<PAGE>
MONEY MARKET
FUNDS
[Graphic Omitted]
the difference is experience
Semi-Annual Report
for the period ended April 30, 2000
<PAGE>
[graphic omitted]
MONEY FUNDS CONTENTS
MONEY MARKET FUND message from the president 1
TAX-EXEMPT MONEY MARKET FUND statements of assets 2
and liabilities
CALIFORNIA MONEY FUND
statements of operations 4
statements of changes 5
in net assets
statements of changes 7
in net assets - capital
stock activity
financial highlights 8
portfolio of investments 14
notes to financial 21
statements
(unaudited)
<PAGE>
[Photo of William G. Papesh]
Dear Shareholder,
The tides of the equity markets shifted in the past six months, as the prices of
many stocks that drove markets to new highs in late 1999 retreated. Although
first quarter earnings were strong and most companies had healthy balance
sheets, prices of many growth stocks were overextended, peaking in early March.
This concentrated correction may be a healthy revaluation and could pave the way
for the return of market breadth. Some of the "Old Economy" stocks should
continue to gain favor relative to higher-valued "dot com" companies. Market
volatility has been unprecedented, as four of the technology-heavy NASDAQ
Index's ten worst historical days (on a percentage basis) were recorded in April
2000.
The recent divergence of market indices can create confusion when reported by
media sources. Historically, the Dow Jones Industrial Average (DJIA), which is
most watched, dates back prior to 1900 and measures 30 of the country's largest
companies' stock performance. With increased investment awareness and
intensified financial news reporting, additional indices are now being followed
on a minute-by-minute basis around the globe. For example, the Standard & Poor's
500 (S&P 500) Index, a capitalization-weighted compilation of 500 of the largest
companies traded on domestic market exchanges, has become the most common
benchmark used by domestic equity mutual funds. It is broader in scope than the
DJIA and more indicative of the overall large-cap market. Another index that has
grabbed recent headlines is the NASDAQ. It has a much more significant exposure
to small- and medium-sized companies. Much of the NASDAQ's popularity can be
attributed to its concentration in technology holdings and its meteoric rise in
the past several years. No matter what index you track, it is important to keep
the scope and relative magnitude of the daily moves in perspective. While 100
point fluctuations in the DJIA attracted headlines in the past, this now only
represents a 1% move and has become routine. For comparative purposes, 100
points on the NASDAQ index is approximately 3%. During the 12-month period ended
April 30, 2000, the weekly risk or volatility of the NASDAQ Index was nearly
double that of the DJIA.(1)
Since the biggest advances in the past several years were narrowly focused,
portfolio managers who had stayed away from large concentrations in the hottest
sectors were stung by weaker relative performance. Now, as the markets appear to
be shifting, adherence to a long-term strategy and investment discipline becomes
crucial. The WM Group of Funds' unique focus on strict investment philosophy
could pay off with a broadening market and a resurgence of some core value
holdings that generate consistent cash flows and earnings.
Because of the recent narrow focus, it is important to manage our expectations
of the equity markets. The five-year period ended December 31, 1999, was the
strongest ever, with the S&P 500 returning an average of over 28%(2) per year.
As we have seen since this past March, these steep gains, particularly for the
largest growth stocks, will not continue forever. Therefore, we have to manage
our portfolios with that in mind. There are several strategies and solutions
that can help temper short-term market fluctuations including: regular
investments, diversified portfolios with multiple asset classes, and sticking
with a long-term plan.
During the period, we added the WM Mid Cap Stock Fund to help round out our Fund
family. The Fund will focus on taking advantage of the growth potential from
medium-sized companies. We also changed the names of a few of our Funds to more
closely match their investment objectives, making it easier for you to
understand how the Funds could possibly fit your individual investment needs.
I again stress the importance of meeting with your Investment Representative and
maintaining a long-term diversified focus. Your Representative can assess your
risk tolerance and help you make any changes necessary to put you on track
toward meeting your long-term goals. At the WM Group of Funds, our experience
has proven that the key to successful investing is a long-term focus. Markets
will shift in response to short-term conditions, but long-term investing does
not depend on accurate predictions of short-term events.
We will continue to build, grow and leverage our experience and history to help
meet your investment needs - just as we have for over 60 years. Thank you for
your continued confidence in the WM Group of Funds.
Sincerely,
/s/ William G. Papesh
William G. Papesh
President
(1) Source: NASDAQ and Dow Jones. Both are unmanaged indices of common stocks.
Risk is measured by standard deviation or the movement around the mean
return.
(2) Source: Ibbotson Associates. The S&P 500 is an unmanaged index of common
stocks. Results include reinvestment of dividends.
Past performance is no guarantee of future results. Individuals cannot invest
directly in any index.
<PAGE>
STATEMENTS of ASSETS and LIABILITIES
WM GROUP OF FUNDS
APRIL 30, 2000 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ----------- -----------
ASSETS:
Investments, at value
(See portfolios of investments) (a) $494,090,092 $27,730,902 $35,573,781
Interest receivable .................. 1,562,809 238,453 360,559
Receivable for Fund shares sold ...... 4,433,368 48,565 218,816
Prepaid expenses and other assets .... 12,282 710 842
------------ ----------- -----------
Total Assets ..................... 500,098,551 28,018,630 36,153,998
------------ ----------- -----------
LIABILITIES:
Payable for Fund shares redeemed ..... 2,981,782 20,251 28,580
Payable for investment securities
purchased .......................... 21,016,539 -- 960,245
Investment advisory fee payable ...... 180,910 6,755 12,500
Shareholder servicing and distribution
fees payable ....................... 13,884 289 1
Accrued printing and postage fees .... 181,242 13,704 12,363
Accrued legal and audit fees ......... 38,059 10,920 11,055
Accrued registration and filing fees . 27,133 4,668 1,191
Transfer agent fees payable .......... 46,608 5,284 2,740
Dividends payable .................... 30,017 1,688 1,539
Due to custodian ..................... 101 10 1,834
Accrued expenses and other payables .. 64,772 5,441 11,075
------------ ----------- -----------
Total Liabilities ................ 24,581,047 69,010 1,043,123
------------ ----------- -----------
NET ASSETS ........................... $475,517,504 $27,949,620 $35,110,875
============ =========== ===========
----------------
(a) Investments, at cost ............. $494,090,092 $27,730,902 $35,573,781
============ =========== ===========
See Notes to Financial Statements.
<PAGE>
STATEMENTS of ASSETS and LIABILITIES (continued)
WM GROUP OF FUNDS
APRIL 30, 2000 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------- ------------ -----------
NET ASSETS CONSIST OF:
Undistributed net investment
income ......................... $ 3,519 $ -- $ 3,771
Accumulated net realized (loss) on
investments sold ............... (71,807) (4,891) (40,976)
Paid-in capital .................. 475,585,792 27,954,511 35,148,080
------------ ----------- -----------
Total Net Assets ........... $475,517,504 $27,949,620 $35,110,875
============ =========== ===========
NET ASSETS:
Class A Shares ................... $438,501,707 $27,596,873 $35,110,141
============ =========== ===========
Class B Shares ................... $ 16,719,888 $ 352,747 $ 734
============ ========== ===========
Class I Shares ................... $ 20,295,909 -- --
============
SHARES OUTSTANDING:
Class A Shares ................... 438,541,405 27,596,850 35,151,847
============ ========== ===========
Class B Shares ................... 16,720,315 352,748 734
============ ========== ===========
Class I Shares ................... 20,308,271 -- --
============
CLASS A SHARES:
Net asset value, offering and
redemption price per share of
beneficial interest outstanding $1.00 $1.00 $1.00
============ ========== ===========
CLASS B SHARES:
Net asset value and offering price
per share of beneficial interest
outstanding* ................... $1.00 $1.00 $1.00
============ ========== ===========
CLASS I SHARES:
Net asset value, offering and
redemption price per share of
beneficial interest outstanding $1.00 -- --
============
--------------
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See Notes to Financial Statements.
<PAGE>
STATEMENTS of OPERATIONS
WM GROUP OF FUNDS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ----------- ---------
INVESTMENT INCOME:
Interest ............................. $15,778,599 $ 573,041 $ 537,791
----------- ---------- ---------
EXPENSES:
Investment advisory fee .............. 1,208,899 67,770 77,875
Legal and audit fees ................. 41,366 9,217 8,916
Registration and filing fees ......... 117,674 19,843 6,925
Printing and postage fees ............ 81,684 6,523 8,407
Other ................................ 105,437 8,599 12,122
Shareholder servicing and distribution
fees:
Class B Shares ..................... 88,977 1,796 79
Transfer agent fees:
Class A Shares ..................... 270,547 26,183 15,366
Class B Shares ..................... 15,437 75 22
Fees waived by investment advisor .... -- (28,515) --
----------- ---------- ---------
Total expenses ................. 1,930,021 111,491 129,712
Fees reduced by credits allowed by the
custodian .......................... (4,314) (1,031) (449)
----------- ---------- ---------
Net expenses ................... 1,925,707 110,460 129,263
----------- ---------- ---------
NET INVESTMENT INCOME ................ 13,852,892 462,581 408,528
----------- ---------- ---------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS ....................... 2,000 -- --
----------- ---------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................... $13,854,892 $ 462,581 $ 408,528
=========== ========== =========
See Notes to Financial Statements.
