WM TRUST I, 485BPOS, 2000-02-29

WM TRUST I
485BPOS, 2000-02-29

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 29, 2000

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Securities Act of 1933 File #33-27489
Investment Company Act of 1940 File #811-5775
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.

Post-Effective Amendment No. 33

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 36

WM Trust II

(Exact name of Registrant as specified in Charter)

AND

Securities Act of 1933 File #333-01999
Investment Company Act of 1940 File #811-07577
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.

Post-Effective Amendment No. 9

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 11

WM Strategic Asset Management Portfolios

(Exact name of Registrant as specified in Charter)

AND

Securities Act of 1933 File #333-36941
Investment Company Act of 9140 File #811-00123
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.

Post-Effective Amendment No. 78

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 76

WM Trust I

(Exact name of Registrant as specified in Charter)

1201 Third Avenue, 22nd Floor, Seattle, WA 98101

(Address of principal executive offices)

Registrant's telephone number, including area code (206) 461-3800

John T. West
1201 Third Avenue, 22nd Floor, Seattle, WA 98101

(Name and address of agent for service)

With a copy to:

Joseph B. Kittredge, Esq.
Ropes & Gray
One International Place
Boston, MA 02110

It is proposed that this filing will become effective:

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485

[X] on March 1, 2000 pursuant to paragraph (b) of Rule 485

[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485

[ ] on (date) pursuant to paragraph (a)(i) of Rule 485

[ ] 75 days after filing pursuant to paragraph (a)(ii) of Rule 485

[ ] on March 1, 2000 pursuant to paragraph (a)(ii) of Rule 485

[ ] this post-effective amendment designated a new effective date for a
previously filed post-effective amendment.

<PAGE> 2

WM GROUP OF FUNDS
PROSPECTUS
MARCH 1, 2000
- --------------------------------------------------------------------------------

Money Funds

- - Market Fund
- ----------------------------------------------------------------
- - Tax-Exempt Money Market Fund
- ----------------------------------------------------------------
- - California Money Fund
- ----------------------------------------------------------------
Fixed-Income Funds

- - Short Term Income Fund
- ----------------------------------------------------------------
- - U.S. Government Securities Fund
- ----------------------------------------------------------------
- - Income Fund
- ----------------------------------------------------------------
- - High Yield Fund
- ----------------------------------------------------------------
Municipal Funds

- - Tax-Exempt Bond Fund
- ----------------------------------------------------------------
- - California Municipal Fund
- ----------------------------------------------------------------
- - California Insured Intermediate Municipal Fund
- ----------------------------------------------------------------
- - Florida Insured Municipal Fund
- ----------------------------------------------------------------
Equity Funds

- - Bond & Stock Fund
- ----------------------------------------------------------------
- - Growth & Income Fund
- ----------------------------------------------------------------
- - Growth Fund of the Northwest
- ----------------------------------------------------------------
- - Growth Fund
- ----------------------------------------------------------------
- - Mid Cap Stock Fund
- ----------------------------------------------------------------
- - Small Cap Stock Fund
- ----------------------------------------------------------------
- - International Growth Fund
- ----------------------------------------------------------------
WM Strategic Asset Management Portfolios, LLC

- - Strategic Growth Portfolio
- ----------------------------------------------------------------
- - Conservative Growth Portfolio
- ----------------------------------------------------------------
- - Balanced Income Portfolio
- ----------------------------------------------------------------
- - Flexible Income Portfolio
- ----------------------------------------------------------------
- - Income Portfolio
- ----------------------------------------------------------------

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

WM Group of Funds provides a broad selection
of investment alternatives to investors.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a crime.
<PAGE> 3

WM GROUP OF FUNDS

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

CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Risk/Return Summary............................. 2
Money Funds................................... 3
Fixed-Income Funds............................ 6
Municipal Funds............................... 10
Equity Funds.................................. 14
Strategic Asset Management Portfolios......... 21
Summary of Principal Risks.................... 26
Fees and Expenses of the Funds and Portfolios... 31
Description of the Funds and Portfolios......... 35
Money Funds................................... 35
Fixed-Income Funds............................ 36
Municipal Funds............................... 37
Equity Funds.................................. 39
Strategic Asset Management Portfolios......... 41
Common Investment Practices..................... 41
Ways to Set Up Your Account..................... 50
How Can I Invest in the Funds and Portfolios?... 51
Which Class of Shares is Best for Me?........... 53
Class A Shares................................ 53
Class B Shares................................ 54
Distribution Plans............................ 56
Distribution of Income and Capital Gains........ 56
How Can I Sell Shares?.......................... 57
How Can I Exchange My Shares?................... 57
Dividends, Capital Gains and Taxes.............. 58
Organization.................................... 59
Financial Highlights............................ 63
</TABLE>

<PAGE> 4

RISK/RETURN SUMMARY

WM Group of Funds provides a broad range of investment choices, including asset
allocation strategies available through WM Strategic Asset Management
Portfolios, LLC (the "Portfolios"). This summary identifies the investment
objective, principal investment strategies and principal risks of each Fund and
Portfolio. The principal investment strategies identified in this summary are
not the only investment strategies available to the Funds and Portfolios, and
some of the principal investment strategies may not be available at any given
time. For a discussion of all of the investment strategies available to the
Funds and Portfolios, please see the Statement of Additional Information (the
"SAI").

The principal investment strategies identified in this summary provide specific
information about each of the Funds and Portfolios, but there are some general
principles WM Advisors and the sub-advisors apply in making investment
decisions. When making decisions about whether to buy or sell equity securities,
WM Advisors and the sub-advisors will consider, among other things, a company's
strength in fundamentals, its potential for earnings growth over time, and the
current price of its securities relative to their perceived worth. When making
decisions about whether to buy or sell fixed-income investments, WM Advisors and
the sub-advisors will generally consider, among other things, the strength of
certain sectors of the fixed-income market relative to others, interest rates
and other general market conditions, as well as the credit quality of individual
issuers.

The discussion of each Fund's and Portfolio's principal investment strategies
includes a short discussion of some of the principal risks of investing in such
Fund or Portfolio. You can find additional information about each Fund and
Portfolio, including a more detailed description of these and other principal
risks of an investment in each Fund or Portfolio, after this summary.
Investments mentioned in the summary and described in greater detail under
"Common Investment Practices" below appear in BOLD TYPE. Please be sure to read
the more complete descriptions of the Funds and Portfolios, and the related
risks, before you invest.

Below the description of each Fund or Portfolio is a bar chart showing how the
investment returns of its Class A shares have varied in the past ten years, or
in the years since the Fund or Portfolio began if that is less than ten years.
The bar chart is intended to provide some indication of the volatility of the
Fund's or Portfolio's returns. The table following each bar chart shows how, for
each class of shares, average annual total returns of the Fund or Portfolio
compare to returns of a broad-based securities market index for the last one,
five and ten years (or, for a newer Fund or Portfolio, for the life of the Fund
or Portfolio). Performance shown in the table reflects the maximum applicable
sales charge, but performance shown in the bar chart does not reflect any sales
charges. PAST PERFORMANCE IS NOT NECESSARILY AN INDICATION OF FUTURE
PERFORMANCE.

There can be no assurance that any Fund or Portfolio will achieve its objective.
It is possible to lose money "by investing" in the Funds and Portfolios. An
investment in a Fund or Portfolio is not a deposit of a bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Money Funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in the
Money Funds.

2
<PAGE> 5
- --------------------------------------------------------------------------------
MONEY MARKET fund

OBJECTIVE This Fund seeks to maximize current income while preserving capital
and maintaining liquidity.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests in high-quality
money market instruments, which may include U.S. GOVERNMENT SECURITIES, FLOATING
AND VARIABLE RATE SECURITIES, MUNICIPAL OBLIGATIONS, U.S. dollar denominated
FOREIGN INVESTMENTS, ASSET-BACKED SECURITIES, REPURCHASE AGREEMENTS, and
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Liquidity Risk,
- - Credit Risk, - Management Risk, and
- - Foreign Investment - Money Market Risk.
Risk,
</TABLE>

YEARLY performance of Class A Shares*
[Money Market Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 7.58
1991 5.39
1992 3.06
1993 2.41
1994 3.47
1995 5.33
1996 4.87
1997 5.04
1998 5.00
1999 4.56
</TABLE>

During the periods shown above, the highest quarterly return was 1.87% (for the
quarter ended 6/30/90), and the lowest was 0.56% (for the quarter ended
6/30/93).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (5/2/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 4.56% 4.96% 4.66% N/A
CLASS B SHARES 3.43% 4.00% N/A 3.80%
MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX** 4.85% 5.35% 5.28% 5.28%
</TABLE>

* The Fund's performance through December 31, 1997 benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.
Class B share average annual total returns shown in the Performance Table
reflect the maximum applicable contingent deferred sales charge.

** This is an unmanaged index that measures the performance of 3-month U.S.
Treasury bills currently available in the marketplace.

3
<PAGE> 6
- --------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET fund

OBJECTIVE This Fund seeks to maximize current income that is exempt from
federal income tax while preserving capital and maintaining liquidity.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-quality, short-term, fixed-income MUNICIPAL OBLIGATIONS issued by states,
counties, cities or other governmental entities that generate income exempt from
federal income tax. The Fund's investments may include VARIABLE RATE
OBLIGATIONS, HOLDINGS IN OTHER INVESTMENT COMPANIES, MUNICIPAL LEASES,
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES and ALTERNATIVE MINIMUM TAX ("AMT")-
SUBJECT BONDS.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Management Risk,
- - Credit Risk, - Tax Risk, and
- - Liquidity Risk, - Money Market Risk.
</TABLE>

YEARLY performance of Class A Shares*
[Tax-Exempt Money Market Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 5.76
1991 4.18
1992 2.41
1993 2.06
1994 2.37
1995 4.00
1996 3.05
1997 3.18
1998 3.07
1999 2.69
</TABLE>

During the periods shown above, the highest quarterly return was 1.44% (for the
quarter ended 6/30/95), and the lowest was 0.46% (for the quarter ended
3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past
(for periods ended December 31, 1999) One Year Five Years Ten Years
<S> <C> <C> <C>
CLASS A SHARES 2.69% 3.20% 3.27%
MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX** 4.85% 5.35% 5.28%
</TABLE>

* The Fund's performance through December 31, 1999 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This is an unmanaged index that measures the performance of 3-month U.S.
Treasury bills currently available in the marketplace.

4
<PAGE> 7
- --------------------------------------------------------------------------------
CALIFORNIA MONEY fund

OBJECTIVE This Fund seeks to maximize current income that is exempt from
federal and California state personal income tax, consistent with safety of
principal and maintenance of liquidity.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-quality, short-term, fixed-income MUNICIPAL OBLIGATIONS issued by states,
counties, cities or other governmental bodies that generate income exempt from
California state personal income tax. The Fund may also invest in VARIABLE RATE
OBLIGATIONS, HOLDINGS IN OTHER INVESTMENT COMPANIES, MUNICIPAL LEASES,
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES AND ALTERNATIVE MINIMUM TAX
("AMT") -- SUBJECT BONDS.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Liquidity Risk,
- - Credit Risk, - Management Risk,
- - Geographic - Tax Risk, and
Concentration Risk, - Money Market Risk.
</TABLE>

The Fund is also "non-diversified," which means that the Fund may invest more of
its assets in the securities of fewer issuers than other mutual funds. Thus, the
Fund is also subject to Non-Diversification Risk.

YEARLY performance of Class A Shares*
[California Money Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 5.02
1991 3.85
1992 2.60
1993 1.85
1994 2.20
1995 3.11
1996 2.76
1997 2.85
1998 2.48
1999 2.27
</TABLE>

During the periods shown above, the highest quarterly return was 1.30% (for the
quarter ended 12/31/90), and the lowest was 0.43% (for the quarter ended
12/31/90).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past
(for periods ended December 31, 1999) One Year Five Years Ten Years
<S> <C> <C> <C>
CLASS A SHARES 2.27% 2.70% 2.90%
MERRILL LYNCH 3-MONTH U.S. TREASURY
BILL INDEX** 4.85% 5.35% 5.28%
</TABLE>

* The Fund's performance through December 31, 1998 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This is an unmanaged index that measures the performance of 3-month U.S.
Treasury bills currently available in the marketplace.

5
<PAGE> 8
- --------------------------------------------------------------------------------
SHORT TERM INCOME fund

OBJECTIVE This Fund (formerly known as Short Term High Quality Bond Fund) seeks
as high a level of current income as is consistent with prudent investment
management and stability of principal.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests in short-term bonds
and other FIXED-INCOME SECURITIES, which are rated in the top four categories by
a nationally recognized statistical rating organization ("investment grade") or
are of comparable quality. Under normal circumstances, the Fund maintains a
dollar-weighted average portfolio duration of three years or less. The Fund's
investments may include CORPORATE SECURITIES, U.S. AND FOREIGN GOVERNMENT
SECURITIES, REPURCHASE AGREEMENTS AND MORTGAGE- AND ASSET-BACKED SECURITIES.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk, - Liquidity Risk, and
- - Foreign - Management Risk.
Investment Risk,
</TABLE>

YEARLY performance of Class A Shares*
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1994 -2.05
1995 10.03
1996 4.09
1997 5.77
1998 6.30
1999 2.92
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 3.28% (for the quarter
ended 6/30/95), and the lowest was -1.52 (for the quarter ended 12/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (11/1/93) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -0.48% 5.07% 3.81% N/A
CLASS B SHARES -2.00% 4.96% N/A 4.26%
LEHMAN BROTHERS MUTUAL FUND SHORT (1-5)
INVESTMENT GRADE DEBT INDEX** 2.49% 7.30% 5.90% 6.80%
</TABLE>

* The Fund's performance through December 31, 1999 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.
Average annual total returns shown in the Performance Table reflect deduction
of the maximum applicable sales charge.

** This index includes all investment-grade, corporate debt securities with
maturities of one to five years.

6
<PAGE> 9
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES fund

OBJECTIVE This Fund seeks a high level of current income consistent with safety
and liquidity.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in U.S.
GOVERNMENT SECURITIES, including collateralized mortgage obligations and other
MORTGAGE-BACKED SECURITIES. The Fund may also invest in DOLLAR ROLLS, which
involve leverage.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk, and
- - Leveraging Risk, - Management Risk.
</TABLE>

YEARLY performance of Class A Shares*
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 9.45
1991 14.72
1992 6.12
1993 8.12
1994 -4.91
1995 19.45
1996 2.48
1997 9.92
1998 7.21
1999 0.13
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would be lower. During the
periods shown above, the highest quarterly return was 6.48% (for the quarter
ended 6/30/95), and the lowest was -3.68% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -4.41% 6.65% 6.58% N/A
CLASS B SHARES -5.33% 6.59% N/A 5.49%
LEHMAN BROTHERS GOVERNMENT BOND INDEX** -2.23% 7.44% 7.48% 6.37%
</TABLE>

** This index includes all U.S. Government agency and Treasury securities.

7
<PAGE> 10
- --------------------------------------------------------------------------------
INCOME fund

OBJECTIVE This Fund seeks a high level of current income consistent with
preservation of capital.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in a
diversified pool of FIXED-INCOME SECURITIES, including corporate securities,
U.S. GOVERNMENT SECURITIES and MORTGAGE-BACKED SECURITIES (including
collateralized mortgage obligations), up to 35% of which may be in LOWER-RATED
SECURITIES (which are sometimes called "junk bonds"). The Fund may also invest
in convertible securities.

Among the principal risks of investing in the Fund are:
- - Market Risk,
- - Credit Risk,
- - Currency Risk,
- - Foreign Investment Risk, - Leveraging Risk,
- Derivatives Risk,
- Liquidity Risk, and
- Management Risk.

YEARLY performance of Class A Shares*
[Income Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 8.21
1991 17.29
1992 7.38
1993 10.82
1994 -4.82
1995 21.58
1996 3.46
1997 10.51
1998 7.15
1999 0.09
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 8.04% (for the quarter
ended 6/30/95), and the lowest was -3.95% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -4.43% 7.32% 7.43% N/A
CLASS B SHARES -5.30% 7.30% N/A 6.13%
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX* -2.15% 7.61% 7.65% 6.51%
</TABLE>

** This index is generally considered representative of the U.S. government and
corporate bond markets.

8
<PAGE> 11
- --------------------------------------------------------------------------------
HIGH YIELD fund

OBJECTIVE This Fund seeks to provide a high level of current income.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-yielding LOWER-RATED SECURITIES (sometimes called "junk bonds"), which may
include FOREIGN INVESTMENTS. The Fund may also invest in higher-rated
FIXED-INCOME SECURITIES, preferred stock and convertible securities.

Among the principal risks of investing in the Fund are:
- - Market Risk,
- - Credit Risk,
- - Currency Risk,
- - Foreign Investment Risk,
- Leveraging Risk,
- Derivatives Risk,
- Liquidity Risk,
- Management Risk, and
- Smaller Company Risk.

YEARLY performance of Class A Shares*

[Income Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1999 12.02
</TABLE>

Sales charges are not included in the return shown in the above bar chart. If
those charges were included, the return shown would have been lower. During the
period shown above, the highest quarterly return was 4.72% (for the quarter
ended 6/30/99), and the lowest was 0.88% (for the quarter ended 9/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Inception (4/8/98) Inception (5/5/98)
<S> <C> <C> <C>
CLASS A SHARES 7.02% 1.98% N/A
CLASS B SHARES 6.10% N/A 2.39%
LEHMAN BROTHERS HIGH YIELD INDEX** 2.39% 0.52% 0.31%
</TABLE>

** This index includes all below investment-grade, corporate debt securities.

9
<PAGE> 12
- --------------------------------------------------------------------------------
TAX-EXEMPT BOND fund

OBJECTIVE This Fund seeks to provide a high level of income that is exempt from
federal income tax while protecting investors' capital.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
MUNICIPAL OBLIGATIONS issued by states, counties, cities or other governmental
entities, including MUNICIPAL LEASES, AMT-SUBJECT BONDS and INVERSE FLOATING
RATE OBLIGATIONS, that generate income exempt from federal income tax. The Fund
may also invest in taxable FIXED-INCOME SECURITIES (including junk bonds) and
utilize STRATEGIC TRANSACTIONS (derivatives) such as interest rate futures and
options.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Liquidity Risk,
- - Credit Risk, - Management Risk, and
- - Leveraging Risk, - Tax Risk.
- - Derivatives Risk,
</TABLE>

YEARLY performance of Class A Shares
YEARLY PERFORMANCE GRAPH

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 6.71
1991 11.36
1992 9.00
1993 12.54
1994 -6.53
1995 18.25
1996 2.52
1997 8.59
1998 5.08
1999 -4.4
</TABLE>

Sales Charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 7.29% (for the quarter
ended 3/31/95), and the lowest was -6.33% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -8.69% 4.77% 5.58% N/A
CLASS B SHARES -9.67% 4.72% N/A 3.97%
LEHMAN BROTHERS MUNICIPAL BOND INDEX** -2.06% 6.91% 6.89% 6.05%
</TABLE>

* Average annual total returns shown in the Performance Table reflect deduction
of the applicable sales charges.

** This index includes all investment grade, tax-exempt bond issues.

10
<PAGE> 13
- --------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL fund

OBJECTIVE This Fund seeks to provide as high a level of current income that is
exempt from federal and California state income tax as is consistent with
prudent investment management and preservation of capital.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
intermediate-and long-term California MUNICIPAL OBLIGATIONS, including municipal
leases and AMT-SUBJECT BONDS. The Fund may also invest in other municipal
obligations and utilize STRATEGIC TRANSACTIONS (derivatives) such as interest
rate futures and options.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Leveraging Risk, - Management Risk, and
- - Geographic - Tax Risk.
Concentration Risk,
</TABLE>

YEARLY performance of Class A Shares*
Yearly Performance Graph

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 6.47
1991 9.65
1992 9.17
1993 13.65
1994 -8.61
1995 18.09
1996 4.42
1997 10.30
1998 6.09
1999 -4.53
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 7.76% (for the quarter
ended 3/31/95), and the lowest was -6.61% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -8.84% 5.65% 5.71% N/A
CLASS B SHARES -9.81% 5.66% N/A 4.77%
LEHMAN BROTHERS MUNICIPAL BOND INDEX** -2.06% 6.91% 6.89% 6.12%
</TABLE>

** This index includes all investment grade tax-exempt bond issues.

11
<PAGE> 14
- --------------------------------------------------------------------------------
CALIFORNIA INSURED INTERMEDIATE MUNICIPAL fund

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
intermediate-term insured California MUNICIPAL OBLIGATIONS, including MUNICIPAL
LEASES and AMT-SUBJECT BONDS. The weighted average effective maturity of the
Fund's investments is ten years or less, and the maximum effective maturity of
any of its investments is fifteen years. The Fund may also invest in other
municipal obligations and utilize STRATEGIC TRANSACTIONS (derivatives) such as
interest rate futures and options.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Leveraging Risk, - Management Risk, and
- - Geographic Concentra- - Tax Risk.
tion Risk,
</TABLE>

YEARLY performance of Class A Shares*
[California Insured Intermediate Municipal Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1995 16.45
1996 3.91
1997 7.14
1998 5.26
1999 -0.83
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 7.23% (for the quarter
ended 3/31/95), and the lowest was -1.77% (for the quarter ended 6/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (4/04/94) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -5.31% 5.27% 4.89% N/A
CLASS B SHARES -6.36% 5.28% N/A 4.76%
LEHMAN BROTHERS MUNICIPAL BOND INDEX** -2.06% 6.91% 6.05% 6.12%
</TABLE>

** This index includes all investment grade tax-exempt bond issues.

12
<PAGE> 15
- --------------------------------------------------------------------------------
FLORIDA INSURED MUNICIPAL fund

OBJECTIVE This Fund seeks to provide as high a level of current income that is
exempt from federal income tax as is consistent with prudent investment
management and preservation of capital. The Fund also seeks to ensure that the
value of its shares is exempt from Florida intangible personal property tax.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
intermediate-and long-term insured Florida MUNICIPAL OBLIGATIONS, including
MUNICIPAL LEASES and AMT-SUBJECT BONDS. The Fund may also invest in other
municipal obligations and utilize STRATEGIC TRANSACTIONS (derivatives) such as
interest rate futures and options.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Leveraging Risk, - Management Risk, and
- - Geographic - Tax Risk.
Concentration Risk,
</TABLE>

YEARLY performance of Class A Shares*
[Florida Insured Municipal Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1994 -8.48
1995 17.57
1996 3.41
1997 10.01
1998 5.99
1999 -4.85
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 6.99% (for the quarter
ended 3/31/95), and the lowest was -8.33% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (6/7/93) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -9.11% 5.18% 3.58% N/A
CLASS B SHARES -10.14% 5.21% N/A 4.56%
LEHMAN BROTHERS MUNICIPAL BOND INDEX** -2.06% 6.91% 5.37% 6.12%
</TABLE>

** This index includes all investment grade tax-exempt bond issues.

13
<PAGE> 16
- --------------------------------------------------------------------------------
BOND & STOCK fund

OBJECTIVE This Fund seeks to provide continuity of income, conservation of
principal and long-term growth of income and principal.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in common
stocks, preferred stocks, bonds and convertible securities. At least 25% of the
Fund's assets are generally invested in FIXED-INCOME SECURITIES. The Fund's
investments may include U.S. GOVERNMENT SECURITIES, AMERICAN DEPOSITORY RECEIPTS
(ADRs) and EUROPEAN DEPOSITORY RECEIPTS (EDRs), MORTGAGE-BACKED SECURITIES
(including collateralized mortgage obligations), REPURCHASE AGREEMENTS and REAL
ESTATE INVESTMENT TRUSTS (REITs).
In selecting equity investments for the Fund, WM Advisors looks for long-term
potential for growth in "value" stocks currently selling for less than WM
Advisors believes they are worth. In selecting debt investments for the Fund, WM
Advisors looks for investments that provide regular income in addition to some
opportunity for capital appreciation.

Among the risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Currency Risk, - Management Risk, and
- - Foreign Investment - Smaller Company Risk.
Risk,
</TABLE>

YEARLY performance of Class A Shares
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 0.08
1991 21.75
1992 9.89
1993 9.27
1994 -2.13
1995 31.18
1996 13.60
1997 19.89
1998 6.93
1999 4.83
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 12.85% (for the quarter
ended 12/31/98), and the lowest was -10.15% (for the quarter ended 9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES -0.96% 13.61% 10.48% N/A
CLASS B SHARES -0.90% 13.85% N/A 12.17%
STANDARD & POOR'S 500 INDEX** 21.04% 28.54% 18.19% 25.52%
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND*** -2.15% 7.61% 7.65% 6.51%
</TABLE>

* Average annual total returns shown in the Performance Table reflect
deduction of the maximum applicable sales charges.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock
market.

*** This index is generally considered representative of the U.S. Government and
corporate bond markets.

14
<PAGE> 17
- --------------------------------------------------------------------------------
GROWTH & INCOME fund

OBJECTIVE This Fund seeks to provide long-term capital growth. Current income
is a secondary consideration.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in common
stocks. In selecting investments for the Fund, WM Advisors looks for common
stocks that it believes are currently undervalued and whose issuers WM Advisors
believes have the potential to increase earnings over time. WM Advisors seeks
out companies that it believes have solid management, a competitive advantage,
and the resources to maintain superior cash flow and profitability over the long
term.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk - Liquidity Risk,
- - Foreign - Management Risk, and
Investment Risk - Smaller Company Risk.
</TABLE>

YEARLY performance of Class A Shares
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 -5.98
1991 27.39
1992 11.01
1993 6.83
1994 2.58
1995 33.15
1996 22.28
1997 29.52
1998 14.41
1999 18.26
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 21.33% (for the quarter
ended 12/31/98), and the lowest was -14.72% (for the quarter ended 9/30/90).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 11.74% 21.95% 14.67% N/A
CLASS B SHARES 12.36% 22.26% N/A 19.81%
STANDARD & POOR'S 500 INDEX** 21.04% 28.54% 18.19% 25.52%
</TABLE>

* Average annual total returns shown in the Performance Table reflect deduction
of the maximum applicable sales charges.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock market.

15
<PAGE> 18
- --------------------------------------------------------------------------------
GROWTH FUND OF THE NORTHWEST

OBJECTIVE This Fund (formerly known as Northwest Fund) seeks long-term growth
of capital.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in common
stocks of companies located or doing business in Alaska, Idaho, Montana, Oregon
and Washington. The Fund's investments may include REPURCHASE AGREEMENTS and
REAL ESTATE INVESTMENT TRUSTS (REITS).

In selecting investments for the Fund, WM Advisors looks for equity securities
that it believes are undervalued, yet well-managed, with excellent long-term
growth possibilities.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Foreign Investment - Management Risk, and
Risk, - Smaller Company Risk.
- - Geographic
Concentration Risk,
</TABLE>

YEARLY performance of Class A Shares*
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1990 -1.14
1991 43.98
1992 3.54
1993 2.50
1994 -1.42
1995 26.52
1996 22.56
1997 32.88
1998 22.98
1999 42.27
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 45.26% (for the quarter
ended 12/31/98), and the lowest was -23.42% (for the quarter ended 9/30/90).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Class B
(for periods ended December 31, 1999) One Year Five Years Ten Years Inception (3/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 34.45% 27.78% 17.64% N/A
CLASS B SHARES 36.07% 28.04% N/A 23.54%
STANDARD & POOR'S 500 INDEX** 21.04% 28.54% 18.19% 25.52%
</TABLE>

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock market.

16
<PAGE> 19
- --------------------------------------------------------------------------------
GROWTH fund

OBJECTIVE This Fund seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in common
stocks, including FOREIGN INVESTMENTS, that, in the opinion of WM Advisors or
the sub-advisor, offer potential for growth. The Fund may also invest in
commercial paper and preferred stock.

In selecting investments for the Fund, the Fund's sub-advisor looks for
individual companies that it believes have exceptional potential for growth,
regardless of economic conditions. Companies are evaluated on their individual
merit, their ability to generate earnings growth, and their superior management
teams, rather than on the broad analysis of a particular sector or market trend.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk, - Liquidity Risk,
- - Foreign Investment - Management Risk, and
Risk, - Smaller Company Risk.
</TABLE>

YEARLY performance of Class A Shares
[Yearly Performance Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1994 0.65
1995 36.25
1996 16.92
1997 9.78
1998 57.10
1999 94.42
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 42.69% (for the quarter
ended 12/31/99), and the lowest was -8.60% (for the quarter ended 6/30/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (4/5/93) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 83.23% 38.24% 30.25% N/A
CLASS B SHARES 88.09% 38.71% N/A 36.85%
STANDARD & POOR'S 500 INDEX** 21.04% 28.54% 21.63% 26.73%
</TABLE>

* Average annual total returns shown in the Performance Table reflect deduction
of the maximum applicable sales charges.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock market.

17
<PAGE> 20
- --------------------------------------------------------------------------------
MID CAP STOCK fund

OBJECTIVE The Fund seeks to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily (at least
65% of its assets) in common stocks of companies having market capitalizations
in the range of companies included in the S&P MidCap 400 Index at the time of
purchase. In selecting investments for the Fund, WM Advisors looks for equity
investments in companies which have solid management, a competitive advantage,
and the resources to maintain superior cash flow and profitability over the long
term.

In determining whether securities should be sold, the Advisor considers factors
such as high valuations relative to other investment opportunities, and
deteriorating short or long-term business fundamentals or future growth
prospects. The Fund will not necessarily dispose of a security merely because
its issuer's market capitalization is no longer in the range represented by the
S&P MidCap 400 Index.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Liquidity Risk,
- - Credit Risk, - Management Risk,
- - Currency Risk, - Derivatives Risk, and
- - Foreign Investment - Smaller Company Risk.
Risk,
- - Leveraging Risk,
</TABLE>

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE MID CAP STOCK FUND BECAUSE IT
HAD NOT BEEN IN OPERATION FOR A FULL YEAR AS OF THE DATE OF THIS PROSPECTUS.

18
<PAGE> 21
- --------------------------------------------------------------------------------
SMALL CAP STOCK fund

OBJECTIVE This Fund (formerly known as Emerging Growth Fund) seeks long-term
capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in equity
securities, including FOREIGN INVESTMENTS, of companies with market
capitalizations of less than $1.4 billion. The Fund may also invest in
REPURCHASE AGREEMENTS and utilize STRATEGIC TRANSACTIONS (derivatives) such as
futures and options on futures.
In selecting investments for the Fund, WM Advisors looks for small cap companies
that it expects to achieve growth in earnings and revenues or that it believes
are currently undervalued relative to their true worth.

Among the principal risks of investing in the Fund are:

YEARLY performance of Class A Shares
[Emerging Growth Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1991 39.29
1992 15.40
1993 22.27
1994 -0.34
1995 32.26
1996 8.50
1997 12.63
1998 4.94
1999 71.61
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 54.03% (for the quarter
ended 12/31/99), and the lowest was -10.63% (for the quarter ended 3/31/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (7/18/90) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 61.75% 22.43% 17.11% N/A
CLASS B SHARES 65.05% 22.74% N/A 22.58%
STANDARD & POOR'S 500 INDEX** 21.04% 28.54% 19.07% 26.73%
RUSSELL 2000 INDEX*** 21.26% 16.69% 14.65% 16.08%
</TABLE>

* Average annual total returns shown in the Performance Table reflect
deduction of the maximum applicable sales charges.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock
market.

*** This index represents the smallest 2000 companies followed by Russell and is
used to measure the small cap market.

19
<PAGE> 22
- --------------------------------------------------------------------------------
INTERNATIONAL GROWTH fund

OBJECTIVE This Fund seeks to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in equity
securities of foreign issuers, including issuers located in developing or
emerging market countries. The Fund may also use STRATEGIC TRANSACTIONS
(derivatives) such as FOREIGN CURRENCY EXCHANGE TRANSACTIONS and REPURCHASE
AGREEMENTS.

In selecting investments for the Fund, Capital Guardian Trust Company seeks to
identify foreign stocks which have an attractive valuation, high return on
invested capital, excellent cash flow, strong balance sheets, and strong
management. Capital Guardian utilizes a research driven "bottom-up" approach in
that decisions are made based upon extensive field research and direct company
contacts. Capital Guardian blends its basic value-oriented approach with
macroeconomic and political judgments on the outlook for economies, industries,
currencies, and markets.

Among the principal risks of investing in the Fund are:

YEARLY performance of Class A Shares
[International Growth Fund Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1991 14.42
1992 -10.57
1993 32.35
1994 -1.31
1995 4.87
1996 8.02
1997 -2.49
1998 4.08
1999 49.91
</TABLE>

Sales charges are not included in the returns shown in the bar chart. If those
charges were included, the returns shown would be lower. During the periods
shown above, the highest quarterly return was 29.06% (for the quarter ended
12/31/99), and the lowest was -17.45% (for the quarter ended 9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (7/18/90) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 41.71% 10.25% 6.25% N/A
CLASS B SHARES 43.64% 10.50% N/A 9.14%
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE
INDEX* 26.96% 12.83% 8.78% 11.41%
</TABLE>

* Average annual total returns shown in the Performance Table reflect deduction
of the applicable sales charges.

** This index includes stock markets of Europe, Australia and the Far East
weighted by capitalization and represents the equity markets of 18 countries.

20
<PAGE> 23
- --------------------------------------------------------------------------------
STRATEGIC GROWTH portfolio

OBJECTIVE This Portfolio seeks to provide long-term capital appreciation. In
general, relative to the other Portfolios, the Strategic Growth Portfolio should
offer you the potential for a higher level of capital growth while exposing you
to corresponding levels of principal risk.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests at least 75% of its net assets in the Equity Funds.

The Portfolio may invest up to 25% of its assets in each of the Money Market,
Short Term Income and High Yield Funds. It may also invest up to 50% of its
assets in each of the Growth & Income, Growth Fund of the Northwest, Growth, Mid
Cap Stock, Small Cap Stock and International Growth Funds.

The Portfolio may also invest in U.S. GOVERNMENT SECURITIES, short-term debt
rated A or higher, commercial paper (including master notes and bank
obligations), REPURCHASE AGREEMENTS and STRATEGIC TRANSACTIONS such as futures
contracts and options.

The Portfolio shares the principal risks of each of the Funds it invests in, as
well as Portfolio Risk.

YEARLY performance of Class A Shares*
[Strategic Growth Portfolio Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1996 14.59
1997 12.38
1998 22.63
1999 44.48
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 25.23% (for the quarter
ended 12/31/99), and the lowest was -12.72% (for the quarter ended 9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1999) One Year (5/31/95)
<S> <C> <C>
CLASS A SHARES 36.51% 22.24%
CLASS B SHARES 38.44% 22.79%
STANDARD & POOR'S 500 INDEX** 21.04% 26.93%
RUSSELL 3000 INDEX*** 20.90% 25.57%
</TABLE>

* The Portfolio's performance through December 31, 1998 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance prior to November 1, 1996, represents the performance
of the Sierra Asset Management Account ("SAM Account"), Aggressive Growth
Strategy, a discretionary asset allocation account that was the predecessor
to the Portfolio. The SAM account's performance has been adjusted to reflect
mutual fund fees and expenses, however, it was not registered as a mutual
fund under the Investment Company Act of 1940, and therefore it was not
subject to certain restrictions that might have affected its performance.
Average annual total returns shown in the Performance Table reflect
deduction of the maximum applicable sales charges.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock
market.
*** This index is intended to represent the equity market as a whole.

21
<PAGE> 24
- --------------------------------------------------------------------------------
CONSERVATIVE GROWTH portfolio

OBJECTIVE This Portfolio seeks to provide long-term capital appreciation. In
general, relative to the other Portfolios, the Conservative Growth Portfolio
should offer you the potential for a low level of income and the potential for a
medium to high level of capital growth while exposing you to a medium level of
principal risk.

The Portfolio may invest up to 30% of its assets in each of the Money Market,
Short Term Income, U.S. Government Securities, Income and High Yield Funds. It
may also invest up to 40% of its assets in each of the Growth & Income, Growth
Fund of the Northwest, Growth, Mid Cap Stock, Small Cap Stock and International
Growth Funds.

The Portfolio shares the principal risks of each of the Funds it invests in, as
well as Portfolio Risk.

YEARLY performance of Class A Shares*
[Conservative Growth Portfolio Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1991 22.87
1992 4.46
1993 18.58
1994 -3.47
1995 22.65
1996 11.26
1997 8.65
1998 18.82
1999 40.28
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 22.16% (for the quarter
ended 12/31/99), and the lowest was -11.99% (for the quarter ended 9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Since Class A Since Class B
Average Annual Total Returns Past Past Five Inception Inception
(for periods ended December 31, 1999) One Year Years (9/30/90) (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 32.52% 18.50% 14.94% N/A
CLASS B SHARES 33.76% 18.72% N/A 17.31%
RUSSELL 3000 INDEX** 20.90% 26.94% 21.08% 25.27%
CAPITAL MARKET BENCHMARK*** 16.46% 15.76% 13.34% 14.78%
</TABLE>

* The Portfolio's performance through December 31, 1998 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance prior to November 1, 1996 represents the performance
of the Sierra Asset Management Account ("SAM Account"), Growth Strategy, a
discretionary asset allocation account that was the predecessor to the
Portfolio. The SAM Account's performance has been adjusted to reflect mutual
fund fees and expenses, however, it was not registered as a mutual fund
under the Investment Company Act of 1940, and therefore it was not subject
to certain restrictions that might have affected its performance. Average
annual total returns shown in the Performance Table reflect deduction of the
maximum applicable sales charges.

** This index is intended to represent the equity market as a whole.

*** This is a blended mix of capital market indices that is intended to
represent a proxy for portfolio performance. The benchmark allocation is as
follows: 35% S&P 500, 20% MSCI EAFE + Emerging Markets, 20% Lehman Bros.
Mutual Fund (1-5) Gov/Corp Index, 20% Salomon Bros. 90-day T-Bills, and 5%
Russell 2000 Growth. A description of the components of the Portfolio's
Capital Market Index can be found in the Statement of Additional
Information, which you can obtain free of charge by calling 800-222-5852.

22
<PAGE> 25
- --------------------------------------------------------------------------------
BALANCED portfolio

OBJECTIVE This Portfolio seeks to provide as high a level of total return
(consisting of reinvested income and capital appreciation) as is consistent with
reasonable risk. In general, relative to the other Portfolios, the Balanced
Portfolio should offer you the potential for a medium level of income and the
potential for a medium level of capital growth while exposing you to a medium
level of principal risk.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
investments among certain of the Funds to achieve their objectives. This
Portfolio invests at least 30% and no more than 70% of its net assets in both
the Equity Funds and the Fixed-Income Funds.

The Portfolio may invest up to 40% of its assets in each of the Money Market,
Short Term Income Bond, U.S. Government Securities, Income and High Yield Funds.
It may also invest up to 30% of its assets in each of the Growth & Income,
Growth Fund of the Northwest, Growth, Small Cap Stock, Mid Cap Stock and
International Growth Funds.

The Portfolio shares the principal risks of each of the Funds it invests in, as
well as Portfolio Risk.

