<PAGE>
STAGECOACH FUNDS-Registered
Trademark-
Annual Report
OVERLAND EXPRESS
Sweep Fund
March 31, 1999
<PAGE>
Overland Express Sweep Fund TABLE OF CONTENTS
- ------------------------------------------------------------------------
LETTER TO SHAREHOLDERS...........................................1
INVESTMENT ADVISOR COMMENTARY AND
PERFORMANCE AT A GLANCE
Overland Express Sweep Fund..................................3
PORTFOLIO OF INVESTMENTS
Overland Express Sweep Fund..................................5
STAGECOACH FUNDS
Statement of Assets and Liabilities..........................9
Statement of Operations.....................................10
Statements of Changes in Net Assets.........................11
Financial Highlights........................................12
Notes to Financial Statements...............................14
INDEPENDENT AUDITORS' REPORT....................................18
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
i
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THIS PAGE IS INTENTIONALLY LEFT BLANK --
ii
<PAGE>
LETTER TO SHAREHOLDERS Overland Express Sweep Fund
- ------------------------------------------------------------------------
TO OUR SHAREHOLDERS
Thank you for investing in the Stagecoach Funds.
We're pleased to provide you with this annual report for the period ended
March 31, 1999. The report provides information about your investment over the
12-month period, including economic and market trends, a performance summary, a
portfolio review and a strategic outlook.
The Stagecoach Funds experienced another year of significant growth, with net
assets increasing from $25 billion to $29 billion during the 12-month period
ended March 31, 1999. We believe our success can be partly attributed to the
confidence and support of our shareholders generated by the continued positive
performance of many of the Funds. Of course, we'll do our best to provide
prudent management to maintain and earn that confidence.
The 12-month period that ended March 31, 1999 was marked by significant
volatility. Stocks marched steadily upward early in the period, but later
surrendered some of those gains during a sell-off in the stock market last
summer. Last summer and fall, global financial turmoil disrupted the U.S.
financial markets, but the economy still benefited from overseas flight to
capital and aggressive monetary easing by the Federal Reserve Board that drove
interest rates down to historic lows. By the end of the year, the stock market
had set new highs as broad stock indexes were propelled higher by a series of
upbeat earnings reports, and the economy's two-tiered performance produced solid
economic growth. Overall, bond yields are significantly lower than they were a
year ago, and fundamentals still point toward healthy growth during the balance
of 1999. The combination of subdued inflation, moderating economic growth and
strong foreign demand should set the stage for lower interest rates.
During the 12-month period ended March 31, 1999, stocks, as measured by the
S&P 500 Index,(1) returned 18.49%. The U.S. Government bond market increased
7.01% as measured by the Lehman Brothers Long
1
<PAGE>
Overland Express Sweep Fund LETTER TO SHAREHOLDERS
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Government Bond Index(2) during the period. Most shorter-dated money market
yields dropped late in the period, while yields on longer-dated papers rose.
According to the Investment Company Institute, an estimated 44 million U.S.
households, or 77.3 million individual investors, owned mutual funds in 1998.
Many of these investors have benefited from unprecedented growth in the market.
While the latest signs of economic strength are positive, investors should
manage their expectations. The challenges of investing in today's markets make
mutual funds one of the most popular investment vehicles. 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.
Over the years, the Stagecoach Funds have built a reputation for innovation,
leadership and commitment to investors. We understand you have a variety of
investment options and we appreciate your confidence in selecting us to help you
meet your financial goals. Thank you again for your continued investment with
the Stagecoach Funds.
Sincerely,
/s/ Michael J. Hogan
Michael J. Hogan
Senior Vice President
Wells Fargo Bank,
Mutual Fund Group
/s/ R. Greg Feltus
R. Greg Feltus
Chairman and President of
Stagecoach Funds
1 The "S&P 500 Index" is a trademark of the Standard and Poor's Corporation. The
S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
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>
INVESTMENT ADVISOR COMMENTARY Overland Express Sweep Fund
- ------------------------------------------------------------------------
OVERLAND EXPRESS SWEEP FUND
The Overland Express Sweep Fund seeks to provide investors with a high level
of current income, while preserving capital and liquidity. The investment
objective of the Fund is fundamental and may not be changed without shareholder
approval.
