STAGECOACH TRUST, 497, 1996-07-11

STAGECOACH TRUST
497, 1996-07-11

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<PAGE> 1

LOGO

------------------------------

PROSPECTUS
------------------------------

LOGO

INSTITUTIONAL CLASS

June 28, 1996
<PAGE> 2

STAGECOACH LIFEPATH(TM) FUNDS

The LifePath Funds consist of five asset allocation funds (the "LifePath
Funds") offered by Stagecoach Trust (the "Trust"), an open-end, series
investment company. This Prospectus describes shares of the Institutional Class
of the five LifePath Funds. Shares of the Institutional Class of the LifePath
Funds are no longer being offered to investors, although a limited number of
shares remain outstanding as of the date of this Prospectus. See "Description of
Shares."

EACH FUND INVESTS ALL OF ITS ASSETS IN A SEPARATE SERIES (EACH, A "MASTER
PORTFOLIO") OF MASTER INVESTMENT PORTFOLIO ("MIP"), AN OPEN-END, SERIES
INVESTMENT COMPANY, RATHER THAN IN A PORTFOLIO OF SECURITIES AND, AS SUCH, MAY
BE CONSIDERED A FEEDER FUND IN A MASTER/FEEDER STRUCTURE. EACH MASTER PORTFOLIO
HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND BEARING THE CORRESPONDING NAME.
THEREFORE, EACH FUND'S INVESTMENT EXPERIENCE CORRESPONDS DIRECTLY WITH THE
RELEVANT MASTER SERIES' INVESTMENT EXPERIENCE.

The LifePath Funds seek to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Each LifePath
Fund invests in the corresponding LifePath Master Series which invests in a wide
range of U.S. and foreign equity and debt securities and money market
instruments. Investors are encouraged to select a particular LifePath Fund based
on the decade of their anticipated retirement or when they anticipate beginning
to withdraw substantial portions of their investment.

Please read this Prospectus and retain it for future reference. It sets
forth concisely information about the Trust and Funds that an investor should
know. A Statement of Additional Information ("SAI") dated June 28, 1996 has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated
herein by reference. For a free copy, write to the Trust c/o Wells Fargo Bank,
N.A. -- Transfer Agent, 525 Market Street, San Francisco, California 94105, or
call 1-800-776-0179. If you hold shares in an IRA, please call 1-800-BEST-IRA
(1-800-237-3472) for information or assistance.
------------------------

FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY WELLS FARGO BANK, N.A., BZW BARCLAYS GLOBAL INVESTORS, N.A.,
("BGFA") OR ANY OF THEIR AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY. AN INVESTMENT IN A FUND INVOLVES CERTAIN INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
------------------------

AS WITH ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR
ANY OTHER REGULATORY AUTHORITY NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PROSPECTUS DATED JUNE 28, 1996
<PAGE> 3

- LIFEPATH 2000 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2000.

- LIFEPATH 2010 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2010.

- LIFEPATH 2020 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2020.

- LIFEPATH 2030 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2030.

- LIFEPATH 2040 FUND is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2040.

Institutional Shares of the Funds are no longer being offered for sale,
although a limited number of such shares remain outstanding as of the date of
this Prospectus. This Prospectus provides information to the existing
shareholders of Institutional Class Shares of the Funds.

The LifePath Funds also offer Retail Class Shares. Investors may be
eligible to invest in the Retail Class Shares. A free copy of the current
Prospectus for the Retail Class Shares is available by writing to the Trust c/o
Wells Fargo Bank, N.A. -- Shareholder Services, P.O. Box 7033, San Francisco,
California 94120-9517 or by calling 1-800-222-8222.

------------------------

BZW BARCLAYS GLOBAL FUND ADVISERS, N.A. ("BGFA") SERVES AS EACH MASTER
PORTFOLIO'S INVESTMENT ADVISER, AND TOGETHER WITH ITS AFFILIATES, PROVIDES
OTHER SERVICES FOR WHICH IT IS COMPENSATED. STEPHENS INC. ("STEPHENS"),
WHICH IS NOT AFFILIATED WITH BGFA, SERVES AS THE TRUST'S
ADMINISTRATOR AND AS DISTRIBUTOR OF EACH FUND'S SHARES.
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Fund Expenses...................................... 1
Financial Highlights.......................................... 3
Description of the Funds...................................... 5
Risk Factors.................................................. 7
Management of the Funds....................................... 19
Description of Shares......................................... 24
How to Redeem Shares.......................................... 25
Exchange Privilege............................................ 29
Dividends, Distributions and Taxes............................ 30
Performance Information....................................... 32
General Information........................................... 33
Appendix...................................................... A-1
</TABLE>
<PAGE> 5

SUMMARY OF FUND EXPENSES

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Master Portfolio
Management Fees(1)....... .55% .55% .55% .55% .55%
Other Expenses
Shareholder Servicing
Fees................... .20% .20% .20% .20% .20%
Miscellaneous Expenses... .20% .20% .20% .20% .20%
Total Other Expenses....... .40% .40% .40% .40% .40%
Total Fund Operating
Expenses................. .95% .95% .95% .95% .95%
(1) A portion of these fees is covered by a "defensive" Rule 12b-1 Distribution
Plan that does not result in additional expenses to the Funds or Master
Portfolios. (See "Management of the Funds -- MIP 12b-1 Plan" for further
information.)
- ------------------------------------------------------------------------------------
EXAMPLE OF EXPENSES
An investor would pay the following expenses on a $1,000 investment in the
Institutional Class of the Fund, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
</TABLE>

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1 YEAR............. $ 10 $ 10 $ 10 $ 10 $ 10
3 YEARS............ $ 30 $ 30 $ 30 $ 30 $ 30
5 YEARS............ $ 53 $ 53 $ 53 $ 53 $ 53
10 YEARS............ $ 117 $ 117 $ 117 $ 117 $ 117
------------------------------------------------------------------------------------
</TABLE>

EXPLANATION OF TABLES

The purpose of the foregoing tables is to help a shareholder understand the
various costs and expenses that an investor in the Funds will bear directly or
indirectly. The foregoing tables reflect expenses at both the Fund and Master
Portfolio levels. The tables do not reflect any charges that may be imposed by
Wells Fargo Bank or other shareholder servicing agents directly on customers
accounts in connection with an investment in a Fund.

ANNUAL FUND OPERATING EXPENSES are based on each Fund's actual expenses for
the fiscal year ended February 29, 1996. For more complete descriptions of the
various costs and expenses you can expect to incur as an investor in the Funds,
please see "Management of the Funds."

1
<PAGE> 6

EXAMPLE OF EXPENSES is a hypothetical example that illustrates the expenses
associated with a $1,000 investment over stated periods, based on the expenses
in the above tables and an assumed annual rate of return of 5%. This rate of
return should not be considered an indication of actual or expected performance
of a Fund nor a representation of past or future expenses; actual expenses and
returns may be greater or lesser than those shown.

With regard to the combined fees and expenses of the Funds and Master
Portfolios, the Trust's Board of Trustees has considered whether the various
costs and benefits of investing each Fund's assets in the corresponding Master
Portfolio rather than directly in a portfolio of securities would be more or
less than if the Fund invested in portfolio securities directly. The Trust's
Board of Trustees believes that the aggregate per share expenses of a Fund and
its corresponding Master Portfolio will be less than or approximately equal to
the expenses such Fund would incur if it directly acquired and managed the type
of securities held by its corresponding Master Portfolio. The information in the
foregoing tables does not reflect any fee waivers or expense reimbursement
arrangements that may be in effect. For a description of the various costs and
expenses incurred in the operation of the Trust and MIP, as well as any fee
waivers or expense reimbursements, see "Management of the Funds."

The Trust currently offers a second class of LifePath Shares -- The Retail
Class Shares. In addition, MasterWorks Funds Inc., an open-end, series
investment company, currently offers series of shares which invest in the Master
Portfolios. The expenses, and accordingly the investment returns, of the Retail
Shares and the MasterWorks series may differ from those of the Institutional
Class shares. Information about these other investment options in the Master
Portfolios may be obtained by calling Stephens at 1-800-643-9691. For additional
information see "Description of the Funds -- Master/Feeder Structure."

2
<PAGE> 7

FINANCIAL HIGHLIGHTS

The following information has been derived from the Financial Highlights of
the Institutional Class shares in the Funds' financial statements for the fiscal
year ended February 29, 1996. The financial statements are incorporated by
reference into the SAI for the Funds. The financial statements have been audited
by KPMG Peat Marwick LLP, independent auditors, whose report dated April 12,
1996 also is incorporated by reference into the SAI. This information should be
read in conjunction with the Funds' 1996 annual financial statements and notes
thereto. The SAI has been incorporated by reference into this Prospectus.

FOR AN INSTITUTIONAL CLASS SHARE OUTSTANDING FOR THE
YEAR ENDED FEBRUARY 29, 1996:

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
FUND FUND FUND FUND FUND
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period..... $ 9.94 $ 10.02 $ 10.17 $ 10.18 $ 10.37
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income.................. 0.42 0.34 0.29 0.23 0.17
Net realized and unrealized gain/(loss)
on investments....................... 0.86 1.60 2.03 2.47 2.84
-------- -------- -------- -------- --------
Total from investment operations......... 1.28 1.94 2.32 2.70 3.01
Less distributions:
Dividends from net investment income... (0.42 ) (0.35 ) (0.30 ) (0.24 ) (0.18 )
Distributions from net realized
capital gains........................ (0.13 ) (0.14 ) (0.21 ) (0.27 ) (0.34 )
-------- -------- -------- -------- --------
Total Distributions...................... (0.55 ) (0.49 ) (0.51 ) (0.51 ) (0.52 )
-------- -------- -------- -------- --------
Net Asset Value, end of period........... $ 10.67 $ 11.47 $ 11.98 $ 12.37 $ 12.86
======= ======= ======= ======= =======
Total Return (not annualized)............ 13.19 % 19.69 % 23.18 % 26.88 % 29.32 %
Ratios/Supplemental Data:
Net assets, end of period (000)........ $17,262 $34,458 $40,570 $25,447 $33,386
Number of shares outstanding, end of
period(000).......................... 1,618 3,004 3,385 2,058 2,596
Ratio to average net assets
(annualized)(1):
Ratio of expenses to average net
assets............................... 0.95 % 0.95 % 0.95 % 0.95 % 0.95 %
Portfolio Turnover(2).................... 84 % 39 % 49 % 39 % 29 %
Ratio of net investment income to
average net assets................... 4.23 % 3.27 % 2.68 % 2.15 % 1.53 %
</TABLE>

- ---------------

(1) This ratio includes expenses charged to the Master Portfolio.

(2) The portfolio turnover rate represents activity by the Master Portfolio for
the year ended February 29, 1996.

3
<PAGE> 8

FOR AN INSTITUTIONAL CLASS SHARE OUTSTANDING FOR THE
YEAR ENDED FEBRUARY 28, 1995:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
FUND FUND FUND FUND FUND
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning
of period................ $ 10.00 $ 10.00 $ 10.00 $10.00 $10.00
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income.... 0.35 0.33 0.30 0.29 0.20
Net realized and
unrealized gain/(loss)
on investments......... (0.12) 0.01 0.12 0.14 0.34
-------- -------- -------- -------- --------
Total from investment
operations............... 0.23 0.34 0.42 0.43 0.54
Less distributions:
Dividends from net
investment income...... (0.28) (0.27) (0.25) (0.25) (0.17)
Distributions from net
realized capital
gains.................. (0.01) (0.05) 0.00 0.00 0.00
-------- -------- -------- -------- --------
Total Distributions........ (0.29) (0.32) (0.25) (0.25) (0.17)
-------- -------- -------- -------- --------
Net Asset Value, end of
period................... $ 9.94 $ 10.02 $ 10.17 $10.18 $10.37
========= ========= ========= ========= =========
Total Return (not
annualized).............. 2.38% 3.53% 4.39% 4.42% 5.55%
Ratios/Supplemental Data:
Net assets, end of period
(000).................. $ 7,499 $13,028 $16,618 $9,682 $9,976
Number of shares
outstanding, end of
period (000)........... 754 1,300 1,634 951 962
Ratios to average net
assets (annualized):
Ratio of expenses to
average net
assets(1).............. 0.95% 0.95% 0.95% 0.95% 0.95%
Ratio of net investment
income to average net
assets(1).............. 4.89% 4.61% 3.88% 3.59% 2.61%
Portfolio Turnover(2)...... 17% 24% 28% 40% 5%
- --------------------------------------------------------------------------------
</TABLE>

- ---------------

(1) This ratio includes expenses charged to the Master Portfolio.
(2) The portfolio turnover rate represents activity by the Master Portfolio for
the year ended February 28, 1995 that was audited by other auditors.

4
<PAGE> 9

DESCRIPTION OF THE FUNDS
GENERAL

The Trust is a "series fund," which is a mutual fund divided into separate
portfolios. Each portfolio is treated as a separate entity for certain matters
under the Investment Company Act of 1940, as amended (the "1940 Act"), and for
other purposes, and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. Each LifePath Fund is comprised of two
classes of shares -- Retail Class and Institutional Class. As described below,
for certain matters Trust shareholders vote together as a group, as to others
they vote separately by portfolio, and, in certain instances, they vote by class
of shares within a portfolio. In addition, because of differences between the
fees and expenses borne by the Retail Class Shares and Institutional Class
Shares, the net asset value of the shares in these two classes will typically
differ. By this Prospectus, Institutional Class Shares of five of the Trust's
portfolios are being offered -- LifePath 2000 Fund, LifePath 2010 Fund, LifePath
2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund, each of which is
diversified. From time to time, the Trust may establish other portfolios. See
"General Information."

MASTER/FEEDER STRUCTURE

Each Fund is a feeder fund in a master/feeder structure, which means it
invests all of its assets in a separate Master Portfolio of MIP with the same
investment objective as such Fund. See "Investment Objectives" and "Management
Policies" below. MIP is organized as a trust under the laws of the State of
Delaware. See "Management of the Funds." In addition to selling its shares to a
Fund, each Master Portfolio may sell its shares to certain other mutual funds or
other qualified investors. Information regarding additional options, if any, for
investment in shares of the Master Portfolio is available from Stephens and may
be obtained by calling 1-800-643-9691. The expenses and, correspondingly, the
returns of other investment options in MIP are expected to differ from those of
the Funds.

The Board of Trustees believes that, if other investors invest their assets
in a Master Portfolio of MIP, certain economic efficiencies may be realized with
respect to such Master Portfolio. For example, fixed expenses that otherwise
would have been borne solely by a Fund would be spread across a larger asset
base provided by more than one fund investing in the Master Portfolio. The Fund
and other entities investing in that Master Portfolio will each be liable for
all obligations of the Master Portfolio. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance

5
<PAGE> 10

exists and MIP itself is unable to meet its obligations. Accordingly, the
Trust's Board of Trustees believes that none of the Funds nor their shareholders
will be adversely affected by reason of investing their assets in a Master
Portfolio. However, if a mutual fund or other investor withdraws its investment
from such Master Portfolio, the economic efficiencies (e.g., spreading fixed
expenses across a larger asset base) that the Trust's Board believes should be
available through investment in the Master Portfolio may not be fully achieved.
In addition, given the relatively novel nature of the master/feeder structure,
accounting and operational difficulties could occur.

Each Master Portfolio's investment objective and other fundamental
policies, which are the same as those of the Fund bearing the corresponding
name, cannot be changed without approval by the holders of a majority (as
defined in the 1940 Act) of such Master Portfolio's outstanding voting
interests. Whenever a Fund, as a Master Portfolio interestholder, is requested
to vote on matters pertaining to any fundamental policy of such Master
Portfolio, the Fund will hold a meeting of its shareholders to consider such
matters and such Fund will cast its votes in proportion to the votes received
from Fund shareholders. A Fund will vote Master Portfolio interests for which it
receives no voting instructions in the same proportion as the votes received
from Fund shareholders. In addition, certain policies of the Master Portfolio
which are non-fundamental could be changed by vote of a majority of MIP's
Trustees without shareholder vote. If a Master Portfolio's investment objective
or fundamental or non-fundamental policies are changed, the Fund investing in
that Master Portfolio could subsequently change its objective or policies to
correspond to those of the Master Portfolio or the Fund could redeem its Master
Portfolio shares and either seek a new investment company in which to invest
with a matching objective or retain its own investment adviser to manage such
Fund's portfolio in accordance with its objective. In the latter case, the
Fund's inability to find a substitute investment company in which to invest or
equivalent management services could adversely affect shareholders' investments
in that Fund. A Fund will provide shareholders with 30 days' written notice
prior to the implementation of any change in a non-fundamental policy of such
Fund or Master Portfolio, to the extent possible.

Each LifePath Fund is comprised of two classes of shares -- Retail Class
and Institutional Class. The classes have identical rights with respect to the
series of which they are a part, except that there are certain matters which
affect one class but not another. Currently, there is a Distribution Plan
pursuant to Rule 12b-1 under the 1940 Act with respect to the Retail Class but
not the Institutional Class. In addition, certain purchase, ex-

6
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change and dividend reinvestment options available to Retail Class shareholders
are not available to Institutional Class shareholders. On all such matters the
shareholders of the affected class vote as a class.

RISK FACTORS

The net asset value and investment return of each LifePath Fund and
LifePath Master Portfolio are expected to fluctuate and are neither insured nor
guaranteed. To the extent that each LifePath Master Portfolio holds both equity
and fixed-income securities, it is subject to equity market risk, as well as
credit and interest rate risks. Equity market risk is the risk that common stock
prices will fluctuate or decline over short or even extended periods of time.
Credit risk is the risk that the issuer of a debt instrument is unable, due to
financial constraints, to make timely payments on its outstanding obligations.
Portfolio debt instruments held by the Master Portfolios are subject to
interest-rate risk. Interest-rate risk is the risk that increases in market
interest rates may adversely affect the value of the debt instruments in which a
Fund invests and hence the value of an investment in the Fund. The value of debt
instruments held by a Fund generally changes inversely to changes in market
interest rates. Investments in foreign securities can expose a Master Portfolio
to currency exchange risks and other potentially adverse consequences associated
with investing in securities markets that are not as developed or efficient as
those in the United States. Certain investment techniques that may be used by a
LifePath Master Portfolio, such as investing in stock index options, futures
contracts and interest-rate swaps, present special risk considerations. See
"Appendix -- Investment Techniques". As with all mutual funds, there can be no
assurance that each Fund or Master Portfolio will achieve its investment
objective. This summary of risk factors is qualified by reference to more
detailed descriptions of the risks associated with an investment in the Funds,
as set forth under "Risk Considerations" below.

INVESTMENT OBJECTIVES

Each LifePath Fund seeks to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Specifically:

- LifePath 2000 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2000.

7
<PAGE> 12

- LifePath 2010 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2010.

- LifePath 2020 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2020.

- LifePath 2030 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2030.

- LifePath 2040 Fund is managed for investors planning to retire (or begin
to withdraw substantial portions of their investment) approximately in the year
2040.

Each Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Fund's outstanding
voting securities. Each Master Portfolio's investment objective, which is the
same as the corresponding Fund's, cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Master Portfolio's
outstanding voting interests. Shareholders of a Fund that invests in a Master
Portfolio are provided the opportunity to vote on any proposed change to such
Master Portfolio's investment objective, and that Fund will vote on any such
proposal in proportion to the votes received from Fund shareholders. See
"General" above. The differences in objectives and policies among the Master
Portfolios determine the types of portfolio securities in which each Master
Portfolio invests and can be expected to affect the degree of risk to which each
Master Portfolio and, therefore, the corresponding Fund is subject and the yield
or return of each Master Portfolio and Fund.

MANAGEMENT POLICIES

Each Fund invests all of its assets in the Master Portfolio bearing the
corresponding name, which has the same investment objective as such Fund. A Fund
may withdraw its investment in the relevant Master Portfolio at any time,
provided that the Trust's Board of Trustees determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Trust's Board of
Trustees would consider what action should be taken, including investing all
such Fund's assets in another pooled investment entity having the same
investment objective as the Fund, or retaining an investment adviser to manage
such Fund's assets in accordance with the policies described below.

8
<PAGE> 13

Since the investment characteristics of each Fund correspond directly with
those of the Master Portfolio bearing the corresponding name, the following is a
discussion of the management policies used by each Master Portfolio.

The LifePath Master Portfolios are a diversified series of asset allocation
funds designed for long-term investors. The LifePath 2000 Master Portfolio,
LifePath 2010 Master Portfolio, LifePath 2020 Master Portfolio, LifePath 2030
Master Portfolio and LifePath 2040 Master Portfolio follow an asset allocation
strategy among three broad investment classes: equity and debt securities of
issuers located throughout the world and cash in the form of money market
instruments. Each LifePath Master Portfolio differs in the weighting assigned to
each such investment class, with the later-dated Master Portfolios generally
bearing more risk than the earlier-dated Master Portfolios, with the expectation
of greater total return. Thus, the investment class weightings of the LifePath
2040 Master Portfolio initially might be 100%, 0% and 0% among equity
securities, debt securities and cash, respectively, while the weightings of the
LifePath 2000 Master Portfolio initially might be 25%, 50% and 25%,
respectively. Over the years, each LifePath Master Portfolio is managed more
conservatively, on the premise that individuals investing for retirement desire
to reduce investment risk in their retirement accounts as they age. The
difference in such investment class weightings is based on the statistically
determined risk that such investors, on average, may be willing to accept given
their investment time horizons in an effort to maximize assets in anticipation
of retirement or for other purposes.

Investors are encouraged to invest in a particular LifePath Fund based on
the decade of their anticipated retirement or when they anticipate beginning to
withdraw substantial portions of their accounts. For example, the LifePath 2000
Fund is designed for investors in their 50s and 60s who plan to retire (or begin
to withdraw substantial portions of their investment) in approximately 2000; the
LifePath 2010 Fund is designed for investors in their 40s and 50s who plan to
retire (or begin to withdraw as described above) in approximately 2010; and so
on. In addition, when making their investment decisions, investors could
consider evaluating their own risk profiles, recognizing, for example, that the
LifePath 2040 Fund is designed for investors with a high tolerance for risk
while the LifePath 2000 Fund is designed for investors with a low tolerance for
risk. The LifePath Funds were the first mutual funds of their kind to offer a
flexible investment strategy designed to change over specific time horizons.

To manage the LifePath Master Portfolio, BGFA employs a proprietary
investment model (the "Model") that analyzes extensive financial and

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<PAGE> 14

economic data, including risk correlation and expected return statistics, to
recommend the portfolio allocation among the investment classes described below.
At its simplest, for each point in time, the Model recommends a portfolio
allocation designed to maximize total return for each LifePath Master Series
based on each such LifePath Master Portfolio's evolving risk profile. As a
result, while each LifePath Master Portfolio invests in substantially the same
securities within an investment class, the amount of each LifePath Master
Portfolio's aggregate assets invested in a particular investment class, and thus
in particular securities, differs, but the relative percentage that a particular
security comprises within an investment class ordinarily remains substantially
the same. As of June 1, 1996 asset allocations in the LifePath Master Portfolios
were approximately as follows:

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
MASTER MASTER MASTER MASTER MASTER
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Equity Securities
Domestic............. 17% 39% 53% 63% 75%
International........ 5% 11% 15% 19% 20%
Debt Securities.......... 77% 49% 31% 17% 4%
Cash..................... 1% 1% 1% 1% 1%
</TABLE>

The relative weightings for each LifePath Master Portfolio of the various
investment classes are expected to change over time, with the LifePath 2040
Master Portfolio adopting in the 2030s characteristics similar to the LifePath
2000 Master Portfolio today. BGFA may in the future refine the Model, or the
financial and economic data analyzed by the Model, in ways that could result in
changes to recommended allocations.

The LifePath Model contains both "strategic" and "tactical" components,
with the strategic component weighted more heavily than the tactical component.
The strategic component of the Model evaluates the risk that investors, on
average, may be willing to accept given their investment time horizons. The
strategic component thus determines the changing investment risk level of each
LifePath Fund as time passes. The tactical component of the Model, on the other
hand, addresses short-term market conditions. The tactical component thus
adjusts the amount of investment risk taken by each LifePath Fund without regard
to time horizon, but rather in consideration of the relative risk-adjusted
short-term attractiveness of various asset classes.

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<PAGE> 15

assets in foreign securities that are not publicly traded in the United States.
Rather than choosing specific securities, the Model selects indices representing
segments of the global equity and debt markets and invests to create market
exposure to these market segments by purchasing representative samples of
securities comprising the indices in an attempt to replicate their performance.
From time to time, other indices may be selected in addition to, or as a
substitute for, any of the indices listed herein and market exposure may be
broadened. Investors will be notified of any such change.

The Model has broad latitude in selecting the class of investments and the
particular securities within a class in which each LifePath Master Portfolio
invests. The LifePath Master Portfolios are managed as balanced portfolios and
are not required to maintain a portion of their investments in each of the
permitted investment categories at all times. Until a LifePath Master Portfolio
attains an asset level of approximately $100 to $150 million, the Model
allocates assets across fewer of the investment categories identified below than
it otherwise would. As a LifePath Master Portfolio approaches this minimum asset
level, the Model adds investment categories from among those identified below,
thereby approaching the desired investment mix over time.

Each LifePath Master Portfolio's investments are compared from time to time
to the Model's recommended allocation. Recommended reallocations are implemented
subject to BGFA's assessment of current economic conditions and investment
opportunities. BGFA may change from time to time the criteria and methods it
uses to implement the recommendations of the Model. Recommended reallocation is
implemented in accordance with trading policies designed to take advantage of
market opportunities and reduce transaction costs. The asset allocation mix
selected by the Model is a primary determinant in the respective LifePath Master
Portfolio's investment performance.

BGFA manages other portfolios which also invest in accordance with the
Model. The performance of each of those other portfolios is likely to vary from
the performance of each LifePath Master Portfolio and corresponding LifePath
Fund. Such variation in performance is primarily due to different equilibrium
asset mix assumptions used for the various portfolios, timing differences in the
implementation of the Model's recommendations and differences in expenses and
liquidity requirements. The overall management of each LifePath Master Portfolio
is based on the recommendation of the Model, and no person is primarily
responsible for recommending the mix of asset classes in each Master Portfolio
or the mix of securities

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<PAGE> 16

within the asset classes. Decisions relating to the Model are made by BGFA's
investment committee.

Each LifePath Master Portfolio may invest in up to 17 asset classes,
including 10 stock classes, 6 bond classes and a money market class. Each
LifePath Master Portfolio invests in the classes of investments described below.

EQUITY SECURITIES -- The LifePath Master Portfolios seek U.S. equity
market exposure through the following indices of common stock:

- The S&P/BARRA Value Stock Index (consisting of primarily large-
capitalization U.S. stocks with lower-than-average price/book ratios).

- The S&P/BARRA Growth Stock Index (consisting of primarily
large-capitalization U.S. stocks with higher-than-average price/book
ratios).

- The Intermediate Capitalization Value Stock Index (consisting of
primarily medium-capitalization U.S. stocks with lower-than-average
price/book ratios).

- The Intermediate Capitalization Growth Stock Index (consisting of
primarily medium-capitalization U.S. stocks with higher-than-average
price/book ratios).

- The Intermediate Capitalization Utility Stock Index (consisting of
primarily medium-capitalization U.S. utility stocks).

- The Micro Capitalization Market Index (consisting of primarily
small-capitalization U.S. stocks).

- The Small Capitalization Value Stock Index (consisting of primarily
small-capitalization U.S. stocks with lower-than-average price/book
ratios).

- The Small Capitalization Growth Stock Index (consisting of primarily
small-capitalization U.S. stocks with higher-than-average price/book
ratios).

The LifePath Master Portfolios seek foreign equity market exposure
through the following indices of foreign equity securities:

- The Morgan Stanley Capital International (MSCI) Japan Index (consisting
of primarily large-capitalization Japanese stocks).

- The Morgan Stanley Capital International Europe, Australia, Far East
Index (MSCI EAFE) Ex-Japan Index (consisting of primarily
large-capitalization foreign stocks, excluding Japanese stocks).

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<PAGE> 17

In addition, each LifePath Master Portfolio may invest in other common
stocks, preferred stocks and convertible securities, including those in the
form of American, European and Continental Depositary Receipts, as well as
warrants to purchase such securities, and investment company securities.
See "Appendix -- Portfolio Securities."

DEBT SECURITIES -- The LifePath Master Portfolios seek U.S. debt
market exposure through the following indices of U.S. debt securities:

- The Lehman Brothers Long-Term Government Bond Index (consisting of all
U.S. Government bonds with maturities of at least ten years).

- The Lehman Brothers Intermediate-Term Government Bond Index (consisting
of all U.S. Government bonds with maturities of less than ten years and
greater than one year).

- The Lehman Brothers Long-Term Corporate Bond Index (consisting of all
U.S. investment-grade corporate bonds with maturities of at least ten
years).

- The Lehman Brothers Intermediate-Term Corporate Bond Index (consisting of
all U.S. investment-grade corporate bonds with maturities of less than
ten years and greater than one year).

- The Lehman Brothers Mortgage-Backed Securities Index (consisting of all
fixed-coupon mortgage pass-throughs issued by the Federal National
Mortgage Association, Government National Mortgage Association and
Federal Home Loan Mortgage Corporation with maturities greater than
one year).

The LifePath Master Portfolios seek foreign debt market exposure
through the following index of foreign debt securities:

- The Salomon Brothers Non-U.S. World Government Bond Index (consisting of
foreign government bonds with maturities of greater than one year).

Each U.S. and foreign debt security is expected to be part of an issuance
with a minimum outstanding amount at the time of purchase of approximately $50
million and $100 million, respectively. Each security in which a LifePath Master
Portfolio invests must be rated at least Baa by Moody's Investors Service, Inc.
("Moody's"), or BBB by Standard & Poor's Corporation ("S&P"), Fitch Investors
Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff") or, if unrated, deemed
to be of comparable

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<PAGE> 18

quality by WFNIA. See "Risk Considerations -- Fixed-Income Securities"
below, and "Appendix" in the Statement of Additional Information.

MONEY MARKET INSTRUMENTS -- The money market instruments held by each
Master Portfolio generally consist of high-quality money market instruments,
including U.S. Government obligations, obligations of domestic and foreign
banks, short-term corporate debt instruments and repurchase agreements. See
"Appendix" below for a more complete description of the money market instruments
in which each Master Portfolio may invest.

INVESTMENT TECHNIQUES -- Each LifePath Master Portfolio also may lend its
portfolio securities and enter into transactions in certain derivatives, each of
which involves risk. Derivatives are financial instruments whose values are
derived, at least in part, from the prices of other securities or specified
assets, indices or rates. The futures contracts and options on futures contracts
that each Master Portfolio may purchase are considered derivatives. Each Master
Portfolio may use some derivatives as part of its short-term liquidity holdings
and/or as substitutes for comparable market positions in the underlying
securities. Also, asset-backed securities issued or guaranteed by U.S.
Government agencies or instrumentalities and certain floating- and variable-rate
instruments can be considered derivatives. Some derivatives may be more
sensitive than direct securities to changes in interest rates or sudden market
moves. Some derivatives also may be susceptible to fluctuations in yield or
value due to their structure or contract terms.

BGFA (as investment adviser to each Master Portfolio) use a variety of
internal risk management procedures to ensure that derivatives use is consistent
with each Master Portfolio's and each Fund's investment objective, does not
expose either a Master Portfolio or a Fund to undue risks and is closely
monitored, including providing periodic reports to the Boards of Trustees
concerning the use of derivatives. Derivatives use also is subject to broadly
applicable investment policies. For example, in no case may a Master Portfolio
invest more than 15% of the current value of its assets in "illiquid
securities," including derivatives without active secondary markets. Nor may a
Master Portfolio use derivatives to create leverage without establishing
adequate "cover" in compliance with Securities and Exchange Commission leverage
rules. For more information, see "Risk Considerations" below, and
"Appendix -- Investment Techniques."

CERTAIN FUNDAMENTAL POLICIES

Each Fund and Master Portfolio may (i) borrow money to the extent permitted
under the 1940 Act; (ii) invest up to 5% of its total assets in the obligations
of any single issuer, except that up to 25% of the value of the

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<PAGE> 19

total assets of such Fund or Master Portfolio may be invested and obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
may be purchased, without regard to any such limitation; and (iii) invest up to
25% of the value of its total assets in the securities of issuers in a
particular industry or group of closely related industries, provided there is no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed as to a Fund or Master Portfolio
without approval by the holders of a majority (as defined in the 1940 Act) of
the outstanding voting securities of such Fund or Master Portfolio, as the case
may be. See "Investment Objectives and Management Policies -- Investment
Restrictions" in the Statement of Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES

Each Fund and Master Portfolio may (i) purchase securities of any company
having less than three years' continuous operation (including operations of any
predecessors) if such purchase does not cause the value of its investments in
all such companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest up to 15% of the value of its net assets
in repurchase agreements providing for settlement in more than seven days after
notice and in other illiquid securities. Although each LifePath Fund and
LifePath Master Portfolio reserves the right to invest up to 15% of the value of
its net assets in illiquid securities, including repurchase agreements providing
for settlement in more than seven days after notice, as long as such Fund's
shares are registered for sale in a state that imposes a lower limit on the
percentage of a fund's assets that may be so invested, such LifePath Fund and
LifePath Master Portfolio will comply with the lower limit. Each LifePath Fund
currently is limited to investing up to 10% of the value of its net assets in
such securities due to limits applicable in several states. See "Investment
Objectives and Management Policies -- Investment Restrictions" in the Statement
of Additional Information.

