<PAGE>
August 29, 2000
Dear Valued Customer:
Enclosed are Semiannual Reports for the underlying investment portfolios
available as investment options in your SAFECO variable product.* This
consolidated report is for the period ended June 30, 2000. Not all investment
portfolios in this report are available in all contracts/policies.
We invite you to visit us on the World Wide Web at WWW.SAFECO.COM to experience
how SAFECO is rapidly expanding its Internet services to provide timely
information and self-service convenience. In addition to other helpful
information, monthly performance updates for some of our variable products are
now available online.
As always, SAFECO is committed to providing you with outstanding products and
convenient services. We thank you for your business and look forward to helping
you meet your financial goals in the years ahead.
Sincerely,
/s/ Randall H. Talbot
Randall H. Talbot
President
SAFECO Life & Investments ("SAFECO")
SAFECO Life Insurance Company
First SAFECO National Life Insurance Company of New York
*Variable products include: Resource B, Spinnaker-Registered Trademark-,
Spinnaker-Registered Trademark- Plus, NY Spinnaker-Registered Trademark-, NY
Spinnaker-Registered Trademark- Plus, Mainsail,
ENHANCED Accumulation Life-Registered Trademark- and PREMIER Accumulation
Life-Registered Trademark-.
<PAGE>
SEMIANNUAL REPORT
JUNE 30, 2000
SAFECO RESOURCE SERIES TRUST
----------
<TABLE>
<S> <C>
Equity Portfolio .................. 2
Growth Opportunities Portfolio .... 6
Northwest Portfolio .............. 10
Small Company Value Portfolio .... 14
Bond Portfolio ................... 18
Money Market Portfolio ........... 22
</TABLE>
[SAFECO MUTUAL FUNDS LOGO]
<PAGE>
REPORT FROM THE PORTFOLIO MANAGER
SAFECO RST EQUITY PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The SAFECO RST Equity Portfolio beat the S&P in second quarter 2000, but
lagged behind when compared to the year-to-date and last twelve months. It's
six-month and one-year underperformance is a hangover from being underweighted
in technology, which we have rectified, and the first quarter halving of
Procter & Gamble's share price on missed earnings.
Two major purchases I made in the first quarter--Washington Mutual for its
value and Pfizer for its earnings growth--gained handsomely in the second.
At June 30, the Portfolio was slightly overweighted in financials due to 30+%
gains in Washington Mutual. We will trim shares as the stock climbs, which we
expect it to do. Pfizer, one of the fastest growing companies in the health care
sector, completed its merger with Warner Lambert and gained over 20% in the
second quarter.
I typically add to existing positions when I think they are cheap and sell
down positions when they appear to be high priced. In the second quarter, I
bought lower-cost shares in Procter & Gamble and Worldcom and sold higher-cost
shares. Intending to make more of these trades, I added to May Department
Stores and CenturyTel.
The remaining purchases were concentrated in the technology area, principally
Microsoft. Having declined on uncertainties surrounding its anti-trust case,
this seemed a prudent way to add to our tech holdings. The remaining sales,
which eliminated Anheuser Busch and Best Foods from the portfolio were made to
reduce the weighting in consumer staples.
My long-term goal for the RST Equity Portfolio is to approximate returns of
the S&P 500. Along the way, I hope to provide consis-
[PHOTO OF RICH MEAGLEY]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C> <C>
SAFECO RST Equity Portfolio (2.90)% (3.64)% 18.45% 16.91%
S&P 500 Index (0.43)% 7.24% 23.79% 17.78%
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT VALUE SAFECO RST EQUITY PORTFOLIO: S&P 500 INDEX:
<S> <C> <C>
6/90 $10,000 $10,000
7/90 $10,024 $9,968
8/90 $9,141 $9,068
9/90 $8,731 $8,627
10/90 $8,635 $8,591
11/90 $9,124 $9,145
12/90 $9,402 $9,400
1/91 $9,807 $9,808
2/91 $10,419 $10,509
3/91 $10,675 $10,763
4/91 $11,005 $10,788
5/91 $11,435 $11,252
6/91 $10,807 $10,737
7/91 $11,518 $11,237
8/91 $11,658 $11,503
9/91 $11,410 $11,310
10/91 $11,509 $11,462
11/91 $10,873 $11,001
12/91 $11,927 $12,257
1/92 $12,528 $12,029
2/92 $12,838 $12,185
3/92 $12,139 $11,948
4/92 $12,245 $12,299
5/92 $12,121 $12,359
6/92 $11,369 $12,175
7/92 $11,794 $12,672
8/92 $11,405 $12,413
9/92 $11,449 $12,559
10/92 $11,856 $12,602
11/92 $12,581 $13,030
12/92 $12,887 $13,190
1/93 $13,205 $13,300
2/93 $13,187 $13,481
3/93 $13,750 $13,766
4/93 $13,468 $13,433
5/93 $14,530 $13,791
6/93 $14,576 $13,832
7/93 $14,412 $13,776
8/93 $15,193 $14,297
9/93 $15,646 $14,185
10/93 $16,055 $14,478
11/93 $16,164 $14,340
12/93 $16,485 $14,514
1/94 $17,531 $15,007
2/94 $17,086 $14,600
3/94 $16,398 $13,965
4/94 $16,863 $14,143
5/94 $17,279 $14,375
6/94 $16,659 $14,023
7/94 $17,047 $14,483
8/94 $18,161 $15,076
9/94 $17,977 $14,708
10/94 $18,374 $15,037
11/94 $18,006 $14,490
12/94 $17,958 $14,705
1/95 $18,108 $15,086
2/95 $18,577 $15,673
3/95 $18,844 $16,135
4/95 $19,335 $16,610
5/95 $19,826 $17,272
6/95 $20,455 $17,673
7/95 $20,765 $18,259
8/95 $21,373 $18,305
9/95 $22,205 $19,077
10/95 $22,184 $19,009
11/95 $22,835 $19,842
12/95 $23,100 $20,224
1/96 $23,749 $20,912
2/96 $23,881 $21,106
3/96 $24,181 $21,310
4/96 $24,685 $21,623
5/96 $25,261 $22,180
6/96 $25,718 $22,265
7/96 $24,721 $21,282
8/96 $24,949 $21,731
9/96 $26,462 $22,953
10/96 $27,303 $23,586
11/96 $29,404 $25,367
12/96 $28,826 $24,865
1/97 $30,523 $26,417
2/97 $30,682 $26,625
3/97 $29,383 $25,533
4/97 $30,324 $27,056
5/97 $32,365 $28,702
6/97 $33,717 $29,987
7/97 $36,036 $32,372
8/97 $34,154 $30,560
9/97 $35,400 $32,233
10/97 $34,273 $31,158
11/97 $35,373 $32,599
12/97 $35,988 $33,158
1/98 $36,546 $33,525
2/98 $39,447 $35,941
3/98 $40,762 $37,780
4/98 $40,848 $38,160
5/98 $40,090 $37,505
6/98 $41,119 $39,028
7/98 $40,619 $38,613
8/98 $35,374 $33,036
9/98 $37,846 $35,153
10/98 $41,205 $38,009
11/98 $43,863 $40,312
12/98 $44,947 $42,634
1/99 $45,682 $44,416
2/99 $44,737 $43,036
3/99 $46,147 $44,758
4/99 $49,041 $46,492
5/99 $48,036 $45,394
6/99 $49,506 $47,913
7/99 $48,516 $46,417
8/99 $48,036 $46,186
9/99 $46,237 $44,920
10/99 $49,536 $47,762
11/99 $48,711 $48,737
12/99 $49,130 $51,606
1/00 $47,197 $49,013
2/00 $44,346 $48,085
3/00 $48,702 $52,790
4/00 $47,467 $51,196
5/00 $47,213 $50,146
6/00 $47,704 $51,382
</TABLE>
Performance represents the performance of the Equity Portfolio, but does not
include deductions for administration charges, contingent deferred sales
charges, or mortality and expense risk premiums.
The performance of the Portfolio assumes the reinvestment of all dividends and
capital gains. The Standard & Poor's 500 Index is an unmanaged index of 500
stocks weighted by market capitalization with dividends reinvested. Management
fees and other portfolio expenses have been applied to the calculation of
Portfolio performance, but not to the index. If portfolio expenses had been
applied to the index, the index values would have been lower.
Investment returns are historical and not predictive of future performance.
Portfolio share prices and investment returns will fluctuate.
- 2 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
tent returns by using a blend style. While our holdings range from aggressive
value to growth companies, such as GE whose above-average earnings are
accelerating, they are what I believe to be quality companies, chosen for their
more predictable earnings, durable business franchises and strong core
competencies.
Richard Meagley
-------------------------------------------
Rich Meagley joined SAFECO in 1983. After advancing from analyst to Northwest
Fund Manager, he left the company. He re-joined in January 1995 as RST Equity
Portfolio Manager. He holds an M.B.A. from the University of Washington, and is
a Chartered Financial Analyst.
HIGHLIGHTS
-------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS NET ASSETS
------------------------------------------------------------------------
<S> <C>
Washington Mutual, Inc. ......................................... 5.4%
(Savings & Loans)
General Electric Co. .............................................. 5.2
(Electrical Equipment)
Microsoft Corp. ................................................... 4.8
(Computers--Software & Services)
Intel Corp. ....................................................... 4.8
(Electronics--Semiconductors)
Johnson & Johnson .................................................. 3.4
(Health Care--Diversified)
Citigroup, Inc. .................................................. 2.7
(Banks--Major Regional)
American International Group, Inc. ............................... 2.6
(Insurance--Multi-Line)
Pfizer, Inc. ..................................................... 2.6
(Health Care--Drugs--Generic & Other)
Lucent Technologies, Inc. ........................................ 2.6
(Telecommunications--Equipment)
Exxon Mobil Corp. ................................................. 2.6
(Oil--International Integrated)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MARKET CAPITALIZATION
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
Large-Cap: (over $4 billion) 97%
Mid-Cap: ($1.5 billion-$4 billion) 0%
Small-Cap: (under $1.5 billion) 0%
Cash & Other: 3%
</TABLE>
- 3 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 96.5%
BANKS (MAJOR REGIONAL) - 3.9%
165,000 Bank of America Corp. $ 7,095
267,000 Citigroup, Inc. 16,087
BANKS (MONEY CENTER) - 1.3%
172,500 Chase Manhattan Corp. 7,946
BEVERAGES (NON-ALCOHOLIC) - 2.0%
265,000 PepsiCo, Inc. 11,776
CHEMICALS - 2.5%
163,000 Du Pont (E.I.) de Nemours &
Co. 7,131
200,000 Praxair, Inc. 7,487
COMMUNICATION EQUIPMENT - 2.9%
156,000 Motorola, Inc. 4,534
110,000 Nortel Networks Corp. 7,507
70,000 *Tellabs, Inc. 4,791
COMPUTERS (HARDWARE) - 7.2%
145,000 *Dell Computer Corp. 7,150
100,000 Hewlett-Packard Co. 12,487
131,000 International Business
Machines Corp. 14,353
97,000 *Sun Microsystems, Inc. 8,821
COMPUTERS (NETWORKING) - 2.4%
224,000 *Cisco Systems, Inc. 14,238
COMPUTERS (PERIPHERALS) - 0.8%
85,000 *America Online, Inc. 4,484
COMPUTERS (SOFTWARE & SERVICES) - 5.4%
165,000 *Cadence Design
Systems, Inc. 3,362
358,000 *Microsoft Corp. 28,640
ELECTRICAL EQUIPMENT - 7.8%
38,140 *Agilent Technologies, Inc. 2,813
210,000 Emerson Electric Co. 12,679
582,000 General Electric Co. 30,846
ELECTRONICS (SEMICONDUCTORS) - 4.8%
212,000 Intel Corp. 28,342
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT - 3.6%
225,000 The Walt Disney Co. $ 8,733
162,000 Time Warner, Inc. 12,312
EQUIPMENT (SEMICONDUCTOR) - 0.8%
50,000 *Applied Materials, Inc. 4,531
FINANCIAL (DIVERSIFIED) - 3.2%
165,000 Federal Home Loan Mortgage
Corp. 6,682
240,000 Federal National Mortgage
Association 12,525
HEALTH CARE (DIVERSIFIED) - 8.2%
230,000 Abbott Laboratories 10,249
137,000 American Home Products Corp. 8,049
170,000 Bristol-Myers Squibb Co. 9,902
200,000 Johnson & Johnson 20,375
HEALTH CARE (DRUGS - GENERIC & OTHER) - 2.6%
325,000 Pfizer, Inc. 15,600
HEALTH CARE (MAJOR PHARMACEUTICALS) - 1.7%
130,000 Merck & Co., Inc. 9,961
HOUSEHOLD PRODUCTS (NON-DURABLES) - 2.0%
205,000 Procter & Gamble Co. 11,736
INSURANCE (MULTI-LINE) - 2.6%
133,000 American International
Group, Inc. 15,627
MANUFACTURING (DIVERSIFIED) - 1.1%
200,000 Honeywell
International, Inc. 6,738
OFFICE EQUIPMENT & SUPPLIES - 0.5%
135,000 Xerox Corp. 2,801
OIL (INTERNATIONAL INTEGRATED) - 5.1%
197,000 Exxon Mobil Corp. 15,464
239,000 Royal Dutch Petroleum Co.
