTANT RISK FACTORS
We attempt to match as closely as possible the performance of the S&P 500 Index.
Therefore, during periods when the S&P 500 Index is losing value, your
investment will also lose value.
You should consider the Summary of Important Risks on page 6, the General
Investment Risks beginning on page 54, and the specific risks listed above. They
are all important to your investment choice.
Stagecoach Equity Funds Prospectus 31
<PAGE>
EQUITY INDEX FUND Financial Highlights
See "Historical Fund Information" on page 81.
- --------------------------------------------------------------------------------
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- -----------------------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON JANUARY 25, 1984
--------------------------------------------------------
Sept. 30, March 31, March 31, Sept. 30, Dec. 31,
FOR THE PERIOD ENDED: 1998/1/ 1998 1997/2/ 1996/3/ 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 70.32 $ 49.60 $ 46.24 $ 41.45 $ 31.42
- -----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.33 0.48 0.25 0.42 0.59
Net realized and unrealized gain (loss)
on investments (5.39) 22.31 4.61 4.79 10.65
- -----------------------------------------------------------------------------------------------------
Total from investment operations (5.06) 22.79 4.86 5.21 11.24
- -----------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.33) (0.48) (0.25) (0.42) (0.59)
Distributions from net realized gain 0.00 (1.59) (1.25) 0.00 (0.62)
- -----------------------------------------------------------------------------------------------------
Total from distributions (0.33) (2.07) (1.50) (0.42) (1.21)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 64.93 $ 70.32 $ 49.60 $ 46.24 $ 41.45
- -----------------------------------------------------------------------------------------------------
Total return (not annualized) (loss) (7.22)% 46.48 % 10.63 % 12.60 % 35.99 %
- -----------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $518,778 $578,882 $406,739 $370,439 $327,208
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets/4/ 0.71 % 0.89 % 0.97 % 1.01 % 0.96 %
Ratio of net investment income to
average net assets/4/ 0.94 % 0.80 % 1.02 % 1.28 % 1.59 %
- -----------------------------------------------------------------------------------------------------
Portfolio turnover/4/ 3 % 4 % 2 % 1 %/5/ 6 %
- -----------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses/4/ 0.77 % 0.95 % 1.07 % 1.08 % 1.00 %
- -----------------------------------------------------------------------------------------------------
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses (loss)/4/ 0.88 % 0.74 % 0.92 % 1.21 % 1.55 %
- -----------------------------------------------------------------------------------------------------
</TABLE>
/1/The Fund changed year-end from March 31 to September 30.
/2/The Fund changed fiscal year-end from September 30 to March 31.
/3/The Fund changed fiscal year-end from December 31 to September 30.
32 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- ------------------------------------------------------------------------------------
CLASS B SHARES -- COMMENCED
ON FEBRUARY 17, 1998
---------------------------------------
Dec. 31, Sept. 30, March 31,
FOR THE PERIOD ENDED: 1994 1998/1/ 1998
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 33.00 $ 70.41 $65.18
- ------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.63 0.04 (0.01)
Net realized and unrealized gain (loss)
on investments (0.50) (5.38) 5.24
- ------------------------------------------------------------------------------------
Total from investment operations 0.13 (5.34) 5.23
- ------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.63) (0.04) 0.00
Distributions from net realized gain (1.08) 0.00 0.00
- ------------------------------------------------------------------------------------
Total from distributions (1.71) (0.04) 0.00
- ------------------------------------------------------------------------------------
Net asset value, end of period $ 31.42 $ 65.03 $70.41
- ------------------------------------------------------------------------------------
Total return (not annualized) (loss) 0.42 % (7.59)% 8.02 %
- ------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $236,265 $17,499 $3,811
- ------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets/4/ 0.97 % 1.45 % 1.45 %
Ratio of net investment income to
average net assets/4/ 1.92 % 0.14 % (0.19)%
- ------------------------------------------------------------------------------------
Portfolio turnover/4/ 7 % 3 % 4 %
- ------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses/4/ 1.00 % 1.58 % 1.64 %
- ------------------------------------------------------------------------------------
Ratio of net investment income to average net
assets prior to waived fees and reimbursed 1.89 % 0.01 % (0.38)%
expenses (loss)/4/
- ------------------------------------------------------------------------------------
</TABLE>
/4/ Reflects activity of the Master Portfolio prior to December 15, 1997.
/5/ Represents activity for the Fund's stand-alone period only. The portfolio
turnover rate for the Corporate Stock Master Portfolio for the period from
April 28, 1996 to September 30, 1996, was 3%.
Stagecoach Equity Funds Prospectus 33
<PAGE>
EQUITY VALUE FUND
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The Equity Value Fund seeks to provide investors with long-term capital
appreciation.
INVESTMENT POLICIES
We seek long-term capital appreciation by investing in a diversified portfolio
composed primarily of equity securities that are trading at low price-to-
earnings ratios, as measured against the stock market as a whole or against the
individual stock's own price history. In addition we look at the price-to-book
value and price-to-cash flow ratios of companies for indications of attractive
valuation. We use both quantitative and qualitative analysis to identify
possible investments. Dividends are a secondary consideration when selecting
stocks. We may purchase particular stocks when we believe that a history of
strong dividends may increase their market value.
PERMITTED INVESTMENTS
Under normal market conditions, we invest:
. primarily in common stocks of both large, well-established companies and
smaller companies with market capitalization exceeding $50 million at the time
of purchase;
. in debt instruments that may be converted into the common stock of both U.S.
and foreign companies; and
. up to 25% of our assets in foreign companies through American Depositary
Receipts and similar instruments.
We may also purchase convertible debt securities with the same characteristics
as common stock, as well as in preferred stock and warrants. We may temporarily
hold assets in cash or in money market instruments, including U.S. Government
obligations, shares of other mutual funds and repurchase agreements, or make
short-term investments, either to maintain liquidity or for short-term defensive
purposes when we believe it is in the best interests of shareholders. During
such periods, the Fund may not achieve its objective of long term capital
appreciation.
34 Stagecoach Equity Funds Prospectus
<PAGE>
- --------------------------------------------------------------------------------
IMPORTANT RISK FACTORS
There is no guarantee that securities selected as "undervalued" will perform as
expected. Stocks of smaller, medium-sized and foreign companies purchased using
the value approach may be more volatile and less liquid than other comparable
securities.
You should consider the Summary of Important Risks on page 6, the General
Investment Risks beginning on page 54, and the specific risks listed above. They
are all important to your investment choice.
PORTFOLIO MANAGERS
. REX WARDLAW, CFA
Has managed the Equity Value Fund since January 1997, and has been with
Wells Fargo/Wells Capital Management since 1986. Since 1993, Mr. Wardlaw
has managed investment funds, pension assets, and private accounts for
Wells Fargo Bank/Wells Capital Management. Prior to 1993 he was an
investment analyst specializing in several equity market sectors, including
utilities, transportation, basic industries and Capital goods. Mr. Wardlaw
leads the Value Equity Investment Team, managing portfolios and directing
the research effort. He has over ten years of investment management
experience.
. ALLEN WISNIEWSKI, CFA
Has co-managed the Equity Value Fund since September 1996, and has been
with Wells Fargo/Wells Capital Management since 1987. Mr. Wisniewski has
over ten years of equity and balanced portfolio investment management
experience.
. GREGG GIBONEY, CFA
Has co-managed the Equity Value Fund since August 1998, and has been with
Wells Fargo/Wells Capital Management as a member of the Value Equity Team
providing security analysis and portfolio management since 1996. Mr.
Giboney was with First Interstate Capital Management prior to 1996 in
various capacities, including fixed-income trading, derivatives management,
equity analysis, stable value asset management and as a portfolio manager
for personal, institutional and trust accounts.
Stagecoach Equity Funds Prospectus 35
<PAGE>
EQUITY VALUE FUND Financial Highlights
See "Historical Fund Information" on page 81.
- --------------------------------------------------------------------------------
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information for period subsequence to September 30, 1995 which, along with their
report and the Fund's financial statements, is available upon request in the
Fund's annual report.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON JULY 2, 1990
---------------------------------------------------------------------------------------
Sept. 30, March 31, March 31, Sept. 30, Sept. 30, Sept. 30,
FOR THE PERIOD ENDED: 1998/1/ 1998 1997/2/ 1996/3/ 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.15 $ 14.43 $ 12.66 $ 13.27 $ 12.36 $ 13.17
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.09 0.17 0.08 0.20 0.24/4/ 0.20/4/
Net realized and unrealized gain (loss)
on investments (3.22) 5.58 1.89 1.60 1.63/4/ 0.74/4/
- ------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.13) 5.75 1.97 1.80 1.87 0.94
- ------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.09) (0.17) (0.08) (0.19) (0.25) (0.21)
Distributions from net realized gain 0.00 (1.86) (0.12) (2.22) (0.71) (1.54)
- ------------------------------------------------------------------------------------------------------------------------------------
Total from distributions (0.09) (2.03) (0.20) (2.41) (0.96) (1.75)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.93 $ 18.15 $ 14.43 $ 12.66 $ 13.27 $ 12.36
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (17.27)% 41.76 % 15.63 % 14.27 % 16.58 % 7.49 %
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $43,679 $52,392 $20,798 $18,453 $170,406 $168,852
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.09 % 1.07 % 1.05 % 1.18 % 0.96 % 0.99 %
Ratio of net investment income to
average net assets 1.06 % 1.03 % 1.14 % 1.73 % 1.97 % 1.60 %
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 23 % 50 % 45 % 91 % 75 % 41 %
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.09 % 1.16 % 1.12 % 1.22 % 0.98 % 1.01 %
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees and 1.06 % 0.94 % 1.07 % 1.69 % 1.95 % 1.58 %
reimbursed expenses (loss)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 30.
/2/ The Fund changed its fiscal year-end from September 30 to March 31.
36 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES --
CLASS B SHARES -- COMMENCED COMMENCED ON
ON SEPTEMBER 6, 1996 APRIL 1, 1998
- -------------------------------------------------------------------------------------------------------------------------------
Sept. 30, March 31, Sept. 30, Sept. 30, Sept. 30,
FOR THE PERIOD ENDED: 1998/1/ 1998 1997/2/ 1996/3/ 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.86 $ 11.81 $ 10.34 $ 10.00 $ 14.86
- -------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.02 0.05 0.01 0.00 0.02
Net realized and unrealized gain (loss)
on investments (2.63) 4.57 1.57 0.34 (2.63)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.61) 4.62 1.58 0.34 (2.61)
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.01) 0.00 (0.02)
Distributions from net realized gain 0.00 (1.52) (0.10) 0.00 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Total from distributions (0.02) (1.57) (0.11) 0.00 (0.02)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.23 $ 14.86 $ 11.81 $ 10.34 $ 12.23
- -------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (17.54)% 40.87 % 15.31 % 3.40% (17.57)%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $73,343 $72,428 $ 2,542 $ 0 $ 1,239
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.81 % 1.76 % 1.70 % 0.00% 1.83 %
Ratio of net investment income to
average net assets 0.36 % 0.42 % 0.34 % 1.83% 0.41 %
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 23 % 50 % 45 % 91% 23 %
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.81 % 1.83 % 2.19 % N/A 2.84 %
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees and 0.36 % 0.35 % (0.15)% N/A (0.60)%
reimbursed expenses (loss)
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/3/ The Fund changed its Investment Advisor during this fiscal year.
/4/ Per share data based upon average monthly shares outstanding.
Stagecoach Equity Funds Prospectus 37
<PAGE>
GROWTH FUND
INVESTMENT OBJECTIVE
The Growth Fund seeks to earn current income and achieve long-term capital
appreciation by investing primarily in common stocks and preferred stocks and
debt securities that are convertible into common stocks.
INVESTMENT POLICIES
We actively manage a diversified portfolio of common stocks and other equities.
We look for companies that have a strong earnings growth trend that we believe
have above-average prospects for future growth. We may also invest in the stocks
of medium- to smaller-size companies that we believe have the potential to
produce high levels of future earnings growth or when we believe the stock is
undervalued.
PERMITTED INVESTMENTS
Under normal market conditions, we may invest:
. at least 65% of our total assets in equity securities, including common and
preferred stocks;
. at least 65% of our total assets in income-producing securities and
securities convertible into common stocks;
. the majority of our total assets in issues of companies with market
capitalization that falls within the range of the Russell 1000 Index (As of
March 31, 1999 this range was from $20 million to $452 billion. The range
is expected to change frequently.); and
. up to 25% of our total assets in foreign companies through American
Depositary Receipts and similar instruments.
We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make short-term investments, either to maintain liquidity or for
short-term defensive purposes when we believe it is in the best interests of
shareholders to do so. During such periods, the Fund may not achieve its
objective of capital appreciation.
38 Stagecoach Equity Funds Prospectus
<PAGE>
IMPORTANT RISK FACTORS
This Fund is primarily subject to the equity market risks described in the
Common Risks section.
You should consider the Summary of Important Risks on page 6, and the General
Investment Risks beginning on page 54. They are all important to your investment
choice.
PORTFOLIO MANAGERS
. KELLI HILL
Has managed the Growth Fund since February 1997, and has been with Wells
Fargo/Wells Capital Management since 1987. Ms. Hill is the Core Equity Team
Leader, providing portfolio management and fundamental security analysis
for the team. She has over twelve years of equity investment management
experience.
Stagecoach Equity Funds Prospectus 39
<PAGE>
GROWTH FUND Financial Highlights
See "Historical Fund Information" on page 81.
