MASTER INVESTMENT PORTFOLIO, POS AMI, 1998-06-30

MASTER INVESTMENT PORTFOLIO
POS AMI, 1998-06-30

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As filed with the Securities and Exchange Commission
on June 30, 1998

Registration No. 811-8162

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_______________

FORM N-1A

AMENDMENT NO. 6 TO THE
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940

MASTER INVESTMENT PORTFOLIO
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

111 Center Street, Little Rock, Arkansas 72201
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

_______________________________________

Registrant's Telephone Number, including Area Code:
(800) 643-9691

Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(NAME AND ADDRESS OF AGENT FOR SERVICE)

WITH A COPY TO:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W., Suite 5500
Washington, D.C. 20006-1812
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EXPLANATORY NOTE

This Amendment No. 6 to the Registration Statement of Master Investment
Portforlio (the "Trust") is being filed to add audited financial statements and
certain related financial information for the fiscal year ended February 28,
1998 for the Trust's Asset Allocation, Bond Index, LifePath 2000, LifePath 2010,
LifePath 2020, LifePath 2030, LifePath 2040, S&P 500 Index and U.S. Treasury
Allocation Master Portfolios, and to add certain other non-material changes to
the Registration Statement.

This Amendment has been filed by the Registrant pursuant to Section 8(b) of
the Investment Company Act of 1940. However, beneficial interests in the
Registrant are not being registered under the Securities Act of 1933 (the "1933
Act") because such interests will be issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Registrant may only be made by
registered broker/dealers or by investment companies, insurance company separate
accounts, common commingled trust funds, group trusts or similar organizations
or entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. This Registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any beneficial interest in the
Registrant.
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Master Investment Portfolio
Cross Reference Sheet

Form N-1A Item Number

Part A Prospectus Caption

4 General Description of Registrant
Investment Objectives
Investment Policies
Risk Considerations
5 Management of the Master Portfolios
Investment Adviser
Co-Administrators
Placement Agent
Custodian
Transfer Agent
Expenses
6 Capital Stock and Other Securities
Organization and Interests
Dividends and Distributions
Taxes
7 Purchase of Interests
8 Redemption or Repurchase
9 Not Applicable

Part B Statement of Additional Information

10 Cover Page
11 Table of Contents
12 General Information and History
13 Investment Objectives and Policies
Portfolio Securities
Management Policies
Investment Restrictions
14 Management of MIP
15 Control Persons and Principal Holders of Securities
16 Investment Advisory and Other Services
17 Brokerage Allocation and Other Practices
18 Capital Stock and Other Securities
19 Purchase, Redemption and Pricing of Securities
20 Tax Status
21 Underwriters
22 Calculation of Performance Data
23 Financial Information

Part C Other Information

24-32 Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Document.
<PAGE>

MASTER INVESTMENT PORTFOLIO
ALLOCATION MASTER PORTFOLIOS

ASSET ALLOCATION MASTER PORTFOLIO
U.S. TREASURY ALLOCATION MASTER PORTFOLIO

PART A

JUNE 30, 1998

Responses to Items 1 through 3 have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

GENERAL. Master Investment Portfolio ("MIP") is an open-end, management
investment company, organized on October 21, 1993 as a business trust under the
laws of the State of Delaware. MIP is a "series fund," which is a mutual fund
divided into separate portfolios. By this offering document, MIP is offering
two diversified portfolios (each, a "Master Portfolio"). Each Master 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 an
interestholder of one Master Portfolio is not deemed to be an interestholder of
the other Master Portfolio. As described below, for certain matters MIP
interestholders vote together as a group; as to others they vote separately by
Master Portfolio. MIP currently offers seven other portfolios pursuant to other
offering documents. From time to time, other portfolios may be established and
sold pursuant to other offering documents.

Beneficial interests in each master portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Regulation D under the Securities Act of 1933, as amended (the "1933
Act"). Investments in a Master Portfolio may be made only by investment
companies or certain other entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does
not constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.

INVESTMENT OBJECTIVES.

* The ASSET ALLOCATION MASTER PORTFOLIO seeks to maximize total return,
consisting of capital appreciation and current income, without
assuming undue risk. This Master Portfolio will follow an asset
allocation strategy by investing in a wide range of publicly traded
common stocks, U.S. Treasury Bonds and money market instruments.

* The U.S. TREASURY ALLOCATION MASTER PORTFOLIO seeks to maximize total
return, consisting of capital appreciation and current income,
without assuming undue risk. This Master Portfolio will follow an
asset allocation strategy by investing primarily among long-,
intermediate- and short-term U.S. Treasury securities.

The investment objective of each Master Portfolio cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act) of
such Master Portfolio's outstanding voting securities. The differences in
investment objectives and policies between each Master Portfolio determines
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 is
subject and the performance of each master portfolio. There can be no
assurance that the investment objective of each Master Portfolio will be
achieved.

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INVESTMENT POLICIES.

The Asset Allocation and U.S. Treasury Allocation Master Portfolios each
follow an asset allocation strategy. For each Master Portfolio, Barclays Global
Fund Advisors ("BGFA") uses proprietary investment models ("Asset Allocation
Models"), that analyze extensive financial and economic data, including risk,
correlation and expected return statistics, to recommend a portfolio allocation
as described below. BGFA may, from time to time, develop and refine the asset
Allocation Models.

THE ASSET ALLOCATION MASTER PORTFOLIO will invest its assets among three asset
classes -- common stocks, U.S. Treasury bonds and money market instruments as
follows:

* COMMON STOCKS. The Asset Allocation Master Portfolio will invest in the
common stocks which compose the Standard & Poor's 500 Stock Index (the
"S&P 500 Index")./1/ The S&P 500 Index is composed of 500 common stocks,
most of which are listed on the New York Stock Exchange. The weightings
of stocks in the S&P 500 Index are based on each stock's relative total
market capitalization; that is, its market price per share times the
number of shares outstanding. No attempt is made to manage this portion
of the Master Portfolio's investment portfolio in the traditional sense
using economic, financial and market analysis. Instead, the Master
Portfolio uses for this portion of its portfolio a computer program to
determine which securities are to be purchased or sold to replicate the
total return performance of the S&P 500 Index to the extent feasible. The
percentage of the Asset Allocation Master Portfolio's assets invested in
each stock will be approximately the same as the percentage such stock
represents in the S&P 500 Index.

* U.S. TREASURY BONDS. The Asset Allocation Master Portfolio will invest in
U.S. Treasury bonds with remaining maturities of at least 20 years. The
Master Portfolio will invest this portion of its assets in an effort to
replicate the total return performance of the Lehman Brothers 20+ Year
Treasury Index which is composed of U.S. Treasury securities with 20
years or more to maturity.

* MONEY MARKET INSTRUMENTS. The Master Portfolio will invest in money market
instruments.

The U.S. TREASURY ALLOCATION MASTER PORTFOLIO will invest its assets among
three maturity classes -- long, intermediate and short-term -- of U.S. Treasury
debt securities and repurchase agreements in respect thereof as follows:

* LONG-TERM U.S. TREASURY BONDS. The U.S. Treasury Allocation Master
Portfolio will invest in U.S. Treasury bonds with remaining maturities of
at least 20 years.

* INTERMEDIATE-TERM U.S. TREASURY NOTES. The U.S. Treasury Allocation Master
Portfolio will invest in U.S. Treasury notes and other U.S. Treasury
securities with remaining maturities ranging from one to 10 years.

* SHORT-TERM U.S. TREASURY BILLS. The U.S. Treasury Allocation Master
Portfolio will invest in U.S. Treasury bills with remaining maturities of
one year or less.

It is a fundamental policy of the U.S. Treasury Allocation Master Portfolio
that it will invest at least 65% of the value of its total assets in U.S.
Treasury securities.

- ---------------------
/1/ S&P does not sponsor the Master Portfolio, nor is it affiliated in any
way with BGFA or the Master Portfolio. "Standard & Poor's ,"S&P ,"S&P 500,"
and "Standard & Poor's 500 " are trademarks of McGraw-Hill, Inc. The Master
Portfolio is not sponsored, endorsed, sold, or promoted by S&P and S&P makes
no representation or warranty, express or implied, regarding the advisability
of investing in the Master Portfolio.

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FUNDAMENTAL INVESTMENT POLICIES. Each Master Portfolio may (i) borrow money to
the extent permitted under the 1940 Act, except that each Master Portfolio may
borrow up to 20% of the current value of its net assets for temporary purposes
only in order to meet redemptions; (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 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, subject to certain exceptions
specified in Part B, including that 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 Master Portfolio without approval by the holders of a majority
(as defined in the 1940 Act) of such Master Portfolio's outstanding voting
securities. See Item 13, "Investment Objectives and Policies -- Investment
Restrictions," in Part B.

NON-FUNDAMENTAL INVESTMENT POLICIES. Each Master Portfolio may (i) purchase
securities of companies having less than three years' continuous operation
(including operations of any predecessors), provided that the securities are
fully guaranteed or insured by the U.S. Government, a state, commonwealth,
possession, territory, the District of Columbia or by an entity in existence at
least three years, or the securities are backed by the assets and revenues of
any of the foregoing, 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. See Item 13, "Investment
Objectives and Policies -- Investment Restrictions," in Part B.

RISK CONSIDERATIONS.

GENERAL -- The net asset value per interest of each Master Portfolio is neither
insured nor guaranteed, is not fixed and should be expected to fluctuate.

EQUITY SECURITIES -- The stock investments of the Asset Allocation Master
Portfolio are subject to equity market risk. Equity market risk is the
possibility that common stock prices will fluctuate or decline over short or
even extended periods. The U.S. stock market tends to be cyclical, with periods
when stock prices generally rise and periods when prices generally decline.
Throughout the first six months of 1998, the stock market, as measured by the
S&P 500 Index and other commonly used indices, was trading at or close to record
levels. There can be no guarantee that these performance levels will continue.

DEBT SECURITIES -- The debt instruments in which the Master Portfolios may
invest are subject to credit and interest rate risk. Credit risk is the risk
that issuers of the debt instruments in which the Master Portfolios invest may
default on the payment of principal and/or interest. Interest-rate risk is the
risk that increases in market interest rates may adversely affect the value of
the debt instruments in which the Master Portfolios invest. The value of the
debt instruments generally changes inversely to market interest rates. Debt
securities with longer maturities, which tend to produce higher yields, are
subject to potentially greater capital appreciation and depreciation than
obligations with shorter maturities. Changes in the financial strength of an
issuer or changes in the ratings of any particular security may also affect the
value of these investments. Although some of the Master Portfolios' portfolio
securities are guaranteed by the U.S. Government, its agencies or
instrumentalities, such securities are subject to interest rate risk and the
market value of these securities, upon which the Master Portfolios' daily net
asset value is based, will fluctuate. No assurance can be given that the U.S.
Government would provide financial support to its agencies or instrumentalities
where it is not obligated to do so.

FOREIGN SECURITIES -- The Asset Allocation Master Portfolio may invest in the
securities of foreign issuers. Investing in the securities of issuers in any
foreign country, including American Depository Receipts ("ADRs") and European
Depository Receipts ("EDRs") and similar securities, involves special risks and
considerations not typically associated with investing in U.S. companies. These
include differences in accounting, auditing and financial reporting standards;
generally higher commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory taxation; adverse
changes in

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investment or exchange control regulations (which may include suspension of
the ability to transfer currency from a country); and political, social and
monetary or diplomatic developments that could affect U.S. investments in
foreign countries. Additionally, dispositions of foreign securities and
dividends and interest payable on those securities may be subject to foreign
taxes, including withholding taxes. Foreign securities often trade with less
frequency and volume than domestic securities and, therefore, may exhibit
greater price volatility. Additional costs associated with an investment in
foreign securities may include higher custodial fees than apply to domestic
custodial arrangements and transaction costs of foreign currency conversions.
Changes in foreign exchange rates also will affect the value of securities
denominated or quoted in currencies other than the U.S. dollar. The Master
Portfolio's performance may be affected either unfavorably or favorably by
fluctuations in the relative rates of exchange between the currencies of
different nations, by exchange control regulations and by indigenous economic
and political developments.

OTHER INVESTMENT CONSIDERATIONS -- Because the Master Portfolios may shift
investment allocations significantly from time to time, their performance may
differ from funds which invest in one asset class or from funds with a stable
mix of assets. Further, shifts among asset classes may result in relatively
high turnover and transaction (i.e., brokerage commission) costs. Portfolio
turnover also can generate short-term capital gains tax consequences. During
those periods in which a higher percentage of a Master Portfolio's assets are
invested in long-term bonds, the Master Portfolio's exposure to interest-rate
risk will be greater because the longer maturity of such securities means they
are generally more sensitive to changes in market interest rates than short-term
securities.

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 Master Portfolio and one or more of these investment companies
or accounts, available investments or opportunities for sales are allocated
equitably to each by the investment advice. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by a
Master Portfolio or the price paid or received by such Master Portfolio.

The Master Portfolios may enter into futures transactions, each of which
involves risk. The futures contracts and options on futures contracts that the
Master Portfolios may purchase may be considered derivatives. Certain of the
floating- and variable-rate instruments that each Master Portfolio may purchase
may also be considered derivatives. Derivatives are financial instruments whose
values are derived, at least in part, from the prices of other securities or
specified assets, indices or rates. 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. Some derivatives
may be more sensitive than direct securities to change 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. Master Portfolio
may not use derivatives to create leverage without establishing adequate "cover"
in compliance with SEC leverage rules.

YEAR 2000 -- Many computer software systems in use today cannot distinguish the
Year 2000 from the Year 1900. Most of the services provided to the Master
Portfolios depend on the smooth functioning of computer systems. Any failure to
adapt these systems in time could hamper a Master Portfolio's operations and
services. The Master Portfolios' principal service providers have advised the
Master Portfolios that they are working on necessary changes to their systems
and that they expect their systems to be adapted in time. There can, of course,
be no assurance of success. In addition, because the Year 2000 issue affects
virtually all organizations, the companies or entities in which the Master
Portfolios invest also could be adversely impacted by the Year 2000 issue. The
extent of such impact cannot be predicted.

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ITEM 5. MANAGEMENT OF THE MASTER PORTFOLIOS.

INVESTMENT ADVISER -- BGFA serves as investment adviser to each Master
Portfolio. BGFA is a direct subsidiary of Barclays Global Investors, N.A.,
(which, in turn, is an indirect subsidiary of Barclays Bank PLC ("Barclays"))
and is located at 45 Fremont Street, San Francisco, CA 94105. As of April 30,
1998, BGFA and its affiliates provided investment advisory services for over
approximately $575 billion of assets under management.

BGFA provides each Master Portfolio with investment guidance and policy
direction in connection with the daily portfolio management of such Master
Portfolio, subject to the supervision of MIP's Board of Trustees and in
conformity with Delaware law and the stated policies of each Master Portfolio.
BGFA furnishes to MIP's Board of Trustees periodic reports on the investment
strategy and performance of each Master Portfolio.

BGFA is entitled to receive monthly fees at the annual rate of 0.35% and 0.30%
of the average daily net assets of the Asset Allocation Master Portfolio and
U.S. Treasury Allocation Master Portfolio, respectively, as compensation for its
advisory services. From time to time, BGFA may waive such fees in whole or in
part. Any such waiver will reduce the expenses of a Master Portfolio and,
accordingly, have a favorable impact on its performance. For the year ended
February 28, 1998, BGFA received amounts equal to 0.35% and 0.30% of the average
daily net assets of the Asset Allocation and U.S. Treasury Allocation Master
Portfolios, respectively, as compensation for its advisory services.

Purchase and sale orders of the securities held by a Master Portfolio may be
combined with those of other accounts that BGFA manages or advises, and for
which it has brokerage placement authority, in the interest of seeking the most
favorable overall net results. When BGFA, subject to the supervision of and the
overall authority of MIP's Board of Trustees, determines that a particular
security should be bought or sold for a Master Portfolio and other accounts
managed by BGFA, it undertakes to allocate those transactions among the
participants equitably.

BGFA may deal, trade and invest for its own account in the types of securities
in which the Master Portfolios may invest. BGFA has informed MIP that in making
its investment decisions it does not obtain or use material inside information
in its possession.

Morrison & Foerster LLP, counsel to MIP and special counsel to BGFA, has
advised MIP and BGFA that BGFA and its affiliates may perform the services
contemplated by the BGFA Advisory Contracts and this Part A 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
regulations 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.

CO-ADMINISTRATORS -- Stephens and Barclays Global Investors, N.A. ("BGI") are
the Master Portfolio's co-administrators. Stephens and BGI provide the Master
Portfolios with administration services, including general supervision of the
Master Portfolios' non-investment operations, coordination of the other services
provided to the Master Portfolios, compilation of information for reports to the
SEC and the state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to the MIP's trustees and officers. Stephens
also furnishes office space and certain facilities to conduct the Master
Portfolios' business, and compensates the MIP's trustees, officers and employees
who are affiliated with Stephens. In addition, except as outlined below under
"Expenses," Stephens and BGI will be responsible for paying all expenses
incurred by the Master Portfolios other than the fees payable to BGFA. Stephens
and BGI are not entitled to compensation for providing administration services
to a Master Portfolio.

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BGI has delegated certain of its duties as co-administrator to Investors Bank
& Trust Company ("IBT"). IBT, as sub-administrator, is compensated by BGI for
performing certain administration services. Prior to October 21, 1996, Stephens
was the Master Portfolios' sole administrator and received fees for its services
as described in the Part B.

PLACEMENT AGENT -- Stephens is the placement agent for the Master Portfolios.
Stephens is a full service broker/dealer and investment advisory firm located
at 111 Center Street, Little Rock, Arkansas 72201. 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. Stephens does not receive compensation for acting as
placement agent.

CUSTODIAN -- IBT currently acts as the Master Portfolios' custodian. The
principal business address of IBT is 200 Clarendon Street, Boston, Massachusetts
02116. IBT is not entitled to receive compensation for its custodial services so
long as it is entitled to receive compensation for providing sub-administration
services to the Master Portfolios.

TRANSFER AGENT -- IBT also acts as each Master Portfolio's Transfer and Dividend
Disbursing Agent (the "Transfer Agent").

EXPENSES -- Except for extraordinary expenses, brokerage and other expenses
connected to the execution of portfolio transactions and certain other expenses
which are borne by the Master Portfolios, Stephens and BGI have agreed to bear
all costs of the Master Portfolios' and MIP's operations.

ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.

ORGANIZATION AND INTERESTS

MIP is organized as a trust under the laws of the State of Delaware.
investors in MIP will each be liable for all obligations of MIP. However, the
risk of an investor incurring financial loss on account of such liability is
limited to circumstances in which both inadequate insurance existed and MIP
itself was unable to meet its obligations.

To date, the Board of Trustees has authorized the creation of fourteen
separate series. All consideration received by MIP for interests of one of the
series and all assets in which such consideration is invested will belong to
that series (subject only to the rights of creditors of MIP) and will be subject
to the liabilities related thereto. The income attributable to, and the
expenses of, one series are treated separately from those of the other series.
MIP may create, from time to time, new series without interestholder approval.

As of June 1, 1998, the Asset Allocation Fund and U.S. Treasury Allocation
Fund of Masterworks Funds Inc. (formerly, Stagecoach Inc.), 111 Center Street,
Little Rock, Arkansas 72201, owned approximately 99% of the outstanding voting
securities of the Asset Allocation Master Portfolio and approximately 99% of the
outstanding voting securities of the U.S. Treasury Allocation Master Portfolio,
respectively, and each fund could be considered a "controlling person" of the
corresponding Master Portfolio for purposes of the 1940 Act.

INTERESTS IN A MASTER PORTFOLIO ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY. INVESTMENT IN A MASTER PORTFOLIO INVOLVES CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE SHARE PRICE AND INVESTMENT RETURN
OF EACH MASTER PORTFOLIO IS EXPECTED TO FLUCTUATE AND INVESTMENTS IN THE MASTER
PORTFOLIOS ARE NOT GUARANTEED.

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Unless otherwise required by the 1940 act, ordinarily it will not be necessary
for MIP to hold annual meetings of interestholders. As a result,
interestholders may not consider each year the election of trustees or the
appointment of auditors. However, the holders of at least 10% of the securities
outstanding and entitled to vote may require MIP to hold a special meeting of
interestholders for purposes of removing a trustee from office. MIP
interestholders may remove a Trustee by the affirmative vote of a majority of
MIP's outstanding voting securities. In addition, the Board of Trustees will
call a meeting of interestholders for the purpose of electing Trustees if, at
any time, less than a majority of the Trustees then holding office have been
elected by interestholders. Investments in a Master Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
at any time at net asset value.

DIVIDENDS AND DISTRIBUTIONS

The net investment income of a Master Portfolio generally will be declared and
paid as a dividend daily to all investors of record as of 1:00 p.m. (Pacific
time) with respect to each Master Portfolio. Net investment income for a
Saturday, Sunday or Holiday (as defined below) will be declared as a dividend to
investors of record as of 1:00 p.m. (Pacific time) on the previous business day
with respect to each Master Portfolio. All the net investment income of a Master
Portfolio so determined is allocated pro rata among the investors in such Master
Portfolio at the time of such determination.

Dividends and capital gain distributions, if any, paid by a Master Portfolio
will be reinvested in the investor's interest in such Master Portfolio at net
asset value and credited to the investor's account on the payment date.