<PAGE>
STATEMENTS of CHANGES in NET assets
WM GROUP OF FUNDS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
Net investment income .................................... $ 13,852,892 $ 462,581 $ 408,528
Net realized gain on investment transactions ............. 2,000 -- --
------------- ------------- -------------
Net increase in net assets resulting from operations ..... 13,854,892 462,581 408,528
Distributions to shareholders from net investment income:
Class A Shares ......................................... (11,647,143) (458,506) (408,410)
Class B Shares ......................................... (368,520) (4,075) (118)
Class I Shares ......................................... (1,837,229) -- --
Net (decrease) in net assets from Fund share transactions:
Class A Shares ......................................... (21,945,124) (3,756,023) 894,413
Class B Shares ......................................... (3,731,881) (815) (52,399)
Class I Shares ......................................... (82,463,306) -- --
------------- ------------- -------------
Net increase/(decrease) in net assets .................... (108,138,311) (3,756,838) 842,014
NET ASSETS:
Beginning of period ...................................... 583,655,815 31,706,458 34,268,861
------------- ------------- -------------
End of period ............................................ $ 475,517,504 $ 27,949,620 $ 35,110,875
============= ============= =============
Undistributed net investment income at end of period ..... $ 3,519 $ -- $ 3,771
============= ============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS of CHANGES in NET assets
WM GROUP OF FUNDS
FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
Net investment income ............................................. $ 25,645,689 $ 869,348 $ 803,647
Net realized gain/(loss) on investment transactions ............... 14,291 25 (2)
------------- ------------- -------------
Net increase in net assets resulting from operations .............. 25,659,980 869,373 803,645
Distributions to shareholders from net investment income:
Class A Shares .................................................. (21,285,571) (867,445) (802,809)
Class B Shares .................................................. (349,900) (1,903) (710)
Class S Shares .................................................. (106,011) -- (9)
Class I Shares .................................................. (3,900,688) -- (19)
Net increase/(decrease) in net assets from Fund share transactions:
Class A Shares .................................................. 56,987,030 5,911,868 (2,951,415)
Class B Shares .................................................. 13,832,418 141,454 (4,995)
Class S Shares .................................................. (6,304,983) -- (1,182)
Class I Shares .................................................. (5,963,302) -- (1,068)
------------- ------------- -------------
Net increase/(decrease) in net assets ............................. 58,568,973 6,053,347 (2,958,562)
NET ASSETS:
Beginning of year ................................................. 525,086,842 25,653,111 37,227,423
------------- ------------- -------------
End of year ....................................................... $ 583,655,815 $ 31,706,458 $ 34,268,861
============= ============= =============
Undistributed net investment income at end of year ................ $ 3,519 $ -- $ 3,771
============= ============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS of CHANGES in NET assets -- CAPITAL stock ACTIVITY
WM GROUP OF FUNDS
Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same as
the amounts shown below for such transactions.
<TABLE>
<CAPTION>
MONEY MARKET FUND TAX-EXEMPT MONEY MARKET FUND CALIFORNIA MONEY FUND
---------------------------------- -------------------------------- ------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
04/30/00 YEAR ENDED 04/30/00 YEAR ENDED 04/30/00 YEAR ENDED
(UNAUDITED) 10/31/99 (UNAUDITED) 10/31/99 (UNAUDITED) 10/31/99
-------------- -------------- ------------- ------------- ------------- -------------
CLASS A:
<S> <C> <C> <C> <C> <C> <C>
Sold ..................... $ 536,844,211 $ 849,142,559 $ 15,726,790 $ 43,233,412 $ 22,323,486 $ 33,348,665
Issued in exchange for
Class A shares of the
Griffin Money Market
Fund.................... -- 227,709,262 -- -- -- --
Issued in exchange for
Class A shares of the
Griffin Tax-Free Money
Market Fund ............ -- -- -- 21,062,829 -- --
Issued as reinvestment of
dividends .............. 11,407,972 20,521,935 448,672 838,120 396,162 773,933
Redemption in-kind
(Note 8) ................ -- (31,927,854) -- -- -- --
Redeemed ................. (570,197,307) (1,008,458,872) (19,931,485) (59,222,493) (21,825,235) (37,074,013)
-------------- -------------- ------------- ------------- ------------- -------------
Net increase/(decrease) .. $ (21,945,124) $ 56,987,030 $ (3,756,023) $ 5,911,868 $ 894,413 $ (2,951,415)
============== ============== ============= ============= ============= =============
CLASS B:
Sold ..................... $ 18,314,181 $ 28,425,937 $ 256,329 $ 534,633 $ 5,461 $ 32,072
Converted from Class S
shares of Fund ......... -- 3,673,738 -- -- -- --
Issued as reinvestment of
dividends .............. 339,959 330,884 2,050 1,641 105 685
Redeemed ................. (22,386,021) (18,598,141) (259,194) (394,820) (57,965) (37,752)
-------------- -------------- ------------- ------------- ------------- -------------
Net increase/(decrease) .. $ (3,731,881) $ 13,832,418 $ (815) $ 141,454 $ (52,399) $ (4,995)
============== ============== ============= ============= ============= =============
CLASS S:
Sold ..................... -- $ 322,752 -- -- -- $ --
Issued as reinvestment of
dividends .............. -- 97,701 -- -- -- 9
Converted to Class B
shares of Fund ......... -- (3,673,738) -- -- -- --
Redeemed ................. -- (3,051,698) -- -- -- (1,191)
-------------- -------------
Net decrease ............. -- $ (6,304,983) -- -- -- $ (1,182)
============== =============
CLASS I:
Sold ..................... $ 71,177,246 $ 71,638,115 -- -- -- $ --
Contribution in-kind
(Note 8) ............... -- 31,927,854 -- -- -- --
Issued as reinvestment of
dividends .............. 1,837,009 3,634,675 -- -- -- 18
Redeemed ................. (155,477,561) $ (113,163,946) -- -- -- (1,086)
-------------- -------------- -------------
Net decrease ............. $ (82,463,306) $ (5,963,302) -- -- -- $ (1,068)
============== ============== =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
FINANCIAL highlights
MONEY MARKET FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------------------ --------------------------------
NET DIVIDENDS
ASSET VALUE, NET NET REALIZED TOTAL FROM FROM NET
BEGINNING INVESTMENT GAIN ON INVESTMENT INVESTMENT TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME DISTRIBUTIONS
----------- ------------ ------------ ------------ ------------- -------------
CLASS A
<S> <C> <C> <C> <C> <C> <C>
04/30/00 (unaudited) $1.00 $0.026 $0.000# $0.026 $(0.026) $(0.026)
10/31/99 1.00 0.044 -- 0.044 (0.044) (0.044)
10/31/98(a) 1.00 0.041 -- 0.041 (0.041) (0.041)
12/31/97 1.00 0.049 -- 0.049 (0.049) (0.049)
12/31/96 1.00 0.048 -- 0.048 (0.048) (0.048)
12/31/95 1.00 0.052 -- 0.052 (0.052) (0.052)
12/31/94 1.00 0.034 -- 0.034 (0.034) (0.034)
CLASS B
04/30/00 (unaudited) 1.00 0.021 0.000# 0.021 (0.021) (0.021)
10/31/99 1.00 0.034 -- 0.034 (0.034) (0.034)
10/31/98(a) 1.00 0.035 -- 0.035 (0.035) (0.035)
12/31/97 1.00 0.041 -- 0.041 (0.041) (0.041)
12/31/96 1.00 0.038 -- 0.038 (0.038) (0.038)
12/31/95 1.00 0.042 -- 0.042 (0.042) (0.042)
12/31/94(c) 1.00 0.018 0.018 (0.018) (0.018)
CLASS I
04/30/00 (unaudited) 1.00 0.026 0.000# 0.026 (0.026) (0.026)
10/31/99 1.00 0.046 -- 0.046 (0.046) (0.046)
10/31/98(c) 1.00 0.031 -- 0.031 (0.031) (0.031)
--------------
* Annualized.
# Amount represents less than $0.001 per share.
+ Total return is not annualized for periods less than one year. Total returns would have been lower if certain fees had not
been waived by the investment advisor or if fees had not been reduced by credits allowed by the custodian.
