SAFECO RESOURCE SERIES TRUST, 485APOS, 1998-02-26

SAFECO RESOURCE SERIES TRUST
485APOS, 1998-02-26

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<PAGE>

Registration Nos. 33-06547/811-4717
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. ____________ /_/

Post-Effective Amendment No. 20 /X/

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. 21 /X/

(Check appropriate box or boxes.)

SAFECO RESOURCE SERIES TRUST
-------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

SAFECO Plaza, Seattle, Washington 98185
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(Address of Principal Executive Offices) ZIP Code

Registrant's Telephone Number, including Area Code (206) 545- 5180
----------------

NAME AND ADDRESS OF AGENT
FOR SERVICE

DAVID F. HILL
SAFECO Plaza
Seattle, Washington 98185

Approximate Date of Proposed Public Offering: Continuous

It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
----
on pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
----
X on April 30, 1998 pursuant to paragraph (a)(1)
----
75 days after filing pursuant to paragraph (a)(2)
----
on pursuant to paragraph (a)(2) of Rule 485
---- -------------

If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Registrant hereby declares that, pursuant to Rule 24f-2 under the Investment
Company Act of 1940, an indefinite number of its shares have previously been
registered. The notice required by such Rule for Registrant's most recent fiscal
year was filed on or about February 26, 1997. Registrant adopts such
declarations pursuant to Rule 24f-2.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>

SAFECO RESOURCE SERIES TRUST

Contents of Registration Statement

This registration statement consists of the following papers and documents:

Cover Sheet

Cross Reference Sheet

Equity Portfolio - Part A - Prospectus

Growth Portfolio - Part A - Prospectus

Northwest Portfolio - Part A - Prospectus

Small Company Stock Portfolio - Part A - Prospectus

Bond Portfolio - Part A - Prospectus

Money Market Portfolio - Part A - Prospectus

Equity Portfolio
Growth Portfolio
Northwest Portfolio
Small Company Stock Portfolio
Bond Portfolio
Money Market Portfolio
Part B -- Statement of Additional Information

Part C -- Other Information

Signature Page

Exhibits

2
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SAFECO RESOURCE SERIES TRUST

Registration Statement on Form N-1A
Cross Reference Sheet
Part A
------

Item No. Location in Prospectus
- -------- ----------------------

1. Cover Page Cover page

2. Synopsis Introduction to the Trust and
the Portfolio; Fund Expenses

3. Condensed Financial Information Financial Highlights;
Performance Information

4. General Description of Registrant The Trust and the Portfolio's
Investment Policies; Persons
Controlling the Trust

5. Management of the Fund Information about Share
Ownership and Companies that
Provide Services to the Trust;
Portfolio Manager

6. Capital Stock and Other Securities Information about Share
Ownership and Companies that
Provide Services to the Trust;
Persons Controlling the Trust;
Portfolio Distribution and Tax
Information

7. Purchase of Securities Being Offered Sale and Redemption of Shares

8. Redemption or Repurchase Sale and Redemption of Shares

9. Pending Legal Proceedings Not applicable

Part B
------

Item No. Location in Statement
- -------- ---------------------
of Additional Information
-------------------------

10. Cover page Cover page

11. Table of Contents Cover page

12. General Information and History Not applicable

13. Investment Objectives and Policies Investment Policies;
Additional Investment
Information

14. Management of the Fund Trustees and Officers

15. Control Persons and Principal Principal Shareholders of
Holders of Securities the Portfolios

16. Investment Advisory and Other Services Investment Advisory and
Other Services

17. Brokerage Allocation and Other Practices Brokerage Practices

18. Capital Stock and Other Securities Not Applicable

19. Purchase, Redemption and Pricing of Additional Information on
Securities Being Offered Calculation of Net Asset Value
Per Share

3
<PAGE>

20. Tax Status Distribution and Tax
Information

21. Underwriters Investment Advisory and Other
Services

22. Calculations of Yield Quotations of Money Additional Performance
Market Funds Information

23. Financial Statements Financial Statements

Part C

Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.

4
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Equity Portfolio (or the "Portfolio") described in this Prospectus is a
series of the SAFECO Resource Series Trust ("Trust"), an open-end, management
investment company consisting of six separate series. Shares of the Trust are
offered to life insurance companies, which may or may not be affiliated with one
another ("Participating Insurance Companies"), for allocation to certain of
their separate accounts established for the purpose of funding variable life
insurance policies and variable annuity contracts ("Variable Contracts") and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans").

This Prospectus sets forth the information a prospective investor should know
before investing. PLEASE READ AND RETAIN THE PROSPECTUS FOR FUTURE REFERENCE. A
Statement of Additional Information, dated April 30, 1998 and incorporated
herein by reference, has been filed with the Securities and Exchange Commission
and is available at no charge upon request by calling 1-800-624-5711 or writing
SAFECO Securities, Inc., SAFECO Plaza, Seattle, WA 98185. The Statement of
Additional Information and other information about the Portfolio is also
available on the Securities and Exchange Commission website at
http://www.sec.gov. The Statement of Additional Information contains more
information about many of the topics in this Prospectus as well as information
about the trustees and officers of the Trust.

The EQUITY PORTFOLIO has as its investment objective to seek long-term growth of
capital and reasonable current income. The Equity Portfolio ordinarily invests
principally in common stocks or securities convertible into common stocks.

There are market risks in all securities transactions. There is no assurance
that the Portfolio will achieve its investment objective. See "The Trust and the
Portfolio's Investment Policies" for more information.
- ---------------------------------------------------------

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

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<PAGE>
PORTFOLIO SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, THE U.S. GOVERNMENT OR ANY BANK, NOR ARE PORTFOLIO SHARES FEDERALLY INSURED
OR OTHERWISE PROTECTED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY, AND PORTFOLIO SHARES ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR SAFECO
SECURITIES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY BY THE TRUST OR BY SAFECO SECURITIES IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE.

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 6
Financial Highlights 7
The Trust and the Portfolio's Investment Policies 9
Portfolio Manager 14
Information about Share Ownership and Companies that Provide
Services to the Trust 15
Persons Controlling the Trust 18
Sale and Redemption of Shares 18
Performance Information 19
Portfolio Distributions and Tax Information 20
Share Price Calculation 21
Ratings Supplement 22
</TABLE>

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<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Equity Portfolio, is offered through this Prospectus. The Equity Portfolio is a
diversified series of the Trust, an open-end, management investment company that
continuously offers to sell and to redeem (buy back) its shares at the current
net asset value per share without any sales or redemption charges or 12b-1 fees.
(See "Share Price Calculation" for more information.)

Shares of the Portfolio are issued and redeemed in connection with investments
in and payments under certain Variable Contracts issued through separate
accounts of Participating Insurance Companies. Shares of the Trust may also be
offered directly to Qualified Plans. The Participating Insurance Companies and
the Qualified Plans may or may not make all of the Trust Portfolios available
for investment.

Although the Trust does not foresee any disadvantage to Variable Contract owners
arising out of the fact that the Trust may offer its shares to Qualified Plans
and for products offered by Participating Insurance Companies, the interests of
Variable Contract owners or Qualified Plan participants might at some time be in
conflict due to future differences in tax treatment or other considerations.
Therefore, the Trust's Board of Trustees intends to monitor events in order to
identify any material irreconcilable conflicts which may occur and to determine
what action, if any, should be taken in response to such conflicts. If such a
conflict were to occur, one or more insurance company separate accounts or
Qualified Plans might withdraw its investment in the Trust, which might force
the Trust to sell portfolio securities at disadvantageous prices. In addition,
the Trust's Board of Trustees may refuse to sell shares of any of the Trust
Portfolios to any separate account or Qualified Plan or terminate the offering
of shares of any of the

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<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO (CONTINUED)
Trust Portfolios if such action is required by law or regulatory authority or is
in the best interests of the shareholders of any Trust Portfolio.

The Portfolio is managed by SAFECO Asset Management Company ("SAM"). SAM is
headquartered in Seattle, Washington and managed over $4.3 billion in mutual
fund assets as of December 31, 1997. SAM has been an advisor to mutual funds and
other investment portfolios since 1973 and its predecessors have been such
advisers since 1932. See "Information about Share Ownership and Companies that
Provide Services to the Trust" for more information.

There is a risk that the market value of the Portfolio's securities may decrease
and result in a decrease in the value of a shareholder's investment. See "The
Trust and the Portfolio's Investment Policies" for more information.

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<PAGE>
FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED SALES
PURCHASES DIVIDENDS LOAD REDEMPTION FEES EXCHANGE FEES
- ----------- ----------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL ANNUAL
MANAGEMENT OTHER OPERATING
PORTFOLIO 12B-1 FEES FEE EXPENSES EXPENSES
- ----------------------------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Equity None 0.73% 0.02% 0.75%
</TABLE>

The amounts shown are actual expenses incurred by the Equity Portfolio for the
fiscal year ended December 31, 1997.

C. EXAMPLE OF EXPENSES

You would pay the following expenses on a $1,000 investment assuming a 5% annual
return. The example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed in "Total Annual Operating
Expenses" above remain the same in the years shown.

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Equity $ 8 $ 24 $ 42 $ 93
</TABLE>

The purpose of the table is to assist you in understanding the various costs and
expenses that an investor in the Portfolio would bear, directly or indirectly.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE PORTFOLIO'S ACTUAL EXPENSES OR PERFORMANCE MAY BE GREATER OR LESS
THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS REQUIRED BY SECURITIES AND
EXCHANGE COMMISSION REGULATIONS APPLICABLE TO ALL MUTUAL FUNDS AND IT IS NOT A
PREDICTION OF, NOR DOES IT REPRESENT, PAST OR FUTURE EXPENSES OR THE PERFORMANCE
OF THE PORTFOLIO.

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<PAGE>
FINANCIAL HIGHLIGHTS

The amounts shown for the Portfolio in the Financial Highlights table that
follows are based upon a single share outstanding throughout the period
indicated. The following selected data has been derived from financial
statements that have been audited by Ernst & Young LLP. The data should be read
in conjunction with the financial statements, related notes and other financial
information included in the Trust's annual report to shareholders and
incorporated by reference in the Trust's Statement of Additional Information. A
copy of the Trust's Statement of Additional Information may be obtained by
calling the number on the first page of this Prospectus.

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<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST -- EQUITY PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning
of period $ 21.75 $ 19.24 $ 16.83 $ 17.02 $ 14.20 $ 13.48 $ 11.38 $ 12.35 $ 10.40
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .27 .34 .39 .31 .23 .20 .24 .25 .43
Net realized and unrealized
gain (loss) on investments 5.13 4.43 4.43 1.21 3.74 .89 2.82 (.90) 2.39
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 5.40 4.77 4.82 1.52 3.97 1.09 3.06 (.65) 2.82
--------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income (.27) (.34) (.39) (.31) (.23) (.20) (.24) (.25) (.43)
Distributions from capital
gains (1.70) (1.92) (2.02) (1.40) (.92) (.17) (.72) (.07) (.44)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (1.97) (2.26) (2.41) (1.71) (1.15) (.37) (.96) (.32) (.87)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value at end of
period $ 25.18 $ 21.75 $ 19.24 $ 16.83 $ 17.02 $ 14.20 $ 13.48 $ 11.38 $ 12.35
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total Return 24.85% 24.79% 28.63% 8.94% 27.92% 8.06% 26.85% (5.21%) 27.11%
Net assets at end of period
(000's omitted) $ 389,256 $ 263,067 $ 169,479 $ 102,321 $ 68,157 $ 36,064 $ 20,402 $ 9,742 $ 6,366
Ratio of expenses to average
net assets .75% .72% .75% .77% .73% .73% .73% .73% .73%
Ratio of expenses to average
net assets before expense
reimbursement N/A N/A N/A .78% -- -- -- -- --
Ratio of net investment income
to average net assets 1.19% 1.72% 2.26% 1.98% 1.71% 1.80% 2.31% 2.71% 4.47%
Portfolio turnover ratio 41.75% 56.99% 69.18% 28.71% 41.35% 24.75% 43.60% 30.13% 50.74%
Average Commission Rate Paid $ .0565 $ .0584 -- -- -- -- -- -- --

1988

<S> <C>
Net asset value at beginning
of period $ 8.63
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .29
Net realized and unrealized
gain (loss) on investments 1.95
---------
Total from investment
operations 2.24
---------
LESS DISTRIBUTIONS:
Dividends from net
investment income (.29)
Distributions from capital
gains (.18)
---------
Total distributions (.47)
---------
Net asset value at end of
period $ 10.40
---------
---------
Total Return 25.98%
Net assets at end of period
(000's omitted) $ 3,256
Ratio of expenses to average
net assets .73%
Ratio of expenses to average
net assets before expense
reimbursement --
Ratio of net investment income
to average net assets 3.08%
Portfolio turnover ratio 58.38%
Average Commission Rate Paid --
</TABLE>

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Equity Portfolio, is a diversified series of the Trust.

The investment objective and investment policies for the Portfolio are described
below. The Trust's Board of Trustees may change the Portfolio's objective
without shareholder vote, but no such change will be made without 30 days' prior
written notice to shareholders of the Portfolio. In the event the Portfolio
changes its investment objective, the new objective may not meet the investment
needs of every shareholder and may be different from the objective a shareholder
considered appropriate at the time of initial investment.

Unless otherwise stated, all investment policies and limitations described below
under "Investment Objective and Policies" and "Additional Investment Practices"
are non-fundamental and may be changed without shareholder vote. If the
Portfolio follows a percentage limitation at the time of investment, a later
increase or decrease in values, assets or other circumstances will not be
considered in determining whether the Portfolio complies with the applicable
policy (except to the extent the change may impact the Portfolio's borrowing
limits).

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Equity Portfolio is to seek long-term growth of
capital and reasonable current income. The Equity Portfolio does not seek to
achieve both growth and income with every portfolio security investment. Rather,
it attempts to achieve a reasonable balance between growth and income on an
overall basis.

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
To pursue its objective, the Equity Portfolio:

1. WILL INVEST PRINCIPALLY IN COMMON STOCKS SELECTED BY SAM
PRIMARILY FOR APPRECIATION AND/OR DIVIDEND POTENTIAL AND FROM A LONG-RANGE
INVESTMENT STANDPOINT.

2. MAY INVEST UP TO 35% OF ITS TOTAL ASSETS IN SECURITIES
CONVERTIBLE INTO COMMON STOCK (INCLUDING CORPORATE BONDS AND PREFERRED STOCK
THAT CONVERT TO COMMON STOCKS, WHETHER AUTOMATICALLY AFTER A SPECIFIED PERIOD
OF TIME OR AT THE OPTION OF THE ISSUER). The Portfolio may invest in
convertible securities if such securities offer a higher yield than an
issuer's common stock and provide reasonable potential for capital
appreciation. The value of convertible securities will normally vary with the
value of the underlying common stock. The Portfolio may purchase corporate
bonds and preferred stock that convert to common stock either automatically
after a specified period of time or at the option of the issuer. The
Portfolio may purchase convertible securities which are investment grade,
I.E., rated in the top four categories by either Standard & Poor's
Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"). Moody's
deems securities rated in the fourth category (Baa) to have speculative
characteristics. The Portfolio may retain a convertible security that is
down-graded to below investment grade after purchase. The Portfolio will not
hold more than 3% of its total assets in bonds that go into default on the
payment of principal and interest after purchase. For a description of
ratings, see the "Ratings Supplement" in this Prospectus.

3. MAY INVEST UP TO 10% OF TOTAL ASSETS IN REAL ESTATE
INVESTMENT TRUSTS ("REITS"). REITs purchase real property, which is then
leased, and make mortgage investments. For federal income tax purposes, REITs
attempt to qualify for beneficial "modified pass-through" tax treatment by
annually distributing at least 95% of their taxable income. If a REIT were
unable to qualify for such tax treatment, it

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
would be taxed as a corporation and the distributions made to its
shareholders would not be deductible by it in computing its taxable income.
REITs are dependent upon the successful operation of properties owned and the
financial condition of lessees and mortgagors. The value of REIT units
fluctuates depending on the underlying value of the real property and
mortgages owned and the amount of cash flow (net income plus depreciation)
generated and paid out. In addition, REITs typically borrow to increase funds
available for investment. Generally, there is a greater risk associated with
REITs that are highly leveraged.

4. MAY INVEST UP TO 5% OF ITS TOTAL ASSETS IN CLOSED-END
INVESTMENT COMPANIES AND INVESTMENT TRUSTS (OTHER THAN REITS).

5. MAY PURCHASE FIXED-INCOME SECURITIES IN ACCORDANCE WITH
BUSINESS AND FINANCIAL CONDITIONS.

6. MAY INVEST IN DEBT SECURITIES WHOSE PERFORMANCE AND
PRINCIPAL AMOUNT AT MATURITY IS LINKED TO A SPECIFIC EQUITY SECURITY OR
SECURITIES INDEX.

The principal risk factor associated with the Equity Portfolio is that the
market value of its portfolio securities may decrease.

ADDITIONAL INVESTMENT PRACTICES

The Portfolio may also follow the investment practices described below:

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
to repurchase agreements, the Portfolio will invest no more than 5% of its
total assets in qualified repurchase agreements and will not purchase
repurchase agreements that mature in more than seven days.

2. MAY INVEST FOR SHORT-TERM PURPOSES WHEN SAM BELIEVES
SUCH ACTION TO BE DESIRABLE AND CONSISTENT WITH SOUND INVESTMENT PROCEDURES.
The Portfolio, however, will not engage primarily in trading for the purpose
of short-term profits. The Portfolio may dispose of securities whenever it is
deemed advisable without regard to the length of time the securities have
been held.

3. MAY INVEST UP TO 5% OF NET ASSETS IN WARRANTS. Warrants
are options to buy a stated number of shares of common stock at a specified
price any time during the life of the warrant.

4. MAY INVEST IN RESTRICTED SECURITIES ELIGIBLE FOR RESALE UNDER
RULE 144A ("RULE 144A SECURITIES"), PROVIDED THAT SAM HAS DETERMINED THAT
SUCH SECURITIES ARE LIQUID UNDER GUIDELINES ADOPTED BY THE BOARD OF TRUSTEES.
Restricted securities may be sold only in offerings registered under the
Securities Act of 1933, as amended ("1933 Act"), or in transactions exempt
from the registration requirements under the 1933 Act. Rule 144A under the
1933 Act provides an exemption for the resale of certain restricted
securities to qualified institutional buyers. Investing in restricted
securities may increase the Portfolio's illiquidity to the extent that
qualified institutional buyers or other buyers become unwilling, for a time,
to purchase the securities. As a result, the Portfolio may not be able to
sell these securities when its investment adviser deems it advisable to sell,
or may have to sell them at less than fair value. In addition, market
quotations are sometimes less readily available for restricted securities.
Therefore, judgment may at times play a greater role in valuing these
securities than in the case of unrestricted securities.

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
5. MAY INVEST IN AMERICAN DEPOSITARY RECEIPTS ("ADRS"),
WHICH REPRESENT SECURITIES ISSUED BY A FOREIGN ISSUER. ADRs are registered
receipts evidencing ownership of an underlying foreign security. They are
typically issued in the United States by a bank or trust company. ADRs
involve risks in addition to risks normally associated with securities issued
by domestic issuers, including the possibility of adverse political or
economic developments in foreign countries. Foreign companies may not be
subject to accounting standards or governmental supervision comparable to
U.S. companies and there may be less public or less current information about
their operations. In addition to the risks of foreign investment applicable
to the underlying securities, ADRs may also be subject to the risks that the
foreign issuer may not be obligated to cooperate with the U.S. bank or trust
company, or that such information in the U.S. market may not be current. ADRs
which are structured without sponsorship of the issuer of the underlying
foreign security may also be subject to the risk that the foreign issuer may
not provide financial and other material information to the U.S. bank or
trust company issuer.

FUNDAMENTAL POLICIES

The Portfolio is subject to the following fundamental policies which cannot be
changed without shareholder vote:

1. MAY NOT INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN THE
SECURITIES OF ANY ONE ISSUER (OTHER THAN SECURITIES ISSUED BY THE U.S.
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES), EXCEPT THAT UP TO 25% OF THE
VALUE OF THE PORTFOLIO'S ASSETS (NOT INCLUDING SECURITIES ISSUED BY ANOTHER
INVESTMENT COMPANY) MAY BE INVESTED WITHOUT REGARD TO THIS LIMIT;

2. MAY NOT, WITH RESPECT TO 100% OF THE VALUE OF ITS TOTAL
ASSETS, PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
3. MAY NOT PURCHASE SECURITIES OF ANY ISSUER (OTHER THAN
OBLIGATIONS OF, OR GUARANTEED BY, THE U.S. GOVERNMENT, ITS AGENCIES OR
INSTRUMENTALITIES) IF SUCH PURCHASE WOULD CAUSE MORE THAN TEN PERCENT (10%)
OF ANY CLASS OF SECURITIES OF SUCH ISSUER TO BE HELD BY THE PORTFOLIO;

4. MAY NOT INVEST MORE THAN 25% OF THE TOTAL ASSETS IN ANY
ONE INDUSTRY. SECURITIES OF FOREIGN BANKS AND FOREIGN BRANCHES OF U.S. BANKS
ARE CONSIDERED TO BE ONE INDUSTRY. The Portfolio will not concentrate its
assets in particular industries. The 25% limitation does not apply to
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or to certificates of deposit or bankers' acceptances
issued by domestic banks; and

5. MAY BORROW MONEY ONLY FOR TEMPORARY OR EMERGENCY
PURPOSES FROM A BANK OR AFFILIATE OF SAFECO CORPORATION AT AN INTEREST RATE
NOT GREATER THAN THAT AVAILABLE FROM COMMERCIAL BANKS. The Portfolio will not
borrow amounts in excess of 5% of its total assets. The Portfolio intends to
exercise its borrowing authority primarily to meet shareholder redemptions
under circumstances where redemptions exceed available cash.

For more information, see the "Investment Policies" and "Additional
Investment Information" sections of the Trust's Statement of Additional
Information.

PORTFOLIO MANAGER

The manager for the Equity Portfolio is Richard D. Meagley, Vice President, SAM.
Mr. Meagley began serving as portfolio manager for the Portfolio in 1995. He is
also the portfolio manager for certain other SAFECO Funds. Prior to these
positions he served as portfolio manager and analyst from 1992 to 1994 for
Kennedy Associates, Inc., an investment

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<PAGE>
PORTFOLIO MANAGER (CONTINUED)
advisory firm located in Seattle, Washington. He was an Assistant Vice President
of SAM and the fund manager of the SAFECO Northwest Fund from 1991 to 1992.

The portfolio manager and certain other persons related to SAM and the Portfolio
are subject to written policies and procedures designed to prevent abusive
personal securities trading. Incorporated within these policies and procedures
are recommendations made by the Investment Company Institute (the trade group
for the mutual fund industry) with respect to personal securities trading by
persons associated with mutual funds. Those recommendations include preclearance
procedures and blackout periods when certain personnel may not trade in
securities that are the same or related securities being considered for purchase
or sale by the Portfolio.

INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

Shares of the Portfolio represent equal proportionate interests in the assets of
the Portfolio and have identical voting, dividend, redemption, liquidation and
other rights. All shares issued are fully paid and non-assessable, and
shareholders have no preemptive or other right to subscribe to any additional
shares.

Shares of the Trust may be owned by the separate accounts of Participating
Insurance Companies and by Qualified Plans (see "Introduction to the Trust and
the Portfolio"). Pursuant to the Investment Company Act of 1940 (the "1940
Act"), Participating Insurance Companies will solicit voting instructions from
Variable Contract owners with respect to any matters that are presented to a
vote of shareholders. See the separate account prospectus for the Variable
Contract for more information regarding the pass-through of these voting rights.
With respect to Qualified Plans, the Trustees of such plans will vote the shares
held by the Qualified Plans, except that in certain cases

-- 15 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
such shares may be voted by a named fiduciary or an investment manager pursuant
to the Employee Retirement Income Security Act of 1974. There is no pass-through
voting to the participants in the Qualified Plans.

On any matter submitted to a vote of shareholders, all shares of the Trust
Portfolios then issued and outstanding and entitled to vote shall be voted in
the aggregate and not by portfolio except for matters concerning only a
portfolio. The holders of each share of a Trust Portfolio shall be entitled to
one vote for each full share and a fractional vote for each fractional share.
Shares of one Trust Portfolio may not bear the same economic relationship to the
Trust as shares of another Trust Portfolio.

The Trust does not intend to hold annual meetings of shareholders of the Trust
Portfolios. The Trustees will call a special meeting of shareholders of a Trust
Portfolio only if required by the 1940 Act, in their written discretion, or upon
the written notice of holders of 10% or more of the outstanding shares of the
Trust Portfolio entitled to vote.

Under Delaware law, the shareholders of the Trust Portfolios will not be
personally liable for the obligations of any Trust Portfolio; a shareholder is
entitled to the same limitation of personal liability extended to shareholders
of corporations. To guard against the risk that Delaware law might not be
applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Trust Portfolio contain a statement that such
obligation may only be enforced against the assets of the Trust or the Trust
Portfolio and generally provides for indemnification out of the Trust's or the
Trust Portfolio's property of any shareholder nevertheless held personally
liable for the Trust's or a Trust Portfolio's obligations, respectively.

SAM is the investment adviser for the Portfolio under an agreement with the
Trust. Under the agreement, SAM is

-- 16 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
responsible for the overall management of the Trust's and the Portfolio's
business affairs. SAM provides investment research, advice, management and
supervision to the Trust and the Portfolio. Consistent with the Portfolio's
investment objectives and policies, SAM determines what securities will be
purchased, retained or sold by the Portfolio, and implements those decisions.
The Portfolio's turnover rate is set forth in the "Financial Highlights"
section. The Portfolio's turnover rate will vary from year to year. A high
portfolio turnover rate involves correspondingly higher transaction costs in the
form of broker commissions, dealer spreads and other costs that the Portfolio
will bear directly. The Portfolio pays SAM an annual management fee of .74% of
the Portfolio's net assets ascertained each business day and paid monthly.

The distributor of the Portfolio's shares under an agreement with the Trust is
SAFECO Securities, Inc. ("SAFECO Securities"), a broker-dealer registered under
the Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. SAFECO Securities is not compensated by the Trust or
the Portfolio for these services.

The transfer, dividend and distribution disbursement and shareholder servicing
agent for the Portfolio under an agreement with the Trust is SAFECO Services
Corporation ("SAFECO Services"). SAFECO Services is not compensated by the Trust
or the Portfolio for these services.

YEAR 2000

-- 17 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)

SAFECO Securities, Inc. are taking steps they believe are reasonably designed to
address the Year 2000 problem with respect to the computer systems that each of
them uses and to obtain satisfactory assurances that comparable steps are being
taken by each of the Portfolio's other, major service providers. It is not
anticipated that the Portfolio will incur any charges or that there will be any
difficulties in accurate and timely reporting resulting in the change in year
from 1999 to 2000.

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") controlled
the Equity Portfolio. SAFECO Life is a stock life insurance company incorporated
under the laws of Washington, with headquarters at 15411 N.E. 51st Street,
Redmond, Washington. SAFECO Life is a wholly-owned subsidiary of SAFECO
Corporation, and is an affiliated company of SAM, SAFECO Securities and SAFECO
Services, the investment adviser, principal underwriter and transfer agent,
respectively, of the Trust. SAFECO Life advanced all costs for the organization
of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO Services have
their principal place of business at SAFECO Plaza, Seattle, Washington 98185.
SAM has its principal place of business at Two Union Square, 25th Floor,
Seattle, Washington 98101.

SALE AND REDEMPTION OF SHARES

The Portfolio is a series of SAFECO Resource Series Trust, a Delaware business
trust, which issues an unlimited number of shares of beneficial interest. The
Board of Trustees may establish additional series of shares of the Trust without
the approval of shareholders.

Shares are sold to the separate accounts of Participating Insurance Companies
and may also be sold to Qualified Plans.

-- 18 --
<PAGE>
SALE AND REDEMPTION OF SHARES (CONTINUED)
Shares of the Portfolio are purchased and redeemed at net asset value.
Redemptions will be effected by the separate accounts to meet obligations under
the Variable Contracts and by the Qualified Plans. Variable Contract owners and
Qualified Plan participants do not deal directly with the Trust with respect to
acquisition or redemption of shares. The Board of Trustees of the Trust may
refuse to sell shares of the Portfolio to any person, or may suspend or
terminate the offering of shares of the Portfolio if such action is required by
law or by any regulatory authority having jurisdiction or is, in the sole
discretion of the Trustees acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of the Portfolio.

PERFORMANCE INFORMATION

The Portfolio's yield, total return and average annual total return may be
quoted in advertisements. Performance figures are indicative only of past
performance and are not intended to represent future investment results. The
yield and share price of the Equity Portfolio will fluctuate and your shares,
when redeemed, may be worth more or less than you originally paid for them.

Yield is the annualization on a 360-day basis of the Portfolio's net income per
share over a 30-day period divided by the Portfolio's net asset value per share
on the last day of the period. Total return is the total percentage change in an
investment in the Portfolio, assuming the reinvestment of dividends and capital
gains distributions over a stated period of time. Average annual total return is
the annual percentage change in an investment in the Portfolio, assuming the
reinvestment of dividends and capital gains distributions, over a stated period
of time.

-- 19 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
RANKINGS

From time to time, the Portfolio may advertise its rankings. Rankings are
calculated by independent companies that monitor mutual fund performance (E.G.
CDA Technologies, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
are reported periodically in national financial publications such as BARRON'S,
BUSINESS WEEK, FORBES, INVESTOR'S BUSINESS DAILY, MONEY MAGAZINE and THE WALL
STREET JOURNAL. In addition, non-standardized performance figures may accompany
the standardized figures described above. Non-standardized figures may be
calculated in a variety of ways, including but not necessarily limited to,
different time periods and different initial investment amounts. The Portfolio
may also compare its performance to the performance of the Standard & Poor's 500
Index or other relevant indices. Performance information and quoted rankings are
indicative only of past performance and are not intended to represent future
investment results.

OTHER CHARGES

The Portfolio does not impose a sales charge. However, other charges payable by
all shareholders include investment advisory fees. These charges affect the
Portfolio's calculation of yield, effective yield, total return and average
annual total return.