(ADR) 14,713
PUBLISHING (NEWSPAPERS) - 1.6%
160,000 Gannett Co., Inc. 9,570
RETAIL (DEPARTMENT STORES) - 2.1%
510,000 May Department Stores Co. 12,240
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 4 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
RETAIL (DRUG STORES) - 1.5%
220,000 CVS Corp. $ 8,800
RETAIL (FOOD CHAINS) - 1.3%
230,000 Albertson's, Inc. 7,648
RETAIL (GENERAL MERCHANDISE) - 1.5%
155,000 Wal-Mart Stores, Inc. 8,932
SAVINGS & LOANS - 5.4%
1,115,000 Washington Mutual, Inc. 32,196
SERVICES (DATA PROCESSING) - 1.2%
135,000 Automatic Data
Processing, Inc. 7,231
TELECOMMUNICATIONS (EQUIPMENT) - 2.6%
263,000 Lucent Technologies, Inc. 15,583
TELECOMMUNICATIONS (LONG DISTANCE) - 1.6%
300,000 AT&T Corp. 9,488
TELEPHONE - 5.8%
230,000 Bell Atlantic Corp. 11,687
356,700 CenturyTel, Inc. 10,255
275,000 *MCI WorldCom, Inc. 12,616
-----------
TOTAL COMMON STOCKS 574,813
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
COMMERCIAL PAPER - 3.5%
TRUCKS & PARTS - 3.5%
21,089,000 Cooperative Association of
Tractor Dealers
7.05%, due 7/03/00 $ 21,089
-----------
TOTAL COMMERCIAL PAPER 21,089
-----------
CASH EQUIVALENTS - 0.0%
INVESTMENT COMPANIES
3,745 AIM Short-Term Investments
Co. Liquid Assets
Money Market Portfolio
(Institutional Shares) 4
-----------
TOTAL CASH EQUIVALENTS 4
-----------
TOTAL INVESTMENTS - 100.0% 595,906
Other Assets, less Liabilities (290)
-----------
NET ASSETS $ 595,616
-----------
-----------
</TABLE>
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
- 5 -
<PAGE>
REPORT FROM THE PORTFOLIO MANAGER
SAFECO RST GROWTH OPPORTUNITIES PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Over the course of the first half of 2000, the RST Growth Opportunities
Portfolio, despite reeling from the beating the market gave two of our large
holdings, finished the period ahead of the S&P 500 Index.
Micros and Ciber plummeted when they missed their earnings estimates. These
two are suffering from reductions in corporate technology spending that have
followed Y2K. A third tech holding, S3, fell off its high. This company, which
manufacturers the leading MP3 player and home networking devices, is
transforming itself into an internet appliance company. To me it appears to have
great value and a great future.
I took some gains and trimmed the size of our Rent-way position. With
Rent-a-Center, we own the number one and number two companies in the $4 billion
rental industry. These businesses generate great cash flow and demand for their
product is growing.
The rental companies and our collection company, NCO Group, are
counter-cyclical. That is, demand for their services increases as the economy
declines. NCO is growing very quickly.
I also trimmed back United Stationers which continues to gain as it builds
its e-fulfillment operations.
[PHOTO OF THOMAS M. MAGUIRE]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 5 YEAR SINCE INCEPTION
<S> <C> <C> <C> <C>
SAFECO RST Growth Opportunites Portfolio 1.47% 12.80% 20.10% 22.19%
S&P 500 Index (0.43)% 7.24% 23.79% 19.98%
</TABLE>
<TABLE>
<CAPTION>
SAFECO RST GROWTH S&P 500 INDEX:
INVESTMENT VALUE OPPORTUNITIES PORTFOLIO
<S> <C> <C>
1/93 $10,000 $10,000
2/93 $9,475 $10,136
3/93 $10,059 $10,350
4/93 $9,683 $10,100
5/93 $10,535 $10,369
6/93 $10,891 $10,400
7/93 $11,297 $10,358
8/93 $12,198 $10,750
9/93 $12,822 $10,665
10/93 $13,386 $10,886
11/93 $12,792 $10,782
12/93 $13,473 $10,913
1/94 $14,382 $11,283
2/94 $13,861 $10,977
3/94 $13,351 $10,500
4/94 $13,750 $10,634
5/94 $14,094 $10,808
6/94 $13,662 $10,544
7/94 $14,216 $10,889
8/94 $14,714 $11,335
9/94 $14,626 $11,058
10/94 $15,169 $11,306
11/94 $14,936 $10,895
12/94 $15,079 $11,056
1/95 $15,148 $11,343
2/95 $15,694 $11,784
3/95 $15,671 $12,131
4/95 $15,973 $12,488
5/95 $16,670 $12,987
6/95 $17,727 $13,288
7/95 $18,506 $13,728
8/95 $18,587 $13,763
9/95 $19,644 $14,343
10/95 $19,818 $14,292
11/95 $20,666 $14,919
12/95 $21,261 $15,206
1/96 $21,476 $15,723
2/96 $22,051 $15,869
3/96 $22,654 $16,022
4/96 $24,060 $16,258
5/96 $25,519 $16,677
6/96 $24,608 $16,740
7/96 $22,439 $16,001
8/96 $24,381 $16,339
9/96 $25,827 $17,258
10/96 $26,322 $17,734
11/96 $26,898 $19,073
12/96 $28,077 $18,695
1/97 $29,769 $19,863
2/97 $28,529 $20,019
3/97 $27,480 $19,198
4/97 $26,255 $20,343
5/97 $30,395 $21,580
6/97 $32,757 $22,547
7/97 $34,988 $24,340
8/97 $36,431 $22,978
9/97 $39,419 $24,235
10/97 $38,340 $23,427
11/97 $40,177 $24,510
12/97 $40,587 $24,931
1/98 $40,796 $25,206
2/98 $45,019 $27,023
3/98 $48,391 $28,406
4/98 $50,147 $28,692
5/98 $47,592 $28,199
6/98 $47,731 $29,344
7/98 $44,950 $29,032
8/98 $34,364 $24,839
9/98 $35,425 $26,430
10/98 $37,928 $28,578
11/98 $39,509 $30,310
12/98 $41,329 $32,055
1/99 $42,396 $33,396
2/99 $37,274 $32,358
3/99 $36,963 $33,653
4/99 $37,740 $34,956
5/99 $37,837 $34,130
6/99 $39,272 $36,025
7/99 $38,438 $34,900
8/99 $36,944 $34,726
9/99 $36,711 $33,774
10/99 $37,759 $35,911
11/99 $39,117 $36,644
12/99 $43,658 $38,801
1/00 $41,853 $36,852
2/00 $47,092 $36,154
3/00 $49,828 $39,691
4/00 $46,141 $38,493
5/00 $40,844 $37,703
6/00 $44,298 $38,633
</TABLE>
* The Portfolio's inception was January 7, 1993. Performance information begins
on January 31, 1993.
Performance represents the performance of the Growth Opportunities Portfolio but
does not include administration charges, contingent deferred sales charges, or
mortality and expense risk premiums.
The performance of the Portfolio assumes the reinvestment of all dividends and
capital gains. The Standard & Poor's 500 Index is an unmanaged index of 500
stocks weighted by market capitalization with dividends reinvested . Investment
management fees have been applied to the calculation of Portfolio performance,
but not to the index. If portfolio investment management fees had been applied
to the index, the index values would have been lower.
Investment returns are historical and not predictive of future performance.
Portfolio share prices and investment returns will fluctuate.
- 6 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To me, our current portfolio, with both bricks and clicks, makes good sense
in ways that range from valuations to demographics, and from the old economy to
the new. I've always believed that good sense will prevail and I know that while
the Portfolio is down, it is not out.
Tom Maguire
-------------------------------------------
After completing his M.B.A. at the University of Washington, Thomas M. Maguire
joined the company as an equity analyst in 1981 and today is a Vice President.
From 1984 to 1989, he co-managed the SAFECO Equity Fund.
HIGHLIGHTS
-------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS NET ASSETS
------------------------------------------------------------------------
<S> <C>
NCO Group, Inc. ................................................. 5.8%
(Services--Commercial & Consumer)
Rent-Way, Inc. ................................................... 5.7
(Services--Commercial & Consumer)
Rent-a-Center, Inc. .............................................. 5.5
(Services--Commercial & Consumer)
PolyMedica Corp. .................................................. 5.3
(Health Care--Medical Products & Supplies)
United Stationers, Inc. .......................................... 4.8
(Office Equipment & Supplies)
S3, Inc. ......................................................... 3.2
(Computer--Peripherals)
Intranet Solutions ................................................. 2.8
(Computer--Peripherals)
J.D. Edwards & Co. ................................................ 2.5
(Computers--Software & Services)
AMFM, Inc. ....................................................... 2.4
(Broadcasting--Television, Radio & Cable)
Damark International, Inc. ....................................... 2.2
(Retail--Home Shopping)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MARKET CAPITALIZATION
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
Large-Cap: (over $4 billion) 6%
Mid-Cap: ($1.5 billion-$4 billion) 13%
Small-Cap: (under $1.5 billion) 77%
Cash & Other: 4%
</TABLE>
- 7 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
GROWTH OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 96.0%
AIR FREIGHT - 0.0%
74,000 *Dynamex, Inc. (Illiquid) $ 30
AUTO PARTS & EQUIPMENT - 0.1%
552,000 *+Precision Auto Care, Inc. 380
BIOTECHNOLOGY - 0.5%
300,000 *Novavax, Inc. 2,194
BROADCASTING (TV, RADIO & CABLE) - 3.0%
136,254 *AMFM, Inc. 9,402
42,000 *Emmis Communications Corp.
(Class A) 1,738
100,200 *Salem Communications Corp.
(Class A) 930
COMMUNICATION EQUIPMENT - 1.6%
132,200 *PSi Technologies
Holdings, Inc.
(ADR) 2,743
77,600 *Research In Motion, Ltd. 3,511
COMPUTERS (HARDWARE) - 4.5%
428,400 *MICROS Systems, Inc. 7,952
177,600 *NYFIX, Inc. 7,448
65,000 *Optimal Robotics Corp. 2,494
COMPUTERS (PERIPHERALS) - 8.1%
170,400 *Go2Net, Inc. 8,573
286,500 *IntraNet Solutions, Inc. 10,994
876,400 *S3, Inc. 12,927
COMPUTERS (SOFTWARE & SERVICES) - 7.9%
39,800 *Aspen Technology, Inc. 1,532
83,527 Autodesk, Inc. 2,897
174,300 *Cadence Design Systems, Inc. 3,551
483,900 *Ciber, Inc. 6,412
17,000 *Digitas, Inc. 277
81,200 *F5 Networks, Inc. 4,430
647,800 *J.D. Edwards & Co. 9,757
340,000 *Phoenix International
Ltd., Inc. 1,020
304,500 *ShowCase Corp. 1,770
CONSUMER FINANCE - 0.6%
171,000 Doral Financial Corp. 1,956
287,800 *Towne Services, Inc. 270
DISTRIBUTORS (FOOD & HEALTH) - 1.2%
718,200 *Nu Skin Enterprises, Inc.
(Class A) 4,130
258,960 Weider Nutrition
International, Inc. 777
ELECTRONICS (COMPONENT DISTRIBUTORS) - 0.7%
120,000 *Audiovox Corp. (Class A) 2,648
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
----------------------------------------------------------
<C> <S> <C>
ENGINEERING & CONSTRUCTION - 0.3%
59,600 *Tetra Tech, Inc. $ 1,363
ENTERTAINMENT - 1.6%
142,500 *SFX Entertainment, Inc.