TAXES

Based upon the anticipated classification of each Master Portfolio for federal
income tax purposes, MIP believes that each Master Portfolio will qualify as a
partnership for such purposes. MIP therefore believes that each Master Portfolio
will not be subject to any federal income tax on its income and net capital
gains (if any). However, each investor in a Master Portfolio will be taxable on
its distributive share of such Master Portfolio's taxable income in determining
its federal income tax liability. The determination of such share will be made
in accordance with the Internal Revenue Code of 1986, as amended (the "Code"),
and regulations promulgated thereunder.

It is intended that each Master Portfolio's assets, income and distributions
will be managed in such a way that a regulated investment company investing in
such Master Portfolio may satisfy the requirements of Subchapter M of the Code
by investing substantially all of its assets in such Master Portfolio.

Investor inquiries should be directed to Master Investment Portfolio, 111
Center Street, Little Rock, Arkansas 72201.

ITEM 7. PURCHASE OF INTERESTS.

Beneficial interests in a Master Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in a Master Portfolio may
be made only by investment companies or certain other entities which are
"accredited investors" within the meaning of Regulation D under the Securities
Act of 1933, as amended. This registration statement does not constitute an
offer to sell, or the solicitation of an offer to buy, any "security" within the
meaning of the Securities Act of 1933, as amended.

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less liabilities) by the total number of shares of such Master Portfolio
outstanding. Each Master Portfolio's investments are valued each Business Day
generally by using available market quotations or at fair value determined in
good faith by MIP's Board of Trustees. For further information regarding the
methods employed in valuing each Master Portfolio's investments, see item 19,
"Purchase, Redemption and Pricing of Securities" in Part B.

ITEM 8. REDEMPTION OR REPURCHASE.

An investor in MIP may withdraw all or any portion of its investment on any
Business Day at the net asset value next determined after a withdrawal request
in proper form is furnished by the investor to the Transfer Agent. When a
request is received in proper form, MIP will redeem the shares at the next
determined net asset value.

Each Master Portfolio will make payment for all shares redeemed within three
days after receipt by the Transfer Agent of a redemption request in proper form,
except as provided by the rules of the Securities and Exchange Commission.
Investments in a Master Portfolio may not be transferred.

The right of any investor to receive payment with respect to any withdrawal
may be suspended or the payment of the withdrawal proceeds postponed during any
period in which the New York Stock Exchange is closed (other than weekends or
holidays) or trading on such Exchange is restricted, or, to the extent otherwise
permitted by the 1940 Act, if an emergency exists.

ITEM 9. PENDING LEGAL PROCEEDINGS.

Not Applicable.

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APPENDIX

PORTFOLIO SECURITIES.

To the extent set forth in this offering document, each Master Portfolio may
invest in the securities described below.

U.S. GOVERNMENT OBLIGATIONS -- The Master Portfolios may invest in various
types of U.S. Government obligations. U.S. Government obligations include
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities. Payment of principal and interest
on U.S. Government obligations (i) may be backed by the full faith and credit of
the United States (as with U.S. Treasury obligations and GNMA certificates) or
(ii) may be backed solely by the issuing or guaranteeing agency or
instrumentality itself (as with FNMA notes). In the latter case, 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 where it is not
obligated to do so. 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.

SECURITIES OF NON-U.S. ISSUERS -- The Master Portfolios may invest in certain
securities of non-U.S. issuers as discussed below.

Obligations of Foreign Governments, Banks and Corporations -- Each Master
----------------------------------------------------------
Portfolio may invest in U.S. dollar-denominated short-term 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. The Master Portfolios may also invest in 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 each Fund's assets invested in obligations of foreign
governments and supranational entities will vary 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.

Each Master Portfolio may invest a portion of its total assets in high-
quality, short-term (one year or less) debt obligations of foreign branches of
U.S. banks or U.S. branches of foreign banks that are denominated in and pay
interest in U.S. dollars.

SHORT-TERM INSTRUMENTS AND TEMPORARY INVESTMENTS -- The Master Portfolios may
invest in high-quality money market instruments on an ongoing basis to provide
liquidity, for temporary purposes when there is an unexpected level of
shareholder purchases or redemptions or when "defensive" strategies are
appropriate. The instruments in which the Master Portfolios may invest include:
(i) short-term obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (including government-sponsored enterprises); (ii)
negotiable certificates of deposit ("CDs"), bankers' acceptances, fixed time
deposits and other obligations of domestic banks (including foreign branches)
that have more than $1 billion in total assets at the time of investment and
that are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the FDIC; (iii)
commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1+" or
"A-1" by S&P, or, if unrated, of comparable quality as determined by BGFA or
Wells Fargo Bank; (iv) non-convertible corporate debt securities (e.g., bonds
and debentures) with remaining maturities at the date of purchase of not more
than one year that are rated at least "Aa" by Moody's or "AA" by S&P; (v)
repurchase agreements; and (vi) short-term, U.S. dollar-denominated obligations
of foreign banks (including U.S. branches) that, at the time of investment have
more than $10 billion, or the

A-1
<PAGE>

equivalent in other currencies, in total assets and in the opinion of BGFA or
Wells Fargo Bank are of comparable quality to obligations of U.S. banks which
may be purchased by the Master Portfolio.

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.

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
Federal Deposit Insurance Corporation.

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.

Commercial Paper and Short-Term Corporate Debt Instruments -- Each Master
----------------------------------------------------------
Portfolio may invest in commercial paper (including variable amount master
demand notes), which consists of short-term, unsecured promissory notes issued
by corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
investment adviser and/or sub-adviser to each Master Portfolio monitors on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand.

Each Master Portfolio also may invest in non-convertible corporate debt
securities (e.g., bonds and debentures) with not more than one year remaining to
maturity at the date of settlement. A Master Portfolio will invest only in such
corporate bonds and debentures that are rated at the time of purchase at least
"Aa" by Moody's or "AA" by S&P. Subsequent to its purchase by the Master
Portfolio, an issue of securities may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by the Master Portfolio.
The investment adviser and/or sub-adviser to each Master Portfolio will consider
such an event in determining whether the Master Portfolio should continue to
hold the obligation. To the extent the Master Portfolio continues to hold such
obligations, it may be subject to additional risk of default.

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. The period of maturity is usually quite short, often overnight
or a few days, although it may extend over a number of months. A Master
Portfolio may enter into repurchase agreements only with respect to securities
that could otherwise be purchased by the Master Portfolio, and all repurchase
transactions must be collateralized. A Master Portfolio may incur a loss on a
repurchase transaction if the seller defaults and the value of the underlying
collateral declines or is otherwise limited or if receipt of the security or
collateral is delayed. The Master Portfolios may participate in pooled
repurchase agreement transactions with other funds advised by BGFA. See
"Additional Permitted Investment Activities" in the SAI for additional
information.

A-2
<PAGE>

changes. These adjustments generally limit the increase or decrease in the
amount of interest received on the debt instruments. Floating- and variable-
rate instruments are subject to interest-rate risk and credit risk.

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
privately issued securities and other securities that are subject to legal or
contractual restrictions on resale, floating- and variable-rate demand
obligations as to which the Master Portfolio cannot exercise a demand feature on
not more than seven days' notice and as to which there is no secondary market
and repurchase agreements providing for settlement more than seven days after
notice.

INVESTMENT COMPANY SECURITIES -- Each Master Portfolio may invest in
securities issued by other open-end management 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 the Master Portfolio's
net assets with respect to any one investment company and (iii) 10% of the
Master Portfolio's net assets in the aggregate. Investments in the securities
of other investment companies generally will involve duplication of advisory
fees and certain other expenses. The Master Portfolios may also purchase shares
of exchange-listed closed-end funds.

FUTURES CONTRACTS AND OPTIONS TRANSACTIONS -- Each Master Portfolio may use
futures as a substitute for a comparable market position in the underlying
securities.

A futures contract is an agreement between two parties, a buyer and a seller,
to exchange a particular commodity or financial statement at a specific price on
a specific date in the future. An option transaction generally involves a right,
which may or may not be exercised, to buy or sell a commodity or financial
instrument at a particular price on a specified future date. Futures contracts
and options are standardized and traded on exchanges, where the exchange serves
as the ultimate counterparty for all contracts. Consequently, the primary credit
risk on futures contracts is the creditworthiness of the exchange. Futures
contracts are subject to market risk (i.e., exposure to adverse price changes).

Although each Master Portfolio intends to 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 a Master
Portfolio to substantial losses. If it is not possible, or if a Master Portfolio
determines not to close a futures position in anticipation of adverse price
movements, the Master Portfolio will be required to make daily cash payments on
variation margin.

Stock Index Futures and Options on Stock Index Futures -- The Asset Allocation
------------------------------------------------------
Master Portfolio may invest in stock index futures and options on stock index
futures as a substitute for a comparable market position in the underlying
securities. 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, the 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.
There can be no assurance that a liquid market will exist at the time when a
Master Portfolio seeks to close out a futures contract or a futures option
position. Lack of a liquid market may prevent liquidation of an unfavorable
position.

A-3
<PAGE>

Interest-Rate Futures Contracts and Options on Interest-Rate Futures Contracts
------------------------------------------------------------------------------
- -- Each 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. The Master Portfolios may also
sell options on interest-rate futures contracts as part of closing purchase
transactions to terminate their options positions. No assurance can be given
that such closing transactions can be effected or the degree of correlation
between price movements in the options on interest rate futures and price
movements in the Master Portfolios' portfolio securities which are the subject
of the transaction.

Interest-Rate and Index Swaps -- Each Master Portfolio may enter into
-----------------------------
interest-rate and index swaps in pursuit of their investment objectives.
Interest-rate swaps involve the exchange by a Master Portfolio with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments on fixed-rate payments). Index swaps
involve the exchange by a Master Portfolio with another party of cash flows
based upon the performance of an index of securities or a portion of an index of
securities that usually include dividends or income. In each case, the exchange
commitments can involve payments to be made in the same currency or in different
currencies. A Master Portfolio will usually enter into swaps on a net basis. In
so doing, the two payment streams are netted out, with a Master Portfolio
receiving or paying, as the case may be, only the net amount of the two
payments. If a Master Portfolio enters into a swap, it will maintain a
segregated account on a gross basis, unless the contract provides for a
segregated account on a net basis. If there is a default by the other party to
such a transaction, a Master Portfolio will have contractual remedies pursuant
to the agreements related to the transaction.

The use of interest-rate and index swaps is a highly specialized activity
which involves investment techniques and risks 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 a Master Portfolio is contractually obligated to make. There is also a risk
of a default by the other party to a swap, in which case a Master Portfolio may
not receive net amount of payments that a Master Portfolio contractually is
entitled to receive.

LOANS OF PORTFOLIO SECURITIES -- Each Master Portfolio may lend securities
from their portfolios to brokers, dealers and financial institutions (but not
individuals) in order to increase the return on such Master Portfolio's
portfolio. The value of the loaned securities may not exceed one-third of a
Master Portfolio's total assets and loans of portfolio securities are fully
collateralized based on values that are market-to-market daily. The Master
Portfolios will not enter into any portfolio security lending arrangement having
a duration of longer than one year. The principal risk of portfolio lending is
potential default or insolvency of the borrower. In either of these cases, a
Master Portfolio could experience delays in recovering securities or collateral
or could lose all or part of the value of the loaned securities. The Master
Portfolios may pay reasonable administrative and custodial fees in connection
with loans of portfolio securities and may pay a portion of the interest or fee
earned thereon the borrower or a placing broker. See "Additional Permitted
Investment Activities" in the Part B for additional information.

FORWARD COMMITMENTS, WHEN-ISSUED PURCHASES AND DELAYED-DELIVERY TRANSACTIONS -
- - Each Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines, or
the value of the security to be sold increases, before the settlement date.
Although a Master Portfolio will generally purchase securities with the
intention of acquiring them, a Master Portfolio may dispose of securities
purchased on a when-issued, delayed-delivery or a forward commitment basis
before settlement when deemed appropriate by the adviser.

A-4
<PAGE>

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, the
Master Portfolio will not make any new investments.

A-5
<PAGE>

MASTER INVESTMENT PORTFOLIO
INDEX MASTER PORTFOLIOS

S&P 500 INDEX MASTER PORTFOLIO
BOND INDEX MASTER PORTFOLIO

PART A

JUNE 30, 1998

Responses to Items 1 through 3 have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

GENERAL. Master Investment Portfolio ("MIP") is an open-end, management
investment company, organized on October 21, 1993 as a business trust under the
laws of the State of Delaware. MIP is a "series fund," which is a mutual fund
divided into separate portfolios. By this offering document, MIP is offering two
diversified portfolios (each, a "Master Portfolio"). Each Master 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 an
interestholder of one Master Portfolio is not deemed to be an interestholder of
the other Master Portfolio. As described below, for certain matters MIP
interestholders vote together as a group; as to others they vote separately by
Master Portfolio. MIP currently offers seven other portfolios pursuant to other
offering documents. From time to time, other portfolios may be established and
sold pursuant to other offering documents.

Beneficial interests in each Master Portfolio are issued solely in
private placement transactions which do not involve any "public offering" within
the meaning of Regulation D under the Securities Act of 1933, as amended (the
"1933 Act"). Investments in a Master Portfolio may be made only by investment
companies or certain other entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act. Organizations or other entities
that hold shares of beneficial interest of a Master Portfolio may be referred to
herein as "feeder funds."

INVESTMENT OBJECTIVES.

* The S&P 500 INDEX MASTER PORTFOLIO/1/ seeks to provide
investment results that correspond to the total return
performance of publicly traded common stocks in the aggregate,
as represented by the Standard & Poor's 500 Stock Index.

* The BOND INDEX MASTER PORTFOLIO seeks to provide investment
results that correspond to the total return performance of
fixed-income securities in the aggregate, as represented by
the Lehman Brothers Government/Corporate Bond Index.

The investment objective of each Master Portfolio cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act) of
such Master Portfolio's outstanding voting securities. The differences in
objectives and policies among each Master determines 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 is subject and the

- --------
/1/ S&P does not sponsor the Master Portfolio, nor is it affiliated in any way
with BGFA or the Master Portfolio. "Standard & Poor's(R),"S&P(R),"S&P 500(R),"
and "Standard & Poor's 500(R)" are trademarks of McGraw-Hill, Inc. The Master
Portfolio is not sponsored, endorsed, sold, or promoted by S&P and S&P makes no
representation or warranty, express or implied, regarding the advisability of
investing in the Master Portfolio.

1
<PAGE>

APPENDIX

PORTFOLIO SECURITIES.

To the extent set forth in this offering document, each Master
Portfolio may invest in the securities described below.

SECURITIES OF NON-U.S. ISSUERS -- The Master Portfolios may invest in
certain securities of non-U.S. issuers as discussed below.

Obligations of Foreign Governments, Banks and Corporations -- Each Master
----------------------------------------------------------
Portfolio may invest in U.S. dollar-denominated short-term 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. The Master Portfolios may also invest in 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 each Master Portfolio's assets invested in obligations of
foreign governments and supranational entities will vary 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.

SHORT-TERM INSTRUMENTS AND TEMPORARY INVESTMENTS -- The Master Portfolios
may invest in high-quality money market instruments on an ongoing basis to
provide liquidity, for temporary purposes when there is an unexpected level of
shareholder purchases or redemptions or when "defensive" strategies are
appropriate. The instruments in which the Master Portfolios may invest include:
(i) short-term obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (including government-sponsored enterprises); (ii)
negotiable certificates of deposit ("CDs"), bankers' acceptances, fixed time
deposits and other obligations of domestic banks (including foreign branches)
that have more than $1 billion in total assets at the time of investment and
that are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the FDIC; (iii)
commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1+" or
"A-1" by S&P, or, if unrated, of comparable quality as determined by BGFA or
Wells Fargo Bank; (iv) non-convertible corporate debt securities (e.g., bonds
and debentures) with remaining maturities at the date of purchase of not more
than one year that are rated at least "Aa" by Moody's or "AA" by S&P; (v)
repurchase agreements; and (vi) short-term, U.S. dollar-denominated obligations
of foreign banks (including U.S. branches) that, at the time of investment have
more than $10 billion, or the

A-1
<PAGE>

equivalent in other currencies, in total assets and in the opinion of BGFA or
Wells Fargo Bank are of comparable quality to obligations of U.S. banks which
may be purchased by the Master Portfolio.

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 Federal Deposit Insurance Corporation.

A-2
<PAGE>

changes. These adjustments generally limit the increase or decrease in the
amount of interest received on the debt instruments. Floating- and variable-rate
instruments are subject to interest-rate risk and credit risk.

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 privately issued securities and other securities that are
subject to legal or contractual restrictions on resale, floating- and
variable-rate demand obligations as to which the Master Portfolio cannot
exercise a demand feature on not more than seven days' notice and as to which
there is no secondary market and repurchase agreements providing for settlement
more than seven days after notice.

INVESTMENT COMPANY SECURITIES -- Each Master Portfolio may invest in
securities issued by open-end other investment companies which principally
invest in securities of the type in which the 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 the Master Portfolio's net assets with
respect to any one investment company and (iii) 10% of the Master Portfolio's
net assets in the aggregate. Investments in the securities of other investment
companies generally will involve duplication of advisory fees and certain other
expenses. The Master Portfolios may also purchase shares of exchange-listed
closed-end funds.

FUTURES CONTRACTS AND OPTIONS TRANSACTIONS -- Each Master Portfolio may use
futures as a substitute for a comparable market position in the underlying
securities.

A futures contract is an agreement between two parties, a buyer and a
seller, to exchange a particular commodity or financial statement at a specific
price on a specific date in the future. An option transaction generally involves
a right, which may or may not be exercised, to buy or sell a commodity or
financial instrument at a particular price on a specified future date. Futures
contracts and options are standardized and traded on exchanges, where the
exchange serves as the ultimate counterparty for all contracts. Consequently,
the primary credit risk on futures contracts is the creditworthiness of the
exchange. Futures contracts are subject to market risk (i.e., exposure to
adverse price changes).

Stock Index Futures and Options on Stock Index Futures -- The S&P 500 Stock
------------------------------------------------------
Master Portfolio may invest in stock index futures and options on stock index
futures as a substitute for a comparable market position in the underlying
securities. 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 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.
There can be no assurance that a liquid market will exist at the time when a
Master Portfolio seeks to close out a futures contract or a futures option
position. Lack of a liquid market may prevent liquidation of an unfavorable
position.

A-3
<PAGE>

Interest-Rate Futures Contracts and Options on Interest-Rate Futures
--------------------------------------------------------------------
Contracts -- The Bond Index 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. The Master Portfolios
may also sell options on interest-rate futures contracts as part of closing
purchase transactions to terminate their options positions. No assurance can be
given that such closing transactions can be effected or the degree of
correlation between price movements in the options on interest rate futures and
price movements in the Master Portfolio's portfolio securities which are the
subject of the transaction.

Interest-Rate and Index Swaps -- The Bond Index Master Portfolio may enter
-----------------------------
into interest-rate and index swaps in pursuit of its investment objectives.
Interest-rate swaps involve the exchange by the Master Portfolio with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments on fixed-rate payments). Index swaps
involve the exchange by the Master Portfolio with another party of cash flows
based upon the performance of an index of securities or a portion of an index of
securities that usually include dividends or income. In each case, the exchange
commitments can involve payments to be made in the same currency or in different
currencies. The Master Portfolio will usually enter into swaps on a net basis.
In so doing, the two payment streams are netted out, with the Master Portfolio
receiving or paying, as the case may be, only the net amount of the two
payments. If the Master Portfolio enters into a swap, it will maintain a
segregated account on a gross basis, unless the contract provides for a
segregated account on a net basis. If there is a default by the other party to
such a transaction, the Master Portfolio will have contractual remedies pursuant
to the agreements related to the transaction.

The use of interest-rate and index swaps is a highly specialized activity
which involves investment techniques and risks 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
the 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 Master Portfolio is contractually obligated to make. There is also a
risk of a default by the other party to a swap, in which case the Master
Portfolio may not receive net amount of payments that a Master Portfolio
contractually is entitled to receive.

FORWARD COMMITMENTS, WHEN-ISSUED PURCHASES AND DELAYED-DELIVERY TRANSACTIONS
- -- Each Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines, or
the value of the security to be sold increases, before the settlement date.
Although a Master Portfolio will generally purchase securities with the
intention of acquiring them, a Master Portfolio may dispose of securities
purchased on a when-issued, delayed-delivery or a forward commitment basis
before settlement when deemed appropriate by the adviser.

A-4
<PAGE>

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 will evaluate such obligations and
the ability of their issuers to pay interest and principal. Each Master
Portfolio will rely on BGFA's judgment, analysis and experience in evaluating
the creditworthiness of an issuer. In this evaluation, BGFA will take 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 Item 4, "Description of Registrant -- Risk Factors -- Fixed-Income
Securities."
<PAGE>

MASTER INVESTMENT PORTFOLIO

LIFEPATH 2000 MASTER PORTFOLIO
LIFEPATH 2010 MASTER PORTFOLIO
LIFEPATH 2020 MASTER PORTFOLIO
LIFEPATH 2030 MASTER PORTFOLIO
LIFEPATH 2040 MASTER PORTFOLIO

PART A

June 30, 1998

Responses to Items 1 through 3 have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

GENERAL. Master Investment Portfolio ("MIP") is an open-end, management
investment company, organized on October 21, 1993 as a business trust under the
laws of the State of Delaware. MIP is a "series fund," which is a mutual fund
divided into separate portfolios. By this offering document, MIP is offering
five asset allocation portfolios (each, a "Master Portfolio" or "LifePath Master
Portfolio"). Each LifePath Master 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 an interestholder of one LifePath Master
Portfolio is not deemed to be an interestholder of any other LifePath Master
Portfolio. as described below, for certain matters MIP interestholders vote
together as a group; as to others they vote separately by Master Portfolio. MIP
currently offers four other series pursuant to other offering documents. From
time to time, other portfolios may be established and sold pursuant to other
offering documents.

