<PAGE>
STAGECOACH FUNDS-Registered
Trademark-
Annual Report
MONEY MARKET
Trusts
California Tax-Free Money Market Trust
Money Market Trust
National Tax-Free Money Market Trust
March 31, 1999
<PAGE>
Money Market Trusts TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS...........................................1
INVESTMENT ADVISOR COMMENTARY AND
PERFORMANCE AT A GLANCE
California Tax-Free Money Market Trust.......................3
National Tax-Free Money Market Trust.........................3
Money Market Trust...........................................6
PORTFOLIOS OF INVESTMENTS
California Tax-Free Money Market Trust.......................8
Money Market Trust..........................................15
National Tax-Free Money Market Trust........................18
STAGECOACH FUNDS
Statement of Assets and Liabilities.........................30
Statement of Operations.....................................31
Statements of Changes in Net Assets.........................32
Financial Highlights........................................34
Notes to Financial Statements...............................37
INDEPENDENT AUDITORS' REPORT....................................41
LIST OF ABBREVIATIONS...........................................42
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
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ii
<PAGE>
LETTER TO SHAREHOLDERS Money Market Trusts
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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
1
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Money Market Trusts LETTER TO SHAREHOLDERS
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7.01% as measured by the Lehman Brothers Long 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
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INVESTMENT ADVISOR COMMENTARY Money Market Trusts
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CALIFORNIA TAX-FREE MONEY MARKET TRUST
NATIONAL TAX-FREE MONEY MARKET TRUST
TWO STAGECOACH TAX-FREE MONEY MARKET TRUSTS (EACH, A "TRUST," COLLECTIVELY,
THE "TRUSTS") WILL BE HIGHLIGHTED IN THE FOLLOWING MANAGER DISCUSSION AND
ANALYSIS.
The Stagecoach California Tax-Free Money Market Trust seeks to obtain a high
level of income exempt from federal income tax and California personal income
tax, while preserving capital and liquidity, by investing in high-quality,
short-term, U.S. dollar-denominated money market instruments, primarily
municipal obligations.
The Stagecoach National Tax-Free Money Market Trust seeks to obtain a high
level of income exempt from federal income tax, while preserving capital and
liquidity, by investing in high-quality, U.S. dollar-denominated money market
instruments, primarily municipal obligations.
The California Tax-Free Money Market Trust is managed by Kevin Shaughnessy of
Wells Capital Management Incorporated. Mr. Shaughnessy joined Wells Fargo Bank
in 1996 from Lehman Brothers. He holds a B.S. degree in Business Administration
and an M.B.A. in Finance from California State University, Hayward. Mr.
Shaughnessy has more than 10 years of experience in the investment industry and
is a Chartered Financial Analyst candidate.
As of January 1999, the National Tax-Free Money Market Trust is managed by
Mary Gail Walton. The Trust was previously managed by Mr. Shaughnessy. Before
joining Wells Capital Management, Ms. Walton was employed at Dean Witter
Reynolds, Inc. and Ragen MacKenzie, Inc. Her career spans 14 years and includes
extensive experience in tax-exempt portfolio management. She received a B.A.
from the University of Washington and is a candidate for the Chartered
3
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Money Market Trusts INVESTMENT ADVISOR COMMENTARY
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Financial Analyst designation. She is a member of the Association for Investment
Management and Research (AIMR) and the Security Analysts of San Francisco.
PERFORMANCE SUMMARY
The cumulative total returns for the 12-month period ended March 31, 1999, for
the Stagecoach Tax-Free Money Market Trusts were as follows:
- --------------------------------------------------
<TABLE>
<S> <C>
CALIFORNIA TAX-FREE MONEY MARKET TRUST 2.93%
NATIONAL TAX-FREE MONEY MARKET TRUST 3.16%
</TABLE>
The seven-day current yields for the Stagecoach Tax-Free Money Market Trusts
as of March 31, 1999, were as follows:
- --------------------------------------------------
<TABLE>
<S> <C>
CALIFORNIA TAX-FREE MONEY MARKET TRUST 2.65%
NATIONAL TAX-FREE MONEY MARKET TRUST 2.84%
</TABLE>
These tax-free yields are generally higher than the after-tax return on a
comparable taxable investment. For example, an investor in the maximum combined
federal and California income tax bracket of 45.22% would need to earn 4.84%
from a taxable investment to match a 2.65% tax-free yield. In order to match a
2.84% tax-free yield, an investor in the maximum 39.60% federal income tax
bracket would need to earn 4.70% on a taxable investment. Keep in mind that past
performance is no guarantee of future results.
PORTFOLIO REVIEW
As a result of the low interest rate environment and in anticipation of an
interest rate decrease by the Federal Reserve Board, we lengthened each Trust's
weighted average maturity early in the 12-month period. Weighted average
maturity is an indication of a fund's sensitivity to interest rates. In
addition, California's economy was strong last June and the state was
experiencing a budget surplus. As a result, the issuance of short-term one-year
notes dropped off significantly.
Considering seasonal influences in the market, our strategy to increase
maturity early in the period was made in an attempt to capture higher yields
offered by securities such as one-year tax-exempt notes and com-
4
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INVESTMENT ADVISOR COMMENTARY Money Market Trusts
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mercial paper. In addition, we decreased our exposure to variable-rate
securities. During the first quarter of 1999, most shorter-dated money market
yields dropped, while yields on longer-dated paper rose. Yields were lower in
January and February, while slightly higher in March. In anticipation of
shareholders drawing on their funds during tax season, we have let maturities
roll down.
STRATEGIC OUTLOOK
Since yields have already declined in the money fund market, we will continue
to maintain longer maturities in the Trusts and will increase our fixed-rate
exposure if we feel security prices are attractive. We believe the Federal
Reserve Board will remain neutral in its outlook toward interest rates. With the
expectation that short-term issuance of notes will remain thin, we will focus on
maintaining our strong position in liquid paper to handle cash outflows.
Overall, we feel the Trusts are positioned well given the international
economic condition and low interest rate environment. We intend to maintain our
emphasis on preservation of principal, high liquidity, credit quality and the
highest possible tax-exempt returns for our clients.
Figures quoted represent past performance, which is no guarantee of future
results. The Trusts are neither insured nor guaranteed by the U.S. Government.
A portion of the Trusts' distributions may be subject to federal, state, and/or
local taxes or the alternative minimum tax (AMT).
The Trusts' 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 Trusts' returns would have been lower. There is no guarantee such reductions
will continue.
An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
5
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Money Market Trusts INVESTMENT ADVISOR COMMENTARY
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MONEY MARKET TRUST
The Money Market Trust (the "Trust") seeks to provide investors with current
income and stability of principal, by investing in high-quality, U.S. dollar-
denominated money market instruments with remaining maturities not exceeding 397
days (13 months).
The Trust 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. degree in Finance from California State University, Los Angeles.