(Class A) 6,457
FINANCIAL (DIVERSIFIED) - 0.3%
122,800 *BNC Mortgage, Inc. 1,190
96,900 *United PanAm Financial Corp. 97
HEALTH CARE (DIVERSIFIED) - 1.9%
15,400 *Anesta Corp. 383
167,200 *Emisphere Technologies, Inc. 7,124
HEALTH CARE (DRUGS - GENERIC & OTHER) - 2.1%
317,000 *Dura Pharmaceuticals, Inc. 4,557
305,000 *First Horizon Pharmaceutical
Corp. 2,974
220,800 *Nastech Pharmaceutical Co.,
Inc. 1,001
HEALTH CARE (HOSPITAL MANAGEMENT) - 0.1%
103,917 *AmSurg Corp. (Class B) 565
HEALTH CARE (LONG-TERM CARE) - 0.8%
558,977 *Res-Care, Inc. 3,005
HEALTH CARE (MAJOR PHARMACEUTICALS) - 1.7%
49,800 Alpharma, Inc. 3,100
757,500 *Serologicals Corp. 3,788
HEALTH CARE (MANAGED CARE) - 0.6%
550,400 *Matria Healthcare, Inc. 2,528
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) - 10.5%
140,400 Datascope Corp. 5,054
169,500 DENTSPLY International, Inc. 5,223
247,100 *Lifeline Systems, Inc. 3,459
488,800 *PolyMedica Corp. 21,141
415,400 *Quidel Corp. 2,181
225,800 *STAAR Surgical Co. 2,526
153,700 *Virologic, Inc. 2,286
HEALTH CARE (SPECIALIZED SERVICES) - 1.6%
320,000 *Aksys, Ltd. 2,740
202,800 *American Healthways, Inc. 1,039
318,850 *Prime Medical Services, Inc. 2,471
HOUSEWARES - 0.6%
200,600 *Home Products International,
Inc. 777
158,800 The First Years, Inc. 1,767
LEISURE TIME (PRODUCTS) - 0.1%
151,300 *American Coin Merchandising,
Inc. 378
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 8 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
GROWTH OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
----------------------------------------------------------
<C> <S> <C>
LODGING (HOTELS) - 1.2%
172,200 *ResortQuest
International, Inc. $ 883
734,900 *+Suburban Lodges of America,
Inc. 4,180
MANUFACTURING (DIVERSIFIED) - 1.3%
100,000 *GSI Lumonics, Inc. 3,513
86,900 *Nortek, Inc. 1,716
OFFICE EQUIPMENT & SUPPLIES - 5.8%
331,900 *+Open Plan Systems, Inc. 622
570,850 *+TRM Copy Centers Corp. 3,068
585,800 *United Stationers, Inc. 18,965
PERSONAL CARE - 0.4%
211,700 *French Fragrances, Inc. 1,733
RESTAURANTS - 0.1%
78,900 *Schlotzsky's, Inc. 449
RETAIL (DEPARTMENT STORES) - 0.4%
51,700 *Rainbow Rentals, Inc, 582
63,450 *Whitehall Jewellers, Inc. 1,182
RETAIL (DRUG STORES) - 0.9%
90,000 CVS Corp. 3,600
RETAIL (FOOD CHAINS) - 0.6%
266,800 *NPC International, Inc. 2,393
RETAIL (GENERAL MERCHANDISE) - 0.7%
140,000 Claire's Stores, Inc. 2,695
RETAIL (HOME SHOPPING) - 2.2%
399,700 *+DAMARK International, Inc. 8,594
RETAIL (SPECIALTY - APPAREL) - 3.7%
579,800 *American Eagle
Outfitters, Inc. 8,117
495,200 *+Concepts Direct, Inc. 4,921
219,071 *Harold's Stores, Inc. 548
129,900 *Wet Seal, Inc. (Class A) 1,705
RETAIL (SPECIALTY) - 0.5%
172,600 *Blue Rhino Corp. 1,392
115,500 *Travis Boats & Motors, Inc. 635
SERVICES (COMMERCIAL & CONSUMER) - 20.9%
64,600 *Bluegreen Corp. 178
243,100 Central Parking Corp. 5,758
278,500 *FirstService Corp. 3,342
191,720 *Iron Mountain, Inc. 6,518
992,592 *NCO Group, Inc. 22,954
977,650 *Rent-A-Center, Inc. 21,997
783,600 *Rent-Way, Inc. 22,871
103,400 *SunSource, Inc. 523
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
----------------------------------------------------------
<C> <S> <C>
SERVICES (COMPUTER SYSTEMS) - 0.6%
165,000 *Computer Horizons Corp. $ 2,217
SERVICES (EMPLOYMENT) - 1.3%
151,000 *Hall, Kinion &
Associates, Inc. 5,030
SPECIALTY PRINTING - 0.8%
376,700 *Mail-Well, Inc. 3,249
TELECOMMUNICATIONS (CELLULAR/WIRELESS) - 3.7%
39,300 *Powertel, Inc. 2,788
68,100 *VoiceStream Wireless Corp. 7,920
70,000 *Western Wireless Corp.
(Class A) 3,815
TELEPHONE - 0.1%
99,700 *Innotrac Corp. 511
--------
TOTAL COMMON STOCKS 383,081
--------
WARRANTS - 0.1%
BIOTECHNOLOGY - 0.1%
75,000 *Novavax, Inc. (Illiquid) 332
--------
TOTAL WARRANTS 332
--------
COMMERCIAL PAPER - 3.4%.
FINANCIAL (DIVERSIFIED) - 3.4%
13,638,000 PHH Corporation
7.25%, due 7/03/00 13,638
--------
TOTAL COMMERCIAL PAPER 13,638
--------
CASH EQUIVALENTS - 0.0%
INVESTMENT COMPANIES
3,171 AIM Short-Term Investments
Co. Liquid Assets Money
Market Portfolio
(Institutional Shares) 3
--------
TOTAL CASH EQUIVALENTS 3
--------
TOTAL INVESTMENTS - 99.5% 397,054
Other Assets, less Liabilities 1,942
--------
NET ASSETS $ 398,996
--------
--------
</TABLE>
* Non-income producing security.
+ Affiliated issuer as defined by the Investment Company Act of 1940 (the Fund
controls 5% or more of the outstanding voting shares of the company).
SEE NOTES TO FINANCIAL STATEMENTS
- 9 -
<PAGE>
REPORT FROM THE PORTFOLIO MANAGER
SAFECO RST NORTHWEST PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SAFECO RST Northwest Portfolio remained well ahead of the S&P 500 for the six
months and year ended June 30, 2000.
While our heavy weighting in technology is responsible for the Portfolio's
outperformance over those periods, it caused the performance to lag in the
second quarter. Still, I am pleased with the way the portfolio weathered the
storm April and May unleashed on the technology sector. Our well-calculated, but
aggressive, approach to high tech enabled us to benefit in the red-hot
speculative market; while our balancing act kept us from getting burned.
We continue to take small positions in numerous companies that generally
enable, rather than use the internet. We balance our heavy weighting in
technology with "old economy" stocks. Indeed, our consumer staples, basic
industry and financial stocks--namely Albertson's, Washington Mutual, Starbucks,
Weyerhaeuser and Kroger--cushioned the Portfolio through the tech correction.
Microsoft fell 33% over the first half of 2000 on concerns surrounding its
anti-trust case and I actually bought a little bit. I believe Microsoft will
come back no matter how its legal issues are resolved.
Still, many of the internet stocks have yet to--and may never--regain their
highs. During the second quarter, we weeded N2H2 from our portfolio and added to
other positions when they came into our price range, including internet
companies InterNap and Go2Net.
Demand for its commodity memory chips, primarily for PCs and cell phones,
powered Micron Technology through the correction. It was the Portfolio's biggest
contributor, up 125% through June 30.
[PHOTO OF BILL WHITLOW]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 5 YEAR SINCE INCEPTION
<S> <C> <C> <C> <C>
SAFECO RST Northwest Portfolio 8.38% 40.83% 19.89% 14.96%
S&P 500 Index (0.43)% 7.24% 23.79% 19.98%
WM Group NW 50 Index (4.66)% 1.08% 23.60% 17.77%
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT VALUE SAFECO RST NORTHWEST PORTFOLIO: S&P 500 INDEX: NW 50 INDEX:
<S> <C> <C> <C>
1/93 $10,000 $10,000 $10,000
2/93 $9,385 $10,136 $9,675
3/93 $9,633 $10,350 $10,062
4/93 $9,325 $10,100 $9,822
5/93 $9,563 $10,369 $10,052
6/93 $9,474 $10,400 $9,823
7/93 $9,425 $10,358 $9,457
8/93 $9,623 $10,750 $9,832
9/93 $9,722 $10,665 $9,598
10/93 $9,841 $10,886 $9,929
11/93 $9,901 $10,782 $10,129
12/93 $9,945 $10,913 $10,250
1/94 $10,146 $11,283 $10,548
2/94 $10,496 $10,977 $10,693
3/94 $10,216 $10,500 $10,303
4/94 $10,166 $10,634 $10,259
5/94 $10,055 $10,808 $10,400
6/94 $9,915 $10,544 $10,071
7/94 $10,086 $10,889 $10,135
8/94 $10,526 $11,335 $10,705
9/94 $10,536 $11,058 $10,281
10/94 $10,646 $11,306 $10,205
11/94 $10,396 $10,895 $10,008
12/94 $10,309 $11,056 $10,049
1/95 $10,097 $11,343 $10,006
2/95 $10,258 $11,784 $10,362
3/95 $10,661 $12,131 $10,690
4/95 $10,681 $12,488 $10,999
5/95 $10,812 $12,987 $10,987
6/95 $11,356 $13,288 $11,642
7/95 $12,040 $13,728 $12,070
8/95 $12,292 $13,763 $12,287
9/95 $12,070 $14,343 $12,723
10/95 $11,778 $14,292 $12,413
11/95 $11,517 $14,919 $12,582
12/95 $11,074 $15,206 $12,719
1/96 $11,043 $15,723 $12,637
2/96 $11,349 $15,869 $12,914
3/96 $11,972 $16,022 $13,328
4/96 $12,268 $16,258 $14,114
5/96 $12,452 $16,677 $14,327
6/96 $12,196 $16,740 $14,251
7/96 $11,707 $16,001 $13,536
8/96 $12,023 $16,339 $14,192
9/96 $12,207 $17,258 $14,544
10/96 $11,900 $17,734 $14,428
11/96 $12,390 $19,073 $15,456
12/96 $12,452 $18,695 $15,802
1/97 $13,315 $19,863 $16,491
2/97 $13,294 $20,019 $16,782
3/97 $12,749 $19,198 $16,302
4/97 $13,130 $20,343 $17,014
5/97 $13,962 $21,580 $18,391
6/97 $14,753 $22,547 $19,243
7/97 $16,058 $24,340 $20,981
8/97 $15,636 $22,978 $20,284
9/97 $16,417 $24,235 $21,686
10/97 $15,647 $23,427 $20,234
11/97 $16,438 $24,510 $21,444
12/97 $16,314 $24,931 $20,941
1/98 $16,121 $25,206 $20,842
2/98 $17,763 $27,023 $22,954
3/98 $17,892 $28,406 $24,029
4/98 $18,364 $28,692 $24,211
5/98 $17,001 $28,199 $22,749
6/98 $17,366 $29,344 $24,155
7/98 $16,336 $29,032 $22,658
8/98 $13,084 $24,839 $19,025
9/98 $13,835 $26,430 $19,903
10/98 $14,715 $28,578 $22,106
11/98 $16,003 $30,310 $24,615
12/98 $16,787 $32,055 $27,555
1/99 $17,828 $33,396 $28,932
2/99 $17,141 $32,358 $28,501
3/99 $17,366 $33,653 $30,497
4/99 $17,753 $34,956 $31,708
5/99 $18,547 $34,130 $31,748
6/99 $19,974 $36,025 $33,218
7/99 $19,534 $34,900 $30,670
8/99 $19,567 $34,726 $30,575
9/99 $19,320 $33,774 $29,953
10/99 $21,327 $35,911 $31,511
11/99 $23,087 $36,644 $32,023
12/99 $25,956 $38,801 $35,217
1/00 $26,036 $36,852 $34,760
2/00 $28,943 $36,154 $36,155
3/00 $29,561 $39,691 $38,288
4/00 $25,956 $38,493 $34,767
5/00 $24,926 $37,703 $32,533
6/00 $28,130 $38,633 $33,576
</TABLE>
* The Portfolio's inception was January 7, 1993.
Performance represents the performance of the Northwest Portfolio , but does not
include deductions for administration charges, contingent deferred sales
charges, or mortality and expense risk premiums.
The performance of the Portfolio assumes the reinvestment of all dividends and
capital gains. The Standard & Poor's 500 Index is an unmanaged index of 500
stocks weighted by market capitalization with dividends reinvested. The WM
Group's Northwest 50 Index is an index of 50 Northwest companies weighted by
their regional impact. Investment management fees have been applied to the
calculation of Portfolio performance, but not to the indexes. If portfolio
investment management fees had been applied to the indexes, the index values
would have been lower.
Investment returns are historical and not predictive of future performance.
Portfolio share prices and investment returns will fluctuate.
- 10 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I have kept the Portfolio positioned to take advantage of what I think are
the drivers of the Northwest's economy. Going forward I will continue to manage
in a growth style, while remaining sensitive to value and risk.
Bill Whitlow
-------------------------------------------
William B. Whitlow began his career at SAFECO in 1976 and left in 1980. Before
re-joining SAFECO in April 1997 as RST Northwest Portfolio Manager, he was
Director of Research at Pacific Crest Securities. He holds a B.A. in chemistry
from the U. of Colorado and an M.B.A. from the U. of Calif. at Berkeley. He is a
CFA and a member of the Washington State Governor's Council of Economic
Advisors.