RISK CONSIDERATIONS

General -- Since the investment characteristics and, therefore, investment
risks directly associated with such characteristics of each LifePath Fund
correspond to those of the Master Portfolio in which such Fund invests, the
following is a discussion of the risks associated with an investment in a Master
Portfolio.

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<PAGE> 20

The net asset value per share of each LifePath Fund is not fixed and should
be expected to fluctuate.

Investment Techniques -- Each LifePath Master Portfolio may engage in
various investment techniques the use of which involves greater risk than that
incurred by other funds with similar investment objectives. See
"Appendix -- Investment Techniques." Using these techniques may affect the
degree to which a LifePath Master Portfolio's net asset value fluctuates.

Equity Securities -- Investors should be aware that equity securities
fluctuate in value, often based on factors unrelated to the value of the issuer
of the securities, and that fluctuations can be pronounced. Changes in the value
of securities held by a LifePath Master Portfolio result in changes in the value
of such LifePath Master Portfolio's shares and thus the LifePath Master
Portfolio's performance.

The securities of the smaller companies in which each LifePath Master
Portfolio may invest may be subject to more abrupt or erratic market movements
than larger, more-established companies, both because the securities typically
are traded in lower volume and because the issuers typically are subject to a
greater degree to changes in earnings and prospects.

Fixed-Income Securities -- Investors should be aware that even though
interest-bearing securities are investments which promise a stable stream of
income, the prices of such securities are inversely affected by changes in
interest rates and, therefore, are subject to the risk of market price
fluctuations. Long-term securities are affected to a greater extent by interest
rates than shorter-term securities. The values of fixed-income securities also
may be affected by changes in the credit rating or financial condition of the
issuing entities. Once the rating of a portfolio security has been changed to a
rating below investment grade, the particular LifePath Master Portfolio
considers all circumstances deemed relevant in determining whether to continue
to hold the security. Certain securities that may be purchased by a LifePath
Master Portfolio, such as those rated Baa by Moody's and BBB by S&P, Fitch and
Duff, may be subject to such risk with respect to the issuing entity and to
greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Securities which are rated Baa by Moody's are
considered medium-grade obligations; they are neither highly protected nor
poorly secured, and are considered by Moody's to have speculative
characteristics. Securities rated BBB by S&P are regarded as having adequate
capacity to pay interest and repay principal, and, while such debt securities
ordinarily exhibit adequate protection parameters, adverse economic conditions
or changing circumstances are

16
<PAGE> 21

more likely to lead to a weakened capacity to pay interest and repay principal
for securities in this category than in higher rated categories. Securities
rated BBB by Fitch are considered investment grade and of satisfactory credit
quality; however, adverse changes in economic conditions and circumstances are
more likely to have an adverse impact on these securities and, therefore, impair
timely payment. Securities rated BBB by Duff have below average protection
factors but nonetheless are considered sufficient for prudent investment. If a
security held by a LifePath Master Portfolio is downgraded to a rating below
investment grade, such Master Portfolio may continue to hold the security until
such time as BGFA determines it advantageous for the LifePath Master Portfolio
to sell the security. If such a policy would cause a LifePath Master Portfolio
to have 5% or more of its net assets invested in securities that have been
downgraded below investment grade, the Master Portfolio promptly would seek to
dispose of such securities in an orderly manner. See "Appendix -- Portfolio
Securities -- Ratings" and "Appendix" in the Statement of Additional
Information.

Foreign Securities -- Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some foreign
issuers are less liquid and more volatile than securities of comparable U.S.
issuers. Similarly, volume and liquidity in most foreign securities markets are
less than in the United States, and, at times, volatility of price can be
greater than in the United States. In addition, there may be less publicly
available information about a non-U.S. issuer, and non-U.S. issuers generally
are not subject to uniform accounting and financial reporting standards,
practices and requirements comparable to those applicable to U.S. issuers. See
"Appendix -- Portfolio Securities -- Bank Obligations."

Because evidences of ownership of such securities usually are held outside
the United States, each Master Portfolio will be subject to additional risks
which include possible adverse political and economic developments, possible
seizure or nationalization of foreign deposits and possible adoption of
governmental restrictions which might adversely affect the payment of principal
and interest on the foreign securities or might restrict the payment of
principal and interest to investors located outside the country of the issuers,
whether from currency blockage or otherwise. Custodial expenses for a portfolio
of non-U.S. securities generally are higher than for a portfolio of U.S.
securities.

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<PAGE> 22

currency rates and exchange control regulations. Some currency exchange costs
generally are incurred when a LifePath Master Portfolio changes investments from
one country to another.

Furthermore, some of these securities may be subject to brokerage or stamp
taxes levied by foreign governments, which have the effect of increasing the
cost of such investment and reducing the realized gain or increasing the
realized loss on such securities at the time of sale. Income received by a
Master Portfolio from sources within foreign countries may be reduced by
withholding and other taxes imposed by such countries. Tax conventions between
certain countries and the United States, however, may reduce or eliminate such
taxes. All such taxes paid by a Master Portfolio reduce its net income available
for distribution to its shareholders.

Foreign Currency Exchange -- Currency exchange rates may fluctuate
significantly over short periods of time. They generally are determined by the
forces of supply and demand in the foreign exchange markets and the relative
merits of investments in different countries, actual or perceived changes in
interest rates and other complex factors, as seen from an international
perspective. Currency exchange rates also can be affected unpredictably by the
intervention of U.S. or foreign governments or central banks, or by the failure
to intervene, or by currency controls or political developments in the United
States or abroad. The LifePath Master Portfolios intend to engage in foreign
currency transactions to maintain the same foreign currency exposure as the
relevant foreign securities index through which the Master Portfolios seek
foreign equity market exposure, but not as part of a defensive strategy to
protect against fluctuations in exchange rates.

Foreign currency transactions may occur on a spot (i.e., cash) basis at the
rate prevailing in the currency exchange market or on a forward basis. A forward
currency exchange contract involves an obligation to purchase or sell a specific
currency at a set price on a future date which must be more than two days from
the date of the contract. The forward foreign currency market offers less
protection against default than is available when trading currencies on an
exchange, since a forward currency contract is not guaranteed by an exchange or
clearinghouse. Therefore, a default on a forward currency contract would deprive
a LifePath Master Portfolio of unrealized profits or force such Master Portfolio
to cover its commitments for purchase or resale, if any, at the current market
price.

Foreign Futures Transactions -- Unlike trading on domestic futures
exchanges, trading on foreign futures exchanges is not regulated by the
Commodity Futures Trading Commission (the "CFTC") and generally is

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<PAGE> 23

subject to greater risks than trading on domestic exchanges. For example, some
foreign exchanges are principal markets so that no common clearing facility
exists and an investor may look only to the broker for performance of the
contract. BGFA, however, considers on an ongoing basis the creditworthiness of
such counterparties. In addition, any profits that a LifePath Master Portfolio
might realize in trading could be eliminated by adverse changes in the exchange
rate; adverse exchange rate changes also could cause a Master Portfolio to incur
losses. Transactions on foreign exchanges may include both futures contracts
which are traded on domestic exchanges and those which are not. Such
transactions may also be subject to withholding and other taxes imposed by
foreign governments.

Other Investment Considerations -- Asset allocation and modeling strategies
are employed by BGFA for other investment companies and accounts advised or
sub-advised by BGFA. If these strategies indicate particular securities should
be purchased or sold, at the same time, by a LifePath Master Portfolio and one
or more of these investment companies or accounts, available investments or
opportunities for sales will be allocated equitably to each by BGFA. In some
cases, this procedure may adversely affect the size of the position obtained for
or disposed of by a LifePath Master Portfolio or the price paid or received by
such LifePath Master Portfolio.

Under normal market conditions, the portfolio turnover rate for each
LifePath Master Portfolio is not expected to exceed 100%. A portfolio turnover
rate of 100% would occur, for example, if all of a LifePath Master Portfolio's
securities were replaced within one year. Higher portfolio turnover rates are
likely to result in comparatively greater brokerage commissions. In addition,
short-term gains realized from portfolio transactions are taxable to
shareholders as ordinary income. Portfolio turnover will not be a limiting
factor in making investment decisions.

MANAGEMENT OF THE FUNDS

GENERAL -- The Trust has not retained the services of an investment adviser
because each Fund's assets are invested in a Master Portfolio that has retained
investment advisory services (see "Master Portfolio Investment Adviser" below).
Each LifePath Fund bears a pro rata portion of the fees paid to the
corresponding Master Portfolio.

BOARD OF TRUSTEES -- The business and affairs of the Trust are managed
under the direction of its Board of Trustees. The Trust's Trustees are also
MIP's Trustees and also serve as Directors of MasterWorks Funds Inc., another
open-end, series investment company, whose LifePath Fund

19
<PAGE> 24

series are wholly invested in the Master Portfolios. The Trust's Board,
including a majority of the Trustees who are not "interested persons" (as that
term is defined in the 1940 Act) of the Trust, has adopted procedures to address
potential conflicts of interest that may arise as a result of the structure of
the Boards. See "Management of the Trust" in the SAI. The SAI also contains the
name and general business experience of each Trustee.

MASTER PORTFOLIO INVESTMENT ADVISER -- BGFA serves as investment adviser to
each of the LifePath Master Portfolios. Pursuant to an Investment Advisory
Contract with each Master Portfolio, BGFA provides investment guidance and
policy direction in connection with the management of each Master Portfolio's
assets, subject to the overall authority of MIP's Board of Trustees and in
conformity with Delaware Law and the stated policies of such Master Portfolio.
BGFA began serving as investment adviser on January 1, 1996. BGFA was created by
the reorganization of Wells Fargo Nikko Investment Advisors ("WFNIA"), the
former sub-adviser to each Master Portfolio, with and into an affiliate of Wells
Fargo Institutional Trust Company, N.A. ("WFITC"). BGFA is an indirect
subsidiary of Barclays Bank PLC and is located at 45 Fremont Street, San
Francisco, California 94105. As of March 31, 1996 BGFA and its affiliates
provided investment advisory services for over $284 billion of assets. MIP has
agreed to pay to BGFA a monthly fee at the annual rate of 0.55% of each LifePath
Master Portfolio's average daily net assets as compensation for its advisory
services. For the period beginning January 1, 1996 and ended February 29, 1996,
MIP, on behalf of each Master Portfolio, actually paid BGFA an amount equal to
0.55% of each Master Portfolio's average daily net assets as compensation for
its advisory services.

Prior to January 1, 1996, Wells Fargo Bank, a wholly owned subsidiary of
Wells Fargo & Company, located at 420 Montgomery Street, San Francisco,
California 94105, served as each Master Portfolio's investment adviser. Pursuant
to an Investment Advisory Agreement with MIP, Wells Fargo Bank provided
investment guidance and policy direction in connection with the management of
each Master Portfolio's assets, subject to the supervision of MIP's Board of
Trustees and in conformity with Delaware law and the stated policies of such
Master Portfolio. Wells Fargo Bank was entitled to receive a monthly fee at the
annual rate of 0.55% of each LifePath Master Portfolio's average daily net
assets as compensation for its advisory services. For the period beginning March
1, 1995 and ended December 31, 1995, MIP, on behalf of each Master Portfolio,
actually paid an amount equal to 0.55% of each Master Portfolio's average daily
net assets to Wells Fargo Bank for advisory services.

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<PAGE> 25

Prior to January 1, 1996, Wells Fargo Bank engaged WFNIA, located at 45
Fremont Street, San Francisco, California 94105, to provide sub-investment
advisory services to each Master Portfolio. WFNIA was a general partnership
owned 50% by a wholly owned subsidiary of Wells Fargo Bank and 50% by a
subsidiary of The Nikko Securities Co., Ltd. Pursuant to a Sub-Investment
Advisory Agreement, WFNIA, subject to the supervision and approval of Wells
Fargo Bank, provided investment advisory assistance and the day-to-day
management of each Master Portfolio's assets. WFNIA was entitled to receive from
Wells Fargo Bank a monthly fee at the annual rate of 0.40% of each LifePath
Master Portfolio's average daily net assets for its sub-advisory services. For
the period beginning March 1, 1995 and ended December 31, 1995, Wells Fargo Bank
actually paid WFNIA an amount equal to 0.40% of the average daily net assets of
each LifePath Master Portfolio. The LifePath Master Portfolios no longer retain
a sub-investment adviser.

BGFA, Barclays and their affiliates deal, trade and invest for their own
account in the types of securities in which a Master Portfolio may invest and
may have deposit, loan and commercial banking relationships with the issuers of
securities purchased by a Master Portfolio. BGFA has informed MIP that in making
investment decisions the Adviser does not obtain or use material inside
information in its possession.

BGFA has adopted a personal investment policy that is consistent with the
1994 recommendations of the Investment Company Institute's Advisory Group on
Personal Investing (see the SAI).

Morrison & Foerster LLP, counsel to the Trust and MIP and special counsel
to BGFA, has advised the Trust, MIP and BGFA that BGFA and its affiliates may
perform the services contemplated by the Investment Advisory Contract and this
Prospectus without violation of the Glass-Steagall Act. Such counsel has pointed
out, however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state statutes,
including the Glass-Steagall Act, and relating to the permissible activities of
banks and their subsidiaries or affiliates, as well as future changes in such
statutes, regulations and judicial or administrative decisions or
interpretations, could prevent such entities from continuing to perform, in
whole or in part, such services. If any such entity were prohibited from
performing any such services, it is expected that new agreements would be
proposed or entered into with another entity or entities qualified to perform
such services.

ADMINISTRATOR AND DISTRIBUTOR -- Stephens, located at 111 Center Street,
Little Rock, Arkansas 72201, serves as the Trust's administrator

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<PAGE> 26

pursuant to an Administration Agreement with the Trust. Under the Administration
Agreement, Stephens generally supervises all aspects of the operation of the
Trust other than providing investment advice, subject to the overall authority
of the Board of Trustees in accordance with Massachusetts law. The
administrative services provided to the LifePath Funds also include coordination
of the other services provided to the LifePath Funds, compilation of information
for reports to the Securities and Exchange Commission and state securities
commissions, preparation of proxy statements and shareholder reports, and
general supervision of data compilation in connection with preparing periodic
reports to the Trust's Board of Trustees and officers. Stephens also furnishes
office space and certain facilities to conduct the Trust's business and
compensates the Trust's Trustees, officers and employees who are affiliated with
Stephens. In addition, except as noted below, Stephens has assumed all ordinary
expenses incurred by a LifePath Fund other than the fees payable by such Fund
pursuant to the Trust's various service contracts. For providing administrative
services to the Trust, the Trust has agreed to pay Stephens a monthly fee at the
annual rate of 0.10% of each LifePath Fund's average daily net assets. For the
fiscal year ended February 29, 1996, the Trust paid Stephens a monthly fee of
0.10% with respect to each LifePath Fund's average daily net assets.

Financial institutions acting as Selling Agents, Shareholder Servicing
Agents, or in certain other capacities may be required to register as dealers
pursuant to applicable state securities laws which may differ from federal law
and any interpretations expressed herein.

Stephens is a full service broker/dealer and investment advisory firm.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years, including discretionary portfolio management
services since 1983. Stephens currently manages investment portfolios for
pension and profit sharing plans, individual investors, foundations, insurance
companies and university endowments.

CUSTODIAN AND TRANSFER AGENT -- BZW Barclays Global Investors, N.A. ("BGI")
currently acts as custodian to each Fund and Master Portfolio. The principal
business address of BGI is 45 Fremont Street, San Francisco, California 94105.
BGI is not entitled to receive compensation

22
<PAGE> 27

for its custodial services so long as BGFA is entitled to receive compensation
for providing investment advisory services to the LifePath Master Portfolios.
BGI was formerly known as Wells Fargo Institutional Trust Company, N.A.
("WFITC") and is a subsidiary of BZW Barclays Global Investors Holdings Inc.

Wells Fargo Bank serves as the Company's and MIP's transfer and dividend
disbursing agent (the "Transfer Agent"). The Company has agreed to pay Wells
Fargo Bank, which provides transfer agency services at 525 Market Street, San
Francisco, California 94105, a monthly fee at the annual rate of 0.10% of each
Fund's average daily net assets for transfer agency services. MIP pays no
additional fee for transfer and dividend disbursing agency services. Wells Fargo
Bank previously served as custodian to the Funds.

SHAREHOLDER SERVICING PLAN -- The Trust has adopted a Shareholder Servicing
Plan pursuant to which it may enter into Shareholder Servicing Agreements with
certain financial institutions, securities dealers and other industry
professionals (collectively, "Shareholder Servicing Agents") for the provision
of certain services to Fund shareholders. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Funds, providing reports and other
information, and providing services related to the maintenance of shareholder
accounts. For the services provided pursuant to a Shareholder Servicing
Agreement, the Trust may pay each Shareholder Servicing Agent a monthly fee at
the annual rate of up to 0.20% of the average daily value of each LifePath
Fund's shares beneficially owned by customers of the Shareholder Servicing
Agent. The fee payable for such services is intended to be a "service fee" as
defined in Article III, Section 26 of the National Association of Securities
Dealers, Inc.'s Rules of Fair Practice.

A Shareholder Servicing Agent also may impose certain conditions on its
customers, subject to the terms of this Prospectus, in addition to or different
from those imposed by the Trust, such as requiring a minimum initial investment
or payment of a separate fee for additional services. Each Shareholder Servicing
Agent is required to agree to disclose any fees it may directly charge its
customers who are Fund shareholders and to notify them in writing at least 30
days before it imposes any transaction fees.

MIP 12B-1 PLAN -- MIP's Board of Trustees has adopted, on behalf of each
Master Portfolio, a "defensive" distribution plan under Section 12(b) of the
1940 Act and Rule 12b-1 thereunder (the "Plan"). The Plan does not result in any
additional expenses being borne by a Master Portfolio or a Fund. The Plan was
adopted by a majority of MIP's Board of

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<PAGE> 28

Trustees (including a majority of those Trustees who are not "interested
persons" of MIP as defined in the 1940 Act) on October 10, 1995. The Plan was
intended as a precaution designed to address the possibility that certain
ongoing payments by Barclays to Wells Fargo Bank in connection with the sale of
WFNIA may be characterized as indirect payments by each Master Portfolio to
finance activities primarily intended to result in the sale of interests in such
Master Portfolio. The Plan provides that if any portion of a Master Portfolio's
advisory fees (up to 0.25% of the average daily net assets of each Master
Portfolio on an annual basis) were deemed to constitute an indirect payment for
activities that are primarily intended to result in the sale of interests in a
Master Portfolio, such payment would be authorized pursuant to the Plan.

EXPENSES -- Under the Administration Agreement, Stephens has agreed to
assume the operating expenses of each LifePath Fund and a pro rata share of the
operating expenses of each LifePath Master Portfolio, except for extraordinary
expenses and those fees and expenses payable pursuant to the various service
contracts described above which are borne by the Trust and those expenses
specifically assumed by Wells Fargo Bank and BGFA under their respective
contracts with the Funds. The initial term of the Administration Agreement runs
to October 25, 1996; thereafter it continues for successive one-year periods,
subject to approval by the Trust's Board of Trustees. For the fiscal year ended
February 29, 1996, the operating expenses for the Institutional Shares of each
of the LifePath Funds were 0.95% of the average daily net assets of each of the
LifePath Funds, respectively.

Stephens has not assumed the following operating expenses of the LifePath
Master Portfolios: advisory fees, interest, brokerage fees and commissions, if
any, costs of independent pricing services and any extraordinary expenses.

Stephens has not assumed the following operating expenses of the LifePath
Funds: administration fees, Shareholder Servicing Agent fees, Transfer Agent
fees and expenses and any extraordinary expenses.

DESCRIPTION OF SHARES
GENERAL

Institutional Shares are no longer being offered to investors. Investors
who wish to invest in the Funds may purchase Retail Shares of the Funds.
Investors wishing to obtain information and a prospectus describing the Retail
Shares or to obtain information about the Institutional Shares may call
1-800-776-0179.

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NET ASSET VALUE

Net asset value per share of each LifePath Fund is determined as of the
close of regular trading (currently 4:00 p.m., Eastern Standard Time), on each
day the New York Stock Exchange ("NYSE") is open for business (a "Business
Day"). Currently, the weekdays on which the NYSE is closed are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

The net asset value of a share of each class of the LifePath Funds is the
value of total net assets attributable to such class divided by the number of
outstanding shares of that class. The value of the net assets per class is
determined daily by adjusting the net assets per class at the beginning of the
day by the value of each class's shareholder activity, net investment income and
net realized and unrealized gains or losses for that day. Net investment income
is calculated each day for each class by attributing to each class a pro rata
share of daily income and common expenses, and by assigning class-specific
expenses to each class as appropriate. The net asset value of each class is
expected to fluctuate daily and is expected to differ. The Master Portfolios'
investments are valued each Business Day generally by using available market
quotations or at fair value determined in good faith by the investment adviser
or sub-adviser pursuant to guidelines approved by MIP's Board of Trustees. For
further information regarding the methods employed in valuing each Master
Portfolios' investments, see "Determination of Net Asset Value" in the SAI.

STATEMENTS AND REPORTS

The Funds, or a Shareholder Servicing Agent on their behalf, will typically
send you a confirmation or statement of your account after every transaction
that affects your share balance or your Fund account registration. The Funds do
not issue share certificates. A statement with tax information for the previous
year will be mailed to you each year, and also will be filed with the IRS. At
least twice a year, you will receive financial statements.

HOW TO REDEEM SHARES

GENERAL

Investors may redeem all or a portion of their Institutional Shares on any
Business Day without any charge by the Trust. The redemption price of the shares
is the next determined net asset value of the relevant Fund calculated after the
Trust has received a redemption request in proper

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<PAGE> 30

form. Redemption proceeds may be more or less than the amount invested depending
on the relevant Fund's net asset value at the time of purchase and redemption.
The redemption of Fund shares is ordinarily treated as a sale or exchange for
federal income tax purposes and, therefore, a redeeming shareholder may
recognize a taxable gain or loss.

The Trust remits redemption proceeds from a Fund within seven days after a
redemption order is received in proper form, absent extraordinary circumstances.
Such extraordinary circumstances could include a period during which an
emergency exists as a result of which (a) disposal by the Master Portfolio in
which such Fund invests of securities owned by the Master Portfolio is not
reasonably practicable or (b) it is not reasonably practicable for the Fund
fairly to determine the value of its net assets, or a period during which the
SEC by order permits deferral of redemptions for the protection of Fund
shareholders. In addition, the Trust may defer payment of a shareholder's
redemption until reasonably satisfied that such shareholder's investments made
by check have been collected (which can take up to ten (10) days from the
purchase date). Payment of redemption proceeds may be made in portfolio
securities, subject to regulation by some state securities commissions. Such
redemptions ordinarily will be taxable.

Telephone redemption or exchange privileges are made available to
shareholders automatically upon opening an account, unless the shareholder
specifically declines the privileges. These privileges authorize the Transfer
Agent to act on telephone instructions from any person representing himself or
herself to be the investor and reasonably believed by the Transfer Agent to be
genuine. The Trust requires the Transfer Agent to employ reasonable procedures,
such as requiring a form of personal identification, to confirm that
instructions are genuine and, if it does not follow such procedures, the Trust
or the Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Trust nor the Transfer Agent will be liable
for following telephone instructions reasonably believed to be genuine.

During times of drastic economic or market conditions investors may
experience difficulty in contacting the Transfer Agent by telephone to request a
redemption or exchange of Fund shares. In such cases, investors should consider
using the other redemption procedures made available to such investors. Use of
these other redemption procedures may result in the investor's redemption
request being processed at a later time than it would have been if telephone
redemption had been used. During the delay, a LifePath Fund's net asset value
may fluctuate.

Due to the high cost of maintaining Fund accounts with small balances, the
Trust reserves the right to close an individual or corporate

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<PAGE> 31

investor's account and send the proceeds to such investor if the balance falls
below $1,000 because of a redemption (including a redemption of Fund shares
after an investor has made only the $1,000 minimum initial investment). However,
investors will be given 30 days' notice to make an additional investment to
increase their account balance to $1,000 or more.

Redemption orders that are received by the Transfer Agent before the close
of trading on the NYSE generally are executed at the net asset value determined
as of the close of regular trading on the NYSE on that day. Redemption orders
that are received by the Transfer Agent after the close of trading on the NYSE
are executed on the next Business Day. The investor's Shareholder Servicing
Agent is responsible for the prompt transmission of redemption orders to the
Fund on the investor's behalf. Under certain circumstances, a Shareholder
Servicing Agent may establish an earlier deadline for receipt of orders or an
investor's order transmitted to a Shareholder Servicing Agent may not be
received by the Transfer Agent on the same day.

Unless the investor has made other arrangements with the Shareholder
Servicing Agent and the Transfer Agent has been informed of such arrangements,
proceeds of a redemption order made through the investor's Shareholder Servicing
Agent are credited to the account with the Approved Bank that the investor has
designated in the Account Application. If no such account is designated, a check
for the proceeds is mailed to the investor's address of record or, if such
address is no longer valid, the proceeds are credited to the investor's account
with the investor's Shareholder Servicing Agent.

BENEFIT PLANS, IRAS, KEOGHS AND OTHER INDIVIDUAL RETIREMENT PLANS

Investors in these types of plans are subject to restrictions on
withdrawing their money under the Code. Each type of plan has established
withdrawal procedures that are disclosed to investors at the time of purchase.
Investors may obtain more information by contacting their employer and/or their
Shareholder Servicing Agent. The redemption procedures outlined in the remainder
of this section do not apply to investors in employee benefit plans or
retirement plans, nor do the minimum-balance requirements outlined above.
Investors in these types of plans should contact their Shareholder Servicing
Agent regarding redemption procedures applicable to them.

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<PAGE> 32

REDEMPTIONS BY ELIGIBLE INDIVIDUAL AND CORPORATE INVESTORS

Redemptions by Mail

1. Write a letter of instruction. Indicate the dollar amount or number of
Fund shares to be redeemed, the Fund account number and TIN.

2. Sign the letter in exactly the same way the account is registered. If
there is more than one owner of the shares, all owners must sign.

Unless other instructions are given in proper form, a check for the
redemption proceeds is sent to the investor's address of record.

Expedited Redemptions by Mail or Telephone

An individual or corporate investor may request an expedited redemption of
Fund shares by letter, in which case the investor's receipt of redemption
proceeds, but not the Fund's receipt of the investor's redemption request, would
be expedited. Telephone redemption or exchange privileges are made available to
an investor automatically upon the opening of an account unless the investor
declines the privilege. The investor also may request an expedited redemption of
Fund shares by telephone on any Business Day, in which case both the investor's
receipt of redemption proceeds and the Fund's receipt of the investor's
redemption request would be expedited.

Investors may telephone an expedited redemption request to the Transfer
Agent at 1-800-776-0179.

Investors may mail an expedited redemption request to the Transfer Agent at
the mailing address set forth under "How to Buy Shares -- Initial Purchases by
Wire."

Upon request, proceeds of expedited redemptions of $5,000 or more are wired
or credited to the Approved Bank Account. The Trust reserves the right to impose
a charge for wiring redemption proceeds. When proceeds of an investor's
expedited redemption are to be paid to someone else, to an address other than
that of record, or to an Approved Bank Account that the investor has not
predesignated in the Account Application, the expedited redemption request must
be made by letter and the signature(s) on the letter must be guaranteed,
regardless of the amount of the redemption. If the individual or corporate
investor's expedited redemption request is received by the Transfer Agent on a
Business Day, the investor's redemption proceeds are transmitted to the
investor's Approved Bank Account on the next Business Day (assuming the
investor's investment check has cleared as described above), absent
extraordinary circumstances. Such extraordinary circumstances could

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<PAGE> 33

include those described above as potentially delaying redemptions, and also
could include situations involving an unusually heavy volume of wire transfer
orders on a national or regional basis or communication or transmittal delays
that could cause a brief delay in the wiring or crediting of funds. A check for
proceeds of less than $5,000 is mailed to the investor's address of record or,
at the investor's election, credited to the investor's Approved Bank Account.

EXCHANGE PRIVILEGE

The exchange privilege enables an investor to purchase, in exchange for
shares of a class of a Fund, shares of a Fund of MasterWorks Funds Inc.
("MasterWorks"), an open-end, series investment company, provided such shares
are offered for sale in the investor's state of residence. The exchange
privilege may be expanded or modified in the future. Investors will be notified
of any such change. Before any exchange into a fund offered by another
prospectus, the investor must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses may
be obtained from Stephens.

Shares are exchanged at the next determined net asset value; however, a
sales load may be charged with respect to exchanges into a fund sold with a
sales load. No fees currently are charged shareholders directly in connection
with exchanges although the Trust reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal exchange fee in
accordance with rules promulgated by the Securities and Exchange Commission. The
Trust reserves the right to limit the number of times shares may be exchanged
and to reject in whole or in part any exchange request into a Fund when
management believes that such action would be in the best interests of the
Fund's other shareholders, such as when management believes such action would be
appropriate to protect such Fund against disruptions in portfolio management
resulting from frequent transactions by those seeking to time market
fluctuations. Any such rejection will be made by management on a prospective
basis only, upon notice to the shareholder given not later than 10 days
following such shareholder's most recent exchange. The exchange privilege may be
modified or terminated at any time upon 60 days' written notice to shareholders.

The exchange of shares of one fund for shares of another is treated for
federal income tax purposes as a sale of the shares relinquished in the exchange
by the shareholder and, therefore, an exchanging shareholder may recognize a
taxable gain or loss.

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<PAGE> 34

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Trust intends to qualify each Fund every year as a regulated investment
company pursuant to Subchapter M of the Code as long as such qualification is in
the best interest of each Fund's shareholders. In addition, net capital gains,
net investment income, and operating expenses will be determined separately for
each Fund. By complying with the applicable provisions of the Code, each Fund
will not be subject to federal income tax with respect to its net investment
income and net realized capital gains distributed to its shareholders. Each Fund
declares and pays dividends quarterly of substantially all of its net investment
income. Each Fund makes distributions from any net realized gains at least once
a year, in all events in a manner consistent with the provisions of the 1940 Act
and the Code. No Fund will make distributions from net realized gains unless
capital loss carryovers, if any, have been utilized or have expired. Since the
Trust is no longer offering Institutional Shares of the LifePath Funds for sale,
dividends and distributions are automatically paid out in cash.

Dividends and capital gain distributions have the effect of reducing the
net asset value per share by the amount distributed on the record date. Although
such a dividend or distribution paid to an investor on newly issued shares
shortly after purchase would represent, in substance, a return of capital, the
dividend or distribution would consist of net investment income or net realized
capital gain and, accordingly, would be taxable to the investor.

Dividends paid by a Fund derived from net investment income and
distributions from any net realized short-term gains of such Fund generally are
taxable to taxable U.S. investors as ordinary income. Distributions from any net
realized long-term gains generally are taxable to taxable U.S. investors as
long-term capital gain for federal income tax purposes, regardless of how long
shareholders have held their shares.

Dividends paid by a Fund to a foreign investor generally are subject to
U.S. nonresident withholding taxes at the rate of 30%, unless the foreign
investor claims the benefits of a lower rate specified in a tax treaty. Capital
gain distributions paid by a Fund to a foreign investor, as well as the proceeds
of any redemptions from a foreign investor's Fund account, regardless of the
extent to which gain or loss may be recognized, will generally not be subject to
U.S. nonresident withholding tax. However, such distributions may be subject to
backup withholding, as described below, unless the foreign investor certifies a
non-U.S. residency status.

Notice as to the tax status of an investor's dividends and capital gain
distributions will be mailed to such investor annually. Each investor also

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<PAGE> 35

will receive periodic summaries of such investor's account which will include
information as to dividends and capital gain distributions, if any, paid during
the year.

If a shareholder fails to certify that the taxpayer identification number
("TIN") furnished in connection with opening an account is correct and that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a federal income tax return, federal regulations may require
the Trust to withhold ("backup withholding") and remit to the IRS 31% of taxable
dividends, capital gain distributions from net realized securities gains and
redemption proceeds, regardless of the extent to which gain or loss may have
been realized, paid to such shareholder. Furthermore, the IRS may notify the
Trust to institute backup withholding if the IRS determines a shareholder's TIN
is incorrect or if a shareholder has failed to properly report taxable dividend
and interest income on a federal income tax return. Any tax withheld as a result
of backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a tax payment on the record
owner's federal income tax return.