YEARLY performance of Class A Shares*

[Balanced Portfolio Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1991 17.41
1992 2.46
1993 16.20
1994 -4.62
1995 21.73
1996 8.50
1997 10.22
1998 16.27
1999 26.97
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 15.37% (for the quarter
ended 12/31/99), and the lowest was -8.47% (for the quarter ended 9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (9/30/90) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 19.94% 15.34% 11.96% N/A
CLASS B SHARES 21.00% 15.44% N/A 14.29%
LEHMAN BROTHERS AGGREGATE BOND INDEX** -0.82% 7.73% 7.92% 7.20%
RUSSELL 3000 INDEX*** 20.90% 26.94% 21.08% 25.27%
CAPITAL MARKET BENCHMARK**** 9.35% 10.70% 9.04% 10.02%
</TABLE>

* The Portfolio's performance through December 31, 1998 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance prior to November 1, 1996 represents the performance
of the Sierra Asset Management Account ("SAM Account") Balanced Strategy, a
discretionary asset allocation account that was the predecessor to the
Portfolio. The SAM Account's performance has been adjusted to reflect
mutual fund fees and expenses, however, it was not registered as a mutual
fund under the Investment Company Act of 1940, and therefore it was not
subject to certain restrictions that might have affected its performance.
Average annual total returns shown in the Performance Table reflect
deduction of the maximum applicable sales charges.

** This index is intended to represent the fixed-income market as a whole.

*** This index is intended to represent the equity market as a whole.

**** This is a blended mix of capital market indices that is intended to
represent a proxy for portfolio performance. The benchmark allocation is as
follows: 25% Lehman Bros Mutual Fund Short (1-5) Gov/Corp Index, 25%
Salomon Bros 90-day T-Bills, 20% Lehman Bros Mortgage Index, 15% S&P 500,
and 15% MSCI EAFE + Emerging Markets. A description of the components of
the Portfolio's Capital Market Index can be found in the Statement of
Additional Information, which you can obtain free of charge by calling
800-222-5852.

23
<PAGE> 26
- --------------------------------------------------------------------------------
FLEXIBLE INCOME portfolio

OBJECTIVE This Portfolio seeks to provide a high level of total return
(consisting of reinvestment of income with some capital appreciation). In
general, relative to the other Portfolios, the Flexible Income Portfolio should
offer you the potential for a medium to high level of reinvestment income and
the potential for a low to medium level of capital growth, while exposing you to
a low to medium level of principal risk.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests no more than 30% of its net assets in the Equity Funds.

The Portfolio shares the principal risks of the Funds it invests in, as well as
Portfolio Risk.

YEARLY performance of Class A Shares*

[Flexible Income Portfolio Bar Chart]

<TABLE>
<CAPTION>
CALENDAR YEAR ANNUAL RETURN (%)
- ------------- -----------------
<S> <C>
1994 -6.1
1995 20.98
1996 6.48
1997 10.25
1998 9.24
1999 8.64
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 5.83% (for the quarter
ended 12/31/98), and the lowest was -3.84% (for the quarter ended 6/30/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (3/31/93) Inception (6/30/94)
<S> <C> <C> <C> <C>
CLASS A SHARES 3.75% 10.24% 7.47% N/A
CLASS B SHARES 2.76% 9.94% N/A 9.23%
LEHMAN BROTHERS AGGREGATE BOND INDEX** -0.82% 7.73% 6.03% 7.20%
CAPITAL MARKET BENCHMARK*** 4.99% 8.41% 6.90% 7.98%
</TABLE>

* The Portfolio's performance through December 31, 1998 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance prior to November 1, 1996 represents the performance
of the Sierra Asset Management Account ("SAM Account") Value Strategy, a
discretionary asset allocation account that was the predecessor to the
Portfolio. The SAM Account's performance has been adjusted to reflect mutual
fund fees and expenses, however, it was not registered as a mutual fund
under the Investment Company Act of 1940, and therefore it was not subject
to certain restrictions that might have affected its performance. Average
annual total returns shown in the Performance Table reflect deduction of the
maximum applicable sales charges.

** This index is intended to represent the fixed-income market as a whole.

*** This is a blended mix of capital market indices that is intended to
represent a proxy for portfolio performance. The benchmark allocation is as
follows: 40% Lehman Bros Mutual Fund Short (1-5) Gov/Corp Index, 40% Salomon
Bros 90-day T-Bills, 10% Lehman Bros Mortgage Index and 10% S&P 500. A
description of the components of the Portfolio's Capital Market Index can be
found in the Statement of Additional Information, which you can obtain free
of charge by calling 800-222-5852.

24
<PAGE> 27
- --------------------------------------------------------------------------------
INCOME portfolio

OBJECTIVE This Portfolio seeks long-term total return through reinvestment of
current income consistent with preservation of capital. In general, relative to
the other Portfolios, the Income Portfolio should offer you the potential for a
high level of income while maintaining principal and exposing you to a low level
of principal risk.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests 100% of its investable assets in the Fixed-Income Funds.

The Portfolio may invest up to 50% of its assets in each of the Money Market,
Short Term Income and U.S. Government Securities Funds. It may also invest up to
40% of its assets in either of the Income and High Yield Funds.

The Portfolio shares the principal risks of each of the Funds it invests in, as
well as Portfolio Risk.

YEARLY performance of Class A Shares*

[Income Portfolio Bar Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN (%)
-----------------
<S> <C>
1991 16.51
1992 7.12
1993 10.51
1994 -7.5
1995 16.67
1996 2.24
1997 8.29
1998 5.28
1999 1.97
</TABLE>

Sales charges are not included in the returns shown in the above bar chart. If
those charges were included, the returns shown would have been lower. During the
periods shown above, the highest quarterly return was 5.57% (for the quarter
ended 6/30/95), and the lowest was -4.34% (for the quarter ended 3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class A Since Class B
(for periods ended December 31, 1999) One Year Five Years Inception (9/30/90) Inception 6/30/94
<S> <C> <C> <C> <C>
CLASS A SHARES -2.59% 6.02% 6.34% N/A
CLASS B SHARES -3.66% 5.67% N/A 5.12%
LEHMAN BROTHERS AGGREGATE BOND INDEX** -0.82% 7.73% 7.92% 7.20%
CAPITAL MARKET BENCHMARK*** 2.81% 6.39% 6.26% 6.13%
</TABLE>

* The Portfolio's performance through December 31, 1998 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance prior to November 1, 1996 represents the performance
for the Sierra Asset Management Agreement Account ("SAM Account"), Fixed
Strategy, a discretionary asset allocation account that was the predecessor
to the Portfolio. The SAM Account's performance has been adjusted to reflect
mutual fund fees and expenses, however, it was not registered as a mutual
fund under the Investment Company Act of 1940, and therefore it was not
subject to certain restrictions that might have affected its performance.
Average annual returns shown in the Performance Table reflect deduction of
the maximum applicable sales charges.

** This index is intended to represent the fixed-income market as a whole.

*** This is a blended mix of capital market indices that is intended to
represent a proxy for portfolio performance. The benchmark allocation is as
follows: 20% Salomon Bros, 90-day T-Bills, 30% Lehman Bros Mutual Fund Short
(1-5) Gov/Corp Index, 10% Lehman Bros Mortgages Index and 10% Lehman Bros
BAA LT Corporate Bond Index. A description of the components of the
Portfolio's Capital Market Index can be found in the Statement of Additional
Information, which you can obtain free of charge by calling 800-222-5852.

25
<PAGE> 28

SUMMARY OF PRINCIPAL RISKS

The value of your investment in a Fund or Portfolio changes with the value of
the investments held by that Fund or Portfolio. Many factors can affect that
value, and it is possible that you may lose money on investments in the Funds
and Portfolios. Factors that may affect a particular Fund or Portfolio as a
whole are called "principal risks." They are summarized in this section. The
chart at the end of this section displays similar information. All Funds and
Portfolios are subject to principal risks. These risks can change over time,
because the types of investments made by the Funds and Portfolios can change
over time. Investments mentioned in this summary and described in greater detail
under "Description of the Funds" or "Common Investment Practices" appear in BOLD
TYPE. Those sections also include more information about the Funds, their
investments and the related risks.

- - MARKET RISK. Each of the Funds and Portfolios is subject to market risk,
which is the general risk of unfavorable changes in the market value of a
Fund's portfolio securities.

One aspect of market risk is interest rate risk. As interest rates rise,
your investment in a Fund or Portfolio is likely to be worth less because
its income-producing equity or debt investments are likely to be worth less.

Even Funds such as the Short Term Income and U.S. Government Securities
Funds are subject to interest rate risk, even though they generally invest
substantial portions of their assets in the highest quality debt securities,
such as U.S. GOVERNMENT SECURITIES.

Interest rate risk is generally greater for Funds that invest in debt
securities with longer maturities. This risk may be compounded for Funds
such as the Tax-Exempt Bond, California Municipal, Florida Insured
Municipal, Income and U.S. Government Securities Funds that invest in
MORTGAGE-BACKED or other ASSET-BACKED SECURITIES that may be prepaid. These
securities have variable maturities that tend to lengthen when that is least
desirable -- when interest rates are rising. Increased market risk is also
likely for Funds such as the Income and Short Term Income that invest in
debt securities paying no interest, such as ZERO-COUPON, PRINCIPAL-ONLY and
INTEREST-ONLY SECURITIES.

The Equity Funds, by investing in equity securities, such as common stock,
preferred stock and convertible securities, are exposed to a separate set of
market risks. Those risks include the risks of broader equity market
declines as well as more specific risks affecting the issuer, such as
management performance, financial leverage, industry problems and reduced
demand for the issuer's goods or services.

- - CREDIT RISK. Each of the Funds may be subject to credit risk to the extent it
invests in FIXED-INCOME SECURITIES. This is the risk that the issuer or the
guarantor (or, in the case of the California Insured Intermediate Municipal
Fund and the Florida Insured Municipal Fund, the insurer) of a debt security,
or the counterparty to any of a Fund's portfolio transactions (including
without limitation REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS,
LENDING OF SECURITIES and other over-the-counter transactions), will be unable
or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations. Varying degrees of credit risk, often
reflected in Credit Ratings, apply. Credit risk is particularly significant
for Funds such as the Income, High Yield, Tax-Exempt Bond, Bond & Stock,
Growth & Income, Growth, Mid Cap Stock and Small Cap Stock Funds that may
invest significantly in LOWER-RATED SECURITIES. These securities and similar
unrated securities (commonly known as "junk bonds") have speculative elements
or are predominantly speculative credit risks. The Short Term Income, Income,
High Yield, Bond & Stock, Growth & Income, Growth Fund of the Northwest,
Growth, Mid Cap Stock, Small Cap Stock and International Growth Funds, which
make FOREIGN INVESTMENTS denominated in U.S. dollars, are also subject to
increased credit risk because of the added difficulties associated with
requiring foreign entities to honor their contractual commitments, and because
a number of foreign governments and other issuers are already in default. The
Money Market Fund may also make U.S. dollar denominated FOREIGN INVESTMENTS.

- - CURRENCY RISK. Funds such as the Short Term Income, Income, High Yield, Bond
& Stock, Growth & Income, Growth, Mid Cap Stock, Small Cap Stock and
International Growth Funds that

26
<PAGE> 29

invest in securities denominated in, and/or receive revenues in, foreign
currencies will be subject to currency risk. This is the risk that those
currencies will decline in value relative to the U.S. dollar, or, in the case
of hedging positions, that the U.S. dollar will decline in value relative to
the currency hedged.

- - FOREIGN INVESTMENT RISK. Each of the Funds with FOREIGN INVESTMENTS such as
the Short Term Income, Income, High Yield, Bond & Stock, Growth & Income,
Growth, Mid Cap Stock, Small Cap Stock and International Growth Funds, may
experience more rapid and extreme changes in value than Funds with investments
solely in securities of U.S. companies. This is because the securities markets
of many foreign countries are relatively small, with a limited number of
companies representing a small number of industries. Additionally, foreign
securities issuers are usually not subject to the same degree of regulation as
U.S. issuers. Reporting, accounting and auditing standards of foreign
countries differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely affect a Fund's
investments in a foreign country. In the event of nationalization,
expropriation or other confiscation, a Fund could lose its entire investment.
Adverse developments in certain regions, such as Southeast Asia, may adversely
affect the markets of other countries whose economies appear to be unrelated.
The Money Market Fund and the Growth Fund of the Northwest may also make U.S.
dollar denominated FOREIGN INVESTMENTS.

- - GEOGRAPHIC CONCENTRATION RISK. Funds such as the California Money, Growth
Fund of the Northwest, California Municipal, California Insured Intermediate
Municipal and Florida Insured Municipal Funds that invest significant portions
of their assets in concentrated geographic areas like the northwestern United
States, California or Florida generally have more exposure to regional
economic risks than Funds making investments more broadly.

- - LEVERAGING RISK. When a Fund is BORROWING money or otherwise leveraging its
portfolio, the value of an investment in that Fund will be more volatile and
all other risks will tend to be compounded. The Income, Short Term Income,
U.S. Government Securities, California Municipal, California Insured
Intermediate Municipal, Florida Insured Municipal, Growth, International
Growth, Mid Cap Stock and Small Cap Stock Funds may achieve leverage by using
REVERSE REPURCHASE AGREEMENTS and/or DOLLAR ROLLS. The Municipal Funds, the
Fixed-Income Funds, and the Growth & Income Fund may achieve leverage through
the use of INVERSE FLOATING RATE INVESTMENTS. Funds such as the California
Money, California Insured Intermediate Municipal, Short Term Income, U.S.
Government Securities, Mid Cap Stock, Small Cap Stock, Growth and
International Growth Funds may also take on leveraging risk by investing
collateral from securities loans, by using STRATEGIC TRANSACTIONS
(derivatives) and by BORROWING money to meet redemption requests.

- - NON-DIVERSIFICATION RISK. Most analysts believe that overall risk can be
reduced through diversification, while concentration of investments in a small
number of securities increases risk. Each of the California Money, California
Municipal, California Insured Intermediate Municipal and Florida Insured
Municipal Funds is NON-DIVERSIFIED. This means they can invest a greater
portion of their assets in a relatively small number of issuers and will have
greater concentration of risk. Some of those issuers may present substantial
credit or other risks.

- - DERIVATIVES RISK. Each of the Funds, except the Money Funds, may, subject to
the limitations and restrictions stated elsewhere in this Prospectus and the
SAI, enter into STRATEGIC TRANSACTIONS involving derivatives such as forward
contracts, futures contracts, options, swaps, caps, floors and collars, which
are financial contracts whose value depends on, or is derived from, the value
of something else, such as an underlying asset, reference rate or index. In
addition to other risks such as the credit risk of the counterparty,
derivatives involve the risk of mispricing or improper valuation and the risk
that changes in the value of the derivative may not correlate perfectly with
relevant assets, rates and indices.

- - LIQUIDITY RISK. Liquidity risk exists when particular investments are
difficult to purchase or sell, possibly preventing a Fund from selling out of
these ILLIQUID SECURITIES at an advantageous price.

27
<PAGE> 30

All of the Funds may be subject to liquidity risk. Funds that engage in
STRATEGIC TRANSACTIONS, make FOREIGN INVESTMENTS, or invest in securities
involving substantial market and/or credit risk tend to be subject to greater
liquidity risk. In addition, liquidity risk increases for Funds that hold
RESTRICTED SECURITIES.

MANAGEMENT RISK. Each Fund and Portfolio is subject to management risk
because it is an actively managed investment portfolio. WM Advisors, or the
sub-advisor if applicable, will apply its investment techniques and risk
analyses in making investment decisions for the Funds or Portfolios, but there
can be no guarantee that they will meet stated objectives or produce desired
results. In some cases derivatives and other investments may be unavailable or
WM Advisors or the sub-advisor may choose not to use them under market
conditions when their use, in hindsight, may be determined to have been
beneficial to the Funds or Portfolios.

SMALLER COMPANY RISK. Market risk and liquidity risk are particularly
pronounced for stocks of companies with relatively small market
capitalizations. These companies may have limited product lines, markets or
financial resources, or they may depend on a few key employees. The Equity
Funds, the High Yield Fund, and the Small Cap Stock Fund in particular,
generally have the greatest exposure to this risk.

TAX RISK. The Tax-Exempt Money Market, California Money and the Municipal
Funds are subject to the risk that some or all of the interest they receive
might become taxable by law or be determined by the Internal Revenue Service
(or the relevant state tax authority) to be taxable. In this event, the value
of the Funds' investments would likely fall, and some or all of the income
distributions paid by the Funds might become taxable. In addition, some or all
of the income distributions paid by these Funds may be subject to federal
alternative minimum income tax.

MONEY MARKET RISK. While the Money Funds are designed to be relatively low
risk investments, they are not entirely free of risk. The Money Funds may not
be able to maintain a net asset value of $1.00 per share, as a result of a
deterioration in the credit quality of issuers whose securities the Funds
hold, or an increase in interest rates. In addition, the Money Funds are still
subject to the risk that the value of your investment may be eroded over time
by inflation.

PORTFOLIO REALLOCATION RISK. From time to time, one or more of a Portfolio's
underlying Funds may experience relatively large investments or redemptions
due to reallocations or rebalancings by the Portfolios as recommended by WM
Advisors. These transactions will affect such Funds, since the Funds that
experience redemptions as a result of reallocations or rebalancings may have
to sell portfolio securities and Funds that receive additional cash will have
to invest such cash. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
performance to the extent that the Funds may be required to sell securities or
invest cash at times when they would not otherwise do so. These transactions
could also accelerate the realization of taxable income if sales of securities
resulted in gains and could also increase transaction costs. WM Advisors is
committed to minimizing such impact on the Funds to the extent it is
consistent with pursuing the investment objectives of the Portfolios. WM
Advisors may nevertheless face conflicts in fulfilling its dual
responsibilities to the Portfolios and the Funds. WM Advisors will at all
times monitor the impact on the Funds of transactions by the Portfolios.

PORTFOLIO RISK. Each of the Portfolios allocates its assets among the Funds
as determined by its Advisor and in accordance with the investment
restrictions discussed above. As a result, the Portfolios share the risks of
each of the Funds in which they invest, which are described above.

In particular, the Portfolios may be subject to credit risk. For instance, the
Strategic Growth Portfolio can invest up to 50% of its assets in each of the
Growth, Growth & Income, Mid Cap Stock and Small Cap Stock Funds and up to 25%
of its assets in the High Yield Fund. Each of these Funds may invest
significant amounts of its assets in lower-rated securities ("junk bonds").
The Portfolios may also be exposed to FOREIGN INVESTMENT RISK through their
investments in the Growth, Mid Cap Stock or Small Cap Stock Funds. In choosing
among the Portfolios, investors should understand the risks of each of the
Funds and the 28
<PAGE> 31

extent to which each Portfolio invests in each Fund.

Investing in Funds through the Portfolios involves certain additional
expenses and tax results that would not be present in a direct investment in
the Funds. See "Dividends, Capital Gains and Taxes" for additional
information about the tax implications of investing in the Portfolios.

Under certain circumstances, a Fund may determine to pay a redemption
request by a Portfolio wholly or partly by a distribution in kind of
securities from its portfolio, instead of cash. In such cases, the
Portfolios may hold portfolio securities until WM Advisors determines that
it is appropriate to dispose of such securities.

The officers, trustees, advisor, distributor and transfer agent of the
Portfolios serve in the same capacities for the Funds. Conflicts may arise
as these persons and companies seek to fulfill their fiduciary
responsibilities to the Portfolios and the Funds.

29
<PAGE> 32

PRINCIPAL RISKS by fund

The following chart summarizes the Principal Risks of each Fund other than
Market Risk, Credit Risk, Liquidity Risk, Management Risk and Portfolio
Reallocation Risk, which apply to all of the Funds. Risks not marked for a
particular Fund may, however, still apply to some extent to that Fund at various
times.
<TABLE>
<CAPTION>
Foreign Geographic Smaller Money
Currency Investment Concentration Leveraging Non-Diversification Derivatives Company Tax Market
Fund Risk Risk Risk Risk Risk Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY
MARKET X X
fund
TAX-EXEMPT
MONEY MARKET X X
fund
CALIFORNIA
MONEY X X X X
fund
SHORT TERM
INCOME X X X X
fund
U.S. GOVERNMENT
SECURITIES X X
fund
INCOME
fund X X X X
HIGH YIELD
fund X X X X X
TAX-EXEMPT
BOND X X X
fund
CALIFORNIA
MUNICIPAL X X X X X
fund
CALIFORNIA INSURED
INTERMEDIATE X X X X X
MUNICIPAL fund
FLORIDA INSURED
MUNICIPAL X X X X X
fund
BOND &
STOCK X X X X
fund
GROWTH &
INCOME X X X X X
fund
GROWTH FUND OF
THE NORTHWEST X X X X
GROWTH
fund X X X X X
MID CAP
STOCK X X X X X
fund
SMALL CAP
STOCK X X X X X
fund
INTERNATIONAL
GROWTH X X X X X
fund
</TABLE>

30
<PAGE> 33

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

FEES AND EXPENSES OF THE FUNDS
AND PORTFOLIOS

This table describes the fees and expenses that you may pay if you invest in
Class A or Class B shares of a Fund or Portfolio. Each of the Funds may offer
other classes of shares that are subject to different fees and expenses. For
information about other classes of shares offered by the Funds, please contact
WM Shareholder Services at 800-222-5852. The Examples on the next two pages are
intended to help you compare the cost of investing in the Funds and Portfolios
with the costs of investing in other mutual funds. The Examples assume that your
investment has a 5% return each year, required for illustration purposes by the
Securities and Exchange Commission, and that the Fund's or Portfolio's operating
expenses remain the same. Your actual costs may be higher or lower than those in
the Examples.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS A CLASS B
(fees paid directly from your investment) SHARES (in %) SHARES (in %)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maximum sales charge (load) imposed on purchases (as a
percentage of offering price)
Equity Funds and Strategic Growth, Conservative Growth and
Balanced Portfolios 5.50 0.00
----------------------------------------------------------------------------------------------------
Fixed-Income Funds, Municipal Funds and Flexible Income and
Income Portfolios 4.50(1) 0.00
----------------------------------------------------------------------------------------------------
Money Funds 0.00(2) 0.00
----------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as a percentage of
original purchase price or redemption proceeds, as
applicable)(5) 0.00(3) 5.00(4)
----------------------------------------------------------------------------------------------------
(1) 3.50% for Short Term Income Fund.
(2) Regular sales charges apply when Class A shares of a Money Fund (on which no sales charge
was paid at time of purchase) are exchanged for shares of any other Fund.
(3) Certain investors who purchase Class A shares without paying an initial sales charge may
be subject to a deferred sales charge of 1.00% on redemptions within the first year or 0.50%
on redemptions within the second year after purchase. Class A shares are not otherwise
subject to a deferred sales charge.
(4) The maximum deferred sales charge is imposed on shares redeemed in the first year. For
shares held longer than one year, the deferred sales charge declines according to the
schedules set forth under "Buying Class B Shares -- Contingent deferred sales charge" in
this Prospectus. The maximum deferred sales charge for Class B shares of the Short Term
Income Fund is 4.00%.
(5) A $10 fee may be charged for redemptions made by wire transfer.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

31
<PAGE> 34

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------

ANNUAL FUND
OPERATING EXPENSES
(expenses that are deducted
CLASS A SHARES from Fund assets)
--------------------------------------------------------------------------------------------------------------
Total
Annual
Service Fund
Management (12b-1) Other Operating Expense Net
Fees Fees(3) Expenses Expenses Reimbursement(1) Expenses
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market Fund 0.45 0.00 0.28 0.73 N/A 0.73
--------------------------------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund(1) 0.45 0.00 0.44 0.89 0.17 0.72
--------------------------------------------------------------------------------------------------------------
California Money Fund 0.45 0.00 0.36 0.81 N/A 0.81
--------------------------------------------------------------------------------------------------------------
Short Term Income Fund(1) 0.50 0.25 0.41 1.16 0.16 1.00
--------------------------------------------------------------------------------------------------------------
U.S. Government Securities
Fund(1,2) 0.50 0.25 0.29 1.04 0.08 0.96
--------------------------------------------------------------------------------------------------------------
Income Fund(1,2) 0.50 0.25 0.35 1.10 0.06 1.04
--------------------------------------------------------------------------------------------------------------
High Yield Fund 0.63 0.25 0.49 1.37 N/A 1.37
--------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund(1) 0.48 0.25 0.16 0.89 0.01 0.88
--------------------------------------------------------------------------------------------------------------
California Municipal Fund(1,2) 0.50 0.25 0.16 0.91 0.03 0.88
--------------------------------------------------------------------------------------------------------------
California Insured Intermediate
Municipal Fund(2) 0.50 0.25 0.22 0.97 N/A 0.97
--------------------------------------------------------------------------------------------------------------
Florida Insured Municipal Fund(2) 0.50 0.25 0.39 1.14 N/A 1.14
--------------------------------------------------------------------------------------------------------------
Bond & Stock Fund 0.59 0.25 0.21 1.05 N/A 1.05
--------------------------------------------------------------------------------------------------------------
Growth & Income Fund 0.53 0.25 0.22 1.00 N/A 1.00
--------------------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 0.63 0.25 0.27 1.15 N/A 1.15
--------------------------------------------------------------------------------------------------------------
Growth Fund(1) 0.85 0.25 0.36 1.46 0.16 1.30
--------------------------------------------------------------------------------------------------------------
Mid Cap Stock Fund 0.75 0.25 0.79 1.79 N/A 1.79
--------------------------------------------------------------------------------------------------------------
Small Cap Stock Fund 0.85 0.25 0.84 1.94 N/A 1.94
--------------------------------------------------------------------------------------------------------------
International Growth Fund 0.99 0.25 0.65 1.89 N/A 1.89
--------------------------------------------------------------------------------------------------------------
Strategic Growth Portfolio(4) 0.15 0.25 0.69 1.09 N/A 1.09
--------------------------------------------------------------------------------------------------------------
Conservative Growth Portfolio(4) 0.15 0.25 0.63 1.03 N/A 1.03
--------------------------------------------------------------------------------------------------------------
Balanced Portfolio(4) 0.15 0.25 0.64 1.04 N/A 1.04
--------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio(4) 0.15 0.25 0.66 1.06 N/A 1.06
--------------------------------------------------------------------------------------------------------------
Income Portfolio(4) 0.15 0.25 0.84 1.24 N/A 1.24
--------------------------------------------------------------------------------------------------------------

<CAPTION>
- ------------------------------------------- ---------------------------------------------
EXAMPLES: You would pay the
following expenses on a $10,000
investment assuming a 5% annual
return and redemption at the end of
CLASS A SHARES each period:
---------------------------------- ---------------------------------------------

One Three Five Ten
Year Years Years Years
---------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund $ 75 $ 233 $ 409 $ 906
-------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund(1) 91 284 497 1,096
---------------------------------------------------------------------------------------------
California Money Fund 83 259 453 1,002
-----------------------------------------------------------------------------------------------------
Short Term Income Fund(1) 464 706 970 1,710
-------------------------------------------------------------------------------------------------------------
U.S. Government Securities
Fund(1,2) 551 766 1,002 1,664
--------------------------------------------------------------------------------------------------------------
Income Fund(1,2) 557 784 1,033 1,730
--------------------------------------------------------------------------------------------------------------
High Yield Fund 583 864 1,171 2,022
--------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund(1) 537 721 924 1,497
--------------------------------------------------------------------------------------------------------------
California Municipal Fund(1,2) 539 727 935 1,519
--------------------------------------------------------------------------------------------------------------
California Insured Intermediate
Municipal Fund(2) 545 745 966 1,586
--------------------------------------------------------------------------------------------------------------
Florida Insured Municipal Fund(2) 561 796 1,054 1,774
--------------------------------------------------------------------------------------------------------------
Bond & Stock Fund 651 866 1,101 1,762
--------------------------------------------------------------------------------------------------------------
Growth & Income Fund 646 851 1,076 1,707
--------------------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 661 895 1,152 1,871
--------------------------------------------------------------------------------------------------------------
Growth Fund(1) 690 986 1,309 2,300
--------------------------------------------------------------------------------------------------------------
Mid Cap Stock Fund 722 1,082 N/A N/A
--------------------------------------------------------------------------------------------------------------
Small Cap Stock Fund 736 1,126 1,545 2,690
--------------------------------------------------------------------------------------------------------------
International Growth Fund 731 1,111 1,521 2,640
--------------------------------------------------------------------------------------------------------------
Strategic Growth Portfolio(4) 655 878 1,122 1,806
--------------------------------------------------------------------------------------------------------------
Conservative Growth Portfolio(4) 649 860 1,091 1,740
--------------------------------------------------------------------------------------------------------------
Balanced Portfolio(4) 650 863 1,096 1,751
--------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio(4) 552 769 1,007 1,673
--------------------------------------------------------------------------------------------------------------
Income Portfolio(4) 569 822 1,098 1,867
--------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Reflects the Advisor's obligation to limit Total Annual Fund Operating
Expenses through October 31, 2000, as described on page 62.

(2) Reflects reduction in Management Fees effective January 1, 1999.

(3) 12b-1 fees represent servicing fees which are paid to the Distributor.
See "Which Class of Shares is Best for Me -- Distribution Plans."

(4) Does not include underlying Fund expenses that the Portfolios bear
indirectly.

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

32
<PAGE> 35

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------

ANNUAL FUND
OPERATING EXPENSES
(expenses that are deducted
CLASS B SHARES from Fund assets)
------------------------------------------------------------------------------------------------------------
Distribution Total
and Annual
Service Fund
Management (12b-1) Other Operating Expense Net
Fees Fees(3) Expenses Expenses Reimbursement(1) Expenses
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market Fund 0.45% 1.00% 0.33% 1.78% N/A 1.78%
------------------------------------------------------------------------------------------------------------
Short Term Income Fund(1) 0.50 1.00 0.44 1.94 0.16 1.78
------------------------------------------------------------------------------------------------------------
U.S. Government Securities
Fund(1,2) 0.50 1.00 0.28 1.78 0.08 1.70
------------------------------------------------------------------------------------------------------------
Income Fund(1,2) 0.50 1.00 0.35 1.85 0.06 1.79
------------------------------------------------------------------------------------------------------------
High Yield Fund 0.63 1.00 0.30 1.93 N/A 1.93
------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund(1) 0.48 1.00 0.16 1.64 0.01 1.63
------------------------------------------------------------------------------------------------------------
California Municipal
Fund(1,2) 0.50 1.00 0.16 1.66 0.03 1.63
------------------------------------------------------------------------------------------------------------
California Insured
Intermediate Municipal
Fund(2) 0.50 1.00 0.22 1.72 N/A 1.72
------------------------------------------------------------------------------------------------------------
Florida Insured Municipal
Fund(2) 0.50 1.00 0.38 1.88 N/A 1.88
------------------------------------------------------------------------------------------------------------
Bond & Stock Fund 0.59 1.00 0.25 1.84 N/A 1.84
------------------------------------------------------------------------------------------------------------
Growth & Income Fund 0.53 1.00 0.31 1.84 N/A 1.84
------------------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 0.63 1.00 0.36 1.99 N/A 1.99
------------------------------------------------------------------------------------------------------------
Growth Fund(1) 0.85 1.00 0.40 2.25 0.16 2.09
------------------------------------------------------------------------------------------------------------
Mid Cap Stock Fund 0.75 1.00 0.97 2.72 N/A 2.72
------------------------------------------------------------------------------------------------------------
Small Cap Stock Fund 0.85 1.00 1.01 2.86 N/A 2.86
------------------------------------------------------------------------------------------------------------
International Growth Fund 0.99 1.00 0.82 2.81 N/A 2.81
------------------------------------------------------------------------------------------------------------
Strategic Growth
Portfolio(5) 0.15 1.00 0.70 1.85 N/A 1.85
------------------------------------------------------------------------------------------------------------
Conservative Growth
Portfolio(5) 0.15 1.00 0.63 1.78 N/A 1.78
------------------------------------------------------------------------------------------------------------
Balanced Portfolio(5) 0.15 1.00 0.63 1.78 N/A 1.78
------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio(5) 0.15 1.00 0.66 1.81 N/A 1.81
------------------------------------------------------------------------------------------------------------
Income Portfolio(5) 0.15 1.00 0.83 1.98 N/A 1.98
------------------------------------------------------------------------------------------------------------

<CAPTION>
- --------------------------------- -------------------------------------------------------------------------------
EXAMPLES: You would pay the following expenses on
a $10,000 investment assuming a 5% annual return and
either
a) redemption at the end of each period or
CLASS B SHARES b) no redemption:
---------------------------- ---------------------------------------------------------------------------

(a) (b)
One Three Five Ten One Three Five Ten
Year Years Years Years(4) Year Years Years Years(4)
---------------------------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market Fund $681 $ 860 $1,070 $1,815 $181 $ 560 $ 970 $1,815
------------------------------------------------------------------------------------------------------------
Short Term Income Fund(1) 597 809 1,053 2,060 197 609 1,053 2,060
------------------------------------------------------------------------------------------------------------
U.S. Government Securities
Fund(1,2) 681 860 1,070 898 181 560 970 1,898
------------------------------------------------------------------------------------------------------------
Income Fund(1,2) 688 882 1,107 1,971 188 582 1,007 1,971
------------------------------------------------------------------------------------------------------------
High Yield Fund 696 906 1,148 2,107 196 606 1,048 2,107
------------------------------------------------------------------------------------------------------------
Tax-Exempt Bond Fund(1) 667 817 997 1,742 167 517 897 1,742
------------------------------------------------------------------------------------------------------------
California Municipal
Fund(1,2) 669 823 1,108 1,764 169 523 908 1,764
------------------------------------------------------------------------------------------------------------
California Insured
Intermediate Municipal
Fund(2) 675 842 1,039 1,830 175 542 939 1,830
------------------------------------------------------------------------------------------------------------
Florida Insured Municipal
Fund(2) 691 891 1,122 2,006 191 591 1,022 2,006
------------------------------------------------------------------------------------------------------------
Bond & Stock Fund 687 879 1,101 1,949 187 579 1,001 1,949
------------------------------------------------------------------------------------------------------------
Growth & Income Fund 687 879 1,101 1,936 187 579 1,001 1,936
------------------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 702 924 1,179 2,097 202 624 1,079 2,097
------------------------------------------------------------------------------------------------------------
Growth Fund(1) 728 1,003 1,311 2,383 228 703 1,211 2,383
------------------------------------------------------------------------------------------------------------
Mid Cap Stock Fund 775 1,144 N/A N/A 275 844 N/A N/A
------------------------------------------------------------------------------------------------------------
Small Cap Stock Fund 789 1,186 1,615 2,963 289 886 1,515 2,963
------------------------------------------------------------------------------------------------------------
International Growth Fund 731 1,111 1,521 2,640 731 1,111 1,521 2,640
------------------------------------------------------------------------------------------------------------
Strategic Growth
Portfolio(5) 688 882 1,107 1,968 188 582 1,007 1,968
------------------------------------------------------------------------------------------------------------
Conservative Growth
Portfolio(5) 681 860 1,070 1,895 181 560 970 1,895
------------------------------------------------------------------------------------------------------------
Balanced Portfolio(5) 681 860 1,070 1,898 181 560 970 1,898
------------------------------------------------------------------------------------------------------------
Flexible Income Portfolio(5) 688 882 1,107 1,960 188 582 1,007 1,960
------------------------------------------------------------------------------------------------------------
Income Portfolio(5) 701 921 1,174 2,113 201 621 1,074 2,113
------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Reflects the Advisor's obligation to limit Total Annual Fund Operating
Express through October 31, 2000, as described on page 62.

(2) Reflects reduction in Management Fees effective January 1, 1999.

(3) 0.25% of the 12b-1 fees shown represent servicing fees which are paid to
the Distributor. Long-term Class B shareholders may pay more than the
sales charge paid by Class A shareholders. See "Which Class of Shares is
Best for Me -- Distribution Plans."

(4) Class B shares convert to Class A shares after eight years; accordingly,
the expense amounts for years nine and ten are based on Class A share
expenses.

(5) Does not include underlying Fund expenses that the Portfolios bear
indirectly.

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

33
<PAGE> 36

ESTIMATED AGGREGATE PORTFOLIO EXPENSES

The following table sets forth the estimated aggregate expenses of the
Portfolios, including expenses of the underlying Funds, based upon expenses
shown in the table above for each Portfolio and for each underlying Fund's Class
I shares, which are available only to the Portfolios. These estimates assume a
constant allocation by each Portfolio of its assets among the underlying Funds
identical to the actual allocation of the Portfolio at October 31, 1999. A
Portfolio's actual expenses may be higher as a result of changes in the
allocation of the Portfolio's assets among the underlying Funds, the expenses of
the underlying Funds, and/or the Portfolio's own expenses.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
EXAMPLES: You would pay the following
combined expenses on a $10,000 investment
assuming a 5% annual return and redemption at
the end of each period.
----------------------------------------------------------------------------------------------
Total
Annual
Combined
Operating One Three Five Ten
Expenses Year Years Years Years
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
----------------------------------------------------------------------------------------------
Strategic Growth Portfolio 1.93% $735 $1,123 $1,540 $2,680
----------------------------------------------------------------------------------------------
Conservative Growth Portfolio 1.80% 723 1,085 1,477 2,549
----------------------------------------------------------------------------------------------
Balanced Portfolio 1.60% 704 1,028 1,380 2,349
----------------------------------------------------------------------------------------------
Flexible Income Portfolio 1.25% 572 829 1,110 1,893
----------------------------------------------------------------------------------------------
Income Portfolio 1.24% 571 826 1,105 1,882

CLASS B SHARES
----------------------------------------------------------------------------------------------
Strategic Growth Portfolio 2.69% 772 1,135 1,531 2,835
----------------------------------------------------------------------------------------------
Conservative Growth Portfolio 2.55% 758 1,093 1,462 2,698
----------------------------------------------------------------------------------------------
Balanced Portfolio 2.34% 737 1,031 1,358 2,492
----------------------------------------------------------------------------------------------
Flexible Income Portfolio 2.00% 703 927 1,184 2,131
----------------------------------------------------------------------------------------------
Income Portfolio 1.98% 701 921 1,174 2,113
- -------------------------------------------------------------------------------------------------------

<CAPTION>
- ------------------------------------------- ---------------------------------------------------------
EXAMPLES: You would pay the following
combined expenses on a $10,000 investment
assuming a 5% annual return and no redemption
at the end of each period.
---------------------------------- ---------------------------------------------------------

One Three Five Ten
Year Years Years Years
---------------------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Strategic Growth Portfolio $735 $1,123 $1,540 $2,680
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Conservative Growth Portfolio 723 1,085 1,477 2,549
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Balanced Portfolio 704 1,026 1,360 2,349
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Flexible Income Portfolio 572 829 1,110 1,893
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Income Portfolio 571 826 1,105 1,882
CLASS B SHARES
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Strategic Growth Portfolio 272 835 1,431 2,835
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Conservative Growth Portfolio 258 793 1,362 2,698
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Balanced Portfolio 237 731 1,258 2,492
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Flexible Income Portfolio 203 627 1,084 2,131
---------------------------------------------------------------------------------------------- --------------------------
- -------------------------------
Income Portfolio 121 621 1,074 2,113
- -------------------------------------------------------------------------------------------------------
</TABLE>

As of October 31, 1999, the Portfolios' assets were allocated among the
underlying Funds as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Strategic Conservative Flexible
Growth Growth Balanced Income Income
Portfolio Portfolio Portfolio Portfolio Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund 8% 8% -- 10% 10%
- -------------------------------------------------------------------------------------------------------------------------------
Short Term Income Fund -- 1% 14% 20% 15%
- -------------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities Fund -- 4% 19% 20% 33%
- -------------------------------------------------------------------------------------------------------------------------------
Income Fund -- 1% 3% 20% 29%
- -------------------------------------------------------------------------------------------------------------------------------
High Yield Fund -- 3% 2% 5% 10%
- -------------------------------------------------------------------------------------------------------------------------------
Growth & Income Fund 37% 35% 27% 19% --
- -------------------------------------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 3% -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Growth Fund 41% 33% 21% 6% --
- -------------------------------------------------------------------------------------------------------------------------------
International Growth Fund 10% 14% 13% -- --
- -------------------------------------------------------------------------------------------------------------------------------
Other Assets 1% 1% 1% -- 3%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

34
<PAGE> 37

DESCRIPTION OF THE FUNDS AND PORTFOLIOS

This section provides a more complete description of the principal investment
strategies and risks of each Fund and Portfolio. The "Common Investment
Practices" section that follows provides additional information about the
principal investment strategies of the Funds and identifies the Funds and
Portfolios that may engage in such practices to a significant extent. You can
find additional descriptions of the Funds' strategies and risks in the Statement
of Additional Information ("SAI"). Except for policies explicitly identified as
"fundamental" in this Prospectus or the SAI, the investment objectives and
investment policies set forth in this Prospectus and the SAI are not fundamental
and may be changed at any time without shareholder consent. Except as otherwise
indicated, all policies and limitations are considered at the time of purchase;
the sale of securities is not required in the event of a subsequent change in
valuation or other circumstances.