HIGHLIGHTS
-------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS NET ASSETS
------------------------------------------------------------------------
<S> <C>
Micron Technology, Inc. ......................................... 5.9%
(Electronics--Semiconductors)
Microsoft Corp. ................................................... 5.5
(Computers--Software & Services)
Western Wireless Corp. (Class A) .................................. 4.9
(Telecommunications--Cellular/Wireless)
NEXTLINK Communications, Inc (Class A) ............................ 4.9
(Telephone)
VoiceStream Wireless Corp. ........................................ 4.9
(Telecommunications--Cellular/Wireless)
Expeditors International of Washington, Inc. ....................... 4.5
(Air Freight)
Intel Corp. ....................................................... 4.4
(Electronics--Semiconductors)
Hewlett-Packard Co. ............................................... 4.3
(Computers--Hardware)
Starbucks Corp. ................................................... 4.0
(Restaurants)
Kroger Co. ........................................................ 3.8
(Retail--Food Chains)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MARKET CAPITALIZATION
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
Large-Cap: (over $4 billion) 54%
Mid-Cap: ($1.5 billion-$4 billion) 14%
Small-Cap: (under $1.5 billion) 32%
Cash & Other: 0%
</TABLE>
- 11 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
NORTHWEST PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 99.3%
AIR FREIGHT - 4.5%
94,000 Expeditors International of
Washington, Inc. $ 4,465
AIRLINES - 2.7%
86,000 *Northwest Airlines Corp. 2,618
BANKS (MAJOR REGIONAL) - 1.4%
48,092 U.S. Bancorp 926
48,000 West Coast Bancorp, Inc. 480
BANKS (REGIONAL) - 0.3%
36,500 Washington Banking Co. 315
BIOTECHNOLOGY - 2.2%
51,000 *Corixa Corp. 2,190
CHEMICALS (DIVERSIFIED) - 2.4%
110,000 Penford Corp. 2,365
COMMUNICATION EQUIPMENT - 1.1%
153,000 *AVT Corp. 1,128
COMPUTERS (HARDWARE) - 7.2%
65,500 *Apex, Inc. 2,866
34,000 Hewlett-Packard Co. 4,246
COMPUTERS (PERIPHERALS) - 6.2%
91,000 *click2learn.com, Inc. 1,604
31,000 *Go2Net, Inc. 1,560
53,000 *ImageX.com, Inc. 321
20,000 *Loudeye Technologies, Inc. 349
21,000 *Primus Knowledge
Solutions, Inc. 945
23,000 *WatchGuard
Technologies, Inc. 1,264
COMPUTERS (SOFTWARE & SERVICES) - 11.1%
13,000 *Digimarc Corp. 500
18,000 *F5 Networks, Inc. 982
25,000 *Internap Network
Services Corp. 1,038
68,000 *Microsoft Corp. 5,440
60,000 *ONYX Software Corp. 1,781
31,000 *WebTrends Corp. 1,199
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT - 1.0%
12,967 *Agilent Technologies, Inc. $ 956
ELECTRONICS (SEMICONDUCTORS) - 10.3%
32,000 Intel Corp. 4,278
66,000 *Micron Technology, Inc. 5,812
HARDWARE & TOOLS - 0.5%
90,000 *Jore Corporation 489
HEALTH CARE (DIVERSIFIED) - 2.3%
39,000 American Home Products
Corp. 2,291
HEALTH CARE (DRUGS - GENERIC & OTHER) - 1.1%
40,000 *PathoGenesis Corp. 1,040
HEALTH CARE (MAJOR PHARMACEUTICALS) - 1.3%
125,000 *Penwest Pharmaceuticals Co. 1,258
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) - 4.2%
141,500 *Protocol Systems, Inc. 2,255
64,000 *SonoSite, Inc. 1,844
INSURANCE (LIFE & HEALTH) - 2.3%
70,500 StanCorp Financial
Group, Inc. 2,265
IRON & STEEL - 1.7%
103,000 Schnitzer Steel
Industries, Inc. 1,635
LEISURE TIME (PRODUCTS) - 1.0%
60,000 *Ambassadors
International, Inc. 945
LODGING (HOTELS) - 0.5%
68,500 *Westcoast Hospitality Corp. 479
PAPER & FOREST PRODUCTS - 1.9%
42,500 Weyerhaeuser Co. 1,828
RESTAURANTS - 4.0%
104,000 *Starbucks Corp. 3,971
RETAIL (FOOD CHAINS) - 6.4%
76,000 Albertson's, Inc. 2,527
171,000 *Kroger Co. 3,773
RETAIL (GENERAL MERCHANDISE) - 3.1%
92,000 *Costco Wholesale Corp. 3,036
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 12 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
NORTHWEST PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
RETAIL (SPECIALTY) - 0.8%
21,000 *Amazon.com, Inc. $ 763
SAVINGS & LOANS - 2.8%
95,000 Washington Mutual, Inc. 2,743
SERVICES (DATA PROCESSING) - 0.4%
155,000 *ARIS Corp. 426
TELECOMMUNICATIONS (CELLULAR/WIRELESS) - 9.8%
41,000 *VoiceStream Wireless Corp. 4,768
89,000 *Western Wireless Corp.
(Class A) 4,851
TELEPHONE - 4.9%
126,000 *NEXTLINK Communications,
Inc. (Class A) 4,780
-----------
TOTAL COMMON STOCKS 97,595
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
CASH EQUIVALENTS - 1.4%
INVESTMENT COMPANIES
1,380,243 AIM Short-Term Investments
Co.
Liquid Assets Money Market
Portfolio (Institutional
Shares) $ 1,380
-----------
TOTAL CASH EQUIVALENTS 1,380
-----------
TOTAL INVESTMENTS - 100.7% 98,975
Other Assets, less Liabilities (712)
-----------
NET ASSETS $ 98,263
-----------
-----------
</TABLE>
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
- 13 -
<PAGE>
REPORT FROM THE PORTFOLIO MANAGER
SAFECO RST SMALL COMPANY VALUE PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The RST Small Company Value Portfolio's one-year total return beat the
Russell 2000 index. However, the Portfolio is behind the index for the last six
months.
The Portfolio outperformed over the longer term by owning stocks that moved
into the growth mode and by participating in the previously hot initial public
offering market. The second quarter underperformance is largely due to earnings
shortfalls. The second quarter setbacks appear temporary, and in most cases I'm
holding the stock.
Micros fell 70% in the second quarter on disappointing sales and revenue. I
believe spending will resume, and Micros, a proven leader in hospitality
software systems, will get the business.
A change in insurance regulation caused slower sales at the Portamedic,
Hooper Holmes' largest subsidiary. This caused a second-quarter earnings
shortfall. I think this company is set to resume its historical growth rates in
an expanded marketplace. In addition to no debt and good cash flow, Portamedic
has systems in place to participate in web-based distribution of life insurance.
S-3's stock fell as the company divested its money-losing graphics-card
business to concentrate on internet appliances, such as the MP3 Rio Player, and
its semiconductor business. [PHOTO OF GREG EISEN]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR SINCE INCEPTION
<S> <C> <C> <C>
SAFECO RST Small Company Value Portfolio (1.14)% 21.86% 5.16%
Russell 2000 Index 3.08% 14.51% 15.37%
</TABLE>
<TABLE>
<CAPTION>
SAFECO RST SMALL COMPANY RUSSELL 2000 INDEX:
INVESTMENT VALUE VALUE PORTFOLIO:
<S> <C> <C>
4/97 $10,000 $10,000
5/97 10,680 11,115
6/97 11,230 11,587
7/97 12,010 12,128
8/97 12,240 12,402
9/97 13,450 13,307
10/97 12,920 12,716
11/97 12,840 12,629
12/97 12,840 12,856
1/98 12,757 12,660
2/98 14,006 13,609
3/98 15,495 14,181
4/98 16,162 14,259
5/98 15,443 13,494
6/98 15,100 13,533
7/98 13,506 12,428
8/98 9,549 10,018
9/98 9,997 10,794
10/98 9,726 11,236
11/98 9,893 11,830
12/98 10,278 12,568
1/99 10,611 12,734
2/99 9,955 11,708
3/99 9,414 11,888
4/99 9,331 12,952
5/99 9,404 13,144
6/99 9,622 13,734
7/99 9,789 13,355
8/99 9,341 12,864
9/99 9,372 12,864
10/99 9,424 12,921
11/99 10,664 13,705
12/99 11,861 15,257
1/00 11,372 15,010
2/00 12,267 17,491
3/00 12,476 16,341
4/00 12,028 15,357
5/00 11,143 14,461
6/00 11,726 15,726
</TABLE>
* The Portfolio's inception was April 30, 1997. Performance information begins
on April 30, 1997.
Performance represents the performance of the Small Company Value Portfolio ,
but does not include deductions for administration charges, contingent deferred
sales charges, or mortality and expense risk premiums.
The performance of the Portfolio assumes the reinvestment of all dividends and
capital gains. The Russell 2000 Index is an unmanaged index that is
representative of the small cap market. Investment management fees have have
been applied to the calculation of Portfolio performance, but not to the
indexes. If portfolio investment management fees had been applied to the
indexes, the index values would have been lower.
Investment returns are historical and not predictive of future performance.
Portfolio share prices and investment returns will fluctuate.
- 14 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
On the up side, GSI Lumonics flew into our top ten. I initiated the position
in the second quarter and it doubled in value. This company makes lasers for
three existing markets and is expanding into optical networking. Insight
Enterprises, a position I built in the first quarter is also up over 100%. It's
met great success telemarketing computer products to mid-size businesses.
BSquare, another strong performer, is a company of ex-Microsoft talent that
develops Windows CE operating systems for such devices as set-top boxes and
palm-size computers.
Going forward, I will continue to buy value in pursuit of growth.
Greg Eisen
-------------------------------------------
Greg Eisen joined SAFECO in 1986. He holds a B.A. from Rutgers University and is
a Certified Public Accountant and a Chartered Financial Analyst.
HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS NET ASSETS
------------------------------------------------------------------------
<S> <C>
Optimal Robotics, Corp. .......................................... 4.6%
(Computers--Hardware)
Rent-Way, Inc. ................................................... 4.2
(Services--Commercial & Consumer)
Rent-A-Center, Inc. .............................................. 3.8
(Services--Commercial & Consumer)
ACT Manufacturing .................................................. 3.7
(Electronics--Component Distributors)
Insight Enterprises, Inc. ........................................ 3.5
(Retail--Computers & Electronics)
Landstar System, Inc. ............................................ 3.2
(Trucking)
BSQUARE Corp. ..................................................... 3.1
(Computers--Software & Services)
GSI Lumonics, Inc. ............................................... 3.1
(Manufacturing--Diversified)
Astec Industries, Inc. ........................................... 3.0
(Engineering & Construction)
Wet Seal, Inc. (Class A) .......................................... 2.6
(Retail--Specialty--Apparel)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MARKET CAPITALIZATION
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
Small-Cap:
Large (over $750 million) 11%
Medium ($250-$750 million) 48%
Small (under $250 million) 25%
Mid-Cap: ($1.5 billion-$4 billion) 16%
Large-Cap: (over $4 billion) 0%
Cash & Other: 0%
</TABLE>
- 15 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
SMALL COMPANY VALUE PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 98.9%
AEROSPACE/DEFENSE - 2.6%
73,950 *International Aircraft
Investors, Inc. $388
BANKS (REGIONAL) - 1.6%
17,924 *Hanmi Financial Corp. 245
COMMUNICATION EQUIPMENT - 4.7%
26,000 *Concurrent Computer Corp. 341
9,500 *SBS Technologies, Inc. 351
COMPUTERS (HARDWARE) - 6.1%
11,800 *MICROS Systems, Inc. 219
17,800 *Optimal Robotics Corp. 683
COMPUTERS (PERIPHERALS) - 4.5%
16,300 *Integrated Measurement Systems,
Inc. 257
26,300 *S3, Inc. 388
800 *Versata, Inc. 32
COMPUTERS (SOFTWARE & SERVICES) - 7.1%
20,700 *BSQUARE Corp. 464
14,000 *Ciber, Inc. 185
19,700 *ITT Educational Services, Inc. 346
16,000 *Smith-Gardner & Associates, Inc. 77
ELECTRONICS (COMPONENT DISTRIBUTORS) - 4.7%
12,000 *ACT Manufacturing, Inc. 557
7,000 *Audiovox Corp. (Class A) 154
ENGINEERING & CONSTRUCTION - 3.0%
17,400 *Astec Industries, Inc. 442
FINANCIAL (DIVERSIFIED) - 1.5%
12,000 Cash America International, Inc. 88
17,300 *Hawthorne Financial Corp. 134
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) - 4.6%
39,900 Hooper Holmes, Inc. 319
13,000 *SonoSite, Inc. 375
INSURANCE (PROPERTY-CASUALTY) - 1.1%
38,400 *American Safety Insurance
Group, Ltd. 161
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
MANUFACTURING (DIVERSIFIED) - 4.8%
15,300 Federal Signal Corp. $252
13,200 *GSI Lumonics, Inc. 464
MANUFACTURING (SPECIALIZED) - 2.0%
12,800 *Imax Corp. 291
OIL & GAS (DRILLING & EQUIPMENT) - 6.0%
11,500 *Marine Drilling Cos., Inc. 322
11,500 *Patterson Energy, Inc. 328
6,000 *UTI Energy Corp. 241
REAL ESTATE INVESTMENT TRUST - 1.1%
4,900 Alexandria Real Estate
Equities, Inc. 168
RESTAURANTS - 2.0%
45,300 *Taco Cabana, Inc. (Class A) 300
RETAIL (COMPUTERS & ELECTRONICS) - 3.5%
8,800 *Insight Enterprises, Inc. 522
RETAIL (DEPARTMENT STORES) - 2.1%
41,600 *Musicland Stores Corp. 309
RETAIL (FOOD CHAINS) - 2.4%
34,000 Ingles Markets, Inc. (Class A) 355
RETAIL (GENERAL MERCHANDISE) - 0.7%
7,800 Deb Shops, Inc. 98
RETAIL (SPECIALTY - APPAREL) - 4.3%
25,400 *Stein Mart, Inc. 260
29,600 *Wet Seal, Inc. (Class A) 388
RETAIL (SPECIALTY) - 2.0%
24,400 Regis Corp. 305
SERVICES (ADVERTISING/MARKETING) - 2.0%
12,700 *Snyder Communications, Inc. 302
SERVICES (COMMERCIAL & CONSUMER) - 12.1%
16,600 *Dollar Thrifty Automotive
Group, Inc. 306
18,800 *Profit Recovery Group
International, Inc. 313
25,350 *Rent-A-Center, Inc. 570
21,500 *Rent-Way, Inc. 628
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 16 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
SMALL COMPANY VALUE PORTFOLIO
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
SHIPPING - 1.2%
10,700 Nordic American Tanker
Shipping, Ltd. $177
TELECOMMUNICATIONS (CELLULAR/WIRELESS) - 2.0%
15,300 *Dobson Communications
Corp. (Class A) 295
TEXTILES (APPAREL) - 1.2%
21,800 *Cutter & Buck, Inc. 173
TRUCKING - 6.7%
7,900 *Landstar System, Inc. 471
38,200 Rollins Truck Leasing Corp. 265
17,700 *Swift Transportation Co., Inc. 248
WASTE MANAGEMENT - 1.5%
14,000 Landauer, Inc. 218
--------
TOTAL COMMON STOCKS 14,775
--------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL VALUE
AMOUNT (000'S)
---------------------------------------------------------
<C> <S> <C>
PREFERRED STOCKS - 1.0%
ELECTRIC COMPANIES - 1.0%
2,007 Massachusetts Electric Co. $144
--------
TOTAL PREFERRED STOCKS 144
--------
CASH EQUIVALENTS - 8.9%
INVESTMENT COMPANIES
761,491 AIM Short-Term Investments Co.