Beneficial interests in each Master Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Regulation D under the Securities Act of 1933, as amended (the "1933
Act"). Investments in a Master Portfolio may be made only by investment
companies or certain other entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does
not constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act. Organizations or other entities
that hold shares of beneficial interest of a Master Portfolio may be referred to
herein as "feeder funds."

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

* LIFEPATH 2000 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of
their investment) approximately in the year 2000.

* LIFEPATH 2010 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of
their investment) approximately in the year 2010.

* LIFEPATH 2020 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of
their investment) approximately in the year 2020.

* LIFEPATH 2030 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of
their investment) approximately in the year 2030.

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* LIFEPATH 2040 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of
their investment) approximately in the year 2040.

Each LifePath Master Portfolio's investment objective cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act) of
such Master Portfolio's outstanding voting securities. 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 is subject and the
performance of each Master Portfolio. There can be no assurance that the
investment objective of each Master Portfolio will be achieved.

INTRODUCTION. The LifePath 2000, LifePath 2010, LifePath 2020, LifePath 2030,
and LifePath 2040 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 LifePath Master Portfolio generally
bearing more risk than the earlier-dated LifePath Master Portfolio, 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. These weightings will change periodically. The difference in the
investment class weightings is based on the statistically determined risk that
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. As each LifePath Master Portfolio approaches its designated time
horizon, it generally 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 LifePath 2000 Master Portfolio will not terminate when it reaches its
target date on the first day of the year 2000. Instead, it will enter its
"retirement phase" during which it will seek to maximize assets consistent with
the risk that an average investor in retirement may be willing to accept. The
LifePath 2000 Master Portfolio will continue to follow an asset allocation
strategy among three broad investment classes: equity and debt securities of
domestic and foreign issuers and cash in the form of money market instruments.
However, unlike the remaining Master Portfolios with target dates, during its
retirement phase a Master Portfolio will no longer reduce its investment risk
through time. Instead, a retirement phase Master Portfolio is expected to have
a long-term average mix of approximately 20% equity securities, with the
remainder in debt securities and some cash. In the same manner as all LifePath
Master Portfolios, a Master Portfolio in its retirement phase will continue to
employ a tactical asset allocation component, which will alter the investment
mix to account for changing expected risks and opportunities. When other Master
Portfolios reach their target dates, it is expected that they will be combined
with the retirement phase Master Portfolio under the same investment strategy.

To manage the LifePath Master Portfolios, Barclays Global Fund Advisors
("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, 1998, the asset
allocations in the LifePath Master Portfolios were approximately as follows:

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<TABLE>
<CAPTION>
LIFEPATH 2000 LIFEPATH 2010 LIFEPATH 2020 LIFEPATH 2030 LIFEPATH 2040
MASTER PORTFOLIO MASTER PORTFOLIO MASTER PORTFOLIO MASTER PORTFOLIO MASTER PORTFOLIO
----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Equity Securities
Domestic 16.84% 36.74% 54.05% 65.13% 79.53%
International 5.26% 9.92% 14.45% 19.00% 19.76%
Debt Securities 54.73% 44.51% 26.84% 13.36% 0.00%
Cash 23.17% 8.83% 4.66% 2.51% 0.71%
</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.

INVESTMENT POLICIES.

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 Master Portfolio 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 Master Portfolio 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, that 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, BGFA 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 to allocate the Master Portfolios'
investments among equity securities, debt securities and money market
instruments. 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 will allocate assets across fewer of the investment categories
identified below than it otherwise would. As a Master Portfolio approaches this
minimum asset level, the Model will add investment categories from among those
identified below, thereby approaching the desired investment mix over time. The
portfolio of investments of each Master Portfolio is 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 that also invest in accordance with the
Model. The performance of each of those other portfolios is likely to vary
among themselves and from the performance of each LifePath Master Portfolio.
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 Master Portfolio is based
on the recommendation of the Model, and no person is primarily responsible for
recommending the mix of asset

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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.

EQUITY SECURITIES -- The LifePath Master Portfolios seek U.S. equity market
exposure through investment in securities representative of 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 investment in foreign equity securities, American Depositary Receipts or
European Depositary Receipts of issuers whose securities are representative of
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).

The LifePath Master Portfolios also may seek U.S. and foreign equity
market exposure through investment in equity securities of U.S. and foreign
issuers that are not included in the indices listed above.

DEBT SECURITIES -- The LifePath Master Portfolios seek U.S. debt market exposure
through investment in securities representative of 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).

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* 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 investment in securities representative of 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 BGFA. See "Risk Factors--
Fixed-Income Securities" below, and "Appendix" in Part B.

MONEY MARKET INSTRUMENTS -- The money market instrument portion of each LifePath
Master Portfolio's investment portfolio generally is invested in 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.

CERTAIN FUNDAMENTAL POLICIES. Each 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 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 Master Portfolio without approval by the holders
of a majority (as defined in the 1940 Act) of such Master Portfolio's
outstanding voting securities. See Item 13, "Investment Objectives and
Policies -- Investment Restrictions," in Part B.

CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES. Each Master Portfolio may (i)
purchase securities of companies 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.

RISK CONSIDERATIONS.

GENERAL -- The net asset value per interest of each LifePath Master Portfolio is
neither insured nor guaranteed, is not fixed and should be expected to
fluctuate.

EQUITY SECURITIES -- The stock investments of the LifePath Master Portfolios are
subject to equity market risk. Equity market risk is the possibility that
common stock prices will fluctuate or decline over short or even extended
periods. The U.S. stock market tends to be cyclical, with periods when stock
prices generally rise and periods when prices generally decline. Throughout the
first six months of 1998, the stock market, as measured by

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the S&P 500 Index and other commonly used indices, was trading at or close to
record levels. There can be no guarantee that these performance levels will
continue.

DEBT SECURITIES -- The debt instruments in which the LifePath Master Portfolios
invest are subject to credit and interest rate risk. Credit risk is the risk
that issuers of the debt instruments in which the Master Portfolios invest may
default on the payment of principal and/or interest. Interest-rate risk is the
risk that increases in market interest rates may adversely affect the value of
the debt instruments in which the Master Portfolios invest. The value of the
debt instruments generally changes inversely to market interest rates. Debt
securities with longer maturities, which tend to produce higher yields, are
subject to potentially greater capital appreciation and depreciation than
obligations with shorter maturities. Changes in the financial strength of an
issuer or changes in the ratings of any particular security may also affect the
value of these investments. Although some of the Master Portfolios' portfolio
securities are guaranteed by the U.S. Government, its agencies or
instrumentalities, such securities are subject to interest rate risk and the
market value of these securities, upon which the Master Portfolios' daily net
asset value is based, will fluctuate. No assurance can be given that the U.S.
Government would provide financial support to its agencies or instrumentalities
where it is not obligated to do so.

FOREIGN SECURITIES -- The LifePath Master Portfolios may invest in debt
obligations and equity securities of foreign issuers and may invest in American
Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs") of such
issuers. Investing in the securities of issuers in any foreign country, ADRs and
EDRs, involves special risks and considerations not typically associated with
investing in U.S. companies. These include differences in accounting, auditing
and financial reporting standards; generally higher commission rates on foreign
portfolio transactions; the possibility of nationalization, expropriation or
confiscatory taxation; adverse changes in investment or exchange control
regulations (which may include suspension of the ability to transfer currency
from a country); and political, social and monetary or diplomatic developments
that could affect U.S. investments in foreign countries. Additionally,
dispositions of foreign securities and dividends and interest payable on those
securities may be subject to foreign taxes, including withholding taxes.
Foreign securities often trade with less frequency and volume than domestic
securities and, therefore, may exhibit greater price volatility. Additional
costs associated with an investment in foreign securities may include higher
custodial fees than apply to domestic custodial arrangements and transaction
costs of foreign currency conversions. Changes in foreign exchange rates also
will affect the value of securities denominated or quoted in currencies other
than the U.S. dollar. A Master Portfolio's performance may be affected either
unfavorably or favorably by fluctuations in the relative rates of exchange
between the currencies of different nations, by exchange control regulations and
by indigenous economic and political developments.

OTHER INVESTMENT CONSIDERATIONS -- Because the Master Portfolios may shift
investment allocations significantly from time to time, their performance may
differ from funds which invest in one asset class or from funds with a stable
mix of assets. Further, shifts among asset classes may result in relatively
high turnover and transaction (i.e., brokerage commission) costs. Portfolio
turnover also can generate short-term capital gains tax consequences. During
those periods in which a high percentage of a Master Portfolio's assets are
invested in long-term bonds, the Master Portfolio's exposure to interest-rate
risk will be greater because the longer maturity of such securities means they
are generally more sensitive to changes in market interest rates than short-term
securities.

Each LifePath Master Portfolio also may lend its portfolio securities
and enter into futures transactions, each of which involves risk. The futures
contracts and options on futures contracts that each Master Portfolio may
purchase may be considered derivatives. Derivatives are financial instruments
whose values are derived, at least in part, from the prices of other securities
or specified assets, indices or rates. 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. 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.

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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 are 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
interestholders as ordinary income. Portfolio turnover is not a limiting factor
for the investment adviser in making investment decisions.

ITEM 5. MANAGEMENT OF THE MASTER PORTFOLIOS.

INVESTMENT ADVISER -- BGFA serves as investment adviser to each LifePath Master
Portfolio. BGFA is a direct subsidiary of Barclays Global Investors, N.A.
(which, in turn, is an indirect subsidiary of Barclays Bank PLC ("Barclays"))
and is located at 45 Fremont Street, San Francisco, CA 94105. As of April 30,
1998, BGFA and its affiliates provided investment advisory services for
approximately $575 billion of assets under management.

BGFA provides each LifePath Master Portfolio with investment guidance
and policy direction in connection with the daily portfolio management of such
Master Portfolio, subject to the supervision of MIP's Board of Trustees and in
conformity with Delaware law and the stated policies of each Master Portfolio.
BGFA furnishes to MIP's Board of Trustees periodic reports on the investment
strategy and performance of each LifePath Master Portfolio.

BGFA is entitled to receive monthly fees at the annual rate of 0.55%
of the average daily net assets of each LifePath Master Portfolio as
compensation for its advisory services. From time to time, BGFA may waive such
fees in whole or in part. Any such waiver will reduce the expenses of a Master
Portfolio and, accordingly, have a favorable impact on its performance. For the
year ended February 28, 1998, BGFA received amounts equal to 0.55% of the
average daily net assets of each of the LifePath Master Portfolios as
compensation for its advisory services.

In connection with payments made by BGFA in certain business
transactions, MIP's Board of Trustees 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 Master Portfolios currently do not
pay any amounts pursuant to the Plan. See Item 16, "Distribution Plan" in Part
B.

Purchase and sale orders of the securities held by a Master Portfolio
may be combined with those of other accounts that BGFA manages or advises, and
for which it has brokerage placement authority, in the interest of seeking the
most favorable overall net results. When BGFA, subject to the supervision of,
and the overall authority of MIP's Board of Trustees, determines that a
particular security should be bought or sold for a Master Portfolio and other
accounts managed by BGFA, it undertakes to allocate those transactions among the
participants equitably.

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BGFA may deal, trade and invest for its own account in the types of
securities in which the Master Portfolios may invest. BGFA has informed MIP
that in making its investment decisions it does not obtain or use material
inside information in its possession.

Morrison & Foerster LLP, counsel to MIP and special counsel to BGFA,
has advised MIP and BGFA that BGFA and its affiliates may perform the services
contemplated by the BGFA Advisory Contracts and this Part A 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
regulations 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.

CO-ADMINISTRATORS -- Stephens and Barclays Global Investors, N.A. ("BGI") are
the Master Portfolio's co-administrators. Stephens and BGI provide the Master
Portfolios with administrative services, including general supervision of the
Master Portfolios' non-investment operations, coordination of the other services
provided to the Master Portfolios, compilation of information for reports to the
SEC and the state securities commissions, preparation of proxy statements and
shareholder reports, and general supervision of data compilation in connection
with preparing periodic reports to MIP's trustees and officers. Stephens also
furnishes office space and certain facilities to conduct the Master Portfolios'
business, and compensates MIP's trustees, officers and employees who are
affiliated with Stephens. In addition, except as outlined below under
"Expenses", Stephens and BGI will be responsible for paying all expenses
incurred by the Master Portfolios other than the fees payable to BGFA. Stephens
and BGI are not entitled to compensation for providing administration services
to a Master Portfolio. Prior to October 21, 1996, Stephens was the Master
Portfolios' sole administrator and received fees for its services us described
in the Part B.

BGI has delegated certain of its duties as co-administrator to
Investors Bank & Trust Company ("IBT"). IBT, as sub-administrator, is
compensated by BGI for performing certain administration services.

PLACEMENT AGENT -- Stephens is the placement agent for the Master Portfolios.
Stephens is a full service broker/dealer and investment advisory firm located at
111 Center Street, Little Rock, Arkansas 72201. 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. Stephens does not receive compensation for acting as placement
agent.

CUSTODIAN -- IBT currently acts as the Master Portfolios' custodian. The
principal business address of IBT is 200 Clarendon Street, Boston, Massachusetts
02111. IBT is not entitled to receive compensation for its custodial services so
long as it is entitled to receive compensation for providing sub-administration
services to the Master Portfolios. Prior to October 21, 1996, BGI acted as the
Master Portfolios' custodian. The principal business address of BGI is 45
Fremont Street, San Francisco, California 94105. BGI did not receive
compensation for its custodial services.

TRANSFER AGENT -- IBT also acts as each Master Portfolio's Transfer and
Dividend Disbursing Agent (the "Transfer Agent").

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ITEM 6. CAPITAL STOCK AND OTHER INTERESTS.

MIP is organized as a trust under the laws of the State of Delaware.
Investors in MIP are each liable for all obligations of MIP. However, the risk
of an investor 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.

To date, the Board of Trustees has authorized the creation of fourteen
separate series. All consideration received by MIP for interests of one of the
series and all assets in which such consideration is invested belong to that
series (subject only to the rights of creditors of MIP) and is subject to the
liabilities related thereto. The income attributable to, and the expenses of,
one series are treated separately from those of the other series. MIP has the
ability to create, from time to time, new series without interestholder
approval.

Unless otherwise required by the 1940 aact, ordinarily it is not
necessary for MIP to hold annual meetings of interestholders. As a result,
interestholders may not consider each year the election of Trustees or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require MIP to hold a special meeting of
interestholders for purposes of removing a Trustee from office. MIP
interestholders may remove a Trustee by the affirmative vote of a majority of
MIP's outstanding voting securities. In addition, the Board of Trustees will
call a meeting of interestholders for the purpose of electing Trustees if, at
any time, less than a majority of the Trustees then holding office have been
elected by interestholders. Investments in a Master Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
at any time at net asset value.

Each Master Portfolio of MIP will be considered a non-publicly traded
partnership for federal income tax purposes, and as such, it will not be subject
to federal income tax. However, each investor in a Master Portfolio is taxable
on its share (as determined in accordance with the governing instruments of MIP)
of such Master Portfolio's taxable income in determining its income tax
liability. The determination of such share is made in accordance with the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations
promulgated thereunder.

It is expected that each Master Portfolio is managed so that each
investment company that invests all of its assets in a Master Portfolio
qualifies as a "regulated investment company" under the Code.

As of June 1, 1998, the following funds of MasterWorks Funds Inc.
("MasterWorks") and Stagecoach Trust ("Stagecoach") held approximately the
following percentages of the outstanding voting securities of the indicated
LifePath Master Portfolio and, as such, could be considered controlling persons
for purposes of the 1940 Act of the corresponding Master Portfolio:

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<TABLE>
<CAPTION>
% OUTSTANDING
LIFEPATH MASTER PORTFOLIO FUND SECURITIES HELD
- -------------------------------- -------------------------------- --------------------------------
<S> <C> <C>

Lifepath 2000 Master Portfolio MasterWorks LifePath 2000 43%
Stagecoach LifePath Opportunity 57%

Lifepath 2010 Master Portfolio MasterWorks LifePath 2010 55%
Stagecoach LifePath 2010 45%

Lifepath 2020 Master Portfolio MasterWorks LifePath 2020 46%
Stagecoach LifePath 2020 54%

Lifepath 2030 Master Portfolio MasterWorks LifePath 2030 41%
Stagecoach LifePath 2030 59%

Lifepath 2040 Master Portfolio MasterWorks LifePath 2040 33%
Stagecoach LifePath 2040 67%
</TABLE>

For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25% of the voting securities of a
company is presumed to "control" such company. Accordingly, to the extent that
an interestholder identified in the foregoing table is identified as the
beneficial holder of more than 25% of a Master Portfolio, or is identified as
the holder of record of more than 25% of a Master Portfolio and has voting
and/or investment powers, such interestholder may be presumed to control such
Master Portfolio.

ITEM 7. PURCHASE OF INTERESTS.

Beneficial interests in the Master Portfolios are issued solely in
private placement transactions which do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Master
Portfolios may be made only by investment companies or certain other entities
which are "accredited investors" within the meaning of Regulation D under the
1933 Act. This registration statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.

Shares of each Master Portfolio 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 for each LifePath
Master Portfolio is determined as of the close of 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"). Net asset value per share is
computed by dividing the value of a Master Portfolio's net assets (i.e., the
value of its assets less liabilities) by the total number of shares of such
Master Portfolio outstanding. A Master Portfolio's 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 Portfolio's investments,
see Item 19, "Purchase, Redemption and Pricing of Securities" in Part B.

ITEM 8. REDEMPTION OR REPURCHASE.

An investor in MIP may withdraw all or any portion of its investment
on any Business Day at the net asset value next determined after a withdrawal
request in proper form is furnished by the investor to the Transfer Agent. When
a request is received in proper form, MIP redeems the shares at the next
determined net asset value.

Each Master Portfolio makes payment for all shares redeemed within
five days after receipt by the Transfer Agent of a redemption request in proper
form, except as provided by the rules of the Securities and Exchange Commission.
Investments in a Master Portfolio may not be transferred.

10
<PAGE>

The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted, or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.

ITEM 9. PENDING LEGAL PROCEEDINGS.

Not applicable.

11
<PAGE>

APPENDIX

PORTFOLIO SECURITIES.

To the extent set forth in this offering document, each Master
Portfolio may invest in the securities described below.

U.S. GOVERNMENT OBLIGATIONS -- The Master Portfolios may invest in
various types of U.S. Government obligations. U.S. Government obligations
include securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities. Payment of principal and interest
on U.S. Government obligations (i) may be backed by the full faith and credit of
the United States (as with U.S. Treasury obligations and GNMA certificates) or
(ii) may be backed solely by the issuing or guaranteeing agency or
instrumentality itself (as with FNMA notes). In the latter case, 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 where it is not
obligated to do so. 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.

SECURITIES OF NON-U.S. ISSUERS -- The Master Portfolios may invest in
certain securities of non-U.S. issuers as discussed below.

Obligations of Foreign Governments, Supranational Entities and Banks -
--------------------------------------------------------------------
- - Each Master Portfolio may invest in U.S. dollar-denominated short-term
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. The Master Portfolios may also invest in 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 each Fund's assets invested in obligations of foreign
governments and supranational entities will vary 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.

Each Master Portfolio may invest a portion of its total assets in
high-quality, short-term (one year or less) debt obligations of foreign branches
of U.S. banks or U.S. branches of foreign banks that are denominated in and pay
interest in U.S. dollars.

Foreign Equity Securities and Depositary Receipts -- Each Master
-------------------------------------------------
Portfolio's assets may be invested in the securities of foreign issuers and
American Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs")
of such issuers.

ADRs and EDRs 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 U. S. securities markets and EDRs
and CDRs in bearer form are designed for use in Europe. Each 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

A-1
<PAGE>

facilities and the depositary of an unsponsored facility frequently is under no
obligation to distribute interestholder 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.

SHORT-TERM INSTRUMENTS AND TEMPORARY INVESTMENTS -- The Master
Portfolios may invest in high-quality money market instruments on an ongoing
basis to provide liquidity, for temporary purposes when there is an unexpected
level of shareholder purchases or redemptions or when "defensive" strategies are
appropriate. The instruments in which the Master Portfolios may invest include:
(i) short-term obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities (including government-sponsored enterprises); (ii)
negotiable certificates of deposit ("CDs"), bankers' acceptances, fixed time
deposits and other obligations of domestic banks (including foreign branches)
that have more than $1 billion in total assets at the time of investment and
that are members of the Federal Reserve System or are examined by the
Comptroller of the Currency or whose deposits are insured by the FDIC; (iii)
commercial paper rated at the date of purchase "Prime-1" by Moody's or "A-1+" or
"A-1" by S&P, or, if unrated, of comparable quality as determined by BGFA or
Wells Fargo Bank; (iv) non-convertible corporate debt securities (e.g., bonds
and debentures) with remaining maturities at the date of purchase of not more
than one year that are rated at least "Aa" by Moody's or "AA" by S&P; (v)
repurchase agreements; and (vi) short-term, U.S. dollar-denominated obligations
of foreign banks (including U.S. branches) that, at the time of investment have
more than $10 billion, or the equivalent in other currencies, in total assets
and in the opinion of BGFA or Wells Fargo Bank are of comparable quality to
obligations of U.S. banks which may be purchased by the Master Portfolio.