(a) Fiscal year end changed to October 31 from December 31.
(b) Ratio of operating expenses to average net assets includes expenses paid indirectly beginning in fiscal year 1995.
(c) On May 2, 1994 and March 23, 1998 the Fund commenced selling Class B and Class I shares, respectively.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
RATIO OF RATIO OF RATIO OF OPERATING
OPERATING NET INVESTMENT EXPENSES TO AVERAGE
NET NET ASSETS, EXPENSES TO INCOME TO NET ASSETS WITHOUT FEE WAIVERS
ASSET VALUE, TOTAL END OF PERIOD AVERAGE NET AVERAGE NET AND/OR FEES REDUCED BY CREDITS
END OF PERIOD RETURN+ (IN 000'S) ASSETS(b) ASSETS ALLOWED BY THE CUSTODIAN
------------ -------- ------------ ----------- ----------- ------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 2.61% $438,502 0.70%* 5.18%* 0.70%*
1.00 4.52% 460,444 0.72% 4.43% 0.73%
1.00 4.19% 403,443 0.66%* 4.94%* 0.67%*
1.00 5.04% 260,877 0.75% 4.93% 0.83%
1.00 4.88% 229,355 0.79% 4.77% 0.89%
1.00 5.33% 171,225 0.92% 5.19% 1.04%
1.00 3.47% 125,651 0.95% 3.39% 1.04%
1.00 2.08% 16,720 1.75%* 4.13%* 1.75%*
1.00 3.44% 20,452 1.77% 3.38% 1.78%
1.00 3.52% 6,619 1.64%* 3.96%* 1.65%*
1.00 4.15% 471 1.59% 4.15% 1.80%
1.00 3.91% 117 1.69% 3.87% 1.90%
1.00 4.30% 74 1.94% 4.19% 2.10%
1.00 2.78% 11 1.93%* 3.29%* 2.62%*
1.00 2.67% 20,296 0.58%* 5.30%* 0.58%*
1.00 4.66% 102,760 0.62% 4.53% 0.63%
1.00 3.17% 108,720 0.54%* 5.06%* 0.55%*
</TABLE>
See Notes to Financial Statements.
<PAGE>
FINANCIAL highlights
TAX-EXEMPT MONEY MARKET FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------------- --------------------------------------------
NET NET REALIZED DIVIDENDS DISTRIBUTIONS
ASSET VALUE, NET AND UNREALIZED TOTAL FROM FROM NET FROM
BEGINNING INVESTMENT GAIN ON INVESTMENT INVESTMENT NET REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
----------- ------------ ------------ ------------ ----------- -------------- -------------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C>
04/30/00 (unaudited) $1.00 $0.015 $ -- $0.015 $(0.015) $ -- $(0.015)
10/31/99 1.00 0.026 -- 0.026 (0.026) -- (0.026)
10/31/98(a) 1.00 0.026 -- 0.026 (0.026) -- (0.026)
12/31/97 1.00 0.031 -- 0.031 (0.031) -- (0.031)
12/31/96 1.00 0.030 0.030 (0.030) (0.030)
12/31/95 1.00 0.034 0.000# 0.034 (0.034) (0.000)# (0.034)
12/31/94 1.00 0.024 -- 0.024 (0.024) -- (0.024)
CLASS B
04/30/00 (unaudited) 1.00 0.011 -- 0.011 (0.011) -- (0.011)
10/31/99 1.00 0.016 -- 0.016 (0.016) -- (0.016)
10/31/98(a) 1.00 0.018 -- 0.018 (0.018) -- (0.018)
12/31/97 1.00 0.022 -- 0.022 (0.022) -- (0.022)
12/31/96 1.00 0.020 -- 0.020 (0.020) -- (0.020)
12/31/95 1.00 0.023 0.000# 0.023 (0.023) (0.000)# (0.023)
12/31/94(c) 1.00 0.010 -- 0.010 (0.010) -- (0.010)
----------------
* Annualized.
# Amount represents less than $0.001 per share.
+ Total return is not annualized for periods less than one year. Total returns would have been lower if certain fees had not
been waived by the investment advisor or if fees had not been reduced by credits allowed by the custodian.
(a) Fiscal year end changed to October 31 from December 31.
(b) Ratio of operating expenses to average net assets includes expenses paid indirectly beginning in fiscal year 1995.
(c) On May 2, 1994 the Fund commenced selling Class B shares.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------------------------------
RATIO OF RATIO OF RATIO OF OPERATING
OPERATING NET INVESTMENT EXPENSES TO AVERAGE
NET NET ASSETS, EXPENSES TO INCOME TO NET ASSETS WITHOUT FEE WAIVERS
ASSET VALUE, TOTAL END OF PERIOD AVERAGE NET AVERAGE NET AND/OR FEES REDUCED BY CREDITS
END OF PERIOD RETURN+ (IN 000'S) ASSETS(b) ASSETS ALLOWED BY THE CUSTODIAN
------------ -------- ------------ ----------- -------------- ------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 1.54% $ 27,597 0.72%* 3.08%* 0.92%*
1.00 2.65% 31,353 0.57% 2.63% 0.89%
1.00 2.60% 25,441 0.55%* 3.09%* 0.72%*
1.00 3.18% 32,134 0.57% 3.14% 0.71%
1.00 3.05% 31,974 0.57% 3.01% 0.72%
1.00 4.01% 30,988 0.61% 3.39% 0.81%
1.00 2.37% 33,612 0.60% 2.33% 0.76%
1.00 1.11% 353 1.59%* 2.21%* 1.79%*
1.00 1.57% 354 1.56% 1.64% 1.88%
1.00 1.79% 212 1.63%* 2.01%* 1.80%*
1.00 2.26% 12 1.50% 2.32% 2.27%
1.00 2.01% 2 1.53% 1.99% 4.22%
1.00 2.83% 1 1.73% 2.12% 3.66%
1.00 1.45% 1 1.66%* 1.38%* 3.61%*
</TABLE>
See Notes to Financial Statements.
<PAGE>
FINANCIAL highlights
CALIFORNIA MONEY FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------- ------------------------------------
NET DIVIDENDS
ASSET VALUE, NET TOTAL FROM FROM NET
BEGINNING INVESTMENT INVESTMENT INVESTMENT TOTAL
OF PERIOD INCOME OPERATIONS INCOME DISTRIBUTIONS
-------------- --------------- -------------- --------------- ---------------
CLASS A
<S> <C> <C> <C> <C> <C>
04/30/00 (unaudited) $1.00 $0.012 $0.012 $(0.012) $(0.012)
10/31/99 1.00 0.022 0.022 (0.022) (0.022)
10/31/98(a) 1.00 0.008 0.008 (0.008) (0.008)
06/30/98 1.00 0.027 0.027 (0.027) (0.027)
06/30/97 1.00 0.028 0.028 (0.028) (0.028)
06/30/96 1.00 0.029 0.029 (0.029) (0.029)
06/30/95 1.00 0.028 0.028 (0.028) (0.028)
CLASS B
04/30/00 (unaudited) 1.00 0.005## 0.005 (0.005) (0.005)
10/31/99 1.00 0.011 0.011 (0.011) (0.011)
10/31/98(a) 1.00 0.005 0.005 (0.005) (0.005)
06/30/98 1.00 0.019 0.019 (0.019) (0.019)
06/30/97 1.00 0.020 0.020 (0.020) (0.020)
06/30/96 1.00 0.022 0.022 (0.022) (0.022)
06/30/95(c) 1.00 0.020 0.020 (0.020) (0.020)
----------------
* Annualized.
## Per share numbers have been calculated using the average shares method.
+ Total return is not annualized for periods less than one year. Total returns would have been lower if certain fees had not
been waived by the investment advisor or if fees had not been reduced by credits allowed by the custodian.
(a) Fiscal year end changed to October 31 from June 30.
(b) Ratio of operating expenses to average net assets includes expenses paid indirectly beginning in fiscal year 1995.
(c) On July 1, 1994 the Fund commenced selling Class B shares.