Liquid Assets Money Market
Portfolio (Institutional Shares) 761
561,758 J.P. Morgan Institutional
Prime Money Market 562
--------
TOTAL CASH EQUIVALENTS 1,323
--------
TOTAL INVESTMENTS - 108.8% 16,242
Other Assets, less Liabilities (1,310)
--------
NET ASSETS $14,932
--------
--------
</TABLE>
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
- 17 -
<PAGE>
REPORT FROM THE PORTFOLIO MANAGER
SAFECO RST BOND PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The SAFECO RST Bond Portfolio's performance slightly trailed the Lehman
Government/ Corporate Index for the first half of 2000. Before its fees and
expenses, the portfolio did outperform the index.
In general, bonds have had a good year so far. However, changes in interest
rates and sector returns were quite uneven. In the first quarter, long-term
treasuries stole the show. In the latest quarter mortgage-backed securities were
the best performing sector, followed by asset-backed securities, U.S. Agencies,
U.S. Treasuries and, lastly, Corporate Bonds. The underperformance in corporates
is largely due to individual issuers missing their earnings forecasts.
In the first quarter we benefited by our underweighting in non-Treasury
securities. During the second quarter, we increased our allocation to the
high-quality, intermediate-term spread sectors of the markets, namely asset and
mortgage-backed credits, which were historically cheap. As they recovered, the
Portfolio outperformed. Along the way, our research team did an outstanding job
helping me guide the portfolio through this year's minefield of corporate
credits.
Yield premiums on non-Treasury securities remain extremely generous and I
believe these sectors will outperform treasuries over the second half of the
year. I will continued to over-weight in mortgage-backed and asset-backed
securities because of their minimal credit risk, while limiting our corporate
exposure to top quality issuers.
The market is pricing as though the Federal Reserve's yearlong rate increase
campaign has ended. I think it is too early to claim victory in the Fed's war
against economic growth. While, the economy has shown signs of moderation,
inflation is increasing. It would not surprise me to see the Fed raise rates
another 0.50% to 0.75%.
[PHOTO OF MICHAEL HUGHES]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C> <C>
SAFECO RST Bond Portfolio 3.97% 3.73% 4.93% 6.59%
Lehman Government/Corporate Index 4.18% 4.32% 6.10% 7.84%
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT VALUE
SAFECO RST
BOND PORTFOLIO: LEHMAN G/C INDEX:
<S> <C> <C>
6/90 $10,000 $10,000
7/90 $10,124 $10,124
8/90 $10,086 $9,978
9/90 $10,105 $10,061
10/90 $10,191 $10,194
11/90 $10,315 $10,416
12/90 $10,372 $10,573
1/91 $10,444 $10,692
2/91 $10,536 $10,783
3/91 $10,608 $10,858
4/91 $10,731 $10,983
5/91 $10,814 $11,034
6/91 $10,783 $11,022
7/91 $10,916 $11,160
8/91 $11,122 $11,417
9/91 $11,287 $11,656
10/91 $11,420 $11,760
11/91 $11,523 $11,877
12/91 $11,822 $12,278
1/92 $11,745 $12,096
2/92 $11,745 $12,160
3/92 $11,669 $12,094
4/92 $11,756 $12,166
5/92 $11,953 $12,402
6/92 $12,129 $12,584
7/92 $12,413 $12,905
8/92 $12,501 $13,021
9/92 $12,753 $13,198
10/92 $12,501 $12,997
11/92 $12,424 $12,985
12/92 $12,629 $13,209
1/93 $12,909 $13,496
2/93 $13,189 $13,776
3/93 $13,259 $13,823
4/93 $13,364 $13,929
5/93 $13,341 $13,922
6/93 $13,586 $14,238
7/93 $13,644 $14,329
8/93 $13,959 $14,658
9/93 $14,041 $14,709
10/93 $14,111 $14,769
11/93 $13,889 $14,602
12/93 $13,961 $14,666
1/94 $14,161 $14,887
2/94 $13,810 $14,563
3/94 $13,521 $14,207
4/94 $13,433 $14,089
5/94 $13,433 $14,063
6/94 $13,421 $14,030
7/94 $13,584 $14,310
8/94 $13,634 $14,316
9/94 $13,509 $14,099
10/94 $13,509 $14,084
11/94 $13,496 $14,059
12/94 $13,551 $14,151
1/95 $13,737 $14,423
2/95 $13,963 $14,757
3/95 $14,043 $14,856
4/95 $14,229 $15,064
5/95 $14,760 $15,695
6/95 $14,880 $15,820
7/95 $14,774 $15,759
8/95 $14,973 $15,961
9/95 $15,132 $16,123
10/95 $15,385 $16,360
11/95 $15,690 $16,629
12/95 $15,973 $16,874
1/96 $16,016 $16,979
2/96 $15,634 $16,619
3/96 $15,479 $16,480
4/96 $15,465 $16,367
5/96 $15,493 $16,339
6/96 $15,606 $16,557
7/96 $15,648 $16,596
8/96 $15,677 $16,555
9/96 $15,832 $16,849
10/96 $16,016 $17,242
11/96 $16,213 $17,560
12/96 $16,059 $17,364
1/97 $16,104 $17,385
2/97 $16,059 $17,421
3/97 $15,865 $17,214
4/97 $16,059 $17,466
5/97 $16,179 $17,629
6/97 $16,373 $17,841
7/97 $16,836 $18,387
8/97 $16,642 $18,180
9/97 $16,911 $18,466
10/97 $17,180 $18,762
11/97 $17,195 $18,861
12/97 $17,410 $19,059
1/98 $17,710 $19,327
2/98 $17,646 $19,288
3/98 $17,694 $19,347
4/98 $17,757 $19,445
5/98 $17,978 $19,654
6/98 $18,167 $19,854
7/98 $18,151 $19,869
8/98 $18,577 $20,258
9/98 $19,066 $20,837
10/98 $18,861 $20,690
11/98 $18,892 $20,813
12/98 $18,960 $20,864
1/99 $19,060 $21,012
2/99 $18,545 $20,513
3/99 $18,611 $20,615
4/99 $18,644 $20,666
5/99 $18,378 $20,453
6/99 $18,246 $20,389
7/99 $18,179 $20,332
8/99 $18,146 $20,316
9/99 $18,329 $20,499
10/99 $18,345 $20,552
11/99 $18,329 $20,541
12/99 $18,204 $20,416
1/00 $18,186 $20,410
2/00 $18,398 $20,666
3/00 $18,645 $20,965
4/00 $18,609 $20,862
5/00 $18,574 $20,844
6/00 $18,927 $21,269
</TABLE>
Performance represents the performance of the Bond Portfolio, but does not
include deductions for administration charges, contingent deferred sales
charges, or mortality and expense risk premiums.
The performance of the Portfolio assumes the reinvestment of all dividends and
capital gains. The Lehman Gov't / Corp. Index is a representative total return
benchmark for the Portfolio. Investment management fees have been applied to the
calculation of Portfolio performance, but not to the index. If portfolio
investment management fees had been applied to the index, the index values would
have been lower.
Investment returns are historical and not predictive of future performance.
Portfolio share prices and investment returns will fluctuate.
- 18 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Michael Hughes
-------------------------------------------
Michael Hughes joined SAFECO as RST Bond Portfolio manager in January 1997. He
began his investment career in 1983. He graduated magna cum laude with a B.S. in
finance from University of Colorado in Boulder and holds an M.B.A. from the
University of Southern California in Los Angeles. He is a Chartered Financial
Analyst.
HIGHLIGHTS
-------------------------------------------
<TABLE>
<CAPTION>
PERCENT OF
TEN LARGEST HOLDINGS NET ASSETS
----------------------------------------------
<S> <C>
U.S. Treasury Note, 7.50%, due
11/15/16 ............................. 13.6%
FHLMC, 7.50%, due 1/01/30 ............... 13.2
FNMA, 5.125%, due 2/13/04 ................ 5.0
FNMA, 6.375%, due 6/15/09 ................ 3.1
FNMA, 0.00%, due 9/07/00 ................. 3.1
FNMA, 8.00%, due 4/01/30 ................. 2.9
WorldCom, Inc., 8.00%, due 5/15/06 ....... 2.6
Newcourt Credit, Inc., 6.875%,
due 2/16/05 ............................ 2.5
FNMA, 8.00%, due 2/01/30 ................. 2.4
Ford Motor Credit Co., 7.375%,
due 12/28/09 ........................... 2.4
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PORTFOLIO CREDIT QUALITY
AS A PERCENTAGE OF NET ASSETS
<TABLE>
<S> <C>
AAA/U.S. Gov't/Agency 74%
AA 6%
A 18%
Cash and Other Assets 2%
</TABLE>
- 19 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
BOND PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
ASSET BACKED SECURITIES - 8.3%
ELECTRIC COMPANIES - 1.2%
$ 485 ComEd Transitional Funding
Trust 5.63%, due 6/25/09 $ 447
FINANCIAL (DIVERSIFIED) - 7.0%
15 Chevy Chase Auto
Receivables Trust (Class A)
6.60%, due 12/15/02 15
888 Citicorp Mortgage
Securities, Inc.
6.50%, due 6/25/29 805
360 CNH Equipment Trust
7.34%, due 2/16/07 360
575 Fleet Credit Card Master Trust
6.90%, due 4/16/07 569
835 Providian Master Trust
7.49%, due 8/17/09 843
--------
TOTAL ASSET BACKED SECURITIES 3,039
--------
CORPORATE BONDS - 23.6%
BEVERAGES (ALCOHOLIC) - 2.0%
730 Anheuser-Busch Cos., Inc.
7.50%, due 3/15/12 731
CANADIAN PROVINCES - 0.7%
250 Manitoba (Province of)
7.75%, due 2/01/02 252
ELECTRIC COMPANIES - 1.5%
545 Central Power & Light Co.
7.50%, due 12/01/02 544
FINANCIAL (DIVERSIFIED) - 6.8%
895 Ford Motor Credit Co.
7.375%, due 10/28/09 866
300 General Motors Acceptance Corp.
5.95%, due 3/14/03 289
440 Hertz Corp.
7.00%, due 7/01/04 430
950 Newcourt Credit Group, Inc.
6.875%, due 2/16/05 910
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
INVESTMENT BANKING & BROKERAGE - 1.6%
$ 600 Morgan Stanley Dean Witter Co.
8.00%, due 6/15/10 $ 606
MANUFACTURING (DIVERSIFIED) - 1.7%
675 Tyco International Group SA
6.375%, due 6/15/05 637
PUBLISHING (NEWSPAPERS) - 1.8%
680 Times-Mirror Co.
6.65%, due 10/15/01 675
RETAIL (GENERAL MERCHANDISE) - 3.3%
250 Dayton Hudson Corp.
9.40%, due 2/15/01 253
310 Sears Roebuck & Co.
6.25%, due 1/15/04 299
680 Wal-Mart Stores, Inc.
6.15%, due 8/10/01 673
TELECOMMUNICATIONS (CELLULAR/WIRELESS) - 4.2%
543 TCI Communications, Inc.
8.00%, due 8/01/05 557
960 Worldcom, Inc.
8.00%, due 5/15/06 971
--------
TOTAL CORPORATE BONDS 8,693
--------
MORTGAGE BACKED SECURITIES - 37.2%
COLLATERAL MORTGAGE OBLIGATION (CMO) - 0.9%
313 American Southwest Financial
Securities Corp.
Series 1995-C1 (Class A1B)
7.40%, due 11/17/04 313
FEDERAL HOME LOAN MORTGAGE CORP.