PERFORMANCE SUMMARY
For the 12-month period ended March 31, 1999, the Stagecoach Money Market
Trust's cumulative total return was 5.35%. The seven-day current yield for the
Trust was 4.82% as of March 31, 1999. 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 Trust 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.
STRATEGIC OUTLOOK
With international and domestic markets relatively stable and inflation under
control, interest rates are
6
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INVESTMENT ADVISOR COMMENTARY Money Market Trusts
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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 Trust 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 Trust's longer-than-average
maturity structure. We believe it's prudent to focus more on credit quality,
stability, capital preservation and liquidity, rather than purely on yield.
Figures quoted represent past performance, which is no guarantee of future
results. The Trust is neither insured nor guaranteed by the U.S. Government.
The Trust'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 Trust's returns would have been lower. There is no guarantee such reductions
will continue.
An investment in the Trust is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Trust seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the Trust.
7
<PAGE>
California Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31,
1999
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES - 96.09%
$ 5,000,000 ABN Amro Munitops COP 1998-20 3.05 % 07/05/06 $ 5,000,000
4,600,000 Alameda CA School Finance Authority Revenue
Series A 2.55 07/01/18 4,600,000
2,230,000 Alameda Corrections Authority Revenue 2.94 10/01/15 2,230,000
2,700,000 Anaheim CA Public Improvement COP LOC -
Industrial Bank of Japan Limited 2.70 08/01/19 2,700,000
6,400,000 Big Bear Lake CA Industrial Revenue Southwest
Gas Corporation AMT Series A LOC - Union Bank
of Switzerland 2.80 12/01/28 6,400,000
7,000,000 California Community College Financing
Authority Revenue 2.90 09/30/99 7,000,000
1,035,000 California Educational Facilities 5.25 12/01/99 1,052,226
1,600,000 California Health Facility 3.00 09/01/28 1,600,000
3,995,000 California HFA Revenue AMT 2.95 08/01/25 3,995,000
1,300,000 California HFA Revenue AMT 3.00 02/01/00 1,300,000
1,235,000 California HFFA 2.70 07/01/12 1,235,000
5,150,000 California HFFA FSA Insured 2.95 07/01/22 5,150,000
1,500,000 California HFFA Revenue Catholic Healthcare
Series A MBIA Insured 2.70 07/01/06 1,500,000
7,600,000 California PCR 2.45 05/06/99 7,600,000
600,000 California PCR AMT 2.90 01/01/10 600,000
4,000,000 California PCR Financing Authority 2.70 09/01/17 4,000,000
3,000,000 California Revenue Wateruse Finance Authority 2.70 05/01/28 3,000,000
20,000,000 California School Cash Reserve Program
Authority Series A 4.50 07/02/99 20,036,900
3,800,000 California School Facilities 2.75 07/01/22 3,800,000
2,000,000 California School Facilities COP 2.75 07/01/22 2,000,000
1,195,000 California School Facilities Financing
Corporation Series B Bayerische 2.75 07/01/24 1,195,000
31,700,000 California State Community 2.90 09/30/99 31,700,000
3,000,000 California State COP Series 55 FGIC Insured 2.92 02/01/13 3,000,000
</TABLE>
8
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PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 California Tax-Free Money Market
Trust
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,500,000 California State Development Authority Revenue
Series A 2.85 % 10/01/26 $ 3,500,000
2,700,000 California State HFFA Catholic West Hospital
Series B MBIA Insured 2.70 07/01/05 2,700,000
3,800,000 California State HFFA Memorial Health Services 2.85 10/01/24 3,800,000
1,000,000 California State HFFA Revenue Catholic
Healthcare West MBIA Insured 2.70 07/01/09 1,000,000
2,700,000 California State HFFA Revenue Catholic
Healthcare West Series B MBIA Insured 2.70 07/01/16 2,700,000
6,700,000 California State HFFA Revenue Scripps Hospital 2.75 10/01/21 6,700,000
3,700,000 California State HFFA Revenue Scripps Memorial
Hospital Series B 2.70 12/01/15 3,700,000
1,200,000 California State HFFA Santa Barbara Cottage LOC
Credit Suisse 2.60 09/01/15 1,200,000
3,200,000 California State HFFA St Joseph Health Center
Series A 2.95 07/01/13 3,200,000
2,000,000 California State PCFA Pacific Gas & Electric
Series A AMT 2.70 12/01/16 2,000,000
1,700,000 California State PCFA Pacific Gas & Electric
Series F 3.00 11/01/26 1,700,000
1,000,000 California State PCFA Solid Waste Disposal
Revenue Colmac Energy Project Series A LOC -
Swiss Bank AMT 2.80 12/01/16 1,000,000
1,200,000 California State PCFA Solid Waste Disposal
Revenue Shell Oil Company Martinez Project
AMT AMBAC Insured 3.20 12/01/24 1,200,000
7,400,000 California State PCR Sierra Pacific Industries 2.75 02/01/13 7,400,000
10,400,000 California State Public Works 2.91 09/01/17 10,400,000
23,650,000 California State Revenue Antic Notes 4.00 06/30/99 23,704,547
5,100,000 California State PCR MBIA Insured 2.95 06/01/10 5,100,000
</TABLE>
9
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California Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31,
1999
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,500,000 Central Valley School Financing Authority Tax
Revenue 3.50 % 01/27/00 $ 3,519,268
2,000,000 Chula Vista CA Charter City Revenue Home Depot
Incorporated 2.60 12/01/10 2,000,000
2,000,000 Chula Vista CA GO 2.80 06/10/99 2,000,000
3,440,000 Chula Vista CA MFHR Series A 2.70 03/01/05 3,440,000
1,000,000 Eastern Municipal Water District CA Revenue
Series B FGIC Insured 2.70 07/01/20 1,000,000
4,700,000 Foothill / Eastern CA Transportation Corridor
Agency Toll Road Revenue Series C LOC -
Credit Suisse 2.70 01/02/35 4,700,000