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON AUGUST 2, 1990
------------------------------------------------------------------------
Sept. 30, March 31, March 31, Sept. 30, DEC. 31, DEC.31,
For the period ended: 1998/1/ 1998 1997/2/ 1996/3/ 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.09 $ 19.20 $ 17.91 $ 17.26 $ 14.10 $ 14.75
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.05 0.11 0.06 0.07 0.19 0.22
Net realized and unrealized gain (loss)
on investments (1.61) 6.18 1.34 2.00 3.87 (0.27)
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.56) 6.29 1.40 2.07 4.06 (0.05)
- -----------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.05) (0.11) (0.06) (0.07) (0.19) (0.22)
Distributions from net realized gain 0.00 (3.29) (0.05) (1.35) (0.71) (0.38)
- -----------------------------------------------------------------------------------------------------------------------
Total from distributions (0.05) (3.40) (0.11) (1.42) (0.90) (0.60)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.48 $ 22.09 $ 19.20 $ 17.91 $ 17.26 $ 14.10
- -----------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (7.08)% 34.65% 7.86% 12.45% 28.90% (0.29)%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $305,309 $365,405 $283,468 $254,498 $178,488 $113,525
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.08% 1.12% 1.14% 1.18% 1.18% 1.11%
Ratio of net investment income to
average net assets 0.42% 0.53% 0.65% 0.56% 1.23% 1.51%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover 18% 137% 40% 83% 100% 71%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.08% 1.13% N/A 1.19% 1.21% 1.15%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees
and reimbursed expenses (loss) 0.42% 0.52% N/A 0.55% 1.20% 1.47%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 30.
/2/ The Fund changed its fiscal year-end from September 30 to March 31.
/3/ The Fund changed fiscal year-end from December 31 to September 30.
40 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- ----------------------------------------------------------------------------------------------------------
CLASS B SHARES--COMMENCED
ON JANUARY 1, 1995
------------------------------------------------------------
SEPT. 30, Mar. 31 Mar. 31, Sept. 30, Dec. 31,
For the period ended: 1998/1/ 1998 1997/2/ 1996/3/ 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.70 $ 13.64 $ 12.74 $ 12.29 $ 10.00
- ----------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02) (0.01) 0.00 (0.01) 0.05
Net realized and unrealized gain (loss)
on investments (1.15) 4.38 0.94 1.42 2.79
- ----------------------------------------------------------------------------------------------------------
Total from investment operations (1.17) 4.37 0.94 1.41 2.84
- ----------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.05
Distributions from net realized gain 0.00 (2.31) (0.04) (0.96) (O.50)
- ----------------------------------------------------------------------------------------------------------
Total from distributions 0.00 (2.31) (0.04) (0.96) (0.55)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.53 $ 15.70 $ 13.64 $ 12.74 $ 12.29
- ----------------------------------------------------------------------------------------------------------
Total return (not annualized) (7.45)% 33.83% 7.36% 11.89% 28.47%
- ----------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $ 48,772 $52,901 $23,010 $12,832 $ 4,682
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.79% 1.79% 1.86% 1.93% 1.87%
Ratio of net investment income to
average net assets (0.29)% (0.15)% (0.06)% (0.12)% 0.43%
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover 18% 137% 40% 83% 100%
- ----------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.79% 1.80% 1.89% 2.03% 2.21%
- ----------------------------------------------------------------------------------------------------------
Ratio of net investment income to average
net assets prior to waived fees
and reimbursed expenses (loss) (0.29)% (0.16)% (0.09)% (0.22)% 0.09%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Stagecoach Equity Funds Prospectus 41
<PAGE>
INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE
The International Equity Fund seeks to earn total return, with an emphasis on
capital appreciation, over the long-term, by investing primarily in equity
securities of non-U.S. companies.
INVESTMENT POLICIES
We actively manage a diversified portfolio of equity securities of companies
located or operating in developed non-U.S. countries and in emerging markets of
the world. We expect that the securities we hold will be traded on a stock
exchange or other market in the country in which the issuer is based, but they
also maybe traded in other countries, including the U.S.
We apply a fundamentals-driven, value-oriented analysis to identify companies
with above-average potential for long-term growth. The financial data we examine
includes both the company's historical performance results and its projected
future earnings. Among other key criteria we consider are a company's local,
regional or global franchise; history of effective management demonstrated by
expanding revenues and earnings growth; prudent financial and accounting
policies and ability to take advantage of a changing business environment.
PERMITTED INVESTMENTS
Under normal market conditions, we invest:
. at least 80% of our assets in equity securities of companies located or
operating outside the U.S.;
. in a minimum of five countries exclusive of the U.S.;
. up to 50% of our assets in any one country;
. up to 25% of our portfolio in emerging markets;
. in issuers with an average market capitalization of $10 billion or more,
although we may invest in equity securities of issuers with market
capitalization as low as $250 million; and
. in equity securities including common stocks, and preferred stocks, and in
warrants, convertible debt securities, ADRs, GDRs (and similar instruments)
and shares of other mutual funds.
Although it is not our intention to do so, we reserve the right to hedge the
portfolio's foreign currency exposure by purchasing or selling foreign currency
futures and forward foreign currency contracts.
We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and
42 Stagecoach Equity Funds Prospectus
<PAGE>
repurchase agreements, or make other short-term investments, either to maintain
liquidity or for short-term defensive purposes when we believe it is in the best
interests of shareholders to do so. We may also, for defensive purposes, invest
without limit in cash, short-term debt and equity securities of U.S. companies
when we believe it is in the best interests of shareholders to do so. During
these periods, the Fund may not achieve its objective of capital
appreciation.
IMPORTANT RISK FACTORS
Foreign company stocks may lose value or be more difficult to trade as a result
of adverse changes in currency exchange rates or other developments in the
issuer's home country. Concentrated investment in any single country, especially
a less developed country, would make the Fund's value more sensitive to
economic, currency and regulatory changes within that country. Emerging market
countries are often dependent on international trade and are therefore often
vulnerable to events in other countries. They may have less developed financial
systems and volatile currencies and may be more sensitive than more mature
markets to a variety of economic factors. Emerging market securities may also be
less liquid than securities of more developed countries, which may make them
more difficult to sell, particularly during a market downturn.
You should consider the Summary of Important Risks on page 6, the General
Investment Risks beginning on page 54, and the specific risks listed above. They
are all important to your investment choice.
PORTFOLIO MANAGERS
. KATHERINE SCHAPIRO, CFA
Has managed the International Equity Fund since it commenced operations in
September 1997, and has been with Wells Fargo/Wells Capital Management as a
portfolio manager since 1992. Ms. Schapiro has over eighteen years of
domestic and international equity investment management experience. She is
President of the Security Analysts of San Francisco.
. STACEY HO, CFA
Has co-managed the International Equity Fund since it commenced operations
in September 1997, and has been with Wells Capital Management since early
1997. In 1995 and 1996 she was an international equity portfolio manager at
Clemente Capital Management, and from 1990 to 1995 she managed Japanese and
U.S. equity portfolios for Edison International. Ms. Ho has over nine years
of international equity investment management experience.
Stagecoach Equity Funds Prospectus 43
<PAGE>
INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
- --------------------------------------------------------------------------------------
CLASS A SHARES -- COMMENCED
ON SEPTEMBER 24, 1997
---------------------------
SEPT 30, MARCH 31,
FOR THE PERIOD ENDED: 1998/1/ 1998
- --------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.05 $ 10.00
- --------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.00 0.02
Net realized and unrealized gain (loss) on investments (1.69) 1.03
- --------------------------------------------------------------------------------------
Total from investment operations (1.69) 1.05
- --------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain 0.00 0.00
- --------------------------------------------------------------------------------------
Total from distributions 0.00 0.00
- --------------------------------------------------------------------------------------
Net asset value, end of period $ 9.36 $ 11.05
- --------------------------------------------------------------------------------------
Total return (not annualized) (15.29)% 10.52%
- --------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $23,857 $26,770
- --------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.75% 1.75%
Ratio of net investment income to average net assets 0.10% 0.35%
- -------------------------------------------------------------------------------------
Portfolio turnover 21% 12%
- -------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 2.06% 2.20%
- -------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses (0.21)% (0.10)%
- -------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 30.
44 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
CLASS C SHARES --
CLASS B SHARES -- COMMENCED COMMENCED ON
ON SEPTEMBER 24, 1997 APRIL 1, 1998
- --------------------------------------------------
SEPT 30, MARCH 31, SEPT 30,
1998/1/ 1998 1998
- --------------------------------------------------
<S> <C> <C>
$ 11.01 $ 10.00 $ 11.01
- --------------------------------------------------
(0.03) (0.01) (0.03)
(1.68) 1.02 (1.68)
- --------------------------------------------------
(1.71) 1.01 (1.71)
- --------------------------------------------------
0.00 0.00 0.00
0.00 0.00 0.00
- --------------------------------------------------
0.00 0.00 0.00
- --------------------------------------------------
$ 9.30 $ 11.01 $ 9.30
- --------------------------------------------------
(15.53)% 10.10% (15.53)%
- --------------------------------------------------
$30,070 $33,003 $ 297
- --------------------------------------------------
2.40% 2.40% 2.40%
(0.56)% (0.31)% (1.15)%
- --------------------------------------------------
21% 12% 21%
- --------------------------------------------------
2.70% 2.84% 2.66%
- --------------------------------------------------
(0.86)% (0.75)% (1.41)%
- --------------------------------------------------
</TABLE>
Stagecoach Equity Funds Prospectus 45
<PAGE>
SMALL CAP FUND
INVESTMENT OBJECTIVE
The Small Cap Fund seeks above-average, long-term capital appreciation in order
to provide investors with a rate of total return exceeding that of the Russell
2000 Index, before fees and expenses, over a time horizon of three to five
years.
INVESTMENT POLICIES
We actively manage a diversified portfolio of common stocks issued by companies
whose market capitalization falls within the range of the Russell 2000 Index. We
will sell the stock of any company whose market capitalization exceeds the range
of this index for sixty consecutive days. As of March 31, 1999, the range was up
to $8.5 billion, but it is expected to change frequently.
We invest in the common stock of domestic and foreign companies we believe have
above-average prospects for capital growth, and that are involved in new or
innovative products, services and processes.
PERMITTED INVESTMENTS
Under normal market conditions, we may invest:
. at least 65% of our total assets in common stocks whose market
capitalization falls within the range of the Russell 2000 Index;
. in an actively managed, broadly-diversified portfolio of growth-oriented
common stocks;
. in at least 20 common stock issues spread across multiple industry groups
and sectors of the economy;
. up to 40% of our assets in initial public offerings or recent start-ups and
newer issues; and
. no more than 25% of our assets in foreign companies through American
Depositary Receipts or similar issues.
We may invest in preferred stock or investment-grade debt securities that are
convertible into common stock, and in money market instruments to maintain
liquidity, to meet expected redemption requests or as a temporary defensive
measure when we believe that the basic investment strategy is not in the best
interests of shareholders. Generally, these defensive investments are temporary
and will not exceed 35% of total assets. During such periods, the Fund may not
achieve its objective of capital appreciation.
46 Stagecoach Equity Funds Prospectus
<PAGE>
IMPORTANT RISK FACTORS
This Fund is designed for investors willing to assume above-average risk. We may
invest in companies that:
. pay low or no dividends;
. have smaller market capitalization;
. have less market liquidity;
. have no or relatively short operating histories, or are new public
companies or are initial public offerings;
. have aggressive capital structures including high debt levels; or
. are involved in rapidly growing or changing industries and/or new
technologies.
Because we may invest in such aggressive securities, share prices may rise and
fall more than the share prices of other funds. In addition, our active trading
investment strategy may result in a higher-than-average portfolio turnover
ratio, increased trading expenses, and higher short-term capital gains.
You should consider the Common Risks on page 6, the General Investment Risks
beginning on page 54, and the specific risks listed above. They are all
important to your investment choice.
PORTFOLIO MANAGERS
. KENNETH LEE
Has managed the Small Cap Fund since June 1997, and has been with Wells
Fargo/Wells Capital Management since 1993. Mr. Lee has seven years of
experience in the investment industry, and has managed equity investment
portfolios since 1995.
. THOMAS ZEIFANG, CFA
Has co-managed the Small Cap Fund since February 1999, and has been with
Wells Fargo/Wells Capital Management since 1995. Mr. Zeifang provided
fundamental security analysis for Fleet Investment Advisors for three years
prior to joining Wells Fargo. He has over five years of equity investment
management experience.
Stagecoach Equity Funds Prospectus 47
<PAGE>
SMALL CAP FUND Financial Highlights
See "Historical Fund Information" on page 81.
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
FOR SHARES OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES -- COMMENCED
ON SEPTEMBER 16, 1996
-----------------------------------------
SEPT. 30, MARCH 31, MARCH 31,
FOR PERIOD ENDED: 1998/1/ 1998 1997/2/
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 25.62 $ 18.98 $ 22.45
- ----------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.09) (0.06) (0.01)
Net realized and unrealized gain
(loss) on investments (7.76) (8.76) (3.46)
- ----------------------------------------------------------------------------------------------
Total from investment operations (7.76) 8.70 (3.47)
- ----------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain 0.00 (2.06) 0.00
- ----------------------------------------------------------------------------------------------
Total from distributions 0.00 (2.06) 0.00
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $ 17.86 $ 25.62 $ 18.98
- ----------------------------------------------------------------------------------------------
Total return (not annualized) (30.29)% 47.03% (15.46)%
- ----------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $10,899 $15,611 $ 3,107
- ----------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets/3/ 1.36% 1.22% 1.10%
Ratio of net investment income (loss) to
average net assets/3/ (0.82)% (0.43)% (0.23)%
- ----------------------------------------------------------------------------------------------
Portfolio turnover/4/ 110% 291% 69%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees reimbursed expenses/3/ 1.49% 1.57% 2.80%
- ----------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets prior to waived fees
and reimbursed expenses/3/ (0.95)% (0.78)% (1.93)%
- ----------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from March 31 to September 30.