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------
RATIO OF RATIO OF RATIO OF OPERATING EXPENSES
OPERATING NET INVESTMENT TO AVERAGE NET ASSETS WITHOUT
NET NET ASSETS, EXPENSES TO INCOME TO FEE WAIVERS AND/OR FEES REDUCED
ASSET VALUE, TOTAL END OF PERIOD AVERAGE NET AVERAGE NET BY CREDITS ALLOWED
END OF PERIOD RETURN+ (IN 000'S) ASSETS(b) ASSETS BY THE CUSTODIAN
----------- --------- ------------ ----------- ----------- -------------------------------
<S> <C> <C> <C> <C> <C>
$1.00 1.18% $35,110 0.75%* 2.36%* 0.75%*
1.00 2.24% 34,216 0.81% 2.22% 0.81%
1.00 0.99% 37,167 0.73%* 2.31%* 0.87%*
1.00 2.73% 37,403 0.82% 2.71% 0.99%
1.00 2.81% 42,923 0.85% 2.75% 1.14%
1.00 3.00% 51,211 0.85% 2.94% 1.14%
1.00 2.79% 48,836 0.85% 2.73% 1.15%
1.00 0.51% 1 1.94%* 1.17%* 1.94%*
1.00 1.15% 53 1.93% 1.10% 1.93%
1.00 0.63% 58 1.60%* 1.44%* 2.05%*
1.00 1.96% 63 1.60% 1.88% 1.82%
1.00 2.03% 68 1.60% 2.00% 1.89%
1.00 2.22% 147 1.60% 2.19% 1.89%
1.00 2.04% 79 1.60% 1.98% 1.90%
</TABLE>
See Notes to Financial Statements.
<PAGE>
PORTFOLIO of INVESTMENTS
MONEY MARKET FUND
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -------------
COMMERCIAL PAPER (DOMESTIC) - 38.0%
<S> <C>
$10,000,000 AIG Funding Inc.,
6.040% due 06/23/2000+++ .............................. $ 9,911,078
American Express Credit Corporation:
10,000,000 6.000% due 05/26/2000+++ .............................. 9,958,333
10,000,000 6.050% due 06/30/2000+++ .............................. 9,899,167
Associates First Capital Corporation:
10,000,000 6.050% due 05/26/2000+++ .............................. 9,957,986
10,000,000 6.050% due 06/22/2000+++ .............................. 9,912,611
Columbia University:
10,000,000 5.950% due 06/07/2000+++ .............................. 9,938,847
12,000,000 6.030% due 06/09/2000+++ .............................. 11,921,611
10,000,000 DaimlerChrysler N.A. Holding,
6.060% due 06/19/2000+++ .............................. 9,917,517
Ford Motor Credit Corporation:
10,000,000 6.050% due 06/23/2000+++ .............................. 9,910,931
10,000,000 6.070% due 06/27/2000+++ .............................. 9,903,892
10,000,000 General Electric Capital Corporation,
6.070% due 05/25/2000+++ .............................. 9,959,533
10,000,000 Goldman Sachs Group, Inc.,
6.180% due 05/23/2000+++ .............................. 9,962,233
10,000,000 Household Finance Corporation,
5.990% due 05/02/2000+++ .............................. 9,998,336
10,000,000 IBM Corporation,
5.950% due 05/30/2000+++ .............................. 9,952,069
10,000,000 International Lease Finance Corporation,
6.060% due 06/28/2000+++ .............................. 9,902,367
10,000,000 Merrill Lynch & Company Inc.,
6.080% due 06/23/2000+++ .............................. 9,910,489
10,000,000 Private Export Funding Corporation,
5.980% due 07/14/2000+++,# ............................ 9,877,078
10,000,000 Windmill Funding Corporation,
5.900% due 05/12/2000+++,# ............................ 9,981,972
------------
Total Commercial Paper
(Cost $180,776,050) ................................... 180,776,050
------------
COMMERCIAL PAPER (YANKEE) - 6.1%
10,000,000 American Honda Finance Corporation,
5.860% due 05/11/2000+++ .............................. 9,983,722
10,000,000 Commerzbank US Finance Inc.,
6.020% due 06/19/2000+++ .............................. 9,918,061
9,000,000 Sharp Electronics Corporation,
6.040% due 05/17/2000+++ .............................. 8,975,840
------------
Total Commercial Paper (Yankee)
(Cost $28,877,623) .................................... 28,877,623
------------
CERTIFICATES OF DEPOSIT (DOMESTIC) - 2.1%
(Cost $10,000,000)
10,000,000 US Bank N.A. Minnesota,
6.080% due 06/29/2000+++ .............................. 10,000,000
------------
CERTIFICATES OF DEPOSIT (YANKEE) - 6.3%
10,000,000 Deutsche Bank, NY,
6.200% due 06/30/2000+++ .............................. 10,000,805
20,000,000 Societe Generale NY,
6.230% due 06/30/2000+++ .............................. 20,000,656
------------
Total Certificates of Deposit (Yankee)
(Cost $30,001,461) .................................... 30,001,461
------------
CORPORATE BONDS AND NOTES - 11.7%
10,000,000 American Honda Finance Corporation, Note,
6.0675% due 08/07/2000++,# ............................ 9,997,000
3,500,000 DBSI First Mortgage 1998, Note,
6.300% due 07/01/2023++ ............................... 3,500,000
Everett Clinic, P.S., Note:
5,400,000 6.200% due 12/01/2018++ ............................... 5,400,000
3,700,000 6.200% due 12/01/2021++ ............................... 3,700,000
10,000,000 First Union National Bank, Note,
6.3375% due 09/25/2000++ .............................. 10,000,000
10,000,000 Goldman Sachs Group, Note,
6.4087% due 07/14/2000++,# ............................ 10,002,751
8,000,000 National City Bank, Note,
6.3812% due 10/16/2000++ .............................. 8,001,795
5,000,000 Presbyterian Homes & Services of New Jersey Obligated
Group, Revenue Bonds, 1998 Series B1, (Taxable),
6.200% due 12/01/2028++ ............................... 5,000,000
------------
Total Corporate Bonds and Notes
(Cost $55,601,546) .................................... 55,601,546
------------
MEDIUM TERM NOTES - 9.5%
Bear Stearns Companies Inc., Series B:
10,000,000 6.0675% due 05/05/2000++ .............................. 10,000,000
10,000,000 6.230% due 07/18/2000++ ............................... 9,999,028
5,000,000 General Electric Capital Corporation,
8.660% due 08/08/2000 ................................. 5,034,221
10,000,000 Household Finance Corporation,
6.340% due 09/14/2000++ ............................... 9,997,770
10,000,000 Merrill Lynch & Company Inc.,
6.3675% due 03/01/2001++ .............................. 10,014,770
------------
Total Medium Term Notes
(Cost $45,045,789) .................................... 45,045,789
------------
MUNICIPAL BONDS - 7.6%
8,200,000 California Housing Finance Agency Revenue, Home Mortgage,
Series M, Taxable Bonds,
6.130% due 08/01/2019+ ................................ 8,200,000
9,920,000 Santa Rosa, California, Wastewater Revenue, Series A,
Taxable Bonds,
6.300% due 09/01/2028+ ................................ 9,920,000
12,200,000 South Fulton, Georgia, Municipal Regional Jail Authority,
Taxable Revenue Bonds, (Union City Justice Center
Project), Series 1999,
6.160% due 11/01/2017+ ................................ 12,200,000
Washington State Housing Finance Community, Multi-family
Revenue, Series B, Taxable Bonds:
2,480,000 (Boardwalk Apartments),
6.300% due 09/01/2028+ ................................ 2,480,000
2,100,000 (Cedar Landing),
6.300% due 12/01/2028+ ................................ 2,100,000
1,400,000 (Oxford Square),
6.300% due 12/01/2028+ ................................ 1,400,000
------------
Total Municipal Bonds
(Cost $36,300,000) .................................... 36,300,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 16.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 6.7%
10,000,000 5.760% due 05/04/2000+++ .............................. 9,995,200
10,000,000 6.130% due 09/14/2000+++ .............................. 9,768,422
12,000,000 6.750% due 04/27/2001+++ .............................. 12,000,000
------------
Total FHLMCs
(Cost $31,763,622) ................................... 31,763,622
------------
FEDERAL FARM CREDIT BANK (FFCB) - 5.5%
5,000,000 5.730% due 06/01/2000 ................................ 5,000,000
10,000,000 5.940% due 06/01/2000 ................................ 10,000,000
11,000,000 6.180% due 08/01/2000 ................................. 11,000,000
------------
Total FFCBs (Cost $26,000,000) ......................... 26,000,000
------------
FEDERAL HOME LOAN BANK (FHLB) - 4.2%
10,000,000 5.950% due 08/24/2000 ................................. 10,000,000
10,000,000 6.700% due 03/30/2001 ................................. 10,000,000
------------
Total FHLBs
(Cost $20,000,000) .................................... 20,000,000
------------
Total U.S. Government Agency Obligations
(Cost $77,763,622) .................................... 77,763,622
------------
REPURCHASE AGREEMENT - 6.2%
(Cost $29,724,000)
29,724,000 Agreement with Goldman Sachs & Company, 5.640% dated
04/28/2000, to be repurchased at $29,737,970 on 05/01/2000,
collaterialized by $25,580,257 U.S. Treasury Note,
7.500% due 11/15/2024 (Market Value $30,446,831) ...... 29,724,000
------------
TOTAL INVESTMENTS (COST $494,090,092*) .............................. 103.9% 494,090,092
OTHER ASSETS AND LIABILITIES (NET) .................................. (3.9) (18,572,588)
---- ------------
NET ASSETS .......................................................... 100.0% $475,517,504
===== ============
--------------
* Aggregate cost for federal tax purposes.