The Fund is managed by Michael Neitzke of Wells Capital Management
Incorporated. Mr. Neitzke joined Wells Fargo Bank in 1996 from First Interstate
Capital Management. He has more than a decade of experience in managing taxable
money market mutual funds at First Interstate Bank and Union Capital Advisors.
He holds a B.A. in Finance from California State University, Los Angeles.
PERFORMANCE SUMMARY
For the 12-month period ending March 31, 1999, the Stagecoach Overland Express
Sweep Fund's cumulative total return was 4.26%. The seven-day current yield for
the Fund as of March 31, 1999, was 3.78%. Keep in mind that past performance is
no guarantee of future results.
PORTFOLIO REVIEW
Throughout the period, there were several events that affected the financial
markets. Perhaps the most significant was the series of interest rate cuts by
the Federal Reserve Board (the Fed) late in 1998. These cuts were a result of
serious credit/liquidity problems overseas, and problems with several large U.S.
hedge funds. It was clear the Fed was committed to maintaining liquidity in the
markets by lowering interest rates. By adding later-dated securities to our
portfolios, we were able to maintain competitive yields in the low interest rate
environment.
The Fund always maintains a core position in repurchase agreements and other
short-dated securities when they are trading at the upper end of their expected
range.
3
<PAGE>
Overland Express Sweep Fund INVESTMENT ADVISOR COMMENTARY
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STRATEGIC OUTLOOK
With international and domestic markets relatively stable and inflation under
control, interest rates are expected to remain in a fairly narrow trading range.
However, as proven in late 1998, the Fed stands ready to provide necessary
liquidity by further lowering interest rates if global markets continue to
experience credit/ liquidity problems.
The Fund is well positioned given current international economic conditions
and low interest rates. We believe interest rates may remain unchanged at least
until the end of 1999, and we will maintain the Fund's longer-than-average
maturity structure. We believe it's prudent to focus more on credit quality and
stability, rather than purely on yield, and on capital preservation and
liquidity.
Figures quoted represent past performance, which is no guarantee of future
results. The Fund is neither insured nor guaranteed by the U.S. Government.
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 such reductions
will continue.
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
4
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 Overland Express Sweep Fund
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
VARIABLE AND FLOATING RATE BONDS - 12.75%
$50,000,000 Abbey National Treasury Service 4.79 % 07/26/99 $ 49,986,567
35,000,000 Abbey National Treasury Service 4.85 08/17/99 34,989,811
50,000,000 American Express 4.86 09/10/99 50,000,000
40,000,000 Bank of America Corporation 4.82 06/25/99 39,995,553
25,000,000 Bank of America Corporation 4.83 04/27/99 24,999,484
50,000,000 Key Bank 4.87 09/23/99 49,995,321
70,000,000 Key Bank 4.88 10/14/99 69,996,328
75,000,000 Pepsico Incorporated 4.81 08/19/99 74,966,118
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 394,929,182
(Cost $394,929,182)
COMMERCIAL PAPER - 39.32%
$135,000,000 Asset Securitization Coop Corporation++ 5.00 %# 04/14/99 $ 134,755,871
40,000,000 Associates Corporation of North America 4.80 # 05/17/99 39,754,667
50,000,000 Atlantis One Funding Corporation 4.83 # 05/28/99 49,617,625
60,000,000 Atlantis One Funding Corporation 4.85 # 05/14/99 59,652,417