400,000 Fremont CA MFHR Creekside Village Apartments
LOC - National Westminster Bank Plc 2.90 09/01/07 400,000
2,000,000 Huntington Beach CA Rivermeadow Series B 2.80 12/01/05 2,000,000
1,300,000 Irvine Ranch CA Water District LOC - Sumitomo
Bank Limited 3.00 10/01/00 1,300,000
300,000 Irvine Ranch CA Water District Series 85B 3.00 10/01/99 300,000
3,500,000 Livermore MFHR 2.65 07/15/18 3,500,000
2,900,000 Long Beach CA CP 2.45 05/05/99 2,900,000
10,000,000 Los Angeles CA GO 2.65 05/04/99 10,000,000
10,200,000 Los Angeles CA GO 2.70 05/03/99 10,200,000
4,700,000 Los Angeles CA Pension Obligation Series B
AMBAC Insured 2.70 06/30/07 4,700,000
4,400,000 Los Angeles CA USD 2.75 12/01/17 4,400,000
4,000,000 Los Angeles CA USD Series A26, Regulation D 2.90 10/01/99 4,000,000
2,500,000 Los Angeles CA Wastewater System Revenue 2.75 05/04/99 2,500,000
15,000,000 Los Angeles County CA 4.50 06/30/99 15,029,559
5,800,000 Los Angeles County CA Metropolitan
Transportation Authority Sales Tax Revenue
Series A 2.70 07/01/20 5,800,000
</TABLE>
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PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 California Tax-Free Money Market
Trust
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 4,000,000 Los Angeles County CA Pension Obligation Series
A AMBAC Insured 2.70 % 06/30/07 $ 4,000,000
2,000,000 Los Angeles County CA Public Works Financing
Authority Lease Revenue Series 114 2.91 12/01/29 2,000,000
5,000,000 Los Angeles DW&P 2.75 06/10/99 5,000,000
5,000,000 Los Angeles DW&P 2.80 05/04/99 5,000,000
1,000,000 Mt. Diablo CA USD 3.50 01/28/00 1,005,349
2,200,000 Oakland Children's Hospital Medical Center
Revenue 2.80 07/01/99 2,200,000
1,800,000 Orange County CA Apartment Development Revenue
Series U 2.75 11/01/09 1,800,000
5,000,000 Orange County CA Apartment Development Series 2
FNMA Collateralized 2.80 11/15/28 5,000,000
2,700,000 Orange County CA HFA The Lakes Apartments LOC -
Citibank 2.80 12/01/06 2,700,000
1,500,000 Orange County CA Sanitation District Multiple
Credit Enhancments 2.70 08/01/13 1,500,000
1,220,000 Palo Alto CA USD 5.25 08/01/99 1,229,959
2,000,000 Redlands CA 2.75 09/01/17 2,000,000
1,365,000 Redlands CA COP Water Treatment Facilities
Project FGIC Insured 2.75 09/01/15 1,365,000
1,800,000 Riverside County CA 2.65 07/15/18 1,800,000
3,205,000 Riverside County CA 2.75 12/01/15 3,205,000
5,000,000 Riverside County CA 2.90 09/30/99 5,000,000
7,000,000 Riverside County CA 4.50 09/30/99 7,040,322
1,300,000 Riverside County CA COP Series A 2.70 12/01/15 1,300,000
6,000,000 Sacramento County CA Series A28, Regulation D 2.90 09/30/99 6,000,000
2,000,000 Salinas CA MFHR Mariner Village 2.60 04/01/05 2,000,000
2,400,000 San Bernardino County CA COP Housing Authority
Revenue 2.75 07/01/15 2,400,000
1,650,000 San Bernardino County CA GO 7.65 01/01/15 1,740,420
16,000,000 San Diego CA COP 2.90 09/30/99 16,000,000
</TABLE>
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California Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31,
1999
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 4,200,000 San Diego CA Housing Authority Revenue LOC -
Citibank 2.75 % 12/01/08 $ 4,200,000
1,150,000 San Francisco CA City & County Finance
Authority Revenue 2.80 09/01/06 1,150,000
2,000,000 San Francisco CA CP 2.60 04/12/99 2,000,000
4,410,000 San Francisco CA GO 3.05 01/01/27 4,410,000
4,745,000 San Francisco CA GO AMT 2.95 05/01/19 4,745,000
4,200,000 San Francisco CA MFHR Filmore Center Apartments
LOC - Bank of Nova Scotia 2.75 12/01/17 4,200,000
2,000,000 San Francisco CA MFHR Filmore Center Apartments
LOC - Citibank 2.75 12/01/17 2,000,000
2,000,000 San Francisco County CA International Airport
COP Series 31 FGIC Insured 2.92 05/01/29 2,000,000
2,600,000 San Jose CA Redevelopment Agency Project A 2.55 07/01/26 2,600,000
1,000,000 San Jose CA Redevelopment Agency Project B 2.45 07/01/26 1,000,000
3,500,000 San Jose/Santa Clara Clean Water Financing
Authority 2.70 11/15/20 3,500,000
5,200,000 San Juan Project Revenue Series A 2.70 07/01/22 5,200,000
3,245,000 San Mateo County CA JT Powers Authority Lease
Revenue Series 123 FSA Insured 2.92 07/15/29 3,245,000
1,500,000 Santa Ana CA Industrial Development Authority 3.25 11/01/18 1,500,000
3,100,000 Santa Clara CA Electric Revenue Series 85C LOC
- National Westminster Bank Plc 2.90 07/01/10 3,100,000
2,800,000 Santa Clara CA Transit System LOC - Sumitomo
Bank Limited 2.85 06/01/15 2,800,000
4,000,000 Santa Clara County CA 3.00 11/15/22 4,000,000
2,000,000 Santa Clara County CA Finance Authority Lease
Revenue Project B 2.75 11/15/25 2,000,000
5,300,000 Simi Valley CA Public Finance Lease Revenue 2.65 09/01/15 5,300,000
</TABLE>
12
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PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 California Tax-Free Money Market
Trust
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 6,000,000 Sonoma County California Tax & Revenue 3.50 % 02/01/00 $ 6,026,100
3,600,000 South Gate CA RDFA Tax Allocation Revenue
Prerefunded 7.38 09/01/09 3,738,668
2,421,000 Southeast CA Revenue Recovery Facility Series A 2.65 12/01/18 2,421,000
1,781,000 Southeast Resource Recovery Facility Lease
Revenue Series B AMT 2.75 12/01/18 1,781,000
1,500,000 Southern California Metro Water District 2.55 06/02/99 1,500,000
7,700,000 Southern California Metro Water District 2.75 05/04/99 7,700,000
1,000,000 Southern California Metro Water District 2.75 07/08/99 1,000,000
16,500,000 Southern California Metro Water District 2.80 06/08/99 16,500,000
5,500,000 Southern California Metro Water District 2.85 06/07/99 5,500,000
3,205,000 Southern California Metro Water District 4.85 07/01/99 3,221,391
1,350,000 Southern California Public Power Authority