/2/ The Fund changed its fiscal year-end from September 30 to March 31.
/3/ Ratio includes income and expenses allocated from the Master Portfolio for
periods prior to December 15, 1997.
/4/ Reflects activity of the Master Portfolio for periods prior to December 15,
1997.
48 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES -- COMMENCED
ON SEPTEMBER 16, 1996
--------------------------------------------------------------------
SEPT. 30, SEPT. 30, MAR. 31, MAR. 31, SEPT. 30,
FOR PERIOD ENDED: 1996 1998/1/ 1998 1997/2/ 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.01 $ 25.38 $ 18.93 $22.46 $ 22.02
- -----------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.00 (0.18) (0.11) (0.04) 0.00
Net realized and unrealized gain
(loss) on investments 0.44 (7.56) 8.61 (3.49) 0.44
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.44 (7.74) 8.50 (3.53) 0.44
- -----------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gain 0.00 0.00 (2.05) 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------
Total from distributions 0.00 0.00 (2.05) 0.00 0.00
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 22.45 $ 17.64 $ 25.38 $18.93 $ 22.46
- -----------------------------------------------------------------------------------------------------------------------
Total return (not annualized) 2.00% (30.50)% 46.02% 2.00% (30.54)%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $ 96 $13,071 $15,320 $1,905 $ 0
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets/3/ 1.03% 2.11% 1.92% 1.75% 0.00%
Ratio of net investment income (loss) to
average net assets/3/ (0.59)% (1.56)% (1.13) (0.85)% 0.00%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover/4/ 10% 110% 291% 69% 10%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees reimbursed expenses/3/ 38.54 2.13 2.21 3.55% 0.00%
- -----------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets prior to waived fees
and reimbursed expenses/3/ (38.10)% (1.58)% (1.42)% (2.65)% 0.00%
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
CLASS C SHARES -- COMMENCED
ON DEC. 15, 1997
---------------------------
SEPT. 30, MAR. 31,
FOR PERIOD ENDED: 1998/1/ 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 25.38 $21.77
- ------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.18) (0.00)
Net realized and unrealized gain
(loss) on investments (7.57) 3.69
- ------------------------------------------------------------------------------------
Total from investment operations (7.75) 3.61
- ------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain 0.00 0.00
- ------------------------------------------------------------------------------------
Total from distributions 0.00 0.00
- ------------------------------------------------------------------------------------
Net asset value, end of period $ 17.63 $25.38
- ------------------------------------------------------------------------------------
Total return (not annualized) 16.58%
- ------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $ 1,426 $2,495
- ------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets/3/ 2.11% 2.10%
Ratio of net investment income (loss) to
average net assets/3/ (1.56)% (1.17)%
- ------------------------------------------------------------------------------------
Portfolio turnover/4/ 110% 291%
- ------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees reimbursed expenses/3/ 2.71% 2.66%
- ------------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets prior to waived fees
and reimbursed expenses/3/ (2.16)% (1.73)%
- ------------------------------------------------------------------------------------
</TABLE>
Stagecoach Equity Funds Prospectus 49
<PAGE>
STRATEGIC GROWTH FUND
INVESTMENT OBJECTIVE
The Strategic Growth Fund seeks to provide investors with an above-average level
of long-term capital appreciation.
INVESTMENT POLICIES
We seek an above-average level of capital appreciation for investors willing to
assume above-average risk. We actively manage a broadly diversified equity
portfolio of companies expected to have strong growth in revenues, earnings and
assets. We select a range of companies from different industry groups, with the
majority of our holdings consisting of established growth companies, turnaround
or acquisition candidates, or attractive larger capitalization companies.
PERMITTED INVESTMENTS
Under normal market conditions, we may invest:
. in at least 20 common stock issues spread across a number of different
industry groups;
. at least 65% of our assets in growth-oriented common stocks that we
believe have better-than-average prospects to increase in value;
. up to 40% of our assets in initial public offerings and/or small and newer
equity issues; and
. up to 65% of our assets in companies whose market capitalization at the
time we buy their stock is within the capitalization range of the companies
listed on the Russell MidCap/TM/ Index. (As of March 31, 1999, this range
was from $20 million to $38.5 billion. The range is expected to change
frequently.)
We may invest in preferred stock or investment-grade debt securities that are
convertible into common stock, and in money market instruments to maintain
liquidity, to meet expected redemption requests or as a defensive measure when
we believe that the basic investment strategy is not in the best interests of
shareholders. Generally, these defensive investments are temporary and will not
exceed 35% of total assets. During such periods, the Fund may not achieve its
objective of long-term capital appreciation.
50 Stagecoach Equity Funds Prospectus
<PAGE>
IMPORTANT RISK FACTORS
This Fund is designed for investors willing to assume above average risk. We may
invest in companies that:
. pay low or no dividends;
. have smaller market capitalization;
. have less market liquidity;
. have no or relatively short operating histories or are newly public;
. have aggressive capital structures, including high debt levels; or
. are involved in rapidly growing or changing industries and/or new
technologies.
The Fund's share price may rise and fall more than the share prices of other
funds. Investments in foreign and emerging markets may also present special
risks, including currency, political, diplomatic, regulatory and liquidity
risks. In addition, our active trading may result in a higher-than-average
portfolio turnover ratio, increased trading expenses, and short-term capital
gains that pass through to the Fund's shareholders.
You should consider the Common Risks on page 6, the General Investment Risks
beginning on page 54, and the specific risks listed above. They are all
important to your investment choice.
PORTFOLIO MANAGERS
. Chris Greene
Has managed the Strategic Growth Fund since February 1999 and co-managed
since September 1997 when he began working with Wells Fargo/Wells Capital
Management. For the three years prior to his co-managing the Fund, Mr.
Greene provided the fundamental security analysis for Hambrecht & Quist, an
investment banking firm focusing on growth companies. Mr. Greene has over
seven years of investment experience and over two years of equity
investment management experience.
. Thomas Zeifang, CFA
Has co-managed the Small Cap Fund since February 1999, and has been with
Wells Fargo/Wells Capital Management since 1995. Mr. Zeifang provided
fundamental security analysis for Fleet Investment Advisors for three years
prior to joining Wells Fargo. He has over five years of equity investment
management experience.
Stagecoach Equity Funds Prospectus 51
<PAGE>
STRATEGIC GROWTH FUND Financial Highlights
See "Historical Fund Information" on page 81.
This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.
FOR SHARES OUTSTANDING
<TABLE>
<CAPTION>
CLASS A SHARES -- COMMENCED ON
JANUARY 20, 1993
--------------------------------------------------------------------------------
SEPT. 30, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
FOR THE PERIOD ENDED: 1998/1/ 1997 1996 1995 1994 1993/1/
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.96 $ 26.42 $ 24.12 $ 19.06 $ 18.93 $ 24.33
- -------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14) (0.07) (0.04) (0.06) (0.16) (0.29)
Net realized and unrealized gain
(loss) on investments (3.20) 2.48 2.54 8.12 0.96 (3.89)
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.34) 2.41 2.50 8.06 0.80 (4.18)
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gain 0.00 (8.87) (0.20) (3.00) (0.47) 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Tax return of capital 0.00 0.00 0.00 0.00 (0.20) 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Total from distributions 0.00 (8.87) (0.20) (3.00) (0.67) 0.00
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.62 $ 19.96 $ 26.42 $ 24.12 $ 19.06 $ 20.15
- -------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (16.73)% 7.73% 10.32 % 42.51 % 4.23 % (17.18)%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $94,388 $148,122 $131,226 $59,016 $26,744 $20,337
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.27% 1.18%/3/ 1.24%/4/ 1.28% 1.20% 1.93%
Ratio of net investment income to
average net assets (0.90)% (0.96)%/2/ (0.82)%/4/ (0.76)% (0.81)% (1.56)%
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 339% 256%/1/ 10%/2/ 171% 149% 339%
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 1.27% 1.18%/2/ 1.27%/4/ 1.38% 1.55% 1.93%
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses (loss) (0.90)% (0.96)%/2/ (0.85)%/4/ (0.86)% (1.16)% (1.56)%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Fund changed its fiscal year-end from December 31 to September 30.
/2/ This ratio includes activity of the Master Portfolio for the period prior to
December 15, 1997.
/3/ The portfolio turnover rate includes activity of the Master Portfolio prior
to December 15, 1997.
52 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES -- COMMENCED CLASS C SHARES -- COMMENCED
ON DEC. 15, 1997 ON JULY 1, 1993
- ----------------------------------------------------------------------------------------------------------------------------------
SEPT. 30, DEC. 31, SEPT. 30, DEC. 31, DEC. 31, DEC. 31,
FOR THE PERIOD ENDED: 1998/1/ 1997 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 24.33 $ 23.68 $ 24.32 $ 32.42 $ 29.84 $ 23.74
- ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.29) (0.02) (0.29) (0.45) (0.11) (0.23)
Net realized and unrealized gain
(loss) on investments (3.89) 0.67 (3.89) 3.17 2.93 10.03
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (4.18) 0.65 (4.18) 2.72 2.82 9.80
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gain 0.00 0.00 0.00 (10.82) (0.24) (3.70)
- ----------------------------------------------------------------------------------------------------------------------------------
Tax return of capital 0.00 0.00 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total from distributions 0.00 0.00 0.00 (10.82) (0.24) (3.70)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.15 $ 24.33 $ 20.14 $ 24.32 $ 32.42 $ 29.84
- ----------------------------------------------------------------------------------------------------------------------------------
Total return (not annualized) (17.18)% 2.74% (17.19)% 6.98% 9.46% 41.54%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $ 20,337 $ 23,562 $ 17.507 $ 41,608 $ 55,063 $ 26,326
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Ratio of expenses to average net assets 1.93% 1.89% 1.94% 1.93%/2/ 2.00%/4/ 2.02%
Ratio of net investment income to
average net assets (1.56)% (1.63)% (1.57)% (1.70)%/2/ (1.58)%/4/ (1.49)%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover 339% 256% 339% 256%/3/ 10%/5/ 171%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 1.93% 1.89% 1.94% 1.94%/2/ 2.02%/4/ 2.09%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses (loss) (1.56)% (1.63)% (1.57)% (1.71)%/2/ (1.60)%/4/ (1.56)%
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
DEC. 31, DEC. 31,
FOR THE PERIOD ENDED: 1994 1993
- ------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 23.75 $ 21.53
- ------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.34) (0.62)
Net realized and unrealized gain
(loss) on investments 1.16 3.60
- ------------------------------------------------------------------------------
Total from investment operations 0.82 2.98
- ------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00
Distributions from net realized gain (0.57) (0.76)
- ------------------------------------------------------------------------------
Tax return of capital (0.26) 0.00
- ------------------------------------------------------------------------------
Total from distributions 0.83 0.76
- ------------------------------------------------------------------------------
Net asset value, end of period $ 23.74 $ 23.75
- ------------------------------------------------------------------------------
Total return (not annualized) 3.46% 13.84%
- ------------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000s) $ 26.335 $ 11.932
- ------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Ratio of expenses to average net assets 1.95% 0.61%
Ratio of net investment income to
average net assets (1.56)% (1.00)
- ------------------------------------------------------------------------------
Portfolio turnover 149% 182%
- ------------------------------------------------------------------------------
Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 2.23% 2.14%
- ------------------------------------------------------------------------------
Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses (loss) (1.84)% (2.53)%
- ------------------------------------------------------------------------------
</TABLE>
/4/ The ratio includes income and expenses allocated from the Master Portfolio.
/5/ The portfolio turnover for the Capital Appreciation Master Portfolio from
its inception on February 20, 1996 to December 31, 1996, was 137%. The
information shown reflects the stand-alone period only.
Stagecoach Equity Funds Prospectus 53
<PAGE>
GENERAL INVESTMENT RISKS
Understanding the risks involved in mutual fund investing will help you make an
informed decision that takes into account your risk tolerance and preferences.
You should carefully consider the risks common to investing in all mutual funds,
including the Stagecoach Funds. Certain common risks are identified in the
Summary of Important Risks on page 6. Other risks of mutual fund investing
include the following:
. Unlike bank deposits such as CDs or savings accounts, mutual funds are not
insured by the FDIC.
. We cannot guarantee that we will meet our investment objectives.
. We do not guarantee the performance of a Fund, nor can we assure you that
the market value of your investment will not decline. We will not "make
good" any investment loss you may suffer, nor can anyone we contract with
to provide certain services, such as selling agents or investment advisors,
offer or promise to make good any such losses.
. Share prices--and therefore the value of your investment--will increase and
decrease with changes in the value of the underlying securities and other
investments. This is referred to as price volatility.
. Investing in any mutual fund, including those deemed conservative, involves
risk, including the possible loss of any money you invest.
. An investment in a single Fund, by itself, does not constitute a complete
investment plan.
. The Funds that invest in smaller companies, foreign companies (including
investments made through American Depositary Receipts and similar
instruments), and in emerging markets are subject to additional risks,
including less liquidity and greater price volatility. A Fund's investment
in foreign and emerging markets may also be subject to special risks
associated with international trade, including currency, political,
regulatory and diplomatic risk.
. The Funds may invest a portion of their assets in U.S. Government
obligations. It is important to recognize that the U.S. Government does not
guarantee the market value or current yield of those obligations. Not all
U.S. Government obligations are backed by the full faith and credit of the
U.S. Treasury, and the U.S. Government's guarantee does not extend to the
Funds themselves.