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

The Portfolio intends to continue to elect and to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code by
distributing substantially all of its net investment income and net capital
gains to its shareholders (the separate accounts of Participating Insurance
Companies and Qualified Plans) and meeting other requirements of the Internal
Revenue Code relating to the sources of its income and diversification of its
assets.

-- 20 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)
The Portfolio is treated as a separate entity for federal income tax purposes
and, therefore, the investments and results of the Trust Portfolios are not
aggregated for purposes of determining net ordinary income (loss) or net
realized capital gains (losses).

All dividends are distributed to shareholders (separate accounts of
Participating Insurance Companies and Qualified Plans) and will be automatically
reinvested in Trust shares. Dividends and distributions made by the Portfolio to
the separate accounts are taxable, if at all, to the Participating Insurance
Companies; they are not taxable to Variable Contract owners. Dividends and
distributions made by the Portfolio to Qualified Plans are not taxable to the
Qualified Plans or to the participants thereunder.

In addition to the diversification requirements in Subchapter M, the Portfolio
is required to satisfy diversification requirements of Section 817(h) of the
Internal Revenue Code and the Investment Company Act. Failure to comply with the
requirements of Section 817(h) could result in taxation of the insurance company
and immediate taxation of the owners of variable annuity and variable life
insurance contracts to the full extent of appreciation under the contracts.

Variable Contract owners should refer to the prospectuses relating to their
contracts regarding the federal income tax treatment of ownership of such
contracts. Also see "Distributions and Tax Information" in the Statement of
Additional Information.

SHARE PRICE CALCULATION

-- 21 --
<PAGE>
SHARE PRICE CALCULATION (CONTINUED)
transfer agent of the sales order or request for redemption in good order. There
is no sales charge. Net asset value per share is computed as of the close of
regular trading of the New York Stock Exchange (normally 1:00 P.M. Pacific Time)
each day that the Exchange is open for trading.

In general, portfolio securities are valued at the last reported sale price on
the national exchange on which the securities are primarily traded, unless there
are no transactions in which case they shall be valued at the last reported bid
price. Securities traded over-the-counter are valued at the last sale price,
unless there is no reported sale price in which case the last reported bid price
will be used. Portfolio securities that are traded on a stock exchange and
over-the-counter are valued according to the broadest and most representative
market. For bonds and other fixed income securities, this usually is the
over-the-counter market. Long-term corporate bonds and securities not traded on
a national exchange shall be valued based on consideration of information with
respect to transactions in similar securities, quotations from dealers and
various relationships between securities. Valuations of the Portfolio's
securities calculated in a like manner may be obtained from a pricing service.
Investments for which a representative value cannot be established are valued at
their fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.

RATINGS SUPPLEMENT

Ratings by Moody's and S&P represent the respective opinions of those
organizations as to the investment quality of the rated obligations. Investors
should realize these ratings do not constitute a guarantee that the principal
and interest payable under these obligations will be paid when due.

-- 22 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
DESCRIPTION OF DEBT RATINGS

MOODY'S

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

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

A -- Possess many favorable investment attributes and are to
be considered 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 -- Considered as medium-grade obligations (I.E., they are neither highly
protected nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and have, in fact, speculative
characteristics as well.

-- 23 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.

B -- Generally lack characteristics of a 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 -- Have poor standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.

Ca -- Represent obligations which are speculative to a high degree. Such issues
are often in default or have other marked shortcomings.

C -- The lowest-rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

S&P

INVESTMENT GRADE:
AAA -- Highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.

AA -- Very strong capacity to pay interest and repay principal. Differs from the
highest rated issues only in small degree.

A -- Strong capacity to pay interest and repay principal, although it is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than debt in higher-rated categories.

BBB -- Adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.

-- 24 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
NON-INVESTMENT GRADE:
BB, B, CCC, CC, AND C -- Regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
"BB" indicates the least degree of speculation and "C" the highest. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major exposures to adverse conditions.

C1 -- Reserved for income bonds on which no interest is being paid.

D -- In payment default. The "D" rating category is used when interest payments
or principal payments are not made on the date due, even if the applicable grace
period has not expired, unless S&P believes that such payments will be made
during such grace period.

PLUS (+) OR MINUS (-): Ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

-- 25 --
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Growth Portfolio (or the "Portfolio") described in this Prospectus is a
series of the SAFECO Resource Series Trust ("Trust"), an open-end, management
investment company consisting of six separate series. Shares of the Trust are
offered to life insurance companies, which may or may not be affiliated with one
another ("Participating Insurance Companies"), for allocation to certain of
their separate accounts established for the purpose of funding variable life
insurance policies and variable annuity contracts ("Variable Contracts") and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans").

The GROWTH PORTFOLIO has as its investment objective to seek growth of capital
and the increased income that ordinarily follows from such growth. The Growth
Portfolio ordinarily invests a preponderance of its assets in common stock
selected for potential appreciation.

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

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 6
Financial Highlights 7
The Trust and the Portfolio's Investment Policies 9
Portfolio Manager 15
Information about Share Ownership and Companies that Provide Services to
the Trust 16
Persons Controlling the Trust 18
Sale and Redemption of Shares 19
Performance Information 19
Portfolio Distributions and Tax Information 20
Share Price Calculation 22
</TABLE>

-- 3 --
<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Growth Portfolio, is offered through this Prospectus. The Growth Portfolio is a
diversified series of the Trust, an open-end, management investment company that
continuously offers to sell and to redeem (buy back) its shares at the current
net asset value per share without any sales or redemption charges or 12b-1 fees.
(See "Share Price Calculation" for more information.)

There is a risk that the market value of the Portfolio's securities may decrease
and result in a decrease in the value of a shareholder's investment. The Growth
Portfolio invests in small-sized companies, which involve greater risks than
investments in larger, more established issuers, and their securities can be
subject to more abrupt and erratic movements in price. See "The Trust and the
Portfolio's Investment Policies" for more information.

-- 5 --
<PAGE>
FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED SALES
PURCHASES DIVIDENDS LOAD REDEMPTION FEES EXCHANGE FEES
- --------------- --------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL ANNUAL
OTHER OPERATING
PORTFOLIO 12B-1 FEES MANAGEMENT FEE EXPENSES EXPENSES
- ---------------------------- ----------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Growth None 0.74% 0.03% 0.77%
</TABLE>

The amounts shown are actual expenses incurred by the Growth Portfolio for the
fiscal year ended December 31, 1997.

C. EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Growth $ 8 $ 25 $ 43 $ 95
</TABLE>

-- 6 --
<PAGE>
FINANCIAL HIGHLIGHTS

-- 7 --
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST -- GROWTH PORTFOLIO

<TABLE>
<CAPTION>
JANUARY 7, 1993
(INITIAL
EFFECTIVE DATE)
YEAR ENDED DECEMBER 31 TO DECEMBER 31,
1997 1996 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period $ 19.26 $ 15.88 $ 12.98 $ 12.16 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (.04) (.03) .06 -- .01
Net realized and unrealized gain
(loss) on investments 8.62 5.12 5.26 1.45 3.60
--------- --------- --------- --------- --------
Total from investment operations 8.58 5.09 5.32 1.45 3.61
--------- --------- --------- --------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (.06) -- (.01)
Distributions from capital gains (4.49) (1.71) (2.36) (.63) (1.44)
--------- --------- --------- --------- --------
Total distributions (4.49) (1.71) (2.42) (.63) (1.45)
--------- --------- --------- --------- --------
Net asset value at end of
period $ 23.35 $ 19.26 $ 15.88 $ 12.98 $ 12.16
--------- --------- --------- --------- --------
--------- --------- --------- --------- --------
Total Return 44.55% 32.06% 41% 11.92% 34.73%+
Net assets at end of period (000's
omitted) $ 240,400 $ 109,491 $ 44,458 $ 16,156 $ 4,850
Ratio of expenses to average net assets .77% .79% .79% .71% .72%++
Ratio of expenses to average net assets
before expense reimbursements N/A N/A .84% .96% --
Ratio of net investment income to
average net assets -.25% -.28% .55% -.05% .08%++
Portfolio turnover ratio 88.99% 75.58% 111.70% 41.24% 108.67%++
Average Commission Rate Paid $ .0516 $ .053 -- -- --
</TABLE>

+ Not annualized
++ Annualized

-- 8 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Growth Portfolio, is a diversified series of the Trust.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Growth Portfolio is to seek growth of capital
and the increased income that ordinarily follows from such growth.

To pursue its objective, the Growth Portfolio:

1. WILL INVEST A PREPONDERANCE OF ITS ASSETS IN COMMON STOCKS
SELECTED PRIMARILY FOR POTENTIAL APPRECIATION. To determine those common
stocks which have the potential for long-term growth, SAM will evaluate the
issuer's financial strength, quality of management and earnings power.

-- 9 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
2. MAY INVEST UP TO 5% OF ITS TOTAL ASSETS IN CLOSED-END
INVESTMENT COMPANIES AND INVESTMENT TRUSTS.

3. MAY INVEST IN SECURITIES CONVERTIBLE INTO COMMON STOCK
(INCLUDING CORPORATE BONDS AND PREFERRED STOCK THAT CONVERT TO COMMON STOCK,
WHETHER AUTOMATICALLY AFTER A SPECIFIED PERIOD OF TIME OR AT THE OPTION OF
THE ISSUER).

4. MAY INVEST IN DEBT SECURITIES WHOSE PERFORMANCE AND
PRINCIPAL AMOUNT AT MATURITY IS LINKED TO A SPECIFIC EQUITY SECURITY OR
SECURITIES INDEX.

ADDITIONAL INVESTMENT PRACTICES

The Portfolio may also follow the investment practices described below:

1. MAY HOLD CASH OR INVEST TEMPORARILY IN HIGH-QUALITY
COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT, SHARES OF NO-LOAD, OPEN-END MONEY
MARKET FUNDS OR REPURCHASE AGREEMENTS. The Portfolio may purchase these
short-term securities as a cash management technique under those
circumstances where it has cash to manage for a short time period, for
example, after receiving proceeds from dividend distributions or the sale of
portfolio securities. With respect to repurchase agreements, the Portfolio
will invest no more than 5% of its total assets in qualified repurchase
agreements and will not purchase repurchase agreements that mature in more
than seven days.

-- 10 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
3. MAY INVEST UP TO 5% OF NET ASSETS IN WARRANTS. Warrants
are options to buy a stated number of shares of common stock at a specified
price any time during the life of the warrant.

-- 11 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
information about their operations. In addition to the risks of foreign
investment applicable to the underlying securities, ADRs may also be subject
to the risks that the foreign issuer may not be obligated to cooperate with
the U.S. bank or trust company, or that such information in the U.S. market
may not be current. ADRs which are structured without sponsorship of the
issuer of the underlying foreign security may also be subject to the risk
that the foreign issuer may not provide financial and other material
information to the U.S. bank or trust company issuer.

6. MAY PURCHASE AND WRITE (I.E., SELL) COVERED CALL OPTIONS
AND PURCHASE PUT AND CALL OPTIONS ON STOCK INDICES. The Portfolio may employ
certain strategies and techniques utilizing these types of options to
mitigate their exposure to factors that affect security values. There is no
guarantee that these strategies and techniques will work. An option gives an
owner the right to buy or sell securities at a predetermined exercise price
for a given period of time. The writer of a call option is obligated to sell
the underlying securities if the option is exercised during the specified
period of time. If the Portfolio writes a call option and wishes to terminate
the obligation, it may effect a "closing purchase transaction" by buying an
option of the same series as the option previously written. Options on stock
indices are similar to options on stock except that, rather than obtaining
the right to take or make delivery of stock at a specified price, an option
on a stock index gives the holder the right to receive, upon exercise of the
option, an amount of cash if the closing level of the stock index upon which
the option is based is greater than (in the case of a call) or less than (in
the case of a put) the strike price of the option. The Portfolio will write
call options on stocks only if they are covered, and such options must remain
covered so long as the Portfolio is obligated as a writer. The Portfolio,
under normal conditions, will not write a call option if, as a result
thereof, the aggregate value of the

-- 12 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
assets underlying all such options (determined as of the date such options
are written) would exceed 25% of the Portfolio's net assets. The Portfolio
will not purchase an option if, as a result thereof, its aggregate investment
in options would exceed 5% of its total assets. See "Risk Factors" for more
information about the risks inherent in the purchase and sale of options.

FUNDAMENTAL POLICIES

The Portfolio is subject to the following fundamental policies which cannot be
changed without shareholder vote:

2. MAY NOT, WITH RESPECT TO 100% OF THE VALUE OF ITS TOTAL
ASSETS, PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

3. MAY NOT PURCHASE SECURITIES OF ANY ISSUER (OTHER THAN
OBLIGATIONS OF, OR GUARANTEED BY, THE U.S. GOVERNMENT, ITS AGENCIES OR
INSTRUMENTALITIES) IF SUCH PURCHASE WOULD CAUSE MORE THAN TEN PERCENT (10%)
OF ANY CLASS OF SECURITIES OF SUCH ISSUER TO BE HELD BY THE PORTFOLIO;

-- 13 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
5. MAY BORROW MONEY ONLY FOR TEMPORARY OR EMERGENCY
PURPOSES FROM A BANK OR AFFILIATE OF SAFECO CORPORATION AT AN INTEREST RATE
NOT GREATER THAN THAT AVAILABLE FROM COMMERCIAL BANKS. The Portfolio will not
borrow amounts in excess of 5% of its total assets. The Portfolio intends to
exercise its borrowing authority primarily to meet shareholder redemptions
under circumstances where redemptions exceed available cash.

For more information, see the "Investment Policies" and "Additional Investment
Information" sections of the Trust's Statement of Additional Information.

RISK FACTORS

The principal risk factor associated with an investment in the Growth Portfolio
is that the market value of the portfolio securities may decrease. In pursuing
its investment objective, the Growth Portfolio may invest a significant portion
of its assets in securities issued by smaller companies. Companies with small
market capitalizations involve more risks than investments in larger companies.
Such companies may include newly formed companies which have limited product
lines, markets or financial resources and may lack management depth. Therefore,
investments in small or newly formed companies involve greater risks than
investments in larger, more established issuers. Such securities may have
limited marketability and can be subject to more abrupt and erratic movements in
price than securities of larger more established companies. Such volatility in
price may in turn cause the Growth Portfolio's share prices to be volatile.

The Portfolio may invest in options on stock indices and may purchase and write
(i.e., sell) covered call options. Risks inherent in the Portfolio's use of
options include the risk that security prices will not move in the directions
anticipated; imperfect correlation between the price of the option and the price
of the underlying security; the risk that potential losses

-- 14 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
may exceed the amount invested in options; and the reduction or elimination of
the opportunity to profit from increases in the value of the underlying
security.

Like other mutual funds, financial and business organizations and individuals
around the world, the Portfolio could be adversely affected if the computer
systems used by its investment adviser or other companies that provide services
to the Trust do not properly process and calculate date-related information from
and after January 1, 2000. This is commonly called the "Year 2000 problem." SAM,
SAFECO Services and SAFECO Securities, Inc. are taking steps they believe are
reasonably designed to address the Year 2000 problem with respect to the
computer systems that each of them uses and to obtain satisfactory assurances
that comparable steps are being taken by each of the Portfolio's other, major
service providers. It is not anticipated that the Portfolio will incur any
charges or that there will be any difficulties in accurate and timely reporting
resulting in the change in year from 1999 to 2000.

PORTFOLIO MANAGER

The manager for the Growth Portfolio is Thomas M. Maguire, Vice President, SAM.
Mr. Maguire has served as portfolio manager for the Portfolio since it commenced
operations in 1993. He has served as portfolio manager for the SAFECO Growth
Fund since 1989.

-- 15 --
<PAGE>
PORTFOLIO MANAGER (CONTINUED)
funds. Those recommendations include preclearance procedures and blackout
periods when certain personnel may not trade in securities that are the same or
related securities being considered for purchase or sale by the Portfolio.

INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

-- 16 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
each full share and a fractional vote for each fractional share. Shares of one
Trust Portfolio may not bear the same economic relationship to the Trust as
shares of another Trust Portfolio.

SAM is the investment adviser for the Portfolio under an agreement with the
Trust. Under the agreement, SAM is responsible for the overall management of the
Trust's and the Portfolio's business affairs. SAM provides investment research,
advice, management and supervision to the Trust and the Portfolio. Consistent
with the Portfolio's investment objectives and policies, SAM determines what
securities will be purchased, retained or sold by the Portfolio, and implements
those decisions. The Portfolio's turnover rate is set forth in the "Financial
Highlights" section. The Portfolio's turnover rate will vary from year to year.
A high portfolio turnover rate involves

-- 17 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
correspondingly higher transaction costs in the form of broker commissions,
dealer spreads and other costs that the Portfolio will bear directly. The
Portfolio pays SAM an annual management fee of .74% of the Portfolio's net
assets ascertained each business day and paid monthly.

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") controlled
the Growth Portfolio. SAFECO Life is a stock life insurance company incorporated
under the laws of Washington, with headquarters at 15411 N.E. 51st Street,
Redmond, Washington. SAFECO Life is a wholly-owned subsidiary of SAFECO
Corporation, and is an affiliated company of SAM, SAFECO Securities and SAFECO
Services, the investment adviser, principal underwriter and transfer agent,
respectively, of the Trust. SAFECO Life advanced all costs for the organization
of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO Services have
their principal place of business at SAFECO Plaza, Seattle, Washington 98185.
SAM has its principal place of business at Two Union Square, Seattle, Washington
98101.

-- 18 --
<PAGE>
SALE AND REDEMPTION OF SHARES

Shares are sold to the separate accounts of Participating Insurance Companies
and may also be sold to Qualified Plans. Shares of the Portfolio are purchased
and redeemed at net asset value. Redemptions will be effected by the separate
accounts to meet obligations under the Variable Contracts and by the Qualified
Plans. Variable Contract owners and Qualified Plan participants do not deal
directly with the Trust with respect to acquisition or redemption of shares. The
Board of Trustees of the Trust may refuse to sell shares of the Portfolio to any
person, or may suspend or terminate the offering of shares of the Portfolio if
such action is required by law or by any regulatory authority having
jurisdiction or is, in the sole discretion of the Trustees acting in good faith
and in light of their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of the Portfolio.

PERFORMANCE INFORMATION

The Portfolio's yield, total return and average annual total return may be
quoted in advertisements. Performance figures are indicative only of past
performance and are not intended to represent future investment results. The
yield and share price of the Growth Portfolio will fluctuate and your shares,
when redeemed, may be worth more or less than you originally paid for them.

-- 19 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
dividends and capital gains distributions over a stated period of time. Average
annual total return is the annual percentage change in an investment in the
Portfolio, assuming the reinvestment of dividends and capital gains
distributions, over a stated period of time.

RANKINGS

From time to time, the Portfolio may advertise its rankings. Rankings are
calculated by independent companies that monitor mutual fund performance (E.G.
CDA Technologies, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
are reported periodically in national financial publications such as BARRON'S,
BUSINESS WEEK, FORBES, INVESTOR'S BUSINESS DAILY, MONEY Magazine and THE WALL
STREET JOURNAL. In addition, non-standardized performance figures may accompany
the standardized figures described above. Non-standardized figures may be
calculated in a variety of ways, including but not necessarily limited to,
different time periods and different initial investment amounts. The Portfolio
may also compare its performance to the performance of relevant indices.
Performance information and quoted rankings are indicative only of past
performance and are not intended to represent future investment results.

OTHER CHARGES

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

The Portfolio intends to continue to elect and to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code by
distributing substantially all of its

-- 20 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)
net investment income and net capital gains to its shareholders (the separate
accounts of Participating Insurance Companies and Qualified Plans) and meeting
other requirements of the Internal Revenue Code relating to the sources of its
income and diversification of its assets.

The Portfolio is treated as a separate entity for federal income tax purposes
and, therefore, the investments and results of the Trust Portfolios are not
aggregated for purposes of determining net ordinary income (loss) or net
realized capital gains (losses).

Variable Contract owners should refer to the prospectuses relating to their
contracts regarding the federal income tax treatment of ownership of such
contracts. Also SEE Distributions and Tax Information in the Statement of
Additional Information.

-- 21 --
<PAGE>
SHARE PRICE CALCULATION

The net asset value per share of the Portfolio is determined by subtracting the
liabilities of the Portfolio from its assets, valued at market, and dividing the
result by the number of outstanding shares. Shares of the Portfolio are sold and
redeemed at the net asset value next determined after receipt by the transfer
agent of the sales order or request for redemption in good order. There is no
sales charge. Net asset value per share is computed as of the close of regular
trading of the New York Stock Exchange (normally 1:00 P.M. Pacific Time) each
day that the Exchange is open for trading.

-- 22 --
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Northwest Portfolio (or the "Portfolio") described in this Prospectus is a
series of the SAFECO Resource Series Trust ("Trust"), an open-end, management
investment company consisting of six separate series. Shares of the Trust are
offered to life insurance companies, which may or may not be affiliated with one
another ("Participating Insurance Companies"), for allocation to certain of
their separate accounts established for the purpose of funding variable life
insurance policies and variable annuity contracts ("Variable Contracts") and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans").

The NORTHWEST PORTFOLIO has as its investment objective to seek the long-term
growth of capital through investing primarily in Northwest companies. The
Northwest Portfolio invests at least 65% of its total assets in securities
issued by companies with their principal executive offices located in Alaska,
Idaho, Montana, Oregon or Washington (the "Northwest").

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

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 6
Financial Highlights 8
The Trust and the Portfolio's Investment Policies 10
Risk Factors 15
Portfolio Manager 17
Information about Share Ownership and Companies that Provide
Services to the Trust 17
Persons Controlling the Trust 20
Sale and Redemption of Shares 20
Performance Information 21
Portfolio Distributions and Tax Information 22
Share Price Calculation 23
Ratings Supplement 24
</TABLE>

-- 3 --
<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Northwest Portfolio, is offered through this Prospectus. The Northwest Portfolio
is a diversified series of the Trust, an open-end, management investment company
that continuously offers to sell and to redeem (buy back) its shares at the
current net asset value per share without any sales or redemption charges or
12b-1 fees. (See "Share Price Calculation" for more information.)

There is a risk that the market value of the Portfolio's securities may decrease
and result in a decrease in the value of a shareholder's investment. Because the
Northwest Portfolio concentrates its investments in geographic regions, it may
be subject to special risks. Investors should carefully consider the investment
risks of such geographic concentration before purchasing shares of the
Portfolio. See "The Trust and the Portfolio's Investment Policies" for more
information.

-- 5 --
<PAGE>
FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED
PURCHASES DIVIDENDS SALES LOAD REDEMPTION FEES EXCHANGE FEES
- ------------- ------------- ----------- ----------------- ---------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL ANNUAL
OTHER EXPENSES OPERATING EXPENSES
MANAGEMENT AFTER AFTER
PORTFOLIO 12B-1 FEES FEE REIMBURSEMENT REIMBURSEMENT
- ----------------------- ----------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Northwest NONE 0.73% 0.00% 0.73%
</TABLE>

During the year ended December 31, 1997, SAFECO Life Insurance Company ("SAFECO
Life") paid for or reimbursed all of the Other Expenses of the Northwest
Portfolio. Expenses before such reimbursement as a percentage of average net
assets were 0.93%. Because the Portfolio's assets exceeded $20 million in
February 1998, SAFECO Life does not expect to reimburse the Other Expenses of
the Portfolio going forward.

-- 6 --
<PAGE>
FUND EXPENSES (CONTINUED)
C. EXAMPLE OF EXPENSES

You would pay the following expenses on a $1,000 investment assuming a 5% annual
return. The example assumes that all dividends and other distributions are
reinvested and that the Portfolio's total annual operating expenses before
reimbursement of .93% remain the same in the years shown.

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Northwest $ 9 $ 30 $ 51 $ 114
</TABLE>

-- 7 --
<PAGE>
FINANCIAL HIGHLIGHTS

-- 8 --
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST - NORTHWEST PORTFOLIO

<TABLE>
<CAPTION>
JANUARY 7, 1993
(INITIAL
EFFECTIVE DATE)
YEAR ENDED DECEMBER 31, TO DECEMBER 31,
1997 1996 1995 1994 1993
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 12.12 $ 10.85 $ 10.24 $ 9.94 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .03 .08 .08 .06 .09
Net realized and
unrealized gain
(loss) on
investments 3.73 1.27 .68 .30 (.06)
--------- --------- --------- --------- ------
Total from investment
operations 3.76 1.35 .76 .36 .03
--------- --------- --------- --------- ------
LESS DISTRIBUTIONS:
Dividends from net
investment income (.03) (.08) (.08) (.06) (.09)
Distributions from
capital gains (.65) -- (.07) -- --
--------- --------- --------- --------- ------
Total distributions (.68) (.08) (.15) (.06) (.09)
--------- --------- --------- --------- ------
Net asset value at end
of period $ 15.20 $ 12.12 $ 10.85 $ 10.24 $ 9.94
--------- --------- --------- --------- ------
--------- --------- --------- --------- ------
Total return 31.02% 12.44% 7.42% 3.65% .55%+
Net assets at end of
period (000's
omitted) $ 19,795 $ 9,541 $ 6,312 $ 4,564 $ 3,183
Ratio of expenses to
average net assets .73% .70% .71% .71% .72%++
Ratio of expenses to
average net assets
before expense
reimbursements 0.94% 1.11% 1.18% 1.23% --
Ratio of net investment
income to average net
assets .27% .78% .81% .72% 1.06%++
Portfolio turnover
ratio 47.85% 52.20% 21.30% 7.29% 3.93%++
Average commission rate
paid $ .0541 $ .0467 -- -- --
</TABLE>

+ Not annualized

++ Annualized

-- 9 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Northwest Portfolio, is a diversified series of the Trust.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Northwest Portfolio is to seek long-term growth
of capital through investing primarily in Northwest companies. To pursue its
objective, the Northwest Portfolio will invest at least 65% of its total assets
in securities issued by companies with their principal executive offices located
in Alaska, Idaho, Montana, Oregon or Washington.

To pursue its objective, the Northwest Portfolio:

1. WILL ORDINARILY INVEST ITS ASSETS IN SHARES OF COMMON STOCK
SELECTED PRIMARILY FOR POTENTIAL LONG-TERM APPRECIATION. In

-- 10 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
determining those common stocks which have the potential for long-term
growth, SAM will evaluate the issuer's financial strength, quality of
management and earnings power.

2. MAY INVEST IN SECURITIES CONVERTIBLE INTO COMMON STOCK
WHEN, IN THE OPINION OF SAM, THE EXPECTED TOTAL RETURN OF A CONVERTIBLE
SECURITY EXCEEDS THE EXPECTED TOTAL RETURN OF COMMON STOCK ELIGIBLE FOR
PURCHASE BY THE PORTFOLIO. The Portfolio may purchase corporate bonds and
preferred stock that convert to common stock either automatically after a
specified period of time or at the option of the issuer. The Portfolio will
purchase those convertible securities which, in SAM's opinion, have
underlying common stock with potential for long-term growth. The Portfolio
will purchase convertible securities which are investment grade, I.E., rated
in the top four categories by either Standard & Poor's Corporation ("S&P") or
Moody's Investors Service, Inc. ("Moody's"). Moody's deems securities rated
in the fourth category (Baa) to have speculative characteristics. The
Portfolio may retain a convertible security that is down-graded to below
investment grade after purchase. For a description of ratings, see the
"Ratings Supplement" in this Prospectus. The value of convertible securities
will normally vary with the value of the underlying common stock and
fluctuate inversely with interest rates.

3. MAY INVEST IN DEBT SECURITIES WHOSE PERFORMANCE AND
PRINCIPAL AMOUNT AT MATURITY IS LINKED TO A SPECIFIC EQUITY SECURITY OR
SECURITIES INDEX.

ADDITIONAL INVESTMENT PRACTICES

The Portfolio may also follow the investment practices described below:

1. MAY HOLD CASH OR INVEST TEMPORARILY IN HIGH-QUALITY
COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT, SHARES OF NO-

-- 11 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
LOAD, OPEN-END MONEY MARKET FUNDS OR REPURCHASE AGREEMENTS. The Portfolio may
purchase these short-term securities as a cash management technique under
those circumstances where it has cash to manage for a short time period, for
example, after receiving proceeds from dividend distributions or the sale of
portfolio securities. With respect to repurchase agreements, the Portfolio
will invest no more than 5% of its total assets in qualified repurchase
agreements and will not purchase repurchase agreements that mature in more
than seven days.

3. MAY INVEST UP TO 5% OF NET ASSETS IN WARRANTS. Warrants
are options to buy a stated number of shares of common stock at a specified
price any time during the life of the warrant.

-- 12 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
these securities when its investment adviser deems it advisable to sell, or
may have to sell them at less than fair value. In addition, market quotations
are sometimes less readily available for restricted securities. Therefore,
judgment may at times play a greater role in valuing these securities than in
the case of unrestricted securities.

5. MAY INVEST IN AMERICAN DEPOSITARY RECEIPTS ("ADRS"),
WHICH REPRESENT SECURITIES ISSUED BY A FOREIGN ISSUER. ADRs are registered
receipts evidencing ownership of an underlying foreign security. They are
typically issued in the United States by a bank or trust company. ADRs
involve risks in addition to risks normally associated with securities issued
by domestic issuers, including the possibility of adverse political or
economic developments in foreign countries. Foreign companies may not be
subject to accounting standards or governmental supervision comparable to
U.S. companies and there may be less public or less current information about
their operations. In addition to the risks of foreign investment applicable
to the underlying securities, ADRs may also be subject to the risks that the
foreign issuer may not be obligated to cooperate with the U.S. bank or trust
company, or that such information in the U.S. market may not be current. ADRs
which are structured without sponsorship of the issuer of the underlying
foreign security may also be subject to the risk that the foreign issuer may
not provide financial and other material information to the U.S. bank or
trust company issuer.

-- 13 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)

The writer of a call option is obligated to sell the underlying securities if
the option is exercised during the specified period of time. If the Portfolio
writes a call option and wishes to terminate the obligation, it may effect a
"closing purchase transaction" by buying an option of the same series as the
option previously written. Options on stock indices are similar to options on
stock except that, rather than obtaining the right to take or make delivery of
stock at a specified price, an option on a stock index gives the holder the
right to receive, upon exercise of the option, an amount of cash if the closing
level of the stock index upon which the option is based is greater than (in the
case of a call) or less than (in the case of a put) the strike price of the
option. The Portfolio will write call options on stocks only if they are
covered, and such options must remain covered so long as the Portfolio is
obligated as a writer. The Portfolio, under normal conditions, will not write a
call option if, as a result thereof, the aggregate value of the assets
underlying all such options (determined as of the date such options are written)
would exceed 25% of the Portfolio's net assets. The Portfolio will not purchase
an option if, as a result thereof, its aggregate investment in options would
exceed 5% of its total assets. See "Risk Factors" for more information about the
risks inherent in the purchase and sale of options.