MONEY FUNDS

The Money Funds invest only in U.S. dollar-denominated short-term, money market
securities. They will only purchase obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or securities that are, or have
issuers that are,

- - rated by at least two nationally recognized statistical rating organizations
("NRSROs"), such as Standard & Poor's ("S&P") or Moody's Investors Service,
Inc. ("Moody's"), in one of the two highest rating categories for short-term
debt securities,

- - rated in one of the two highest categories for short-term debt by the only
NRSRO that has issued a rating, or

- - if not so rated, are determined to be of comparable quality.

A description of the rating systems of S&P and Moody's is contained in Appendix
A to this Prospectus and in the SAI. At the time of investment, no security
purchased by a Money Fund (except U.S. Government Securities subject to
repurchase agreements and variable rate demand notes) will have a maturity
exceeding 397 days, and each Money Fund's average portfolio maturity will not
exceed 90 days. The Money Funds will attempt to maintain a stable net asset
value ("NAV") of $1.00, but there can be no assurance that any Money Fund will
be able to do so.

MONEY MARKET FUND. To accomplish its objective, the Money Market Fund invests
solely in money market instruments that are selected from the following six
general categories:

- - U.S. Government securities;

- - short-term commercial notes (including asset-backed securities) issued
directly by U.S. and foreign businesses, banking institutions, financial
institutions (including brokerage, finance and insurance companies) and state
and local governments and municipalities to finance short-term cash needs;

- - obligations of U.S. and foreign banks with assets of more than $500 million;

- - securities issued by foreign governments, their agencies or instrumentalities
or by supranational entities;

- - short-term corporate obligations rated in one of the two highest rating
categories by Moody's or S&P; and

- - repurchase agreements.

TAX-EXEMPT MONEY MARKET FUND. The Tax-Exempt Money Market Fund invests
primarily in a diversified selection of Municipal Obligations, the income from
which is exempt from federal income tax. These obligations include fixed income
obligations issued by states, counties, cities or other governmental bodies that
generate income exempt from federal income tax. Short-term Municipal Obligations
may include, but are not limited to, tax anticipation notes, bond anticipation
notes, revenue anticipation notes and project notes, or other forms of
short-term municipal loans and obligations. Under normal market conditions, the
Fund will not invest more than 20% of its assets in obligations that pay
interest subject to alternative minimum tax ("AMT-Subject Bonds").

For temporary defensive purposes, the Fund may invest more than 20% of its
assets in instruments eligible for purchase by the Money Market Fund, which may
produce income that is not exempt from federal income taxes.

The Fund may also invest in variable rate demand obligations, stand-by
commitments, when-issued securities and forward commitments.

CALIFORNIA MONEY FUND. To accomplish its objective, the California Money Fund
invests in a portfolio of

35
<PAGE> 38

Municipal Obligations. It is a fundamental policy of the Fund to invest, under
normal market conditions, at least 80% of its total assets in Municipal
Obligations. The Fund normally invests at least 80% of its total assets in
Municipal Obligations issued by the State of California and its political
subdivisions and certain other governmental issuers (such as the Commonwealth of
Puerto Rico), which produce income that is exempt from California state personal
income tax. The Fund may also invest in AMT-Subject Bonds.

The Fund may also invest in variable rate demand obligations, stand-by
commitments, when-issued securities and forward commitments.

FIXED-INCOME FUNDS

SHORT TERM INCOME FUND. The Short Term Income Fund maintains a portfolio
duration of three years or less and a weighted average maturity of five years or
less. Duration is a measure that relates the price volatility of a security to
changes in interest rates. The duration of a debt security is the weighted
average term to maturity of the present value of future cash flows, including
coupon payments and principal repayments. Thus, duration involves WM Advisors'
judgment with respect to both interest rates and expected cash flows.

The Fund will invest substantially all of its assets in debt securities that, at
the time of purchase, are rated in one of the top four rating categories by one
or more NRSROs or, if unrated, are judged to be of comparable quality by the
Advisor ("investment grade" securities). All debt securities purchased by the
Fund will be investment grade at the time of purchase.

The Fund may invest in obligations issued or guaranteed by domestic and foreign
governments and government agencies and instrumentalities and in high-grade
corporate debt obligations, such as bonds, debentures, notes, equipment lease
and trust certificates, mortgage-backed securities, collateralized mortgage
obligations and asset-backed securities.

The Fund may invest up to 10% of its assets in foreign fixed-income securities,
primarily bonds of foreign governments or their political subdivisions, foreign
companies and supranational organizations, including non-U.S. dollar-denominated
securities and U.S. dollar-denominated debt securities issued by foreign issuers
and foreign branches of U.S. banks. Investment in foreign securities is subject
to special risks. The Fund may invest up to 5% of its assets in preferred stock.
The Fund may engage in certain options transactions, enter into financial
futures contracts and related options for the purpose of portfolio hedging and
enter into currency forwards or futures contracts and related options for the
purpose of currency hedging. The Fund may invest in certain illiquid
investments, such as privately placed obligations, including restricted
securities. The Fund may invest up to 10% of its assets in securities of
unaffiliated mutual funds. The Fund may borrow money or enter into reverse
repurchase agreements or dollar roll transactions in the aggregate up to 33 1/3%
of its total assets. The Fund may invest up to 25% of its total assets in
asset-backed securities, which represent a participation in, or are secured by
and payable from, a stream of payments generated by particular assets, most
often a pool of similar assets.

U.S. GOVERNMENT SECURITIES FUND. The U.S. Government Securities Fund invests
primarily in a selection of obligations of the U.S. Government and its agencies.
The Fund may also invest in collateralized mortgage obligations or repurchase
agreements which are secured by those types of obligations. It is a fundamental
policy of the Fund to invest only in U.S. Government securities, including
mortgage-backed securities and collateralized mortgage obligations and
repurchase agreements which are secured by U.S. Government Securities. The Fund
may borrow up to 5% of its total net assets for emergency, non-investment
purposes. The Fund may also enter into dollar roll transactions.

INCOME FUND. The Income Fund invests most of its assets in:

- - debt and convertible debt securities;

- - U.S. Government securities, including mortgage-backed securities issued by the
Government National Mortgage Association ("GNMA"), Federal National Mortgage
Association ("FNMA"), and Federal Home Loan Mortgage Corporation ("FHLMC") or
similar government agencies;

- - commercial mortgage-backed securities;

36
<PAGE> 39

- - obligations of U.S. banks that belong to the Federal Reserve System;

- - preferred stocks and convertible preferred stocks;

- - the highest grade commercial paper as rated by S&P or Moody's; and

- - deposits in U.S. banks.

The Fund may also invest in securities denominated in foreign currencies and
receive interest, dividends and sale proceeds in foreign currencies. The Fund
may engage in foreign currency exchange transactions for hedging purposes in
connection with the purchase and sale of foreign securities or to protect
against changes in the value of specific securities held by the Fund. It may
also purchase and sell currencies on a spot (i.e., cash) basis, enter into
forward contracts to purchase or sell foreign currencies at a future date, and
buy and sell foreign currency futures contracts. The Fund may borrow up to 5% of
its total net assets for emergency, non-investment purposes, and may enter into
dollar roll transactions. The Fund may purchase securities of issuers which deal
in real estate or securities which are secured by interests in real estate, and
it may acquire and dispose of real estate or interests in real estate acquired
through the exercise of its rights as a holder of debt obligations secured by
real estate or interests therein. The Fund may also purchase and sell interest
rate futures and options. The Fund may invest up to 35% of its assets in
lower-rated fixed-income securities (sometimes called "junk bonds").

HIGH YIELD FUND. The High Yield Fund invests, under normal market conditions,
at least 65% of its assets in a diversified portfolio of fixed income securities
(including debt securities, convertible securities and preferred stocks) rated
lower than BBB by S&P or Baa by Moody's or of equivalent quality as determined
by the Advisor. The remainder of the Fund's assets may be invested in any other
securities the Advisor believes are consistent with the Fund's objective. These
may include higher rated fixed-income securities, common stocks and other equity
securities. The Fund may also invest in securities of foreign issuers including
those located in developing or emerging countries, and engage in hedging
strategies involving options.

MUNICIPAL FUNDS

Each of the Municipal Funds and the California Money Fund, invests most of its
assets in Municipal Obligations. Current federal income tax laws limit the types
and volume of bonds qualifying for the federal income tax exemption of interest
which may affect the ability of a Fund to purchase sufficient amounts of
tax-exempt securities.

TAX-EXEMPT BOND FUND. The Tax-Exempt Bond Fund will invest at least 80% of its
assets in Municipal Obligations, including inverse floating rate obligations,
under normal market conditions.

The Fund specifically limits these investments to: municipal bonds, municipal
notes and securities of unaffiliated tax-exempt mutual funds. The Fund also may
invest up to 35% of its assets in lower-rated securities.

In adverse markets, the Fund may seek to protect its investment position by
investing up to 50% of its portfolio in taxable short-term investments such as:

- - U.S. Government securities;

- - commercial paper rated in the highest grade by either S&P or Moody's;

- - obligations of U.S. banks;

- - time or demand deposits in U.S. banks; and

- - repurchase agreements relating to municipal securities or any of the foregoing
taxable instruments.

Interest income from these investments that is distributed to you by the Fund
may be taxable.

The Fund may also purchase and sell interest rate futures and options. The Fund
may also invest in AMT-Subject Bonds, although, so long as its name includes the
words "tax-exempt" and the SEC so requires, those investments will be limited to
20% of the Fund's total assets.

CALIFORNIA MUNICIPAL FUND. The California Municipal Fund invests primarily in
intermediate- and long-term California municipal obligations which are Municipal
Obligations that generate interest which is exempt from California state
personal income tax. It is a fundamental policy of the Fund that, under normal
market conditions, at least 80% of its total assets will be invested in these
obligations. The Fund may also invest in AMT-Subject Bonds.

The Fund will invest primarily in investment grade Municipal Obligations. The
Fund may also invest in inverse floating rate obligations, which are generally

37
<PAGE> 40

more volatile than other types of Municipal Obligations.

The Fund may, under normal circumstances, invest up to 20% of its assets in

- - Municipal Obligations that are not exempt from California personal income tax;

- - short-term Municipal Obligations;

- - taxable cash equivalents, including short-term U.S. Government securities,
certificates of deposit and bankers' acceptances, commercial paper rated
Prime-1 by Moody's or A-1+ or A-1 by S&P, repurchase agreements (collectively
"Short-Term Instruments"); and

- - securities of money market mutual funds (subject to the limitations set forth
under "Common Investment Practices").

The Fund may, for temporary defensive purposes, invest in these securities
without limitation. Also, as a non-diversified investment company under the 1940
Act, the Fund may invest a larger portion of its assets in the securities of a
small number of issuers.

CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND. The California Insured
Intermediate Municipal Fund will invest primarily in insured intermediate-term
California Municipal Obligations. It is a fundamental policy of the Fund that it
will invest at least 80% of the value of its total assets in Insured California
Municipal Obligations (except when maintaining a temporary defensive position).
Under normal market conditions, the dollar-weighted average maturity of the
securities in which the Fund invests will be more than three years but less than
ten years. The maximum effective maturity (the maturity date without regard to
call provisions, except that for pooled single family mortgage securities
effective maturity is the average life of the underlying mortgage obligations)
of any Municipal Obligation in which the Fund invests will be fifteen years.

All of the Municipal Obligations in which the Fund invests, taking into account
any insurance, are investment grade securities. For more information, see "About
Bond Insurance" on the following page.

The Fund may invest without limitation in AMT-Subject Bonds.

Under normal market conditions, the Fund may invest up to 20% of its assets in

- - uninsured Municipal Obligations;

- - Municipal Obligations that are not exempt from California personal income tax;
and

- - short-term Municipal Obligations and taxable cash equivalents, including
Short-Term Instruments and securities of unaffiliated money market mutual
funds (subject to the limitations set forth under "Common Investment
Practices") and may, for temporary defensive purposes, invest in these
securities without limitation.

In addition, the Fund may invest in inverse floating rate obligations. The Fund
may engage in hedging transactions through the use of financial futures and
options thereon. It may also purchase and sell securities on a when-issued or
forward commitment basis, invest in mortgage-backed securities, enter into
repurchase agreements, invest in stand-by commitments and lend portfolio
securities. The Fund may invest in floating rate and variable rate obligations,
including participation interests therein (referred to collectively as "Hedging
Transactions").

FLORIDA INSURED MUNICIPAL FUND. The Florida Insured Municipal Fund will invest
primarily in insured, intermediate- and long-term Municipal Obligations issued
by the State of Florida and its political subdivisions. The Fund will invest
primarily in investment-grade Municipal Obligations. It is a fundamental policy
of the Fund that it will invest at least 80% of the value of its total assets
(except when maintaining a temporary defensive position) in insured Florida
Municipal Obligations. See "About Bond Insurance" on the following page. The
Fund may invest without limitation in AMT-Subject Bonds and up to 10% of its
total assets in the securities of unaffiliated money market mutual funds. The
Fund may also invest in inverse floating rate obligations.

The Fund may invest up to 20% in aggregate of its total assets in:

- - uninsured Municipal Obligations;

- - Municipal Obligations that are not exempt from Florida intangible personal
property tax; and

- - Short-Term Instruments and securities of unaffiliated money market mutual
funds and, for temporary defensive purposes, invest in these securities
without limitation.

Florida does not impose an income tax on individuals. Distributions of
investment income and capital gains

38
<PAGE> 41

by the Fund will be subject to Florida corporate income taxes. Florida imposes a
tax on intangible personal property owned by Florida residents. Based on a
ruling the Fund has received from the Florida Department of Revenue, if the
Fund's assets consist, on the last business day of the calendar year, solely of
assets exempt from Florida intangible personal property tax, shares of the Fund
owned by Florida residents will be exempt from Florida intangible personal
property tax. Assets exempt from Florida intangible personal property tax
include Florida Municipal Obligations; obligations of the U. S. Government or
its agencies; and cash.

ABOUT BOND INSURANCE. The insured Municipal Obligations in which the California
Insured Intermediate Municipal and Florida Insured Municipal Funds will invest
and the other Municipal Funds may invest are insured under insurance policies
that relate to the specific Municipal Obligation in question and that are issued
by an insurer having a claims-paying ability rated AAA by S&P or Aaa by Moody's.
This insurance is generally non-cancelable and will continue in force so long as
the Municipal Obligations are outstanding and the insurer remains in business.

The insured Municipal Obligations are insured as to the scheduled payment of all
installments of principal and interest as they fall due. The insurance covers
only credit risk and therefore does not guarantee the market value of the
obligations in a Fund's investment portfolio or a Fund's NAV. The Fund's NAV
will continue to fluctuate in response to fluctuations in interest rates. A
Fund's investment policy requiring investment in insured Municipal Obligations
will not affect the Fund's ability to hold its assets in cash or to invest in
escrow-secured and defeased bonds or in certain short-term tax-exempt
obligations, or affect its ability to invest in uninsured taxable obligations
for temporary or liquidity purposes or on a defensive basis.

EQUITY FUNDS

BOND & STOCK FUND. The Fund invests in a combination of equity and fixed-income
securities. Under normal market conditions, at least 25% of the Bond & Stock
Fund's assets will be invested in fixed-income securities, including preferred
stocks and that portion of the value of convertible securities which is not
attributable to a conversion feature. The Fund may invest in money market
instruments for temporary or defensive purposes. The Fund may invest in fixed-
income securities of any maturity, including mortgage-backed securities, U.S.
Government securities and asset-backed securities, and may also invest up to 35%
of its assets, in below investment grade bonds (sometimes called junk bonds).
The Fund may purchase or sell U.S. Government securities or collateralized
mortgage obligations on "when-issued" or "delayed-delivery" basis in an
aggregate of up to 20% of the market value of its total net assets. The Fund may
invest up to 25% of its assets in real estate investment trusts, known as
"REITs." The Fund may write (sell) covered call options. The Fund may invest up
to 25% of its assets in U.S. dollar-denominated securities of foreign issuers.

GROWTH & INCOME FUND. The Growth & Income Fund invests primarily in common
stocks. The Fund may also invest in money market instruments for temporary or
defensive purposes. To limit risk, repurchase agreements maturing in more than
seven days will not exceed 10% of the Fund's total assets. The Fund may invest
up to 25% of its assets in REITs. The Fund may invest in fixed-income securities
of any maturity, including mortgage-backed securities, and may invest up to 35%
of its assets in below investment grade fixed-income securities.

GROWTH FUND OF THE NORTHWEST. Under normal circumstances, at least 65% of the
Fund's total assets will be invested in the common stocks of companies whose
principal executive offices are located in the Northwest States of Alaska,
Idaho, Montana, Oregon and Washington.

The Fund is permitted to invest in money market instruments for temporary or
defensive purposes. The Fund may invest up to 25% of its assets in REITs, and
may write (sell) covered call options.

Because the Fund concentrates its investments in companies located or doing
business in the Northwest, the Fund is not intended as a complete investment
program, and could be adversely impacted by economic trends within the
five-state area.

GROWTH FUND. The Growth Fund invests primarily in common stocks believed to
have significant appreciation potential. The Fund also may invest in debt
securities, bonds, convertible bonds, preferred stock and convertible preferred
stock, including up to 35% of its assets in non-investment-grade debt
securities.

The Fund may invest up to 25% of its assets in foreign securities, usually
foreign common stocks, and up to

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5% of its assets in securities of companies in (or governments of) developing or
emerging countries (sometimes referred to as "emerging markets"). The Fund may
also engage in certain options transactions, enter into financial futures
contracts and related options for the purpose of portfolio hedging and enter
into currency forwards or futures contracts and related options for the purpose
of currency hedging.

MID CAP STOCK FUND. The Mid Cap Stock Fund invests primarily (normally at least
65% of its assets) in common stocks of companies with market capitalizations in
the range represented by companies included in the S&P Mid Cap 400 Index. The
Fund may also invest in money market instruments for temporary or defensive
purposes. To limit risk, repurchase agreements maturing in more than seven days
will not exceed 10% of the Fund's total assets. The Fund may invest up to 25% of
its assets in REITs. The Fund may invest in fixed-income securities of any
maturity, including mortgage-backed securities, and may invest up to 35% of its
assets in below investment grade fixed-income securities.

The Fund may purchase or sell U.S. Government securities or collateralized
mortgage obligations on a "when-issued" or "delayed-delivery" basis in an
aggregate up to 20% of the market value of its total net assets. The Fund may
write (sell) covered call options. The Fund may invest up to 25% of its assets
in U.S. dollar-denominated securities of foreign issuers.

SMALL CAP STOCK FUND. The Small Cap Stock Fund invests primarily in equity
securities of companies with market capitalization of less than $1.4 billion at
the time of purchase. In addition to common stock, the Fund's equity securities
may include convertible bonds, convertible preferred stock and warrants to
purchase common stock. The Fund may also invest in money market instruments for
temporary or defensive purposes. The Fund may invest up to 25% of its assets in
securities of foreign issuers and up to 5% of its assets in securities of
issuers located in developing or emerging countries. The Fund may invest up to
35% of its assets in non-investment-grade debt securities ("junk bonds") if the
Advisor believes that doing so will be consistent with the goal of capital
appreciation.

INTERNATIONAL GROWTH FUND. The International Growth Fund invests primarily in
equity securities of issuers located in foreign countries that the Fund's
sub-advisor believes present attractive investment opportunities. Criteria for
determining the appropriate distribution of investments among various countries
and regions include prospects for relative economic growth, expected levels of
inflation, government policies influencing business conditions, the outlook for
currency relationships and the range of investment opportunities available to
international investors. The relative strength or weakness of a particular
country's currency or economy may dictate whether securities of issuers located
in such country will be purchased or sold. The Fund may invest without limit in
the securities of issuers located in any one country (except as provided below
with respect to emerging markets countries). The Fund will emphasize established
companies, although it may invest in companies of varying sizes as measured by
assets, sales and capitalization.

The Fund invests in common stock and may invest in other securities with equity
characteristics, such as trust or limited partnership interests, preferred
stock, rights and warrants. The Fund may also invest in convertible securities.
The Fund invests in securities listed on foreign or domestic securities
exchanges and securities traded in foreign or domestic over-the-counter markets,
and may invest in restricted or unlisted securities.

The Fund intends to stay fully invested in the securities described above to the
extent practical. Fund assets may be invested in short-term debt instruments to
meet anticipated day-to-day operating expenses, and for temporary defensive
purposes. In addition, when the Fund experiences large cash inflows, it may hold
short-term investments until desirable equity securities become available. These
short-term instruments are generally rated A or higher by Moody's or S&P, or, if
unrated, of comparable quality in the opinion of the Fund's sub-advisor.

The Fund may invest up to 30% of its assets in the securities of companies in or
governments of developing or emerging markets, provided that no more than 5% of
the Fund's total assets are invested in any one emerging markets country. For
temporary defensive purposes, the Fund may invest a major portion of its assets
in securities of U.S. issuers. Furthermore, the Fund may invest up to 5% of its
total assets in investment grade corporate debt securities having maturities
longer than one year, including Euro-currency instruments and securities.

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STRATEGIC ASSET MANAGEMENT PORTFOLIOS

The Portfolios offer you the opportunity to pursue a variety of specially
constructed asset allocation strategies. The Portfolios are designed for
long-term investors seeking total return for tax-advantaged retirement and other
long-term investment or savings accounts.

In order to achieve its investment objective, each Portfolio typically allocates
its assets, within predetermined percentage ranges, among certain of the Funds.
Even so, the Portfolios may temporarily exceed one or more of the applicable
percentage limits for short periods. The percentages reflect the extent to which
each Portfolio will normally invest in the particular market segment represented
by each underlying Fund, and the varying degrees of potential investment risk
and reward represented by each Portfolio's investments in those market segments
and their corresponding Funds. The Advisor may alter these percentage ranges
when it deems appropriate. The assets of each Portfolio will be allocated among
the Funds in accordance with its investment objective, the Advisor's outlook for
the economy and the financial markets, and the relative market valuations of the
Funds.

In addition, in order to meet liquidity needs or for temporary defensive
purposes, each Portfolio may invest, without limit, directly in stock or bond
index futures and options thereon and the following short-term instruments:

- - short-term obligations of the U.S. Government, its agencies,
instrumentalities, authorities or political subdivisions;

- - other short-term debt securities rated A or higher by Moody's or S&P, or if
unrated, of comparable quality in the opinion of the Advisor;

- - commercial paper, including master notes;

- - bank obligations, including negotiable certificates of deposit, time deposits
and bankers' acceptances; and

- - repurchase agreements.

At the time a Portfolio invests in any commercial paper, bank obligations or
repurchase agreements, the issuer must have outstanding debt rated A or higher
by Moody's or S&P; the issuer's parent corporation, if any, must have
outstanding commercial paper rated Prime-1 by Moody's or A-1 by S&P; or, if no
such ratings are available, the investment must be of comparable quality in the
opinion of the Advisor. In addition to purchasing shares of the Funds, a
Portfolio may use futures contracts and options in order to remain effectively
fully invested in proportions consistent with the Advisor's current asset
allocation strategy for the Portfolio. Specifically, each Portfolio may enter
into futures contracts and options thereon, provided that the aggregate deposits
required on these contracts do not exceed 5% of the Portfolio's total assets. A
Portfolio may also use futures contracts and options for bona fide hedging
transactions. Futures contracts and options may also be used to reallocate the
Portfolio's assets among asset categories while minimizing transaction costs, to
maintain cash reserves while simulating full investment, to facilitate trading,
to seek higher investment returns, or to simulate full investment when a futures
contract is priced attractively or is otherwise considered more advantageous
than the underlying security or index. As a fundamental policy, which may not be
changed without shareholder vote, each Portfolio will concentrate its
investments in shares of the Funds.

COMMON INVESTMENT PRACTICES

The next several pages contain more detailed information about types of
securities in which the Funds may invest, and strategies which the Advisor or
the respective sub-advisor may employ in pursuit of that Fund's investment
objective and a summary of risks and restrictions associated with these
securities and investment practices. For more information, see the SAI.

BORROWING. The Funds may borrow money from banks solely for temporary or
emergency purposes, subject to various limitations. If a Fund borrows money, its
share price and yield may be subject to greater fluctuation until the borrowing
is paid off. For the California Money, Short Term Income, California Municipal,
California Insured Intermediate Municipal, Florida Insured Municipal, Growth,
International Growth, Mid Cap Stock and Small Cap Stock Funds, and for the
Portfolios, such borrowings may not exceed 30% of total assets. The Money
Market, Tax-Exempt Money Market, U.S. Government Securities, Income, High Yield,
Tax-Exempt Bond, Bond & Stock, Growth & Income and Growth Fund of the Northwest
may borrow up to 5% of their total assets for emergency purposes. In addition,
the Money Market and Tax-Exempt Money Market Funds may borrow up

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to one-third of their total assets to meet redemption requests. Each of the
foregoing percentage limitations on borrowings is a fundamental policy of the
respective Funds and Portfolios.

The Income, Short Term Income and U.S. Government Securities Funds may enter
into DOLLAR ROLLS. A Fund enters into a DOLLAR ROLL by selling securities for
delivery in the current month and simultaneously contracting to repurchase,
typically in 30 or 60 days, substantially similar (same type, coupon and
maturity) securities on a specified future date. This may be considered
borrowing from the counterparty and may produce similar leveraging effects. The
proceeds of the initial sale of securities in the dollar roll transactions, for
example, may be used to purchase long-term securities which will be held during
the roll period. To the extent that the proceeds of the initial sale of
securities are invested, the Fund will be subject to market risk on those
securities as well as similar risk with respect to the securities the Fund is
required to repurchase.

Each of the Short Term Income, California Municipal, California Insured
Intermediate Municipal, Florida Insured Municipal, Growth, International Growth,
Mid Cap Stock and Small Cap Stock Funds may engage in REVERSE REPURCHASE
AGREEMENTS. Reverse repurchase agreements involve the risk that the market value
of the securities sold by a Fund may decline below the repurchase price of the
securities and, if the proceeds from the reverse repurchase agreement are
invested in securities, that the market value of the securities bought may
decline at the same time there is a decline in the market value of the
securities sold (and required to be repurchased).

FIXED-INCOME SECURITIES. The market value of fixed-income securities held by a
Fund and, consequently, the value of the Fund's shares can be expected to vary
inversely to changes in prevailing interest rates. You should recognize that, in
periods of declining interest rates, the Fund's yield will tend to be somewhat
higher than prevailing market rates and, in periods of rising interest rates,
the Fund's yield will tend to be somewhat lower. Also, when interest rates are
falling, any net inflow of money to the Fund will likely be invested in
instruments producing lower yields than the balance of its assets, thereby
reducing current yield. In periods of rising interest rates, the opposite can be
expected to occur. The prices of longer maturity securities are also subject to
greater market fluctuations as a result of changes in interest rates. In
addition, obligations purchased by a Fund may be subject to the risk of default.
Fixed-Income securities, including Municipal Obligations, rated in the lower end
of the investment-grade category (Baa or BBB) and lower-rated securities may
have speculative characteristics and may be more sensitive to economic changes
and changes in the financial condition of their issuers.

The fixed-income securities in which the Funds may invest include ZERO-COUPON
SECURITIES, which make no payments of interest or principal until maturity.
Because these securities avoid the need to make current interest payments, they
may involve greater credit risks than other fixed-income securities.

FLOATING RATE, INVERSE FLOATING RATE AND VARIABLE RATE INVESTMENTS. The
Municipal Funds, Fixed-Income Funds and the Bond & Stock and Growth & Income
Funds may purchase floating rate, inverse floating rate and variable rate
obligations, including participation interests therein and assignments thereof.

The Money Funds may purchase floating rate and variable rate obligations,
including participation interests therein.

The Fixed-Income Funds may purchase mortgage-backed securities that are floating
rate, inverse floating rate and variable rate obligations. Municipal Obligations
purchased by the Municipal Funds may include floating rate, inverse floating
rate and variable rate obligations, including variable rate demand notes issued
by industrial development authorities and other governmental entities, as well
as participation interests therein. Although variable rate demand notes are
frequently not rated by credit rating agencies, a Fund may purchase unrated
notes that are determined by the Advisor or the Fund's sub-advisor to be of
comparable quality at the time of purchase to rated instruments that may be
purchased by the Fund. The absence of an active secondary market could make it
difficult for a Fund to dispose of these securities in the event the issuer of
the note were to default on its payment obligations, and the Fund could, for
this or other reasons, suffer a loss as a result of the default.

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securities or an index of short-term tax-exempt securities. The interest rates
on inverse floating-rate obligations or residual interest bonds will typically
decline as short-term market interest rates increase and increase as short-term
market rates decline. These securities have the effect of providing a degree of
investment leverage. They will generally respond to changes in market interest
rates more rapidly than fixed-rate long-term securities (typically twice as
fast). As a result, the market values of inverse floating-rate obligations and
residual interest bonds will generally be more volatile than the market values
of fixed-rate tax-exempt securities.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS AND CURRENCY MANAGEMENT. The Equity
Funds and Fixed-Income Funds (with the exception of the U.S. Government
Securities, Bond & Stock, Growth & Income Funds and Growth Fund of the
Northwest) may, subject to the investment limitations stated elsewhere in this
Prospectus and the SAI, engage in foreign currency exchange transactions. Funds
that buy and sell securities denominated in currencies other than the U.S.
dollar, and receive interest, dividends and sale proceeds in currencies other
than the U.S. dollar, may enter into foreign currency exchange transactions to
convert to and from different foreign currencies and to convert foreign
currencies to and from the U.S. dollar. These Funds either enter into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or use forward contracts to purchase or sell
foreign currencies.

These Funds also may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or changes in
foreign currency exchange rates that would adversely affect a portfolio position
or an anticipated portfolio position. These transactions tend to limit any
potential gain that might be realized should the value of the hedged currency
increase. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of these securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain. In addition, when the Advisor or a Fund's
sub-advisor believes that the currency of a specific country may deteriorate
against another currency, it may enter into a forward contract to sell the less
attractive currency and buy the more attractive one. The amount in question
could be less than or equal to the value of the Fund's securities denominated in
the less attractive currency. The Fund may also enter into a forward contract to
sell a currency which is linked to a currency or currencies in which some or all
of the Fund's portfolio securities are or could be denominated, and to buy U.S.
dollars. These practices are referred to as "cross hedging" and "proxy hedging."

Forward currency exchange contracts are agreements to exchange one currency for
another - for example, to exchange a certain amount of U.S. dollars for a
certain amount of Japanese yen - at a future date and specified price. Because
there is a risk of loss to the Fund if the other party does not complete the
transaction, the Advisor or the Fund's sub-advisor will enter into forward
currency exchange contracts only with parties approved by the Trusts' Board of
Trustees or persons acting pursuant to their direction.

Each of the Funds other than the Money Funds (with the exception of the U.S.
Government Securities, Bond & Stock, Growth & Income Funds and Growth Fund of
the Northwest) may invest in securities which are indexed to certain specific
foreign currency exchange rates. These securities expose the Funds to the risk
of significant changes in rates of exchange between the U.S. dollar and any
foreign currency to which an exchange rate-related security is linked. In
addition, there is no assurance that sufficient trading interest to create a
liquid secondary market will exist for a particular exchange rate-related
security due to conditions in the debt and foreign currency markets. Illiquidity
in the forward foreign exchange market and the high volatility of the foreign
exchange market may from time to time combine to make it difficult to sell an
exchange rate-related security prior to maturity without incurring a significant
loss.

While the foregoing actions are intended to protect the Fund from adverse
currency movements, there is a risk that currency movements involved will not be
properly anticipated, and there can be no assurance that such transactions will
be available or that the Funds will use such transactions even if they are
available. Use of currency hedging techniques may also be limited by

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<PAGE> 46

the need to protect the status of the Fund as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code").

FOREIGN INVESTMENTS. The Money Market, Bond & Stock, Growth & Income Funds and
Growth Fund of the Northwest may invest in securities of foreign issuers if such
securities are denominated in U.S. dollars. The High Yield, Income, Short Term
Income, Small Cap Stock, Mid Cap Stock and International Growth Funds may invest
in both U.S. dollar denominated and non-U.S. dollar denominated foreign
securities. There are certain risks involved in investing in foreign securities,
including those resulting from

- - fluctuations in currency exchange rates,

- - devaluation of currencies,

- - future political or economic developments and the possible imposition of
currency exchange blockages or other foreign governmental laws or
restrictions,

- - reduced availability of public information concerning issuers, and

- - the fact that foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to domestic
companies.

Moreover, securities of many foreign companies may be less liquid and their
prices more volatile than those of securities of comparable domestic companies.
In addition, there is the possibility of expropriation, nationalization,
confiscatory taxation and limitations on the use or removal of funds or other
assets of the Funds, including the withholding of dividends. The risks
associated with foreign securities are generally greater for securities of
issuers in emerging markets.

In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains well below
that of the New York Stock Exchange. Accordingly, the Funds' foreign investments
may be less liquid and their prices may be more volatile than comparable
investments in securities of U.S. companies. Moreover, the settlement periods
for foreign securities, which are often longer than those for securities of U.S.
issuers, may affect portfolio liquidity. In buying and selling securities on
foreign exchanges, the Funds normally pay fixed commissions that are generally
higher than the negotiated commissions charged in the United States. In
addition, there is generally less governmental supervision and regulation of
securities exchanges, brokers and issuers in foreign countries than in the
United States. Foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the value of the Funds' net assets as
measured in U.S. dollars will be affected favorably or unfavorably by changes in
exchange rates.

The Equity Funds, the Short Term Income, Income and High Yield Funds may invest
in securities of foreign issuers directly or in the form of AMERICAN DEPOSITARY
RECEIPTS ("ADRs"), EUROPEAN DEPOSITARY RECEIPTS ("EDRs"), GLOBAL DEPOSITARY
RECEIPTS ("GDRs") or other similar securities representing securities of foreign
issuers. These securities may not be denominated in the same currency as the
securities they represent. ADRs are receipts typically issued by a United States
bank or trust company evidencing ownership of the underlying foreign securities.
EDRs, which are sometimes referred to as Continental Depositary Receipts
("CDRs"), are receipts issued by a European financial institution evidencing a
similar arrangement. Generally, ADRs, in registered form, are designed for use
in the United States securities markets, and EDRs, in bearer form, are designed
for use in European securities markets.

GEOGRAPHIC CONCENTRATION. Potential investors in the Growth Fund of the
Northwest, the Municipal Funds (other than the Tax-Exempt Bond Fund) and the
California Money Fund should consider the possibly greater risk arising from the
geographic concentration of their investments, as well as the current and past
financial condition of California and Florida municipal issuers in the case of
the Municipal Funds. In addition to factors affecting the state or regional
economy, certain California and Florida constitutional amendments, legislative
measures, executive orders, administrative regulations, court decisions and
voter initiatives could result in certain adverse consequences affecting
California and Florida municipal obligations, respectively. See the SAI for a
more detailed description of these risks.

HOLDINGS IN OTHER INVESTMENT COMPANIES. When the Advisor or a Fund's
sub-advisor believes that it would be beneficial to the Fund, each of the
Tax-Exempt Money Market, California Money, California Insured Intermediate
Municipal, California Municipal, Florida Insured Municipal, Short Term Income,
Tax-Exempt

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Bond, Small Cap Stock, Mid Cap Stock, Growth and International Growth Funds may
invest up to 10% of its assets in securities of mutual funds that are not
affiliated with the Advisor or the Fund's sub-advisor. As a shareholder in any
such mutual fund, the Fund will bear its ratable share of the mutual fund's
expenses, including management fees, and will remain subject to the Fund's
advisory and administration fees with respect to the assets so invested. In
addition, the Growth Fund may invest Fund assets in money market funds
affiliated with Janus (its sub-advisor), provided that Janus remits to the Fund
the amount of any investment advisory and administrative services fees paid to
Janus as the investment manager of the money market fund.

ILLIQUID SECURITIES AND RESTRICTED SECURITIES. Up to 10% of the net assets of
each Money Fund and up to 15% of the net assets of every other Fund may be
invested in securities that are not readily marketable. Such illiquid securities
may include:

- - repurchase agreements with maturities greater than seven calendar days;

- - time deposits maturing in more than seven calendar days;

- - to the extent a liquid secondary market does not exist for the instruments,
futures contracts and options thereon;

- - certain over-the-counter options, as described in the SAI;

- - certain variable rate demand notes having a demand period of more than seven
days; and

- - securities which are restricted under federal securities laws with respect to
disposition (excluding certain Rule 144A securities, as described below).

Securities which may be resold pursuant to Rule 144A under the Securities Act of
1933, as amended, will not be included for the purposes of these restrictions,
so long as such securities meet liquidity guidelines established by the Trusts'
Board of Trustees.

Each of the Funds may purchase RESTRICTED SECURITIES (provided such securities
are, in the case of the Money Market, Tax-Exempt Money Market, Income, U.S.
Government Securities, Tax-Exempt Bond, Bond & Stock, Growth & Income and Growth
Fund of the Northwest Funds, eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended). Although recent and ongoing developments in
the securities markets have resulted in greater trading of restricted
securities, making restricted securities, in many instances, more liquid than
they once were considered to be, investing in restricted securities could
increase the level of illiquidity of the portfolio securities of a Fund. This
could make it more difficult for a Fund to fulfill shareholder redemption orders
on a timely basis. If a Fund were required to sell these securities on short
notice, it might be unable to obtain fair market value.