. The Funds may also use certain derivative instruments, such as options or
futures contracts. The term "derivatives" covers a wide number of
investments, but in general it refers to any financial instrument whose
value is derived, at least in part, from the price of another security or a
specified index, asset or rate. Some derivatives may be more sensitive to
54 Stagecoach Equity Funds Prospectus
<PAGE>
interest rate changes or market moves, and some may be susceptible to
changes in yields or values due to their structure or contract terms.
What follows is a general list of the types of risks (some of which are
described above) that may apply to a given Fund and a table showing some of the
additional investment practices that each Fund may use and the risks associated
with them. Additional information about these practices is available in the
Statement of Additional Information.
COUNTER-PARTY RISK-- The risk that the other party in a repurchase agreement or
other transaction, such as securities lending, will not fulfill its contract
obligation.
CREDIT RISK-- The risk that the issuer of a debt security will be unable to make
interest payments or repay principal on schedule. If an issuer does default, the
affected security could lose all of its value, or be renegotiated at a lower
interest rate or principal amount. Affected securities might also lose
liquidity. Credit risk also includes the risk that a party in a transaction may
not be able to complete the transaction as agreed.
CURRENCY RISK-- The risk that a change in the exchange rate between U.S. dollars
and a foreign currency may reduce the value of an investment made in a security
denominated in that foreign currency.
DIPLOMATIC RISK-- The risk that an adverse change in the diplomatic relations
between the United States and another country might reduce the value or
liquidity of investments in either country.
EMERGING MARKET RISK-- The risk that the emerging market, as defined in the
glossary, may be more sensitive to certain economic changes. For example,
emerging market countries may experience increased political instability, and
are often dependent on international trade, making them more vulnerable to
recessions in other countries. They may have obsolete financial systems, have
volatile currencies and may be more sensitive than more mature markets to a
variety of economic factors. Emerging market securities may also be less liquid
than securities of more developed countries and could be difficult to sell,
particularly during a market downturn.
EXPERIENCE RISK-- The risk presented by a new or innovative security, such as an
initial public offering, or foreign or emerging market offering. The risk is
that insufficient experience exists to forecast how the security's value might
be affected by various economic condition.
Stagecoach Equity Funds Prospectus 55
<PAGE>
GENERAL INVESTMENT RISKS
INFORMATION RISK-- The risk that information about a security is either
unavailable, incomplete or is inaccurate.
INTEREST RATE RISK-- The risk that changes in interest rates can reduce the
value of an existing security. Generally, when interest rates increase, the
value of a debt security decreases. The effect is usually more pronounced for
securities with longer dates to maturity.
LEVERAGE RISK-- The risk that an investment practice may increase a Fund's
exposure to market risk, interest rate risk or other risks by, in effect,
increasing assets available for investment.
LIQUIDITY RISK-- The risk that a security cannot be sold, or cannot be sold
without adversely affecting the price.
MARKET RISK-- The risk that the value of a stock, bond or other security will be
reduced by market fluctuations. This is a basic risk associated with all
securities.
POLITICAL RISK-- The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.
REGULATORY RISK-- The risk that changes in government regulations will adversely
affect the value of a security. Also the risk that an insufficiently regulated
market might permit inappropriate trading practices.
YEAR 2000 RISK-- The Funds' principal service providers have advised the Funds
that they are working on the necessary changes to their computer systems to
avoid any system failure based on an inability to distinguish the year 2000 from
the year 1900, and that they expect their systems to be adapted in time. There
can, of course, be no assurance of success. In addition, the companies or
entities in which the Funds invest also could be adversely impacted by the Year
2000 issue. The extent of such impact cannot be predicted.
INVESTMENT PRACTICE/RISK
The following table lists some of the additional investment practices of the
Funds, including some not disclosed in the Investment Objective and Investment
Policies sections of the Prospectus. The risks indicated after the description
of the practice are NOT the only potential risks associated with that
practice, but are among the more prominent. Market risk is assumed for each.
See the Investment Objective and Investment Policies for each Fund or the
Statement of Additional Information for more information on these practices.
Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Fund remains within the parameters of
its objective. Remember, each Fund is designed to meet different investment
needs and objectives.
In addition to the general risks discussed above, you should carefully
consider and evaluate any special risks that may apply to investing in a
particular Fund. See the "Important Risk Factors" in the summary for each
Fund. You should also see the Statement of Additional Information for
additional information about the investment practices and risks particular to
each Fund.
56 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE RISK BALANCED DIVERSIFIED EQUITY EQUITY EQUITY
INCOME INDEX VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLOATING AND VARIABLE RATE DEBT
Instruments with interest rates that are adjusted either Interest Rate and . . . .
on a schedule or when an index or benchmark changes. Credit Risk
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
A transaction in which the seller of a security agrees Credit and
to buy back a security at an agreed upon time and Counter-Party Risk . . . .
price usually with interest.
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER MUTUAL FUNDS
The temporary investment in shares of another mutual Market Risk
fund. A pro rata portion of the other fund's expenses, in . . . .
addition to the expenses paid by the Funds, will be borne
by Fund shareholders.
- ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES
Securities issued by a non-US. company or debt of a Information, Political,
foreign government in the form of an American Regulatory, Diplomatic, . . . .
Depositary Receipt or similar instrument. Limited to 25% Liquidity and Currency
of total assets for each Fund except the International Risk
Equity Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS
Investments in companies located or operating in Information, Political,
countries considered developing or to have "emerging" Regulatory, Diplomatic .
stock markets. Generally, these investments have the and Currency Risk
same type of risks as foreign securities, but to a higher
degree. Limited to 25% of total assets for the International
Equity Fund and 15% of total assets for all other Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS
The right or obligation to receive or deliver a security or Credit, Information and
cash payment depending on the security's price or the Liquidity Risk
performance of an index or benchmark. Limited to 5% of
total assets for the Balanced and Equity Value Funds and
15% of total assets for the Strategic Growth Fund.
-------------------------------------------------------------------------------------------------------------------------------
Options on Securities . . .
Options on a Stock Index . . .
Stock Index Futures and options on Stock Index Futures
to protect liquidity and portfolio value . . .
- ------------------------------------------------------------------------------------------------------------------------------------
PRIVATELY ISSUED SECURITIES
Securities that are not publicly traded but which may be Liquidity Risk . . . .
resold in accordance with Rule 144A of the Securities
Act of 1933.
- ------------------------------------------------------------------------------------------------------------------------------------
LOANS OF PORTFOLIO SECURITIES
The practice of loaning securities to brokers, dealers Credit, Counter-Party
and financial institutions to increase return on those and Leverage Risk . . . .
securities. Loans may be made in accordance with
existing investment policies and may not exceed
33 1/3% of total assets.
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING POLICIES
The ability to borrow an equivalent of 10% of total assets Leverage Risk . . . .
from banks for temporary purposes to meet shareholders
redemptions.
- ------------------------------------------------------------------------------------------------------------------------------------
ILLIQUID SECURITIES
A security that cannot be readily sold, or cannot be Liquidity Risk . . . .
readily sold without negatively affecting its fair price.
Limited to 15% of total assets.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE RISK GROWTH INTERNATIONAL SMALL STRATEGIC
EQUITY CAP GROWTH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLOATING AND VARIABLE RATE DEBT
Instruments with interest rates that are adjusted either Interest Rate and . . .
on a schedule or when an index or benchmark changes. Credit Risk
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
A transaction in which the seller of a security agrees Credit and
to buy back a security at an agreed upon time and Counter-Party Risk . . . .
price usually with interest.
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER MUTUAL FUNDS
The temporary investment in shares of another mutual Market Risk
fund. A pro rata portion of the other fund's expenses, in . . . .
addition to the expenses paid by the Funds, will be borne
by Fund shareholders.
- ------------------------------------------------------------------------------------------------------------------------------------
FOREIGN SECURITIES
Securities issued by a non-US. company or debt of a Information, Political,
foreign government in the form of an American Regulatory, Diplomatic, . . . .
Depositary Receipt or similar instrument. Limited to 25% Liquidity and Currency
of total assets for each Fund except the International Risk
Equity Fund.
- ------------------------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS
Investments in companies located or operating in Information, Political,
countries considered developing or to have "emerging" Regulatory, Diplomatic . . . .
stock markets. Generally, these investments have the and Currency Risk
same type of risks as foreign securities, but to a higher
degree. Limited to 25% of total assets for the International
Equity Fund and 15% of total assets for all other Funds.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTIONS
The right or obligation to receive or deliver a security or Credit, Information and
cash payment depending on the security's price or the Liquidity Risk
performance of an index or benchmark. Limited to 5% of
total assets for the Balanced and Equity Value Funds and
15% of total assets for the Strategic Growth Fund.
-------------------------------------------------------------------------------------------------------------------------------
Options on Securities . . .
Options on a Stock Index . . .
Stock Index Futures and options on Stock Index Futures
to protect liquidity and portfolio value . . .
- ------------------------------------------------------------------------------------------------------------------------------------
PRIVATELY ISSUED SECURITIES
Securities that are not publicly traded but which may be Liquidity Risk . . . .
resold in accordance with Rule 144A of the Securities
Act of 1933.
- ------------------------------------------------------------------------------------------------------------------------------------
LOANS OF PORTFOLIO SECURITIES
The practice of loaning securities to brokers, dealers Credit, Counter-Party
and financial institutions to increase return on those and Leverage Risk . . . .
securities. Loans may be made in accordance with
existing investment policies and may not exceed
33 1/3% of total assets.
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWING POLICIES
The ability to borrow an equivalent of 10% of total assets Leverage Risk . . . .
from banks for temporary purposes to meet shareholders
redemptions.
- ------------------------------------------------------------------------------------------------------------------------------------
ILLIQUID SECURITIES
A security that cannot be readily sold, or cannot be Liquidity Risk . . . .
readily sold without negatively affecting its fair price.
Limited to 15% of total assets.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STAGECOACH EQUITY FUNDS PROSPECTUS 57
<PAGE>
ORGANIZATION AND MANAGEMENT OF THE FUNDS
A number of different entities provide services to the Funds. This section shows
how the Funds are organized, the entities that perform different services, and
how they are compensated. Further information is available in the Statement of
Additional Information for the Funds.
ABOUT STAGECOACH
Each Fund is one of over 30 Funds of Stagecoach Funds, an open-end management
investment company. Stagecoach was organized on September 9, 1991, as a Maryland
Corporation.
The Board of Directors of Stagecoach supervises the Funds' activities and
approves the selection of various companies hired to manage the Funds'
operation. The major service providers are described in the diagram below.
Except for the advisers, which require shareholder vote to change, if the Board
believes that it is in the best interests of the shareholders it may make a
change in one of these companies.
SHAREHOLDERS
FINANCIAL SERVICES FIRMS AND SELLING AGENTS
Advise current and prospective shareholders on their Fund investments
<TABLE>
<CAPTION>
TRANSFER AND
DISTRIBUTOR ADMINISTRATOR DIVIDEND DISBURSING SHAREHOLDER
AGENT SERVICING AGENTS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Stephens Inc. Wells Fargo Bank Wells Fargo Bank Various Agents
111 Center St. 525 Market St 525 Market St.
Little Rock, AR San Francisco, CA San Francisco, CA
Markets the Funds Manages the Funds' Maintains records Provides services
and distributes business activities of shares and to customers
shares supervises the
paying of dividends
- --------------------------------------------------------------------------------
INVESTMENT SUB-ADVISORS
Wells Capital Management, Barclays Global Fund Advisors
525 Market St.,San Francisco, CA 45 Fremont St.
San Francisco, CA
Manages the Funds' Manages the Equity
investment activities Index Fund's investment activities
(except Equity Index Fund)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT ADVISOR CUSTODIAN
<S> <C>
Wells Fargo Bank, Wells Fargo Bank,
525 Market St., 525 Market St.,
San Francisco, CA San Francisco, CA
Manages the Funds' Provides safekeeping for Funds' assets
investment activities (except as indicated below)
Barclays Global Investors, N.A.,
45 Fremont St.,
San Francisco, CA
Provides safekeeping for the Equity
Index Fund's assets
Investors Bank & Trust Company
89 South Street,
Boston, MA 02111
Provides safekeeping for the
International Equity Fund Assets
- --------------------------------------------------------------------------------
</TABLE>
BOARD OF DIRECTORS
Supervises the Funds' activities
58 Stagecoach Equity Funds Prospectus
<PAGE>
In the following sections, the percentages shown are the percentages of the
average daily Net Assets of each Fund class paid on an annual basis for the
services described.
THE INVESTMENT ADVISOR
Wells Fargo Bank provides portfolio management and fundamental security analysis
services as the advisor for each of the Funds. Wells Fargo Bank, founded in
1852, is the oldest bank in the western United States and is one of the largest
banks in the United States. Wells Fargo Bank is a wholly owned subsidiary of
Wells Fargo & Company, a national bank holding company. As of December 31, 1998
Wells Fargo Bank and its affiliates managed over $121 billion in assets. The
Funds pay Wells Fargo Bank for advisory services as shown in the Summary of
Expenses section of this prospectus.
THE SUB-ADVISOR
Wells Capital Management ("WCM"), a wholly owned subsidiary of Wells Fargo Bank
N.A., is the sub-advisor for each of the Funds except the Equity Index Fund. As
of December 31, 1998, WCM provided advisory services for assets aggregating in
excess of $39 billion.