FUNDAMENTAL POLICIES

The Portfolio is subject to the following fundamental policies which cannot be
changed without shareholder vote:

-- 14 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
2. MAY NOT, WITH RESPECT TO 100% OF THE VALUE OF ITS TOTAL
ASSETS, PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

For more information, see the "Investment Policies" and "Additional Investment
Information" sections of the Trust's Statement of Additional Information.

RISK FACTORS

The principal risk factor associated with an investment in the Northwest
Portfolio is that the market value of the portfolio securities may decrease. An
investment in the Northwest

-- 15 --
<PAGE>
RISK FACTORS (CONTINUED)
Portfolio is also subject to different risks than a portfolio whose securities
are issued by more geographically diverse companies. Since the Portfolio invests
primarily in companies with their principal executive offices located in the
Northwest, the number of issuers whose securities are eligible for purchase is
significantly less than for many other portfolios. Also, some companies whose
securities are held in the Portfolio may primarily distribute products or
provide services in a specific locale or in the Northwest region. The long-term
growth of these companies can be significantly affected by business trends in
and the economic health of those areas. Other companies whose securities are
held by the Portfolio may have a predominately national or partially
international market for their products or services and are more likely to be
impacted by national or international trends. As a result, the performance of
the Portfolio may be influenced by business trends or economic conditions not
only in a specific locale or in the Northwest region, but also on a national or
international level depending on the companies whose securities are held in the
Portfolio at any particular time.

The Portfolio may invest in options on stock indices and may purchase and write
(I.E., sell) covered call options. Risks inherent in the Portfolio's use of
options include the risk that security prices will not move in the directions
anticipated; imperfect correlation between the price of the option and the price
of the underlying security; the risk that potential losses may exceed the amount
invested in options; and the reduction or elimination of the opportunity to
profit from increases in the value of the underlying security.

-- 16 --
<PAGE>
RISK FACTORS (CONTINUED)
SAFECO Securities, Inc. are taking steps they believe are reasonably designed to
address the Year 2000 problem with respect to the computer systems that each of
them uses and to obtain satisfactory assurances that comparable steps are being
taken by each of the Portfolio's other, major service providers. It is not
anticipated that the Portfolio will incur any charges or that there will be any
difficulties in accurate and timely reporting resulting in the change in year
from 1999 to 2000.

PORTFOLIO MANAGER

The manager for the Northwest Portfolio is Bill Whitlow. Mr. Whitlow began
serving as portfolio manager for the Portfolio in April 1997. From 1990 to April
1997, he was a principal and Manager of Pacific Northwest Research for the
brokerage firm of Pacific Crest Securities, located in Seattle, Washington.

INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

Shares of the Portfolio represent equal proportionate interests in the assets of
the Portfolio and have identical voting, dividend, redemption, liquidation and
other rights. All shares

-- 17 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
issued are fully paid and non-assessable, and shareholders have no preemptive or
other right to subscribe to any additional shares.

-- 18 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
Under Delaware law, the shareholders of the Trust Portfolios will not be
personally liable for the obligations of any Trust Portfolio; a shareholder is
entitled to the same limitation of personal liability extended to shareholders
of corporations. To guard against the risk that Delaware law might not be
applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Trust Portfolio contain a statement that such
obligation may only be enforced against the assets of the Trust or the Trust
Portfolio and generally provides for indemnification out of the Trust's or the
Trust Portfolio's property of any shareholder nevertheless held personally
liable for the Trust's or a Trust Portfolio's obligations, respectively.

-- 19 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
The distributor of the Portfolio's shares under an agreement with the Trust is
SAFECO Securities, Inc. ("SAFECO Securities"), a broker-dealer registered under
the Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. SAFECO Securities is not compensated by the Trust or
the Portfolio for these services.

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") and SAM
controlled the Northwest Portfolio. SAFECO Life is a stock life insurance
company incorporated under the laws of Washington, with headquarters at 15411
N.E. 51st Street, Redmond, Washington. SAFECO Life is a wholly-owned subsidiary
of SAFECO Corporation, and is an affiliated company of SAM, SAFECO Securities
and SAFECO Services, the investment adviser, principal underwriter and transfer
agent, respectively, of the Trust. SAFECO Life advanced all costs for the
organization of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO
Services have their principal place of business at SAFECO Plaza, Seattle,
Washington 98185. SAM is incorporated under the laws of Washington and has its
principal place of business at Two Union Square, 25th Floor, Seattle, Washington
98101.

SALE AND REDEMPTION OF SHARES

The Portfolio is a series of SAFECO Resource Series Trust, a Delaware business
trust, which issues an unlimited number of

-- 20 --
<PAGE>
SALE AND REDEMPTION OF SHARES (CONTINUED)

shares of beneficial interest. The Board of Trustees may establish additional
series of shares of the Trust without the approval of shareholders.

PERFORMANCE INFORMATION

The Portfolio's yield, total return and average annual total return may be
quoted in advertisements. Performance figures are indicative only of past
performance and are not intended to represent future investment results. The
yield and share price of the Northwest Portfolio will fluctuate and your shares,
when redeemed, may be worth more or less than you originally paid for them.

-- 21 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
of time. Average annual total return is the annual percentage change in an
investment in the Portfolio, assuming the reinvestment of dividends and capital
gains distributions, over a stated period of time.

RANKINGS

From time to time, the Portfolio may advertise its rankings. Rankings are
calculated by independent companies that monitor mutual fund performance (E.G.
CDA Technologies, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
are reported periodically in national financial publications such as BARRON'S,
BUSINESS WEEK, FORBES, INVESTOR'S BUSINESS DAILY, MONEY MAGAZINE and THE WALL
STREET JOURNAL. In addition, non-standardized performance figures may accompany
the standardized figures described above. Non-standardized figures may be
calculated in a variety of ways, including but not necessarily limited to,
different time periods and different initial investment amounts. The Portfolio
may also compare its performance to the performance of relevant indices.
Performance information and quoted rankings are indicative only of past
performance and are not intended to represent future investment results.

OTHER CHARGES

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

The Portfolio intends to continue to elect and to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code by
distributing substantially all of its

-- 22 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)
net investment income and net capital gains to its shareholders (the separate
accounts of Participating Insurance Companies and Qualified Plans) and meeting
other requirements of the Internal Revenue Code relating to the sources of its
income and diversification of its assets.

-- 23 --
<PAGE>
SHARE PRICE CALCULATION

RATINGS SUPPLEMENT

Ratings by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services, a division of the McGraw-Hill Companies ("S&P"), represent the
respective opinions of those organizations as to the investment quality of the
rated

-- 24 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
obligations. Investors should realize these ratings do not constitute a
guarantee that the principal and interest payable under these obligations will
be paid when due.

DESCRIPTION OF DEBT RATINGS

MOODY'S

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

A -- Possess many favorable investment attributes and are to be considered 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 -- Considered as medium-grade obligations, (I.E., they are neither highly
protected nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and have, in fact, speculative
characteristics as well.

-- 25 --
<PAGE>
DESCRIPTION OF DEBT RATINGS (CONTINUED)
NON-INVESTMENT GRADE:
Ba -- Judged to have speculative elements; their future cannot be considered as
well-assured. 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 -- Generally lack characteristics of a 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 -- Have poor standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.

Ca -- Represent obligations which are speculative to a high degree. Such issues
are often in default or have other marked shortcomings.

C -- The lowest-rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

S&P

INVESTMENT GRADE:
AAA -- Highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.

AA -- Very strong capacity to pay interest and repay principal. Differs from the
highest rated issues only in small degree.

BBB -- Adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters,

-- 26 --
<PAGE>
DESCRIPTION OF DEBT RATINGS (CONTINUED)
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher- rated categories.

NON-INVESTMENT GRADE:
BB, B, CCC, CC, AND C -- Regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
"BB" indicates the least degree of speculation and "C" the highest. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major exposures to adverse conditions.

C1 -- Reserved for income bonds on which no interest is being paid.

PLUS (+) OR MINUS (-): Ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

-- 27 --
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Small Company Stock Portfolio described in this Prospectus is a series of
the SAFECO Resource Series Trust ("Trust"), an open-end, management investment
company consisting of six separate series. Shares of the Trust are offered to
life insurance companies, which may or may not be affiliated with one another
("Participating Insurance Companies"), for allocation to certain of their
separate accounts established for the purpose of funding variable life insurance
policies and variable annuity contracts ("Variable Contracts") and may also be
offered directly to qualified pension and retirement plans ("Qualified Plans").

This Prospectus sets forth the information a prospective investor should know
before investing. PLEASE READ AND RETAIN THE PROSPECTUS FOR FUTURE REFERENCE. A
Statement of Additional Information, dated April 30, 1998 and incorporated
herein by reference, has been filed with the Securities and Exchange Commission
and is available at no charge upon request by calling 1-800-624-5711 or writing
SAFECO Securities, Inc., SAFECO Plaza, Seattle, WA 98185. The Statement of
Additional Information and other information about the Small Company Stock
Portfolio is also available on the Securities and Exchange Commission website at
http://www.sec.gov. The Statement of Additional Information contains more
information about many of the topics in this Prospectus as well as information
about the trustees and officers of the Trust.

The SMALL COMPANY STOCK PORTFOLIO ("Small Company Portfolio" or the "Portfolio")
has as its investment objective to seek long-term growth of capital through
investing primarily in small-sized companies. To pursue its objective, the Small
Company Portfolio will invest primarily in companies with total market
capitalization of less than $1 billion.

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

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 5
Financial Highlights 7
The Trust and the Portfolio's Investment Policies 9
Portfolio Manager 18
Information about Share Ownership and Companies that Provide
Services to the Trust 19
Persons Controlling the Trust 21
Sale and Redemption of Shares 22
Performance Information 22
Portfolio Distributions and Tax Information 24
Share Price Calculation 25
Ratings Supplement 26
</TABLE>

-- 3 --
<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Small Company Portfolio, is offered through this Prospectus. The Small Company
Portfolio is a diversified series of the Trust, an open-end, management
investment company that continuously offers to sell and to redeem (buy back) its
shares at the current net asset value per share without any sales or redemption
charges or 12b-1 fees. (See "Share Price Calculation" for more information.)

There is a risk that the market value of the Portfolio's securities may decrease
and result in a decrease in the value of a shareholder's investment. The Small
Company Portfolio invests in small-sized companies, which involve greater risks
than investments in larger, more established issuers, and their securities can
be subject to more abrupt and erratic movements in price. See "The Trust and the
Portfolio's Investment Policies" for more information.

FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED SALES
PURCHASES DIVIDENDS LOAD REDEMPTION FEES EXCHANGE FEES
- ------------- ------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL ANNUAL
OTHER EXPENSES OPERATING EXPENSES
MANAGEMENT AFTER AFTER
PORTFOLIO 12B-1 FEES + FEE + REIMBURSEMENT = REIMBURSEMENT
- --------------- ----------- ------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Small Company NONE 0.85% 0.10% 0.95%
</TABLE>

-- 5 --
<PAGE>
FUND EXPENSES (CONTINUED)
The amounts shown above are estimated expenses for the Small Company Portfolio
based on the maximum management fee and estimated Other Expenses for fiscal year
1998. During the year ended December 31, 1997, SAM paid all Other Expenses of
the Small Company Portfolio in excess of .10% of the Portfolio's average annual
net assets. Expenses before such reimbursement as a percentage of average net
assets were 1.24%. SAM will continue to pay all Other Expenses of the Small
Company Portfolio in excess of .10% of the Portfolio's average annual net assets
until such time as the Portfolio's net assets exceed $20 million. Once the
Portfolio's net assets exceed $20 million, all of the Other Expenses will be
paid by the Portfolio.

C. EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS
- ------------------------------------------------------ ----------- -----------
<S> <C> <C>
Small Company $ 10 $ 30
</TABLE>

-- 6 --
<PAGE>
FINANCIAL HIGHLIGHTS

-- 7 --
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST - SMALL COMPANY PORTFOLIO

<TABLE>
<CAPTION>
APRIL 30, 1997
(INITIAL EFFECTIVE
DATE) TO
DECEMBER 31, 1997
----------------------
<S> <C>
Net asset value at beginning of period $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01
Net realized and unrealized gain (loss) on investments 2.83
--------
Total from investment operations 2.84
--------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01)
Distributions from capital gains (0.50)
--------
Total distributions (0.51)
--------
Net asset value at end of period $ 12.33
--------
--------
Total return 28.40%**
Net assets at end of period (000's omitted) $ 10,250
Ratio of expenses to average net assets .95% *
Ratio of expenses to average net assets before expense reimbursements 1.24% *
Ratio of net investment income to average net assets 0.19% *
Portfolio turnover ratio 47.91% *
Average commission rate paid $ .0564
</TABLE>

* Annualized

** Not annualized

-- 8 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Small Company Portfolio, is a diversified series of the Trust.

Unless otherwise stated, all investment policies and limitations described below
under "Investment Objective and Policies" are non-fundamental and may be changed
without shareholder vote. If the Portfolio follows a percentage limitation at
the time of investment, a later increase or decrease in values, assets or other
circumstances will not be considered in determining whether the Portfolio
complies with the applicable policy (except to the extent the change may impact
the Portfolio's borrowing limits).

INVESTMENT OBJECTIVE AND POLICIES

The Small Company Portfolio has as its investment objective to seek long-term
growth of capital through investing primarily in small-sized companies. To
pursue its objective, the Small Company Portfolio will invest primarily in
companies with total market capitalization of less than $1 billion.

To pursue its investment objective, the Small Company Portfolio:

1. WILL INVEST AT LEAST 65% OF ITS TOTAL ASSETS IN COMMON STOCK
AND PREFERRED STOCK OF SMALL-SIZED COMPANIES WITH TOTAL

-- 9 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
MARKET CAPITALIZATION OF LESS THAN $1 BILLION. Companies whose capitalization
falls outside this range after purchase continue to be considered
small-capitalized for purposes of the 65% policy. The Portfolio will invest
principally in common stocks selected by SAM primarily for appreciation
and/or dividend potential and from a long-range investment standpoint. In
determining those common and preferred stocks which have the potential for
long-term growth, SAM will evaluate the issuer's financial strength, quality
of management and earnings power. The Small Company Portfolio invests in
companies with small market capitalizations which involve more risks than
investments in larger companies. Newly formed companies have limited product
lines, markets or financial resources and may lack management depth.
Therefore, investments in small or newly formed companies involve greater
risks than investments in larger, more established issuers. Such securities
may have limited marketability and can be subject to more abrupt and erratic
movements in price. Such volatility in price may in turn cause the Small
Company Portfolio's share prices to be volatile.

2. MAY INVEST IN SECURITIES CONVERTIBLE INTO COMMON STOCK
WHEN, IN SAM'S OPINION, THE EXPECTED TOTAL RETURN OF A CONVERTIBLE SECURITY
EXCEEDS THE EXPECTED TOTAL RETURN OF COMMON STOCK ELIGIBLE FOR PURCHASE BY
THE PORTFOLIO. The Portfolio will purchase convertible securities if such
securities offer a higher yield than an issuer's common stock and provide
reasonable potential for capital appreciation. The Portfolio may invest in
convertible corporate bonds that are rated below investment grade (commonly
referred to as "high-yield" or "junk" bonds) or in comparable, unrated bonds,
but less than 35% of the Portfolio's net assets will be invested in such
securities. Below investment grade bonds are speculative and involve greater
investment risks than investment grade bonds due to the issuer's reduced
creditworthiness and increased likelihood of default and

-- 10 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
bankruptcy. During periods of economic uncertainty or change, the market
prices of below investment grade bonds may experience increased volatility.
Below investment grade bonds tend to reflect short-term economic and
corporate developments to a greater extent than higher quality bonds.

3. MAY INVEST IN BONDS AND OTHER DEBT SECURITIES. The
Portfolio may invest in bonds and other debt securities that are rated
investment grade by Moody's Investor's Services, Inc. ("Moody's") or Standard
& Poor's Corporation ("S&P"), or unrated bonds determined by SAM to be of
comparable quality to such rated bonds. Bonds rated in the lowest category of
investment grade (Baa by Moody's and BBB by S&P) and comparable unrated bonds
have speculative characteristics and are more likely to have a weakened
capacity to make principal and interest payments under changing economic
conditions or upon deterioration in the financial condition of the issuer.

After purchase by the Portfolio a corporate bond may be downgraded or, if
unrated, may cease to be comparable to a rated security. Neither event will
require the Portfolio to dispose of that security, but SAM will take a
downgrade or loss of comparability into account in determining whether the
Portfolio should continue to hold the security in its portfolio. In the event
that 35% or more of the Portfolio's net assets is held in securities rated
below investment grade due to a downgrade of one or more corporate bonds, SAM
will engage in an orderly disposition of such securities to the extent
necessary to ensure that the Portfolio's holdings of such securities remain
below 35% of the Portfolio's net assets.

4. MAY INVEST UP TO 5% OF ITS NET ASSETS IN WARRANTS. Warrants
are options to buy a stated number of shares of common stock at a specified
price any time during the life of the warrant. Generally, the value of a
warrant will fluctuate by

-- 11 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
greater percentages than the value of the underlying common stock. The
primary risk associated with a warrant is that the term of the warrant may
expire before the exercise price of the common stock has been reached. Under
these circumstances, the Portfolio could lose all of its principal investment
in the warrant.

5. MAY HOLD CASH OR INVEST TEMPORARILY IN HIGH QUALITY, SHORT-
TERM SECURITIES ISSUED BY AN AGENCY OR INSTRUMENTALITY OF THE U.S.
GOVERNMENT, HIGH QUALITY COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT, SHARES OF
NO-LOAD, OPEN-END MONEY MARKET FUNDS OR REPURCHASE AGREEMENTS. The Portfolio
may purchase these short-term securities as a cash management technique under
those circumstances where it has cash to manage for a short time period, for
example, after receiving proceeds from the sale of securities, dividend
distributions from portfolio securities or cash from the sale of the
Portfolio's shares to investors. With respect to repurchase agreements, the
Portfolio will invest no more than 5% of its total assets in repurchase
agreements and will not purchase repurchase agreements that mature in more
than seven days. Counterparties of foreign repurchase agreements may be less
creditworthy than U.S. counterparties.

6. MAY PURCHASE SECURITIES ON A "WHEN-ISSUED" OR "DELAYED-
DELIVERY" BASIS OR PURCHASE OR SELL SECURITIES ON A "FORWARD COMMITMENT"
BASIS. Under this procedure, the Portfolio agrees to acquire securities that
are to be issued and delivered against payment in the future. The price,
however, is fixed at the time of commitment. When the Portfolio purchases
when-issued or delayed-delivery securities, its custodian bank will maintain
in a temporary holding account cash, U.S. Government securities or other
high-grade debt obligations having a value equal to or greater than such
commitments. On delivery dates for such transactions, the Portfolio will meet
its obligations from maturities or sales of the securities held in the
temporary

-- 12 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
holding account or from then-available cash flow. If the Portfolio chooses to
dispose of the right to acquire a when-issued or delayed delivery security
prior to its acquisition, it could incur a gain or loss due to market
fluctuations. Use of these techniques may affect the Portfolio's share price
in a manner similar to leveraging.

7. MAY INVEST IN AMERICAN DEPOSITARY RECEIPTS ("ADRS").
ADRs are registered receipts evidencing ownership of an underlying foreign
security. They are typically issued in the United States by a bank or trust
company. ADRs involve risks in addition to risks normally associated with
securities issued by domestic issuers, including the possibility of adverse
political or economic developments in foreign countries. Foreign companies
may not be subject to accounting standards or governmental supervision
comparable to U.S. companies and there may be less public or less current
information about their operations. In addition to the risks of foreign
investment applicable to the underlying securities, ADRs may also be subject
to the risks that the foreign issuer may not be obligated to cooperate with
the U.S. bank or trust company, or that such information in the U.S. market
may not be current. ADRs which are structured without sponsorship of the
issuer of the underlying foreign security may also be subject to the risk
that the foreign issuer may not provide financial and other material
information to the U.S. bank or trust company issuer.

8. MAY INVEST UP TO 10% OF ITS TOTAL ASSETS IN FOREIGN
SECURITIES. FOREIGN SECURITIES ARE SUBJECT TO RISKS IN ADDITION TO THOSE
INHERENT IN INVESTMENTS IN DOMESTIC SECURITIES. Foreign investments involve
sovereign risk, which includes the possibility of adverse local political or
economic developments, expropriation or nationalization of assets, imposition
of withholding taxes on dividend or interest payments and currency blockage
(which would

-- 13 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
prevent currency from being sold). Foreign investments may be affected
favorably or unfavorably by changes in currency rates and exchange control
regulations. There is generally less publicly available information about
issuers of foreign securities as compared to U.S. issuers. Many foreign
companies are not subject to accounting, auditing and financial reporting
standards and requirements comparable to those applicable to U.S. companies.
Securities of some foreign issuers are less liquid and more volatile than
securities of U.S. issuers. Financial markets on which foreign securities
trade are generally subject to less governmental regulation as compared to
U.S. markets. Foreign brokerage commissions and custodian fees are generally
higher than those in the United States.

9. MAY INVEST UP TO 10% OF ITS TOTAL ASSETS IN SHARES OF REAL
ESTATE INVESTMENT TRUSTS ("REITS"). REITs purchase real property, which is
then leased, and make mortgage investments. For federal income tax purposes,
REITs attempt to qualify for beneficial "modified pass-through" tax treatment
by annually distributing at least 95% of their taxable income. If a REIT were
unable to qualify for such tax treatment, it would be taxed as a corporation
and the distributions made to its shareholders would not be deductible by it
in computing its taxable income. REITs are dependent upon the successful
operation of properties owned and the financial condition of lessees and
mortgagors. The value of REIT units fluctuates depending on the underlying
value of the real property and mortgages owned and the amount of cash flow
(net income plus depreciation) generated and paid out. In addition, REITs
typically borrow to increase funds available for investment. Generally, there
is a greater risk associated with REITs that are highly leveraged.

10.MAY INVEST IN RESTRICTED SECURITIES, PROVIDED THAT SAM HAS
DETERMINED THAT SUCH SECURITIES ARE LIQUID UNDER GUIDELINES

-- 14 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
ADOPTED BY THE TRUST'S BOARD OF TRUSTEES. Restricted securities may be sold
only in offerings registered under the Securities Act of 1933, as amended
("1933 Act"), or in transactions exempt from the registration requirements
under the 1933 Act. Rule 144A under the 1933 Act provides an exemption for
the resale of certain restricted securities to qualified institutional
buyers. Investing in restricted securities may increase the Portfolio's
illiquidity to the extent that qualified institutional buyers or other buyers
become, for a time, unwilling to purchase the securities. As a result, the
Portfolio may not be able to sell these securities when its investment
adviser deems it advisable to sell, or may have to sell them at less than
fair value. In addition, market quotations are sometimes less readily
available for restricted securities. Therefore, judgment may at times play a
greater role in valuing these securities than in the case of unrestricted
securities.

11.MAY INVEST IN SECURITIES WHOSE PERFORMANCE AND PRINCIPAL
AMOUNT AT MATURITY ARE LINKED TO A SPECIFIED EQUITY SECURITY OR SECURITIES
INDEX. The value of an indexed security is determined by reference to a
specific equity instrument or statistic. The performance of indexed
securities depends largely on the performance of the securities or indices to
which they are indexed, but such securities are also subject to credit risks
associated with the issuer of the security. Indexed securities may also be
more volatile than their underlying instruments.

12.MAY INVEST UP TO 5% OF ITS TOTAL ASSETS IN SECURITIES OF
UNSEASONED ISSUERS. Unseasoned issuers are those companies which, together
with any predecessors, have been in operation for less than three years.

13.MAY PURCHASE AND WRITE (I.E., SELL) COVERED CALL OPTIONS
AND PURCHASE PUT AND CALL OPTIONS ON STOCK INDICES. The Portfolio may employ
certain strategies and techniques utilizing these types of options to
mitigate their exposure to

-- 15 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
factors that affect security values. There is no guarantee that these
strategies and techniques will work. An option gives an owner the right to
buy or sell securities at a predetermined exercise price for a given period
of time. The writer of a call option is obligated to sell the underlying
securities if the option is exercised during the specified period of time. If
the Portfolio writes a call option and wishes to terminate the obligation, it
may effect a "closing purchase transaction" by buying an option of the same
series as the option previously written. Options on stock indices are similar
to options on stock except that, rather than obtaining the right to take or
make delivery of stock at a specified price, an option on a stock index gives
the holder the right to receive, upon exercise of the option, an amount of
cash if the closing level of the stock index upon which the option is based
is greater than (in the case of a call) or less than (in the case of a put)
the strike price of the option. The Portfolio will write call options on
stocks only if they are covered, and such options must remain covered so long
as the Portfolio is obligated as a writer. The Portfolio, under normal
conditions, will not write a call option if, as a result thereof, the
aggregate value of the assets underlying all such options (determined as of
the date such options are written) would exceed 25% of the Portfolio's net
assets. The Portfolio will not purchase an option if, as a result thereof,
its aggregate investment in options would exceed 5% of its total assets. See
"Risk Factors" for more information about the risks inherent in the purchase
and sale of options.

-- 16 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)

FUNDAMENTAL POLICIES

The following restrictions are fundamental policies of the Small Company
Portfolio that cannot be changed without shareholder vote:

1. THE SMALL COMPANY PORTFOLIO, WITH RESPECT TO 75% OF THE
VALUE OF ITS TOTAL ASSETS, MAY NOT INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN
THE SECURITIES OF ANY ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

2. THE SMALL COMPANY PORTFOLIO, WITH RESPECT TO 100% OF THE
VALUE OF ITS TOTAL ASSETS, MAY NOT PURCHASE MORE THAN 10% OF THE OUTSTANDING
VOTING SECURITIES OF ANY ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

3. THE SMALL COMPANY PORTFOLIO MAY BORROW MONEY ONLY FOR
TEMPORARY OR EMERGENCY PURPOSES FROM A BANK OR AFFILIATE OF SAFECO
CORPORATION AT AN INTEREST RATE NOT GREATER THAN THAT AVAILABLE FROM
COMMERCIAL BANKS. The Small Company Portfolio will not borrow amounts in
excess of 33% of total assets or purchase securities if borrowings equal to,
or greater than, 5% of its total assets are outstanding.

For more information, see the "Investment Policies" and "Additional Investment
Information" sections of the Trust's Statement of Additional Information.

RISK FACTORS

The Portfolio invests in companies with small market capitalizations which
involve more risks than investments in larger companies. Such companies may
include newly formed companies which have limited product lines, markets or
financial resources and may lack management depth. The securities of small or
newly formed companies may have limited marketability and may be subject to more
abrupt and erratic movements in price than securities of larger, more
established

-- 17 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S
INVESTMENT POLICIES (CONTINUED)
companies, or equity securities in general. Such volatility in price may in turn
cause the Portfolio's share prices to be volatile.

PORTFOLIO MANAGER

The manager for the Small Company Portfolio is Greg Eisen, Assistant Vice
President, SAM. Mr. Eisen has served as an investment analyst for SAM since
1992. From 1986 to 1992, Mr. Eisen was engaged by the SAFECO Insurance Companies
as a financial analyst.

-- 18 --
<PAGE>
PORTFOLIO MANAGER (CONTINUED)
The portfolio manager and certain other persons related to SAM and the Portfolio
are subject to written policies and procedures designed to prevent abusive
personal securities trading. Incorporated within these policies and procedures
are recommendations made by the Investment Company Institute (the trade group
for the mutual fund industry) with respect to personal securities trading by
persons associated with mutual funds. Those recommendations include preclearance
procedures and blackout periods when certain personnel may not trade in
securities that are the same or related securities being considered for purchase
or sale by the Portfolio.

INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

-- 19 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
On any matter submitted to a vote of shareholders, all shares of the Trust
Portfolios then issued and outstanding and entitled to vote shall be voted in
the aggregate and not by portfolio except for matters concerning only a
portfolio. The holders of each share of a Trust Portfolio shall be entitled to
one vote for each full share and a fractional vote for each fractional share.
Shares of one Trust Portfolio may not bear the same economic relationship to the
Trust as shares of another Trust Portfolio.

-- 20 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
and policies, SAM determines what securities will be purchased, retained or sold
by the Portfolio, and implements those decisions. The Portfolio's turnover rate
is set forth in the "Financial Highlights" section. A high portfolio turnover
rate involves correspondingly higher transaction costs in the form of broker
commissions, dealer spreads and other costs that the Portfolio will bear
directly. The Portfolio pays SAM an annual management fee of .85% of the
Portfolio's net assets ascertained each business day and paid monthly.

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") controlled
the Small Company Portfolio. SAFECO Life is a stock life insurance company
incorporated under the laws of Washington, with headquarters at 15411 N.E. 51st
Street, Redmond, Washington. SAFECO Life is a wholly-owned subsidiary of SAFECO
Corporation, and is an affiliated company of SAM, SAFECO Securities and SAFECO
Services, the investment adviser, principal underwriter and transfer agent,
respectively, of the Trust. SAFECO Life advanced all costs for the organization
of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO Services have
their principal

-- 21 --
<PAGE>
PERSONS CONTROLLING THE TRUST (CONTINUED)
place of business at SAFECO Plaza, Seattle, Washington 98185. SAM has its
principal place of business at Two Union Square, 25th Floor, Seattle, Washington
98101.

SALE AND REDEMPTION OF SHARES

PERFORMANCE INFORMATION

-- 22 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
price of the Small Company Portfolio will fluctuate and your shares, when
redeemed, may be worth more or less than you originally paid for them.

