<PAGE>
STAGECOACH FUNDS-Registered Trademark-
Semi-Annual Report
TAX-FREE Funds
Arizona Tax-Free Fund
California Tax-Free Bond Fund
California Tax-Free Income Fund
National Tax-Free Fund
Oregon Tax-Free Fund
This Report Contains a Prospectus Supplement
DECEMBER 31, 1998
Stagecoach Tax-Free Funds 1998 Semi-Annual Report
<PAGE>
Tax-Free Funds TABLE OF CONTENTS
- ------------------------------------------------------------------------
LETTER TO SHAREHOLDERS................................1
PERFORMANCE AT A GLANCE AND
INVESTMENT ADVISOR COMMENTARY
Arizona Tax-Free Fund.............................3
California Tax-Free Bond Fund.....................8
California Tax-Free Income Fund..................14
National Tax-Free Fund...........................19
Oregon Tax-Free Fund.............................25
PORTFOLIOS OF INVESTMENTS
Arizona Tax-Free Fund............................32
California Tax-Free Bond Fund....................36
California Tax-Free Income Fund..................61
National Tax-Free Fund...........................65
Oregon Tax-Free Fund.............................73
TAX-FREE FUNDS
Statements of Assets and Liabilities.............78
Statement of Operations..........................80
Statements of Changes in Net Assets..............82
Financial Highlights.............................86
Notes to Financial Statements...................105
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
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THIS PAGE IS INTENTIONALLY LEFT BLANK --
ii
<PAGE>
LETTER TO SHAREHOLDERS Tax-Free Funds
- ------------------------------------------------------------------------
TO OUR SHAREHOLDERS
Thank you for your investment in the Stagecoach Funds.
It is a pleasure to bring this Semi-Annual Report to you for the period ended
December 31, 1998. The report provides information about your investment,
including economic and market trends over the period as well as a performance
summary, portfolio review and strategic outlook for each Fund.
As we enter the eighth consecutive year of economic expansion, the U.S.
economy remains strong, the stock market is riding the crest of another
outstanding year and December capped a very profitable year for the income
markets. While 1998 ended on a high note, the six-month reporting period will be
best remembered for unprecedented highs in conjunction with volatility in the
market. In response to global economic concerns, the Federal Reserve Board ("the
Fed") reduced interest rates in three different moves. This calmed the domestic
financial markets and prompted accelerating economic activity.
Stocks, as measured by the S&P 500 Index(1), returned 9.24% for the six-month
period ending December 31, 1998. We witnessed a sell-off in the stock market
during the summer that served as an introduction to sharp market swings and
volatility that we would see for the remainder of the year. In the end, however,
broad stock indexes were propelled higher by a series of upbeat earnings
reports.
Government bonds also performed well, returning 6.74% as measured by the
Lehman Brothers Long Government Bond Index.(2) While the U.S. Treasury market
rallied in response to the Fed's actions to lower interest rates, the corporate,
asset-backed and mortgage-backed securities markets did not perform as well
early in the reporting period. However, both mortgage-backed and corporate
securities bounced back by December.
While the latest signs of economic strength are positive, we still expect the
Fed to decrease short-term rates again sometime during the first half of 1999.
We
1
<PAGE>
Tax-Free Funds LETTER TO SHAREHOLDERS
- ------------------------------------------------------------------------
feel this move may come in response to subdued inflation, lingering strains on
emerging markets, and signs of slower economic growth.
In our ongoing commitment to provide you with quality investment options, we
introduced a new Stagecoach Fund during the six month reporting period -- the
Strategic Income Fund, which was launched in July 1998.
We appreciate your continued investment with the Stagecoach Funds. As always,
we recommend that you continually review your investment portfolio with your
financial consultant to determine an appropriate mix of investments to meet your
ongoing needs. We understand that you have a variety of investment options and
thank you for your confidence in selecting us to help you manage your money.
Sincerely,
[SIGNATURE]
Michael J. Hogan
Senior Vice President
Wells Fargo Bank,
Mutual Fund Group
[SIGNATURE]
R. Greg Feltus
Chairman and President of
Stagecoach Funds
1 The "S&P 500 Index" is a trademark of Standard & Poor's Corporation. The S&P
500 Index is an unmanaged index of 500 widely held common stocks,
representing, among others, industrial, financial, utility and transportation
companies, listed or traded on national exchanges or over-the-counter markets.
2 The Lehman Brothers Long Government Bond Index is an unmanaged index composed
of U.S. Treasury bonds with 20-year or longer maturities.
2
<PAGE>
PERFORMANCE AT A GLANCE Arizona Tax-Free Fund
- ------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS (%) (as of December 31, 1998)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (3/2/92)
<S> <C> <C> <C> <C>
CLASS A 3.20 5.02 5.36 6.59
CLASS B 3.00 4.33 4.30 5.52
INSTITUTIONAL CLASS 3.33 5.20 5.50 6.69
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (3/2/92)
<S> <C> <C> <C> <C>
CLASS A (1.45) 0.30 4.39 5.87
CLASS B (1.97) (0.62) 3.97 5.52
INSTITUTIONAL CLASS N/A N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR
<S> <C> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 3.69 6.48 6.22
</TABLE>
The Stagecoach Arizona Tax-Free Fund (the "Fund") seeks to provide investors
with income exempt from federal income tax and Arizona personal income tax. The
Fund invests in high-quality Arizona municipal obligations. The Fund has the
ability to invest in municipal bonds with a wide range of maturities, allowing
for greater investment flexibility within the portfolio and the potential to
maximize income.
Steve Galiani has responsibility for the day-to-day management of the Arizona
Tax-Free Fund. Mr. Galiani has 23 years of experience in the securities industry
and has been managing portfolios since 1981. His value-oriented philosophy
brings a unique strategy to the Fund.
3
<PAGE>
Arizona Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY
The Arizona Tax-Free Fund's Class A share price decreased slightly from $10.79
on June 30, 1998, to $10.71 on December 31, 1998. The Fund distributed $0.23 per
share in dividend income and $0.19 per share in capital gains distributions.
Keep in mind that past distributions are not predictive of future trends as
distributions will vary based on Fund portfolio earnings.
The Fund's distribution rate for Class A shares was 4.06%. When measured
against a comparable taxable investment, the Fund's double tax-free yield is
generally higher. For example, an investor would need to earn a yield of 6.83%
from a taxable investment to match the Fund's 3.91% tax-free SEC yield, assuming
the maximum combined federal and Arizona state personal income tax bracket.
PORTFOLIO DATA (as of December 31, 1998)(2)
- ---------------------------------------------------------
<TABLE>
<S> <C>
NUMBER OF ISSUES 27
WEIGHTED AVERAGE COUPON 5.45%
WEIGHTED AVERAGE MATURITY 19.79 years
AMT EXPOSURE 0.00%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
NAV 10.71 10.33
DISTRIBUTION RATE 4.06% 3.52%
SEC YIELD 3.91% 3.37%
TAX EQUIVALENT YIELD 6.83% 5.88%
</TABLE>
The Arizona Tax-Free Fund reported a cumulative total return of 3.20% for
Class A shares, excluding sales charge, and a 3.33% return for Institutional
Class shares for the six-month period ended December 31, 1998. The Fund slightly
underperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 3.69% over the same period. While the Lehman Brothers Municipal Bond
Index represents municipal securities across the country, the Fund invests
primarily in Arizona municipal securities, which affected the performance of the
Fund relative to its benchmark. We attempted to extend the Fund's duration to
increase performance, however, there was a limited supply of Arizona municipal
bonds, making them difficult to obtain at a reasonable price. In addition, our
strategy was to
4
<PAGE>
INVESTMENT ADVISOR COMMENTARY Arizona Tax-Free Fund
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purchase longer, non-callable bonds, but the bonds that came to market generally
had shorter maturities than we preferred.
Our move to sell some natural resource-related securities positively affected
the Fund's performance. When a large decline in commodity prices occurred during
the period, this strategy helped to insulate the Fund from its effects.
CREDIT QUALITY
(as of December 31, 1998)3
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 61%
AA 21%
A 12%
BBB or below 1%
5% Cash Equivalents 5%
</TABLE>
PORTFOLIO REVIEW
During the six-month reporting period, we improved the credit quality of the
portfolio by increasing the percentage of bonds rated AA or better to 82% on
December 31, 1998 from 73% on June 30, 1998. We decreased BBB-rated bonds for
two reasons. First, the natural resource positions that we sold were lower-rated
bonds. Second, in our attempt to extend the Fund's duration and boost yield, we
purchased more AAA-rated, insured bonds, as they were generally the only types
available with longer maturities.
With a focus on total return, which is particularly important in a lower
interest rate environment, we searched for bonds that would enhance yield and
performance. Most of the Fund's top ten holdings are bonds that we felt were
either unusually attractive on a valuation basis, very high yielding, or a
combination of the two. During the six-month reporting period we added a
healthcare bond, the Mayo Clinic Hospital in Maricopa County, for its strong
yield and longer maturity. In addition, it is a very high quality bond, rated
AA-plus, which is an unusually strong credit rating for a healthcare bond. We
also increased our holdings in housing bonds, which helped bolster the income
component of the Fund.
5
<PAGE>
Arizona Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
TOP TEN HOLDINGS (as of December 31, 1998)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
NAME/COUPON MARKET VALUE
<S> <C>
MESA, AZ GO FGIC INSURED, 6.50%,
7/1/09 6.7%
PHOENIX, AZ, GO SERIES A, 6.25%,
7/1/16 6.6%
PUERTO RICO COMMONWEALTH, 5.50%,
7/1/26 5.9%
TUCSON, AZ WATER REVENUE, 5.13%,
7/1/21 5.7%
PHOENIX, AZ HOSPITAL REVENUE REFUND
SERIES B, 5.65%, 12/1/12 5.6%
ARIZONA HFA REVENUE, 4.75%, 10/1/30 5.4%
PIMA COUNTY, AZ MULTIFAMILY HOUSING
REVENUE, 5.50%, 3/1/28 4.3%
GUAM HOUSING SINGLE FAMILY MORTGAGE
BACKED SERIES A, 5.75%, 9/1/31 4.3%
PHOENIX, AZ CIVIC IMPROVEMENT
CORPORATION AMT LIEN, 5.00%, 7/1/14 4.3%
MARICOPA COUNTY AZ HOSPITAL DISTRICT
AMBAC INSURED, 5.00%, 6/1/21 4.2%
</TABLE>
STRATEGIC OUTLOOK
We believe the domestic economy's stronger-than-expected performance in the
second half of 1998 will give way to moderate growth during the first half of
1999. Our interest rate bias is toward the downside as we expect the Federal
Reserve Board will lower interest rates again sometime in the first half of
1999. In the municipal market, we also foresee rates trending slightly lower.
Based on this outlook, we have positioned the Fund to take advantage of a
lower interest rate environment, but are careful not to be overly aggressive.
With low rates, coupon will play a bigger role in our strategy. We will search
for bonds with solid current income that possess the ability to move with
interest rates. As always, we will continue our value approach to investing,
searching for bonds that are somewhat undervalued. We feel this strategy gives
the Fund price protections, which should help limit volatility.
In the current interest rate environment, we have extended the Fund's maturity
and will continue to add bonds with good call protection to take advantage of
declining rates. Overall, our goal is to add more bonds with solid current yield
when we see opportunities to do
6
<PAGE>
INVESTMENT ADVISOR COMMENTARY Arizona Tax-Free Fund
- ------------------------------------------------------------------------
so. As always, our research will focus on credit quality, relative valuation and
sensitivity to interest rate movements in order to provide competitive tax-free
income.
Past performance is no guarantee of future results.
1 A portion of the performance shown for the Class A, Class B and Institutional
Class shares of the Arizona Tax-Free Fund reflects performance of a class of
shares of a predecessor fund. Complete historical information about any
Stagecoach Fund can be found in such Fund's prospectus and statement of
additional information.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that such
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes maximum contingent deferred sales
charge for the corresponding time period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The formula used to calculate the SEC yield is described in detail in the
Fund's statement of additional information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market advertisements. SEC yields include the actual amount of interest earned
adjusted by any gain or loss realized due to the return of principal, less
expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
42.72%. Any capital gains distribution may be taxable.
3 The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc. and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies and these
rating agencies make no representation regarding the advisability of investing
in the Fund.
7
<PAGE>
California Tax-Free Bond Fund PERFORMANCE AT A GLANCE
- ------------------------------------------------------------------------
CALIFORNIA TAX-FREE BOND FUND
AVERAGE ANNUAL TOTAL RETURNS (%) (as of December 31, 1998)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A 3.84 6.81 6.16 8.13
CLASS B 3.47 6.05 5.38 7.39
CLASS C 3.47 6.05 5.38 7.39
INSTITUTIONAL CLASS 3.96 6.87 6.17 8.14
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A (0.86) 2.03 5.19 7.64
CLASS B (1.53) 1.05 5.06 7.39
CLASS C 2.47 5.05 5.38 7.39
INSTITUTIONAL CLASS N/A N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 3.69 6.48 6.22 8.22
</TABLE>
The Stagecoach California Tax-Free Bond Fund (the "Fund") seeks to provide
investors with a high level of income exempt from federal income tax and
California personal income tax, while preserving capital, by investing in
medium- to long-term investment-grade municipal securities. The Fund is managed
with a total return strategy that balances reasonable risk with competitive
income and capital preservation.
David Klug has responsibility for the day-to-day management of the California
Tax-Free Bond Fund. Mr. Klug has been managing bond portfolios for the
tax-exempt fixed income team for the past ten years. Mr. Klug earned his MBA
from the University of Chicago and is a member of the National and California
Federations of Municipal Analysts.
8
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Bond Fund
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY
The California Tax-Free Bond Fund's Class A share net asset value increased
slightly from $11.38 on June 30, 1998, to $11.41 on December 31, 1998. The Fund
distributed $0.26 per share in dividend income and $0.15 per share in capital
gains. The capital gains distribution reflects the long-term gains realized in
the portfolio when bonds were sold at a profit. Many of these bonds increased in
value when they were pre-refunded. Keep in mind that past distributions are not
predictive of future trends as distributions will vary based on Fund portfolio
earnings.
The Fund's distribution rate for Class A shares was 4.28%. When measured
against a comparable taxable investment, the Fund's double tax-free yield was
generally higher. For example, an investor would need to earn a yield of 6.52%
from a taxable investment to match the Fund's 3.57% tax-free SEC yield, assuming
the maximum combined federal and California state personal income tax bracket.
PORTFOLIO DATA (as of December 31, 1998)(2)
- ---------------------------------------------------------
<TABLE>
<S> <C>
NUMBER OF ISSUES 367
WEIGHTED AVERAGE COUPON 5.30%
WEIGHTED AVERAGE MATURITY 14.91 years
AMT EXPOSURE 4.12%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
NAV 11.41 11.63 11.63
DISTRIBUTION RATE 4.28% 3.77% 3.76%
SEC YIELD 3.57% 3.03% 3.02%
TAX EQUIVALENT YIELD 6.52% 5.53% 5.51%
</TABLE>
The California Tax-Free Bond Fund reported a cumulative total return of 3.84%
for Class A shares, excluding sales charge, and a 3.96% return for Institutional
Class shares for the six-month period ended December 31, 1998. The Fund
outperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 3.69% over the same period. The Fund's strong performance was
influenced by the strength of the
9
<PAGE>
California Tax-Free Bond Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
California economy. In addition, the Fund benefited from municipal bonds that
were pre-refunded, meaning that the issuing municipalities had escrowed the
bonds to their first call date. The escrows generally consisted of U.S.
government securities. When the Fund's bonds were pre-refunded and repriced at a
higher value, the Fund's performance was bolstered as price gains were realized.
The Fund again earned a four-star rating from Morningstar for its excellent
long-term performance record. The Fund performed in the top 32.5% out of 1,549
Municipal Bond Funds as of December 31, 1998.* Please remember that past
performance is no guarantee of future results.
* Morningstar proprietary ratings reflect historical risk-adjusted performance
as of 12/31/98. Morningstar ratings are calculated from a Fund's 3, 5, and
10-year average annual returns in excess of 90-day Treasury bills with
appropriate fee and sales charge adjustments and a risk factor that reflects
fund performance below 90-day T-bill returns with appropriate fee adjustments.
Funds with performance records of less than 3 years have not been assigned a
star rating. Ten percent of the funds in an investment category receive 5
stars, 22.5% receive 4 stars, 35% receive 3 stars and 22.5% receive 2 stars.
PORTFOLIO REVIEW
At the end of the reporting period on December 31, 1998, the Fund had 77% of
its portfolio allocated to AAA-rated bonds. We maintained the Fund's credit
quality at this high level because yield spreads remained narrow. As a result,
we saw little incentive to buy lower quality bonds and were comfortable being
overweighted in AAA-rated bonds.
CREDIT QUALITY
(as of December 31, 1998)3
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 77%
AA 10%
A 10%
BBB 2%
Cash Equivalents 1%
</TABLE>
With a focus on total return management, which is particularly important in a
lower interest rate environment, we search for bonds that enhance yield and
performance. Most of the Fund's top ten holdings are bonds that we felt were a
good value and had good call protection at the time of purchase. Although Rialto
Redevelopment Agency bonds were not one of the top holdings, they added
significant value to the Fund. Initially rated BBB, these bonds were
pre-refunded, which benefited the Fund's performance as they increased in value.
10
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Bond Fund
- ------------------------------------------------------------------------
TOP 10 HOLDINGS (as of December 31, 1998)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
NAME/COUPON MARKET VALUE
<S> <C>
LOS ANGELES COUNTY, USD SERIES A FGIC
INSURED, 5.00%, 10/0/19 1.7%
SAN DIEGO CA PFA SEWER REVENUE FGIC
INSURED, 5.00%, 5/15/15 1.2%
CHINO CA ELECTRIC WATER FACILITY
AUTHORITY CERTIFICATES SERIES A, 5.2%,
10/1/15 1.1%
SACRAMENTO, CA MUD ELECTRIC REVENUE
SERIES L, 5.10%, 7/1/14 1.1%
EAST BAY CA MUD WASTEWATER TREATMENT
REVENUE FGIC INSURED, 5.00%, 6/1/16 1.1%
NORTHERN CA TRANSMISSION REVENUE
TRANSMISSION PROJECT A MBIA INSURED,
5.50%, 5/1/14 1.1%
RIVERSIDE COUNTY CA ASSET LEASING CORP
REVENUE COUNTY HOSPITAL PROJECT A,
6.38%, 6/1/09 0.9%
SOUTH COUNTY CA REGIONAL WASTEWATER
AUTHORITY REVENUE CAPITAL IMPROVEMENT
FGIC INSURED, 5.75%, 8/1/10 0.9%
SANTA ANA, CALIFORNIA FINANCING
AUTHORITY REVENUE REFUNDED SOUTH
HARBOR BOULEVARD SERIES A, 5.00%,
9/1/19 0.9%
CALIFORNIA STATE WATER RESOURCE
CENTRAL VALLEY PROJECT REVENUE, 6.00%,
12/1/07 0.8%
</TABLE>
STRATEGIC OUTLOOK
We believe the economy's stronger-than-expected performance in the second half
of 1998 will give way to moderate growth during the first half of 1999. Our
interest rate bias is toward the downside as we expect the Federal Reserve Board
will lower interest rates again sometime in the first half of 1999. In the
municipal market, we also foresee rates trending slightly lower.
On a state level, we feel California's economy will continue to improve and
outperform the national economy. The state's credit quality, in fact, was
upgraded by Moody's in the fourth quarter, which we view as a positive sign for
the state. Municipal bond issuance was
11
<PAGE>
California Tax-Free Bond Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
high in 1998 and we feel it could decrease in the coming year, which should help
the municipal market relative to other fixed-income markets.
Based on this outlook, we will maintain our current strategy. As always, we
will carefully review each bond's investment quality, maturity, duration, and
sensitivity to interest rate movements in order to provide strong long-term
total return. Overall, we feel the Fund is well positioned and expect it to
continue to produce a high level of double tax-free income consistent with
prudent risk.
Past performance is no guarantee of future results.
1 A portion of the performance shown for the Class A, Class B, Class C and
Institutional Class shares of the California Tax-Free Bond Fund reflects
performance of a class of shares of a predecessor fund. Complete historical
information about any Stagecoach Fund can be found in such Fund's prospectus
and statement of additional information.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%. Class B and
Class C share performance with sales charges assumes maximum contingent
deferred sales charge for the corresponding time period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The formula used to calculate the SEC yield is described in detail in the
Fund's statement of additional information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market advertisements. SEC yields include the actual amount of interest earned
adjusted by any gain or loss realized due to the return of principal, less
expenses and the maximum offering price calculated on a 30-day month-end
basis.
12
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Bond Fund
- ------------------------------------------------------------------------
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distribution may be taxable.
3 The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies").
Standard & Poor's is a trademark of McGraw-Hill Inc. and has been licensed. The
Fund is not sponsored, endorsed, sold or promoted by these rating agencies and
these rating agencies make no representation regarding the advisability of
investing in the Fund.
13
<PAGE>
California Tax-Free Income Fund PERFORMANCE AT A GLANCE
- ------------------------------------------------------------------------
CALIFORNIA TAX-FREE INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS (%) (as of December 31, 1998)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (11/18/92)
<S> <C> <C> <C> <C>
CLASS A 3.53 5.46 4.44 4.92
INSTITUTIONAL CLASS 3.56 5.53 4.46 4.93
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (11/18/92)
<S> <C> <C> <C> <C>
CLASS A 0.45 2.32 3.81 4.40
INSTITUTIONAL CLASS N/A N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR
<S> <C> <C> <C> <C>
LEHMAN BROTHERS 3-YEAR MUNICIPAL BOND
INDEX 2.97 5.20 4.90
</TABLE>
The Stagecoach California Tax-Free Income Fund (the "Fund") seeks to provide
investors with a high level of income exempt from federal income tax and
California personal income tax, while preserving capital. The Fund invests in
short- and intermediate-term California municipal securities. This policy
enables the Fund to take advantage of short-term interest rate fluctuations,
seeking to provide a consistent level of tax-free income while limiting the
price volatility usually found in a fund with longer duration.
Laura Milner is responsible for the day-to-day management of the California
Tax-Free Income Fund and is the senior specialist for all tax-exempt money
market and short-term portfolios. Ms. Milner has 17 years of experience in the
securities industry with an expertise in short-and long-term municipal
securities. She is a member of the California Chapter of the National Federation
of Municipal Analysts.