LENDING OF SECURITIES. Certain of the Funds may lend portfolio securities to
brokers and other financial organizations. The Short Term Income, Growth, Small
Cap Stock, and International Growth Funds each may lend portfolio securities up
to 20% of total assets. The Money Market, U.S. Government Securities, Income,
High Yield, Bond & Stock, and Growth & Income Funds and the Growth Fund of the
Northwest Mid Cap Stock may lend portfolio securities up to 33% of total assets.
These transactions involve a risk of loss to the Fund if the counterparty should
fail to return such securities to the Fund upon demand.

LOWER-RATED SECURITIES. The Income, Tax-Exempt Bond, Bond & Stock, Small Cap
Stock, and Mid Cap Stock Funds may each invest up to 35% of their total assets,
and the Growth and Growth and Income Funds may invest up to 20% of its total
assets, in non-investment grade debt securities, sometimes referred to as "junk
bonds." The High Yield Fund may invest all of its assets in these securities,
and will generally invest at least 65% of its assets in them.

Non-investment-grade debt securities usually entail greater risk (including the
possibility of default or bankruptcy of the issuers), generally involve greater
price volatility and risk of principal and income, and may be less liquid than
higher-rated securities. Both price volatility and illiquidity may make it
difficult for a Fund to value or to sell certain of these securities under
certain market conditions. These securities are often considered to be
speculative and involve greater risk of default or price changes due to changes
in the issuer's creditworthiness. The market prices of these securities may
fluctuate more than higher-rated securities and may decline significantly in
periods of general economic difficulty, which may follow periods of rising
interest rates. For further information, see Appendix A to this Prospectus.

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MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The California Insured
Intermediate Municipal, California Municipal, Florida Insured Municipal, Short
Term Income, Income, U.S. Government Securities, Bond & Stock, Growth & Income
Mid Cap Stock, Small Cap Stock and International Growth Funds may invest in
GOVERNMENT MORTGAGE-BACKED SECURITIES issued or guaranteed by GNMA, FNMA or
FHLMC.

To the extent that a Fund purchases mortgage-backed securities at a premium,
mortgage foreclosures and payments and prepayments of principal (which may be
made at any time without penalty) will tend to result in the loss of that
premium. The yield of a Fund may be affected by reinvestment of prepayments at
higher or lower rates than the original investment. In addition, like other debt
securities, the value of mortgage-backed securities will generally fluctuate in
response to market interest rates.

The U.S. Government guarantees the timely payment of interest and principal for
GNMA certificates. However, the guarantees do not extend to the securities'
yield or value, which are likely to vary inversely with fluctuations in interest
rates. Also, the guarantees do not extend to the yield or value of the Fund's
shares.

Government stripped mortgage-based securities represent beneficial ownership
interests in either principal distributions (principal-only securities or "PO
strips") or interest distributions (interest-only securities or "IO strips")
from government mortgage-backed securities. Investing in government stripped
mortgage-backed securities involves the risks normally associated with investing
in mortgage-backed securities issued by government entities. In addition, the
yields on PO and IO strips are extremely sensitive to prepayments on the
underlying mortgage loans. If a decline in the level of prevailing interest
rates results in a higher than anticipated rate of principal prepayment,
distributions of principal will be accelerated, thereby reducing the yield to
maturity on IO strips and increasing the yield to maturity on PO strips.
Conversely, if an increase in the level of prevailing interest rates results in
a rate of principal prepayments lower than anticipated, distributions of
principal will be deferred, thereby increasing the yield to maturity on IO
strips and decreasing the yield to maturity on PO strips. Sufficiently high
prepayment rates could result in the Fund losing some or all of its initial
investment in an IO strip. The Funds will acquire government stripped mortgage-
backed securities only if a liquid secondary market for the securities exists at
the time of acquisition. However, there can be no assurance that the Funds will
be able to effect a trade of a government stripped mortgage-backed security at a
time when it wishes to do so.

In addition, the Short Term Income, Income, Bond & Stock, Mid Cap Stock and
Growth & Income Funds may invest in commercial mortgage-backed securities, which
are similar to government mortgage-backed securities, except that they are not
issued or guaranteed by governmental entities. Commercial mortgage-backed
securities include collateralized mortgage obligations and real estate mortgage
investment conduits ("REMICs"). While commercial mortgage-backed securities are
generally structured with one or more types of credit enhancement, and often
have high credit ratings, they lack the credit status of a governmental agency
or instrumentality.

The Money Market, Tax-Exempt Money Market, Short Term Income, Income, Bond &
Stock, Mid Cap Stock, Small Cap Stock and High Yield Funds may purchase
ASSET-BACKED SECURITIES. These Funds will not invest more than 10% of their
total assets in asset-backed securities, except that the Short Term Income Fund
may invest up to 25% of its total assets in such securities. Asset-backed
securities are structured like mortgage-backed securities, but instead of
mortgage loans or interests in mortgage loans, the underlying assets may include
such items as motor vehicle installment sales or installment loan contracts,
leases of various types of real and personal property, including home equity
loans, and receivables from credit card agreements. The ability of an issuer of
asset-backed securities to enforce its security interest in the underlying
assets may be limited.

MUNICIPAL OBLIGATIONS, LEASES AND AMT-SUBJECT BONDS. The two principal
classifications of municipal bonds are "general obligation" and "revenue" bonds.
General obligation bonds are secured by the issuer's pledge of its full faith
and credit, with either limited or unlimited taxing power for the payment of
principal and interest. Revenue bonds are not supported by the issuer's full
taxing authority. Generally, they are payable only from the revenues of a
particular facility, a class of facilities, or the proceeds of another specific
revenue source.

The Tax-Exempt Money Market, California Money and California Insured
Intermediate Municipal Funds

46
<PAGE> 49

may acquire participations in lease obligations or installment purchase contract
obligations (collectively, "lease obligations") of municipal authorities or
entities. Lease obligations do not constitute general obligations of the
municipality for which the municipality's taxing power is pledged. Certain of
these lease obligations contain "non-appropriation" clauses, which provide that
the municipality has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose on a
yearly basis. In addition to the "non-appropriation" risk, these securities
represent a relatively new type of financing that has not yet developed the
depth of marketability associated with more conventional bonds. In the case of a
"non-appropriation" lease, the Fund's ability to recover under the lease in the
event of non-appropriation or default will be limited solely to the repossession
of the leased property, and in any event, foreclosure of that property might
prove difficult.

"AMT-Subject Bonds" are Municipal Obligations issued to finance certain "private
activities," such as bonds used to finance airports, housing projects, student
loan programs and water and sewer projects. Interest on AMT-Subject Bonds is a
specific tax preference item for purposes of the federal individual and
corporate alternative minimum taxes. See "Dividends, Capital Gains and Taxes"
for a discussion of the tax consequences of investing in AMT-Subject Bonds.

Current federal income tax laws limit the types and volume of bonds qualifying
for the federal income tax exemption of interest, which may have an effect upon
the ability of the Fund to purchase sufficient amounts of tax-exempt securities.

REAL ESTATE INVESTMENT TRUSTS. The Income, High Yield, Bond & Stock, Growth &
Income, Mid Cap Stock Funds and the Growth Fund of the Northwest may invest in
real estate investment trusts, known as "REITs." REITs involve certain unique
risks in addition to those risks associated with investing in the real estate
industry in general (such as possible declines in the value of real estate, lack
of availability of mortgage funds or extended vacancies of property). Equity
REITs may be affected by changes in the value of the underlying property owned
by the REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, are
subject to heavy cash flow dependency, risks of default by borrowers, and
self-liquidation. REITs are also subject to the possibilities of failing to
qualify for tax-free pass-through of income under the Code, and failing to
maintain their exemptions from registration under the 1940 Act.

Investment in REITs involves risks similar to those associated with investing in
small capitalization companies. REITs may have limited financial resources, may
trade less frequently and in a limited volume and may be subject to more abrupt
or erratic price movements than larger company securities.

REPURCHASE AGREEMENTS. All of the Funds may invest in repurchase agreements,
which are purchases of underlying debt obligations from financial institutions,
such as banks and broker-dealers, subject to the seller's agreement to
repurchase the obligations at an established time and price. Repurchase
agreements can be regarded as loans to the seller, collateralized by the
securities that are the subject of the agreement. Default by the seller would
expose the Fund to possible loss because of adverse market action or delay in
connection with the disposition of the underlying obligations. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
obligations, the Fund may be delayed or limited in its ability to sell the
collateral. The Tax-Exempt Money Market and California Money Funds' investments
in repurchase agreements are limited by their restrictions on investment in
taxable instruments. Pursuant to an exemptive order granted by the SEC, the
Funds may transfer daily uninvested cash balances into one or more joint trading
accounts. Assets in the joint trading accounts are invested in repurchase
agreements or other money market instruments, and the proceeds are allocated to
the participating funds on a pro rata basis.

STAND-BY COMMITMENTS. The California Money, Tax-Exempt Money Market and the
Municipal Funds may acquire "stand-by commitments" with respect to Municipal
Obligations held in their portfolios. Under a stand-by commitment, a dealer
agrees to purchase, at a Fund's option, specified Municipal Obligations at a
specified price. A Fund may pay for stand-by commitments either separately in
cash or by paying a higher price for the securities acquired with the
commitment, thus increasing the cost of the securities and reducing the yield
otherwise available from them. The Funds will acquire stand-by commitments
solely to facilitate portfolio liquidity and do not intend to exercise their
rights thereunder for trading purposes.

47
<PAGE> 50

STRATEGIC TRANSACTIONS. Subject to the investment limitations and restrictions
stated elsewhere in this Prospectus and the SAI, each of the Funds and
Portfolios except the Money Funds may utilize various investment strategies as
described below to hedge various market risks, to manage the effective maturity
or duration of fixed-income securities or for other bona fide hedging purposes.
Utilizing these investment strategies, the Fund or Portfolio may purchase and
sell, exchange-listed and over-the-counter put and call options on securities,
equity and fixed-income indices and other financial instruments. It may also
purchase and sell financial futures contracts and options thereon, enter into
various interest rate transactions such as swaps, caps, floors or collars, and
enter into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or currency
futures. The Funds may write (sell) covered call options as well. A call option
is "covered" if the Fund owns the security underlying the option it has written
or it maintains enough cash, cash equivalents or liquid securities to purchase
the underlying security. All the above are collectively referred to as
"Strategic Transactions."

Strategic Transactions may be used

- - to attempt to protect against possible changes in the market value of
securities held in, or to be purchased for, the Fund's portfolio resulting
from securities markets or currency exchange rate fluctuations,

- - to protect the Fund's unrealized gains in the value of its portfolio
securities,

- - to facilitate the sale of such securities for investment purposes,

- - to manage the effective maturity or duration of the Fund's portfolio, or

- - to establish a position in the derivatives markets as a temporary substitute
for purchasing or selling particular securities.

Some Strategic Transactions may also be used to seek potentially higher returns.
Any or all of these investment techniques may be used at any time, as the use of
any Strategic Transaction is a function of numerous variables including market
conditions.

The use of Strategic Transactions involves special considerations and risks; for
example,

- - the ability of the Fund to utilize Strategic Transactions successfully will
depend on the ability of the Advisor or the sub-advisor to predict pertinent
market movements,

- - the risk that the other party to a Strategic Transaction will fail to meet its
obligations to the Fund,

- - the risk that the Fund will be unable to close out a Strategic Transaction at
a time when it would otherwise do so, due to the illiquidity of the Strategic
Transaction, and

- - the risk of imperfect correlation, or even no correlation, between price
movements of Strategic Transactions and price movements of the related
portfolio positions.

Strategic Transactions can reduce opportunity for gain by offsetting the
positive effect of favorable price movements in the related portfolio positions.

U.S. GOVERNMENT SECURITIES. All of the Funds may invest in U.S. Government
securities, which include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes and bonds) and obligations issued or guaranteed by U.S.
Government agencies or instrumentalities. Some obligations issued or guaranteed
by agencies or instrumentalities of the U.S. Government are backed by the full
faith and credit of the U.S. Government (such as GNMA bonds), others are backed
only by the right of the issuer to borrow from the U.S. Treasury (such as
securities of Federal Home Loan Banks) and still others are backed only by the
credit of the instrumentality (such as FNMA and FHLMC bonds).

WHEN-ISSUED SECURITIES, FORWARD COMMITMENTS AND DELAYED-DELIVERY
TRANSACTIONS. In order to secure yields or prices deemed advantageous at the
time, the Funds may purchase or sell securities on a when-issued or a
delayed-delivery basis. Due to fluctuations in the value of securities purchased
on a when-issued or a delayed-delivery basis, the yields obtained on such
securities may be higher or lower than the yields available in the market on the
dates when the securities are actually delivered to the Fund. Similarly, the
sale of securities for delayed-delivery can involve the risk that the prices
available in the market when delivery is made may actually be higher than those
obtained in the transaction itself. The California

48
<PAGE> 51

Money Fund and the Municipal Funds may purchase Municipal Obligations offered on
a "forward commitment" basis.

When-issued Municipal Obligations may include bonds purchased on a "when, as and
if issued" basis, under which the issuance of the securities depends on the
occurrence of a subsequent event, such as approval of a proposed financing by
appropriate municipal authorities. No when-issued or forward commitments will be
made by the California Money Fund or any Municipal Fund if, as a result, more
than 20% of the value of the Fund's total assets would be committed to such
transactions. A significant commitment of a Fund's assets to the purchase of
securities on a "when, as and if issued" basis may increase the volatility of
the Fund's NAV.

PORTFOLIO TRANSACTIONS AND TURNOVER. Each Fund's turnover rate varies from year
to year, depending on market conditions and investment strategies. High turnover
rates increase transaction costs and may increase taxable capital gains.
Historical portfolio turnover rates for each Fund are shown under "Financial
Highlights" in this Prospectus. The Advisor and the sub-advisors will not
consider a Funds portfolio turnover rate to be a limiting factor in making
investment decisions consistent with the Fund's investment objectives and
policies.

49
<PAGE> 52

WAYS TO SET UP YOUR ACCOUNT

- - Individual or Joint Account
Individual accounts are owned by one person. Two types of joint accounts
(having two or more owners) can be opened:

1) in a "joint tenancy" account, the surviving owner(s) automatically
receive(s) the shares of any owner(s) who die(s); and

2) in a "tenants in common" account, the heir(s) of any deceased owner
receive(s) such owner's shares, rather than the surviving owners of the joint
account.

- - Retirement
Retirement plans protect investment income and capital gains from current
taxes. Contributions to these accounts may be tax deductible. Retirement
accounts require special applications and typically have lower minimums.

- TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS("IRAs") If you are of legal age
and under 70 1/2 years old, you and your spouse may each invest up to
$2,000 of earned income in a Traditional IRA. Depending upon your income
level and other factors, all or some of your contribution may be tax
deductible. Contributions for the prior year must be received by April 15
of the current year. For further information, read IRS publication 590 or
consult your tax or investment advisor.

- ROTH IRAs If you are of legal age with AGI not exceeding $110,000 (or
$160,000 if married and filing jointly) you and your spouse may each
protect up to $2,000 of earned income on a non-deductible basis (subject to
certain limitations for single persons with AGI equal to or greater than
$95,000 and married persons who file jointly with AGI equal to or greater
than $150,000) per tax year from certain tax effects. Contributions for the
prior year must be received by April 15 of the current year. For further
information, read IRS publication 590 or consult your tax or investment
advisor.

- ROLLOVER IRAs You may transfer money from certain employer-sponsored
retirement plans and keep your tax benefits (often happens when you change
employers).

- SIMPLIFIED EMPLOYEE PENSION PLANS ("SEP-IRAs") If you own a small business
or are self-employed, you and your eligible employees could get many of the
same advantages as a Keogh, but with fewer administrative requirements.

- - Gifts or Transfers to a Minor Child
("UGMA" or "UTMA")

You can give money to a child and obtain certain tax benefits. Depending on
state laws, you can set up a custodial account under the Uniform Gifts to
Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). Each account
may only have one custodian and one minor.

- - Trust
You can use a Trust for many purposes, including charitable contributions and
providing a regular income for a child until a certain age. The trust must be
established before an account can be opened.

- - Corporation or Other Organization
Corporations, associations, partnerships, institutions, or other groups may
invest for many purposes.

50
<PAGE> 53

HOW CAN I INVEST IN THE FUNDS
AND PORTFOLIOS?

<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT: TO ADD TO AN ACCOUNT:
(MINIMUM $1,000 PER FUND*) (MINIMUM $50 PER FUND**)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - By Phone -- 800-222-5852 Exchange from another Fund or Exchange from another Fund or
Portfolio account with the same Portfolio account with the same
registration, including name, registration, including name,
address, and taxpayer ID number address, and taxpayer ID
(social security number for an number. If you have previously
individual). established bank information
for electronic funds transfer,
Call WM Shareholder Services at you may purchase additional
800-222-5852. (5:00 a.m. to shares by phone.
6:00 p.m., Pacific Time/8:00
a.m. to 9:00 p.m., Eastern Call WM Shareholder Services at
Time, Monday through Friday and 800-222-5852
6:00 a.m. to 3:00 p.m., Pacific
Time/9:00 a.m. to 6:00 p.m.,
Eastern Time, on Saturdays)
- ---------------------------------------------------------------------------------------------------------
- - By Mail Complete and sign the Make your check payable to the
application. Make your check or WM Group of Funds. Any check
negotiable bank draft payable (not payable to WM Group of
to the WM Group of Funds. Any Funds) may be rejected.
check (not payable to WM Group Indicate your account number on
of Funds) may be rejected.*** your check. Include the "next
investment" stub from your
Mail the completed application previous account statement.
form and check to: Mail the check and stub to the
address printed on your account
THE WM GROUP OF FUNDS statement.***
P.O. BOX 9757
PROVIDENCE, RI 02940-9757 Exchange by mail: call
800-222-5852 for instructions
- ---------------------------------------------------------------------------------------------------------
- - By Wire 1) Telephone WM Shareholder Instruct your bank/financial
Services for an application institution to wire Federal
form and instructions. Funds as described at left
under paragraph 2.
2) Instruct your bank to wire
Federal Funds exactly as
follows:
BOSTON SAFE DEPOSIT AND TRUST
BOSTON, MA
ABA# 011-001234
FOR CREDIT TO:
THE WM GROUP OF FUNDS
ACCOUNT #167053
(FUND NAME AND CLASS OF SHARES)
(CUSTOMER'S NAME)
(CUSTOMER'S SOCIAL SECURITY
NUMBER)
3) Mail the completed
application form to:
THE WM GROUP OF FUNDS
P.O. BOX 9757
PROVIDENCE, RI 02940-9757
</TABLE>

51
<PAGE> 54
HOW CAN I INVEST IN THE FUNDS
AND PORTFOLIOS? (CONT.)

<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT:
(MINIMUM $50 FOR AUTOMATIC TO ADD TO AN ACCOUNT:
INVESTMENT PLANS) (MINIMUM $50 per fund**)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Automatic Investment Plan 1) Obtain and complete an Pre-authorized periodic
application form. (weekly, bi-monthly, or
(Minimum New Account amount monthly) investments will be
$50+) 2) Attach a voided check or processed automatically.
deposit slip from the bank
account you would like the
investments transferred from
and indicate either the day of
the week or day(s) of the month
when the purchase would occur.
3) Mail the application and
check to the address listed
above.***
- ---------------------------------------------------------------------------------------------------------
</TABLE>

* $10,000 for each Portfolio and $2,000 for IRA accounts investing in a
Portfolio.

** $100 for each Portfolio.

*** Payment of redemption proceeds for shares purchased by check, negotiable
bank draft or by Automated Clearing House transfer may be delayed for up to
15 days after purchase. See page 57 for additional information.

+ $1,000 for the Portfolios.

52
<PAGE> 55

WHICH CLASS OF SHARES IS BEST FOR ME?

This prospectus offers you a choice of two classes of fund shares: Class A and
Class B. The next several pages will expand upon the "Fees and Expenses" section
(pages 31 - 34) to help you determine which class of shares is best for you.
This will depend upon a number of factors, including the amount you plan to
invest and how long you plan to hold your shares.

CLASS A SHARES

The offering price for Class A shares of the Non-Money Funds is the NAV next
calculated after receipt of a properly completed purchase order, plus an initial
sales charge as shown in the table below. Sales charges may be reduced or waived
as discussed following the table. The final column in each table indicates what
dealers receive for selling Class A shares.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
-Fixed-Income Funds
(other than Short Term Income Fund)
-Municipal Funds
-Income and Flexible Income
Portfolios
------------------------------------------------------------------------------------
REALLOWED
SALES CHARGE TO DEALERS
------------------------------------------------------------------------------------
Percentage Percentage of Percentage
of Offering Net Amount of Offering
Purchase of Class A Shares Price Invested Price
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 4.50% 4.71% 4.00%
------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.00 4.17 3.50
------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.50 3.63 3.00
------------------------------------------------------------------------------------
$250,000 but less than $500,000 2.50 2.56 2.00
------------------------------------------------------------------------------------
$500,000 but less than $1,000,000 2.00 2.04 1.75
------------------------------------------------------------------------------------
$1,000,000 or more* .00 .00 .00
------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------

<CAPTION>
- ------------------------------------------- -----------------------------------------------------

-Equity Funds
-Strategic Growth,
Conservative Growth and
Balanced Portfolios
---------------------------------- -------------------------------------------------
REALLOWED
SALES CHARGE TO DEALERS
---------------------------------- -------------------------------------------------
Percentage Percentage of Percentage
of Offering Net Amount of Offering
Purchase of Class A Shares Price Invested Price
---------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.50% 5.82% 4.75%
------------------------------------------------------------------------------------
$50,000 but less than $100,000 4.75 4.99 4.00
------------------------------------------------------------------------------------
$100,000 but less than $250,000 3.75 3.90 3.00
------------------------------------------------------------------------------------
$250,000 but less than $500,000 3.00 3.09 2.50
------------------------------------------------------------------------------------
$500,000 but less than $1,000,000 2.00 2.04 1.75
------------------------------------------------------------------------------------
$1,000,000 or more* .00 .00 .00
------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
-Short Term Income Fund
------------------------------------------------------------------------------------
REALLOWED
SALES CHARGE TO DEALERS
------------------------------------------------------------------------------------
Percentage Percentage of Percentage
of Offering Net Amount of Offering
Purchase of Class A Shares Price Invested Price
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 3.50% 3.63% 3.00%
------------------------------------------------------------------------------------
$50,000 but less than $100,000 3.00 3.09 2.50
------------------------------------------------------------------------------------
$100,000 but less than $250,000 2.50 2.56 2.00
------------------------------------------------------------------------------------
$250,000 but less than $500,000 2.25 2.30 2.00
------------------------------------------------------------------------------------
$500,000 but less than $1,000,000 2.00 2.04 1.75
------------------------------------------------------------------------------------
$1,000,000 or more* .00 .00 .00
------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------

</TABLE>

* See "net asset value purchases" below.

Example: An investor considers putting $1,000 into an Equity Fund's Class A
shares. Based on the first column in the above table, 5.50% of the $1,000 would
pay for a sales charge. The charge would be $55.00, which is 5.82% of the net
investment of $945.00, as the next column shows. The dealer selling the shares
would be paid $47.50 of the $55.00, which is 4.75% of $1,000, as the last column
shows.
53
<PAGE> 56

CUMULATIVE DISCOUNT. This allows your current purchases to qualify for the
foregoing discounts by including the value of shares of the Funds and Portfolios
that were purchased subject to an initial or contingent deferred sales charge.
The discount will be based on current market value. An individual, his or her
spouse and/or minor children and trustees purchasing for single fiduciary
accounts are eligible for this discount. It is the responsibility of the
shareholder at the time of purchase to inform WM Group of Funds that the
cumulative discount applies.

LETTER OF INTENT. This discount is for purchases made over an extended period.
It provides you with a cumulative discount on the same basis as explained in the
previous paragraph if the following conditions are met: Purchases of Class A
shares must be made within a 13-month period that begins no earlier than 90 days
before the submission of a letter of intent from the investor to the Funds. For
more information about this discount, please contact Shareholder Services or
your Investment Representative.

REINVESTMENT. You can reinvest redemption proceeds of Class A shares that were
subject to a sales charge when first purchased in other Class A shares within
120 days without incurring another initial sales charge. You can also reinvest
any redemption proceeds of Class B shares that were subject to a contingent
deferred sales charge in Class A shares within 120 days without incurring an
initial sales charge. It is the responsibility of the shareholder at the time of
purchase to inform WM Group of Funds that the 120-day reinvestment option
applies.

NET ASSET VALUE PURCHASES. There is no initial sales charge on Class A
purchases of $1 million or more, but such purchases are generally subject to a
contingent deferred sales charge of 1.00% if you redeem them during the first
year after purchase or .50% if you redeem them during the second year after
purchase.

Qualified employee benefit plans that have more than 100 participants investing
in the plan or that have more than $500,000 invested in the Funds and Portfolios
may purchase shares without an initial sales charge. However, a contingent
deferred sales charge of 1% may be imposed on the amount that was invested
through such a plan in Class A shares and that is redeemed (1) if, within the
first two years after the plan's initial investment in the Funds or Portfolios,
the named fiduciary of the plan withdraws the plan from investing in the Funds
and Portfolios in a manner that causes all shares held by the plan's
participants to be redeemed; or (2) by a plan participant within two years of
the plan participant's purchase of such Class A shares. The contingent deferred
sales charge will be waived on redemptions in connection with certain
involuntary distributions, including distributions arising out of the death or
post-purchase disability of a shareholder (including one who owns the shares as
joint tenant).

Class A shares may be purchased at net asset value, by officers, directors and
employees of the Advisor or its affiliates, or companies which have entered into
selling agreements with the Distributor, and to children, step-children, and
parents of such individuals. The purchase must be for investment purposes only
and may not be resold other than through redemption by the Fund or Portfolio.
The Funds and Portfolios may also offer their shares at net asset value to
certain retirement plans; to investors who purchase shares with the proceeds of
redemptions of shares of other mutual funds advised by WM Advisors or its
affiliates within five business days of such redemptions; and to brokers,
dealers or registered investment advisors who have entered into arrangements
with the Distributor providing specifically for the shares to be used in
particular investment products made available to their clients for which they
may charge a separate fee. No sales charge will be assessed on a purchase by any
other investment company in connection with the combination of such company with
the Trust by merger, acquisition of assets or otherwise. The Distributor will
pay authorized dealers commissions on certain net asset value purchases as
described in the SAI.

EACH FUND AND PORTFOLIO RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES OF
ANY CLASS OF ANY FUND OR PORTFOLIO AT ANY TIME. Each Fund and Portfolio also
reserves the right to reject any specific purchase order, including purchases by
exchange.

CONSULT AN INVESTMENT REPRESENTATIVE OR SEE THE SAI IF YOU THINK YOU MAY QUALIFY
FOR ANY OF THESE PURCHASE PLANS. YOU MUST NOTIFY THE FUND OR PORTFOLIO AT THE
TIME OF PURCHASE WHENEVER A REDUCED SALES CHARGE OR NET ASSET VALUE PURCHASE
APPLIES.

CLASS B SHARES

Class B shares are offered at the NAV next calculated after receipt of a
properly completed purchase order,

54
<PAGE> 57

without an initial sales charge. The entire amount of the purchase price is
invested in the Fund selected. However, Class B shares have higher distribution
and service fees than Class A shares for eight years. Also, if you redeem Class
B shares within five years of purchase (four years in the case of Class B shares
of the Short Term Income Fund), you generally must pay a contingent deferred
sales charge.

The proceeds from any contingent deferred sales charges are paid to the
Distributor to defray expenses for providing distribution services for Class B
shares. Examples of such expenses include compensation to salespeople and
selected dealers. The Distributor currently pays authorized dealers commissions
of 4.00% of the price of Class B shares sold by them (3.00% for Class B shares
of the Short Term Income Fund).

CONTINGENT DEFERRED SALES CHARGE (CDSC). Class B shares redeemed within five
years of purchase are subject to a contingent deferred sales charge according to
the following schedule. Class B shares purchased by exchange will be subject to
a contingent deferred sales charge using the schedule of the Fund originally
purchased. Shares purchased through reinvestment of dividends or capital gain
distributions are not subject to a contingent deferred sales charge.

Class B shares of all Funds (except for the Short Term Income Fund) and Class B
shares of all Portfolios:

<TABLE>
<CAPTION>
YEAR OF
REDEMPTION Contingent
AFTER PURCHASE Deferred Sales Charge
- -------------------------------------------------------------------
<S> <C>
First....................................... 5.00%
Second...................................... 4.00%
Third....................................... 3.00%
Fourth...................................... 2.00%
Fifth....................................... 1.00%
Sixth and following......................... 0.00%
</TABLE>

Class B shares of the Short Term Income Fund:

<TABLE>
<CAPTION>
YEAR OF
REDEMPTION Contingent
AFTER PURCHASE Deferred Sales Charge
- -------------------------------------------------------------------
<S> <C>
First..................................... 4.00%
Second.................................... 3.00%
Third..................................... 2.00%
Fourth.................................... 1.00%
Fifth and following....................... 0.00%
</TABLE>

Class B shares of certain Funds purchased prior to March 20, 1998, may be
subject to a different contingent deferred sales charge schedule, as described
in the SAI.

The contingent deferred sales charge is calculated by applying the above
percentages to the lesser of (1) the NAV of the redeemed shares at the time they
were purchased or (2) the NAV of the redeemed shares at the time of redemption.
This means that no contingent deferred sales charge will be charged on any NAV
increases above the initial purchase price. Shares are redeemed in the order
that results in the lowest possible rate being charged. Accordingly, they will
be redeemed first from shares purchased through reinvested dividends or capital
gain distributions and then in the order of purchase.

Here is an example:

An investor purchases 100 Class B shares at $10 per share -- for a total cost of
$1,000. In the second year after the purchase, the NAV has risen to $12 per
share, and the investor has acquired 10 more shares through dividend
reinvestment.

At that time, the investor decides to make the first redemption. The transaction
includes 50 shares at $12 per share -- for a total of $600.

The first 10 shares to be redeemed will not be subject to any charge because of
the 10 shares received from dividend reinvestment.

As for the other 40 shares, the charge will be applied only to the original cost
of $10 per share. The NAV increase of $2 per share will not be considered. As a
result, $400 of the redemption proceeds (40 X $10) will be charged a rate of 4%,
which is the second-year rate shown in the table above. The resulting sales
charge will be 4% X $400, which will be $16.

The contingent deferred sales charge may be waived for redemptions of Class B
shares under these circumstances:

- - Following the death or post-purchase disability of a shareholder, as defined
in Section 72(m)(7) of the Code;

- - In connection with distributions (other than transfers of assets) from an IRA
or other retirement plan made to shareholders over age 59 1/2 (70 1/2 in the
case of Class B shares of certain Funds purchased prior to March 20, 1998 as
described in the SAI);

- - According to a systematic withdrawal plan -- but limited to 12% annually of
the value of the Fund at the time the systematic withdrawal plan is
established; and

55
<PAGE> 58

- - In connection with the involuntary liquidation by the Fund or Portfolio of a
shareholder's account such as described under "How to Sell Shares."

YOU MUST NOTIFY THE FUND OR PORTFOLIO WHENEVER YOU ARE ENTITLED TO A WAIVER OR
REIMBURSEMENT OF CDSC.

CONVERSION FEATURE. Class B shares that remain outstanding for eight years will
generally convert to Class A shares of the same Fund or Portfolio based on the
relative NAVs at the time of conversion.

DISTRIBUTION PLANS

Each of the Funds has adopted distribution plans, pursuant to Rule 12b-1 under
the 1940 Act, applicable to Class A and Class B and shares of the Fund (each, a
"Rule 12b-1 Plan"), respectively. The Tax-Exempt Money Market and California
Money Funds currently offer only Class A shares. Under the applicable Rule 12b-1
Plans, WM Funds Distributor, Inc., referred to as the Distributor in this
Prospectus, receives a service fee at an annual rate of 0.25% of the average
daily net assets of each class. 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.

The Distributor may, from time to time, pay to other dealers, in connection with
retail sales or the distribution of shares of a Fund or Portfolio, material
compensation in the form of merchandise or trips. Salespersons, including
representatives of WM Financial Services, Inc. (a subsidiary of Washington
Mutual), and any other person entitled to receive any compensation for selling
or servicing Fund or Portfolio shares may receive different compensation with
respect to one particular class of shares over another, and may receive
additional compensation or other incentives for selling Fund or Portfolio
shares.

DISTRIBUTION OF INCOME AND CAPITAL GAINS

The Funds and Portfolios distribute dividends from net investment income (which
is essentially interest and dividends earned from owning securities, minus
expenses). They also make capital gain distributions if realized gains from the
sale of securities exceed realized losses. The amount of dividends of net
investment income and distributions of net realized long- and short-term capital
gains payable to shareholders will be determined separately for each Fund or
Portfolio. Dividends from the net investment income of the Money, Fixed-Income
and Municipal Funds and the Balanced, Flexible Income and Income Portfolios will
normally be declared daily and paid monthly. Dividends from the net investment
income of the Bond & Stock and Growth & Income Funds and the Conservative Growth
Portfolio will normally be declared and paid quarterly. Dividends from the net
investment income of the Growth Fund and the Strategic Growth Portfolio will
normally be declared and paid semiannually. Dividends from the net investment
income of the Growth Fund of the Northwest and the Mid Cap Stock, Small Cap
Stock and International Growth Funds will normally be declared and paid
annually. Except as otherwise specified, the Funds and Portfolios distribute
capital gains, if any, at least annually, normally in December.

You have three choices regarding what you do with dividends and capital gain
distributions. You can make your choice at the time of your initial purchase or
by contacting the Funds' offices or your investment representative. The options
include:

AUTOMATIC REINVESTMENT. This procedure is automatically effective unless you
choose another option. All dividends and capital gain distributions are
reinvested into additional shares of the Fund or Portfolio.

REINVESTMENT OF DIVIDENDS IN ANOTHER FUND OR PORTFOLIO. Income dividends may be
automatically invested in the same class of shares of another Fund or Portfolio,
provided that Fund or Portfolio is available for sale in your state of
residence.

CASH PAYMENT OF ALL DISTRIBUTIONS. All dividends and capital gain distributions
are deposited to your pre-authorized bank account or paid by check.

Reinvestments of income dividends and capital gain distributions are made at the
closing NAV on the day dividends or distributions are deducted from the Fund's
assets.

If you've chosen to receive dividends or capital gain distributions in cash and
your check is returned as undeliverable, the Funds and Portfolios reserve the
right (but are not obligated) to reinvest your check at the then-current NAV and
to automatically reinvest subsequent dividends and capital gain distributions in
your account. The Funds and Portfolios may also automatically reinvest dividends
or distributions of $10 or less.

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<PAGE> 59

HOW CAN I SELL SHARES?

You may redeem shares at any time in the following ways. The price paid per
share will be the NAV next calculated after receipt of a properly completed
redemption request (less any applicable CDSC).

TELEPHONE. You may authorize telephone transactions on your account
application. Provided you have pre-authorized these transactions, you may redeem
or exchange shares by telephoning 800-222-5852. Telephone transaction privileges
may be restricted and generally, redemptions will not be allowed for amounts
totalling more than $50,000 per fund in a given day. You may also request these
transactions through your investment representative. Proceeds may be directed to
a pre-authorized bank or broker account or to the address of record for the
account.

It may be difficult to reach the Trusts' offices by telephone during periods of
unusual economic or market activity. Please be persistent if this occurs. The
Funds' and Portfolios' transfer agent is committed to extending its 5:00 a.m. to
6:00 p.m. Pacific time business hours during such periods.

WRITTEN REQUEST. You may also redeem shares by writing the Trusts' offices.
Written requests, including requests for redemptions exceeding $50,000, may
require a signature guarantee, as described below, and the return of any
outstanding share certificates. Changes in pre-authorized redemption
instructions or your account registration may also require signature guarantees
of all registered owners. For your protection, the signature(s) must be
guaranteed by an eligible guarantor institutions which includes banks, credit
unions, broker dealers, national securities exchanges, savings institutions as
well as medallion signature guarantee.

PROMPT PAYMENT. Payment normally will be made on the next business day after
redemption, but no later than seven days after the transaction, unless you
recently purchased Fund shares by check or Automated Clearing House transfer. In
that case, redemption proceeds may be delayed for up to 15 days after the
purchase transaction, to allow for the collection of funds. Under unusual
circumstance, the Fund may suspend redemptions or postpone payment for seven
days as permitted by federal securities laws. Redemption proceeds will be sent
by check or Automated Clearing House transfer to your bank account without
charge. Wire redemption proceeds may be subject to a $10 fee. The receiving bank
may also charge a fee.

SYSTEMATIC WITHDRAWAL PLAN. Shareholders may choose to receive specific cash
withdrawals of at least $50 on a periodic basis. A $5,000 minimum balance in the
applicable Fund or $10,000 in the applicable Portfolio is required to establish
a systematic withdrawal plan (the minimum balance requirement is waived for IRA
accounts). Shares of the Fund or Portfolio will be redeemed to provide the
requested payment. Naturally, withdrawals that continually exceed dividend
income and capital gains will eventually exhaust the account. Class B
shareholders may use a systematic withdrawal plan to redeem up to 12% of the
Fund beginning balance annually, without incurring a contingent deferred sales
charge. The beginning balance is the Fund balance at the time the systematic
withdrawal plan is established.

OTHER CONSIDERATIONS. It is costly to maintain small accounts. Accordingly, an
account may be closed after 60 days' written notice if the value in an
individual Fund or Portfolio falls below a minimum (currently $10,000 for the
Portfolios and $1,000 for the Funds or, in the case of an IRA account, $2,000
for the Portfolios and $1,000 for the Funds). Accounts will not be closed if
they fall below the minimum solely because of declines in market value. Shares
will be redeemed at the next calculated NAV, less any applicable CDSC, on the
day the account is closed. To prevent an account closure, you may purchase
shares to bring your account balance above the minimum or initiate an automatic
investment plan during the 60-day grace period.

IRAs AND OTHER TAX-SHELTERED RETIREMENT PLANS

Shares of the Funds or Portfolios may be appropriate for many retirement plans,
including IRAs. Retirement plan contributions are tax deductible in some cases,
and earnings compound on a tax-deferred and, in some cases, on a tax-free basis
until withdrawn.

Information about IRAs and other qualified retirement plans is available from
the Trusts' offices or your Investment Representative.

HOW CAN I EXCHANGE MY SHARES?

You may exchange shares of any of the Funds or Portfolios for shares of the same
class of any other of

57
<PAGE> 60

the Funds or Portfolios. Exchanges of shares are sales and may result in a gain
or loss for income tax purposes.

Exchanges are made at the relative NAVs of the shares being exchanged. No
additional sales charge will be incurred when exchanging shares from a Fund
which imposes an initial or contingent deferred sales charge. Any contingent
deferred sales charge on the subsequent sale of shares acquired by exchange will
be based on the contingent deferred sales charge schedule of the Fund from which
the shares were initially purchased. Shares exchanged from a Money Fund will be
subject to the acquired Fund's sales charge unless the shares given in exchange
were previously exchanged from a Fund that imposes an initial or contingent
deferred sales charge.