RANKINGS

From time to time, the Portfolio may advertise its rankings. Rankings are
calculated by independent companies that monitor mutual fund performance (E.G.
CDA Technologies, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
are reported periodically in national financial publications such as BARRON'S,
BUSINESS WEEK, FORBES, INVESTOR'S BUSINESS DAILY, MONEY MAGAZINE and THE WALL
STREET JOURNAL. In addition, non-standardized performance figures may accompany
the standardized figures described above. Non-standardized figures may be
calculated in a variety of ways, including but not necessarily limited to,
different time periods and different initial investment amounts. The Portfolio
may also compare its performance to the performance of the Russell 2000 Index or
other relevant indices. Performance information and quoted rankings are
indicative only of past performance and are not intended to represent future
investment results.

-- 23 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
OTHER CHARGES

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

In addition to the diversification requirements in Subchapter M, the Portfolio
is required to satisfy diversification requirements of Section 817(h) of the
Internal Revenue Code and the

-- 24 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)

Investment Company Act. Failure to comply with the requirements of Section
817(h) could result in taxation of the insurance company and immediate taxation
of the owners of variable annuity and variable life insurance contracts to the
full extent of appreciation under the contracts.

SHARE PRICE CALCULATION

-- 25 --
<PAGE>
SHARE PRICE CALCULATION (CONTINUED)
on consideration of information with respect to transactions in similar
securities, quotations from dealers and various relationships between
securities. Valuations of the Portfolio's securities calculated in a like manner
may be obtained from a pricing service. Investments for which a representative
value cannot be established are valued at their fair value as determined in good
faith by or under the direction of the Trust's Board of Trustees.

RATINGS SUPPLEMENT

DESCRIPTION OF DEBT RATINGS

MOODY'S

INVESTMENT GRADE:

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

-- 26 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
A -- Possess many favorable investment attributes and are to be considered 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.

NON-INVESTMENT GRADE:
Ba -- Judged to have speculative elements; their future cannot be considered as
well-assured. 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 -- Generally lack characteristics of a 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 -- Have poor standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.

Ca -- Represent obligations which are speculative to a high degree. Such issues
are often in default or have other marked shortcomings.

C -- The lowest-rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

-- 27 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
S&P

INVESTMENT GRADE:
AAA -- Highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.

AA -- Very strong capacity to pay interest and repay principal. Differs from the
highest rated issues only in small degree.

C1 -- Reserved for income bonds on which no interest is being paid.

PLUS (+) OR MINUS (-): Ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

-- 28 --
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Bond Portfolio (or the "Portfolio") described in this Prospectus is a series
of the SAFECO Resource Series Trust ("Trust"), an open-end, management
investment company consisting of six separate series. Shares of the Trust are
offered to life insurance companies, which may or may not be affiliated with one
another ("Participating Insurance Companies"), for allocation to certain of
their separate accounts established for the purpose of funding variable life
insurance policies and variable annuity contracts ("Variable Contracts") and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans").

The BOND PORTFOLIO has as its investment objective to seek to provide as high a
level of current income as is consistent with the relative stability of capital.
The Bond Portfolio invests primarily in medium-term debt securities.

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

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 6
Financial Highlights 8
The Trust and the Portfolio's Investment Policies 10
Portfolio Manager 18
Information about Share Ownership and Companies that Provide
Services to the Trust 19
Persons Controlling the Trust 21
Sale and Redemption of Shares 22
Performance Information 23
Portfolio Distributions and Tax Information 24
Share Price Calculation 25
Ratings Supplement 25
</TABLE>

-- 3 --
<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Bond Portfolio, is offered through this Prospectus. The Bond Portfolio is a
diversified series of the Trust, an open-end, management investment company that
continuously offers to sell and to redeem (buy back) its shares at the current
net asset value per share without any sales or redemption charges or 12b-1 fees.
(See "Share Price Calculation" for more information.)

There is a risk that the market value of the Portfolio's securities may decrease
and result in a decrease in the value of a shareholder's investment. The value
of the Bond Portfolio will normally fluctuate inversely with changes in market
interest rates. See "The Trust and the Portfolio's Investment Policies" for more
information.

-- 5 --
<PAGE>
FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED REDEMPTION EXCHANGE
PURCHASES DIVIDENDS SALES LOAD FEES FEES
- ------------- ------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
TOTAL ANNUAL
OPERATING EXPENSES
MANAGEMENT OTHER EXPENSES AFTER
PORTFOLIO 12B-1 FEES FEE AFTER REIMBURSEMENT REIMBURSEMENT
- ----------------------- ----------- ------------ ------------------- ------------------
<S> <C> <C> <C> <C>
Bond NONE 0.74% 0.0% 0.74%
</TABLE>

During the year ended December 31, 1997, SAFECO Life Insurance Company ("SAFECO
Life") paid for or reimbursed all of the Other Expenses of the Bond Portfolio.
Expenses before such reimbursement as a percentage of average net assets were
.90%.

SAFECO Life will continue to pay all Other Expenses of the Portfolio until the
Portfolio's assets exceed $20 million. Once the Portfolio's net assets exceed
$20 million, all of the Other Expenses of the Portfolio will be paid by the
Portfolio. (See "Persons Controlling the Trust" for more information.)

C. EXAMPLE OF EXPENSES

-- 6 --
<PAGE>
FUND EXPENSES (CONTINUED)
EXPENSES. THE PORTFOLIO'S ACTUAL EXPENSES OR PERFORMANCE MAY BE GREATER OR LESS
THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS REQUIRED BY SECURITIES AND
EXCHANGE COMMISSION REGULATIONS APPLICABLE TO ALL MUTUAL FUNDS AND IT IS NOT A
PREDICTION OF, NOR DOES IT REPRESENT, PAST OR FUTURE EXPENSES OR THE PERFORMANCE
OF THE PORTFOLIO.

-- 7 --
<PAGE>
FINANCIAL HIGHLIGHTS

-- 8 --
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST -- BOND PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of
period $ 10.75 $ 11.31 $ 10.20 $ 11.12 $ 10.82 $ 10.80 $ 10.09 $ 10.18 $ 9.83
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .61 .62 .71 .59 .56 .58 .70 .74 .75
Net realized and unrealized
gain (loss) on investments .29 (.56) 1.11 (.92) .58 .16 .71 (.07) .36
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations .90 .06 1.82 (.33) 1.14 .74 1.41 .67 1.11
--------- --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.61) (.62) (.71) (.59) (.56) (.58) (.70) (.74) (.75)
Distributions from capital
gains -- -- -- -- (.28) (.14) -- (.02) (.01)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (.61) (.62) (.71) (.59) (.84) (.72) (.70) (.76) (.76)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value at end of
period $ 11.04 $ 10.75 $ 11.31 $ 10.20 $ 11.12 $ 10.82 $ 10.80 $ 10.09 $ 10.18
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total return 8.41% .54% 17.87% -2.93% 10.55% 6.82% 13.98% 6.57% 11.30%
Net assets at end of period
(000's omitted) $ 17,881 $ 15,991 $ 14,257 $ 13,361 $ 13,245 $ 9,172 $ 4,852 $ 3,228 $ 2,700
Ratio of expenses to average
net assets .74% .73% .72% .72% .73% .74% .74% .74% .73%
Ratio of expenses to average
net assets before expense
reimbursement .90% .87% .94% .89% -- -- -- -- --
Ratio of net investment income
to average net assets 5.75% 5.64% 6.50% 5.53% 5.68% 6.96% 7.26% 7.48% 7.47%
Portfolio turnover ratio 151.43% 140.90% 77.93% 147.22% 60.20% 46.66% 36.31% 7.21% 8.42%

1988

<S> <C>
Net asset value at beginning of
period $ 9.90
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .75
Net realized and unrealized
gain (loss) on investments (.06)
---------
Total from investment
operations .69
---------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.75)
Distributions from capital
gains (.01)
---------
Total distributions (.76)
---------
Net asset value at end of
period $ 9.83
---------
---------
Total return 7.03%
Net assets at end of period
(000's omitted) $ 2,244
Ratio of expenses to average
net assets .74%
Ratio of expenses to average
net assets before expense
reimbursement --
Ratio of net investment income
to average net assets 7.37%
Portfolio turnover ratio 5.36%
</TABLE>

-- 9 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Bond Portfolio, is a diversified series of the Trust.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Bond Portfolio is to seek as high a level of
current income as is consistent with the relative stability of capital.

To pursue its objective, the Bond Portfolio:

1. WILL INVEST PRIMARILY IN MEDIUM-TERM DEBT SECURITIES.

2. MAY INVEST UP TO 50% OF ITS TOTAL ASSETS IN MORTGAGE
RELATED SECURITIES. These securities (a) are either investments in a pool of
mortgages or in securities secured by a pool of mortgages and (b) must be
rated in the top two

-- 10 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
grades by either Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's"). Unlike conventional bonds, the principal on
mortgage-related securities is paid back over the life of the loan rather
than at maturity. Consequently, the Bond Portfolio will receive monthly
scheduled payments of both principal and interest. In addition, the Bond
Portfolio may receive unscheduled principal payments representing unscheduled
prepayments on the underlying mortgages which could lower the overall return
of the investment.

Because the Bond Portfolio must reinvest scheduled and unscheduled principal
payments at prevailing interest rates, and because such interest rates may be
higher or lower than the current yield of the Bond Portfolio, mortgage-
related securities may not be an effective means to lock in long-term
interest rates. In addition, prices of mortgage-related securities like
conventional bonds are inversely affected by changes in interest rate levels.
Because of the likelihood of increased prepayments of mortgages in times of
declining interest rates, they have less potential for capital appreciation
than comparable fixed-income securities and may in fact decrease in value
when interest rates fall. Mortgage-related securities include:

(a) Government National Mortgage Association ("GNMA")
securities, which are interests in pools of mortgage loans issued by the
Federal Housing Administration or the Farmer's Home Administration or
guaranteed by the Veterans Administration and issued by GNMA. Once
approved by GNMA, the timely payment of principal and interest by each
mortgage pool is guaranteed by GNMA. This guarantee represents a general
obligation of the U.S. Treasury.

(b) Mortgage pass-through securities issued by the Federal
National Mortgage Association ("FNMA") and the Federal Home Loan
Mortgage Corporation ("FHLMC").

-- 11 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
(c) Conventional pass-through mortgage securities issued
by non-governmental issuers.

(d) Collateralized Mortgage Obligations ("CMOs"), which
are securities that have been pledged as collateral mortgages or
mortgage-backed securities and are issued by non-government issuers.

(e) Mortgage pass-through bonds and mortgage-backed
bonds issued by non-government issuers. A mortgage pass-through bond is
an interest in a pool of mortgages where the cash flow generated from
the mortgage collateral pool is dedicated to the repayment of the bond.
A mortgage-backed bond is a general obligation of an issuer secured by a
first lien on a pool of mortgages.

(f) Securities which are derivatives of securities listed in
(a),(b) and (c) above. Derivative mortgage securities are created from
the cash flows of mortgages or pools of mortgages. While the derivative
securities retain the combination of quality and yield possessed by the
underlying collateral, the cash flows are reshaped to suit various
investment strategies. Examples of such securities include residuals
from CMOs, floating rate notes, inverse floating rate notes, interest
only and principal only strips and junior/senior securities. Certain
derivatives may be extremely risky investments because, among other
things, they may be particularly sensitive to changes in interest rates.
(The Portfolio will not invest in leveraged derivatives.)

3. MAY INVEST UP TO 30% OF ITS TOTAL ASSETS IN DEBT SECURITIES
OF ISSUERS IN EACH OF THE FOLLOWING SECTORS: DOMESTIC INDUSTRIALS, DOMESTIC
UTILITIES, SUPRANATIONALS, YANKEE AND FOREIGN.

SUPRANATIONAL ISSUERS are organizations whose memberships include two or more
national governments and which

-- 12 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
have a limited right to draw on the resources of such governments. Examples
of such issuers include the World Bank, the European Investment Bank, the
European Economic Community and the European Coal and Steel Community.

The YANKEE SECTOR is made up of securities issued in the U.S. by foreign
issuers. These bonds involve investment risks that are different from those
of domestic issuers. Such risks may include nationalization of the issuer,
confiscatory taxation by the foreign government, establishment of controls by
the foreign government that would inhibit the remittance of amounts due the
Bond Portfolio, lack of comparable publicly-available information concerning
foreign issuers, the lack of comparable accounting and auditing practices in
foreign countries and finally, in the event of default, difficulty of
enforcing claims against foreign issuers.

The FOREIGN SECTOR is made up of securities issued and traded outside of the
U.S. by either U.S. or foreign issuers. These securities may be denominated
in U.S. dollars (E.G., Eurobonds) or foreign currency and may be held in the
U.S. or a foreign country. In addition to the risks discussed in connection
with the Yankee sector, these bonds would be traded in a market subject to
less regulation than U.S. markets and have the liquidity and settlement
problems attendant in some foreign markets. Those bonds denominated in
foreign currencies have the risk of an unfavorable exchange rate fluctuation
subsequent to purchase by the Bond Portfolio.

SAM will make every effort to analyze potential investments in foreign
issuers on the same basis as the rating services analyze domestic issuers.
Because public information is not always comparable to that available on
domestic issuers, this may not be possible. Therefore, while SAM will make
every effort to select investments in securities of

-- 13 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
foreign issuers on the same basis relative to quality and risk as its
investments in domestic securities, it may not always be able to do so. There
are also currency risks associated with foreign investments.

4. MAY INVEST IN INVESTMENT GRADE AND BELOW INVESTMENT
GRADE CORPORATE DEBT SECURITIES. No more than 20% of the Bond Portfolio's
assets will be invested in corporate debt securities which are rated lower
than the top four grades by S&P or Moody's (such top four grades constitute
"investment grade" securities) or, if not rated, are in the opinion of SAM of
less than investment grade quality.

Bonds which are rated lower than the top four grades by S&P (BB and below)
and Moody's (Ba and below) are referred to as high-yield bonds or "junk
bonds." The Bond Portfolio does not intend to purchase high-yield bonds for
the coming year, but may retain bonds which were investment grade at the time
of purchase but later downgraded to lower than the top four grades assigned
by S&P or Moody's. High-yield bonds normally offer a current yield or
yield-to-maturity which is significantly higher than the yield available from
investment grade bonds. However, high-yield bonds are speculative and involve
greater investment risks due to the issuer's reduced creditworthiness and
increased likelihood of default and bankruptcy. Generally, high-yield bonds
are subject to greater price changes, fluctuations in yield and risk to
principal and income than higher rated bonds of the same maturity. For more
information on ratings see the "Ratings Supplement" section of this
Prospectus, and for more information on the special risks associated with
high-yield bonds see the Trust's Statement of Additional Information.

SAM uses S&P and Moody's ratings only as a preliminary indicator of
investment quality. SAM will periodically research each high-yield bond held
in the Bond Portfolio,

-- 14 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
whether rated or not rated, to analyze such factors as the issuer's interest
and dividend coverage, asset coverage, earnings prospects and managerial
strength.

5. MAY INVEST IN OBLIGATIONS OF, OR GUARANTEED BY THE U.S.
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES including (a) securities backed
by the full faith and credit of the U.S. Government, such as U.S. Treasury
bills, notes and bonds; (b) securities issued by U.S. Government agencies or
instrumentalities that are not backed by the full faith and credit of the
U.S. Government but are supported by the issuer's right to borrow from the
U.S. Treasury, such as securities issued by FNMA and FHLMC; and (c)
securities supported solely by the creditworthiness of the issuer, such as
securities issued by Tennessee Valley Authority ("TVA"). While U.S.
Government securities are considered to be of the highest credit quality
available, they are subject to the same market risks as comparable debt
securities.

6. MAY INVEST IN ASSET-BACKED SECURITIES, WHICH REPRESENT
INTERESTS IN, OR ARE SECURED BY AND PAYABLE FROM, POOLS OF ASSETS SUCH AS
CONSUMER LOANS, AUTOMOBILE RECEIVABLE SECURITIES, CREDIT CARD RECEIVABLE
SECURITIES, AND INSTALLMENT LOAN CONTRACTS. These securities may be supported
by credit enhancements such as letters of credit. Payment of interest and
principal ultimately depends upon borrowers paying the underlying loans.
There exists a risk of default by the underlying borrowers and recovery on
repossessed collateral may be unavailable or inadequate to support payments
on asset-backed securities. In addition, asset-backed securities are subject
to prepayment risks which may reduce the overall return of the investment.

Generally, bond values fluctuate inversely with changes in interest rates. The
longer the maturity or the poorer the quality of a bond, the greater volatility
it will have. The principal risks of investment in the Bond Portfolio have been
discussed in connection with specific types of securities above.

-- 15 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
ADDITIONAL INVESTMENT PRACTICES

The Portfolio may also follow the investment practices described below:

3. MAY INVEST UP TO 10% OF TOTAL ASSETS IN RESTRICTED
SECURITIES ELIGIBLE FOR RESALE UNDER RULE 144A ("RULE 144A SECURITIES"),
PROVIDED THAT SAM HAS DETERMINED THAT SUCH SECURITIES ARE LIQUID UNDER
GUIDELINES ADOPTED BY THE BOARD OF TRUSTEES. Restricted securities may be
sold only in offerings registered under the Securities Act of 1933, as
amended ("1933 Act"), or in transactions exempt from the registration
requirements under the 1933 Act. Rule 144A under the 1933 Act provides an
exemption for the resale of certain restricted securities to qualified
institutional buyers. Investing in restricted securities may increase the
Portfolio's illiquidity to the extent that qualified institutional buyers or
other buyers become, for a time, unwilling to

-- 16 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
purchase the securities. As a result, the Portfolio may not be able to sell
these securities when its investment adviser deems it advisable to sell, or
may have to sell them at less than fair value. In addition, market quotations
are sometimes less readily available for restricted securities. Therefore,
judgment may at times play a greater role in valuing these securities than in
the case of unrestricted securities.

FUNDAMENTAL POLICIES

The Portfolio is subject to the following fundamental policies which cannot be
changed without shareholder vote:

1. MAY NOT INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN THE
SECURITIES OF ANY ONE ISSUER, EXCEPT THAT (I) UP TO 25% OF THE VALUE OF THE
PORTFOLIO'S ASSETS (NOT INCLUDING SECURITIES ISSUED BY ANOTHER INVESTMENT
COMPANY) MAY BE INVESTED WITHOUT REGARD TO THIS LIMIT, AND (II) UP TO 100% OF
THE PORTFOLIO'S TOTAL ASSETS MAY BE INVESTED IN OBLIGATIONS OF OR GUARANTEED
BY THE U.S. GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES;

2. MAY NOT, WITH RESPECT TO 100% OF THE VALUE OF ITS TOTAL
ASSETS, PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

-- 17 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
industries. The 25% limitation does not apply to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities or to
mortgage-related securities; and

For more information, see the "Investment Policies" and "Additional
Investment Information" sections of the Trust's Statement of Additional
Information.

PORTFOLIO MANAGER

The manager for the Bond Portfolio is Michael Hughes, Assistant Vice President,
SAM. Mr. Hughes was Vice President and a portfolio manager for First Interstate
Capital Management Company from 1995 to 1996, and Vice President and portfolio
manager for First Interstate Bank of California from 1988 to 1995.

-- 18 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

The Trust does not intend to hold annual meetings of shareholders of the Trust
Portfolios. The Trustees will call a special meeting of shareholders of a Trust
Portfolio only if

-- 19 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
required by the 1940 Act, in their written discretion, or upon the written
notice of holders of 10% or more of the outstanding shares of the Trust
Portfolio entitled to vote.

Under Delaware law, the shareholders of the Trust Portfolios will not be
personally liable for the obligations of any Trust Portfolio; a shareholder is
entitled to the same limitation of personal liability extended to shareholders
of corporations. To guard against the risk that Delaware law might not be
applied in other states, the Trust Instrument requires that every written
obligation of the Trust or a Trust Portfolio contain a statement that such
obligation may only be enforced against the assets of the Trust or the Trust
Portfolio and provides for indemnification out of the Trust's or the Trust
Portfolio's property of any shareholder nevertheless held personally liable for
the Trust's or a Trust Portfolio's obligations, respectively.

-- 20 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
The distributor of the Portfolio's shares under an agreement with the Trust is
SAFECO Securities, Inc. ("SAFECO Securities"), a broker-dealer registered under
the Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. SAFECO Securities is not compensated by the Trust or
the Portfolio for these services.

YEAR 2000

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") controlled
the Bond Portfolio. SAFECO Life is a stock life insurance company incorporated
under the laws of Washington, with headquarters at 15411 N.E. 51st Street,

-- 21 --
<PAGE>
PERSONS CONTROLLING THE TRUST (CONTINUED)
Redmond, Washington. SAFECO Life is a wholly-owned subsidiary of SAFECO
Corporation, and is an affiliated company of SAM, SAFECO Securities and SAFECO
Services, the investment adviser, principal underwriter and transfer agent,
respectively, of the Trust. SAFECO Life advanced all costs for the organization
of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO Services have
their principal place of business at SAFECO Plaza, Seattle, Washington 98185.
SAM has its principal place of business at Two Union Square, Seattle, Washington
98101.

SALE AND REDEMPTION OF SHARES

-- 22 --
<PAGE>
PERFORMANCE INFORMATION

The Portfolio's yield, total return and average annual total return may be
quoted in advertisements. Performance figures are indicative only of past
performance and are not intended to represent future investment results. The
yield and share price of the Bond Portfolio will fluctuate and your shares, when
redeemed, may be worth more or less than you originally paid for them.

RANKINGS

From time to time, the Portfolio may advertise its rankings. Rankings are
calculated by independent companies that monitor mutual fund performance (E.G.
CDA Technologies, Lipper Analytical Services, Inc. and Morningstar, Inc.) and
are reported periodically in national financial publications such as BARRON'S,
BUSINESS WEEK, FORBES, INVESTOR'S BUSINESS DAILY, MONEY MAGAZINE and THE WALL
STREET JOURNAL. In addition, non-standardized performance figures may accompany
the standardized figures described above. Non-standardized figures may be
calculated in a variety of ways, including but not necessarily limited to,
different time periods and different initial investment amounts. The Portfolio
may also compare its performance to the performance of relevant indices.
Performance information and quoted rankings are indicative only of past
performance and are not intended to represent future investment results.

-- 23 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
OTHER CHARGES

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

-- 24 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)
insurance company and immediate taxation of the owners of variable annuity and
variable life insurance contracts to the full extent of appreciation under the
contracts.

SHARE PRICE CALCULATION

Securities are valued based on consideration of information with respect to
transactions in similar securities, quotations from dealers and various
relationships between securities. Valuations of the Portfolio's securities
calculated in a like manner may be obtained from a pricing service. Investments
for which a representative value cannot be established are valued at their fair
value as determined in good faith by or under the direction of the Trust's Board
of Trustees.

RATINGS SUPPLEMENT

Ratings by Moody's and S&P represent the respective opinions of those
organizations as to the investment quality of the rated

-- 25 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
obligations. Investors should realize these ratings do not constitute a
guarantee that the principal and interest payable under these obligations will
be paid when due.

DESCRIPTION OF DEBT RATINGS

MOODY'S

INVESTMENT GRADE:

A -- Possess many favorable investment attributes and are to be considered 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.

-- 26 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
NON-INVESTMENT GRADE:

Ba -- Judged to have speculative elements; their future cannot be considered as
well-assured. 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 -- Generally lack characteristics of a 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 -- Have poor standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.

Ca -- Represent obligations which are speculative to a high degree. Such issues
are often in default or have other marked shortcomings.

C -- The lowest-rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.

S&P

INVESTMENT GRADE:

AAA -- Highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.

AA -- Very strong capacity to pay interest and repay principal. Differs from the
highest rated issues only in small degree.

BBB -- Adequate capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters,

-- 27 --
<PAGE>
RATINGS SUPPLEMENT (CONTINUED)
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher-rated categories.

NON-INVESTMENT GRADE:

BB, B, CCC, CC, AND C -- Regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal.
"BB" indicates the least degree of speculation and "C" the highest. While such
debt will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major exposures to adverse conditions.

C1 -- Reserved for income bonds on which no interest is being paid.

PLUS (+) OR MINUS (-): Ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

-- 28 --
<PAGE>
SAFECO RESOURCE SERIES TRUST PROSPECTUS
SAFECO Plaza
Seattle, Washington 98185 April 30, 1998

The Money Market Portfolio (or the "Portfolio") described in this Prospectus is
a series of the SAFECO Resource Series Trust ("Trust"), an open-end, management
investment company consisting of six separate series. Shares of the Trust are
offered to life insurance companies, which may or may not be affiliated with one
another ("Participating Insurance Companies"), for allocation to certain of
their separate accounts established for the purpose of funding variable life
insurance policies and variable annuity contracts ("Variable Contracts") and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans").

The MONEY MARKET PORTFOLIO has as its investment objective to seek as high a
level of current income as is consistent with the preservation of capital and
liquidity through investments in high-quality money market instruments maturing
in thirteen months or less. THE MONEY MARKET PORTFOLIO SEEKS TO MAINTAIN A $1.00
PER SHARE NET ASSET VALUE. THERE IS NO ASSURANCE THAT THE MONEY MARKET PORTFOLIO
WILL MAINTAIN A STABLE $1.00 PER SHARE NET ASSET VALUE.

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

-- 2 --
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Introduction to the Trust and the Portfolio 4
Fund Expenses 5
Financial Highlights 8
The Trust and the Portfolio's Investment Policies 10
Portfolio Manager 17
Information about Share Ownership and Companies that Provide
Services to the Trust 18
Persons Controlling the Trust 21
Sale and Redemption of Shares 21
Performance Information 22
Portfolio Distributions and Tax Information 23
Share Price Calculation 24
</TABLE>

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<PAGE>
INTRODUCTION TO THE TRUST AND THE PORTFOLIO

The Trust is a series investment company that currently issues shares
representing six mutual funds (the "Trust Portfolios"), only one of which, the
Money Market Portfolio, is offered through this Prospectus. The Money Market
Portfolio is a diversified series of the Trust, an open-end, management
investment company that continuously offers to sell and to redeem (buy back) its
shares at the current net asset value per share without any sales or redemption
charges or 12b-1 fees. (See "Share Price Calculation" for more information.)

There is a risk that the market value of the Portfolios securities may decrease
and result in a decrease in the value of a shareholder's investment. The
principal risk associated with money market funds is that they may experience a
delay or failure in principal or interest payments at maturity of one or more of
the portfolio securities. The Money Market Portfolio's yield will fluctuate with
general money market interest rates. See "The Trust and the Portfolio's
Investment Policies" for more information.

FUND EXPENSES

A. SHAREHOLDER TRANSACTION EXPENSES FOR THE PORTFOLIO

<TABLE>
<CAPTION>
SALES LOAD
SALES LOAD IMPOSED ON
IMPOSED ON REINVESTED DEFERRED SALES
PURCHASES DIVIDENDS LOAD REDEMPTION FEES EXCHANGE FEES
- ----------- ----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
NONE NONE NONE NONE NONE
</TABLE>

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<PAGE>
FUND EXPENSES (CONTINUED)
B. ANNUAL OPERATING EXPENSES

(as a percentage of average net assets)

During the year ended December 31, 1997, SAFECO Life Insurance Company ("SAFECO
Life") paid for or reimbursed all of the Other Expenses of the Money Market
Portfolio. Expenses before such reimbursement as a percentage of average net
assets were 0.81%.

SAFECO Life Insurance Company will continue to pay all Other Expenses of the
Money Market Portfolio until its assets exceed $20 million. Once the Portfolio's
net assets exceed $20 million, all of the Other Expenses of the Portfolio will
be paid by the Portfolio. (See "Persons Controlling the Trust" for more
information.)

C. EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Money Market $ 7 $ 20 $ 36 $ 80
</TABLE>

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<PAGE>
FUND EXPENSES (CONTINUED)
COMMISSION REGULATIONS APPLICABLE TO ALL MUTUAL FUNDS AND IT IS NOT A PREDICTION
OF, NOR DOES IT REPRESENT, PAST OR FUTURE EXPENSES OR THE PERFORMANCE OF THE
PORTFOLIO.

-- 7 --
<PAGE>
FINANCIAL HIGHLIGHTS

-- 8 --
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)

SAFECO RESOURCE SERIES TRUST - MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996 1995 1994 1993 1992 1991 1990 1989
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .05 .05 .05 .04 .03 .03 .06 .08 .08
LESS DISTRIBUTIONS:
Dividends from net
investment income (.05) (.05) (.05) (.04) (.03) (.03) (.06) (.08) (.08)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value at end
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total return 5.08% 4.94% 5.56% 3.65% 2.61% 3.26% 5.67% 7.86% 8.96%
Net assets at end of
period (000's
omitted) $ 17,757 $ 12,493 $ 8,719 $ 9,315 $ 6,327 $ 5,399 $ 4,534 $ 4,284 $ 3,275
Ratio of expenses to
average net assets .64% .62% .62% .63% .64% .68% .74% .73% .73%
Ratio of expenses to
average net assets
before expense
reimbursements .81% .90% .87% .87% -- -- -- -- --
Ratio of net investment
income to average net
assets 4.97% 4.86% 5.32% 3.63% 2.61% 3.23% 5.54% 7.60% 8.55%

1988

<S> <C>
Net asset value at
beginning of period $ 1.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .07
LESS DISTRIBUTIONS:
Dividends from net
investment income (.07)
---------
Net asset value at end
of period $ 1.00
---------
---------
Total return 7.11%
Net assets at end of
period (000's
omitted) $ 2,908
Ratio of expenses to
average net assets .74%
Ratio of expenses to
average net assets
before expense
reimbursements --
Ratio of net investment
income to average net
assets 7.00%
</TABLE>

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<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES

The Trust is a Delaware business trust established by a Trust Instrument dated
May 13, 1993. The Trust currently consists of six series, each of which,
including the Money Market Portfolio, is a diversified series of the Trust.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Money Market Portfolio is to seek as high a
level of current income as is consistent with the preservation of capital and
liquidity through investments in high-quality money market instruments maturing
in thirteen months or less.

To pursue its objective, the Money Market Portfolio:

1. WILL PURCHASE SECURITIES WHICH IN THE OPINION OF SAM,
OPERATING PURSUANT TO GUIDELINES ESTABLISHED BY THE BOARD

-- 10 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
OF TRUSTEES, PRESENT MINIMAL CREDIT RISKS AFTER AN EVALUATION OF THE CREDIT
QUALITY OF THE ISSUER OR OF ANY ENTITY PROVIDING A CREDIT ENHANCEMENT FOR THE
SECURITY. The Portfolio complies with industry-standard guidelines on the
quality and maturity of its investments, which are designed to help maintain
a stable $1.00 share price. The Portfolio invests in instruments with
remaining maturities of 397 days or less (determined in accordance with Rule
2a-7 under the Investment company Act of 1940 (the "1940 Act")) and maintains
a dollar-weighted average portfolio maturity of not more than 90 days.

2. MAY INVEST, SUBJECT TO THE MATURITY AND QUALITY
REQUIREMENTS DESCRIBED ABOVE, IN:

(a) Commercial paper obligations, including obligations sold pursuant to
Section 4(2) ("Section 4(2) paper") of the Securities Act of 1933 ("1933
Act"). Section 4(2) exempts from the registration requirements of the
1933 Act securities sold by the issuer in private transactions. Section
4(2) paper may be purchased by the Money Market Portfolio only if SAM
has determined that such securities are liquid under guidelines adopted
by the Board of Trustees. Because Section 4(2) paper is a restricted
security, investing in Section 4(2) paper could have the effect of
increasing the Money Market Portfolio's illiquidity to the extent buyers
are unwilling to purchase the securities. In addition to commercial
paper obligations of domestic corporations, the Money Market Portfolio
may also purchase dollar-denominated commercial paper issued in the U.S.
by foreign entities. While investments in foreign obligations are
intended to reduce risk by providing further diversification, such
investments involve sovereign and other risks, in addition to the credit
and market risks normally associated with domestic securities. These
additional risks include the

-- 11 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
possibility of adverse political and economic developments (including
political instability) and the potentially adverse effects of
unavailability of public information regarding issuers, reduced
governmental supervision regarding financial markets, reduced liquidity
of certain financial markets, and the lack of uniform accounting,
auditing, and financial standards or the application of standards that
are different or less stringent than those applied in the U.S. The
Portfolio will purchase such obligations only if in SAM's opinion the
obligation is of an investment quality comparable to other obligations
which may be purchased by the Money Market Portfolio;

(b) Negotiable and non-negotiable time deposits and certificates of deposit,
bankers' acceptances and other short-term obligations of banks (provided
the issuing bank has total assets of at least $1 billion, or in the case
of a bank not having total assets of at least $1 billion, the bank is a
member of and insured by the Federal Deposit Insurance Corporation in
which case the Money Market Portfolio will limit its investment to the
statutory insurance coverage);

(c) Dollar-denominated securities issued by foreign banks (including foreign
branches of U.S. banks) provided that in SAM's opinion the security is
of an investment quality comparable to other obligations which may be
purchased by the Money Market Portfolio; and

(d) Corporate obligations such as publicly traded bonds, debentures and
notes. Bonds and other debt securities are used by issuers to borrow
money from investors. The issuer pays the investor a fixed rate of
interest, and must repay the amount borrowed at maturity. The value of
bonds and other debt securities will normally

-- 12 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
vary inversely with interest rates. In general, bond prices rise when
interest rates fall, and bond prices fall when interest rates rise.

3. MAY INVEST IN OBLIGATIONS OF, OR GUARANTEED BY, THE U.S.
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES including (a) securities backed
by the full faith and credit of the U.S. Government, such as U.S. Treasury
bills, notes and bonds; (b) securities issued by U.S. Government agencies or
instrumentalities that are not backed by the full faith and credit of the
U.S. Government but are supported by the issuer's right to borrow from the
U.S. Treasury, such as securities issued by the Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation; and (c) securities
supported solely by the creditworthiness of the issuer, such as securities
issued by the Tennessee Valley Authority. While U.S. Government securities
are considered to be of the highest credit quality available, they are
subject to the same market risks as comparable debt securities.

4. MAY INVEST IN VARIABLE AND FLOATING RATE INSTRUMENTS.
Issuers of floating or variable rate notes include, but are not limited to,
corporations, partnerships, the U.S. Government, its agencies and
instrumentalities, and municipalities. The interest rates on variable rate
instruments reset periodically on specified dates so as to cause the
instruments' market value to approximate their par value. The interest rates
on floating rate instruments change whenever there is a change in a
designated benchmark rate. Variable and floating rate instruments may have
optional or mandatory put features. In the case of a mandatory put, the
Portfolio would be required to act to keep the instrument.

5. MAY INVEST IN REPURCHASE AGREEMENTS. In a repurchase
agreement, the Portfolio buys securities at one price and simultaneously
agrees to sell them back at a higher price. Delays or losses could result if
the counterparty to the

-- 13 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
agreement defaults or becomes insolvent. The Portfolio will invest no more
than 10% of total assets in repurchase agreements that mature in more than
seven days.

6. MAY INVEST UP TO 10% OF TOTAL ASSETS IN RESTRICTED
SECURITIES ELIGIBLE FOR RESALE UNDER RULE 144A ("RULE 144A SECURITIES"),
PROVIDED THAT SAM HAS DETERMINED THAT SUCH SECURITIES ARE LIQUID UNDER
GUIDELINES ADOPTED BY THE BOARD OF TRUSTEES. Restricted securities may be
sold only in offerings registered under the Securities Act of 1933, as
amended ("1933 Act"), or in transactions exempt from the registration
requirements under the 1933 Act. Rule 144A under the 1933 Act provides an
exemption for the resale of certain restricted securities to qualified
institutional buyers. Investing in restricted securities may increase the
Portfolio's illiquidity to the extent that qualified institutional buyers or
other buyers become, for a time, unwilling to purchase the securities. As a
result, the Portfolio may not be able to sell these securities when its
investment adviser deems it advisable to sell, or may have to sell them at
less than fair value. In addition, market quotations are sometimes less
readily available for restricted securities. Therefore, judgment may at times
play a greater role in valuing these securities than in the case of
unrestricted securities.

7. MAY INVEST IN MORTGAGE- AND ASSET-BACKED SECURITIES.
Mortgage-backed securities represent interests in pools of mortgage loans and
include, but are not limited to, securities issued by the U.S. Government or
one of its agencies or instrumentalities such as GNMA, FNMA or FHLMC.
Principal is paid back to the Portfolio as payments are made on the
underlying mortgages in the pool. Accordingly, the Portfolio receives
scheduled monthly principal and interest payments as well as any unscheduled
principal prepayments on the underlying mortgages. Unscheduled principal
prepayments could lower the overall

-- 14 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
return of the investment. Like other fixed income securities, when interest
rates rise, the value of mortgage-backed securities generally will decline.
However, when interest rates fall, mortgage-backed securities have less
potential for capital appreciation than comparable fixed income securities
and may in fact decrease in value due to the likelihood of increased
prepayments of mortgages in times of declining interest rates.

Asset-backed securities represent interests in, or are secured by and payable
from, pools of assets such as consumer loans, automobile receivable
securities, credit card receivable securities and installment loan contracts.
These securities may be pass-through certificates, which are similar to
mortgage-backed securities, or they may be asset-backed commercial paper,
which is issued by a special purpose entity organized solely to issue the
commercial paper and to purchase interests in the assets. There is the risk
that one or more of the underlying borrowers may default and that recovery on
the repossessed collateral may be unavailable or inadequate to support
payments on the defaulted securities. Like mortgage-backed securities,
asset-backed securities are subject to prepayment risks, which may reduce the
overall return on the investment. The credit quality of these securities
depends upon the quality of the underlying assets and the level of credit
enhancements, such as letters of credit, provided.

8. MAY PURCHASE OR SELL SECURITIES ON A "WHEN-ISSUED" OR
"DELAYED-DELIVERY" BASIS. Under this procedure, the Portfolio agrees to
acquire or sell securities that are to be issued and delivered against
payment in the future, normally 30 to 45 days. The price, however, is fixed
at the time of commitment. When the Portfolio purchases when-issued or
delayed-delivery securities, it will earmark liquid, high-quality securities
in an amount equal in value to the

-- 15 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
purchase price of the security. Use of these techniques may affect the
Portfolio's share price in a manner similar to the use of leveraging.

9. MAY INVEST UP TO 10% OF ITS NET ASSETS IN ILLIQUID
SECURITIES, WHICH ARE SECURITIES THAT CANNOT BE SOLD WITHIN SEVEN DAYS IN THE
ORDINARY COURSE OF BUSINESS FOR APPROXIMATELY THE AMOUNT AT WHICH THEY ARE
VALUED. Due to the absence of an active trading market, the Portfolio may
experience difficulty in valuing or disposing of illiquid securities. SAM
determines the liquidity of the securities under guidelines adopted by the
Trust's Board of Trustees.

The principal risk factor associated with investment in the Money Market
Portfolio is that it may experience a delay or failure in principal or
interest payments at maturity of one or more of the portfolio securities. The
Money Market Portfolio's yield will fluctuate with general money market
interest rates.

FUNDAMENTAL POLICIES

The Portfolio is subject to the following fundamental policies which cannot be
changed without shareholder vote:

1. MAY NOT INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN THE
SECURITIES OF ANY ONE ISSUER, EXCEPT THAT UP TO 100% OF THE PORTFOLIO'S TOTAL
ASSETS MAY BE INVESTED IN OBLIGATIONS OF OR GUARANTEED BY THE U.S.
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES;

2. MAY NOT, WITH RESPECT TO 100% OF THE VALUE OF ITS TOTAL
ASSETS, PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES);

3. MAY NOT PURCHASE SECURITIES OF ANY ISSUER (OTHER THAN
OBLIGATIONS OF, OR GUARANTEED BY, THE U.S. GOVERNMENT, ITS

-- 16 --
<PAGE>
THE TRUST AND THE PORTFOLIO'S INVESTMENT POLICIES (CONTINUED)
AGENCIES OR INSTRUMENTALITIES) IF SUCH PURCHASE WOULD CAUSE MORE THAN TEN
PERCENT (10%) OF ANY CLASS OF SECURITIES OF SUCH ISSUER TO BE HELD BY THE
PORTFOLIO;

For more information, see the "Investment Policies" and "Additional Investment
Information" sections of the Trust's Statement of Additional Information.

PORTFOLIO MANAGER

The manager for the Money Market Portfolio is Naomi Urata, Assistant Vice
President, SAM. Ms. Urata began serving as portfolio manager for the Portfolio
in 1994. Ms. Urata has served as portfolio manager for another SAFECO mutual
fund since 1994. From 1993 to 1994 she was a Fixed Income Analyst for SAM. From
1990 to 1993 Ms. Urata was Cash Manager for the Seattle Times newspaper,
Seattle, Washington.

The portfolio manager and certain other persons related to SAM and the Portfolio
are subject to written policies and

-- 17 --
<PAGE>
PORTFOLIO MANAGER (CONTINUED)
procedures designed to prevent abusive personal securities trading. Incorporated
within these policies and procedures are recommendations made by the Investment
Company Institute (the trade group for the mutual fund industry) with respect to
personal securities trading by persons associated with mutual funds. Those
recommendations include preclearance procedures and blackout periods when
certain personnel may not trade in securities that are the same or related
securities being considered for purchase or sale by the Portfolio.

INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST

-- 18 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
On any matter submitted to a vote of shareholders, all shares of the Trust
Portfolios then issued and outstanding and entitled to vote shall be voted in
the aggregate and not by portfolio except for matters concerning only a
portfolio. The holders of each share of a Trust Portfolio shall be entitled to
one vote for each full share and a fractional vote for each fractional share.
Shares of one Trust Portfolio may not bear the same economic relationship to the
Trust as shares of another Trust Portfolio.

-- 19 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
and policies, SAM determines what securities will be purchased, retained or sold
by the Portfolio, and implements those decisions. The Portfolio's turnover rate
is set forth in the "Financial Highlights" section. The Portfolio's turnover
rate will vary from year to year. A high portfolio turnover rate involves
correspondingly higher transaction costs in the form of broker commissions,
dealer spreads and other costs that the Portfolio will bear directly. The
Portfolio pays SAM an annual management fee of .65% of the Portfolio's net
assets ascertained each business day and paid monthly.

YEAR 2000

-- 20 --
<PAGE>
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE SERVICES TO THE
TRUST (CONTINUED)
taken by each of the Portfolio's other, major service providers. It is not
anticipated that the Portfolio will incur any charges or that there will be any
difficulties in accurate and timely reporting resulting in the change in year
from 1999 to 2000.

PERSONS CONTROLLING THE TRUST

As of February 3, 1998, SAFECO Life Insurance Company ("SAFECO Life") controlled
the Money Market Portfolio. SAFECO Life is a stock life insurance company
incorporated under the laws of Washington, with headquarters at 15411 N.E. 51st
Street, Redmond, Washington. SAFECO Life is a wholly-owned subsidiary of SAFECO
Corporation, and is an affiliated company of SAM, SAFECO Securities and SAFECO
Services, the investment adviser, principal underwriter and transfer agent,
respectively, of the Trust. SAFECO Life advanced all costs for the organization
of the Trust. SAFECO Corporation, SAFECO Securities and SAFECO Services have
their principal place of business at SAFECO Plaza, Seattle, Washington 98185.
SAM has its principal place of business at Two Union Square, Seattle, Washington
98101.

SALE AND REDEMPTION OF SHARES

-- 21 --
<PAGE>
SALE AND REDEMPTION OF SHARES (CONTINUED)
Plan participants do not deal directly with the Trust with respect to
acquisition or redemption of shares. The Board of Trustees of the Trust may
refuse to sell shares of the Portfolio to any person, or may suspend or
terminate the offering of shares of the Portfolio if such action is required by
law or by any regulatory authority having jurisdiction or is, in the sole
discretion of the Trustees acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of the Portfolio.

PERFORMANCE INFORMATION

The Portfolio's yield and effective yield may be quoted in advertisements.
Performance figures are indicative only of past performance and are not intended
to represent future investment results. While the Money Market Portfolio will
attempt to maintain a stable net asset value of $1.00 per share, there can be no
assurance that it will do so. The yield of the Money Market Portfolio will
fluctuate.

Yield is the annualization on a 365-day basis of the Money Market Portfolio's
net income over a 7-day period. Effective yield is the annualization on a
365-day basis of the Money Market Portfolio's net income over a 7-day period
with dividends reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment.

RANKINGS

-- 22 --
<PAGE>
PERFORMANCE INFORMATION (CONTINUED)
non-standardized performance figures may accompany the standardized figures
described above. Non-standardized figures may be calculated in a variety of
ways, including but not necessarily limited to, different time periods and
different initial investment amounts. The Portfolio may also compare its
performance to the performance of relevant indices. Performance information and
quoted rankings are indicative only of past performance and are not intended to
represent future investment results.

OTHER CHARGES

PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION

-- 23 --
<PAGE>
PORTFOLIO DISTRIBUTIONS AND TAX INFORMATION (CONTINUED)
separate accounts are taxable, if at all, to the Participating Insurance
Companies; they are not taxable to Variable Contract owners. Dividends and
distributions made by the Portfolio to Qualified Plans are not taxable to the
Qualified Plans or to the participants thereunder.

Variable Contract owners should refer to the prospectuses relating to their
contracts regarding the federal income tax treatment of ownership of such
contracts. ALSO SEE "Distributions and Tax Information" in the Statement of
Additional Information.

SHARE PRICE CALCULATION

The Money Market Portfolio intends to maintain a net asset value per share of
$1.00. There can be no assurance that it will be able to maintain this constant
value per share. The shares of the Money Market Portfolio are neither insured,
nor

-- 24 --
<PAGE>
SHARE PRICE CALCULATION (CONTINUED)
guaranteed, by the U.S. Government. The Money Market Portfolio's securities are
valued on the basis of amortized cost. Amortized cost valuation, which may be
used so long as the Board of Trustees believes that it fairly reflects market
value, involves valuing a security at its cost and adding or subtracting,
ratably to maturity, any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the security. This method
provides stability of net asset value per share. For additional information
concerning the impact of amortized cost on the calculation of net asset value,
see "Additional Information Concerning Calculation of Net Asset Value Per Share"
in the Statement of Additional Information.

-- 25 --
<PAGE>

SAFECO RESOURCE SERIES TRUST
EQUITY PORTFOLIO
GROWTH PORTFOLIO
NORTHWEST PORTFOLIO
SMALL COMPANY STOCK PORTFOLIO
BOND PORTFOLIO
MONEY MARKET PORTFOLIO

Statement of Additional Information

---------

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the Prospectuses for the Portfolios listed above. Copies of
the Portfolios' Prospectuses may be obtained by calling 1-800-624-5711 or by
writing SAFECO Securities, Inc., S-3 SAFECO Plaza, Seattle, Washington 98185.

The date of the most current Prospectuses to which this Statement of Additional
Information relates is April 30, 1998. The date of this Statement of Additional
Information is April 30, 1998.

Shares of the Trust are offered to life insurance companies, which may or may
not be affiliated with one another ("Participating Insurance Companies"), for
allocation to certain of their separate accounts established for the purpose of
funding variable life insurance policies and variable annuity contracts, and may
also be offered directly to qualified pension and retirement plans ("Qualified
Plans"). The Participating Insurance Companies and the Qualified Plans may or
may not make all Portfolios described in this Statement of Additional
Information available for investment.

<PAGE>

TABLE OF CONTENTS

Investment Policies 3 Additional Performance 20
Information

Additional Investment Information 10 Trustees and Officers 23

Special Risks of Below Investment 18 Investment Advisory and 26
Grade Bonds Other Services

Principal Shareholders of the 19 Brokerage Practices 28
Portfolios

Distributions and Tax 29
Additional Information on 19 Information
Calculation of Net Asset Value
Per Share Financial Statements 30

2
<PAGE>

INVESTMENT POLICIES

The Equity Portfolio, Growth Portfolio, Northwest Portfolio, Small Company Stock
Portfolio ("Small Company Portfolio"), Bond Portfolio and Money Market Portfolio
(collectively, the "Portfolios") are each a series of the SAFECO Resource Series
Trust ("Trust"). The investment policies of the Portfolios are described in each
Portfolio's Prospectus and this Statement of Additional Information. These
policies state the investment practices that each Portfolio will follow, in some
cases limiting investments to a certain percentage of assets, as well as those
investment activities that are prohibited. The types of securities (E.G., common
stock, U.S. Government securities or bonds) a Portfolio may purchase are also
disclosed in its Prospectus. Before a Portfolio purchases a security that the
following policies permit but which is not currently described in its
Prospectus, its Prospectus will be amended or supplemented to describe the
security. The following information supplements the discussion of investment
policies and limitations in each Portfolio's Prospectus.

Each Portfolio's fundamental policies may not be changed without the approval of
a majority of its outstanding voting securities as defined in the Investment
Company Act of 1940 ("1940 Act"). For purposes of such approval, the vote of a
majority of the outstanding voting securities of a Portfolio means the vote, at
a meeting of the shareholders of such Portfolio duly called, (i) of 67% or more
of the voting securities present at such meeting if the holders of more than 50%
of the outstanding voting securities are present or represented by proxy, or
(ii) of more than 50% of the outstanding voting securities, whichever is less.

FUNDAMENTAL INVESTMENT POLICIES OF THE EQUITY PORTFOLIO, GROWTH PORTFOLIO,
NORTHWEST PORTFOLIO, BOND PORTFOLIO AND MONEY MARKET PORTFOLIO

Each Portfolio will NOT:

1. Invest more than five percent (5%) of any Portfolio's total assets in the
securities of any one issuer (other than securities issued by the U.S.
Government, its agencies and instrumentalities), except (i) with respect to
the Equity, Growth, Northwest, Bond and Money Market Portfolios, up to
twenty-five percent (25%) of the value of each Portfolio's assets (not
including securities issued by another investment company) may be invested
without regard to this limit and (ii) with respect to the Bond and Money
Market Portfolios, up to one hundred percent (100%) of total assets may be
invested in obligations of or guaranteed by the U.S. Government, its
agencies or instrumentalities.

2. Purchase securities of any issuer (other than obligations of, or guaranteed
by, the U.S. Government, its agencies and instrumentalities) if such
purchase would cause more than ten percent (10%) of any class of securities
of such issuer to be held by a Portfolio.

3. a. With respect to the Equity, Growth, Northwest and Money Market
Portfolios, concentrate its investments in particular industries and
in no event will the respective Portfolio invest twenty-five (25%) or
more of its assets in any one industry. Securities of foreign banks
and foreign branches of U.S. banks are considered to be one industry.
This limitation does not apply to obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities or to
certificates of deposit or bankers' acceptances issued by domestic
banks.

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b. With respect to the Bond Portfolio, invest more than twenty-five
percent (25%) of its assets in securities of issuers in the same
industry. This restriction does not apply to mortgage-related
securities or to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

4. Invest more than five percent (5%) of the total assets of any Portfolio in
securities of issuers which with their predecessors have a record of less
than three years continuous operation.

5. Make loans to others, except through the purchase of publicly-distributed
debt obligations or repurchase agreements.

6. Borrow money, except from banks or affiliates of SAFECO Corporation at an
interest rate not greater than that available to a Portfolio from
commercial banks, and then only for temporary or emergency purposes and not
for investment purposes, and in an amount not exceeding five percent (5%)
of a Portfolio's assets at the time of borrowing.

7. Make short sales (sales of securities not presently owned) or purchase
securities on margin, except where the Trust has at the time of the sale by
virtue of its ownership in other securities the right to obtain securities
equivalent in kind and amount to the securities sold and except for such
short-term credits as are necessary for the clearance of transactions,
respectively.

8. Purchase or retain the securities of any issuer any of whose officers,
directors or security holders is an officer or trustee of the Trust if, or
so long as, any such officer or trustee owns beneficially more than
one-half (1/2) of one percent (1%) of such securities and the officers or
trustees of the Trust, together own beneficially more than five percent
(5%) of such securities.

9. Invest in commodities or commodity futures contracts or in real estate,
except the Trust may invest in securities which are secured by real estate
and securities which are of issuers which invest in or deal in real estate.

10. Underwrite securities issued by others, except to the extent that the Trust
may be deemed to be an underwriter under the federal securities laws in
connection with the disposition of portfolio securities.

11. Issue or sell any senior security.

12. Purchase from or sell portfolio securities to any officer or director, the
Trust's investment adviser, principal underwriter or any affiliates or
subsidiaries thereof.

FUNDAMENTAL INVESTMENT POLICIES OF THE SMALL COMPANY PORTFOLIO

The Small Company Portfolio will NOT:

1. Purchase the securities of any issuer (except the U.S. Government, its
agencies or instrumentalities) if as a result more than 5% of the value of
the Small Company Portfolio's total assets would be invested in the
securities of such issuer or the Small Company Portfolio would own or hold
more than 10% of

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the outstanding voting securities of such issuer, except that up to 25% of
the value of such assets (which 25% shall not include securities issued by
another investment company) may be invested without regard to these limits;

2. Borrow money, except the Small Company Portfolio may borrow money for
temporary and emergency purposes (not for leveraging or investment
purposes) in an amount not exceeding 33 1/3% of its total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings by the Small Company Portfolio that come to exceed this amount
shall be reduced within three business days to the extent necessary to
comply with the 33 1/3% limit. "Business Day" means any day the New York
Stock Exchange is open for trading;

3. Act as underwriter of securities issued by any other person, firm or
corporation; except to the extent that, in connection with the disposition
of portfolio securities, the Small Company Portfolio may be deemed an
underwriter under federal securities laws;

4. Issue senior securities, except as permitted under the 1940 Act, the rules
or regulations promulgated thereunder or pursuant to a no-action letter or
an exemptive order issued by the Securities and Exchange Commission;

5. Purchase the securities of any issuer (except the U.S. Government, its
agencies or instrumentalities) if, as a result, more than 25% of the Small
Company Portfolio's total assets would be invested in securities of
companies whose principal business activities are in the same industry;

6. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; however, the Small Company
Portfolio may purchase or sell options or futures contracts and invest in
securities or other instruments backed by physical commodities;

7. Lend any security or make any loan if, as a result, more than 33 1/3% of
its total assets would be lent to other parties; however, this limit does
not apply to purchases of debt securities or to repurchase agreements; and

8. Purchase or sell real estate, except real estate investment trusts.

NON-FUNDAMENTAL INVESTMENT POLICIES

In addition to the policies described in the Prospectus, each Portfolio has
adopted the non-fundamental policies described below that may be changed by the
Trust's Board of Trustees without shareholder approval.

NON-FUNDAMENTAL INVESTMENT POLICIES OF THE EQUITY PORTFOLIO, GROWTH PORTFOLIO,
NORTHWEST PORTFOLIO, BOND PORTFOLIO AND MONEY MARKET PORTFOLIO

1. A Portfolio may not participate on a joint or joint and several basis in
any trading account in securities, except that a Portfolio may join with
other transactions executed by the investment adviser or the investment
adviser's parent company and any subsidiary thereof, for the purpose of
seeking better net results on portfolio transactions or lower brokerage
commission rates.

2. A Portfolio may not purchase securities with unlimited liability, I.E.,
securities for which the holder may be assessed for amounts in addition to
the subscription or other price paid for the security.

3. The Equity, Bond and Money Market Portfolios may not purchase or sell

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put or call options or combinations thereof.

4. The Growth and Northwest Portfolios may not purchase puts, calls,
straddles, spreads or any combination thereof if by reason thereof the
value of the Portfolio's aggregate investment in such classes of securities
would exceed 5% of its total assets.

5. A Portfolio may not invest in oil, gas or other mineral exploration or
development programs or in arbitrage transactions.

6. A Portfolio may not trade in foreign exchange, except as may be
necessary to convert the proceeds of the sale of foreign portfolio
securities into U.S. dollars.

7. A Portfolio may not enter into a repurchase agreement for longer than
seven days, except that the Money Market Portfolio may invest up to 10% of
its total assets in repurchase agreements that mature in more than 7 days.

8. A Portfolio may not purchase the securities of any other investment company
or investment trust, except by purchase in the open market where no
commission or profit to a broker or dealer results from such purchase other
than the customary broker's commissions, or except as part of a merger,
consolidation or acquisition. A Portfolio will not invest more than ten
percent (10%) of its total assets in shares of other investment companies,
invest more than five percent (5%) of its total assets in a single
investment company nor purchase more than three percent (3%) of the
outstanding voting securities of a single investment company. The Trust's
investment adviser will waive its advisory fees for assets invested in
other investment companies.

9. The Trust's Equity, Growth, Northwest and Bond Portfolios may purchase
as temporary investments for their cash commercial paper, certificates of
deposit, no-load, open-end money market funds (subject to the limitations
in subparagraph 8 above), repurchase agreements (subject to the limitations
in subparagraph 7 above) or any other short-term instrument that the
Trust's investment adviser deems appropriate.

Commercial paper must be rated A-1 or A-2 by Standard & Poor's Ratings
Group ("S&P") or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moodys") or issued by companies with an unsecured debt issue currently
outstanding rated AA by S&P or Aa or higher by Moody's.

10. While the Trust will not engage primarily in trading in the Equity, Growth,
Northwest and Bond Portfolios for the purpose of short-term profits, it
may at times make investments for short-term purposes when such action is
believed to be desirable and consistent with sound investment procedures.
The Trust will dispose of securities whenever it is deemed advisable
without regard to the length of time the securities have been held.

11. The Trust's Money Market Portfolio may invest in short-term instruments, or
long-term instruments with characteristics qualifying them as short-term
instruments, which at the time of purchase are rated in the highest rating
category by at least two nationally recognized rating organizations or, if
rated by only one organization, are rated in the highest category by that
organization, and which in the opinion of the Money Market Portfolio's
investment adviser present minimal credit risks.

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12. The Trust's Money Market Portfolio may invest in short-term instruments, or
long-term instruments with characteristics qualifying them as short-term
instruments, which at the time of purchase are split-rated (i.e. rated in
the highest category by one nationally recognized rating organization and
the second highest category by at least one other such organization), are
rated in the second highest rating category by at least two nationally
recognized rating organizations or, if rated by only one organization are
rated in the second highest category by that organization and which in the
opinion of the Money Market Portfolio's investment adviser present minimal
credit risks. However, the Money Market Portfolio may invest no more than
five percent (5%) of total assets in these securities and may invest only
the greater of $1 million or one percent (1%) of total assets in such
securities from the same issuer.

13. The Trust's Money Market Portfolio may invest in short-term instruments,
or long-term instruments with characteristics qualifying them as short-term
instruments, which are unrated if such securities are determined to be
comparable in quality to securities rated as described in paragraphs 11 and
12 and which in the opinion of the Money Market Portfolio's investment
adviser present minimal credit risks. The Money Market Portfolio will
invest no more than twenty percent (20%) of total assets in unrated
securities which in SAM's opinion are comparable to securities in the
highest rating category. Purchases of unrated securities which in SAM's
opinion are comparable to split-rated securities are subject to the five
percent (5%) and one percent (1%) limitations described in paragraph 12.

14. Subject to the maturity requirements stated in the Money Market Portfolio's
investment objective and the quality and credit risk requirements set forth
in paragraphs 11-13, the Money Market Portfolio may purchase the following
types of securities:

a. Commercial paper obligations.

b. Negotiable and non-negotiable time deposits and certificates of
deposit, bankers' acceptances and other short-term debt obligations of
banks. The Money Market Portfolio will not invest in any security
issued by a commercial bank unless (a) the bank has total assets of at
least $1 billion or the equivalent in other currencies or, in the case
of United States banks which do not have total assets of at least $1
billion, the aggregate investment made in any one such bank is limited
to $100,000 and the principal sum of such investment is insured in
full by the Federal Deposit Insurance Corporation (FDIC), (b) in the
case of a United States bank, it is a member of the FDIC, and (c) in
the case of a foreign bank, the security is in the opinion of
management of an investment quality comparable with other debt
securities which may be purchased by the Money Market Portfolio. These
limitations do not prohibit investment in securities issued by foreign
branches of U.S. banks, provided the U. S. banks meet the foregoing
requirements.

c. Corporate obligations such as publicly-traded bonds, debentures and
notes.

15. The Trust may not invest more than five percent (5%) of the net assets of
the Equity, Growth and Northwest Portfolios in warrants valued at the lower
of cost or market. Warrants acquired as a result of unit offerings or
attached

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to securities may be deemed without value for purposes of the five percent
(5%) limitation.

16. A Portfolio will not issue long-term debt securities.

17. A Portfolio will not invest in any security for the purpose of acquiring or
exercising control or management of the issuer.