MIP is organized as a trust under Delaware law. Under MIP's method of
operation as a partnership, MIP and each Master Portfolio is not subject to any
income tax. However, each investor in a Master Portfolio is allocated its share
(as determined in accordance with the governing instruments of MIP) of such
Master Portfolio's ordinary income and capital gain in determining its income
tax liability. The determination of such share will be made in accordance with
the Code and regulations promulgated thereunder.

It is expected that each Fund will qualify as a "regulated investment
company" under Subchapter M of the Code as long as such qualification is in the
best interests of its shareholders. Such qualification generally relieves the
Fund of any liability for federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. In addition,
each Fund is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of investment income and capital gains.

The foregoing discussion regarding dividends, distributions, and taxes is
based on tax laws and federal regulations which were in effect as of the date of
this Prospectus and summarizes only some of the important federal income tax
considerations generally affecting a Fund and its shareholders. It is not
intended as a substitute for careful tax planning; investors should consult
their tax advisors with respect to their specific tax situations as well

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<PAGE> 36

as with respect to state and local taxes. Further tax information is contained
in the SAI.

PERFORMANCE INFORMATION

For purposes of advertising, performance of the LifePath Funds may be
calculated on the basis of average annual total return and/or cumulative total
return of a class of shares. Average annual total return of a class of shares is
calculated pursuant to a standardized formula which assumes that an investment
in that class of shares of the Fund was purchased with an initial payment of
$1,000 and that the investment was redeemed at the end of a stated period of
time, after giving effect to the reinvestment of dividends and distributions
during the period. The return of a class of shares is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment in a class of shares at the end of the
period. Advertisements of the performance of a class of shares of a LifePath
Fund includes the Fund's average annual total return of a class of shares for
one, five and ten year periods, or for shorter time periods depending upon the
length of time during which such Fund has operated.

Cumulative total return of a class of shares is computed on a per share
basis and assumes the reinvestment of dividends and distributions. Cumulative
total return of a class of shares generally is expressed as a percentage rate
which is calculated by combining the income and principal changes for a
specified period and dividing by the net asset value per share at the beginning
of the period. Advertisements may include the percentage rate of total return of
a class of shares or may include the value of a hypothetical investment in a
class of shares at the end of the period which assumes the application of the
percentage rate of total return.

Performance of a class of shares varies from time to time, and past results
are not necessarily representative of future results. Investors should remember
that performance is a function of the type and quality of portfolio securities
held by the Master Portfolio in which the Fund invests and is affected by
operating expenses. Performance information, such as that described above, may
not provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.

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Industrial Average, CDA Investment Technologies, Inc., Wiesenberger
Investment Companies Service, Mutual Fund Values; Mutual Fund Forecaster,
Schabacker Investment Management, Inc., Morningstar, Inc. and other industry
publications.

Total return quotations are computed separately for each class of the
Funds' shares. See "Management of the Funds -- Other Classes of Shares." Because
of the difference in the fees and expenses borne by the Retail Shares of the
Funds, the return on such shares can be expected, at any given time, to be lower
than the return on Institutional Shares.

Additional information about the performance of each Fund is contained in
the Annual Report for each Fund. The Annual Reports may be obtained by calling
the Trust at 1-800-776-0179.

GENERAL INFORMATION

The Trust was organized as an unincorporated business trust under the laws
of the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated May 14, 1993. The Trust is authorized to
issue an unlimited number of shares of beneficial interest. Each LifePath Fund
of the Trust is comprised of two classes of shares -- Retail Class and
Institutional Class. Each share has one vote. Institutional Class shares are no
longer offered to the public, although a limited number of such shares were
outstanding as of the date of this Prospectus.

To date, the Board of Trustees has authorized the creation of ten separate
portfolios of shares, including the five Funds offered hereby and the Growth and
Value Fund, the International Stock Index Fund, the Prime Money Market Reserve
Fund, the Short-Term Allocation Fund and the Small/Medium Stock Index Fund. All
consideration received by the Trust for shares of one of the portfolios and all
assets in which such consideration is invested belong to that portfolio (subject
only to the rights of creditors of the Trust) and are subject to the liabilities
related thereto. The income attributable to, and the expenses of, one portfolio
are treated separately from those of the other portfolios. The Trust has the
ability to create, from time to time, new portfolios without shareholder
approval.

Under the terms of a License Agreement between the Trust and Wells Fargo
Bank, Wells Fargo Bank has granted the Trust a non-exclusive license to use the
name "Stagecoach." If the License Agreement is terminated, the Trust, at the
request of Wells Fargo Bank, will cease using the name "Stagecoach."

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<PAGE> 38

Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a Trustee. The
Trust Agreement provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust itself is unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Trust, the shareholder paying such liability is entitled to reimbursement from
the general assets of the Trust. The Trustees intend to conduct the operations
of the Trust in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Trust. As described under
"Management of the Trust" in the SAI, the Trust ordinarily does not hold
shareholder meetings; however, shareholders under certain circumstances have the
right to call a meeting of shareholders for the purpose of voting to remove
Trustees.

The Transfer Agent maintains a record of each investor's ownership and
sends confirmations and statements of account.

Investor inquiries may be made by writing to the Trust c/o Wells Fargo
Bank, N.A. -- Shareholder Services, P.O. Box 7033, San Francisco, California
94120-9517 or by calling 1-800-222-8222.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE TRUST'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUNDS' SHARES AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT
LAWFULLY BE MADE.

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<PAGE> 40

APPENDIX

PORTFOLIO SECURITIES

To the extent set forth in this Prospectus, each Fund through its
investment in the corresponding Master Portfolio may invest in the securities
described below.

U.S. GOVERNMENT OBLIGATIONS -- U.S. Government obligations include
securities issued or guaranteed as to principal and interest by the U.S.
Government and supported by the full faith and credit of the U.S. Treasury. U.S.
Treasury obligations differ mainly in the length of their maturity. Treasury
bills, the most frequently issued marketable government securities, have a
maturity of up to one year and are issued on a discount basis. U.S. Government
obligations also include securities issued or guaranteed by federal agencies or
instrumentalities, including government-sponsored enterprises. Some obligations
of agencies or instrumentalities of the U.S. Government are supported by the
full faith and credit of the United States or U.S. Treasury guarantees; others,
by the right of the issuer or guarantor to borrow from the U.S. Treasury; still
others by the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, only by the credit of
the agency or instrumentality issuing the obligation. In the case of obligations
not backed by the full faith and credit of the United States, the investor must
look principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities (including
government-sponsored enterprises) where it is not obligated to do so. In
addition, U.S. Government obligations are subject to fluctuations in market
value due to fluctuations in market interest rates. As a general matter, the
value of debt instruments, including U.S. Government obligations, declines when
market interest rates increase and rises when market interest rates decrease.
Certain types of U.S. Government obligations are subject to fluctuations in
yield or value due to their structure or contract terms.

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<PAGE> 41

supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank. The percentage of a
Master Portfolio's assets invested in securities issued by foreign governments
varies depending on the relative yields of such securities, the economic and
financial markets of the countries in which the investments are made and the
interest rate climate of such countries.

BANK OBLIGATIONS -- Each Master Portfolio may invest in bank obligations,
including certificates of deposit, time deposits, bankers' acceptances and other
short-term obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and foreign branches of
foreign banks, domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign branches of
domestic banks, foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, a Master Portfolio may be subject to additional
investment risks that are different in some respects from those incurred by a
fund which invests only in debt obligations of U.S. domestic issuers. Such risks
include possible future political and economic developments, the possible
imposition of foreign withholding taxes on interest income payable on the
securities, the possible establishment of exchange controls or the adoption of
other foreign governmental restrictions which might adversely affect the payment
of principal and interest on these securities and the possible seizure or
nationalization of foreign deposits.

Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.

Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by a Master Portfolio will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC.

Bankers' acceptances are credit instruments evidencing the obligation of a
bank to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating or variable interest
rates.

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COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS -- Each Master
Portfolio may invest in commercial paper, which consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the LifePath Master Portfolio consists only of
direct obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's, A-1 by S&P, F-1 by Fitch or Duff-1 by Duff, (b) issued
by companies having an outstanding unsecured debt issue currently rated not
lower than Aa3 by Moody's or AA- by S&P, Fitch or Duff, or (c) if unrated,
determined by WFNIA to be of comparable quality to those rated obligations which
may be purchased by such Master Portfolio.

REPURCHASE AGREEMENTS -- Each Master Portfolio may enter into repurchase
agreements, wherein the seller of a security to a Master Portfolio agrees to
repurchase that security from the Master Portfolio at a mutually agreed upon
time and price. MIP's custodian will have custody of, and will hold in a
segregated account, securities acquired by a Master Portfolio under a repurchase
agreement. Repurchase agreements are considered by the staff of the Securities
and Exchange Commission to be loans by the Master Portfolio entering into them.
In an attempt to reduce the risk of incurring a loss on a repurchase agreement,
each Master Portfolio enters into repurchase agreements only with federally
regulated or insured banks or primary government securities dealers reporting to
the Federal Reserve Bank of New York or their affiliates, or, under certain
circumstances, banks with total assets in excess of $5 billion or domestic
broker/dealers with total equity capital in excess of $100 million, with respect
to securities of the type in which such Master Portfolio may invest or
government securities regardless of their remaining maturities, and requires
that additional securities be deposited with it if the value of the securities
purchased should decrease below repurchase price. BGFA monitors on an ongoing
basis the value of the collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by a Master Portfolio in
connection with the sale of the securities if the seller does not repurchase
them in accordance with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
disposition of the securities by a Master Series may be delayed or limited. Each
Master Portfolio considers on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.

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<PAGE> 43

Portfolio's goal. No Master Portfolio invests more than 15% of the value of
its net assets in Notes and in other illiquid securities.

FLOATING- AND VARIABLE-RATE OBLIGATIONS -- Each Master Portfolio may
purchase floating- and variable-rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time or at
specified intervals not exceeding 13 months. Variable-rate demand notes include
master demand notes which are obligations that permit a Master Portfolio to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Master Portfolio, as lender, and the borrower.
The interest rates on these notes fluctuate from time to time. The issuer of
such obligations ordinarily has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to the holders of
such obligations. The interest rate on a floating-rate demand obligation is
based on a known lending rate, such as a bank's prime rate, and is adjusted
automatically each time such rate is adjusted. The interest rate on a
variable-rate demand obligation is adjusted automatically at specified
intervals. Frequently, such obligations are secured by letters of credit or
other credit support arrangements provided by banks. Because these obligations
are direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded. There generally is
no established secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these obligations are not secured
by letters of credit or other credit support arrangements, the Master
Portfolios' right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies and each Master Portfolio may invest in obligations which
are not so rated only if BGFA determines that at the time of investment the
obligations are of comparable quality to the other obligations in which such
Master Portfolio may invest. BGFA, on behalf of each Master Portfolio, considers
on an ongoing basis the creditworthiness of the issuers of the floating- and
variable-rate demand obligations in such Master Portfolio's portfolio. No Master
Portfolio invests more than 15% of the value of its net assets in illiquid
securities including floating- or variable-rate demand obligations not
exercisable within seven days. Such obligations may be treated as liquid,
provided that an active secondary market exists.

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Portfolio an undivided interest in the security in the proportion that the
Master Portfolio's participation interest bears to the total principal amount of
the security. These instruments may have fixed, floating or variable rates of
interest. If the participation interest is unrated, or has been given a rating
below that which is permissible for purchase by the Master Portfolios, the
participation interest must be backed by an irrevocable letter of credit or
guarantee of a bank, or the payment obligation otherwise must be collateralized
by U.S. Government obligations, or, in the case of unrated participation
interests, BGFA must have determined that the instrument is of comparable
quality to those instruments in which such Master Portfolio may invest. Prior to
a Master Portfolio's purchase of any such instrument backed by a letter of
credit or guarantee of a bank, BGFA evaluates the creditworthiness of the bank,
considering all factors which it deems relevant, which generally may include
review of the bank's cash flow; level of short-term debt; leverage;
capitalization; the quality and depth of management; profitability; return on
assets; and economic factors relative to the banking industry. For certain
participation interests, a Master Portfolio has the right to demand payment, on
not more than seven days' notice, for all or any part of the Master Portfolio's
participation interest in the security, plus accrued interest. As to these
instruments, each Master Portfolio intends to exercise its right to demand
payment only upon a default under the terms of the security, as needed to
provide liquidity to meet redemptions, or to maintain or improve the quality of
its investment portfolio.

MORTGAGE-RELATED SECURITIES -- Each LifePath Master Portfolio may invest in
mortgage-related securities ("MBSs"), which are securities representing
interests in a pool of loans secured by mortgages. The resulting cash flow from
these mortgages is used to pay principal and interest on the securities. MBSs
are assembled for sale to investors by various government-sponsored enterprises
such as the Federal National Mortgage Association ("FNMA") and the Federal Home
Loan Mortgage Corporation ("FHLMC") or are guaranteed by such governmental
agencies as the Government National Mortgage Association ("GNMA"). Regardless of
the type of guarantee, all MBSs are subject to interest rate risk (i.e.,
exposure to loss due to changes in interest rates).

GNMA MBSs include GNMA Mortgage Pass-Through Certificates ("Ginnie Maes")
which are guaranteed as to the full and timely payment of principal and interest
by GNMA and such guarantee is backed by the authority of GNMA to borrow funds
from the U.S. Treasury to make payments under its guarantee. GNMA is a
wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development and, as such, Ginnie Maes are backed by the full faith and
credit of the

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federal government. In contrast, MBSs issued by FNMA include FNMA Guaranteed
Mortgage Pass-Through Certificates ("Fannie Maes") which are solely the
obligations of FNMA and are neither backed by nor entitled to the full faith and
credit of the federal government). FNMA is a government-sponsored enterprise
which is also a private corporation whose stock trades on the NYSE. Fannie Maes
are guaranteed as to timely payment of principal and interest by FNMA. MBSs
issued by FHLMC include FHLMC Mortgage Participation Certificates ("Freddie
Macs" or "PCs"). FHLMC is a government-sponsored enterprise whose MBSs are
solely obligations of FHLMC. Therefore, Freddie Macs are not guaranteed by the
United States or by any Federal Home Loan Bank and do not constitute a debt or
obligation of the United States or of any Federal Home Loan Bank. FHLMC
guarantees timely payment of interest, but only ultimate payment of principal
due under the obligations it issues. FHLMC may, under certain circumstances,
remit the guaranteed payment of principal at any time after default on an
underlying mortgage, but in no event later than one year after the guarantee
becomes payable.

AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS -- Each LifePath
Master Portfolio assets may be invested in the securities of foreign issuers in
the form of American Depositary Receipts ("ADRs") and European Depositary
Receipts ("EDRs"). These securities may not necessarily be denominated in the
same currency as the securities into which they may be converted. ADRs are
receipts typically issued by a United States bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs, which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued in Europe typically by non-United States banks and
trust companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in the
United States securities markets and EDRs and CDRs in bearer form are designed
for use in Europe. Each LifePath Master Portfolio may invest in ADRs, EDRs and
CDRs through "sponsored" or "unsponsored" facilities. A sponsored facility is
established jointly by the issuer of the underlying security and a depositary,
whereas a depositary may establish an unsponsored facility without participation
by the issuer of the deposited security. Holders of unsponsored depositary
receipts generally bear all the costs of such facilities and the depositary of
an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through voting rights to the holders of such receipts in respect of the
deposited securities.

CONVERTIBLE SECURITIES -- Each LifePath Master Portfolio may purchase
fixed-income convertible securities, such as bonds or preferred

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stock, which may be converted at a stated price within a specified period of
time into a specified number of shares of common stock of the same or a
different issuer. Convertible securities are senior to common stock in a
corporation's capital structure, but usually are subordinated to non-convertible
debt securities. While providing a fixed-income stream (generally higher in
yield than the income from a common stock but lower than that afforded by a
non-convertible debt security), a convertible security also affords an investor
the opportunity, through its conversion feature, to participate in the capital
appreciation of the common stock into which it is convertible.

In general, the market value of a convertible security is the higher of its
"investment value" (i.e., its value as a fixed-income security) or its
"conversion value" (i.e., the value of the underlying shares of common stock if
the security is converted). As a fixed-income security, the market value of a
convertible security generally increases when interest rates decline and
generally decreases when interest rates rise. However, the price of a
convertible security also is influenced by the market value of the security's
underlying common stock. Thus, the price of a convertible security generally
increases as the market value of the underlying stock increases, and generally
decreases as the market value of the underlying stock declines. Investments in
convertible securities generally entail less risk than investments in the common
stock of the same issuer.

WARRANTS -- Each LifePath Master Portfolio may invest generally up to 5% of
its net assets at the time of purchase in warrants, except that this limitation
does not apply to warrants acquired in units or attached to securities. A
warrant is an instrument issued by a corporation which gives the holder the
right to subscribe to a specified amount of the corporation's capital stock at a
set price for a specified period of time. The prices of warrants do not
necessarily correlate with the prices of the underlying securities.

ILLIQUID SECURITIES -- Each Master Portfolio may invest up to 15% of the
value of its net assets in securities as to which a liquid trading market does
not exist, provided such investments are consistent with its investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or contractual
restrictions on resale, participation interests that are not subject to the
demand feature described above, floating- and variable-rate demand obligations
as to which a Master Portfolio cannot exercise the related demand feature
described above on not more than seven days' notice and as to which there is no
secondary market and repurchase agreements providing for settlement in more than
seven days after notice.

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Disposing of illiquid securities generally will involve additional costs and
require additional time. However, if a substantial market of qualified
institutional investors develops pursuant to Rule 144A under the 1933 Act for
certain of these securities held by a Master Portfolio, such Master Portfolio
intends to treat such securities as liquid securities in accordance with
procedures approved by MIP's Board of Trustees. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to Rule
144A will develop, MIP's Board of Trustees has directed BGFA to monitor
carefully each Master Portfolio's investments in such securities with particular
regard to trading activity, availability of reliable price information and other
relevant information. To the extent that for a period of time, qualified
institutional investors cease purchasing such restricted securities pursuant to
Rule 144A, a Master Portfolio's investing in such securities may have the effect
of increasing the level of illiquidity in such Master Portfolio's portfolio
during such period.

INVESTMENT COMPANY SECURITIES -- Each Master Portfolio may invest in
securities issued by other investment companies which principally invest in
securities of the type in which such Master Portfolio invests. Under the 1940
Act, a Master Portfolio's investment in such securities currently is limited to,
subject to certain exceptions, (i) 3% of the total voting stock of any one
investment company, (ii) 5% of such Master Portfolio's net assets with respect
to any one investment company and (iii) 10% of such Master Portfolio's net
assets in the aggregate. Investments in the securities of other investment
companies involve duplication of advisory fees and certain other expenses.

RATINGS -- The ratings of Moody's, S&P, Fitch and Duff represent their
opinions as to the quality of the obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of such
obligations. Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, BGFA also evaluates such obligations and the
ability of their issuers to pay interest and principal. Each Master Portfolio
relies on BGFA's judgment, analysis and experience in evaluating the
creditworthiness of an issuer. In this evaluation, BGFA takes into
consideration, among other things, the issuer's financial resources, its
sensitivity to economic conditions and trends, the quality of the issuer's
management and regulatory matters. It also is possible that a rating agency
might not timely change the rating on a particular issue to reflect subsequent
events. See "Description of the Funds -- Risk Considerations -- Fixed-Income
Securities."

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INVESTMENT TECHNIQUES

STOCK INDEX OPTIONS -- Each LifePath Master Portfolio may purchase and
write (i.e., sell) put and call options on stock indices as a substitute for
comparable market positions in the underlying securities. A stock index
fluctuates with changes in the market values of the stocks included in the
index. The aggregate premiums paid on all options purchased may not exceed 20%
of a LifePath Master Portfolio's total assets and the value of options written
or purchased may not exceed 10% of the value of a LifePath Master Portfolio's
total assets.

The effectiveness of purchasing or writing stock index options depends upon
the extent to which price movements in the LifePath Master Portfolio's portfolio
correlate with price movements of the stock index selected. Because the value of
an index option depends upon movements in the level of the index rather than the
price of a particular stock, whether a LifePath Master Portfolio realizes a gain
or loss from purchasing or writing options on an index depends upon movements in
the level of stock prices in the stock market generally or, in the case of
certain indices, in an industry or market segment, rather than movements in the
price of a particular stock.

When a LifePath Master Portfolio writes an option on a stock index, such
LifePath Master Portfolio places in a segregated account with MIP's custodian
cash, U.S. Government obligations or other liquid securities in an amount at
least equal to the market value of the underlying stock index and maintains the
account while the option is open or otherwise covers the transaction.

FUTURES TRANSACTIONS -- IN GENERAL -- None of the LifePath Master
Portfolios will be a commodity pool. To the extent permitted by applicable
regulations, each LifePath Master Portfolio is permitted to use futures as a
substitute for a comparable market position in the underlying securities.

A futures transaction involves a firm agreement to buy or sell a commodity
or financial instrument at a particular price on a specified future date.
Futures contracts are traded on exchanges, where the exchange serves as the
ultimate counterparty for all contracts. Consequently, the only credit risk on
futures contracts is the creditworthiness of the exchange. Futures contracts
are, however, subject to market risk (i.e., exposure to adverse price changes).

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under applicable law, on exchanges located outside the United States, such as
the London International Financial Futures Exchange, the Deutscher Aktienindex
and the Sydney Futures Exchange Limited. See "Description of the Funds -- Risk
Considerations -- Foreign Futures Transactions."

Each LifePath Master Portfolio's futures transactions must constitute
permissible transactions pursuant to regulations promulgated by the CFTC. In
addition, a LifePath Master Portfolio may not engage in futures transactions if
the sum of the amount of initial margin deposits and premiums paid for unexpired
options on futures contracts, other than those contracts entered into for bona
fide hedging purposes, would exceed 5% of the liquidation value of the Master
Portfolio's assets, after taking into account unrealized profits and unrealized
losses on such contracts; provided, however, that in the case of an option that
is in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating this 5% liquidation limit. Pursuant to regulations and/or
published positions of the Securities and Exchange Commission, a LifePath Master
Portfolio may be required to segregate cash, U.S. Government obligations or
other high quality money market instruments in connection with its futures
transactions in an amount generally equal to the entire value of the underlying
commitment.

Initially, when purchasing or selling futures contracts a LifePath Master
Portfolio is required to deposit with the Portfolio's custodian in the broker's
name an amount of cash or cash equivalents up to approximately 10% of the
contract amount. This amount is subject to change by the exchange or board of
trade on which the contract is traded. Members of such exchange or board of
trade may impose their own higher requirements. This amount is known as "initial
margin" and is in the nature of a performance bond or good faith deposit on the
contract which is returned to such LifePath Master Portfolio upon termination of
the futures position, assuming all contractual obligations have been satisfied.
Subsequent payments to and from the broker, known as "variation margin," are
made daily as the price of the index or securities underlying the futures
contract fluctuates, making the long and short positions in the futures contract
more or less valuable, a process known as "marking-to-market." At any time prior
to the expiration of a futures contract, a LifePath Master Portfolio may elect
to close the position by taking an opposite position, at the then-prevailing
price, thereby terminating its existing position in the contract.

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amount of fluctuation permitted in futures contract prices during a single
trading day. Once the daily limit has been reached in a particular contract, no
trades may be made that day at a price beyond that limit or trading may be
suspended for specified periods during the trading day. Futures contract prices
could move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the relevant LifePath Master Portfolio to substantial
losses. If it is not possible, or the LifePath Master Portfolio determines not
to close a futures position in anticipation of adverse price movements, it will
be required to make daily cash payments of variation margin.

An option on a futures contract gives the purchaser the right, in return
for the premium paid, to assume a position in a futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the option exercise period. The
writer (i.e., seller) of the option is required upon exercise to assume an
offsetting futures position (a short position if the option is a call and a long
position if the option is a put). Upon exercise of the option, the assumption of
offsetting futures positions by both the writer and the holder of the option
will be accompanied by delivery of the accumulated cash balance in the writer's
futures margin account in the amount by which the market price of the futures
contract, at exercise, exceeds (in the case of a call) or is less than (in the
case of a put) the exercise price of the option on the futures contract.

STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES -- Each LifePath
Master Portfolio may purchase and sell stock index futures contracts and options
on stock index futures contracts.

A stock index future obligates the seller to deliver (and the purchaser to
take), effectively, an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of the underlying stocks in the index is made. With respect
to stock indices that are permitted investments, each LifePath Master Portfolio
intends to purchase and sell futures contracts on the stock index for which it
can obtain the best price with consideration also given to liquidity.

INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES
CONTRACTS -- Each LifePath Master Portfolio may invest in interest rate futures
contracts and options on interest rate futures contracts as a substitute for a
comparable market position in the underlying securities.

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Each LifePath Master Portfolio also may write options on interest rate
futures contracts as part of closing purchase transactions to terminate its
options positions. No assurance can be given that such closing transactions can
be effected or concerning the degree of correlation between price movements in
the options on interest rate futures and price movements in the LifePath Master
Series' portfolio securities which are the subject of the transaction.

INTEREST RATE AND INDEX SWAPS -- Each LifePath Master Portfolio may enter
into interest rate and index swaps in pursuit of its investment objective.
Interest rate swaps involve the exchange by a LifePath Master Portfolio with
another party of their respective commitments to pay or receive interest (for
example, an exchange of floating-rate payments for fixed-rate payments). Index
swaps involve the exchange by a LifePath Master Portfolio with another party of
cash flows based upon the performance of an index or a portion of an index
(usually including dividends or income). In each case, the exchange commitments
can involve payments to be made in the same currency or in different currencies.

Each LifePath Master Portfolio usually enters into swaps on a net basis. In
so doing, only the net difference of the payment obligations is exchanged
between the counterparties. If a LifePath Master Portfolio enters into a swap,
it maintains a segregated account in an amount equivalent to the gross value of
its payment obligations unless the contract provides otherwise. If the other
party to such a transaction defaults on a swap, the Master Series has
contractual remedies pursuant to the agreements related to the transaction. In
such a case, the LifePath Master Portfolio's risk of loss consists of the net
amount of payments that the LifePath Master Portfolio contractually is entitled
to receive.

The use of interest rate and index swaps is a highly specialized activity
which involves investment techniques different from those associated with
ordinary portfolio security transactions. There is no limit, except as provided
below, on the amount of swap transactions that may be entered into by a Master
Portfolio. These transactions generally do not involve the delivery of
securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to swaps generally is limited to the net amount of payments
that the LifePath Master Portfolio is contractually entitled to receive. No
LifePath Master Portfolio invests more than 15% of the value of its net assets
in swaps that are illiquid, and in other illiquid securities.

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currency exchange contract involves an obligation between two parties to
exchange a specific currency at a set price on a future date, which must be more
than two days from the date of the contract. These contracts are entered into in
the interbank market conducted directly between currency traders (typically
commercial banks or other financial institutions) and their customers.

Each LifePath Master Portfolio may combine forward currency exchange
contracts with investments in securities denominated in other currencies.

Each LifePath Master Portfolio also may maintain short positions in forward
currency exchange transactions, which would involve the Master Portfolio
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the value of
the currency sold relative to the currency such Master Portfolio contracted to
receive in the exchange.

LENDING PORTFOLIO SECURITIES -- From time to time, each Master Portfolio
may lend securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. Such
loans may not exceed one-third of the value of the relevant Master Portfolio's
total assets. In connection with such loans, each Master Portfolio receives
collateral consisting of cash, U.S. Government obligations or other high-quality
debt instruments which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. Each Master
Portfolio can increase its income through the investment of such collateral.
Each Master Portfolio continues to be entitled to receive payments in amounts
equal to the dividends, interest and other distributions payable on the loaned
security and receives interest on the amount of the loan. Such loans are
terminable at any time upon specified notice. A Master Portfolio might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with such Master Portfolio.

FORWARD COMMITMENTS -- Each Master Portfolio may purchase securities on a
when-issued or forward commitment basis, which means that the price is fixed at
the time of commitment but delivery and payment ordinarily take place a number
of days after the date of the commitment to purchase. A Master Portfolio makes
commitments to purchase such securities only with the intention of actually
acquiring the securities, but the Master Portfolio may sell these securities
before the settlement date if it is deemed advisable. A Master Portfolio will
not accrue income in respect of a security purchased on a forward commitment
basis prior to its stated delivery date.

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Securities purchased on a when-issued or forward commitment basis and
certain other securities held in a Master Portfolio's portfolio are subject to
changes in value (both generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest rates rise) based
upon the public's perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest rates. Securities purchased on a
when-issued or forward commitment basis may expose the relevant Master Portfolio
to risk because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued or forward commitment basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of each Master Portfolio consisting of
cash, U.S. Government obligations or other high quality liquid debt securities
at least equal at all times to the amount of the when-issued or forward
commitments is established and maintained at MIP's custodian bank. Purchasing
securities on a forward commitment basis when a Master Portfolio is fully or
almost fully invested may result in greater potential fluctuation in the value
of such Master Portfolio's net assets and its net asset value per share.

BORROWING MONEY -- As a fundamental policy, each Master Portfolio is
permitted to borrow to the extent permitted under the 1940 Act. However, each
Master Portfolio currently intends to borrow money only for temporary or
emergency (not leveraging) purposes, in an amount up to one-third of the value
of its total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of a Master Portfolio's total
assets, such Master Portfolio will not make any investments.

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<PAGE> 54

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
Little Rock, Arkansas
INVESTMENT ADVISER

BZW Barclays Global Fund Advisors
San Francisco, California
TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank, N.A.
San Francisco, California
CUSTODIAN

BZW Barclays Global Investors, N.A.
San Francisco, California
LEGAL COUNSEL

Morrison & Foerster LLP
Washington, D.C.
INDEPENDENT AUDITORS

KPMG Peat Marwick LLP
San Francisco, California
FOR MORE INFORMATION ABOUT THE FUNDS WRITE OR CALL:

Stagecoach Funds
c/o Wells Fargo Bank, N.A. -- Transfer Agent
525 Market Street
San Francisco, California 94105
1-800-776-0179

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

STLP 6/96
<PAGE> 55

STAGECOACH FUNDS
c/o Wells Fargo Bank, N.A.
Transfer Agent
525 Market Street
San Francisco, CA 94105

STLP 6/96
<PAGE> 56

LOGO

------------------------------

PROSPECTUS

------------------------------

LOGO

RETAIL CLASS

June 28, 1996
<PAGE> 57

STAGECOACH FUNDS(R)

STAGECOACH LIFEPATH(TM) FUNDS

The LIFEPATH FUNDS consist of five asset allocation funds (the "LifePath
Funds") offered by Stagecoach Trust (the "Trust"), an open-end, series
investment company. By this Prospectus, the Trust is offering shares of the
Retail Class of the five LifePath Funds. The LifePath Funds seek to provide
long-term investors with an asset allocation strategy designed to maximize
assets for retirement or for other purposes consistent with the quantitatively
measured risk investors, on average, may be willing to accept given their
investment time horizons.

Please read this Prospectus before investing and retain it for future
reference. It sets forth concisely information about the Trust and Funds that a
prospective investor should know before investing. A Statement of Additional
Information ("SAI") dated June 28, 1996 has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For a free copy,
write to the Trust c/o Wells Fargo Bank, N.A. - Stagecoach Shareholder Services,
P.O. Box 7066, San Francisco, California 94120-7066, or call 1-800-222-8222. If
you hold shares in an IRA, please call 1-800-BEST-IRA (1-800-237-8472) for
information or assistance.

FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY WELLS FARGO BANK, N.A., BZW BARCLAYS GLOBAL FUND ADVISORS ("BGFA")
OR ANY OF THEIR AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY. AN INVESTMENT IN A FUND INVOLVES CERTAIN INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY NOR HAVE ANY OF THESE AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PROSPECTUS DATED JUNE 28, 1996

PROSPECTUS
<PAGE> 58

Each LifePath Fund invests in the corresponding LifePath Master Portfolio. The
LifePath Master Portfolios invest in a wide range of U.S. and foreign equity and
debt securities and money market instruments. Investors are encouraged to select
a particular LifePath Fund based on the decade of their anticipated retirement
or when they anticipate beginning to withdraw substantial portions of their
investment.

- LIFEPATH 2000 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2000.

- LIFEPATH 2010 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2010.

- LIFEPATH 2020 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2020.

- LIFEPATH 2030 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2030.

- LIFEPATH 2040 FUND is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2040.

Retail Shares of each Fund are sold without a sales load, but are subject to
Rule 12b-1 fees. Investors can invest, reinvest or redeem Fund Shares at any
time without charge or penalty imposed by the Fund.