All exchanges are subject to the minimum investment requirements of the Fund or
Portfolio being acquired and to its availability for sale in your state of
residence. You may arrange for automatic monthly exchanges. The Funds and
Portfolios reserve the right to refuse any order for the purchase of shares,
including those by exchange. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to a Fund or
Portfolio and, consequently, may be disallowed.

DIVIDENDS, CAPITAL GAINS AND TAXES

Each Fund and Portfolio will distribute substantially all of its net investment
income and net realized capital gain on a current basis.

You are responsible for federal income tax (and state and local income taxes, if
applicable) on dividends and capital gain distributions. This is true whether
such dividends or distributions are paid in cash or reinvested in additional
shares.

Generally, dividends paid by the Funds and Portfolios from interest, dividends
or net short-term capital gains will be taxed as ordinary income. Distributions
designated by the Fund or Portfolio as deriving from net gains on securities
held for more than one year are taxable as such (generally at a 20% tax rate),
regardless of how long you have held your shares.

A dividend or distribution made shortly after the purchase of shares of a Fund
or Portfolio by a shareholder, although in effect a return of capital to that
particular shareholder, would be taxable to him or her as described above.

Because of tax law requirements, you must provide the Trusts an accurate and
certified taxpayer identification number (for individuals, a Social Security
number) to avoid the 31% "back-up" withholding tax.

Early in each calendar year each Fund and Portfolio will notify you of the
amount and tax status of distributions paid to you for the preceding year.

A Portfolio's use of a fund-of-funds structure could affect the amount, timing
and character of distributions to shareholders. See "Taxes" in the Statement of
Additional Information.

Any gain resulting from the sale or exchange of your shares will generally also
be subject to tax. You should consult your tax advisor for more information on
your own tax situation, including possible foreign, state and local taxes.

ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE MUNICIPAL FUNDS, TAX-EXEMPT
MONEY MARKET FUND, CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND AND CALIFORNIA
MONEY FUNDS. Distributions designated as "exempt-interest dividends" by any of
the Municipal Funds, the Tax-Exempt Money Market Fund or the California Money
Fund are not generally subject to federal income tax. However, if you receive
social security or railroad retirement benefits, you should consult your tax
adviser to determine what effect, if any, an investment in the fund may have on
the federal taxation of your benefits. In addition, an investment in the Fund
may result in liability for federal alternative minimum tax, both for individual
and corporate shareholders.

ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE FLORIDA INSURED MUNICIPAL,
CALIFORNIA MONEY, CALIFORNIA MUNICIPAL, AND CALIFORNIA INSURED INTERMEDIATE
FUNDS. It is expected that shares of the Florida Insured Municipal Fund held by
a Florida resident will be exempt from the Florida intangible personal property
tax and that a portion of the dividends paid by the California Money Fund,
California Municipal Fund and the California Insured Intermediate Municipal Fund
will be exempt from California State personal income tax, but not from
California State franchise tax or California State corporate income tax.
Corporate taxpayers should consult their tax advisor concerning the Florida and
California state tax treatment of investments in these funds.

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<PAGE> 61

ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE INTERNATIONAL GROWTH
FUND. The International Growth Fund's investments in foreign securities may be
subject to foreign withholding taxes. In that case, the Fund's yield on those
securities would be decreased. Shareholders may be entitled to claim a credit or
deduction with respect to foreign taxes. In addition, the Fund's investments in
foreign securities or foreign currencies may increase or accelerate the Fund's
recognition of ordinary income and may affect the timing or amount of the Fund's
distributions.

THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT A COMPLETE DESCRIPTION OF
THE FEDERAL, STATE OR LOCAL TAX CONSEQUENCES OF INVESTING IN THE FUNDS OR
PORTFOLIOS. YOU SHOULD CONSULT YOUR TAX ADVISOR BEFORE INVESTING IN THE FUNDS OR
PORTFOLIOS.

ORGANIZATION

HOW NAV IS DETERMINED

Investment securities and other assets are valued primarily on the basis of
market quotations or, if quotations are not readily available, by a method that
the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates. As a result, changes in the value of those
currencies in relation to the U.S. dollar may affect the Funds' NAV. Because
foreign markets may be open at different times than the New York Stock Exchange,
the value of the Funds' shares may change on days when shareholders are not able
to buy or sell them. If events materially affecting the values of the Funds'
foreign investments occur between the closed foreign markets and the close of
regular trading on the New York Stock Exchange, those investments may be valued
at their fair value. The NAVs are determined at the end of each business day of
the New York Stock Exchange or at 1:00 p.m. Pacific time, whichever is earlier.

ADVISOR AND SUB-ADVISORS

The Funds and Portfolios are managed by WM Advisors, Inc., which is referred to
as the Advisor in this Prospectus. The Advisor's address is 1201 Third Avenue,
22nd Floor, Seattle, Washington 98101. The Advisor has delegated portfolio
management responsibilities in respect of the Growth, International Growth,
California Municipal, Florida Insured Municipal, California Insured Intermediate
Municipal and Tax-Exempt Bond Funds, to a sub-advisor. Each Fund and Portfolio
may, to the extent permitted under the 1940 Act, place portfolio transactions
with (and pay brokerage commissions to) affiliates of the Advisor and the
sub-advisors to the Funds indicated below. For more information see the SAI.

The Advisor has been in the business of investment management since 1944. Its
responsibilities include formulating each Fund's and Portfolio's investment
policies (subject to the terms of this Prospectus), analyzing economic trends,
directing and evaluating the investment services provided by the sub-advisors
and monitoring each Fund's or Portfolio's investment performance and reporting
to the Board of Trustees, as well as providing certain administrative services
to the Funds and Portfolios. In connection with its service as investment
advisor to each Fund and Portfolio, the Advisor may engage one or more
sub-advisors to provide investment advisory services to any of the Funds or
Portfolios and may change or eliminate any such sub-advisor if it deems such
action to be in the best interests of a Fund or Portfolio and its shareholders.
Where the Advisor has not delegated such duties to a sub-advisor, it is
responsible for managing the investment and reinvestment of the Fund's or
Portfolio's assets. The Advisor is an indirect wholly owned subsidiary of
Washington Mutual, Inc. ("Washington Mutual"), a publicly owned financial
services company.

The following organizations, under the supervision of the Advisor, act as
sub-advisors to the Funds indicated below, and are responsible for continuously
reviewing, supervising and administering such Funds' respective investment
programs:

JANUS, 100 Fillmore Street, Denver, Colorado 80206, acts as sub-advisor to the
Growth Fund. Janus is an indirectly majority owned subsidiary of Kansas City
Southern Industries, Inc., a publicly traded holding company whose primary
subsidiaries are engaged in transportation, information processing and financial
services. Janus has been providing investment advice to mutual funds or other
large institutional clients

59
<PAGE> 62

since 1970. As of December 31, 1999, Janus' assets under management were in
excess of $248 billion.

VAN KAMPEN, One Parkview Plaza, Oakbrook, Illinois 60181, acts as sub-advisor to
the California Municipal, California Insured Intermediate Municipal, Florida
Insured Municipal Funds and Tax-Exempt Bond Funds. Van Kampen is an indirect
wholly owned subsidiary of Morgan Stanley, Dean Witter, Discover & Co., a
publicly held global financial services company. Van Kampen provides investment
advice to a wide variety of individual, institutional and investment company
clients and, together with its affiliates, had aggregate assets under management
or supervision, as of December 31, 1999, of more than $64 billion.

CAPITAL GUARDIAN TRUST COMPANY, 333 South Hope Street, Los Angeles, CA 90071,
acts as sub-advisor to the International Growth Fund. Capital Guardian is a
wholly-owned subsidiary of Capital Group International, Inc. ("CGI"), which is
in turn owned by The Capital Group Companies, Inc. ("CGC"). CGC is also the
parent company of several other subsidiaries, all of which directly or
indirectly provide investment management services. CGC maintains investment
management relationships with several other organizations around the world.
Capital Guardian had aggregate assets under management of approximately $123
billion as of December 31, 1999.

INDIVIDUAL FUND MANAGERS

Gary J. Pokrzywinski, CFA, Vice President and Senior Portfolio Manager of the
Advisor, is primarily responsible for the day-to-day management of the High
Yield and Income Funds. He has managed these Funds since March 1998 and 1992,
respectively, and has been employed by the Advisor since 1992. Craig V. Sosey,
Vice President and Senior Portfolio Manager of the Advisor, has been primarily
responsible for the day-to-day management of the U.S. Government Securities and
Short Term Income Funds since November 1998 and January 2000, respectively. He
has been employed by the Advisor since May 1998. Prior to that, he was the
Assistant Treasurer of California Federal Bank, where he worked for over eight
years. Randall L. Yoakum, CFA, First Vice President and Chief Investment Officer
of the Advisor and Stephen Spencer, CFA, Vice President and Portfolio Manager
are primarily responsible for the day-to-day management of the Growth & Income
and Mid Cap Stock Funds. Mr. Yoakum has been Portfolio Manager of the Growth &
Income Fund since February 1999 and co-manager of the Mid Cap Stock Fund since
March 2000. Mr. Yoakum also leads a team of investment professionals in managing
each of the Portfolios and has done so since January 2000. Prior to assuming
these duties, Mr. Yoakum was Chief Investment Officer for D.A. Davison & Co.
(DADCO) for 2 years. From September 1994 until he joined DADCO, Mr. Yoakum was
the Senior Vice President and Managing Director of Portfolio Management for
Boatmen's Trust Company, and, prior to that, Mr. Yoakum was Senior Vice
President and Chief Equity Officer for Composite Research & Management Co. (the
predecessor to WM Advisors, Inc.) for 8 years. Mr. Spencer has been employed by
the Advisor since September 1999 and has been co-manager of the Growth & Income
Fund since January 2000 and of the Mid Cap Stock Fund since March 2000. Prior to
that, Mr. Spencer was a portfolio manager and Senior Equity Analyst for Smoot,
Miller, Cheney and Co. since 1985. Jeffrey D. Huffman, CFA, Vice President and
Senior Portfolio Manager of the Advisor, has had primary responsibility for the
day-to-day management of the Bond & Stock Fund since 1995. Prior to 1995, Mr.
Huffman was Vice President of Trust Investments for First Interstate Bank since
1994 and a portfolio manager at Safeco since 1992. David W. Simpson, CFA, Vice
President and Senior Portfolio Manager of the Advisor, has had primary
responsibility for the day-to-day management of the Growth Fund of the Northwest
since 1993. Mr. Simpson has been employed by the Advisor since 1993. Linda C.
Walk, CFA, is Vice President and Senior Portfolio Manager of the Advisor, has
been primarily responsible for the day-to-day management of the Small Cap Stock
Fund since January 2000. She shared that responsibility with Mr. Simpson from
March 1998 to January 2000. Prior to 1997, Ms. Walk was a Portfolio Manager at
Laird Norton Trust Company since 1996, a Valuation Consultant for Ernst & Young
LLP since 1994, and a Valuation Consultant for Management Advising Services
since 1990. Audrey S. Quaye, CFA, CPA, Vice President and Portfolio Manager of
the Advisor, is primarily responsible for the day-to-day management of the Money
Market, Tax-Exempt Money Market and California Money Funds. She has managed such
Funds since 1997, 1997, and March 1998, respectively, and has been employed by
the Advisor since 1996. Prior to 1996, Ms. Quaye worked at the Benham

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<PAGE> 63

Group as a municipal credit analyst and the California Health Facilities
Financing Authority as a Program Officer.

Warren B. Lammert has had primary responsibility for the day-to-day management
of the Growth Fund since its inception. Mr. Lammert is a Vice President of
Janus. Mr. Lammert joined Janus in 1987, and his duties at Janus include the
management of separate equity accounts.

Since May 1992, Joseph A. Piraro, Vice President of Van Kampen, has had primary
responsibility for the day-to-day management of the California Municipal Fund.
Mr. Piraro has been employed by Van Kampen since 1992. Mr. Piraro has also had
primary responsibility for the day-to-day management of the California Insured
Intermediate Municipal Fund since the Fund's inception. Thomas M. Byron, Vice
President of Van Kampen, has had primary responsibility for the day-to-day
management of the Florida Insured Municipal Fund since January 1997 and the
Tax-Exempt Bond Fund since January 1, 1999. Mr. Byron has been at Van Kampen for
over 15 years and prior to taking over responsibility for managing the Fund, Mr.
Byron was Head Buyer and Manager of Van Kampen's Unit Investment Trust desk.

Capital Guardian has been sub-advisor since June 23, 1999 for the International
Growth Fund. Capital Guardian employs a team of portfolio managers each of whom
can be considered to have primary responsibility for the day-to-day management
of the portion of the Fund assigned to him or her. They are: David I. Fisher,
Harmut Giesecke, Richard N. Havas, Nancy J. Kyle, John McIlwraith, Robert Ronus,
Lionel M. Sauvage, Nilly Sikorsky and Rudolf M. Staehelin. Mr. Fisher is
Chairman of the Board of Capital Group International, Inc. and Capital Guardian
as well as Vice Chairman of Capital International, Inc., Emerging Markets Growth
Fund, Inc. and also a director of the Capital Group Companies, Inc. He has been
employed by the Capital Group organization for 29 years. Mr. Giesecke is
Chairman of the Board of Capital Group's Japanese investment management
subsidiary, Capital International K.K., and Managing Director, Asia-Pacific,
Capital Group International, Inc. Mr. Giesecke, who has been with the Capital
Group organization for 26 years, is also a Senior Vice President and a Director
of Capital International, Inc. as well as a Senior Vice President of Capital
International Research, Inc. and a Vice President of Emerging Markets Growth
Fund. Mr. Havas, who has been with the Capital Group organization for 13 years,
is a Senior Vice President and portfolio manager for Capital Guardian and
Capital International Limited as well as a Senior Vice President and Director of
Capital Guardian (Canada), Inc. Ms. Kyle, who has been with the Capital Group
organization for 8 years, is a Senior Vice President and Director of Capital
Guardian. Ms. Kyle is also President and a Director of Capital Guardian
(Canada), Inc. and a Vice President of Emerging Markets Growth Fund. Mr.
McIlwraith is a Senior Vice President and a Director of Capital Guardian as well
as a Director and Senior Vice President of Capital International Limited. Mr.
McIlwraith is also an international equity portfolio manager and has been with
the Capital Group organization for 15 years. Mr. Ronus is President and a
Director of Capital Guardian, as well as Chairman of the Board of Directors of
Capital Guardian (Canada), Inc., a Director of the Capital Group and Capital
Group International, Inc., and a Senior Vice President of Capital International
S.A. and Capital International Limited. Mr. Ronus has been employed by the
Capital Group organization for 26 years. Mr. Sauvage is a Senior Vice President
and portfolio manager for Capital Guardian and a Vice President for Capital
International Research, Inc. Mr. Sauvage has been employed by the Capital Group
organization for 12 years. Ms. Sikorsky is President and Managing Director of
Capital International S.A., Chairman of Capital International Perspective, S.A.,
Managing Director-Europe and a Director of Capital Group International, Inc.,
and serves as a Director of the Capital Group, Capital International Limited and
Capital International K.K. Ms. Sikorsky has been employed by the Capital Group
organization for 36 years. Mr. Staehelin is a Senior Vice President and Director
of Capital International Research, Inc. and Capital International S.A., and has
been employed by the Capital Group organization for 17 years.

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<PAGE> 64

MANAGEMENT FEES

During their most recent fiscal years, each of the Funds paid management fees to
the Advisor at the following rates:

<TABLE>
<CAPTION>
Fees Paid as a Percentage
FUNDS of Net Assets
- -----------------------------------------------------------------------
<S> <C>
Money Market Fund..................... 0.45%
Tax-Exempt Money Market Fund.......... 0.45%
California Money Fund................. 0.45%
Short Term Income Fund................ 0.50%
U.S. Government Securities Fund....... 0.51%
Income Fund........................... 0.52%
High Yield Fund....................... 0.63%
Tax-Exempt Bond Fund.................. 0.48%
California Municipal Fund............. 0.53%
California Insured Intermediate
Municipal Fund...................... 0.53%
Florida Insured Municipal Fund........ 0.53%
Bond & Stock Fund..................... 0.59%
Growth & Income Fund.................. 0.53%
Growth Fund of the Northwest.......... 0.63%
Growth Fund........................... 0.87%
Small Cap Stock....................... 0.89%
International Growth Fund............. 0.99%
Strategic Growth Portfolio............ 0.15%
Conservative Growth Portfolio......... 0.15%
Balanced Portfolio.................... 0.15%
Flexible Income Portfolio............. 0.15%
Income Portfolio...................... 0.15%
</TABLE>

*Effective January 1, 1999, management fees were reduced to 0.50% for the U.S.
Government Securities, Income, California Municipal, California Insured
Intermediate Municipal and Florida Insured Municipal Funds. Also effective
January 1, 1999, management fees were reduced to 0.85% for the Growth and
Small Cap Stock Funds.

The Advisor has undertaken to waive its management fees and reimburse expenses
to the extent necessary to limit the total Fund operating expenses for Class A
shares of the following funds to the indicated annual rates through October 31,
2000.

<TABLE>
<CAPTION>
Total Fund
FUNDS Operating Expenses
- ------------------------------------------------------------------
<S> <C>
Money Market Fund............................. 0.73%
Tax-Exempt Money Market Fund.................. 0.72%
Short Term Income Fund........................ 1.00%
U.S. Government Securities Fund............... 0.96%
Tax-Exempt Bond Fund.......................... 0.88%
California Municipal Fund..................... 0.88%
Income Fund................................... 1.04%
Growth & Income Fund.......................... 1.00%
Growth Fund................................... 1.30%
</TABLE>

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

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

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<PAGE> 65

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

The financial highlights table is intended to help you understand the Funds' and
the Portfolios' financial performance for the past 5 years (or, if shorter, the
period of the Fund's or Portfolio's operations). Certain information reflects
financial results for a single Fund or Portfolio share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund or the Portfolio (assuming reinvestment of all dividends
and distributions). The information provided below for the periods ended October
31, 1999 and 1998 has been audited by Deloitte & Touche LLP. The information
provided below for periods prior to October 31, 1998 has been audited by other
auditors. The Reports of Independent Accountants, along with the Funds' and
Portfolios' financial statements, are included in the respective Annual Reports
to Shareholders, which are available upon request.

MONEY MARKET FUND CLASS A SHARES(15)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, ---------------------------
1999 1998(1) 1997 1996 1995
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.044 0.041 0.0493 0.0476 0.0519
Net Realized & Unrealized Gain on Investments............. - - - - -
-------- ------- ------- ------- -------
Total From Investment Operations........................ 0.044 0.041 0.0493 0.0476 0.0519
-------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.044) (0.041) (0.0493) (0.0476) (0.0519)
Distributions from Net Realized Gains..................... - - - - -
-------- ------- ------- ------- -------
Total Distributions..................................... (0.044) (0.041) (0.0493) (0.0476) (0.0519)
-------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======= ======= ======= =======
Total Return(2)............................................. 4.52% 4.19% 5.04% 4.88% 5.33%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $460,444 $403,443 $260,877 $229,355 $171,225
Ratio of Operating Expenses to Average Net Assets(3)...... 0.72% 0.66%(5) 0.75% 0.79% 0.92%
Ratio of Net Investment Income to Average Net Assets...... 4.43% 4.94%(5) 4.93% 4.77% 5.19%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.73% 0.67%(5) 0.83% 0.89% 1.04%
</TABLE>

MONEY MARKET FUND CLASS B SHARES(15)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, -----------------------------
1999 1998(1) 1997 1996 1995
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.034 0.035 0.0407 0.0384 0.0421
Net Realized & Unrealized Gain on Investments............. - - - - -
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.034 0.035 0.0407 0.0384 0.0421
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.034) (0.035) (0.0407) (0.0384) (0.0421)
Distributions from Net Realized Gains..................... - - - - -
------- ------- ------- ------- -------
Total Distributions..................................... (0.034) (0.035) (0.0407) (0.0384) (0.0421)
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.00 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
Total Return(2)............................................. 3.44% 3.52% 4.15% 3.91% 4.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $20,452 $6,619 $471 $117 $74
Ratio of Operating Expenses to Average Net Assets(3)...... 1.77% 1.64%(5) 1.59% 1.69% 1.94%
Ratio of Net Investment Income to Average Net Assets...... 3.38% 3.96%(5) 4.15% 3.87% 4.19%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.78% 1.65%(5) 1.80% 1.90% 2.10%
</TABLE>

Footnotes appear on page 84

63
<PAGE> 66
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

TAX-EXEMPT MONEY MARKET FUND CLASS A SHARES(16)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, -----------------------------
1999 1998(1) 1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.026 0.026 0.0314 0.0301 0.034
Net Realized & Unrealized Gain on Investments............. - - - - 0.000(8)
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.026 0.026 0.0314 0.0301 0.034
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.026) (0.026) (0.0314) (0.0301) (0.034)
Distributions from Net Realized Gains..................... - - - - 0.000(8)
------- ------- ------- ------- -------
Total Distributions..................................... (0.026) (0.026) 0.0314 (0.0301) (0.034)
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
Total Return(2)............................................. 2.65% 2.60% 3.18% 3.05% 4.01%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $31,353 $25,441 $32,134 $31,974 $30,988
Ratio of Operating Expenses to Average Net Assets(3)...... 0.57% 0.55%(5) 0.57% 0.57% 0.61%
Ratio of Net Investment Income to Average Net Assets...... 2.63% 3.09%(5) 3.14% 3.01% 3.39%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.89% 0.72%(5) 0.71% 0.72% 0.81%
</TABLE>

CALIFORNIA MONEY FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -----------------------------
1999 1998(1) 1998(6) 1997 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.022 0.008 0.027 0.028 0.029
Net Realized & Unrealized Gain on Investments............. -- - - - -
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.022 0.008 0.027 0.028 0.029
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.022) (0.008) (0.027) (0.028) (0.029)
Distributions in Excess of Net Investment Income.......... - - - - -
Distributions from Net Realized Gains..................... - - - - -
Distributions in Excess of Net Realized Gains............. - - - - -
Distributions from Capital................................ - - - - -
------- ------- ------- ------- -------
Total Distributions..................................... (0.022) (0.008) (0.027) (0.028) (0.029)
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return(2)............................................. 2.24% 0.99% 2.73% 2.81% 3.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $34,216 $37,167 $37,403 $42,923 $51,211
Ratio of Operating Expenses to Average Net Assets(3)...... 0.81% 0.73%(5) 0.82% 0.85% 0.85%
Ratio of Net Investment Income to Average Net Assets...... 2.22% 2.31%(5) 2.71% 2.75% 2.94%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.81% 0.87%(5) 0.99% 1.14% 1.14%
</TABLE>

Footnotes appear on page 84

64
<PAGE> 67
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

SHORT TERM INCOME FUND CLASS A SHARES(26)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(1)
------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period............. $2.35 $2.32
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................... 0.13(9) 0.04
Net Realized & Unrealized Gain/(Loss) on
Investments................................... (0.06) 0.03
------- -------
Total From Investment Operations............. 0.07 0.07
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income........... (0.13) (0.04)
Distributions in Excess of Net Investment
Income........................................ - -
Distributions from Net Realized Gains.......... - -
Distributions in Excess of Net Realized
Gains......................................... - -
Distributions from Capital..................... - -
------- -------
Total Distributions.......................... (0.13) (0.04)
------- -------
Net Asset Value, End of Period................... $2.29 $2.35
======= =======
Total Return(2).................................. 2.84% 3.11%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)........... $27.059 $32,748
Ratio of Operating Expenses to Average Net
Assets(3)..................................... 0.82% 0.82%(5)
Ratio of Net Investment Income to Average Net
Assets........................................ 5.22% 5.44%(5)
Portfolio Turnover Rate........................ 85% 19%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credit Allowed by the Custodian........ 1.16% 1.40%(5)

YEAR ENDED JUNE 30,
---------------------------------------
1998(6) 1997 1996
---------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............. $2.32 $2.32 $2.35
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................... 0.13 0.14 0.15(9)
Net Realized & Unrealized Gain/(Loss) on
Investments................................... 0.00(8) 0.00(8) (0.03)
------- ------- -------
Total From Investment Operations............. 0.13 0.14 0.12
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income........... (0.13) (0.14) (0.15)
Distributions in Excess of Net Investment
Income........................................ - - -
Distributions from Net Realized Gains.......... - - -
Distributions in Excess of Net Realized
Gains......................................... - - -
Distributions from Capital..................... (0.00)(8) - (0.00)(8)
------- ------- -------
Total Distributions.......................... (0.13) (0.14) (0.15)
------- ------- -------
Net Asset Value, End of Period................... $2.32 $2.32 $2.32
======= ======= =======
Total Return(2).................................. 5.91% 6.15% 5.05%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)........... $35,551 $13,685 $32,440
Ratio of Operating Expenses to Average Net
Assets(3)..................................... 0.86% 0.82% 0.75%
Ratio of Net Investment Income to Average Net
Assets........................................ 5.71% 6.50% 6.22%
Portfolio Turnover Rate........................ 138% 51% 225%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credit Allowed by the Custodian........ 1.32%(10) 1.45%(10) 1.42%(10)
</TABLE>

SHORT TERM INCOME FUND CLASS B SHARES(26)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(1)
------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period............... $2.35 $2.32
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............................ 0.10(9) 0.04
Net Realized & Unrealized Gain/(Loss) on
Investments..................................... (0.06) 0.03
------ ------
Total From Investment Operations............... 0.04 0.07
------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............. (0.10) (0.04)
Distributions in Excess of Net Investment
Income.......................................... - -
Distributions from Net Realized Gains............ - -
Distributions in Excess of Net Realized Gains.... - -
Distributions from Capital....................... - -
------ ------
Total Distributions............................ (0.10) (0.04)
------ ------
Net Asset Value, End of Period..................... $2.29 $2.35
====== ======
Total Return(2).................................... 1.79% 2.85%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)............. $4,597 $3,747
Ratio of Operating Expenses to Average Net
Assets(3)....................................... 1.60% 1.57%(5)
Ratio of Net Investment Income to Average Net
Assets.......................................... 4.44% 4.69%(5)
Portfolio Turnover Rate.......................... 85% 19%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or
Credit Allowed by the Custodian................. 1.94% 2.18%(5)

YEAR ENDED JUNE 30,
-------------------------------------
1998(6) 1997 1996
-------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............... $2.32 $2.32 $2.35
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............................ 0.12 0.12 0.13(9)
Net Realized & Unrealized Gain/(Loss) on
Investments..................................... 0.00(8) 0.00(8) (0.03)
------ ------ ------
Total From Investment Operations............... 0.12 0.12 0.10
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............. (0.12) (0.12) (0.13)
Distributions in Excess of Net Investment
Income.......................................... - - -
Distributions from Net Realized Gains............ - - -
Distributions in Excess of Net Realized Gains.... - - -
Distributions from Capital....................... (0.00)(8) - (0.00)(8)
------ ------ ------
Total Distributions............................ (0.12) (0.12) (0.13)
------ ------ ------
Net Asset Value, End of Period..................... $2.32 $2.32 $2.32
====== ====== ======
Total Return(2).................................... 5.13% 5.37% 4.27%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)............. $3,459 $2,994 $3,437
Ratio of Operating Expenses to Average Net
Assets(3)....................................... 1.61% 1.57% 1.50%
Ratio of Net Investment Income to Average Net
Assets.......................................... 4.96% 5.75% 5.47%
Portfolio Turnover Rate.......................... 138% 51% 225%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or
Credit Allowed by the Custodian................. 2.07%(10) 2.20%(10) 2.17%(10)
</TABLE>

Footnotes appear on page 84

65
<PAGE> 68
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

U.S. GOVERNMENT SECURITIES FUND CLASS A SHARES(17)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, ------------------------------
1999 1998(1) 1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $10.98 $10.84 $10.46 $10.84 $9.64
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.62 0.54 0.62 0.63 0.63
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.47) 0.14 0.38 (0.38) 1.20
-------- -------- -------- -------- --------
Total From Investment Operations........................ 0.15 0.68 1.00 0.25 1.83
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.61) (0.54) (0.62) (0.63) (0.63)
Distributions in Excess of Net Investment Income.......... (0.01) 0.00 0.00 0.00 0.00
Total Distributions..................................... (0.62) (0.54) (0.62) (0.63) (0.63)
-------- -------- -------- -------- --------
Net Asset Value, End of Period.............................. $10.51 $10.98 $10.84 $10.46 $10.84
======== ======== ======== ======== ========
Total Return(2)............................................. 1.38% 6.38% 9.92% 2.48% 19.45%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $221,592 $266,334 $107,054 $138,159 $177,310
Ratio of Operating Expenses to Average Net Assets(3)...... 0.96% 0.92%(5) 1.05% 0.97% 1.01%
Ratio of Net Investment Income to Average Net Assets...... 5.76% 5.99%(5) 5.92% 6.01% 6.08%
Portfolio Turnover Rate................................... 55% 12% 6% 16% 8%
Ratio of operating expenses to average net assets w/o fee
waivers or fees reduced by credits allowed by the
custodian................................................ 1.04% 1.45%(5) 1.05% 0.97% 1.01%
Ratio of operating expenses to average net assets
including interest expense............................... N/A 1.36%(5) N/A N/A N/A
</TABLE>

U.S. GOVERNMENT SECURITIES FUND CLASS B SHARES(17)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, ----------------------------
1999 1998(1) 1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $10.97 $10.84 $10.46 $10.84 $9.64
------- ------- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.54 0.47 0.54 0.54 0.54
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.48) 0.12 0.38 (0.38) 1.20
------- ------- ------ ------ ------
Total From Investment Operations........................ 0.06 0.59 0.92 0.16 1.74
------- ------- ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.53) (0.46) (0.54) (0.54) (0.54)
------- ------- ------ ------ ------
Net Asset Value, End of Period.............................. $10.50 $10.97 $10.84 $10.46 $10.84
======= ======= ====== ====== ======
Total Return(2)............................................. 0.53% 5.54% 9.03% 1.58% 18.48%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $72,751 $28,747 $3,352 $2,963 $2,206
Ratio of Operating Expenses to Average Net Assets(3)...... 1.70% 1.67%(5) 1.84% 1.85% 1.84%
Ratio of Net Investment Income to Average Net Assets...... 5.02% 5.24%(5) 5.08% 5.14% 5.20%
Portfolio Turnover Rate................................... 55% 12% 6% 16% 8%
Ratio of operating expenses to average net assets w/o fee
waivers or fees reduced by credits allowed by the
custodian................................................ 1.78% 2.22%(5) 1.84% 1.85% 1.84%
Ratio of operating expenses to average net assets
including interest expense............................... N/A 2.12%(5) N/A N/A N/A
</TABLE>

Footnotes appear on page 84

66
<PAGE> 69
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INCOME FUND CLASS A SHARES(19)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, ---------------------------
1999 1998(1) 1997 1996 1995
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period:....................... $9.44 $9.48 $9.15 $9.44 $8.29
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.63 0.53 0.60 0.59 0.59
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.45) (0.04)(12) 0.33 (0.29) 1.15
-------- -------- ------- ------- -------
Total From Investment Operations........................ 0.18 0.49 0.93 0.30 1.74
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.63) (0.53) (0.60) (0.59) (0.59)
-------- -------- ------- ------- -------
Net Asset Value, End of Period.............................. $8.99 $9.44 $9.48 $9.15 $9.44
======== ======== ======= ======= =======
Total Return(2)............................................. 1.98% 5.21% 10.51% 3.46% 21.58%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $172,217 $213,397 $77,864 $86,657 $97,534
Ratio of Operating Expenses to Average Net Assets(3)...... 1.06% 1.07%(5) 1.08% 1.03% 1.08%
Ratio of Net Investment Income to Average Net Assets...... 6.84% 6.66%(5) 6.47% 6.52% 6.59%
Portfolio Turnover Rate................................... 19% 37% 27% 42% 43%
Ratio of Operating Expenses to Average Net Assets without
Fee Waivers, Expenses Absorbed and/or Credit Allowed by
the Custodian............................................ 1.10% N/A N/A N/A N/A
</TABLE>

INCOME FUND CLASS B SHARES(19)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, ---------------------------
1999 1998(1) 1997 1996 1995
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period:....................... $9.45 $9.49 $9.17 $9.46 $8.30
------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.56 0.46 0.53 0.52 0.51
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.45) (0.04)(12) 0.32 (0.29) 1.16
------- -------- ------- ------- -------
Total From Investment Operations........................ 0.11 0.42 0.85 0.23 1.67
------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... 0.56 (0.46) (0.53) (0.52) (0.51)
------- -------- ------- ------- -------
Net Asset Value, End of Period.............................. $9.00 $9.45 $9.49 $9.17 $9.46
======= ======== ======= ======= =======
Total Return(2)............................................. 1.12% 4.51% 9.51% 2.59% 20.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $42,715 $34,321 $9,691 $7,122 $4,452
Ratio of Operating Expenses to Average Net Assets(3)...... 1.81% 1.84%(5) 1.86% 1.89% 1.91%
Ratio of Net Investment Income to Average Net Assets...... 6.09% 5.89%(5) 5.65% 5.69% 5.73%
Portfolio Turnover Rate................................... 19% 37% 27% 42% 43%
Ratio of Operating Expenses to Average Net Assets without
Fee Waivers, Expenses Absorbed and/or Credit Allowed by
the Custodian............................................ 1.85% N/A N/A N/A N/A
</TABLE>

Footnotes appear on page 84

67
<PAGE> 70
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

HIGH YIELD FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL PERIOD
YEAR ENDED APRIL 8, 1998 -
OCTOBER 31, 1999 OCTOBER 31, 1998(4)
----------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $8.86 $10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.91 0.47
Net Realized & Unrealized Loss on Investments............. 0.14 (1.15)
------- -------
Total from Investment Operations........................ 1.05 (0.68)
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.94) (0.45)
Distributions in Excess of Net Investment Income.......... - (0.01)
Distributions from Net Realized Gains..................... (0.05) -
Distributions in Excess of Net Realized Gains............. - -
Distributions from Capital................................ - -
------- -------
Total Distributions..................................... (0.99) (0.46)
------- -------
Net Asset Value, End of Period.............................. $8.92 $8.86
======= =======
Total Return(5)............................................. 12.26% (6.90)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period ($1,000's)....................... $5,827 $10,861
Ratio of Operating Expenses to Average Net Assets(12)..... 0.73% 0.78%(5)
Ratio of Net Investment Income to Average Net Assets...... 10.17% 8.80%(5)
Portfolio Turnover Rate................................... 30% 54%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers or fees reduced by Credits Allowed by the
Custodian................................................ 1.37% 1.22%(5)
</TABLE>

HIGH YIELD FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL PERIOD
YEAR ENDED MAY 5, 1998 -
OCTOBER 31, 1999 OCTOBER 31, 1998(4)
-----------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $8.90 $10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.86(9) 0.42
Net Realized & Unrealized Loss on Investments............. 0.15(12) (1.09)
------- -------
Total from Investment Operations........................ 1.01 (0.67)
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.89) (0.42)
Distributions in Excess of Net Investment Income.......... - (0.01)
Distributions from Net Realized Gains..................... (0.05) -
Distributions in Excess of Net Realized Gains............. - -
Distributions from Capital................................ - -
------- -------
Total Distributions..................................... (0.94) (0.43)
------- -------
Net Asset Value, End of Period.............................. $8.97 $8.90
======= =======
Total Return(5)............................................. 11.44% (6.33)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period ($1,000's)....................... $21,259 $2,830
Ratio of Operating Expenses to Average Net Assets(12)..... 1.29% 1.57%(5)
Ratio of Net Investment Income to Average Net Assets...... 9.61% 8.01%(5)
Portfolio Turnover Rate................................... 30% 54%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers or fees reduced by Credits Allowed by the
Custodian................................................ 1.93% 2.02%(5)
</TABLE>

Footnotes appear on page 84

68
<PAGE> 71
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

TAX-EXEMPT BOND FUND CLASS A SHARES(21)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, -----------------------
1999 1998(1) 1997 1996 1995
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $8.11 $8.09 $7.83 $8.02 $7.13
----- ----- ----- ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.41 0.34 0.38 0.38 0.38
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.70) 0.02 0.27 (0.19) 0.89
----- ----- ----- ------ ------
Total From Investment Operations........................ (0.29) 0.36 0.65 0.19 1.27
----- ----- ----- ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.41) (0.34) (0.38) (0.38) (0.38)
Distribution from Capital Gains........................... - - (0.01) - -
----- ----- ----- ------ ------
Total Distributions..................................... (0.41) (0.34) (0.39) (0.38) (0.38)
----- ----- ----- ------ ------
Net Asset Value, End of Period.............................. $7.41 $8.11 $8.09 $7.83 $8.02
===== ===== ===== ====== ======
Total Return(2)............................................. (3.77)% 4.58% 8.59% 2.52% 18.25%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $247,814 $301,162 $188,021 $203,606 $230,055
Ratio of Operating Expenses to Average Net Assets(3)...... 0.89% 0.84%(5) 0.80% 0.75% 0.81%
Ratio of Net Investment Income to Average Net Assets...... 5.16% 5.14%(5) 4.84% 4.90% 5.03%
Portfolio Turnover Rate................................... 57% 6% 21% 22% 8%
</TABLE>

TAX-EXEMPT BOND FUND CLASS B SHARES(21)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED DECEMBER 31,
OCTOBER 31, OCTOBER 31, -------------------------
1999 1998(1) 1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $8.11 $8.09 $7.83 $8.02 $7.13
----- ----- ----- ----- ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.35 0.28 0.32 0.31 0.32
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.70) 0.03 0.27 (0.19) 0.89
----- ----- ----- ----- ------
Total From Investment Operations........................ (0.35) 0.31 0.59 0.12 1.21
----- ----- ----- ----- ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.35) (0.29) (0.32) (0.31) (0.32)
Distribution from Capital Gains........................... - - (0.01) - -
----- ----- ----- ----- ------
Total Distributions..................................... (0.35) (0.29) (0.33) (0.31) (0.32)
----- ----- ----- ----- ------
Net Asset Value, End of Period.............................. $7.41 $8.11 $8.09 $7.83 $8.02
===== ===== ===== ===== ======
Total Return(2)............................................. (4.52)% 3.88% 7.71% 1.61% 17.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $25,059 $17,344 $8,110 $5,266 $2,682
Ratio of Operating Expenses to Average Net Assets(3)...... 1.64% 1.62%(5) 1.62% 1.65% 1.62%
Ratio of Net Investment Income to Average Net Assets...... 4.41% 4.36%(5) 4.00% 4.01% 4.18%
Portfolio Turnover Rate................................... 57% 6% 21% 22% 8%
</TABLE>