+ Variable rate securities payable upon not more than seven calendar days' notice, and secured by
bank letters of credit. The interest rate shown reflects the rate currently in effect.
++ Floating rate security whose interest rate is reset periodically based on an index.
+++ Rate represents discount rate at the date of purchase.
# Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities
may be resold in transactions exempt from registration, normally to qualified institutional buyers.
</TABLE>
See Notes to Financial Statements.
<PAGE>
PORTFOLIO of INVESTMENTS
TAX-EXEMPT MONEY MARKET FUND
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -----------
<C> <S> <C>
STATE AND MUNICIPAL SECURITIES - 99.0%
ALABAMA - 1.4%
$ 400,000 North Alabama, Environmental Improvement Authority,
Pollution Control Revenue, (Reynold Metals Company),
6.000% due 12/01/2000+ .................................. $ 400,000
-----------
ALASKA - 2.5%
700,000 Anchorage, Refunding Water Revenue,
4.500% due 09/01/2000 ................................... 701,591
-----------
FLORIDA - 3.9%
600,000 Dade County, Aviation Revenue, Series A,
4.950% due 10/01/2009+ .................................. 600,000
500,000 Florida, Housing Finance Agency, Refunding Revenue, MFHR,
(Oaks), Series A,
4.950% due 07/01/2007+ .................................. 500,000
-----------
1,100,000
-----------
GEORGIA - 1.8%
500,000 Douglas County, (Judicial & Administration Complex
Project), COP,
4.375% due 11/01/2000 ................................... 500,304
-----------
ILLINOIS - 1.4%
200,000 Chicago, School Finance Authority, Unlimited Tax General
Obligation Bonds, Series A,
4.700% due 06/01/2000 ................................... 200,133
200,000 Cook County, High School District, No. 205, Thornton
Thruway, Refunding Unlimited Tax General Obligation
Bonds, Series B,
5.400% due 12/01/2000 ................................... 201,250
-----------
401,383
-----------
INDIANA - 6.4%
530,000 Delaware County, Indiana Hospital Authority, Hospital
Refunding Revenue, (Cardinal Health System Obligation),
4.250% due 08/01/2000 ................................... 530,000
Indiana Health Facilities Financing Authority Revenue:
500,000 (Deaconess Hospital Inc.),
5.050% due 01/01/2022+ .................................. 500,000
245,000 Refunding and Improvement, (Community Hospital),
4.700% due 05/15/2001 ................................... 245,487
500,000 Indiana State, Development Financing Authority Revenue,
(Lutheran Education Facilities),
5.200% due 10/01/2017+ .................................. 500,000
-----------
1,775,487
-----------
LOUISIANA - 7.2%
1,000,000 Ascension Parish, Refunding Pollution Control Revenue,
(Borden Inc. Project),
5.000% due 12/01/2009+ .................................. 1,000,000
1,000,000 Louisiana Public Facilities Authority Revenue, Multi-family
Mortgage Revenue, (Emberwood),
5.000% due 10/01/2022+ .................................. 1,000,000
-----------
2,000,000
-----------
MASSACHUSETTS - 1.0%
275,000 Massachusetts State, Unlimited Tax General Obligation
Consolidated Loan Bonds,
Series C, (Pre-refunded to 12/01/2000 @ 100),
7.000% due 12/01/2010 ................................... 279,375
-----------
MICHIGAN - 11.8%
500,000 Anchor Bay, School District, School Building & Site,
Unlimited Tax General Obligation Bonds, Series I,
3.850% due 05/01/2000 ................................... 500,000
400,000 Michigan State Hospital Finance Authority Revenue,
(Hospital Equipment Loan Program), Series A,
5.000% due 12/01/2023+ .................................. 400,000
1,000,000 Michigan State Housing Development Authority, Limited
Obligation Revenue, (Laurel Valley),
5.000% due 12/01/2007+ .................................. 1,000,000
Michigan State Job Development Authority Revenue:
300,000 (East Lansing Residence),
4.350% due 12/01/2014+ .................................. 300,000
200,000 (Kentwood Residence),
4.350% due 11/01/2014+ .................................. 200,000
620,000 Okemos, Public School District, Unlimited Tax General
Obligation Bonds,
3.600% due 05/01/2000 ................................... 620,000
280,000 Tawas, Area Schools, Refunding Unlimited Tax General
Obligation Bonds,
3.900% due 05/01/2000 ................................... 280,000
-----------
3,300,000
-----------
MINNESOTA - 5.5%
550,000 Minnesota State, Unlimited Tax General Obligation Bonds,
(Pre-refunded to 08/01/2000 @ 100),
7.000% due 08/01/2006 ................................... 554,437
St. Paul Minnesota, Housing & Redevelopment Authority,
Parking Revenue, Series A,
(Pre-refunded to 08/01/2000 @ 102):
475,000 5.950% due 08/01/2001 ................................... 486,691
505,000 6.050% due 08/01/2002 ................................... 517,554
-----------
1,558,682
-----------
MISSOURI - 3.6%
500,000 Columbia, Water & Electric Revenue, Series B,
5.050% due 12/01/2015+ .................................. 500,000
500,000 Kansas City Industrial Development Authority, Hospital
Revenue, (Baptist Health System), Series A,
5.150% due 08/01/2018+ .................................. 500,000
-----------
1,000,000
-----------
NEVADA - 3.1%
875,000 Clark County, Sanitation District, Refunding, Limited Tax
General Obligation Bonds,
5.250% due 07/01/2000 ................................... 877,329
-----------
NEW YORK - 6.1%
300,000 Jefferson County, Industrial Development Agency Industrial
Development Revenue, (Watertown-Carthage TV),
4.100% due 12/01/2012+ .................................. 300,000
500,000 Long Island Power Authority, Electric Systems Revenue,
Subordinated Revenue, Series 6,
5.950% due 05/01/2033+ .................................. 500,000
200,000 New York State, Housing Finance Agency, Refunding State
University, Construction Revenue, Series A, ETM,
7.500% due 11/01/2000 ................................... 203,084
200,000 New York State, Thruway Authority, Highway & Bridge Trust
Fund, Series B,
6.000% due 04/01/2001 ................................... 202,933
500,000 Suffolk County, Industrial Development Agency, Southwest
Sewer System Revenue,
4.400% due 02/01/2001 ................................... 500,342
-----------
1,706,359
-----------
NORTH CAROLINA - 4.0%
500,000 Durham, Water & Sewer Utility System Revenue,
5.150% due 12/01/2015+ .................................. 500,000
620,000 Wake County, Industrial Facilities & Pollution Control
Financing Authority Revenue, (Carolina Power & Light
Company), Series A,
4.950% due 05/01/2015+ .................................. 620,000
-----------
1,120,000
-----------
TENNESSEE - 4.5%
250,000 Chattanooga-Hamilton County, Refunding Hospital Authority
Revenue, (Erlanger Medical Center),
5.000% due 10/01/2000 ................................... 251,179
500,000 Metropolitan Government Nashville & Davidson County,
Industrial Development Board, MFHR, (Chimneytop II),
4.500% due 09/01/2006+ .................................. 500,000
500,000 Metropolitan Nashville Airport Revenue Authority, Special
Facilities Revenue, (American Airlines Project),
Series B,
6.000% due 10/01/2012+ .................................. 500,000
-----------
1,251,179
-----------
TEXAS - 17.3%
500,000 Austin County, Industrial Development Corporation,
Industrial Development Revenue (Justin Industries, Inc.
Project),
5.050% due 12/01/2014+ .................................. 500,000
495,000 Bell County, Health Facilities Development Corporation,
Scott & White Memorial Hospital Revenue, Series A,
5.250% due 08/15/2000 ................................... 496,471
200,000 Bremond, Independent School District, Unlimited Tax General
Obligation Bonds,
7.000% due 08/15/2000 ................................... 201,391
235,000 Brownsville, Independent School District, Unlimited Tax
General Obligation Bonds,
7.250% due 08/15/2000 ................................... 237,284
Grapevine, Industrial Development Corporation Revenue,
(American Airlines Inc.):
200,000 Series A1,
6.000% due 12/01/2024+ .................................. 200,000
400,000 Series A4,
6.000% due 12/01/2024+ .................................. 400,000
200,000 Series B1,
6.000% due 12/01/2024+ .................................. 200,000
300,000 Series B4,
6.000% due 12/01/2024+ .................................. 300,000
300,000 Harris County, Unlimited Tax General Obligation Bonds, ETM,
8.200% due 05/01/2000 ................................... 300,000
500,000 Lower Neches Valley Authority, Industrial Development
Corporation, Pollution Control Revenue, (Neches River
Treatment Corporation Project), Series 1994A, (Guaranteed
By Mobil Oil Corporation),
4.900% due 02/01/2004+,++ ............................... 500,000
590,000 McLennan County, Junior College, Limited Tax General
Obligation Bonds,
5.875% due 08/15/2000 ................................... 593,588
900,000 Texas State, Veterans Housing Assistance
Fund I, Unlimited Tax General Obligation Bonds,
5.000% due 12/01/2016+ .................................. 900,000
-----------
4,828,734
-----------
WASHINGTON - 10.9%
1,000,000 King County, Economic Enterprise Corporation Revenue,
(Puget Sound Blood Center Project),
5.100% due 04/01/2023+ .................................. 1,000,000
600,000 Richland, Golf Enterprise Revenue,
5.000% due 12/01/2021+ .................................. 600,000
940,000 Seattle Housing Authority, Low Income Housing Assistance,
Revenue, (Bayview Manor Project), Series B,
5.000% due 05/01/2019+ .................................. 940,000
500,000 Washington State, Unlimited Tax General Obligation Bonds,
Series 1995C, AT-8 and R-95B,
6.500% due 07/01/2000 ................................... 502,179
-----------
3,042,179
-----------
WISCONSIN - 6.6%
200,000 Kewaunee, School District, Unlimited Tax General Obligation
Bonds,
5.000% due 03/01/2001 ................................... 201,045
500,000 Milwaukee, Metropolitan Sewer District, Unlimited Tax
General Obligation Bonds, ETM,
6.700% due 10/01/2000 ................................... 504,991
500,000 Wisconsin State, Health and Educational Facilities
Authority Revenue, (Franciscan Health Care), Series A-1,
5.000% due 01/01/2016+ .................................. 500,000
625,000 Wisconsin State, Health and Educational Facilities
Authority Revenue, (Wheaton Franciscan Services),
5.200% due 08/15/2016+ .................................. 625,000
-----------
1,831,036
-----------
Total State and Municipal Securities
(Cost $27,673,638) ...................................... 27,673,638
-----------
SHARES
------
INVESTMENT COMPANY SECURITY - 0.2%
(Cost $57,264)
57,264 Dreyfus Tax-Exempt Cash Management Fund ................... 57,264
-----------
TOTAL INVESTMENTS (COST $27,730,902*) ................................ 99.2% 27,730,902
OTHER ASSETS AND LIABILITIES (NET) ................................... 0.8 218,718
----- -----------
NET ASSETS ........................................................... 100.0% $27,949,620
===== ===========
--------------
* Aggregate cost for federal tax purposes.
+ Variable rate security that is payable on demand or upon a five business days' notice, and secured by a
letter of credit, liquidity agreement or other credit support. The interest rate shown reflects the rate
currently in effect.
++ Obligations of various corporations and are not supported by other third party credit agreements.
</TABLE>
------------------------------------
GLOSSARY OF TERMS
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
MFHR -- Multi-family Housing Revenue
------------------------------------
See Notes to Financial Statements.
<PAGE>
PORTFOLIO of INVESTMENTS
CALIFORNIA MONEY FUND
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- -----
MUNICIPAL BONDS AND NOTES - 101.1%
CALIFORNIA - 101.1%
<C> <S> <C>
Alameda County, Industrial Development Authority Revenue:
$ 900,000 Heat and Control Inc. Project, Series 1995A,
5.000% due 11/01/2025+ .................................. $ 900,000
500,000 JMS Family Partnership, Series A,
5.000% due 10/01/2025+ .................................. 500,000
200,000 Anaheim, COP:
Electric Systems Refunding Project,
(Pre-refunded to 10/01/2000 @ 102),
6.750% due 10/01/2022 ................................... 206,258
California Health Facilities Financing Authority:
1,000,000 Insured Health Facilities Revenue Bonds,
(Valleycare Hospital Corporation), Series A, (Pre-
refunded to 05/01/2000 @ 102),
7.000% due 05/01/2020 ................................... 1,020,000
100,000 Kaiser Permanente, Series A,
(Pre-refunded to 12/01/2010 @ 102),
7.000% due 12/01/2010 ................................... 103,780
800,000 Scripps Health, Insured Revenue Bonds, Series B,
4.750% due 10/01/2022+ .................................. 800,000
150,000 UC Stanford Heath Care Revenue Bonds, Series B,
5.000% due 11/15/2000 ................................... 150,780
500,000 California Housing Finance Agency,
Home Mortgage, Series J-2, AMT,
4.800% due 08/01/2020+ .................................. 500,000
800,000 California Pollution Control Financing Authority, Pollution
Control Revenue Refunding Bonds:
(Pacific Gas & Electric Corporation), Series C,
4.900% due 12/01/2016+ .................................. 800,000
California State, Unlimited Tax General Obligation Bonds:
85,000 6.300% due 06/01/2000 ................................... 85,157
200,000 5.000% due 10/01/2000 ................................... 200,891
500,000 California State Public Works Board, Lease Revenue Bonds,
(California State University), Series C,
5.000% due 10/01/2000 ................................... 502,242
200,000 California Statewide Communities Development Authority
Revenue, COP, (John Muir / Mount Diablo Health),
5.950% due 08/15/2027+ .................................. 200,000
1,000,000 California Transportation Finance Authority, Revenue Bonds,
5.000% due 10/01/2027+ .................................. 1,000,000
400,000 Castaic Lake, Water Agency, COP, Water System Improvement
Project, (Pre-refunded to 08/01/2000 @ 102),
7.125% due 08/01/2016 ................................... 411,134
900,000 Chula Vista, Charter City Revenue Bonds, Home Depot Inc.
Project,
4.800% due 12/01/2010+ .................................. 900,000
East Bay, Municipal Utility District, Water System
Subordinated Revenue Bonds, (Pre-refunded to 06/01/2000 @
102):
535,000 7.500% due 06/01/2018 ................................... 547,678
580,000 7.600% due 06/01/2020 ................................... 593,793
1,000,000 Fontana, Special Tax, Community Facilities District No. 3,
Series A, (Pre-refunded to 10/01/2000 @ 102),
8.700% due 10/01/2015 ................................... 1,039,615
1,500,000 Fremont, Unified High School District, Santa Clara County,
TRAN,
3.250% due 06/30/2000 ................................... 1,498,545
150,000 Glendale, California Insured Refunding Hospital Revenue
Bonds, Adventist Health System, Series A,
6.450% due 03/01/2001 ................................... 153,034
900,000 Irvine Ranch, Water District Consolidated Revenue Bonds,
5.900% due 08/01/2016+ .................................. 900,000
600,000 Irvine Ranch, Water District, Nos. 105, 140, 240 & 250,
Unlimited Tax General Obligation Bonds,
6.000% due 01/01/2021+ .................................. 600,000
1,000,000 Livermore, MFHR, Portola Meadows Apartments, Series 1989A,
4.900% due 05/01/2019+ .................................. 1,000,000
700,000 Los Angeles County, Pension Obligation, Refunding Revenue,
Series C,
5.000% due 06/30/2007+ .................................. 700,000
1,000,000 Los Angeles County, Transportation Commission Sales Tax
Refunding Revenue Bonds, Series 1992A,
5.000% due 07/01/2012+ .................................. 1,000,000
880,000 Los Angeles County, Unified School District, COP, Belmont
Learning Complex, Series 1997A,
4.800% due 12/01/2017+ .................................. 880,000
700,000 Modesto, Irrigation District Financing Authority Revenue
Bonds, Domestic Water Project, Series D,
4.250% due 09/01/2000 ................................... 700,742
100,000 Northern California Transmission Revenue, California-Oregon
Transmission Projects, Series A,
(Pre-refunded to 05/01/2000 @ 101.50),
7.000% due 05/01/2024 ................................... 101,500
1,000,000 Oakland, Joint Powers Financing Authority, Lease Revenue,
Series A-1,
5.000% due 08/01/2021+ .................................. 1,000,000
1,000,000 Orange County, Apartment Development Revenue, (Wood Canyon
Villas),
5.050% due 12/01/2021+ .................................. 1,000,000
400,000 Orange County, Sanitation District, COP, Nos. 1-3, 5-7, 11,
13 & 14,
5.900% due 08/01/2015+ .................................. 400,000
1,100,000 Orange County, COP, Florence Crittendoc Services,
4.750% due 03/01/2016+ .................................. 1,100,000
1,500,000 Orange County, Fire Authority, TRAN,
4.500% due 07/12/2000 ................................... 1,502,994
100,000 Petaluma, Wastewater Revenue Bonds,
4.250% due 05/01/2001 ................................... 100,241
1,000,000 Rancho Mirage, Joint Powers Financing Authority, COP,
Eisenhower Medical Center, Series 1997B,
4.750% due 07/01/2022+ .................................. 1,000,000
2,400,000 Regional Airports Improvement Corporation, Los Angeles
Terminal Facilities Completion, (Los Angeles
International Airport),
6.150% due 12/01/2025+ .................................. 2,400,000
500,000 Riverside County, Industrial Development Authority Revenue,
(Calavo Growers),
4.800% due 09/01/2005+ .................................. 500,000
864,000 Riverside County, Public Facilities Authority, COP, Series B,
4.750% due 12/01/2015+ .................................. 864,000
135,000 Sacramento, Redevelopment Agency Tax Allocation, Merged
Downtown, Series A, (Pre-refunded to 11/01/2000 @ 102),
6.500% due 11/01/2013 ................................... 139,334
100,000 San Bernardino, Joint Powers Financing Authority, Tax
Allocation Refunding Revenue, Series A,
4.450% due 10/01/2000 ................................... 100,221
250,000 San Diego, GO Refunding Series 1994, Open Space Parking
Facilities District No. 1,
5.200% due 01/01/2001 ................................... 252,105
300,000 San Diego, Multi-family Mortgage Revenue Bonds,
4.800% due 08/01/2014+ .................................. 300,000
500,000 San Diego, TAN, Series A,
4.250% due 09/29/2000 ................................... 501,755
730,000 San Diego, Unified School District, 1999-2000 TRAN, Series A,
4.250% due 09/29/2000 ................................... 732,097
500,000 San Dimas, Redevelopment Agency, Diversified Shopping, COP,
Refunding,
4.800% due 12/01/2005+ .................................. 500,000
1,000,000 San Francisco City & County, Refunding Housing Revenue
Redevelopment Agency, MFHR, (Fillmore Center), Series A-1,
4.750% due 12/01/2017+ .................................. 1,000,000
1,000,000 San Jose, Redevelopment Agency Revenue, Merged Area
Redevelopment Project, Series B,
4.500% due 07/01/2026+ .................................. 1,000,000
500,000 San Jose, Santa Clara, Water Financing Authority, Sewer
Revenue Bonds, Series B,
5.000% due 11/15/2011+ .................................. 500,000
500,000 South Orange County, Public Financing Authority, Assessment
Revenue, Special Re-assessment Bonds,
3.700% due 09/02/2000 ................................... 500,000
Southern California Public Power Authority Refunding Revenue:
700,000 Palo Verde Project, Series C,
5.000% due 07/01/2017+ .................................. 700,000
600,000 Transmission Project,
(Southern Transmission),
5.000% due 07/01/2019+ .................................. 600,000
400,000 Union City, Industrial Development Authority, IDR,
Series A-1,
5.150% due 12/01/2006+ .................................. 400,000
395,000 West Covina, Redevelopment Agency Refunding Lease Revenue
Bonds, (Lakes Public Parking Project),
4.600% due 08/01/2018+ .................................. 395,000
-----------
Total Municipal Bonds and Notes
(Cost $35,482,896) ...................................... 35,482,896
-----------
SHARES
-------
INVESTMENT COMPANY SECURITY - 0.2%
(Cost $90,885)
90,885 Dreyfus Basic California Municipal Money Market Fund ...... 90,885
-----------
TOTAL INVESTMENTS (COST $35,573,781*) ................................ 101.3% 35,573,781
OTHER ASSETS AND LIABILITIES (NET) ................................... (1.3) (462,906)
---- -----------
NET ASSETS ........................................................... 100.0% $35,110,875
===== ===========
--------------
* Aggregate cost for federal tax purposes.
+ Variable rate security that is payable on demand or upon a five business days' notice, and secured by a
letter of credit, liquidity agreement or other credit support. The interest rates shown reflects the
rate currently in effect.
</TABLE>
-----------------------------------------
GLOSSARY OF TERMS
AMT -- Alternative Minimum Tax
COP -- Certificate of Participation
GO -- General Obligation Bond
IDR -- Industrial Development Revenue
MFHR -- Multi-family Housing Revenue
TAN -- Tax Anticipation Note
TRAN -- Tax and Revenue Anticipation Note
-----------------------------------------
See Notes to Financial Statements.
<PAGE>
NOTES to FINANCIAL statements (unaudited)
WM GROUP OF FUNDS
1. ORGANIZATION AND BUSINESS
WM Trust I ("Trust I") and WM Trust II ("Trust II") (collectively, the "Trusts")
were organized under the laws of the Commonwealth of Massachusetts on September
19, 1997 and February 22, 1989, respectively, as business entities commonly
known as "Massachusetts business trusts." Trust I and Trust II are each
registered under the Investment Company Act of 1940, as amended (The "1940
Act"), as open-end management investment companies. The Trusts consist of 18
funds as follows:
TRUST I TRUST II
EQUITY FUNDS EQUITY FUNDS
Bond & Stock Fund Growth Fund
Growth & Income Fund Small Cap Stock Fund
Growth Fund of the Northwest (formerly, Emerging Growth)
(formerly, Northwest Fund) International Growth Fund
Mid Cap Stock Fund
FIXED INCOME FUNDS
FIXED INCOME FUNDS Short Term Income Fund
U.S. Government Securities Fund (formerly, Short Term High Quality Bond Fund)
Income Fund
High Yield Fund MUNICIPAL FUNDS
California Municipal Fund
MUNICIPAL FUND California Insured Intermediate Municipal Fund
Tax-Exempt Bond Fund Florida Insured Municipal Fund
MONEY MARKET FUNDS MONEY MARKET FUND
Money Market Fund California Money Fund
Tax-Exempt Money Market Fund
Information presented in these financial statements pertains only to the Money
Market Funds, hereafter referred to as the "Funds." The financial statements for
the Equity Funds, Fixed Income Funds and the Municipal Funds are presented in a
separate report.
WM Advisors, Inc. (the "Advisor" or "WM Advisors"), a wholly-owned subsidiary
of Washington Mutual, Inc. ("Washington Mutual"), a publicly owned financial
services company, serves as investment advisor to the Trusts.
The Money Market Fund offers three classes of shares: Class A shares, Class B
shares and Class I shares. The Tax-Exempt Money Market Fund and the California
Money Fund currently offer Class A and Class B shares. Class A shares of the
Funds are not subject to an initial or contingent deferred sales charge
("CDSC"). Certain Class A shares purchased by exchange from another Fund within
the Trusts may be subject to a CDSC if redeemed within two years of purchase.
Class B shares are not subject to an initial sales charge although they are
generally subject to a CDSC if redeemed within five years of purchase. Class I
shares are not available for direct purchase by investors and are not subject to
an initial sales charge or CDSC.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Funds in the
preparation of their financial statements.
PORTFOLIO VALUATION:
Securities are valued on the basis of amortized cost, which approximates market
value. Amortized cost valuation involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, as long as the effect of fluctuating interest rates on the market
value of the instrument is not significant. Restricted securities and certain
other assets are valued by the investment advisor under the supervision of the
Board of Trustees.
REPURCHASE AGREEMENTS:
Each Fund may engage in repurchase agreement transactions. The value of the
collateral is at all times at least equal to the total amount of the repurchase
obligation. In the event of counterparty default, the Fund would seek to use the
collateral to offset losses incurred. There is potential loss to the Fund in the
event the Fund is delayed or prevented from exercising its right to dispose of
the collateral securities, including the risk of a possible decline in the value
of the underlying securities during the period while the Fund seeks to assert
its rights. WM Advisors, acting under the supervision of the Board of Trustees,
reviews the value of the collateral and the credit-worthiness of those banks and
dealers with whom each Fund enters into repurchase agreements.
ILLIQUID INVESTMENTS:
Up to 10% of the net assets of the Funds may be invested in securities that are
not readily marketable, including: (1) repurchase agreements with maturities
greater than seven calendar days; (2) time deposits maturing in more than seven
calendar days; (3) certain variable rate demand notes having a demand period of
more than seven days; and (4) securities, the disposition of which are
restricted under Federal securities laws, excluding certain Rule 144A
securities, as defined below.
Illiquid securities generally cannot be sold or disposed of in the ordinary
course of business (within seven days) at approximately the value at which the
Funds have valued the investments. This may have an adverse effect on the Fund's
ability to dispose of particular illiquid securities at fair market value and
may limit the Fund's ability to obtain accurate market quotations for purposes
of valuing the securities and calculating the net asset value of shares of the
Fund. The Funds may also purchase securities that are not registered under the
Securities Act of 1933, as amended (the "Act"), but that can be sold to
qualified institutional buyers in accordance with Rule 144A under the Act ("Rule
144A Securities"). Rule 144A Securities generally may be resold only to other
qualified institutional buyers. If a particular investment in Rule 144A
Securities is not determined to be liquid under the guidelines established by
the Board of Trustees, that investment will be included within the 10%
limitation, as applicable, on investments in illiquid securities.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date (the date the order to
buy or sell is executed). Realized gains and losses from securities sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis and consists of interest accrued and, if applicable, discount
accreted less premiums amortized. Each Fund's investment income and realized and
unrealized gains and losses are allocated among the classes of that Fund based
upon the relative average net assets of each class.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. Each Fund instructs the custodian to segregate assets of
the Fund with a current value at least equal to the amount of its when-issued
purchase commitments.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Funds are declared daily and paid
monthly. Distributions of any net capital gains earned by a Fund are distributed
no less frequently than annually at the discretion of the Board of Trustees.
Additional distributions of net investment income and capital gains for each
Fund may be made at the discretion of the Board of Trustees in order to avoid
the application of a 4% non-deductible excise tax on certain undistributed
amounts of ordinary income and capital gains. Income distributions and capital
gain distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to timing differences and differing
characterizations of distributions made by each Fund as a whole.
FEDERAL INCOME TAXES:
It is each Fund's policy to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and by, among other
things, distributing substantially all of its taxable and tax-exempt earnings to
its shareholders. Therefore, no Federal income tax provision is required.
EXPENSES:
General expenses of the Trusts are allocated to all the Funds based upon
relative net assets of each Fund except printing and postage expenses, which are
allocated to all the Funds based upon the relative number of shareholder
accounts of each Fund. Operating expenses directly attributable to a class of
shares are charged to the operations of that class of shares. Expenses of each
Fund not directly attributable to the operations of any class of shares are
prorated among the classes to which the expenses relate based on the relative
average net assets of each class of shares.
3. INVESTMENT ADVISORY AND OTHER TRANSACTIONS
WM Advisors serves as investment advisor to the Funds. The Advisor is entitled
to a monthly fee, in arrears, based on a percentage of the average daily net
assets of each Fund at the following rates:
FEES ON NET ASSETS FEES ON NET ASSETS
UP TO EXCEEDING
NAME OF FUND $1 BILLION $1 BILLION
------------ ---------- ----------
Money Market Fund ................ .45% .40%
Tax-Exempt Money Market Fund ..... .45% .40%
FEES ON NET ASSETS FEES ON ASSETS
UP TO EXCEEDING
NAME OF FUND $500 MILLION $500 MILLION
------------ ---------- ----------
California Money Fund ............ .45% .40%
WM Advisors provides administrative services to the Trusts at no additional fee.
The Advisor has agreed to waive a portion of its management fees. Fees waived by
the Advisor for the six months ended April 30, 2000 are as follows:
NAME OF FUND FEES WAIVED
------------ -----------
Tax-Exempt Money Market Fund ..... $28,515
WM Shareholder Services, Inc. (the "Transfer Agent") serves as the transfer and
shareholder servicing agent of the Funds. Shareholder servicing fees were paid
to the Transfer Agent for services incidental to issuance and transfer of
shares, maintaining shareholder lists, and issuing and mailing distributions and
reports. The authorized monthly shareholder servicing fee is $1.65 for both
Class A and Class B shareholder accounts. Class I shares are not subject to
shareholder servicing fees.
Custodian fees for certain Funds have been reduced by credits allowed by the
custodian for uninvested cash balances. These Funds could have invested this
cash in income producing investments. Fees reduced by credits allowed by the
custodian for the six months ended April 30, 2000 are shown separately in the
Statements of Operations.
4. TRUSTEES' FEES
No director, officer or employee of Washington Mutual or its subsidiaries
receives any compensation from the Trusts for serving as an officer or Trustee
of the Trusts. The Trusts, together with other mutual funds advised by WM
Advisors, Inc., pays each Trustee who is not a director, officer or employee of
Washington Mutual or its subsidiaries, $18,000 per annum plus $3,000 per board
meeting attended and $1,000 per board meeting attended by telephone. The Lead
Trustee receives an additional $6,000 per annum. Trustees are also reimbursed
for travel and out-of-pocket expenses. The Chairman of each committee receives
an additional $500 per committee meeting attended.
Pursuant to an exemptive order granted by the Securities and Exchange
Commission, the Trust's eligible Trustees may participate in a deferred
compensation plan (the "Plan") which may be terminated at any time. Under the
Plan, Trustees may elect to defer receipt of all or a portion of their fees
which, in accordance with the Plan, are invested in mutual fund shares. Upon
termination of the Plan, Trustees that have deferred accounts under the Plan
will be paid benefits no later than the time the payments would otherwise have
been made without regard to such termination. All benefits provided under these
plans are funded and any payments to Plan participants are paid solely out of
the Trusts' assets.
5. DISTRIBUTION PLANS
WM Funds Distributor, Inc. (the "Distributor"), a registered broker-dealer and
indirect wholly-owned subsidiary of Washington Mutual, serves as distributor for
Class A and B shares. For the six months ended April 30, 2000, the Distributor
received $249,546 representing CDSC fees from Class B shares. WM Financial
Services, Inc. ("WM Securities) also serves as a registered broker-dealer for
the Funds. For the six months ended April 30, 2000, WM Securities received
$10,448, representing CDSC fees from Class B shares.
Each of the Funds has adopted two distribution plans, pursuant to Rule 12b-1
under the 1940 Act, applicable to Class A and Class B shares of the Fund (each,
a "Rule 12b-1 Plan"), respectively. There are no 12b-1 Plans applicable to the
Class I shares of the Funds. Under the applicable Rule 12b-1 Plans, the
Distributor receives a service fee at an annual rate of 0.25% of the average
daily net assets of both classes. The Trustees have not authorized, and the
Funds do not currently pay, service fees with respect to Class A shares. In
addition, the Distributor is paid a fee as compensation in connection with the
offering and sale of Class B shares at an annual rate of 0.75% of the average
daily net assets of such shares. These fees may be used to cover the expenses of
the Distributor primarily intended to result in the sale of such shares,
including payments to the Distributor's representatives or others for selling
shares. Because the Distributor may retain any amount of its fee that is not so
expended, the Rule 12b-1 Plans are characterized by the SEC as
"compensation-type" plans. The service fee is paid by the Fund to the
Distributor, which in turn, pays a portion of the service fee to broker/dealers
that provide services, such as accepting telephone inquiries and transaction
requests and processing correspondences, new account applications and subsequent
purchases by check for the shareholders. Under their terms, both the Class A
Plan and the Class B Plan shall remain in effect from year to year, provided
such continuance is approved annually by vote of the Board of Trustees,
including a majority of those Trustees who are not "interested persons" of the
Trust, as defined in the 1940 Act, and who have no direct or indirect financial
interest in the operation of such distribution plans, or any agreements related
to such plans, respectively.
6. SHARES OF BENEFICIAL INTEREST
The Trusts may issue an unlimited number of shares of beneficial interest, each
without par value.
As of April 30, 2000, WM Shareholder Services, Inc. owned greater than five
percent of the following Fund:
NUMBER OF PERCENTAGE OF
NAME OF FUND FUND SHARES TOTAL FUND SHARES
------------ ----------- -----------------
Money Market Fund (Class I) ............ 4,482,124 22.07%
7. GEOGRAPHIC AND INDUSTRY CONCENTRATION AND RISK FACTORS
There are certain risks arising from the concentration of California Money
Fund's investments in California municipal securities. The California Money Fund
is more susceptible to factors adversely affecting issuers of California
municipal securities than a fund that is not concentrated in these issuers to
the same extent. Uncertain economic conditions or governmental developments may
affect the ability of California municipal securities issuers to meet their
financial obligations.
8. CONTRIBUTION IN KIND
Effective as of the close of business on July 16, 1999, the Griffin Portfolio
Builder Accounts (asset allocation accounts that were invested in Class A shares
of certain Funds in the WM Group of Funds) redeemed in kind their investments in
Class A of the Money Market Fund and contributed these assets to the WM
Strategic Asset Management Portfolios (the "Portfolios"). The Portfolios used
these contributed assets to acquire shares in Class I of certain Funds in the WM
Group of Funds.
<PAGE>
[graphic omitted]
This Semi-Annual Report is published for the general information of the
shareholders of the WM Group of Funds. It is authorized for distribution to
prospective investors only when preceded or accompanied by a current WM Group of
Funds prospectus. A mutual fund's share price and investment return will vary
with market conditions, and the principal value of an investment when you sell
your shares may be more or less than the original cost.
The WM Group of Funds are not insured by the FDIC. They are not deposits or
obligations of, nor are they guaranteed by, any bank. These securities are
subject to investment risk, including possible loss of principal amount
invested.
Distributed by WM Funds Distributor, Inc.
Member NASD
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