BGFA SERVES AS EACH MASTER PORTFOLIO'S INVESTMENT ADVISER AND, TOGETHER WITH ITS
AFFILIATES, PROVIDES OTHER SERVICES FOR WHICH IT IS COMPENSATED. STEPHENS INC.
("STEPHENS"), WHICH IS NOT AFFILIATED WITH BGFA, SERVES AS THE TRUST'S
ADMINISTRATOR AND AS DISTRIBUTOR OF EACH FUND'S SHARES.

PROSPECTUS
<PAGE> 59

TABLE OF CONTENTS
-------

SUMMARY OF FUND EXPENSES 1

FINANCIAL HIGHLIGHTS 3

DESCRIPTION OF THE FUNDS 5

RISK FACTORS 7

MANAGEMENT OF THE FUNDS 17

HOW TO BUY SHARES 22

HOW TO REDEEM SHARES 28

EXCHANGE PRIVILEGE 32

DIVIDENDS AND DISTRIBUTIONS 33

FEDERAL TAX INFORMATION 34

PERFORMANCE INFORMATION 36

GENERAL INFORMATION 37

APPENDIX A-1

PROSPECTUS
<PAGE> 60

SUMMARY OF FUND EXPENSES

- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)

- ---------------

<TABLE>
<C> <S>
1 A portion of these fees is covered by a "defensive" Rule 12b-1 Distribution
Plan that does not result in additional expenses to the Funds or Master
Portfolios. (See "Management of the Funds -- MIP 12b-1 Plan" for further
information.)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
EXAMPLE OF EXPENSES

An investor would pay the following expenses on a $1,000 investment in the Retail
Class of a Fund, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
</TABLE>

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 FUND 2010 FUND 2020 FUND 2030 FUND 2040 FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1 YEAR............. $ 12 $ 12 $ 12 $ 12 $ 12
3 YEARS............ $ 38 $ 38 $ 38 $ 38 $ 38
5 YEARS............ $ 66 $ 66 $ 66 $ 66 $ 66
10 YEARS............ $ 145 $ 145 $ 145 $ 145 $ 145
</TABLE>
- --------------------------------------------------------------------------------

EXPLANATION OF TABLES

The purpose of the foregoing tables is to help a shareholder understand the
various costs and expenses that an investor in the Funds will bear directly or
indirectly. The foregoing tables reflect expenses at both the Fund and Master
Portfolio levels. The tables do not reflect any charges that may be imposed by
Wells Fargo Bank or other shareholder servicing agents directly on customer
accounts in connection with an investment in a Fund.

1 PROSPECTUS
<PAGE> 61

a portfolio of securities would be more or less than if the Fund invested in
portfolio securities directly. The Trust's Board of Trustees believes that the
aggregate per share expenses of a Fund and its corresponding Master Portfolio
will be less than or approximately equal to the expenses such Fund would incur
if it directly acquired and managed the type of securities held by its
corresponding Master Portfolio. The information in the foregoing tables does not
reflect any fee waivers or expense reimbursement arrangements that may be in
effect. For a description of the various costs and expenses incurred in the
operation of the Trust and MIP, as well as any fee waivers or expense
reimbursements, see "Management of the Funds."

The Trust is currently authorized to issue a second class of LifePath
shares -- the Institutional Class Shares -- which are available only to certain
institutional investors. In addition, other mutual funds may invest in each
LifePath Master Portfolio. The expenses and, accordingly, the investment returns
of such other mutual funds and the Institutional Class Shares may differ from
those of the Retail Class shares. Information about the Institutional Class
Shares and other investment options in the Master Portfolios may be obtained by
calling Stephens at 1-800-643-9691. For additional information, see "Description
of the Funds -- Master/Feeder Structure."

PROSPECTUS 2
<PAGE> 62

FINANCIAL HIGHLIGHTS

The following information has been derived from the Financial Highlights of
the Retail Class shares in the Funds' financial statements for the fiscal year
ended February 29, 1996. The financial statements are incorporated by reference
into the SAI for the Funds. The financial statements have been audited by KPMG
Peat Marwick LLP, independent auditors, whose report dated April 12, 1996 also
is incorporated by reference into the SAI. This information should be read in
conjunction with the Funds' 1996 annual financial statements and notes thereto.
The SAI has been incorporated by reference into this Prospectus.

FOR A RETAIL CLASS SHARE OUTSTANDING

<TABLE>
<CAPTION>
LIFEPATH
LIFEPATH 2000 FUND LIFEPATH 2010 FUND 2020 FUND
-------------------------- ------------------------- ------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 29, FEBRUARY 28, FEBRUARY FEBRUARY 28, FEBRUARY 29,
1996 1995 29, 1996 1995 1996
------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period............ $ 9.92 $ 10.00 $ 9.99 $ 10.00 $ 10.17
-------- ------- ------- ------- --------
Income from investment operations:
Net investment income.......................... 0.40 0.34 0.32 0.34 0.27
Net realized and unrealized gain/(loss) on
investments.................................. 0.86 (0.14) 1.58 (0.02) 2.03
-------- ------- ------- ------- --------
Total from investment operations................ 1.26 0.20 1.90 0.32 2.30
Less distributions:
Dividends from net investment income........... (0.41) (0.27) (0.33) (0.28) (0.28)
Distributions from net realized capital
gains........................................ (0.13) (0.01) (0.14) (0.05) (0.21)
-------- ------- ------- ------- --------
Total Distributions............................. (0.54) (0.28) (0.47) (0.33) (0.49)
-------- ------- ------- ------- --------
Net Asset Value, end of Period.................. $ 10.64 $ 9.92 $ 11.42 $ 9.99 $ 11.98
======== ======= ======= ======= ========
Total Return (not annualized)................... 12.98% 2.10% 19.40% 3.31% 22.94%
Ratios/Supplemental Data:
Net assets, end of period (000)................ $100,070 $ 54,617 $67,178 $ 36,764 $122,488
Number of shares outstanding, end of
period (000)................................. 9,406 5,503 5,883 3,679 10,224
Ratios to average net assets (annualized)(1):
Ratio of expenses to average net assets........ 1.20% 1.20% 1.20% 1.20% 1.20%
Ratio of net investment income to average net
assets....................................... 4.00% 4.62% 3.06% 4.40% 2.45%
Portfolio Turnover(2)........................... 84% 17% 39% 24% 49%
</TABLE>

(1) These ratios include expenses charged to the Master Portfolio.

(2) The portfolio turnover rate reflects activity by the Master Portfolio. For
the year ended February 28, 1995 the Master Portfolio was audited by other
auditors.

(Continued)

3 PROSPECTUS
<PAGE> 63

<TABLE>
<CAPTION>
LIFEPATH
2020 FUND LIFEPATH 2030 FUND LIFEPATH 2040 FUND
------------ -------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1995 1996 1995 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period..... $ 10.00 $ 10.17 $ 10.00 $ 10.37 $ 10.00
------- ------- ------- -------- -------
Income from investment operations:
Net investment income................... 0.28 0.21 0.26 0.15 0.18
Net realized and unrealized gain/(loss)
on investments........................ 0.12 2.45 0.13 2.82 0.34
------- ------- ------- -------- -------
Total from investment operations......... 0.40 2.66 0.39 2.97 0.52
Less distributions:
Dividends from net investment income.... (0.23) (0.22) (0.22) (0.16) (0.15)
Distributions from net realized capital
gains................................. 0.00 (0.27) 0.00 0.34 0.00
------- ------- ------- -------- -------
Total Distributions...................... (0.23) (0.49) (0.22) (0.50) (0.15)
------- ------- ------- -------- -------
Net Asset Value, end of Period........... $ 10.17 $ 12.34 $ 10.17 $ 12.84 $ 10.37
======= ======= ======= ======== =======
Total Return (not annualized)............ 4.12% 26.53% 4.03% 28.91% 5.26%
Ratios/Supplemental Data:
Net assets, end of period (000)......... $ 66,036 $ 83,012 $ 41,153 $142,738 $ 56,737
Number of shares outstanding, end of
period (000).......................... 6,494 6,728 4,045 11,114 5,472
Ratios of average net assets
(annualized)(1):
Ratio of expenses to average net
assets................................ 1.20% 1.20% 1.20% 1.20% 1.20%
Ratio of net investment income to
average net assets.................... 3.64% 1.92% 3.35% 1.29% 2.35%
Portfolio Turnover(2).................... 28% 39% 40% 29% 5%
</TABLE>

(1) These ratios include expenses charged to the Master Portfolio.

(2) The portfolio turnover rate reflects activity by the Master Portfolio. For
the year ended February 28, 1995 the Master Portfolio was audited by other
auditors.

PROSPECTUS 4
<PAGE> 64

DESCRIPTION OF THE FUNDS

GENERAL
The Trust is a "series fund," which is a mutual fund divided into separate
portfolios. Each portfolio is treated as a separate entity for certain matters
under the Investment Company Act of 1940, as amended (the "1940 Act"), and for
other purposes, and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. Each LifePath Fund is comprised of two
classes of shares -- Retail Class and Institutional Class. As described below,
for certain matters Trust shareholders vote together as a group, as to others
they vote separately by portfolio, and, in certain instances, they vote by class
of shares within a portfolio. In addition, because of differences between the
fees and expenses borne by the Retail Class Shares and Institutional Class
Shares, the net asset value of the shares in these two classes will typically
differ. By this Prospectus, Retail Class Shares of five of the Trust's
portfolios are being offered -- LifePath 2000 Fund, LifePath 2010 Fund, LifePath
2020 Fund, LifePath 2030 Fund and LifePath 2040 Fund, each of which is
diversified. From time to time, the Trust may establish other portfolios. See
"General Information."

MASTER/FEEDER STRUCTURE
Each Fund is a feeder fund in a master/feeder structure, which means it
invests all of its assets in a separate Master Portfolio of MIP with the same
investment objective as such Fund. See "Investment Objectives" and "Management
Policies" below. MIP is organized as a trust under the laws of the State of
Delaware. See "Management of the Funds."

The Board of Trustees believes that, if other investors invest their assets in
a Master Portfolio, certain economic efficiencies may be realized with respect
to such Master Portfolio. For example, fixed expenses that otherwise would have
been borne solely by a Fund would be spread across a larger asset base provided
by more than one fund investing in the Master Portfolio. The Fund and other
entities investing in that Master Portfolio will each be liable for all
obligations of the Master Portfolio. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance exists and MIP itself is unable to meet its
obligations. Accordingly, the Trust's Board of Trustees believes that the Funds
and their shareholders will not be adversely affected by reason of investing
their assets in a Master Portfolio. However, if a mutual fund or other investor
withdraws its investment from such Master Portfolio, the economic efficiencies
(e.g., spreading fixed expenses across a larger asset base) that the Trust's
Board believes should be available through investment in the Master Portfolio
may not be fully achieved or maintained. In addition, given the relatively novel
nature of the master/feeder structure, accounting and operational difficulties
could result. See "Management of the Funds" for additional description of the
Funds' and Master Portfolios' management and expenses.

5 PROSPECTUS
<PAGE> 65

Each Master Portfolio's investment objective and other fundamental policies,
which are the same as those of the Fund bearing the corresponding name, cannot
be changed without approval by the holders of a majority (as defined in the 1940
Act) of such Master Portfolio's outstanding voting interests. Whenever a Fund,
as a Master Portfolio interestholder, is requested to vote on matters pertaining
to any fundamental policy of such Master Portfolio, the Fund will hold a meeting
of its shareholders to consider such matters and such Fund will cast its votes
in proportion to the votes received from Fund shareholders. A Fund will vote
Master Portfolio interests for which it receives no voting instructions in the
same proportion as the votes received from Fund shareholders. In addition,
certain policies of a Master Portfolio which are non-fundamental could be
changed by vote of a majority of MIP's Trustees without shareholder vote. If a
Master Portfolio's investment objective or fundamental or non-fundamental
policies are changed, the Fund investing in that Master Portfolio could
subsequently change its objective or policies to correspond to those of the
Master Portfolio or the Fund could redeem its Master Portfolio interests and
either seek a new investment company in which to invest with a matching
objective or retain its own investment adviser to manage such Fund's portfolio
in accordance with its objective. In the latter case, the Fund's inability to
find a substitute investment company in which to invest or equivalent management
services could adversely affect shareholders' investments in that Fund. A Fund
will provide shareholders with 30 days' written notice prior to the
implementation of any change in a non-fundamental policy of such Fund or Master
Portfolio, to the extent possible. Information on the Funds' and Master
Portfolios' investment objectives, policies and restrictions is included under
"Description of the Funds -- Investment Objectives" and "Appendix" in this
Prospectus and "Investment Objectives and Management Policies" in the SAI.
Additional Information regarding officers and directors/trustees is included in
the SAI under "Management of the Trust."

Each LifePath Fund is comprised of two classes of shares - Retail Class and
Institutional Class. The Institutional Class Shares are no longer being offered
to investors, although a limited number of such shares remained outstanding as
of the date of this Prospectus. The classes have identical rights with respect
to the series of which they are a part, except that there are certain matters
which affect one class but not another. Currently, there is a Distribution Plan
pursuant to Rule 12b-1 under the 1940 Act with respect to the Retail Class but
not the Institutional Class. In addition, certain purchase, exchange and
dividend reinvestment options available to Retail Class shareholders are not
available to Institutional Class shareholders. On all such matters the
shareholders of the affected class vote as a class.

In addition to selling its shares to a Fund, each Master Portfolio may sell
its shares to certain other mutual funds or other qualified investors.
Information regarding additional options for investment in shares of the Master
Portfolios is available from Stephens and may be obtained by calling
1-800-643-9691. The expenses and, correspondingly, the returns of other
investment options in the Master Portfolios are expected to differ from those of
the Funds.

PROSPECTUS 6
<PAGE> 66

RISK FACTORS
The net asset value and investment return of each LifePath Fund and LifePath
Master Portfolio are expected to fluctuate and are neither insured nor
guaranteed. To the extent that each LifePath Master Portfolio holds both equity
and fixed-income securities, it is subject to equity-market risk as well as
credit and interest-rate risks. Equity-market risk is the risk that common stock
prices will fluctuate or decline over short or even extended periods of time.
Credit risk is the risk that the issuer of a debt instrument is unable, due to
financial constraints, to make timely payments on its outstanding obligations.
Interest-rate risk is the risk that increases in market interest rates may
adversely affect the value of the debt instruments in which a Fund invests and
hence the value of an investment in the Fund. The value of debt instruments held
by a Fund generally changes inversely to changes in market interest rates.
Investments in foreign securities can expose the Master Portfolios to currency
exchange risks and other potentially adverse consequences associated with
investing in securities markets that are not as developed or efficient as those
in the United States. Certain investment techniques that may be used by the
LifePath Master Portfolios, such as investing in stock index options, futures
contracts and interest-rate swaps, present special risk considerations. See
"Appendix - Investment Techniques". As with all mutual funds, there can be no
assurance that each Fund or Master Portfolio will achieve its investment
objective. This summary of risk factors is qualified by reference to more
detailed descriptions of the risks associated with an investment in the Funds,
as set forth under "Risk Considerations" below.

INVESTMENT OBJECTIVES
Each LifePath Fund seeks to provide long-term investors with an asset
allocation strategy designed to maximize assets for retirement or for other
purposes consistent with the quantitatively measured risk investors, on average,
may be willing to accept given their investment time horizons. Specifically:

- LifePath 2000 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2000.

- LifePath 2010 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2010.

- LifePath 2020 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2020.

- LifePath 2030 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2030.

- LifePath 2040 Fund is managed for investors planning to retire (or begin to
withdraw substantial portions of their investment) approximately in the year
2040.
Each Fund's investment objective cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Fund's outstanding
voting securities. Each Master Portfolio's investment objective, which is the
same as the corresponding Fund's, cannot be changed without approval by the
holders of a majority (as defined in the 1940 Act) of such Master Portfolio's
outstanding voting interests. Shareholders of a

7 PROSPECTUS
<PAGE> 67

Fund that invests in a Master Portfolio are provided the opportunity to vote on
any proposed change to such Master Portfolio's investment objective, and that
Fund will vote on any such proposal in proportion to the votes received from
Fund shareholders. See "General" above. The differences in objectives and
policies among the Master Portfolios determine the types of portfolio securities
in which each Master Portfolio invests and can be expected to affect the degree
of risk to which each Master Portfolio, and, therefore, the corresponding Fund,
is subject and the performance of each Master Portfolio and Fund.

MANAGEMENT POLICIES
Each Fund invests all of its assets in the Master Portfolio bearing the
corresponding name, which has the same investment objective as the Fund. A Fund
may withdraw its investment in the relevant Master Portfolio at any time,
provided that the Trust's Board of Trustees determines that it is in the best
interests of the Fund to do so. Upon any such withdrawal, the Trust's Board of
Trustees would consider what action should be taken, including investing all
such Fund's assets in another pooled investment entity having the same
investment objective as the Fund, or retaining an investment adviser to manage
such Fund's assets in accordance with the policies described below.

The LifePath Master Portfolios are a diversified series of asset allocation
funds designed for long-term investors. The LifePath Master Portfolios follow an
asset allocation strategy among three broad investment classes: equity and debt
securities of issuers located throughout the world and cash in the form of money
market instruments. Each LifePath Master Portfolio differs in the weighting
assigned to each such investment class, with the later-dated Master Portfolios
generally bearing more risk than the earlier-dated Master Portfolios, with the
expectation of greater total return. Thus, the investment class weightings of
the LifePath 2040 Master Portfolio initially might be 100%, 0% and 0% among
equity securities, debt securities and cash, respectively, while the weightings
of the LifePath 2000 Master Portfolio initially might be 25%, 50% and 25%,
respectively. Over the years, each LifePath Master Portfolio is managed more
conservatively, on the premise that individuals investing for retirement desire
to reduce investment risk in their retirement accounts as they age. The
difference in such investment class weightings is based on the statistically
determined risk that such investors, on average, may be willing to accept given
their investment time horizons in an effort to maximize assets in anticipation
of retirement or for other purposes.

You are encouraged to invest in a particular LifePath Fund based on the decade
of your anticipated retirement or when you anticipate beginning to withdraw
substantial portions of your account. For example, the LifePath 2000 Fund is
designed for investors in their 50s and 60s who plan to retire (or begin to
withdraw substantial portions of their investment) in approximately 2000; the
LifePath 2010 Fund is designed for

PROSPECTUS 8
<PAGE> 68

investors in their 40s and 50s who plan to retire (or begin to withdraw as
described above) in approximately 2010; and so on. In addition, when making your
investment decision, you could consider evaluating your own risk profile,
recognizing, for example, that the LifePath 2040 Fund is designed for investors
with a high tolerance for risk while the LifePath 2000 Fund is designed for
investors with a low tolerance for risk. The LifePath Funds were the first
mutual funds of their kind to offer a flexible investment strategy designed to
change over specific time horizons.

To manage the LifePath Master Portfolios, BGFA employs a proprietary
investment model (the "Model") that analyzes extensive financial and economic
data, including risk correlation and expected return statistics, to recommend
the portfolio allocation among the investment classes described below. At its
simplest, for each point in time, the Model recommends a portfolio allocation
designed to maximize total return for each LifePath Master Portfolio based on
each such LifePath Master Portfolio's evolving risk profile. As a result, while
each LifePath Master Portfolio invests in substantially the same securities
within an investment class, the amount of each LifePath Master Portfolio's
aggregate assets invested in a particular investment class, and thus in
particular securities, differs, but the relative percentage that a particular
security comprises within an investment class ordinarily remains substantially
the same. As of June 1, 1996 asset allocations in the LifePath Master Portfolios
were approximately as follows:

<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH LIFEPATH LIFEPATH
2000 2010 2020 2030 2040
MASTER MASTER MASTER MASTER MASTER
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Equity Securities
Domestic ........ 17% 39% 53% 63% 75%
International ... 5% 11% 15% 19% 20%
Debt Securities ... 77% 49% 31% 17% 4%
Cash .............. 1% 1% 1% 1% 1%
</TABLE>

The LifePath Model contains both "strategic" and "tactical" components, with
the strategic component weighted more heavily than the tactical component. The
strategic component of the Model evaluates the risk that investors, on average,
may be willing to accept given their investment time horizons. The strategic
component thus determines the changing investment risk level of each LifePath
Fund as time passes. The tactical component of the Model, on the other hand,
addresses short-term market conditions. The tactical component thus adjusts the
amount of investment risk taken by each

9 PROSPECTUS
<PAGE> 69

LifePath Fund without regard to time horizon, but rather in consideration of the
relative risk-adjusted short-term attractiveness of various asset classes.

Through the strategic and tactical components the asset allocation strategy
contemplates shifts, which may be frequent, among a wide range of U.S. and
foreign investments and market sectors. Each LifePath Master Portfolio may
invest up to approximately 20% of the value of its total assets in foreign
securities that are not publicly traded in the United States. Rather than
choosing specific securities, the Model selects indices representing segments of
the global equity and debt markets and invests to create market exposure to
these market segments by purchasing representative samples of securities
comprising the indices in an attempt to replicate their performance. From time
to time, other indices may be selected in addition to, or as a substitute for,
any of the indices listed herein and market exposure may be broadened. You will
be notified of any such change.

The Model has broad latitude to select the class of investments and the
particular securities within a class in which each LifePath Master Portfolio
invests. The LifePath Master Portfolios are not managed as balanced portfolios
and are not required to maintain a portion of their investments in each of the
permitted investment categories at all times. Until a LifePath Master Portfolio
attains an asset level of approximately $100 to $150 million, the Model
allocates assets across fewer of the investment categories identified below than
it otherwise would. As a LifePath Master Portfolio approaches this minimum asset
level, the Model adds investment categories from among those identified below,
thereby approaching the desired investment mix over time.

Each LifePath Master Portfolio's investments are compared from time to time to
the Model's recommended allocation. Recommended reallocations are implemented
subject to BGFA's assessment of current economic conditions and investment
opportunities. BGFA may change from time to time the criteria and methods it
uses to implement the recommendations of the Model. Recommended reallocations
are implemented in accordance with trading policies designed to take advantage
of market opportunities and reduce transaction costs. The asset allocation mix
selected by the Model is a primary determinant in the respective LifePath Master
Portfolio's investment performance.

BGFA manages other portfolios which also invest in accordance with the Model.
The performance of each of those other portfolios is likely to vary from the
performance of each LifePath Master Portfolio and corresponding LifePath Fund.
Such variation in performance is primarily due to different equilibrium asset
mix assumptions used for the various portfolios, timing differences in the
implementation of the Model's recommendations and differences in expenses and
liquidity requirements. The overall management of each LifePath Master Portfolio
is based on the recommendation of the Model, and no person is primarily
responsible for recommending the mix of asset classes in each Master Portfolio
or the mix of securities within the asset classes. Decisions relating to the
Model are made by BGFA's investment committee.

PROSPECTUS 10
<PAGE> 70

Each LifePath Master Portfolio may invest in up to 17 asset classes, including
10 stock classes, 6 bond classes and a money market class. Each LifePath Master
Portfolio invests in the classes of investments described below.

EQUITY SECURITIES -- The LifePath Master Portfolios seek U.S. equity market
exposure through the following indices of common stock:

- The S&P/BARRA Value Stock Index (consisting of primarily
large-capitalization U.S. stocks with lower-than-average price/book ratios).

- The S&P/BARRA Growth Stock Index (consisting of primarily
large-capitalization U.S. stocks with higher-than-average price/book
ratios).

- The Intermediate Capitalization Value Stock Index (consisting of primarily
medium-capitalization U.S. stocks with lower-than-average price/book
ratios).

- The Intermediate Capitalization Growth Stock Index (consisting of primarily
medium-capitalization U.S. stocks with higher-than-average price/book
ratios).

- The Intermediate Capitalization Utility Stock Index (consisting of primarily
medium-capitalization U.S. utility stocks).

- The Micro Capitalization Market Index (consisting of primarily
small-capitalization U.S. stocks).

- The Small Capitalization Value Stock Index (consisting of primarily small-
capitalization U.S. stocks with lower-than-average price/book ratios).

- The Small Capitalization Growth Stock Index (consisting of primarily small-
capitalization U.S. stocks with higher-than-average price/book ratios).

The LifePath Master Portfolios seek foreign equity market exposure through the
following indices of foreign equity securities:

- The Morgan Stanley Capital International (MSCI) Japan Index (consisting of
primarily large-capitalization Japanese stocks).

- The Morgan Stanley Capital International Europe, Australia, Far East Index
(MSCI EAFE) Ex-Japan Index (consisting of primarily large-capitalization
foreign stocks, excluding Japanese stocks).

In addition, each LifePath Master Portfolio may invest in other common stocks,
preferred stocks and convertible securities, including those in the form of
American, European and Continental Depositary Receipts, as well as warrants to
purchase such securities, and investment company securities. See
"Appendix -- Portfolio Securities."

11 PROSPECTUS
<PAGE> 71

DEBT SECURITIES -- The LifePath Master Portfolios seek U.S. debt market
exposure through the following indices of U.S. debt securities:

- The Lehman Brothers Long-Term Government Bond Index (consisting of all U.S.
Government bonds with maturities of at least ten years).

- The Lehman Brothers Intermediate-Term Government Bond Index (consisting of
all U.S. Government bonds with maturities of less than ten years and greater
than one year).

- The Lehman Brothers Long-Term Corporate Bond Index (consisting of all U.S.
investment-grade corporate bonds with maturities of at least ten years).

- The Lehman Brothers Intermediate-Term Corporate Bond Index (consisting of
all U.S. investment-grade corporate bonds with maturities of less than ten
years and greater than one year).

- The Lehman Brothers Mortgage-Backed Securities Index (consisting of all
fixed-coupon mortgage pass-throughs issued by the Federal National Mortgage
Association, Government National Mortgage Association and Federal Home Loan
Mortgage Corporation with maturities greater than one year).

The LifePath Master Portfolios seek foreign debt market exposure through the
following index of foreign debt securities:

- The Salomon Brothers Non-U.S. World Government Bond Index (consisting of
foreign government bonds with maturities of greater than one year).

Each U.S. and foreign debt security is expected to be part of an issuance with
a minimum outstanding amount at the time of purchase of approximately $50
million and $100 million, respectively. Each security in which a LifePath
Master Portfolio invests must be rated at least Baa by Moody's Investors
Service, Inc. ("Moody's"), or BBB by Standard & Poor's Corporation ("S&P"),
Fitch Investors Service, Inc. ("Fitch") or Duff & Phelps, Inc. ("Duff") or, if
unrated, deemed to be of comparable quality by WFNIA. See "Risk
Considerations -- Fixed-Income Securities."

MONEY MARKET INSTRUMENTS -- The money market instruments held by each Master
Portfolio generally consist of high-quality money market instruments,
including U.S. Government obligations, obligations of domestic and foreign
banks, short-term corporate debt instruments and repurchase agreements. See
"Appendix" below for a more complete description of the money market
instruments in which each Master Portfolio may invest.

PROSPECTUS 12
<PAGE> 72

contracts and options on futures contracts that each Master Portfolio may
purchase are considered derivatives. Each Master Portfolio may use some
derivatives as part of its short-term liquidity holdings and/or as substitutes
for comparable market positions in the underlying securities. Also,
asset-backed securities issued or guaranteed by U.S. Government agencies or
instrumentalities and certain floating- and variable-rate instruments can be
considered derivatives. Some derivatives may be more sensitive than direct
securities to changes in interest rates or sudden market moves. Some
derivatives also may be susceptible to fluctuations in yield or value due to
their structure or contract terms.

BGFA (as investment adviser to each Master Portfolio) uses a variety of
internal risk management procedures to ensure that derivatives use is
consistent with each Master Portfolio's and each Fund's investment objective,
does not expose either the Master Portfolio or a Fund to undue risks and is
closely monitored, including providing periodic reports to the Boards of
Trustees concerning the use of derivatives. Derivatives use also is subject to
broadly applicable investment policies. For example, in no case may a Master
Portfolio invest more than 15% of the current value of its assets in "illiquid
securities," including derivatives without active secondary markets. Nor may a
Master Portfolio use derivatives to create leverage without establishing
adequate "cover" in compliance with Securities and Exchange Commission
leverage rules. For more information, see "Risk Considerations" below, and
"Appendix -- Investment Techniques."

CERTAIN FUNDAMENTAL POLICIES
Each Fund and Master Portfolio may (i) borrow money to the extent permitted
under the 1940 Act; (ii) invest up to 5% of its total assets in the obligations
of any single issuer, except that up to 25% of the value of the total assets of
such Fund or Master Portfolio may be invested and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities may be
purchased, without regard to any such limitation; and (iii) invest up to 25% of
the value of its total assets in the securities of issuers in a particular
industry or group of closely related industries, provided there is no limitation
on the purchase of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. This paragraph describes fundamental policies
that cannot be changed as to a Fund or Master Portfolio without approval by the
holders of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund or Master Portfolio, as the case may be. See "Investment
Objectives and Management Policies -- Investment Restrictions" in the Statement
of Additional Information.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES
Each Fund and Master Portfolio may (i) purchase securities of any company
having less than three years' continuous operation (including operations of any
predecessors) if such purchase does not cause the value of its investments in
all such companies to exceed 5% of the value of its total assets; (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (iii) invest

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up to 15% of the value of its net assets in repurchase agreements providing for
settlement in more than seven days after notice and in other illiquid
securities. Although each LifePath Fund and LifePath Master Portfolio reserves
the right to invest up to 15% of the value of its net assets in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice, as long as such Fund's shares are registered for
sale in a state that imposes a lower limit on the percentage of a fund's assets
that may be so invested, such LifePath Fund and LifePath Master Portfolio will
comply with the lower limit. Each LifePath Fund currently is limited to
investing up to 10% of the value of its net assets in such securities due to
limits applicable in several states. See "Investment Objectives and Management
Policies -- Investment Restrictions" in the Statement of Additional Information.

RISK CONSIDERATIONS

General
Since the investment characteristics and, therefore, investment risks directly
associated with such characteristics of each LifePath Fund correspond to those
of the Master Portfolio in which such Fund invests, the following is a
discussion of the risks associated with an investment in the Master Portfolio.

The net asset value per share of each LifePath Fund is not fixed and should be
expected to fluctuate.

Investment Techniques
Each LifePath Master Portfolio may engage in various investment techniques the
use of which involves greater risk than that incurred by other funds with
similar investment objectives. See "Appendix -- Investment Techniques." Using
these techniques may affect the degree to which a LifePath Master Portfolio's
net asset value fluctuates.

Equity Securities
You should be aware that equity securities fluctuate in value, often based on
factors unrelated to the value of the issuer of the securities, and that
fluctuations can be pronounced. Changes in the value of securities held by a
LifePath Master Portfolio result in changes in the value of such LifePath Master
Portfolio's shares and thus the LifePath Master Portfolio's performance.

Fixed-Income Securities
You should be aware that even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price

PROSPECTUS 14
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fluctuations. Long-term securities are affected to a greater extent by interest
rates than shorter-term securities. The values of fixed-income securities also
may be affected by changes in the credit rating or financial condition of the
issuing entities. Once the rating of a portfolio security has been changed to a
rating below investment grade, the particular LifePath Master Portfolio
considers all circumstances deemed relevant in determining whether to continue
to hold the security. Certain securities that may be purchased by the LifePath
Master Portfolio, such as those rated Baa by Moody's and BBB by S&P, Fitch and
Duff, may be subject to such risk with respect to the issuing entity and to
greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Securities which are rated Baa by Moody's are
considered medium-grade obligations; they are neither highly protected nor
poorly secured, and are considered by Moody's to have speculative
characteristics. Securities rated BBB by S&P are regarded as having adequate
capacity to pay interest and repay principal, and while such debt securities
ordinarily exhibit adequate protection parameters, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for securities in this category than in higher
rated categories. Securities rated BBB by Fitch are considered investment grade
and of satisfactory credit quality; however, adverse changes in economic
conditions and circumstances are more likely to have an adverse impact on these
securities and, therefore, impair timely payment. Securities rated BBB by Duff
have below average protection factors but nonetheless are considered sufficient
for prudent investment. If a security held by a LifePath Master Portfolio is
downgraded to a rating below investment grade, such Master Portfolio may
continue to hold the security until such time as BGFA determines it advantageous
for the LifePath Master Portfolio to sell the security. If such a policy would
cause a LifePath Master Series to have 5% or more of its net assets invested in
securities that have been downgraded below investment grade, the Master
Portfolio promptly would seek to dispose of such securities in an orderly
manner. See "Appendix -- Portfolio Securities" in this Prospectus and "Appendix"
in the SAI.

Foreign Securities
Foreign securities markets generally are not as developed or efficient as
those in the United States. Securities of some foreign issuers are less liquid
and more volatile than securities of comparable U.S. issuers. Similarly, volume
and liquidity in most foreign securities markets are less than in the United
States and, at times, volatility of price can be greater than in the United
States. In addition, there may be less publicly available information about a
non-U.S. issuer, and non-U.S. issuers generally are not subject to uniform
accounting and financial reporting standards, practices and requirements
comparable to those applicable to U.S. issuers. See "Appendix -- Portfolio
Securities -- Bank Obligations."