10,000,000 Bank of America Corporation 4.85 # 08/20/99 9,810,042
20,000,000 CC USA Incorporated 4.84 # 05/12/99 19,889,756
15,000,000 CC USA Incorporated 4.84 # 08/16/99 14,723,717
50,000,000 Commercial Credit Corporation 4.85 # 05/14/99 49,710,347
40,000,000 CXC Incorporated++ 4.87 # 04/13/99 39,935,067
52,752,000 Enterprise Funding Corporation++ 4.87 # 04/29/99 52,552,187
30,000,000 Ford Motor Credit Company 4.81 # 05/14/99 29,827,642
100,000,000 Ford Motor Credit Company 4.85 # 07/01/99 98,774,028
10,000,000 General Electric Capital Services Incorporated 4.67 # 04/20/99 9,975,353
30,000,000 Goldman Sachs Group LP 4.84 # 07/07/99 29,608,767
28,593,000 Greenwich Funding Corporation++ 4.84 # 05/17/99 28,416,168
100,000,000 Johnson & Johnson Corporation++ 4.75 # 04/20/99 99,749,306
100,000,000 Morgan Stanley Dean Witter 4.87 # 04/08/99 99,905,306
50,000,000 National City Corporation 4.83 # 04/16/99 49,899,375
35,000,000 National City Corporation 4.85 # 04/20/99 34,910,410
</TABLE>
5
<PAGE>
Overland Express Sweep Fund PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONTINUED)
$45,217,000 Park Avenue Receivables Corporation++ 4.88 %# 04/23/99 $ 45,082,153
50,000,000 Riverwoods Funding 4.81 # 04/28/99 49,819,625
75,000,000 Riverwoods Funding 4.84 # 05/21/99 74,495,833
25,000,000 Salomon Smith Barney Holdings 4.80 # 04/20/99 24,936,667
32,500,000 Sheffield Receivables Corporation++ 4.88 # 04/12/99 32,451,539
9,000,000 Variable Funding Corporation++ 4.82 # 05/13/99 8,949,390
30,653,000 Windmill Funding Corporation++ 4.86 # 04/23/99 30,561,961
--------------
TOTAL COMMERCIAL PAPER $1,217,765,219
(Cost $1,217,765,219)
CORPORATE BONDS & NOTES - 11.88%
$10,000,000 Abbey National Treasury Service 5.64 % 07/15/99 $ 10,008,577
35,000,000 Abbey National Treasury Service 5.65 07/27/99 34,991,105
30,000,000 American Express Centurion Bank 4.94 12/14/99 30,000,000
25,000,000 Bank of America Corporation 4.96 11/18/99 24,996,945
30,000,000 Bank of America Corporation 4.95 # 04/05/00 29,988,177
25,000,000 Beta Finance Incorporated 5.26 03/06/00 25,000,000
50,000,000 Comerica Bank 4.94 01/10/00 49,988,510
49,500,000 First Union National Bank 5.35 09/09/99 49,500,000
17,500,000 IBM Credit Corporation 5.27 04/07/00 17,487,510
16,500,000 IBM Credit Corporation 5.57 08/17/99 16,495,751
25,000,000 JP Morgan & Company Incorporated 4.86 09/15/99 25,000,000
40,000,000 Sigma Finance Incorporated 5.23 03/29/00 40,000,000
14,451,000 Signet Bank 9.63 06/01/99 14,542,978
--------------
TOTAL CORPORATE BONDS & NOTES $ 367,999,553
(Cost $367,999,553)
</TABLE>
6
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 Overland Express Sweep Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
SHORT-TERM FEDERAL AGENCIES - 6.17%
$16,500,000 Federal Home Loan Banks 4.95 % 02/17/00 $ 16,493,013
10,000,000 Federal Home Loan Banks 4.95 08/19/99 9,993,855
23,000,000 Federal Home Loan Banks 5.54 07/13/99 23,048,305
50,000,000 Federal National Mortgage Association 4.75 # 06/14/99 49,511,805
30,000,000 Student Loan Mortgage Association 4.77 11/05/99 30,000,000
62,000,000 Student Loan Mortgage Association 4.78 11/04/99 61,992,432
--------------
TOTAL SHORT-TERM FEDERAL AGENCIES $ 191,039,410
(Cost $191,039,410)
CERTIFICATES OF DEPOSIT - 14.53%
$75,000,000 Chase Manhattan Bank 4.87 % 04/21/99 $ 75,000,000
50,000,000 Chase Manhattan Bank 5.10 04/20/99 50,000,000
70,000,000 CIBC 5.04 06/29/99 70,000,000
25,000,000 Deutsche Bank 4.85 07/22/99 25,000,000
20,000,000 FCC National Bank 4.82 04/22/99 20,000,000
40,000,000 National Westminster Bank 5.14 04/14/00 39,980,035
40,000,000 RaboBank Nederland 5.13 03/24/00 39,981,109