(FHLMC) - 14.8%
4,921 7.50%, due 1/01/30 4,856
600 7.50%, due 10/01/29 592
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 20 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
BOND PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) - 16.9%
$ 228 6.00%, due 1/01/29 $ 209
900 6.00%, due 6/01/30 824
503 6.50%, due 1/01/15 485
736 7.00%, due 3/01/12 724
892 8.00%, due 2/01/30 896
727 8.00%, due 2/01/30 730
673 8.00%, due 2/15/29 677
253 8.00%, due 4/01/08 254
1,046 8.00%, due 4/01/30 1,051
356 9.50%, due 2/01/21 370
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) - 4.6%
47 6.00%, due 4/15/14 45
398 6.00%, due 8/15/13 381
880 7.00%, due 4/15/28 856
425 7.75%, due 10/15/29 424
--------
TOTAL MORTGAGE BACKED SECURITIES 13,687
--------
U.S. GOVERNMENT OBLIGATIONS - 28.0%
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 3.0%
1,135 Discount Note
0.00%, due 9/07/00 1,122
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
U.S. FEDERAL AGENCY NOTES - 9.6%
$1,955 5.125%, due 2/13/04 $1,837
95 6.00%, due 8/15/02 93
1,190 6.375%, due 6/15/09 1,128
500 6.875%, due 11/22/06 484
U.S. TREASURY NOTES - 15.3%
620 6.50%, due 10/15/06 627
4,455 7.50%, due 11/15/16 5,017
--------
TOTAL U.S. GOVERNMENT OBLIGATIONS 10,308
--------
CASH EQUIVALENTS - 2.0%
INVESTMENT COMPANIES
728 AIM Short-Term Investments Co.
Liquid Assets Money Market
Portfolio (Institutional
Shares) 728
--------
TOTAL CASH EQUIVALENTS 728
--------
TOTAL INVESTMENTS - 99.1% 36,455
Other Assets, less Liabilities 342
--------
NET ASSETS $36,797
--------
--------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 21 -
<PAGE>
REPORT FROM THE PORTFOLIO MANAGERS
SAFECO RST MONEY MARKET PORTFOLIO
June 30, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The 12-month return of 5.23% for the SAFECO RST Money Market Portfolio was
significantly higher than the 3.7% year-over-year increase in the Consumer Price
Index.
The portfolio continues to have relatively good performance for three
reasons. One, our short average maturity (41 days at June 30) allows us to take
advantage of increasing short-term rates. Two, we have a high percentage of
floating rate notes which reset with higher interest rates. (At June 30, the
portfolio held 38% floating rate notes, 13.8% of which are taxable municipal
securities). And three, we purchase some higher-yielding tier-one eligible paper
that has some tier 2 ratings. (All securities purchased for the Fund have at
least two ratings in the top category giving the fund a Tier One status.)
The portfolio currently has a "barbell" structure. Most of the cash is
invested in short-term securities or floating rate notes under 60 days. About
10% of the portfolio is invested in issues maturing in greater than 180 days,
locking in higher yields there. This has proved to be an effective strategy
because short-term rates have risen rapidly--and because the market anticipates
higher rates, thus paying the investor well for locking in yields up to 13
months.
The average maturity of the Portfolio was no longer than 90 days at any point
during the period and no individual investment had a maturity longer than 397
days. Assets were diversified among different industries so that no more than
25% of assets were invested in any one sector.
[PHOTO OF NAOMI URATA]
[PHOTO OF LESLEY FOX]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PERFORMANCE OVERVIEW
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C> <C>
SAFECO RST Money Market Portfolio 2.72% 5.23% 5.01% 4.69%
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT VALUE
SAFECO RST MONEY MARKET PORTFOLIO:
<S> <C>
6/90 $10,000
7/90 $10,065
8/90 $10,128
9/90 $10,186
10/90 $10,252
11/90 $10,316
12/90 $10,380
1/91 $10,441
2/91 $10,493
3/91 $10,544
4/91 $10,600
5/91 $10,649
6/91 $10,691
7/91 $10,743
8/91 $10,793
9/91 $10,841
10/91 $10,886
11/91 $10,926
12/91 $10,969
1/92 $11,005
2/92 $11,035
3/92 $11,068
4/92 $11,099
5/92 $11,129
6/92 $11,163
7/92 $11,197
8/92 $11,225
9/92 $11,248
10/92 $11,272
11/92 $11,299
12/92 $11,326
1/93 $11,352
2/93 $11,375
3/93 $11,401
4/93 $11,425
5/93 $11,447
6/93 $11,474
7/93 $11,498
8/93 $11,525
9/93 $11,548
10/93 $11,571
11/93 $11,595
12/93 $11,622
1/94 $11,648
2/94 $11,672
3/94 $11,697
4/94 $11,725
5/94 $11,759
6/94 $11,794
7/94 $11,830
8/94 $11,873
9/94 $11,912
10/94 $11,955
11/94 $11,995
12/94 $12,046
1/95 $12,105
2/95 $12,157
3/95 $12,212
4/95 $12,268
5/95 $12,330
6/95 $12,385
7/95 $12,443
8/95 $12,495
9/95 $12,545
10/95 $12,609
11/95 $12,666
12/95 $12,715
1/96 $12,775
2/96 $12,821
3/96 $12,868
4/96 $12,920
5/96 $12,974
6/96 $13,021
7/96 $13,077
8/96 $13,129
9/96 $13,184
10/96 $13,234
11/96 $13,287
12/96 $13,343
1/97 $13,399
2/97 $13,446
3/97 $13,497
4/97 $13,555
5/97 $13,609
6/97 $13,669
7/97 $13,727
8/97 $13,780
9/97 $13,841
10/97 $13,902
11/97 $13,957
12/97 $14,021
1/98 $14,078
2/98 $14,131
3/98 $14,189
4/98 $14,244
5/98 $14,296
6/98 $14,357
7/98 $14,417
8/98 $14,469
9/98 $14,529
10/98 $14,593
11/98 $14,654
12/98 $14,715
1/99 $14,764
2/99 $14,819
3/99 $14,873
4/99 $14,928
5/99 $14,978
6/99 $15,030
7/99 $15,087
8/99 $15,145
9/99 $15,204
10/99 $15,264
11/99 $15,325
12/99 $15,393
1/00 $15,459
2/00 $15,524
3/00 $15,593
4/00 $15,663
5/00 $15,736
6/00 $15,816
</TABLE>
Performance represents the performance of the Money Market Portfolio but does
not include deductions for administration charges, contingent deferred sales
charges, or mortality and expense risk premiums.
Performance of the Portfolio assumes the reinvestment of all dividends.
The Money Market Portfolio seeks to maintain a $1.00 per share net asset value.
Shares of the Money Market Portfolio are neither insured nor guaranteed by the
U.S. Government. There is no assurance that the Money Market Portfolio will
maintain a stable $1.00 per share net asset value.
- 22 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The Fed raised overnight interest rates from 6.00% to 6.50% at its May
meeting but held steady in June. Although there is increasing uncertainty about
the Fed's future actions, currently high one-year interest rates indicate that
the market anticipates some rate increases. We will manage the fund accordingly.
Naomi Urata
-------------------------------------------
Naomi Urata joined SAFECO in 1993 as a fixed-income analyst and began managing
the Money Market Portfolio in August of 1994. She holds a Master in Management
from Yale University and is a Chartered Financial Analyst.
Lesley Fox
-------------------------------------------
Lesley Fox joined SAFECO Asset Management in April 2000 and began soon
thereafter serving as co-portfolio manager of the RST Money Market Portfolio.
She spent the previous five years managing $3.5 billion in short-term funds for
King County. Ms. Fox earned her MBA, Finance, at George Washington University
- 23 -
<PAGE>
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
COMMERCIAL PAPER - 47.4%
ASSET BACKED SECURITIES - 5.4%
$1,300 Moat Funding LLC
6.56%, due 7/28/00 $ 1,294
FINANCIAL (DIVERSIFIED) - 27.0%
1,300 Apreco, Inc.
6.56%, due 7/31/00 1,293
1,300 #Corporate Receivables Corp.
(144A)
6.54%, due 7/12/00 1,298
1,300 General Motors Acceptance
Corp.
6.55%, due 7/07/00 1,299
1,300 New Center Asset Trust
6.78%, due 7/06/00 1,299
1,300 PHH Corporation
6.77%, due 7/17/00 1,297
INVESTMENT BANKING & BROKERAGE - 5.4%
1,300 Salomon Smith Barney
6.56%, due 8/03/00 1,293
PHOTOGRAPHY/IMAGING - 5.4%
1,300 Xerox Corp.
6.74%, due 7/05/00 1,300
TRUCKS & PARTS - 4.2%
1,000 Cooperative Association of
Tractor Dealers
6.58%, due 7/19/00 997
---------
TOTAL COMMERCIAL PAPER 11,370
---------
CORPORATE BONDS - 37.7%
BANKS (MAJOR REGIONAL) - 5.8%
1,400 MBNA Corp.
7.22%, due 2/09/01 1,402
BANKS (REGIONAL) - 5.8%
1,365 PNC Funding Corp.
9.875 %, due 3/01/01 1,390
CONSUMER FINANCE - 4.2%
1,000 Countrywide Funding Corp.
7.32%, due 8/15/00 1,001
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
FINANCIAL (DIVERSIFIED) - 3.5%
$ 850 Heller Financial, Inc.
5.48%, due 2/05/01 $ 844
HEALTH CARE (SPECIALIZED SERVICES) - 5.0%
1,200 Everett Clinic
6.72%, due 12/01/21
Put Date 7/06/00 1,200
INSURANCE (LIFE & HEALTH) - 5.4%
1,300 First Allmerica Financial
6.68%, due 8/05/04
Put Date 8/05/00 1,300
INVESTMENT BANKING & BROKERAGE - 7.9%
1,000 #Goldman Sachs Group, Inc.
(144A)
6.935%, due 7/13/01 1,000
900 Morgan Stanley Dean Witter Co.
6.90%, due 3/13/01
Put Date 12/12/00 900
---------
TOTAL CORPORATE BONDS 9,037
---------
MUNICIPAL BONDS - 13.8%
HEALTH CARE (LONG-TERM CARE) - 5.4%
1,300 Maryland Health and Higher
Education Facilities Authority
Revenue
7.00%, due 1/01/28
Put Date 7/05/00 1,300
HOMEBUILDING - 4.2%
1,000 Tenderfoot Seasonal Housing
Facilities Revenue
6.734%, due 7/01/35
Put Date 7/06/00 1,000
RETAIL (GENERAL MERCHANDISE) - 4.2%
1,000 Racetrac Capital, LLC
6.67%, due 4/01/18
Put Date 7/05/00 1,000
---------
TOTAL MUNICIPAL BONDS 3,300
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 24 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000'S) (000'S)
---------------------------------------------------------
<C> <S> <C>
CASH EQUIVALENTS - 1.1%
INVESTMENT COMPANIES
$ 267 AIM Short-Term Investments Co.
Liquid Assets Money Market
Portfolio (Institutional
Shares) $ 267
---------
TOTAL CASH EQUIVALENTS 267
---------
TOTAL INVESTMENTS - 99.9% 23,974
Other Assets, less Liabilities 15
---------
NET ASSETS $ 23,989
---------
---------
</TABLE>
If a Put date is indicated, the Fund has a right to sell a specified
underlying security at an exercise price equal to the amortized cost of the
underlying security plus interest, if any, as of that date.
Securities with a maturity of more than thirteen months have variable rates
and/or demand features which qualify them as short-term securities. Rates
shown are those in effect on 6/30/00. These rates change periodically based on
specified market rate or indices.
# Securities are exempt from registration and restricted as to resale only to
dealers, or through a dealer to an "accredited investor" or a "qualified
institutional buyer". The total cost of such securities is $2,297,875 and the
total value is 9.6% of net assets.