18. The Growth Portfolio will normally invest a preponderance of assets in
common stocks selected primarily for potential appreciation. The Northwest
Portfolio will invest primarily in shares of common stock selected
primarily for potential appreciation that have been issued by Northwest
companies. In determining these common stocks which have the potential for
long-term growth, the Trust's investment adviser will evaluate the issuer's
financial strength, quality of management and earnings power.

19. The Northwest Portfolio may occasionally invest in securities convertible
into common stock when, in the opinion of SAM, the expected total return of
a convertible security exceeds the expected total return of common stock
eligible for purchase by the Portfolio.

20. The Equity Portfolio may invest up to ten percent (10%) of its total assets
in shares of real estate investment trusts ("REITs"). The Growth and
Northwest Portfolios may invest up to five percent (5%) of their total
assets in shares of real estate investment trusts ("REITs").

21. The Equity Portfolio may invest up to 5% of total assets in closed-end
investment companies and investment trusts (other than REITS).

22. The Equity Portfolio may purchase fixed-income securities in accordance
with business and financial conditions.

23. The Bond and Money Market Portfolios may invest up to 10% of total assets
in restricted securities eligible for resale under Rule 144A ("Rule 144A
securities"), provided that SAM has determined that such securities are
liquid under guidelines adopted by the Board of Trustees.

24. The Equity, Growth and Northwest Portfolios may invest in Rule 144A
securities, provided that SAM has determined that such securities are
liquid under guidelines adopted by the Board of Trustees, except that the
Equity, Growth and Northwest Portfolios may each invest up to 10% of their
respective total assets in 144A securities that are illiquid.

25. The Equity, Growth, Northwest and Money Market Portfolios of the Trust may
not purchase foreign securities, unless at the time thereof, such purchase
would not cause more than five percent (5%) of the total assets of a
Portfolio (taken at market value) to be invested in foreign securities.
This restriction does not apply to the Bond Portfolio.

WHILE THE TRUST CAN INVEST IN THE TYPES OF SECURITIES OR ENGAGE IN THE PRACTICES
WHICH FOLLOW IF THE APPLICABLE LIMITATIONS ARE MET, IT HAS NO PRESENT INTENTION
TO DO SO IN THE COMING YEAR. BEFORE THE TRUST PURCHASES THESE TYPES OF
SECURITIES OR ENGAGES IN THESE PRACTICES WITHIN THE ALLOWED LIMITS, THE
PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED TO IDENTIFY OR DESCRIBE THE SECURITY.

26. A Portfolio may not pledge, mortgage or hypothecate portfolio securities,

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except that to secure borrowings permitted by the fundamental policy on
borrowing, a Portfolio may pledge securities having a market value at the
time of the pledge not exceeding ten percent (10%) of the Portfolio's net
assets.

NON-FUNDAMENTAL INVESTMENT POLICIES OF THE SMALL COMPANY PORTFOLIO

1. The Small Company Portfolio will not make short sales (sales of securities
not presently owned), except where the Portfolio has at the time of sale,
by virtue of its ownership in other securities, the right to obtain at no
additional cost securities equivalent in kind and amount to the securities
to be sold;

2. The Small Company Portfolio will not purchase securities issued by any
other investment company, except by purchase in the open market where no
commission or profit to a broker or dealer results from such purchase,
other than the customary broker's commissions, or except when such
purchase, although not made in the open market, is part of a merger,
consolidation or acquisition. Nothing in this policy shall prevent any
purchase for the purpose of effecting a merger, consolidation or
acquisition of assets expressly approved by the shareholders after full
disclosure of any commission or profit to the principal underwriter;

3. The Small Company Portfolio will not invest in oil, gas or other mineral
exploration, development programs or leases;

4. The Small Company Portfolio will not invest more than 5% of its net assets
in warrants. Warrants acquired by the Portfolio in units or attached to
securities are not subject to the 5% limit;

5. The Small Company Portfolio will not invest more than 10% of its total
assets in real estate investment trusts, nor will the Portfolio invest in
interests in real estate investment trusts that are not readily marketable
or interests in real estate limited partnerships not listed or traded on
the Nasdaq Stock Market if, as a result, the sum of such interests
considered illiquid and other illiquid securities would exceed 15% of the
Portfolio's net assets;

6. The Small Company Portfolio will not purchase securities on margin, except
that the Portfolio may obtain such short-term credits as are necessary for
the clearance of transactions, and provided that margin payments made in
connection with futures contracts and options on futures shall not
constitute purchasing securities on margin;

7. The Small Company Portfolio may borrow money only from a bank or SAFECO
Corporation or affiliates thereof or by engaging in reverse repurchase
agreements with any party. The Portfolio will not purchase any securities
while borrowings equal to or greater than 5% of its total assets are
outstanding;

8. The Small Company Portfolio will not purchase any security, if as a result,
more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued;

9. The Small Company Portfolio will not make loans to any person, firm or
corporation, but the purchase by the Portfolio of a portion of an issue of
publicly distributed bonds, debentures or other securities issued by
persons other than the Portfolio, whether or not the purchase was made upon
the original issue of securities, shall not be considered a loan within the
prohibition of this section;

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10. The Small Company Portfolio will not purchase or retain the securities of
any issuer if, to the knowledge of the Portfolio's management, the officers
and Trustees of the Trust and the officers and directors of the investment
adviser to the Portfolio (each owning beneficially more than 0.5% of the
outstanding securities of an issuer) own in the aggregate 5% or more of the
securities of the issuer;

11. The Small Company Portfolio may invest in restricted securities eligible
for resale under Rule 144A, provided that SAM has determined that such
securities are liquid under guidelines adopted by the Board of Trustees,
except that the Portfolio may invest up to 10% of its total assets in 144A
securities that are illiquid.

12. The Small Company Portfolio shall not engage primarily in trading for
short-term profits, but it may from time to time make investments for
short-term purposes when such action is believed to be desirable and
consistent with sound investment policy. The Portfolio may dispose of
securities whenever its adviser deems advisable without regard to the
length of time they have been held;

13. The Small Company Portfolio will not purchase securities of companies which
together with any predecessors have a record of less than 3 years of
continuous operation, if such purchase at the time thereof would cause more
than 5% of the Portfolio's total assets to be invested in the securities of
such companies;

14. The Small Company Portfolio will not purchase puts, calls, straddles,
spreads or any combination thereof, if by reason thereof the value of its
aggregate investment in such classes of securities would exceed 5% of its
total assets; provided, however, that nothing herein shall prevent the
purchase, ownership, holding or sale of warrants where the grantor of the
warrants is the issuer of the underlying securities; and

15. The Small Company Portfolio will not purchase or sell commodities or
commodity contracts.

ADDITIONAL INVESTMENT INFORMATION

Unless otherwise noted, each Portfolio may make some or all of the following
investments, among others, although they may not buy all of the types of
securities that are described.

1. RESTRICTED SECURITIES AND RULE 144A SECURITIES. Restricted securities are
securities that may be sold only in a public offering with respect to which
a registration statement is in effect under the Securities Act of 1933
("1933 Act") or, if they are unregistered, pursuant to an exemption from
registration. In recognition of the increased size and liquidity of the
institutional markets for unregistered securities and the importance of
institutional investors in the formation of capital, the Securities and
Exchange Commission ("SEC") has adopted Rule 144A under the 1933 Act, which
is designed to further facilitate efficient trading among institutional
investors by permitting the sale of Rule 144A securities to qualified
institutional buyers. To the extent privately placed securities held by a
Portfolio qualify under Rule 144A and an institutional market develops for
those securities, the Portfolio likely will be able to dispose of the
securities without registering them under the 1933 Act. SAM, acting under
guidelines established by the Trust's Board of Trustees, may determine that
certain securities qualified for

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trading under Rule 144A are liquid.

Where registration is required, a Portfolio may be obligated to pay all or
part of the registration expenses, and a considerable period may elapse
between the decision to sell and the time the Portfolio may be permitted to
sell a security under an effective registration statement. If during such a
period adverse market conditions were to develop, the Portfolio might
obtain a less favorable price than prevailed when it decided to sell. To
the extent privately placed securities are illiquid, purchases thereof will
be subject to any limitations on investments in illiquid securities.
Restricted securities for which no market exists are priced at fair value
as determined in accordance with procedures approved and periodically
reviewed by the Trust's Board of Trustees.

2. REPURCHASE AGREEMENTS. Repurchase agreements are transactions in which a
Portfolio purchases securities from a bank or recognized securities dealer
and simultaneously commits to resell the securities to the bank or dealer
at an agreed-upon date and price reflecting a market rate of interest
unrelated to the coupon rate or maturity of the purchased securities. A
Portfolio maintains custody of the underlying securities prior to their
repurchase; thus, the obligation of the bank or dealer to pay the
repurchase price on the date agreed to is, in effect, secured by such
securities. If the value of these securities is less than the repurchase
price, plus any agreed-upon additional amount, the other party to the
agreement must provide additional collateral so that at all times the
collateral is at least equal to the repurchase price, plus any agreed-upon
additional amount.

Repurchase agreements carry certain risks not associated with direct
investments in securities, including possible declines in the market value
of the underlying securities and delays and costs to a Portfolio if the
other party to a repurchase agreement becomes bankrupt. Each Portfolio
intends to enter into repurchase agreements only with banks and dealers in
transactions believed by SAM to present minimum credit risks in accordance
with guidelines established by the Trust's Board of Trustees. SAM will
review and monitor the creditworthiness of those institutions under the
general supervision of the Board of Trustees.

3. ILLIQUID SECURITIES. Illiquid securities are securities that cannot be sold
within seven days in the ordinary course of business for approximately the
amount at which they are valued. The Portfolios do not intend to purchase
illiquid securities but the market for some securities may become illiquid
following purchase by a Portfolio. Due to the absence of an active trading
market, a Portfolio may experience difficulty in valuing or disposing of
illiquid securities. SAM determines the liquidity of the securities
pursuant to guidelines adopted by the Trust's Board of Trustees.

4. WARRANTS. A warrant is an option issued by a corporation that gives the
holder the right to buy a stated number of shares of common stock of the
corporation at a specified price within a designated time period. Warrants
may be purchased and sold separately or attached to stocks or bonds as part
of a unit offering. The term of a warrant may run from two to five years
and in some cases the term may be longer. The exercise price carried by the
warrant is usually well above the prevailing market price of the underlying
common stock at the time the warrant is issued. The holder of a warrant has
no voting rights and receives no dividends. Warrants are freely
transferable and may trade on the major national exchanges.

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Warrants may be speculative. Generally, the value of a warrant will
fluctuate by greater percentages than the value of the underlying common
stock. The primary risk associated with a warrant is that the term of the
warrant may expire before the exercise price of the common stock has been
reached. Under these circumstances, a Portfolio could lose all of its
principal investment in the warrant.

A Portfolio will invest in a warrant only if the Portfolio has the
authority to hold the underlying common stock. Additionally, if a warrant
is part of a unit offering, a Portfolio will purchase the warrant only if
it is attached to a security in which the Portfolio has authority to
invest. In all cases, a Portfolio will purchase warrants only after SAM
determines that, in its opinion, the exercise price for the underlying
common stock is likely to be achieved within the required time-frame and
that an actively traded market exists. SAM will make this determination by
analyzing the issuer's financial health, quality of management and any
other factors deemed to be relevant.

5. REAL ESTATE INVESTMENT TRUSTS. Real estate investment trusts ("REITs")
purchase real property, which is then leased, and make mortgage
investments. For federal income tax purposes REITs attempt to qualify for
beneficial tax treatment by distributing at least 95% of their taxable
income. If a REIT were unable to qualify for such beneficial tax treatment,
it would be taxed as a corporation and distributions to its shareholders
would not be deductible by it in computing its taxable income.

REITs are dependent upon the successful operation of the properties owned
and the financial condition of lessees and mortgagors. The value of REIT
units will fluctuate depending on the underlying value of the real property
and mortgages owned and the amount of cashflow (net income plus
depreciation) generated and paid out. In addition, REITs typically borrow
to increase funds available for investment. Generally there is a greater
risk associated with REITs which are highly leveraged.

6. CONVERTIBLE SECURITIES. Convertible bonds and convertible preferred stock
may be exchanged for a stated number of shares of the issuer's common stock
at a certain price known as the conversion price. The conversion price is
usually greater than the price of the common stock at the time the
convertible security is purchased. Generally, the interest rate of
convertible bonds and the yield of convertible preferred stock will be
lower than the issuer's non-convertible securities. Also, the value of
convertible securities will normally vary with the value of the underlying
common stock and fluctuate inversely with interest rates. However,
convertible securities may show less volatility in value than the issuer's
non-convertible securities. A risk associated with convertible bonds and
convertible preferred stock is that the conversion price of the common
stock will not be attained.

7. YANKEE DEBT SECURITIES AND EURODOLLAR BONDS. (Equity, Growth, Northwest,
Bond and Money Market Portfolios only.) The Yankee Sector is made up of
securities issued in the U.S. by foreign issuers. These bonds involve
investment risks that are different from those of domestic issuers. Such
risks may include nationalization of the issuer, confiscatory taxation by
the foreign government, establishment of controls by the foreign government
that would inhibit the remittance of amounts due a Portfolio, lack of
comparable publicly-available information concerning foreign issuers, lack
of comparable accounting and auditing practices in foreign countries and
finally, difficulty

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in enforcing claims against foreign issuers in the event of default.

Eurodollar Bonds are bonds issued by either U.S. or foreign issuers that
are traded in the European bond markets and denominated in U.S. dollars.
Eurodollar bonds are subject to the same risks that pertain to domestic
issues, notably credit risk, market risk and liquidity risk. Additionally,
Eurodollar bonds are subject to certain sovereign risks. One such risk is
the possibility that a foreign government might prevent dollar-denominated
funds from flowing across its borders. Eurodollar Bonds issued by foreign
issuers also are subject to the same risks as Yankee Sector bonds.

8. MORTGAGE-BACKED SECURITIES. (Bond and Money Market Portfolios only.) Unlike
conventional bonds, the principal with respect to mortgage-backed
securities is paid back over the life of the loan rather than at maturity.
Consequently, the Portfolio will receive monthly scheduled payments of both
principal and interest. In addition, the Portfolio may receive unscheduled
prepayments on the underlying mortgages. Since the Portfolio must reinvest
scheduled and unscheduled principal payments at prevailing interest rates
and such interest rates may be higher or lower than the current yield of
the Portfolio's portfolio, mortgage-backed securities may not be an
effective means to lock in long-term interest rates. In addition, while
prices of mortgage-backed securities, like conventional bonds, are
inversely affected by changes in interest rate levels, because of the
likelihood of increased prepayments of mortgages in times of declining
interest rates, they have less potential for capital appreciation than
comparable fixed-income securities and may in fact decrease in value when
interest rates fall.

The rate of interest payable on collateralized mortgage obligation ("CMO")
classes may be set at levels that are either above or below market rates at
the time of issuance, so that the securities will be sold at a substantial
premium to, or at a discount from, par value. There is the risk that the
Portfolio may fail to recover any premium it pays due to market conditions
and/or mortgage prepayments. A Portfolio will not invest in interest-only
or principal-only classes -- such investments are extremely sensitive to
changes in interest rates.

Some CMO classes are structured to pay interest at rates that are adjusted
in accordance with a formula, such as a multiple or fraction of the change
in a specified interest rate index, so as to pay at a rate that will be
attractive in certain interest rate environments but not in others. For
example, a CMO may be structured so that its yield moves in the same
direction as market interest rates - I.E., the yield may increase as rates
increase and decrease as rates decrease - but may do so more rapidly or to
a greater degree. Other CMO classes may be structured to pay floating
interest rates that either move in the same direction or the opposite of
short-term interest rates. The market value of such securities may be more
volatile than that of a fixed rate obligation. Such interest rate formulas
may be combined with other CMO characteristics.

9. WHEN-ISSUED OR DELAYED-DELIVERY SECURITIES (Money Market and Small Company
Portfolios only). Under this procedure, a Portfolio agrees to acquire
securities (whose terms and conditions, including price, have been fixed by
the issuer) that are to be issued and delivered against payment in the
future. Delivery of securities so sold normally takes place 30 to 45

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days (settlement date) after the date of the commitment. No interest is
earned by a Portfolio prior to the settlement date. The value of securities
sold on a "when-issued" or "delayed-delivery" basis may fluctuate before
the settlement date and the Portfolio bears the risk of such fluctuation
from the date of purchase. A Portfolio may dispose of its interest in those
securities before delivery.

10. SHORT-TERM INVESTMENTS. The Equity, Growth, Northwest and Bond Portfolios
may purchase short-term securities under those circumstances where they
have cash to manage for a short-term time period or as a defensive measure
when, in the investment adviser's opinion, business or economic conditions
warrant. Certificates of deposit must be issued by banks or savings and
loan associations which have total assets of at least $1 billion or, in the
case of a bank or savings and loan association not having total assets of
at least $1 billion, the bank or savings and loan association is insured by
the Federal Deposit Insurance Corporation in which case the Portfolio will
limit its investment to the statutory insurance coverage.

11. FOREIGN SECURITIES. Foreign securities are securities issued in and traded
in foreign markets and contain greater risks (including currency risk) than
securities issued in and traded in U.S. markets. The Equity, Growth,
Northwest and Money Market Portfolios may not purchase foreign securities,
unless at the time thereof, such purchase would not cause more than five
percent (5%) of the total assets of a Portfolio (taken at market value) to
be invested in foreign securities. The Money Market Portfolio may purchase
dollar-denominated commercial paper issued in the U.S. by foreign entities
(as described in the Prospectus). The Small Company Stock Portfolio may
invest up to 10% of its total assets (taken at market value) in foreign
securities. The Bond Portfolio may invest up to 30% of its total
assets(taken at market value) in foreign securities. While investments in
foreign securities are intended to reduce risk by providing further
diversification, such investments involve sovereign and other risks, in
addition to the credit and market risks normally associated with domestic
securities. These additional risks include the possibility of adverse
political and economic developments (including political instability) and
the potentially adverse effects of unavailability of public information
regarding issuers, reduced governmental supervision regarding financial
markets, reduced liquidity of certain financial markets, and the lack of
uniform accounting, auditing, and financial standards or the application of
standards that are different or less stringent than those applied in the
U.S.

12. ASSET-BACKED SECURITIES. (Equity, Growth, Northwest, Bond and Money Market
Portfolios only.) Asset-backed securities represent interests in, or are
secured by and payable from, pools of assets such as (but not limited to)
consumer loans, automobile receivable securities, credit card receivable
securities, and installment loan contracts. The assets underlying the
securities are securitized through the use of trusts and special purpose
corporations. These securities may be supported by credit enhancements such
as letters of credit. Payment of interest and principal ultimately depends
upon borrowers paying the underlying loans. Repossessed collateral may be
unavailable or inadequate to support payments on defaulted asset-backed
securities. In addition, asset-backed securities are subject to prepayment
risks which may reduce the overall return of the investment.

Automobile receivable securities represent undivided fractional interests
in a trust whose assets consist of a pool of automobile retail installment
sales contracts and security interests in vehicles securing the contracts.
Payments

14
<PAGE>

of principal and interest on the certificates issued by the automobile
receivable trust are passed through periodically to certificate holders and
are generally guaranteed up to specified amounts by a letter of credit
issued by a financial institution. Certificate holders may experience
delays in payments or losses if the full amounts due on the underlying
installment sales contracts are not realized by the trust because of
factors such as unanticipated legal or administrative costs of enforcing
the contracts, or depreciation, damage or loss of the vehicles securing the
contracts.

Credit card receivable securities are backed by receivables from revolving
credit card accounts. Certificates issued by credit card receivable trusts
generally are pass-through securities. Competitive and general economic
factors and an accelerated cardholder payment rate can adversely affect the
rate at which new receivables are credited to an account, potentially
shortening the expected weighted average life of the credit card receivable
security and reducing its yield. Credit card accounts are unsecured
obligations of the cardholder.

13. OPTIONS ON EQUITY SECURITIES. (Growth, Income, Northwest and Small Company
Portfolios only.) The Growth, Income, Northwest and Small Company
Portfolios may purchase and write (i.e., sell) covered call options. A call
option is a short-term contract pursuant to which the purchaser or holder,
in return for a premium paid, has the right to buy the equity security
underlying the option at a specified exercise price (the strike price) at
any time during the term of the option (for "American-style" options) or on
the option expiration date (for "European-style" options). The writer of
the call option, who received the premium, has the obligation, upon
exercise of the option, to deliver the underlying equity security against
payment of the strike price.

The Portfolios will write call options on stocks only if they are covered,
and such options must remain covered so long as a Portfolio is obligated as
a writer. A call option is "covered" only if at the time the Portfolio
writes the call, the Portfolio holds on a share-for-share basis the same
security as the call written. A Portfolio must maintain such security in
its portfolio from the time the Portfolio writes the call option until the
option is exercised, terminated or expires. The Portfolios' use of options
on equity securities is subject to certain special risks including the risk
that the market value of the security will move adversely to the
Portfolio's option position.

The Portfolios may effect "closing purchase transactions." If a Portfolio,
as a writer of an option, wishes to terminate the obligation, it may effect
a closing purchase transaction by buying an option of the same series as
the option previously written. A Portfolio will realize a profit from a
closing transaction if the price of the transaction is less than the
premium received from writing the option. Because increases in the market
price of a call option will generally reflect increases in the market price
of the underlying security, any loss resulting from a closing purchase
transaction with respect to a call option is likely to be offset in whole
or in part by appreciation of the underlying equity security owned by the
Portfolio. There is no guaranty that closing purchase transactions can be
effected.

The Portfolios' use of options on equity securities is subject to certain
special risks, in addition to the risk that the market value of the
security will move adversely to the Portfolio's option position. An option
position may be closed out only on an exchange, board of trade or other
trading facility that provides a secondary market for an option of the same
series. There is no assurance that a liquid secondary market on an exchange
will exist for any particular option, or at any particular time,

15
<PAGE>

and for some options no secondary market on an exchange or otherwise may
exist. In such event it might not be possible to effect closing
transactions in particular options. If a Portfolio as a covered call option
writer is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange can
include any of the following: (i) there may be insufficient trading
interest in certain options; (ii) restrictions imposed by an exchange on
opening transactions or closing transactions or both; (iii) trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities; (iv) unusual or
unforeseen circumstances may interrupt normal operations on an exchange;
(v) the facilities of an exchange or a clearing corporation may not at all
times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a particular
class or series of options), in which event the secondary market on that
exchange (or in the class or series of options) would cease to exist,
although outstanding options on that exchange that had been issued by a
clearing corporation as a result of trades on that exchange would continue
to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events
might not, at times, render certain of the facilities of any of the
clearing corporations inadequate, and thereby result in the institution by
an exchange of special procedures that may interfere with the timely
execution of customers' orders.

14. OPTIONS ON STOCK INDICES. (Growth, Income, Northwest and Small Company
Portfolios only.) The Growth, Income, Northwest and Small Company
Portfolios may purchase put and call options on stock indices. Options on
stock indices are similar to options on stock except that, rather than
obtaining the right to take or make delivery of stock at a specified price,
an option on a stock index gives the holder the right to receive, upon
exercise of the option, an amount of cash if the closing level of the stock
index upon which the option is based is greater than (in the case of a
call) or less than (in the case of a put) the strike price of the option.
The amount of cash is equal to such difference between the closing price of
the index and the strike price of the option times a specified multiple
(the "multiplier"). If the option is exercised, the writer is obligated, in
return for the premium received, to make delivery of this amount. Unlike
stock options, all settlements are in cash, and gain or loss depends on
price movements in the stock market generally (or in a particular industry
or segment of the market) rather than price movements in individual stocks.

The Portfolios do not intend to invest more than 5% of their net assets at
any one time in the purchase of puts and calls on stock indices. The
Portfolios may effect "closing sale transactions," whereby a Portfolio may
liquidate its position in an option it holds by selling an option of the
same series as the option previously purchased. A Portfolio will realize a
profit from a closing transaction if the price of the transaction is more
than the premium paid to purchase the option. There is no guaranty that
closing sale transactions can be effected.

Investment in options on stock indices will be subject to the same risks as
investment in options on equity securities, described above. In addition,
the distinctive characteristics of options on indices create certain risks
that are not present with stock options. Index prices may be distorted if
trading of certain stocks included in the index is interrupted. Trading in
index options also may be interrupted in certain circumstances, such as if

16
<PAGE>

trading were halted in a substantial number of stocks included in the
index. If this occurred, the Portfolios would not be able to close out
options that they had purchased and, if restrictions on exercise were
imposed, a Portfolio might be unable to exercise an option it holds, which
could result in substantial losses to the Portfolio. The Portfolios
generally will select stock indices that include a number of stocks
sufficient to minimize the likelihood of a trading halt in options on the
index.

Although the markets for certain index option contracts have developed
rapidly, the markets for other index options are still relatively illiquid.
The ability of the Portfolios to establish and close out positions on such
options will be subject to the development and maintenance of a liquid
secondary market. It is not certain that this market will develop in all
index options contracts. The Portfolios will not purchase any index option
contract unless and until the Portfolios' investment adviser believes the
market for such options has developed sufficiently that the risk in
connection with such transactions is no greater than the risk in connection
with options on stocks.

There are other special risks involved in purchasing put and call options
on stock indices. If a Portfolio holds an index option and exercises it
before final determination of the closing index value for that day, it runs
the risk that the level of the underlying index may change before closing.
If such a change causes the exercised option to fall out-of-the-money, the
Portfolio will be required to pay the difference between the closing index
value and the strike price of the option (times the applicable multiplier)
to the assigned writer. Although the Portfolio may be able to minimize the
risk by withholding exercise instructions until just before the daily
cutoff time or by selling rather than exercising an option when the index
level is close to the exercise price, it may not be possible to eliminate
this risk entirely because the cutoff times for index options may be
earlier than those fixed for other types of options and may occur before
definitive closing index values are announced.

15. COMMERCIAL PAPER AND CERTIFICATES OF DEPOSIT. (Small Company Portfolio
only.) In making temporary investments in commercial paper and certificates
of deposit, the Portfolio will adhere to the following guidelines:

a) Commercial paper must be rated A-1 or A-2 by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("S&P") or
Prime-1 or Prime-2 by Moody's Investors Services, Inc. ("Moody's") or
issued by companies with an unsecured debt issue currently outstanding
rated AA by S&P or Aa by Moody's or higher.

b) Certificates of deposit ("CDs") must be issued by banks or savings and
loan associations that have total assets of at least $1 billion or, in
the case of a bank or savings and loan association not having total
assets of at least $1 billion, the bank or savings and loan
association is insured by the Federal Deposit Insurance Corporation
("FDIC").

16. CONTINGENT VALUE RIGHTS. (Small Company Portfolio only.) A contingent value
right ("CVR") is a right issued by a corporation that takes on a
pre-established value if the underlying common stock does not attain a
target price by a specified date. Generally, a CVR's value will be the
difference between the target price and the current market price of the
common stock on the target date. If the common stock does attain the target
price by the date, the CVR expires without value. CVRs may be purchased and
sold as part

17
<PAGE>

of the underlying common stock or separately from the stock. CVRs may also
be issued to owners of the underlying common stock as the result of a
corporation's restructuring.

17. SOVEREIGN DEBT OBLIGATIONS. (Small Company Portfolio only.) Sovereign debt
instruments are issued or guaranteed by foreign governments or their
agencies. Sovereign debt may be in the form of conventional securities or
other types of debt instruments such as loans or loan participations.
Governments or governmental entities responsible for repayment of the debt
may be unable or unwilling to repay principal and interest when due, and
may require renegotiation or rescheduling of debt payments. Repayment of
principal and interest may depend also upon political and economic factors.

18. INDEXED SECURITIES. (Small Company Portfolio only.) Indexed securities are
securities whose prices are indexed to the prices of other securities,
securities indices, currencies, commodities or other financial indicators.
Indexed securities generally are debt securities whose value at maturity or
interest rate is determined by reference to a specific instrument or
statistic. Currency-indexed securities generally are debt securities whose
maturity values or interest rates are determined by reference to values of
one or more specified foreign currencies. Currency-indexed securities may
be positively or negatively indexed; I.E., their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument, or
their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of different foreign securities relative to each
other.

The performance of an indexed security depends largely on the performance
of the security, currency or other instrument to which they are indexed.
Performance may also be influenced by interest rate changes in the United
States and foreign countries. Indexed securities additionally are subject
to credit risks associated with the issuer of the security. Their values
may decline substantially if the issuer's creditworthiness deteriorates.
Indexed securities may also be more volatile than their underlying
instruments.

19. SHORT SALES AGAINST THE BOX. (Small Company Portfolio only.) The Portfolio
may make short sales of securities or maintain a short position, provided
that at all times when a short position is open the Portfolio owns an equal
amount of such securities or an equal amount of the securities of the same
issuer as the securities sold short (a "short sale against the box"). If
the Portfolio engages in short sales against the box, it will incur
transaction costs.

SPECIAL RISKS OF BELOW INVESTMENT GRADE BONDS

The Bond Portfolio may invest up to 20% of its assets in below investment grade
bonds (commonly referred to as "high-yield" or "junk" bonds). Certain additional
risks are associated with these bonds. Yields on below investment grade bonds
will fluctuate over time. These bonds tend to reflect short-term economic and
corporate developments to a greater extent than higher quality bonds which
primarily react to fluctuations in interest rates. During an economic downturn
or period of rising interest rates, issuers of below investment grade bonds may
experience financial difficulties which adversely affect their ability to make
principal and interest payments, meet projected business goals and obtain
additional financing. In

18
<PAGE>

addition, issuers often rely on cash flow to service debt. Failure to realize
projected cash flows may seriously impair the issuer's ability to service its
debt load which in turn might cause a Portfolio to lose all or part of its
investment in that security. SAM will seek to minimize these additional risks
through diversification, careful assessment of the issuer's financial structure,
business plan and management team and monitoring of the issuer's progress toward
its financial goals.

The liquidity and price of below investment grade bonds can be affected by a
number of factors, including investor perceptions and adverse publicity
regarding major issues, underwriters or dealers of lower-quality corporate
obligations. These effects can be particularly pronounced in a thinly-traded
market with few participants and may adversely impact the Portfolio's ability to
dispose of the bonds as well as make valuation of the bonds more difficult.
Because there tend to be fewer investors in below investment grade bonds, it may
be difficult for the Portfolio to sell these securities at an optimum time.
Consequently, these bonds may be subject to more price changes, fluctuations in
yield and risk to principal and income than higher-rated bonds of the same
maturity.

Credit ratings evaluate the likelihood that an issuer will make principal and
interest payments, but may not reflect market value risks associated with
lower-rated bonds. Credit rating agencies may not timely revise ratings to
reflect subsequent events affecting an issuer's ability to pay principal and
interest.

PRINCIPAL SHAREHOLDERS OF THE PORTFOLIOS

At February 3, 1998 SAFECO Life Insurance Company ("SAFECO Life") owned the
following percentages of the outstanding shares of the Portfolios listed:

Equity 96.87%
Growth 94.75%
Northwest 100%
Bond 100%
Money Market 100%
Small Company 100%

SAFECO Life is a Washington corporation and a wholly-owned subsidiary of
SAFECO Corporation. SAFECO Corporation, also a Washington corporation, has
its principal place of business at SAFECO Plaza, Seattle, WA 98185. SAFECO
Life has its principal place of business at 15411 N.E. 51st Street,
Redmond, Washington.

ADDITIONAL INFORMATION ON CALCULATION OF NET ASSET VALUE PER SHARE

The portfolio instruments of the Money Market Portfolio are valued on the basis
of amortized cost. The valuation of the Money Market Portfolio securities based
upon its amortized cost and the maintenance of its net asset value per share at
$1.00 is permitted pursuant to Rule 2a-7 under the 1940 Act. Pursuant to that
rule, the Money Market Portfolio will maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only securities having remaining
maturities of thirteen months or less and invest only in securities determined
by SAM under guidelines adopted by the Board of Trustees to be of high quality
with minimal credit risks. The Board of Trustees has established procedures
designed to stabilize, to the extent reasonably possible, the Portfolio's
price-per-share as computed for the purpose of sales and redemptions at $1.00.
These procedures include a review of the Portfolio's holdings by the Board of
Trustees, at such

19
<PAGE>

intervals as it may deem appropriate, to determine whether the Portfolio's net
asset value per share, calculated by using available market quotations, deviates
from $1.00 per share and, if so, whether such deviation may result in material
dilution or is otherwise unfair to existing contract owners. In the event the
Board of Trustees determines that such a deviation exists, it will take such
corrective action as it regards as necessary and appropriate, including, but not
limited to: selling portfolio investments prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; or establishing the net asset value per share by using
available market quotations.

Short-term debt securities held by each Portfolio having a remaining maturity of
less than 60 days when purchased, and securities originally purchased with
maturities in excess of 60 days but which currently have maturities of 60 days
or less, may be valued at cost adjusted for amortization of premiums or accrual
of discounts, or under such other methods as the Board of Trustees may from time
to time deem to be appropriate. The cost of those securities that had original
maturities in excess of 60 days shall be determined by their fair market value
up until the 61st day prior to maturity. All other securities and assets held by
the Portfolios will be appraised in accordance with those procedures established
by the Board of Trustees in good faith in computing the fair market value of
those assets.

ADDITIONAL PERFORMANCE INFORMATION

EQUITY, GROWTH, NORTHWEST, BOND AND SMALL COMPANY PORTFOLIOS

The yield for the 30-day period ended December 31, 1997 for the Bond Portfolio
was 3.87%

Yield is computed using the following formula:

a-b 6
Yield = 2 [(---+1) - 1]
cd

Where: a = dividends and interest earned during the period

b = expenses accrued for the period (net of reimbursements)

c = the average daily number of shares outstanding during
the period that were entitled to receive dividends

d = the maximum offering price per share on the last day of the
period

The total returns, expressed as a percentage, for the one-year, five-year, and
ten-year periods ended December 31, 1997 for the Equity and Bond Portfolios were
as follows:

Portfolio 1 Year 5 Year 10 Year
<S> <C> <C> <C>

Equity 24.85% 179.25% 480.97%
Bond 8.41% 37.86% 113.09%
113.0

</TABLE>

The total returns, expressed as a percentage, for the one-year, and since
effective date periods ended December 31, 1997 for the Growth and
Northwest

20
<PAGE>

Portfolios were as follows:

Since # of
Portfolio 1 Year Effective Date Months Effective Date
- --------- ------ -------------- ------ --------------
<S> <C> <C> <C> <C>

Growth 44.55% 305.87% 59 January 7, 1993
Northwest 31.02% 63.14% 59 January 7, 1993

</TABLE>

The total return, expressed as a percentage, for the eight-month period ended
December 31, 1997 for the Small Company Portfolio was 28.40

The average annual total returns, expressed as a percentage, for the one-, five-
and ten-year periods ended December 31, 1997 for the Equity and Bond Portfolios
were as follows:

Portfolio 1 Year 5 Year 10 Year
<S> <C> <C> <C>

Equity 24.85% 22.80% 19.24%
Bond 8.41% 6.63% 7.86%

</TABLE>

The average annual total returns, expressed as a percentage, for the one-year
and since effective date periods ended December 31, 1997 for the Growth and
Northwest Portfolios were as follows:

Since # of
Portfolio 1 Year Effective Date Months Effective Date
- --------- ------ -------------- ------ --------------
<S> <C> <C> <C> <C>

Growth 44.55% 32.97% 59 January 7, 1993
Northwest 31.02% 10.47% 59 January 7, 1993

</TABLE>

The total return is computed using the following formula:

ERV-P
T = ------- X 100
P

The average annual total return is computed using the following formula:

-----
A =( n\/ ERV/P - 1) x 100

Where: T = total return

A = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time

P = a hypothetical initial investment of $1,000

In making the above calculations, all dividends and capital-gain distributions
are assumed to be reinvested at the respective Portfolio's NAV on the
reinvestment date.

21
<PAGE>

MONEY MARKET PORTFOLIO:

The yield and effective yield for the Money Market Portfolio of the Trust for
the 7-day period ended December 31, 1997, are 3.55% and 3.61%, respectively.

Yield is computed using the following formula:

(x-y) -z 365
Yield = [------ ] = Base Period Return X -----
y 7

Where: x = value of one share at the end of a 7-day period

y = value of one share at the beginning of a 7-day
period ($1.00)

z = capital changes during the 7-day period, if any

Effective yield is computed using the following formula:

Effective yield = [(Base Period Return + 1) 365/7 ] -1

The Portfolios may occasionally reproduce articles or portions of articles about
the Portfolios written by independent third parties such as financial writers,
financial planners and financial analysts, which have appeared in financial
publications of general circulation or financial newsletters (including but not
limited to BARRONS, BUSINESS WEEK, FABIANS, FORBES, FORTUNE, INVESTOR'S BUSINESS
DAILY, KIPLINGER'S, MONEY MAGAZINE, MORNINGSTAR MUTUAL FUNDS, MUTUAL FUNDS
FORECASTER, MUTUAL FUNDS MAGAZINE, NEWSWEEK, PENSIONS & INVESTMENTS, RUCKEYSER'S
MUTUAL FUNDS, TELESWITCH, TIME MAGAZINE, U.S. NEWS AND WORLD REPORT, YOUR MONEY
AND THE WALL STREET JOURNAL).

Each Portfolio may present in its advertisements and sales literature (i) a
biography or the credentials of its portfolio manager (including but not
limited to educational degrees, professional designations, work experience, work
responsibilities and outside interests), (ii) current facts (including but not
limited to number of employees, number of shareholders, business
characteristics) about its investment adviser (SAM) or the investment adviser's
parent company (SAFECO Corporation) or (iii) descriptions, including quotations
attributable to the portfolio manager, of the investment style used to manage
the Portfolio, the research methodologies underlying securities selection and
a Portfolio's investment objective and (iv) information about particular
securities held by a Portfolio.

From time to time, each Portfolio may discuss its performance in relation to
the performance of relevant indices and/or representative peer groups. Such
discussions may include how a Portfolio's investment style (including but not
limited to portfolio holdings, asset types, industry/sector weightings and
the purchase and sale of specific securities) contributed to such performance.

In addition, each Portfolio may comment on the market and economic outlook in
general, on specific economic events, on how these conditions have impacted
its performance and on how the portfolio manager will or has addressed such
conditions.

22
<PAGE>

TRUSTEES AND OFFICERS

Name, Address and Age Position(s) Held Principal Occupations(s)
with the During Past 5 Years
Trust

Boh A. Dickey* Chairman and Trustee President, Chief Operating
SAFECO Plaza Officer, and Director of SAFECO
Seattle, WA 98185 Corporation. Previously,
(53) Executive Vice President and
Chief Financial Officer. He has
been an executive officer of
SAFECO Corporation subsidiaries
since 1982. See table under
"Investment Advisory and Other
Services."

Barbara J. Dingfield Trustee Manager, Corporate Contributions
Microsoft Corporation and Community Programs for
One Microsoft Way Microsoft Corporation, Redmond,
Redmond, WA 98052 Washington, a computer software
(52) company; Director and former
Executive Vice President of
Wright Runstad & Co., Seattle,
Washington, a real estate
development company; Director of
First SAFECO National Life
Insurance Company of New York.

David F. Hill* President President of SAFECO Securities,
SAFECO Plaza Trustee Inc. and SAFECO Services
Seattle, WA 98185 Corporation; Senior Vice
(49) President of SAFECO Asset
Management Company. See table
under "Investment Advisory and
Other Services."

Richard W. Hubbard Trustee Retired Vice President and
1270 NW Blakely Ct. Treasurer of the Trust and other
Seattle, WA 98177 SAFECO Trusts; retired Senior
(68) Vice President and Treasurer of
SAFECO Corporation; former
President of SAFECO Asset
Management Company; Director of
First SAFECO National Life
Insurance Company of New York;
Member of Diocese of Olympia
Investment Committee.

Richard E. Lundgren Trustee Director of Marketing and
764 S. 293rd Street Customer Relations, Building
Federal Way, WA 98032 Materials Distribution,
(60) Weyerhaeuser Company, Tacoma,
Washington; Director of First
SAFECO National Life Insurance
Company of New York.

Larry L. Pinnt Trustee Retired Vice President and Chief
1600 Bell Plaza, Financial Officer U.S. WEST
Room 1802 Communications, Seattle,
Seattle, WA 98191 Washington; Member of University
(63) of Washington Medical Center

23
<PAGE>

Board, Seattle, Washington;
Director of Cascade Natural Gas
Corporation, Seattle,
Washington; Director of First
SAFECO National Life Insurance
Company of New York.

John W. Schneider Trustee President of Wallingford Group,
1808 N. 41st St. Inc., Seattle, Washington;
Seattle, WA 98103 former President of Coast
(56) Hotels, Inc., Seattle,
Washington; Director of First
SAFECO National Life Insurance
Company of New York.

Neal Fuller Vice President Vice President, Controller,
SAFECO Plaza Controller Assistant Secretary and
Seattle, WA 98185 Assistant Treasurer of SAFECO Securities,
(35) Secretary Inc. and SAFECO Services
Corporation; Vice President,
Controller, Secretary and
Treasurer of SAFECO Asset
Management Company. See table
under "Investment Advisory and
Other Services."

Ronald L. Spaulding Vice President Chairman of SAFECO Asset
SAFECO Plaza Treasurer Management Company; Treasurer
Seattle, WA 98185 and Chief Investment Officer of
(54) SAFECO Corporation; Vice
President of SAFECO Insurance
Companies; Director, Vice
President and Treasurer of First
SAFECO National Life Insurance
Company of New York; former
Senior Portfolio Manager of
SAFECO insurance companies and
Portfolio Manager for SAFECO
mutual funds. See table under
"Investment Advisory and Other
Services."

David H. Longhurst Assistant Assistant Controller of SAFECO
SAFECO Plaza Controller Securities, Inc., SAFECO
Seattle, WA 98185 Services Corporation and SAFECO
(40) Asset Management Company; former
Senior Manager with Ernst &
Young LLP, an independent
accounting company.

Stephen D. Collier Assistant Secretary Assistant Secretary of SAFECO
(45) Asset Management Company, SAFECO
Securities, Inc. and SAFECO
Services Corporation. He has
been an executive officer of
SAFECO Insurance Company and
subsidiaries since 1991.

*Trustees who are interested persons as defined by the 1940 Act.

At February 3, 1998, none of the Trustees and officers of the Trust owned shares
of any series of the Trust. Each Trustee and officer of the Trust holds the

24
<PAGE>

same position(s) with five other registered open-end, management investment
companies that have, in the aggregate, nineteen series companies managed by SAM.

25
<PAGE>

COMPENSATION TABLE
FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1997

Total
Pension or Compensation
Retirement From
Benefits Estimated Registrant and
Aggregate Accrued As Annual Fund Complex
Compensation Part of Fund Benefits Upon Paid to
Trustee from Registrant Expenses Retirement Trustees
- ------- --------------- -------- ---------- --------
<S> <C> <C> <C> <C>

Boh A. Dickey N/A N/A N/A N/A

Barbara J. $5,188.47 N/A N/A $22,750
Dingfield

David F. Hill N/A N/A N/A N/A

Richard W.
Hubbard $4,805.11 N/A N/A $21,000

Richard E.
Lundgren $5,188.47 N/A N/A $22,750

Larry L. Pinnt $5,188.47 N/A N/A $22,750

John W.
Schneider $5,188.47 N/A N/A $22,750

</TABLE>

Currently, there is no pension, retirement, or other plan or any arrangement
pursuant to which Trustees or officers of the Trust are compensated by the
Trust.

INVESTMENT ADVISORY AND OTHER SERVICES

SAM, SAFECO Securities, Inc. ("SAFECO Securities") and SAFECO Services
Corporation ("SAFECO Services") are wholly-owned subsidiaries of SAFECO
Corporation. SAFECO Securities is the principal underwriter and SAFECO Services
is the transfer, dividend and distribution disbursement and shareholder
servicing agent for each Portfolio under agreements with the Trust.

The following individuals have the following positions and offices with the
Trust, SAM, SAFECO Securities and SAFECO Services:

SAFECO SAFECO
Name Trust SAM Securities Services
---- ----- --- ---------- --------

B. A. Dickey Chairman Director
Trustee

D. F. Hill President Senior President President
Trustee Vice Director Director
President Secretary Secretary
Director

26
<PAGE>

N. A. Fuller Vice Vice Vice Vice
President President President President
Controller Controller Controller Controller
Assistant Assistant Assistant Assistant
Secretary Treasurer Secretary Secretary
Treasurer Treasurer

R. A. Spaulding Vice Chairman Director Director
President Director
Treasurer

S. C. Bauer President
Director

D. H. Longhurst Assistant Assistant Assistant Assistant
Controller Controller Controller Controller

S.D. Collier Assistant Assistant Assistant Assistant
Secretary Secretary Secretary Secretary

Mr. Dickey is President , Chief Operating Officer and a Director of SAFECO
Corporation, and Mr. Spaulding is a Vice President and Treasurer of SAFECO
Corporation. Messrs. Dickey and Spaulding are also Directors of other SAFECO
Corporation subsidiaries.

In connection with the investment advisory contract with the Trust, SAM
furnishes or pays for all facilities and services furnished or performed for or
on behalf of the Trust and each Portfolio that include furnishing office
facilities, books, records and personnel to manage the Trust's and each
Portfolio's affairs and paying certain expenses.

For the services and facilities furnished by SAM, the Trust has agreed to pay an
annual fee of .74% for the Equity, Growth, Northwest and Bond Portfolios, .85%
for the Small Company Portfolio and .65% for the Money Market Portfolio computed
on the basis of the average market value of the net assets of each Portfolio
ascertained each business day and paid monthly. During its last three fiscal
years, the Trust paid SAM the following investment advisory fees for each
Portfolio:

Investment Advisory Fees Paid to SAM

<TABLE>
<CAPTION>
Years Ended
December 31 December 31 December 31
Portfolio 1997 1996 1995
- --------- --------------------------------------------
<S> <C> <C> <C>

Equity $2,429,000 $1,488,000 $961,000
Bond $ 120,000 $ 113,000 $ 93,000
Northwest $ 104,000 $ 56,000 $ 40,000
Growth $1,227,000 $ 519,000 $200,000
Money Market $ 108,000 $ 63,000 $ 54,000

</TABLE>

For the period April 30, 1997 (effective date) to December 31, 1997, the
Trust paid SAM $40,000 in investment advisory fees for the Small Company
Portfolio.

27
<PAGE>

State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy, MA 02170
is the custodian of the securities and cash of each Portfolio under an agreement
with the Trust. Ernst & Young LLP, 999 Third Avenue, Suite 3500, Seattle,
Washington 98104 is the independent auditor which audits the financial
statements of the Trust.

SAFECO Services, SAFECO Plaza, Seattle, Washington 98185, is the transfer,
dividend, and distribution disbursement and shareholder servicing agent for each
Portfolio under an agreement with the Trust. SAFECO Services is responsible for
all required transfer agent activity, including maintenance of records for each
Portfolio's shareholders, records of transactions involving each Portfolio's
shares and the compilation, distribution, or reinvestment of income dividends or
capital gains distributions. SAFECO Services is not compensated by the Trust or
the Portfolios for these services.

SAFECO Securities is the principal underwriter for each Portfolio and
distributes each Portfolio's shares on a continuous best efforts basis under an
agreement. SAFECO Securities is not compensated by the Trust or the Portfolios
for underwriting, distribution or other activities.

BROKERAGE PRACTICES

Brokers typically charge commissions or mark-ups/mark-downs to effect securities
transactions. The Portfolios may also purchase securities from underwriters, the
price of which will include a commission or concession paid by the issuer to the
underwriter. The purchase price of securities purchased from dealers serving as
market makers will include the spread between the bid and asked prices.
Brokerage transactions involving securities of companies domiciled in countries
other than the United States will normally be conducted on the principal stock
exchanges of those countries. In most international markets, commission rates
are not negotiable and may be higher than the negotiated commission rates
available in the United States. There is generally less government supervision
and regulation of foreign stock exchanges and broker-dealers than in the United
States.

SAM determines the broker/dealers through whom securities transactions for the
Portfolios are executed. SAM may select a broker/dealer who may receive a
commission for portfolio transactions exceeding the amount another broker/dealer
would have charged for the same transaction if SAM determines that such amount
of commission is reasonable in relation to the value of the brokerage and
research services performed or provided by the broker/dealer, viewed in terms of
either that particular transaction or SAM's overall responsibilities to the
client for whose account such portfolio transaction is executed and other
accounts advised by SAM. Research services include market information, analysis
of specific issues, presentation of special situations and trading opportunities
on a timely basis, advice concerning industries, economic factors and trends,
portfolio strategy and performance of accounts. Research services come in the
form of written reports, telephone conversations between brokerage security
analysts and members of SAM's staff, and personal visits by such analysts and
brokerage strategists and economists to SAM's office.

Research services are used in advising all accounts, including accounts advised
by related persons of SAM, and not all such services are necessarily used by SAM
in connection with the specific account that paid commissions to the
broker/dealer providing such services. SAM does not acquire research services
through the generation of credits with respect to principal transactions or

28
<PAGE>

transactions in financial futures.

The overall reasonableness of broker commissions paid is evaluated periodically.
Such evaluation includes review of what competing broker/dealers are willing to
charge for similar types of services and what discounts are being granted by
brokerage firms. The evaluation also considers the timeliness and accuracy of
the research received.

The following table states the total amount of brokerage expenses for the
Portfolios listed for the fiscal years ending December 31, 1997, 1996, and 1995
respectively:

<TABLE>
<CAPTION>
Years Ended
December 31 December 31 December 31
Portfolio 1997 1996 1995
- --------- --------------------------------------------
<S> <C> <C> <C>

Equity $302,000 $314,000 $$286,000
Northwest $ 17,000 $ 8,000 $ $1,000
Growth $313,000 $135,000 $ $82,000

</TABLE>

The brokerage expenses for the Small Company Portfolio for the period from April
30, 1997 (effective date) to December 31, 1997 were $11,000.

Because the portfolio securities purchased and sold by the Bond and Money Market
Portfolios are traded on a principal basis, no commission is charged.

DISTRIBUTIONS AND TAX INFORMATION

DISTRIBUTIONS. The Portfolios will receive income in the form of dividends and
interest earned on their investments in securities. This income, less the
expenses incurred in their operations, is the Portfolios' net investment income,
substantially all of which will be declared as dividends to the Portfolios'
shareholders (the separate accounts of Participating Insurance Companies and
Qualified Plans).

Any per-share dividend or distribution paid by a Portfolio reduces the
Portfolio's net asset value per share on the date paid by the amount of the
dividend or distribution per share. As stated in the Prospectus, dividends
and other distributions will generally be made in the form of additional
shares of the Portfolios.

29
<PAGE>

TAX INFORMATION. Each Portfolio is treated as a separate corporation for
federal income tax purposes. Each Portfolio intends to continue to qualify as
a "regulated investment company" under Subchapter M of the Internal Revenue
Code of 1986 ("Code"). In order to qualify for treatment as a regulated
investment company under the Code, a Portfolio must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of taxable net investment income and net
short-term capital gain) and diversify its holdings, as reflected in the
Portfolio's investment policies. Each Portfolio intends to make sufficient
distributions to shareholders to relieve it from liability for federal excise
and income taxes.

Each Portfolio will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of
its ordinary income for that year and capital gain net income for the
one-year period ending on December 31 (by election) of that year, plus
certain other amounts.

The excess of net long-term capital gains over net short-term capital loss
realized by a Portfolio on portfolio transactions, when distributed by the
Portfolio, is subject to long-term capital gains treatment under the Code,
regardless of how long the Participating Insurance Company or Qualified Plan
has held the shares of the Portfolio. Distributions of net short-term
capital gains realized from portfolio transactions are treated as ordinary
income for federal income tax purposes. The tax consequences described above
apply whether distributions are taken in cash or in additional shares.

The Trust and the Portfolios intend to comply with the requirements of Section
817(h) of the Internal Revenue Code and related regulations, including certain
diversification requirements that are in addition to the diversification

30
<PAGE>

requirements of Subchapter M and the Investment Company Act. Failure to comply
with the requirements of Section 817(h) could result in taxation of the
insurance company and immediate taxation of the owners of variable contracts to
the full extent of appreciation under the contracts.

Shares of a Portfolio underlying variable contracts that comply with the
requirements of Section 817(h) and related regulations will generally be treated
as owned by the insurance company and not by the owners of variable contracts.
In that case, income derived from the appreciation in shares of the Portfolio
would not be currently taxable to the owners of variable contracts. Owners of
variable contracts that do not comply with the requirements of Section 817(h)
would generally be subject to immediate taxation of the appreciation under the
contracts.

Section 817(h) requires that the investment portfolios underlying variable life
insurance and variable annuity contracts be "adequately diversified." Section
817(h) contains a safe harbor provision which provides that a variable life
insurance or variable annuity contract will meet the diversification
requirements if, as of the close of each calendar quarter, (i) the assets
underlying the contract meet the diversification standards for a regulated
investment company under Subchapter M of the Internal Revenue Code, and (ii) no
more than 55% of the total assets of the account consist of cash, cash items,
U.S. Government securities and securities of regulated investment companies.

Treasury Department regulations provide an alternative test to the safe harbor
provision to meet the diversification requirements. Under these regulations, an
investment portfolio will be adequately diversified if (i) not more than 55% of
the value of its total assets is represented by any one investment; (ii) not
more than 70% of the value of its total assets is represented by any two
investments; (iii) not more than 80% of the value of its total assets is
represented by any three investments; and (iv) not more than 90% of the value of
its total assets is represented by any four investments. These limitations are
increased for investment portfolios which are invested in whole or in part of
U.S. Treasury securities.

Stock of a regulated investment company, such as a Portfolio, held in an
insurance company's separate accounts underlying variable life insurance or
variable annuity contracts may be treated as a single investment for purposes of
the diversification rules of Section 817(h). A special rule in Section 817(h),
however, allows a shareholder of a regulated investment company to
"look-through" the company and treat a pro rata share of the company's assets as
owned directly by the shareholder. This special "look-through" rule may make it
easier to comply with the diversification requirements of Section 817(h). To
qualify for "look-through" treatment, public access to the regulated investment
company must generally be limited to (i) the purchase of a variable contract,
(ii) life insurance companies' general accounts, and (iii) qualified pension or
retirement plans. Interests in the Portfolios are sold only to insurance company
separate accounts to fund the benefits of variable contracts, and may be sold to
qualified pension and retirement plans.

Even if the diversification requirements of Section 817(h) are met, the owner of
a variable contract might be subject to current federal income taxation if the
owner has excessive control over the investments underlying the contract. The
Treasury Department has indicated that guidelines might be forthcoming that
address this issue. At this time, it is impossible to predict where they may be
issued, what the guidelines will include and the extent, if any, to which they

31
<PAGE>

may be retroactive.

In order to maintain the variable contracts' status as annuities or insurance
contracts, the Trust may in the future find it necessary, and reserves the
right, to take certain actions, including, without limitation, amending a
Portfolio's investment objective (upon SEC or shareholder approval) or
substituting shares of one Portfolio for another.

FINANCIAL STATEMENTS

The following financial statements for the Growth, Equity, Bond, Northwest, and
Money Market Portfolios and the report thereon of Ernst & Young LLP, independent
auditors, are incorporated herein by reference to each Portfolio's Annual Report
for the year ended December 31, 1997.

Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the Year Ended December 31, 1997
Statement of Changes in Net Assets for the Years Ended December 31, 1997
and December 31, 1996
Notes to Financial Statements

The following financial statements for the Small Company Portfolio and the
report thereon of Ernst & Young LLP, independent auditors, are incorporated
herein by reference to the Portfolio's Annual Report for the period ended
December 31, 1997.

Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the Period from April 30, 1997
(effective date) to December 31, 1997
Statement of Changes in Net Assets for the Period from April 30, 1997
(effective date) to December 31, 1997
Notes to Financial Statements

A copy of each Portfolio's Annual Report accompanies this Statement of
Additional Information. Additional copies may be obtained by calling
1-800-624-5711 or by writing to the address on the first page of this
Statement of Additional Information.

32
<PAGE>

SAFECO RESOURCE SERIES TRUST

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS*

PART A

None

PART B

(a) The following financial statements for the Growth, Equity, Bond, Northwest
and Money Market Portfolios of the Registrant for the year ended December
31, 1997 including the report thereon of Ernst & Young LLP, independent
auditors, are incorporated herein by reference in Part B of this
Registration Statement.

Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the Year Ended December 31, 1997
Statement of Changes in Net Assets for the Years Ended
December 31, 1997 and December 31, 1996
Notes to Financial Statements

The following financial statements for the Small Company Portfolio and the
report thereon of Ernst and Young LLP, independent auditors, are
incorporated herein by reference in Part B of this Registration Statement.

Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the Period from April 30, 1997 (initial
public offering) to December 31, 1997
Statement of Changes in Net Assets for the Period from April 30, 1997
(initial public offering) to December 31, 1997
Notes to Financial Statements

(b) Exhibits:

Exhibit Number Description of Document Page
- -------------- ----------------------- ----

(27.1-6) Financial Data Schedules (Filed herewith)

(1) Trust Instrument/Certificate of Trust +

(2) Bylaws +

(3) Inapplicable

(4) Inapplicable

(5) Investment Advisory and Management +
Contract

(6) Distribution Agreement +

(7) Inapplicable

<PAGE>

(8) Custody Agreement with State Street Bank *
and Trust Company

Form of Amendment to Custody Agreement with State
Street Bank and Trust Company (Filed herewith)

(9a) Transfer Agent Agreement +

(9b) Fund Participation Agreement +

(10) Opinion and Consent of Counsel *

(99.11) Consent of Independent Auditors (Filed herewith)

(99.12) Registrant's Annual Report for ++
the Year Ended December 31, 1997
including Financial Statements

(13) Agreement Governing Contribution +
to SAFECO Resource Series Trust by
SAFECO Life Insurance Company dated
June 23, 1986. +

(14) Inapplicable

(15) Inapplicable

(16) Calculation of Performance Information **

(17) See (27.1-6) above (Filed herewith)

(18) Inapplicable

+ Filed as an exhibit to Post-Effective Amendment No. 16 filed with the SEC
on April 26, 1996

++ Registrant's Annual Report was filed with the SEC on or about February 25,
1998. The Report contains the financial statement incorporated by reference
in the Registrant's Statement of Additional Information.

* Filed as an exhibit to Post-Effective Amendment No. 18 filed with the SEC
on April 22, 1997.

** Filed as an exhibit to Post-Effective Amendment No. 16 filed with the SEC
on April 26, 1996 for all Portfolios except the Small Company Portfolio,
which was filed as an exhibit to Post Effective Amendment No. 19 on April
27, 1997.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

SAFECO Corporation, a Washington corporation, owns 100% of SAFECO Asset
Management Company (SAM), SAFECO Services Corporation (SAFECO Services) and
SAFECO Securities, Inc. (SAFECO Securities), each a Washington corporation. SAM
is the investment advisor, SAFECO Services is the transfer agent and SAFECO
Securities is the principal underwriter for each of the SAFECO Mutual Funds. The
SAFECO Mutual Funds consist of six Delaware business trusts: SAFECO Common Stock
Trust, SAFECO Taxable Bond Trust, SAFECO Tax-Exempt Bond Trust, SAFECO Money
Market Trust, SAFECO Managed Bond Trust (formerly SAFECO Institutional Series
Trust) and SAFECO Resource Series Trust. The SAFECO Common Stock Trust consists
of eight mutual funds: SAFECO Growth Fund, SAFECO Equity Fund, SAFECO Income
Fund, SAFECO Northwest Fund, SAFECO International Stock Fund, SAFECO Balanced
Fund, SAFECO Small Company Stock Fund and

2
<PAGE>

SAFECO U.S. Value Fund. The SAFECO Taxable Bond Trust consists of three mutual
funds: SAFECO Intermediate-Term U.S. Treasury Fund, SAFECO GNMA Fund and SAFECO
High-Yield Bond Fund. The SAFECO Tax-Exempt Bond Trust consists of five mutual
funds: SAFECO Intermediate-Term Municipal Bond Fund, SAFECO Insured Municipal
Bond Fund, SAFECO Municipal Bond Fund, SAFECO California Tax-Free Income Fund
and SAFECO Washington State Municipal Bond Fund. The SAFECO Money Market Fund
consists of two mutual funds: SAFECO Money Market Fund and SAFECO Tax-Free Money
Market Fund. The SAFECO Managed Bond Trust consists of one mutual fund: Managed
Bond Fund (formerly Fixed-Income Portfolio). The SAFECO Resource Series Trust
consists of six mutual funds: Equity Portfolio, Growth Portfolio, Northwest
Portfolio, Small Company Stock Portfolio, Bond Portfolio and Money Market
Portfolio.