Barclays Global Fund Advisors ("BGFA"), a wholly owned subsidiary of Barclays
Global Investors and an indirect subsidiary of Barclays Bank PLC, is the sub-
advisor for the Equity Index Fund. BGFA was created from the reorganization of
Wells Fargo Nikko Investment Advisors, a former affiliate of Wells Fargo Bank,
and is one of the world's largest providers of index portfolio management
services. As of January 31, 1999, BGFA managed or provided investment advice for
assets aggregating in excess of $27 billion.
THE ADMINISTRATOR
Wells Fargo Bank provides the Funds with administration services, including
general supervision of each Fund's operation, coordination of the other services
provided to each Fund, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the Company's Directors and officers. Wells Fargo
Bank also furnishes office space and certain facilities to conduct each Fund's
business, and compensates the Company's Directors.
Stagecoach Equity Funds Prospectus 59
<PAGE>
ORGANIZATION AND MANAGEMENT OF THE FUNDS
SHAREHOLDER SERVICING PLAN
We have a shareholder servicing plan for each Fund class. We have agreements
with various shareholder servicing agents to process purchase and redemption
requests, to service shareholder accounts, and to provide other related
services.
For these services each Fund pays as follows:
- -----------------------------------------------------------------------
CLASS A CLASS B CLASS C
- -----------------------------------------------------------------------
Balanced Fund .25% .25% N/A
- -----------------------------------------------------------------------
Diversified Equity Income Fund .30% .30% N/A
- -----------------------------------------------------------------------
Equity Index Fund .25% .25% N/A
- -----------------------------------------------------------------------
Equity Value Fund .25% .25% .25%
- -----------------------------------------------------------------------
Growth Fund .30% .30% N/A
- -----------------------------------------------------------------------
International Equity Fund .25% .25% .25%
- -----------------------------------------------------------------------
Small Cap Fund .25% .25% .25%
- -----------------------------------------------------------------------
Strategic Growth Fund .25% .25% .25%
- -----------------------------------------------------------------------
THE TRANSFER AGENT
Wells Fargo Bank provides transfer agency and dividend disbursing services to
the Funds. After July 17, 1999, Boston Financial Data Services will provide
these services to the Funds.
60 Stagecoach Equity Funds Prospectus
<PAGE>
A CHOICE OF SHARE CLASSES
After choosing a Fund, your next most important choice is which share class to
buy. The following classes of shares are available through this Prospectus:
. CLASS A SHARES--with a front-end sales charge, volume reductions and lower
on-going expenses than Class B and Class C shares.
. CLASS B SHARES--with a contingent deferred sales charge ("CDSC") that
diminishes over time, and higher on-going expenses than Class A shares.
. CLASS C SHARES--with a 1.00% CDSC on redemptions made within one year of
purchase, and higher on-going expenses than Class A shares.
The choice between share classes is largely a matter of preference. You should
consider, among other things, the different fees and sales loads assessed on
each share class and the length of time you anticipate holding your investment.
If you prefer to pay sales charges up front, wish to avoid higher on-going
expenses, or, more importantly, you think you may qualify for volume discounts
based on the amount of your investment, then Class A shares may be the choice
for you.
You may prefer to see "every dollar working" from the moment you invest.
If so, then consider Class B or Class C shares. Please note that Class B shares
convert to Class A shares after six years to avoid the higher on-going expenses
assessed against Class B shares.
Class C shares are available for the Equity Value, International Equity, Small
Cap, and Strategic Growth Funds only. They are similar to Class B shares, with
some important differences. Unlike Class B shares, Class C shares do not convert
to Class A shares. The higher on-going expenses will be assessed as long as you
hold the shares. The choice between Class B and Class C shares may depend on how
long you intend to hold Fund shares before redeeming them.
Please see the expenses listed for each Fund and the following sales charge
schedule before making your decision. You should also review the "Reduced Sales
Charges" section of this Prospectus. You may wish to discuss this choice with
your financial consultant.
CLASS A SHARE SALES CHARGE SCHEDULE
If you choose to buy Class A shares, you will pay the Public Offering Price
(POP) which is the Net Asset Value (NAV) plus the applicable sales charge.
Stagecoach Equity Funds Prospectus 61
<PAGE>
A CHOICE OF SHARE CLASSES
Since sales charges are reduced for Class A share purchases above certain dollar
amounts, known as "breakpoint levels", the POP is lower for these purchases. For
purchases of the Equity Index Fund, the following sales charge schedule
applies:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
AMOUNT FRONT-END SALES CHARGE AS FRONT-END SALES CHARGE AS DEALER ALLOWANCE AS %
OF PURCHASE % OF PUBLIC OFFERING PRICE % OF NET AMOUNT INVESTED OF PUBLIC OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
- ----------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.00% 4.17% 3.55%
- ----------------------------------------------------------------------------------------------------------------
$100,000 to $249,999 3.50% 3.63% 3.125%
- ----------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.00%
- ----------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- ----------------------------------------------------------------------------------------------------------------
$1,000,000 and over 0.00% 0.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
We will assess Class A shares purchases of $1,000,000 or more a 1.00% CDSC if
they are redeemed within one year from the date of purchase. Charges are based
on the lower of the NAV on the date of purchase or the date of redemption.
For purchases of all other Funds in this Prospectus, prior to July 17, 1999, the
following sales charge schedule applies:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
AMOUNT FRONT-END SALES CHARGE AS FRONT-END SALES CHARGE AS DEALER ALLOWANCE AS %
OF PURCHASE % OF PUBLIC OFFERING PRICE % OF NET AMOUNT INVESTED OF PUBLIC OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.25% 5.54% 4.75%
- ----------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.50% 4.71% 3.75%
- ----------------------------------------------------------------------------------------------------------------
$100,000 to $249,999 3.50% 3.63% 2.75%
- ----------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.00%
- ----------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- ----------------------------------------------------------------------------------------------------------------
$1,000,000 and over/1/ 0.00% 0.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ We will assess Class A shares purchases of $1,000,000 or more a 1.00% CDSC
if they are redeemed within one year from the date of purchase. Charges are
based on the lower of the NAV on the date of purchase or the date of
redemption.
Please note that Class A shares of other Funds listed in other prospectuses have
different loads and breakpoints levels.
62 Stagecoach Equity Funds
<PAGE>
After July 17, 1999, purchases of Class A shares for all Funds are subject to
the following sales charge schedule:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
AMOUNT FRONT-END SALES CHARGE AS FRONT-END SALES CHARGE AS DEALER ALLOWANCE AS % OF
OF PURCHASE % OF PUBLIC OFFERING PRICE % OF NET AMOUNT INVESTED PUBLIC OFFERING PRICE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
- ----------------------------------------------------------------------------------------------------------------
$50,000 to $99,999 4.75% 4.99% 4.00%
- ----------------------------------------------------------------------------------------------------------------
$100,000 to $249,999 3.75% 3.90% 3.00%
- ----------------------------------------------------------------------------------------------------------------
$250,000 to $499,999 2.75% 2.83% 2.25%
- ----------------------------------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
- ----------------------------------------------------------------------------------------------------------------
$1,000 and over/1/ 0.00% 0.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ We will assess Class A shares purchases of $1,000,000 or more a 1.00% CDSC
if they are redeemed within one year from the date of purchase. Charges are
based on the lower of the NAV on the date of purchase or the date of
redemption.
CLASS B SHARE CDSC SCHEDULE
If you choose Class B shares, you buy them at NAV and agree that if you redeem
your shares within six years of the purchase date, you will pay a CDSC based on
how long you have held your shares. Certain exceptions apply (see "Class B and
Class C Share CDSC Reductions" and "Waivers for Certain Parties"). The CDSC
schedule for purchases prior to July 17, 1999 is as follows:
<TABLE>
<CAPTION>
CLASS B SHARES LISTED IN THIS PROSPECTUS HAVE THE FOLLOWING CHARGE SCHEDULE:
- ----------------------------------------------------------------------------------------------------------------
redemption within 1 year 2 years 3 years 4 years 5 years 6 years
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CDSC 5.00% 4.00% 3.00% 3.00% 2.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The CDSC percentage you pay is based on the lower of the NAV of the shares on
the date of the original purchase, or the NAV of the shares on the date of
redemption.
We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. After shares are held for
six years, the CDSC expires and the Class B shares are converted to Class A
shares to reduce your future on-gong expenses.
Stagecoach Equity Funds Prospectus 63
<PAGE>
After July 17, 1999, purchases of Class B shares are subject to the following
sales charge schedule:
<TABLE>
<CAPTION>
CLASS B SHARES LISTED IN THIS PROSPECTUS HAVE THE FOLLOWING CHARGE SCHEDULE:
- --------------------------------------------------------------------------------------------------------------
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS 7 YEARS
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CDSC 5.00% 4.00% 3.00% 3.00% 2.00% 1.00% 0.00%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
The CDSC percentage you pay is based on the lower of the NAV of the shares on
the date of the original purchase, or the NAV of the shares on the date of
redemption.
We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. After shares are held for
six years, the CDSC expires. After shares are held for seven years, the Class B
shares are converted to Class A shares to reduce your future on-going expenses.
CLASS C SHARE CDSC SCHEDULE
If you choose Class C shares, you buy them at NAV and agree that if you redeem
your shares within one year of the purchase date, you will pay a CDSC of
1.00%.
The CDSC percentage you pay is based on the lower of the NAV on the date of the
original purchase, or the NAV on the date of redemption. The distributor pays
sales commissions of up to 1.00% of the purchase price of Class C shares to
selling agents at the time of the sale.
We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. Class C shares do not
convert to Class A shares, and therefore continue to pay the higher on-going
expenses.
64 Stagecoach Equity Funds Prospectus
<PAGE>
REDUCED SALES CHARGES
Generally, we offer more sales charge reductions for Class A shares than for
Class B and Class C shares, particularly if you intend to invest greater
amounts. You should consider whether you are eligible for any of these potential
reductions when you are deciding which share class to buy.
CLASS A SHARE REDUCTIONS:
. You pay no sales charges on Fund shares you buy with reinvested
distributions.
. You pay a lower sales charge if you are investing an amount over a
breakpoint level. See the "Class A Share Sales Charge Schedule" above.
. By signing a Letter of Intent (LOI), you pay a lower sales charge now in
exchange for promising to invest an amount over a specified breakpoint
within the next 13 months. We will hold in escrow shares equal to
approximately 5% of the amount you intend to buy. If you do not invest the
amount specified in the LOI before the expiration date, we will redeem
enough escrowed shares to pay the difference between the reduced sales load
you paid and the sales load you should have paid. Otherwise, we will
release the escrowed shares when you have invested the agreed amount. After
July 17, 1999, purchases of either Stagecoach or Norwest Advantage Funds
will count toward satisfying breakpoint requirements.
. Rights of Accumulation (ROA) allow you to combine the amount you invest
with the total NAV of shares you own in other Stagecoach front-end load
Funds in order to reach breakpoint levels for a reduced load. We give you a
discount on the entire amount of the investment that puts you over the
breakpoint level. After July 17, 1999, purchases of either Stagecoach or
Norwest Advantage Funds will count toward satisfying breakpoint
requirements.
. If you are reinvesting the proceeds of a Stagecoach Fund redemption for
shares on which you have already paid a front-end sales charge, you have
120 days to reinvest the proceeds of that redemption with no sales charge
into a Fund that charges the same or a lower front-end sales charge. If you
use such a redemption to purchase shares of a Fund with a higher front-end
sales charge, you will have to pay the difference between the lower and
higher charge.
. You may reinvest into a Stagecoach Fund with no sales charge a required
distribution from a pension, retirement, benefits, or similar plan for
which Wells Fargo Bank acts as trustee provided the distribution occurred
within the last 30 days.
Stagecoach Equity Funds Prospectus 65
<PAGE>
If you believe you are eligible for any of these reductions, it is up to you to
ask the selling agent or the shareholder servicing agent for the reduction and
to provide appropriate proof of eligibility.
You, or your fiduciary or trustee, may also tell us to extend volume discounts,
including the reductions offered for rights of accumulation and letters of
intent, to include purchases made by:
. a family unit, consisting of a husband and wife and children under the age
of twenty-one or single trust estate;
. a trustee or fiduciary purchasing for a single fiduciary relationship; or
. the members of a "qualified group" which consists of a "Company" (as
defined in the Investment Company Act of 1940 ("1940 Act"), and related
parties of such a "Company", which has been in existence for at least six
months and which has a primary purpose other than acquiring Fund shares at
a discount.
HOW A LETTER OF INTENT CAN SAVE YOU MONEY!
If you plan to invest, for example, $100,000 in a Stagecoach Fund in
installments over the next year, by signing a letter of intent you would pay
only a 3.50% sales load on the entire purchase. Otherwise, you might pay 5.25%
on the first $50,000, then 4.50% on the next $49,999.
CLASS B AND CLASS C SHARE CDSC REDUCTIONS:
. You pay no CDSC on Funds shares you purchase with reinvested distributions.
. We waive the CDSC for all redemptions made because of scheduled or
mandatory distributions for certain retirement plans. (See your retirement
plan disclosure for details.)
. We waive the CDSC for redemptions made in the event of the shareholder's
death or for a disability suffered after purchasing shares. ("Disability"
is defined by the Internal Revenue Code of 1986.)
. We waive the CDSC for redemptions made at the direction of Stagecoach
Funds, Inc. in order to, for example, complete a merger or close an account
whose value has fallen below the minimum balance.
. We waive Class C share CDSC for certain types of accounts.