SEE NOTES TO FINANCIAL STATEMENTS
- 25 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
SAFECO Resource Series Trust
As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
PORTFOLIOS
(In Thousands, -------------------------------------------------------------------------
Except Per-Share Amounts) EQUITY GROWTH OPS NORTHWEST SMALL CO. BOND MMKT
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at cost $441,927 $ 387,790 $ 77,132 $ 15,981 $36,818 $23,974
======== ========== ========= ======== ======= =======
Investments, at value
Unaffiliated issuers $595,906 $ 378,539 $ 98,975 $ 16,242 $36,455 $23,974
Affiliated issuers -- 18,515 -- -- -- --
-------- ---------- --------- -------- ------- -------
Total investments at value 595,906 397,054 98,975 16,242 36,455 23,974
Receivables:
Dividends and interest 254 25 10 17 373 176
Investments sold -- 2,751 -- -- -- --
Due from affiliate -- -- -- 26 -- --
-------- ---------- --------- -------- ------- -------
Total assets 596,160 399,830 98,985 16,285 36,828 24,150
LIABILITIES:
Investment securities purchased -- 357 651 1,342 -- --
Investment advisory fees 388 254 61 11 23 15
Dividends payable -- -- -- -- -- 135
Notes payable 125 165 -- -- -- --
Other 31 58 10 8 11
-------- ---------- --------- -------- ------- -------
Total liabilities 544 834 722 1,353 31 161
-------- ---------- --------- -------- ------- -------
NET ASSETS $595,616 $ 398,996 $ 98,263 $ 14,932 $36,797 $23,989
======== ========== ========= ======== ======= =======
Net Assets consist of:
Accumulated net investment
income (loss) $ 2,090 $ (1,049) $ (50) $ 1 $ 875 $ --
Accumulated net realized gain
(loss) on investment
transactions 11,056 14,302 239 (882) (1,949) --
Net unrealized appreciation
(depreciation) 153,979 9,265 21,843 261 (363) --
Paid in capital (par value
$.001, unlimited shares
authorized) 428,491 376,478 76,231 15,552 38,234 23,989
-------- ---------- --------- -------- ------- -------
Net assets $595,616 $ 398,996 $ 98,263 $ 14,932 $36,797 $23,989
======== ========== ========= ======== ======= =======
TRUST SHARES OUTSTANDING 19,775 17,474 3,998 1,327 3,425 23,989
======== ========== ========= ======== ======= =======
NET ASSET VALUE PER SHARE
(Net assets divided by Trust
shares outstanding) $ 30.12 $ 22.83 $ 24.58 $ 11.26 $ 10.74 $ 1.00
======== ========== ========= ======== ======= =======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 26 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SAFECO Resource Series Trust
For the six months ended June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------------
EQUITY GROWTH OPS NORTHWEST SMALL CO. BOND MMKT
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 3,866 $ 225 $ 168 $ 40 $ -- $ --
Interest 612 208 89 30 1,038 805
-------- ---------- --------- -------- ------ --------
Total investment income 4,478 433 257 70 1,038 805
EXPENSES:
Investment advisory fees 2,230 1,373 277 62 111 84
Legal and auditing fees 12 10 9 9 9 9
Custodian fees 17 12 3 4 3 3
Trustees fees 4 3 3 3 2 3
Other 132 82 15 3 37 10
-------- ---------- --------- -------- ------ --------
Total expenses before
reimbursement 2,395 1,480 307 81 162 109
Expense reimbursement -- -- -- (12) -- --
-------- ---------- --------- -------- ------ --------
Total expenses after
reimbursement 2,395 1,480 307 69 162 109
NET INVESTMENT INCOME (LOSS) 2,083 (1,047) (50) 1 876 696
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
NET REALIZED GAIN (LOSS) FROM:
Investments in unaffiliated
issuers 11,054 10,565 239 1,398 (672) --
Investments in affiliated issuers -- 4,990 -- -- -- --
-------- ---------- --------- -------- ------ --------
Total net realized gain (loss) 11,054 15,555 239 1,398 (672) --
Net change in unrealized
appreciation (depreciation) (32,671) (10,945) 5,935 (1,592) 892 --
-------- ---------- --------- -------- ------ --------
NET GAIN (LOSS) ON INVESTMENTS (21,617) 4,610 6,174 (194) 220 --
-------- ---------- --------- -------- ------ --------
Net change in net assets resulting
from operations $(19,534) $ 3,563 $ 6,124 $ (193) $1,096 $ 696
======== ========== ========= ======== ====== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 27 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SAFECO Resource Series Trust
(Unaudited)
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------
EQUITY GROWTH OPS
-------------------------- --------------------------
SIX-MONTH YEAR ENDED SIX-MONTH YEAR ENDED
PERIOD ENDED DECEMBER 31 PERIOD ENDED DECEMBER 31
(IN THOUSANDS) JUNE 30 2000 1999 JUNE 30 2000 1999
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 2,083 $ 5,055 $ (1,047) $ (1,460)
Net realized gain (loss) on investment
transactions 11,054 29,280 15,555 (1,256)
Net change in unrealized appreciation
(depreciation) (32,671) 20,195 (10,945) 17,800
-------- -------- -------- --------
Net change in net assets resulting
from operations (19,534) 54,530 3,563 15,084
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (5,098) -- --
Net realized gain on investments -- (29,266) -- --
-------- -------- -------- --------
Total distributions -- (34,364) -- --
NET TRUST SHARE TRANSACTIONS (31,928) 69,598 49,708 (25,766)
-------- -------- -------- --------
TOTAL CHANGE IN NET ASSETS (51,462) 89,764 53,271 (10,682)
NET ASSETS AT BEGINNING OF PERIOD 647,078 557,314 345,725 356,407
-------- -------- -------- --------
NET ASSETS AT END OF PERIOD $595,616 $647,078 $398,996 $345,725
======== ======== ======== ========
------------------------------------------------------------------------------------------------
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES AND
AMOUNTS
SHARES:
Sales 3,055 6,829 5,257 5,871
Reinvestments -- 1,108 -- --
Redemptions (4,138) (5,675) (3,150) (7,240)
-------- -------- -------- --------
Net Change (1,083) 2,262 2,107 (1,369)
AMOUNTS:
Sales $ 90,965 $215,939 $122,458 $116,742
Reinvestments -- 34,364 -- --
Redemptions (122,893) (180,705) (72,750) (142,508)
-------- -------- -------- --------
Net Change $(31,928) $ 69,598 $ 49,708 $(25,766)
======== ======== ======== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 28 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------------------------
NORTHWEST SMALL CO. BOND
-------------------------- -------------------------- --------------------------
SIX-MONTH YEAR ENDED SIX-MONTH YEAR ENDED SIX-MONTH YEAR ENDED
PERIOD ENDED DECEMBER 31 PERIOD ENDED DECEMBER 31 PERIOD ENDED DECEMBER 31
JUNE 30 2000 1999 JUNE 30 2000 1999 JUNE 30 2000 1999
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (50) $ (72) $ 1 $ (16) $ 876 $ 1,592
Net realized gain (loss) on investment
transactions 239 3,868 1,398 (1,273) (672) (1,276)
Net change in unrealized appreciation
(depreciation) 5,935 10,965 (1,592) 3,170 892 (1,542)
------- ------- ------- ------- ------- -------
Net change in net assets resulting
from operations 6,124 14,761 (193) 1,881 1,096 (1,226)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- -- -- -- -- (1,591)
Net realized gain on investments -- (2,987) -- -- -- (13)
------- ------- ------- ------- ------- -------
Total distributions -- (2,987) -- -- -- (1,604)
NET TRUST SHARE TRANSACTIONS 44,215 11,563 1,071 393 7,570 844
------- ------- ------- ------- ------- -------
TOTAL CHANGE IN NET ASSETS 50,339 23,337 878 2,274 8,666 (1,986)
NET ASSETS AT BEGINNING OF PERIOD 47,924 24,587 14,054 11,780 28,131 30,117
------- ------- ------- ------- ------- -------
NET ASSETS AT END OF PERIOD $98,263 $47,924 $14,932 $14,054 $36,797 $28,131
======= ======= ======= ======= ======= =======
----------------------------------------------------------------------------------------------------------------------------
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES AND
AMOUNTS
SHARES:
Sales 2,865 889 206 369 1,369 946
Reinvestments -- 132 -- -- -- 155
Redemptions (980) (480) (113) (328) (666) (1,019)
------- ------- ------- ------- ------- -------
Net Change 1,885 541 93 41 703 82
AMOUNTS:
Sales $67,026 $17,365 $ 2,348 $ 3,458 $14,539 $10,490
Reinvestments -- 2,987 -- -- -- 1,604
Redemptions (22,811) (8,789) (1,277) (3,065) (6,969) (11,250)
------- ------- ------- ------- ------- -------
Net Change $44,215 $11,563 $ 1,071 $ 393 $ 7,570 $ 844
======= ======= ======= ======= ======= =======
<CAPTION>
PORTFOLIOS
--------------------------
MMKT
--------------------------
SIX-MONTH YEAR ENDED
PERIOD ENDED DECEMBER 31
JUNE 30 2000 1999
---------------------------------------- --------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 696 $ 1,254
Net realized gain (loss) on investment
transactions -- --
Net change in unrealized appreciation
(depreciation) -- --
------- --------
Net change in net assets resulting
from operations 696 1,254
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (696) (1,254)
Net realized gain on investments -- --
------- --------
Total distributions (696) (1,254)
NET TRUST SHARE TRANSACTIONS (5,146) 1,512
------- --------
TOTAL CHANGE IN NET ASSETS (5,146) 1,512
NET ASSETS AT BEGINNING OF PERIOD 29,135 27,623
------- --------
NET ASSETS AT END OF PERIOD $23,989 $ 29,135
======= ========
----------------------------------------
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES AND
AMOUNTS
SHARES:
Sales 37,062 73,527
Reinvestments 569 1,363
Redemptions (42,777) (73,378)
------- --------
Net Change (5,146) 1,512
AMOUNTS:
Sales $37,062 $ 73,527
Reinvestments 569 1,363
Redemptions (42,777) (73,378)
------- --------
Net Change $(5,146) $ 1,512
======= ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
- 29 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
SAFECO Resource Series Trust (the Trust) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Trust is comprised of the Equity, Growth Opportunities
(GROWTH OPS) (Formerly the Growth Portfolio), Northwest, Small Company Value
(SMALL Co.) (Formerly the Small Company Stock Portfolio), Bond and Money Market
(MMKT) Portfolios. Each of the six Portfolios has different investment
objectives. Shares of the Trust Portfolios are available only as funding
vehicles for certain variable annuity and variable life products sold by SAFECO
Life Insurance Company (SAFECO) and other insurance companies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
SECURITY VALUATION. Equity securities in the Equity, Growth Opportunities,
Northwest and Small Company Value Portfolios traded on a national exchange or
over-the-counter are valued at the last reported sales price, unless there are
no transactions in which case they are valued at the last reported bid price.
Fixed income securities in the Bond Portfolio are stated on the basis of
valuations provided by a pricing service, which uses information with respect to
transactions in securities, quotations from securities dealers, market
transactions in comparable securities and various relationships between
securities in determining value. For the Money Market Portfolio, short-term
securities purchased at par are valued at cost. Other short-term securities are
valued at amortized cost. For all Portfolios, temporary investments in other
mutual funds are valued at net asset value.
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on investment transactions are determined using the
identified cost method.
INCOME RECOGNITION. Interest is accrued on Portfolio investments daily.
Dividend income, less foreign taxes withheld (if any), is recorded on the
ex-dividend date.
DIVIDENDS TO SHAREHOLDERS. In the Equity, Growth Opportunities, Northwest,
Small Company Value and Bond Portfolios, dividends to shareholders from net
investment income and realized gains are recorded on the last business day of
December each year. In the Money Market Portfolio, dividends to shareholders
from net investment income are declared as of the close of each business day and
payment is made as of the last business day of each month.
FEDERAL INCOME TAX. It is the Trust's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income or excise tax provision is required.
- 30 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEES. SAFECO Asset Management Company receives investment
advisory fees from the Portfolios. For the Equity, Growth Opportunities,
Northwest and Bond Portfolios, the fee is based on average daily net assets at
annual rate of .74%. For the Small Company Value Portfolio, the fee is based on
average daily net assets at an annual rate of .85%. For the Money Market
Portfolio, the fee is based on average daily net assets at an annual rate of
.65%.
NOTES PAYABLE AND INTEREST EXPENSE. The Portfolios may borrow money for
temporary purposes from SAFECO Corporation or its affiliates at rates comparable
to commercial bank interest rates.
LINE OF CREDIT. The Trust, together with all other management investment
companies for which SAFECO Asset Management Company serves as investment
advisor, has line of credit arrangements with certain financial institutions.
Under these arrangements, $200 million is available to meet short-term financing
needs. No balance was outstanding under these arrangements at June 30, 2000
AFFILIATE OWNERSHIP. At June 30, 2000, SAFECO owned over 87% of the
outstanding shares of the Equity Portfolio, 76% of the outstanding shares of the
Growth Opportunities Portfolio, and 100% of the outstanding shares in the
Northwest, Small Company Value, Bond and Money Market Portfolios.
EXPENSE REIMBURSEMENT. For the Equity, Growth Opportunities, Northwest, Bond
and Money Market Portfolios, SAFECO Life Insurance Company has agreed to pay all
the expenses of the Portfolios except for investment advisory fees if net assets
of the Portfolio are below $20 million. For the Small Company Value Portfolio,
SAFECO Asset Management Company pays all expenses other than investment advisory
fees in excess of .10% of the Portfolio's average annual net assets. When net
assets exceed $20 million, the Portfolio will be charged for all operating
expenses.
4. INVESTMENT TRANSACTIONS
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------
EQUITY GROWTH OPS NORTHWEST SMALL CO. BOND
(In Thousands)
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Purchases for the six-month period
ended June 30, 2000 (including $7,043
of U.S. Government and Agency
Securities in the Bond Portfolio) $ 159,985 $ 155,806 $ 55,793 $ 9,381 $ 23,070
=========== =========== ========== ========== ========
Sales for the six-month period ended
June 30, 2000 (including $8,927 of
U.S. Government and Agency Securities
in the Bond Portfolio) $ 193,375 $ 117,786 $ 11,357 $ 7,847 $ 14,975
=========== =========== ========== ========== ========
---------------------------------------------------------------------------------------------------
Purchases and sales amounts exclude
short-term investments which, at the
time of purchase had a maturity of
one year or less.