SAFECO Corporation, a Washington Corporation, owns 100% of the following
Washington corporations: SAFECO Insurance Company of America, General Insurance
Company of America, First National Insurance Company of America, SAFECO Life
Insurance Company, SAFECO Assigned Benefits Service Company, SAFECO
Administrative Services, Inc., SAFECO Properties Inc., SAFECO Credit Company,
Inc., SAFECO Asset Management Company, SAFECO Securities, Inc., SAFECO Services
Corporation, SAFECO Trust Company and General America Corporation. SAFECO
Corporation owns 100% of SAFECO National Insurance Company, a Missouri
corporation, SAFECO Insurance Company of Illinois, an Illinois corporation and
SAFECO Insurance Company of Pennsylvania, a Pennsylvania corporation. SAFECO
Insurance Company of America owns 100% of SAFECO Surplus Lines Insurance
Company, a Washington corporation, and Market Square Holding, Inc., a Minnesota
corporation. SAFECO Life Insurance Company owns 100% of SAFECO National Life
Insurance Company, a Washington corporation, First SAFECO National Life
Insurance Company of New York, a New York corporation, and WM Life Insurance
Company, an Arizona corporation. WM Life Insurance Company owns 100% of Empire
Life Insurance Company, a Washington corporation. SAFECO Administrative
Services, Inc. owns 100% of Employee Benefit Claims of Wisconsin, Inc. and
Wisconsin Pension and Group Services, Inc., each a Wisconsin corporation.
General America Corporation owns 100% of COMAV Managers, Inc., an Illinois
corporation, F.B. Beattie & Co., Inc., a Washington corporation, General America
Corp. of Texas, a Texas corporation, Talbot Financial Corporation, a Washington
corporation, Goldware & Taylor Insurance Service, a California corporation and
SAFECO Select Insurance Services, Inc., a California corporation. F.B. Beattie &
Co., Inc. owns 100% of F.B. Beattie Insurance Services, Inc., a California
corporation. General America Corp. of Texas is Attorney-in-fact for SAFECO
Lloyds Insurance Company, a Texas corporation. Talbot Financial Corporation owns
100% of Talbot Agency, Inc., a New Mexico corporation. Talbot Agency, Inc. owns
100% of PNMR Securities, Inc., a Washington corporation. SAFECO Properties Inc.
owns 100% of the following, each a Washington corporation: SAFECARE Company,
Inc. and Winmar Company, Inc. SAFECARE Company, Inc. owns 100% of the following,
each a Washington corporation: RIA Development, Inc., S.C. Arkansas, Inc., S.C.
Bellevue/Lynn, S.C. Bellevue, Inc., S.C. Everett, Inc., S.C. Everett/Lynn, S.C.
Lynden, Inc., S.C. Lynden/Lynn, S.C. Marysville, Inc., S.C. Northgate, Inc.,
S.C. Northgate/LR1, L.L.C., S.C. Vancouver, Inc., S.C. Vancouver/Lynn (Joint
Venture), SAFECARE S.C. Bakersfield, Inc. and SAFECARE S.C. Bakersfield/Lynn
Limited Partnership. SAFECARE Company, Inc. owns 50% of Lifeguard Ventures,
Inc., a California corporation, and S.C. River Oaks, Inc., a Washington
corporation. Winmar Company, Inc. owns 100% of the following: C-W Properties,
Inc., Gem State Investors, Inc., Kitsap Mall, Inc., WNY Development, Inc.,
Winmar Cascade, Inc., Winmar Metro, Inc., Winmar Northwest, Inc., Winmar
Redmond, Inc. and Winmar of Kitsap, Inc., each a Washington corporation, and
Capitol Court Corp., a Wisconsin corporation, SAFECO Properties of Boise, Inc.,
an Idaho corporation, SCIT, Inc., a Massachusetts corporation, Valley Fair
Shopping Centers, Inc., a Delaware corporation, WDI Golf Club, Inc., a
California corporation, Winmar Oregon, Inc., an Oregon corporation, Winmar of
Texas, Inc., a Texas corporation, and Winmar of the Desert, Inc., a California
corporation. Winmar Oregon, Inc. owns 100% of the following, each an Oregon
corporation: North Coast Management, Inc., Pacific Surfside Corp., Winmar of
Jantzen Beach, Inc. and W-P Development, Inc., and 100% of the following, each a
Washington corporation: Washington Square, Inc. and Winmar Pacific, Inc.

SAFECO Corporation, a Washington corporation, owns 100% of American States
Financial Corporation, an Indiana corporation. American States Financial
Corporation owns 100% of American States Insurance Company, an Indiana
corporation. American States Insurance Company owns 100% of the following
Indiana corporations: American Economy Insurance Company, American States
Preferred Insurance Company, American States Life Insurance company, and City
Insurance Agency, Inc. American States Insurance Company owns 100% of Insurance
Company of Illinois, an Illinois corporation, and American States Lloyds
Insurance Company, a Texas

3
<PAGE>

corporation. American Economy Insurance Company owns 100% of American States
Insurance Company of Texas, a Texas corporation.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

At February 3, 1998 (i) SAFECO Life Insurance Company was the sole shareholder
of the Money Market Portfolio, Small Company Stock Portfolio and Bond Portfolio;
(ii) SAFECO Life Insurance Company and SAFECO Asset Management Company owned all
of the shares of the Northwest Portfolio; SAFECO Life Insurance Company and six
other insurance companies owned all of the shares of the Equity Portfolio, and
SAFECO Life Insurance Company and four other insurance companies owned all of
the shares of the Growth Portfolio.

ITEM 27. INDEMNIFICATION

Under the Trust Instrument of the Registrant, the Registrant's trustees,
officers, employees and agents are indemnified against certain liabilities,
subject to specified conditions and limitations.

Under the indemnification provisions in the Registrant's Trust Instrument and
subject to the limitations described in the paragraph below, every person who
is, or has been, a trustee, officer, employee or agent of the Registrant shall
be indemnified by the Registrant or the appropriate Series of the Registrant to
the fullest extent permitted by law against liability and against all expenses
reasonably incurred or paid by him or her in connection with any claim, action,
suit or proceeding in which he or she becomes involved as a party or otherwise
by virtue of his or her being, or having been, a trustee, officer, employee or
agent and against amounts paid or incurred by him or her in the settlement
thereof. As used in this paragraph, "claim," "action," "suit" or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.

No indemnification will be provided to a trustee, officer, employee or agent:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought (a) to be liable to the Registrant or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, or (b) not to have
acted in good faith in the reasonable belief that his or her action was in the
best interest of the Registrant; or (ii) in the event of settlement, unless
there has been a determination that such trustee, officer, employee or agent did
not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office: (a) by the
court or other body approving the settlement, (b) by the vote of at least a
majority of a quorum of those trustees who are neither interested persons, as
that term is defined by the Investment Company Act of 1940 ("1940 Act"), of the
Registrant nor parties to the proceeding based upon a review of readily
available facts (as opposed to a full trial type inquiry) or (c) by written
opinion of independent legal counsel based upon a review of readily available
facts (as opposed to a full trial type inquiry).

To the maximum extent permitted by applicable law, expenses incurred in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described above may be paid by the
Registrant or applicable Series from time to time prior to final disposition
thereof upon receipt of an undertaking by or on behalf of such trustee, officer,
employee or agent that such amount will be paid over by him or her to the
Registrant or the applicable Series if it is ultimately determined that he or
she is not entitled to indemnification under the Trust Instrument; provided,
however, that either (i) such trustee, officer, employee or agent shall have
provided appropriate security for such undertaking, (ii) the Registrant is
insured against such losses arising out of such advance payments or (iii) either
a majority of the trustees who are neither interested persons, as that term is
defined by the 1940 Act, of the Registrant nor parties to the proceeding, or
independent legal counsel in a written opinion, shall have determined, based on
a review of readily available facts (as opposed to a full trial type inquiry),
that there is reason to believe that such trustee, officer, employee or agent,
will not be disqualified from indemnification under Registrant's Trust
Instrument.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 ("1933 Act") may be permitted
4
<PAGE>
to trustees, officers, employees and agents of the Registrant pursuant to such
provisions of the Trust Instrument or statutes or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in said Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer, employee or agent of the Registrant in the
successful defense of any such action, suit or proceeding) is asserted by such
trustee, officer, employee or agent in connection with the shares of any series
of the Registrant, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

Under an agreement with its distributor ("Distribution Agreement"), Registrant
has agreed to indemnify, defend and hold the distributor, the distributor's
several directors, officers and employees, and any person who controls the
distributor within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
distributor, its directors, officers or employees, or any such controlling
person may incur, under the 1933 Act or under common law or otherwise, arising
out of or based upon any alleged untrue statement of a material fact contained
in the Registration Statement or arising out of or based upon any alleged
omission to state a material fact required to be stated or necessary to make the
Registration Statement not misleading.

In no event shall anything contained in the Distribution Agreement be
construed so as to protect the distributor against any liability to the
Registrant or its shareholders to which the distributor would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in
the performance of its duties, or by reason of its reckless disregard of its
obligations and duties under the Distribution Agreement, and further provided
that the Registrant shall not indemnify the distributor for conduct set forth
in this paragraph.

Under an agreement with its transfer agent, Registrant has agreed to indemnify
and hold the transfer agent harmless against any losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and expenses)
resulting from: (1) any claim, demand, action or suit brought by any person
other than the Registrant, including by a shareholder, which names the transfer
agent and/or the Registrant as a party, and is not based on and does not result
from the transfer agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with the
transfer agent's performance under the Transfer Agent Agreement; or (2) any
claim, demand, action or suit (except to the extent contributed to by the
transfer agent's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant, or
from the transfer agent acting upon any instruction(s) reasonably believed by it
to have been executed or communicated by any person duly authorized by the
Registrant, or as a result of the transfer agent acting in reliance upon advice
reasonably believed by the transfer agent to have been given by counsel for the
Registrant, or as a result of the transfer agent acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been genuine
and signed, countersigned or executed by the proper person.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

The investment adviser to the Registrant, SAM, serves as an adviser to (a)
twenty-five series (portfolios) of six registered investment companies,
including six series of Registrant, and (b) a number of pension funds not
affiliated with SAFECO Corporation or its affiliates. The directors and officers
of SAM serve in similar capacities with SAFECO Corporation or its affiliates.
The information set forth under "Investment Advisory and Other Services" in the
Registrant's Statement of Additional Information is incorporated by reference.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) SAFECO Securities, Inc., the principal underwriter for the Registrant, also
acts as the principal underwriter for the sale of variable annuity
contracts (SAFECO Resource Variable Account B and SAFECO Separate Account
C) and variable universal life insurance policies (SAFECO Separate Account
SL) issued by SAFECO Life Insurance Company, and variable annuity contracts
(SAFECO Separate Account S) issued by First SAFECO National Life Insurance
Company of New York, as well as for the SAFECO Common Stock Trust, SAFECO
Taxable Bond Trust, SAFECO Tax-Exempt Bond Trust,

5
<PAGE>

SAFECO Money Market Trust, and SAFECO Managed Bond Trust.

(b) The information set forth under "Investment Advisory and Other Services" of
Registrant's Statement of Additional Information is incorporated by
reference.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

State Street Bank and Trust Company, 1776 Heritage Drive, North Quincy,
Massachusetts 02170 maintains physical possession of the accounts, books and
documents of Registrant relating to its activities as custodian of the
Registrant. SAFECO Asset Management Company, Two Union Square, 25th Floor,
Seattle, Washington, 98101, maintains physical possession of all other accounts,
books or documents of the Registrant required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and the rules promulgated thereunder.

ITEM 31. MANAGEMENT SERVICES

Inapplicable.

ITEM 32. UNDERTAKINGS

Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual report to shareholders, upon
request and without charge.

6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned thereto duly authorized, in the
City of Seattle, and State of Washington on the 23rd day of February, 1998.

SAFECO RESOURCE SERIES TRUST

By: /s/ David F. Hill
--------------------------------
David F. Hill

Name Title Date
- ---- ----- ----

/s/ DAVID F. HILL President and Trustee
David F. Hill++ Principal Executive Officer 2/23/98

RONALD L. SPAULDING* Vice President
Ronald L. Spaulding Treasurer 2/23/98

NEAL A. FULLER* Vice President
Neal A. Fuller Controller
Assistant Secretary 2/23/98
/s/ BOH A. DICKEY
Boh A. Dickey++ Chairman and Trustee 2/23/98

BARBARA J. DINGFIELD*
Barbara J. Dingfield Trustee 2/23/98

RICHARD W. HUBBARD*
Richard W. Hubbard Trustee 2/23/98

RICHARD E. LUNDGREN*
Richard E. Lundgren Trustee 2/23/98

LARRY L. PINNT*
Larry L. Pinnt Trustee 2/23/98

JOHN W. SCHNEIDER*
John W. Schneider Trustee 2/23/98

++ Trustees who are interested persons as defined by the 1940 Act

*By: /s/ Boh A. Dickey
--------------------------------------
Boh A. Dickey, Attorney-in-Fact

*By: /s/David F. Hill
--------------------------------------
David F. Hill, Attorney-in-Fact

7
<PAGE>

Registration Nos. 33-06547 / 811-4717
- --------------------------------------------------------------------------------

EXHIBITS

FORM N-1A

REGISTRATION STATEMENT

Under

The Securities Act of 1933

Post-Effective Amendment No. 20

and

Post-Effective Amendment No. 21

Under

The Investment Company Act of 1940

SAFECO Resource Series Trust
(Exact Name of Registrant as Specified in Charter)

SAFECO Plaza
Seattle, Washington 98185
(Address of Principal Executive Offices)

206-545-5180
(Registrant's Telephone Number, including Area Code)

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

8
<PAGE>

SAFECO RESOURCE SERIES TRUST

FORM N-1A
Post-Effective Amendment No. 20

Exhibit Index

Exhibit Number Description of Document Page
- -------------- ----------------------- ----

(27.1-6) Financial Data Schedules

(99.8) Form of Amendment to Custody Agreement with
State Street Bank and Trust Company

(99.11) Consent of Independent Auditors

(99.12) Registrant's Annual Report for Year Ended
December 31, 1997* including Financial
Statements

* Registrant's Annual Report for the year ended December 31, 1997 including
financial statements was filed with the SEC on or about February 25, 1998.

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 1
<NAME> SAFECO RST EQUITY PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 299,018
<INVESTMENTS-AT-VALUE> 388,692
<RECEIVABLES> 1,125
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 389,817
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 561
<TOTAL-LIABILITIES> 561
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,582
<SHARES-COMMON-STOCK> 15,461
<SHARES-COMMON-PRIOR> 13,155
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 89,674
<NET-ASSETS> 389,256
<DIVIDEND-INCOME> 5,923
<INTEREST-INCOME> 482
<OTHER-INCOME> 0
<EXPENSES-NET> 2,484
<NET-INVESTMENT-INCOME> 3,921
<REALIZED-GAINS-CURRENT> 24,360
<APPREC-INCREASE-CURRENT> 41,547
<NET-CHANGE-FROM-OPS> 69,828
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,926)
<DISTRIBUTIONS-OF-GAINS> (24,356)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,150
<NUMBER-OF-SHARES-REDEEMED> (2,908)
<SHARES-REINVESTED> 1,123
<NET-CHANGE-IN-ASSETS> 126,189
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,429
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,484
<AVERAGE-NET-ASSETS> 330,516
<PER-SHARE-NAV-BEGIN> 21.75
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 5.13
<PER-SHARE-DIVIDEND> (.27)
<PER-SHARE-DISTRIBUTIONS> (1.70)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.18
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 2
<NAME> SAFECO RST B0ND PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 17,327
<INVESTMENTS-AT-VALUE> 17,821
<RECEIVABLES> 277
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,098
<PAYABLE-FOR-SECURITIES> 192
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25
<TOTAL-LIABILITIES> 217
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,924
<SHARES-COMMON-STOCK> 1,620
<SHARES-COMMON-PRIOR> 1,482
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (536)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 493
<NET-ASSETS> 17,881
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,062
<OTHER-INCOME> 0
<EXPENSES-NET> 120
<NET-INVESTMENT-INCOME> 942
<REALIZED-GAINS-CURRENT> (116)
<APPREC-INCREASE-CURRENT> 507
<NET-CHANGE-FROM-OPS> 1,333
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (942)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 458
<NUMBER-OF-SHARES-REDEEMED> (411)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,890
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 120
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 147
<AVERAGE-NET-ASSETS> 16,366
<PER-SHARE-NAV-BEGIN> 10.75
<PER-SHARE-NII> 0.61
<PER-SHARE-GAIN-APPREC> 0.29
<PER-SHARE-DIVIDEND> (0.61)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.04
<EXPENSE-RATIO> 0.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 3
<NAME> SAFECO RST MONEY MARKET PORFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 17,521
<INVESTMENTS-AT-VALUE> 17,521
<RECEIVABLES> 707
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,228
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 471
<TOTAL-LIABILITIES> 471
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17,757
<SHARES-COMMON-STOCK> 17,757
<SHARES-COMMON-PRIOR> 16,568
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17,757
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 946
<OTHER-INCOME> 0
<EXPENSES-NET> 108
<NET-INVESTMENT-INCOME> 838
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 838
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (838)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 90,491
<NUMBER-OF-SHARES-REDEEMED> (86,065)
<SHARES-REINVESTED> 838
<NET-CHANGE-IN-ASSETS> 5,264
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 108
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 136
<AVERAGE-NET-ASSETS> 16,868
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.05)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 4
<NAME> SAFECO RST GROWTH PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 199,002
<INVESTMENTS-AT-VALUE> 240,510
<RECEIVABLES> 990
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 241,500
<PAYABLE-FOR-SECURITIES> 652
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 448
<TOTAL-LIABILITIES> 1,100
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 198,892
<SHARES-COMMON-STOCK> 10,297
<SHARES-COMMON-PRIOR> 7,135
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 41,508
<NET-ASSETS> 240,400
<DIVIDEND-INCOME> 746
<INTEREST-INCOME> 125
<OTHER-INCOME> 0
<EXPENSES-NET> 1,283
<NET-INVESTMENT-INCOME> (412)
<REALIZED-GAINS-CURRENT> 39,099
<APPREC-INCREASE-CURRENT> 24,467
<NET-CHANGE-FROM-OPS> 63,154
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (38,691)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,106
<NUMBER-OF-SHARES-REDEEMED> (2,151)
<SHARES-REINVESTED> 1,657
<NET-CHANGE-IN-ASSETS> 130,909
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,227
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,283
<AVERAGE-NET-ASSETS> 166,941
<PER-SHARE-NAV-BEGIN> 19.26
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 8.62
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (4.49)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.35
<EXPENSE-RATIO> 0.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 5
<NAME> SAFECO RST NORTHWEST PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 16,248
<INVESTMENTS-AT-VALUE> 20,047
<RECEIVABLES> 87
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,134
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 339
<TOTAL-LIABILITIES> 339
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,997
<SHARES-COMMON-STOCK> 1,303
<SHARES-COMMON-PRIOR> 956
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,798
<NET-ASSETS> 19,795
<DIVIDEND-INCOME> 108
<INTEREST-INCOME> 34
<OTHER-INCOME> 0
<EXPENSES-NET> 104
<NET-INVESTMENT-INCOME> 38
<REALIZED-GAINS-CURRENT> 944
<APPREC-INCREASE-CURRENT> 2,490
<NET-CHANGE-FROM-OPS> 3,472
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (38)
<DISTRIBUTIONS-OF-GAINS> (806)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 675
<NUMBER-OF-SHARES-REDEEMED> (215)
<SHARES-REINVESTED> 56
<NET-CHANGE-IN-ASSETS> 10,254
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 104
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 133
<AVERAGE-NET-ASSETS> 14,230
<PER-SHARE-NAV-BEGIN> 12.12
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 3.73
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> (0.65)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.20
<EXPENSE-RATIO> 0.73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>
<ARTICLE> 6
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS OF THE RESOURCE SERIES TRUST AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL EXHIBITS.
</LEGEND>
<RESTATED>
<CIK> 0000795892
<NAME> SAFECO RESOURCE SERIES TRUST
<SERIES>
<NUMBER> 6
<NAME> SAFECO RST SMALL COMPANY PORTFOLIO
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-30-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 9,678
<INVESTMENTS-AT-VALUE> 10,720
<RECEIVABLES> 50
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,770
<PAYABLE-FOR-SECURITIES> 512
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8
<TOTAL-LIABILITIES> 520
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,207
<SHARES-COMMON-STOCK> 831
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,043
<NET-ASSETS> 10,250
<DIVIDEND-INCOME> 29
<INTEREST-INCOME> 25
<OTHER-INCOME> 0
<EXPENSES-NET> 45
<NET-INVESTMENT-INCOME> 9
<REALIZED-GAINS-CURRENT> 397
<APPREC-INCREASE-CURRENT> 1,043
<NET-CHANGE-FROM-OPS> 1,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9)
<DISTRIBUTIONS-OF-GAINS> (397)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 819
<NUMBER-OF-SHARES-REDEEMED> (21)
<SHARES-REINVESTED> 33
<NET-CHANGE-IN-ASSETS> 10,250
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 40
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 59
<AVERAGE-NET-ASSETS> 7,074
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 2.83
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> (0.50)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.33
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<PAGE>

EXHIBIT 99.8

FORM OF AMENDMENT TO CUSTODY AGREEMENT

10
<PAGE>

FORM OF
AMENDMENT TO THE CUSTODIAN CONTRACT

AGREEMENT made by and between State Street Bank and Trust Company (the
"Custodian") and SAFECO ____________ Trust (the "Fund").

WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated as of March 31, 1997 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and

WHEREAS, the Custodian and the Fund desire to amend the Custodian Contract
to provide for the maintenance of the Fund's foreign securities, and cash
incidental to transactions in such securities, in the custody of certain foreign
banking institutions and foreign securities depositories acting as
sub-custodians in conformity with the requirements of Rule 17f-5 under the
Investment Company Act of 1940,

NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and conditions:

1. Appointment of Foreign Sub-Custodians.

The Fund hereby authorizes and instructs the Custodian to employ as
sub-custodians for the Fund's securities and other assets maintained
outside the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper Instructions", as defined in the
Custodian Contract, together with a certified resolution of the Fund's
Board of Trustees, the Custodian and the Fund may agree to amend Schedule A
hereto from time to time to designate additional foreign banking
institutions and foreign securities depositories to act as sub-custodian.
Upon receipt of Proper Instructions, the Fund may instruct the Custodian to
cease the employment of any one or more such sub-custodians for maintaining
custody of the Fund's assets.

2. Assets to be Held.

The Custodian shall limit the securities and other assets maintained in the
custody of the foreign sub-custodians to: (a) "foreign securities", as
defined in paragraph (c)(1) of Rule 17f-5 under the Investment Company Act
of 1940, and (b) cash and cash equivalents in such amounts as the Custodian
or the Fund may determine to be reasonably necessary to effect the Fund's
foreign securities transactions. The Custodian shall identify on its books
as belonging to the Fund, the foreign securities of the Fund held by each
foreign sub-custodian.

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3. Foreign Securities Systems.

Except as may otherwise be agreed upon in writing by the Custodian and the
Fund, assets of the Funds shall be maintained in a clearing agency which
acts as a securities depository or in a book-entry system for the central
handling of securities located outside of the United States (each a
"Foreign Securities System") only through arrangements implemented by the
foreign banking institutions serving as sub-custodians pursuant to the
terms hereof.

4. Holding Securities.

The Custodian may hold securities and other non-cash property for all of
its customers, including the Fund, with a foreign sub-custodian in a single
account that is identified as belonging to the Custodian for the benefit of
its customers, provided however, that (i) the records of the Custodian with
respect to securities and other non-cash property of the Fund which are
maintained in such account shall identify by book-entry those securities
and other non-cash property belonging to the Fund and (ii) the Custodian
shall require that securities and other non-cash property so held by the
foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.

5. Agreements with Foreign Banking Institutions.

Each agreement with a foreign banking institution shall provide that: (a)
the Fund's assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of the foreign banking
institution or its creditors or agent, except a claim of payment for their
safe custody or administration; (b) beneficial ownership of the Fund's
assets will be freely transferable without the payment of money or value
other than for custody or administration; (c) adequate records will be
maintained by the Custodian identifying the assets as belonging to the
Fund; (d) officers of or auditors employed by, or other representatives of
the Custodian, including to the extent permitted under applicable law the
independent public accountants for the Fund, will be given access to the
books and records of the foreign banking institution relating to its
actions under its agreement with the Custodian; and (e) assets of the Fund
held by the foreign sub-custodian will be subject only to the instructions
of the Custodian or its agents.

6. Access of Independent Accountants of the Fund.

Upon request of the Fund, the Custodian will use its best efforts to
arrange for the independent accountants of the Fund to be afforded access
to the books and records of any foreign banking institution employed as a
foreign sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement with
the Custodian.

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7. Reports by Custodian.

The Custodian will supply to the Fund from time to time, as mutually agreed
upon, statements in respect of the securities and other assets of the Fund
held by foreign sub-custodians, including but not limited to an
identification of entities having possession of the Fund's securities and
other assets and advices or notifications of any transfers of securities to
or from each custodial account maintained by a foreign banking institution
for the Custodian on behalf of its customers indicating, as to securities
acquired for the Fund, the identity of the entity having physical
possession of such securities.

8. Transactions in Foreign Custody Account.

(a) Except as otherwise provided in paragraph (b) of this Section 8, the
provision of Sections 2.2 and 2.7 of the Custodian Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.

(b) Notwithstanding any provision of the Custodian Contract to the
contrary, settlement and payment for securities received for the account of
the Fund and delivery of securities maintained for the account of the Fund
may be effected in accordance with the customary established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with
the expectation of receiving later payment for such securities from such
purchaser or dealer.

(c) Securities maintained in the custody of a foreign sub-custodian may be
maintained in the name of such entity's nominee to the same extent as set
forth in Section 2.3 of the Custodian Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of such
securities.

9. Liability of Foreign Sub-Custodians.

Each agreement pursuant to which the Custodian employs a foreign banking
institution as a foreign sub-custodian shall require the institution to
exercise reasonable care in the performance of its duties and to indemnify,
and hold harmless, the Custodian and the Fund from and against any loss,
damage, cost, expense, liability or claim arising out of or in connection
with the institution's performance of such obligations. At the election of
the Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking institution
as a consequence of any such loss, damage, cost, expense, liability or
claim if and to the extent that the Fund has not been made whole for any
such loss, damage, cost, expense, liability or claim.

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10. Liability of Custodian.

The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in the Custodian Contract and, regardless of
whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
contemplated by paragraph 13 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this paragraph
10, in delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss due to
such delegation, except such loss as may result from (a) political risk
(including, but not limited to, exchange control restrictions,
confiscation, expropriation, nationalization, insurrection, civil strife or
armed hostilities) or (b) other losses (excluding a bankruptcy or
insolvency of State Street London Ltd. not caused by political risk) due to
Acts of God, nuclear incident or other losses under circumstances where the
Custodian and State Street London Ltd. have exercised reasonable care.

11. Reimbursement for Advances.

If the Fund requires the Custodian to advance cash or securities for any
purpose including the purchase or sale of foreign exchange or of contracts
for foreign exchange, or in the event that the Custodian or its nominee
shall incur or be assessed any taxes, charges, expenses, assessments,
claims or liabilities in connection with the performance of this Contract,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the Fund shall be security therefor and should the
Fund fail to repay the Custodian promptly, the Custodian shall be entitled
to utilize available cash and to dispose of such Fund assets to the extent
necessary to obtain reimbursement.

12. Monitoring Responsibilities.

The Custodian shall furnish annually to the Fund, during the month of June,
information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of the
Custodian Contract. In addition, the Custodian will promptly inform the
Fund in the event that the Custodian learns of a material adverse change in
the financial condition of a foreign sub-custodian or any material loss of
the assets of the Fund or in the case of any foreign sub-custodian not the
subject of an exemptive order from the Securities and Exchange Commission
is notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline below
$200 million (U.S. dollars or the equivalent thereof) or that its
shareholders' equity has declined below $200 million (in each case computed
in accordance with generally accepted U.S. accounting principles).

13. Branches of U.S. Banks.

(a) Except as otherwise set forth in this amendment to the Custodian
Contract, the provisions hereof shall not apply where the custody of the
Funds assets is maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a)(5) of the Investment Company
Act of 1940 meeting the qualification set forth in Section 26(a) of said
Act. The appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of the Custodian Contract.

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(b) Cash held for the Fund in the United Kingdom shall be maintained in an
interest bearing account established for the Fund with the Custodian's
London branch, which account shall be subject to the direction of the
Custodian, State Street London Ltd. or both.

14. Tax Law.

The Custodian shall have no responsibility or liability for any obligations
now or hereafter imposed on the Fund or the Custodian as custodian of the
Fund by the tax law of the United States of America or any state or
political subdivision thereof. It shall be the responsibility of the Fund
to notify the Custodian of the obligations imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of jurisdictions other
than those mentioned in the above sentence, including responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility of the
Custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the
tax law of jurisdictions for which the Fund has provided such information.

15. Applicability of Custodian Contract

Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full
force and effect.

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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of *[date].

ATTEST SAFECO TRUST

By:
Name:
Name:

Title:

ATTEST: STATE STREET BANK AND TRUST COMPANY

By:
Name:
Name: Ronald E. Logue

Title:

<PAGE>

EXHIBIT 99.11

CONSENT OF INDEPENDENT AUDITORS

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CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Financial
Highlights", "Investment Advisory and Other Services" and "Financial Statements"
in Post-Effective Amendment No. 20 to the Registration Statement (Form N-1A, No.
33-06547) and related Prospectuses of SAFECO Resource Series Trust.

We also consent to the incorporation by reference therein of our report dated
January 30, 1998 with respect to the financial statements of SAFECO Resource
Series Trust as of and for the period ended December 31, 1997 and the related
financial statement schedules included in its 1997 Annual Report filed with
the Securities and Exchange Commission.

/s/ Ernst & Young LLP
- -----------------------

Seattle, Washington
February 23, 1998