Revenue Paloverde Project AMBAC Insured 2.75 07/01/17 1,350,000
1,670,000 Tehachapi CA Community Facilities District
Special Tax No. 89-1 7.40 10/01/14 1,757,964
2,000,000 Turlock CA COP Irrigation Project Series A 2.65 01/01/26 2,000,000
8,900,000 University of California GO 2.55 05/04/99 8,900,000
2,600,000 University of California GO 2.60 05/03/99 2,600,000
10,000,000 University of California GO 2.70 06/11/99 10,000,000
5,479,000 University of California GO 2.75 05/03/99 5,479,000
3,500,000 University of California GO 2.75 05/04/99 3,500,000
6,000,000 University of California GO 2.90 08/05/99 6,000,000
2,700,000 Vallecitos CA 2.70 07/01/30 2,700,000
1,000,000 Vallejo CA Housing Revenue 2.65 05/15/22 1,000,000
</TABLE>
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California Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31,
1999
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<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 7,100,000 Vallejo CA MFHR Revenue 2.75 % 01/01/08 $ 7,100,000
400,000 West Basin CA Municipal Water District Revenue
Project B 2.60 08/01/27 400,000
--------------
TOTAL CALIFORNIA MUNICIPAL SECURITIES $ 527,798,673
(Cost $527,798,673)
PUERTO RICO MUNICIPAL SECURITIES - 2.05%
$ 1,800,000 Puerto Rico Commonwealth Highway &
Transportation Authority Revenue Series X 2.75 % 07/01/99 $ 1,800,000
200,000 Puerto Rico Commonwealth Highway &
Transportation Authority Series A AMBAC
Insured 2.65 07/01/28 200,000
6,145,000 Puerto Rico Commonwealth Series 120 MBIA
Insured 2.88 07/01/23 6,145,000
3,120,000 Puerto Rico Revenue 2.90 07/01/28 3,120,000
--------------
TOTAL PUERTO RICO MUNICIPAL SECURITIES $ 11,265,000
(Cost $11,265,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $539,063,673)* (Note 1) 98.14% $ 539,063,673
Other Assets and Liabilities, Net 1.86 10,225,246
------ --------------
TOTAL NET ASSETS 100.00% $ 549,288,919
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS 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.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
VARIABLE AND FLOATING RATE BONDS - 14.19%
$20,000,000 Commercial Bank 4.82 % 07/13/99 $ 19,996,663
12,000,000 First Union National Bank 4.87 09/28/99 12,000,000
20,000,000 Key Bank 4.88 10/13/99 19,995,630
15,000,000 Wachovia Bank 4.79 05/14/99 14,998,781
--------------
TOTAL VARIABLE AND FLOATING RATE BONDS $ 66,991,074
(Cost $66,991,074)
COMMERCIAL PAPER - 52.16%
$20,000,000 Asset Securitization Coop Corporation++ 4.85 %# 06/23/99 $ 19,776,361
15,000,000 Associates First Capital 4.80 # 04/28/99 14,946,000
20,000,000 Atlantis One Funding Corporation 4.78 # 05/13/99 19,888,000
8,000,000 Beta Finance Incorporated++ 4.86 # 06/14/99 7,920,080
10,000,000 CC USA Incorporated 4.84 # 08/16/99 9,815,811
20,000,000 Commercial Credit Corporation 4.80 # 04/19/99 19,952,000
15,000,000 Enterprise Funding Corporation++ 4.86 # 04/23/99 14,955,450
15,000,000 Ford Motor Credit Company 4.83 # 06/15/99 14,849,063
20,000,000 General Electric Capital Services Incorporated 4.67 # 04/20/99 19,950,706
20,000,000 Greenwich Funding Corporation++ 4.84 # 05/17/99 19,876,311
19,500,000 Johnson & Johnson++ 4.68 # 05/06/99 19,411,275
20,000,000 Merrill Lynch & Company Incorporated 4.79 # 04/16/99 19,960,083
20,000,000 Morgan Stanley Dean Witter 4.87 # 04/08/99 19,981,061
5,000,000 Preferred Receivables Funding Corporation++ 4.88 # 05/10/99 4,973,567
20,000,000 Windmill Funding Corporation++ 4.86 # 04/26/99 19,932,500
--------------
TOTAL COMMERCIAL PAPER $ 246,188,268
(Cost $246,188,268)
</TABLE>
15
<PAGE>
Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CORPORATE BONDS & NOTES - 22.48%
$10,000,000 Bank of America Corporation 4.95 %# 04/05/00 $ 9,996,059
10,000,000 CC USA Incorporated 5.78 06/11/99 9,999,613
10,000,000 First Union National Bank 5.35 09/09/99 10,000,000
5,962,000 Ford Holdings Incorporated 9.25 03/01/00 6,178,317
12,000,000 Huntington National Bank 5.74 05/05/99 11,999,518
7,850,000 Huntington National Bank 6.10 11/29/99 7,910,495
20,000,000 IBM Credit Corporation 5.57 08/17/99 19,994,850
10,000,000 JP Morgan & Company Incorporated 4.86 09/15/99 10,000,000
20,000,000 Sigma Finance Incorporated 5.39 03/10/00 20,000,000
--------------
TOTAL CORPORATE BONDS & NOTES $ 106,078,852
(Cost $106,078,852)
SHORT-TERM FEDERAL AGENCIES - 6.65%
$ 3,000,000 Federal Home Loan Banks 5.14 % 03/29/00 $ 3,002,092
3,000,000 Federal Home Loan Banks 5.57 04/07/99 2,999,956
1,700,000 Federal National Mortgage Association 5.27 # 08/04/99 1,669,188
3,700,000 Federal National Mortgage Association 5.48 07/09/99 3,698,855
20,000,000 Student Loan Mortgage Association 4.77 11/05/99 20,000,000
--------------
TOTAL SHORT-TERM FEDERAL AGENCIES $ 31,370,091
(Cost $31,370,091)
CERTIFICATES OF DEPOSIT - 4.24%
$10,000,000 Chase Manhattan Bank 5.10 % 04/20/99 $ 10,000,000
10,000,000 Northern Trust Company 4.78 04/05/99 10,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT $ 20,000,000
(Cost $20,000,000)
</TABLE>
16
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 2.29%
$ 4,468,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 4.90 04/01/99 $ 4,468,000
344,000 JP Morgan Securities Incorporated Repurchase
Agreement - 102% Collateralized by U.S.
Government Securities 4.88 04/01/99 344,000
5,984,000 Morgan Stanley & Company Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 4.90 04/01/99 5,984,000
--------------
TOTAL REPURCHASE AGREEMENTS $ 10,796,000
(Cost $10,796,000)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $481,424,285)* (Note 1) 102.01% $ 481,424,285
Other Assets and Liabilities, Net (2.01) (9,501,522)
------ --------------
TOTAL NET ASSETS 100.00% $ 471,922,763
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</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.