Footnotes appear on page 84

69
<PAGE> 72
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

CALIFORNIA MUNICIPAL FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -----------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $11.46 $11.33 $10.92 $10.60 $10.53 $10.38
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.54 0.19(9) 0.58(9) 0.59 0.60(9) 0.61
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.94) 0.13 0.41 0.32 0.07 0.15
------ ------ ------ ------ ------ ------
Total From Investment Operations........................ (0.40) 0.32 0.99 0.91 0.67 0.76
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.57) (0.19) (0.58) (0.59) (0.60) (0.61)
Distributions in Excess of Net Investment Income.......... - - - - - -
Distributions from Net Realized Gains..................... (0.06) - - - - (0.00)(8)
Distributions in Excess of Net Realized Gains............. - - - - - -
Distributions from Capital................................ - - - - - -
------ ------ ------ ------ ------ ------
Total Distributions..................................... (0.63) (0.19) (0.58) (0.59) (0.60) (0.61)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.............................. $10.43 $11.46 $11.33 $10.92 $10.60 $10.53
====== ====== ====== ====== ====== ======
Total Return(2)............................................. (3.87)% 2.82% 9.26% 8.83% 6.40% 7.57%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $283,929 $287,590 $290,328 $318,251 $372,177 $405,967
Ratio of Operating Expenses to Average Net Assets(3)...... 0.88% 0.97%(5) 1.00% 0.97% 0.94% 0.85%
Ratio of Net Investment Income to Average Net Assets...... 4.94% 4.87%(5) 5.18% 5.51% 5.56% 5.89%
Portfolio Turnover Rate................................... 92% 28% 87% 36% 17% 22%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.91% 1.05%(5) 1.19%(10) 1.26%(10) 1.29%(10) 1.29%
</TABLE>

CALIFORNIA MUNICIPAL FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995(7)
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $11.46 $11.33 $10.92 $10.60 $10.53 $10.38
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.48 0.16(9) 0.50(9) 0.51 0.51(9) 0.53
Net Realized & Unrealized Gain on Investments............. (0.97) 0.13 0.41 0.32 0.07 0.15
------ ------ ------ ------ ------ ------
Total From Investment Operations........................ (0.49) 0.29 0.91 0.83 0.58 0.68
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.48) (0.16) (0.50) (0.51) (0.51) (0.53)
Distributions in Excess of Net Investment Income.......... - - - - - -
Distributions from Net Realized Gains..................... (0.06) - - - - (0.00)(8)
Distributions in Excess of Net Realized Gains............. - - - - - -
Distributions from Capital................................ - - - - - -
------ ------ ------ ------ ------ ------
Total Distributions..................................... (0.54) (0.16) (0.50) (0.51) (0.51) (0.53)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.............................. $10.43 $11.46 $11.33 $10.92 $10.60 $10.53
====== ====== ====== ====== ====== ======
Total Return(2)............................................. (4.62)% 2.56% 8.45% 8.02% 5.61% 6.78%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $133,842 $49,683 $34,537 $25,219 $20,543 $7,230
Ratio of Operating Expenses to Average Net Assets(3)...... 1.63% 1.72%(5) 1.75% 1.72% 1.69% 1.60%
Ratio of Net Investment Income to Average Net Assets...... 4.19% 4.12%(5) 4.42% 4.76% 4.81% 5.14%
Portfolio Turnover Rate................................... 92% 28% 87% 36% 17% 22%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.66% 1.81%(5) 1.95%(10) 2.01%(10) 2.04%(10) 2.04%
</TABLE>

Footnotes appear on page 84

70
<PAGE> 73
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, --------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $11.02 $10.81 $10.74 $10.56 $10.45 $10.10
------ ------ ------ ------ ------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.44(9) 0.16 0.49 0.49(9) 0.49 0.50
Net Realized & Unrealized Gain on Investments............. (0.55) 0.21 0.17 0.23 0.15 0.35
------ ------ ------ ------ ------- ------
Total From Investment Operations........................ (0.11) 0.37 0.66 0.72 0.64 0.85
------ ------ ------ ------ ------- ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.45) (0.16) (0.49) (0.49) (0.49) (0.50)
Distributions in Excess of Net Investment Income.......... - - (0.00)(8) - - -
Distributions from Net Realized Gains..................... (0.16) - (0.10) (0.05) (0.04) -
Distributions in Excess of Net Realized Gains............. - - - - - -
Distributions from Capital................................ - - - - - -
------ ------ ------ ------ ------- ------
Total Distributions..................................... (0.61) (0.16) (0.59) (0.54) (0.53) (0.50)
------ ------ ------ ------ ------- ------
Net Asset Value, End of Period.............................. $10.30 $11.02 $10.81 $10.74 $10.56 $10.45
====== ====== ====== ====== ======= ======
Total Return(2)............................................. (1.11)% 3.46% 6.26% 6.97% 6.25% 8.71%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $31,253 $37,529 $38,724 $45,157 $54,518(10) $54,507
Ratio of Operating Expenses to Average Net Assets(3)...... 0.89% 0.82%(5) 0.86% 0.82% 0.73% 0.42%
Ratio of Net Investment Income to Average Net Assets...... 4.13% 4.39%(5) 4.49% 4.61% 4.62% 4.95%
Portfolio Turnover Rate................................... 93% 7% 25% 29% 27% 13%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.97% 1.15%(5) 1.25%(10) 1.31%(10) 1.39%(10) 1.41%
</TABLE>

CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, --------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995(7)
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $11.02 $10.81 $10.74 $10.56 $10.45 $10.10
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.36(9) 0.13 0.41 0.41(9) 0.41 0.43
Net Realized & Unrealized Gain on Investments............. (0.56) 0.21 0.17 0.23 0.15 0.35
------ ------ ------ ------ ------ ------
Total From Investment Operations........................ (0.20) 0.34 0.58 0.64 0.56 0.78
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.36) (0.13) (0.41) (0.41) (0.41) (0.43)
Distributions in Excess of Net Investment Income.......... - - (0.00)(8) - - -
Distributions from Net Realized Gains..................... (0.16) - (0.10) (0.05) (0.04) -
Distributions in Excess of Net Realized Gains............. - - - - - -
Distributions from Capital................................ - - - - - -
------ ------ ------ ------ ------ ------
Total Distributions..................................... (0.52) (0.13) (0.51) (0.46) (0.45) (0.43)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period.............................. $10.30 $11.02 $10.81 $10.74 $10.56 $10.45
====== ====== ====== ====== ====== ======
Total Return(2)............................................. (1.89)% 3.20% 5.47% 6.17% 5.46% 7.90%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $35,501 $23,960 $21,688 $20,992 $20,948 $12,391
Ratio of Operating Expenses to Average Net Assets(3)...... 1.64% 1.57%(5) 1.61% 1.57% 1.48% 1.17%
Ratio of Net Investment Income to Average Net Assets...... 3.38% 3.64%(5) 3.74% 3.86% 3.87% 4.20%
Portfolio Turnover Rate................................... 93% 7% 25% 29% 27% 13%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.72% 1.90%(5) 2.01%(10) 2.06%(10) 2.14%(10) 2.16%
</TABLE>

Footnotes appear on page 84

71
<PAGE> 74
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

FLORIDA INSURED MUNICIPAL FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
PERIOD
YEAR ENDED ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $10.50 $10.35 $9.93 $9.64 $9.43 $9.40
------- ------ ------ ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.48 0.17 0.49 0.49(9) 0.50 0.52
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.90) 0.15 0.42 0.30 0.21 0.03(12)
------- ------ ------ ----- ----- -----
Total From Investment Operations........................ (0.42) 0.32 0.91 0.79 0.71 0.55
------- ------ ------ ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.48) (0.17) (0.49) (0.50) (0.50) (0.52)
Distributions in Excess of Net Investment Income.......... - - - (0.00)(8) - -
Distributions from Net Realized Gains..................... - - - - - -
Distributions in Excess of Net Realized Gains............. - - - - - -
Distributions from Capital................................ - - - - - -
------- ------ ------ ----- ----- -----
Total Distributions..................................... (0.48) (0.17) (0.49) (0.50) (0.50) (0.52)
------- ------ ------ ----- ----- -----
Net Asset Value, End of Period.............................. $9.60 $10.50 $10.35 $9.93 $9.64 $9.43
======= ====== ====== ===== ===== =====
Total Return(2)............................................. (4.14)% 3.08% 9.34% 8.43% 7.56% 6.01%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $12,015 $15,813 $16,538 $22,761 $29,821 $33,714
Ratio of Operating Expenses to Average Net Assets(3)...... 0.97% 0.82%(5) 0.88% 0.82% 0.63% 0.39%
Ratio of Net Investment Income to Average Net Assets...... 4.68% 4.76%(5) 4.79% 5.01% 5.08% 5.53%
Portfolio Turnover Rate................................... 104% 40% 51% 53% 52% 44%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credit Allowed by
the Custodian............................................ 1.14% 1.40%(5) 1.45%(10) 1.46%(10) 1.46%(10) 1.51%
</TABLE>

FLORIDA INSURED MUNICIPAL FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL
PERIOD
YEAR ENDED ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, --------------------------------------
1999 1998(1) 1998(6) 1997 1996 1995(7)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...................... $10.50 $10.35 $9.93 $9.64 $9.43 $9.40
------ ------ ------ ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income................................... 0.40 0.14 0.41 0.42(9) 0.42 0.45
Net Realized & Unrealized Gain on Investments........... (0.90) 0.15 0.43 0.30 0.21 0.03(12)
------ ------ ------ ----- ----- -----
Total From Investment Operations...................... (0.50) 0.29 0.84 0.72 0.63 0.48
------ ------ ------ ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.................... (0.40) (0.14) (0.42) (0.43) (0.42) (0.45)
Distributions in Excess of Net Investment Income........ - - - (0.00)(8) - -
Distributions from Net Realized Gains................... - - - - - -
Distributions in Excess of Net Realized Gains........... - - - - - -
Distributions from Capital.............................. - - - - - -
------ ------ ------ ----- ----- -----
Total Distributions................................... (0.40) (0.14) (0.42) (0.43) (0.42) (0.45)
------ ------ ------ ----- ----- -----
Net Asset Value, End of Period............................ $9.60 $10.50 $10.35 $9.93 $9.64 $9.43
====== ====== ====== ===== ===== =====
Total Return(2)........................................... (4.91)% 2.82% 8.53% 7.63% 6.76% 5.23%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).................... $7,273 $6,054 $5,075 $5,067 $5,428 $3,330
Ratio of Operating Expenses to Average Net Assets(3).... 1.71% 1.57%(5) 1.63% 1.57% 1.38% 1.14%
Ratio of Net Investment Income to Average Net Assets.... 3.94% 4.01%(5) 4.04% 4.26% 4.33% 4.78%
Portfolio Turnover Rate................................. 104% 40% 51% 53% 52% 44%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or Credit
Allowed by the Custodian............................... 1.88% 2.15%(5) 2.21%(10) 2.21%(10) 2.21%(10) 2.26%
</TABLE>

Footnotes appear on page 84

72
<PAGE> 75
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

BOND & STOCK FUND CLASS A SHARES(22)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, ------------------------
1999 1998 1997 1996 1995
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $14.02 $16.13 $14.71 $13.48 $11.53
-------- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.41 0.45(9) 0.50 0.52 0.50
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.61 0.21(12) 2.37 1.53 2.02
-------- ------ ------ ------ ------
Total From Investment Operations........................ 1.02 0.66 2.87 2.05 2.52
-------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.40) (0.45) (0.51) (0.50) (0.49)
Distributions from Capital Gains.......................... (.04) (2.32) (0.94) (0.32) (0.08)
-------- ------ ------ ------ ------
Total Distributions..................................... (0.44) (2.77) (1.45) (0.82) (0.57)
-------- ------ ------ ------ ------
Net Asset Value, End of Period.............................. $14.60 $14.02 $16.13 $14.71 $13.48
======== ====== ====== ====== ======
Total Return(2)............................................. 7.36% 4.03% 20.81% 15.66% 22.55%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $241,746 $298,651 $307,018 $255,414 $208,592
Ratio of Operating Expenses to Average Net Assets(3)...... 1.05% 0.97% 0.99% 0.98% 1.02%
Ratio of Net Investment Income to Average Net Assets...... 2.61% 3.09% 3.31% 3.68% 3.98%
Portfolio Turnover Rate................................... 45% 80% 54% 46% 32%
</TABLE>

BOND & STOCK FUND CLASS B SHARES(22)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, ------------------------
1999 1998 1997 1996 1995
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $13.96 $16.10 $14.69 $13.47 $11.51
------- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.27 0.33(9) 0.39 0.41 0.39
Net Realized & Unrealized Gain on Investments............. 0.63 0.19(12) 2.36 1.53 2.03
------- ------ ------ ------ ------
Total From Investment Operations........................ 0.90 0.52 2.75 1.94 2.42
------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.29) (0.34) (0.40) (0.40) (0.38)
Distributions from Capital Gains.......................... (0.04) (2.32) (0.94) (0.32) (0.08)
------- ------ ------ ------ ------
Total Distributions..................................... (0.33) (2.66) (1.34) (0.72) (0.46)
------- ------ ------ ------ ------
Net Asset Value, End of Period.............................. $14.53 $13.96 $16.10 $14.69 $13.47
======= ====== ====== ====== ======
Total Return(2)............................................. 6.46% 3.12% 19.86% 14.73% 21.60%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $75,485 $74,542 $46,556 $22,243 $7,372
Ratio of Operating Expenses to Average Net Assets(3)...... 1.84% 1.76% 1.79% 1.86% 1.84%
Ratio of Net Investment Income to Average Net Assets...... 1.82% 2.30% 2.48% 2.80% 3.10%
Portfolio Turnover Rate................................... 45% 80% 54% 46% 32%
</TABLE>

Footnotes appear on page 84

73
<PAGE> 76
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

GROWTH & INCOME FUND CLASS A SHARES(23)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, ------------------------
1999 1998 1997 1996 1995
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $19.99 $21.01 $17.26 $14.65 $12.71
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.09(9) 0.11(9) 0.12 0.20 0.22
Net Realized & Unrealized Gain/(Loss) on Investments...... 4.62 1.43 4.98 3.16 2.31
------ ------ ------ ------ ------
Total From Investment Operations........................ 4.71 1.54 5.10 3.36 2.53
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.09) (0.09) (0.14) (0.21) (0.19)
Distributions from Capital Gains.......................... (0.00)(8) (2.47) (1.21) (0.54) (0.40)
------ ------ ------ ------ ------
Total Distributions..................................... (0.09) (2.56) (1.35) (0.75) (0.59)
------ ------ ------ ------ ------
Net Asset Value, End of Period.............................. $24.61 $19.99 $21.01 $17.26 $14.65
====== ====== ====== ====== ======
Total Return(2)............................................. 23.57% 7.38% 31.24% 23.61% 20.87%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $705,835 $502,115 $299,928 $178,331 $130,630
Ratio of Operating Expenses to Average Net Assets(3)...... 1.00% 0.94% 1.05% 1.03% 1.07%
Ratio of Net Investment Income to Average Net Assets...... 0.37% 0.52% 0.66% 1.26% 1.62%
Portfolio Turnover Rate................................... 47% 79% 71% 52% 39%
</TABLE>

GROWTH & INCOME FUND CLASS B SHARES(23)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, -------------------------
1999 1998 1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $19.77 $20.85 $17.17 $14.59 $12.68
------- -------- ------- ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).............................. (0.09)(9) (0.07)(9) (0.02) 0.06 0.11
Net Realized & Unrealized Gain on Investments............. 4.56 1.46 4.93 3.14 2.31
------- -------- ------- ------ ------
Total From Investment Operations........................ 4.47 1.39 4.91 3.20 2.42
------- -------- ------- ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... - (0.00)(8) (0.02) (0.08) (0.11)
Distributions from Capital Gains.......................... - (2.47) (1.21) (0.54) (0.40)
------- -------- ------- ------ ------
Total Distributions..................................... - (2.47) (1.23) (0.62) (0.51)
------- -------- ------- ------ ------
Net Asset Value, End of Period.............................. $24.24 $19.77 $20.85 $17.17 $14.59
======= ======== ======= ====== ======
Total Return(2)............................................. 22.61% 6.60% 30.20% 22.55% 19.95%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $233,216 $117,063 $49,994 $22,851 $8,871
Ratio of Operating Expenses to Average Net Assets(3)...... 1.76% 1.79% 1.88% 1.94% 1.91%
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... (0.39)% (0.33)% (0.19)% 0.34% 0.69%
Portfolio Turnover Rate................................... 47% 79% 71% 52% 39%
Ratio of Operating Expenses to Average Net Assets without
Fee Waivers, Expenses Absorbed and/or Credit Allowed by
the Custodian............................................ 1.84% N/A N/A N/A N/A
</TABLE>

Footnotes appear on page 84

74
<PAGE> 77
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

GROWTH FUND OF THE NORTHWEST CLASS A SHARES(24)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, -------------------------
1999 1998 1997 1996 1995
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $20.37 $25.92 $19.69 $17.40 $14.30
------ ------ ------- ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).............................. (0.05) (0.02)(9) (0.02) 0.03 0.07
Net Realized & Unrealized Gain/(Loss) on Investments...... 11.72 (0.76) 8.13 2.47 3.10
------ ------ ------- ------ ------
Total From Investment Operations........................ 11.67 (0.78) 8.11 2.50 3.17
------ ------ ------- ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... - - - (0.03) (0.07)
Distributions from Capital Gains.......................... - (4.74) (1.88) (0.18) -
Distributions from Capital................................ - (0.03) - - -
------ ------ ------- ------ ------
Total Distributions..................................... - (4.77) (1.88) (0.21) (0.07)
------ ------ ------- ------ ------
Net Asset Value, End of Period.............................. $32.04 $20.37 $25.92 $19.69 $17.40
====== ====== ======= ====== ======
Total Return(2)............................................. 57.29% (4.81)% 44.47% 14.54% 22.24%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $338,980 $243,126 $256,908 $176,706 $157,953
Ratio of Operating Expenses to Average Net Assets(3)...... 1.15% 1.10% 1.05% 1.08% 1.10%
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... (0.21)% (0.09)% (0.08)% 0.16% 0.44%
Portfolio Turnover Rate................................... 41% 39% 37% 42% 9%
Ratio of operating expenses to average net assets w/o fee
waivers or fees reduced by credits allowed by the
custodian................................................ 1.15% 1.10% 1.11% 1.08% 1.10%
</TABLE>

GROWTH FUND OF THE NORTHWEST CLASS B SHARES(24)

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED OCTOBER 31,
OCTOBER 31, OCTOBER 31, ---------------------------
1999 1998 1997 1996 1995
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $19.64 $25.34 $19.45 $17.31 $14.28
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss....................................... (0.25) (0.20)(9) (0.08) (0.08) (0.05)
Net Realized & Unrealized Gain/(Loss) on Investments...... 11.24 (0.73) 7.85 2.40 3.08
------- ------- ------- ------- -------
Total From Investment Operations........................ 10.99 (0.93) 7.77 2.32 3.03
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... - - - - -
Distributions from Capital Gains.......................... - (4.74) (1.88) (0.18) -
Distributions from Capital................................ - (0.03) - - -
------- ------- ------- ------- -------
Total Distributions..................................... - (4.77) (1.88) (0.18) -
------- ------- ------- ------- -------
Net Asset Value, End of Period.............................. $30.63 $19.64 $25.34 $19.45 $17.31
======= ======= ======= ======= =======
Total Return(2)............................................. 55.96% (5.63)% 43.17% 13.54% 21.25%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $77,658 $47,106 $39,627 $14,653 $7,083
Ratio of Operating Expenses to Average Net Assets(3)...... 1.99% 1.95% 1.91% 1.98% 1.95%
Ratio of Net Investment Loss to Average Net Assets........ (1.05)% (0.94)% (0.96)% (0.76)% (0.45)%
Portfolio Turnover Rate................................... 41% 39% 37% 42% 9%
Ratio of operating expenses to average net assets w/o fee
waivers or fees reduced by credits allowed by the
custodian................................................ 1.99% 1.95% 1.97% 1.98% 1.95%
</TABLE>

Footnotes appear on page 84

75
<PAGE> 78
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

GROWTH FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -----------------------------
1999 1998(1) 1998(6) 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $17.64 $18.46 $14.90 $15.69 $14.18
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).................... (0.21)(9) (0.07)(9) (0.15)(9) (0.03)(9) (0.07)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.................................... 14.11 (0.75) 4.99 1.58 3.47
------ ------ ------ ------ ------
Total From Investment Operations.............. 13.90 (0.82) 4.84 1.55 3.40
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............ - - - - -
Distributions in Excess of Net Investment
Income......................................... - - - - -
Distributions from Net Realized Gains........... (1.83) - (1.28) (2.34) (1.89)
Distributions in Excess of Net Realized Gains... - - - - -
Distributions from Capital...................... - - - - -
------ ------ ------ ------ ------
Total Distributions........................... (1.83) - (1.28) (2.34) (1.89)
------ ------ ------ ------ ------
Net Asset Value, End of Period.................... $29.71 $17.64 $18.46 $14.90 $15.69
====== ====== ====== ====== ======
Total Return(2)................................... 84.96% (4.44)% 35.43% 10.88% 25.44%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)............ $240,363 $104,775 $112,153 $111,187 $179,720
Ratio of Operating Expenses to Average Net
Assets(3)...................................... 1.27% 1.69%(5) 1.66% 1.70% 1.70%
Ratio of Net Investment Income to Average Net
Assets......................................... (0.84)% (1.21)%(5) (0.91)% (0.22)% (0.49)%
Portfolio Turnover Rate......................... 119% 24% 153% 156% 205%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian........ 1.46% - - - -
</TABLE>

GROWTH FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, OCTOBER 31, -----------------------------
1999 1998(1) 1998(6) 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $16.99 $17.82 $14.53 $15.47 $14.10
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss....................................... (0.38)(9) (0.12)(9) (0.25)(9) (0.14)(9) (0.19)(9)
Net Realized & Unrealized Gain on Investments............. 13.51 (0.71) 4.82 1.54 3.45
------ ------ ------ ------ ------
Total From Investment Operations........................ 13.13 (0.83) 4.57 1.40 3.26
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... - - - - -
Distributions in Excess of Net Investment Income.......... - - - - -
Distributions from Net Realized Gains..................... (1.83) - (1.28) (2.34) (1.89)
Distributions in Excess of Net Realized Gains............. - - - - -
Distributions from Capital................................ - - - - -
------ ------ ------ ------ ------
Total Distributions..................................... (1.83) - (1.28) (2.34) (1.89)
------ ------ ------ ------ ------
Net Asset Value, End of Period.............................. $28.29 $16.99 $17.82 $14.53 $15.47
====== ====== ====== ====== ======
Total Return(2)............................................. 83.57% (4.66)% 34.43% 9.99% 24.54%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $226,507 $39,379 $38,390 $30,397 $25,067
Ratio of Operating Expenses to Average Net Assets(3)...... 2.03% 2.54%(5) 2.46% 2.45% 2.45%
Ratio of Net Investment Loss to Average Net Assets........ (1.60)% (2.06)%(5) (1.70)% (0.97)% (1.24)%
Portfolio Turnover Rate................................... 119% 24% 153% 156% 205%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 2.25% - - - -
</TABLE>

Footnotes appear on page 84

76
<PAGE> 79
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

SMALL CAP STOCK FUND CLASS A SHARES(27)

<TABLE>
<CAPTION>
YEAR FISCAL
ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(1)
-------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........ $16.25 $19.49
--------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss....................... (0.20)(9) (0.08)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.............................. 6.36 (3.16)
--------- --------
Total From Investment Operations........ 6.16 (3.24)
--------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...... -
Distributions in Excess of Net Investment
Income................................... -
Distributions from Net Realized Gains..... (2.80) -
Distributions in Excess of Net Realized
Gains.................................... -
Distributions from Capital................ -
--------- --------
Total Distributions..................... (2.80) -
--------- --------
Net Asset Value, End of Period.............. $19.61 $16.25
========= ========
Total Return(2)............................. 42.60% (16.62)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...... $92,130 $88,502
Ratio of Operating Expenses to Average Net
Assets(3)................................ 1.78% 1.88%(5)
Ratio of Net Investment Loss to Average
Net Assets............................... (1.16)% (1.43)%(5)
Portfolio Turnover Rate................... 45% 20%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses
Absorbed and/or Credits Allowed by the
Custodian................................ 1.94% 1.89%(5)

YEAR ENDED JUNE 30,
-----------------------------------------------
1998(6) 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $18.28 $20.17 $15.47 $13.02
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss....................... (0.22)(9) (0.21)(9) (0.19)(9) (0.00)(8)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.............................. 2.50 (0.18) 5.65 2.77
-------- -------- -------- --------
Total From Investment Operations........ 2.28 (0.39) 5.46 2.77
-------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...... - - - -
Distributions in Excess of Net Investment
Income................................... - - - -
Distributions from Net Realized Gains..... (1.07) (1.50) (0.76) (0.32)
Distributions in Excess of Net Realized
Gains.................................... - - - -
Distributions from Capital................ - - - -
-------- -------- -------- --------
Total Distributions..................... (1.07) (1.50) (0.76) (0.32)
-------- -------- -------- --------
Net Asset Value, End of Period.............. $19.49 $18.28 $20.17 $15.47
======== ======== ======== ========
Total Return(2)............................. 12.95% (1.50)% 35.93% 21.54%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...... $118,473 $165,719 $283,747 $185,722
Ratio of Operating Expenses to Average Net
Assets(3)................................ 1.66% 1.64% 1.64% 1.68%
Ratio of Net Investment Loss to Average
Net Assets............................... (1.10)% (1.17)% (1.02)% (0.31)%
Portfolio Turnover Rate................... 112% 81% 131% 181%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses
Absorbed and/or Credits Allowed by the
Custodian................................ 1.66%(10) 1.64%(10) 1.65%(10) N/A
</TABLE>

SMALL CAP STOCK FUND CLASS B SHARES(27)

<TABLE>
<CAPTION>
YEAR
ENDED
OCTOBER 31,
1999
------------------
<S> <C>
Net Asset Value, Beginning of
Period............................. $15.67
---------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss)..... (0.34)(9)
Net Realized & Unrealized
Gain/(Loss) on Investments...... 6.08
---------
Total From Investment
Operations..................... 5.74
---------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income.......................... -
Distributions in Excess of Net
Investment Income............... -
Distributions from Net Realized
Gains........................... (2.80)
Distributions in Excess of Net
Realized Gains.................. -
Distributions from Capital....... -
---------
Total Distributions............ (2.80)
---------
Net Asset Value, End of Period..... $18.61
=========
Total Return(2).................... 41.32%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)...................... $28,969
Ratio of Operating Expenses to
Average Net Assets(3)........... 2.70%
Ratio of Net Investment
Income/Loss to Average Net
Assets.......................... 2.08%
Portfolio Turnover Rate.......... 45%
Ratio of Operating Expenses to
Average Net Assets Without Fee
Waivers,
Expenses Absorbed and/or Credits
Allowed by the Custodian........ 2.86%

<CAPTION>
FISCAL
PERIOD ENDED YEAR ENDED JUNE 30,
OCTOBER 31, -------------------------------------------------------------
1998(1) 1998(6) 1997 1996 1995(7)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period............................. $18.86 $17.85 $19.88 $15.37 $13.02
--------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss)..... (0.13)(9) (0.36)(9) (0.34)(9) (0.32)(9) (0.10)(9)
Net Realized & Unrealized
Gain/(Loss) on Investments...... (3.06) 2.44 (0.19) 5.59 2.77
--------- ------- ------- ------- -------
Total From Investment
Operations..................... (3.19) 2.08 (0.53) 5.27 2.67
--------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income.......................... - - - - -
Distributions in Excess of Net
Investment Income............... - - - - -
Distributions from Net Realized
Gains........................... - (1.07) (1.50) (0.76) (0.32)
Distributions in Excess of Net
Realized Gains.................. - - - - -
Distributions from Capital....... - - - - -
--------- ------- ------- ------- -------
Total Distributions............ - (1.07) (1.50) (0.76) (0.32)
--------- ------- ------- ------- -------
Net Asset Value, End of Period..... $15.67 $18.86 $17.85 $19.88 $15.37
========= ======= ======= ======= =======
Total Return(2).................... (16.87)% 12.05% (2.26)% 34.93% 20.69%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)...................... $22,172 $28,540 $29,123 $28,920 $10,208
Ratio of Operating Expenses to
Average Net Assets(3)........... 2.84%(5) 2.47% 2.39% 2.39% 2.43%
Ratio of Net Investment
Income/Loss to Average Net
Assets.......................... (2.39)%(5) (1.92)% (1.92)% (1.77)% (1.06)%
Portfolio Turnover Rate.......... 20% 112% 81% 131% 181%
Ratio of Operating Expenses to
Average Net Assets Without Fee
Waivers,
Expenses Absorbed and/or Credits
Allowed by the Custodian........ 2.85%(5) 2.47%(10) 2.39%(10) 2.40%(10) N/A
</TABLE>

Footnotes appear on page 84

77
<PAGE> 80
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INTERNATIONAL GROWTH FUND CLASS A SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(1)
----------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period............ $8.86 $10.20
------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).................. 0.01(9) (0.02)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.................................. 2.65 (1.32)
------- ---------
Total From Investment Operations............ 2.66 (1.34)
------- ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......... (0.27) -
Distributions in Excess of Net Investment
Income....................................... - -
Distributions from Net Realized Gains......... (0.11) -
Distributions in Excess of Net Realized
Gains........................................ - -
------- ---------
Total Distributions......................... (0.38) -
------- ---------
Net Asset Value, End of Period.................. $11.14 $8.86
======= =========
Total Return(2)................................. 31.15% (13.14)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).......... $28,618 $30,117
Ratio of Operating Expenses to Average Net
Assets(3).................................... 1.88% 1.86%(5)
Ratio of Net Investment Income/(Loss) to
Average Net Assets........................... 0.13% (0.50)%(5)
Portfolio Turnover Rate....................... 164% 41%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian...... 1.89% 1.86%(5)

YEAR ENDED JUNE 30,
-----------------------------------------
1998(6) 1997 1996 1995
-----------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $11.85 $10.49 $9.78 $10.74
------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).................. 0.05(9) 0.04(9) 0.05(9) (0.11)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.................................. (0.67) 1.55 1.21 (0.31)
------- -------- ------- -------
Total From Investment Operations............ (0.62) 1.59 1.26 (0.42)
------- -------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......... (0.50) (0.13) (0.05) (0.04)
Distributions in Excess of Net Investment
Income....................................... (0.03) - (0.04) -
Distributions from Net Realized Gains......... (0.50) (0.10) (0.46) (0.44)
Distributions in Excess of Net Realized
Gains........................................ - - - (0.06)
------- -------- ------- -------
Total Distributions......................... (1.03) (0.23) (0.55) (0.54)
------- -------- ------- -------
Net Asset Value, End of Period.................. $10.20 $11.85 $10.49 $9.78
======= ======== ======= =======
Total Return(2)................................. (4.19)% 15.50% 13.16% (4.01)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).......... $38,281 $57,776 $116,254 $91,763
Ratio of Operating Expenses to Average Net
Assets(3).................................... 1.67% 1.65% 1.77% 1.69%
Ratio of Net Investment Income/(Loss) to
Average Net Assets........................... 0.50% 0.35% 0.46% 0.62%
Portfolio Turnover Rate....................... 118% 67% 125% 81%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian...... 1.67%(10) 1.65%(10) 1.77%(10) N/A
</TABLE>

INTERNATIONAL GROWTH FUND CLASS B SHARES

<TABLE>
<CAPTION>
FISCAL
YEAR PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1999 1998(1)
-----------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period............ $8.72 $10.07
------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss........................... (0.08)(9) (0.05)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.................................. 2.60 (1.30)
------- ---------
Total From Investment Operations............ 2.52 (1.35)
------- ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......... (0.26) -
Distributions in Excess of Net Investment
Income....................................... - -
Distributions from Net Realized Gains......... (0.11) -
Distributions in Excess of Net Realized
Gains........................................ - -
------- ---------
Total Distributions......................... (0.37) -
------- ---------
Net Asset Value, End of Period.................. $10.87 $8.72
======= =========
Total Return(2)................................. 29.87% (13.41)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).......... $11,101 $3,552
Ratio of Operating Expenses to Average Net
Assets(3).................................... 2.80% 2.97%(5)
Ratio of Net Investment Loss to Average Net
Assets....................................... (0.79)% (1.61)%(5)
Portfolio Turnover Rate....................... 164% 41%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian...... 2.81% 2.97%

YEAR ENDED JUNE 30,
--------------------------------------------
1998(6) 1997 1996 1995(7)
--------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $11.70 $10.39 $9.73 $10.74
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss........................... (0.04)(9) (0.04)(9) (0.03)(9) (0.17)(9)
Net Realized & Unrealized Gain/(Loss) on
Investments.................................. (0.64) 1.53 1.21 (0.31)
-------- -------- -------- --------
Total From Investment Operations............ (0.68) 1.49 1.18 (0.48)
-------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.......... (0.42) (0.08) (0.02) (0.03)
Distributions in Excess of Net Investment
Income....................................... (0.03) - (0.04) -
Distributions from Net Realized Gains......... (0.50) (0.10) (0.46) (0.44)
Distributions in Excess of Net Realized
Gains........................................ - - - (0.06)
-------- -------- -------- --------
Total Distributions......................... (0.95) (0.18) (0.52) (0.53)
-------- -------- -------- --------
Net Asset Value, End of Period.................. $10.07 $11.70 $10.39 $9.73
======== ======== ======== ========
Total Return(2)................................. (4.95)% 14.66% 12.34% (4.61)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).......... $4,294 $4,876 $4,447 $2,268
Ratio of Operating Expenses to Average Net
Assets(3).................................... 2.94% 2.40% 2.52% 2.44%
Ratio of Net Investment Loss to Average Net
Assets....................................... (0.35)% (0.40)% (0.29)% (0.13)%
Portfolio Turnover Rate....................... 118% 67% 125% 81%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian...... 2.94% 2.40%(10) 2.52%(10) 2.44%
</TABLE>

Footnotes appear on page 84

78
<PAGE> 81
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

STRATEGIC GROWTH PORTFOLIO(25)

<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------
FISCAL
YEAR PERIOD YEAR JULY 25,
ENDED ENDED ENDED 1996 TO
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30,
1999 1998(1) 1998(6) 1997(4)
-----------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $11.67 $12.66 $11.26 $10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss)............ (0.03)(9) (0.02)(9) 0.00(8)(9) (0.02)(9)
Net Realized & Unrealized Gain on
Investments............................ 4.36 (0.97) 2.12 1.90
------- ------- ------- -------
Total From Investment Operations...... 4.33 (0.99) 2.12 1.88
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.... (0.22) - - -
Distributions in Excess of Net
Investment Income...................... (0.19) - (0.68) (0.62)
Distributions from Net Realized Gains... (0.98) - (0.04) (0.00)(8)
------- ------- ------- -------
Total Distributions................... 1.39 - (0.72) (0.62)
------- ------- ------- -------
Net Asset Value, End of Period............ $14.61 $11.67 $12.66 $11.26
======= ======= ======= =======
Total Return(2)........................... 39.55% (7.82)% 20.11% 19.33%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).... $74,678 $19,690 $18,330 $14,253
Ratio of Operating Expenses to Average
Net Assets(3).......................... 1.07% 0.95%(5) 0.94% 0.90%(5)
Ratio of Net Investment Income/(Loss) to
Average Net Assets..................... (0.21)% (0.53)%(5) 0.01% (0.19)%(5)
Portfolio Turnover Rate................. 20% 10% 23% 33%
Ratio of Operating Expenses to Average
Net Assets Without Fee Waivers,
Expenses Absorbed and/or Credits
Allowed by the Custodian............... 1.09% 1.13%(5) 1.08% 1.45%(5)

<CAPTION>
CLASS B
-------------------------------------------------
FISCAL
YEAR PERIOD YEAR JULY 25,
ENDED ENDED ENDED 1996 TO
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30,
1999 1998(1) 1998(6) 1997(4)
-------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $11.52 $12.53 $11.19 $10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss)............ (0.13)(4) (0.05)(4) (0.09)(9) (0.10)(9)
Net Realized & Unrealized Gain on
Investments............................ 4.31 (0.96) 2.11 1.90
------- ------- ------- -------
Total From Investment Operations...... 4.81 (1.01) 2.02 1.80
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.... (0.13) - - -
Distributions in Excess of Net
Investment Income...................... (0.19) - (0.64) (0.61)
Distributions from Net Realized Gains... (0.98) - (0.04) (0.00)(8)
------- ------- ------- -------
Total Distributions................... (1.30) - (0.68) (0.61)
------- ------- ------- -------
Net Asset Value, End of Period............ $14.40 $11.52 $12.53 $11.19
======= ======= ======= =======
Total Return(2)........................... 38.60% (8.06)% 19.24% 18.48%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).... $130,522 $51,752 $51,173 $35,802
Ratio of Operating Expenses to Average
Net Assets(3).......................... 1.83% 1.70%(5) 1.68% 1.65%(5)
Ratio of Net Investment Income/(Loss) to
Average Net Assets..................... (0.97)% (1.28)%(5) (0.74)% (0.94)%(5)
Portfolio Turnover Rate................. 20% 10% 23% 33%
Ratio of Operating Expenses to Average
Net Assets Without Fee Waivers,
Expenses Absorbed and/or Credits
Allowed by the Custodian............... 1.85% 1.88%(5) 1.83% 2.20%(5)
</TABLE>

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79
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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

CONSERVATIVE GROWTH PORTFOLIO(25)

<TABLE>
<CAPTION>
CLASS A CLASS B
---------------------------------------------------------- ---------------------------------------
FISCAL FISCAL
YEAR PERIOD YEAR JULY 25, YEAR PERIOD YEAR
ENDED ENDED ENDED 1996 TO ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, OCTOBER 31, OCTOBER 31, JUNE 30,
1999 1998(1) 1998(6) 1997(4) 1999 1998(1) 1998(6)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................... $10.97 $11.84 $10.86 $10.00 $10.85 $11.74 $10.80
-------- -------- ------- ------ -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment
Income/(Loss)............ 0.06(9) 0.01 0.13(9) 0.08(9) (0.03)(9) (0.03) 0.04(9)
Net Realized & Unrealized
Gain on Investments...... 3.70 (0.88) 1.42 1.32 3.61 (0.86) 1.43
-------- -------- ------- ------ -------- -------- -------
Total From Investment
Operations.............. 3.76 (0.87) 1.55 1.40 3.58 (0.89) 1.47
-------- -------- ------- ------ -------- -------- -------
LESS DISTRIBUTIONS:
Dividends from Net
Investment Income........ (0.20) - (0.09) (0.08) (0.13) - (0.08)
Distributions in Excess of
Net Investment Income.... (0.22) - (0.42) (0.46) (0.21) - (0.39)
Distributions from Net
Realized Gains........... (0.88) - (0.06) - (0.88) - (0.06)
-------- -------- ------- ------ -------- -------- -------
Total Distributions..... (1.30) - (0.57) (0.54) (1.22) - (0.53)
-------- -------- ------- ------ -------- -------- -------
Net Asset Value, End of
Period...................... $13.43 $10.97 $11.84 $10.86 $13.21 $10.85 $11.74
======== ======== ======= ====== ======== ======== =======
Total Return(2)............. 36.54% (7.35)% 15.18% 14.39% 34.98% (7.58)% 14.44%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)............... $249,650 $100,024 $114,946 $136,141 $263,911 $155,064 $169,269
Ratio of Operating
Expenses to Average Net
Assets(13)(3)............ 1.02% 0.95%(5) 0.95% 0.92%(5) 1.77% 1.70%(5) 1.70%
Ratio of Net Investment
Income/(Loss) to Average
Net Assets............... 0.48% 0.05%(5) 1.17% 0.81%(5) (0.27)% (.70)%(5) 0.40%
Portfolio Turnover Rate... 16% 9% 28% 20% 16% 9% 28%
Ratio of Operating
Expenses to Average Net
Assets Without Fee
Waivers, Expenses
Absorbed and/or Credits
Allowed by the
Custodian................ 1.03% 1.03%(5) 1.00% 1.17%(5) 1.78% 1.78%(5) 1.74%