50,000,000 RaboBank Nederland 5.29 03/06/00 49,982,085
30,000,000 RaboBank Nederland 5.74 05/19/99 29,997,355
50,000,000 Swiss Bank 5.75 05/07/99 49,997,639
--------------
TOTAL CERTIFICATES OF DEPOSIT $ 449,938,223
(Cost $449,938,223)
</TABLE>
7
<PAGE>
Overland Express Sweep Fund PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 17.48%
$202,839,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 4.90 04/01/99 $ 202,839,000
250,000,000 JP Morgan Securities Incorporated Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 4.88 04/01/99 250,000,000
88,570,000 Morgan Stanley & Company Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 4.90 04/01/99 88,570,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 541,409,000
(Cost $541,409,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $3,163,080,587)* (Note 1) 102.13% $3,163,080,587
Other Assets and Liabilities, Net (2.13) (65,861,891)
------ --------------
TOTAL NET ASSETS 100.00% $3,097,218,696
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
++ REPRESENTS COMMERCIAL PAPER SOLD WITHIN TERMS OF PRIVATE PLACEMENT
MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION 4(2) OF THE
SECURITIES ACT OF 1933, THAT MAY BE RESOLD TO QUALIFIED INSTITUTIONAL
BUYERS. THIS SECURITY WAS DEEMED LIQUID BY THE INVESTMENT ADVISER IN
ACCORDANCE WITH PROCEDURES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
# YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - MARCH 31, 1999 Overland Express Sweep Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVERLAND
EXPRESS
SWEEP FUND
<S> <C>
ASSETS
INVESTMENTS:
In securities, at market value and
cost (include repurchase agreements
of $541,409,000) $3,163,080,587
Cash 53,322
RECEIVABLES:
Interest 16,636,595
Prepaid expenses 13,536
TOTAL ASSETS 3,179,784,040
LIABILITIES
Payables:
Investment securities purchased 69,968,212
Distribution to shareholders 9,433,217
Due to distributor (Note 2) 735,046
Due to adviser (Note 2) 2,188,350
Other 240,519
TOTAL LIABILITIES 82,565,344
TOTAL NET ASSETS $3,097,218,696
NET ASSETS CONSIST OF:
Paid-in capital $3,097,743,692
Undistributed net realized gain (loss)
on investments (524,996)
TOTAL NET ASSETS $3,097,218,696
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
Net assets $3,097,218,696
Shares outstanding 3,097,754,325
Net asset value and offering price per
share $ 1.00
- -----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
STATEMENT OF OPERATIONS -
Overland Express Sweep Fund FOR THE YEAR ENDED MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVERLAND
EXPRESS
SWEEP FUND
<S> <C>
INVESTMENT INCOME
Interest $ 151,527,631
TOTAL INVESTMENT INCOME 151,527,631
EXPENSES (NOTE 2)
Advisory fees 12,601,667
Administration fees 1,960,259
Custody fees 473,760
Shareholder servicing fees 8,401,108
Portfolio accounting fees 621,571
Transfer agency fees 2,800,370
Distribution fees 8,401,108
Legal and audit fees 169,984
Registration 401,147
Directors' fees 2,488
Shareholder reports 46,085
Other 59,682
Total Expenses 35,939,229
Less:
Waived fees and reimbursed expenses (934,459)
NET EXPENSES 35,004,770
NET INVESTMENT INCOME 116,522,861
NET REALIZED GAIN (LOSS) ON SALE OF
INVESTMENTS 32,554
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 116,555,415
- ----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Overland Express Sweep Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVERLAND EXPRESS SWEEP FUND
----------------------------------------------------
FOR THE FOR THE THREE FOR THE
YEAR ENDED MONTHS ENDED YEAR ENDED
MARCH 31, 1999 MARCH 31, 1998 DEC. 31, 1997
<S> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 116,522,861 $ 27,812,589 $ 93,283,901
Realized gain (loss) on sale of
investments 32,554 6,512 (8,595)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 116,555,415 27,819,101 93,275,306
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (116,522,861) (27,812,589) (93,283,901)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 7,434,822,164 1,536,002,681 5,854,849,943
Reinvestment of dividends 5,766 1,188 5,474
Cost of shares redeemed (6,932,551,633) (1,897,190,623) (4,901,482,140)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS 502,276,297 (361,186,754) 953,373,277
INCREASE (DECREASE) IN NET ASSETS 502,308,851 (361,180,242) 953,364,682
NET ASSETS:
Beginning net assets 2,594,909,845 2,956,090,087 2,002,725,405
ENDING NET ASSETS $3,097,218,696 $2,594,909,845 $2,956,090,087
- -------------------------------------------------------------------------------------------------
</TABLE>
Shares issued and redeemed at constant $1.00 NAV
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Overland Express Sweep Fund FINANCIAL HIGHLIGHTS
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FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OVERLAND EXPRESS SWEEP
FUND
-------------------------
THREE
MONTHS
YEAR ENDED ENDED MAR.
MARCH 31, 31,
1999 1998 (2)
<S> <C> <C>
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.04 0.01
LESS DISTRIBUTIONS:
Dividends from net investment income (0.04) (0.01)
----------- -----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
----------- -----------
----------- -----------
TOTAL RETURN (NOT ANNUALIZED) 4.26% 1.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $3,097,219 $2,594,910
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 1.25% 1.25%
Ratio of net investment income to average net assets(1) 4.16% 4.49%
- -------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses(1) 1.28% 1.26%
Ratio of net investment income to average net assets prior to
waived fees and reimbursed expenses(1) 4.13% 4.48%
- -------------------------------------------------------------------------------------------
</TABLE>
(1) RATIOS INCLUDE ACTIVITY OF THE CASH INVESTMENT TRUST MASTER PORTFOLIO
PRIOR TO DECEMBER 15, 1997.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS Overland Express Sweep Fund
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OVERLAND EXPRESS SWEEP FUND (CONT.)
----------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1997 1996 1995 1994
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.04 0.04 0.05 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.04) (0.04) (0.05) (0.03)
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 4.47% 4.29% 4.80% 3.11%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $2,956,090 $2,002,725 $1,209,183 $812,559
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.24% 1.24% 1.25% 1.25%
Ratio of net investment
income to average net
assets(1) 4.40% 4.20% 4.70% 2.92%
- ----------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses(1) 1.26% 1.26% 1.28% 1.33%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses(1) 4.38% 4.18% 4.67% 2.84%
- ----------------------------------------------------------------------------
</TABLE>
(1) RATIOS INCLUDE ACTIVITY OF THE CASH INVESTMENT TRUST MASTER PORTFOLIO
PRIOR TO DECEMBER 15, 1997.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Overland Express Sweep Fund NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on January 1,
1992, and is currently comprised of thirty-one separate series. These financial
statements represent the Overland Express Sweep Fund (the "Fund"), a diversified
series of the Company.