17
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES - 99.72%
ALABAMA - 3.08%
$ 2,700,000 Birmingham AL Medical Clinic Revenue 2.85 % 12/01/26 $ 2,700,000
2,000,000 Stevenson AL IDA The Mead Corporation Project
Series B 3.35 04/01/33 2,000,000
2,500,000 Stevenson AL IDA The Mead Corporation Project
Series D 3.30 11/01/11 2,500,000
--------------
$ 7,200,000
ARIZONA - 3.55%
$ 600,000 Apache County AZ IDA Tucson Electric Power
Series 83-A 3.05 % 12/15/18 $ 600,000
2,000,000 Arizona School District Tax Antic Financing
Project COP Series A 4.10 07/30/99 2,003,378
2,500,000 Arizona Tax Antic Notes COP Series B 4.20 07/30/99 2,510,270
3,150,000 Maricopa County AZ Community College District
Series B 6.50 07/01/99 3,176,873
--------------
$ 8,290,521
ARKANSAS - 0.64%
$ 1,500,000 Fayetteville Ark Public Facilities Board
Revenue Butterfield Trail Project 3.15 % 09/01/27 $ 1,500,000
CALIFORNIA - 0.86%
$ 1,000,000 Golden Empire Schools Financing Authority Kern
High School District Series A 2.90 % 12/01/24 $ 1,000,000
1,000,000 Los Angeles CA Pension Obligation Series B
AMBAC Insured 2.70 06/30/07 1,000,000
--------------
$ 2,000,000
</TABLE>
18
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 National Tax-Free Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
COLORADO - 2.35%
$ 2,200,000 Colorado State HFFA Boulder County Hospital
Project Series C 3.00 % 10/01/14 $ 2,200,000
1,600,000 Colorado State HFFA Catholic Healthcare Series
B 3.00 12/01/25 1,600,000
1,200,000 Colorado Student Obligation Board Authority
Series A 3.15 09/01/24 1,200,000
500,000 Douglas County CO MFHR Autumn Chase Project 3.10 07/01/06 500,000
--------------
$ 5,500,000
CONNECTICUT - 1.23%
$ 2,870,000 Connecticut State HFA Series G AMBAC Insured 2.90 % 05/15/18 $ 2,870,000
FLORIDA - 9.63%
$ 3,800,000 Broward County FL Port Everglades Facilities
AMBAC Insured 3.10 % 09/01/27 $ 3,800,000
1,000,000 Dade County FL HFA GAbles FNMA Collateralized 3.00 05/15/05 1,000,000
5,485,000 Jacksonville FL Electric Authority Revenue
Series 127 3.16 10/01/32 5,485,000
5,000,000 Lee County FL IDA Healthcare 2.95 10/01/04 5,000,000
1,200,000 Miami FL HFFA Mercy Hospital Project 2.95 08/01/20 1,200,000
1,000,000 Orlando FL Assessment Revenue 2.95 10/01/21 1,000,000
5,000,000 Tampa FL Sports Authority Revenue Series 98 3.05 01/01/27 5,000,000
--------------
$ 22,485,000
</TABLE>
19
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
GEORGIA - 6.08%
$ 1,800,000 Georgia Municipal Electric Revenue 2.90 % 05/03/99 $ 1,800,000
1,100,000 Georgia Municipal Gas Authority Revenue Gas
Portfolio II Project Series A 2.90 11/01/06 1,100,000
2,600,000 Georgia Municipal Gas Authority Revenue Gas
Portfolio II Project Series B 2.90 09/01/07 2,600,000
3,000,000 Georgia Municipal Gas Authority Revenue Gas
Portfolio II Project Series C 2.90 01/01/08 3,000,000
5,000,000 Richmond County GA Development Authority
Revenue Solidwaste Disposal 3.00 07/01/32 5,000,000
700,000 Savannah GA Downtown Development Authority
Revenue 2.95 09/01/05 700,000
--------------
$ 14,200,000
HAWAII - 0.80%
$ 1,875,000 Hawaii State GO 3.16 % 03/01/14 $ 1,875,000
IDAHO - 0.86%
$ 2,000,000 Idaho State Tax Antic Notes 4.50 % 06/30/99 $ 2,004,282
ILLINOIS - 7.04%
$ 2,000,000 Chicago IL O'Hare Airport Revenue 3.05 % 01/01/15 $ 2,000,000
1,000,000 Chicago IL Park District Capital Improvement 7.00 01/01/04 1,029,143
1,000,000 Chicago IL Park District Tax Antic Notes 4.30 09/17/99 1,003,341
6,500,000 Illinois HFFA Loyola University Health System
Series B 2.90 07/01/24 6,500,000
5,900,000 Illinois HFFA Revenue Advocate Healthcare
Project Series B 3.05 08/15/22 5,900,000
--------------
$ 16,432,484
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 National Tax-Free Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
INDIANA - 4.88%
$ 1,800,000 Indiana HFFA Revenue Clarian Health Partners
Series B 2.95 % 02/15/26 $ 1,800,000
2,800,000 Indiana HFFA Revenue Deacones Hospital
Incorporated 2.95 01/01/22 2,800,000
2,500,000 Indianapolis IN Resource Recovery Revenue 3.35 12/01/16 2,500,000
2,300,000 Monroe County Hospital Authority Revenue 2.95 05/01/11 2,300,000
1,000,000 Mt Vernon IN PCR General Electric Company
Project 3.35 11/01/18 1,000,000
1,000,000 Princeton IN PCR PSI Energy Incorporated 3.30 04/01/22 1,000,000
--------------
$ 11,400,000
IOWA - 0.86%
$ 2,000,000 Iowa Financing Authority Revenue SFMR 3.00 % 02/23/00 $ 2,000,000
KENTUCKY - 1.13%
$ 1,150,000 Kentucky Higher Education Student Loan
Corporation Series A 3.05 % 06/01/26 $ 1,150,000
1,500,000 Kentucky State Development Authority Pooled
Loan Program Series A 3.00 12/01/15 1,500,000
--------------
$ 2,650,000
</TABLE>
21
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
LOUISIANA - 5.60%
$ 800,000 Ascension Parish LA PCR Shell Oil Company
Project 3.10 % 09/01/23 $ 800,000
3,770,000 Calcasieu Parish LA Sales Tax District No. 4-A 3.00 09/01/01 3,770,000
1,200,000 East Baton Rouge Parish LA PCR Georgia Pacific
Corporation 3.00 10/01/99 1,200,000
4,300,000 Louisiana Public Facilities Authority Revenue
Willis Knighton Medical Center AMBAC Insured 3.10 09/01/27 4,300,000
3,000,000 Plaquemines LA Port Harbor & Terminal District 3.60 03/15/06 3,000,000
--------------
$ 13,070,000
MARYLAND - 4.92%
$ 3,000,000 Baltimore MD GO CP 2.85 % 04/06/99 $ 3,000,000
7,500,000 Maryland State Community Development
Residential Housing Series B 3.15 01/14/00 7,500,000
1,000,000 Maryland State GO CP 3.10 04/21/99 1,000,000
--------------
$ 11,500,000
MASSACHUSETTS - 0.44%
$ 1,000,000 Massachusetts State Health & Educational
Facilities Authority Revenue Northeastern
University Series C 6.80 % 10/01/99 $ 1,018,619
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 National Tax-Free Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
MICHIGAN - 1.84%
$ 1,000,000 Michigan State GO CP 2.60 % 05/05/99 $ 1,000,000
600,000 Michigan State Higher Education Student Loan
Revenue Series X11-B 3.00 10/01/13 600,000
1,400,000 Michigan State Strategic Fund IDA Allen Group
Incorporated Project 3.00 11/01/25 1,400,000
1,300,000 Michigan State Strategic Fund Limited
Obligation Revenue 3.30 09/01/30 1,300,000
--------------
$ 4,300,000
MINNESOTA - 0.68%
$ 1,500,000 Duluth MN GO 8.38 % 02/15/20 $ 1,598,343
MISSOURI - 1.16%
$ 700,000 Columbia MO Special Obligation Series A 2.95 % 06/01/08 $ 700,000
2,000,000 Missouri State Health & Educational Facilities
Authority Revenue Series B 3.00 12/01/16 2,000,000
--------------
$ 2,700,000
NEBRASKA - 2.14%
$ 5,000,000 Omaha Public Power Distirct Revenue Series 122 3.05 % 02/01/14 $ 5,000,000
NEVADA - 1.07%
$ 1,500,000 Clark County NV Airport Improvement Revenue
Series A 2.90 % 07/01/12 $ 1,500,000
1,000,000 Clark County NV Passenger Facilities Charge
Revenue Las Vegas McCarran International
Airport - Series A 5.30 07/01/99 1,005,695
--------------
$ 2,505,695
</TABLE>
23
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
NEW JERSEY - 2.12%
$ 4,945,000 New Jersey State GO 3.07 % 02/15/11 $ 4,945,000
NEW MEXICO - 1.46%
$ 1,700,000 Albuquerque NM Airport Revenue Project AMBAC
Insured 2.90 % 07/01/14 $ 1,700,000
1,700,000 Eddy County NM PCR IMC Fertilizer Incorporated
Project 3.00 02/01/03 1,700,000
--------------
$ 3,400,000
NEW YORK - 3.46%
$ 5,100,000 New York City Housing Development Corporation
Carnegie Park Project Series A 2.70 % 11/15/19 $ 5,100,000
2,975,000 New York NY GO Series B2 Subseries B5 MBIA
Insured 3.20 08/15/09 2,975,000
--------------
$ 8,075,000
NORTH CAROLINA - 2.40%
$ 2,500,000 East Carolina NC University Revenue
Dowdy-Ficklen Stadium Project 2.95 % 05/01/17 $ 2,500,000
1,000,000 North Carolina Community Medical Care Revenue
Baptist Hospitals Project Series A 3.05 06/01/12 1,000,000
1,000,000 North Carolina Community Medical Care Revenue
Baptist Hospitals Project Series B 3.05 06/01/22 1,000,000
1,100,000 North Carolina Community Medical Care Revenue
Carol Woods Project 3.35 04/01/21 1,100,000
--------------
$ 5,600,000
</TABLE>
24
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 National Tax-Free Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
OHIO - 3.31%
$ 2,100,000 Clermont County OH Hospital Facilities Revenue
Mercy Health System Series B 3.00 % 09/01/21 $ 2,100,000
2,625,000 Ohio State Educational Revenue Series 116 3.08 10/01/29 2,625,000
3,000,000 Ohio State PCR 3.15 04/22/99 3,000,000
--------------
$ 7,725,000
OKLAHOMA - 1.04%
$ 1,200,000 Muskogee OK Industrial Pollution Oklahoma Gas &
Electric Company Series A 3.15 % 01/01/25 $ 1,200,000
1,240,000 Oklahoma State Revenue Water Reserve Board 2.95 09/01/26 1,240,000
--------------
$ 2,440,000
OREGON - 0.39%
$ 900,000 Portland OR MFHR South Park Block Project
Series A 3.00 % 12/01/11 $ 900,000
PENNSYLVANIA - 3.74%
$ 3,000,000 Allegheny County PA International Airport
Revenue MBIA Insured 5.00 % 01/01/00 $ 3,038,584
2,175,000 Montgomery County PA Higher Education & Health
Authority Hospital Revenue Bonds Series A 7.63 02/01/20 2,257,434
2,000,000 Pennsylvania State GO Series A 6.60 06/01/03 2,041,728
1,400,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series E 3.10 07/01/18 1,400,000
--------------
$ 8,737,746
</TABLE>
25
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
SOUTH CAROLINA - 5.52%
$ 1,000,000 Florence County SC Hospital Revenue McLeod
Medical Center Series A 3.05 % 11/01/15 $ 1,000,000
3,900,000 Piedmont Municipal Power Agency Series B 2.95 01/01/19 3,900,000
3,500,000 Piedmont Municipal Power Agency Series C 2.95 01/01/22 3,500,000
2,000,000 South Carolina Jobs Economic Development
Authority Hospital Facility Tuomey Regional
Medical Center Series B 3.00 11/01/25 2,000,000
2,500,000 Spartanburg County SC Health Services District 2.90 04/15/23 2,500,000
--------------
$ 12,900,000
TENNESSEE - 1.20%
$ 1,200,000 Memphis TN Weekly Refunded Series A 3.15 % 08/01/07 $ 1,200,000
1,600,000 Metro Gov't & Davidson County Nashville TN IDA 3.12 09/01/06 1,600,000
--------------
$ 2,800,000
TEXAS - 4.81%
$ 2,000,000 Greater Texas Student Loan Corporation Series A 3.00 % 04/01/05 $ 2,000,000
100,000 Harris County TX Health Facilities Development
Revenue Series B 2.90 06/01/24 100,000
1,000,000 Harris County TX Toll Road 6.85 08/15/01 1,043,333
1,900,000 Harris County TX Toll Road Series D 2.95 08/01/15 1,900,000
1,000,000 Lower Colorado River Authority Revenue MBIA
Insured 2.90 01/01/13 1,000,000
1,000,000 Panhandle-Plains TX Higher Education Authority
Student Loan Revenue Series A 3.00 06/01/21 1,000,000
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS - MARCH 31, 1999 National Tax-Free Money Market Trust
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
$ 1,500,000 Panhandle-Plains TX Higher Education Authority
Student Loan Revenue Series B 3.00 % 06/01/21 $ 1,500,000
1,700,000 Panhandle-Plains TX Higher Education Authority
Student Loan Revenue Series Y 3.00 10/01/02 1,700,000
1,000,000 South Texas Higher Education Authority Revenue 3.00 12/01/03 1,000,000
--------------
$ 11,243,333
UTAH - 0.47%
$ 1,100,000 Salt Lake City UT GO 3.05 % 01/01/20 $ 1,100,000
VIRGINIA - 0.44%
$ 1,000,000 Fairfax County VA Water Authority Revenue 6.13 % 01/01/29 $ 1,022,685
WASHINGTON - 4.45%
$ 1,900,000 Port Seattle WA Revenue Series B 5.90 % 11/01/99 $ 1,932,821
1,625,000 Seattle WA Sewer Revenue Series T 6.88 01/01/13 1,702,625
1,500,000 Seattle WA Waste Utility Revenue Series A 7.00 05/01/04 1,534,458
1,000,000 Tacoma WA Electric System Revenue 7.38 01/01/08 1,031,918
1,000,000 Washington State GO Series 96B 2.90 06/01/20 1,000,000
1,000,000 Washington State HFFA Sisters Providence Series
B 3.15 10/01/05 1,000,000
2,200,000 Washington State MFHR Inglenook Court Project
LOC - Bank of America 3.45 07/01/25 2,200,000
--------------
$ 10,401,822
</TABLE>
27
<PAGE>
National Tax-Free Money Market Trust PORTFOLIO OF INVESTMENTS - MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C> <C>
MUNICIPAL SECURITIES (CONTINUED)
WISCONSIN - 3.00%
$ 5,500,000 Kenosha WI USD No. 1 Tax & Revenue Antic 3.00 % 10/29/99 $ 5,500,000
1,500,000 Oak Creek WI PCR Wisconsin Electric Power
Company Project 3.00 08/01/16 1,500,000
--------------
$ 7,000,000
WYOMING - 1.07%
$ 2,500,000 Sweetwater County WY PCR Pacific Corporation
Project Series A 2.90 % 07/01/15 $ 2,500,000
--------------
TOTAL MUNICIPAL SECURITIES $ 232,890,530
(Cost $232,890,530)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $232,890,530)* (Notes 1 and 3) 99.72% $ 232,890,530
Other Assets and Liabilities, Net 0.28 655,008
------ --------------
TOTAL NET ASSETS 100.00% $ 233,545,538
------ --------------