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adversely affect the payment of principal and interest on the foreign securities
or might restrict the payment of principal and interest to investors located
outside the country of the issuers, whether from currency blockage or otherwise.
Custodial expenses for a portfolio of non-U.S. securities generally are higher
than for a portfolio of U.S. securities.

Since the LifePath Master Portfolios may purchase foreign securities in
currencies of foreign countries, the value of these assets as measured in U.S.
dollars may be affected favorably or unfavorably by changes in currency rates
and exchange control regulations. Some currency exchange costs generally are
incurred when a LifePath Master Portfolio changes investments from one country
to another.

Foreign Currency Exchange
Currency exchange rates may fluctuate significantly over short periods of
time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by the intervention of U.S. or foreign governments
or central banks, or by the failure to intervene, or by currency controls or
political developments in the United States or abroad. The LifePath Master
Portfolios intend to engage in foreign currency transactions to maintain the
same foreign currency exposure as the relevant foreign securities index through
which the Master Portfolios seek foreign equity market exposure, but not as part
of a defensive strategy to protect against fluctuations in exchange rates.

PROSPECTUS 16
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Foreign Futures Transactions
Unlike trading on domestic futures exchanges, trading on foreign futures
exchanges is not regulated by the Commodity Futures Trading Commission (the
"CFTC") and generally is subject to greater risks than trading on domestic
exchanges. For example, some foreign exchanges are principal markets so that no
common clearing facility exists and an investor may look only to the broker for
performance of the contract. BGFA, however, considers on an ongoing basis the
creditworthiness of such counterparties. In addition, any profits that a
LifePath Master Portfolio might realize in trading could be eliminated by
adverse changes in the exchange rate; adverse exchange rate changes also could
cause a Master Portfolio to incur losses. Transactions on foreign exchanges may
include both futures contracts which are traded on domestic exchanges and those
which are not. Such transactions may also be subject to withholding and other
taxes imposed by foreign governments.

Other Investment Considerations
Asset allocation and modeling strategies are employed by BGFA for other
investment companies and accounts advised or sub-advised by BGFA. If these
strategies indicate particular securities should be purchased or sold, at the
same time, by a LifePath Master Portfolio and one or more of these investment
companies or accounts, available investments or opportunities for sales will be
allocated equitably to each by BGFA. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by a LifePath Master
Portfolio or the price paid or received by such LifePath Master Portfolio.

Under normal market conditions, the portfolio turnover rate for each LifePath
Master Portfolio is not expected to exceed 100%. A portfolio turnover rate of
100% would occur, for example, if all of a LifePath Master Portfolio's
securities were replaced within one year. Higher portfolio turnover rates are
likely to result in comparatively greater brokerage commissions. In addition,
short-term gains realized from portfolio transactions are taxable to
shareholders as ordinary income. Portfolio turnover will not be a limiting
factor in making investment decisions.

MANAGEMENT OF THE FUNDS

GENERAL
The Trust has not retained the services of an investment adviser because each
Fund's assets are invested in a Master Portfolio that has retained investment
advisory services (see "Master Portfolio Investment Adviser). Each LifePath Fund
bears a pro rata portion of the fees paid to the corresponding Master Portfolio.

BOARD OF TRUSTEES
The business and affairs of the Trust are managed under the direction of its
Board of Trustees. The Trust's Trustees are also MIP's Trustees and also serve
as Directors of MasterWorks Funds Inc., another open-end investment company
whose LifePath Fund

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MASTER PORTFOLIO INVESTMENT ADVISER
BGFA serves as investment adviser to each of the LifePath Master Portfolios.
Pursuant to an Investment Advisory Contract with each Master Portfolio, BGFA
provides investment guidance and policy direction in connection with the
management of each Master Portfolio's assets, subject to the overall authority
of MIP's Board of Trustees and in conformity with Delaware Law and the stated
policies of such Master Portfolio. BGFA was created by the reorganization of
Wells Fargo Nikko Investment Advisors ("WFNIA"), the former sub-adviser to each
Master Portfolio, with and into an affiliate of Wells Fargo Institutional Trust
Company, N.A. ("WFITC"). BGFA is an indirect subsidiary of Barclays Bank PLC and
is located at 45 Fremont Street, San Francisco, California 94105. As of March
31, 1996, BGFA and its affiliates provided investment advisory services for over
$284 billion of assets. MIP has agreed to pay to BGFA a monthly fee at the
annual rate of 0.55% of each LifePath Master Portfolio's average daily net
assets as compensation for its advisory services. For the period beginning
January 1, 1996 and ended February 29, 1996, MIP, on behalf of each Master
Portfolio, actually paid BGFA an amount equal to 0.55% of each Master
Portfolio's average daily net assets as compensation for its advisory services.

Prior to January 1, 1996, Wells Fargo Bank, a wholly owned subsidiary of Wells
Fargo & Company, located at 420 Montgomery Street, San Francisco, California
94105, served as each Master Portfolio's investment adviser. Pursuant to an
Investment Advisory Agreement with MIP, Wells Fargo Bank provided investment
guidance and policy direction in connection with the management of each Master
Portfolio's assets, subject to the supervision of MIP's Board of Trustees and in
conformity with Delaware law and the stated policies of such Master Portfolio.
Wells Fargo Bank was entitled to receive a monthly fee at the annual rate of
0.55% of each LifePath Master Portfolio's average daily net assets as
compensation for its advisory services. For the period beginning March 1, 1995
and ended December 31, 1995, MIP, on behalf of each Master Portfolio, actually
paid an amount equal to 0.55% of each such Master Portfolio's average daily net
assets to Wells Fargo Bank for advisory services.

Prior to January 1, 1996, Wells Fargo Bank engaged WFNIA, located at 45
Fremont Street, San Francisco, California 94104, to provide sub-investment
advisory services to each Master Portfolio. WFNIA was a general partnership
owned 50% by a wholly owned subsidiary of Wells Fargo Bank and 50% by a
subsidiary of The Nikko Securities Co., Ltd. Pursuant to a Sub-Investment
Advisory Agreement, WFNIA, subject to the supervision and approval of Wells
Fargo Bank, provided investment advisory assistance and the

PROSPECTUS 18
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day-to-day management of each Master Portfolio's assets. WFNIA was entitled to
receive from Wells Fargo Bank a monthly fee at the annual rate of 0.40% of each
LifePath Master Portfolio's average daily net assets for its sub-advisory
services. For the fiscal year ended February 29, 1996, Wells Fargo Bank actually
paid WFNIA an amount equal to 0.40% of the average daily net assets of each
LifePath Master Portfolio. The LifePath Master Portfolios no longer retain a
sub-investment adviser.

Morrison & Foerster LLP, counsel to the Trust and MIP and special counsel to
BGFA, has advised the Trust, MIP and BGFA that BGFA and its affiliates may
perform the services contemplated by the Investment Advisory Contracts and this
Prospectus without violation of the Glass-Steagall Act. Such counsel has pointed
out, however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state statutes,
including the Glass-Steagall Act, and relating to the permissible activities of
banks and their subsidiaries or affiliates, as well as future changes in such
statutes, regulations and judicial or administrative decisions or
interpretations, could prevent such entities from continuing to perform, in
whole or in part, such services. If any such entity were prohibited from
performing any such services, it is expected that new agreements would be
proposed or entered into with another entity or entities qualified to perform
such services.

ADMINISTRATOR AND DISTRIBUTOR
Stephens, located at 111 Center Street, Little Rock, Arkansas 72201, serves as
the Trust's administrator pursuant to an Administration Agreement with the
Trust. Under the Administration Agreement, Stephens generally supervises all
aspects of the operation of the Trust other than providing investment advice,
subject to the overall authority of the Board of Trustees in accordance with
Massachusetts law. The administrative services provided to the LifePath Funds
also include coordination of the other services provided to the LifePath Funds,
compilation of information for reports to the Securities and Exchange Commission
and state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to the Trust's Board of Trustees and officers.
Stephens also furnishes office space and certain facilities to conduct the
Trust's business and compensates the Trust's Trustees, officers and employees
who are affiliated with Stephens. In addition, except as noted below, Stephens
has assumed all ordinary expenses incurred by a LifePath Fund other than the
fees payable by such Fund pursuant to the Trust's various service contracts. For
providing administrative services to the Trust, the Trust has agreed to pay
Stephens a monthly fee at the annual rate of 0.10% of

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each LifePath Fund's average daily net assets. For the fiscal year ended
February 29, 1996, the Trust paid Stephens a monthly fee of 0.10% with respect
to each LifePath Fund's average daily net assets.

Stephens also serves as the Trust's principal underwriter within the meaning
of the 1940 Act and as distributor of each Fund's shares pursuant to a
Distribution Agreement with the Trust. The Distribution Agreement provides that
Stephens acts as agent for the Trust for the sale of Fund shares and may enter
into Selling Agreements with Selling Agents that wish to make available shares
of the Funds to their respective customers. The Funds may participate in joint
distribution activities with any of the other funds of the Company, in which
event expenses reimbursed out of the assets of the Fund may be attributable, in
part, to the distribution-related activities of another fund of the Company.
Generally, the expenses attributable to joint distribution activities are
allocated among each Fund and the other funds of the Company in proportion to
their relative net asset sizes, although the Company's Board of Directors may
allocate such expenses in any other manner that it deems fair and equitable.

Under the Distribution Agreement, Stephens is entitled to receive from each
Fund a monthly fee at an annual rate of up to 0.25% of the average daily net
assets of the Retail Shares of the Fund. Through Selling Agreements Stephens may
compensate Selling Agents for sales support services relating to the Retail
Class, including, but not limited to, commissions or other payments to such
agents based on the average daily net assets of Fund shares attributable to
them. Services provided by selling agents in exchange for payments to selling
agents are the principal sales support services provided to the Fund relating to
the Retail Class. Stephens may retain any portion of the total distribution fee
payable under the Distribution Agreement to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses. Since the Distribution Agreement provides for
fees that are used by Stephens to pay for distribution expenses, a plan of
distribution for the Retail Class of each Fund (a "Distribution Plan") and the
Distribution Agreement are approved and reviewed in accordance with Rule 12b-1
under the 1940 Act, which regulates the manner in which an investment company
may, directly or indirectly, bear the expense of distributing its shares.

Financial institutions acting as Selling Agents, Shareholder Servicing Agents,
or in certain other capacities may be required to register as dealers pursuant
to applicable state securities laws which may differ from federal law and any
interpretations expressed herein.

PROSPECTUS 20
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CUSTODIAN AND TRANSFER AGENT
BZW Barclays Global Investors, N.A. ("BGI") currently acts as custodian to
each Fund and Master Portfolio. The principal business address of BGI is 45
Fremont Street, San Francisco, California 94105. BGI is not entitled to receive
compensation for its custodial services so long as BGFA is entitled to receive
compensation for providing investment advisory services to the LifePath Master
Portfolios. BGI was formerly known as Wells Fargo Institutional Trust Company,
N.A. ("WFITC") and is a subsidiary of BZW Barclays Global Investors Holdings
Inc.

SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan pursuant to which it may
enter into Shareholder Servicing Agreements with certain financial institutions,
securities dealers and other industry professionals (collectively, "Shareholder
Servicing Agents") for the provision of certain services to Fund shareholders.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Funds, providing
reports and other information, and providing services related to the maintenance
of shareholder accounts. For the services provided pursuant to a Shareholder
Servicing Agreement, the Trust may pay each Shareholder Servicing Agent a
monthly fee at the annual rate of up to 0.20% of the average daily value of each
LifePath Fund's shares beneficially owned by customers of the Shareholder
Servicing Agent. The fee payable for such services is intended to be a "service
fee" as defined in Article III, Section 26 of the NASD Rules of Fair Practice.

MIP 12B-1 PLAN

MIP's Board of Trustees has adopted, on behalf of each Master Portfolio, a
"defensive" distribution plan under Section 12(b) of the 1940 Act and Rule 12b-1
thereunder (the "Plan"). The Plan does not result in any additional expenses
being borne by a Master Portfolio or a Fund. The Plan was adopted by a majority
of MIP's Board of Trustees (including a majority of those Trustees who are not
"interested persons" of MIP as defined in the 1940 Act) on October 10, 1995. The
Plan was intended as a precaution

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designed to address the possibility that certain ongoing payments by Barclays to
Wells Fargo Bank in connection with the sale of WFNIA may be characterized as
indirect payments by each Master Portfolio to finance activities primarily
intended to result in the sale of interests in such Master Portfolio. The Plan
provides that if any portion of a Master Portfolio's advisory fees (up to 0.25%
of the average daily net assets of each Master Portfolio on an annual basis)
were deemed to constitute an indirect payment for activities that are primarily
intended to result in the sale of interests in a Master Portfolio, such payment
would be authorized pursuant to the Plan.

EXPENSES
Under the Administration Agreement, Stephens has agreed to assume the
operating expenses of each LifePath Fund and a pro rata share of the operating
expenses of each LifePath Master Portfolio, except for extraordinary expenses
and those fees and expenses payable pursuant to the various service contracts
described above which are borne by the Trust and those expenses specifically
assumed by Wells Fargo Bank or BGFA under their respective contracts with the
Funds. The initial term of the Administration Agreement runs to October 25,
1996; thereafter, it continues for successive one-year periods, subject to
approval by the Trust's Board of Trustees.

HOW TO BUY SHARES

GENERAL
You may purchase Retail Shares in one of the several ways described below. You
must complete and sign an Account Application to open an account. Additional
documentation may be required from corporations, associations and certain
fiduciaries. Do not mail cash. For more information or additional forms call
1-800-222-8222. For more information about buying shares in an IRA, call
1-800-BEST-IRA, (1-800-237-8472). The Trust or Stephens may make the Prospectus
available in an electronic format. Upon receipt of a request from you or your
representative, the Trust or Stephens will transmit or cause to be transmitted
promptly, without charge, a paper copy of the electronic Prospectus.

To invest in a Fund's Retail Shares through a tax-deferred retirement plan
through which such Fund's Retail Shares are available, please contact a
Shareholder Servicing Agent to receive information and an application. See
"Tax-Deferred Retirement Plans" below.

PROSPECTUS 22
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The minimum initial investment amount is generally $1,000. The minimum initial
investment amount is $100 by the AutoSaver Plan purchase method (described
below), $250 for any tax-deferred retirement account for which a Shareholder
Servicing Agent serves as trustee under a prototype trust approved by the
Internal Revenue Service ("IRS") (a "Plan Account"), and $1,000 by all other
methods or for all other investors. Generally, subsequent investments must be
made in amounts of $100 or more. Where Fund shares are acquired in exchange for
shares of another fund in the Stagecoach Family of Funds, the minimum initial
investment amount applicable to the shares being exchanged generally carries
over. However, if the value of your investment in the shares you are exchanging
has been reduced below the minimum initial investment amount by changes in
market conditions or sales charges (and not by redemptions), you may carry over
the lesser amount into one of the Funds. Plan Accounts that invest in the Fund
through Wells Fargo ExpressInvest(TM)(available to certain Wells Fargo tax-
deferred retirement plans) are not subject to the minimum initial investment
amount or the subsequent investment amount requirements. If you have any
questions regarding purchases of shares call 1-800-222-8222. If you have
questions regarding ExpressInvest please contact the Company at 1-800-237-8472.
For additional information on tax-deferred accounts, please refer to the section
"How to Buy Shares -- Tax-Deferred Retirement Plans" or contact a Shareholder
Servicing Agent or Selling Agent.

All investments in a Fund's shares are subject to a determination by the Trust
that the investment instructions are complete. Payment for shares purchased
through a Selling Agent is not due from the Selling Agent until the settlement
date, which is normally three Business Days after the order is placed. If shares
are purchased by a check which does not clear, the Trust reserves the right to
cancel the purchase and hold the investor responsible for any losses or fees
incurred. The Trust reserves the right in its sole discretion to suspend the
availability of any Fund's shares and to reject any purchase requests.
Certificates for Fund shares are not issued.

Shares of each Fund are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the Transfer
Agent. Net asset value per share is determined as of the close of regular
trading on the New York Stock Exchange ("NYSE") (currently 4:00 p.m., Eastern
Standard Time), on each day the NYSE is open for business (a "Business Day").
Currently, the weekdays on which the NYSE is closed are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

23 PROSPECTUS
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expenses to each class as appropriate. The net asset value of each class of
shares is expected to fluctuate daily and is expected to differ. The Master
Portfolio's investments are valued each Business Day generally by using
available market quotations or at fair value determined in good faith by BGFA
pursuant to guidelines approved by MIP's Board of Trustees. For further
information regarding the methods employed in valuing each Master Portfolio's
investments, see "Determination of Net Asset Value" in the SAI.

Purchase orders that are received by the Transfer Agent before the close of
regular trading on the NYSE generally are executed on the same day. Orders
received by the Transfer Agent after the close of regular trading on the NYSE
are executed on the next Business Day.

Federal regulations require that an investor provide a valid taxpayer
identification number ("TIN"), which is usually the investor's social security
number or employee identification number, upon opening or reopening an account.
See "Dividends, Distributions and Taxes" for further information concerning this
requirement. Failure to furnish a valid TIN to the Trust could subject the
investor to penalties imposed by the IRS.

You may buy Fund shares on any Business Day by any of the methods described
below.

INITIAL PURCHASES BY WIRE
1. Telephone toll free 1-800-222-8222. Give the name of the Fund in which an
investment is being made, and the name(s) in which the shares are to be
registered, address, TIN, amount to be wired, name of the wiring bank and
name and telephone number of the person to be contacted in connection with
the order. Some banks may impose wiring fees.

2. Instruct the wiring bank to transmit the specified amount in federal funds
($1,000 or more) to:

Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000587
Attention: Stagecoach Trust (Name of Fund -- Retail Class)
Account Name(s): (name(s) in which to be registered)
Account Number: (if investing into an existing account)

PROSPECTUS 24
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3. A completed Account Application should be mailed, or sent by telefacsimile
with the original subsequently mailed, to the following address immediately
after the funds are wired and must be received and accepted by the Transfer
Agent before an account can be opened:

Wells Fargo Bank, N.A.
Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-543-9538

4. Share purchases are effected at the net asset value next determined after the
Account Application is received and accepted.

INITIAL PURCHASES BY MAIL
1. Complete an Account Application. Indicate the services to be used.

2. Mail the Account Application and a check for $1,000 or more, payable to
"Stagecoach Trust/(Name of Fund -- Retail Class)," to the address above.

AUTOSAVER PLAN
The Trust's AutoSaver Plan provides you with a convenient way to establish and
automatically add to a Fund account on a monthly basis. To participate in the
AutoSaver Plan, you must specify an amount ($100 or more) to be withdrawn
automatically by the Transfer Agent on a monthly basis from an account with a
bank designated in your Account Application and approved by the Transfer Agent
("Approved Bank Account"). You may open an Approved Bank Account with Wells
Fargo Bank. The Transfer Agent withdraws and uses the amount you designate to
purchase specified shares of the designated Fund on your behalf each month on or
about the day that you have selected, or, if you have not selected a day, on or
about the 20th day of each month. The Transfer Agent requires a minimum of ten
(10) Business Days to implement your AutoSaver Plan purchases. There are no
separate fees charged to you by the Funds for participating in the AutoSaver
Plan.

You may change your investment amount, or the date on which your AutoSaver
purchase is effected, suspend purchases or terminate participation in the Auto
Saver Plan at any time by providing written notice to the Transfer Agent at
least five (5) Business Days prior to any scheduled transaction. Participation
in the AutoSaver Plan will be terminated automatically if an Approved Bank
account balance is insufficient to make a scheduled withdrawal, or if either the
Approved Bank Account or Fund account is closed.

TAX-DEFERRED RETIREMENT PLANS
You may be entitled to invest in Shares of a Fund through a tax-deferred
retirement plan. Contact a Shareholder Servicing Agent for materials describing
plans available through it, and their benefits, provisions and fees related to
such plans. The minimum

25 PROSPECTUS
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initial amount for Fund Shares acquired through a plan is $250 (the minimum
initial investment amount is not applicable if you participate in ExpressInvest
through a Plan Account).

Pursuant to the Internal Revenue Code of 1986, as amended (the "Code"), an
individual who is not an active participant (and who does not have a spouse who
is an active participant) in certain types of retirement plans ("qualified
retirement plans") may deduct contributions to an individual retirement account
("IRA"), up to specified limits. Investment earnings in the IRA will be
tax-deferred until withdrawn, at which time the individual may be in a lower tax
bracket.

The maximum annual deductible contribution to an IRA for individuals under age
seventy and a half is 100% of includible compensation up to a maximum of (i)
$2,000 for single individuals; (ii) $4,000 for a married couple when both
spouses earn income; and (iii) $2,250 when one spouse earns, or elects for IRA
purposes to be treated as earning, no income (together the "IRA contribution
limits").

The IRA deduction is also available for single individual taxpayers and
married couples who are active participants in qualified retirement plans but
who have adjusted gross incomes which do not exceed certain specified limits. If
their adjusted gross income exceeds these limits, the amount of the deductible
contribution is phased down and eventually eliminated.

Any individual who works may make nondeductible contributions to an IRA in
addition to any deductible contributions. Total aggregate deductible and
nondeductible contributions are limited to the IRA contribution limits discussed
above. Aggregate contributions in excess of the applicable IRA contribution
limits are "excess contributions." In addition, contributions made to an IRA for
the year in which an individual attains the age of seventy and a half, or any
year thereafter, are also excess contributions. Excess contributions are subject
to a 6% excise tax penalty which is charged each year that the excess
contribution remains in the IRA.

An employer also may contribute to an individual's IRA by establishing a
Simplified Employee Pension Plan, known as a SEP-IRA, through a Shareholder
Servicing Agent. Participating employers may make an annual contribution in an
amount up to the lesser of 15% of earned income or $22,500, subject to certain
provisions of the Code. Investment earnings will be tax-deferred until
withdrawn.

The foregoing discussion regarding IRAs is based upon the Code and federal
regulations in effect as of the date of this Prospectus and summarizes only some
of the important federal income tax considerations generally affecting IRA
contributions made by individuals or their employers. It is not intended as a
substitute for careful tax planning. You should consult your tax advisor with
respect to your specific tax situation as well as with respect to state and
local taxes. Further tax-related information is available in the "Dividends,
Distributions and Taxes" section of this Prospectus and in the SAI.

PROSPECTUS 26
<PAGE> 86

A Shareholder Servicing Agent also may offer other types of tax-deferred or
tax-advantaged plans, including a Keogh retirement plan for self-employed
professional persons, sole proprietors and partnerships.

Shares of each Fund also are offered to employee benefits plans, including,
but not limited to, retirement plans ("Benefit Plans"), that have appointed one
of the Trust's Shareholder Servicing Agents as such plan's trustee or investment
manager ("Plan Trustee"). Benefit Plans include plans qualified under Section
401(a) of the Code ("Qualified Plans"). Other Benefit Plans that are eligible to
invest in Fund shares include health and welfare plans and certain executive
deferred compensation plans. For additional information about Benefit Plans that
may be eligible to invest in Fund shares, prospective investors should contact a
Shareholder Servicing Agent.

Application materials for opening a tax-deferred retirement plan can be
obtained from a Shareholder Servicing Agent. Completed tax-deferred retirement
plan applications should be returned to the investor's Shareholder Servicing
Agent for approval and processing. If an investor's tax-deferred retirement plan
application is incomplete or improperly filled out, there may be a delay before
the Fund account is opened. Certain features described herein, such as the
AutoSaver Plan, may not be available to individuals or entities who invest
through a tax-deferred retirement plan. Investors should consult their
Shareholder Servicing Agent.

ADDITIONAL PURCHASES
You may make additional purchases of $100 or more by instructing the Fund's
Transfer Agent to debit your Approved Bank Account by wire by using the
procedures described under initial purchases by wire, above, or by mail with a
check payable to "Stagecoach Funds/(Name of Fund -- Retail Class)" to the above
address. Write your Fund account number on the check and include the detachable
stub from your Statement of Account or a letter providing your Fund account
number.

PURCHASES THROUGH SELLING AGENTS
You may place a purchase order for shares of the Funds through a broker/dealer
or financial institution which has entered into a Selling Agreement with
Stephens, as the Funds' Distributor ("Selling Agent").

If your purchase order is placed by the close of trading on the NYSE, the
purchase order generally is executed on the same day if the order is received by
the Transfer Agent before the close of business. If your purchase order is
received by a Selling Agent after the close of trading on the NYSE or by the
Transfer Agent after the close of business, then your purchase order is executed
on the next Business Day. Because payment for shares is not due until settlement
date, normally three Business Days after your order is placed, the Selling Agent
might benefit from temporary use of your payment.

The Selling Agent is responsible for the prompt transmission of your purchase
order to the Funds. A financial institution acting as a Selling Agent,
Shareholder Servicing Agent or in certain other capacities may be required to
register as a dealer pursuant to

27 PROSPECTUS
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applicable state securities laws, which may differ from federal law and any
interpretations expressed herein.

PURCHASES THROUGH SHAREHOLDER SERVICING AGENTS
Purchase orders for Fund shares may be transmitted to the Transfer Agent
through a Shareholder Servicing Agent, such as Wells Fargo Bank.

The Shareholder Servicing Agent may transmit a purchase order to the Transfer
Agent, on your behalf, including a purchase order for which payment is to be
transferred from an Approved Bank Account or wired from a financial institution.
If your order is transmitted by the Shareholder Servicing Agent, on your behalf,
to the Transfer Agent before the close of trading on the NYSE, the purchase
order will be executed on the same day. If your Shareholder Servicing Agent
transmits your purchase order to the Transfer Agent after the close of trading
on the NYSE, then the order generally is executed on the next Business Day
following the day your order is received. The Shareholder Servicing Agent is
responsible for the prompt transmission of your purchase order to the Transfer
Agent.

STATEMENTS AND REPORTS

HOW TO REDEEM SHARES

GENERAL
You may redeem all or a portion of your Retail Shares on any Business Day
without any charge by the Trust. The redemption price of the shares is the next
determined net asset value of the relevant Fund calculated after the Trust has
received a redemption request in proper form. Redemption proceeds may be more or
less than the amount invested depending on the relevant Fund's net asset value
at the time of purchase and redemption. Redemption of Fund shares ordinarily is
treated as a sale or exchange for federal income tax purposes and, therefore, a
redeeming shareholder may recognize a taxable gain or loss.

PROSPECTUS 28
<PAGE> 88

period during which the Securities and Exchange Commission by order permits
deferral of redemptions for the protection of Fund shareholders. In addition,
the Trust may defer payment of a shareholder's redemption until reasonably
satisfied that such shareholder's investments made by check have been collected
(which can take up to ten (10) days from the purchase date). Payment of
redemption proceeds may be made in portfolio securities, subject to regulation
by some state securities commissions. Such redemptions ordinarily will be
taxable.

Telephone redemption or exchange privileges are made available to shareholders
automatically upon opening an account, unless the shareholder specifically
declines the privileges. These privileges authorize the Transfer Agent to act on
telephone instructions from any person representing himself or herself to be the
investor and reasonably believed by the Transfer Agent to be genuine. The Trust
requires the Transfer Agent to employ reasonable procedures, such as requiring a
form of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Trust or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent instructions. Neither
the Trust nor the Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine.

During times of drastic economic or market conditions you may experience
difficulty in contacting the Transfer Agent by telephone to request a redemption
or exchange of Fund shares. In such cases, you should consider using the other
redemption procedures made available to you. Use of these other redemption
procedures may result in your redemption request being processed at a later time
than it would have been if telephone redemption had been used. During the delay,
a LifePath Fund's net asset value may fluctuate.

Due to the high cost of maintaining Fund accounts with small balances, the
Trust reserves the right to close an investor's account and send the proceeds to
such investor if the balance falls below $1,000 because of a redemption
(including a redemption of Fund shares after an investor has made only the
$1,000 minimum initial investment). However, investors will be given 30 days'
notice to make an additional investment to increase their account balance to
$1,000 or more. Plan Accounts are not subject to minimum Fund account balance
requirements.

Redemption orders that are received by the Transfer Agent before the close of
regular trading on the NYSE generally are executed at the net asset value
determined as of the close of regular trading on the NYSE on that day.
Redemption orders that are received by the Transfer Agent after the close of
trading on the NYSE are executed on the next Business Day.

REDEMPTIONS BY MAIL
1. Write a letter of instruction. Indicate the dollar amount or number of Fund
shares to be redeemed, the Fund account number and TIN.

29 PROSPECTUS
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2. Sign the letter in exactly the same way the account is registered. If there
is more than one owner of the shares, all owners must sign.

3. If shares to be redeemed have a value of $5,000 or more, or redemption
proceeds are to be paid to someone other than you at your address of record
or your Approved Bank Account, the signature(s) must be guaranteed by an
"eligible guarantor institution," which generally includes a commercial
bank whose deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC"), a trust company, a member firm of a domestic stock
exchange, a savings association, or a credit union that is authorized by
its charter to provide a signature guarantee. Signature guarantees by
notaries public are not acceptable. Further documentation may be requested
from corporations, administrators, executors, personal representatives,
trustees or custodians.

4. Mail the redemption letter to the Transfer Agent at the mailing address set
forth under "How to Buy Shares - Initial Purchases By Wire."

Unless other instructions are given in proper form, a check for the redemption
proceeds is sent to your address of record.

SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan provides you with a convenient way to have Fund
shares redeemed from your account and the proceeds distributed to you on a
monthly basis. You may participate in the Systematic Withdrawal Plan only if you
have a Fund account valued at $10,000 or more as of the date of your election to
participate, you have an account at an Approved Bank, your dividends and capital
gain distributions are being reinvested automatically, and you are not
participating in the AutoSaver Plan at any time while participating in the
Systematic Withdrawal Plan. You may specify an amount ($100 or more) to be
distributed by check to your address of record or deposited in the Approved Bank
account designated in your Account Application. The Transfer Agent redeems
sufficient shares and mails or deposits redemption proceeds as instructed on or
about the fifth Business Day prior to the end of each month. There are no
separate fees charged to you by the Fund for participating in the Systematic
Withdrawal Plan.

It may take up to ten (10) days after receipt of your request to establish
your participation in the Systematic Withdrawal Plan. You may change your
withdrawal amount, suspend withdrawals or terminate your participation in the
Systematic Withdrawal Plan at any time by providing written notice to the
Transfer Agent at least five (5) Business Days prior to any scheduled
transaction. Your participation in the Systematic Withdrawal Plan is terminated
automatically if your Fund account, or, in some cases, Approved Bank Account, is
closed.

EXPEDITED REDEMPTIONS BY MAIL OR TELEPHONE
You may request an expedited redemption of Fund shares by letter, in which
case your receipt of redemption proceeds, but not the Fund's receipt of your
redemption request, would be expedited. Telephone redemption or exchange
privileges are made available

PROSPECTUS 30
<PAGE> 90

to you automatically upon the opening of an account unless you decline the
privilege. You also may request an expedited redemption of Fund shares by
telephone on any Business Day, in which case both your receipt of redemption
proceeds and the Fund's receipt of your redemption request would be expedited.

You may call 1-800-222-8222 to request expedited redemption by telephone.

You may mail an expedited redemption request to the Transfer Agent at the
mailing address set forth under "How to Buy Shares -- Initial Purchases by
Wire."

Upon request, proceeds of expedited redemptions of $5,000 or more are wired or
credited to your Approved Bank Account or wired to the Selling Agent designated
in the Account Application. The Trust reserves the right to impose a charge for
wiring redemption proceeds. When proceeds of your expedited redemption are to be
paid to someone else, to an address other than that of record, or to an Approved
Bank Account or Selling Agent that you have not predesignated in your Account
Application, the expedited redemption request must be made by letter and the
signature(s) on the letter must be guaranteed, regardless of the amount of the
redemption. If your expedited redemption request is received by the Transfer
Agent on a Business Day, your redemption proceeds are transmitted to your
Approved Bank Account or Selling Agent on the next Business Day (assuming your
investment check has cleared as described above), absent extraordinary
circumstances. Such extraordinary circumstances could include those described
above as potentially delaying redemptions, and also could include situations
involving an unusually heavy volume of wire transfer orders on a national or
regional basis or communication or transmittal delays that could cause a brief
delay in the wiring or crediting of funds. A check for proceeds of less than
$5,000 is mailed to your address of record or, at your election, credited to
your Approved Bank Account.

During periods of drastic economic or market activity or changes, you may
experience problems implementing an expedited redemption by telephone. In the
event you are unable to reach the Transfer Agent by telephone, you should
consider using overnight mail to implement an expedited redemption. The Funds
reserve the right to modify or terminate the expedited telephone redemption
privilege at any time.