Effective at the close of business on December 12, 1997, the Funds of Overland
Express Funds, Inc. were consolidated into the Company in a tax-free exchange
for shares of designated classes of the corresponding Stagecoach fund. Also, at
the close of business on December 12, 1997, funds structured as a "feeder" fund
in a "master-feeder" structure were restructured to invest directly in a
portfolio of securities, rather than to invest in a portfolio of securities
through a "master" portfolio.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
The Fund invests only in securities with remaining maturities not exceeding 397
days (thirteen months). Certain floating- and variable-rate instruments in the
portfolio may have maturities in excess of 397 days, but carry a demand feature
that permits the holder to tender the instruments back to the issuer at par
value prior to maturity.
The Fund uses the amortized cost method to value its portfolio securities. The
amortized cost method involves valuing a security at its cost, plus accretion of
discount or minus amortization of premium over the period until maturity, which
approximates market value. The Fund seeks to maintain a constant net asset value
of $1.00 per share, although there is no assurance that it will be able to do
so.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS Overland Express Sweep Fund
- ------------------------------------------------------------------------
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.
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in the Fund's Portfolio of
Investments. The Fund may participate in pooled repurchase agreement
transactions with other funds advised by Wells Fargo Bank, N.A. ("WFB"). The
repurchase agreements must be fully collateralized based on values that are
marked to market daily. The collateral may be held by an agent bank under a tri-
party agreement. It is the custodian's responsibility to value collateral daily
and to take action to obtain additional collateral as necessary to maintain
market value equal to or greater than the resale price. The repurchase
agreements held in the Fund are collateralized by instruments such as U.S.
Treasury or federal agency obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared
daily and distributed monthly. Any distributions to shareholders from net
realized capital gains are declared and distributed at least annually.
FEDERAL INCOME TAXES
The Fund is treated as a separate entity for federal income tax purposes. It
is the policy of the Fund to continue to qualify as a regulated investment
company by complying with the provisions applicable to regulated investment
companies, as defined in the Code, and to make distributions of substantially
all of its investment company taxable income and any net realized capital gains
(after reduction for capital loss carryforwards) sufficient to relieve it from
all, or substantially all, federal income taxes. Accordingly, no provision for
federal income taxes was required at March 31, 1999. The Fund has capital loss
carryforwards of $516,401 and $8,595 which will expire in the years 2004 and
2005, respectively. The Company's Board of Directors intends to offset net
capital gains with the capital loss carryforwards, and no capital gain
distribution shall be made until the carryforwards have been fully utilized or
expire.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into an advisory contract on behalf of the Fund with
WFB. Pursuant to the contract, WFB has agreed to provide the Fund with daily
portfolio management. Under the contract, WFB is entitled to receive a
15
<PAGE>
Overland Express Sweep Fund NOTES TO FINANCIAL STATEMENTS
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monthly advisory fee at an annual rate of 0.45% of the average daily net assets
of the Fund. On August 1, 1998, Wells Capital Management Incorporated ("WCM"), a
wholly-owned subsidiary of WFB, began acting as investment sub-advisor to the
Fund. WCM is entitled to receive from WFB, as compensation for its sub-advisory
services to the Fund, a monthly fee at the annual rate of 0.05% of the Fund's
average daily net assets up to $960 million and 0.04% of the Fund's average
daily net assets in excess of $960 million. WCM's minimum annual fee is $120,000
for the Fund. This minimum annual fee does not increase the advisory fees paid
by the Funds to WFB.
The Company has entered into a contract on behalf of the Fund with WFB,
whereby WFB is responsible for providing custody and portfolio accounting
services for the Fund. Pursuant to the contract, WFB is entitled to certain
transaction charges plus a monthly fee for custody services at the annual rate
of 0.0167% of the Fund's average daily net assets. For portfolio accounting
services, WFB is entitled to a monthly base fee of $2,000 plus an annual fee of
0.07% of the first $50 million of the Fund's average daily net assets, 0.045% of
the next $50 million, and 0.02% of the Fund's average daily net assets in excess
of $100 million.
The Company has entered into a contract on behalf of the Fund with WFB,
whereby WFB provides transfer agency services for the Fund. Under the transfer
agency contract, WFB is entitled to receive transfer agency fees at an annual
rate of 0.10% of the average daily net assets of the Fund.