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.

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 Federal Deposit Insurance Corporation.

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.

Commercial Paper and Short-Term Corporate Debt InstrumentS -- Each
----------------------------------------------------------
Master Portfolio may invest in commercial paper (including variable amount
master demand notes), which consists of short-term, unsecured promissory notes
issued by corporations to finance short-term credit needs. Commercial paper is
usually sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. The
investment adviser and/or sub-adviser to each Master Portfolio monitors on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand.

A-2
<PAGE>

Portfolio. The investment adviser and/or sub-adviser to each Master Portfolio
will consider such an event in determining whether the Master Portfolio should
continue to hold the obligation. To the extent the Master Portfolio continues to
hold such obligations, it may be subject to additional risk of default.

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. The period of maturity is usually quite short, often
overnight or a few days, although it may extend over a number of months. A
Master Portfolio may enter into repurchase agreements only with respect to
securities that could otherwise be purchased by the Master Portfolio, and all
repurchase transactions must be collateralized. A Master Portfolio may incur a
loss on a repurchase transaction if the seller defaults and the value of the
underlying collateral declines or is otherwise limited or if receipt of the
security or collateral is delayed. The Master Portfolios may participate in
pooled repurchase agreement transactions with other funds advised by BGFA. See
"Additional Permitted Investment Activities" in the Part B for additional
information.

FLOATING- AND VARIABLE-RATE OBLIGATIONS -- The Master Portfolios may
purchase debt instruments with interest rates that are periodically adjusted at
specified intervals or whenever a benchmark rate or index changes. These
adjustments generally limit the increase or decrease in the amount of interest
received on the debt instruments. Floating- and variable-rate instruments are
subject to interest-rate risk and credit risk.

MORTGAGE-RELATED SECURITIES -- Each 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 government
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, GNMA obligations are obligations of the United
States and 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 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 the 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 the ultimate payment of principal 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.

CONVERTIBLE SECURITIES -- Each 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.

A-3
<PAGE>

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.

ILLIQUID SECURITIES -- Each Master Portfolio may invest up to 15% of
the value of its total 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, floating- and variable-rate demand
obligations as to which the Master Portfolio cannot exercise a demand feature 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.

INVESTMENT COMPANY SECURITIES -- Each Master Portfolio may invest in
securities issued by open-end other management 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 the Master Portfolio's
total net assets with respect to any one investment company and (iii) 10% of the
Master Portfolio's total net assets in the aggregate. Investments in the
securities of other investment companies involve duplication of advisory fees
and certain other expenses. A Master Portfolio may also purchase shares of
exchange listed closed-end funds.

FUTURES CONTRACTS AND OPTIONS TRANSACTIONS -- Each LifePath Master
Portfolio may use futures as a substitute for a comparable market position in
the underlying securities.

A futures contract is an agreement between two parties, a buyer and a
seller, to exchange a particular commodity or financial statement at a specific
price on a specific date in the future. An option transaction generally involves
a right, which may or may not be exercised, to buy or sell a commodity or
financial instrument at a particular price on a specified future date. Futures
contracts and options are standardized and traded on exchanges, where the
exchange serves as the ultimate counterparty for all contracts. Consequently,
the primary credit risk on futures contracts is the creditworthiness of the
exchange. Futures contracts are subject to market risk (i.e., exposure to
adverse price changes).

Although each Master Portfolio intends to 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 a Master Portfolio to substantial losses. If it is not possible, or
if a Master Portfolio determines not to close a futures position in anticipation
of adverse price movements, the Master Portfolio will be required to make daily
cash margin payments.

Stock Index Futures and Options on Stock Index Futures -- Each
------------------------------------------------------
LifePath Master Portfolio may invest in stock index futures and options on stock
index futures as a substitute for a comparable market position in the underlying
securities. 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

A-4
<PAGE>

is made. No physical delivery of the underlying stocks in the index is made.
With respect to stock indices that are permitted investments, each 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.
There can be no assurance that a liquid market will exist at the time when a
Master Portfolio seeks to close out a futures contract or a futures option
position. Lack of a liquid market may prevent liquidation of an unfavorable
position.

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. The Master Portfolios
may also sell options on interest-rate futures contracts as part of closing
purchase transactions to terminate their options positions. No assurance can be
given that such closing transactions can be effected or the degree of
correlation between price movements in the options on interest rate futures and
price movements in the Master Portfolios' 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 their investment
objectives. Interest-rate swaps involve the exchange by a Master Portfolio with
another party of their respective commitments to pay or receive interest (for
example, an exchange of floating-rate payments on fixed-rate payments). Index
swaps involve the exchange by a Master Portfolio with another party of cash
flows based upon the performance of an index of securities or a portion of an
index of securities that usually include dividends or income. In each case, the
exchange commitments can involve payments to be made in the same currency or in
different currencies. A Master Portfolio will usually enter into swaps on a net
basis. In so doing, the two payment streams are netted out, with a Master
Portfolio receiving or paying, as the case may be, only the net amount of the
two payments. If a Master Portfolio enters into a swap, it will maintain a
segregated account on a gross basis, unless the contract provides for a
segregated account on a net basis. If there is a default by the other party to
such a transaction, a Master Portfolio will have contractual remedies pursuant
to the agreements related to the transaction.

The use of interest-rate and index swaps is a highly specialized
activity which involves investment techniques and risks 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 a Master Portfolio is contractually obligated to make. There is
also a risk of a default by the other party to a swap, in which case a Master
Portfolio may not receive net amount of payments that a Master Portfolio
contractually is entitled to receive.

Foreign Currency and Futures Transactions -- 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.

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.

A-5
<PAGE>

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.

LOANS OF PORTFOLIO SECURITIES -- Each Master Portfolio may lend
securities from their portfolios to brokers, dealers and financial institutions
(but not individuals) in order to increase the return on such Master Portfolio's
portfolio. The value of the loaned securities may not exceed one-third of a
Master Portfolio's total assets and loans of portfolio securities are fully
collateralized based on values that are marked-to-market daily. The Master
Portfolios will not enter into any portfolio security lending arrangement having
a duration of longer than one year. The principal risk of portfolio lending is
potential default or insolvency of the borrower. In either of these cases, a
Master Portfolio could experience delays in recovering securities or collateral
or could lose all or part of the value of the loaned securities. The Master
Portfolios may pay reasonable administrative and custodial fees in connection
with loans of portfolio securities and may pay a portion of the interest or fee
earned thereon the borrower or a placing broker. See "Additional Permitted
Investment Activities" in the Part B for additional information.

FORWARD COMMITMENT WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS --
Each Master Portfolio may purchase or sell securities on a when-issued or
delayed-delivery basis and make contracts to purchase or sell securities for a
fixed price at a future date beyond customary settlement time. Securities
purchased or sold on a when-issued, delayed-delivery or forward commitment basis
involve a risk of loss if the value of the security to be purchased declines, or
the value of the security to be sold increases, before the settlement date.
Although a Master Portfolio will generally purchase securities with the
intention of acquiring them, a Master Portfolio may dispose of securities
purchased on a when-issued, delayed-delivery or a forward commitment basis
before settlement when deemed appropriate by the adviser.

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.

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 Item 4, "General Description of Registrant -- Risk Considerations -
- - Fixed-Income Securities."

A-6
<PAGE>

MASTER INVESTMENT PORTFOLIO
ALLOCATION MASTER PORTFOLIOS

ASSET ALLOCATION MASTER PORTFOLIO
U.S. TREASURY ALLOCATION MASTER PORTFOLIO

PART B -- STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 1998

ITEM 10. COVER PAGE.

Master Investment Portfolio ("MIP") is an open-end, management investment
company. MIP is a "series fund," which is a mutual fund divided into separate
portfolios. This Part B is not a prospectus and should be read in conjunction
with MIP's Part A, also dated June 30, 1998. All terms used in this Part B that
are defined in Part A have the meanings assigned in Part A. A copy of Part A
may be obtained without charge by writing Master Investment Portfolio, c/o
Investors Bank & Trust Co.,--Transfer Agent, P.O. Box 9130, Mail Code MFD23,
Boston, MA 02117-9130, or by calling 1-888-204-3956. MIP's Registration
Statement may be examined at the office of the Securities and Exchange
Commission ("SEC") in Washington, D.C.

ITEM 11. TABLE OF CONTENTS.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information and History.......................................... 1
Investment Objectives and Policies....................................... 1
Management of MIP........................................................ 6
Control Persons and Principal Holders of Securities...................... 8
Investment Advisory and Other Services................................... 9
Brokerage Allocation and Other Practices................................. 11
Capital Stock and Other Securities....................................... 12
Purchase, Redemption and Pricing of Securities........................... 12
Tax Status............................................................... 13
Underwriters............................................................. 14
Calculations of Performance Data......................................... 14
Financial Information.................................................... 14
Appendix................................................................. A-1
Financial Statements..................................................... F-1
</TABLE>

ITEM 12. GENERAL INFORMATION AND HISTORY.

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). BGFA is
now a subsidiary of WFITC which, effective January 1, 1996, changed its name to
Barclays Global Investors, N.A. ("BGI"). Stephens Inc. ("Stephens") serves as
placement agent of each Master Portfolio's interests.

ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.

The following information supplements and should be read in conjunction with
Item 4 in Part A.

Investment Objectives. MIP is an open-end, management investment company. By
this offering document, MIP is offering two diversified portfolios - the Asset
Allocation Master Portfolio and U.S. Treasury Allocation Master Portfolio (each,
a "Master Portfolio" and together, the "Master Portfolios").

1
<PAGE>

Each Master Portfolio's investment objective is set forth in Item 4, "General
Description of Registrant -- Investment Objective," of Part A. There can be no
assurance that the investment objectives of each Master Portfolio will be
achieved. Each Master Portfolio's investment objective is fundamental, and
therefore cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
such Master Portfolio's outstanding voting interests.

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 regulation 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 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 United States 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 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 regulator, by depositing assets with a designated bank within the
state, a certain percentage of their assets as fixed from time to time by the
appropriate regulatory authority; and (2) maintain assets within the 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.

2
<PAGE>

Each Master Portfolio may purchase CDs issued by banks, savings and loan
associations and similar thrift institutions with less than $1 billion in
assets, which are members of the FDIC, 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.

Repurchase Agreements. Each Master Portfolio may engage in a repurchase
agreement with respect to any security in which it is authorized to invest,
although the underlying security may mature in more than thirteen months. The
Master Portfolio may enter into repurchase agreements wherein the seller of a
security to the Master Portfolio agrees to repurchase that security from the
Master Portfolio at a mutually agreed-upon time and price that involves the
acquisition by the Master Portfolio of an underlying debt instrument, subject to
the seller's obligation to repurchase, and the Master Portfolio's obligation to
resell, the instrument at a fixed price usually not more than one week after its
purchase. The Master Portfolio's custodian has custody of, and holds in a
segregated account, securities acquired as collateral by the Master Portfolio
under a repurchase agreement. Repurchase agreements are considered by the staff
of the SEC to be loans by the Master Portfolio. The Master Portfolio may enter
into repurchase agreements only with respect to securities of the type in which
it may invest, including government securities and mortgage-related securities,
regardless of their remaining maturities, and requires that additional
securities be deposited with the custodian if the value of the securities
purchased should decrease below resale 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 the Master Portfolio in
connection with the sale of the underlying 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 the Master Portfolio may be delayed
or limited. While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delay and costs to the Master
Portfolio in connection with insolvency proceedings), it is the policy of the
Master Portfolio to limit repurchase agreements to selected creditworthy
securities dealers or domestic banks or other recognized financial institutions.
The Master Portfolio considers on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements. Repurchase
agreements are considered to be loans by a Master Portfolio under the 1940 Act.

Floating- and Variable-Rate Obligations. Each Master Portfolio may purchase
floating- and variable-rate obligations as described in the Prospectus. The
Master Portfolio may purchase floating- and variable-rate demand notes and
bonds, which are obligations ordinarily having stated maturities in excess of
thirteen months, but which permit the holder to demand payment of principal at
any time, or at specified intervals not exceeding thirteen months. Variable
rate demand notes include master demand notes that are obligations that permit
the 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,
and 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 Portfolio's 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 the Master Portfolio may
invest in obligations which are not so rated only if BGFA determines that at the

3
<PAGE>

time of investment the obligations are of comparable quality to the other
obligations in which the Master Portfolio may invest. BGFA, on behalf of the
Master Portfolio, considers on an ongoing basis the creditworthiness of the
issuers of the floating- and variable-rate demand obligations in the Master
Portfolio's portfolio. The Master Portfolio will not invest more than 10% of
the value of its total net assets in floating- or variable-rate demand
obligations whose demand feature is not exercisable within seven days. Such
obligations may be treated as liquid, provided that an active secondary market
exists.

Futures Contracts and Options on Futures Contracts. The Master Portfolio may
enter into futures contracts and may purchase and write options thereon. Upon
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 does change daily and that change
would be reflected in the net asset value of the relevant Master Portfolio.

Future Developments. Each Master Portfolio may take advantage of
opportunities in the area 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 Master Portfolio's investment objective and legally
permissible for the Master Portfolio. Before entering into such transactions or
making any such investment, the Master Portfolio will provide appropriate
disclosure in its prospectus.

Loans of Portfolio Securities. Each Master Portfolio may lend securities from
its portfolio to brokers, dealers and financial institutions (but not
individuals) if cash, U.S. Government securities or other high quality debt
obligations equal to at least 100% of the current market value of the securities
loaned (including accrued interest thereon) plus the interest payable to such
Master Portfolio with respect to the loan is maintained with the Master
Portfolio. In determining whether or not to lend a security to a particular
broker, dealer or financial institution, each Master Portfolio's investment
adviser or such-adviser considers all relevant facts and circumstances,
including the size, creditworthiness and reputation of the broker, dealer, or
financial institution. Any loans of portfolio securities are fully
collateralized based on values that are marked to market daily. The Master
Portfolios do not enter into any portfolio security lending arrangements having
a duration longer than one year. Any securities that a Master Portfolio receives
as collateral do not become part of its portfolio at the time of the loan and,
in the event of a default by the borrower, such Master Portfolio will, if
permitted by law, dispose of such collateral except for such part thereof that
is a security in which the Master Portfolio is permitted to invest. During the
time securities are on loan, the borrower will pay the Master Portfolio any
accrued income on those securities, and the Master Portfolio may invest the cash
collateral and earn income or receive an agreed-upon fee from a borrower that
has delivered cash- equivalent collateral. The Master Portfolios will not lend
securities having a value that exceeds one-third of the current value of their
respective total assets. Loans of securities by a Master Portfolio are subject
to termination at such Master Portfolio's or the borrower's option. Each Master
Portfolio may pay reasonable administrative and custodial fees in connection
with a securities loan and may pay a negotiated portion of the interest or fee
earned with respect to the collateral to the borrower or the placing broker.
Borrowers and placing brokers are not permitted to be affiliated, directly or
indirectly, with the Master Portfolios, BGFA or Stephens.

Investment Restrictions. Each Master Portfolio has adopted investment
restrictions numbered 1 through 10 as fundamental policies. These restrictions
cannot be changed, as to a Master Portfolio, without approval by the holders of
a majority (as defined in the 1940 Act) of such Master Portfolio's outstanding
voting securities. Investment restrictions numbered 11 through 17 are not
fundamental policies and may be changed by vote of a majority of the Trustees of
MIP at any time. The Master Portfolios may not:

4
<PAGE>

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 Master Portfolio may purchase and
sell (i.e., write) options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or indexes.

4. Purchase, hold or deal in real estate, or oil, gas or other mineral
leases or exploration or development programs, but each 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, provided
that each Master Portfolio may borrow up to 20% of the current value of its net
assets for temporary purposes only in order to meet redemptions, and these
borrowings may be secured by the pledge of up to 20% of the current value of its
net assets (but investments may not be purchased while any such outstanding
borrowing in excess of 5% of its net assets exists). For purposes of this
investment restriction, a Master Portfolio's entry into options, forward
contracts, futures contracts, including those relating to indexes, and options
on futures contracts or indexes shall not constitute borrowing to the extent
certain segregated accounts are established and maintained by the Master
Portfolio.

6. Make loans to others, except through the purchase of debt obligations and
the entry into repurchase agreements. However, each 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 MIP's Board
of Trustees.

7. Act as an underwriter of securities of other issuers, except to the
extent the Master Portfolio 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
there shall be no limitation with respect to investments in (i) obligations of
the U.S. Government, its agencies or instrumentalities; (ii) in the case of the
stock portion of the Asset Allocation Master Portfolio, any industry in which
the S&P 500 Index becomes concentrated to the same degree during the same period
(provided that, with respect to the stock and money market portions of the Asset
Allocation Master Portfolio, the Master Portfolio will be concentrated as
specified above only to the extent the percentage of its assets invested in
those categories of investments is sufficiently large that 25% or more of its
total assets would be invested in a single industry); and (iii) in the case of
the money market portion of the Asset Allocation Master Portfolio, its money
market instruments may be concentrated in the banking industry (but it will not
do so unless the SEC staff confirms that it does not object to the Master
Portfolio reserving freedom of action to concentrate investments in the banking
industry).

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

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

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

5
<PAGE>

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
indexes, and options on futures contracts or indexes.

13. Purchase, sell or write puts, calls or combinations thereof, except as
may be described in the Master Portfolio's offering documents.

14. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) unless the
securities are fully guaranteed or insured by the U.S. Government, a state,
commonwealth, possession, territory, the District of Columbia or by an entity in
existence at least three years, or the securities are backed by the assets and
revenues of any of the foregoing, 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% of the value of its net assets would be so invested.

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

17. Purchase or retain securities of any issuer if the officers or Directors
of the Company, the Trusts or the investment adviser owning beneficially more
than one-half of one percent (0.5%) of the securities of the issuer together
owned beneficially more than 5% of such securities.

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.

ITEM 14. MANAGEMENT OF MIP.

The following information supplements and should be read in conjunction with
the Part A section entitled "Management of the Master Portfolio." The Trustees
and Principal Officer of MIP, 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 MIP,
as defined in the 1940 Act, is indicated by an asterisk.

6
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE POSITION DURING PAST 5 YEARS
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 75 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027

*R. Greg Feltus, 46 Trustee, Executive Vice President of
Chairman and President Stephens; President of
Stephens Insurance Services Inc.;
Senior Vice President of Stephens
Sports Management Inc.; and
President of Investors
Brokerage Insurance Inc.

Thomas S. Goho, 55 Trustee Associate Professor of Finance,
P.O. Box 7285 Calloway School of Business and
Reynolda Station Accounting, Wake Forest
Winston-Salem, NC 27104 University, since 1982.

*W. Rodney Hughes, 71 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

*J. Tucker Morse, 53 Trustee Chairman of Home Account Network,
4 Beaufain Street Inc.; Real Estate Developer;
Charleston, SC 29401 Chairman of Renaissance
Properties Ltd; President of
Morse Investment Corporation; and
Co-Managing Partner of Main
Street Ventures.

Richard H. Blank, Jr., 41 Chief Operating Officer, Vice President of Stephens;
Secretary and Treasurer Director of Stephens Sports
Management Inc.; and Director
of Capo Inc.
</TABLE>

7
<PAGE>

COMPENSATION TABLE
For the Fiscal Year Ended February 28, 1998

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM REGISTRANT
NAME AND POSITION FROM REGISTRANT AND FUND COMPLEX
----------------- ---------------------- -------------------
<S> <C> <C>
Jack S. Euphrat $ 0 $ 11,250
Trustee

*R. Greg Feltus 0 0
Trustee

Thomas S. Goho 0 11,250
Trustee

*Zoe Ann Hines/1/ 0 0
Trustee

*W. Rodney Hughes 0 11,000
Trustee

Robert M. Joses/2/ 0 1,000
Trustee

*J. Tucker Morse 0 11,0050
Trustee
</TABLE>

- -----------
/1/ Zoe Ann Hines retired as of January 28, 1998.
/2/ Robert M. Joses retired as of December 31, 1997.

Trustees of MIP are compensated annually 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. MIP,
MasterWorks Funds Inc. and Managed Series Investment Trust are considered to be
members of the same fund complex as such term is defined in Form N-1A under the
1940 Act (the "BGFA Fund Complex"). Stagecoach Funds, Inc., Stagecoach Trust and
Life & Annuity Trust together form a separate fund complex (the "Wells Fargo
Fund Complex"). Prior to December 15, 1997, the Wells Fargo Fund Complex also
included Overland Express Funds, Inc. and Master Investment Trust. On that
date, Overland Express Funds, Inc., was consolidated with and into Stagecoach
Funds, Inc. and Master Investment Trust was dissolved. Each of the Trustees and
the principal officer of MIP serves in the identical capacity as
directors/trustees and/or officer of each registered open-end management
investment company in both the BGFA and Wells Fargo Fund Complexes. The
Trustees are compensated by other Companies and Trusts within the fund complexes
for their services as Directors/Trustees to such Companies and Trusts. Currently
the Trustees do not receive any retirement benefits or deferred compensation
from MIP or any other member of each fund complex.