66 Stagecoach Equity Funds Prospectus
<PAGE>
REDUCED SALES CHARGES
For Class B shares purchased outside of an IRA or other qualified plan after
July 17, 1999, no CDSC is imposed on withdrawals that occur under the following
circumstances:
. Withdrawals are made by participating in the Systematic Withdrawal
Plan;
. Withdrawals may not exceed 10% of your fund assets annually based on
your anniversary date in the Systematic Withdrawal Plan; and
. you must participate in the dividend and capital gain reinvestment
program.
Also, mandatory withdrawals after age 70 1/2 are not subject to the 10%
limitation and are not charged any CDSC.
WAIVERS FOR CERTAIN PARTIES
If you are eligible for certain waivers, we will sell you Class A shares so you
can avoid higher on-going expenses. The following people can buy Class A shares
at NAV:
. Current and retired employees, directors and officers of:
. Stagecoach Funds and its affiliates;
. Wells Fargo Bank and its affiliates;
. Stephens and its affiliates; and
. Broker-Dealers who act as selling agents.
. The spouses of any of the above, as well as the grandparents, parents,
siblings, children, grandchildren, aunts, uncles, nieces, nephews, fathers-
in-law, mothers-in-law, brothers-in-law and sisters-in-law of either the
spouse or the current or retired employee, director or officer.
You may also buy Class A Fund shares at NAV if they are to be included in
certain retirement, benefits, pension or investment wrap accounts with whom
Stagecoach Funds has reached an agreement, or through an omnibus account
maintained with a Fund by a broker/dealer.
We reserve the right to enter into agreements that reduce or eliminate sales
charges for groups or classes of shareholders, or for Fund shares included in
other investment plans such as "wrap accounts." If you own Fund shares as part
of another account or package such as an IRA or a sweep account, you must read
the directions for that account. These directions may supersede the terms and
conditions discussed here.
Class B shares you purchased prior to March 3, 1997 are subject to a CDSC if
they are redeemed within four years of purchase. The CDSC Schedule for these
shares is below:
Stagecoach Equity Funds Prospectus 67
<PAGE>
<TABLE>
<CAPTION>
CLASS B SHARES LISTED IN THIS PROSPECTUS HAVE THE FOLLOWING CHARGE SCHEDULE:
- -------------------------------------------------------------------------------------------------
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CDSC 3.00% 2.00% 1.00% 1.00% 0.00% 0.00%
- -------------------------------------------------------------------------------------------------
</TABLE>
The above schedules do not apply for any new shares purchased. If you exchange
Class B shares for Class B shares of another Fund, you will retain the above
CDSC schedule on your exchanged shares, but additional shares of the newly
purchased Fund will age at the higher CDSC schedule.
DISTRIBUTION PLAN
We have adopted Distribution Plans pursuant to Rule 12b-1 under the 1940 Act for
each class of the Funds. For the Class A shares of the Diversified Equity Income
and Growth Funds, the plans defray all or part of the cost of preparing and
distributing prospectuses and promotional materials. For Class A shares of the
Balanced, Equity Value, International Equity, Small Cap and Strategic Growth
Funds, and the Class B and Class C shares of each Fund, these plans are used to
pay for distribution-related services including ongoing compensation to selling
agents. Each Fund may participate in joint activities with other Stagecoach
Funds. The cost of these activities is generally allocated among the Funds.
Funds with higher assets levels pay a higher proportion of these costs. These
fees are paid out of the Fund's assets on an on-going basis. Over time, these
fees will increase the cost of your investment and may cost you more than paying
other types of sales charges. The fees paid under these plans are as
follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balanced Fund .10% .75% N/A
- -------------------------------------------------------------------------------------------------
Diversified Equity Income Fund .05% .70% N/A
- -------------------------------------------------------------------------------------------------
Equity Index Fund N/A .75% N/A
- -------------------------------------------------------------------------------------------------
Equity Value Fund .10% .75% .75%
- -------------------------------------------------------------------------------------------------
Growth Fund .05% .70% N/A
- -------------------------------------------------------------------------------------------------
International Equity Fund .10% .75% .75%
- -------------------------------------------------------------------------------------------------
Small Cap Fund .10% .75% .75%
- -------------------------------------------------------------------------------------------------
Strategic Growth Fund .10% .75% .75%
- -------------------------------------------------------------------------------------------------
</TABLE>
68 Stagecoach Equity Funds Prospectus
<PAGE>
EXCHANGES
Exchanges between Stagecoach Funds are two transactions: a sale of one Fund and
the purchase of another. In general, the same rules and procedures that apply to
sales and purchases apply to exchanges. There are, however, additional factors
you should keep in mind while making or considering an exchange:
. You should carefully read the Prospectus for the Fund into which you wish
to exchange.
. Every exchange involves selling Fund shares and that sale may produce a
capital gain or loss for federal income tax purposes.
. If you exchange between Class A shares, you will have to pay any difference
between a load you have already paid and the load you are subject to in the
new Fund.
. If you are making an initial investment into a new Fund through an
exchange, you must exchange at least the minimum first purchase amount of
the Fund you are redeeming, unless your balance has fallen below that
amount due to market conditions.
. Any exchange between Funds you already own must meet the minimum redemption
and subsequent purchase amounts for the Funds involved.
. If you are exchanging from a higher-load Fund to a lower or no-load Fund,
then back to the higher load, it is up to you to inform Stagecoach Funds
that you have already paid the higher load.
. Exchanges between Class B shares, between Class C shares or between either
Class B or Class C shares and a Stagecoach money market fund will not
trigger the CDSC. The new shares will continue to age according to their
original schedule while in the new Fund and will be charged the CDSC
applicable to the original shares upon redemption. This also applies to
exchanges of Class A shares that are subject to a CDSC.
. Exchanges from any share class to a money market fund can only be re-
exchanged for the original share class.
. In order to discourage excessive Fund transaction expenses that must be
borne by other shareholders, we reserve the right to limit or reject
exchange orders. Generally, we will notify you 60 days in advance of any
changes in your exchange privileges.
. You may make exchanges between like share classes. You may also exchange
from Class A, Class B or Class C shares and non-Institutional class shares
to a non-institutional money market fund.
Stagecoach Equity Funds Prospectus 69
<PAGE>
YOUR ACCOUNT
This section tells you how Fund shares are priced, how to open an account and
how to buy and sell Fund shares once your account is open.
PRICING FUND SHARES:
. As with all mutual fund investments, the price you pay to purchase shares
or the price you receive when you redeem shares is not determined until
after a request has been received in proper form.
. We determine the Net Asset Value ("NAV") of each class of the Funds' shares
each Business Day as of the close of regular trading on the NYSE. We
determine the NAV by subtracting the Fund class' liabilities from its total
assets, and then dividing the result by the total number of outstanding
shares of that class. Each Fund's assets are generally valued at current
market prices. See the Statement of Additional Information for further
disclosure.
. We process requests to buy or sell shares each Business Day as of the close
of regular trading on the New York Stock Exchange ("NYSE"), which is
usually 1:00 p.m. Pacific time. Any request we receive in proper form
before the close of regular trading on the NYSE is processed the same day.
Requests we receive after the close are processed the next Business Day.
. The Funds are open for business on each day the NYSE is open for business.
NYSE holidays include New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. When any holiday falls on a weekend,
the NYSE typically is closed on the weekday immediately before or after
such holiday.
YOU CAN BUY FUND SHARES:
. By opening an account directly with the Fund (simply complete and return a
Stagecoach Funds application with proper payment);
. Through a brokerage account with an approved selling agent; or
. Through certain retirement, benefits and pension plans, or through certain
packaged investment products (please see the providers of the plan for
instructions).
MINIMUM INVESTMENTS:
. $1,000 per Fund minimum initial investment;
. $100 per Fund if you use the Systematic Purchase Plan; or
. $100 per Fund for all investments after your first.
. We may waive the minimum for Funds you purchase through certain retirement,
benefit and pension plans, through certain packaged investment products, or
for certain classes of shareholders as permitted by the SEC. Check the
specific disclosure statements and applications for the program through
which you intend to invest.
70 Stagecoach Equity Funds Prospectus
<PAGE>
IMPORTANT SHAREHOLDER INFORMATION
The instructions below describe how to buy and sells shares through the period
ended July 17, 1999. After that date, please refer to the instructions on pages
74 to 77.
HOW TO BUY SHARES
The following section explains how you can buy shares directly from Stagecoach
Funds. For Funds held through brokerage and other types of accounts, please
consult your Selling Agent.
BY MAIL
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
Complete a Stagecoach Funds application. Be sure to
indicate the Fund name and the share class into which
you intend to invest.
MAIL TO:
Enclose a check for at least $1,000 made out in the full Stagecoach Funds
name and share class of the Fund. For example, "Stagecoach PO Box 7066
Strategic Growth Fund, Class B." San Francisco, CA
94120-9201
You may start your account with $100 if you elect the
Systematic Purchase Plan option on the application.
IF YOU ARE BUYING ADDITIONAL SHARES:
Make a check payable to the full name and share class of MAIL TO:
your Fund for at least $100. Be sure to write your account Stagecoach Funds
number on the check as well. PO Box 7066
San Francisco, CA
Enclose the payment stub/card from your statement if 94120-9201
available.
BY WIRE
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
You must first establish an account by completing an MAIL TO:
application and mailing it to the address shown at Stagecoach Funds
right. PO Box 7066
San Francisco, CA
Mail the completed application. 94120-9201
Fax to:
You may also fax the completed application (with original 1-415-546-0280
to follow).
IF YOU ARE BUYING ADDITIONAL SHARES:
<TABLE>
<S> <C>
Instruct your wiring bank to transmit WIRE TO:
at least $100 according to the instructions Wells Fargo Bank, N.A.
given to the right. Be sure to have the San Francisco, California
wiring bank include your current account Bank Routing Number:
number and the name your account is 121000248
registered in. Wire Purchase Account Number:
4068-000587
Attention:
Stagecoach Funds (Name of Fund and Share Class)
Account Name:
(Registration Name Indicated on Application)
</TABLE>
Stagecoach Equity Funds Prospectus 71
<PAGE>
BY PHONE
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
You can only make your first purchase of a Fund by phone
if you already have an existing Stagecoach Account.
Call Investor Services and instruct the representative CALL:
to either: 1-800-222-8222
. transfer at least $1,000 from a linked settlement
account, or
. exchange at least $1,000 worth of shares from an existing
Stagecoach Fund. Please see "Exchanges" for special rules.
IF YOU ARE BUYING ADDITIONAL SHARES:
Call Investor Services and instruct the representative CALL:
to either: 1-800-222-8222
. transfer at least $100 from a linked settlement
account, or
. exchange at least $100 worth of shares from another
Stagecoach Fund.
SELLING SHARES:
The following section explains how you can sell shares held directly through an
account with Stagecoach Fund by mail or telephone. For Funds held through
brokerage and other types of accounts, please consult your Selling Agent.
BY MAIL
Write a letter stating your account registration, your
account number, the Fund you wish to redeem and the
dollar amount ($100 or more) of the redemption you to
receive (or write "Full Redemption").
Make sure all the account owners sign the request.
You may request that redemption proceeds be sent to you by MAIL TO:
check, by ACH transfer into a bank account, or by wire Stagecoach Funds
($5,000 minimum). Please call Investor Services regarding PO Box 7066
requirements for linking bank accounts or for wiring funds. San Francisco, CA
We reserve the right to charge a fee for wiring funds 94120-9201
although it is not currently our practice to do so.
Signature Guarantees are required for mailed redemption
requests over $5,000. You can get a signature guarantee
at financial institutions such as a bank or brokerage house.
We do not accept notarized signatures.
72 Stagecoach Equity Funds Prospectus
<PAGE>
YOUR ACCOUNT
BY PHONE
Call Investor Services to request a redemption of at least
$100. Be prepared to provide your account number and
Taxpayer Identification Number.
Unless you have instructed us otherwise, only one account
owner needs to call in redemption requests.
You may request that redemption proceeds be sent to you by
check, by transfer into an ACH-linked bank account, or by
wire ($5,000 minimum). Please call Investor Services
regarding requirements for linking bank accounts or for
wiring funds. We reserve the right to charge a fee for
wiring funds although it is not currently our practice to
do so.
Telephone privileges are automatically made available to CALL:
you unless you specifically decline them on your 1-800-222-8222
application or subsequently in writing.
Phone privileges allow us to accept transaction
instructions by anyone representing themselves as the
shareholder and who provides reasonable confirmation of
their identity, such as providing the Taxpayer
Identification Number on the account. We will not be
liable for any losses incurred if we follow telephone
instructions we reasonably believe to be genuine.
Telephone requests are not accepted if the address on your
account was changed by phone in the last 15 days.
GENERAL NOTES FOR SELLING SHARES
We determine the NAV each day as of the close of the NYSE, which is generally
1:00 PM Pacific time.
Your redemptions are net of any applicable CDSC.
We will process requests to sell shares at the first NAV calculated after a
request in proper form is received. Requests received before the close of
trading on the NYSE are processed on the same business day.
If you purchased shares through a packaged investment product or retirement
plan, read the directions for selling shares provided by the product or plan.
There may be special requirements that supersede the directions in this
Prospectus.
We reserve the right to delay payment of a redemption so that we may be
reasonably certain that investments made by check or Systematic Purchase Plan
have been collected. Payments of redemptions also may be delayed under
extraordinary circumstances or as permitted by the SEC in order to protect
remaining shareholders. Payments of redemptions also may be delayed up to
seven days under normal circumstances, although it is not our policy to delay
such payments.
Generally, we pay redemption requests in cash, unless the redemption request
is for more than $250,000 or 1% of the net assets of the Fund by a single
shareholder over any ninety-day period. If a request for a redemption is over
these limits, it may be to the detriment of existing shareholders to pay such
redemption in cash. Therefore, we may pay all or part of the redemption in
securities of equal value.