------ --------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS 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.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
28
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
29
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES -
Money Market Trusts MARCH 31, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA NATIONAL
TAX-FREE MONEY TAX-FREE
MONEY MARKET MARKET MONEY MARKET
TRUST TRUST TRUST
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value and
cost $539,063,673 $481,424,285 $232,890,530
Cash 126,100 13,709 653,089
RECEIVABLES
Interest 5,387,547 2,830,058 1,186,613
Investment securities sold 6,100,000 0 5,950,000
Organizational expenses, net of
amortization 14,154 0 19,067
Prepaid expenses 1,701 920 0
TOTAL ASSETS 550,693,175 484,268,972 240,699,299
LIABILITIES
Payables:
Investment securities purchased 0 9,996,059 6,500,000
Distribution to shareholders 1,269,073 2,024,584 554,444
Due to distributor (Note 2) 14,575 16,745 7,903
Due to adviser (Note 2) 59,765 61,533 14,204
Other 60,843 247,288 77,210
TOTAL LIABILITIES 1,404,256 12,346,209 7,153,761
TOTAL NET ASSETS $549,288,919 $471,922,763 $233,545,538
NET ASSETS CONSIST OF:
Paid-in capital $549,292,968 $471,922,763 $233,545,538
Undistributed net realized gain (loss)
on investments (4,049) 0 0
TOTAL NET ASSETS $549,288,919 $471,922,763 $233,545,538
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
Net Assets $549,288,919 $471,922,763 $233,545,538
Shares outstanding 549,292,968 471,999,497 233,545,538
Net asset value and offering price per
share $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
STATEMENT OF OPERATIONS -
FOR THE YEAR ENDED MARCH 31, 1999 Money Market Trusts
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL
CALIFORNIA TAX-FREE
TAX-FREE MONEY MONEY
MONEY MARKET MARKET MARKET
TRUST TRUST TRUST
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $ 17,330,091 $28,325,563 $7,489,167
TOTAL INVESTMENT INCOME 17,330,091 28,325,563 7,489,167
EXPENSES (NOTE 2)
Advisory fees 2,810,251 1,315,654 565,461
Administration fees 394,691 368,383 158,507
Custody fees 94,162 87,886 37,815
Shareholder servicing fees 1,127,689 1,052,523 452,878
Portfolio accounting fees 174,266 166,750 106,785
Transfer agency fees 112,769 105,252 45,288
Organization costs 4,577 0 5,281
Legal and audit fees 66,631 52,361 59,129
Registration fees 208,789 38,837 95,521
Directors' fees 3,449 2,488 3,419
Shareholder reports 29,051 12,076 15,192
Other 23,813 12,375 9,180
Total Expenses 5,050,138 3,214,585 1,554,456
Less:
Waived fees and reimbursed expenses (3,922,184) (2,161,061) (1,101,384)
NET EXPENSES 1,127,954 1,053,524 453,072
NET INVESTMENT INCOME 16,202,137 27,272,039 7,036,095
Net realized gain (loss) on sale of
investments (1,896) 11,709 4,735
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 16,200,241 $27,283,748 $7,040,830
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
Money Market Trusts STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
TRUST
-----------------------------------
FROM MAY 5,
1997
(COMMENCEMENT
FOR THE OF OPERATIONS)
YEAR ENDED TO
MARCH 31, 1999 MARCH 31, 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 16,202,137 $ 11,310,951
Net realized gain (loss) on sale of
investments (1,896) (2,153)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 16,200,241 11,308,798
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (16,202,137) (11,310,951)
From net realized gain on sale of
investments 0 0
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,227,641,270 1,750,384,724
Reinvestment of dividends 502,038 269,738
Cost of shares redeemed (1,315,293,065) (1,114,211,737)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS (87,149,757) 636,442,725
INCREASE (DECREASE) IN NET ASSETS (87,151,653) 636,440,572
NET ASSETS:
Beginning net assets 636,440,572 0
ENDING NET ASSETS $ 549,288,919 $ 636,440,572
- --------------------------------------------------------------------------------
</TABLE>
Shares issued and redeemed at constant $1.00 NAV
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Money Market Trusts
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL TAX-FREE MONEY MARKET
TRUST
-------------------------------
FROM NOV. 10,
1997
MONEY MARKET TRUST (COMMENCEMENT
----------------------------------- OF
FOR THE OPERATIONS)
FOR THE FOR THE YEAR ENDED TO
YEAR ENDED YEAR ENDED MARCH 31, MARCH 31,
MARCH 31, 1999 MARCH 31, 1998 1999 1998
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 27,272,039 $ 36,943,556 $ 7,036,095 $ 2,920,354
Net realized gain (loss) on sale of
investments 11,709 108,337 4,735 7,368
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 27,283,748 37,051,893 7,040,830 2,927,722
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (27,272,039) (36,943,556) (7,036,095) (2,920,354)
From net realized gain on sale of
investments (52,582) (85,012) (12,103) 0
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,712,425,682 1,309,060,229 649,353,822 409,222,975
Reinvestment of dividends 5 47 206 0
Cost of shares redeemed (1,871,232,124) (1,485,316,752) (645,247,726) (179,783,739)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS (158,806,437) (176,256,476) 4,106,302 229,439,236
INCREASE (DECREASE) IN NET ASSETS (158,847,310) (176,233,151) 4,098,934 229,446,604
NET ASSETS:
Beginning net assets 630,770,073 807,003,224 229,446,604 0
ENDING NET ASSETS $ 471,922,763 $ 630,770,073 $ 233,545,538 $ 229,446,604
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Shares issued and redeemed at constant $1.00 NAV
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
Money Market Trusts FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE
MONEY MARKET TRUST (1)
PERIOD
YEAR ENDED ENDED
MARCH 31, MARCH 31,
1999 1998
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.03)
---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 2.93% 2.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $549,289 $636,441
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.20 % 0.20 %
Ratio of net investment income to average net assets 2.91 % 3.18 %
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 0.91 % 0.85 %
Ratio of net investment income to average net assets prior to waived
fees and reimbursed expenses 2.20 % 2.53 %
- -----------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND COMMENCED OPERATIONS ON MAY 5, 1997.