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

8
<PAGE>

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of June 1, 1998, the Asset Allocation Fund and U.S. Treasury
Allocation Fund of MasterWorks Funds Inc., 111 Center Street, Little Rock,
Arkansas 72201, owned approximately 99% of the outstanding voting securities of
the Asset Allocation Master Portfolio and approximately 99% of the outstanding
voting securities of the U.S. Treasury Allocation Master Portfolio,
respectively, and each Fund may be presumed to control its corresponding Master
Portfolio for purposes of the 1940 Act.

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.

The following information supplements and should be read in conjunction
with Item 5 in Part A.

Investment Adviser. BGFA provides investment advisory services to each
Master Portfolio pursuant to separate Investment Advisory Contracts (each, a
"BGFA Advisory Contract") dated January 1, 1996 with MIP. As to each Master
Portfolio, the applicable BGFA Advisory Contract 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 Contract is terminable without penalty on 60 days' written notice by
either party. The BGFA Advisory Contracts terminate automatically in the event
of 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. The terms of the
Advisory Agreement were identical in all material respects, other than the
identity of the parties, to each BGFA Advisory Contract.

Advisory Fees Paid. For the period beginning March 1, 1995 and ended
December 31, 1995, the Master Portfolios paid to Wells Fargo Bank the following
advisory fees, without waiver. For the period beginning January 1, 1996 and
ended February 29, 1996, and for the fiscal years ended February 28, 1997 and
February 28, 1998, the Master Portfolios paid to BGFA the following advisory
fees, without waivers.

<TABLE>
<CAPTION>
3/1/95-12/31/95 1/1/96- 2/29/96 FYE 2/28/97 FYE 2/28/98
FEES PAID FEES PAID FEES PAID FEES PAID
---------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C>
Asset Allocation Master $ 997,003 $ 225,669 $1,531,951 $1,616,380
Portfolio
U.S. Treasury Allocation $ 152,657 $ 25,863 $ 148,606 $ 136,672
Master Portfolio
</TABLE>

Investment Sub-Adviser. Effective January 1, 1996, the Master
Portfolios no longer retained WFNIA as investment sub-adviser.

Sub-Advisory Fees Paid. For the period beginning March 1, 1995 and
ended December 31, 1995, Wells Fargo Bank paid the following sub-advisory fees
to WFNIA for services provided on behalf of each Master Portfolio, without
waivers:

<TABLE>
<CAPTION>
3/1/95-12/31/95
FEES PAID
--------------
<S> <C>
Asset Allocation Master Portfolio $ 567,009
U.S. Treasury Allocation Master Portfolio $ 75,895
</TABLE>

9
<PAGE>

Co-Administrators. Stephens and BGI are the Master Portfolio's co-
administrators. Stephens and BGI provide the Master Portfolios with
administrative services, including general supervision of the Master Portfolios'
non-investment operations, coordination of the other services provided to the
Master Portfolios, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the MIP's trustees and officers. Stephens also
furnishes office space and certain facilities to conduct the Master Portfolios'
business, and compensates the MIP's trustees, officers and employees who are
affiliated with Stephens. In addition, except as outlined below under
"Expenses," Stephens and BGI will be responsible for paying all expenses
incurred by the Master Portfolios other than the fees payable to BGFA. Stephens
and BGI are not entitled to compensation for providing administration services
to a Master Portfolio. BGI has delegated certain of its duties as co-
administrator to Investors Bank & Trust Company ("IBT"). IBT, as sub-
administrator, is compensated by BGI for performing certain administration
services.

Prior to October 21, 1996, Stephens alone provided administration
services to MIP pursuant to an Administration Agreement dated February 25, 1994
(the "Administration Agreement"). Stephens was not entitled to compensation for
providing administration services to the Master Portfolios so long as Stephens
received fees for providing similar services to a feeder fund of another
investment company investing all of its assets in a Master Portfolio. The
Master Portfolios did not pay any administration fees to Stephens.

Placement Agent. Stephens is the placement agent for the Master
Portfolios. Stephens is a full service broker/dealer and investment advisory
firm located at 111 Center Street, Little Rock, Arkansas 72201. 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. Stephens does not receive compensation for acting as placement
agent.

Custodian. IBT currently acts as the Master Portfolios' custodian. The
principal business address of IBT is 200 Clarendon Street, Boston, Massachusetts
02116. IBT is not entitled to receive compensation for its custodial services so
long as it is entitled to receive compensation for providing sub-administration
services to the Master Portfolios. Prior to October 21, 1996, BGI acted as the
Master Portfolios' custodian. BGI did not receive compensation for its custodial
services.

Transfer and Dividend Disbursing Agent. IBT also acts as each Master
Portfolio's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). IBT
is not entitled to receive compensation for providing such services to MIP so
long as it receives fees for providing similar services to the funds which
invest substantially all of their assets in the Master Portfolios. Prior to
March 2, 1998, Wells Fargo Bank acted as each Master Portfolio's Transfer Agent.
To date, the Master Portfolios have not paid any transfer and dividend
disbursing agency fees.

Distribution 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 was adopted by a
majority of MIP's Board of Trustees (including a majority of those Trustees who
are not "interested persons" as defined in the 1940 Act of MIP) 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. The Master Portfolios do not currently pay any amounts pursuant to the
Plan.

Expenses. Except for extraordinary expenses, brokerage and other
expenses connected with to the execution of portfolio transactions and certain
other expenses which are borne by the Master Portfolios, Stephens and BGI have
agreed to bear all costs of the Master Portfolios' and MIP's operations.

10
<PAGE>

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

General. BGFA assumes general supervision over placing orders on
behalf of each Master Portfolio 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
commission paid by other institutional investors for comparable services. Prior
to January 1, 1996, WFNIA exercised general supervision over placing orders on
behalf of each Master Portfolio for the purchase or sale of portfolio securities
and the brokerage allocation practices described herein are applicable to WFNIA
and the Master Portfolios prior to January 1, 1996.

Asset Allocation Master Portfolio. 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.

U.S. Treasury Allocation Master Portfolio. Purchases and sales of
portfolio securities for the U.S. Treasury Allocation Master Portfolio 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 U.S. Treasury Allocation 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 29, 1996,
February 28, 1997 and February 28, 1998, the Master Portfolios paid brokerage
commissions in the dollar amounts shown below. None of the brokerage
commissions were paid to affiliated brokers.

MASTER PORTFOLIO FYE 2/29/96 FYE 2/28/97 FYE 2/28/98
- ---------------- ----------- ----------- -----------
<S> <C> <C> <C>
Asset Allocation Master Portfolio $9,782 $28,606 $11,933
U.S. Treasury Allocation Master Portfolio $ 0 $ 0 $ 0
</TABLE>

Securities of Regular Broker/Dealers. On February 28, 1998, the Master
Portfolios owned securities of their "regular brokers or dealers" or their
parents, as defined in the 1940 Act, as follows:

MASTER PORTFOLIO REGULAR BROKER/DEALER AMOUNT
- ---------------- --------------------- -----------
<S> <C> <C>
Asset Allocation Master Portfolio Goldman Sachs & Co. $21,000,000
J.P. Morgan $ 999,259
U.S. Treasury Allocation Master Portfolio Goldman Sachs & Co. $ 2,000,000
</TABLE>

11
<PAGE>

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

Pursuant to MIP's Declaration of Trust, the Trustees are authorized to
issue shares of beneficial interests in each Master Portfolio. Investors in a
Master Portfolio are entitled to participate pro rata in distributions of
taxable income, loss, gain and credit of such Master Portfolio. Upon
liquidation or dissolution of a Master Portfolio, investors are entitled to
share pro rata in such Master Portfolio's net assets available for distribution
to its investors. Investments in a Master Portfolio have no preference, pre-
exemptive, conversion or similar rights and are fully paid and non-assessable,
except as set forth below. Investments in the Master Portfolio may not be
transferred. No certificates are issued.

Each investor is entitled to vote, with respect to matters affecting
each of MIP's series, in proportion to the amount of its investment in MIP.
Investors in MIP do not have cumulative voting rights, and investors holding
more than 50% of the aggregate beneficial interest in MIP may elect all of the
Trustees of MIP if they choose to do so and in such event the other investors in
MIP would not be able to elect any Trustee. MIP is not required to hold annual
meetings of investors but MIP may hold special meetings of investors when in the
judgment of MIP's Trustees it is necessary or desirable to submit matters for an
investor vote.

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
company, such as MIP, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of each
Master Portfolio affected by such matter. Rule 18f-2 further provides that a
Master Portfolio shall be deemed to be affected by a matter unless it is clear
that the interests of such Master Portfolio in the matter are identical or that
the matter does not affect any interest of such Master Portfolio. However, the
Rule exempts the selection of independent accountants and the election of
Trustees from the separate voting requirements of the Rule.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.

The following information supplements and should be read in conjunction
with Items 7 and 8 in Part A.

Purchase of Securities. Beneficial interests in each Master Portfolio
are issued solely in private placement transactions which do not involve any
"public offering" within the meaning of Section 4(2) of the Securities Act of
1933, as amended (the "1933 Act"). Investments in the Master Portfolio may only
be made by investment companies or certain other entities which are "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
registration statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.

Payment for shares of a Master Portfolio may, at the discretion of the
adviser, be made in the form of securities that are permissible investments for
the Master Portfolio and must meet the investment objective, policies and
limitations of the Master Portfolio as described in the Part A. In connection
with an in-kind securities payment, a Master Portfolio may require, among other
things, that the securities (i) be valued on the day of purchase in accordance
with the pricing methods used by the Master Portfolio; (ii) are accompanied by
satisfactory assurance that the Master Portfolio will have good and marketable
title to such securities received by it; (iii) are not subject to any
restrictions upon resale by the Master Portfolio; (iv) be in proper form for
transfer to the Master Portfolio; and (v) are accompanied by adequate
information concerning the basis and other tax matters relating to the
securities. All dividends, interest, subscription or other rights pertaining to
such securities shall become the property of the Master Portfolio engaged in the
in-kind purchase transaction and must be delivered to such Master Portfolio by
the investor upon receipt from the issuer. Securities acquired through an in-
kind purchase will be acquired for investment and not for immediate resale.
Shares purchased in exchange for securities generally cannot be redeemed until
the transfer has settled.

12
<PAGE>

PRICING OF SECURITIES.

Asset Allocation Master Portfolio. The securities of the Asset
Allocation Master Portfolio, including covered call options written by the
Master Portfolio, are valued as discussed below. Domestic securities are valued
at the last sale price on the domestic securities or commodities exchange or
national securities market on which such securities primarily are traded.
Securities not listed on a domestic exchange or national securities market, or
securities in which there were no transactions, are valued at the most recent
bid prices. Short-term investments are carried at amortized cost, which
approximates 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 BGFA pursuant to guidelines approved by MIP's Board of Trustees.
Expenses and fees, including advisory fees, are accrued daily and taken into
account for the purpose of determining the net asset value of the Master
Portfolio's shares.

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 BGFA in accordance with guidelines approved by MIP's
Board of Trustees. BGFA and MIP's Board of Trustees periodically review the
method of valuation. In making its good faith valuation of restricted
securities, BGFA generally takes the following factors into consideration:
restricted securities which 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 purchased. This
discount is revised periodically if it is believed 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 will be
valued initially at cost. Any subsequent adjustments from cost are made in
accordance with guidelines approved by MIP's Board of Trustees.

U.S. Treasury Allocation Master Portfolio. The investments of the U.S.
Treasury Allocation Master Portfolio are valued each business day using
available market quotations or at fair value as determined by one or more
independent pricing services (collectively, the "Services") approved by MIP's
Board of Trustees. The Services may use available market quotations, employ
electronic data processing techniques and/or a matrix system to determine
valuations. Each Service's procedures are reviewed by MIP's officers in
accordance with guidelines approved by 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 the Master Portfolio's shares.

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

ITEM 20. TAX STATUS.

MIP is organized as a business trust under Delaware law. Under MIP's
current classification for federal income tax purposes, it is intended that each
Master Portfolio will be treated as a partnership for such purposes and,
therefore, such Master Portfolio will not be subject to any federal income tax.
However, each investor in a Master Portfolio will be taxable on 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 federal income
tax liability. The determination of such share will be made in accordance with
the Internal Revenue Code of 1986, as amended (the "Code"), and regulations
promulgated thereunder.

MIP's taxable year-end is the last day of December. Although MIP will
not be subject to Federal income tax, it will file appropriate Federal income
tax returns.

Each Master Portfolio's assets, income and distributions will be
managed in such a way that an investor in such Master Portfolio may satisfy the
requirements of Subchapter M of the Code, by investing substantially all of its
investable assets in the Master Portfolio. Investors are advised to consult
their own tax advisors as to the tax consequences of an investment in a Master
Portfolio.

13
<PAGE>

ITEM 21. UNDERWRITERS.

The exclusive placement agent for MIP is Stephens, which receives no
compensation for serving in this capacity. Registered broker/dealers and
investment companies, insurance company separate accounts, common and commingled
trust funds, group trust and similar organizations and entities which constitute
accredited investors as defined in the regulations adopted under the 1933 Act,
may continuously invest in a Master Portfolio of MIP.

ITEM 22. CALCULATIONS OF PERFORMANCE DATA.

Not applicable.

ITEM 23. FINANCIAL INFORMATION.

KPMG Peat Marwick LLP provides audit services, tax return preparation
and assistance and consultation in connection with the review of certain SEC
filings. KPMG Peat Marwick LLP's address is Three Embarcadero Center, San
Francisco, California 94111. For the fiscal year ended February 28, 1995,
MIP's financial statements were audited by other independent auditors. Such
auditors expressed an unqualified opinion on the financial statements of MIP.

The audited financial statements, including the portfolio of
investments, and independent auditors report for the Master Portfolios for the
fiscal year ended February 28, 1998 are hereby incorporated by reference to the
MasterWorks Funds Inc. (SEC File Nos. 33-54126; 811-7322) Annual Report, as
filed with the SEC on May 1, 1998. The audited financial statements are
attached to all Part Bs delivered to interestholders or prospective
interestholders.

14
<PAGE>

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.

"AA"

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.

"A"

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.

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.

A-1
<PAGE>

"Aa"

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.

"A"

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 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.

A-2
<PAGE>

"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.

"AA"

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+.

"A"

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"

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.

A-3
<PAGE>

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.

"AA"

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.

"A"

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

A-4
<PAGE>

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-5
<PAGE>

MASTER INVESTMENT PORTFOLIO
INDEX MASTER PORTFOLIOS

S&P 500 INDEX MASTER PORTFOLIO
BOND INDEX MASTER PORTFOLIO

PART B -- STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 1998

ITEM 10. COVER PAGE.

ITEM 11. TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information and History........................................... 1
Investment Objectives and Policies........................................ 1
Management of MIP......................................................... 6
Control Persons and Principal Holders of Securities....................... 8
Investment Advisory and Other Services.................................... 9
Brokerage Allocation and Other Practices.................................. 11
Capital Stock and Other Securities........................................ 12
Purchase, Redemption and Pricing of Securities............................ 12
Tax Status................................................................ 13
Underwriters.............................................................. 14
Calculations of Performance Data.......................................... 14
Financial Information..................................................... 14
Appendix.................................................................. A-1
Financial Statements...................................................... F-1
</TABLE>

ITEM 12. GENERAL INFORMATION AND HISTORY.

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"). BGFA is
now a subsidiary of WFITC which, effective January 1, 1996, changed its name to
Barclays Global Investors, N.A. ("BGI"). Stephens Inc. ("Stephens") serves as
placement agent of each Master Portfolio's interests.

ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.

The following information supplements and should be read in conjunction with
Item 4 in Part A.

Investment Objectives. By this offering document, MIP is offering two
diversified portfolios, the Bond Index Master Portfolio and S&P 500 Index Master
Portfolio (each, a "Master Portfolio" and together, the "Master

1
<PAGE>

Portfolios"). Organizations and other entities that hold shares of beneficial
interest of a Master Portfolio may be referred to herein as "feeder funds."

Each Master Portfolio's investment objective is set forth in Item 4, "General
Description of Registrant -- Investment Objective," of Part A. There can be no
assurance that the investment objectives of each Master Portfolio will be
achieved. Each Master Portfolios' investment objective is fundamental and,
therefore, cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
such Master Portfolios' outstanding voting interests.

PORTFOLIO SECURITIES.

2
<PAGE>

MANAGEMENT POLICIES.

3
<PAGE>

and the 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 the Master Portfolio may
invest. BGFA, on behalf of the Master Portfolio, considers on an ongoing basis
the creditworthiness of the issuers of the floating- and variable-rate demand
obligations in the Master Portfolio's portfolio. The Master Portfolio will not
invest more than 10% of the value of its total net assets in floating- or
variable-rate demand obligations whose demand feature is not exercisable within
seven days. Such obligations may be treated as liquid, provided that an active
secondary market exists.

Futures Contracts and Options on Futures Contracts. Each Master Portfolio
may enter into futures contracts and may purchase and write options thereon.
Upon 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 does change daily and that
change would be reflected in the net asset value of the relevant Master
Portfolio.

Future Developments. Each Master Portfolio may take advantage of
opportunities in the area 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 Master Portfolio's investment objective and legally
permissible for the Master Portfolio. Before entering into such transactions or
making any such investment, each Master Portfolio will provide appropriate
disclosure in its prospectus.

Investment Restrictions. Each Master Portfolio has adopted investment
restrictions numbered 1 through 10 as fundamental policies. These restrictions
cannot be changed, as to a Master Portfolio, without approval by the holders of
a majority (as defined in the 1940 Act) of such Master Portfolios' outstanding
voting securities. Investment restrictions numbered 11 through 17 are not
fundamental policies and may be changed by vote of a majority of the Trustees of
MIP at any time. The Master Portfolios may not:

4
<PAGE>

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 Master Portfolio may purchase
and sell (i.e., write) options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or indexes.

5. Borrow money, except to the extent permitted under the 1940 Act,
provided that the Bond Index Master Portfolio may borrow from banks up to 10% of
the current value of its net assets for temporary purposes only in order to meet
redemptions, and these borrowings may be secured by the pledge of up to 10% of
the current value of its net assets (but investments may not be purchased while
any such outstanding borrowing in excess of 5% of its net assets exists), and
except that the S&P 500 Stock Master Portfolio may borrow up to 20% of the
current value of its net assets for temporary purposes only in order to meet
redemptions, and these borrowings may be secured by the pledge of up to 20% of
the current value of its net assets (but investments may not be purchased while
any such outstanding borrowing in excess of 5% of its net assets exists). For
purposes of this investment restriction, a Master Portfolio's entry into
options, forward contracts, futures contracts, including those relating to
indexes, and options on futures contracts or indexes shall not constitute
borrowing to the extent certain segregated accounts are established and
maintained by the Master Portfolio.

6. Make loans to others, except through the purchase of debt obligations
and the entry into repurchase agreements. However, each 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
MIP's Board of Trustees.

8. Invest 25% or more of its total assets in the securities of issuers in
any particular industry or group of closely related industries and except that,
in the case of each Master Portfolio, there shall be no limitation with respect
to investments in (i) obligations of the U.S. Government, its agencies or
instrumentalities; (ii) in the case of the S&P 500 Stock Master Portfolio, any
industry in which the S&P 500 Index becomes concentrated to the same degree
during the same period, the Master Portfolio will be concentrated as specified
above only to the extent the percentage of its assets invested in those
categories of investments is sufficiently large that 25% or more of its total
assets would be invested in a single industry); (iii) in the case of the Bond
Index Master Portfolio, any industry in which the Lehman Brothers
Government/Corporate Bond Index (the "LB Bond Index") becomes concentrated to
the same degree during the same period.

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

5
<PAGE>

13. Purchase, sell or write puts, calls or combinations thereof, except as
may be described in the Master Portfolio's offering documents.

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

17. Purchase or retain securities of any issuer if the officers or Trustees
of the Company, the Trusts or the investment adviser owning beneficially more
than one-half of one percent (0.5%) of the securities of the issuer together
owned beneficially more than 5% of such securities.

ITEM 14. MANAGEMENT OF MIP.

The following information supplements and should be read in conjunction with
the Part A section entitled "Management of the Master Portfolio." The Trustees
and Principal Officer of MIP, 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
MIP, as defined in the 1940 Act, is indicated by an asterisk.

6
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE POSITION DURING PAST 5 YEARS
--------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 75 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027

*R. Greg Feltus, 46 Trustee, Senior Vice President of
President Stephens; President of
and Trustee, Stephens Insurance Services
Inc.; Senior Vice President of
Stephens Sports Management Inc.;
and President of Investors
Brokerage Insurance Inc.

Thomas S. Goho, 55 Trustee Associate Professor of Finance,
P.O. Box 7285 Calloway School of Business and
Reynolda Station Accounting, Wake Forest
Winston-Salem, NC 27104 University, since 1982.

*W. Rodney Hughes, 71 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

*J. Tucker Morse, 53 Trustee Chairman of Home Account
4 Beaufain Street Networks, Inc.; Real Estate
Charleston, SC 29401 Developer; Chairman of
Renaissance Properties Ltd;
President of Morse Investment
Corporation; and Co-Managing
Partner of Main Street Ventures.