14
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Income Fund
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY
The California Tax-Free Income Fund's Class A share net asset value increased
slightly from $10.44 on June 30, 1998, to $10.49 on December 31, 1998. The Fund
distributed $0.20 per share in dividend income, and the Fund distributed $0.12
per share in capital gains. We attempted to minimize these gains when interest
rates dropped and the portfolio had to be repositioned. Keep in mind that past
distributions are not predictive of future trends as distributions will vary
based on Fund portfolio earnings and market fluctuations.
The Fund's distribution rate for Class A shares was 3.65%. When measured
against a comparable taxable investment, the Fund's double tax-free yield is
generally higher. For example, an investor would need to earn a yield of 5.73%
from a taxable investment to match the Fund's 3.14% tax-free SEC yield, assuming
the maximum combined federal and California state personal income tax bracket.
PORTFOLIO DATA (as of December 31, 1998)(2)
- ---------------------------------------------------------
<TABLE>
<S> <C>
NUMBER OF ISSUES 38
WEIGHTED AVERAGE COUPON 5.69%
WEIGHTED AVERAGE MATURITY 5.91 years
AMT EXPOSURE 15.46%
</TABLE>
<TABLE>
<CAPTION>
CLASS A
<S> <C>
NAV 10.49
DISTRIBUTION RATE 3.65%
SEC YIELD 3.14%
TAX EQUIVALENT YIELD 5.73%
</TABLE>
The California Tax-Free Income Fund reported a cumulative total return of
3.53% for Class A shares, excluding sales charge, and a 3.56% return for
Institutional Class shares for the six-month period ended December 31, 1998. The
Fund outperformed its benchmark, the Lehman Brothers 3-Year Municipal Bond
Index, which returned 2.97% over the same period. The
Fund's strong performance can be attributed to the Fund's duration. Currently,
the majority of the Fund's assets are less than five years in duration, and
approxi-
15
<PAGE>
California Tax-Free Income Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
mately 10% of the Fund's assets have a duration of 12 years where the yield
curve is particularly steep and the yield pick-up is wide.
We purchased bonds when the market was unusually volatile in September and
October, which paid off later when the Federal Reserve Board eased rates, the
market improved and bonds returned to favor. In addition, we purchased issues
when the yield spread was wide, which benefited the Fund's long-term performance
when spreads narrowed.
PORTFOLIO REVIEW
We increased the percentage of AAA-rated bonds in the portfolio, providing
high credit quality for investors. As of December 31, 1998, the Fund held 61% of
the portfolio in AAA-rated bonds, up from 50% on June 30, 1998. When the economy
started to slow due to global economic concerns, spreads remained narrow. As a
result, AAA-rated bonds provided greater value, and we increased the weighting
within the portfolio. We expect the high credit quality of the Fund to continue
as more than 70% of the bonds that come to market are AAA-rated.
CREDIT QUALITY
(as of December 31, 1998)3
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 61%
AA 12%
A 24%
Cash Equivalents 3%
</TABLE>
With a focus on total return, which is particularly important in a lower
interest rate environment, we searched for bonds that would enhance yield and
performance. Most of the Fund's top ten holdings are bonds that we felt were
either unusually attractive on a valuation basis, very high yielding, or a
combination of the two. After extensively researching Northern California Power
bonds, for example, we purchased them at an inexpensive price, then later sold
them when spreads narrowed.
AMT bonds did not perform as well as other bonds in the Fund's portfolio
during the reporting period. We purchased them when we felt they were
undervalued, but their relationship to other bonds did not change. As a result,
we do not expect to add to our AMT position.
16
<PAGE>
INVESTMENT ADVISOR COMMENTARY California Tax-Free Income Fund
- ------------------------------------------------------------------------
TOP 10 HOLDINGS (as of December 31, 1998)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
NAME/COUPON MARKET VALUE
<S> <C>
SOUTHERN CALIFORNIA STATE PUBLIC POWER
AUTHORITY PROJECT, 6.88%, 7/1/03 5.7%
LOS ANGELES CA HARBOR DEPARTMENT
REVENUE AMT SERIES B, 5.00%, 8/1/02 4.6%
RANCHO CA WATER DISTRICT FINANCING
AUTHORITY REVENUE, 4.7% 8/15/21 4.5%
LOS ANGELES CA WASTE WATER SYSTEM
REVENUE SERIES D FGIC INSURED,
8.70%, 11/1/03 4.3%
SAN JOAQUIN HILLS CA TRANSPORTATION
CORRIDOR AGENCY REVENUE, 7.00%, 1/1/02 4.0%
CALIFORNIA STATEWIDE COMMUNITY
DEVELOPMENT AUTHORITY REVENUE CONNIE
LEE INSURED, 5.25%, 7/1/05 3.9%
SOUTHERN CA RAPID TRANSIT DISTRICT
CERTIFICATES PARTICIPATION MBIA
INSURED, 7.50%, 7/1/05 3.9%
CENTRAL VALLEY FINANCE AUTHORITY
REVENUE MBIA INSURED, CA 5.25% 7/1/10 3.9%
CONTRA COSTA COUNTY, CA COP MBIA
INSURED, 5.25%, 11/1/10 3.8%
CALIFORNIA STATE AMT VETERANS BONDS
SERIES B, 4.95%, 12/1/07 3.7%
</TABLE>
STRATEGIC OUTLOOK
We believe the economy's stronger-than-expected performance in the second half
of 1998 will give way to moderate growth during the first half of 1999. Our
interest rate bias is toward the downside as we expect the Federal Reserve Board
will lower interest rates again sometime in the first half of 1999. In the
municipal market, we also foresee rates trending slightly lower.
On a state level, we feel California's economy will continue to improve and
outperform the national economy. The state's credit quality, in fact, was
upgraded by Standard & Poor's in the fourth quarter, which we view as a positive
sign for the state. Municipal bond issuance was high in 1998 and we feel it
could decrease in the coming year, which should help the municipal market
relative to other fixed-income markets.
We see opportunity in the coming months in revenue bonds because they have a
fixed rate of cash flow, a feature that is typically beneficial when the economy
17
<PAGE>
California Tax-Free Income Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
slows. We are also cautious on electric utility bonds as we feel the impact of
deregulation has not yet impacted the market. The electric utility bonds we do
own, in fact, are insured. Overall, we feel the Fund is well positioned and
expect it to continue to produce a high level of double tax-free income
consistent with prudent risk.
Past performance is no guarantee of future results.
1 Performance shown for the Institutional Class shares for periods prior to
September 6, 1996 reflects the performance and expenses of the Fund's Class A
shares.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that these
reductions will continue.
For Class A shares the maximum front-end sales charge is 3.00%.
The Lehman Brothers 3-year Municipal Bond Index is an unmanaged index composed
of municipal bonds with an approximate maturity of three years. The index does
not incur expenses and is not available directly for investment. Had this
index incurred operating expenses, its performance would have been lower.
2 The formula used to calculate the SEC yield is described in detail in the
Fund's statement of additional information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market advertisements. SEC yields include the actual amount of interest earned
adjusted by any gain or loss realized due to the return of principal, less
expenses and the maximum offering price calculated on a 30-day month-end
basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distribution may be taxable.
3 The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc. and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies and these
rating agencies make no representation regarding the advisability of investing
in the Fund
18
<PAGE>
PERFORMANCE AT A GLANCE National Tax-Free Fund
- ------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS (%) (as of December 31, 1998)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (1/15/93)
<S> <C> <C> <C> <C>
CLASS A 3.21 5.77 5.45 6.01
CLASS B 2.84 5.14 4.36 4.96
CLASS C 2.84 5.05 4.34 4.93
INSTITUTIONAL CLASS 3.17 5.79 5.46 6.02
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SINCE
INCEPTION
SIX-MONTHS 1-YEAR 5-YEAR (1/15/93)
<S> <C> <C> <C> <C>
CLASS A (1.42) 1.02 4.49 5.18
CLASS B (2.16) 0.14 4.02 4.82
CLASS C 1.84 4.05 4.34 4.93
INSTITUTIONAL CLASS N/A N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR
<S> <C> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 3.69 6.48 6.22
</TABLE>
The Stagecoach National Tax-Free Fund (the "Fund") seeks to provide investors
with income exempt from federal income tax. The Fund invests in a broad range of
municipal obligations. Investment quality, maturity, sensitivity to interest
rate movements and duration are carefully reviewed in order to provide
competitive tax-free income.
Steve Galiani is responsible for the day-to-day management of the National
Tax-Free Fund. Mr. Galiani has 23 years of experience in the securities industry
and has been managing portfolios since 1981. His value-oriented philosophy
brings a unique strategy to the Fund.
19
<PAGE>
National Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
PERFORMANCE SUMMARY
The National Tax-Free Fund's Class A share net asset value increased from
$15.97 on June 30, 1998, to $16.10 on December 31, 1998. The Fund distributed
$0.38 per share in dividend income, and no capital gains were distributed from
the Fund. Keep in mind that past distributions are not predictive of future
trends as distributions will vary based on Fund portfolio earnings.
The Fund's distribution rate for Class A shares was 4.50%. When measured
against a comparable taxable investment, the Fund's tax-free yield is generally
higher. For example, an investor would need to earn a yield of 7.02% from a
taxable investment to match the Fund's 4.24% tax-free SEC yield, assuming the
maximum federal income tax bracket.
PORTFOLIO DATA (as of December 31, 1998)(2)
- ---------------------------------------------------------
<TABLE>
<S> <C>
NUMBER OF ISSUES 68
WEIGHTED AVERAGE COUPON 5.51%
WEIGHTED AVERAGE MATURITY 21.82 years
AMT EXPOSURE 15.95%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
NAV 16.10 10.62 10.62
DISTRIBUTION RATE 4.50% 4.11% 4.11%
SEC YIELD 4.24% 3.83% 3.84%
TAX EQUIVALENT YIELD 7.02% 6.34% 6.36%
</TABLE>
The National Tax-Free Fund reported a cumulative total return of 3.21% for
Class A shares, excluding sales charge, and a 3.17% return for Institutional
Class shares for the six-month period ended December 31, 1998. The Fund slightly
underperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 3.69% over the same period. One reason for the slight difference in
performance centers on duration. As the benchmark has a shorter duration than
the Fund, it was not as affected by call features. This was particularly
noticeable in September when rapidly declining interest rates caused the Fund to
lag the market.
20
<PAGE>
INVESTMENT ADVISOR COMMENTARY National Tax-Free Fund
- ------------------------------------------------------------------------
The Fund's performance was enhanced by our strong focus on current income. The
Fund's manager searched for high current income bonds and structured the Fund to
be less volatile, meaning less subject to interest rate changes, by holding
bonds that were priced-to-call.
CREDIT QUALITY
(as of December 31, 1998)3
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 52%
AA 13%
A 8%
BBB or non-rated 26%
Cash Equivalents 1%
</TABLE>
PORTFOLIO REVIEW
The Fund offers high credit quality, with 65% of the portfolio invested in
bonds rated AA or better. We have slightly increased the weighting of BBB-rated
bonds in the portfolio to take advantage of credit spreads and achieve higher
income.
During the period, we conducted extensive research to locate bonds with a
higher coupon and offered value because the security was underrated or had
credit improvement potential. At the end of the research process, we assessed
whether a lower credit quality bond met our criteria. We are very selective in
choosing bonds for the portfolio and turn down many BBB-rated bonds if they
don't meet our high standards of credit quality.
With a focus on total return management, which is particularly important in a
lower interest rate environment, we searched for bonds that would enhance yield
and performance. Most of the Fund's top ten holdings were bonds that we felt
were either unusually attractive on a valuation basis, very high yielding, or a
combination of the two. Virginia's Pocahontas Parkway Toll Road Bonds, for
example, are high yielding bonds that we feel could be upgraded once
construction is complete and tolls are collected. Our research showed great
potential for these bonds as the road provides a direct route into the city for
a highly populated area with high projected growth.
Constantly reviewing the Fund's portfolio holdings, we made a decision to sell
Gunnison County, Colorado hospital bonds during the reporting period. We were
able to purchase the bonds at an inexpensive price as they were a new issue in
the market. Later, as demand increased for these bonds, we sold them for a
higher price.
21
<PAGE>
National Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
TOP 10 HOLDINGS (as of December 31, 1998)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
NAME/COUPON MARKET VALUE
<S> <C>
CHESTER COUNTY PA HEALTH & EDUCATION
FACILITIES, 5.38%, 5/15/27 4.0%
DENVER CO CITY & COUNTY AIRPORT
REVENUE SERIES A MBIA INSURED, 5.60%,
11/15/20 3.7%
COLORADO HEALTH FACILITIES AUTHORITY
REVENUE, 5.75%, 9/15/22 3.6%
HOWARD COUNTY IN JAIL & JUVENILE
DETENTION CENTER AMBAC INSURED,
5.25%, 1/15/12 3.6%
POCAHONTAS VA PARKWAY ASSOCIATE,
5.50%, 8/15/28 3.5%
GRANT COUNTY WA PUBLIC HOSPITAL
DISTRICT, 5.15%, 12/1/23 3.5%
BALDWIN COUNTY GA HOSPITAL,
5.38%, 12/1/28 3.5%
PITTSBURGH PA WATER & SEWER AUTHORITY,
5.25%, 9/1/23 3.2%
CALIFORNIA ST. VETERANS BONDS SERIES
BN, 5.45%, 12/1/28 2.8%
IOWA STATE HFA SFMR SERIES B AMT GNMA/
FNMA COLLATERALIZED, 6.95%, 7/1/24 2.7%
</TABLE>
STRATEGIC OUTLOOK
We believe the economy's stronger-than-expected performance in the second half
of 1998 will give way to moderate growth during the first half of 1999. Our
interest rate bias is toward the downside as we expect the Federal Reserve Board
will lower interest rates again sometime in the first half of 1999. In the
municipal market where the retail investor dominates the market, we also foresee
rates trending slightly lower.
Based on this outlook, we have positioned the Fund to take advantage of a
lower interest rate environment, and will continue to implement our current
strategy. With low rates, coupon will play a bigger role in our strategy. We
will search for bonds with solid current income that possess the ability to move
with interest
22
<PAGE>
INVESTMENT ADVISOR COMMENTARY National Tax-Free Fund
- ------------------------------------------------------------------------
rates. Specifically, we will research non-callable bonds and slightly discounted
bonds, looking for current yield and slight capital appreciation potential.
With regard to the Fund's duration, we feel the municipal yield curve is
relatively steep out to 20 years, particularly between the 10- to 20-year range.
As a result, we expect the Fund's duration will remain near the 20-year range in
an attempt to capture yield and take advantage of any capital appreciation
potential. As always, we will continue our value approach to investing,
searching for bonds that are somewhat undervalued. We feel this strategy
contributes to the price protection of the Fund, which should help limit
volatility.
Past performance is no guarantee of future results.
1 A portion of the performance for the Class A, Class B, Class C and
Institutional Class shares of the National Tax-Free Fund reflects performance
of a class of shares of a predecessor fund. Complete historical information
about any Stagecoach Fund can be found in such Fund's prospectus and statement
of additional information.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee that these
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%. Class B and
Class C share performance with sales charges assumes maximum contingent
deferred sales charge for the corresponding time period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The formula used to calculate the SEC yield is described in detail in the
Fund's statement of additional information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market
23
<PAGE>
National Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
advertisements. SEC yields include the actual amount of interest earned
adjusted by any gain or loss realized due to the return of principal, less
expenses and the maximum offering price calculated on a 30-day month-end
basis. The distribution rate is calculated by annualizing the Fund's most
recent income dividend and dividing that figure by the applicable current
public offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the federal rate of 39.6%. Any capital gains
distribution may be taxable.
3 The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc. and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies and these
rating agencies make no representation regarding the advisability of investing
in the Fund.
24
<PAGE>
PERFORMANCE AT A GLANCE Oregon Tax-Free Fund
- ------------------------------------------------------------------------
OREGON TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS (%)(as of December 31, 1998)(1)
- ----------------------------------------------------------------
EXCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A 3.59 5.44 5.08 7.04
CLASS B 3.04 4.45 4.20 6.22
INSTITUTIONAL CLASS 3.62 5.51 5.17 7.08
</TABLE>
INCLUDING SALES CHARGES
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A (1.06) 0.67 4.12 6.54
CLASS B (1.96) (0.55) 3.87 6.22
INSTITUTIONAL CLASS N/A N/A N/A N/A
</TABLE>
BENCHMARK
- ----------------------------------------------------------
<TABLE>
<CAPTION>
SIX-MONTHS 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
LEHMAN BROTHERS MUNICIPAL BOND INDEX 3.69 6.48 6.22 8.22
</TABLE>
The Stagecoach Oregon Tax-Free Fund (the "Fund") seeks to provide investors
with a high level of income exempt from federal income tax and Oregon personal
income tax. The Fund invests in high-quality Oregon municipal obligations. The
Fund has the ability to invest in municipal bonds with a wide range of
maturities, allowing for greater investment flexibility within the portfolio and
the potential to maximize income.
Steve Galiani is responsible for the day-to-day management of the Oregon
Tax-Free Fund. Mr. Galiani has 23 years of experience in the securities industry
and has been managing portfolios since 1981. His value-oriented philosophy
brings a unique strategy to the Fund.
PERFORMANCE SUMMARY
The Oregon Tax-Free Fund's Class A share net asset value decreased slightly
from $16.82 on June 30, 1998, to $16.79 on December 31, 1998. The Fund
distributed $0.38 per share in dividend income and $0.25 per share in capital
gains. Keep in mind that past distributions are not predictive of future trends
as distributions will vary based on Fund portfolio earnings.
25
<PAGE>
Oregon Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
The Fund's distribution rate for Class A shares was 4.22%. When measured
against a comparable taxable investment, the Fund's double tax-free yield was
generally higher. For example, an investor would need to earn a yield of 7.13%
from a taxable investment to match the Fund's 3.92% tax-free SEC yield, assuming
the maximum combined federal and Oregon state personal income tax bracket.
PORTFOLIO DATA (as of December 31, 1998)(2)
- ---------------------------------------------------------
<TABLE>
<S> <C>
NUMBER OF ISSUES 42
WEIGHTED AVERAGE COUPON 5.59%
WEIGHTED AVERAGE MATURITY 17.81 years
AMT EXPOSURE 0.00%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
<S> <C> <C>
NAV 16.79 10.28
DISTRIBUTION RATE 4.22% 3.57%
SEC YIELD 3.92% 3.26%
TAX EQUIVALENT YIELD 7.13% 5.93%
</TABLE>
The Oregon Tax-Free Fund reported a cumulative total return of 3.59% for Class
A shares, excluding sales charge, and a 3.62% return for Institutional Class
shares for the six-month period ended December 31, 1998. The Fund slightly
underperformed its benchmark, the Lehman Brothers Municipal Bond Index, which
returned 3.69% over the same period. One reason for the difference in
performance centers on the limited supply, or availability, of Oregon municipal
bonds. It was difficult to extend the Fund's duration because the Oregon
municipal bond supply was thin. In fact, of the $284 billion tax-exempt
municipal bonds issued nationwide in 1998, only $2.5 billion were issued in
Oregon. Oregon has a limited supply of municipal bonds due to a ballot measure
passed a few years ago that places restrictions on municipal bond issuance.
Our decision to sell some natural resource-related securities helped the
Fund's performance. When a large decline in commodity prices occurred during the
period, this strategy helped to insulate the Fund from its effects.
26
<PAGE>
INVESTMENT ADVISOR COMMENTARY Oregon Tax-Free Fund
- ------------------------------------------------------------------------
CREDIT QUALITY
(as of December 31, 1998)3
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 48%
AA 31%
A 11%
BBB or non-rated 9%
Cash Equivalents 1%
</TABLE>
PORTFOLIO REVIEW
With over 79% of the portfolio invested in bonds rated AA or above, the
portfolio's overall credit quality is very high. This allowed us to add A- and
BBB-rated bonds to the portfolio in an attempt to capture more current yield. We
took advantage of credit spreads to achieve higher income.
As always, our extensive credit research thoroughly analyzes all potential
bonds and determines the factors that differentiate a BBB-rated bond, for
example, from an A-rated bond. During the period, we searched for bonds that had
a higher coupon and the potential to improve its credit rating. In fact, we were
very selective and turned down many BBB bonds because they didn't meet our high
credit quality standards.
With a focus on total return, which is particularly important in a lower
interest rate environment, we searched for bonds that would enhance yield and
performance. Most of the Fund's top ten holdings are bonds that we felt were
either unusually attractive on a valuation basis, very high yielding, or a
combination of the two. The Oregon State Health Housing, Educational and
Cultural Facilities bond, for example, was purchased for its high yield and
value potential. The bond is used to finance the Oregon Coast Aquarium project.
This aquarium, once home to Keiko the Whale from the movie Free Willy, is being
remodeled to house "Open Ocean", a walk-through underwater tunnel. Our credit
research work showed that it is a viable institution with strong financial
planning and built-in investor protections. We felt that this bond was of a
strong credit quality with excellent potential.
27
<PAGE>
Oregon Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
TOP 10 HOLDINGS (as of December 31, 1998)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
% OF PORTFOLIO'S
NAME/COUPON MARKET VALUE
<S> <C>
OREGON STATE HOUSING & COMMUNITY
SERVICES REVENUE SERIES B,
5.45%, 7/1/29 7.2%
EMERALD PEOPLES OR UTILITY DISTRICT,
7.35%, 11/1/07 5.1%
WASHINGTON COUNTY OR UNIFIED SEWER
AGENCY REVENUE FGIC INSURED,
5.50%, 10/1/13 5.0%
OREGON STATE VETERANS WELFARE SERIES
77,
5.30%, 10/1/29 4.8%
OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL FACILITIES
AUTHORITY,
CEDARWEST HOUSING PROJECT SERIES A
4.75%, 1/1/30 4.1%
BENTON COUNTY OR HOSPITAL REVENUE,
5.13%, 10/2/28 4.1%
GUAM HOUSING SINGLE FAMILY MORTGAGE
BACKED SERIES A, 5.75%, 9/1/31 3.8%
OREGON STATE HEALTH HOUSING
EDUCATIONAL &
CULTURAL FACILITIES AUTHORITY,
5.25%, 10/1/16 3.8%
HILLSBORO OR HOSPITAL HEALTHCARE
FACILITY, 5.75%, 10/1/12 3.7%
MEDFORD OR HOSPITAL FACILITY AUTHORITY
REVENUE ASANTE HEALTH SERVICES SERIES
A MBIA INSURED, 5.25%, 8/15/13 3.7%
</TABLE>
STRATEGIC OUTLOOK
We believe the economy's stronger-than-expected performance in the second half
of 1998 will give way to moderate growth during the first half of 1999. Our
interest rate bias is toward the downside as we expect the Federal Reserve Board
will lower interest rates again sometime in the first half of 1999. In the
municipal market, we also foresee rates trending slightly lower.
Based on this outlook, we have positioned the Fund to take advantage of a
lower interest rate environment, but are careful not to be overly aggressive.
With low rates, coupon will play a bigger role in our strategy. We will search
for bonds with solid current income that possess the
28
<PAGE>
INVESTMENT ADVISOR COMMENTARY Oregon Tax-Free Fund
- ------------------------------------------------------------------------
ability to move with interest rates. As always, we will continue our value
approach to investing, searching for bonds that are somewhat undervalued. We
feel this strategy gives the Fund price protections, which should help limit
volatility.
On the state level, we expect to see an increased supply of Oregon municipal
bonds for two reasons. First, we believe issuers have learned how to deal with
temporary restrictions limiting volume, as imposed by Oregon voters. Secondly,
we feel there is a pent-up demand for infrastructure improvements throughout the
state. As supply increases, our goal will be to improve the current yield. We
hope to achieve this by adding higher yielding bonds, such as lower-grade
investment securities and revenue bonds. As always, our research will focus on
credit quality, maturity, sensitivity to interest rate movements and duration in
order to provide competitive tax-free income.
Past performance is no guarantee of future results.
1 A portion of the performance for the Class A, Class B and Institutional Class
shares of the Oregon Tax-Free Fund reflects performance of a class of shares
of a predecessor fund. Complete historical information about any Stagecoach
Fund can be found in such Fund's prospectus and statement of additional
information.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these reductions
the Fund's returns would have been lower. There is no guarantee these
reductions will continue.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes maximum contingent deferred sales
charge for the corresponding time period.
The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The index does not incur expenses and is not available
directly for investment. Had this index incurred operating expenses, its
performance would have been lower.
2 The formula used to calculate the SEC yield is described in detail in the
Fund's statement of additional information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios use a uniform method to obtain yield figures for their non-money
market advertisements. SEC yields
29
<PAGE>
Oregon Tax-Free Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
include the actual amount of interest earned adjusted by any gain or loss
realized due to the return of principal, less expenses and the maximum
offering price calculated on a 30-day month-end basis.
The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.04%. Any capital gains distribution may be taxable.
3 The average credit rating is compiled from ratings by Standard & Poor's and/or
Moody's Investor Service (together "rating agencies"). Standard & Poor's is a
trademark of McGraw-Hill Inc. and has been licensed. The Fund is not
sponsored, endorsed, sold or promoted by these rating agencies and these
rating agencies make no representation regarding the advisability of investing
in the Fund.
30
<PAGE>
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31
<PAGE>
Arizona Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 95.01%
ARIZONA - 81.99%
$ 1,000,000 Arizona HFA Revenue 4.75 % 10/01/30 $ 961,250
170,000 Bullhead City AZ Special Assessment Parkway
Improvement District 6.10 01/01/03 181,263
500,000 Chandler AZ Street & Highway User Revenue 6.00 07/01/11 563,880
110,000 Glendale AZ Improvement
District #59 6.00 01/01/01 114,887
175,000 Glendale AZ Improvement
District #59 6.00 01/01/02 184,758
750,000 Maricopa County AZ Hospital District AMBAC
Insured 5.00 06/01/21 744,375
570,000 Maricopa County AZ IDA Multifamily Housing
Revenue GNMA Collateralized 5.50 12/20/37 574,417
250,000 Maricopa County AZ IDA Multifamily Housing
Revenue MBIA Insured 5.30 07/01/28 252,163
500,000 Maricopa County AZ IDA Revenue 5.25 11/15/37 503,125
625,000 Maricopa County AZ USD Phoenix Elementary MBIA
Insured 6.00 07/01/08 707,744
500,000 Maricopa County AZ USD Project Series A AMBAC
Insured 5.00 07/01/09 525,605
1,000,000 Mesa AZ GO FGIC Insured 6.50 07/01/09 1,182,500
500,000 Mohave County AZ IDA Baptist Hospital Revenue
MBIA Insured 5.70 09/01/15 536,580
250,000 Navajo County AZ PCR Series A 5.88 08/15/28 259,687
750,000 Phoenix AZ Civic Improvement Corporation AMT
Lien 5.00 07/01/14 751,875
1,000,000 Phoenix AZ GO Series A 6.25 07/01/16 1,167,720
900,000 Phoenix AZ IDA Hospital Revenue Refunded Series
B 5.65 12/01/12 985,500
750,000 Pima County AZ IDA 5.50 03/01/28 763,275
500,000 Pima County AZ IDA Multifamily Housing Revenue
Project GNMA Collateralized 5.13 12/20/18 497,810
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) Arizona Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 500,000 Tucson AZ Street & Highway Revenue Series C
FGIC Insured 7.00 % 07/01/11 $ 621,595
500,000 Tucson AZ Street & Highway Revenue Series C
FGIC Insured 7.00 07/01/12 625,880
1,000,000 Tucson AZ Water Revenue 5.13 07/01/21 1,003,870
500,000 University of Arizona FSA Insured 5.00 06/01/18 498,750
500,000 Yavapai County AZ IDA Revenue 5.45 06/01/33 507,500
--------------
$ 14,716,009
GUAM - 4.22%
$ 700,000 Guam Housing Single Family Mortgage Backed
Series A 5.75 % 09/01/31 $ 757,218
PUERTO RICO - 8.80%
$ 1,000,000 Puerto Rico Commonwealth 5.50 % 07/01/26 $ 1,040,000
500,000 Puerto Rico Public Finance Corporation 5.38 06/01/18 539,375
--------------
$ 1,579,375
TOTAL MUNICIPAL BONDS $ 17,052,602
(Cost $16,392,282)
SHORT-TERM INSTRUMENTS - 3.63%
MUNICIPAL BONDS - 1.20%
$ 215,000 Phoenix AZ Special Assessment 7.00 % 01/01/99 $ 215,015
</TABLE>
33
<PAGE>
Arizona Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS -
MONEY MARKET FUNDS - 2.43%
436,437 Stagecoach National Tax-Free Money Market Trust+X+ $ 436,437
--------------
TOTAL SHORT-TERM INSTRUMENTS $ 651,437
(Cost $651,437)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $17,043,719)* (Notes 1 and 3) 98.64% $ 17,704,054
Other Assets and Liabilities, Net 1.36 244,680
------ --------------
TOTAL NET ASSETS 100.00% $ 17,948,734
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 663,937
Gross Unrealized Depreciation (3,602)
--------------
NET UNREALIZED APPRECIATION $ 660,335
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Hospital 21%
Public Improvements 20%
Transportation 16%
General Obligation 13%
Housing 12%
Education 10%
Water 6%
Other 2%
</TABLE>
Investment Categories Reflect Percentages of Investments in Securities
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
35
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 98.13%
$ 2,000,000 ABAG Finance Authority for Nonprofit Corp CA
Stanford University Hospital 5.50 % 11/01/13 $ 2,182,500
1,000,000 ABAG Financing Authority for Nonprofit Corp COP 5.13 07/01/13 1,012,500
2,000,000 Alameda County CA COP Medical Center Project 5.00 06/01/23 1,966,920
1,000,000 Alameda County CA Water District Revenue COP
Water System Project MBIA Insured 6.20 06/01/13 1,098,550
2,500,000 Anaheim CA PFA Tax Allocation Revenue
Redevelopment Project Series A MBIA Insured 5.25 02/01/18 2,567,675
3,620,000 Antioch CA PFA Water Revenue Treatment Plant
Project MBIA Insured 5.63 07/01/14 3,809,615
1,330,000 Arcadia CA USD Capital Appreciation Series A
MBIA Insured 4.15 # 09/01/06 971,060
1,000,000 Baldwin Park CA PFA Revenue San Gabriel River
Tax Allocation MBIA Insured 5.00 08/01/21 997,370
1,000,000 Bellevue CA USD COP MBIA Insured 5.45 # 09/01/19 867,900
810,000 Benicia CA USD Series B FGIC Insured 5.13 08/01/12 849,083
2,545,000 Bonita CA USD COP MBIA Insured 5.63 05/01/10 2,749,465
1,000,000 Brea CA PFA Lease Revenue MBIA Insured 4.75 07/01/18 975,140
1,485,000 Brea CA PFA Water Revenue FGIC Insured 4.75 07/01/18 1,448,083
1,300,000 Burbank Glendale Pasadena Airport Authority CA
Airport Revenue AMBAC Insured 6.40 06/01/10 1,401,283
1,250,000 Cabrillo CA Community College District Series A
FSA Insured 4.75 08/01/23 1,199,338
1,000,000 Calaveras CA USD FSA Insured 5.13 08/01/18 1,012,690
1,125,000 California Community College Financing
Authority Lease Revenue Series A MBIA Insured 4.63 10/01/19 1,072,238
350,000 California Educational Facilities Authority 6.00 10/01/14 368,040
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,110,000 California Educational Facilities Authority
Revenue Refunded Mills College MBIA Insured 5.00 % 09/01/12 $ 1,152,247
1,000,000 California Educational Facilities Authority
Revenue Refunded University of San Diego
AMBAC Insured 4.75 10/01/15 991,840
1,000,000 California State DWR Central Valley Project
Revenue 4.75 09/01/12 1,034,330
1,500,000 California State DWR Central Valley Project
Revenue 5.00 12/01/12 1,532,655
1,830,000 California State DWR Central Valley Project
Revenue Series L 5.75 12/01/13 1,954,349
3,235,000 California State DWR Central Valley Project
Series O 4.75 12/01/17 3,163,635
1,195,000 California State EDFA Revenue Chapman College
Refunding Pending 7.30 01/01/02 1,286,884
1,000,000 California State EDFA Revenue Claremont
Colleges Pooled Facilities 6.38 05/01/22 1,073,430
50,000 California State EDFA Revenue Pomona College 6.13 02/15/08 53,989
1,000,000 California State EDFA Revenue Pomona College 5.60 12/01/14 1,066,250
1,000,000 California State EDFA Revenue University of San
Francisco MBIA Insured 5.60 10/01/10 1,119,470
1,500,000 California State Educational Facility Authority
Revenue Pooled College and University Project
Series C 5.13 03/01/15 1,535,625
1,000,000 California State GO 4.75 09/01/11 1,037,300
1,000,000 California State GO 5.00 10/01/11 1,043,750
1,910,000 California State GO Eagles II Series 6 4.51 # 04/01/10 1,156,065
3,000,000 California State GO MBIA Insured 6.00 10/01/10 3,462,180
320,000 California State HFA Home Mortgage Revenue AMT
Series B Multiple Credit Enhancements 8.00 08/01/29 329,100
</TABLE>
37
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 480,000 California State HFA Home Mortgage Revenue AMT
Series D Multiple Credit Enhancements 7.75 % 08/01/10 $ 497,740
260,000 California State HFA Home Mortgage Revenue AMT
Series G Multiple Credit Enhancements 8.15 08/01/19 264,007
1,380,000 California State HFA Home Mortgage Revenue
Series A Multiple Credit Enhancements 7.35 08/01/11 1,445,039
355,000 California State HFA Home Mortgage Revenue
Series B Multiple Credit Enhancements 7.25 08/01/10 370,883
45,000 California State HFA Home Mortgage Revenue
Series F Multiple Credit Enhancements 7.75 08/01/08 45,587
140,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 147,935
500,000 California State HFA Multi-Unit Home Rental
Mortgage Revenue Series B-II 6.70 08/01/15 533,290
500,000 California State HFA Multi-Unit Home Rental
Mortgage Revenue Series C-II AMT 6.85 08/01/15 533,175
2,825,000 California State HFA Multi-Unit Rental Housing
Revenue Series A AMT 5.50 08/01/15 2,859,070
1,000,000 California State HFFA Gould Medical Foundation
Escrowed to Maturity 7.25 04/01/10 1,059,400
1,250,000 California State HFFA Gould Medical Foundation
Escrowed to Maturity 7.30 04/01/20 1,320,925
2,000,000 California State HFFA Revenue Catholic
Healthcare West AMBAC Insured 5.75 07/01/15 2,165,560
1,000,000 California State HFFA Revenue Insured Health
Facilities Valleycare Series State Insured 6.50 05/01/05 1,092,820
1,500,000 California State HFFA Revenue Kaiser Permanente
Series A 6.25 03/01/21 1,578,540
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,795,000 California State HFFA Revenue Scripps Memorial
Hospital Series A MBIA Insured 6.25 % 10/01/13 $ 1,929,320
2,000,000 California State HFFA Revenue Scripps Memorial
Hospital MBIA Insured 6.40 10/01/12 2,197,200
2,000,000 California State HFFA Revenue Scripps Research
Institute 6.63 07/01/14 2,209,700
1,750,000 California State HFFA Revenue Small Insured
Health Facilities Series A 6.75 03/01/20 1,890,508
3,500,000 California State HFFA San Diego Hospital
Association MBIA Insured 6.20 08/01/12 3,810,730
1,000,000 California State Maritime Infrastructure
Authority Revenue Port of San Diego Project
AMBAC Insured 5.25 11/01/15 1,026,380
2,500,000 California State PCFA Pacific Gas & Electric Co
AMT 6.35 06/01/09 2,736,875
1,445,000 California State PCFA Pacific Gas & Electric Co
AMT 6.63 06/01/09 1,567,074
1,000,000 California State PCFA San Diego Gas & Electric
Co AMT 6.80 06/01/15 1,221,400
4,355,000 California State GO AMBAC Insured 5.75 03/01/15 4,809,668
1,500,000 California State Public Works Board Lease
Revenue California State University Project
Series A 5.38 10/01/17 1,562,100
2,000,000 California State Public Works Board Lease
Revenue Community Colleges 6.63 09/01/07 2,188,040
1,000,000 California State Public Works Board Lease
Revenue Department of Corrections AMBAC
Insured 5.25 01/01/21 1,017,460
3,000,000 California State Public Works Board Lease
Revenue Department of Corrections AMBAC
Insured 6.40 11/01/10 3,434,460
4,000,000 California State Public Works Board Lease
Revenue Department of Corrections Series A 5.40 01/01/09 4,347,920
</TABLE>
39
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 California State Public Works Board Lease
Revenue Department of Corrections Series A
AMBAC Insured 5.50 % 01/01/15 $ 2,142,440
5,000,000 California State Universities & Colleges
Revenue HSG System FGIC Insured 5.80 11/01/17 5,470,050
1,250,000 California State Water Department Reserve
Center Series U 5.13 10/01/15 1,281,488
5,000,000 California State Water Resource Central Valley
Project Revenue 6.00 12/01/07 5,716,200
1,500,000 California Statewide CDA Lease Revenue Oakland
Convention Centers Project AMBAC Insured 5.50 10/01/14 1,552,515
2,750,000 California Statewide CDA Lease Revenue Oakland
Convention Centers Project AMBAC Insured 6.00 10/01/10 2,988,370
1,000,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.20 01/01/11 1,044,580
1,750,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/12 1,827,875
1,590,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/13 1,651,088
1,500,000 California Statewide CDA Motion Picture and
Television Development AMBAC Insured 5.25 01/01/14 1,549,470
5,000,000 California Statewide CDA Revenue 5.00 08/01/18 4,975,000
500,000 California Statewide CDA Revenue COP Health
Facilities Barton Memorial Hospital LOC -
Banque Nationale de Paris 6.40 12/01/05 536,780
3,310,000 California Statewide CDA Revenue COP Hospital
Cedars Sinai Medical Center 6.50 08/01/12 3,808,354
1,500,000 California Statewide CDA Revenue COP Sutter
Health Obligated Group AMBAC Insured 6.00 08/15/09 1,626,855
</TABLE>
40
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,935,000 California Statewide CDA Water Revenue Series A 6.00 % 07/01/10 $ 2,109,285
2,500,000 Calleguas Las Virgines CA PFA Municipal Water
District FSA Insured 5.00 11/01/23 2,475,625
2,980,000 Calleguas Las Virgines CA PFA Municipal Water
District FSA Insured 5.00 11/01/17 2,997,254
1,500,000 Campbell CA USD FGIC Insured 5.00 08/01/17 1,515,165
3,100,000 Capistrano CA Unified PFA Special Tax Revenue
AMBAC Insured 5.25 09/01/09 3,355,750
1,000,000 Capistrano CA USD 5.00 09/01/18 1,001,310
200,000 Capitol Area Development Authority Sacramento
CA Lease Revenue Series A MBIA Insured 6.50 04/01/12 219,630
3,840,000 Cathedral City CA PFA RevenueTax Allocation
Redevelopment Projects Series A MBIA Insured 5.25 08/01/13 4,015,718
1,800,000 Chino Basin CA Regional Financial Authority
Revenue Municipal Water District Sewer
Systems Project AMBAC insured 6.00 08/01/16 1,979,982
7,500,000 Chino CA Electric Water Facility Authority
Certificates Series A 5.20 10/01/15 7,766,175
400,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/07 433,552
735,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/08 794,057
820,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/10 882,295
570,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 610,812
2,000,000 Coachella CA Water Revenue COP FSA Insured 6.10 03/01/22 2,141,160
2,500,000 Colton CA PFA Tax Allocation Series A MBIA
Insured 5.00 08/01/18 2,503,325
2,505,000 Contra Costa CA Water Treatment Revenue FGIC
Insured 5.70 10/01/12 2,669,203
</TABLE>
41
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 270,000 Contra Costa County CA Home Mortgage Revenue
AMT Escrowed to Maturity 7.75 % 05/01/22 $ 352,436
2,755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 2,954,738
4,000,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A FGIC Insured 5.50 03/01/08 4,312,360
3,655,000 Contra Costa County CA Water District Revenue
Series G MBIA Insured 5.75 10/01/14 3,970,244
1,000,000 Contra Costa County CA Water Treatment Revenue
Series A FGIC Insured 5.60 10/01/10 1,065,710
1,045,000 Contra Costa County CA PFA Lease Revenue
Refunded Various Capital Facility Series A
MBIA Insured 5.13 08/01/17 1,062,378
1,000,000 Corona CA Community Facility District MBIA
Insured 4.70 09/01/20 949,130
2,635,000 Corona CA Community Facility District Special
Tax Number 90-1-A MBIA Insured 4.40 09/01/11 2,623,985
2,820,000 Corona CA Community Facility District Special
Tax Number 90-1-A MBIA Insured 4.50 09/01/12 2,807,789
1,505,000 Corona CA PFA Water Revenue FGIC Insured 4.75 09/01/18 1,467,330
1,075,000 Cotati CA Facilities Financing Authority Tax
Allocation Series A 5.60 09/01/12 1,118,957
1,250,000 Cucamonga County CA Water District COP
Refinancing Facilities FGIC Insured 6.30 09/01/12 1,348,063
15,000 Culver City CA RDFA AMBAC Insured 6.75 11/01/15 15,655
1,450,000 Cupertino CA Series B 6.25 07/01/10 1,567,595
1,355,000 Duarte CA COP City of Hope National Medical
Center 6.13 04/01/13 1,426,570
</TABLE>
42
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,500,000 East Bay CA MUD Wastewater Treatment System
Revenue AMBAC Insured 6.00 % 06/01/09 $ 1,626,720
7,480,000 East Bay CA MUD Wastewater Treatment System
Revenue FGIC Insured 5.00 06/01/16 7,548,592
1,500,000 East Bay California Regional Park District 5.00 09/01/20 1,496,055
2,000,000 East Stockton CA Water District COP Series A
AMBAC Insured 4.75 04/01/17 1,956,740
2,785,000 Elk Grove CA USD Special Tax MBIA Insured 5.10 # 12/01/15 1,189,334
5,000,000 Elsinore Valley CA Municipal Water District COP
Series A FGIC Insured 5.75 07/01/19 5,271,900
1,000,000 Elsinore Valley CA Municipal Water District COP
Series A FGIC Insured 6.00 07/01/12 1,160,190
1,215,000 Emeryville CA PFA Lease Revenue Series A 5.00 05/01/18 1,216,519
2,455,000 Emeryville CA PFA Revenue 6.35 05/01/10 2,645,238
2,475,000 Emeryville CA PFA Revenue MBIA Insured 5.00 09/01/19 2,468,590
1,725,000 Escondido CA PFA Lease Revenue Center for the
Arts AMBAC Insured 5.80 09/01/09 1,920,460
2,000,000 Escondido CA PFA Lease Revenue Center for the
Arts AMBAC Insured 6.00 09/01/18 2,211,360
2,000,000 Escondido CA PFA Lease Revenue Escondido Civic
Center Project Series B AMBAC Insured 6.13 09/01/11 2,279,200
4,330,000 Escondido CA USD Series A FGIC Insured 5.13 09/01/15 4,436,950
1,410,000 Fairfield CA PFA CGIC Insured 5.20 08/01/08 1,493,825
1,000,000 Folsom Cordova CA USD COP 1998 FSA Insured 5.13 03/01/18 1,013,320
3,000,000 Fontana CA USD Convertible Series C FGIC
Insured 6.15 05/01/20 3,404,760
1,000,000 Foothill CA De Anza Community College Connie
Lee Insured 5.25 09/01/21 1,013,810
</TABLE>
43
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,270,000 Fremont CA USD Alameda County Series E FGIC
Insured 5.90 % 09/01/15 $ 1,433,157
3,940,000 Fremont CA USD Alameda County Series F MBIA
Insured 5.88 08/01/16 4,476,628
3,800,000 Fresno CA Conference Center 5.00 04/01/13 3,890,364
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 1,086,740
2,000,000 Fresno CA Joint Powers Financing Authority
Street Light Acquisition Project Series A 5.50 08/01/12 2,091,980
1,000,000 Fresno CA Sewer Revenue Series A MBIA Insured 5.00 09/01/15 1,013,220
2,000,000 Fresno CA USD Series A MBIA Insured 5.70 08/01/15 2,175,640
3,000,000 Fresno CA Water System Revenue FGIC Insured 6.00 06/01/16 3,336,210
1,250,000 Fresno County CA Solid Waste Revenue American
Avenue Landfill Project MBIA Insured 5.75 05/15/14 1,358,575
1,500,000 Glendale CA RDFA Tax Allocation Revenue AMBAC
Insured 5.50 12/01/09 1,619,940
1,000,000 Glendale CA RDFA Tax Allocation Revenue AMBAC
Insured 5.50 12/01/11 1,073,010
1,000,000 Glendale CA USD Series A 5.75 09/01/17 1,103,350
1,650,000 Hayward CA COP Civic Center Project MBIA
Insured 5.50 08/01/17 1,745,997
575,000 Huntington Beach CA PFA Revenue Bond 6.55 08/01/01 597,620
2,800,000 Huntington Beach CA PFA Revenue Bond 7.00 08/01/10 2,996,448
1,000,000 Indian Wells CA RDFA Tax Allocation Whitewater
Project MBIA Insured 6.00 12/01/14 1,082,260
1,000,000 Indian Wells CA Redevelopment Agency Tax
Allocation MBIA Insured 5.38 12/01/15 1,042,910
500,000 Industry CA Urban Development Agency 6.70 11/01/03 550,670
1,280,000 Industry CA Urban Development Agency 6.85 11/01/04 1,413,069
</TABLE>
44
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 Industry CA Urban Development Agency Project 3 6.60 % 11/01/02 $ 548,370
435,000 Inglewood CA Redevelopment Agency Tax
Allocation Series A AMBAC Insured 5.25 05/01/17 457,015
2,500,000 Irvine Ranch CA Water District Consolidated
Bonds 5.10 10/01/05 2,500,000
1,350,000 Jackson CA COP Water System Acquisition Project 6.80 09/01/23 1,482,840
270,000 Jamul-Dulzura CA USD 6.40 08/01/16 294,805
2,000,000 Jurupa CA Community Services Special Tax 4.75 09/01/18 1,950,000
2,000,000 Kern CA High School District MBIA Insured 5.60 08/01/12 2,160,620
2,000,000 King City CA Joint USD FGIC Insured 5.00 08/01/20 1,994,800
1,075,000 La Habra CA COP FSA Insured 4.80 09/01/22 1,039,610
1,240,000 La Habra CA COP Series B 4.80 09/01/19 1,209,780
1,400,000 La Quinta CA Redevelopment Agency Tax
Allocation 5.13 09/01/18 1,419,418
1,185,000 La Verne CA COP Capital Improvements Projects 5.70 06/01/15 1,220,040
1,000,000 Lancaster CA School District COP FSA Insured 4.90 04/01/10 1,044,440
1,000,000 Lancaster CA School District COP FSA Insured 5.13 04/01/14 1,033,680
1,425,000 Long Beach CA Civic Center Project Series A
MBIA Insured 5.00 10/01/17 1,432,538
3,000,000 Long Beach CA Finance Authority Revenue 6.00 11/01/08 3,445,140
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 1,150,340
1,000,000 Long Beach CA Water Revenue 6.13 05/01/19 1,122,180
2,900,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 5.50 05/15/08 3,157,375
1,000,000 Los Angeles CA Community College District COP
Series A FGIC Insured 5.90 08/15/07 1,084,060
</TABLE>
45
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Los Angeles CA Community College District COP
Series A FGIC Insured 6.00 % 08/15/08 $ 1,086,340
4,695,000 Los Angeles CA DW&P Electric Plant Revenue 5.70 09/01/11 5,050,693
200,000 Los Angeles CA DW&P Electric Plant Revenue 6.38 02/01/20 214,838
2,000,000 Los Angeles CA DW&P Electric Plant Revenue
Second Issue 5.75 08/15/11 2,126,720
3,000,000 Los Angeles CA DW&P Waterworks Revenue 5.70 04/15/09 3,226,830
2,775,000 Los Angeles CA Harbor Revenue Series B AMT 6.50 08/01/13 3,039,069
340,000 Los Angeles CA Municipal Improvement Corp Lease
Revenue Central Library Project Series A 6.30 06/01/16 366,506
65,000 Los Angeles CA SFMR Series A AMT Multiple
Credit Enhancements 7.55 12/01/23 67,340
2,000,000 Los Angeles CA USD COP Dr Francisco Bravo
Medical Hospital 6.60 06/01/05 2,205,500
2,800,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.40 10/01/09 3,051,048
2,200,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.50 10/01/10 2,411,640
1,950,000 Los Angeles CA USD COP Multiple Properties
Project Series A FSA Insured 5.50 10/01/16 2,066,610
1,200,000 Los Angeles CA USD Series A 6.00 07/01/13 1,388,556
12,200,000 Los Angeles CA USD Series A FGIC Insured 5.00 10/01/19 12,168,158
1,410,000 Los Angeles CA USD Series B FGIC Insured 5.00 07/01/17 1,418,037
1,000,000 Los Angeles CA Wastewater System Revenue AMBAC
Insured 6.25 06/01/12 1,100,130
</TABLE>
46
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,070,000 Los Angeles CA WasteWater System Revenue
Refunded Series A MBIA Insured 4.90 % 12/01/10 $ 2,167,870
3,250,000 Los Angeles CA WasteWater System Revenue Series
A FGIC Insured 5.00 06/01/23 3,218,638
1,300,000 Los Angeles CA Wastewater System Revenue Series
A MBIA Insured 5.70 06/01/13 1,387,841
1,000,000 Los Angeles CA Wastewater System Revenue Series
C MBIA Insured 5.50 06/01/13 1,059,640
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority Revenue Series A 5.00 07/01/09 1,055,020
1,975,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series A 5.50 07/01/13 2,079,142
2,500,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series A AMBAC Insured 5.50 07/01/17 2,631,250
2,400,000 Los Angeles County CA Metropolitan
Transportation Authority Series A AMBAC
Insured 5.00 07/01/12 2,490,312
480,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B FGIC Insured 6.50 07/01/15 517,301
1,370,000 Madera CA RDFA Tax Allocation Revenue FGIC
Insured 5.75 09/01/11 1,486,984
1,000,000 Manteca CA Financing Authority Tax Allocation
Revenue MBIA Insured 5.05 10/01/18 1,003,950
2,000,000 Menlo Park CA CDA Tax Allocation Revenue MBIA
Insured 5.38 06/01/16 2,082,060
805,000 Merced County CA COP Revenue 6.00 10/01/12 895,973
1,000,000 Metropolitan Water District Southern CA Water
Works Revenue 5.75 07/01/13 1,073,860
2,000,000 Metropolitan Water District Southern CA Water
Works Revenue MBIA Insured 5.75 07/01/15 2,177,380
</TABLE>
47
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 5,000,000 Metropolitan Water District Southern CA Water
Works Revenue Series A 5.00 % 07/01/16 $ 5,052,750
1,450,000 Metropolitan Water District Southern CA Water
Works Revenue Series A 5.00 07/01/17 1,457,932
2,000,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 7.00 09/01/14 2,287,460
1,000,000 Modesto CA Irrigation District Financing
Authority Revenue Refunded Domestic Water
Project Series D AMBAC Insured 5.00 09/01/16 1,011,030
2,780,000 Modesto CA PFA Lease Revenue AMBAC Insured 5.00 09/01/16 2,808,412
3,545,000 Monrovia CA Redevelopment Agency Tax Allocation
Project Area 1B AMBAC Insured 5.13 05/01/17 3,602,819
975,000 Monterey CA RDFA Lease Revenue Series A 5.80 11/01/10 1,005,878
100,000 Monterey CA RDFA Lease Revenue Series A 6.63 11/01/11 103,477
2,835,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation MBIA Insured 5.50 08/01/13 3,065,344
1,230,000 National City CA CDA Tax Allocation Downtown
Redevelopment Project Series B AMT AMBAC
Insured 6.63 08/01/12 1,366,432
1,405,000 Natomas CA USD FGIC Insured 5.10 09/01/13 1,462,113
1,945,000 Natomas CA USD FGIC Insured 5.20 09/01/14 2,025,387
2,060,000 Natomas CA USD FGIC Insured 5.25 09/01/15 2,146,788
2,000,000 Natomas CA USD FGIC Insured 5.25 09/01/16 2,075,180
720,000 Natomas CA USD Series A MBIA Insured 5.75 09/01/12 779,875
2,200,000 Nevada County CA Solid Waste Revenue 6.50 10/01/06 2,400,266
1,000,000 North City West CA School Facility Authority
Special Tax Refunded Series B FSA Insured 5.75 09/01/15 1,092,500
570,000 Northern California Power Agency Multiple
Capital Facilities Revenue Series A MBIA
Insured 6.50 08/01/12 630,260
</TABLE>
48
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 430,000 Northern California Power Agency Multiple
Capital Facilities Revenue Series A MBIA
Insured. 6.50 % 08/01/12 $ 478,212
7,000,000 Northern California Transmission Revenue
Project A MBIA Insured 5.50 05/01/14 7,401,030
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 1,097,266
4,280,000 Northridge CA Water District Revenue AMBAC
Insured 5.25 02/01/14 4,456,336
1,000,000 Nuview CA USD COP 7.25 02/01/16 1,067,440
1,465,000 Oakland CA FGIC Insured 6.00 06/15/12 1,582,376
1,560,000 Olivenhain CA Water District COP FGIC Insured 5.13 06/01/19 1,574,789
1,500,000 Ontario CA RDFA Revenue Project One MBIA
Insured 6.00 08/01/15 1,634,745
800,000 Orange County CA Local Transportation Authority
Sales Tax Revenue First Series Measure M 6.00 02/15/09 910,912
4,400,000 Orange County CA Local Transportation Authority
Sales Tax Revenue MBIA Insured 6.00 02/15/08 5,013,624
1,000,000 Orange County CA Water District Series A 5.50 08/15/10 1,066,990
1,250,000 Palm Desert CA Financing Authority Tax
Allocation MBIA Insured 5.00 10/01/16 1,263,863
1,145,000 Palm Desert CA Financing Authority Tax
Allocation Revenue Housing MBIA Insured 5.00 10/01/14 1,172,125
1,000,000 Palm Springs CA COP Refunded Multiple Capital
Facilities Project AMBAC Insured 5.75 04/01/17 1,096,320
1,000,000 Palmdale CA Water District Revenue COP FGIC
Insured 5.00 10/01/18 1,001,320
165,000 Parlier CA Redevelopment Agency Tax Allocation 6.95 08/01/23 178,891
1,075,000 Parlier CA Redevelopment Agency Tax Allocation
Series A 6.95 08/01/23 1,209,644
</TABLE>
49
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,720,000 Pasadena CA USD Series A 5.00 % 05/01/20 $ 4,707,634
1,795,000 Pinole CA Redevelopment Agency Tax Allocation
Refunded 5.00 08/01/17 1,805,249
1,000,000 Pittsburgh CA PFA Revenue 5.25 06/01/17 1,029,430
3,285,000 Pittsburgh CA Redevelopment Agency Tax
Allocation V/R Series A AMBAC Insured 5.00 08/01/13 3,348,959
2,200,000 Placer County CA COP Juvenile Detention
Facility MBIA Insured 5.00 07/01/18 2,202,574
1,000,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Limited Series A AMT LOC -
Industrial Bank of Japan Ltd 6.70 01/01/07 1,083,320
3,380,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Ltd Series A AMT LOC -
Industrial Bank of Japan Ltd 6.80 01/01/19 3,666,692
4,000,000 Poway CA USD Special Tax Community Facility
MBIA Insured 4.75 10/01/14 4,005,080
1,000,000 Rancho CA Water District Financing Authority
Revenue AMBAC Insured 5.00 08/15/14 1,016,420
1,325,000 Redding CA Joint Powers Financing Authority
Wastewater Revenue Series A FGIC Insured 6.00 12/01/11 1,443,535
1,100,000 Richmond CA Joint Powers Financing Authority
Lease and Gas Tax Revenue Series A 5.25 05/15/13 1,131,339
1,500,000 Riverside CA Asset Leasing Revenue Hospital
Project Series B 5.00 06/01/19 1,496,250
1,000,000 Riverside CA Electric Revenue AMBAC Insured 5.00 10/01/18 1,001,320
5,000,000 Riverside CA Electric Revenue Refunded AMBAC
Insured 5.00 10/01/22 4,952,200
1,055,000 Riverside CA Sewer Revenue FGIC Insured 5.00 08/01/10 1,122,393
</TABLE>
50
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 5,750,000 Riverside County CA Asset Leasing Corp Revenue
Riverside County Hospital Project A 6.38 % 06/01/09 $ 6,224,375
1,170,000 Riverside County CA COP MBIA Insured 5.00 11/01/12 1,215,092
1,045,000 Riverside County CA PFA Special Tax Revenue
Series A MBIA Insured 5.25 09/01/10 1,116,290
1,000,000 Riverside County CA PFA Special Tax Revenue
Series A MBIA Insured 5.25 09/01/13 1,046,110
200,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 215,140
1,000,000 Rocklin CA USD Community Facility District
Special Tax MBIA Insured 5.75 09/01/18 1,086,960
1,000,000 Roseville CA COP AMBAC Insured 5.25 02/01/17 1,030,930
1,335,000 Roseville CA Joint USD Capital Appreciation
Series A 4.24 # 08/01/06 970,799
1,000,000 Sacramento CA Airport Commission International
Airport Revenue AMBAC Insured 6.00 07/01/16 1,143,150
800,000 Sacramento CA Airport Revenue Series A FGIC
Insured 6.00 07/01/12 853,696
1,200,000 Sacramento CA Airport Revenue Series A FGIC
Insured 6.00 07/01/12 1,306,476
1,500,000 Sacramento CA Area Flood Control Authority
Special Assessment FGIC Insured 5.38 10/01/15 1,563,315
1,000,000 Sacramento CA Financing Authority Lease Revenue
Series A 4.75 05/01/23 959,650
5,000 Sacramento CA Financing Authority Revenue
Prerefunded 6.70 11/01/11 5,411
2,300,000 Sacramento CA Light Rail Transportation Project 6.00 07/01/12 2,433,745
1,900,000 Sacramento CA Light Rail Transportation Project 6.75 07/01/07 2,056,750
2,500,000 Sacramento CA MUD Electric Revenue MBIA Insured 6.25 08/15/10 2,931,075
2,400,000 Sacramento CA MUD Electric Revenue Series E
MBIA-IBC Insured 5.70 05/15/12 2,585,928
</TABLE>
51
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Sacramento CA MUD Electric Revenue Series L 5.00 % 07/01/12 $ 1,037,630
7,475,000 Sacramento CA MUD Electric Revenue Series L 5.10 07/01/14 7,710,911
50,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 53,988
200,000 Sacramento CA Municipal Utility District
Revenue Series C FGIC Insured 5.75 11/15/08 216,750
300,000 Sacramento CA Municipal Utility District Series
C FGIC Insured 5.75 11/15/08 332,625
115,000 Sacramento CA Redevelopment Agency Tax
Allocation MBIA Insured 6.50 11/01/13 122,696
1,125,000 Sacramento County CA COP Public Facilities
Project AMBAC Insured 5.00 10/01/12 1,168,076
2,000,000 Sacramento County CA Main Detention Facility
MBIA Insured 5.75 06/01/15 2,140,760
5,000,000 San Bernardino CA Water Department Revenue COP 5.00 02/01/17 5,029,650
380,000 San Bernardino County CA West Valley Detention
Center MBIA Insured 6.50 11/01/12 420,846
200,000 San Bernardino County CA Transportation
Authority Sales Tax Revenue FGIC Insured 6.00 03/01/10 216,560
1,775,000 San Bernardino County CA Transportation
Authority Series A FSA Insured 4.88 03/01/10 1,857,147
4,000,000 San Buenaventura CA COP AMBAC Insured 6.00 01/01/12 4,340,000
3,460,000 San Diego CA COP FGIC Insured 5.00 08/01/21 3,427,787
1,725,000 San Diego CA PFA Revenue Series A AMBAC Insured 5.00 08/01/23 1,708,319
8,195,000 San Diego CA PFA Sewer Revenue FGIC Insured 5.00 05/15/15 8,290,390
1,000,000 San Diego CA Public Safety Commission Project
GO 5.50 04/01/08 1,103,000
1,000,000 San Diego CA Public Safety Commission Project
GO 6.50 07/15/07 1,177,820
</TABLE>
52
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,500,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 % 04/01/08 $ 4,985,550
1,000,000 San Dimas CA Redevelopment Agency FSA Insured 5.00 09/01/16 1,011,030
3,950,000 San Elijo Joint Powers Authority San Diego
County CA Water PCR Facility FGIC Insured 5.38 03/01/13 4,111,555
2,250,000 San Francisco CA BART Sales Tax Revenue FGIC
Insured 5.50 07/01/15 2,380,050
700,000 San Francisco CA City & County RDFA Tax
Allocation Capital 4.27 # 08/01/08 466,767
1,940,000 San Francisco CA City & County Refunded Series
1 FGIC Insured 5.20 06/15/15 1,999,054
1,250,000 San Francisco CA State Building Authority Civic
Center Complex Series A AMBAC Insured 5.25 12/01/21 1,279,425
6,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road 4.05 # 01/15/05 4,710,420
1,345,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road 4.19 # 01/15/07 963,356
4,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road 7.55 # 01/01/10 4,185,000
1,000,000 San Mateo CA Flood Control District COP Colma
Creek Flood Control Zone MBIA Insured 5.25 08/01/17 1,029,820
1,130,000 San Mateo CA Sewer Revenue FSA Insured 5.50 08/01/14 1,218,366
1,500,000 San Mateo County CA Joint Powers Authority
Lease Revenue FSA Insured 5.00 07/15/14 1,535,115
1,500,000 San Mateo County CA Joint Powers Series A FSA
Insured 5.00 07/15/18 1,503,315
6,000,000 Santa Ana CA Financing Authority Revenue
Refunded South Harbor Boulevard Series A 5.00 09/01/19 5,984,460
</TABLE>
53
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,010,000 Santa Clara CA RDFA Tax Allocation Bayshore
North Project AMBAC Insured 5.75 % 07/01/14 $ 4,296,555
4,200,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 05/15/12 4,583,250
1,185,000 Santa Clara County CA District Sales Tax
Revenue Series A 5.25 06/01/17 1,215,004
1,000,000 Santa Clara County CA Financing Authority Lease
Revenue Series A AMBAC Insured 4.85 11/15/10 1,043,370
3,000,000 Santa Fe Springs CA Community Development
Common Tax Allocation Series A MBIA Insured 5.00 09/01/17 3,015,780
1,575,000 Santa Fe Springs CA Community Development
Common Tax Allocation Series A MBIA Insured 5.13 09/01/16 1,607,319
3,020,000 Santa Fe Springs CA Community Development
Common Tax Allocation Series A MBIA Insured 5.13 09/01/22 3,039,449
1,750,000 Santa Maria CA RDFA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 1,831,953
1,195,000 Santa Rosa CA High School District FGIC Insured 5.90 05/01/13 1,312,743
2,575,000 Santa Rosa CA Wastewater Revenue FGIC insured 4.90 09/01/11 2,665,846
3,450,000 Santa Rosa CA Wastewater Treatment Plant FGIC
Insured 4.75 09/01/16 3,400,838
1,000,000 Saratoga CA USD Series A FGIC Insured 5.38 09/01/17 1,040,270
1,000,000 Shasta CA Joint Powers Financing Authority
Lease Revenue Courthouse Improvement Project
MBIA Insured 5.00 06/01/18 1,001,290
1,000,000 Sonoma County CA Water & Wastewater Financing
Authority FSA Insured 5.00 08/01/18 1,001,330
1,000,000 Sonoma Valley CA USD FSA Insured 6.00 07/15/21 1,108,860
</TABLE>
54
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 5,720,000 South County CA Regional Wastewater Authority
Revenue Capital Improvement FGIC Insured 5.75 % 08/01/10 $ 6,123,317
1,000,000 Southern CA Public Power Project Revenue 6.75 07/01/11 1,219,410
600,000 Southern California State SFMR Series A AMT
GNMA Collateralized 7.63 10/01/22 620,148
350,000 Southern California State SFMR Series A AMT
GNMA Collateralized 7.63 10/01/23 365,768
580,000 Southern California State SFMR Series A AMT
GNMA/FNMA Collateralized 6.75 09/01/22 611,482
665,000 Southern California State SFMR Series A AMT
GNMA/FNMA Collateralized 7.35 09/01/24 693,296
2,000,000 Stanislaus County CA Capital Improvement
Program Series A MBIA Insured 5.25 05/01/14 2,084,200
1,600,000 Stanislaus County CA COP Capital Improvement
Project AMBAC Insured 5.25 05/01/18 1,640,592
2,720,000 Stanislaus County CA COP Capital Improvement
Project Series A MBIA Insured 5.00 05/01/10 2,854,966
20,000 Stockton CA SFMR Government Agency
Collateralized 7.50 02/01/23 22,445
5,690,000 Sulphur Springs CA USD Series A MBIA Insured 4.73 # 09/01/13 2,848,869
1,465,000 Sunnyvale CA Elementary School District Series
A 5.70 09/01/20 1,543,363
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials Series B AMT
MBIA Insured 6.00 10/01/08 1,084,850
1,000,000 Temecula CA Community Services Recreational
Center Project 7.13 10/01/12 1,109,850
1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 09/01/14 1,083,880
1,640,000 Temple City CA USD Series A FGIC Insured 5.10 08/01/19 1,662,255
</TABLE>
55
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Three Valleys CA Municipal Water District
Revenue COP FGIC Insured 5.00 % 11/01/14 $ 1,014,850
2,000,000 Three Valleys CA Municipal Water District
Revenue COP FGIC Insured 5.25 11/01/10 2,111,060
1,000,000 Torrance CA COP AMBAC Insured 5.50 04/01/11 1,080,190
1,900,000 Torrance CA COP AMBAC Insured 5.50 04/01/12 2,046,927
2,705,000 Torrance CA COP AMBAC Insured 5.75 04/01/16 2,930,651
1,100,000 Travis CA USD COP AMBAC Insured 5.40 09/01/19 1,143,967
1,000,000 Truckee-Donner Public Utility District COP
Water System Improvement Project 5.50 11/15/16 1,068,560
2,250,000 Twentynine Palms CA Water District COP 7.00 08/01/17 2,420,033
1,000,000 Union City CA Community RDFA Tax Allocation
Revenue Community Redevelopment Project AMBAC
Insured 5.65 10/01/14 1,064,760
1,645,000 University of California Revenue Housing System
Series A AMBAC Insured 5.50 11/01/11 1,759,953
3,400,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 3,564,662
1,000,000 University of California Revenue Multiple
Purpose Projects AMBAC Insured 4.75 09/01/15 991,870
1,000,000 University of California Revenue Refunded
Multiple Purpose Projects Series E MBIA
Insured 5.13 09/01/20 1,010,560
3,200,000 University of California Revenue Seismic Safety
Project MBIA Insured 5.50 11/01/10 3,438,176
990,000 Upland CA HFA Revenue Issue A 7.85 07/01/20 1,019,581
1,000,000 Upland CA Redevelopment Agency Tax Allocation 4.85 09/01/23 973,420
1,000,000 Vacaville CA PFA Tax Allocation Redevelopment
Project MBIA Insured 6.35 09/01/22 1,051,270
</TABLE>
56
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 3,275,000 Vallejo CA Revenue Water Improvement Project
FSA Insured 5.70 % 05/01/16 $ 3,569,324
2,000,000 Ventura CA COP Public Facilities 5.75 12/01/06 2,189,480
2,000,000 Ventura CA COP Public Facilities Corporation IV 5.75 12/01/07 2,184,780
1,305,000 Vista CA Community Redevelopment Project Area B
Tax Allocation 5.10 09/01/18 1,325,828
4,250,000 Walnut Creek CA John Muir Medical Center MBIA
Insured 5.00 02/15/16 4,267,170
1,135,000 Walnut Valley CA USD Series C FGIC Insured 5.75 08/01/15 1,219,353
1,130,000 West Hollywood CA COP MBIA Insured 5.10 02/01/16 1,151,549
1,125,000 West Hollywood CA COP MBIA Insured 5.10 02/01/17 1,140,683
1,170,000 West Sacramento CA Financing Authority Revenue
Water System Improvement Project FGIC Insured 5.50 08/01/15 1,219,128
2,780,000 West Sacramento CA Redevelopment Agency Tax
Allocation 4.75 09/01/20 2,692,208
1,200,000 Westminster CA RDFA AMT 6.50 08/01/10 1,270,428
1,000,000 Whittier CA Educational Facilities Revenue
Whittier College Connie Lee Insured 5.40 12/01/18 1,025,330
1,000,000 Yolo County CA HFA Mortgage Revenue AMT FHA
Collateralized 7.20 08/01/33 1,081,800
1,040,000 Yolo County CA Library Special Tax Community
Facilities 6.25 12/01/22 1,125,020
--------------
TOTAL CALIFORNIA MUNICIPAL BONDS $ 693,533,726
(Cost $647,321,912)
</TABLE>
57
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Bond Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.87%
MONEY MARKET FUNDS - 0.24%
1,737,146 Stagecoach California Tax-Free Money Market Trust+X+ $ 1,737,146
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 0.63%
$ 1,750,000 California HFFA V/R FSA Insured+ 5.10 % 07/01/22 $ 1,750,000
1,000,000 California State PCFA Shell Oil Company
Project V/R Series C+ 5.10 11/01/00 1,000,000
1,000,000 California State PCFA Southern California
Edison V/R Series C+ 5.20 02/28/08 1,000,000
700,000 Chula Vista CA Industrial Development Revenue
V/R San Diego Gas & Electric Company+ 5.15 03/01/23 700,000
--------------
$ 4,450,000
TOTAL SHORT-TERM INSTRUMENTS $ 6,187,146
(Cost $6,187,146)
</TABLE>
58
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Bond Fund
- ------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $653,509,058)* (Notes 1 and 3) 99.00% $ 699,720,872
Other Assets and Liabilities, Net 1.00 7,039,590
------ --------------
TOTAL NET ASSETS 100.00% $ 706,760,462
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
+ THESE VARIABLE RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH
REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 46,382,874
Gross Unrealized Depreciation (171,060)
--------------
NET UNREALIZED APPRECIATION $ 46,211,814
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Education 17%
Water 15%
Sales Tax 14%
Public Improvements 13%
General Obligation 9%
Lease 7%
Sewer 7%
Electric 6%
Transportation 4%
Health 3%
Housing 2%
Airport 1%
Hospital 1%
Other 1%
</TABLE>
Investment Categories Reflect Percentages of Investments in Securities
The accompanying notes are an integral part of these financial statements.
59
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
60
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Income Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 96.16%
$ 2,060,000 California Statewide Community Development
Authority Revenue Connie Lee Insured 5.25 % 07/01/05 $ 2,197,175
1,100,000 California ABAG Finance Authority For Nonprofit
Corporation 5.00 07/01/07 1,149,500
1,250,000 California State AMT Veterans Bonds Series B 4.65 12/01/05 1,280,238
2,000,000 California State AMT Veterans Bonds Series B 4.95 12/01/07 2,067,760
1,250,000 California State Public Works Board Lease
Revenue 5.25 11/01/08 1,354,688
1,000,000 California State Public Works Board Lease
Revenue Series A 6.63 10/01/10 1,120,430
250,000 Carlsbad CA USD COP Phase III 6.70 11/01/99 257,213
2,000,000 Central Valley Finance Authority Revenue MBIA
Insured 5.25 07/01/10 2,160,000
2,000,000 Contra Costa County CA COP MBIA Insured 5.25 11/01/10 2,155,000
685,000 Foster City CA PFA 5.40 09/01/01 713,249
1,000,000 Industry CA Urban Development Agency FSA
Insured 4.70 05/01/04 1,028,400
1,000,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 6.00 05/15/05 1,116,250
1,460,000 Los Angeles CA DW&P Revenue Project 9.00 10/15/03 1,786,719
2,500,000 Los Angeles CA Harbor Department Revenue AMT
Series B 5.00 08/01/02 2,603,425
1,300,000 Los Angeles CA Waste Water System Revenue
Series A MBIA Insured 8.50 06/01/03 1,546,779
2,000,000 Los Angeles CA Waste Water System Revenue
Series D FGIC Insured 8.70 11/01/03 2,430,120
500,000 Morgan Hill CA RDFA Tax Allocation Ojo De Agua
Community Development Project 5.60 03/01/00 506,300
1,075,000 Mount Diablo CA USD Community Facilities
District Special Tax AMBAC Insured 8.00 08/01/03 1,261,373
</TABLE>
61
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Income Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Northern California Public Power Agency Revenue
Series A AMBAC Insured 5.00 % 07/01/04 $ 1,057,670
1,110,000 Paramount CA USD Series A FSA Insured 4.60 09/01/10 1,135,750
2,500,000 Rancho CA Water District Financing Authority
Revenue 4.70 08/15/21 2,541,500
2,000,000 Roseville CA Financial Agency Authority Revenue
Series A FSA Insured 4.50 09/01/08 2,055,820
300,000 Sacramento CA Light Rail Transportation Project 6.30 07/01/00 312,060
975,000 Sacramento CA Workers Compensation Program 5.75 06/01/03 1,016,896
500,000 San Diego CA Transportation Authority COP Bus
Acquistion Project 6.60 12/01/01 516,325
1,000,000 San Diego County CA Regional Transportation
Commission Sales Tax Revenue Series A FGIC
Insured 6.25 04/01/02 1,079,570
1,145,000 San Francisco CA City & County Airport
Community International Airport Series 18B
MBIA Insured 5.25 05/01/09 1,245,050
1,090,000 San Francisco CA City & County International
Airport Revenue MBIA Insured 8.00 05/01/05 1,323,097
1,150,000 San Francisco CA City & County International
Airport Revenue AMT MBIA Insured 8.00 05/01/05 1,399,504
2,500,000 San Joaquin Hills CA Transportation Corridor
Agency Revenue 3.78 # 01/01/02 2,234,375
1,555,000 San Jose CA Improvement Board Act of 1915 AMBAC
Insured 4.65 09/02/08 1,602,194
500,000 Santa Monica CA Wastewater Enterprise Revenue
Hyperion Project 12.00 01/01/01 578,760
1,000,000 South Orange County CA PFA Special Tax Revenue
Series C FGIC Insured 5.75 08/15/05 1,105,000
</TABLE>
62
<PAGE>
PORTFOLIO OF INVESTMENTS -
DECEMBER 31, 1998 (UNAUDITED) California Tax-Free Income Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 Southern California Rapid Transit District
Certificates Participation MBIA Insured 7.50 % 07/01/05 $ 2,192,760
1,100,000 Southern California State Public Power
Authority 6.75 07/01/00 1,152,250
3,000,000 Southern California State Public Power
Authority Project 6.88 07/01/03 3,191,250
1,000,000 University of California Multiple Projects
Revenue Series A MBIA Insured 6.00 09/01/02 1,079,630
1,000,000 University of California Research Facility
Series B 6.50 09/01/03 1,110,590
--------------
TOTAL CALIFORNIA MUNICIPAL BONDS $ 54,664,670
(Cost $53,217,474)
</TABLE>
63
<PAGE>
PORTFOLIO OF INVESTMENTS -
California Tax-Free Income Fund DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 2.51%
MONEY MARKET FUNDS - 2.51%
1,429,000 Stagecoach California Tax-Free Money Market Trust+X+ $ 1,429,000
(Cost $1,429,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $54,646,474)* (Notes 1 and 3) 98.67% $ 56,093,670
Other Assets and Liabilities, Net 1.33 756,921
------ --------------
TOTAL NET ASSETS 100.00% $ 56,850,591
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,458,470
Gross Unrealized Depreciation (11,274)
--------------
NET UNREALIZED APPRECIATION $ 1,447,196
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
General Obligation 20%
Transportation 13%
Public Improvements 11%
Electric 10%
Education 10%
Airport 9%
Water 8%
Sewer 8%
Sales Tax 5%
Lease 4%
Other 2%
</TABLE>
Investment Categories Reflect Percentages of Investments in Securities
The accompanying notes are an integral part of these financial statements.
64
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.48%
ALASKA - 0.18%
$ 100,000 Valdez AK Marine Term Revenue Pipelines Inc
Series A 5.85 % 08/01/25 $ 103,125
CALIFORNIA - 6.11%
$ 20,000 California State GO 6.00 % 02/01/01 $ 20,969
1,540,000 California State Veterans Bonds Series BN 5.45 12/01/28 1,577,453
1,000,000 California Student Education Loan Marketing
Corporation 5.88 01/01/18 952,050
1,000,000 San Francisco CA City & County Airport 4.50 05/01/28 917,870
--------------
$ 3,468,342
COLORADO - 7.83%
$ 2,000,000 Colorado Health Facility Authority Revenue 5.75 % 09/15/22 $ 2,031,600
2,000,000 Denver CO City & County Airport Revenue Series
A MBIA Insured 5.60 11/15/20 2,102,880
270,000 El Paso County CO USD 6.15 12/15/08 312,323
--------------
$ 4,446,803
CONNECTICUT - 1.20%
$ 655,000 Connecticut State HFA Series B4 7.30 % 11/15/03 $ 680,565
FLORIDA - 0.26%
$ 140,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 % 03/01/13 $ 148,050
GEORGIA - 3.43%
$ 2,000,000 Baldwin County GA Hospital 5.38 % 12/01/28 $ 1,949,440
</TABLE>
65
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
IDAHO - 3.45%
$ 900,000 Idaho Health Facilities Authority Revenue 5.45 % 07/15/23 $ 898,875
995,000 Idaho State HFA SFMR Series C-2 AMT 6.35 07/01/15 1,058,680
--------------
$ 1,957,555
ILLINOIS - 12.92%
$ 1,000,000 Chicago IL Midway Airport Revenue 5.00 % 01/01/28 $ 974,820
200,000 Chicago IL O'Hare International Airport Revenue
Series A 6.75 01/01/06 230,744
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 535,625
1,280,000 Du Page County IL Community High School 4.58 # 12/01/11 712,909
1,000,000 Illinois Development FHA Revenue Series A FHA
Insured 5.75 07/01/18 1,033,340
1,000,000 Illinois Development Finance Authority Revenue
Community Rehabilitation Providers Series A 5.70 07/01/19 1,005,880
1,120,000 Illinois Development Finance Authority Revenue
Community Rehabilitation Providers Series C 5.65 07/01/19 1,124,234
1,000,000 Illinois HFFA Revenue Edward Hospital Series A 5.75 02/15/09 1,062,130
1,635,000 McHenry County IL Community Unified School 5.17 # 12/01/16 654,718
--------------
$ 7,334,400
</TABLE>
66
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
INDIANA - 5.37%
$ 1,940,000 Howard County IN Jail & Juvenile Detention
Center AMBAC Insured 5.25 % 01/15/12 $ 2,024,254
1,000,000 Indiana State Educational Facility Authority
Revenue Butler University Project MBIA
Insured 5.30 01/01/27 1,024,470
--------------
$ 3,048,724
IOWA - 3.17%
$ 1,435,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA
Collateralized 6.95 % 07/01/24 $ 1,521,114
265,000 Iowa State HFA SFMR Series B AMT GNMA/FNMA
Collateralized 7.45 07/01/23 280,846
--------------
$ 1,801,960
KENTUCKY - 0.26%
$ 140,000 Kentucky State Housing Corporation Revenue FHA
Insured 6.50 % 07/01/17 $ 149,338
LOUISIANA - 0.58%
$ 310,000 Louisiana State PFA Student Loan Revenue AMT
FSA Insured 6.85 % 01/01/09 $ 328,144
MASSACHUSETTS - 1.92%
$ 1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 % 11/15/21 $ 1,088,560
MINNESOTA - 1.16%
$ 250,000 Minneapolis MN Community Development Agency
Series 7-A 5.50 % 06/01/12 $ 262,233
375,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 394,792
--------------
$ 657,025
</TABLE>
67
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MISSISSIPPI - 0.90%
$ 500,000 Jones County MS Hospital Revenue South Central
Regional Medical Center 4.90 % 12/01/04 $ 509,100
MONTANA - 1.74%
$ 1,000,000 Lewis & Clark County MT Environmental Revenue 5.60 % 01/01/27 $ 986,210
NEBRASKA - 1.81%
$ 995,000 Nebraska Finance Authority Single Family
Housing Series B GNMA/ FNMA/FHLMC
Collateralized 5.85 % 09/01/28 $ 1,029,825
NEVADA - 1.91%
$ 500,000 Clark County NV Las Vegas Convention & Visitors
Authority FSA Insured 6.00 % 07/01/26 $ 564,395
500,000 Reno NV Hospital Revenue 5.63 05/15/23 519,215
--------------
$ 1,083,610
NEW JERSEY - 2.38%
$ 1,250,000 New Jersey State MFHR FHA Collateralized 7.00 % 05/01/30 $ 1,353,825
NEW YORK - 2.16%
$ 250,000 New York NY FGIC Series E 6.00 % 08/01/12 $ 279,263
1,000,000 New York State Dormatory Authority Lease
Revenue 4.75 01/15/29 946,710
--------------
$ 1,225,973
</TABLE>
68
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OKLAHOMA - 2.28%
$ 200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A FNMA Collateralized 7.13 % 07/01/21 $ 208,726
530,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 561,191
500,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 523,500
--------------
$ 1,293,417
OREGON - 1.71%
$ 1,000,000 Oregon State Health Housing Educational &
Cutural Facilities Authority 5.25 % 10/01/16 $ 973,740
PENNSYLVANIA - 8.05%
$ 2,250,000 Chester County PA Health & Education Facilities 5.38 % 05/15/27 $ 2,269,688
500,000 Pennsylvania State Higher EDFA Student Loan
Revenue Series D AMT AMBAC Insured 7.05 10/01/16 525,625
1,750,000 Pittsburgh PA Water & Sewer Authority 5.25 09/01/23 1,778,227
--------------
$ 4,573,540
TENNESSEE - 1.84%
$ 1,000,000 Shelby County TN Health Educational & Housing
Facility Series A 6.00 % 07/01/28 $ 1,044,240
</TABLE>
69
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
TEXAS - 5.46%
$ 250,000 Decatur TX Indeptness School District 6.13 % 08/01/25 $ 269,320
250,000 El Paso TX GO 7.00 08/15/06 295,037
1,000,000 Gulf Coast Texas Waste Disposal 5.50 09/01/17 1,016,200
125,000 Port Arthur TX MBIA Insured 8.50 # 02/15/03 146,417
350,000 Travis County TX HFC Residential Mortgage
Revenue Series A GNMA/ FNMA Collateralized 7.00 12/01/11 373,734
1,000,000 Webb County TX COP Series A 5.25 10/01/22 997,320
--------------
$ 3,098,028
UTAH - 3.98%
$ 250,000 Salt Lake City UT RDA Neighborhood Tax Revenue 6.50 % 10/01/01 $ 266,830
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 528,525
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,184,798
250,000 Utah State Building Ownership Authority Lease
Series A 6.00 05/15/09 275,868
5,000 Utah State HFA SFMR Series D-2 AMT FHA
Collateralized 6.45 01/01/11 5,358
--------------
$ 2,261,379
VERMONT - 1.04%
$ 500,000 Burlington VT Electricity Revenue Series A MBIA
Insured 6.38 % 07/01/10 $ 588,655
VIRGINIA - 3.50%
$ 2,000,000 Pocahontas VA Parkway Associate 5.50 % 08/15/28 $ 1,986,180
</TABLE>
70
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) National Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
WASHINGTON - 11.88%
$ 500,000 Clark County WA Sewer Revenue 6.00 % 12/01/06 $ 562,210
2,000,000 Grant County WA Public Hospital District 5.15 12/01/23 1,950,780
100,000 Island County WA USD South Whidbey AMBAC
Insured 6.75 12/01/07 118,322
100,000 South Columbian Basin WA Irrigation District
Revenue 6.00 12/01/02 107,944
350,000 Tacoma WA Solid Waste Utility Revenue Series B
AMBAC Insured 6.00 12/01/09 401,559
1,100,000 Vancouver WA HFA Revenue 5.65 03/01/31 1,084,292
1,000,000 Washington State Public Power Supply System
Nuclear Project Number 1 Series B 5.13 07/01/13 1,015,000
1,440,000 Washington State SFMR Series E AMT GNMA/FNMA
Collateralized 7.10 07/01/22 1,506,413
--------------
$ 6,746,520
TOTAL MUNICIPAL BONDS $ 55,916,273
(Cost $54,355,839)
</TABLE>
71
<PAGE>
National Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.42%
MONEY MARKET FUNDS - 0.42%
242,000 Stagecoach National Tax-Free Money Market Trust+X+ $ 242,000
(Cost $242,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $54,597,839)* (Notes 1 and 3) 98.90% $ 56,158,273
Other Assets and Liabilities, Net 1.10 622,761
------ --------------
TOTAL NET ASSETS 100.00% $ 56,781,034
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
# YIELD TO MATURITY.
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,636,084
Gross Unrealized Depreciation (75,650)
--------------
NET UNREALIZED APPRECIATION $ 1,560,434
--------------
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
72
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) Oregon Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS - 97.62%
GUAM - 3.77%
$ 1,500,000 Guam Housing Single Family Mortgage Backed
Series A 5.75 % 09/01/31 $ 1,622,610
OREGON - 86.59%
$ 1,750,000 Benton County OR Hospital Revenue 5.13 % 10/01/28 $ 1,725,938
1,100,000 Chemeketa OR Community College District FGIC
Insured 6.00 06/01/06 1,233,848
1,000,000 Chemeketa OR Community College District Series
B 5.60 06/01/14 1,073,750
250,000 Chemeketa OR Community College MBIA Insured 6.50 07/01/07 283,403
495,000 Clackamas County OR HFFA Jennings Lodge Project
GNMA FHA credit support 7.50 10/20/31 523,463
300,000 Clackamas County OR HFFA Sisters of Providence
Series A 6.38 10/01/05 325,440
1,750,000 Emerald Peoples OR Utility District 7.35 11/01/07 2,157,750
845,000 Eugene OR Public Safety Facilities 6.00 06/01/06 948,969
1,490,000 Hillsboro OR Hospital Healthcare Facility 5.75 10/01/12 1,573,813
500,000 Josephine County OR USD FGIC 5.75 06/01/07 557,875
1,000,000 Linn & Benton OR School District GO 5.35 06/01/08 1,092,160
1,000,000 Medford OR Hosital Facilities 5.13 08/15/28 1,006,430
1,500,000 Medford OR Hospital Facilities Authority
Revenue Asante Health Services Series A MBIA
Insured 5.25 08/15/13 1,567,500
250,000 Oregon Health Sciences 5.25 07/01/28 256,875
1,500,000 Oregon State Board of Higher Education
Baccalaureate Series D 5.00 08/01/22 1,504,620
750,000 Oregon State Board of Higher Education GO
Series C 5.95 08/01/26 853,148
500,000 Oregon State Department Administrative Services
COP Series A 5.80 05/01/24 542,500
595,000 Oregon State Economic Development Revenue, 6.35 08/01/25 631,634
480,000 Oregon State GO 7.25 07/01/07 584,918
</TABLE>
73
<PAGE>
Oregon Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 175,000 Oregon State GO 9.00 % 10/01/05 $ 226,826
1,715,000 Oregon State Health Housing Educational &
Cultural Facilities Cedarwest Housing Project
Series A 4.75 01/01/30 1,738,580
1,650,000 Oregon State Health Housing Educational &
Cutural Facilities Authority 5.25 10/01/16 1,606,670
3,000,000 Oregon State Housing & Community Services
Revenue Series B 5.45 07/01/29 3,059,070
2,000,000 Oregon State Veterans Welfare Series 77 5.30 10/01/29 2,025,000
1,000,000 Port St Helens OR Pollution Control Revenue
Project Portland General Electric Company
Series A 5.25 08/01/14 1,016,880
500,000 Portland OR Airport Revenue 5.00 07/01/18 501,890
500,000 Portland OR Airport Revenue 5.25 07/01/11 534,730
485,000 Portland OR Arena Gas Tax Revenue Series A 5.35 06/01/07 522,748
1,000,000 Portland OR GO Series A 4.88 06/01/18 1,000,000
1,000,000 Portland OR Housing Authority Revenue 5.10 01/01/27 997,500
1,000,000 South Fork OR Water Board Revenue Series B FSA
Insured 6.00 02/01/14 1,106,370
575,000 Washington County OR School District No. 088 J
Sherwood FSA insured 6.10 06/01/12 644,310
1,000,000 Washington County OR Sewer Agency Revenue FGIC
Insured 5.75 10/01/11 1,131,250
2,000,000 Washington County OR Unified Sewer Agency
Revenue FGIC Insured 5.50 10/01/13 2,145,040
550,000 Western Lane OR HFFA Revenue Sisters of St.
Joseph Peace Services MBIA Insured 5.63 08/01/07 598,015
--------------
$ 37,298,913
</TABLE>
74
<PAGE>
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED) Oregon Tax-Free Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
PUERTO RICO - 7.26%
$ 40,000 Commonwealth of Puerto Rico Aqueduct & Sewer
Revenue 10.25 % 07/01/09 $ 54,486
295,000 Commonwealth of Puerto Rico MFHR LOC -
Government Development Bank of Puerto Rico 7.50 04/01/22 306,608
425,000 Commonwealth of Puerto Rico PCR Facilities
Financing Authority Upjohn Co Project 7.50 02/01/23 442,548
1,000,000 Commonwealth of Puerto Rico Public Financing
Corporation Series A 5.38 06/01/15 1,080,060
250,000 Commonwealth of Puerto Rico SFMR Series B GNMA
Insured 7.50 10/15/12 261,675
1,000,000 Puerto Rico Commonwealth 5.00 07/01/27 980,000
--------------
$ 3,125,377
TOTAL MUNICIPAL BONDS $ 42,046,900
(Cost $40,482,193)
</TABLE>
75
<PAGE>
Oregon Tax-Free Fund PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.16%
MONEY MARKET FUNDS - 1.16%
501,635 Stagecoach National Tax-Free Money Market Trust+X+ $ 501,635
(Cost $501,635)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $40,983,828) 98.78% $ 42,548,535
Other Assets and Liabilities, Net 1.22 524,996
------ --------------
TOTAL NET ASSETS 100.00% $ 43,073,531
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+X+ THIS STAGECOACH FUND INVESTS CASH BALANCES THAT IT RETAINS FOR
LIQUIDITY PURPOSES IN A STAGECOACH MONEY MARKET FUND. THE FUND IS NOT
CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE
STAGECOACH MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,592,082
Gross Unrealized Depreciation (27,375)
--------------
NET UNREALIZED APPRECIATION $ 1,564,707
--------------
--------------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Housing 22%
Education 17%
Public Improvements 15%
Hospital 14%
General Obligation 13%
Sewer 8%
Health 4%
Water 3%
Airport 2%
Sales Tax 1%
Other 1%
</TABLE>
Investment Categories Reflect Percentages of Investments in Securities
The accompanying notes are an integral part of these financial statements.
76
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
77
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES -
Tax-Free Funds DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA
TAX-FREE
FUND
<S> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $ 17,704,054
Cash 5,848
RECEIVABLES:
Interest 332,998
Fund shares sold 68,604
Organization expenses, net of
amortization 0
Prepaid expenses 0
TOTAL ASSETS 18,111,504
LIABILITIES
Cash overdraft due to custodian (Note
2) 0
Payables:
Investment securities purchased 0
Distribution to shareholders 63,591
Fund shares redeemed 0
Due to distributor (Note 2) 4,713
Due to adviser (Note 2) 1,542
Other 92,924
TOTAL LIABILITIES 162,770
TOTAL NET ASSETS
$ 17,948,734
NET ASSETS CONSIST OF:
Paid-in capital $ 17,266,791
Undistributed net realized gain (loss)
on investments 21,608
Net unrealized appreciation
(depreciation) of investments 660,335
TOTAL NET ASSETS $ 17,948,734
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $ 5,567,242
Shares outstanding - Class A 519,621
Net asset value per share - Class A $ 10.71
Maximum offering price per share - Class
A $ 11.21(1)
Net assets - Class B $ 1,679,075
Shares outstanding - Class B 162,466
Net asset value and offering price per
share - Class B $ 10.33
Net assets - Class C N/A
Shares outstanding - Class C N/A
Net asset value and offering price per
share - Class C N/A
Net assets - Institutional Class $ 10,702,417
Shares outstanding - Institutional Class 998,442
Net asset value and offering price per
share - Institutional Class $ 10.72
INVESTMENT AT COST (NOTE 3) $ 17,043,719
- ---------------------------------------------------------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
The accompanying notes are an integral part of these financial statements.
78
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES -
DECEMBER 31, 1998 (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
BOND FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see
cost below) $699,720,872 $ 56,093,670 $ 56,158,273 $ 42,548,535
Cash 0 5,180 5,072 5,919
RECEIVABLES:
Interest 10,749,800 917,259 958,096 653,442
Fund shares sold 2,030,677 141,504 111,057 123,358
Organization expenses, net of
amortization 0 0 0 6,765
Prepaid expenses 35,846 0 0 63
TOTAL ASSETS 712,537,195 57,157,613 57,232,498 43,338,082
LIABILITIES
Cash overdraft due to custodian (Note
2) 896,647 0 0 0
Payables:
Investment securities purchased 1,082,104 0 0 0
Distribution to shareholders 2,581,017 178,679 221,448 154,157
Fund shares redeemed 171,242 13 9,228 7,660
Due to distributor (Note 2) 439,757 8,021 17,970 30,564
Due to adviser (Note 2) 416,001 19,275 17,526 3,792
Other 189,965 101,034 185,292 68,378
TOTAL LIABILITIES 5,776,733 307,022 451,464 264,551
TOTAL NET ASSETS
$706,760,462 $ 56,850,591 $ 56,781,034 $ 43,073,531
NET ASSETS CONSIST OF:
Paid-in capital $659,010,314 $ 55,327,043 $ 55,447,039 $ 41,461,082
Undistributed net realized gain (loss)
on investments 1,538,334 76,352 (226,439) 47,742
Net unrealized appreciation
(depreciation) of investments 46,211,814 1,447,196 1,560,434 1,564,707
TOTAL NET ASSETS $706,760,462 $ 56,850,591 $ 56,781,034 $ 43,073,531
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets - Class A $493,142,420 $ 48,505,129 $ 38,695,053 $ 27,685,848
Shares outstanding - Class A 43,218,451 4,622,931 2,403,744 1,649,066
Net asset value per share - Class A $ 11.41 $ 10.49 $ 16.10 $ 16.79
Maximum offering price per share - Class
A $ 11.95(1) $ 10.81(2) $ 16.86(1) $ 17.58(1)
Net assets - Class B $119,687,386 N/A $ 2,481,041 $ 8,617,990
Shares outstanding - Class B 10,290,654 N/A 233,666 837,989
Net asset value and offering price per
share - Class B $ 11.63 N/A $ 10.62 $ 10.28
Net assets - Class C $ 14,418,791 N/A $ 6,754,024 N/A
Shares outstanding - Class C 1,239,523 N/A 635,861 N/A
Net asset value and offering price per
share - Class C $ 11.63 N/A $ 10.62 N/A
Net assets - Institutional Class $ 79,511,865 $ 8,345,462 $ 8,850,916 $ 6,769,693
Shares outstanding - Institutional Class 6,951,522 808,367 549,996 403,322
Net asset value and offering price per
share - Institutional Class $ 11.44 $ 10.32 $ 16.09 $ 16.78
INVESTMENT AT COST (NOTE 3) $653,509,058 $ 54,646,474 $ 54,597,839 $ 40,983,828
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
(2) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
The accompanying notes are an integral part of these financial statements.
79
<PAGE>
STATEMENT OF OPERATIONS -
Tax-Free Funds FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA
TAX-FREE
FUND
<S> <C>
INVESTMENT INCOME
Interest $ 453,444
TOTAL INVESTMENT INCOME 453,444
EXPENSES (NOTE 2)
Advisory fees 44,494
Administration fees 6,362
Custody fees 1,518
Shareholder servicing fees 22,465
Portfolio accounting fees 18,460
Transfer agency fees 8,312
Distribution fees 6,266
Organization costs 0
Legal and audit fees 40,053
Registration fees 13,369
Directors' fees 1,201
Shareholder reports 5,787
Other 3,748
TOTAL EXPENSES 172,035
Less:
Waived fees and reimbursed expenses (99,372)
Net Expenses 72,663
NET INVESTMENT INCOME (LOSS) 380,781
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 30,508
Net change in unrealized appreciation
(depreciation) of investments 165,920
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 196,428
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 577,209
- ------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
80
<PAGE>
STATEMENT OF OPERATIONS -
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA CALIFORNIA NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
BOND FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 18,412,853 $ 1,326,767 $ 1,588,355 $ 1,080,248
TOTAL INVESTMENT INCOME 18,412,853 1,326,767 1,588,355 1,080,248
EXPENSES (NOTE 2)
Advisory fees 1,754,834 146,442 141,378 104,828
Administration fees 246,901 20,929 20,260 14,928
Custody fees 60,593 5,497 4,831 3,561
Shareholder servicing fees 1,032,830 86,826 71,695 52,951
Portfolio accounting fees 101,544 31,853 31,423 27,026
Transfer agency fees 461,794 38,509 37,120 26,933
Distribution fees 429,898 0 44,582 28,399
Organization costs 0 0 0 1,278
Legal and audit fees 16,303 69,315 39,002 49,560
Registration fees 119,505 5,372 33,003 11,089
Directors' fees 1,201 1,514 1,201 1,201
Shareholder reports 33,179 27,161 8,638 9,692
Other 30,195 22,768 6,120 3,340
TOTAL EXPENSES 4,288,777 456,186 439,253 334,786
Less:
Waived fees and reimbursed expenses (1,176,035) (234,258) (178,965) (161,519)
Net Expenses 3,112,742 221,928 260,288 173,267
NET INVESTMENT INCOME (LOSS) 15,300,111 1,104,839 1,328,067 906,981
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 2,361,401 387,197 474,754 207,289
Net change in unrealized appreciation
(depreciation) of investments 8,468,871 623,151 35,568 327,137
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 10,830,272 1,010,348 510,322 534,426
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 26,130,383 $ 2,115,187 $ 1,838,389 $ 1,441,407
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
81
<PAGE>
Tax-Free Funds STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND
-------------------------------------------
(UNAUDITED) FOR THE
FOR THE SIX THREE
MONTHS MONTHS FOR THE
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 380,781 $ 198,657 $ 864,395
Net realized gain (loss) on sale of
investments 30,508 127,076 425,355
Net change in unrealized appreciation
(depreciation) of investments 165,920 (107,342) 543,222
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 577,209 218,391 1,832,972
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (115,296) (58,125) (241,375)
CLASS B (29,633) (14,122) (29,604)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (235,852) (126,410) (593,416)
From net realized gain on sale of
investments
CLASS A (97,543) 0 (99,458)
CLASS B (29,680) 0 (21,224)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (191,837) 0 (238,712)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 390,581 153,082 473,873
Reinvestment of dividends - Class A 199,239 46,249 265,218
Cost of shares redeemed - Class A (364,924) (290,952) (1,192,150)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 224,896 (91,621) (453,059)
Proceeds from shares sold - Class B 13,634 268,310 1,453,702
Reinvestment of dividends - Class B 51,335 9,208 39,432
Cost of shares redeemed - Class B (57,367) (142,881) (127,727)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 7,602 134,637 1,365,407
Proceeds from shares sold - Class C N/A N/A N/A
Reinvestment of dividends - Class C N/A N/A N/A
Cost of shares redeemed - Class C N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A N/A N/A
Proceeds from shares sold -
Institutional Class 820,548 162,455 1,272,595
Reinvestment of dividends -
Institutional Class 10,404 1,396 10,674
Cost of shares redeemed -
Institutional Class (1,053,565) (1,206,926) (4,037,264)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (222,613) (1,043,075) (2,753,995)
INCREASE (DECREASE) IN NET ASSETS (112,747) (980,325) (1,232,464)
NET ASSETS:
Beginning net assets 18,061,481 19,041,806 20,274,270
ENDING NET ASSETS $17,948,734 $18,061,481 $19,041,806
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $275,906,280 FOR CLASS A SHARES,
$72,298,980 FOR CLASS B SHARES AND $80,613,090 FOR INSTITUTIONAL CLASS
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA
TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
82
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME
FUND
CALIFORNIA TAX-FREE BOND FUND -----------------------------
---------------------------------------------- FOR THE
(UNAUDITED) THREE
FOR THE SIX FOR THE SIX FOR THE (UNAUDITED) MONTHS
MONTHS ENDED MONTHS ENDED YEAR ENDED FOR THE SIX ENDED
DEC. 31, JUNE 30, DEC. 31, MONTHS ENDED JUNE 30,
1998 1998 1997 (1) DEC. 31, 1998 1998
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 15,300,111 $ 15,466,102 $ 12,378,782 $ 1,104,839 $ 587,499
Net realized gain (loss) on sale of
investments 2,361,401 7,346,974 1,877,019 387,197 18,369
Net change in unrealized appreciation
(depreciation) of investments 8,468,871 (4,290,607) 34,032,101 623,151 (42,012)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 26,130,383 18,522,469 48,287,902 2,115,187 563,856
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (11,208,056) (11,682,363) (11,799,980) (948,281) (521,049)
CLASS B (2,083,314) (1,761,231) (141,890)(2) N/A N/A
CLASS C (206,749) (140,621) (247,997) N/A N/A
INSTITUTIONAL CLASS (1,801,992) (1,881,887) (188,915)(2) (156,558) (66,450)
From net realized gain on sale of
investments
CLASS A (6,286,449) 0 (1,345,647) (542,011) 0
CLASS B (1,503,850) 0 0(2) N/A N/A
CLASS C (163,586) 0 (36,342) N/A N/A
INSTITUTIONAL CLASS (1,005,446) 0 0(2) (97,377) 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 18,183,265 30,091,476 286,472,490 2,991,605 2,175,218
Reinvestment of dividends - Class A 12,833,931 6,863,798 6,671,789 1,430,155 464,836
Cost of shares redeemed - Class A (39,153,471) (49,367,498) (49,748,321) (10,420,317) (7,462,370)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (8,136,275) (12,412,224) 243,395,958 (5,998,557) (4,822,316)
Proceeds from shares sold - Class B 23,658,873 26,245,794 75,031,948(2) N/A N/A
Reinvestment of dividends - Class B 3,117,675 1,294,047 1,436(2) N/A N/A
Cost of shares redeemed - Class B (6,991,010) (5,915,208) (468,649)(2) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 19,785,538 21,624,633 74,564,735(2) N/A N/A
Proceeds from shares sold - Class C 6,701,766 2,905,277 1,299,532 N/A N/A
Reinvestment of dividends - Class C 277,302 65,436 133,685 N/A N/A
Cost of shares redeemed - Class C (789,560) (612,517) (2,250,658) N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C 6,189,508 2,358,196 (817,441) N/A N/A
Proceeds from shares sold -
Institutional Class 7,762,106 11,031,568 80,818,091(2) 1,168,506 875,011
Reinvestment of dividends -
Institutional Class 1,308,699 188,998 611(2) 119,718 18,829
Cost of shares redeemed -
Institutional Class (12,350,404) (13,124,832) (1,090,971)(2) (538,427) (399,668)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (3,279,599) (1,904,266) 79,727,731(2) 749,797 494,172
INCREASE (DECREASE) IN NET ASSETS 16,430,113 12,722,706 431,398,114 (4,877,800) (4,351,787)
NET ASSETS:
Beginning net assets 690,330,349 677,607,643 246,209,529 61,728,391 66,080,178
ENDING NET ASSETS $706,760,462 $690,330,349 $677,607,643 $ 56,850,591 $61,728,391
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE
YEAR ENDED
MARCH 31,
1998
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 2,700,180
Net realized gain (loss) on sale of
investments 525,212
Net change in unrealized appreciation
(depreciation) of investments 896,098
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,121,490
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (2,439,178)
CLASS B N/A
CLASS C N/A
INSTITUTIONAL CLASS (261,002)
From net realized gain on sale of
investments
CLASS A (226,771)
CLASS B N/A
CLASS C N/A
INSTITUTIONAL CLASS (23,115)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 19,705,630
Reinvestment of dividends - Class A 2,375,541
Cost of shares redeemed - Class A (31,777,362)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (9,696,191)
Proceeds from shares sold - Class B N/A
Reinvestment of dividends - Class B N/A
Cost of shares redeemed - Class B N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B N/A
Proceeds from shares sold - Class C N/A
Reinvestment of dividends - Class C N/A
Cost of shares redeemed - Class C N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A
Proceeds from shares sold -
Institutional Class 1,040,195
Reinvestment of dividends -
Institutional Class 87,332
Cost of shares redeemed -
Institutional Class (1,230,497)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (102,970)
INCREASE (DECREASE) IN NET ASSETS (8,627,737)
NET ASSETS:
Beginning net assets 74,707,915
ENDING NET ASSETS $ 66,080,178
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0
- -----------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $275,906,280 FOR CLASS A SHARES,
$72,298,980 FOR CLASS B SHARES AND $80,613,090 FOR INSTITUTIONAL CLASS
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA
TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
83
<PAGE>
Tax-Free Funds STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND
-------------------------------------------
(UNAUDITED) FOR THE
FOR THE SIX THREE
MONTHS MONTHS FOR THE
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 1998 (1)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 1,328,067 $ 671,375 $ 1,223,735
Net realized gain (loss) on sale of
investments 474,754 (63,205) (633,882)
Net change in unrealized appreciation
(depreciation) of investments 35,568 244,959 1,310,218
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,838,389 853,129 1,900,071
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (937,247) (489,020) (746,374)
CLASS B (45,288) (16,592) (23,330)
CLASS C (144,649) (76,695) (95,551)(2)
INSTITUTIONAL CLASS (200,883) (89,068) (358,480)
From net realized gain on sale of
investments
CLASS A 0 0 (18,814)
CLASS B 0 0 (3,377)
CLASS C 0 0 0(2)
INSTITUTIONAL CLASS 0 0 (30,309)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 1,551,897 243,714 39,883,662
Reinvestment of dividends - Class A 542,067 242,152 375,942
Cost of shares redeemed - Class A (4,555,437) (2,111,170) (3,464,028)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (2,461,473) (1,625,304) 36,795,576
Proceeds from shares sold - Class B 705,434 592,961 1,173,456
Reinvestment of dividends - Class B 37,797 10,434 20,658
Cost of shares redeemed - Class B (123,957) (98,879) (613)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 619,274 504,516 1,193,501
Proceeds from shares sold - Class C 131,325 4,329 8,974,820(2)
Reinvestment of dividends - Class C 65,078 27,703 28,180(2)
Cost of shares redeemed - Class C (810,814) (350,171) (647,934)(2)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C (614,411) (318,139) 8,355,066(2)
Proceeds from shares sold -
Institutional Class 2,521,073 439,548 2,720,368
Reinvestment of dividends -
Institutional Class 87,931 37,915 133,806
Cost of shares redeemed -
Institutional Class (1,551,418) (458,684) (2,912,585)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS 1,057,586 18,779 (58,411)
INCREASE (DECREASE) IN NET ASSETS (888,702) (1,238,394) 46,909,568
NET ASSETS:
Beginning net assets 57,669,736 58,908,130 11,998,562
ENDING NET ASSETS $56,781,034 $57,669,736 $58,908,130
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
(1) "PROCEEDS FROM SHARES SOLD" INCLUDES $37,681,717 FOR CLASS A SHARES AND
$8,939,165 FOR CLASS C SHARES AS A RESULT OF THE CONSOLIDATION OF THE
OVERLAND MUNICIPAL INCOME FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
The accompanying notes are an integral part of these financial statements.
84
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND
-------------------------------------------
(UNAUDITED) FOR THE
FOR THE SIX THREE
MONTHS MONTHS FOR THE
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 906,981 $ 429,810 $ 1,729,188
Net realized gain (loss) on sale of
investments 207,289 100,122 600,687
Net change in unrealized appreciation
(depreciation) of investments 327,137 (61,124) 1,227,645
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,441,407 468,808 3,557,520
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (609,290) (303,983) (1,311,235)
CLASS B (135,164) (42,790) (43,691)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (162,527) (83,037) (374,262)
From net realized gain on sale of
investments
CLASS A (413,064) 0 (475,455)
CLASS B (126,475) 0 (29,182)
CLASS C N/A N/A N/A
INSTITUTIONAL CLASS (109,685) 0 (128,424)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 982,213 948,349 2,372,220
Reinvestment of dividends - Class A 873,907 218,677 1,381,033
Cost of shares redeemed - Class A (1,772,318) (1,356,107) (7,505,296)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 83,802 (189,081) (3,752,043)
Proceeds from shares sold - Class B 2,500,051 2,271,463 3,439,482
Reinvestment of dividends - Class B 226,733 26,167 54,270
Cost of shares redeemed - Class B (28,331) (121,481) (6,373)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 2,698,453 2,176,149 3,487,379
Proceeds from shares sold - Class C N/A N/A N/A
Reinvestment of dividends - Class C N/A N/A N/A
Cost of shares redeemed - Class C N/A N/A N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C N/A N/A N/A
Proceeds from shares sold -
Institutional Class 664,500 339,055 895,262
Reinvestment of dividends -
Institutional Class 103,777 23,882 119,243
Cost of shares redeemed -
Institutional Class (1,296,894) (688,847) (1,808,127)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - INSTITUTIONAL CLASS (528,617) (325,910) (793,622)
INCREASE (DECREASE) IN NET ASSETS 2,138,840 1,700,156 136,985
NET ASSETS:
Beginning net assets 40,934,691 39,234,535 39,097,550
ENDING NET ASSETS $43,073,531 $40,934,691 $39,234,535
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME (LOSS) $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
85
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE
FUND (1)
CLASS A
----------------------
(UNAUDITED) THREE
SIX MONTHS MONTHS
ENDED ENDED
DEC. 31, JUNE 30,
1998 1998 (2)
<S> <C> <C>
- ----------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.79 $10.77
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.23 0.12
Net realized and unrealized gain
(loss) on investments 0.11 0.02
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.34 0.14
LESS DISTRIBUTIONS:
Dividends from net investment income (0.23) (0.12)
Distributions from net realized gain (0.19) 0.00
---------- ----------
TOTAL FROM DISTRIBUTIONS (0.42) (0.12)
---------- ----------
NET ASSET VALUE, END OF PERIOD $10.71 $10.79
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.20% 1.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $5,567 $5,383
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets 0.76% 0.73%
Ratio of net investment income to
average net assets 4.23% 4.31%
Portfolio turnover 23% 14%
- ----------------------------------------------------------------
Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses 1.84% 1.68%
Ratio of net investment income (loss) to
average net assets prior to waived
fees and reimbursed expenses 3.15% 3.36%
- ----------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
86
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
CLASS A (CONT.)
----------------------------------------------------------
FOUR
SIX MONTHS MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1998 1997 (3) 1996 1995 (4) 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.44 $10.45 $10.71 $10.68 $10.48
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.46 0.24 0.48 0.17 0.51
Net realized and
unrealized gain (loss)
on investments 0.53 (0.01) (0.09) 0.06 0.23
---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.99 0.23 0.39 0.23 0.74
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.46) (0.24) (0.48) (0.20) (0.53)
Distributions from net
realized gain (0.20) 0.00 (0.17) 0.00 (0.01)
---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.66) (0.24) (0.65) (0.20) (0.54)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.77 $10.44 $10.45 $10.71 $10.68
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 9.67% 2.18% 3.60% 6.55%** 7.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $5,467 $5,744 $7,331 $24,622 $24,581
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.64% 0.60% 0.78% 0.45% 0.40%
Ratio of net investment
income to average net
assets 4.32% 4.54% 4.45% 4.73% 4.89%
Portfolio turnover 127% 77% 42% 62% 14%
- ----------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.77% 1.58% 1.46% 1.35% 1.13%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.19% 3.56% 3.77% 3.83% 4.16%
- ----------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
87
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
CLASS B
----------------------------------
(UNAUDITED) THREE
SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 (2) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.40 $10.39 $10.07
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.19 0.09 0.37
Net realized and unrealized gain (loss) on investments 0.12 0.01 0.51
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.31 0.10 0.88
LESS DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.09) (0.37)
Distributions from net realized gain (0.19) 0.00 (0.19)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.38) (0.09) (0.56)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.33 $10.40 $10.39
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.00% 1.00% 8.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $1,679 $1,683 $1,546
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.48% 1.45% 1.37%
Ratio of net investment income to average net assets 3.51% 3.59% 3.49%
Portfolio turnover 23% 14% 127%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 3.44% 2.62% 3.26%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 1.55% 2.42% 1.60%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
88
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND (1) (CONT.)
INSTITUTIONAL CLASS
CLASS B (CONT.) ----------------------------------------------------------
---------------------- (UNAUDITED) THREE
SIX MONTHS PERIOD SIX MONTHS MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, DEC. 31, JUNE 30, MARCH 31, MARCH 31, SEPT. 30,
1997 (3) 1996 (4) 1998 1998 (2) 1998 1997 (3) 1996 (5)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.07 $10.00 $10.79 $10.78 $10.44 $10.44 $10.71
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.11 0.01 0.23 0.12 0.49 0.25 0.49
Net realized and
unrealized gain (loss)
on investments (0.00) 0.07 0.12 0.01 0.54 0.00 (0.10)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.11 0.08 0.35 0.13 1.03 0.25 0.39
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.11) (0.01) (0.23) (0.12) (0.49) (0.25) (0.49)
Distributions from net
realized gain 0.00 0.00 (0.19) 0.00 (0.20) 0.00 (0.17)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.11) (0.01) (0.42) (0.12) (0.69) (0.25) (0.66)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.07 $10.07 $10.72 $10.79 $10.78 $10.44 $10.44
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.09% 0.76% 3.33% 1.19% 9.99% 2.38% 3.74%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $182 $20 $10,702 $10,995 $12,029 $14,349 $15,577
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.30% 1.16% 0.71% 0.68% 0.44% 0.40% 0.48%
Ratio of net investment
income to average net
assets 3.83% 3.59% 4.28% 4.36% 4.52% 4.73% 4.63%
Portfolio turnover 77% 42% 23% 14% 127% 77% 42%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.96% 1.81% 1.68% 1.55% 1.55% 1.50% 1.20%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 2.17% 2.94% 3.31% 3.49% 3.41% 3.63% 3.91%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE ARIZONA INTERMEDIATE TAX-FREE FUND OF
WESTCORE TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON,
N.A. FROM ITS COMMENCEMENT OF OPERATIONS ON MARCH 2, 1992 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
89
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1)
CLASS A
----------------------------------
(UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, DEC. 31,
1998 1998 (2) 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.38 $11.32 $10.97
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.26 0.26 0.54
Net realized and unrealized gain (loss) on investments 0.18 0.06 0.42
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.44 0.32 0.96
LESS DISTRIBUTIONS:
Dividends from net investment income (0.26) (0.26) (0.54)
Distributions from net realized gain (0.15) 0.00 (0.07)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.41) (0.26) (0.61)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.41 $11.38 $11.32
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.84% 2.86% 9.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $493,142 $499,720 $509,844
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.77% 0.75% 0.74%
Ratio of net investment income to average net assets 4.46% 4.63% 4.84%
Portfolio turnover 5% 15% 12%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.08% 1.11% 0.89%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 4.15% 4.27% 4.69%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES).
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
90
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1) (CONT.)
CLASS B
----------------------------------
CLASS A (CONT.) (UNAUDITED)
---------------------------------- SIX MONTHS SIX MONTHS PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31,
1996 1995 1994 1998 1998 (2) 1997 (3)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $11.34 $10.67 $12.00 $11.60 $11.54 $11.51
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.57 0.63 0.67 0.22 0.23 0.02
Net realized and
unrealized gain (loss)
on investments (0.13) 1.08 (1.18) 0.18 0.06 0.03
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.44 1.71 (0.51) 0.40 0.29 0.05
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.57) (0.63) (0.67) (0.22) (0.23) (0.02)
Distributions from net
realized gain (0.24) (0.41) (0.15) (0.15) 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.81) (1.04) (0.82) (0.37) (0.23) (0.02)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.97 $11.34 $10.67 $11.63 $11.60 $11.54
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 4.03% 16.38% (4.32)% 3.47% 2.49% 0.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $239,703 $268,352 $273,105 $119,687 $99,784 $77,792
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.71% 0.58% 0.50% 1.47% 1.45% 1.44%
Ratio of net investment
income to average net
assets 5.08% 5.59% 5.87% 3.74% 3.90% 3.95%
Portfolio turnover 19% 38% 4% 5% 15% 12%
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.82% 0.78% 0.95% 1.89% 1.82% 1.76%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.97% 5.39% 5.42% 3.32% 3.53% 3.63%
- ----------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES).
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
91
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1)
(CONT.)
CLASS C (2)
----------------------------------
(UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, DEC. 31,
1998 1998 (3) 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.60 $11.54 $11.19
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.22 0.23 0.47
Net realized and unrealized gain (loss) on investments 0.18 0.06 0.42
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.40 0.29 0.89
LESS DISTRIBUTIONS:
Dividends from net investment income (0.22) (0.23) (0.47)
Distributions from net realized gain (0.15) 0.00 (0.07)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.37) (0.23) (0.54)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $11.63 $11.60 $11.54
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.47% 2.49% 8.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $14,419 $8,249 $5,860
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.47% 1.45% 1.48%
Ratio of net investment income to average net assets 3.71% 3.90% 4.19%
Portfolio turnover 5% 15% 12%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.79% 1.78% 1.63%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.39% 3.57% 4.04%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES).
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D AND WAS RENAMED
AS CLASS C IN CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS
FUNDS, INC. AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
92
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND (1) (CONT.)
INSTITUTIONAL CLASS
----------------------------------
CLASS C (2) (CONT.) (UNAUDITED)
---------------------------------- SIX MONTHS SIX MONTHS PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31,
1996 1995 1994 1998 1998 (3) 1997 (4)
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $11.57 $10.88 $12.24 $11.40 $11.35 $11.32
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.49 0.56 0.60 0.26 0.26 0.03
Net realized and
unrealized gain (loss)
on investments (0.13) 1.10 (1.20) 0.18 0.05 0.03
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.36 1.66 (0.60) 0.44 0.31 0.06
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.49) (0.56) (0.60) (0.26) (0.26) (0.03)
Distributions from net
realized gain (0.25) (0.41) (0.16) (0.14) 0.00 0.00
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.74) (0.97) (0.76) (0.40) (0.26) (0.03)
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $11.19 $11.57 $10.88 $11.44 $11.40 $11.35
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 3.24% 15.58% (5.00)% 3.96% 2.80% 0.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $6,506 $7,063 $7,346 $79,512 $82,577 $84,113
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.46% 1.30% 1.20% 0.72% 0.69% 0.63%
Ratio of net investment
income to average net
assets 4.33% 4.87% 5.15% 4.51% 4.69% 4.79%
Portfolio turnover 19% 38% 4% 5% 15% 12%
- ----------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.59% 1.57% 1.82% 1.03% 0.98% 0.92%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.20% 4.60% 4.53% 4.20% 4.40% 4.50%
- ----------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) PERIODS PRIOR TO DECEMBER 31, 1997 HAVE BEEN RESTATED TO GIVE EFFECT
TO THE CONVERSION RATIOS APPLIED IN THE CONSOLIDATION OF OVERLAND
EXPRESS FUNDS, INC. AND STAGECOACH FUNDS, INC. (0.95571302 FOR CLASS A
SHARES AND 1.22415291 FOR CLASS C SHARES).
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D AND WAS RENAMED
AS CLASS C IN CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS
FUNDS, INC. AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO JUNE 30.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
93
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND
CLASS A
----------------------------------
(UNAUDITED) THREE
SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 (1) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.44 $10.44 $10.27
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.20 0.10 0.39
Net realized and unrealized gain (loss) on investments 0.17 0.00 0.20
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.37 0.10 0.59
LESS DISTRIBUTIONS:
Dividends from net investment income (0.20) (0.10) (0.39)
Distributions from net realized gain (0.12) 0.00 (0.03)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.32) (0.10) (0.42)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.49 $10.44 $10.44
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.53% 0.93% 5.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $48,505 $54,169 $59,011
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.75% 0.75% 0.68%
Ratio of net investment income to average net assets 3.69% 3.72% 3.78%
Portfolio turnover 41% 2% 88%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.54% 1.44% 1.29%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 2.90% 3.03% 3.17%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
94
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND (CONT.)
CLASS A (CONT.) INSTITUTIONAL CLASS
---------------------------------------------- ----------------------------------
NINE (UNAUDITED) THREE
SIX MONTHS MONTHS SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, DEC. 31, DEC. 31, DEC. 31, JUNE 30, MARCH 31,
1997 (2) 1996 (3) 1995 1994 1998 1998 (1) 1998
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.26 $10.35 $9.84 $10.36 $10.27 $10.27 $10.11
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.19 0.29 0.38 0.40 0.20 0.10 0.39
Net realized and
unrealized gain (loss)
on investments 0.01 (0.09) 0.51 (0.52) 0.17 0.00 0.19
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.20 0.20 0.89 (0.12) 0.37 0.10 0.58
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.19) (0.29) (0.38) (0.40) (0.20) (0.10) (0.39)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 (0.12) 0.00 (0.03)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) (0.29) (0.38) (0.40) (0.32) (0.10) (0.42)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.27 $10.26 $10.35 $9.84 $10.32 $10.27 $10.27
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.97% 2.01% 9.14% (1.10)% 3.56% 0.94% 5.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $67,647 $82,359 $77,965 $48,998 $8,345 $7,559 $7,069
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.65% 0.65% 0.65% 0.16% 0.70% 0.70% 0.62%
Ratio of net investment
income to average net
assets 3.73% 3.83% 3.70% 4.03% 3.74% 3.77% 3.84%
Portfolio turnover 14% 48% 31% 33% 41% 2% 88%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.18% 1.14% 1.22% 1.21% 1.44% 1.40% 1.17%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.20% 3.34% 3.13% 2.98% 3.00% 3.07% 3.29%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO SEPTEMBER 30.
95
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE
INCOME FUND (CONT.)
INSTITUTIONAL CLASS
(CONT.)
----------------------
SIX MONTHS PERIOD
ENDED ENDED
MARCH 31, SEPT. 30,
1997 (2) 1996 (3)
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.10 $10.06
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.19 0.02
Net realized and unrealized gain (loss) on investments 0.01 0.04
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.20 0.06
LESS DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.02)
Distributions from net realized gain 0.00 0.00
---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) (0.02)
---------- ----------
NET ASSET VALUE, END OF PERIOD $10.11 $10.10
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 2.00% 0.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $7,061 $10,066
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.60% 0.55%
Ratio of net investment income to average net assets 3.73% 3.06%
Portfolio turnover 14% 48%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 1.05% 0.92%
Ratio of net investment income (loss) to average net assets prior to
waived fees and reimbursed expenses 3.28% 2.69%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
96
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1)
CLASS A
----------------------------------------------------------------------------------
(UNAUDITED) THREE FOUR
SIX MONTHS MONTHS SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1998 1998 (4) 1998 1997 (2) 1996 1995 (5) 1995
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $15.97 $15.92 $15.17 $15.24 $15.34 $15.28 $14.98
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.38 0.19 0.75 0.37 0.72 0.24 0.68
Net realized and
unrealized gain (loss)
on investments 0.13 0.05 0.81 (0.07) (0.10) 0.08 0.32
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.51 0.24 1.56 0.30 0.62 0.32 1.00
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.38) (0.19) (0.75) (0.37) (0.72) (0.26) (0.70)
Distributions from net
realized gain 0.00 0.00 (0.06) 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.38) (0.19) (0.81) (0.37) (0.72) (0.26) (0.70)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $16.10 $15.97 $15.92 $15.17 $15.24 $15.34 $15.28
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 3.21% 1.50% 10.44% 1.95% 4.03% 6.53%** 6.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $38,695 $40,820 $42,316 $4,526 $4,827 $14,305 $14,458
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.81% 0.81% 0.71% 0.35% 0.42% 0.35% 0.35%
Ratio of net investment
income to average net
assets 4.68% 4.72% 4.69% 4.81% 4.69% 4.65% 4.59%
Portfolio turnover 42% 30% 78% 86% 73% 86% 23%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.35% 1.37% 1.61% 2.11% 1.42% 1.85% 1.51%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 4.14% 4.16% 3.79% 3.05% 3.69% 3.15% 3.43%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
** ANNUALIZED
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
97
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1) (CONT.)
CLASS B
----------------------------------
(UNAUDITED) THREE
SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 (2) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.54 $10.50 $10.01
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.22 0.11 0.42
Net realized and unrealized gain (loss) on investments 0.08 0.04 0.53
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.30 0.15 0.95
LESS DISTRIBUTIONS:
Dividends from net investment income (0.22) (0.11) (0.42)
Distributions from net realized gain 0.00 0.00 (0.04)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.22) (0.11) (0.46)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.62 $10.54 $10.50
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 2.84% 1.41% 9.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $2,481 $1,841 $1,330
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.41% 1.41% 1.26%
Ratio of net investment income to average net assets 4.05% 4.05% 3.88%
Portfolio turnover 42% 30% 78%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 3.05% 2.71% 5.74%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 2.41% 2.75% (0.60)%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
98
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1) (CONT.)
CLASS C INSTITUTIONAL CLASS
CLASS B (CONT.) ---------------------------------- ----------------------
---------------------- (UNAUDITED) THREE (UNAUDITED) THREE
SIX MONTHS PERIOD SIX MONTHS MONTHS PERIOD SIX MONTHS MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPT. 30, DEC. 31, JUNE 30, MARCH 31, DEC. 31, JUNE 30,
1997 (3) 1996 (4) 1998 1998 (2) 1998 (5) 1998 1998 (2)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.06 $10.00 $10.54 $10.51 $10.48 $15.97 $15.92
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.06 0.00 0.22 0.11 0.13 0.38 0.19
Net realized and
unrealized gain (loss)
on investments (0.05) 0.06 0.08 0.03 0.03 0.12 0.05
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.01 0.06 0.30 0.14 0.16 0.50 0.24
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.06) 0.00 (0.22) (0.11) (0.13) (0.38) (0.19)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.06) 0.00 (0.22) (0.11) (0.13) (0.38) (0.19)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.01 $10.06 $10.62 $10.54 $10.51 $16.09 $15.97
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 0.10% 0.60% 2.84% 1.32% 1.49% 3.17% 1.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $119 $0 $6,754 $7,312 $7,608 $8,851 $7,696
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.10% 0.00% 1.41% 1.41% 1.40% 0.76% 0.76%
Ratio of net investment
income to average net
assets 3.80% 1.83% 4.08% 4.12% 4.09% 4.72% 4.76%
Portfolio turnover 86% 73% 42% 30% 78% 42% 30%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 13.74% 0.00% 2.07% 2.10% 2.28% 1.46% 1.35%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses (8.84)% 1.83% 3.42% 3.43% 3.21% 4.02% 4.17%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
99
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND (1) (CONT.)
INSTITUTIONAL CLASS (CONT.)
----------------------------------
SIX MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (3) 1996 (4)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $15.17 $15.24 $15.34
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.76 0.37 0.71
Net realized and unrealized gain (loss) on investments 0.81 (0.07) (0.10)
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 1.57 0.30 0.61
LESS DISTRIBUTIONS:
Dividends from net investment income (0.76) (0.37) (0.71)
Distributions from net realized gain (0.06) 0.00 0.00
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.82) (0.37) (0.71)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $15.92 $15.17 $15.24
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 10.51% 1.95% 4.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $7,654 $7,354 $7,132
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.42% 0.35% 0.36%
Ratio of net investment income to average net assets 4.82% 4.82% 4.66%
Portfolio turnover 78% 86% 73%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.92% 2.03% 1.45%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 3.32% 3.14% 3.57%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(6) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
100
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (2)
CLASS A
----------------------------------------------------------------------------------
(UNAUDITED) THREE FOUR
SIX MONTHS MONTHS SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31,
1998 1998 (5) 1998 1997 (3) 1996 1995 (6) 1995
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $16.82 $16.81 $16.29 $16.42 $16.38 $16.47 $16.17
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.38 0.18 0.76 0.37 0.79 0.28 0.82
Net realized and
unrealized gain (loss)
on investments 0.22 0.01 0.81 (0.10) 0.04 (0.08) 0.39
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.60 0.19 1.57 0.27 0.83 0.20 1.21
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.38) (0.18) (0.76) (0.37) (0.79) (0.29) (0.87)
Distributions from net
realized gain (0.25) 0.00 (0.29) (0.03) 0.00 0.00 (0.04)
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.63) (0.18) (1.05) (0.40) (0.79) (0.29) (0.91)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $16.79 $16.82 $16.81 $16.29 $16.42 $16.38 $16.47
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 3.59% 1.16% 9.81% 1.65% 5.03% 3.67%** 7.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $27,686 $27,665 $27,837 $30,635 $33,676 $50,077 $52,245
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.67% 0.67% 0.62% 0.60% 0.85% 0.70% 0.70%
Ratio of net investment
income to average net
assets 4.40% 4.41% 4.54% 4.52% 4.87% 5.01% 5.19%
Portfolio turnover 23% 24% 82% 90% 27% 57% 15%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.42% 1.29% 1.36% 1.31% 1.15% 1.01% 0.90%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 3.65% 3.79% 3.80% 3.81% 4.57% 4.70% 4.99%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND OPERATED AS THE QUALITY TAX-EXEMPT INCOME FUND OF WESTCORE
TRUST AND WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM
ITS COMMENCEMENT OF OPERATIONS ON JANUARY 15, 1993 UNTIL IT WAS
REORGANIZED AS A SERIES OF PACIFICA FUNDS TRUST ON OCTOBER 1, 1995,
WHEN FIRST INTERSTATE CAPITAL MANAGEMENT, INC. ("FICM") ASSUMED
INVESTMENT ADVISORY RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF
FIRST INTERSTATE BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM
WAS RENAMED AS WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND
OPERATED AS A SERIES OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED
AS A SERIES OF STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN
CONJUNCTION WITH THE SEPTEMBER 6, 1996 REORGANIZATION, EXISTING
INVESTOR SHARES WERE CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB
ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(6) THE FUND CHANGED ITS FISCAL YEAR-END FROM MAY 31 TO SEPTEMBER 30.
101
<PAGE>
Tax-Free Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (2) (CONT.)
CLASS B
----------------------------------
(UNAUDITED) THREE
SIX MONTHS MONTHS
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 (1) 1998
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.31 $10.30 $10.00
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.18 0.09 0.39
Net realized and unrealized gain (loss) on investments 0.13 0.01 0.47
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.31 0.10 0.86
LESS DISTRIBUTIONS:
Dividends from net investment income (0.18) (0.09) (0.39)
Distributions from net realized gain (0.16) 0.00 (0.17)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.34) (0.09) (0.56)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.28 $10.31 $10.30
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN (NOT ANNUALIZED)* 3.04% 0.98% 8.77%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $8,618 $5,956 $3,762
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.51% 1.51% 1.43%
Ratio of net investment income to average net assets 3.53% 3.48% 3.56%
Portfolio turnover 23% 24% 82%
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 2.27% 2.10% 2.39%
Ratio of net investment income (loss) to average net assets
prior to waived fees and reimbursed expenses 2.77% 2.89% 2.60%
- -----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
102
<PAGE>
FINANCIAL HIGHLIGHTS Tax-Free Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND (2) (CONT.)
INSTITUTIONAL CLASS
CLASS B (CONT.) ----------------------------------------------------------
---------------------- (UNAUDITED) THREE
SIX MONTHS PERIOD SIX MONTHS MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, SEPT. 30, DEC. 31, JUNE 30, MARCH 31, MARCH 31, SEPT. 30,
1997 (3) 1996 (4) 1998 1998 (1) 1998 1997 (3) 1996 (5)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.07 $10.00 $16.82 $16.81 $16.28 $16.42 $16.38
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.17 0.00 0.38 0.19 0.79 0.39 0.72
Net realized and
unrealized gain (loss)
on investments (0.05) 0.07 0.22 0.01 0.82 (0.11) 0.04
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 0.12 0.07 0.60 0.20 1.61 0.28 0.76
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.17) 0.00 (0.38) (0.19) (0.79) (0.39) (0.72)
Distributions from net
realized gain (0.02) 0.00 (0.26) 0.00 (0.29) (0.03) 0.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.19) 0.00 (0.64) (0.19) (1.08) (0.42) (0.72)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $10.00 $10.07 $16.78 $16.82 $16.81 $16.28 $16.42
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED)* 1.17% 0.70% 3.62% 1.18% 10.08% 1.69% 5.13%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $287 $0 $6,770 $7,314 $7,635 $8,175 $8,512
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.30% 0.00% 0.62% 0.62% 0.43% 0.40% 0.63%
Ratio of net investment
income to average net
assets 3.23% 1.83% 4.45% 4.46% 4.72% 4.72% 4.41%
Portfolio turnover 90% 27% 23% 24% 82% 90% 27%
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.15% 0.00% 1.41% 1.26% 1.27% 1.24% 0.93%
Ratio of net investment
income (loss) to average
net assets prior to waived
fees and reimbursed
expenses 2.38% 1.83% 3.66% 3.82% 3.88% 3.88% 4.11%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO JUNE 30.
(2) THE FUND OPERATED AS THE OREGON TAX-EXEMPT FUND OF WESTCORE TRUST AND
WAS ADVISED BY FIRST INTERSTATE BANK OF OREGON, N.A. FROM ITS
COMMENCEMENT OF OPERATIONS UNTIL IT WAS REORGANIZED AS A SERIES OF
PACIFICA FUNDS TRUST ON OCTOBER 1, 1995, WHEN FIRST INTERSTATE CAPITAL
MANAGEMENT, INC. ("FICM") ASSUMED INVESTMENT ADVISORY
RESPONSIBILITIES. IN CONNECTION WITH THE MERGER OF FIRST INTERSTATE
BANCORP INTO WELLS FARGO & CO. ON APRIL 1, 1996, FICM WAS RENAMED AS
WELLS FARGO INVESTMENT MANAGEMENT, INC. THE FUND OPERATED AS A SERIES
OF PACIFICA FUNDS TRUST UNTIL IT WAS REORGANIZED AS A SERIES OF
STAGECOACH FUNDS, INC. ON SEPTEMBER 6, 1996. IN CONJUNCTION WITH THE
SEPTEMBER 6, 1996 REORGANIZATION, EXISTING INVESTOR SHARES WERE
CONVERTED INTO CLASS A SHARES OF THE FUND AND WFB ASSUMED INVESTMENT
ADVISORY RESPONSIBILITIES.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THIS CLASS OF SHARES COMMENCED OPERATIONS ON SEPTEMBER 6, 1996.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON OCTOBER 1, 1995.
103
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
104
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on January 1,
1992, and is currently comprised of thirty-one separate series. These financial
statements represent the Arizona Tax-Free, California Tax-Free Bond, California
Tax-Free Income, National Tax-Free, and Oregon Tax-Free Funds (each, a "Fund",
collectively, the "Funds"), each, with the exception of the National Tax-Free
Fund, a non-diversified series of the Company. The National Tax-Free Fund is a
diversified series of the Company.
Effective at the close of business on December 12, 1997, the Overland Express
Funds, Inc. were consolidated into the Company in a tax-free exchange for shares
of designated classes of the corresponding Stagecoach fund. Also, at the close
of business on December 12, 1997, funds structured as a "feeder" fund in a
"master-feeder" structure were restructured to invest directly in a portfolio of
securities, rather than to invest in a portfolio of securities through a
"master" portfolio. Effective on September 6, 1996 the Pacifica Funds Trust was
consolidated into the Company in a tax-free exchange for shares of designated
classes of the corresponding Stagecoach fund.
The Arizona Tax-Free and Oregon Tax-Free Funds offer Class A, Class B, and
Institutional Class shares. The California Tax-Free Bond and National Tax-Free
Funds offer Class A, Class B, Class C and Institutional Class shares. The
California Tax-Free Income Fund offers Class A and Institutional Class shares.
The separate classes of shares differ principally in the applicable sales
charges (if any), distribution fees, shareholder servicing fees and transfer
agency fees. Shareholders of each class also bear certain expenses that pertain
to that particular class. All shareholders bear the common expenses of the Fund
and earn income from the portfolio pro rata based on the average daily net
assets of each class, without distinction between share classes. Dividends are
determined separately for each class based on income and expenses allocable to
each class. Realized gains are allocated to each class pro rata based on the net
assets of each class on the date of distribution. No class has preferential
dividend rights. Differences in per share dividend rates generally result from
the relative weightings of pro rata income and realized gain allocations and
from differences in separate class expenses, including distribution, shareholder
servicing and transfer agency fees.
105
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
All securities are valued at the close of each business day. Securities for
which the primary market is a nationally recognized securities or commodities
exchange or the National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market are valued at the last reported sales price on the
day of valuation. Debt securities are generally traded in the over-the-counter
market and are valued at a price deemed best to reflect fair value as quoted by
dealers who make markets in those securities or by an independent pricing
source. U.S. Government obligations are valued at the last reported bid price.
In the absence of any sale of such securities on the valuation date and in the
case of other securities, excluding money market instruments maturing in 60 days
or less, the valuations are based on latest quoted bid prices. Debt securities
maturing in 60 days or less are valued at amortized cost. The amortized cost
method involves valuing a security at its cost, plus accretion of discount or
minus amortization of premium over the period until maturity, which approximates
market value. Securities for which quotations are not readily available are
valued at fair value as determined by policies set by the Company's Board of
Directors.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Interest income is
accrued daily. Realized gains or losses are reported on the basis of identified
cost of securities delivered. Bond discounts are accreted and premiums are
amortized under provisions of the Internal Revenue Code of 1986, as amended (the
"Code").
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared
daily and distributed monthly. Any distributions to shareholders from net
realized capital gains are declared and distributed annually.
106
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It
is the policy of each Fund of the Company to continue to qualify as a regulated
investment company by complying with the provisions applicable to regulated
investment companies, as defined in the Code, and to make distributions of
substantially all of its investment company taxable income and any net realized
capital gains (after reduction for capital loss carryforwards) sufficient to
relieve it from all, or substantially all, federal income taxes. Accordingly, no
provision for federal income taxes was required at December 31, 1998. The
National Tax-Free Fund had estimated net capital loss carryforwards at December
31, 1998 as follows:
<TABLE>
<CAPTION>
YEAR CAPITAL LOSS
FUND EXPIRES CARRYFORWARDS
- ---------------------------------------------------------------------------
<S> <C> <C>
National Tax-Free Fund 2002 $ 33,702
2003 245,237
</TABLE>
Any loss carryforwards from Pacifica and Overland are included in the Fund's
carryforwards as shown above. The Company's Board of Directors intends to offset
net capital gains with each capital loss carryforward, and no capital gain
distribution shall be made until each carryforward has been fully utilized or
expires.
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains (losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may differ
from the year in which the income and realized gains (losses) were recorded by a
Fund. The differences between the income or gains distributed on a book versus
tax basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of Changes
in Net Assets. The amount of distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from GAAP. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent that these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require reclassifications.
DEFERRED ORGANIZATION COSTS
Certain costs incurred in connection with the organization of the Funds and
their initial registration with the Securities and Exchange Commission and with
the various states are amortized on a straight-line basis over 60 months from
the date each Fund commenced operations.
107
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company entered into separate advisory contracts on behalf of the Funds
with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contracts, WFB has agreed
to provide the Funds with daily portfolio management. Under the contracts, WFB
is entitled to be paid a monthly advisory fee at an annual rate of 0.50% of the
average daily net assets of each Fund.
On August 1, 1998, Wells Capital Management Incorporated ("WCM"), a wholly
owned subsidiary of WFB, began acting as investment sub-advisor to the Funds.
WCM is entitled to receive from WFB, as compensation for its sub-advisory
services to the Funds, a monthly fee at the annual rate of 0.15% of the Funds'
average daily net assets up to $400 million, 0.125% for the next $400 million
and 0.10% of the Fund's average daily net assets in excess of $800 million.
WCM's minimum annual fee is $120,000 for each Fund. This minimum annual fee does
not increase the advisory fees paid by the Funds to WFB.
The Company entered into contracts on behalf of each Fund with WFB, whereby
WFB is responsible for providing custody and portfolio accounting services for
the Funds. Pursuant to the contracts, WFB is entitled to certain transaction
charges plus a monthly fee for custody services at an annual rate of 0.0167% of
the average daily net assets of each Fund. For portfolio accounting services,
WFB is entitled to a monthly base fee from each Fund of $2,000 plus an annual
fee of 0.07% of the first $50 million of each Fund's average daily net assets,
0.045% of the next $50 million, and 0.02% of each Fund's average daily net
assets in excess of $100 million.
The Company entered into a contract on behalf of the Funds with WFB, whereby
WFB provides transfer agency services for the Funds. Under the transfer agency
contract, WFB is entitled to receive transfer agency fees at the following
annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE DAILY NET ASSETS
------------------------------------------------
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund 0.14 0.14 N/A 0.06
California Tax-Free Bond Fund 0.14 0.14 0.14 0.06
California Tax-Free Income Fund 0.14 N/A N/A 0.06
National Tax-Free Fund 0.14 0.14 0.14 0.06
Oregon Tax-Free Fund 0.14 0.14 N/A 0.06
</TABLE>
108
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
The transfer agency fees paid on behalf of the Funds for the six months ended
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 3,821 $ 1,183 N/A $ 3,308
California Tax-Free Bond
Fund 352,143 77,884 $ 7,762 24,005
California Tax-Free Income
Fund 36,000 N/A N/A 2,509
National Tax-Free Fund 28,041 1,563 4,967 2,549
Oregon Tax-Free Fund 19,400 5,340 N/A 2,193
</TABLE>
The Company entered into contracts on behalf of the Funds with WFB, whereby
WFB has agreed to provide shareholder services for the Funds. Pursuant to the
contracts, WFB is entitled to receive shareholder servicing fees at the
following annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE DAILY NET ASSETS
------------------------------------------------
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund 0.25 0.25 N/A 0.25
California Tax-Free Bond Fund 0.30 0.30 0.25 0.25
California Tax-Free Income Fund 0.30 N/A N/A 0.25
National Tax-Free Fund 0.25 0.25 0.25 0.25
Oregon Tax-Free Fund 0.25 0.25 N/A 0.25
</TABLE>
The shareholder servicing fees paid on behalf of the Funds for the six months
ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 6,745 $ 2,089 N/A $ 13,631
California Tax-Free Bond
Fund 752,758 166,470 $ 13,823 99,779
California Tax-Free Income
Fund 76,468 N/A N/A 10,358
National Tax-Free Fund 49,623 2,762 8,790 10,520
Oregon Tax-Free Fund 34,409 9,466 N/A 9,076
</TABLE>
The Company entered into administration agreements on behalf of the Funds
whereby WFB as administrator and Stephens Inc. ("Stephens") as co-administrator
provide each Fund with administration services. For these services, WFB and
Stephens are entitled to receive monthly fees at the annual rates of 0.03% and
0.04%, respectively, of each Fund's average daily net assets.
The Company adopted separate Distribution Plans for the Class A, Class B, and
Class C shares of the Funds pursuant to Rule 12b-1 under the 1940 Act (each, a
"Plan"). The Plan for the Class A shares of the Arizona Tax-Free, National
Tax-Free and Oregon Tax-Free Funds provides that each such Fund may pay to
Stephens, as compensation for distribution-related services or as reimbursement
for distribution-related expenses, up to 0.05% of the average
109
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
daily net assets attributable to its Class A shares. The Plan for Class A shares
of the California Tax-Free Income and California Tax-Free Bond Funds provides
that the Funds may defray all or part of the cost of preparing, printing and
distributing prospectuses and other promotional materials by paying for costs
incurred on an annual basis of up to 0.05% of the average daily net assets
attributable to the California Tax-Free Income's Class A shares and up to the
greater of $100,000 or 0.05% of the California Tax-Free Bond's Class A shares.
The Plan for the Class B shares of the Arizona Tax-Free, National Tax-Free and
Oregon Tax-Free Funds provides that each such Fund may pay to Stephens, as
compensation for distribution-related services or as reimbursement for
distribution-related expenses, up to 0.75% of the average daily net assets
attributable to the Class B shares. The Plan for Class B shares of California
Tax-Free Bond Fund provides that the Fund may pay to Stephens, as compensation
for distribution-related services or as reimbursement for distribution-related
expenses, up to 0.70% of the average daily net assets attributable to the Class
B shares.
The Plan for Class C shares of the California Tax-Free Bond and National
Tax-Free Funds provides that the Funds may pay to Stephens, as compensation for
distribution-related services or as reimbursement for distribution-related
expenses, up to 0.75% of the average daily net assets attributable to the Class
C shares.
Each Fund may participate in joint distribution activities with other Funds,
in which event, expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses of joint distribution activities are allocated among the
Funds in proportion to their relative net asset sizes.
The distribution fees paid on behalf of the Funds for the six months ended
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Arizona Tax-Free Fund $ 0 $ 6,266 N/A
California Tax-Free Bond Fund 0 388,429 $ 41,469
California Tax-Free Income Fund 0 N/A N/A
National Tax-Free Fund 9,925 8,286 26,371
Oregon Tax-Free Fund 0 28,399 N/A
</TABLE>
110
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
The registration fees paid on behalf of the Funds for the six months ended
December 31, 1998 were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
FUND CLASS A CLASS B CLASS C CLASS
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona Tax-Free Fund $ 3,025 $ 8,195 N/A $ 2,149
California Tax-Free Bond
Fund 17,020 68,601 $ 1,399 32,485
California Tax-Free Income
Fund 3,223 N/A N/A 2,149
National Tax-Free Fund 6,875 11,526 2,418 12,184
Oregon Tax-Free Fund 3,529 4,535 N/A 3,025
</TABLE>
WAIVED FEES AND REIMBURSED EXPENSES
The following amounts of fees and expenses were waived or reimbursed for the
six months ended December 31, 1998:
<TABLE>
<CAPTION>
EXPENSES REIMBURSED BY FEES WAIVED
FUND STEPHENS BY WFB
- --------------------------------------------------------------------------
<S> <C> <C>
Arizona Tax-Free Fund $ 4,600 $ 94,772
California Tax-Free Bond Fund 0 1,176,035
California Tax-Free Income Fund 1,043 233,215
National Tax-Free Fund 0 178,965
Oregon Tax-Free Fund 0 161,519
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens.
Certain officers and one director of the Company are also officers of
Stephens. As of December 31, 1998, Stephens owned 8 shares of the Arizona
Tax-Free Fund, 9,412 shares of the California Tax-Free Bond Fund, 12,796 shares
of the California Tax-Free Income Fund, 10,612 shares of the National Tax-Free
Fund and 6 shares of the Oregon Tax-Free Fund.
Stephens has retained $1,708,170 as sales charges from the proceeds of Class A
shares sold, $1,439,982 as proceeds from Class B shares redeemed by the Company
and $43,103 as proceeds from Class C shares redeemed by the Company for the six
months ended December 31, 1998. Wells Fargo Securities Inc., a subsidiary of
WFB, received $1,515,763 as sales charges from the proceeds of Class A shares
sold, $290,721 as proceeds from Class B shares redeemed by the Company and $0 as
proceeds from Class C shares redeemed by the Company for the six months ended
December 31, 1998.
111
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date), for each Fund
for the six months ended December 31, 1998 were as follows:
AGGREGATE PURCHASES AND SALES
<TABLE>
<CAPTION>
PURCHASES SALES
FUND AT COST PROCEEDS
- ------------------------------------------------------------------------
<S> <C> <C>
Arizona Tax-Free Fund $3,964,906 $ 4,559,844
California Tax-Free Bond Fund 37,351,953 34,097,957
California Tax-Free Income Fund 23,885,754 27,092,411
National Tax-Free Fund 23,773,531 23,476,809
Oregon Tax-Free Fund 10,360,042 9,571,111
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
As of December 31, 1998, there were over 242 billion shares of $0.001 par
value capital stock authorized by the Company. As of December 31, 1998, each
Fund was authorized to issue 500 million shares of $0.001 par value capital
stock for each class of shares.
Capital share transactions for the Funds were as follows:
<TABLE>
<CAPTION>
ARIZONA TAX-FREE FUND
------------------------------------
(UNAUDITED)
FOR THE FOR THE
SIX THREE
MONTHS MONTHS FOR THE
ENDED ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 1998
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 35,845 14,261 43,843
Shares issued in reinvestment of
dividends -- Class A 18,404 4,309 24,687
Shares redeemed -- Class A (33,711) (27,105) (110,898)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 20,538 (8,535) (42,368)
Shares sold -- Class B 1,289 25,915 139,190
Shares issued in reinvestment of
dividends -- Class B 4,916 889 3,792
Shares redeemed -- Class B (5,500) (13,840) (12,211)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 705 12,964 130,771
Shares sold -- Institutional Class 75,268 15,084 116,767
Shares issued in reinvestment of
dividends -- Institutional Class 962 130 991
Shares redeemed -- Institutional
Class (96,625) (112,704) (375,960)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (20,395) (97,490) (258,202)
</TABLE>
112
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
-----------------------------------------
(UNAUDITED)
FOR THE SIX
MONTHS FOR THE FOR THE
ENDED SIX MONTHS YEAR ENDED
DEC. 31, JUNE 30, DEC. 31,
1998 1998 1997 (1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 1,583,602 2,646,915 27,081,868
Shares issued in reinvestment of
dividends -- Class A 1,117,296 604,957 601,099
Shares redeemed -- Class A (3,409,541) (4,347,657) (4,493,270)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (708,643) (1,095,785) 23,189,697
Shares sold -- Class B 2,016,441 2,264,459 6,780,297
Shares issued in reinvestment of
dividends -- Class B(2) 266,297 111,908 125
Shares redeemed -- Class B(2) (597,460) (510,735) (40,678)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B(2) 1,685,278 1,865,632 6,739,744
Shares sold -- Class C 571,624 250,882 114,726
Shares issued in reinvestment of
dividends -- Class C 23,680 5,659 11,817
Shares redeemed -- Class C (67,102) (52,825) (200,314)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS C 528,202 203,716 (73,771)
Shares sold -- Institutional Class(2) 673,359 968,464 7,506,033
Shares issued in reinvestment of
dividends -- Institutional Class(2) 113,748 16,617 54
Shares redeemed -- Institutional
Class(2) (1,076,770) (1,153,845) (96,138)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS(2) (289,663) (168,764) 7,409,949
</TABLE>
(1) "SHARES SOLD" INCLUDES 26,130,006 FOR CLASS A SHARES, 6,543,148 FOR CLASS B
SHARES AND 7,487,949 FOR INSTITUTIONAL CLASS SHARES AS A RESULT OF THE
CONSOLIDATION OF THE OVERLAND EXPRESS CALIFORNIA TAX-FREE BOND FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
113
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE INCOME FUND
-----------------------------------------
(UNAUDITED)
FOR THE SIX FOR THE
MONTHS THREE
ENDED MONTHS ENDED FOR THE
DEC. 31, JUNE 30, YEAR ENDED
1998 1998 MARCH 31, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 284,307 208,631 1,890,485
Shares issued in reinvestment of
dividends -- Class A 135,684 44,610 228,242
Shares redeemed -- Class A (987,735) (715,645) (3,052,403)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (567,744) (462,404) (933,676)
Shares sold -- Institutional Class 112,667 85,189 101,348
Shares issued in reinvestment of
dividends -- Institutional Class 11,549 1,837 8,519
Shares redeemed -- Institutional Class (52,044) (39,041) (120,343)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS 72,172 47,985 (10,476)
</TABLE>
114
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Tax-Free Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL TAX-FREE FUND
-----------------------------------------
(UNAUDITED)
FOR THE SIX FOR THE
MONTHS THREE FOR THE
ENDED MONTHS ENDED YEAR ENDED
DEC. 31, JUNE 30, MARCH 31,
1998 1998 1998 (1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 97,877 15,392 2,553,367
Shares issued in reinvestment of
dividends -- Class A 33,729 15,229 23,740
Shares redeemed -- Class A (283,288) (132,609) (218,009)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (151,682) (101,988) 2,359,098
Shares sold -- Class B 66,983 56,596 112,758
Shares issued in reinvestment of
dividends -- Class B 3,564 995 1,979
Shares redeemed -- Class B (11,638) (9,437) (59)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 58,909 48,154 114,678
Shares sold -- Class C(2) 12,397 412 782,874
Shares issued in reinvestment of
dividends -- Class C(2) 6,137 2,640 2,672
Shares redeemed -- Class C(2) (76,392) (33,407) (61,472)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS C(2) (57,858) (30,355) 724,074
Shares sold -- Institutional Class 159,172 27,553 172,762
Shares issued in reinvestment of
dividends -- Institutional Class 5,473 2,385 8,516
Shares redeemed -- Institutional Class (96,619) (28,822) (185,287)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS 68,026 1,116 (4,009)
</TABLE>
(1) "SHARES SOLD" INCLUDES 2,415,150 FOR CLASS A SHARES AND 779,496 FOR CLASS C
SHARES AS A RESULT OF THE CONSOLIDATION OF THE OVERLAND MUNICIPAL INCOME
FUND.
(2) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
115
<PAGE>
Tax-Free Funds NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OREGON TAX-FREE FUND
-----------------------------------------
(UNAUDITED)
FOR THE SIX FOR THE
MONTHS THREE
ENDED MONTHS ENDED FOR THE
DEC. 31, JUNE 30, YEAR ENDED
1998 1998 MARCH 31, 1998
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARES ISSUED AND REDEEMED:
Shares sold -- Class A 58,012 56,463 140,558
Shares issued in reinvestment of
dividends -- Class A 51,658 13,045 82,429
Shares redeemed -- Class A (104,902) (80,855) (448,209)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A 4,768 (11,347) (225,222)
Shares sold -- Class B 240,950 221,819 331,842
Shares issued in reinvestment of
dividends -- Class B 21,879 2,548 5,330
Shares redeemed -- Class B (2,718) (11,758) (615)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 260,111 212,609 336,557
Shares sold -- Institutional Class 39,297 20,167 53,185
Shares issued in reinvestment of
dividends -- Institutional Class 6,135 1,426 7,122
Shares redeemed -- Institutional Class (76,959) (40,976) (108,163)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- INSTITUTIONAL CLASS (31,527) (19,383) (47,856)
</TABLE>
116
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
117
<PAGE>
LIST OF ABBREVIATIONS
- ------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which
may have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRN -- Floating Rate Notes
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
MTN -- Medium Term Note
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
118
<PAGE>
Wells Fargo provides investment advisory services, shareholder services, and
certain other services for Stagecoach Funds. The Funds are distributed by
STEPHENS INC., member NYSE/SIPC. Wells Fargo is not affiliated with Stephens
Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Stagecoach Funds. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. For a prospectus containing
more complete information, including charges and expenses, call
1-800-222-8222. Read the prospectus carefully before you invest or send money.
- -C- Stagecoach Funds
STAGECOACH FUNDS-Registered Trademark-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
[Recycle Logo] SC TF SAR (2/99)