The Company has entered into a contract on behalf of the Fund with WFB,
whereby WFB has agreed to provide shareholder services for the Fund. Pursuant to
the contract, WFB is entitled to receive shareholder servicing fees at an annual
rate of 0.30% of the average daily net assets of the Fund.
Prior to March 25, 1999, the Company had entered into administration
agreements on behalf of the Funds whereby WFB as administrator and Stephens Inc.
("Stephens") as co-administrator provided each Fund with administration
services. Under the prior arrangement, WFB and Stephens were entitled to receive
monthly fees at the annual rates of 0.03% and 0.04%, respectively, of each
Fund's average daily net assets.
On March 25, 1999, the Company entered into an Administration Agreement with
WFB on behalf of the Funds. Under the Administration Agreement, WFB will act as
the sole Administrator of the Funds and is entitled to receive monthly fees at
an annual rate of 0.15% of the average daily net assets of the Funds.
The Company has adopted a Distribution Plan on behalf of the Fund pursuant to
Rule 12b-1 under the 1940 Act (the "Plan"). The Plan provides that the Fund may
pay to Stephens, as compensation for distribution-related services or as
reimbursement for distribution-related expenses, a monthly fee at an annual rate
of up to 0.30% of the Fund's average daily net assets.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS Overland Express Sweep Fund
- ------------------------------------------------------------------------
Under the contracts and agreements described above, WFB and Stephens may each
voluntarily waive fees or reimburse expenses to the Fund. Waived fees and
reimbursed expenses continue at the discretion of WFB.
Certain officers and one director of the Company are also officers of
Stephens. As of March 31, 1999, Stephens owned 131,153 shares of the Fund.
3. CAPITAL SHARE TRANSACTIONS
As of March 31, 1999, there were over 242 billion shares of $0.001 par value
capital stock authorized by the Company. As of March 31, 1999, each Fund was
authorized to issue 10 billion shares of $0.001 par value capital stock. Capital
shares are issued and redeemed at a constant $1.00 net asset value as disclosed
in the Statement of Changes in Net Assets.
4. SUBSEQUENT EVENTS
On March 25, 1999, the Board of Directors of the Company approved the
reorganization of the Funds into new portfolios of Wells Fargo Funds Trust. The
reorganization is part of a larger plan to consolidate the Stagecoach Family of
Funds with the Norwest Advantage Family of Funds 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.
17
<PAGE>
Overland Express Sweep Fund INDEPENDENT AUDITORS' REPORT
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INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Stagecoach Funds, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the Overland Express Sweep Fund (one
of the funds comprising Stagecoach Funds, Inc.) as of March 31, 1999, and the
related statement of operations for the year then ended, the statement of
changes in net assets for the year ended March 31, 1999, the three-month period
ended March 31, 1998, and the year ended December 31, 1997, and financial
highlights for the periods indicated herein. These financial statements and
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999, by correspondence with the custodian and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Overland Express Sweep Fund as of March 31, 1999, the results of its operations,
the changes in its net assets, and its financial highlights for the periods
indicated herein, in conformity with generally accepted accounting principles.
[SIGNATURE]
San Francisco, California
May 7, 1999
18
<PAGE>
LIST OF ABBREVIATIONS
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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
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MTN -- Medium Term Note
MUD -- Municipal Utility District
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
<PAGE>
Wells Fargo Bank, N.A. provides investment advisory services, shareholder
services and/or certain other services for the Stagecoach Funds. Wells
Capital Management Incorporated ("WCM") provides investment sub-advisory
services for certain Stagecoach Funds. The Funds are distributed by
STEPHENS INC., Member NYSE/SIPC. Wells Fargo Bank, N.A. and WCM are not
affiliated with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Stagecoach Funds. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. For a prospectus containing
more complete information, including charges and expenses, call
1-800-222-8222. Read the prospectus carefully before you invest or send money.
STAGECOACH FUNDS-Registered
Trademark-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
SC OEX AR (5/99)