Richard H. Blank, Jr., 41 Chief Operating Officer, Vice President of Stephens;
Secretary and Treasurer Director of Stephens Sports
Management Inc.; and Director
of Capo Inc.
</TABLE>

7
<PAGE>

COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM REGISTRANT
NAME AND POSITION FROM REGISTRANT AND FUND COMPLEX
------------------ ---------------------- --------------------
<S> <C> <C>
Jack S. Euphrat $0 $11,250
Trustee

*R. Greg Feltus 0 0
Trustee

Thomas S. Goho 0 11,250
Trustee

*Zoe Ann Hines/1/ 0 0
Trustee

*W. Rodney Hughes 0 11,000
Trustee

Robert M. Joses/2/ 0 1,000
Trustee

*J. Tucker Morse 0 11,000
Trustee
</TABLE>
__________________________
/1/ Zoe Ann Hines retired as of January 28, 1998.
/2/ Robert M. Joses retired as of December 31, 1997.

Trustees of MIP are compensated annually 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. MIP,
MasterWorks Funds Inc. and Managed Series Investment Trust are considered to be
members of the same fund complex as such term is defined in Form N-1A under the
1940 Act (the "BGFA Fund Complex"). Stagecoach Funds, Inc., Stagecoach Trust and
Life & Annuity Trust together form a separate fund complex (the "Wells Fargo
Fund Complex"). Prior to December 15, 1997, the Wells Fargo Fund Complex also
included Overland Express Funds, Inc. and Master Investment Trust. On that
date, Overland Express Funds, Inc. was consolidated with and into Stagecoach
Funds, Inc. and Master Investment Trust was dissolved. Each of the Trustees and
the principal officer of MIP serves in the identical capacity as
directors/trustees and/or officer of each registered open-end management
investment company in both the BGFA and Wells Fargo Fund Complexes. The Trustees
are compensated by other Companies and Trusts within the fund complexes for
their services as Directors/Trustees to such Companies and Trusts. Currently the
Trustees do not receive any retirement benefits or deferred compensation from
MIP or any other member of each fund complex.

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

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of June 1, 1998, the S&P 500 Stock Fund of MasterWorks Funds Inc.
("MasterWorks"), 111 Center Street, Little Rock, Arkansas 72201, owned
approximately 88.41% of the outstanding voting securities of the

8
<PAGE>

S&P 500 Index Master Portfolio and could be considered a "controlling person" of
the S&P 500 Index Master Portfolio for purposes of the 1940 Act. As of June 1,
1998, the Bond Index Fund of MasterWorks owned approximately 99.99% of the
outstanding voting securities of the Bond Index Master Portfolio. As such, the
Fund could be considered a "controlling person" of the Bond Index Master
Portfolio for purposes of the 1940 Act.

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.

The following information supplements and should be read in conjunction
with Item 5 in Part A.

Investment Adviser. BGFA provides investment advisory services to each
Master Portfolio pursuant to separate Investment Advisory Contracts (each, a
"BGFA Advisory Contract") with MIP, dated January 1, 1996. As to each Master
Portfolio, the applicable BGFA Advisory Contract 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 Portfolios, the applicable BGFA
Advisory Contract is terminable without penalty, on 60 days' written notice, by
either party. The applicable BGFA Advisory Contract will terminate
automatically, as to the relevant Master Portfolio, in the event of its
assignment (as defined in the 1940 Act).

Advisory Fees Paid. For the period beginning March 1, 1995 and ended
December 31, 1995, the Master Portfolios paid the following advisory fees to
Wells Fargo Bank, without waivers. For the period beginning January 1, 1996 and
ended February 29, 1996, the year ended February 28, 1997 and the year ended
February 28, 1998, the Master Portfolios paid the following advisory fees to
BGFA, without waivers:

<TABLE>
<CAPTION>
MARCH 1, 1995- JANUARY 1, 1996- YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 FEBRUARY 29, 1996 FEBRUARY 28, 1997 FEBRUARY 28, 1998
FEES PAID FEES PAID FEES PAID FEES PAID
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Bond Index Master Portfolio $ 91,365 $20,123 $147,204 $147,755
S&P 500 Index Master Portfolio $279,843 $73,598 $577,637 $939,051
</TABLE>

Investment Sub-Adviser. The Master Portfolios do not currently engage
a sub-adviser. However, prior to January 1, 1996, WFNIA provided investment sub-
advisory services to each Master Portfolio pursuant to a Investment Sub-Advisory
Agreement (the "Sub-Advisory Agreement") dated February 25, 1994 with Wells
Fargo Bank and MIP.

<TABLE>
<CAPTION>
MARCH 1, 1995-
DECEMBER 31, 1995
FEES PAID
--------------------------
<S> <C>
Bond Index Master Portfolio $ 72,919
S&P 500 Index Master Portfolio $224,069
</TABLE>

9
<PAGE>

Co-Administrators. Stephens and BGI are the Master Portfolio's co-
administrators. Stephens and BGI provide the Master Portfolios with
administrative services, including general supervision of the Master Portfolios'
non-investment operations, coordination of the other services provided to the
Master Portfolios, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the MIP's trustees and officers. Stephens also
furnishes office space and certain facilities to conduct the Master Portfolios'
business, and compensates the MIP's trustees, officers and employees who are
affiliated with Stephens. In addition, except as outlined below under "
Expenses," Stephens and BGI will be responsible for paying all expenses incurred
by the Master Portfolios other than the fees payable to BGFA. Stephens and BGI
are not entitled to compensation for providing administration services to a
Master Portfolio. BGI has delegated certain of its duties as co-administrator to
Investors Bank & Trust Company ("IBT"). IBT, as sub-administrator, is
compensated by BGI for performing certain administration services.

Prior to October 21, 1996, Stephens alone provided administration
services to MIP. Stephens was not entitled to compensation for providing
administration services to the Master Portfolios so long as Stephens received
fees for providing similar services to a feeder fund of another investment
company investing all of its assets in a Master Portfolio. The Master
Portfolios did not pay any administration fees to Stephens.

Custodian. IBT currently acts as the Master Portfolios' custodian. The
principal business address of IBT is 200 Clarendon Street, Boston, Massachusetts
02111. IBT is not entitled to receive compensation for its custodial services so
long as it is entitled to receive compensation for providing sub-administration
services to the Master Portfolios. Prior to October 21, 1996, Barclays Global
Investors, N.A. ("BGI") acted as the Master Portfolios' custodian. The principal
business address of BGI is 45 Fremont Street, San Francisco, California 94105.
BGI did not receive compensation for its custodial services.

Transfer and Dividend Disbursing Agent. IBT also acts as each Master
Portfolio's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). IBT
is not entitled to receive compensation for providing such services to MIP so
long as it receives fees for providing similar services to the funds which
invest substantially all of their assets in the Master Portfolios. Prior to
March 2, 1998, Wells Fargo Bank acted as Transfer Agent to the Master
Portfolios. To date, the Master Portfolios have not paid any transfer and
dividend disbursing agency fees.

10
<PAGE>

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

General. BGFA assumes general supervision over placing orders on
behalf of each Master Portfolio 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.
Prior to January 1, 1996, WFNIA exercised general supervision over placing
orders on behalf of each Master Portfolio for the purchase or sale of portfolio
securities and the brokerage allocation practices described herein are
applicable to WFNIA and the Master Portfolios prior to January 1, 1996.

S&P 500 Index Master Portfolio. 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.

Bond Index Master Portfolio. Purchases and sales of portfolio
securities for the Bond Index Master Portfolio 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 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 29, 1996,
February 28, 1997, and February 28, 1998, the Master Portfolios paid brokerage
commissions in the dollar amounts shown below. None of the brokerage
commissions were paid to affiliated brokers.

MASTER PORTFOLIO FYE 2/29/96 FYE 2/28/97 FYE 2/28/98
- ---------------- ----------- ----------- -----------
<S> <C> <C> <C>
S&P 500 Index Master Portfolio $80,902 $69,826 $112,100
Bond Index Master Portfolio $ 0 $ 0 $ 0
</TABLE>

Securities of Regular Broker/Dealers. On February 28, 1998, the Master
Portfolios owned securities of their "regular brokers or dealers" or their
parents, as defined in the 1940 Act, as follows:

BOND INDEX MASTER
- -----------------
Goldman Sachs $ 3,000,000
Lehman Bros., Inc. $ 539,406
Salomon Inc. $ 1,010,214

S&P 500 INDEX MASTER
- --------------------
Goldman Sachs $19,000,000
J.P. Morgan $ 5,565,474
Lehman Bros. Holdings $ 1,763,606

11
<PAGE>

Morgan Stanley $10,841,222

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

Pursuant to MIP's Declaration of Trust, the Trustees are authorized to
issue shares of beneficial interests in each Master Portfolio. Investors in a
Master Portfolios are entitled to participate pro rata in distributions of
taxable income, loss, gain and credit of such Master Portfolios. Upon
liquidation or dissolution of a Master Portfolios, investors are entitled to
share pro rata in such Master Portfolios' net assets available for distribution
to its investors. Investments in a Master Portfolio have no preference, pre-
exemptive, conversion or similar rights and are fully paid and non-assessable,
except as set forth below. Investments in the Master Portfolios may not be
transferred. No certificates are issued.

Each investor is entitled to vote, with respect to matters affecting
each of MIP's portfolios, in proportion to the amount of its investment in the
MIP. Investors in the MIP do not have cumulative voting rights, and investors
holding more than 50% of the aggregate beneficial interest in MIP may elect all
of the Trustees of MIP if they choose to do so and in such event the other
investors in MIP would not be able to elect any Trustee. MIP is not required to
hold annual meetings of investors but MIP may hold special meetings of investors
when in the judgment of MIP's Trustees it is necessary or desirable to submit
matters for an investor vote.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.

The following information supplements and should be read in
conjunction with Items 7 and 8 in Part A.

Purchase of Securities. Beneficial interests in each Master Portfolio
are issued solely in private placement transactions which do not involve any
"public offering" within the meaning of Section 4(2) of the Securities Act of
1933, as amended (the "1933 Act"). Investments in the Master Portfolios may
only be made by investment companies or certain other entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.

12
<PAGE>

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

PRICING OF SECURITIES.

S&P 500 Index Master Portfolio. The securities of the S&P 500 Index
Master Portfolio, including covered call options written by the Master
Portfolios, are valued as discussed below. Domestic securities are valued at
the last sale price on the domestic securities or commodities exchange or
national securities market on which such securities primarily are traded.
Securities not listed on a domestic 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 or commodities 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 BGFA in accordance with guidelines approved by MIP's Board of
Trustees. Short-term investments are carried at amortized cost, which
approximates 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 BGFA in accordance with such guidelines.

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 BGFA in accordance with guidelines approved by MIP's
Board of Trustees. BFGA and MIP's Board of Trustees periodically review the
method of valuation. In making its good faith valuation of restricted
securities, BGFA generally takes the following factors into consideration:
restricted securities which are, or are convertible into, securities of the same
class of securities for which a public market exists usually will be valued at
market value less the same percentage discount at which purchased. This
discount is revised periodically if it is believed 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 MIP's Board of Trustees.

Bond Index Master Portfolio. The investments of the Bond Index Master
Portfolio are valued each business day using available market quotations or at
fair value as determined by one or more independent pricing services
(collectively, the "Services") approved by MIP's Board of Trustees. Services
may use available market quotations, employ electronic data processing
techniques and/or a matrix system to determine valuations. Each 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 a Master Portfolio's shares. Expenses and fees, including advisory
fees, are accrued daily and are taken into account for the purpose of
determining the net asset value of a Master Portfolio's shares.

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

13
<PAGE>

ITEM 20. TAX STATUS.

MIP's taxable year-end is the last day of December. Although MIP will
not be subject to Federal income tax, it will file appropriate Federal income
tax returns.

ITEM 21. UNDERWRITERS.

The exclusive placement agent for MIP is Stephens, which receives no
compensation for serving in this capacity. Registered broker/dealers and
investment companies, insurance company separate accounts, common and commingled
trust funds, group trust and similar organizations and entities which constitute
accredited investors, as defined in the regulations adopted under the 1933 Act,
may continuously invest in a Master Portfolio of MIP.

ITEM 22. CALCULATIONS OF PERFORMANCE DATA.

Not applicable.

ITEM 23. FINANCIAL INFORMATION.

KPMG Peat Marwick LLP provides audit services, tax return preparation
and assistance and consultation in connection with the review of certain SEC
filings. KPMG Peat Marwick LLP's address is Three Embarcadero Center, San
Francisco, California 94111. For the fiscal year ended February 28, 1995, MIP's
financial statements were audited by other independent auditors. Such auditors
expressed an unqualified opinion on the financial statements of the MIP.

The audited financial statements, including the portfolio of
investments, and independent auditors' report for the Master Portfolios for the
fiscal year ended February 28, 1998 are hereby incorporated by reference to the
MasterWorks Funds Inc. (SEC File Nos. 33-54126; 811-7322) Annual Report, as
filed with the SEC on May 1, 1998. The audited financial statements for the
Master Portfolios are attached to all Part Bs delivered to interestholders or
prospective interestholders.

14
<PAGE>

APPENDIX

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.

"AA"

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.

"A"

"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.

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.

A-1
<PAGE>

"Aa"

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.

"A"

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 ("p-1") prime-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 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 ("p-2") prime-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.

A-2
<PAGE>

"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.

"AA"

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+".

"A"

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"

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

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.

A-3
<PAGE>

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.

"AA"

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.

"A"

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

A-4
<PAGE>

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-5
<PAGE>

MASTER INVESTMENT PORTFOLIO
LIFEPATH/TM/ MASTER PORTFOLIOS

LIFEPATH 2000 MASTER PORTFOLIO
LIFEPATH 2010 MASTER PORTFOLIO
LIFEPATH 2020 MASTER PORTFOLIO
LIFEPATH 2030 MASTER PORTFOLIO
LIFEPATH 2040 MASTER PORTFOLIO

PART B -- STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 1998

ITEM 10. COVER PAGE.

Master Investment Portfolio ("MIP") is an open-end, management investment
company. MIP is a "series fund," which is a mutual fund divided into separate
portfolios. This Part B is not a prospectus and should be read in conjunction
with MIP's Part A, also dated June 30, 1998. All terms used in this Part B that
are defined in Part A have the meanings assigned in Part A. A copy of Part A may
be obtained without charge by writing Master Investment Portfolio, c/o Investors
Bank & Trust Co.,--Transfer Agent, P.O. Box 9130, Mail Code MFD23, Boston, MA
02117-9130, or by calling 1-888-204-3956. MIP's Registration Statement may be
examined at the office of the Securities and Exchange Commission ("SEC") in
Washington, D.C.

ITEM 11. TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information and History........................................ 1
Investment Objectives and Policies..................................... 1
Management of MIP...................................................... 8
Control Persons and Principal Holders of Securities.................... 10
Investment Advisory and Other Services................................. 10
Brokerage Allocation and Other Practices............................... 12
Capital Stock and Other Securities..................................... 14
Purchase, Redemption and Pricing of Securities......................... 14
Tax Status............................................................. 16
Underwriters........................................................... 16
Calculations of Performance Data....................................... 16
Financial Information.................................................. 16
Appendix............................................................... A-1
Financial Statements................................................... F-1
</TABLE>

ITEM 12. GENERAL INFORMATION AND HISTORY.

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 Portfolios' custodian. BGFA is now a subsidiary of WFITC which,
effective January 1, 1996, changed its name to Barclays Global Investors, N.A.
("BGI"). Stephens Inc. ("Stephens") serves as placement agent of each Master
Portfolio's interests.

ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.

Investment Objectives. The LifePath Master Portfolios consists of five asset
allocation funds (the "LifePath Master Portfolios" or the "Master Portfolios"),
each of which is a diversified portfolio. Organizations and other entities that
hold shares of beneficial interest of a Master Portfolio may be referred to
herein as "feeder funds."

1
<PAGE>

The LifePath Master Portfolios seek to provide long-term investors in
a feeder fund with an asset allocation strategy designed to maximize assets
consistent with the quantitatively-measured risk such investors, on average, may
be willing to accept given their investment time horizons. The LifePath Master
Portfolios invest in a wide range of U.S. and foreign equity and debt securities
and money market instruments.

* LIFEPATH 2000 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of their
investment) approximately in the year 2000.

* LIFEPATH 2010 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of their
investment) approximately in the year 2010.

* LIFEPATH 2020 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of their
investment) approximately in the year 2020.

* LIFEPATH 2030 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of their
investment) approximately in the year 2030.

* LIFEPATH 2040 MASTER PORTFOLIO is managed for investors in a feeder
fund planning to retire (or begin to withdraw substantial portions of their
investment) approximately in the year 2040.

As with all mutual funds, there can be no assurance that the
investment objective of each Master Portfolio will be achieved. Each Master
Portfolio's investment objective cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of such Master Portfolio's outstanding voting
interests.

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.

2
<PAGE>

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 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.

Repurchase Agreements. Each Master Portfolio may engage in a
repurchase agreement with respect to any security in which it is authorized to
invest, although the underlying security may mature in more than thirteen
months. The Master Portfolio may enter into repurchase agreements wherein the
seller of a security to the Master Portfolio agrees to repurchase that security
from the Master Portfolio at a mutually agreed-upon time and price that involves
the acquisition by the Master Portfolio of an underlying debt instrument,
subject to the seller's obligation to repurchase, and the Master Portfolio's
obligation to resell, the instrument at a fixed price usually not more than one
week after its purchase. The Master Portfolio's custodian has custody of, and
holds in a segregated account, securities acquired as collateral by the Master
Portfolio under a repurchase agreement. Repurchase agreements are considered by
the staff of the SEC to be loans by the Master Portfolio. The Master Portfolio
may enter into repurchase agreements only with respect to securities of the type
in which it may invest, including government securities and mortgage-related
securities, regardless of their remaining maturities, and requires that
additional securities be deposited with the custodian if the value of the
securities purchased should decrease below resale 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 the Master
Portfolio in connection with the sale of the underlying 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 the Master Portfolio may be
delayed or limited. While it does not presently appear possible to eliminate
all risks from these transactions (particularly the possibility of a decline in
the market value of the underlying securities, as well as delay and costs to the
Master Portfolio in connection with insolvency proceedings), it is the policy of
the Master Portfolio to limit repurchase agreements to selected creditworthy
securities dealers or domestic banks or other recognized financial institutions.
The Master Portfolio considers on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements. Repurchase
agreements are considered to be loans by a Master Portfolio under the 1940 Act.

3
<PAGE>

permit the holder to demand payment of principal at any time, or at specified
intervals not exceeding thirteen months. Variable rate demand notes include
master demand notes that are obligations that permit the 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, and 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 Portfolio's 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 the Fund 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 the Master Portfolio may invest. BGFA,
on behalf of the Master Portfolio, considers on an ongoing basis the
creditworthiness of the issuers of the floating- and variable-rate demand
obligations in the Master Portfolio's portfolio. The Master Portfolio will not
invest more than 10% of the value of its total net assets in floating- or
variable-rate demand obligations whose demand feature is not exercisable within
seven days. Such obligations may be treated as liquid, provided that an active
secondary market exists.

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.

Futures Contracts and Options on Futures Contracts. The LifePath
Master Portfolios may enter into futures contracts and may purchase and write
(i.e., sell) 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. 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

4
<PAGE>

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. If a
LifePath Master Portfolio enters into a foreign currency transaction or forward
contract, such Master Portfolio deposits, if required by applicable regulations,
with MIP's custodian, cash or high-grade debt securities in a segregated account
of the LifePath Master Portfolios in an amount at least equal to the value of
the LifePath 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 LifePath 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 LifePath
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 the LifePath Master Portfolios 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 LifePath Master
Portfolios may not be able to contract to sell the currency at a price above the
devaluation level it anticipates.

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.

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 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 LifePath Master Portfolio to incur

5
<PAGE>

losses. Transactions on foreign exchanges may include both futures contracts
which are traded on domestic exchanges and those which are not.

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 Part A 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 unaffiliated with MIP 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 SEC 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,
MIP'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.

Warrants. Each Master Portfolio may invest generally up to 5% of its
total 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.

Investment Restrictions. Each Master Portfolio has adopted investment
restrictions numbered 1 through 10 as fundamental policies. These restrictions
cannot be changed without approval by the holders of a majority (as defined in
the 1940 Act) of such Master Portfolio's outstanding voting securities.
Investment restrictions numbered 11 through 20 are not fundamental policies and
may be changed by vote of a majority of the Trustees of MIP at any time. The
Master Portfolios may not:

1. Invest more than 5% of their assets in the obligations of any
single issuer, except that up to 25% of the value of their 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
their total assets.

3. Invest in commodities, except that each 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.

6
<PAGE>

4. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but each 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 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 Master Portfolios as described in Part A.

6. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, each 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 MIP's Board of Trustees.

7. Act as an underwriter of securities of other issuers, except to
the extent the Master Portfolios 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 their total assets, respectively, in the
securities of issuers in any particular industry or group of closely-related
industries, except that, in the case of each 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(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restriction Nos. 3, 5, 12 and 13 may be deemed to give rise to a
senior security.

10. Purchase securities on margin, but each 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 Master Portfolio will vote the
securities it owns in its portfolio as a shareholder in accordance with its
views.

12. Pledge, mortgage or hypothecate their 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 Master Portfolios' offering documents.

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% of the value of a Master Portfolio's net assets
would be so invested.

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.

7
<PAGE>

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

19. Purchase or retain securities of any issuer if the officers, and
trustees of the Trust, its advisers or managers owing 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 matter of general operating policy, each Master Portfolio may
invest up to 20% of the value of its total assets in foreign securities that are
not publicly traded in the United States.

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.