REDEMPTIONS THROUGH SELLING AGENTS
If your redemption order is received by a Selling Agent before the close of
trading on the NYSE and received by the Transfer Agent before the close of
business on the same day, the order is executed at the net asset value
determined as of the close of trading on the NYSE on that day. If your
redemption order is received by a Selling Agent after the close of trading on
the NYSE, or not received by the Transfer Agent prior to the close of business,
your order is executed at the net asset value determined as of the close of
trading on the NYSE on the next Business Day.

The Selling Agent is responsible for the prompt transmission of your
redemption order to the Funds.

31 PROSPECTUS
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Unless you have made other arrangements with a Selling Agent, and the Transfer
Agent has been informed of such arrangements, net proceeds of a redemption order
made by you through a Selling Agent are credited to an account with an Approved
Bank that you have designated in your Account Application. If no such account is
designated, a check for the net redemption proceeds is mailed to your address of
record or, if such address is no longer valid, the net redemption proceeds are
credited to your account with the Selling Agent. You may request a check from
the Selling Agent or may elect to retain the net redemption proceeds in such
account. The Selling Agent may charge you a service fee. In addition, it may
benefit from the use of your redemption proceeds until the check it issues to
you has cleared or until such proceeds have been disbursed or reinvested on your
behalf.

REDEMPTIONS THROUGH SHAREHOLDER SERVICING AGENTS
You may request a redemption of Fund shares through your Shareholder Servicing
Agent. If your redemption order is transmitted by the Shareholder Servicing
Agent, on your behalf, to the Transfer Agent before the close of regular trading
on the NYSE, the redemption order is executed at the net asset value determined
as of the close of regular trading on the NYSE on that day. If your Shareholder
Servicing Agent transmits your redemption order to the Transfer Agent after the
close of trading on the NYSE, then your order is executed on the next Business
Day following the date your order is received. The Shareholder Servicing Agent
is responsible for the prompt transmission of redemption orders to the Funds.

Unless you have made other arrangements with your Shareholder Servicing Agent,
and the Transfer Agent has been informed of such arrangements, proceeds of a
redemption order made by you through your Shareholder Servicing Agent are
credited to your Approved Bank Account. If no such account is designated, a
check for the proceeds is mailed to your address of record or, if such address
is no longer valid, the proceeds are credited to your account with your
Shareholder Servicing Agent or to another account designated in your agreement
with your Shareholder Servicing Agent. The Shareholder Servicing Agent may
charge you a fee. In addition, the Shareholder Servicing Agent may benefit from
the use of proceeds credited to your account until any check it issues to you
has cleared or until such proceeds have been disbursed or reinvested on your
behalf.

EXCHANGE PRIVILEGE

The exchange privilege enables you to purchase, in exchange for shares of a
Fund, shares of the same class of one of the other Funds offered by this
Prospectus or shares of certain other investment companies advised by Wells
Fargo Bank, provided such shares are offered for sale in your state of
residence. The exchange privilege may be expanded or modified in the future. You
will be notified of any such change. Before any exchange into a fund offered by
another prospectus, you must obtain and should review a copy of

PROSPECTUS 32
<PAGE> 92

the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained from Stephens.

Shares are exchanged at the next determined net asset value; however, a sales
load may be charged with respect to exchanges into a fund sold with a sales
load. The dollar amount of shares you exchange generally must meet the minimum
initial and/or subsequent investment amounts of the fund from which you are
exchanging. If the value of your investment in the shares of the fund from which
you are exchanging has been reduced below the minimum initial investment amount
by changes in market conditions or sales charges (and not by redemptions), you
may carry over the shares you acquire. No fees currently are charged
shareholders directly in connection with exchanges although the Trust reserves
the right, upon not less than 60 days' written notice, to charge shareholders a
nominal exchange fee in accordance with rules promulgated by the SEC.

The Trust reserves the right to limit the number of times shares may be
exchanged and to reject in whole or in part any exchange request into a Fund
when management believes that such action would be in the best interests of the
Fund's other shareholders, such as when management believes such action would be
appropriate to protect such Fund against disruptions in portfolio management
resulting from frequent transactions by those seeking to time market
fluctuations. Any such rejection will be made by management on a prospective
basis only, upon notice to the shareholder given not later than 10 days
following such shareholder's most recent exchange. The exchange privilege may be
modified or terminated at any time upon 60 days' written notice to shareholders.

DIVIDENDS AND DISTRIBUTIONS

Each Fund declares and pays quarterly dividends of substantially all of its
net investment income. Each Fund's net investment income available for
distribution to the holders of the Retail Shares will be reduced by the amount
of the distribution-related expenses payable under the Distribution Plan. Each
Fund makes distributions from any net realized gains at least once a year, in
all events in a manner consistent with the provisions of the 1940 Act and the
Code. No Fund will make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have expired. Dividends
are automatically reinvested in additional Fund shares at net asset value,
unless payment in cash has been requested.

Dividends and capital gain distributions have the effect of reducing the net
asset value per share by the amount distributed on the record date. Although
such a dividend or

33 PROSPECTUS
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distribution paid to you on newly issued shares shortly after purchase would
represent, in substance, a return of capital, the dividend or distribution would
consist of net investment income or net realized capital gain and, accordingly,
would be taxable to you.

DIVIDEND AND DISTRIBUTION OPTIONS

When you fill out your Account Application, you can choose from the following
dividend and distribution options:

A. The Automatic Reinvestment Option provides for the reinvestment of your
dividends and capital gain distributions in additional shares of the same class
of the Fund which paid such dividends or capital gain distributions. Dividends
and distributions declared in a month generally are reinvested at NAV on the
last Business Day of such month. You are assigned this option automatically if
you make no choice on your Account Application.

B. The Fund Purchase Option lets you use your dividends and/or capital gain
distributions from the Funds to purchase, at NAV plus any applicable sales
charge, shares of another fund in the Stagecoach Family of Funds offered in your
state of residence with which you have an established account that has met the
applicable minimum initial investment requirement.

C. The Automatic Clearing House Option permits you to have dividends and
capital gain distributions deposited in your Approved Bank Account. In the event
your Approved Bank Account is closed and such distribution is returned to the
Funds' dividend disbursing agent, the distribution will be reinvested in your
Fund account at the NAV next determined after the distribution has been resumed.
Your Automatic Clearing House Option will be converted to the Automatic
Reinvestment Option.

D. The Check Payment Option lets you receive a check for all dividends and/or
capital gain distributions, which is mailed either to your designated address or
your designated Approved Bank shortly following declaration. If the U.S. Postal
Service cannot deliver such checks, or if such checks remain uncashed for six
months, those checks will be reinvested in your Fund account at the NAV next
determined after the earlier of the date the checks have been returned to the
dividend disbursing agent or the date six months after the payment of such
dividend or distribution. Your Check Payment Option will be converted to the
Automatic Reinvestment Option.

The Company takes reasonable efforts to locate investors whose checks are
returned or uncashed after six months.

FEDERAL TAX INFORMATION

PROSPECTUS 34
<PAGE> 94

applicable provisions of the Code, each Fund will not be subject to federal
income tax with respect to its net investment income and net realized capital
gains distributed to its shareholders.

Dividends paid by a Fund derived from net investment income and distributions
from any net realized short-term gains of such Fund generally are taxable to
U.S. investors as ordinary income, whether or not such dividends are reinvested
in additional Fund shares. Distributions from any net realized long-term gains
generally are taxable to U.S. investors as long-term capital gain for federal
income tax purposes, regardless of how long shareholders have held their shares
and whether such distributions are received in cash or reinvested in additional
Fund shares.

Dividends paid by a Fund to a foreign investor generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the foreign investor
claims the benefits of a lower rate specified in a tax treaty. Capital gain
distributions paid by a Fund to a foreign investor, as well as the proceeds of
any redemptions from a foreign investor's Fund account, regardless of the extent
to which gain or loss may be recognized, will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies a
non-U.S. residency status.

Notice as to the tax status of your dividends and capital gain distributions
will be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and capital gain
distributions, if any, paid during the year.

Each Fund may be required to withhold, subject to certain exemptions, at a
rate of 31% ("backup withholding") on dividends, capital gain distributions, and
redemption proceeds (including proceeds from exchanges) paid or credited to an
individual shareholder, unless a shareholder certifies that the TIN provided is
correct and that the shareholder is not subject to backup withholding, or the
IRS notifies the Fund that the shareholder's TIN is incorrect or the shareholder
is subject to backup withholding. Such tax withheld does not constitute an
additional tax imposed on the shareholder, and may be claimed as a tax payment
on the shareholder's federal income tax return.

The foregoing discussion regarding federal income taxes, is based on tax laws
and federal regulations which were in effect as of the date of this Prospectus
and summarizes only some of the important federal income tax considerations
generally affecting a Fund and its shareholders. It is not intended as a
substitute for careful tax planning; you should consult your tax advisor with
respect to your specific tax situation as well as with respect to state and
local taxes. Further tax information is contained in the SAI.

35 PROSPECTUS
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PERFORMANCE INFORMATION

Cumulative total return of a class of shares is computed on a per share basis
and assumes the reinvestment of dividends and distributions. Cumulative total
return of a class of shares generally is expressed as a percentage rate which is
calculated by combining the income and principal changes for a specified period
and dividing by the net asset value per share at the beginning of the period.
Advertisements may include the percentage rate of total return of a class of
shares or may include the value of a hypothetical investment in a class of
shares at the end of the period which assumes the application of the percentage
rate of total return.

Performance of a class of shares varies from time to time, and past results
are not predictive of future performance. Investors should remember that
performance is a function of the type and quality of portfolio securities held
by the Master Portfolio in which the Fund invests and is affected by operating
expenses. Performance information, such as that described above, may not provide
a basis for comparison with other investments or other investment companies
using a different method of calculating performance.

Comparative performance information may be used from time to time in
advertising or marketing a Fund's shares, including data from Lipper Analytical
Services, Inc., Bank Rate Monitor, Bond 20-Bond Index, Moody's Bond Survey Bond
Index, Lehman Brothers Aggregate Bond Index and components thereof,
IBC/Donoghue's Money Fund Report, Standard & Poor's 500 Stock Index, Wilshire
5000 Index, the Dow Jones Industrial Average, CDA Investment Technologies, Inc.,
Wiesenberger Investment Companies Service, Mutual Fund Values; Mutual Fund
Forecaster, Schabacker Investment Management, Inc., Morningstar, Inc. and other
industry publications.

Total return quotations are computed separately for each class of the Funds'
shares. Because of the difference in the fees and expenses borne by the Retail
Shares of the

PROSPECTUS 36
<PAGE> 96

Funds, the return on such shares can be expected, at any given time, to be lower
than the return on Institutional Shares.

Additional information about the performance of each Fund is contained in the
Funds' Annual Report. The Annual Report may be obtained free of charge by
calling the Trust at 1-800-222-8222.

GENERAL INFORMATION

The Trust was organized as an unincorporated business trust under the laws of
the Commonwealth of Massachusetts pursuant to an Agreement and Declaration of
Trust (the "Trust Agreement") dated May 14, 1993. The Trust is authorized to
issue an unlimited number of shares of beneficial interest. Each LifePath Fund
of the Trust is comprised of two classes of shares - Retail Class and
Institutional Class. Each share has one vote. Institutional Class shares are no
longer offered to the public, although a limited number of such shares were
outstanding as of the date of this Prospectus.

To date, the Board of Trustees has authorized the creation of ten separate
portfolios of shares, including the five Funds offered hereby. All consideration
received by the Trust for shares of one of the portfolios and all assets in
which such consideration is invested belong to that portfolio (subject only to
the rights of creditors of the Trust) and are subject to the liabilities related
thereto. The income attributable to, and the expenses of, one portfolio are
treated separately from those of the other portfolios. The Trust has the ability
to create, from time to time, new portfolios without shareholder approval.

Under the terms of a License Agreement between the Trust and Wells Fargo Bank,
Wells Fargo Bank has granted the Trust a non-exclusive license to use the name
"Stagecoach." If the License Agreement is terminated, the Trust, at the request
of Wells Fargo Bank, will cease using the name "Stagecoach."

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust
Agreement disclaims shareholder liability for acts or obligations of the Trust
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or a Trustee. The
Trust Agreement provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust itself is unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by the
Trust, the shareholder paying such liability is entitled to reimbursement from
the general assets of the Trust. The Trustees intend to conduct the operations
of the Trust in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Trust. As described under
"Management of the Trust" in the SAI, the Trust ordinarily does not hold

37 PROSPECTUS
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shareholder meetings; however, shareholders under certain circumstances have the
right to call a meeting of shareholders for the purpose of voting to remove
Trustees.

The Transfer Agent maintains a record of each investor's ownership and sends
confirmations and statements of account.

Investor inquiries may be made by writing to the Trust c/o Wells Fargo Bank,
N.A. -- Shareholder Services, P.O. Box 7066, San Francisco, California
94120-7066 or by calling 1-800-222-8222.

PROSPECTUS 38
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<PAGE> 99

APPENDIX

PORTFOLIO SECURITIES

To the extent set forth in this Prospectus, each Fund through its investment
in the corresponding Master Portfolio may invest in the securities described
below.

U.S. GOVERNMENT OBLIGATIONS -- U.S. Government obligations include securities
issued or guaranteed as to principal and interest by the U.S. Government and
supported by the full faith and credit of the U.S. Treasury. U.S. Treasury
obligations differ mainly in the length of their maturity. Treasury bills, the
most frequently issued marketable government securities, have a maturity of up
to one year and are issued on a discount basis. U.S. Government obligations also
include securities issued or guaranteed by federal agencies or
instrumentalities, including government-sponsored enterprises. Some obligations
of agencies or instrumentalities of the U.S. Government are supported by the
full faith and credit of the United States or U.S. Treasury guarantees; others,
by the right of the issuer or guarantor to borrow from the U.S. Treasury; still
others by the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, only by the credit of
the agency or instrumentality issuing the obligation. In the case of obligations
not backed by the full faith and credit of the United States, the investor must
look principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities (including
government-sponsored enterprises) where it is not obligated to do so. In
addition, U.S. Government obligations are subject to fluctuations in market
value due to fluctuations in market interest rates. As a general matter, the
value of debt instruments, including U.S. Government obligations, declines when
market interest rates increase and rises when market interest rates decrease.
Certain types of U.S. Government obligations are subject to fluctuations in
yield or value due to their structure or contract terms.

FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES -- Each
Master Portfolio, through its investment in money market instruments, may invest
in obligations issued or guaranteed by one or more foreign governments or any of
their political subdivisions, agencies or instrumentalities that are determined
by BGFA to be of comparable quality to the other obligations in which such
Master Portfolio may invest. Such securities also include debt obligations of
supranational entities. Supranational entities include international
organizations designated or supported by governmental entities to promote
economic reconstruction or development and international banking institutions
and related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development Bank.
The percentage of a Master Portfolio's assets invested in securities issued by
foreign governments varies depending on the relative yields of such securities,
the economic

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and financial markets of the countries in which the investments are made and the
interest rate climate of such countries. Investments in such securities may be
subject to withholding and other taxes imposed by foreign governments.

Certificates of deposit are negotiable certificates evidencing the obligation
of a bank to repay funds deposited with it for a specified period of time.

Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time at a stated interest rate. Time deposits which
may be held by a Master Portfolio will not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC.

REPURCHASE AGREEMENTS -- Each Master Portfolio may enter into repurchase
agreements, wherein the seller of a security to a Master Portfolio agrees to
repurchase

PROSPECTUS A- 2
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that security from the Master Portfolio at a mutually agreed upon time and
place. MIP's custodian will have custody of, and will hold in a segregated
account, securities acquired by a Master Portfolio under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Master Portfolio entering into them. In an attempt
to reduce the risk of incurring a loss on a repurchase agreement, each Master
Portfolio enters into repurchase agreements only with federally regulated or
insured banks or primary government securities dealers reporting to the Federal
Reserve Bank of New York or their affiliates, or, under certain circumstances,
banks with total assets in excess of $5 billion or domestic broker/dealers with
total equity capital in excess of $100 million, with respect to securities of
the type in which such Master Portfolio may invest or government securities
regardless of their remaining maturities, and requires that additional
securities be deposited with it if the value of the securities purchased should
decrease below repurchase price. BGFA monitors on an ongoing basis the value of
the collateral to assure that it always equals or exceeds the repurchase price.
Certain costs may be incurred by a Master Portfolio in connection with the sale
of the securities if the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the securities, disposition of the securities by a
Master Series may be delayed or limited. Each Master Portfolio considers on an
ongoing basis the creditworthiness of the institutions with which it enters into
repurchase agreements.

UNREGISTERED NOTES -- Each Master Portfolio may purchase unsecured promissory
notes ("Notes") which are not readily marketable and have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), provided such
investments are consistent with such Master Portfolio's goal. No Master
Portfolio invests more than 15% of the value of its net assets in Notes and in
other illiquid securities.

A- 3 PROSPECTUS
<PAGE> 102

arrangements between the lender and borrower, it is not contemplated that such
instruments generally will be traded. There generally is no established
secondary market for these obligations, although they are redeemable at face
value. Accordingly, where these obligations are not secured by letters of credit
or other credit support arrangements, the Master Portfolios' right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Such obligations frequently are not rated by credit rating agencies and
each Master Portfolio may invest in obligations which are not so rated only if
BGFA determines that at the time of investment the obligations are of comparable
quality to the other obligations in which such Master Portfolio may invest.
BGFA, on behalf of each Master Portfolio, considers on an ongoing basis the
creditworthiness of the issuers of the floating- and variable-rate demand
obligations in such Master Portfolio's portfolio. No Master Portfolio invests
more than 15% of the value of its net assets in illiquid securities including
floating- or variable-rate demand obligations not exercisable within seven days.
Such obligations may be treated as liquid, provided that an active secondary
market exists.

PARTICIPATION INTERESTS -- Each Master Portfolio may purchase from financial
institutions participation interests in securities in which such Master
Portfolio may invest. A participation interest gives a Master Portfolio an
undivided interest in the security in the proportion that the Master Portfolio's
participation interest bears to the total principal amount of the security.
These instruments may have fixed, floating or variable rates of interest. If the
participation interest is unrated, or has been given a rating below that which
is permissible for purchase by the Master Portfolios, the participation interest
must be backed by an irrevocable letter of credit or guarantee of a bank, or the
payment obligation otherwise must be collateralized by U.S. Government
obligations, or, in the case of unrated participation interests, BGFA must have
determined that the instrument is of comparable quality to those instruments in
which such Master Portfolio may invest. Prior to a Master Portfolio's purchase
of any such instrument backed by a letter of credit or guarantee of a bank, BGFA
evaluates the creditworthiness of the bank, considering all factors which it
deems relevant, which generally may include review of the bank's cash flow;
level of short-term debt; leverage; capitalization; the quality and depth of
management; profitability; return on assets; and economic factors relative to
the banking industry. For certain participation interests, a Master Portfolio
has the right to demand payment, on not more than seven days' notice, for all or
any part of the Master Portfolio's participation interest in the security, plus
accrued interest. As to these instruments, each Master Portfolio intends to
exercise its right to demand payment only upon a default under the terms of the
security, as needed to provide liquidity to meet redemptions, or to maintain or
improve the quality of its investment portfolio.

PROSPECTUS A- 4
<PAGE> 103

Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC") or
are guaranteed by such governmental agencies as the Government National Mortgage
Association ("GNMA"). Regardless of the type of guarantee, all MBSs are subject
to interest rate risk (i.e., exposure to loss due to changes in interest rates).

GNMA MBSs include GNMA Mortgage Pass-Through Certificates (also known as
"Ginnie Maes") which are guaranteed as to the full and timely payment of
principal and interest by GNMA and such guarantee is backed by the authority of
GNMA to borrow funds from the U.S. Treasury to make payments under its
guarantee. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development and, as such, Ginnie Maes are backed
by the full faith and credit of the federal government. In contrast, MBSs issued
by FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates ("Fannie
Maes") which are solely the obligations of FNMA and are neither backed by nor
entitled to the full faith and credit of the federal government). FNMA is a
government-sponsored enterprise which is also a private corporation whose stock
trades on the NYSE. Fannie Maes are guaranteed as to timely payment of principal
and interest by FNMA. MBSs issued by FHLMC include FHLMC Mortgage Participation
Certificates ("Freddie Macs" or "PCs"). FHLMC is a government-sponsored
enterprise whose MBSs are solely obligations of FHLMC. Therefore, Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Bank and do
not constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. FHLMC guarantees timely payment of interest, but only ultimate
payment of principal due under the obligations it issues. FHLMC may, under
certain circumstances, remit the guaranteed payment of principal at any time
after default on an underlying mortgage, but in no event later than one year
after the guarantee becomes payable.

AMERICAN, EUROPEAN AND CONTINENTAL DEPOSITARY RECEIPTS -- Each LifePath Master
Portfolio assets may be invested in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs") and European Depositary Receipts
("EDRs"). These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs, which
are sometimes referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe typically by non-United States banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in the United States
securities markets and EDRs and CDRs in bearer form are designed for use in
Europe. Each LifePath Master Portfolio may invest in ADRs, EDRs and CDRs through
"sponsored" or "unsponsored" facilities. A sponsored facility is established
jointly by the issuer of the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without participation by the
issuer of the deposited security. Holders of unsponsored depositary receipts
generally bear all the costs of such facilities and the depositary of an
unsponsored facility frequently is under no obligation to

A- 5 PROSPECTUS
<PAGE> 104

distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities.

CONVERTIBLE SECURITIES -- Each LifePath Master Portfolio may purchase
fixed-income convertible securities, such as bonds or preferred stock, which may
be converted at a stated price within a specified period of time into a
specified number of shares of common stock of the same or a different issuer.
Convertible securities are senior to common stock in a corporation's capital
structure, but usually are subordinated to non-convertible debt securities.
While providing a fixed-income stream (generally higher in yield than the income
from a common stock but lower than that afforded by a non-convertible debt
security), a convertible security also affords an investor the opportunity,
through its conversion feature, to participate in the capital appreciation of
the common stock into which it is convertible.

ILLIQUID SECURITIES -- Each Master Portfolio may invest up to 15% of the value
of its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with its investment objective.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, participation interests that are not subject to the demand feature
described above, floating- and variable-rate demand obligations as to which a
Master Portfolio cannot exercise the related demand feature described above on
not more than seven days' notice and as to which there is no secondary market
and repurchase agreements providing for settlement in more than seven days after
notice. Disposing of illiquid securities generally will involve additional costs
and require additional time. However, if a substantial market of qualified
institutional investors develops pursuant to Rule 144A under the 1933 Act for
certain of these securities held by

PROSPECTUS A- 6
<PAGE> 105

a Master Portfolio, such Master Portfolio intends to treat such securities as
liquid securities in accordance with procedures approved by MIP's Board of
Trustees. Because it is not possible to predict with assurance how the market
for restricted securities pursuant to Rule 144A will develop, MIP's Board of
Trustees has directed BGFA to monitor carefully each Master Portfolio's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information. To
the extent that for a period of time, qualified institutional investors cease
purchasing such restricted securities pursuant to Rule 144A, a Master
Portfolio's investing in such securities may have the effect of increasing the
level of illiquidity in such Master Portfolio's portfolio during such period.

INVESTMENT TECHNIQUES

STOCK INDEX OPTIONS -- Each LifePath Master Portfolio may purchase and write
(i.e., sell) put and call options on stock indices as a substitute for
comparable market positions in the underlying securities. A stock index
fluctuates with changes in the market values of the stocks included in the
index. The aggregate premiums paid on all options purchased may not exceed 20%
of a LifePath Master Portfolio's total assets and the value of options written
or purchased may not exceed 10% of the value of a LifePath Master Portfolio's
total assets.

A- 7 PROSPECTUS
<PAGE> 106

FUTURES TRANSACTIONS -- IN GENERAL -- None of the LifePath Master Portfolios
will be a commodity pool. To the extent permitted by applicable regulations,
each LifePath Master Portfolio is permitted to use futures as a substitute for a
comparable market position in the underlying securities.

A futures transaction involves a firm agreement to buy or sell a commodity or
financial instrument at a particular price on a specified future date. Futures
contracts are traded on exchanges, where the exchange serves as the ultimate
counterparty for all contracts. Consequently, the only credit risk on futures
contracts is the creditworthiness of the exchange. Futures contracts are,
however, subject to market risk (i.e., exposure to adverse price changes).

Each LifePath Master Portfolio may trade futures contracts and may purchase
and write options on futures contracts in U.S. domestic markets, such as the
Chicago Board of Trade and the International Monetary Market of the Chicago
Mercantile Exchange, or, to the extent permitted under applicable law, on
exchanges located outside the United States, such as the London International
Financial Futures Exchange, the Deutscher Aktienindex and the Sydney Futures
Exchange Limited. See "Description of the Funds -- Risk
Considerations -- Foreign Futures Transactions."

PROSPECTUS A- 8
<PAGE> 107

Portfolio may be required to segregate cash, U.S. Government obligations or
other high quality money market instruments in connection with its futures
transactions in an amount generally equal to the entire value of the underlying
commitment.

Although each LifePath Master Portfolio may purchase or sell futures contracts
only if there is an active market for such contracts, no assurance can be given
that a liquid market will exist for any particular contract at any particular
time. Many futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of futures positions and potentially subjecting the relevant
LifePath Master Portfolio to substantial losses. If it is not possible, or the
LifePath Master Portfolio determines not to close a futures position in
anticipation of adverse price movements, it will be required to make daily cash
payments of variation margin.

An option on a futures contract gives the purchaser the right, in return for
the premium paid, to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer (i.e.,
seller) of the option is required upon exercise to assume an offsetting futures
position (a short position if the option is a call and a long position if the
option is a put). Upon exercise of the option, the assumption of offsetting
futures positions by both the writer and the holder of the option will be
accompanied by delivery of the accumulated cash balance in the writer's futures
margin account in the amount by which the market price of the futures contract,
at exercise,

A- 9 PROSPECTUS
<PAGE> 108

exceeds (in the case of a call) or is less than (in the case of a put) the
exercise price of the option on the futures contract.

STOCK INDEX FUTURES AND OPTIONS ON STOCK INDEX FUTURES -- Each LifePath Master
Portfolio may purchase and sell stock index futures contracts and options on
stock index futures contracts.

Each LifePath Master Portfolio also may write options on interest rate futures
contracts as part of closing purchase transactions to terminate its options
positions. No assurance can be given that such closing transactions can be
effected or concerning the degree of correlation between price movements in the
options on interest rate futures and price movements in the LifePath Master
Series' portfolio securities which are the subject of the transaction.

INTEREST RATE AND INDEX SWAPS -- Each LifePath Master Portfolio may enter into
interest rate and index swaps in pursuit of its investment objective. Interest
rate swaps involve the exchange by a LifePath Master Portfolio with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments). Index swaps
involve the exchange by a LifePath Master Portfolio with another party of cash
flows based upon the performance of an index or a portion of an index (usually
including dividends or income). In each case, the exchange commitments can
involve payments to be made in the same currency or in different currencies.

Each LifePath Master Portfolio usually enters into swaps on a net basis. In so
doing, only the net difference of the payment obligations is exchanged between
the counterparties. If a LifePath Master Portfolio enters into a swap, it
maintains a segregated account in an amount equivalent to the gross value of its
payment obligations unless the contract provides otherwise. If the other party
to such a transaction defaults on a swap, the Master Series has contractual
remedies pursuant to the agreements related to the transaction. In such a case,
the LifePath Master Portfolio's risk of loss consists of the net

PROSPECTUS A- 10
<PAGE> 109

amount of payments that the LifePath Master Portfolio contractually is entitled
to receive.

FOREIGN CURRENCY TRANSACTIONS -- Each LifePath Master Portfolio may engage in
currency exchange transactions either on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, or by entering into forward
contracts to purchase or sell currencies. A forward currency exchange contract
involves an obligation between two parties to exchange a specific currency at a
set price on a future date, which must be more than two days from the date of
the contract. These contracts are entered into in the interbank market conducted
directly between currency traders (typically commercial banks or other financial
institutions) and their customers.

Each LifePath Master Portfolio may combine forward currency exchange contracts
with investments in securities denominated in other currencies.

LENDING PORTFOLIO SECURITIES -- From time to time, each Master Portfolio may
lend securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. Such
loans may not exceed one-third of the value of the relevant Master Portfolio's
total net assets. In connection with such loans, each Master Portfolio receives
collateral consisting of cash, U.S. Government obligations or other high-quality
debt instruments which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. Each Master
Portfolio can increase its income through the investment of such collateral.
Each Master Portfolio continues to be entitled to receive payments in amounts
equal to the dividends, interest and other distributions payable on the loaned
security and receives interest on the amount of the loan. Such loans are
terminable at any time upon specified notice. A Master Portfolio might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with such Master Portfolio.

A- 11 PROSPECTUS
<PAGE> 110

Securities purchased on a when-issued or forward commitment basis and certain
other securities held in a Master Portfolio's portfolio are subject to changes
in value (both generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based upon the
public's perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities purchased on a
when-issued or forward commitment basis may expose the relevant Master Portfolio
to risk because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued or forward commitment basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of each Master Portfolio consisting of
cash, U.S. Government obligations or other high quality liquid debt securities
at least equal at all times to the amount of the when-issued or forward
commitments is established and maintained at MIP's custodian bank. Purchasing
securities on a forward commitment basis when a Master Portfolio is fully or
almost fully invested may result in greater potential fluctuation in the value
of such Master Portfolio's net assets and its net asset value per share.

BORROWING MONEY -- As a fundamental policy, each Master Portfolio is permitted
to borrow to the extent permitted under the 1940 Act. However, each Master
Portfolio currently intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to one-third of the value of its total net
assets (including the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the borrowing
is made. While borrowings exceed 5% of a Master Portfolio's total net assets,
such Master Portfolio will not make any investments.

PROSPECTUS A- 12
<PAGE> 111

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<PAGE> 112

INVESTMENT ADVISER

BZW Barclays Global Fund Advisors
San Francisco, California

CUSTODIAN

BZW Barclays Global Investors, N.A.
San Francisco, California

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
Little Rock, Arkansas

TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank, N.A.
San Francisco, California
LEGAL COUNSEL

Morrison & Foerster LLP
Washington, D.C.

INDEPENDENT AUDITORS

KPMG Peat Marwick LLP
San Francisco, California

FOR MORE INFORMATION ABOUT THE FUNDS WRITE OR CALL:

STAGECOACH FUNDS
C/O WELLS FARGO BANK, N.A. -
SHAREHOLDER SERVICES
P.O. BOX 7066
SAN FRANCISCO, CALIFORNIA 94120-7066
1-800-222-8222

STAGECOACH FUNDS:
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
- are NOT INSURED BY THE FDIC or U.S. Government
- are NOT obligations or deposits of Wells Fargo Bank
nor guaranteed by the Bank LOGO
- involve investment risk, including possible loss of
principal.
</TABLE>

LOGO
Printed on Recycled Paper LP0220 (6/96)
<PAGE> 113

LOGO
P.O. Box 7066
San Francisco, CA 94120-7066

STAGECOACH FUNDS:
- --------------------------------------------------------------------------------

LOGO
Printed on Recycled Paper LP0220 (6/96)
<PAGE> 114

<TABLE>
<S> <C>
------------------
LOGO BULK RATE
P.O. Box 7066 U.S. POSTAGE
San Francisco, CA 94120-7066 PAID
DALLAS, TEXAS
Permit No. 1808
------------------
- -------------------------------------------------------------------------------
STAGECOACH FUNDS:
-------------------------------------------------------------------------
- are NOT INSURED BY THE FDIC or U.S. Government
- are NOT obligations or deposits of Wells Fargo Bank
nor guaranteed by the Bank
- involve investment risk, including possible loss of LOGO
principal.
- -------------------------------------------------------------------------------
</TABLE>

LP0220 6/96
<PAGE> 115

STAGECOACH LIFEPATH(TM) FUNDS

LIFEPATH 2000(TM) FUND
LIFEPATH 2010(TM) FUND
LIFEPATH 2020(TM) FUND
LIFEPATH 2030(TM) FUND
LIFEPATH 2040(TM) FUND

PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 28, 1996

This Statement of Additional Information ("SAI"), which is not a
prospectus, supplements and should be read in conjunction with the current
Prospectus describing the LifePath 2000 Fund, LifePath 2010 Fund, LifePath 2020
Fund, LifePath 2030 Fund and LifePath 2040 Fund (the "LifePath Funds" or the
"Funds") of Stagecoach Trust (the "Trust"), also dated June 28, 1996, as it may
be revised from time to time. A copy of the Funds' Prospectus may be obtained
without charge by writing Stephens Inc. ("Stephens"), sponsor, administrator
and distributor, at 111 Center Street, Little Rock, Arkansas 72201, or by
calling at 1-800-643-9691.