Stagecoach Equity Funds Prospectus 73
<PAGE>
YOUR ACCOUNT
FOR TRANSACTIONS AFTER JULY 17, 1999
HOW TO BUY SHARES
The following section explains how you can buy shares directly from Stagecoach
Funds. For Funds held through brokerage and other types of accounts, please
consult your Selling Agent.
BY MAIL
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
Complete a Stagecoach Fund application. Be sure to
indicate the Fund name and the share class into which
you intend to invest. Failure to complete an
application properly may result in a delay in
processing your request. MAIL TO:
Stagecoach Funds, Inc.
Enclose a check for a least $1,000 made out in the PO Box 8266
full name and share class of the Fund. For example, Boston, MA
"Growth Fund, Class B." 02266-8266
You may start your account with $100 if you elect the
Systematic Purchase Plan option on the application.
IF YOU ARE BUYING ADDITIONAL SHARES:
Make a check payable to the full name and share class MAIL TO:
of your Fund for at least $100. Be sure to write your Stagecoach Funds, Inc.
account number on the check as well. PO Box 8266
Boston, MA
02266-8266
Enclose the payment stub/card from your statement if
available.
74 Stagecoach Equity Funds Prospectus
<PAGE>
<TABLE>
<CAPTION>
BY WIRE
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
<S> <C> <C>
If you do not currently have an account, complete a MAIL TO:
Stagecoach Funds application. You must wire as least Stagecoach Funds, Inc.
$1,000. Be sure to indicate the Fund name and the PO Box 8266
share class into which you intend to invest. Boston, MA 02266-8266
Mail the completed application.
You may also fax the completed application (with FAX TO:
original to follow). You must first call BFDS at 1-(617) 483-5765
1-800-222-8222 to notify them of an incoming wire trade.
IF YOU ARE BUYING ADDITIONAL SHARES:
Instruct your wiring bank to transmit at least WIRE TO:
$100 according to the instructions given to Stagecoach Funds, Inc.
the right. Be sure to have the wiring bank c/o State Street Bank & Trust
include your current account number and the Boston, MA
name your account is registered in. Bank Routing Number:
ABA 011000028
Wire Purchase Account Number:
9905-437-1
Attention:
Stagecoach Funds (Name of Fund and Share Class)
Account Name:
(Registration Name Indicated on Application)
</TABLE>
Stagecoach Equity Funds Prospectus 75
<PAGE>
YOUR ACCOUNT
<TABLE>
<CAPTION>
BY PHONE
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
<S> <C>
You can only make you first purchase of a Fund by
phone if you already have an Stagecoach Funds Account. CALL:
Call Investor Services and instruct the representative 1-800-222-8222
to either:
. transfer at least $1,000 from a linked settlement
account, or
. exchange at least $1,000 worth of shares from an
existing Wells Fargo Fund. Please see "Exchanges"
for special rules.
IF YOU ARE BUYING ADDITIONAL SHARES:
Call Investor Services and instruct the representative CALL:
to either:
. transfer at least $100 from a linked settlement 1-800-222-8222
account, or
. exchange at least $100 worth of shares from another
Wells Fargo Fund.
</TABLE>
SELLING SHARES:
The following section explains how you can sell shares held directly through an
account with Stagecoach funds by mail or telephone. For Fund shares held through
brokerage and other types of accounts, please consult your Selling Agent.
<TABLE>
<CAPTION>
BY MAIL
IF YOU ARE SELLING SHARES FOR THE FIRST TIME:
<S> <C>
Write a letter stating your account registration, you
account number, the Fund you wish to redeem and the
dollar amount ($100 or more) of the redemption you
wish to receive (or write "Full Redemption").
Make sure all the account owners sign the request. MAIL TO:
You may request that redemption proceeds be sent to you Stagecoach Funds, Inc.
by check, by ACH transfer into a bank account, or by PO Box 8266
wire. Please call Investor Services regarding Boston, MA
requirements for linking bank accounts or for wiring 02266-8266
funds. We reserve the right to charge a fee for wiring
funds although its is not currently our practice to do
so.
Signature Guarantees are required for mailed redemption
requests over $5,000. You can get a signature guarantee
at financial institutions such as a bank or brokerage
house. We do not accept notarized signatures.
</TABLE>
76 Stagecoach Equity Funds Prospectus
<PAGE>
BY PHONE
Call Investor Services to request a redemption of at least
$100. Be prepared to provide your account number and
Taxpayer Identification Number.
Unless you have instructed us otherwise, only one account
owner needs to call in redemption requests.
You may request that redemption proceeds be sent to you by
check, by transfer into an ACH-linked bank account, or by
wire ($5,000 minimum). Please call Investor Services
regarding requirements for linking bank accounts or for
wiring funds. We reserve the right to charge a fee for
wiring funds although it is not currently our practice to
do so.
Telephone privileges are automatically made available to CALL:
you unless you specifically decline them on your 1-800-222-8222
application or subsequently in writing.
Phone privileges allow us to accept transaction
instructions by anyone representing themselves as the
shareholder and who provides reasonable confirmation of
their identity, such as providing the Taxpayer
Identification Number on the account. We will not be
liable for any losses incurred if we follow telephone
instructions we reasonably believe to be genuine.
Telephone requests are not accepted if the address on your
account was changed by phone in the last 15 days.
GENERAL NOTES FOR SELLING SHARES
We determine the NAV each day as of the close of the NYSE, which is generally
1:00 PM (Pacific time)/3:00 PM (Central time). If any of the markets for the
Funds close early, the funds may close early, and may value their shares at
earlier times under these circumstances.
Your redemptions are net of any applicable CDSC.
We will process requests to sell shares at the first NAV calculated after a
request in proper form is received. Requests received before the close of
trading on the NYSE are processed on the same business day.
If you purchased shares through a packaged investment product or retirement
plan, read the directions for selling shares provided by the product or plan.
There may be special requirements that supersede the directions in this
Prospectus.
We reserve the right to delay payment of a redemption so that we may be
reasonably certain that investments made by check or Systematic Purchase Plan
have been collected. Payments of redemptions also may be delayed under
extraordinary circumstances or as permitted by the SEC in order to protect
remaining shareholders. Payments of redemptions also may be delayed up to
seven days under normal circumstances, although it is not our policy to delay
such payments.
Generally, we pay redemption requests in cash, unless the redemption request
is for more than $250,000 or 1% of the net assets of the Fund by a single
shareholder over any ninety-day period. If a request for a redemption is over
these limits, it may be to the detriment of existing shareholders to pay such
redemption in cash. Therefore, we may pay all or part of the redemption in
securities of equal value.
Stagecoach Equity Funds Prospectus 77
<PAGE>
ADDITIONAL SERVICES AND OTHER INFORMATION
AUTOMATIC PROGRAMS:
These programs help you conveniently purchase and/or redeem shares each month.
Call Investor Services at 1-800-222-8222 for more information.
. Systematic Purchase Plan (formerly the Autosaver Plan)-- With this program,
you can regularly purchase shares of a Stagecoach Fund with money
automatically transferred from a linked bank account. Simply select the
Fund you would like to purchase, specify an amount of at least $100, and
tell us the day of the month you would like the money invested. If you do
not specify a date, we will transfer the money and invest in shares of the
Fund you select on or about the 20th day of the month.
. Systematic Exchange Plan--With this program, you can regularly exchange
shares of a Stagecoach Fund you own for shares of another Stagecoach Fund.
The exchange amount must be at least $100, and the exchange will take place
on or about the 25th of each month. See the "Exchanges" section of this
Prospectus for the conditions that apply to your shares. This feature may
not be available for certain types of accounts.
. Systematic Withdrawal Program-- With this program, you can regularly redeem
shares and receive the proceeds by check or by transfer to a linked bank
account. Simply specify an amount of at least $100 and we will sell your
shares equal to that amount on or about the 25th of each month. To
participate in this program, you:
. must have a Fund account valued at $10,000 or more;
. must have your distributions reinvested; and
. may not simultaneously participate in the Systematic Purchase Plan.
It generally takes about ten days to establish a plan once we have received your
instructions. It generally takes about five days to change or cancel
participation in a plan. We automatically cancel your program if the linked bank
account you specified is closed.
DIVIDEND AND CAPITAL GAIN DISTRIBUTION OPTIONS
You may choose to do any of the following:
. Automatic Reinvestment Option--Lets you buy new shares of the same class of
the Fund that generated the distributions. The new shares are purchased at
NAV generally on the day the income is paid. This option is automatically
assigned to your account unless you specify another plan.
78 Stagecoach Equity Funds Prospectus
<PAGE>
. Fund Purchase Plan--Uses your distributions to buy shares at NAV of another
Stagecoach Fund of the same share class or a money market fund. You must
have already satisfied the minimum investment requirements of the Fund into
which your distributions are being transferred in order to participate.
. Automatic Clearing House Option--Deposits your dividends and capital gains
into any bank account you link to your Fund account if it is part of the
ACH system. If your specified bank account is closed, we will reinvest your
distributions.
. Check Payment Option--Allows you to receive checks for distributions mailed
to your address of record or to another name and address which you have
specified in written, signature guaranteed instructions. If checks remain
uncashed for six months or are undeliverable by the Post Office, we will
reinvest the distributions at the earliest date possible.
TWO THINGS TO KEEP IN MIND ABOUT DISTRIBUTIONS
Remember, distributions have the effect of reducing the NAV per share by
the amount distributed. Also, distributions on new shares shortly after
purchase would be in effect a return of capital, although the distribution
may still be taxable to you.
TAXES
The following discussion regarding taxes is based on laws that were in effect as
of the date of this Prospectus. The discussion summarizes only some of the
important tax considerations that affect the Funds and you as a shareholder. It
is not intended as substitute for careful tax planning. You should consult your
tax advisor about your specific tax situation. Federal income tax considerations
are discussed further in the Statement of Additional Information.
We will pass on to you net investment income and net short-term capital gains
earned by a Fund as dividend distributions. These are taxable to you as ordinary
income. We will pass on to you any net capital gains earned by a Fund as a
capital gain distribution. These distributions will be taxable to you as long-
term capital gains, which may qualify for taxation at preferential rates in the
hands of non-corporate shareholders.
Stagecoach Equity Funds Prospectus 79
<PAGE>
ADDITIONAL SERVICES AND OTHER INFORMATION
In general, all distributions will be taxable to you when paid, even if they are
paid in additional Funds Shares. However, distributions declared in October,
November and December and distributed by the following January will be taxable
as if they were paid on December 31 of the year in which they were declared. We
will notify you as to the status of your Fund distributions.
If you buy shares of a Fund shortly before it distributes its annual gains, your
distribution from the Fund will, in effect, be a taxable return of part of your
investment. Similarly, if you buy shares of a Fund that holds appreciated
securities in its portfolio, you will receive a taxable return of part of your
investment if and when the Fund sells the appreciated securities and realizes
the gain. Some of the Funds have built up, or have the potential to build up,
high levels of unrealized appreciation.
Your redemptions, including exchanges, will ordinarily result in a taxable
capital gain or loss, depending on the amount you receive for your shares and
the amount you paid for them. Foreign shareholders may be subject to different
tax treatment, including withholding. In certain circumstances, U.S. residents
will be subject to back-up withholding.
IMPORTANT INFORMATION ABOUT YOUR INVESTMENT
On March 25, 1999, the Board of Directors of Stagecoach Funds, Inc. (the
"Company") approved the reorganization of the Company's Funds into new
portfolios of Wells Fargo Funds Trust ("Funds Trust"). The reorganization is
part of a larger plan to consolidate the Wells Fargo Bank-advised fund family
with the Norwest Advantage fund family, following last November's merger of
Wells Fargo & Company and Norwest Corporation. The Company will present the
reorganization to Fund shareholders for their approval at a special
shareholders' meeting that is planned for August 1999.
If the reorganization is approved by shareholders, the Balanced Fund will be
reorganized into the Funds Trust Asset Allocation Fund and the Diversified
Equity Income Fund will be reorganized into the Income Equity Fund. Although,
respectively, the investment objectives are substantially similar, the principal
investment strategies may differ somewhat.
All of the other Funds of the Company will, if approved by shareholders, be
reorganized into new portfolios of Funds Trust that have investment objectives
and strategies that are substantially identical to the corresponding Funds. In
most cases, theses substantially identical Funds Trust portfolios will not
absorb other funds.
80 Stagecoach Equity Funds Prospectus
<PAGE>
The Funds Trust portfolios are not yet available for purchase, but corresponding
portfolios within either the Stagecoach fund family or the Norwest Advantage
fund family are currently available. No shareholder action is necessary at this
time. The Company's proxy materials, which are expected to be mailed in June to
all persons who are shareholders on May 6, 1999, will describe the
reorganization in detail, including any effect on expense ratios. If you buy
your shares after that date, you will not be entitled to vote on the
reorganization, but you may request a copy of the proxy materials.
Investors should be aware that, for certain share classes of certain Funds,
expense ratio increases of up to 0.14% are contemplated. In other cases, expense
ratios are expected to remain unchanged or decline. For the equity portfolios,
the reorganization is expected to be a tax-free transaction. The reorganization
will not trigger any sales charges.
If you have any questions or, after early June, if you would like to request a
copy of the proxy materials, you should call 1-800-222-8222.
HISTORICAL FUND INFORMATION
BALANCED FUND--The Fund operated as a series of Pacifica Funds Trust from its
commencement of operations until it was reorganized as a series of Stagecoach
Funds on September 6, 1996. In conjunction with the reorganization, existing
Investor Shares were converted into Class A shares of the Fund. Prior to April
1, 1996, the Fund was advised by First Interstate Capital Management, Inc.