</TABLE>
- 31 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Unrealized appreciation (depreciation) at June 30, 2000
<TABLE>
<CAPTION>
PORTFOLIOS
--------------------------------------------------------
EQUITY GROWTH OPS NORTHWEST SMALL CO. BOND
(In Thousands)
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Aggregate gross unrealized appreciation
for investment securities in which
there is an excess of value over cost $ 185,649 $ 93,424 $ 29,048 $ 2,437 $ 141
Aggregate gross unrealized depreciation
for investment securities in which
there is an excess of cost over value (31,670) (84,159) (7,205) (2,176) (504)
----------- ----------- ---------- ---------- ------
Net unrealized appreciation
(depreciation) $ 153,979 $ 9,265 $ 21,843 $ 261 $ (363)
=========== =========== ========== ========== ======
</TABLE>
5. INVESTMENTS IN AFFILIATES
Each of the companies is listed below because the Growth Opportunities
Portfolio owned at least 5% of the company's voting securities during the
six-month period ended June 30, 2000:
<TABLE>
<CAPTION>
SHARES AT SHARES AT MARKET VALUE
BEGINNING END OF JUNE 30
OF YEAR ADDITIONS REDUCTIONS PERIOD DIVIDENDS 2000
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
Concepts Direct, Inc. 435 60 -- 495 None $ 4,921
Damark International, Inc. 412 -- 12 400 None 8,594
Open Plan Systems, Inc. 332 -- -- 332 None 622
Precision Auto Care 609 -- 57 552 None 380
Suburban Lodges of America 735 -- -- 735 None 930
TRM Copy Centers Corp. 571 -- -- 571 None 3,068
Nastech* 464 -- 243 221 None --
Polymedica* 649 -- 160 489 None --
------------
$ 18,515
============
</TABLE>
* Company was not an affiliate at the end of the period.
6. CAPITAL LOSS CARRYFORWARD
At December 31, 1999, these portfolios had the following amounts of
accumulated net realized losses on investment transactions that represent
capital loss carryforwards for federal income tax purposes, which expire as
follows:
<TABLE>
<CAPTION>
EXPIRATION
AMOUNTS DATES
(In Thousands)
<S> <C> <C>
-------------------------------------------------------------
Small Company Value Portfolio $ 2,281 2006-2007
Bond Portfolio 1,218 2007
Growth Opportunities Portfolio 1,203 2007
</TABLE>
- 32 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
EQUITY PORTFOLIO
<TABLE>
<CAPTION>
SIX-MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31
JUNE 30 ------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 31.02 $ 29.97 $ 25.18 $ 21.75 $ 19.24
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.11 0.26 0.25 0.27 0.34
Net realized and unrealized gain
(loss) on investments (1.01) 2.53 6.02 5.13 4.43
------------ --------- --------- --------- ---------
Total from investment operations (0.90) 2.79 6.27 5.40 4.77
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.26) (0.25) (0.27) (0.34)
Distributions from realized gains -- (1.48) (1.23) (1.70) (1.92)
------------ --------- --------- --------- ---------
Total distributions -- (1.74) (1.48) (1.97) (2.26)
------------ --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD $ 30.12 $ 31.02 $ 29.97 $ 25.18 $ 21.75
============ ========= ========= ========= =========
TOTAL RETURN (2.90%)* 9.31% 24.89% 24.85% 24.79%
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 595,616 $ 647,078 $ 557,314 $ 389,256 $ 263,067
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.79%** 0.76% 0.78% 0.75% 0.72%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 0.70%** 0.80% 0.96% 1.19% 1.72%
PORTFOLIO TURNOVER RATE 54.53%** 32.47% 31.57% 41.75% 56.99%
</TABLE>
--------------------------------------------------------------------------------
* Not Annualized
** Annualized
- 33 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
GROWTH OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
SIX-MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31
JUNE 30 ------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 22.50 $ 21.30 $ 23.35 $ 19.26 $ 15.88
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.06) (0.09) (0.10) (0.04) (0.03)
Net realized and unrealized gain on
investments 0.39 1.29 0.53 8.62 5.12
------------ --------- --------- --------- ---------
Total from investment operations 0.33 1.20 0.43 8.58 5.09
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- -- --
Distributions from realized gains -- -- (2.38) (4.49) (1.71)
Distributions from paid in capital -- -- (0.10) -- --
------------ --------- --------- --------- ---------
Total distributions -- -- (2.48) (4.49) (1.71)
------------ --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD $ 22.83 $ 22.50 $ 21.30 $ 23.35 $ 19.26
============ ========= ========= ========= =========
TOTAL RETURN 1.47%* 5.63% 1.83% 44.55% 32.06%
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 398,996 $ 345,725 $ 356,407 $ 240,400 $ 109,491
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.79%** 0.78% 0.80% 0.77% 0.79%
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (0.57%)** (0.45%) (0.48%) (0.25%) (0.28%)
PORTFOLIO TURNOVER RATE 64.50%** 52.96% 46.13% 88.99% 75.58%
</TABLE>
--------------------------------------------------------------------------------
* Not Annualized
** Annualized
- 34 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
NORTHWEST PORTFOLIO
<TABLE>
<CAPTION>
SIX-MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31
JUNE 30 ----------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 22.68 $ 15.64 $ 15.20 $ 12.12 $ 10.85
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01) (0.02) (0.05) 0.03 0.08
Net realized and unrealized gain on
investments 1.91 8.56 0.49 3.73 1.27
------------ --------- --------- --------- ---------
Total from investment operations 1.90 8.54 0.44 3.76 1.35
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (0.03) (0.08)
Distributions from realized gains -- (1.50) -- (0.65) --
------------ --------- --------- --------- ---------
Total distributions -- (1.50) -- (0.68) (0.08)
------------ --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD $ 24.58 $ 22.68 $ 15.64 $ 15.20 $ 12.12
============ ========= ========= ========= =========
TOTAL RETURN 8.38%* 54.62% 2.89%(A) 31.02%(A) 12.44%(A)
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 98,263 $ 47,924 $ 24,587 $ 19,795 $ 9,541
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.82%** 0.84% 0.96% 0.73% 0.70%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE EXPENSE REIMBURSEMENTS ++ N/A N/A 0.99% 0.94% 1.11%
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (0.13%)** (0.24%) (0.32%) 0.27% 0.78%
PORTFOLIO TURNOVER RATE 31.04%** 37.32% 46.99% 47.85% 52.20%
</TABLE>
--------------------------------------------------------------------------------
++ See Note 3 of Notes to Financial Statements.
(A) The total return would have been lower had certain expenses not been
reduced during the periods shown (See Note 3 of Notes to Financial
Statements).
N/A Not applicable as no fund expenses were reimbursed.
* Not Annualized
** Annualized
- 35 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SMALL COMPANY VALUE PORTFOLIO
<TABLE>
<CAPTION>
APRIL 30, 1997
SIX-MONTH (COMMENCEMENT OF
PERIOD ENDED OPERATIONS) TO
YEAR ENDED DECEMBER 31 DECEMBER 31,
-----------------------
JUNE 30 -----------------------------
2000 1999 1998 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 11.39 $ 9.87 $ 12.33 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) -- (0.01) (0.03) 0.01
Net realized and unrealized gain
(loss) on investments (0.13) 1.53 (2.43) 2.83
------------ --------- ---------- ----------------
Total from investment operations (0.13) 1.52 (2.46) 2.84
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (0.01)
Distributions from realized gains -- -- -- (0.50)
------------ --------- ---------- ----------------
Total distributions -- -- -- (0.51)
------------ --------- ---------- ----------------
NET ASSET VALUE AT END OF PERIOD $ 11.26 $ 11.39 $ 9.87 $ 12.33
============ ========= ========== ================
TOTAL RETURN (A) (1.14%)* 15.40% (19.95%) 28.40%*
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 14,932 $ 14,054 $ 11,780 $ 10,250
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.96%** 0.95% 0.95% 0.95%**
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE EXPENSE REIMBURSEMENTS++ 1.12%** 1.22% 1.15% 1.24%**
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 0.02%** (0.14%) (0.32%) 0.19%**
PORTFOLIO TURNOVER RATE 114.01%** 127.80% 92.14% 47.91%**
</TABLE>
--------------------------------------------------------------------------------
++ See Note 3 of Notes to Financial Statements.
(A) The total return would have been lower had certain expenses not been
reduced during the periods shown.
* Not Annualized
** Annualized
- 36 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
BOND PORTFOLIO
<TABLE>
<CAPTION>
SIX-MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31
JUNE 30 ----------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 10.33 $ 11.41 $ 11.04 $ 10.75 $ 11.31
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.26 0.62 0.50 0.61 0.62
Net realized and unrealized gain
(loss) on investments 0.15 (1.07) 0.49 0.29 (0.56)
------------- ---------- ---------- ---------- ----------
Total from investment operations 0.41 (0.45) 0.99 0.90 0.06
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.62) (0.50) (0.61) (0.62)
Distributions from realized gains -- (0.01) (0.12) -- --
------------- ---------- ---------- ---------- ----------
Total distributions -- (0.63) (0.62) (0.61) (0.62)
------------- ---------- ---------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD $ 10.74 $ 10.33 $ 11.41 $ 11.04 $ 10.75
============= ========== ========== ========== ==========
TOTAL RETURN 3.97%* (3.99%) 8.90%(A) 8.41%(A) 0.54%(A)
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 36,797 $ 28,131 $ 30,117 $ 17,881 $ 15,991
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.09%** 0.91% 0.83% 0.74% 0.73%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE EXPENSE REIMBURSEMENTS++ N/A N/A 0.98% 0.90% 0.87%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 5.88%** 5.33% 5.50% 5.75% 5.64%
PORTFOLIO TURNOVER RATE 96.59%** 147.40% 164.82% 151.43% 140.90%
</TABLE>
--------------------------------------------------------------------------------
++ See Note 3 of Notes to Financial Statements.
(A) The total return would have been lower had certain expenses not been
reduced during the periods shown (See Note 3 of Notes to Financial
Statements).
N/A Not applicable as no fund expenses were reimbursed.
* Not Annualized
** Annualized
- 37 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
7. FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
SIX-MONTH
PERIOD ENDED YEAR ENDED DECEMBER 31
JUNE 30 ------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE AT BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.04 0.04 0.05 0.05
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.04) (0.04) (0.05) (0.05)
------------ --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============ ========= ========= ========= =========
TOTAL RETURN 2.72%* 4.63% 4.95%(A) 5.08%(A) 4.94%(A)
NET ASSETS AT END OF PERIOD (000'S
OMITTED) $ 23,989 $ 29,135 $ 27,623 $ 17,757 $ 12,493
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.85%** 0.78% 0.81% 0.64% 0.62%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
BEFORE EXPENSE REIMBURSEMENTS++ N/A N/A 0.89% 0.81% 0.90%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 5.43%** 4.52% 4.87% 4.97% 4.86%
</TABLE>
--------------------------------------------------------------------------------
++ See Note 3 of Notes to Financial Statements.
(A) The total return would have been lower had certain expenses not been
reduced during the periods shown (See Note 3 of Notes to Financial
Statements).
N/A Not applicable as no fund expenses were reimbursed.
* Not Annualized
** Annualized
- 38 -
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
8. SHAREHOLDER MEETING
A joint special meeting of the Portfolios' shareholders was held on March 7,
2000, at which time the shareholders voted to approve changes to the Portfolios'
fundamental investment policies. Shareholders also elected the Board of Trustees
and ratified the selection of Ernst & Young LLP as independent auditors. The
results of that meeting are presented below.
(In Thousands)
<TABLE>
<CAPTION>
PROPOSAL PORTFOLIOS FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Fundamental Investment Policies Equity Portfolio 18,554 649 1,304
Growth Opportunities Portfolio 13,373 559 1,039
Northwest Portfolio 2,117 59 140
Small Company Value Portfolio 1,134 23 87
Bond Portfolio 2,359 88 269
Money Market Portfolio 22,283 1,007 4,018
Elect Boh A. Dickey All 67,166 1,895
Elect Barbara J. Dingfield All 67,076 1,985
Elect David F. Hill All 67,161 1,900
Elect Richard W. Hubbard All 66,956 2,106
Elect Richard E. Lundgren All 67,149 1,913
Elect Larry L. Pinnt All 67,116 1,945
Elect John W. Schneider All 67,142 1,919
Selection of Ernst & Young LLP All 66,466 1,281 1,314
</TABLE>
- 39 -
<PAGE>
SAFECO RESOURCE SERIES TRUST
BOARD OF TRUSTEES:
Boh A. Dickey, Chairman
Barbara J. Dingfield
David F. Hill
Richard W. Hubbard
Richard E. Lundgren
Larry L. Pinnt
John W. Schneider
OFFICERS:
David F. Hill, President
Ronald L. Spaulding
Vice President and Treasurer
David H. Longhurst
Vice President and Controller
INVESTMENT ADVISOR:
SAFECO Asset
Management Company
DISTRIBUTOR:
SAFECO Securities, Inc.
TRANSFER AGENT:
SAFECO Services Corporation
CUSTODIAN:
State Street Bank
<TABLE>
<S> <C>
[RE- Printed on Recycled Paper.
CY-
CLE
LOGO]
</TABLE>
This report must be preceded or
accompanied by a current prospectus.
-Registered Trademark- A registered trademark of SAFECO
Corporation.