ITEM 14. MANAGEMENT OF MIP

The following information supplements and should be read in
conjunction with the Part A section entitled "Management of the Master
Portfolio." The Trustees and Principal Officer of MIP, 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 MIP, as defined in the 1940 Act, is indicated by
an asterisk.

8
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE POSITION DURING PAST 5 YEARS
- --------------------- -------- ----------------------
<S> <C> <C>
Jack S. Euphrat, 75 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027

Thomas S. Goho, 55 Trustee Associate Professor of Finance,
P.O. Box 7285 Calloway School of Business and
Reynolda Station Accounting, Wake Forest University,
Winston-Salem, NC 27104 since 1982.

*W. Rodney Hughes, 71 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

*J. Tucker Morse, 53 Trustee Chairman of Home Account Network,
4 Beaufain Street Inc.; Real Estate Developer;
Charleston, SC 29401 Chairman of Renaissance Properties
Ltd; President of Morse Investment
Corporation; and Co-Managing
Partner of Main Street Ventures.

Richard H. Blank, Jr., 41 Chief Operating Officer, Vice President of Stephens;
Secretary and Treasurer Director of Stephens Sports Management
Inc.; and Director of Capo Inc.
</TABLE>

9
<PAGE>

COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998

<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM REGISTRANT
NAME AND POSITION FROM REGISTRANT AND FUND COMPLEX
- ----------------- ---------------------- --------------------
<S> <C> <C>
Jack S. Euphrat $0 $ 11,250
Trustee

*R. Greg Feltus 0 0
Trustee

Thomas S. Goho 0 11,250
Trustee

*Zoe Ann Hines/1/ 0 0
Trustee

*W. Rodney Hughes 0 11,000
Trustee

Robert M. Joses/2/ 0 1,000
Trustee

*J. Tucker Morse 0 11,000
Trustee
</TABLE>
- ---------------
/1/ Zoe Ann Hines retired as of January 28, 1998.
/2/ Robert M. Joses retired as of December 31, 1997.

Trustees of MSIT are compensated annually 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. MSIT,
MasterWorks Funds Inc., and Master Investment Portfolio are considered to be
members of the same fund complex as such term is defined in Form N-1A under the
1940 Act (the "BGFA Fund Complex"). Stagecoach Funds, Inc., Stagecoach Trust and
Life & Annuity Trust together form a separate fund complex (the "Wells Fargo
Fund Complex"). Prior to December 15, 1997, the Wells Fargo Fund Complex also
included Overland Express Funds, Inc. and Master Investment Trust. On that
date, Overland Express Funds, Inc. was consolidated with and into Stagecoach
Funds, Inc. and Master Investment Trust was dissolved. Each of the Trustees and
the principal officer of MSIT serves in the identical capacity as
directors/trustees and/or officer of each registered open-end management
investment company in both the BGFA and Wells Fargo Fund Complexes. The Trustees
are compensated by other Companies and Trusts within the fund complexes 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 Company or any other member of either fund complex.

As of the date of this SAI, the Trustees and Principal Officer of MIP as a
group beneficially owned less than 1% of the outstanding beneficial interest of
MIP.

10
<PAGE>

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of June 1, 1998, the funds of MasterWorks Funds Inc. and Stagecoach Trust
each held more than 5% of the outstanding voting securities of their
corresponding LifePath Master Portfolios. Approximate percentages are indicated
in the table below:

<TABLE>
<CAPTION>
% OUTSTANDING
MASTER PORTFOLIO FUND SECURITIES HELD
---------------- ---- ---------------
<S> <C> <C>
LifePath 2000 Master Portfolio MasterWorks LifePath 2000 43%
Stagecoach LifePath Opportunity 57%

LifePath 2010 Master Portfolio MasterWorks LifePath 2010 55%
Stagecoach LifePath 2010 45%

LifePath 2020 Master Portfolio MasterWorks LifePath 2020 46%
Stagecoach LifePath 2020 54%

LifePath 2030 Master Portfolio MasterWorks LifePath 2030 41%
Stagecoach LifePath 2030 59%

LifePath 2040 Master Portfolio MasterWorks LifePath 2040 33%
Stagecoach LifePath 2040 67%
</TABLE>

For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Accordingly, to the extent that an
interestholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a Master Portfolio, or is identified as the holder of
record of more than 25% of a Master Portfolio and has voting and/or investment
powers, such interestholder may be presumed to control such Master Portfolio.

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.

The following information supplements and should be read in conjunction with
Item 5 in Part A.

Investment Adviser. BGFA provides investment advisory services to each
Master Portfolio pursuant to separate Investment Advisory Contracts (each, a
"BGFA Advisory Contract") with MIP, each dated January 1, 1996. As to each
Master Portfolio, the applicable BGFA Advisory Contract 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 Contract is terminable without penalty, on 60 days' written notice, by
MIP's Board of Trustees or by vote of the holders of a majority of such Master
Portfolio's interests, or, on not less than 60 days' written notice by BGFA.
The applicable BGFA Advisory Contract terminates 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 the Investment Advisory Agreement
(the "Advisory Agreement") dated February 25, 1994 with MIP. The terms of the
Advisory Agreement were identical in all material respects, other than the
identity of the parties, to each BGFA Advisory Contract.

Advisory Fees Paid. For the period from March 1, 1995 to December 31,
1995, the Master Portfolios paid to Wells Fargo Bank the advisory fees indicated
below, without waivers. For the period beginning January 1, 1996

11
<PAGE>

and ended February 29, 1996, and for the fiscal years ended February 28, 1997
and February 28, 1998, the Master Portfolios paid to BGFA the advisory fees
indicated below, without waivers.

<TABLE>
<CAPTION>
MARCH 1, 1995 JANUARY 1, 1996 FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1995 FEBRUARY 29, 1996 FEBRUARY 28, 1997 FEBRUARY 28, 1998
MASTER PORTFOLIO FEES PAID FEES PAID FEES PAID FEES PAID
- -------------------------------- ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
LifePath 2000 Master Portfolio $363,599 $ 99,511 $ 689,347 $ 656,142
LifePath 2010 Master Portfolio $312,512 $ 86,919 $ 757,505 $1,018,984
LifePath 2020 Master Portfolio $520,362 $141,075 $1,149,160 $1,572,634
LifePath 2030 Master Portfolio $343,916 $ 93,240 $ 714,647 $1,048,151
LifePath 2040 Master Portfolio $503,384 $148,324 $1,154,330 $1,767,632
</TABLE>

Sub-Adviser. The Master Portfolios do not currently engage a sub-adviser.
However, prior to January 1, 1996, WFNIA provided investment sub-advisory
services to each Master Portfolio pursuant to a Investment Sub-Advisory
Agreement (the "Sub-Advisory Agreement") dated February 25, 1994 with Wells
Fargo Bank and MIP.

Sub-Advisory Fees Paid. For the period beginning March 1, 1995 and ended
December 31, 1995, Wells Fargo Bank paid the following sub-advisory fees to
WFNIA, without waivers.

<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995
FEES PAID
----------------------------------
<S> <C>
LifePath 2000 Master Portfolio $261,344
LifePath 2010 Master Portfolio $224,903
LifePath 2020 Master Portfolio $374,802
LifePath 2030 Master Portfolio $247,703
LifePath 2040 Master Portfolio $361,673
</TABLE>

Co-Administrators. Stephens and BGI are the Master Portfolio's co-
administrators. Stephens and BGI provide the Master Portfolios with
administrative services, including general supervision of the Master Portfolios'
non-investment operations, coordination of the other services provided to the
Master Portfolios, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the MIP's trustees and officers. Stephens also
furnishes office space and certain facilities to conduct the Master Portfolios'
business, and compensates the MIP's trustees, officers and employees who are
affiliated with Stephens. In addition, except as outlined below under "
Expenses," Stephens and BGI will be responsible for paying all expenses incurred
by the Master Portfolios other than the fees payable to BGFA. Stephens and BGI
are not entitled to compensation for providing administration services to a
Master Portfolio. BGI has delegated certain of its duties as co-administrator to
Investors Bank & Trust Company ("IBT"). IBT, as sub-administrator, is
compensated by BGI for performing certain administration services.

Prior to October 21, 1996, Stephens alone provided administration services
to MIP. Stephens was not entitled to compensation for providing administration
services to the Master Portfolios so long as Stephens received fees for
providing similar services to a feeder fund of another investment company
investing all of its assets in a Master Portfolio. The Master Portfolios did
not pay any administration fees to Stephens.

12
<PAGE>

Custodian. Investors Bank & Trust Company ("IBT") currently acts as the
Master Portfolios' custodian. The principal business address of IBT is 200
Clarendon Street, Boston, Massachusetts 02111. IBT is not entitled to receive
compensation for its custodial services so long as it is entitled to receive
compensation for providing sub-administration services to the Master Portfolios.
Prior to October 21, 1996, Barclays Global Investors, N.A. ("BGI") acted as the
Master Portfolios' custodian. The principal business address of BGI is 45
Fremont Street, San Francisco, California 94105. BGI did not receive
compensation for its custodial services.

Transfer and Dividend Disbursing Agent. IBT also acts as each Master
Portfolio's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). IBT
is not entitled to receive compensation for providing such services to MIP so
long as it receives fees for providing similar services to the funds which
invest substantially all of their assets in the Master Portfolios. Prior to
March 2, 1998, Wells Fargo Bank acted as Transfer Agent to the Master
Portfolios. To date, the Master Portfolios have not paid any transfer and
dividend disbursing agency fees.

Distribution 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 was adopted by a
majority of MIP's Board of Trustees (including a majority of those Trustees who
are not "interested persons" as defined in the 1940 Act of MIP) 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. The Master Portfolios do not currently pay any amounts pursuant to the
Plan.

Expenses. Except for extraordinary expenses, brokerage and other expenses
connected with to the execution of portfolio transactions and certain other
expenses which are borne by the Master Portfolios, Stephens and BGI have agreed
to bear all costs of the Master Portfolios' and MIP's operations.

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

General. BGFA assumes general supervision over placing orders on behalf of
each Master Portfolio 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
interestholders. 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. A 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
commission paid by other institutional investors for comparable services. Prior
to January 1, 1996, WFNIA exercised general supervision over placing orders on
behalf of each Master Portfolio for the purchase or sale of portfolio securities
and the brokerage allocation practices described herein are applicable to WFNIA
and the Master Portfolios prior to January 1, 1996.

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. Portfolio turnover rates over 100%
(although unexpected) may result in comparatively greater brokerage expenses.

13
<PAGE>

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 Portfolios 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.

MASTER PORTFOLIO 1996 1997 1998
- ---------------- ---- ---- ----
<S> <C> <C> <C>
LifePath 2000 Master Portfolio $ 8,311 $ 3,639 $ 9,361
LifePath 2010 Master Portfolio $12,053 $ 8,837 $15,306
LifePath 2020 Master Portfolio $29,666 $12,383 $29,153
LifePath 2030 Master Portfolio $33,786 $ 6,927 $28,908
LifePath 2040 Master Portfolio $71,608 $28,047 $94,717
</TABLE>

Securities of Regular Broker/Dealers. As of February 28, 1998, the
LifePath Master Portfolios owned securities of their "regular brokers or
dealers" or their parents, as defined in the 1940 Act, as follows:

MASTER PORTFOLIO BROKER/DEALER AMOUNT
- ---------------- ------------- ------------
<S> <C> <C>
LifePath 2000 Master Portfolio Goldman Sachs $ 5,000,000
J.P. Morgan $ 41,347
Lehman Bros. Holdings $ 31,531
Merrill Lynch $ 37,928
Morgan Stanley $ 68,590

LifePath 2010 Master Portfolio Goldman Sachs $ 9,000,000
J.P. Morgan $ 189,288
Lehman Bros. Holdings $ 50,450
Merrill Lynch $ 198,514
Morgan Stanley $ 328,681

LifePath 2020 Master Portfolio Goldman Sachs $14,000,000
J.P. Morgan $ 426,854
Lehman Bros. Holdings $ 126,125
Merrill Lynch $ 475,032
Morgan Stanley $ 752,033

LifePath 2030 Master Portfolio Goldman Sachs $ 9,000,000
J.P. Morgan $ 362,085
Lehman Bros. Holdings $ 132,431
Merrill Lynch $ 407,477
Morgan Stanley $ 650,094

LifePath 2040 Master Portfolio Goldman Sachs $15,000,000
J.P. Morgan $ 609,091
Lehman Bros. Holdings $ 182,881
Merrill Lynch $ 687,859
Morgan Stanley $ 1,606,436
</TABLE>

14
<PAGE>

Item 18. Capital Stock And Other Securities.

Pursuant to MIP's Declaration of Trust, the Trustees are authorized to
issue beneficial interests in each Master Portfolio. Investors in a Master
Portfolio are entitled to participate pro rata in distributions of taxable
income, loss, gain and credit of such Master Portfolio. Upon liquidation or
dissolution of a Master Portfolio, investors are entitled to share pro rata in
such Master Portfolio's net assets available for distribution to its investors.
Investments in a Master Portfolio have no preference, pre-exemptive, conversion
or similar rights and are fully paid and non-assessable, except as set forth
below. Investments in a Master Portfolio may not be transferred. No
certificates are issued.

Each investor is entitled to vote, with respect to matters effecting each
of MIP's portfolios, in proportion to the amount of its investment in MIP.
Investors in MIP do not have cumulative voting rights, and investors holding
more than 50% of the aggregate beneficial interest in MIP may elect all of the
Trustees of MIP if they choose to do so and in such event the other investors in
MIP would not be able to elect any Trustee. MIP is not required to hold annual
meetings of investors but MIP may hold special meetings of investors when in the
judgment of MIP's Trustees it is necessary or desirable to submit matters for an
investor vote.

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
company, such as MIP, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding interests of
each Master Portfolio affected by such matter. Rule 18f-2 further provides that
a Master Portfolio shall be deemed to be affected by a matter unless it is clear
that the interests of such Master Portfolio in the matter are identical or that
the matter does not affect any interest of such Master Portfolio. However, the
Rule exempts the selection of independent auditors and the election of Trustees
from the separate voting requirements of the Rule.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.

Purchase of Securities. Beneficial interests in each Master Portfolio are
issued solely in private placement transactions which do not involve any "public
offering" within the meaning of Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). Investments in the Master Portfolios may only be made
by investment companies or certain other entities which are "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
registration statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.

Suspension of Redemptions. The right of redemption of interests in the
Master Portfolios may be suspended or the date of payment postponed (a) during
any period when the New York Stock Exchange is closed (other than customary
weekend and holiday closings), (b) when trading in the markets the Master
Portfolios ordinarily utilize is restricted, or when an emergency exists as
determined by the SEC so that disposal of the Master Portfolios'

15
<PAGE>

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 Master Portfolios' interestholders.

Pricing of Securities. The securities of each 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 are determined by BGFA in
accordance with guidelines approved by MIP's Board of Trustees. 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 BGFA in
accordance with guidelines approved by MIP's Board of Trustees.

Restricted securities, as well as securities or other assets for which
market quotations are not readily available or which 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. In making a good faith valuation of restricted securities, the
following are generally considered: 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 Portfolios. 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 LifePath 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 "Services") approved by MIP's Board of Trustees.
Each Service may use available market quotations, employ electronic data
processing techniques and/or a matrix system to determine valuations. The
Services' 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 a LifePath
Master Portfolio's shares.

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

16
<PAGE>

ITEM 20. TAX STATUS.

MIP is organized as a business trust under Delaware law. In accordance
with MIP's classification for federal income tax purposes, each Master Portfolio
will be considered a partnership for such purposes, and as such, the Master
Portfolios will not be subject to federal income tax. However, each investor in
a Master Portfolio will be taxable on its share (as determined in accordance
with the governing instruments of MIP) of such Master Portfolio's taxable income
in determining its federal income tax liability. The determination of such
share is made in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.

MIP's taxable year-end is the last day of December. Although MIP is not
subject to federal income tax, it files appropriate federal income tax returns.

Each Master Portfolio's assets, income and distributions are managed in
such a way that an investor in the Master Portfolio may satisfy the requirements
of Subchapter M of the Code, assuming that the investor invested substantially
all of its investable assets in the Master Portfolio. Investors are advised to
consult their own tax advisors as to the tax consequences of an investment in
the Master Portfolios.

ITEM 21. UNDERWRITERS.

The exclusive placement agent for MIP is Stephens, which receives no
compensation for serving in this capacity. Registered broker/dealers and
investment companies, insurance company separate accounts, common and commingled
trust funds, group trusts and similar organizations and entities which
constitute accredited investors, as defined in the regulations adopted under the
1933 Act, may continuously invest in a Master Portfolio of MIP.

ITEM 22. CALCULATIONS OF PERFORMANCE DATA.

Not applicable.

ITEM 23. FINANCIAL INFORMATION.

KPMG Peat Marwick LLP provides audit services, tax return preparation and
assistance and consultation in connection with review of certain SEC filings.
KPMG Peat Marwick LLP's address is Three Embarcadero Center, San Francisco,
California 94111. For the fiscal year ended February 28, 1995, MIP's financial
statements were audited by other independent auditors. Such auditors expressed
an unqualified opinion on the financial statements of MIP.

The audited financial statements including the portfolio of investments,
and the independent auditors' report for the LifePath Master Portfolios for the
fiscal year ended February 28, 1998, are hereby incorporated by reference to the
MasterWorks Funds Inc. (SEC File Nos. 33-54126; 811-7322) Annual Report, as
filed with the SEC on May 1, 1998. The audited financial statements for the
LifePath Master Portfolios are attached to all Part Bs delivered to
interestholders or prospective interestholders.

17
<PAGE>

APPENDIX

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.

"AA"

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.

"A"

"BBB"

COMMERCIAL PAPER RATING

The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is 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
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.

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.

A-1
<PAGE>

"Aa"

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.

"A"

"Baa"

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 obligations, and this ordinarily is 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 is evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, are 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 in a timely
manner. 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.

A-2
<PAGE>

"AAA"

"AA"

"A"

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"

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

"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.

A-3
<PAGE>

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.

"AA"

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.

"A"

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

IBCA

BOND AND LONG-TERM RATINGS

COMMERCIAL PAPER AND SHORT-TERM RATINGS

A-4
<PAGE>

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 interestholders 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-5
<PAGE>

MASTER INVESTMENT PORTFOLIO

FILE NO. 811-8162

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

The portfolio of investments, audited financial statements and independent
auditors' report for the Asset Allocation, Bond Index, LifePath 2000, LifePath
2010, LifePath 2020, LifePath 2030, LifePath 2040, S&P 500 Index and U.S.
Treasury Allocation Master Portfolios for the fiscal year ended February 28,
1998, are hereby incorporated by reference to the MasterWorks Funds Inc. Annual
Report, as filed with the SEC on May 1, 1998.

(b) Exhibits:

Exhibit
Number Description
------- -----------

1(a) - Amended and Restated Declaration of Trust, incorporated by
reference to the Registration Statement on Form N-1A, filed
November 15, 1993.

1(b) - Certificate of Trust, incorporated by reference to the
Registration Statement on Form N-1A, filed November 15,
1993.

2 - By-Laws, incorporated by reference to the Registration
Statement on Form N-1A filed November 15, 1993.

3 - Not Applicable.

4 - Not Applicable.

5(a) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the LifePath 2000 Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(b) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the LifePath 2010 Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(c) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the LifePath 2020 Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

C-1
<PAGE>

5(d) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the LifePath 2030 Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(e) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the LifePath 2040 Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(f) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the Bond Index Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(g) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the Asset Allocation Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(h) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the S&P 500 Index Master
Portfolio, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

5(i) - Investment Advisory Contract by and among BZW Barclays
Global Fund Advisors and Master Investment Portfolio dated
January 1, 1996, on behalf of the U.S. Treasury Allocation
Master Portfolio, incorporated by reference to Amendment No.
3 to the Registration Statement, filed January 5, 1996.

6 - Placement Agency Agreement with Stephens Inc. on behalf of
each Master Portfolio, incorporated by reference to
Amendment No. 4 to the Registration Statement, filed on June
28, 1996.

7 - Not Applicable.

8 - Custody Agreement with Investors Bank & Trust, N.A. dated
October 21, 1996 on behalf of each Master Portfolio,
incorporated by reference to Amendment No. 5 to the
Registration Statement, filed June 30, 1997.

9(a) - Co-Administration Agreement with Stephens Inc. and Barclays
Global Investors, N.A. dated October 21, 1996 on behalf of
each Master Portfolio, incorporated by reference to
Amendment No. 5 to the Registration Statement, filed June
30, 1997.

9(b) - Sub-Administration Agreement with Investors Bank & Trust and
Barclays Global Investors, N.A. dated October 21, 1996 on
behalf of each Master Portfolio, incorporated by reference
to Amendment No. 5 to the Registration Statement, filed June
30, 1997.

C-2
<PAGE>

9(c) - Third Party Feeder Fund Agreement with Massmutual
Institutional Funds and Massachusetts Mutual Life Insurance
Company dated February 27, 1998, filed herewith.

10 - Not Applicable.

11 - Not Applicable.

12 - Not Applicable.

13 - Not Applicable.

14 - Not Applicable.

15 - Distribution Plan on behalf of the LifePath Master
Portfolios, incorporated by reference to Amendment No. 3 to
the Registration Statement, filed January 5, 1996.

16 - Not Applicable.