As described in the Prospectus, each Fund invests all of its
assets in a separate master portfolio ("Master Portfolio") of Master Investment
Portfolio ("MIP") having the same investment objective as the corresponding
Fund. BZW Barclays Global Fund Advisors ("BGFA") serves as investment adviser
to each Master Portfolio. Prior to January 1, 1996, Wells Fargo Bank, N.A.
("Wells Fargo Bank") served as each Master Portfolio's investment adviser and
Wells Fargo Nikko Investment Advisors ("WFNIA") served as each Master
Portfolio's sub-investment adviser. BGFA was created by the reorganization of
WFNIA with and into an affiliate of Wells Fargo Institutional Trust Company
("WFITC"), the Master Portfolio's custodian. BGFA is now a subsidiary of WFITC
which, effective January 1, 1996, changed its name to BZW Barclays Global
Investors, N.A. ("BGI").

This SAI applies to both classes of shares of the LifePath Funds:
the Institutional Class ("Institutional Shares") and the Retail Class (the
"Retail Shares"). Net asset value, total return and yield quotations are
computed separately for each class of Fund shares. Because of the differences
in the fees and expenses borne by the Retail Class of the Funds, the
return/yield on such shares can be expected, at any given time, to be lower
than the return/yield on Institutional Shares. Distributions to the holders of
the Retail Class are reduced by the amount of distribution-related expenses
payable under the Distribution Plan for the Retail Class.

<PAGE> 116
TABLE OF CONTENTS
<TABLE>
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Page
----
<S> <C>

Investment Objectives and Management Policies . . . . . . . . . . . . . . . . 3
Management of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Management Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Purchase and Redemption of Shares . . . . . . . . . . . . . . . . . . . . . . 16
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . 17
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . 18
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Information About the Funds . . . . . . . . . . . . . . . . . . . . . . . . . 29
Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

<PAGE> 117

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES

General. Each Fund seeks to achieve its investment objective by
investing all of its assets in a corresponding Master Portfolio of MIP. A Fund
may withdraw its investment from such Master Portfolio at any time if the
Trust's Board of Trustees determines that it is in the best interest of the
Fund to do so. Since the investment characteristics of a Fund correspond
directly to those of the relevant Master Portfolio, the following is a
discussion of the various investment policies and techniques employed by each
corresponding LifePath Master Portfolio.

Portfolio Securities

Bank Obligations. Domestic commercial banks organized under
federal law are supervised and examined by the Comptroller of the Currency and
are required to be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation (the "FDIC").
Domestic banks organized under state law are supervised and examined by state
banking authorities, but are members of the Federal Reserve System only if they
elect to join. In addition, state banks whose certificates of deposit ("CDs")
may be purchased by each Master Portfolio are insured by the FDIC (although
such insurance may not be of material benefit to the Master Portfolio,
depending on the principal amount of the CDs of each bank held by the Master
Portfolio) and are subject to federal examination and to a substantial body of
federal law and regulation. As a result of federal or state laws and
regulations, domestic branches of domestic banks whose CDs may be purchased by
each Master Portfolio generally are required, among other things, to maintain
specified levels of reserves, are limited in the amounts which they can loan to
a single borrower and are subject to other regulations designed to promote
financial soundness. However, not all of such laws and regulations apply to
the foreign branches of domestic banks.

Obligations of foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks, such as CDs and time deposits ("TDs"), may be general obligations of the
parent banks in addition to the issuing branch, or may be limited by the terms
of a specific obligation and/or governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding and other taxes
on interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements that apply
to domestic banks, such as mandatory reserve requirements, loan limitations,
and accounting, auditing and financial record keeping requirements. In
addition, less information may be publicly available about a foreign branch of
a domestic bank or about a foreign bank than about a domestic bank.

Obligations of U.S. branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation or by federal or state regulation
as well as governmental action in the country in which the foreign bank has its
head office. A domestic branch of a foreign bank with assets in excess of $1
billion may be

3
<PAGE> 118

subject to reserve requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed in that state.

In addition, federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the appropriate regulatory authority, by depositing
assets with a designated bank within the relevant state, a certain percentage
of their assets as fixed from time to time by such regulatory authority; and
(2) maintain assets within the relevant state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank payable
at or through all of its agencies or branches within the state. The deposits
of federal and State Branches generally must be insured by the FDIC if such
branches take deposits of less than $100,000.

In view of the foregoing factors associated with the purchase of
CDs and TDs issued by foreign branches of domestic banks, by foreign
subsidiaries of domestic banks, by foreign branches of foreign banks or by
domestic branches of foreign banks, BGFA carefully evaluates such investments
on a case-by-case basis.

Each Master Portfolio may purchase CDs issued by banks, savings
and loan associations and similar thrift institutions with less than $1 billion
in assets, provided that such institutions are members of the FDIC, and further
provided such Master Portfolio purchases any such CD in a principal amount of
not more than $100,000, which amount would be fully insured by the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC. Interest payments on such a CD are not insured by the FDIC. No Master
Portfolio will own more than one such CD per such issuer.

Management Policies

Stock Index Options. Each LifePath Master Portfolio may purchase
and write (i.e., sell) put and call options on stock indices as a substitute
for comparable market positions in the underlying securities. Options on stock
indices are similar to options on stock except that (a) the expiration cycles
of stock index options are monthly, while those of stock options are currently
quarterly, and (b) the delivery requirements are different. Instead of giving
the right to take or make delivery of stock at a specified price, an option on
a stock index gives the holder the right to receive a cash "exercise settlement
amount" equal to (i) the amount, if any, by which the fixed exercise price of
the option exceeds, in the case of a put, or is less than, in the case of a
call, the closing value of the underlying index on the date of exercise,
multiplied by (ii) a fixed "index multiplier." Receipt of this cash amount
depends upon the closing level of the stock index upon which the option is
based being greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. The amount of cash received is equal to
such difference between the closing price of the index and the exercise price
of the option expressed in dollars multiplied by a specified multiplier. The
writer of the option is obligated, in return for the premium received, to make
delivery of this amount. The writer may offset a position in stock index
options prior to expiration by entering into a closing transaction on an
exchange or the writer may let the option expire unexercised.

4
<PAGE> 119

Futures Contracts and Options on Futures Contracts. The LifePath
Master Portfolios may enter into futures contracts and may purchase and write
options thereon. Upon the exercise of an option on a futures contract, the
writer of the option delivers to the holder of the option the futures position
and the accumulated balance in the writer's futures margin account, which
represents the amount by which the market price of the futures contract
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract. The potential loss
related to the purchase of options on futures contracts is limited to the
premium paid for the option (plus transaction costs). Because the value of the
option is fixed at the time of sale, there are no daily cash payments to
reflect changes in the value of the underlying contract; however, the value of
the option may change daily and that change would be reflected in the net asset
value of the relevant LifePath Master Portfolio.

Foreign Currency Transactions. If a LifePath Master Portfolio
enters into a foreign currency transaction or forward contract, such Master
Portfolio deposits, if required by applicable regulations, with the MIP's
custodian cash or high-grade debt securities in a segregated account of the
LifePath Master Portfolio in an amount at least equal to the value of the
Master Portfolio's total assets committed to the consummation of the forward
contract. If the value of the securities placed in the segregated account
declines, additional cash or securities is placed in the account so that the
value of the account equals the amount of the LifePath Master Portfolio's
commitment with respect to the contract.

At or before the maturity of a forward contract, a LifePath Master
Portfolio either may sell a portfolio security and make delivery of the
currency, or may retain the security and offset its contractual obligation to
deliver the currency by purchasing a second contract pursuant to which such
Master Portfolio obtains, on the same maturity date, the same amount of the
currency which it is obligated to deliver. If the Master Portfolio retains the
portfolio security and engages in an offsetting transaction, such Master
Portfolio, at the time of execution of the offsetting transaction, incurs a
gain or a loss to the extent that movement has occurred in forward contract
prices. Should forward prices decline during the period between the Master
Portfolio's entering into a forward contract for the sale of a currency and the
date it enters into an offsetting contract for the purchase of the currency,
the Master Portfolio realizes a gain to the extent the price of the currency it
has agreed to sell exceeds the price of the currency it has agreed to purchase.
Should forward prices increase, the Master Portfolio suffers a loss to the
extent the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.

The cost to a LifePath Master Portfolio of engaging in currency
transactions varies with factors such as the currency involved, the length of
the contract period and the market conditions then prevailing. Because
transactions in currency exchange usually are conducted on a principal basis,
no fees or commissions are involved. BGFA considers on an ongoing basis the
creditworthiness of the institutions with which a LifePath Master Portfolio
enters into foreign currency transactions. The use of forward currency
exchange contracts does not eliminate fluctuations in the underlying prices of
the securities, but it does establish a rate of exchange that can be achieved
in the future. If a devaluation generally is anticipated, the Master Portfolio
may not be able to contract to sell the currency at a price above the
devaluation level it anticipates.

5
<PAGE> 120

The purchase of options on currency futures allows a LifePath
Master Portfolio, for the price of the premium it must pay for the option, to
decide whether or not to buy (in the case of a call option) or to sell (in the
case of a put option) a futures contract at a specified price at any time
during the period before the option expires.

Future Developments. Each LifePath Master Portfolio may take
advantage of opportunities in the areas of options and futures contracts and
options on futures contracts and any other derivative investments which are not
presently contemplated for use by such Master Portfolio or which are not
currently available but which may be developed, to the extent such
opportunities are both consistent with a LifePath Master Portfolio's investment
objective and legally permissible for the Master Portfolio. Before entering
into such transactions or making any such investment, a LifePath Master
Portfolio would provide appropriate disclosure in its Prospectus or this Part
B.

Lending Portfolio Securities. To a limited extent, each Master
Portfolio may lend its portfolio securities to brokers, dealers and other
financial institutions, provided it receives cash collateral which is
maintained at all times in an amount equal to at least 100% of the current
market value of the securities loaned. By lending its portfolio securities, a
Master Portfolio can increase its income through the investment of the cash
collateral or by receipt of a loan premium from the borrower. For purposes of
this policy, each Master Portfolio considers collateral consisting of U.S.
Government obligations or irrevocable letters of credit issued by banks whose
securities meet the standards for investment by such Master Portfolio to be the
equivalent of cash. From time to time, a Master Portfolio may return to the
borrower, or to a third party which is unaffiliated with MIP, and which is
acting as a "placing broker," a part of the interest earned from the investment
of collateral received in exchange for securities loaned.

The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned: (1)
the Master Portfolio must receive at least 100% cash collateral from the
borrower; (2) the borrower must increase such collateral whenever the market
value of the securities loaned rises above the level of such collateral; (3)
the Master Portfolio must be able to terminate the loan at any time; (4) the
Master Portfolio must receive reasonable interest on the loan, as well as any
dividends, interest or other distributions payable on the loaned securities,
and any increase in market value; (5) the Master Portfolio may pay only
reasonable custodian fees in connection with the loan; and (6) while voting
rights on the loaned securities may pass to the borrower, the Master
Portfolio's Board of Trustees must terminate the loan and regain the right to
vote the securities if a material event adversely affecting the investment
occurs. These conditions may be subject to future modification.

Investment Restrictions. Each Fund and Master Portfolio has
adopted investment restrictions numbered 1 through 10 as fundamental policies.
These restrictions cannot be changed, as to a Fund or Master Portfolio, without
approval by the holders of a majority (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) of the outstanding voting securities of
such Fund or Master Portfolio, as the case may be. Whenever a Fund is
requested to vote on a fundamental policy of the Master Portfolio in which it
invests, such Fund holds a meeting of Fund shareholders and casts its votes as
instructed by such Fund's

6
<PAGE> 121

shareholders. Investment restrictions numbered 11 through 20 are not
fundamental policies and may be changed by vote of a majority of the Trustees
of the Trust or Master Portfolio, as the case may be, at any time. No Fund or
Master Portfolio may:

1. Invest more than 5% of its assets in the obligations of any
single issuer, except that up to 25% of the value of its total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or its
agencies or instrumentalities may be purchased, without regard to any such
limitation.

2. Hold more than 10% of the outstanding voting securities of
any single issuer. This Investment Restriction applies only with respect to
75% of its total assets.

3. Invest in commodities, except that each Fund or Master
Portfolio may purchase and sell (i.e., write) options, forward contracts,
futures contracts, including those relating to indices and options on futures
contracts or indices.

4. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but each Fund or Master
Portfolio may purchase and sell securities that are secured by real estate or
issued by companies that invest or deal in real estate.

5. Borrow money, except to the extent permitted under the 1940
Act. For purposes of this investment restriction, a Fund's or Master
Portfolio's entry into options, forward contracts, futures contracts, including
those relating to indices and options on futures contracts or indices shall not
constitute borrowing to the extent certain segregated accounts are established
and maintained by the Fund or Master Portfolio as described in the Prospectus.

6. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, each Fund or
Master Portfolio may lend its portfolio securities in an amount not to exceed
one-third of the value of its total assets. Any loans of portfolio securities
will be made according to guidelines established by the Securities and Exchange
Commission and the Board of Trustees of the Trust or Master Portfolio, as the
case may be.

7. Act as an underwriter of securities of other issuers,
except to the extent the Fund or Master Portfolio, as the case may be, may be
deemed an underwriter under the Securities Act of 1933, as amended, by virtue
of disposing of portfolio securities.

8. Invest 25% or more of its total assets in the securities of
issuers in any particular industry or group of closely related industries,
except that, in the case of each Fund or Master Portfolio, there shall be no
limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

9. Issue any senior security (as such term is defined in
Section 18(g) of the 1940 Act), except to the extent the activities permitted
in Investment Restriction Nos. 3, 5, 12 and 13

7
<PAGE> 122

may be deemed to give rise to a senior security or as otherwise permitted under
the rules and regulations or an exemptive order of the Securities & Exchange
Commission.

10. Purchase securities on margin, but each Fund or Master
Portfolio may make margin deposits in connection with transactions in options,
forward contracts, futures contracts, including those relating to indices, and
options on futures contracts or indices.

11. Invest in the securities of a company for the purpose of
exercising management or control, but each Fund or Master Portfolio will vote
the securities it owns in its portfolio as a shareholder in accordance with its
views.

12. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related to
the purchase of securities on a when-issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.

13. Purchase, sell or write puts, calls or combinations
thereof, except as may be described in the Funds' Prospectus and this Statement
of Additional Information.

14. Purchase securities of any company having less than three
years' continuous operations (including operations of any predecessors) if such
purchase would cause the value of its investments in all such companies to
exceed 5% of the value of its total assets.

15. Enter into repurchase agreements providing for settlement
in more than seven days after notice or purchase securities which are illiquid,
if, in the aggregate, more than 15%, in the case of a LifePath Fund and
LifePath Master Portfolio, of the value of its net assets would be so invested.
Although each Fund and LifePath Master Portfolio reserves the right to invest
up to 15% of the value of its net assets in repurchase agreements providing for
settlement in more than seven days after notice and in other illiquid
securities, as long as such Fund's shares are registered for sale in a state
that imposes a lower limit on the percentage of a Fund's assets that may be so
invested, such Fund and LifePath Master Portfolio will comply with the lower
limit. Each Fund currently is limited to investing up to 10% of the value of
its net assets in such securities due to limits applicable in several states.

16. Purchase securities of other investment companies, except
to the extent permitted under the 1940 Act.

17. Purchase, hold or deal in real estate limited partnerships.

18. Purchase warrants that exceed 2% of the value of the Fund's
or Master Portfolio's net assets, if those warrants are not listed on the New
York or American Stock Exchanges.

8
<PAGE> 123

19. Purchase or retain securities of any issuer if the
officers, trustees of the Trust or MIP, its advisers or managers owning
beneficially more than one-half of one percent of the securities of an issuer
together own beneficially more than five percent of the securities of that
issuer.

20. Engage in any short sales other than short sales against
the box.

As a fundamental policy, each Fund may invest, notwithstanding any
other investment restriction (whether or not fundamental), all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
restrictions as such Fund.

If a percentage restriction is adhered to at the time of
investment, a later change in percentage resulting from a change in values or
assets, except with respect to compliance with Investment Restriction No. 5,
will not constitute a violation of such restriction.

The Trust may make commitments more restrictive than the restrictions
listed above so as to permit the sale of shares of a Fund in certain states.
Should the Trust determine that a commitment is no longer in the best interest
of the Fund and its shareholders, the Trust reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the state involved.

MANAGEMENT OF THE TRUST

The following information supplements and should be read in
conjunction with the Prospectus section entitled "Management of the Funds."
Trustees and officers of the Trust, together with information as to their
principal business occupations during at least the last five years, are shown
below. The address of each, unless otherwise indicated, is 111 Center Street,
Little Rock, Arkansas 72201. Each Trustee who is deemed to be an "interested
person" of the Trust, as defined in the 1940 Act, is indicated by an asterisk.

Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>

Jack S. Euphrat, 74 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027.

*R. Greg Feltus, 45 Trustee, Senior Vice President of Stephens,
Chairman and Manager of Financial Services Group,
President President of Stephens Insurance Services Inc.; Senior Vice
President of Stephens Sports Management Inc.; and
President of Investors Brokerage Insurance Inc.
</TABLE>

9
<PAGE> 124

Thomas S. Goho, 54 Trustee T.B. Rose Faculty Fellow-Business,
321 Beechcliff Court Wake Forest University, Calloway
Winston-Salem, NC 27104 School of Business and Accounting. Associate Professor of
Finance of the School of Business and Accounting at Wake
Forest University since 1983.

*Zoe Ann Hines, 47 Trustee Senior Vice President of Stephens and Director of
Brokerage Accounting; and Secretary of Stephens Resource
Management.

*W. Rodney Hughes, 70 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

Robert M. Joses, 78 Trustee Private Investor.
47 Dowitcher Way
San Rafael, CA 94901

*J. Tucker Morse, 52 Trustee Private Investor; Real Estate Developer
10 Legrae Street Chairman of Renaissance Properties Ltd.,
Charleston, SC 29401 President of Morse Investment Corporation; and Co-Managing
Partner of Main Street Ventures.

Richard H. Blank, Jr., 40 Chief Associate of Financial Services
Operating Group of Stephens; Director of Stephens
Officer, Sports Management Inc.; and Director of
Secretary and Capo Inc.
Treasurer

</TABLE>

10
<PAGE> 125

COMPENSATION TABLE
For the Fiscal Year Ended February 29, 1996

Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- ---------------------- ------------------
<S> <C> <C>

Jack S. Euphrat 0 $39,000
Trustee

*R. Greg Feltus 0 0
Trustee

Thomas S. Goho 0 $39,000
Trustee

*Zoe Ann Hines 0 0
Trustee

*W. Rodney Hughes 0 $36,250
Trustee

Robert M. Joses 0 $38,250
Trustee

*J. Tucker Morse 0 $33,000
Trustee
</TABLE>

Trustees of the Trust are compensated annually by the Trust and by
all the registrants in the fund complex for their services as indicated above
and also are reimbursed for all out-of-pocket expenses relating to attendance
at board meetings. Each of the Trustees and the Principal Officer of the Trust
serves in the identical capacity as Directors/Trustees and/or Principal Officer
of Overland Express Funds, Inc., ("Overland") Stagecoach Funds, Inc.
("Stagecoach"), MasterWorks Funds Inc. ("MasterWorks," formerly, Stagecoach
Inc.), Master Investment Portfolio ("MIP"), Life & Annuity Trust, Master
Investment Trust and Managed Series Investment Trust ("MSIT"), each of which is
a registered open-end management investment company and each of which, prior to
January 1, 1996 and the reorganization of WFNIA was considered to be in the
same "fund complex," as such term is defined in Form N-1A under the 1940 Act,
as the Trust. Effective January 1, 1996, MIP, MSIT and MasterWorks are
considered to be members of the same fund complex and are no longer part of the
same fund complex as the Trust, Stagecoach, Overland, Life & Annuity Trust and
Master Investment Trust. The Trustees are compensated by other Companies and
Trusts within the fund complex for their services as Directors/Trustees to such
Companies and Trusts. Currently the Trustees do not receive any retirement
benefits or deferred compensation from the Trust or any other member of the
fund complex.

11
<PAGE> 126

As the date of this SAI, the Trustees and Principal Executive
Officer of the Trust as a group beneficially owned less than 1% of the
outstanding shares of the Trust.

MANAGEMENT ARRANGEMENTS

Investment Advisory Agreement. BGFA provides investment advisory
services to each Master Portfolio pursuant to separate Investment Advisory
Agreements (each a "BGFA Advisory Agreement") dated January 1, 1996 with MIP.
As to each Master Portfolio, the applicable BGFA Advisory Agreement is subject
to annual approval by (i) MIP's Board of Trustees or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of such
Master Portfolio, provided that in either event the continuance also is
approved by a majority of MIP's Board of Trustees who are not "interested
persons" (as defined in the 1940 Act) of MIP or BGFA, by vote cast in person at
a meeting called for the purpose of voting on such approval. As to each Master
Portfolio, the applicable BGFA Advisory Agreement is terminable without
penalty, on 60 days' written notice, by either party. The applicable BGFA
Advisory Agreements will terminate automatically, as to the relevant Master
Portfolio, in the event of its assignment (as defined in the 1940 Act).

Prior to January 1, 1996, Wells Fargo Bank provided investment
advisory services to each Master Portfolio pursuant to an Investment Advisory
Agreement (the "Advisory Agreement") dated February 25, 1994 with MIP.

For the fiscal year ended February 28, 1995 and the period
beginning March 1, 1995 and ended December 31, 1995, the portion of advisory
fees paid to Wells Fargo Bank by the corresponding Master Portfolio of each
LifePath Fund and the amount of such fees waived by Wells Fargo Bank that is
allocable to each Fund is shown below. For the period beginning January 1,
1996 and ended February 29, 1996, the portion of advisory fees paid to BGFA by
the corresponding Master Portfolio of each LifePath Fund and the amount of such
fees waived by BGFA that is allocable to each Fund is shown below.

<TABLE>
<CAPTION>
Fiscal Year 3/1/95 - 1/1/96-
End 2/28/95 12/31/95 2/29/96
----------- -------- -------
Fees Fees Fees Fees Fees Fees
Master Portfolio Paid Waived Paid Waived Paid Waived
- ---------------- ---- ------ ---- ------ ---- --------
<S> <C> <C> <C> <C> <C> <C>

LifePath 2000 Master Portfolio $217,676 $0 $363,537 $0 $ 99,511 $0
LifePath 2010 Master Portfolio $158,218 $0 $312,434 $0 $ 86,919 $0
LifePath 2020 Master Portfolio $252,413 $0 $520,296 $0 $141,075 $0
LifePath 2030 Master Portfolio $156,397 $0 $343,850 $0 $ 93,240 $0
LifePath 2040 Master Portfolio $189,121 $0 $503,315 $0 $148,324 $0
</TABLE>

Sub-Investment Advisory Agreement. Prior to January 1, 1996 WFNIA
provided sub-investment advisory services to each Master Portfolio pursuant to
the Sub-Investment Advisory Agreement (the "Sub-Advisory Agreement") dated
February 25, 1994 with Wells Fargo Bank.

12
<PAGE> 127

For the fiscal year ended February 28, 1995 and for the period
beginning March 1, 1995 and ended December 31, 1995, Wells Fargo Bank paid to
WFNIA the sub-advisory fees indicated below and WFNIA waived the amounts shown:

Fiscal Year 3/1/95 -
End 2/28/95 12/31/95
----------- --------
Fees Fees Fees Fees
Master Portfolio Paid Waived Paid Waived
- ---------------- ---- ------ ---- ------
<S> <C> <C> <C> <C>
LifePath 2000 Master Portfolio $159,494 $0 $261,344 $0
LifePath 2010 Master Portfolio $115,647 $0 $224,903 $0
LifePath 2020 Master Portfolio $184,341 $0 $374,802 $0
LifePath 2030 Master Portfolio $114,426 $0 $247,703 $0
LifePath 2040 Master Portfolio $138,511 $0 $361,673 $0
</TABLE>

Administration Agreement. The Trust has engaged Stephens to
provide certain administrative services. Pursuant to an Administration
Agreement dated February 25, 1994 with the Trust, Stephens provides as
administrative services, among other things: (i) general supervision of the
operation of the Trust and the Funds, including coordination of the services
performed by the investment adviser, transfer and dividend disbursing agent,
custodian, shareholder servicing agent(s), independent auditors and legal
counsel; (ii) general supervision of regulatory compliance matters, including
the compilation of information for documents such as reports to, and filings
with, the SEC and state securities commissions, and preparation of proxy
statements and shareholder reports for the Funds; and (iii) general supervision
relative to the compilation of data required for the preparation of periodic
reports distributed to the Trust's officers and Board of Trustees. Stephens
also furnishes office space and certain facilities required for conducting the
business of the Trust together with those ordinary clerical and bookkeeping
services that are not being furnished by the Trust's investment adviser.
Stephens also pays the compensation of the Trust's Trustees, officers and
employees who are affiliated with Stephens.

For the fiscal years ended February 28, 1995 and February 29,
1996, the Funds paid administrative fees to Stephens as follows:

FYE FYE
2/29/95 2/28/96
Fund Fees Paid Fees Paid
- ---- --------- ---------
<S> <C> <C>

LifePath 2000 Fund $39,834 $ 84,548
LifePath 2010 Fund $28,945 $ 72,832
LifePath 2020 Fund $46,153 $ 120,505
LifePath 2030 Fund $28,565 $ 79,564
LifePath 2040 Fund $34,460 $ 118,468
</TABLE>

13
<PAGE> 128

Under the Administration Agreement, Stephens has agreed to assume
the operating expenses of each LifePath Fund and a pro rata share of the
operating expenses of each LifePath Master Portfolio, except for expenses in
connection with securities purchases, sales or other related transactions,
extraordinary expenses and fees and expenses payable pursuant to certain
service contracts, as described in the Prospectus.

Distribution Plan. The following information supplements and
should be read in conjunction with the section in the Prospectus entitled
"Administrator and Distributor."

As indicated in the Prospectus of the Funds, the Retail Class
Shares of each Fund have adopted a Distribution Plan ("Plan") under Section
12(b) of the 1940 Act and Rule 12b-1 thereunder. The Plans were adopted by the
Board of Trustees, including a majority of the Trustees who were not
"interested persons" (as defined in the 1940 Act) of the Funds and who had no
direct or indirect financial interest in the operation of the Plans or in any
agreement related to the Plans (the "Qualified Trustees").

Under the Plans and pursuant to a Distribution Agreement dated
February 25, 1994 with Stephens, the Funds may pay the Distributor, as
compensation for distribution-related services, monthly fees at annual rates of
up to 0.25% of the average daily net assets of each Fund. The actual fee
payable to the Distributor is determined, within such limit, from time to time
by mutual agreement between the Company and the Distributor and will not exceed
the maximum sales charges payable by mutual funds sold by members of the
National Association of Securities Dealers, Inc. ("NASD") under the NASD Rules
of Fair Practice. The Distributor may enter into selling agreements with one
or more selling agents under which such agents may receive compensation for
distribution-related services from the Distributor, including, but not limited
to, commissions or other payments to such agents based on the average daily net
assets of a Fund's shares attributable to them. The Distributor may retain any
portion of the total distribution fee payable thereunder to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses.

Each of the Plans will continue in effect from year to year if
such continuance is approved by a majority vote of both the Trustees of the
Trust and the Qualified Trustees. Any Distribution Agreement related to the
Plans also must be approved by such vote of the Trustees and the Qualified
Trustees. The Distribution Agreement terminates automatically if assigned, and
may be terminated at any time, without payment of any penalty, by a vote of a
majority of the outstanding voting securities of the Fund involved. The Plans
may not be amended to increase materially the amounts payable thereunder
without the approval of a majority of the outstanding voting securities of the
Fund involved, and no material amendments to the Plans may be made except by a
majority of both the Trustees of the Trust and the Qualified Trustees.

Each of the Plans requires that the Treasurer of the Trust shall
provide to the Trustees, and the Trustees shall review, at least quarterly, a
written report of the amounts expended (and purposes therefor) under the Plans.
The Rule also requires that the selection and nomination of Trustees who are
not "interested persons" of the Trust be made by such disinterested Trustees.

14
<PAGE> 129

Wells Fargo Securities Inc., an interested person (as such term is
defined in Section 2(a)(19) of the 1940 Act) of the Trust, acts as a Selling
Agent for the Fund pursuant to a Selling Group Agreement with Stephens
authorized pursuant to the Plans. As a Selling Agent, Wells Fargo Securities
Inc. has an indirect financial interest in the operation of the Plans. The
Board of Trustees believes that it is reasonably likely that the Plans benefit
the Funds and their shareholders because the Plans authorize the relationship
with Wells Fargo Securities Inc. and Wells Fargo Securities Inc. has previously
developed distribution channels and relationships with the types of business and
corporate customers that the Fund is designed to serve. These relationships and
distribution channels are believed by the Board to be responsible for
significantly increased Fund assets and corresponding economic efficiencies
(i.e., lower per-share transaction costs and fixed expenses) that are generated
by increased assets under management.

For the fiscal years ended February 28, 1995 and February 29,
1996, the Retail Shares of the Funds paid to Stephens as compensation for
distribution related services the amounts listed below. All of the Compensation
to Underwriters was retained by Wells Fargo Securities Inc.

Printing & Compensation
Mailing Marketing to
Fund Total Prospectuses Brochures Underwriters
- ---- ----- ------------ --------- --------------
<S> <C> <C> <C> <C>

LifePath 2000 Fund (Retail) $181,815 N/A N/A $181,815
LifePath 2010 Fund (Retail) $123,026 N/A N/A $123,026
LifePath 2020 Fund (Retail) $235,256 N/A N/A $235,256
LifePath 2030 Fund (Retail) $155,737 N/A N/A $155,737
LifePath 2040 Fund (Retail) $244,532 N/A N/A $244,532
</TABLE>

Custodian, Transfer and Dividend Disbursing Agent. Wells Fargo
Bank acts as the Trust's transfer and dividend disbursing agent and performs
such services at 525 Market Street, San Francisco, California 94105. Wells
Fargo Bank also acts as custodian of each Fund's investments. The custodian,
among other things, maintains a custody account or accounts in the name of the
Funds, receives and delivers all assets for the Funds upon purchase and upon
sale or maturity; collects and receives all income and other payments and
distributions on account of the assets of the Funds and pays all expenses of
the Funds. For its services as custodian, Wells Fargo Bank receives an
asset-based fee and transaction charge from each Fund. Wells Fargo Bank is
entitled to receive from the Trust for its services as transfer and dividend
disbursing agent, a monthly fee at the annual rate of 0.10% of each Fund's
average daily net assets.

For the fiscal year ended February 29, 1996, the Trust paid
dividend disbursing agency fees to Wells Fargo Bank as follows:

15
<PAGE> 130

Fund Fees Paid
---- ---------
<S> <C>
LifePath 2000 Fund $ 84,548
LifePath 2010 Fund $ 72,832
LifePath 2020 Fund $120,505
LifePath 2030 Fund $ 79,564
LifePath 2040 Fund $118,468
</TABLE>

Shareholder Services Agreement. Wells Fargo Bank acts as the
shareholder servicing agent ("Agent") for each Fund pursuant to a Shareholder
Services Agreement (the "Agreement") and the related Shareholder Services
Plans. Wells Fargo Bank, as agent, has agreed to perform certain shareholder
liaison services such as answering shareholder inquiries regarding account
status and history, and the manner in which purchases, exchanges and
redemptions of Fund shares may be made. For the services provided pursuant to
a Shareholder Servicing Agreement, the Trust may pay each Shareholder Servicing
Agent a monthly fee at the annual rate of up to 0.20% of the average daily
value of each Fund's shares beneficially owned by customers of the Shareholder
Servicing Agent.

For the fiscal year ended February 29, 1996, each Fund paid
shareholder services fees to Wells Fargo Bank as follows:

<TABLE>
<CAPTION>
Fund Fees Paid
- ---- ---------
<S> <C>
LifePath 2000 Fund $169,096
LifePath 2010 Fund $145,664
LifePath 2020 Fund $241,010
LifePath 2030 Fund $159,128
LifePath 2040 Fund $236,936
</TABLE>

PURCHASE AND REDEMPTION OF SHARES

Terms of Purchase. The Trust reserves the right to reject any
purchase order and to change the amount of the minimum investment and
subsequent purchases in the Funds.

Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period when the New
York Stock Exchange ("NYSE") is closed (other than customary weekend and
holiday closing), (b) when trading in the markets, the Fund or Master Portfolio
normally utilizes is restricted, or when an emergency exists as determined by
the SEC so that disposal of such Fund's or Master Portfolio's investments or
determination of its net asset value is not reasonably practicable, or (c) for
such other periods as the SEC by order may permit to protect the Fund's
shareholders.