("FICM"). In connection with the merger of First Interstate Bancorp into Wells
Fargo & Company on April 1, 1996, FICM was renamed Wells Fargo Investment
Management, Inc.
EQUITY VALUE FUND--The Fund operated as a series of Pacifica Funds Trust from
its commencement of operations until it was reorganized as a series of
Stagecoach Funds on September 6, 1996. In connection with the reorganization,
existing Investor Shares were converted into Class A shares of the Fund. Prior
to April 1, 1996, the Fund was advised by First Interstate Capital Management,
Inc. ("FICM"). In connection with the merger of First Interstate Bancorp into
Wells Fargo & Company on April 1, 1996, FICM was renamed Wells Fargo Investment
Management, Inc.
GROWTH FUND--The financial information for the fiscal periods prior to, and
including, 1991 is based on the financial information for the Select Stock Fund
of the Wells Fargo Investment Trust for Retirement Programs which was
reorganized into the Growth Stock Fund on January 2, 1992.
Stagecoach Equity Funds Prospectus 81
<PAGE>
ADDITIONAL SERVICES AND OTHER INFORMATION
___________________________________________________________________________
SMALL CAP FUND--On December 12, 1997, the Overland Express Small Cap Strategy
Fund was merged into the Small Cap Fund of the Stagecoach Funds. The Stagecoach
Small Cap Fund commenced operations on September 16, 1996. Prior to December 15,
1997, the Fund invested in a Master Portfolio with a corresponding investment
objective. The Fund no longer invests in a Master Portfolio. Currently the Fund
invests directly in a portfolio of securities.
STRATEGIC GROWTH FUND--On December 12, 1997, the Class A and Class D shares of
the Overland Express Strategic Growth Fund were reorganized as the Class A and
Class C shares of the Strategic Growth Fund of Stagecoach Funds. For accounting
purposes, the Overland Express Fund is considered the surviving entity and the
financial highlights shown for the Stagecoach Class A and Class C shares have
been restated to give effect to the conversion ratio applied in the
consolidation of Overland Express Funds, Inc. and Stagecoach Funds,
respectively. The Overland Fund did not offer Class B shares. Prior to December
15, 1997, the Fund invested in a Master Portfolio with a corresponding
investment objective. The Fund no longer invests in a Master Portfolio.
Currently the Fund invests directly in a portfolio of securities.
SHARE CLASS--This Prospectus contains information about Class A, Class B and
Class C shares. Some of the Funds may offer additional share classes with
different expenses and returns than those described here. Call Stephens Inc. at
1-800-643-9691 for information on these or other investment options in
Stagecoach Funds.
82 Stagecoach Equity Funds Prospectus
<PAGE>
_________________________________________________________________________
MINIMUM ACCOUNT VALUE--Due to the expense involved in maintaining low-balance
accounts, we reserve the right to close accounts that have fallen below the
$1,000 minimum balance due to redemptions (as opposed to market conditions). You
will be given an opportunity to make additional investments to prevent account
closure before any action is taken.
STATEMENTS--We mail statements after any account activity, including
transactions, dividends or capital gains, and at year-end. We do not send
statements for Funds held in brokerage, retirement or other similar accounts.
You must check with the administrators of these accounts for statement policies.
The Fund will also send any necessary tax reporting documents in January, and
will send Annual and Semi-Annual Reports each year.
STATEMENT OF ADDITIONAL INFORMATION--Additional information about some of the
topics discussed in this Prospectus as well as details about performance
calculations, distribution plans, servicing plans, tax issues and other
important issues are available in the Statement of Additional Information for
each Fund. The Statement of Additional Information should be read along with
this Prospectus and may be obtained free of charge by calling Investor Services
at 1-800-222-8222.
Stagecoach Equity Funds Prospectus 83
<PAGE>
GLOSSARY
_____________________________________________________________________________
We provide the following definitions to assist you in reading this prospectus.
For a more complete understanding of these terms you should consult your
financial adviser.
ACH
Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.
AMERICAN DEPOSITARY RECEIPTS ("ADRS")
Receipts for non-U.S. company stocks. The stocks underlying ADRs are typically
held in bank vaults. The ADR's owner is entitled to any capital gains or
dividends. ADRs are one way of owning an equity interest in foreign companies.
ANNUAL AND SEMI-ANNUAL REPORT
A document that provides certain financial and other important information for
the most recent reporting period and each Fund's portfolio of investments.
BUSINESS DAY
Any day the New York Stock Exchange is open is a business day for the Funds.
CAPITAL APPRECIATION, CAPITAL GROWTH
The increase in the value of a security. See also "total return."
CAPITALIZATION
When referring to the size of a company, capitalization means the total number
of a company's outstanding shares of stock multiplied by the price per share.
This is an accepted method of determining a company's size and is sometimes
referred to as "market capitalization."
CAPITAL STRUCTURE
Refers to how a company has raised money to operate. Can include, for example,
borrowing or selling stock.
COMMERCIAL PAPER
Debt instruments issued by banks, corporations and other issuers to finance
short-term credit needs. Commercial paper typically is of high credit quality
and offers below market interest rates.
CONVERTIBLE DEBT SECURITIES
Bonds or notes that are exchangeable for equity securities at a set price on a
set date or at the election of the holder.
CURRENT INCOME
Earnings in the form of dividends or interest as opposed to capital growth. See
also "total return."
84 Stagecoach Equity Funds Prospectus
<PAGE>
__________________________________________________________________________
DEBT SECURITIES
Generally, a promise to pay interest and repay principal by an individual or
group of individuals sold as a security. The owner of the security is entitled
to receive any such payments. Examples include bonds and mortgage-backed
securities and can include securities in which the right to receive interest and
principal repayment have been sold separately.
DERIVATIVES
Securities whose values are derived in part from the value of another security
or index. An example is a stock option.
DISTRIBUTIONS
Dividends and/or capital gains paid by a Fund on its shares.
DIVERSIFIED
A diversified fund, as defined by the Investment Company Act of 1940, is one
that invests in cash, Government securities, other investment companies and no
more than 5% of its total assets in a single issuer. These policies must apply
to 75% of the Funds' total assets.
DOLLAR-DENOMINATED
Securities issued by foreign banks, companies or governments in U.S. dollars.
DURATION
A measure of a security's or portfolio's sensitivity to changes in interest
rates. Duration is usually expressed in years, with longer durations typically
more sensitive to interest rate changes than shorter durations.
EMERGING MARKETS
Markets associated with a country that is considered by international financial
organizations, such as the International Finance Corporation and the
International Bank for Reconstruction and Development, and the international
financial community to have an "emerging" stock market. Such markets may be
under-capitalized, have less-developed legal and financial systems or may have
less stable currencies than markets in the developed world.
FDIC
The Federal Deposit Insurance Corporation. This is the company that provides
federally sponsored insurance covering bank deposits such as savings accounts
and CDs. Mutual funds are not FDIC insured.
Stagecoach Equity Funds Prospectus 85
<PAGE>
GLOSSARY
__________________________________________________________________________
HEDGE
Strategy used to offset investment risk. A perfect hedge is one eliminating the
possibility of future gain or loss.
ILLIQUID SECURITY
A security which cannot be readily sold, or cannot be readily sold without
negatively affecting its fair price.
INITIAL PUBLIC OFFERING
The first time a company's stock is offered for sale to the public.
INVESTMENT-GRADE DEBT
A type of bond rated in the top four investment categories by a nationally
recognized ratings organization. Generally these are bonds whose issuers are
considered to have a strong ability to pay interest and repay principal,
although some investment-grade bonds may have some speculative characteristics.
LIQUIDITY
The ability to readily sell a security at a fair price.
MOODY'S
A nationally recognized ratings organization.
NATIONALLY RECOGNIZED RATING ORGANIZATION (NRRO)
A company that examines the ability of a bond issuer to meet its obligations and
which rates the bonds accordingly.
NET ASSET VALUE (NAV)
The value of a single fund share. It is determined by adding together all of a
Fund's assets, subtracting accrued expenses and other liabilities, then dividing
by the total number of shares. The NAV is calculated separately for each class
of the Fund, and is determined as of the close of regular trading on each
Business Day the NYSE is open, typically 1:00 P.M. (Pacific time).
NET INVESTMENT INCOME
Net investment income is calculated by subtracting the aggregate Fund expenses
from the Funds' investment income. The number in the financial highlights is the
net investment income of a class divided by the number of outstanding shares of
that class. The amount distributed to shareholders is listed under the heading
"Less Distributions--Dividends from Net Investment Income."
86 Stagecoach Equity Funds Prospectus
<PAGE>
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
We continually buy and sell investments. The profit on an investment sold for
more than its purchase price is a realized capital gain while a loss on an
investment sold for less than its purchase price is a realized capital loss. An
unrealized gain or loss occurs when an investment gains or loses value but is
not sold. The amount of capital gain or loss per share that was paid to
shareholders is listed under the heading "Less Distributions--Distributions From
Net Realized Gains."
NET ASSETS
The value of the investments in a Fund's portfolio (after accounting for other
assets and liabilities that are attributable to a particular class of the Funds.
OPTIONS
An option is the right to buy or sell a security based on an agreed upon price
for at a specified time. For example, an option may give the holder of a stock
the right to sell the stock to another party, allowing the seller to profit if
the price has fallen below the agreed price. Options may also be based on the
movement of an index such as the S&P 500.
PORTFOLIO TURNOVER
Portfolio turnover reflects the trading activity in the Fund's portfolio and is
expressed as a percentage of a Fund's investment portfolio. For example, a Fund
with a 50% portfolio turnover has sold and bought half of its investment
portfolio during the given period.
PUBLIC OFFERING PRICE (POP)
The NAV with the sales load added.
PRICE-TO-EARNINGS RATIO
The ratio between a stock's price and its historical, current or anticipated
earnings. Low ratios typically indicate a high yield. High ratios are
characteristic of growth stocks which generally have low current yields.
RATIO OF EXPENSES TO AVERAGE NET ASSETS
This ratio reflects the amount paid by a Fund to cover the costs of its daily
operations, and includes advisory, administration and other operating expenses.
It is expressed as a percentage of the average daily net assets of a class.
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS
This ratio is the result of dividing net investment income (or loss) by average
net assets.
Stagecoach Equity Funds Prospectus 87
<PAGE>
GLOSSARY
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT
An agreement between a buyer and seller of a security in which the seller agrees
to repurchase the security at an agreed upon price and time.
RUSSELL 2000 INDEX
An index comprised of the 2000 smallest firms listed on the Russell 3000 Index.
The Russell 3000 Index is a listing of 3000 corporations by the Frank Russell
Company that is intended to be representative of the U.S. economy. The Russell
2000 is considered a "small cap" index.
SELLING AGENT
A person who has an agreement with the Funds' distributors that allows them to
sell a Fund's shares.
SHAREHOLDER SERVICING AGENT
Anyone appointed by the Fund to maintain shareholder accounts and records,
assist and provide information to shareholders or perform similar functions.
SIGNATURE GUARANTEE
A guarantee given by a financial institution that has verified the identity of
the maker of the signature.
S&P, S&P 500 INDEX
Standard and Poors, a nationally recognized ratings organization. S&P's also
publishes various indexes or lists of companies representative of sectors of the
U.S. economy.
STATEMENT OF ADDITIONAL INFORMATION
A document that supplements the disclosures made in the Prospectus.
TAXPAYER IDENTIFICATION NUMBER
Usually the social security number for an individual or the Employer
Identification Number for a corporation.
TOTAL RETURN
The annual return on an investment, including any appreciation or decline in
share value, assumes reinvestment of all dividends and capital gains, reflects
fee waivers and excludes sales loads.
TURNOVER RATIO
The percentage of the securities held in a Fund's portfolio, other than short-
term securities, that were bought or sold within a year.
88 Stagecoach Equity Funds Prospectus
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UNDERVALUED
Describes a stock that is believed to be worth more than its current price.
U.S. GOVERNMENT OBLIGATIONS
Obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
VALUE STRATEGY
A strategy of investing which tries to identify and buy undervalued stocks under
the assumption that the stock will eventually rise to its "fair market" value.
WARRANTS
The right to buy a stock at a set price for a set time.
ZERO COUPON BONDS
Bonds that make no periodic interest payments and which are usually sold at a
discount of their face value. Zero coupon bonds are subject to interest rate and
credit risk.
Stagecoach Equity Funds Prospectus 89
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90 Stagecoach Equity Funds Prospectus
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YOU MAY WISH TO REVIEW THE FOLLOWING DOCUMENTS:
STATEMENT OF ADDITIONAL INFORMATION
Supplements the disclosures made by this Prospectus. The Statement of Additional
Information has been filed with the SEC and is incorporated by reference into
this Prospectus and is legally part of this Prospectus.
ANNUAL/SEMI-ANNUAL REPORT
Provides certain financial and other important information including a
discussion of the market conditions and investment strategies that significantly
affected Fund performance, for the most recent reporting period.
These documents are available free of charge: 1-800-222-8222, or write to:
-------------------
STAGECOACH FUNDS Presorted
P.O. Box 7066 Standard
San Francisco, CA U.S. Postage Paid
94120-7066 Los Angeles, CA
Permit #30835
Visit the SEC's website: -------------------
http://www.sec.gov, or
Request copies for a fee by writing to:
SEC Public Reference Room,
Washington, DC 20549-6009
(call 1-800-SEC-0330 for details)
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ICA # 811-6419 NOT FDIC INSURED -- NO BANK GUARANTEE -- SC EQ P(5/99)
MAY LOSE VALUE
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