STAGECOACH FUNDS, INC.
SUPPLEMENT DATED APRIL 23, 1999
TO ALL CURRENT PROSPECTUSES
This supplement contains important information for shareholders about matters
recently approved by the Board of Directors of Stagecoach Funds, Inc. These
matters are listed below and described in greater detail later in this
supplement.
o The reorganization of Stagecoach Funds into new funds of Wells
Fargo Funds Trust, as part of the consolidation of the Stagecoach
and Norwest Advantage fund families.
o The appointment of a new transfer agent, BFDS, beginning July 17,
1999, which means that after July 17 shareholders must write to a
new address, fax to a new number, or wire money to a new location
to purchase or sell shares.
o Changes to the Sales Loads for Class A and B shares for equity and
income funds, beginning July 17, 1999, and enhancements to sales
charge reduction programs.
o Changes to the Funds' Administration arrangements.
Approval of the Reorganization
On March 25, 1999, the Board of Directors of Stagecoach Funds, Inc. (the
"Company") approved the reorganization of the Company's Funds into new
portfolios of Wells Fargo Funds Trust ("Funds Trust"). The reorganization is
part of a larger plan to consolidate the Wells Fargo Bank-advised fund family
with the Norwest Advantage fund family, following last November's merger of
Wells Fargo & Company and Norwest Corporation. The Company will present the
reorganization to Fund shareholders for their approval at a special
shareholders' meeting that is planned for August 1999.
If the reorganization is approved by shareholders, the following Funds will be
reorganized into the following portfolios of Funds Trust:
<TABLE>
<S> <C> <C>
Stagecoach Funds, Inc. Wells Fargo Funds Trust
Balanced Fund Asset Allocation Fund
Diversified Equity Income Fund Income Equity Fund
Government Money Market Fund Government Money Market Fund
National Tax-Free Fund National Tax-Free Fund
National Tax-Free Money Market National Tax-Free Money Market Fund
Fund (Class A) (Class A)
National Tax-Free Money Market National Tax-Free Institutional Money
Fund (Institutional Class) Market Fund (Service and
Institutional Classes)
Prime Money Market Fund Money Market Fund
(Class A)
Prime Money Market Fund, Cash Investment Money Market Fund
(Administrative, Service &
Institutional Classes)
Short-Intermediate U.S. Limited Term Government Income Fund
Government Income Fund
Strategic Growth Fund Small Cap Fund
Treasury Plus Money Market Treasury Plus Institutional Money
Fund (Administrative, Service Market Fund (Service and
and Institutional Classes) Institutional Classes)
U.S. Government Income Fund Intermediate Government Income Fund
U.S. Government Allocation Fund Intermediate Government Income Fund
</TABLE>
Although the investment objectives of these Funds Trust portfolios are
substantially similar to the investment objectives of the corresponding Funds of
the Company, the principal investment strategies may differ somewhat. In
addition, these Funds Trust portfolios are expected to absorb other Stagecoach
or Norwest Advantage funds. All of the other Funds of the Company will, if
approved by shareholders, be reorganized into new portfolios of Funds Trust that
have investment objectives and strategies that are substantially identical to
the corresponding Funds. In most cases, these substantially identical Funds
Trust portfolios will not absorb other funds.
The Funds Trust portfolios are not yet available for purchase, but corresponding
portfolios within either the Stagecoach fund family or the Norwest Advantage
fund family are currently available. No shareholder action is necessary at this
time. The Company's proxy materials, which are expected to be mailed in June to
all persons who are shareholders on May 6, 1999, will describe the
reorganization in detail, including any effect on expense ratios. If you buy
your shares after that date, you will not be entitled to vote on the
reorganization, but you may request a copy of the proxy materials.
Investors should be aware that, for certain share classes of certain Funds,
expense ratio increases of up to 0.14% are contemplated, except for the Small
Cap Fund Institutional Class, which contemplates an increase of 0.44%. In other
cases, expense ratios are expected to remain unchanged or decline. For most
portfolios, the reorganization is expected to be a tax-free transaction. For
Prime Money Market Fund, National Tax-Free Money Market Fund and Treasury Plus
Money Market Fund, the reorganization will not be a tax-free transaction, but it
is not expected to result in tax consequences for shareholders. The
reorganization will not trigger any sales charges.
If you have any questions or, after early June, if you would like to request a
copy of the proxy materials, you should call 1-800-222-8222.
Appointment of New Transfer Agent-BFDS
The Board of Directors has approved Boston Financial Data Services, known as
BFDS, to replace Wells Fargo Bank as the transfer agent for all Stagecoach
Funds. The Norwest Advantage fund family also has approved BFDS as a
sub-transfer agent for all of its funds. The Company anticipates that BFDS will
begin to act as transfer agent on July 17, 1999.
AFTER JULY 17, 1999: To purchase or sell fund shares, please use the
following new addresses and fax number when mailing or wiring funds to your
Stagecoach account.
By regular mail: Stagecoach Funds, Inc.
P.O. Box 8266
Boston, MA 02266-8266
By overnight mail only to: Stagecoach Funds, Inc.