<CAPTION>
CLASS B
----------------

JULY 25,
1996 TO
JUNE 30,
1997(4)
----------------
<S> <C>
Net Asset Value, Beginning
of Period................... $10.00
------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment
Income/(Loss)............ 0.01(9)
Net Realized & Unrealized
Gain on Investments...... 1.31
------
Total From Investment
Operations.............. 1.32
------
LESS DISTRIBUTIONS:
Dividends from Net
Investment Income........ (0.01)
Distributions in Excess of
Net Investment Income.... (0.51)
Distributions from Net
Realized Gains........... -
------
Total Distributions..... (0.52)
------
Net Asset Value, End of
Period...................... $10.80
======
Total Return(2)............. 13.59%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)............... $158,697
Ratio of Operating
Expenses to Average Net
Assets(13)(3)............ 1.67%(5)
Ratio of Net Investment
Income/(Loss) to Average
Net Assets............... 0.06%(5)
Portfolio Turnover Rate... 20%
Ratio of Operating
Expenses to Average Net
Assets Without Fee
Waivers, Expenses
Absorbed and/or Credits
Allowed by the
Custodian................ 1.92%(5)
</TABLE>

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80
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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

BALANCED PORTFOLIO(25)

<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------------------------- -------------------------------
FISCAL FISCAL
YEAR PERIOD YEAR JULY 25, YEAR PERIOD
ENDED ENDED ENDED 1996 TO ENDED ENDED
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, OCTOBER 31, OCTOBER 31,
1999 1998(1) 1998(6) 1997(4) 1999 1998(1)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $11.02 $11.63 $10.95 $10.00 $11.02 $11.63
------ ------- ------- ------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.19(9) 0.05 0.22 0.20(9) 0.11(9) 0.02
Net Realized & Unrealized
Gain/(Loss) on Investments... 2.39 (0.61) 1.25 1.27 2.38 (0.61)
------ ------- ------- ------- -------- --------
Total From Investment
Operations.................. 2.58 (0.56) 1.47 1.47 2.49 (0.59)
------ ------- ------- ------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.35) (0.05) (0.23) (0.20) (0.27) (0.02)
Distributions in Excess of Net
Investment Income............ (0.09) - (0.45) (0.32) (0.09) -
Distributions from Net
Realized Gains............... (0.94) - (0.11) (0.00)(8) (0.94) -
------ ------- ------- ------- -------- --------
Total Distributions......... (1.38) (0.05) (0.79) (0.52) (1.30) (0.02)
------ ------- ------- ------- -------- --------
Net Asset Value, End of
Period.......................... $12.22 $11.02 $11.63 $10.95 $12.21 $11.02
====== ======= ======= ======= ======== ========
Total Return(2)................. 25.16% (4.85)% 14.32% 15.02% 24.22% (5.09)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)................... $333,639 $93,491 $101,726 $109,421 $237,438 $110,626
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.03% 0.95%(5) 0.95% 0.92%(5) 1.77% 1.70%(5)
Ratio of Net Investment
Income/Loss to Average Net
Assets....................... 1.66% 1.22%(5) 2.14% 2.48%(5) 0.92% 0.47%(5)
Portfolio Turnover Rate....... 39% 3% 29% 46% 39% 3%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 1.04% 1.02%(5) 1.00% 1.17%(5) 1.78% 1.77%(5)

<CAPTION>
CLASS B
-----------------------------

YEAR JULY 25,
ENDED 1996 TO
JUNE 30, JUNE 30,
1998(6) 1997(4)
-----------------------------
<S> <C> <C>
Net Asset Value, Beginning of
Period.......................... $10.95 $10.00
------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.17 0.14(9)
Net Realized & Unrealized
Gain/(Loss) on Investments... 1.22 1.25
------- -------
Total From Investment
Operations.................. 1.39 1.39
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.20) (0.14)
Distributions in Excess of Net
Investment Income............ (0.40) (0.30)
Distributions from Net
Realized Gains............... (0.11) (0.00)(8)
------- -------
Total Distributions......... (0.71) (0.44)
------- -------
Net Asset Value, End of
Period.......................... $11.63 $10.95
======= =======
Total Return(2)................. 13.47% 14.23%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)................... $114,944 $99,821
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.70% 1.67%(5)
Ratio of Net Investment
Income/Loss to Average Net
Assets....................... 1.39% 1.73%(5)
Portfolio Turnover Rate....... 29% 46%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 1.75% 1.92%(5)
</TABLE>

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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

FLEXIBLE INCOME PORTFOLIO(25)

<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------------------------- -------------------------------
FISCAL FISCAL
YEAR PERIOD YEAR JULY 25, YEAR PERIOD
ENDED ENDED ENDED 1996 TO ENDED ENDED
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, OCTOBER 31, OCTOBER 31,
1999 1998(1) 1998(6) 1997(4)* 1999 1998(1)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $10.63 $10.79 $10.57 $10.00 $10.63 $10.79
------ ------- ------ ------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.40(9) 0.12 0.45 0.43(9) 0.33(9) 0.10
Net Realized & Unrealized
Gain/(Loss) on Investments... 0.57 (0.15) 0.67 0.70 0.56(12) (0.16)
------ ------- ------ ------ ------- -------
Total From Investment
Operations.................. 0.97 (0.03) 1.12 1.13 0.89 (0.06)
------ ------- ------ ------ ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.48) (0.13) (0.45) (0.43) (0.40) (0.10)
Distributions in Excess of Net
Investment Income............ (0.00)(8) - (0.21) (0.13) (0.00)(8) -
Distributions from Net
Realized Gains............... (0.37) - (0.24) (0.00)(8) (0.37) -
------ ------- ------ ------ ------- -------
Total Distributions......... (0.85) (0.13) (0.90) (0.56) (0.77) (0.10)
------ ------- ------ ------ ------- -------
Net Asset Value, End of
Period.......................... $10.75 $10.63 $10.79 $10.57 $10.75 $10.63
====== ======= ====== ====== ======= =======
Total Return(2)................. 9.39% (0.26)% 11.07% 11.58% 8.60% (0.51)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period
($1,000's)................... $194,404 $9,766 $8,808 $12,613 $46,821 $11,142
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.00% 0.95%(5) 0.95% 0.92%(5) 1.75% 1.70%(5)
Ratio of Net Investment Income
to Average Net Assets........ 3.86% 3.62%(5) 4.07% 4.95%(5) 3.11% 2.87%(5)
Portfolio Turnover Rate....... 31% 15% 24% 54% 31% 15%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 1.06% 1.37%(5) 1.23% 1.67%(5) 1.81% 2.12%(5)

<CAPTION>
CLASS B
-----------------------------

YEAR JULY 25,
ENDED 1996 TO
JUNE 30, JUNE 30,
1998(6) 1997(4)
-----------------------------
<S> <C> <C>
Net Asset Value, Beginning of
Period.......................... $10.57 $10.00
------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.31 0.38(9)
Net Realized & Unrealized
Gain/(Loss) on Investments... 0.73 0.68
------ ------
Total From Investment
Operations.................. 1.04 1.06
------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.37) (0.38)
Distributions in Excess of Net
Investment Income............ (0.21) (0.11)
Distributions from Net
Realized Gains............... (0.24) (0.00)(8)
------ ------
Total Distributions......... (0.82) (0.49)
------ ------
Net Asset Value, End of
Period.......................... $10.79 $10.57
====== ======
Total Return(2)................. 10.24% 10.80%
RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period
($1,000's)................... $7,684 $7,385
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.70% 1.67%(5)
Ratio of Net Investment Income
to Average Net Assets........ 3.32% 4.20%(5)
Portfolio Turnover Rate....... 24% 54%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 1.98% 2.42%(5)
</TABLE>

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82
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FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INCOME PORTFOLIO(25)

<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------------------------- -------------------------------
FISCAL FISCAL
YEAR PERIOD YEAR JULY 25, YEAR PERIOD
ENDED ENDED ENDED 1996 TO ENDED ENDED
OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, OCTOBER 31, OCTOBER 31,
1999 1998(1) 1998(6) 1997(4) 1999 1998(1)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $10.25 $10.34 $10.13 $10.00 $10.25 $10.34
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.56 0.19 0.64 0.58(9) 0.50 0.16
Net Realized & Unrealized
Gain/(Loss) on Investments... (0.27) (0.09) 0.22 0.14(12) (0.29) (0.09)
------ ------ ------ ------ ------ ------
Total From Investment
Operations.................. 0.29 0.10 0.86 0.72 0.21 0.07
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.57) (0.19) (0.65) (0.58) (0.49) (0.16)
Distributions in Excess of Net
Investment Income............ (0.01) - (0.00)(8) (0.01) (0.01) -
Distributions from Net
Realized Gains............... (0.02) - - (0.00)(8) (0.02) -
------ ------ ------ ------ ------ ------
Total Distributions......... (0.60) (0.19) (0.65) (0.59) (0.52) (0.16)
------ ------ ------ ------ ------ ------
Net Asset Value, End of
Period.......................... $9.94 $10.25 $10.34 $10.13 $9.94 $10.25
====== ====== ====== ====== ====== ======
Total Return(2)................. 2.89% 0.96% 8.71% 7.38% 2.05% 0.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)................... $7,297 $7,611 $7,793 $13,410 $13,443 $5,698
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.00% 0.95%(5) 0.95% 0.93%(5) 1.74% 1.70%(5)
Ratio of Net Investment
Income/Loss to Average Net
Assets....................... 5.57% 5.40%(5) 6.23% 6.09%(5) 4.83% 4.65%(5)
Portfolio Turnover Rate....... 51% 22% 14% 56% 51% 22%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 1.24% 1.53%(5) 1.25% 1.65%(5) 1.98% 2.28%(5)

<CAPTION>
CLASS B
-----------------------------

YEAR JULY 25,
ENDED 1996 TO
JUNE 30, JUNE 30,
1998(6) 1997(4)
-----------------------------
<S> <C> <C>
Net Asset Value, Beginning of
Period.......................... $10.13 $10.00
------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income......... 0.56 0.51(9)
Net Realized & Unrealized
Gain/(Loss) on Investments... 0.22 0.14(12)
------ ------
Total From Investment
Operations.................. 0.78 0.65
------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income....................... (0.57) (0.51)
Distributions in Excess of Net
Investment Income............ (0.00)(8) (0.01)
Distributions from Net
Realized Gains............... - (0.00)(8)
------ ------
Total Distributions......... (0.57) (0.52)
------ ------
Net Asset Value, End of
Period.......................... $10.34 $10.13
====== ======
Total Return(2)................. 7.90% 6.63%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
($1,000's)................... $4,084 $4,537
Ratio of Operating Expenses to
Average Net Assets(13)(3).... 1.70% 1.68%(5)
Ratio of Net Investment
Income/Loss to Average Net
Assets....................... 5.48% 5.34%(5)
Portfolio Turnover Rate....... 14% 56%
Ratio of Operating Expenses to
Average Net Assets Without
Fee Waivers, Expenses
Absorbed and/or Credits
Allowed by the Custodian..... 2.01% 2.40%(5)
</TABLE>

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83
<PAGE> 86
- --------------------------------------------------------------------------------

FOOTNOTES TO FINANCIAL HIGHLIGHTS

<TABLE>
<C> <S>
(1) Fiscal year end changed to October 31.
(2) Total return is not annualized for periods less than one
year and does not reflect any applicable sales charges. The
total return would have been lower if certain fees had not
been waived and/or expenses absorbed by the investment
advisor or if fees had not been reduced by credits allowed
by the custodian.
(3) Ratio of operating expenses to average net assets includes
expenses paid indirectly beginning in fiscal 1995.
(4) From the commencement of offering shares.
(5) Annualized.
(6) On March 23, 1998, WM Advisors, Inc. replaced Sierra
Investment Advisers Corporation as investment advisor to the
Funds. In the case of the Portfolios, on March 23, 1998, WM
Advisors, Inc. replaced Sierra Investment Services
Corporation as investment advisor to the Portfolio.
(7) On July 1, 1994, the Funds commenced selling Class B shares
in addition to Class A shares. Those shares in existence
prior to July 1, 1994 were designated Class A shares.
(8) Amount represents less than $0.01 per share.
(9) Per share numbers have been calculated using the average
shares method.
(10) The ratio and per share numbers include custodian fees
before reduction by credits allowed by the custodian as
required by amended disclosure requirements effective
September 1, 1995.
(11) Total returns do not reflect a sales charge and are not
annualized.
(12) The amount shown may not accord with the change in aggregate
gains and losses of portfolio securities due to the timing
of sales and redemptions of Fund shares.
(13) The Portfolios will indirectly incur their pro rata share of
the expenses of the Funds when they purchase. Such
underlying Fund expenses are not included in the table.
(14) On May 2, 1994, the Fund commenced selling Class B shares.
Those shares in existence prior to May 2, 1994 were
designated as Class A shares.
(15) Formerly, Composite Cash Management Company Money Market
Portfolio.
(16) Formerly, Composite Cash Management Company Tax-Exempt
Portfolio.
(17) Formerly, Composite U.S. Government Securities, Inc.
(18) On March 30, 1994 the Fund commenced selling Class B shares.
Those shares in existence prior to March 30, 1994 were
designated as Class A shares.
(19) Formerly, Composite Income Fund, Inc.
(20) Amounts distributed in excess of accumulated net investment
income as determined for financial statement purposes have
been reported as distributions from paid-in capital at the
fiscal year end in which the distribution was made. Certain
of these distributions which are reported as being from
paid-in capital for financial statement purposes may be
reported to shareholders as taxable distributions due to
differing tax and accounting rules.
(21) Formerly, Composite Tax-Exempt Bond Fund, Inc.
(22) Formerly, Composite Bond & Stock Fund, Inc.
(23) Formerly, Composite Growth & Income Fund.
(24) Formerly, Composite Northwest Fund, Inc. and WM Northwest
Fund.
(25) The financial information shown for each Portfolio is that
of the corresponding series of WM Strategic Asset Management
Portfolios, the Portfolio's predecessor.
(26) Formerly, Short Term High Quality Bond Fund.
(27) Formerly, Emerging Growth Fund.
</TABLE>

84
<PAGE> 87
- --------------------------------------------------------------------------------

APPENDIX A

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. BOND RATINGS:

- - Aaa, Aa, A -- Bonds which are rated Aaa or Aa are judged to be of high quality
by all standards and are generally known as high grade bonds. Bonds rated Aa
are rated lower than Aaa securities because margins of protection may not be
as large as in the latter or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities. Bonds which are
rated A possess many favorable investment attributes and are to be considered
as upper medium grade obligations. Factors giving security to principal and
interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.

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

- - Ba -- Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well secured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

- - B -- Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

- - Caa -- Bonds which are rated Caa are poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.

- - Ca -- Bonds which are rated Ca represent obligations which are speculative in
high degree. Such issues are often in default or have other marked
shortcomings.

- - C -- Bonds which are rated C are the lowest rated class of bonds and can be
regarded as having extremely poor prospectus of ever attaining any real
investment standing.

- - Description of Standard & Poor's bond ratings: AAA, AA, A -- Bonds rated AAA
have the highest rating assigned by S&P to a debt obligation. Capacity to pay
interest and repay principal is extremely strong. Bonds rated AA have a very
strong capacity to pay interest and repay principal and differ from the
highest rated issues only in small degree. Bonds rated A have a strong
capacity to pay interest and repay principal although they are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than bonds in high rated categories.

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

- - BB-B-CCC-CC-C -- Bonds rated BB, B, CCC, CC and C are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation.
BB indicates the lowest degree of speculation and C the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse business, economic and financial conditions.

- - CI -- The rating CI is reserved for income bonds on which no income is being
paid.

- - D -- Bonds rated D are in default, and payment of interest and/or repayment of
principal is in arrears.

85
<PAGE> 88
- --------------------------------------------------------------------------------

FOR MORE INFORMATION ABOUT THE WM GROUP OF FUNDS

The WM Group's Statement of Additional Information (SAI) and Annual and
Semi-annual Reports to shareholders include additional information about the
Funds and Portfolios. The SAI and the Reports of Independent Accountants, along
with the financial statements, included in the Funds' and Portfolios' most
recent Annual Reports are incorporated by reference into this prospectus, which
means that they are part of this prospectus for legal purposes. The Funds' and
Portfolio's Annual Reports discuss the market conditions and investment
strategies that significantly affected performance during the last fiscal year.
You may obtain free copies of these materials, request other information about
the WM Group of Funds, or make shareholder inquiries, by contacting your
financial advisor or by calling toll-free 1-800-222-5852.

You may review and copy information about the Funds and Portfolios, including
the SAI, at the Securities and Exchange Commission's public reference room in
Washington, D.C. You may call the Commission at 1-202-942-8090 for information
about the operation of the public reference room. You may also access reports
and other information about the Funds and Portfolios on the EDGAR database or
the Commission's Internet site at http://www.sec.gov. You may obtain copies of
this information, with payment of a duplication fee, by electronic request at
the following email address: [email protected] by writing the Public
Reference Section of the Commission, Washington, D.C. 20549-6009. You may need
to refer to the following file number:

FILE NO. 811-00123

Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Securities Fund
Income Fund
High Yield Fund
Tax-Exempt Bond Fund
Bond & Stock Fund
Growth & Income Fund
Growth Fund of the Northwest

FILE NO. 811-05775

California Money Fund
Short Term Income Fund
California Municipal Fund
California Insured Intermediate Municipal Fund
Florida Insured Municipal Fund
Growth Fund
Mid Cap Stock Fund
Small Cap Stock Fund
International Growth Fund

FILE NO. 811-07577

Strategic Growth Portfolio
Conservative Growth Portfolio
Balanced Portfolio
Flexible Income Portfolio
Income Portfolio
<PAGE> 89

(This Page Intentionally Left Blank)
<PAGE> 90

THE WM GROUP OF FUNDS
I Share
Prospectus
MARCH 1, 2000
- --------------------------------------------------------------------------------

Money Funds

+ Money Market Fund

- ----------------------------------------------------------------
Fixed-Income Funds

+ Short Term Income Fund
- ----------------------------------------------------------------
+ U.S. Government Securities Fund
- ----------------------------------------------------------------
+ Income Fund
- ----------------------------------------------------------------

+ High Yield Fund

- ----------------------------------------------------------------
Equity Funds

+ Bond & Stock Fund
- ----------------------------------------------------------------
+ Growth & Income Fund
- ----------------------------------------------------------------
+ Growth Fund of the Northwest
- ----------------------------------------------------------------
+ Growth Fund
- ----------------------------------------------------------------
+ Mid Cap Stock Fund
- ----------------------------------------------------------------
+ Small Cap Stock Fund
- ----------------------------------------------------------------
+ International Growth Fund
- ----------------------------------------------------------------

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

The WM Group of Funds provides a broad selection
of investment alternatives to investors.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a crime.
<PAGE> 91

THE WM GROUP OF FUNDS

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Risk/Return Summary 2
Money Funds 3
Fixed-Income Funds 4
Equity Funds 8
Summary of Principal Risks 15
Fees and Expenses of the Funds 19
Description of the Funds 21
Money Funds 21
Fixed-Income Funds 21
Equity Funds 23
Common Investment Practices 24
Ways to Set Up Your Account 32
How Can I Invest in the Funds? 33
Which Class of Shares is Best For Me?
Class I Shares 35
Distribution Plans
Distribution of Income and Capital Gains 35
How Can I Sell My Shares? 35
How Can I Exchange My Shares? 36
Dividends, Capital Gains and Taxes 36
Organization 38
Financial Highlights 41
</TABLE>

<PAGE> 92

RISK/RETURN SUMMARY

The WM Group of Funds provides a broad range of investment choices. This summary
identifies the investment objective, principal investment strategies and
principal risks of each Fund. The principal investment strategies identified in
this summary are not the only investment strategies available to the Funds, and
any number of principal investment strategies may not be in use at any given
time. For a discussion of all of the investment strategies available to the
Funds, please see the Statement of Additional Information (the "SAI").

The principal investment strategies identified in this summary provide specific
information about each of the Funds, but there are some general principles WM
Advisors and the sub-advisors apply in making investment decisions. When making
decisions about whether to buy or sell equity securities, WM Advisors and the
sub-advisors will consider, among other things, a company's strength in
fundamentals, its potential for earnings growth over time, and the current price
of its securities relative to their perceived worth. When making decisions about
whether to buy or sell fixed-income investments, WM Advisors and the sub-
advisors will generally consider among other things, the strength of certain
sectors of the fixed-income market relative to others, interest rates and other
general market conditions, as well as the credit quality of individual issuers.

The discussion of each Fund's principal investment strategies includes a short
discussion of some of the principal risks of investing in such Fund. You can
find additional information about each Fund, including a more detailed
description of these and other principal risks of an investment in each Fund,
after this summary. Investments mentioned in the summary and described in
greater detail under "Common Investment Practices" below appear in BOLD TYPE.
Please be sure to read the more complete descriptions of the Funds, and the
related risks, before you invest.

Below the description of each Fund is a bar chart showing how the investment
returns of its Class I shares have varied in the past ten years, or in the years
since the Fund began if that is less than ten years. The bar chart is intended
to provide some indication of the volatility of the Fund's returns. The table
following each bar chart shows how, for Class I shares, average total annual
returns of the Fund (other than the Money Funds) compare to returns of a
broad-based securities market index for the last one, five and ten years (or,
for a newer Fund, for the life of the Fund). PAST PERFORMANCE IS NOT NECESSARILY
AN INDICATION OF FUTURE PERFORMANCE.

There can be no assurance that any Fund will achieve its objective. It is
possible to lose money "by investing" in the Funds. An investment in a Fund is
not a deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Money Funds
seek to preserve the value of your investment at $1.00 per share, it is possible
to lose money by investing in the Money Funds.

2
<PAGE> 93

- --------------------------------------------------------------------------------
MONEY MARKET fund

OBJECTIVE This Fund seeks to maximize current income while preserving capital
and maintaining liquidity.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Liquidity Risk,
- - Credit Risk, - Management Risk, and
- - Foreign Investment - Money Market Risk.
Risk,
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1999 4.68%
</TABLE>

During the periods shown above, the highest quarterly return was 1.25% (for the
quarter ended 12/31/99), and the lowest was 1.05% (for the quarter ended
3/31/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (3/23/98)
<S> <C> <C> <C>
CLASS I SHARES 4.68% N/A 4.91%
MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX** 4.85% N/A 5.00%
</TABLE>

* The Fund's performance through December 31, 1998 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This is an unmanaged index, that measures the performance of 3-month U.S.
Treasury Bills currently available in the marketplace.

3
<PAGE> 94

- --------------------------------------------------------------------------------
SHORT TERM INCOME fund

OBJECTIVE This Fund (formerly known as Short Term High Quality Bond) seeks as
high a level of current income as is consistent with prudent investment
management and stability of principal.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-quality, short-term, bonds and other FIXED-INCOME SECURITIES, which are
rated in the top four categories by a nationally recognized statistical ratings
organization ("investment grade") or are of comparable quality. Under normal
circumstances, the Fund maintains a dollar-weighted average portfolio duration
of three years or less. The Fund's investments may include corporate securities,
U.S. GOVERNMENT SECURITIES, REPURCHASE AGREEMENTS AND MORTGAGE- AND ASSET-BACKED
SECURITIES.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk, - Liquidity Risk, and
- - Foreign Investment - Management Risk.
Risk,
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1997 5.21%
1998 4.80
1999 3.08
</TABLE>

During the periods shown above, the highest quarterly return was 1.47% (for the
quarter ended 9/30/99), and the lowest was 0.07% (for the quarter ended
6/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (7/25/96)
<S> <C> <C> <C>
CLASS I SHARES 3.08% N/A 5.49%
LEHMAN BROTHERS MUTUAL FUND SHORT (1-5 [YEAR]) INVESTMENT
GRADE DEBT INDEX** 2.49% N/A 6.18%
</TABLE>

* The Fund's performance through December 31, 1998 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.
** This index includes all investment-grade, corporate debt securities with
maturities of one to five years.

4
<PAGE> 95

- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES fund

OBJECTIVE This Fund seeks a high level of current income, consistent with
safety and liquidity.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk, and
- - Leveraging Risk, - Management Risk.
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1999 0.31%
</TABLE>

During the periods shown above, the highest quarterly return was 0.80% (for the
quarter ended 9/30/99), and the lowest was -0.85% (for the quarter ended
6/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (3/23/98)
<S> <C> <C> <C>
CLASS I SHARES 0.31% N/A 3.44%
LEHMAN BROTHERS GOVERNMENT BOND INDEX** -2.23% N/A 3.28%
</TABLE>

* The Fund's performance through December 31, 1998 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This index includes all investment-grade, corporate debt securities with
maturities of one to five years.

5
<PAGE> 96

- --------------------------------------------------------------------------------
INCOME fund

OBJECTIVE This Fund seeks a high level of current income consistent with
preservation of capital.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in a
diversified pool of FIXED-INCOME SECURITIES including corporate securities, U.S.
GOVERNMENT SECURITIES and MORTGAGE-BACKED SECURITIES (including collateralized
mortgage obligations), up to 35% of which may be in LOWER-RATED SECURITIES
(which are sometimes called "junk bonds"). The Fund may also invest in
convertible securities.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk, - Liquidity Risk, and
- - Foreign Investment - Management Risk.
Risk,
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1999 0.48%
</TABLE>

During the periods shown above, the highest quarterly return was 0.96% (for the
quarter ended 9/30/99), and the lowest was -0.76% (for the quarter ended
3/31/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (3/23/98)
<S> <C> <C> <C>
CLASS I SHARES 0.48% N/A 2.95%
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX** -2.15% N/A 3.12%
</TABLE>

* The Fund's performance through December 31, 1999 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This index is generally considered representative of the U.S. government and
corporate bond markets.

6
<PAGE> 97

- --------------------------------------------------------------------------------
HIGH YIELD fund

OBJECTIVE This Fund seeks to provide a high level of current income.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-yielding LOWER-RATED SECURITIES (sometimes called "junk bonds"), which may
include FOREIGN INVESTMENTS. The Fund may also invest higher-rated FIXED-INCOME
SECURITIES, preferred stock and convertible securities.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Derivatives Risk,
- - Currency Risk, - Liquidity Risk, and
- - Foreign Investment - Management Risk.
Risk,
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1999 12.27%
</TABLE>

During the periods shown above, the highest quarterly return was 4.78% (for the
quarter ended 6/30/99), and the lowest was 0.84% (for the quarter ended
9/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (7/27/98)
<S> <C> <C> <C>
CLASS I SHARES 12.27% N/A 4.25%
LEHMAN BROTHERS HIGH YIELD INDEX** 2.39% N/A -0.53%
</TABLE>

* The Fund's performance through December 31, 1999 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This index includes all below investment-grade, corporate debt securities.

7
<PAGE> 98

- --------------------------------------------------------------------------------
BOND & STOCK fund

OBJECTIVE This Fund seeks to provide continuity of income, conservation of
principal and long-term growth of income and principal.

In selecting equity investments for the Fund, WM Advisors looks for long-term
potential for growth in "value" stocks currently selling for less than WM
Advisors believes they are worth. In selecting debt investments for the Fund, WM
Advisors looks for investments that provide regular income in addition to some
opportunity for capital appreciation.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Currency Risk, - Management Risk, and
- - Foreign Investment - Smaller Company Risk.
Risk,
</TABLE>

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE BOND & STOCK FUND BECAUSE IT HAS
YET TO OFFER CLASS I SHARES FOR A FULL YEAR.

8
<PAGE> 99

- --------------------------------------------------------------------------------
GROWTH & INCOME fund

OBJECTIVE This Fund seeks to provide long-term capital growth. Current income
is a secondary consideration.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Derivatives Risk,
- - Credit Risk, - Liquidity Risk,
- - Currency Risk, - Management Risk, and
- - Foreign Investment - Smaller Company Risk.
Risk,
- - Leveraging Risk,
</TABLE>

YEARLY performance (Class I Shares)*

[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1999 18.56%
</TABLE>

During the periods shown above, the highest quarterly return was 12.04% (for the
quarter ended 12/31/99), and the lowest was -8.55% (for the quarter ended
9/30/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Since Class I
(for periods ended December 31, 1999) One Year Five Years Inception (3/23/98)
<S> <C> <C> <C>
CLASS I SHARES 18.56% N/A 12.95%
STANDARD & POOR'S 500 INDEX** 21.04% N/A 19.51%
</TABLE>

* The Fund's performance through December 31, 1998 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock market.

9
<PAGE> 100

- --------------------------------------------------------------------------------
GROWTH FUND OF THE NORTHWEST

OBJECTIVE This Fund (formerly known as Northwest) seeks long-term growth of
capital.

In selecting investments for the Fund, WM Advisors looks for equity securities
that it believes are undervalued, yet well-managed, with excellent long-term
growth possibilities.

Among the principal risks of investing in the Fund are:

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE NORTHWEST FUND BECAUSE IT HAS
YET TO OFFER CLASS I SHARES FOR A FULL YEAR.

10
<PAGE> 101

- --------------------------------------------------------------------------------
GROWTH fund

OBJECTIVE This Fund seeks long-term capital appreciation.

Among the principal risks of investing in the Fund are:

YEARLY performance (Class I Shares)
[Yearly Performance Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
1997 50.01
1998 75.08
1999 94.67
</TABLE>

Calendar Year

During the periods shown above, the highest quarterly return was 42.86% (for the
quarter ended 12/31/99), and the lowest was 3.45% (for the quarter ended
9/30/99).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Class I
(for periods ended December 31, 1999) One Year Inception (7/25/96)
<S> <C> <C>
CLASS I SHARES 94.67% 48.82%
STANDARD & POOR'S 500 INDEX* 28.58% 29.57%
</TABLE>

* This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock market.

11
<PAGE> 102

- --------------------------------------------------------------------------------
MID CAP STOCK fund

OBJECTIVE The Fund seeks to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily (at least
65% of its assets) in common stocks and other equity securities of companies
having market capitalizations in the range of companies included in the S&P
MidCap 400 Index at the time of purchase. In selecting investments for the Fund,
WM Advisors looks for equity investments in companies that it believes have
solid management, a competitive advantage, and the resources to maintain
superior cash flow and profitability over the long term.

Among the principal risks of investing in the Fund are:

<TABLE>
<S> <C>
- - Market Risk, - Leveraging Risk,
- - Credit Risk, - Liquidity Risk,
- - Currency Risk, - Management Risk, and
- - Foreign Investment - Smaller Company Risk.
Risk,
</TABLE>

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE MID CAP STOCK FUND BECAUSE IT
HAD NOT BEEN IN OPERATION FOR A FULL YEAR AS OF THE DATE OF THIS PROSPECTUS.

12
<PAGE> 103

- --------------------------------------------------------------------------------
SMALL CAP STOCK fund

OBJECTIVE This Fund (formerly known as Emerging Growth) seeks long-term capital
appreciation.

In selecting investments for the Fund, WM Advisors looks for small cap companies
that it expects to achieve growth in earnings and revenues, or that it believes
are currently undervalued relative to their true worth.

Among the principal risks of investing in the Fund are:

YEARLY performance (Class I Shares)*
[Bar Graph]

<TABLE>
<CAPTION>
Calendar Year
ANNUAL RETURN
-------------
<S> <C>
1997 16.36%
1998 5.24
1999 71.61
</TABLE>

During the periods shown above, the highest quarterly return was 54.03% (for the
quarter ended 12/31/99), and the lowest was -10.63% (for the quarter ended
3/31/99).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Class I
(for periods ended December 31, 1999) One Year Inception (7/25/96)
<S> <C> <C>
CLASS A SHARES* 71.61% 25.95%
STANDARD & POOR'S 500 COMPOSITE INDEX** 21.04% 29.57%
RUSSELL 2000 INDEX*** 21.26% 16.23%
</TABLE>

* There were no Class I shares outstanding from April 13, 1999 to the date of
this prospectus. Yearly performance for 1999 and Average Annual Returns are
presented for Class A shares which have higher expenses and, therefore,
lower performance.

** This is an index of 500 industrial, transportation, utility and financial
companies widely regarded by investors as representative of the stock
market.

*** This index represents the smallest 2000 companies followed by Russell and is
used to measure the small-cap market.

13
<PAGE> 104

- --------------------------------------------------------------------------------
INTERNATIONAL GROWTH fund

OBJECTIVE This Fund seeks to provide long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in equity
securities of foreign issuers, including issuers located in developing or
emerging market countries. The Fund may also utilize STRATEGIC TRANSACTIONS
(derivatives) such as FOREIGN CURRENCY EXCHANGE TRANSACTIONS and REPURCHASE
AGREEMENTS.

In selecting investments for the Fund, Capital Guardian Trust Company seeks to
identify foreign stocks that it believes have an attractive valuation, high
return on invested capital, excellent cash flow, strong balance sheets, and
strong owner management. Capital Guardian utilizes a research driven "bottom-up"
approach in that decisions are made based upon extensive field research and
direct company contacts. Capital Guardian blends its basic value-oriented
approach with macroeconomic and political judgments on the outlook for
economies, industries, currencies and markets.

Among the principal risks of investing in the Fund are:

YEARLY performance (Class I Shares)
[International Growth Fund Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
1997 15.45
1998 25.44
1999 50.84
</TABLE>

Calendar Year

During the periods shown above, the highest quarterly return was 29.31% (for the
quarter ended 12/31/99), and the lowest was 1.86% (for the quarter ended
3/31/99).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Class I
(for periods ended December 31, 1999) One Year Inception (7/25/96)
<S> <C> <C>
CLASS I SHARES 50.84% 16.05%
MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE INDEX* 26.96% 15.16%
</TABLE>

* This index includes stock markets of Europe, Australia and the Far East
weighted by capitalization and represents the equity markets of 18 countries.

14
<PAGE> 105

SUMMARY OF PRINCIPAL RISKS

The value of your investment in a Fund changes with the value of the investments
held by that Fund. Many factors can affect that value, and it is possible that
you may lose money on investments in the Funds. Factors that may affect a
particular Fund as a whole are called "principal risks." They are summarized in
this section. The chart at the end of this section displays similar information.
All Funds are subject to principal risks. These risks can change over time,
because the types of investments made by the Funds can change over time.
Investments mentioned in this summary and described in greater detail under
"Common Investment Practices" appear in BOLD TYPE. That section also includes
more information about the Funds, their investments and the related risks.

+ MARKET RISK. Each of the Funds is subject to market risk, which is the
general risk of unfavorable changes in the market value of a Fund's portfolio
securities.

One aspect of market risk is interest rate risk. As interest rates rise, your
investment in a Fund is likely to be worth less because its income-producing
equity or debt investments are likely to be worth less.

Even Funds such as the Short Term Income and U.S. Government Securities Funds
are subject to interest rate risk, even though they generally invest
substantial portions of their assets in the highest quality debt securities,
such as U.S. GOVERNMENT SECURITIES.

Interest rate risk is generally greater for Funds that invest in debt
securities with longer maturities. This risk may be compounded for Funds such
as the Income and U.S. Government Securities Funds that invest in
MORTGAGE-BACKED or other ASSET-BACKED SECURITIES that may be prepaid. These
securities have variable maturities that tend to lengthen when that is least
desirable -- when interest rates are rising. Increased market risk is also
likely for Funds such as the Income and Short Term Income Funds that invest
in debt securities paying no interest, such as ZERO-COUPON, PRINCIPAL-ONLY
and INTEREST-ONLY SECURITIES.

The Equity Funds, by investing in equity securities, such as common stock and
preferred stock, and convertible securities, are exposed to a separate set of
market risks. Those risks include the risks of broader equity market declines
as well as more specific risks affecting the issuer, such as management
performance, financial leverage, industry problems and reduced demand for the
issuer's goods or services.

+ CREDIT RISK. Each of the Funds may be subject to credit risk to the extent it
invests in FIXED-INCOME SECURITIES. This is the risk that the issuer or the
guarantor of a debt security, or the counterparty to any of a Fund's portfolio
transactions (including without limitation REPURCHASE AGREEMENTS, REVERSE
REPURCHASE AGREEMENTS, LENDING OF SECURITIES and other over-the-counter
transactions), will be unable or unwilling to make timely principal and/or
interest payments, or to otherwise honor its obligations. Varying degrees of
credit risk, often reflected in credit ratings, apply. Credit risk is
particularly significant for Funds such as the Income, High Yield, Bond &
Stock, Growth & Income, Growth, Mid Cap Stock and Small Cap Stock Funds that
may invest significantly in LOWER-RATED SECURITIES. These securities and
similar unrated securities (commonly known as "junk bonds") have speculative
elements or are predominantly speculative credit risks. The Short Term Income,
Income, High Yield, Bond & Stock, Growth & Income, Growth Fund of the
Northwest, Growth, Mid Cap Stock, Small Cap Stock and International Growth
Funds, which make FOREIGN INVESTMENTS denominated in U.S. dollars, are also
subject to increased credit risk because of the added difficulties associated
with requiring foreign entities to honor their contractual commitments, and
because a number of foreign governments and other issuers are already in
default. The Money Market Fund may also make U.S. Dollar denominated FOREIGN
INVESTMENTS.

+ CURRENCY RISK. Funds such as the Short Term Income, Income, High Yield, Bond
& Stock, Growth & Income, Growth, Mid Cap Stock, Small Cap Stock and
International Growth Funds that invest in securities denominated in, and/or
receive revenues in, foreign currencies will be subject to currency risk. This
is the risk that those currencies will decline in value relative to the U.S.
dollar, or, in the case of hedging positions, that the U.S. dollar will
decline in value relative to the currency hedged.

15
<PAGE> 106

+ FOREIGN INVESTMENT RISK. Each of the Funds with FOREIGN INVESTMENTS such as
the Short Term Income Bond, Income, High Yield, Bond & Stock, Growth & Income,
Growth, Mid Cap Stock, Small Cap Stock and International Growth Funds, may
experience more rapid and extreme changes in value than Funds with investments
solely in securities of U.S. companies. This is because the securities markets
of many foreign countries are relatively small, with a limited number of
companies representing a small number of industries. Additionally, foreign
securities issuers are usually not subject to the same degree of regulation as
U.S. issuers. Reporting, accounting and auditing standards of foreign
countries differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely affect a Fund's
investments in a foreign country. In the event of nationalization,
expropriation or other confiscation, a Fund could lose its entire investment.
Adverse developments in certain regions, such as Southeast Asia, may adversely
affect the markets of other countries whose economies appear to be unrelated.
The Money Market Fund and Growth Fund of the Northwest may also make U.S.
dollar denominated FOREIGN INVESTMENTS.