(2) THE FUND OPERATED AS THE MONEY MARKET 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., SUBSEQUENTLY RENAMED WELLS CAPITAL
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, WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(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.
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
FINANCIAL HIGHLIGHTS Money Market Trusts
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
FOUR MONEY MARKET TRUST (2)
SIX MONTHS MONTHS
YEAR ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, SEPT. 30, SEPT. 30, MAY 31, MAY 31,
1999 1998 1997(3) 1996 1995(4) 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.05 0.05 0.03 0.05 0.02 0.05 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.05) (0.03) (0.05) (0.02) (0.05) (0.03)
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL RETURN (NOT
ANNUALIZED) 5.35% 5.62% 2.66% 5.43% 5.70%** 5.05% 3.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $471,923 $630,770 $807,003 $1,143,767 $286,863 $290,483 $300,894
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.20 % 0.20 % 0.20 % 0.18 % 0.19 % 0.17 % 0.18 %
Ratio of net investment
income to average net
assets 5.20 % 5.46 % 5.28 % 5.33 % 5.70 % 5.06 % 3.21 %
- ----------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 0.61 % 0.61 % 0.61 % 0.55 % 1.11 % 1.07 % 1.02 %
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.79 % 5.05 % 4.87 % 4.96 % 4.78 % 4.16 % 2.37 %
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
** ANNUALIZED
(1) THE FUND COMMENCED OPERATIONS ON MAY 5, 1997.
(2) THE FUND OPERATED AS THE MONEY MARKET 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., SUBSEQUENTLY RENAMED WELLS CAPITAL
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, WFB ASSUMED INVESTMENT ADVISORY RESPONSIBILITIES.
(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.
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
Money Market Trusts FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
NATIONAL TAX-FREE
MONEY MARKET TRUST (1)
PERIOD
YEAR ENDED ENDED
MARCH 31, MARCH 31,
1999 1998
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03 0.01
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.01)
---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
---------- ----------
---------- ----------
TOTAL RETURN (NOT ANNUALIZED) 3.16% 1.30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $233,546 $229,447
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.20 % 0.20 %
Ratio of net investment income to average net assets 3.09 % 3.32 %
- -----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 0.68 % 0.63 %
Ratio of net investment income to average net assets prior to waived
fees and reimbursed expenses 2.61 % 2.89 %
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) THE FUND COMMENCED OPERATIONS ON NOVEMBER 10, 1997.
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
NOTES TO FINANCIAL STATEMENTS Money Market Trusts
- ------------------------------------------------------------------------
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 Money Market Trust and National Tax-Free Money Market
Trust, diversified series of the Company, and the California Tax-Free Money
Market Trust, a non-diversified series of the Company (each, a "Fund",
collectively, the "Funds").
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 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 Funds invest only in securities with remaining maturities not exceeding
397 days (thirteen months). Certain floating- and variable-rate instruments in
the portfolios 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 Funds use the amortized cost method to value their 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 Funds seek to maintain a constant
net asset value of $1.00 per share, although there is no assurance that they
will be able to do so.
37
<PAGE>
Money Market Trusts NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
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 each Fund's Portfolio of
Investments. The Funds 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 Funds 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
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 March 31, 1999.
The California Tax-Free Money Market Trust had estimated net capital loss
carryforward at March 31, 1999 of $4,049 expiring in 2006. 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 such
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
38
<PAGE>
NOTES TO FINANCIAL STATEMENTS Money Market Trusts
- ------------------------------------------------------------------------
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.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the
Funds with 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 the California Tax-Free Money Market Trust and 0.25% of the average
daily net assets of the Money Market Trust and National Tax-Free Money Market
Trust. 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 0.05% of the Funds'
average daily net assets up to $960 million and 0.04% of the Funds' average
daily net assets in excess of $960 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 has 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 has 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 an annual
rate of 0.02% of the average daily net assets of the Funds.
39
<PAGE>
Money Market Trusts NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
The Company has 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 an
annual rate of 0.20% of the average daily net assets of the Funds.
Prior to March 25, 1999, the Company had entered into administration
agreements on behalf of the Funds whereby WFB as administrator and Stephens Inc.
("Stephens") as co-administrator provided 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 entered into a "defensive" Distribution Plan (the "Plan") on
behalf of the Funds. The Plan contemplates that, to the extent any portion of
the fees payable by a Fund pursuant to its servicing plan is deemed to be
"primarily intended to result in the sale of shares" of a Fund, such fees are
approved and payable pursuant to the Plan and in accordance with Rule 12b-1
under the 1940 Act. The maximum authorized fee under the Plan is 0.20% of each
Fund's average daily net assets. The Plan will not result in any separate
payment of fees by the Funds.
WAIVED FEES AND REIMBURSED EXPENSES
The amount shown as waived fees and reimbursed expenses on the Statement of
Operations for the year ended March 31, 1999 was waived by WFB. 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 March 31, 1999, Stephens owned 10 shares of the California Tax-Free
Money Market Trust, 27 shares of the Money Market Trust, and 1 share of the
National Tax-Free Money Market Trust.
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.
4. SUBSEQUENT EVENTS
On March 25, 1999, the Board of Directors of the Company approved the
reorganization of the Trust's 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.
40
<PAGE>
INDEPENDENT AUDITORS' REPORT Money Market Trusts
- ------------------------------------------------------------------------
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 California Tax-Free Money Market
Trust, Money Market Trust and National Tax-Free Money Market Trust (three 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 of the California Tax-Free Money Market Trust for the year ended March
31, 1999 and the period from May 5, 1997 (commencement of operations) to March
31, 1998, the Money Market Trust for each of the years in the two-year period
ended March 31, 1999, and the National Tax-Free Money Market Trust for the year
ended March 31, 1999 and the period from November 10, 1997 (commencement of
operations) to March 31, 1998, 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 each
of the aforementioned funds of Stagecoach Funds, Inc. as of March 31, 1999, the
results of their operations, the changes in their net assets, and their
financial highlights for the periods indicated herein, in conformity with
generally accepted accounting principles.
[KPMG LLP SIGNATURE]
San Francisco, California
May 7, 1999
41
<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
LP -- Limited Partnerships
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>
42
<PAGE>
Wells Fargo Bank, N.A. provides investment advisory services, shareholder
services and/or certain other services for the Stagecoach Funds. Wells
Capital Management Incorporated ("WCM") provides investment sub-advisory
services for certain Stagecoach Funds. The Funds are distributed by
STEPHENS INC., Member NYSE/SIPC. Wells Fargo Bank, N.A. and WCM are not
affiliated with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Stagecoach Funds. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. For a prospectus containing
more complete information, including charges and expenses, call
1-800-260-5969. Read the prospectus carefully before you invest or send money.
STAGECOACH FUNDS-Registered
Trademark-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
SC MMT AR (5/99)