Attn: CCSU
Boston Financial
66 Brooks Drive
Braintree, MA 02184
By Fax to: (617) 483-5765
By Wire to: State Street Bank & Trust
Boston, MA
ABA 01100028
FNF: (Stagecoach Fund name]
AC: 9905-437-1
(Name on Stagecoach Account
and Fund Account Number]
The section of your prospectus entitled "Your Account" describing how to buy and
sell shares should be updated to reflect the information listed above. All other
information in that section remains unchanged. Your current Shareholder Services
telephone number will remain the same. For information on your account, you
should continue to call (800) 222-8222.
Changes to Sales Loads for Class A and B Shares
The Company's Board of Directors has approved a new sales load structure for A
and B mutual fund shares to standardize sales loads among all Stagecoach equity
and income (bond) funds to reflect current industry standards. These sales loads
will go into effect for shares purchased beginning July 17, 1999.
<TABLE>
A Shares
<S> <C> <C>
Tax Free Income &
Breakpoint Equity Funds Income Funds
<$50,000 5.75% 4.50%
$50,000-99,999 4.75% 4.00%
$100,000-249,999 3.75% 3.50%
$250,000-499,999 2.75% 2.50%
$500,000-999,999 2.00% 2.00%
>$1,000,000* 0.00% 0.00%
</TABLE>
*We will assess Class A purchases of $1,000,000 or more a 1.00% CDSC if they are
redeemed within one year of the date of purchase. Charges are based on the lower
of the NAV on the date of purchase or the date of redemption.
B Shares
Currently, Stagecoach equity and bond funds charge a declining CDSC on Class B
shares redeemed within six years of the date of purchase. The Company's Board of
Directors has approved changes to the CDSC schedule on Class B shares. The major
difference is that Class B shares purchased beginning July 17, 1999, will not be
converted into Class A shares until Year 8, instead of Year 7. Shareholders who
sell Class B shares in Year 7, however, will not be charged a CDSC. For
purchases of Class B shares after July 17, 1999, the following CDSC Schedule
will be in effect:
<TABLE>
Class B Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
- ------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
- ------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
CDSC 5% 4% 3% 3% 2% 1% 0% A shares*
- ------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
*At Year 8 the Class B shares are converted into Class A shares at NAV.
The section of all equity and bond fund prospectuses entitled "A Choice of Share
Class" should be updated to reflect the new sales loads for Class A shares and
the new CDSC schedule for Class B shares.
Reduced Sales Charges
Class A shares
Beginning July 17, 1999, purchases of Class A shares of Norwest Advantage Funds
will count towards reductions of sales charges for purchases of Class A shares
of Stagecoach Funds. Currently, through Rights of Accumulation ("ROA"),
Stagecoach shareholders may reduce their sales loads on Class A shares by
accumulating purchases of different Stagecoach Funds to reach one of the sales
charge breakpoints listed above. Shareholders also may pay a lower sales charge
by signing a Letter of Intent ("LOI") to invest a specific amount over a
breakpoint within 13 months. Beginning July 17, 1999, Stagecoach shareholders
using either ROAs or LOIs may accumulate purchases of different Stagecoach and
Norwest Advantage Funds to reach a breakpoint in the sales charges for Class A
shares.
Class B shares
Beginning July 17, 1999, there will be one additional way that shareholders may
avoid being charged a CDSC on Class B shares. If you participate in the
Systematic Withdrawal Plan, no CDSC will be charged for withdrawals made under
this program, provided that the withdrawal does not exceed 10% of your Class B
shareholdings in a Fund annually, based on your anniversary date in the Plan.
The sections of the current prospectuses entitled "Reduced Sales Charges" should
be updated to reflect this new information.
Exchanges
Beginning July 17,1999, Class A shareholders who exchange their shares for Class
A shares of a fund with a higher sales load will not be required to pay the
difference in the sales load.
The section of the current prospectuses entitled "Exchanges" should be updated
to reflect this new information.
Wells Fargo is Primary Administrator for each Fund
Currently, Wells Fargo and Stephens Inc. serve as Co-Administrators for each of
the Company's Funds for annual fees of 0.03% and 0.04%, respectively. On March
25, 1999, the Company's Board of Directors approved Wells Fargo to act as the
sole Administrator at an annual contract rate of 0.15%. Wells Fargo has agreed
to charge only 0.07% of this annual fee and waive the additional 0.08% of the
contract rate until after the completion of the Reorganization in September
1999. As a result of the waiver, this change will not increase fees for your
Fund at this time.
<PAGE>
[MORRISON & FOERSTER LLP LETTERHEAD]
April 23, 1999
Writer's Direct Dial Number
(202) 463-1018
Via EDGAR
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Stagecoach Funds, Inc.
Registration Nos. 33-42927; 811-6419
Ladies and Gentlemen:
In connection with the registration of Stagecoach Funds, Inc. under the
Investment Company Act of 1940, and the issuance of securities by it under the
Securities Act of 1933, and pursuant to 17 C.F.R. 230.497(e), we are
transmitting herewith for filing a supplement dated April 23, 1999 to all
current prospectuses of the Company's Funds.
This supplement is being filed to inform shareholders of the recently
approved reorganization of the funds of the Company into portfolios of Wells
Fargo Funds Trust, the appointment of a new transfer agent, changes to the sales
loads for the Class A and B shares for the equity and income Funds, and changes
to the Funds' Administration arrangements.
If you have any questions, please contact the undersigned at the number
indicated above.
Very truly yours,
/s/ Eileen M. Smiley
Eileen M. Smiley