+ GEOGRAPHIC CONCENTRATION RISK. The Growth Fund of the Northwest invests
significant portions of its assets in concentrated geographic areas like the
northwestern United States generally have more exposure to regional economic
risks than Funds making investments more broadly.

+ LEVERAGING RISK. When a Fund is BORROWING money or otherwise leveraging its
portfolio, the value of an investment in that Fund will be more volatile and
all other risks will tend to be compounded. The Income, Short Term Income
Bond, U.S. Government Securities, Growth, Mid Cap Stock International Growth
and Small Cap Stock Funds may achieve leverage by using REVERSE REPURCHASE
AGREEMENTS and/or DOLLAR ROLLS. The Fixed-Income Funds, and the Growth &
Income Fund may achieve leverage through the use of INVERSE FLOATING RATE
INVESTMENTS. Funds such as the U.S. Government Securities, Short Term Income,
Small Cap Stock, Mid Cap Stock, Growth and International Growth Funds may also
take on leveraging risk by investing collateral from securities loans, by
using STRATEGIC TRANSACTIONS (derivatives) and by BORROWING money to meet
redemption requests.

+ DERIVATIVES RISK. Each of the Funds, except the Money Funds, may, subject to
the limitations and restrictions stated elsewhere in this Prospectus and the
SAI, use STRATEGIC TRANSACTIONS involving derivatives such as forward
contracts, futures contracts, options, swaps, caps, floors and collars, which
are financial contracts whose value depends on, or is derived from, the value
of something else, such as an underlying asset, reference rate or index. In
addition to other risks such as the credit risk of the counterparty,
derivatives involve the risk of mispricing or improper valuation and the risk
that changes in the value of the derivative may not correlate perfectly with
relevant assets, rates and indices.

+ LIQUIDITY RISK. Liquidity risk exists when particular investments are
difficult to purchase or sell, possibly preventing a Fund from selling out of
these ILLIQUID SECURITIES at an advantageous price. All of the Funds may be
subject to liquidity risk. Funds that engage in STRATEGIC TRANSACTIONS, make
FOREIGN INVESTMENTS, or that invest in securities involving substantial market
and/or credit risk tend to be subject to greater liquidity risk. In addition,
liquidity risk increases for Funds that hold RESTRICTED SECURITIES.

+ MANAGEMENT RISK. Each Fund is subject to management risk because it is an
actively managed investment portfolio. WM Advisors or the sub-advisor, if
applicable, will apply its investment techniques and risk analyses in making
investment decisions for the Funds, but there can be no guarantee that they
will meet stated objectives or produce desired results. In some cases
derivatives and other investments may be unavailable or the WM Advisors or
sub-advisor may choose not to use them under market conditions when their use
would have been beneficial to the Funds.

+ SMALLER COMPANY RISK. Market risk and liquidity risk are particularly
pronounced for stocks of companies with relatively SMALL MARKET
CAPITALIZATIONS. These companies may have limited product lines, markets or
financial resources, or they may depend on a few key employees. The Equity
Funds, and the Small Cap Stock Fund in particular, generally have the greatest
exposure to this risk.

16
<PAGE> 107

+ MONEY MARKET RISK. While the Money Funds are designed to be relatively low
risk investments, they are not entirely free of risk. The Money Funds may not
be able to maintain a net asset value of $1.00 per share, as a result of a
deterioration in the credit quality of issuers whose securities the Funds
hold, or an increase in interest rates. In addition, the Money Funds are still
subject to the risk that the value of your investment may be eroded over time
by inflation.

17
<PAGE> 108

PRINCIPAL RISKS by fund

The following chart summarizes the Principal Risks of each Fund. Risks not
marked for a particular Fund may, however, still apply to some extent to that
Fund at various times.

<TABLE>
<CAPTION>
Foreign Geographic Non-
Market Credit Currency Investment Concentration Leveraging Diversification Derivatives Liquidity
Fund Risk Risk Risk Risk Risk Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY
MARKET X X X X
fund
SHORT TERM
INCOME X X X X X X X
fund
U.S. GOVERNMENT
SECURITIES X X X X X
fund
INCOME
fund X X X X X X X
HIGH YIELD
fund X X X X X X X
BOND &
STOCK X X X X X X
fund
GROWTH &
INCOME X X X X X X X
fund
GROWTH FUND OF
THE NORTHWEST
fund X X X X X X
GROWTH
fund X X X X X X X
MID CAP STOCK
fund X X X X X X X
SMALL CAP
STOCK X X X X X X X
fund
INTERNATIONAL
GROWTH X X X X X X X
fund

<CAPTION>
Smaller Money
Management Company Tax Market
Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C>
X X
X
X
X
X
X X
X X
X X
X X
X X
X X
X X
</TABLE>

18
<PAGE> 109

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

FEES AND EXPENSES OF THE FUNDS

This table describes the fees and expenses that you may pay if you invest in
Class I shares of a Fund. Each of the Funds offers other classes of shares that
are subject to different fees and expenses. For information about other classes
of shares offered by the Funds, please contact WM Shareholder Services at
800-222-5852. The Examples on the next two pages are intended to help you
compare the cost of investing in the Funds with the costs of investing in other
mutual funds. The Examples assume that your investment has a 5% return each
year, required for illustration purposes by the Securities and Exchange
Commission, and that the Fund's operating expenses remain the same. Your actual
costs may be higher or lower than those in the Examples.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS I
(fees paid directly from your investment) SHARES(in %)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 0.00
----------------------------------------------------------------------------------------------------
Maximum sales charge imposed on reinvested dividends 0.00
----------------------------------------------------------------------------------------------------
Maximum deferred sales charge ("load") (as a percentage of original purchase price
or redemption proceeds, as applicable)(1) 0.00
----------------------------------------------------------------------------------------------------
Exchange Fee 0.00
----------------------------------------------------------------------------------------------------
(1) A $10 fee may be charged for redemptions made by wire transfer.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

19
<PAGE> 110

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------

ANNUAL FUND
OPERATING EXPENSES
(Expenses that are deducted
CLASS I SHARES from Fund assets)
-----------------------------------------------------------------------------------------------------
Total
Annual Fund
Management Other Operating Expense Net
Fee Expenses Expenses Reimbursement Expenses
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund 0.45% 0.18% 0.63% NA 0.63%
-----------------------------------------------------------------------------------------------------
Short Term Income Fund 0.50% 0.21% 0.71% 0.16% 0.55%
-----------------------------------------------------------------------------------------------------
U.S. Government Securities Fund(2) 0.50% 0.18% 0.68% 0.08% 0.60%
-----------------------------------------------------------------------------------------------------
Income Fund(2) 0.50% 0.22% 0.72% 0.06% 0.66%
-----------------------------------------------------------------------------------------------------
High Yield Fund 0.63% 0.22% 0.85% NA 0.85%
-----------------------------------------------------------------------------------------------------
Growth & Income Fund 0.55% 0.12% 0.67% NA 0.67%
-----------------------------------------------------------------------------------------------------
Growth Fund of the Northwest 0.63% 0.18% 0.81% NA 0.81%
-----------------------------------------------------------------------------------------------------
Growth Fund(1,2) 0.85% 0.21% 1.06% 0.16% 0.90%
-----------------------------------------------------------------------------------------------------
Mid Cap Stock Fund 0.75% 0.79% 1.54% NA 1.54%
-----------------------------------------------------------------------------------------------------
Small Cap Stock Fund(2) 0.85% 0.69% 1.79% NA 1.79%
-----------------------------------------------------------------------------------------------------
International Growth Fund 1.00% 0.29% 1.29% NA 1.29%
-----------------------------------------------------------------------------------------------------

<CAPTION>
-----------------------------------------
EXAMPLES: You would pay
the following expenses on a
$10,000 investment assuming a
5% annual return and
redemption at the end of each
period:
-----------------------------------------

One Three Five Ten
Year Years Years Years
-------------------------------
<S> <C> <C> <C> <C> <C> <C>
$64 $202 $354 $ 786
---------------------------------------------------------------------------
73 227 398 883
---------------------------------------------------------------------------
69 218 382 847
---------------------------------------------------------------------------
74 230 404 894
---------------------------------------------------------------------------
87 271 475 1049
---------------------------------------------------------------------------
68 214 376 835
---------------------------------------------------------------------------
83 259 453 1002
---------------------------------------------------------------------------
108 337 589 1294
---------------------------------------------------------------------------
157 486 845 1834
---------------------------------------------------------------------------
182 563 975 2105
---------------------------------------------------------------------------
131 409 712 1556
---------------------------------------------------------------------------
</TABLE>

(1) Reflects the Advisor's obligation to limit Total Annual Fund Operating
Expenses through October 31, 2000, as described on page 40.

(2) Management Fees shown have been restated to reflect current contractual
rates.
- --------------------------------------------------------------------------------

20
<PAGE> 111

DESCRIPTION OF THE FUNDS

This section provides a more complete description of the investment strategies
and risks of each Fund. The "Common Investment Practices" section that follows
provides additional information about the principal investment strategies of the
Funds and identifies the Funds that may engage in such practices to a
significant extent. You can find additional descriptions of the Funds'
strategies and risks in the Statement of Additional Information ("SAI"). Except
for policies explicitly identified as "fundamental" in this Prospectus or the
SAI, the investment objectives and investment policies set forth in this
Prospectus and the SAI are not fundamental and may be changed at any time
without shareholder consent. Except as otherwise indicated, all policies and
limitations are considered at the time of purchase; the sale of securities is
not required in the event of a subsequent change in valuation or other
circumstances.

MONEY FUNDS

- - rated in one of the two highest categories for short-term debt by the only
NRSRO that has issued a rating, or

- - if not so rated, are determined to be of comparable quality.

MONEY MARKET FUND. To accomplish its objective, the Money Market Fund invests
solely in money market instruments that are selected from the following six
general categories:

- - U.S. Government Securities;

- - obligations of U.S. and foreign banks with assets of more than $500 million;

- - securities issued by foreign governments, their agencies or instrumentalities
or by supranational entities;

- - short-term corporate obligations rated in one of the two highest rating
categories by Moody's or S&P; and

- - repurchase agreements.

FIXED-INCOME FUNDS

SHORT TERM INCOME FUND. The Short Term Income Fund invests primarily in
short-term bonds and other debt securities. Under normal market conditions the
Fund maintains a portfolio duration of three years or less and a weighted
average maturity of five years or less. The Fund may, however, hold individual
securities with remaining maturities of more than three years. Duration is a
measure that relates the price volatility of a security to changes in interest
rates. The duration of a debt security is the weighted average term to maturity,
expressed in years, of the present value of future cash flows, including coupon
payments and principal repayments. Thus, duration involves WM Advisors' judgment
with respect to both interest rates and expected cash flows.

21
<PAGE> 112

normal market conditions, the Fund will invest at least 65% of its total assets
in U.S. Government securities, corporate debt obligations or mortgage-related
securities rated in one of the two highest categories by an NRSRO or determined
by the Advisor to be of comparable quality.

The Fund may invest up to 10% of its assets in foreign fixed-income securities,
primarily bonds of foreign governments or their political subdivisions, foreign
companies and supranational organizations, including non-U.S. dollar-denominated
securities and U.S. dollar-denominated debt securities issued by foreign issuers
and foreign branches of U.S. banks. Investment in foreign securities is subject
to special risks. The Fund may invest up to 5% of its assets in preferred stock.
The Fund may also invest in high-quality, short-term obligations (with
maturities of 12 months or less). The Fund may engage in certain options
transactions, enter into financial futures contracts and related options for the
purpose of portfolio hedging and enter into currency forwards or futures
contracts and related options for the purpose of currency hedging. The Fund may
invest in certain illiquid investments, such as privately placed obligations,
including restricted securities. The Fund may invest up to 10% of its assets in
securities of unaffiliated mutual funds. The Fund may borrow money or enter into
reverse repurchase agreements or dollar roll transactions in the aggregate up to
33 1/3% of its total assets. The Fund may invest up to 25% of its total assets
in asset-backed securities, which represent a participation in, or are secured
by and payable from, a stream of payments generated by particular assets, most
often a pool of similar assets.

U.S. GOVERNMENT SECURITIES FUND. To accomplish its objective, the U.S.
Government Securities Fund invests primarily in a selection of obligations of
the U.S. Government and its agencies. The Fund may also invest in collateralized
mortgage obligations or repurchase agreements which are secured by those types
of obligations. It is a fundamental policy of the Fund to invest only in U.S.
Government securities, including mortgage-backed securities; and collateralized
mortgage obligations and repurchase agreements which are secured by U.S.
Government Securities. The Fund may borrow up to 5% of its total net assets for
emergency, non-investment purposes. The Fund may also enter into dollar roll
transactions.

INCOME FUND. The Income Fund invests most of its assets in:

- - debt and convertible debt securities;

- - U.S. Government Securities, including mortgage-backed securities issued by the
Government National Mortgage Association ("GNMA"), Federal National Mortgage
Association ("FNMA"), and Federal Home Loan Mortgage Corporation ("FHLMC") or
similar government agencies;

- - obligations of U.S. banks that belong to the Federal Reserve System;

- - preferred stocks and convertible preferred stocks;

- - the highest grade commercial paper as rated by S&P or Moody's; and

- - deposits in U.S. banks.

The Fund may also invest in securities denominated in foreign currencies and
likewise receive interest, dividends and sale proceeds in foreign currencies.
The Fund may engage in foreign currency exchange transactions for hedging
purposes in connection with the purchase and sale of foreign securities or to
protect against changes in the value of specific securities held by the Fund,
and may purchase and sell currencies on a spot (i.e., cash) basis, enter into
forward contracts to purchase or sell foreign currencies at a future date, and
buy and sell foreign currency futures contracts. The Fund may also borrow up to
5% of its total net assets for emergency, non-investment purposes, and may enter
into dollar roll transactions. The Fund may purchase securities of issuers which
deal in real estate or securities which are secured by interests in real estate,
and it may acquire and dispose of real estate or interests in real estate
acquired through the exercise of its rights as a holder of debt obligations
secured by real estate or interests therein. The Fund may also purchase and sell
interest rate futures and options. The Fund may invest up to 35% of its assets
in lower-rated fixed-income securities (sometimes called "junk bonds").

22
<PAGE> 113

HIGH YIELD FUND. The High Yield Fund invests, under normal market conditions,
at least 65% of its assets in a diversified portfolio of fixed income securities
(including debt securities, convertible securities and preferred stocks) rated
lower than BBB by S&P or Baa by Moody's or of equivalent quality as determined
by the Advisor. The remainder of the Fund's assets may be invested in any other
securities the Advisor believes are consistent with the Fund's objective,
including higher rated fixed-income securities, common stocks and other equity
securities. The Fund may also invest in securities of foreign issuers including
those located in developing or emerging countries, and engage in hedging
strategies involving options.

EQUITY FUNDS

BOND & STOCK FUND. The Fund invests in a combination of equity and fixed income
securities. Under normal market conditions at least 25% of the Bond & Stock
Fund's assets will be invested in fixed-income securities, including preferred
stocks and that portion of the value of convertible securities which is not
attributable to a conversion feature. The Fund may invest in money market
instruments for temporary or defensive purposes. The Fund may invest in fixed-
income securities of any maturity, including mortgage-backed securities, U.S.
Government Securities and asset-backed securities, and may also invest up to 35%
of its assets, in below investment grade bonds (sometimes called junk bonds).
The Fund may purchase or sell U.S. Government Securities or collateralized
mortgage obligations on "when-issued" or "delayed-delivery" basis in an
aggregate of up to 20% of the market value of its total net assets. The Fund may
invest up to 25% of its assets in real estate investment trusts, known as
"REITs." The Fund may write (sell) covered call options. The Fund may invest up
to 25% of its assets in U.S. dollar-denominated securities of foreign issuers.

The Fund may purchase or sell U.S. Government securities or collateralized
mortgage obligations on a "when-issued" or "delayed-delivery" basis in an
aggregate up to 20% of the market value of its total assets minus total
liabilities (except for the obligations created by these commitments). The Fund
may write (sell) covered call options. The Fund may invest up to 25% of its
assets in U.S. dollar denominated securities of foreign issuers.

GROWTH FUND OF THE NORTHWEST. Under normal circumstances, at least 65% of the
Fund's total assets will be invested in the common stocks of companies whose
principal executive offices are located in the Northwest states of Alaska,
Idaho, Montana, Oregon and Washington.

The Fund is permitted to invest in money market instruments for temporary or
defensive purposes. The Fund may invest up to 25% of its assets in REITs, and
may write (sell) covered call options.

GROWTH FUND. The Growth Fund invests primarily in common stocks believed to
have significant appreciation potential. The Fund also may invest in debt
securities, bonds, convertible bonds, preferred stock and convertible preferred
stock, including up to 20% of its assets in non-investment-grade debt
securities.

The Fund may invest up to 25% of its assets in foreign securities, usually
foreign common stocks, and up to 5% of its assets in securities of companies in
(or governments of) developing or emerging countries (sometimes referred to as
"emerging markets"). The Fund may also engage in certain options transactions,
enter into financial futures contracts and related options for the purpose of
portfolio hedging and enter into currency forwards or futures contracts and
related options for the purpose of currency hedging.

23
<PAGE> 114

The Fund may also invest in money market instruments for temporary or defensive
purposes. To limit risk, repurchase agreements maturing in more than seven days
will not exceed 10% of the Fund's total assets. The Fund may invest up to 25% of
its assets in REITs. The Fund may invest in fixed-income securities of any
maturity, including mortgage-backed securities, and may invest up to 35% of its
assets in below investment grade fixed-income securities.

The Fund may purchase or sell U.S. Government securities or collateralized
mortgage obligations on a "when-issued" or "delayed-delivery" basis in an
aggregate up to 20% of the market value of its total assets minus total
liabilities (except for the obligations created by these commitments). The Fund
may write (sell) covered call options. The Fund may invest up to 25% of its
assets in U.S. dollar denominated securities of foreign issuers.

SMALL CAP STOCK FUND. The Small Cap Stock Fund invests primarily in equity
securities of companies with market capitalization of less than $1.4 billion at
the time of purchase. In addition to common stock, the Fund's equity securities
may include convertible bonds, convertible preferred stock and warrants to
purchase common stock. The Fund may also invest in money market instruments for
temporary or defensive purposes. The Fund may invest up to 25% of its assets in
securities of foreign issuers and up to 5% of its assets in securities in
developing or emerging countries. The Fund may invest up to 35% of its assets in
non-investment-grade debt securities ("junk bonds") if the Advisor believes that
doing so will be consistent with the goal of capital appreciation.

The Fund intends to stay fully invested in the securities described above to the
extent practical. Fund assets may be invested in short-term debt instruments to
meet anticipated day-to-day operating expenses, and for temporary defensive
purposes. In addition, when the Fund experiences large cash inflows, the Fund
may hold short-term investments until desirable equity securities become
available. These short-term instruments are generally rated A or higher by
Moody's or S&P, or, if unrated, of comparable quality in the opinion of the
Fund's sub-advisor.

COMMON INVESTMENT PRACTICES

BORROWING. The Funds may borrow money from banks solely for temporary or
emergency purposes, subject to various limitations. If a Fund borrows money, its
share price and yield may be subject to

24
<PAGE> 115

greater fluctuation until the borrowing is paid off. For the Short Term Income,
Growth, International Growth, Mid Cap Stock and Small Cap Stock Funds, such
borrowings may not exceed 30% of total assets. The Money Market, U.S. Government
Securities, Income, High Yield, Bond & Stock, and Growth & Income Funds and
Growth Fund of the Northwest may borrow up to 5% of total assets for emergency
purposes. In addition, the Money Market Fund may borrow up to 33 1/3% of total
assets to meet redemption requests. The Short Term Income Fund is prohibited
from borrowing money or entering into reverse repurchase agreements or dollar
roll transactions (described below) in the aggregate in excess of 33 1/3% of the
Fund's total assets (after giving effect to such borrowings and transactions).
If a Fund makes additional investments while borrowings are outstanding, this
will have the effect of leveraging the Fund. The Short Term Income, Growth,
International Growth, Mid Cap Stock and Small Cap Stock Funds may not purchase
additional securities when borrowings, including, for each such Fund other than
the Short Term Income Fund, reverse repurchase agreements, exceed 5% of total
assets. Leveraging will magnify declines as well as increases in the NAV of a
Fund's shares and in the yield on a Fund's investments. Each of the foregoing
percentage limitations on borrowings is a fundamental policy of the respective
Funds.

The Income, Short Term Income and U.S. Government Securities Funds may enter
into DOLLAR ROLLS. A Fund enters into a DOLLAR ROLL by selling securities for
delivery in the current month and simultaneously contracts to repurchase,
typically in 30 or 60 days, substantially similar (same type, coupon and
maturity) securities on a specified future date, which, under the Investment
Company Act of 1940, as amended (the "1940 Act") may be considered borrowings
from the counterparty and may produce similar leveraging effects. The proceeds
of the initial sale of securities in the dollar roll transactions, for example,
may be used to purchase long-term securities which will be held during the roll
period. To the extent that the proceeds of the initial sale of securities are
invested in bonds, the Fund will be subject to market risk on these bonds as
well as similar risk with respect to the securities the Fund is required to
repurchase. See "Fixed-Income Obligations" below.

Each of the Short Term Income, Growth, International Growth Mid Cap Stock and
Small Cap Stock Funds may engage in REVERSE REPURCHASE AGREEMENTS. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by a Fund may decline below the repurchase price of the securities and, if
the proceeds from the reverse repurchase agreement are invested in securities,
that the market value of the securities bought may decline at the same time
there is decline in the securities sold (and required to be repurchased).

FIXED-INCOME SECURITIES. The market value of fixed-income securities held by a
Fund and, consequently, the value of the Fund's shares can be expected to vary
inversely to changes in prevailing interest rates. Investors should also
recognize that, in periods of declining interest rates, the yield of the Fund
will tend to be somewhat higher than prevailing market rates and, in periods of
rising interest rates, the Fund's yield will tend to be somewhat lower. Also,
when interest rates are falling, any net inflow of money to the Fund will likely
be invested in instruments producing lower yields than the balance of its
assets, thereby reducing current yield. In periods of rising interest rates, the
opposite can be expected to occur. The prices of longer maturity securities are
also subject to greater market fluctuations as a result of changes in interest
rates. In addition, obligations purchased by a Fund may be subject to the risk
of default. Fixed-Income securities, including Municipal Obligations, rated in
the lower end of the investment-grade category (Baa or BBB) may have speculative
characteristics and may be more sensitive to economic changes and changes in the
financial condition of their issuers.

The fixed-income securities in which the Funds may invest include ZERO COUPON
SECURITIES, which make no payments of interest or principal until maturity.
Because these securities avoid the need to make current interest payments, they
may involve greater credit risks than other fixed-income securities.

FLOATING RATE, INVERSE FLOATING RATE AND VARIABLE RATE INVESTMENTS. The
Fixed-Income Funds and the Growth & Income Fund may purchase floating rate,
inverse floating rate and variable rate obligations, including participation
interests therein.

The Money Funds may purchase floating rate and variable rate obligations,
including participation interests therein.

25
<PAGE> 116

The Fixed-Income Funds may purchase mortgage-backed securities that are floating
rate, inverse floating rate and variable rate obligations.

Each Fund may also invest in securities representing interests in tax-exempt
securities, known as inverse floating obligations or "residual interest bonds,"
which pay interest rates that vary inversely with changes in the interest rates
of specified short-term tax-exempt securities or an index of short-term
tax-exempt securities. The interest rates on inverse floating obligations or
residual interest bonds will typically decline as short-term market interest
rates increase and increase as short-term market rates decline. These securities
have the effect of providing a degree of investment leverage. They will
generally respond to changes in market interest rates more rapidly than
fixed-rate long-term securities (typically twice as fast). As a result, the
market values of inverse floating obligations and residual interest bonds will
generally be more volatile than the market values of fixed-rate tax-exempt
securities.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS AND CURRENCY MANAGEMENT. The Equity
Funds and Fixed-Income Funds (with the exception of the U.S. Government
Securities, Bond & Stock, and Growth & Income Funds and Growth Fund of the
Northwest) may, subject to the investment limitations stated elsewhere in this
Prospectus and the SAI, engage in foreign currency exchange transactions. Funds
that buy and sell securities denominated in currencies other than the U.S.
dollar, and receive interest, dividends and sale proceeds in currencies other
than the U.S. dollar, may enter into foreign currency exchange transactions to
convert to and from different foreign currencies and to convert foreign
currencies to and from the U.S. dollar. The Fund either enters into these
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market, or uses forward contracts to purchase or sell
foreign currencies.

These Funds may enter into foreign currency hedging transactions in an attempt
to protect against changes in foreign currency exchange rates between the trade
and settlement dates of specific securities transactions or changes in foreign
currency exchange rates that would adversely affect a portfolio position or an
anticipated portfolio position. These transactions tend to limit any potential
gain that might be realized should the value of the hedged currency increase.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
these securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain. In addition, when the Advisor or a Fund's
sub-advisor believes that the currency of a specific country may deteriorate
against another currency, it may enter into a forward contract to sell the less
attractive currency and buy the more attractive one. The amount in question
could be less than or equal to the value of the Fund's securities denominated in
the less attractive currency. The Fund may also enter into a forward contract to
sell a currency which is linked to a currency or currencies in which some or all
of the Fund's portfolio securities are or could be denominated, and to buy U.S.
dollars. These practices are referred to as "cross hedging" and "proxy hedging."

Each of the Funds other than the Money Funds (the "Non-Money Funds") (with the
exception of the U.S. Government Securities Bond & Stock and Growth & Income
Funds and Growth Fund of the Northwest Fund) may invest in securities which are
indexed to certain specific foreign currency exchange rates. These securities
expose the Funds to the risk of significant changes in rates of exchange between
the U.S. dollar and any foreign currency to which an exchange rate-related
security is linked. In addition, there is no assurance that sufficient trading
interest to create a liquid secondary market will exist for a particular
exchange rate-related security due to conditions in the debt and foreign
currency markets. Illiquidity in the forward foreign exchange market and the
high volatility of the foreign exchange market may from time to time combine to
make it difficult to sell an exchange

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rate-related security prior to maturity without incurring a significant loss.

FOREIGN INVESTMENTS. The Money Market, Bond & Stock and Growth & Income Funds
and Growth Fund of the Northwest Fund may invest in securities of foreign
issuers if such securities are denominated in U.S. dollars. The High Yield,
Income, Short Term Income, Small Cap Stock, Mid Cap Stock Growth and
International Growth Funds may invest in both U.S. dollar denominated and
non-U.S. dollar denominated foreign securities. There are certain risks involved
in investing in foreign securities, including those resulting from:

- - fluctuations in currency exchange rates,

- - devaluation of currencies,

- - future political or economic developments and the possible imposition of
currency exchange blockages or other foreign governmental laws or
restrictions,

- - reduced availability of public information concerning issuers, and

In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of the New York Stock Exchange. Accordingly, the Funds' foreign
investments may be less liquid and their prices may be more volatile than
comparable investments in securities of U.S. companies. Moreover, the settlement
periods for foreign securities, which are often longer than those for securities
of U.S. issuers, may affect portfolio liquidity. In buying and selling
securities on foreign exchanges, the Fund normally pays fixed commissions that
are generally higher than the negotiated commissions charged in the United
States. In addition, there is generally less governmental supervision and
regulation of securities exchanges, brokers and issuers in foreign countries
than in the United States. Foreign securities generally are denominated and pay
dividends or interest in foreign currencies, and the value of the Funds' net
assets as measured in U.S. dollars will be affected favorably or unfavorably by
changes in exchange rates.

The Equity Funds, the Short Term Income Fund, the Income Fund and the High Yield
Fund may invest in securities of foreign issuers directly or in the form of
AMERICAN DEPOSITARY RECEIPTS ("ADRS"), EUROPEAN DEPOSITARY RECEIPTS ("EDRS"),
GLOBAL DEPOSITARY RECEIPTS ("GDRS") or other similar securities representing
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities they represent. ADRs are
receipts typically issued by a United States bank or trust company evidencing
ownership of the underlying foreign securities. EDRs, which are sometimes
referred to as Continental Depositary Receipts ("CDRs"), are receipts issued by
a European financial institution evidencing a similar arrangement. Generally,
ADRs, in registered form, are designed for use in the United States securities
markets, and EDRs, in bearer form, are designed for use in European securities
markets.

GEOGRAPHIC CONCENTRATION. Potential investors in the Growth Fund of the
Northwest Fund and Money Market Fund should consider the possibly greater risk
arising from the geographic concentration of their investments.

HOLDINGS IN OTHER INVESTMENT COMPANIES. When the Advisor or a Fund's
sub-advisor believes that it would be beneficial to the Fund, each of the Short
Term Income, Small Cap Stock, Mid Cap Stock, Growth and International Growth
Funds may invest up to 10% of its assets in securities of mutual funds that are
not affiliated with the Advisor or the Fund's sub-advisor, if

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any. As a shareholder in any such mutual fund, the Fund will bear its ratable
share of the mutual fund's expenses, including management fees, and will remain
subject to the Fund's advisory and administration fees with respect to the
assets so invested. In addition, the Growth Fund may invest Fund assets in money
market funds affiliated with Janus, provided that Janus remits to the Fund the
amount of any investment advisory and administrative services fees paid to Janus
as the investment manager of the money market fund.

ILLIQUID SECURITIES AND RESTRICTED SECURITIES. Up to 15% of the net assets of
each Non-Money Fund, and up to 10% of the net assets of each Money Fund, may be
invested in securities that are not readily marketable. Such illiquid securities
may include:

- - repurchase agreements with maturities greater than seven calendar days;

- - time deposits maturing in more than seven calendar days;

- - to the extent a liquid secondary market does not exist for the instruments,
futures contracts and options thereon;

- - certain over-the-counter options, as described in the SAI;

- - certain variable rate demand notes having a demand period of more than seven
days; and

- - securities which are restricted under federal securities laws with respect to
disposition (excluding certain Rule 144A securities, as described below).

Each of the Funds may purchase RESTRICTED SECURITIES, provided such securities
are, in the case of the Money Market, Income, U.S. Government Securities, and
Growth & Income Funds and Growth Fund of the Northwest, eligible for resale
pursuant to Rule 144A under the Securities Act of 1933, as amended. Although
recent and ongoing developments in the securities markets have resulted in
greater trading of restricted securities, making restricted securities, in many
instances, more liquid than they once were considered to be, investing in
restricted securities could have the effect of increasing the level of
illiquidity of the portfolio securities of a Fund. While such conditions are in
effect, it could be more difficult for a Fund to fulfill shareholder redemption
orders on a timely basis. If a Fund were required to sell these securities on
short notice, it might be unable to obtain fair market value.

LENDING OF SECURITIES. Certain of the Funds may lend portfolio securities to
brokers and other financial organizations. The Short Term Income, Small Cap
Stock, Growth and International Growth Funds each may lend portfolio securities
up to 20% of total assets. The Money Market, U.S. Government Securities, Income,
High Yield, Mid Cap Stock and Growth & Income Funds and Growth Fund of the
Northwest may lend portfolio securities up to 33% of total assets. These
transactions involve a risk of loss to the Fund if the counterparty should fail
to return such securities to the Fund upon demand.

LOWER-RATED SECURITIES. The Income, Bond & Stock, Small Cap Stock, and Mid Cap
Stock, Growth & Income Funds may each invest up to 35% of their total assets and
Growth Funds may invest up to 20% of its total assets, in non-investment grade
debt securities, sometimes referred to as "junk bonds." The High Yield Fund may
invest all of its assets in such securities and will generally invest at least
65% of its assets in such securities.

Non-investment grade securities usually entail greater risk (including the
possibility of default or bankruptcy of the issuers), generally involve greater
price volatility and risk of principal and income, and may be less liquid than
higher-rated securities. Both price volatility and illiquidity may make it
difficult for the Fund to value or to sell certain of these securities under
certain market conditions. Non-investment-grade debt securities are often
considered to be speculative and involve greater risk of default or price
changes due to changes in the issuer's creditworthiness. The market prices of
these securities may fluctuate more than higher-rated securities and may decline
significantly in periods of general economic difficulty, which may follow
periods of rising interest rates. For further information, see Appendix A to
this Prospectus.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Short Term Income, Income,
Bond & Stock, Growth & Income, High Yield, U.S. Government Securities, Small Cap
Stock, Mid Cap Stock and International Growth Funds may invest in GOVERNMENT

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MORTGAGE-BACKED SECURITIES issued or guaranteed by GNMA, FNMA or FHLMC.

To the extent that a Fund purchases mortgage-backed securities at a premium,
mortgage foreclosures and payments and prepayments of principal (which may be
made at any time without penalty) will tend to result in the loss of that
premium. The yield of the Fund may be affected by reinvestment of prepayments at
higher or lower rates than the original investment. In addition, like other debt
securities, the value of mortgage-backed securities, will generally fluctuate in
response to market interest rates.

The U.S. Government guarantees the timely payment of interest and principal for
GNMA certificates. However, the guarantees do not extend to the securities'
yield or value, which are likely to vary inversely with fluctuations in interest
rates, nor do the guarantees extend to the yield or value of the Fund's shares.

Government stripped mortgage-based securities represent beneficial ownership
interests in either principal distributions (principal-only accounts or "PO
strips") or interest distributions (interest-only securities "IO strips") from
government mortgage-backed securities. Investing in government stripped
mortgage-backed securities involves the risks normally associated with investing
in mortgage-backed securities issued by government or entities. In addition, the
yields on PO and IO strips are extremely sensitive to prepayments on the
underlying mortgage loans. If a decline in the level of prevailing interest
rates results in a higher than anticipated rate of principal prepayment,
distributions of principal will be accelerated, thereby reducing the yield to
maturity on IO strips and increasing the yield to maturity on PO strips.
Conversely, if an increase in the level of prevailing interest rates results in
a rate of principal prepayments lower than anticipated, distributions of
principal will be deferred, thereby increasing the yield to maturity on IO
strips and decreasing the yield to maturity on PO strips. Sufficiently high
prepayment rates could result in the Fund losing some or all of its initial
investment in an IO strip. The Funds will acquire government stripped mortgage-
backed securities only if a liquid secondary market for the securities exists at
the time of acquisition. However, there can be no assurance that the Funds will
be able to effect a trade of a government stripped mortgage-backed security at a
time when it wishes to do so.

In addition, the Short Term Income, Income, Bond & Stock and Mid Cap Stock and
Growth & Income Funds may invest in commercial mortgage-backed securities, which
are similar to government mortgage-backed securities, except they are not issued
or guaranteed by governmental entities. Commercial mortgage-backed securities
include collateralized mortgage obligations and real estate mortgage investment
conduits ("REMICs"). While commercial mortgage-backed securities are generally
structured with one or more types of credit enhancement, and often have high
credit ratings, they lack the credit status of a governmental agency or
instrumentality.

The Money Market, Short Term Income, Income, Bond & Stock, Mid Cap Stock, Small
Cap Stock and High Yield Funds may purchase ASSET-BACKED SECURITIES. These Funds
will not invest more than 10% of their total assets in asset-backed securities,
except that the Short Term Income Fund may invest up to 25% of its total assets
in such securities. Asset-backed securities are structured like mortgage-backed
securities, but instead of mortgage loans or interests in mortgage loans, the
underlying assets may include such items as motor vehicle installment sales or
installment loan contracts, leases of various types of real and personal
property, including home equity loans, and receivables from credit card
agreements. The ability of an issuer of asset-backed securities to enforce its
security interest in the underlying assets may be limited.

The Money Market may acquire participations in lease obligations or installment
purchase contract obligations (collectively, "lease obligations") of municipal
authorities or entities. Lease obligations do not constitute general obligations
of the municipality for which the municipality's taxing power is pledged.
Certain of these lease obligations contain "non-appropriation" clauses, which
provide that the municipality has no obligation to make lease or installment
purchase

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payments in future years unless money is appropriated for such purpose on a
yearly basis. In addition to the "non-appropriation" risk, these securities
represent a relatively new type of financing that has not yet developed the
depth of marketability associated with more conventional bonds. In the case of a
"non-appropriation" lease, the Fund's ability to recover under the lease in the
event of non-appropriation or default will be limited solely to the repossession
of the leased property, and in any event foreclosure of that property might
prove difficult.

REAL ESTATE INVESTMENT TRUSTS. The Income, High Yield Bond & Stock, Growth &
Income and Mid Cap Stock and Growth Fund of the Northwest may invest in real
estate investment trusts, known as "REITs." REITs involve certain unique risks
in addition to those risks associated with investing in the real estate industry
in general (such as possible declines in the value of real estate, lack of
availability of mortgage funds or extended vacancies of property). Equity REITs
may be affected by changes in the value of the underlying property owned by the
REITs, while mortgage REITs may be affected by the quality of any credit
extended. REITs are dependent upon management skills, are not diversified, are
subject to heavy cash flow dependency, risks of default by borrowers, and
self-liquidation. REITs are also subject to the possibilities of failing to
qualify for tax-free pass-through of income under the Code, and failing to
maintain their exemptions from registration under the 1940 Act.

REPURCHASE AGREEMENTS. All of the Funds may invest in repurchase agreements,
which are purchases of underlying debt obligations from financial institutions,
such as banks and broker-dealers, subject to the seller's agreement to
repurchase the obligations at an established time and price. Repurchase
agreements can be regarded as loans to the seller, collateralized by the
securities that are the subject of the agreement. Default by the seller would
expose the Fund to possible loss because of adverse market action or delay in
connection with the disposition of the underlying obligations. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
obligations, the Fund may be delayed or limited in its ability to sell the
collateral. Pursuant to an exemptive order granted by the SEC, the Funds may
transfer daily uninvested cash balances into one or more joint trading accounts.
Assets in the joint trading accounts are invested in repurchase agreements or
other money market instruments, and the proceeds are allocated to the
participating funds on a pro-rata basis.

STRATEGIC TRANSACTIONS. Subject to the investment limitations and restrictions
stated elsewhere in this Prospectus and the SAI, each of the Funds except the
Money Funds may utilize various investment strategies as described below to
hedge various market risks, to manage the effective maturity or duration of
fixed-income securities or for other bona fide hedging purposes. Utilizing these
investment strategies, the Fund may purchase and sell, to the extent not
otherwise limited or restricted for such Fund, exchange-listed and
over-the-counter put and call options on securities, equity and fixed-income
indices and other financial instruments, purchase and sell

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financial futures contracts and options thereon, enter into various interest
rate transactions such as swaps, caps, floors or collars, and enter into various
currency transactions such as currency forward contracts, currency futures
contracts, currency swaps or options on currencies or currency futures. The
Funds may write (sell) covered call options as well. A call option is "covered"
if the Fund owns the security underlying the option it has written or it
maintains enough cash, cash equivalents or liquid securities to purchase the
underlying security. All the above are collectively referred to as "Strategic
Transactions."

Strategic Transactions may be used: