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EX-99.(P)(1)
CODE OF ETHICS
OF THE
WM GROUP OF FUNDS,
WM ADVISORS, INC.,
WM FUNDS DISTRIBUTOR, INC.
AND
SELECTED EMPLOYEES OF WM SHAREHOLDER SERVICES, INC.
This Code of Ethics ("Code") has been adopted by the companies referred to
herein on December 4, 2000. This Code shall apply to all Access Persons of the
Investment Company, to all Access Persons of the Adviser in accordance with Rule
204-2 of the Investment Advisers Act of 1940 for IMS Accounts, to all Access
Persons of the Distributor, and to the Fund Accounting Department and Fund
Administration Department of the Transfer Agent.
1. STATEMENT OF GENERAL PRINCIPLES.
This Code is intended as a statement of general fiduciary principles
that govern the personal investment activities of all Access Persons. In
addition to the specific standards and guidelines set forth below,
Access Persons must govern themselves in accordance with the following
general principles:
(a) The Code is based on the principle that the officers, trustees,
directors and employees of the companies subject to this Code owe
a fiduciary duty to, among others, the shareholders of the
Investment Company, to conduct their personal securities
transactions in a manner which does not interfere with Fund
portfolio transactions or otherwise take unfair advantage of
their relationship to the Funds. Persons covered by this Code
must adhere to this general principle as well as comply with the
Code's specific provisions; and
(b) Access Persons should not take inappropriate advantage of their
position. Troublesome questions can arise whenever Access Persons
receive unusual investment opportunities, perquisites, or gifts
of more than de minimis value from persons doing or seeking
business with the Adviser, Investment Company or IMS Account. As
a general principle, it is imperative that those who work for or
on behalf of an Investment Company or IMS Account avoid any such
situation that might compromise, or call into question, their
exercise of fully independent judgment.
2. DEFINITIONS.
(a) "Access Person" means any director, trustee, officer, employee,
general partner, or Advisory Person of the Investment Company, or
Adviser; in addition, "Access Person" includes any director,
officer, or employee of the Distributor whose function causes
such person to be an "Access Person" as so defined by Rule 17j-1.
(b) "Adviser" means WM Advisors, Inc.
(c) "Advisory Person" means (1) any employee of the Investment
Company or Adviser, or of any company in a control relationship
to the Investment Company or Adviser, who, in connection with his
regular functions or duties, makes, participates in, or obtains
information, regarding the purchase or sale of a Security by the
Investment Company or Adviser, or whose functions relate to the
making of any recommendations with respect to such purchases or
sales; and (2) employees of the Transfer Agent engaged in fund
accounting or fund administration for the Investment Company; and
(3) any natural person in a control relationship to the
Investment Company or Adviser who
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obtains information concerning recommendations made to the
Investment Company or Adviser with regard to the purchase or sale
of a Security.
(d) "IMS Accounts" means accounts that are separately managed by the
Adviser.
(e) "Beneficial Ownership" shall be interpreted in the same manner as
it would be in determining whether a person is subject to the
provisions of Section 16a-1(a)(2) of the Securities Exchange Act
of 1934 and the rules and regulations thereunder, except that the
determination of direct or indirect beneficial ownership shall
apply to all securities which an Access Person has or acquires.
(f) "Control" shall have the same meaning as that set forth in
section 2(a)(9) of the Investment Company Act.
(g) "Disinterested Trustee" means a trustee of the Investment Company
who is not an "interested person" of the Investment Company or
Adviser within the meaning of Section 2(a)(19) of the Investment
Company Act.
(h) "Distributor" means WM Funds Distributor, Inc.
(i) "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933 [15 U.S.C. 77a], the
issuer of which, immediately before the registration, was not
subject to the reporting requirements of sections 13 or 15(d) of
the Securities Exchange Act of 1934 [15 U.S.C. 78m or 78o(d)].
(j) "Investment Company" or "Fund" means:
WM Trust I: U.S. Government Securities Fund, Income Fund, Growth
& Income Fund, Money Market Fund, Tax-Exempt Money Market Fund,
Tax-Exempt Bond Fund, Growth Fund of the Northwest, Mid Cap Stock
Fund, Equity Income Fund;
WM Trust II: Short Term Income Fund, Growth Fund, Small Cap
Stock Fund, International Growth Fund, California Municipal Fund,
California Insured Intermediate, Municipal Fund, California Money
Fund, Florida Insured Municipal Fund;
WM Strategic Asset Management Portfolios: Strategic Growth
Portfolio, Conservative Growth Portfolio, Balanced Portfolio,
Conservative Balanced Portfolio, Flexible Income Portfolio;
WM Variable Trust: Money Market Fund, Short Term Income Fund,
U.S. Government Securities Fund, Income Fund, Growth & Income
Fund, Growth Fund, Small Cap Stock Fund, International Growth
Fund, Equity Income Fund, Growth Fund of the Northwest, Mid Cap
Stock Fund, Strategic Growth Portfolio, Conservative Growth
Portfolio, Balanced Portfolio, Conservative Balanced Portfolio,
Flexible Income Portfolio.
(k) "Investment Personnel" means: (i) Any employee of the Fund or
investment adviser (or of any company in a control relationship
to the Fund or investment adviser) who, in connection with his or
her regular functions or duties, makes or participates in making
recommendations regarding the purchase or sale of securities by
the Fund; (ii) Any natural person who controls the Fund or
investment adviser and who obtains information concerning
recommendations made to the Fund regarding the purchase or sale
of securities by the Fund.
(l) "Purchase or sale of a security" includes, inter alia, the
writing of an option to purchase or sell a security, including
any security that is convertible into or exchangeable for any
security that is held or to be acquired by a fund.
(m) "Security" shall have the meaning set forth in Section 2(a)(36)
of the Investment Company Act, except that it shall not include
shares of registered open-end investment companies, securities
issued by the Government of the United States, short-term debt
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securities which are "government securities" within the meaning
of Section 2(a)(16) of the Investment Company Act, repurchase
agreements and other high quality short term debt instruments
(any instrument with a maturity at issuance of less than 366 days
and that is rated in one of the two highest rating categories by
a nationally recognized rating organization), bankers'
acceptances, bank certificates of deposit, commercial paper, and
such other money market instruments as designated by the board of
trustees of the Investment Company or board of directors of the
Adviser.
(n) "Transfer Agent" means WM Shareholder Services, Inc.
(o) "Security Held or to be Acquired" by the Fund means: (i) any
Security which, within the most recent 15 days: (A) is or has
been held by the Fund; or (B) is being or has been considered by
the Fund or the Adviser for purchase by the Fund; and (ii) any
option to purchase or sell, and any security convertible into or
exchangeable for, a Security described in Section 2(o)(i) of this
Code.
(p) "Subadviser" means: Capital Guardian Trust Company; Van Kampen
Management, Inc.; Janus Capital Corporation; or such other
organization as may from time to time provide sub-advisory
services for a Fund.
(q) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made and
communicated and, with respect to the person making the
recommendation, when such person seriously considers making such
a recommendation.
3. APPLICATION. The Subadvisers and their affiliates have their own Codes
of Ethics pursuant to Rule 17j-1 under the Investment Company Act.
Effective September 1, 2000, any Access Person who is not subject to a
Subadviser's Code of Ethics that has been approved by the Fund's
trustees pursuant to Rule 17j-1, shall be subject to the provisions of
this Code, and any person who is subject to a Subadviser's Code of
Ethics that has been approved by the Fund's trustees pursuant to Rule
17j-1 and who complies with such Code, shall not be subject to the
provisions of this Code.
4. EXEMPTED TRANSACTIONS. The prohibitions of Section 5 of this Code shall
not apply to:
(a) Purchases or sales effected in any account over which the Access
Person has no direct or indirect influence or control.
(b) Purchases or sales of securities which are not eligible for
purchase or sale by the Investment Company or Adviser.
(c) Purchases or sales which are non-volitional on the part of the
Access Person, the Investment Company or the Adviser.
(d) Purchases which are part of an automatic dividend reinvestment
plan.
(e) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its securities, to
the extent such rights were acquired from such issuer, and sales
of such rights so acquired.
5. PROHIBITED PURCHASES OR SALES/BLACKOUT PERIOD.
(a) Access Persons. An Access Person shall not purchase or sell,
directly or indirectly, any Security in which he or she has, or
by reason of such transaction acquires, any direct or indirect
Beneficial Ownership and which he or she knows or should have
known at the time of such purchase or sale:
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(1) is being considered for purchase or sale by the Investment
Company or Adviser;
(2) is being purchased or sold by the Investment Company or
Adviser;
(b) Investment Personnel. Investment Personnel, in addition to the
prohibition of 5(a) above, shall not purchase or sell, directly
or indirectly, any Security in which he or she has, or by reason
of such transaction acquires, any direct or indirect Beneficial
Ownership and which he or she knows or should have known at the
time of such purchase or sale will be purchased or sold by the
Investment Company or Adviser within a period of seven (7)
calendar days before and seven (7) calendar days after the
purchase or sale of the Security by the Investment Company or
Adviser (the "Blackout Period"), and any profits realized on
these trades shall inure to and be recoverable by the Investment
Company or Adviser. Investment Personnel shall not purchase or
sell, directly or indirectly, any Security in which he or she
has, or by reason of such transaction acquires, any direct or
indirect Beneficial Ownership:
(1) that is issued pursuant to an "initial public offering";
or
(2) that is issued pursuant to a "limited offering" (an
offering that is exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2) or Section
4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under
the Securities Act of 1933), unless the purchase or sale
is pre-approved as provided in Section 6.
6. PRE-CLEARANCE OF PARTICIPATION IN PRIVATE OFFERINGS. Investment
Personnel shall obtain approval from the Compliance Officer of the
Adviser prior to the acquisition of Securities issued pursuant to a
"private offering" (as that term is generally recognized as an exemption
from registration under Section 4(2) of the Securities Act of 1933)
("Private Offering Security") in which they, their families (including
those of immediate family sharing the same household as the Access
Person) or trusts of which they are trustees or in which they have a
beneficial interest are parties. The Compliance Officer shall promptly
notify the person of approval or denial for the transaction.
Notification of approval or denial for the transaction may be given
verbally; however, it shall be confirmed in writing within 72 hours of
verbal notification. Such notification must be kept strictly
confidential, and the Compliance Officer shall maintain records of the
approval and the rationale supporting the acquisition of such securities
for at least five years after the end of the fiscal year in which the
approval is granted. In reviewing the request, the Compliance Officer
shall consult with the Presidents of the Investment Company and Adviser,
and shall take into account, among other factors, whether the investment
opportunity should be reserved for an Investment Company or IMS Account,
and whether the opportunity is being offered to such person as a result
of his or her position with the Adviser. Investment Personnel who are
Beneficial Owners of any Private Offering Security shall be required to
disclose such ownership to the Compliance Officer prior to making any
recommendation regarding the purchase or sale of the Private Offering
Security by an Investment Company or IMS Account or participating in the
determination of which recommendations shall be made to the Investment
Company or IMS Account. Under such circumstances, the Adviser's decision
to purchase the Private Offering Securities shall be subject to an
independent review by Investment Personnel with no personal interest in
the Private Offering Securities.
7. BAN ON SHORT-TERM TRADING PROFITS.
For the purpose of preventing the unfair use of information which may
have been obtained by Investment Personnel, any profit realized by such
Investment Personnel from any purchase and sale, or any sale and
purchase, of any Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect Beneficial Ownership (other
than an exempted security), within any period of less than sixty (60)
days, unless such Security was acquired in
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good faith in connection with a debt previously contracted, shall inure
to and be recoverable by the Investment Company or Adviser, irrespective
of any intention on the part of such Investment Personnel in entering
into such transaction of holding the Security purchased or of not
repurchasing the Security sold for a period exceeding sixty (60) days.
This Section shall not apply unless such Investment Personnel was the
Beneficial Owner of the Security or of an interest in a Security both at
the time of the purchase and sale, or the sale and purchase.
8. REPORTING.
(a) Every Access Person shall report to the Compliance Officer (as
that person is designated from time to time by the Adviser) the
information described in Sections 8(c), 8(d), 8(e) and 8(f) of
this Code with respect to transactions in any Security in which
such Access Person has, or by reason of such transaction
acquires, any direct or indirect Beneficial Ownership in the
Security; provided, however, that an Access Person shall not be
required to make a report with respect to transactions effected
for any account over which such person does not have any direct
or indirect influence.
(b) A Disinterested Trustee of the Investment Company need only make
a quarterly report in a Security if such trustee or director, at
the time of that transaction, knew, or in the ordinary course of
fulfilling his official duties as a trustee of the Investment
Company or a director of the Adviser should have known, that
during the 15-day period immediately preceding the date of the
transaction by the director, such Security was purchased or sold
by the Investment Company or Adviser or was being considered by
the Investment Company or Adviser for purchase or sale by the
Investment Company or Adviser.
(c) Within ten (10) days of becoming an Access Person (except persons
who would be included in this subsection solely because of their
capacity as a trustee of the Investment Company), such person
shall disclose to the Compliance Officer all Security holdings
Beneficially Owned by the Access Person. Annually, in conjunction
with the first-quarter report specified in Section 8(e) of this
Code, all Access Persons shall disclose to the Compliance Officer
all Security holdings Beneficially Owned by them. Such annual or
initial report shall contain the date of the report, name, number
of shares and principal amount of all securities owned by the
access person and all securities accounts the access person
maintains with a broker, dealer or bank (or any account in which
the Access Person may have a beneficial interest).
(d) All Access Persons (except persons who would be included in this
subsection solely because of their capacity as a trustee of the
Investment Company) shall immediately provide to or cause to be
provided to the Compliance Officer:
(1) duplicate copies of all documents issued by the broker,
dealer or bank with or through whom the transaction was
effected that confirm the transaction; and
(2) duplicate copies of all periodic statements issued by any
broker, dealer or bank that describe any Security
Beneficially Owned by the Access Person.
(e) Not later than ten (10) days after the end of each calendar
quarter, all Access Persons (except persons who would be included
in this subsection solely because of their capacity as a trustee
of the Investment Company) must certify in a written report that
the securities transactions contained in the duplicate statements
provided to the Compliance Officer pursuant to Section 8(d)
include all the securities transactions (as defined in Section
2(m) of this Code) entered into by said Access Person during the
quarter covered by the report. Access Persons are not required to
list all transactions on the quarterly report unless the
information required to be included in the quarterly report (as
described in Section 8(f) of this Code) has not been described
adequately in the duplicate statements provided to the Compliance
Officer. If said Access Person has no accounts containing
securities (as defined in section 2(m) of this Code), this
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fact also must be certified in written report on a quarterly
basis. If the Access Person establishes a new securities account
during the quarterly period, the quarterly report must also
disclose the name of the broker, dealer or bank with whom the
account is established and the date the account is established.
(f) A quarterly report shall be made by all Access Persons (except
those included in Section 8(e) above and Disinterested Trustees
as set forth in Section 8(b) above) not later than ten (10) days
after the end of the calendar quarter in which the transaction to
which the report relates was effected, and shall contain the
following information:
(1) the date of the transaction, the title and the number of
shares, and the principal amount of each Security
involved;
(2) the nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(3) the price at which the transaction was effected;
(4) the name of the broker, dealer or bank with or through
whom the transaction was effected; and
(5) the date of the report.
(g) Any such report may contain a statement that the report shall not
be construed as an admission by the person making such report
that he has any direct or indirect Beneficial Ownership in the
Security to which the report relates.
(h) All such reports, account statements, and all related
information described in this section (8) of the Code shall be
reviewed by the Designated Compliance Officer.
9. PRE-CLEARANCE OF TRADES. Every Access Person (except persons who would
be included in this Section 9 solely because of their capacity as a
trustee of the Investment Company) shall obtain clearance from the
Compliance Officer prior to effecting any securities transaction in
which they, their families (including those of immediate family sharing
the same household as the Access Person) or trusts of which they are
trustees or in which they have a beneficial interest are parties. The
Compliance Officer shall promptly notify the Access Person of clearance
or denial of clearance for the transaction which decision shall be
effective only on the day it is issued. Notification of approval or
denial may be given verbally; however, it shall be confirmed in writing
within 24 hours of verbal notification. Such notification must be kept
strictly confidential. The Compliance Officer shall record both the date
of the securities transaction and the date pre-clearance was granted.
The President of the Adviser shall assume the above reporting and
pre-clearance activities and act as compliance officer for transactions
of the Designated Compliance Officer.
10. PROHIBITED ACTIVITIES OF INVESTMENT PERSONNEL.
(a) Gifts. Investment Personnel are prohibited from receiving, either
directly or indirectly, anything of value in excess of a de
minimis amount from any person or an employee of another entity
where such payment or gratuity is in relation to the business of
the employer of the offeror of the payment or gratuity.
(b) Service as a Director. Investment Personnel are prohibited from
serving on the boards of directors of publicly traded companies,
absent a prior authorization from the Compliance Officer based
upon a determination that the board service would not be
inconsistent with the interests of the Investment Company.
11. SANCTIONS. Upon discovering a violation of this Code, the board of
trustees of the Investment Company, or the board of directors of the
Adviser, Transfer Agent, or Distributor may impose such sanctions as it
deems appropriate, including inter alia, a letter of censure or
suspension or termination of the employment of the violator. All
material violations of this Code and any
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sanctions imposed with respect thereto shall be reported periodically to
the board of trustees of the Investment Company or board of directors of
the Adviser with respect to whose securities the violation occurred.
12. CERTIFICATION OF COMPLIANCE WITH CODE. All Access Persons shall certify
annually that they:
(a) have read and understood the Code and are subject thereto,
(b) have complied with the requirements of the Code, and
(c) disclosed or reported all personal securities transactions
required to be disclosed or reported pursuant to the requirements
of the Code.
13. REPORT AND CERTIFICATION OF ADEQUACY to the Board of Trustees and Board
of Directors. On an annual basis, the Compliance Officer shall prepare a
written report to the management and the board of trustees of the
Investment Company and board of directors of the Adviser, Transfer Agent
and Distributor setting forth the following:
(a) stating that the Code of Ethics procedures have been designed to
prevent access persons from violating the Code;
(b) a summary of existing procedures concerning personal investing
and any changes in procedures made during the past year;
(c) identifying any violations that required significant remedial
action during the past year; and
(d) identifying any recommended changes in existing restrictions or
procedures based upon the Investment Company's or Adviser's
experience under the Code, evolving industry practices, or
developments in applicable laws or regulations.
14. BOARD APPROVAL. Following the report and certification by the Compliance
Officer, the board of trustees of the Investment Company (including a
majority of independent trustees) must approve this Code of Ethics on an
annual basis. Any material change to this Code must be approved within
six months.
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