17 - See Exhibit 27

18 - Not Applicable

19 - Powers of Attorney for Jack S. Euphrat, R. Greg Feltus,
Thomas S. Goho, Zoe Ann Hines, W. Rodney Hughes, Robert M.
Joses and J. Tucker Morse, incorporated by reference to
Amendment No. 5 to the Registration Statement, filed June
30, 1997.

27.1 - Financial Data Schedule for the LifePath 2000 Master
Portfolio, filed herewith.

27.2 - Financial Data Schedule for the LifePath 2010 Master
Portfolio, filed herewith.

27.3 - Financial Data Schedule for the LifePath 2020 Master
Portfolio, filed herewith.

27.4 - Financial Data Schedule for the LifePath 2030 Master
Portfolio, filed herewith.

27.5 - Financial Data Schedule for the LifePath 2040 Master
Portfolio, filed herewith.

27.11 - Financial Data Schedule for the U.S. Treasury Allocation
Master Portfolio, filed herewith.

27.12 - Financial Data Schedule for the Bond Index Master
Portfolio, filed herewith.

27.13 - Financial Data Schedule for the S&P 500 Master Portfolio,
filed herewith.

27.14 - Financial Data Schedules for the Asset Allocation Master
Portfolio, filed herewith.

C-3
<PAGE>

Item 25. Persons Controlled by or Under Common Control with Registrant

No person is controlled by or under common control with the Registrant.

Item 26. Number of Holders of Securities

As of June 1, 1998, the number of record holders of each class of
securities of the Registrant was as follows:

Number of Record
Title of Class Holders
- ---------------- ----------------

Shares of beneficial interest, $.001 per share, of the following series:

LifePath 2000 Master Portfolio 3
LifePath 2010 Master Portfolio 3
LifePath 2020 Master Portfolio 3
LifePath 2030 Master Portfolio 3
LifePath 2040 Master Portfolio 3
S&P 500 Index Master Portfolio 5
Bond Index Master Portfolio 2
Asset Allocation Master Portfolio 2
U.S. Treasury Allocation Master Portfolio 2

Item 27. Indemnification

Reference is made to Article IX of the Registrant's Declaration of Trust.
The application of these provisions is limited by Article 10 of the Registrant's
By-Laws and by the following undertaking set forth in the rules promulgated by
the Securities and Exchange Commission:

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such Act and will
be governed by the final adjudication of such issue.

C-4
<PAGE>

Item 28. (a) Business and Other Connections of Investment Adviser

The LifePath 2000, LifePath 2010, LifePath 2020, LifePath 2030, LifePath
2040, Asset Allocation, Bond Index, S&P 500 Index and U.S. Treasury Allocation
Master Portfolios are advised by Barclays Global Fund Advisors ("BGFA"), a
wholly-owned subsidiary of Barclays Global Investors, N.A. ("BGI", formerly,
Wells Fargo Institutional Trust Company).

BGFA's business is that of a registered investment adviser to certain
open-end, management investment companies and various other institutional
investors. Wells Fargo Bank's business is that of a national banking
association with respect to which it conducts a variety of commercial banking
and trust activities, including acting as investment adviser and/or sub-adviser
to certain open-end management investment companies and various other
institutional investors.

The directors and officers of BGFA consist primarily of persons who during
the past two years have been active in the investment management business of the
former sub-adviser to the Registrant, Wells Fargo Nikko Investment Advisors
("WFNIA") and, in some cases, the service business of BGI. Each of the directors
and executive officers of BGFA will also have substantial responsibilities as
directors and/or officers of BGI. To the knowledge of the Registrant, except as
set forth below, none of the directors or executive officers of BGFA is or has
been at any time during the past two fiscal years engaged in any other business,
profession, vocation or employment of a substantial nature.

Name and Position Principal Business(es) During at
at BGFA Least the Last Two Fiscal Years
- ------- -------------------------------

Frederick L.A. Grauer Director of BGFA and Co-Chairman and Director of BGI
Director 45 Fremont Street, San Francisco, CA 94105

Patricia Dunn Director of BGFA and Co-Chairman and Director of BGI
Director 45 Fremont Street, San Francisco, CA 94105

Lawrence G. Tint Chairman of the Board of Directors of BGFA and
Chairman and Director Chief Executive Officer of BGI
45 Fremont Street, San Francisco, CA 94105

Geoffrey Fletcher Chief Financial Officer of BGFA and BGI since May 1997
45 Fremont Street, San Francisco, CA 94105
Managing Director and Principal Accounting Officer at
Bankers Trust Company from 1988 - 1997
505 Market Street, San Francisco, CA 94111

Prior to January 1, 1996, Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a
wholly owned subsidiary of Wells Fargo & Company, served as investment adviser
to all of the Registrant's investment portfolios, and to certain other
registered open-end management

C-5
<PAGE>

investment companies. Wells Fargo Bank's business is that of a national banking
association with respect to which it conducts a variety of commercial banking
and trust activities.

To the knowledge of Registrant, none of the directors or executive officers
of Wells Fargo Bank, except those set forth below, is or has been at any time
during the past two fiscal years engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain executive
officers also hold various positions with and engage in business for Wells Fargo
& Company. Set forth below are the names and principal businesses of the
directors and executive officers of Wells Fargo Bank who are or during the past
two fiscal years have been engaged in any other business, profession, vocation
or employment of a substantial nature for their own account or in the capacity
of director, officer, employee, partner or trustee. All the directors of Wells
Fargo Bank also serve as directors of Wells Fargo & Company.

Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
- ------------------- ---------------------------------------------------------
H. Jesse Arnelle Senior Partner of Arnelle, Hastie, McGee, Willis & Greene
Director 455 Market Street
San Francisco, CA 94105

Director of Armstrong World Industries, Inc.
5037 Patata Street
South Gate, CA 90280

Director of Eastman Chemical Corporation
12805 Busch Place
Santa Fe Springs, CA 90670

Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408

Michael R. Bowlin Chairman of the Board of Directors,
Director Chief Executive Officer,
Chief Operating Officer and President of
Atlantic Richfield Co. (ARCO)
Highway 150
Santa Paula, CA 93060

Edward Carson Chairman of the Board and Chief Executive Officer of
Director First Interstate Bancorp
633 West Fifth Street
Los Angeles, CA 90071

Director of Aztar Corporation
2390 East Camelback Road Suite 400
Phoenix, AZ 85016

Director of Castle & Cook, Inc.
10900 Wilshire Blvd.
Los Angeles, CA 90024

C-6
<PAGE>

Director of Terra Industries, Inc.
1321 Mount Pisgah Road
Walnut Creek, CA 94596

William S. Davilla President (Emeritus) and a Director of
Director The Vons Companies, Inc.
618 Michillinda Ave.
Arcadia, CA 91007

Director of Pacific Gas & Electric Company
788 Taylorville Road
Grass Valley, CA 95949

Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065

Director of Tejon Ranch Company
P.O. Box 1000
Lebec, CA 93243

Director of The Bakersfield Californian
1707 I Street
P.O. Box 440
Bakersfield, CA 93302

Trustee of Whittier College
13406 East Philadelphia Ave.
P.O. Box 634
Whittier, CA 90608

Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105

Director of Phelps Dodge Corporation
2600 North Central Ave.
Phoenix, AZ 85004

Director of Safeway, Inc.
4th and Jackson Streets
Oakland, CA 94660

Robert K. Jaedicke Professor (Emeritus) of Accounting
Director Graduate School of Business at Stanford University
MBA Admissions Office
Stanford, CA 94305

Director of Bailard Biehl & Kaiser
Real Estate Investment Trust, Inc.
2755 Campus Dr.

C-7
<PAGE>

San Mateo, CA 94403

Director of Boise Cascade Corporation
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728

Director of California Water Service Company
1720 North First Street
San Jose, CA 95112

Director of Enron Corporation
1400 Smith Street
Houston, TX 77002

Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333

Director of Homestake Mining Company
650 California Street
San Francisco, CA 94108

Thomas L. Lee Chairman and Chief Executive Officer of
Director The Newhall Land and Farming Company
10302 Avenue 7 1-2
Firebaugh, CA 93622

Director of Calmat Co.
501 El Charro Road
Pleasanton, CA 94588

Director of First Interstate Bancorp
633 West Fifth Street
Los Angeles, CA 90071

Ellen Newman President of Ellen Newman Associates
Director 323 Geary Street
Suite 507
San Francisco, CA 94102

Chair (Emeritus) of the Board of Trustees
University of California at San Francisco Foundation
250 Executive Park Blvd.
Suite 2000
San Francisco, CA 94143

Director of the California Chamber of Commerce
1201 K Street 12th Floor
Sacremento, CA 95814

Philip J. Quigley Chairman, President and Chief Executive Officer of
Director Pacific Telesis Group
130 Kearney Street Rm. 3700

C-8
<PAGE>

San Francisco, CA 94108

Carl E. Reichardt Director of Columbia/HCA Healthcare Corporation
Director One Park Plaza
Nashville, TN 37203

Director of Ford Motor Company
The American Road
Dearborn, MI 48121

Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355

Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105

Retired Chairman of the Board of Directors
and Chief Executive Officer of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105

Donald B. Rice President and Chief Executive Officer of Teledyne, Inc.
Director 2049 Century Park East
Los Angeles, CA 90067

Retired Secretary of the Air Force

Director of Vulcan Materials Company
One MetroPlex Drive
Birmingham, AL 35209

Richard J. Stegemeier Chairman (Emeritus) of Unocal Corp
Director 44141 Yucca Avenue
Lancaster, CA 93534

Director of Foundation Health Corporation
166 4th
Fort Irwin, CA 92310

Director of Halliburton Company
3600 Lincoln Plaza
500 North Alcard Street
Dallas, TX 75201

Director of Northrop Grumman Corp.
1840 Century Park East
Los Angeles, CA 90067

Director of Outboard Marine Corporation
100 SeaHorse Drive
Waukegan, IL 60085

C-9
<PAGE>

Director of Pacific Enterprises
555 West Fifth Street
Suite 2900
Los Angeles, CA 90031

Director of First Interstate Bancorp
633 West Fifth Street
Los Angeles, CA 90071

Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080

David M. Tellep Retired Chairman of the Board and
Director Chief Executive Officer of
Martin Lockheed Corp
6801 Rockledge Drive
Bethesda, MD 20817

Director of Edison International
and Southern California Edison Company
2244 Walnut Grove Ave.
Rosemead, CA 91770

Director of First Interstate
633 West Fifth Street
Los Angeles, CA 90071

Chang-Lin Tien Chancellor of the University of California at Berkeley
Director Berkeley, CA 94720

Director of Raychem Corporation
300 Constitution Drive
Menlo Park, CA 94025

John A. Young President, Chief Executive Officer and Director
Director of Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 9434

Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104

Director of Lucent Technologies
25 John Glenn Drive
Amherst, NY 14228

Director of Novell, Inc.
11300 West Olympic Blvd.
Los Angeles, CA 90064

Director of Shaman Pharmaceuticals Inc.
213 East Grand Ave. South

C-10
<PAGE>

San Francisco, CA 94080

William F. Zuendt President of Wells Fargo & Company
President 420 Montgomery Street
San Francisco, CA 94105

Director of 3Com Corporation
5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052

Director of the California Chamber of Commerce

Prior to January 1, 1996, WFNIA served as the sub-adviser to the Asset
Allocation, U.S. Treasury Allocation, Bond Index and S&P 500 Index Master
Portfolios, and as adviser or sub-adviser to various other open-end management
investment companies. For additional information, see "Management" in the Part
B. For information as to the business, profession, vocation or employment of a
substantial nature of each of the officers and management committees of WFNIA,
reference is made to WFNIA's Form ADV and Schedules A and D filed under the
Investment Advisers Act of 1940, SEC File No. 801-36479, incorporated herein by
reference.

Item 29. Principal Underwriters

(a) Stephens Inc., placement agent for the Registrant, does not presently
act as investment adviser for any other registered investment companies, but
does act as principal underwriter for Life & Annuity Trust, MasterWorks Funds
Inc., Stagecoach Funds, Inc., Stagecoach Trust, Nations Fund, Inc., Nations Fund
Trust, Nations Fund Portfolios, Inc., Nations LifeGoal Funds, Inc. and Nations
Institutional Reserves, and is the exclusive placement agent for Managed Series
Investment Trust and Master Investment Portfolio, all of which are registered
open-end management investment companies.

(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV and Schedules A
and D filed by Stephens Inc. with the Securities and Exchange Commission
pursuant to the Investment Advisors Act of 1940 (File No. 501-15510).

Item 30. Location of Accounts and Records

(a) The Registrant maintains accounts, books and other documents required
by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder
(collectively, "Records") at the offices of Stephens Inc., 111 Center Street,
Little Rock, Arkansas 72201.

C-11
<PAGE>

(b) BGFA and BGI maintain all Records relating to their services as
adviser and co-administrator, respectively, at 45 Fremont Street, San Francisco,
California 94105.

(c) Wells Fargo Bank maintains all Records relating to its services as
investment adviser for the periods prior to January 1, 1996, at 525 Market
Street, San Francisco, California 94105.

(d) Stephens maintains all Records relating to its services as sponsor,
co-administrator and distributor at 111 Center Street, Little Rock, Arkansas
72201.

(e) IBT maintains all Records relating to its services as
sub-administrator and custodian at 89 South Street, Boston, Massachusetts 02111.

Item 31. Management Services

Other than as set forth under the captions "Item 5 Management of the Master
Portfolios" in Part A of this Registration Statement and "Item 16 Investment
Advisory and Other Services" in Part B of this Registration Statement,
Registrant is not a party to any management-related service contract.

Item 32. Undertakings

(a) Not applicable.

(b) Not applicable.

(c) Registrant hereby undertakes to call a meeting of shareholders for
the purpose of voting upon the questions of removal of a trustee or trustees
when requested in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in connection with
such meeting to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communications.

C-12
<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereto duly authorized, in
the City of Little Rock, State of Arkansas on the 29th day of June, 1998.

MASTER INVESTMENT PORTFOLIO

By /s/ Richard H. Blank, Jr.
-------------------------
(Richard H. Blank, Jr.)
Secretary and Treasurer
(Principal Financial Officer)

Signature Title
--------- -----

* Trustee, Chairman and President
------------------------- (Principal Executive Officer)
(R. Greg Feltus)

/s/ Richard H. Blank, Jr. Secretary and Treasurer
------------------------- (Principal Financial Officer)
(Richard H. Blank, Jr.)

* Trustee
-------------------------
(Jack S. Euphrat)

* Trustee
-------------------------
(Thomas S. Goho)

* Trustee
-------------------------
(W. Rodney Hughes)

* Trustee
-------------------------
(J. Tucker Morse)

*By: /s/ Richard H. Blank, Jr.
-------------------------
Richard H. Blank, Jr.
As Attorney-in-Fact
June 29, 1998
<PAGE>

MASTER INVESTMENT PORTFOLIO

FILE NO. 811-8162

EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
EX-27.1 . Financial Data Schedule - LifePath 2000 Master Portfolio

EX-27.2 . Financial Data Schedule - LifePath 2010 Master Portfolio

EX-27.3 . Financial Data Schedule - LifePath 2020 Master Portfolio

EX-27.4 . Financial Data Schedule - LifePath 2030 Master Portfolio

EX-27.5 . Financial Data Schedule - LifePath 2040 Master Portfolio

EX-27.11 . Financial Data Schedule - U.S. Treasury Allocation Master Portfolio

EX-27.12 . Financial Data Schedule - Bond Index Master Portfolio

EX-27.13 . Financial Data Schedule - S&P 500 Stock Master Portfolio

EX-27.14 . Financial Data Schedule - Asset Allocation Master Portfolio

EX-99.B9(c) . Third Party Feeder Fund Agreement
</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000915092
<NAME> MASTER INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 1
<NAME> LIFEPATH 2000 MASTER PORTFOLIO

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 119,143,895
<INVESTMENTS-AT-VALUE> 126,687,879
<RECEIVABLES> 6,513,883
<ASSETS-OTHER> 595
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 133,202,357
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 17,003,356
<TOTAL-LIABILITIES> 17,003,356
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 11,095,423
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,302,192
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,543,984
<NET-ASSETS> 116,199,001
<DIVIDEND-INCOME> 470,531
<INTEREST-INCOME> 5,511,578
<OTHER-INCOME> 0
<EXPENSES-NET> 656,142
<NET-INVESTMENT-INCOME> 5,325,967
<REALIZED-GAINS-CURRENT> 5,800,419
<APPREC-INCREASE-CURRENT> 3,089,773
<NET-CHANGE-FROM-OPS> 14,216,159
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (15,073,997)
<ACCUMULATED-NII-PRIOR> 5,769,457
<ACCUMULATED-GAINS-PRIOR> 4,501,773
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 656,142
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 656,142
<AVERAGE-NET-ASSETS> 119,584,849
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000915092
<NAME> MASTER INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 2
<NAME> LIFEPATH 2010 MASTER PORTFOLIO

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 194,952,169
<INVESTMENTS-AT-VALUE> 226,161,394
<RECEIVABLES> 6,968,806
<ASSETS-OTHER> 405
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 233,130,605
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 24,912,906
<TOTAL-LIABILITIES> 24,912,906
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 11,642,553
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,581,028
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 31,209,225
<NET-ASSETS> 208,217,699
<DIVIDEND-INCOME> 1,547,164
<INTEREST-INCOME> 5,932,067
<OTHER-INCOME> 0
<EXPENSES-NET> 1,018,984
<NET-INVESTMENT-INCOME> 6,460,247
<REALIZED-GAINS-CURRENT> 9,734,287
<APPREC-INCREASE-CURRENT> 16,696,571
<NET-CHANGE-FROM-OPS> 32,891,105
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 38,706,779
<ACCUMULATED-NII-PRIOR> 5,182,306
<ACCUMULATED-GAINS-PRIOR> 4,846,741
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,018,984
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,018,984
<AVERAGE-NET-ASSETS> 185,885,099
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
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<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
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<S> <C>
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<PAGE>
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<CIK> 0000915092
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<S> <C>
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<PAGE>

THIRD PARTY FEEDER FUND

AGREEMENT

AMONG

MASSMUTUAL INSTITUTIONAL FUNDS

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

AND

MASTER INVESTMENT PORTFOLIO

DATED AS OF

FEBRUARY 27, 1998

<PAGE>

TABLE OF CONTENTS

ARTICLE I. REPRESENTATIONS AND WARRANTIES................... 1
1.1 Trust............................................ 1
1.2 MIP.............................................. 2
1.3 MassMutual....................................... 3

ARTICLE II. COVENANTS........................................ 4
2.1 Trust............................................ 4
2.2 MIP.............................................. 5
2.3 Reasonable Actions............................... 7

ARTICLE III. INDEMNIFICATION.................................. 7
3.1 Trust and MassMutual............................. 7
3.2 MIP.............................................. 9

ARTICLE IV. ADDITIONAL AGREEMENTS............................ 11
4.1 Access to Information............................ 11
4.2 Confidentiality.................................. 11
4.3 Obligations of Trust and MIP..................... 11

ARTICLE V. TERMINATION, AMENDMENT........................... 11
5.1 Termination...................................... 11
5.2 Amendment........................................ 12

ARTICLE VI. GENERAL PROVISIONS............................... 12
6.1 Expenses......................................... 12
6.2 Headings......................................... 12
6.3 Entire Agreement................................. 12
6.4 Successors....................................... 12
6.5 Governing Law.................................... 12
6.6 Counterparts..................................... 12
6.7 Third Parties.................................... 12
6.8 Notices.......................................... 12
6.9 Interpretation................................... 13
6.10 Operation of Fund................................ 13
6.11 Relationship of Parties; No Joint Venture, Etc... 13
6.12 Use of Name...................................... 13

Signatures

i
<PAGE>

AGREEMENT

THIS AGREEMENT (the "Agreement") is made and entered into as of the 27th
day of February, 1998, by and among MassMutual Institutional Funds, a
Massachusetts business trust ("Trust"), for itself and on behalf of its series,
the MassMutual Indexed Equity Fund ("Fund"), Massachusetts Mutual Life Insurance
Company ("MassMutual"), a Massachusetts corporation, and Master Investment
Portfolio ("MIP"), a Delaware business trust, for itself and on behalf of its
series, the S&P 500 Index Master Portfolio ("Portfolio").

WITNESSETH

WHEREAS, Trust and MIP are each open-end management investment companies;

WHEREAS, Fund and Portfolio have the same investment objective and
substantially the same investment policies;

WHEREAS, Fund desires to invest on an ongoing basis all of its investable
assets (the "Assets") in Portfolio (the "Investments") on the terms and
conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the foregoing, the mutual promises made
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

ARTICLE I

REPRESENTATIONS AND WARRANTIES

1.1 Trust. Trust represents and warrants to MIP that:

(a) Organization. Trust is a voluntary association with transferable
shares organized and existing under and by virtue of the laws of The
Commonwealth of Massachusetts and Fund is a duly and validly designated
series of Trust. Each of Trust and Fund has the requisite power and
authority to own its property and conduct its business as proposed to be
conducted pursuant to this Agreement.

(b) Authorization of Agreement. The execution and delivery of this
Agreement by Trust on behalf of Fund and the conduct of business
contemplated hereby, including the implementation of the Investments, have
been duly authorized by all necessary action on the part of Trust's Board
of Trustees and no other action or proceeding is necessary for the
execution and delivery of this Agreement by Fund, or the performance by
Fund of its obligations hereunder. This Agreement when executed and
delivered by Trust on behalf of Fund shall constitute a legal, valid and
binding obligation