16
<PAGE> 131

DETERMINATION OF NET ASSET VALUE

LifePath Master Portfolios. The securities of the LifePath Master
Portfolios, including covered call options written by a LifePath Master
Portfolio, are valued at the last sale price on the securities exchange or
national securities market on which such securities primarily are traded.
Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Portfolio securities which are traded primarily on foreign
securities exchanges generally are valued at the preceding closing values of
such securities on their respective exchanges, except that when an occurrence
subsequent to the time a value was so established is likely to have changed
such value, then the fair value of those securities is determined by
consideration of other factors by or under the direction of MIP's Board of
Trustees or its delegates. Short-term investments are carried at amortized
cost, which approximates market value. Any securities or other assets for
which recent market quotations are not readily available are valued at fair
value as determined in good faith by MIP's Board of Trustees.

Restricted securities, as well as securities or other assets for
which market quotations are not readily available, or are not valued by a
pricing service approved by MIP's Board of Trustees, are valued at fair value
as determined in good faith by or under the direction of MIP's Board of
Trustees or its delegates. MIP's Board of Trustees reviews the method of
valuation on a current basis. Restricted securities that are, or are
convertible into, securities of the same class of securities for which a public
market exists usually are valued at market value less the same percentage
discount at which such securities were purchased. This discount may be revised
periodically if BGFA believes that the discount no longer reflects the value of
the restricted securities. Restricted securities not of the same class as
securities for which a public market exists usually are valued initially at
cost. Any subsequent adjustment from cost is based upon considerations deemed
relevant by or under the direction of MIP's Board of Trustees or its delegates.

Any assets or liabilities initially expressed in terms of foreign
currency are translated into dollars using information provided by pricing
entities, such as Morgan Stanley Capital International or Gelderman Data
Service, or at a quoted market exchange rate as may be determined to be
appropriate by BGFA. Forward currency contracts are valued at the current cost
of offsetting the contract. Because of the need to obtain prices as of the
close of trading on various exchanges throughout the world, the calculation of
net asset value does not take place contemporaneously with the determination of
prices of the foreign securities held by the LifePath Master Portfolio. In
addition, foreign securities held by a LifePath Master Portfolio may be traded
actively in securities markets which are open for trading on days when the
Master Portfolio does not determine its net asset value. Accordingly, there
may be occasions when a LifePath Master Portfolio does not calculate its net
asset value but when the value of such Master Portfolio's portfolio securities
is affected by such trading activity.

Fixed-income securities are valued each business day using
available market quotations or at fair value as determined by one or more
independent pricing services (collectively, the

17
<PAGE> 132

"Service") approved by the MIP's Board of Trustees. The Service may use
available market quotations, employ electronic data processing techniques
and/or a matrix system to determine valuations. The Service's procedures are
reviewed by MIP's officers under the general supervision of MIP's Board of
Trustees.

Expenses and fees, including advisory fees, are accrued daily and
are taken into account for the purpose of determining the net asset value of
each LifePath Master Portfolio's shares.

New York Stock Exchange Closings. The holidays on which the NYSE
is closed currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

DIVIDENDS, DISTRIBUTIONS AND TAXES

Each Fund intends to qualify each year as a "regulated investment
company" under the Code so long as such qualification is in the best interests
of its shareholders. Such qualification requires, among other things, that (a)
at least 90% of each Fund's annual gross income be derived from interest,
payments with respect to securities loans, dividends, and gains from the sale
or other disposition of securities, or foreign currencies, or other income
(including but not limited to gains from options, futures, or forward
contracts) derived with respect to each Fund's business of investing in such
securities or currencies; (b) each Fund generally derives less than 30% of its
gross income from gains from the sale or other disposition of securities,
options, futures or forward contracts held for less than three months; and (c)
each Fund diversifies its holdings so that, at the end of each quarter of the
taxable year, (i) at least 50% of the market value of each Fund's assets is
represented by cash, government securities and other securities limited in
respect of any one issuer to an amount not greater than 5% of each Fund's
assets and 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its assets is invested in the securities of
any one issuer (other than U.S. Government securities and the securities of
other regulated investment companies), or of two or more issuers which the Fund
controls and which are determined to be engaged in the same or similar trades
or businesses or related trades or businesses.

For purposes of complying with these qualification requirements,
each Fund will be deemed to own a proportionate share of its corresponding
Master Portfolio's assets. As a regulated investment company, each Fund will
not be subject to federal income tax on its net investment income and net
capital gains distributed to its shareholders, provided that it distributes to
its shareholders at least 90% of its net investment income (including its net
tax-exempt income) earned in each year.

Generally, dividends and capital gain distributions are taxable to
shareholders when they are received. However, such dividends and distributions
declared payable as of a record date in October, November or December of any
calendar year are deemed under the Code to have been paid by the Fund and
received by the shareholder on December 31 of that calendar year if

18
<PAGE> 133

the dividend is actually paid in the following January. Such dividends and
distributions will, accordingly, be taxable to the recipient shareholders in
the year in which the record date falls.

In addition, a 4% nondeductible excise tax will be imposed on each
Fund to the extent it does not meet certain minimum distribution requirements
of its net investment income and net realized capital gains by the end of each
calendar year, but each Fund will either actually or be deemed to distribute
substantially all of this income and therefore expects not to be subject to the
excise.

Depending on the composition of a regulated investment company's
income, a portion of the dividends paid by the regulated investment company
from its net investment income may qualify for the dividends-received deduction
allowable to certain U.S. corporate shareholders. In general, dividend income
of the regulated investment company distributed to qualifying corporate
shareholders is eligible for the dividends-received deduction only to the
extent that (i) the regulated investment company's income consists of dividends
paid by U.S. corporations and (ii) the regulated investment company would have
been entitled to the dividends received deduction with respect to such dividend
income if the regulated investment company were not a regulated investment
company under the Code. A corporate shareholder of the Fund must hold the Fund
shares upon which the qualifying dividend is paid for at least 46 days to be
entitled to the dividends-received deduction. The Code also provides other
limitations with respect to the ability of a qualifying corporate shareholder
to claim the dividends-received deduction.

Income received by each Fund from sources within foreign countries
may be subject to withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. Because not more than 50% of the value of the total
assets of any Fund is expected to consist of securities of foreign issuers, no
Fund will be eligible to elect to "pass through" foreign tax credits to its
shareholders.

Ordinarily, gains and losses realized from portfolio transactions
are treated as capital gain or loss, except in certain cases including where a
Master Portfolio acquires a put or grants a call thereon. Gain recognized on
the disposition of a debt obligation (including tax-exempt obligations
purchased after April 30, 1993) purchased by the Master Portfolio at a market
discount (generally, at a price less than its principal amount) will generally
be treated as ordinary income to the extent of the portion of the market
discount which accrued during the period of time the Master Portfolio held the
debt obligation. Other gains or losses on the sale of securities will
generally be short-term capital gains or losses. To the extent that a Fund
recognizes long-term capital gains, such gains will be distributed at least
annually. Distributions of long-term capital gains will be taxable to
shareholders as long-term capital gains, regardless of how long a shareholder
has held Fund shares.

If a shareholder receives a designated capital gain distribution
on a Fund share and such Fund share is held for six months or less, then
(unless otherwise disallowed) any loss on the sale or exchange of that Fund
share will be treated as a long-term capital loss to the extent of the
designated capital gain distribution. In addition, any loss realized by a
shareholder upon the sale or redemption of Fund shares held less than six
months will be disallowed to the extent of any tax-

19
<PAGE> 134

exempt interest dividends received by the shareholder thereon. These rules
shall not apply to losses incurred under a periodic redemption plan.

As of the printing of this SAI, the maximum individual tax rate
applicable to ordinary income is 39.6% (marginal rates may be higher for some
individuals due to phase out of exemptions and elimination of deductions); the
maximum individual tax rate applicable to net capital gains is 28%; and the
maximum corporate tax rate applicable to ordinary income and net capital gains
is 35% (however, to eliminate the benefit of lower marginal corporate income
tax rates, corporations which have taxable income in excess of $100,000 for a
taxable year will be required to pay an additional amount of income tax of up
to $11,750 and corporations which have taxable income in excess of $15,000,000
for a taxable year will be required to pay an additional amount of tax of up to
$100,000).

If a shareholder disposes of Fund shares with reinvestment rights
within 90 days of acquiring such shares and subsequently reacquires Fund shares
or shares of another regulated investment company with a reduced or eliminated
sales charge pursuant to the reinvestment rights, the sales charge incurred, if
any, to acquire the disposed shares (to the extent such previous sales charges
do not exceed the reduction or elimination of sales charges incurred on the
subsequent acquisition) shall not be taken into account for the purpose of
determining the amount of gain or loss on the initial disposition. To the
extent any sales charge is consequently not taken into account, it will be
treated as having been incurred in the subsequent acquisition. In addition,
any loss realized on a redemption or exchange of shares of a Fund will be
disallowed to the extent that substantially identical shares are reacquired
within the 61-day period beginning 30 days before and ending 30 days after the
shares are disposed of.

If an option granted by a Master Portfolio lapses or is terminated
through a closing transaction, such as a repurchase by Master Portfolio of the
option from its holder, the Master Portfolio will realize a short-term capital
gain or loss, depending on whether the premium income is greater or less than
the amount paid by the Master Portfolio in the closing transaction.
Recognition of capital losses may be deferred if they result from a position
which is part of a tax "straddle," as discussed below. If securities are sold
by a Master Portfolio pursuant to the exercise of a call option granted by it,
such Master Portfolio will add the premium received to the sale price of the
securities delivered in determining the amount of gain or loss on the sale. If
securities are purchased by a Master Portfolio pursuant to the exercise of a
put option granted by it, the Master Portfolio will subtract the premium
received from its cost basis in the securities purchased.

Under Section 1256 of the Code, gain or loss realized by a
regulated investment company from certain financial forward, futures and
options transactions is treated as 60% long-term capital gain (or loss) and 40%
short-term capital gain (or loss) (the "60%/40% rule"). Gain or loss may
arise upon the exercise or lapse of such forward contracts, futures and options
as well as from closing transactions. In addition, any such forward contracts,
futures or options remaining unexercised at the end of the regulated investment
company's taxable year are treated as sold for their then fair market value,
resulting in additional gain or loss to the regulated investment company
characterized in the manner described above (the "marked-to-market rule").

20
<PAGE> 135

Transactions that qualify as designated hedges are expected from the
marked-to-market rule and the 60%/40% rule.

All or a portion of the gain or loss from the disposition of
non-U.S. dollar denominated securities (including debt instruments, certain
financial forward, futures and option contracts, and certain preferred stock)
may be treated as ordinary income or loss under Section 988 of the Code
(relating to the taxation of foreign currency transactions). Furthermore, all
or a portion of the gain realized from engaging in "conversion transactions"
may be treated as ordinary income under Section 1258. Conversion transactions
are defined to include certain forward, futures, option and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.

Offsetting positions held by a regulated investment company
involving certain financial forward, futures or option contracts may be
considered, for tax purposes, to constitute straddles. Straddles are defined
to include "offsetting positions" in actively traded personal property. The
tax treatment of straddles is governed by Section 1092 of the Code which, in
certain circumstances, overrides or modifies the provisions of Section 1256.

If a regulated investment company was treated as entering into
straddles by reason of its engaging in certain financial forward, futures or
option contracts, such straddles could be characterized as "mixed straddles" if
the futures, forwards, or options comprising a part of such straddles were
governed by Section 1256. The regulated investment company may make one or
more elections with respect to mixed straddles, and, depending upon which
elections are made, if any, the tax consequences with respect to the
transaction may differ. Generally, to the extent the straddle rules apply to
positions established by the regulated investment company, losses realized by
the regulated investment company may be deferred to the extent of unrealized
gain in any offsetting positions. Moreover, as a result of the straddle and
the conversion transaction rules, short-term capital loss on straddle positions
may be recharacterized as long-term capital loss, and long-term capital gain
may be characterized as short-term capital gain or ordinary income.

Foreign Shareholders. Under the Code, distributions of net
investment income by a Fund to a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, foreign corporation, or foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax
(at a rate of 30% or a lower treaty rate). Withholding will not apply if a
dividend paid by a Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. withholding tax at a rate of 30% if the individual is physically present
in the U.S. for more than 182 days during the taxable year.

Other Matters. Investors should be aware that the investments to
be made by a Master Portfolio may involve sophisticated tax rules such as the
original issue discount and real estate mortgage investment conduit ("REMIC")
rules that would result in income or gain recognition by the Master Portfolio,
and its corresponding Fund, without corresponding cash

21
<PAGE> 136

receipts. Although the Funds will seek to avoid significant noncash income,
such noncash income could be recognized by the Funds, in which case a Fund may
distribute cash derived from other sources in order to meet the minimum
distribution requirements described above.

CAPITAL STOCK

As of June 14, 1996, no shareholders were known by the Trust to
own 5% or more of the Retail Class Shares of the LifePath Funds. As of June
14, 1996, the shareholders identified below were known by the Trust to own 5%
or more of the Institutional Class Shares of the LifePath Fund's outstanding
shares in the following capacity:

<TABLE>
<CAPTION>
Name and Address Percentage Capacity
Name of Fund of Shareholder of Fund Owned
- ------------ ---------------- ---------- --------
<S> <C> <C> <C>
LifePath 2000 Stephens Inc. 46.70% Beneficial
(Institutional) 111 Center Street
Little Rock, AR 72201

Charles Schwab & Co. Inc. 58.30% Beneficial
Special Custody for the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104

LifePath 2010 Stephens Inc. 27.48% Beneficial
(Institutional) 111 Center Street
Little Rock, AR 72201

Charles Schwab & Co. Inc. 72.52% Beneficial
Special Custody for the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104

LifePath 2020 Stephens Inc. 19.48% Beneficial
(Institutional) 111 Center Street
San Francisco, CA 94104
</TABLE>

22
<PAGE> 137

<TABLE>
<S> <C> <C> <C>
Charles Schwab & Co. Inc. 80.52% Beneficial
Special Custody for the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104

LifePath 2030 Stephens Inc. 5.97% Beneficial
(Institutional) 111 Center Street
San Francisco, CA 94104

Charles Schwab & Co. Inc. 94.03% Beneficial
Special Custody for the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104

LifePath 2040 Stephens Inc. 59.97% Beneficial
(Institutional) 111 Center Street
San Francisco, CA 94104

Charles Schwab & Co. Inc. 40.03% Beneficial
Special Custody for the
Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
</TABLE>

PERFORMANCE INFORMATION

LifePath Funds. Average annual total return is calculated by
determining the ending redeemable value of an investment purchased with a
hypothetical $1,000 payment made at the beginning of the period (assuming the
reinvestment of dividends and distributions), dividing by the amount of the
initial investment, taking the "n"th root of the quotient (where "n" is the
number of years in the period) and subtracting 1 from the result.

Total return is calculated by subtracting the amount of the net
asset value per share at the beginning of a stated period from the net asset
value per share at the end of the period (after giving effect to the
reinvestment of dividends and distributions during the period), and dividing
the result by the net asset value per Share at the beginning of the period.

23
<PAGE> 138

Because of the difference in the fees and expenses borne by the
Retail Shares of the Funds, the return on such shares can be expected, at any
given time, to be lower than the return on Institutional Shares.

For the fiscal year ended February 29, 1996, the average annual
total returns on the Funds were as follows:

<TABLE>
<CAPTION>
Fund Retail Institutional
- ---- ------ -------------
<S> <C> <C>
LifePath 2000 Fund 12.98% 13.19%
LifePath 2010 Fund 19.40% 19.69%
LifePath 2020 Fund 22.94% 23.18%
LifePath 2030 Fund 26.53% 26.88%
LifePath 2040 Fund 28.91% 29.32%
</TABLE>

The Fund may advertise the cumulative total return of its shares.
Cumulative total return of shares is computed on a per share basis and assumes
the reinvestment of dividends and distributions. Cumulative total return of
shares generally is expressed as a percentage rate which is calculated by
combining the income and principal changes for a specified period and dividing
by the net asset value per share at the beginning of the period.
Advertisements may include the percentage rate of total return of shares or may
include the value of a hypothetical investment in shares at the end of the
period which assumes the application of the percentage rate of total return.

In addition to the above performance information, the Fund may
also advertise the cumulative total return of the Fund for one-month,
three-month, six-month, and year-to-date periods. The cumulative total return
for such periods is based on the overall percentage change in value of a
hypothetical investment in the Fund, assuming all Fund dividends and capital
gain distributions are reinvested, without reflecting the effect of any sales
charge that would be paid by an investor, and is not annualized.

For the period from inception (March 1, 1994) to February 29,
1996, the cumulative total returns on the Funds were as follows:

<TABLE>
<CAPTION>
Fund Retail
- ---- ------
<S> <C>
LifePath 2000 Fund 15.35%
LifePath 2010 Fund 23.35%
LifePath 2020 Fund 28.01%
LifePath 2030 Fund 31.63%
LifePath 2040 Fund 35.68%
</TABLE>

For the period from inception (March 1, 1994) to February 29,
1996, the average annual total returns on the Funds were as follows:

24
<PAGE> 139

<TABLE>
<CAPTION>
Fund Retail Institutional
- ---- ------ -------------
<S> <C> <C>
LifePath 2000 Fund 7.40% 7.65%
LifePath 2010 Fund 11.06% 11.33%
LifePath 2020 Fund 13.14% 13.40%
LifePath 2030 Fund 14.73% 15.11%
LifePath 2040 Fund 16.48% 16.85%
</TABLE>

From time to time, the Trust may use, in advertisements and other
types of literature, information and statements describing the Funds as the
first mutual funds to offer a flexible investment strategy designed to change
over specific time horizons.

From time to time and only to the extent the comparison is
appropriate for the Funds, the Company may quote performance or price-earning
ratios for the Funds in advertising and other types of literature as compared
to the performance of the Lehman Brothers Municipal Bond Index, 1-Year Treasury
Bill Rate, S&P Index, the Dow Jones Industrial Average, the Lehman Brothers 20+
Treasury Index, the Lehman Brothers 5-7 Year Treasury Index, Donoghue's Money
Fund Averages, Real Estate Investment Averages (as reported by the National
Association of Real Estate Investment Trusts), Gold Investment Averages
(provided by the World Gold Council), Bank Averages (which is calculated from
figures supplied by the U.S. League of Savings Institutions based on effective
annual rates of interest on both passbook and certificate accounts), average
annualized certificate of deposit rates (from the Federal Reserve G-13
Statistical Releases or the Bank Rate Monitor), the Salomon One Year Treasury
Benchmark Index, the Consumer Price Index (as published by the U.S. Bureau of
Labor Statistics), Ten Year U.S. Government Bond Average, S&P's Corporate Bond
Yield Averages, Schabacter Investment Management Indices, Salomon Brothers High
Grade Bond Index, Lehman Brothers Long-Term High Quality Government/Corporate
Bond Index, other managed or unmanaged indices or performance data of bonds,
stocks or government securities (including data provided by Ibbotson
Associates), or by other services, companies, publications or persons who
monitor mutual funds on overall performance or other criteria. The S&P Index
and the Dow Jones Industrial Average are unmanaged indices of selected common
stock prices. The Funds' performance also may be compared to the performance
of other mutual funds having similar objectives. This comparative performance
could be expressed as a ranking prepared by Lipper Analytical Services, Inc.,
CDA Investment Technologies, Inc., Bloomberg Financial Markets or Morningstar,
Inc., independent services which monitor the performance of mutual funds. The
performance of the Funds will be calculated by relating net asset value per
share at the beginning of a stated period to the net asset value of the
investment, assuming reinvestment of all gains distributions and dividends
paid, at the end of the period. Any such comparisons may be useful to
investors who wish to compare the Funds' past performance with that of its
competitors. Of course, past performance cannot be a guarantee of future
results. The Company also may include, from time to time, a reference to
certain marketing approaches of the Distributor, including, for example, a
reference to a potential shareholder being contacted by a selected broker or
dealer. General mutual fund statistics provided by the Investment Company
Institute may also be used.

25
<PAGE> 140

In addition, the Company also may use, in advertisements and other
types of literature, information and statements: (1) showing that bank savings
accounts offer a guaranteed return of principal and a fixed rate of interest,
but no opportunity for capital growth; and (2) describing Wells Fargo Bank, and
its affiliates and predecessors, as one of the first investment managers to
advise investment accounts using asset allocation and index strategies. The
Company also may include in advertising and other types of literature
information and other data from reports and studies prepared by the Tax
Foundation, including information regarding federal and state tax levels and
the related "Tax Freedom Day." The Company also may disclose in advertising
and other types of sales literature the assets and categories of assets under
management by the Master Portfolios' investment adviser or its affiliates.

From time to time the Company may reprint, reference or otherwise
use material from magazines, newsletters, newspapers and books including, but
not limited to the Wall Street Journal, Money Magazine, Barrons, Kiplingers,
Business Week, Fortune, Forbes, the San Francisco Chronicle, the San Jose
Mercury News, The New York Times, the Los Angeles Times, the Boston Globe, the
Washington Post, the Chicago Sun-Times, Investor Business Daily, Worth, Bank
Investor, American Banker, Smart Money, the 100 Best Mutual Funds (Adams
Publishing), Morningstar or Value Line.

The Company also may use the following information in
advertisements and other types of literature, only to the extent the
information is appropriate for the Funds: (i) the Consumer Price Index may be
used to assess the real rate of return from an investment in a Fund; (ii)
other government statistics, including, but not limited to, The Survey of
Current Business, may be used to illustrate investment attributes of the Funds
or the general economic, business, investment, or financial environment in
which the Funds operate; (iii) the effect of tax-deferred compounding on the
investment returns of the Funds, or on returns in general, may be illustrated
by graphs, charts, etc., where such graphs or charts would compare, at various
points in time, the return from an investment in the Funds (or returns in
general) on a tax-deferred basis (assuming reinvestment of capital gains and
dividends and assuming one or more tax rates) with the return on a taxable
basis; and (iv) the sectors or industries in which a Fund invests may be
compared to relevant indices of stocks or surveys (e.g., S&P Industry Surveys)
to evaluate the historical performance of the Funds or current or potential
value with respect to the particular industry or sector.

The Company also may discuss in advertising and other types of
literature that the Funds have been assigned a rating by a nationally
recognized statistical rating organization ("NRSRO"), such as Standard & Poor's
Corporation. Such rating would assess the creditworthiness of the investments
held by a Fund. The assigned rating would not be a recommendation to purchase,
sell or hold the Funds' shares since the rating would not comment on the market
price of the Funds' shares or the suitability of a Fund for a particular
investor. In addition, the assigned rating would be subject to change,
suspension or withdrawal as a result of changes in, or unavailability of,
information relating to a Fund or its investments. The Company may compare the
Funds' performance with other investments which are assigned ratings by NRSROs.
Any such comparisons may be useful to investors who wish to compare the Funds'
past performance with other rated investments.

26
<PAGE> 141

From time to time, the Funds may use the following statements, or
variations thereof, in advertisements and other promotional materials: "Wells
Fargo Bank, as a Shareholder Servicing Agent for the Stagecoach Funds, provides
various services to its customers that are also shareholders of the Funds.
These services may include access to Stagecoach Funds' account information
through Automated Teller Machines (ATMs), the placement of purchase and
redemption requests for shares of the Funds through ATMs and the availability
of combined Wells Fargo Bank and Stagecoach Funds account statements." The
Company may also disclose in advertising and other types of sales literature
the assets and categories of assets under management by the Company's
investment adviser. The Company may also disclose in advertising and other
types of sales literature the assets and categories of assets under management
by a Fund's investment adviser or sub-adviser. The Company may disclose in
advertising, statements and other literature the amount of assets and mutual
fund assets managed by Wells Fargo Bank. As of April 1, 1996, Wells Fargo
Bank provided investment advisory services for approximately $56 billion of
assets of individuals, trusts, estates and institutions and $17 billion of
mutual fund assets.

PORTFOLIO TRANSACTIONS

General. BGFA assumes general supervision over placing orders on
behalf of MIP for the purchase or sale of portfolio securities. Allocation of
brokerage transactions, including their frequency, is made in the best judgment
of BGFA and in a manner deemed fair and reasonable to shareholders. In
executing portfolio transactions and selecting brokers or dealers, BGFA seeks
to obtain the best overall terms available for each Master Portfolio. In
assessing the best overall terms available for any transaction, BGFA considers
factors deemed relevant, including the breadth of the market in the security,
the price of the security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. The primary
consideration is prompt execution of orders at the most favorable net price.

Certain of the brokers or dealers with whom the Master Portfolios
may transact business offer commission rebates to the Master Portfolios. BGFA
considers such rebates in assessing the best overall terms available for any
transaction. The overall reasonableness of brokerage commissions paid is
evaluated by BGFA based upon its knowledge of available information as to the
general level of commissions paid by other institutional investors for
comparable services. While BGFA generally seeks reasonably competetive spreads
or commissions, the Master Portfolio will not necessarily be paying the lowest
spread or commissions available. BGFA does not preference its orders to
brokers or dealers based on receipt of statistical or other research services.

Master Portfolios. Brokers also are selected because of
their ability to handle special executions such as are involved in large block
trades or broad distributions, provided the primary consideration is met.
Portfolio turnover may vary from year to year, as well as within a year. High
turnover rates over 100% are likely to result in comparatively greater
brokerage expenses.

Purchases and sales of fixed-income securities usually are
principal transactions. Portfolio securities ordinarily are purchased directly
from the issuer or from an underwriter or market maker. Usually no brokerage
commissions are paid by the LifePath Master Portfolio for such purchases and
sales. The prices paid to the underwriters of newly-issued securities usually
include a concession paid by the issuer to the underwriter, and purchases of
securities from market makers may include the spread between the bid and asked
price.

Brokerage Commissions. For the fiscal years ended February 28,
1995 and February 29, 1996, the corresponding Master Portfolio of each Fund
paid the dollar amounts of brokerage commissions indicated below. None of
these brokerage commissions were paid to affiliated brokers.

27
<PAGE> 142

<TABLE>
<CAPTION>
Commissions Paid
----------------
Master Portfolio 1995 1996
- ---------------- ---- ----
<S> <C> <C>
LifePath 2000 Master Portfolio $24,231 $71,608
LifePath 2010 Master Portfolio $28,830 $33,786
LifePath 2020 Master Portfolio $56,540 $29,666
LifePath 2030 Master Portfolio $37,890 $12,053
LifePath 2040 Master Portfolio $56,183 $ 8,311
</TABLE>

Securities of Regular Broker Dealers. As of February 29, 1996,
the corresponding Master Portfolio of each Fund owned securities of its
"regular brokers or dealers" or their parents, as defined in the 1940 Act, as
follows:

<TABLE>
<CAPTION>
Master Portfolio Broker/Dealer Amount
- ---------------- ------------- ------
<S> <C> <C>
LifePath 2000 CitiCorp $ 92,000
Lehman Brothers 30,000
Merrill Lynch & Co. 29,000
J.P. Morgan Securities 40,000

LifePath 2010 CitiCorp $295,000
Lehman Brothers 25,000
Merrill Lynch & Co. 79,000
J.P. Morgan Securities 123,000

LifePath 2020 CitiCorp $549,000
Lehman Brothers 45,000
Merrill Lynch & Co. 170,000
J.P. Morgan Securities 255,000

LifePath 2030 CitiCorp $431,000
Lehman Brothers 40,000
Merrill Lynch & Co. 134,000
J.P. Morgan Securities 198,000

LifePath 2040 CitiCorp $784,000
Lehman Brothers 79,000
Merrill Lynch & Co. 213,000
J.P. Morgan Securities 319,000
</TABLE>

28
<PAGE> 143

INFORMATION ABOUT THE FUNDS

Each Fund Share irrespective of class has one vote and, when
issued and paid for in accordance with the terms of the offering, is fully paid
and non-assessable. Shares have no preemptive, subscription or conversion
rights and are freely transferable. Each Share of a class has identical voting
rights with respect to the Fund of which it is a part provided that there are
certain matters which affect one class but not another. Currently, the only
such matter is the existence of a Distribution Plan pursuant to Rule 121 under
the 1940 Act with respect to the Retail Shares but not the Institutional
Shares. On this matter the shareholders of the affected class vote as a class.

Rule 18f-2 under the 1940 Act provides that any matter required to
be submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
Trust, such as the Trust, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding shares of
each Fund affected by such matter. Rule 18f-2 further provides that a Fund
shall be deemed to be affected by a matter unless it is clear that the
interests of such Fund in the matter are identical or that the matter does not
affect any interest of such Fund. However, the Rule exempts the selection of
independent accountants and the election of Trustees from the separate voting
requirements of the Rule.

Each Fund sends annual and semi-annual financial statements to all
its shareholders of record.

COUNSEL

Morrison & Forester LLP, 2000 Pennsylvania Avenue, N.W., Suite
5500, Washington, D.C. 20006, as counsel for the Trust, has rendered its
opinion as to certain legal matters regarding the due authorization and valid
issuance of the shares of beneficial interest being sold pursuant to the Funds'
Prospectus.

INDEPENDENT AUDITORS

KPMG Peat Marwick LLP, Three Embarcadero Center, San Francisco,
California 94111, independent auditors, have been selected as each Fund's
independent auditors. KPMG Peat Marwick LLP provides audit services, tax
return preparation and assistance and consultation in connection with review of
certain Securities and Exchange Commission filings.

FINANCIAL INFORMATION

The portfolio of investments, audited financial statements and
independent auditors' report for the fiscal year ended February 29, 1996 for
each LifePath Fund of the Trust and each corresponding LifePath Master
Portfolio of MIP are hereby incorporated by reference to the Trust's LifePath
Funds Annual Reports, as filed with the SEC on May 28, 1996. The portfolio of

29
<PAGE> 144

investments, audited financial statements and independent auditors' report for
the Funds are attached to all SAIs delivered to shareholders or prospective
shareholders.

30
<PAGE> 145

APPENDIX

Description of certain ratings assigned by Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch
Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc. ("Duff") and IBCA Inc.
and IBCA Limited ("IBCA"):

S&P

Bond Ratings

AAA

Bonds rated AAA have the highest rating assigned by S&P. Capacity
to pay interest and repay principal is extremely strong.

Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.

Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.

BBB

Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated categories.

S&P's letter ratings may be modified by the addition of a plus (+)
or minus (-) sign designation, which is used to show relative standing within
the major rating categories, except in the AAA (Prime Grade) category.

Commercial Paper Rating

The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics are denoted with a
plus sign (+) designation. Capacity for timely payment on issues with an A-2
designation is strong. However, the relative degree of safety is not as high
as for issues designated A-1.

A-1
<PAGE> 146

Moody's

Bond Ratings

Aaa

Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa

Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the major rating categories, except in the Aaa
category. The modifier 1 indicates a ranking for the security in the higher
end of a rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.

Commercial Paper Rating

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory

A-2
<PAGE> 147

obligations, and ordinarily will be evidenced by leading market positions in
well established industries, high rates of return on funds employed,
conservative capitalization structures with moderate reliance on debt and ample
asset protection, broad margins in earnings coverage of fixed financial charges
and high internal cash generation, and well established access to a range of
financial markets and assured sources of alternate liquidity.

Issuers (or relating supporting institutions) rated Prime-2 (P-2)
have a strong capacity for repayment of short-term promissory obligations.
This ordinarily will be evidenced by many of the characteristics cited above
but to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Fitch

Bond Ratings

The ratings represent Fitch's assessment of the issuer's ability
to meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to
other obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.

AAA

Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.

Bonds rated AA are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+.

Bonds rated A are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB

A-3
<PAGE> 148

Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings
of these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.

Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are
payable on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.

Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+

Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1

Very Strong Credit Quality. Issues assigned this rating reflect
an assurance of timely payment only slightly less in degree than issues rated
F-1+.

F-2

Good Credit Quality. Issues carrying this rating have a
satisfactory degree of assurance for timely payments, but the margin of safety
is not as great as the F-1+ and F-1 categories.

Duff

Bond Ratings

AAA

Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

A-4
<PAGE> 149

Bonds rated AA are considered high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.

Bonds rated A have protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.

BBB

Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. Considerable
variability in risk during economic cycles.

Plus (+) and minus (-) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.

Commercial Paper Rating

The rating Duff-1 is the highest commercial paper rating assigned
by Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and Trust fundamentals. Risk factors are small.

IBCA

Bond and Long-Term Ratings

Obligations rated AAA by IBCA have the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly. Obligations
for which there is a very low expectation of investment risk are rated AA by
IBCA. Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.

Commercial Paper and Short-Term Ratings

The designation A1 by IBCA indicates that the obligation is
supported by a very strong capacity for timely repayment. Those obligations
rated A1+ are supported by the highest capacity for timely repayment.
Obligations rated A2 are supported by a strong capacity for timely

A-5
<PAGE> 150

repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.

International and U.S. Bank Ratings

An IBCA bank rating represents IBCA's current assessment of the
strength of the bank and whether such bank would receive support should it
experience difficulties. In its assessment of a bank, IBCA uses a dual rating
system comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks Long-and Short-Term Ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties, and such ratings
are considered by IBCA to be a prime factor in its assessment of credit risk.
Individual Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the question of how
the bank would be viewed if it were entirely independent and could not rely on
support from state authorities or its owners.

A-6