WM VARIABLE TRUST, 485APOS, 1999-03-02

WM VARIABLE TRUST
485APOS, 1999-03-02

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<PAGE> 1
As filed with the Securities and Exchange Commission on March 2, 1999

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Securities Act of 1933 File #033-57732
Investment Company Act of 1940 File #811-07462
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X

Pre-Effective Amendment No.

Post-Effective Amendment No. 16

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 17

WM Variable Trust

(Exact name of Registrant as specified in Charter)

1201 Third Avenue, Suite 1400, Seattle, WA 98101

(Address of principal executive offices)

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

John T. West
1201 Third Avenue, Suite 1400, Seattle, WA 98101
(Name and address of agent for service)

With a copy to:

Joseph B. Kittredge, Esq.
Ropes & Gray
One International Place
Boston, MA 02110
<PAGE> 2
It is proposed that this filing will become effective:

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

____ on (date) pursuant to paragraph (b) of Rule 485

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

_x___ on May 2, 1999 pursuant to paragraph (a)(i) of Rule 485

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

____ on (date) pursuant to paragraph (a)(ii) of Rule 485

____ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

<PAGE> 3

WM VARIABLE TRUST
Prospectus
MAY 1, 1999
- --------------------------------------------------------------------------------

+ Money Market Fund
- ----------------------------------------------------------------
+ Short Term High Quality Bond Fund
- ----------------------------------------------------------------
+ U.S. Government Securities Fund
- ----------------------------------------------------------------
+ Income Fund
- ----------------------------------------------------------------
+ Bond & Stock Fund
- ----------------------------------------------------------------
+ Growth & Income Fund
- ----------------------------------------------------------------
+ Northwest Fund
- ----------------------------------------------------------------
+ Growth Fund
- ----------------------------------------------------------------
+ Emerging Growth Fund
- ----------------------------------------------------------------
+ International Growth Fund
- ----------------------------------------------------------------
+ Strategic Growth Portfolio
- ----------------------------------------------------------------
+ Conservative Growth Portfolio
- ----------------------------------------------------------------
+ Balanced Portfolio
- ----------------------------------------------------------------
+ Flexible Income Portfolio
- ----------------------------------------------------------------
+ Income Portfolio
- ----------------------------------------------------------------

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

This Prospectus describes the Funds and Portfolios that are available as
underlying investments through your variable annuity contract. For information
about your variable annuity contract, including information about
insurance-related expenses,
see the prospectus for your variable annuity contract, which accompanies this
Prospectus.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a crime.
<PAGE> 4

WM VARIABLE TRUST

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Risk/Return Summary 2
Summary of Principal Risks 19
Description of the Funds 23
Common Investment Practices 27
How Can I Invest in the Funds and Portfolios? 35
Dividends, Distributions and Taxes 35
Organization 36
Financial Highlights 40
</TABLE>

<PAGE> 5

RISK/RETURN SUMMARY

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

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

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

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

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

2
<PAGE> 6

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

MONEY MARKET fund

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

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

Among the principal risks of investing in the Fund are:

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

YEARLY performance*
[Money Market Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 3.69
'1995' 5.46
'1996' 4.97
'1997' 4.99
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the
quarter ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (5/10/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX** N/A
</TABLE>

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

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

3
<PAGE> 7

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

SHORT TERM HIGH QUALITY BOND fund

OBJECTIVE This Fund seeks as high a level of current income as is consistent
with prudent investment management and stability of principal.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
high-quality short-term bonds and other FIXED-INCOME SECURITIES. The Fund
generally maintains a dollar-weighted average portfolio maturity of three years
or less. The Fund's investments may include corporate securities, U.S.
GOVERNMENT SECURITIES, REPURCHASE AGREEMENTS AND MORTGAGE- AND ASSET-BACKED
SECURITIES.

Among the principal risks of investing in the Fund are:

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

YEARLY performance*
[Short Term High Quality Bond Fund Performance Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1995' 9.30
'1996' 3.74
'1997' 5.90
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the
quarter ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES N/A N/A
LEHMAN BROTHERS MUTUAL FUND SHORT (1-5
[YEAR]) INVESTMENT GRADE DEBT INDEX** 7.56% N/A N/A
</TABLE>

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

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

4
<PAGE> 8

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

U.S. GOVERNMENT SECURITIES fund

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

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

Among the principal risks of investing in the Fund are:

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

YEARLY performance*
[U.S. Government Securities Fund Bar Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' -4.04
'1995' 16.89
'1996' 3.69
'1997' 9.42
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (1/6/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
LEHMAN BROTHERS GOVERNMENT BOND INDEX** 9.85% 7.18% N/A
</TABLE>

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

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

5
<PAGE> 9

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

INCOME fund

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

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

Among the principal risks of investing in the Fund are:

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

YEARLY performance*
[Income Fund Bar Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 0
'1995' 0
'1996' 0
'1997' 0
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (5/7/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX* N/A
</TABLE>

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

6
<PAGE> 10

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

HIGH YIELD fund

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

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

Among the principal risks of investing in the Fund are:

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

NOTE: THE HIGH YIELD FUND, A DIVERSIFIED SERIES OF WM TRUST I THAT IS MANAGED BY
WM ADVISORS IS NOT AVAILABLE FOR DIRECT PURCHASE THROUGH YOUR VARIABLE ANNUITY
CONTRACT. EACH OF THE PORTFOLIOS MAY, HOWEVER, INVEST SOME OF ITS ASSETS IN THE
HIGH YIELD FUND.

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE HIGH YIELD FUND BECAUSE IT HAS
NOT YET BEEN IN OPERATION FOR A FULL YEAR.

7
<PAGE> 11

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

BOND & STOCK fund

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in common
stocks, preferred stocks, bonds and convertible securities. At least 25% of the
Fund's assets are generally invested in FIXED-INCOME SECURITIES. The Fund's
investments may include U.S. GOVERNMENT SECURITIES, AMERICAN DEPOSITORY RECEIPTS
(ADRS) AND EUROPEAN DEPOSITORY RECEIPTS (EDRS), MORTGAGE-BACKED SECURITIES
(including collateralized mortgage obligations), REPURCHASE AGREEMENTS and REAL
ESTATE INVESTMENT TRUSTS (REITS).

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

Among the principal risks of investing in the Fund are:

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

No performance information is available for the Bond & Stock Fund because it has
not yet been in operation for a full year.

8
<PAGE> 12

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

GROWTH & INCOME fund

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

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

Among the principal risks of investing in the Fund are:

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

YEARLY performance
[Growth & Income Fund Annual Return Bar Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1995' 32.41
'1996' 21.81
'1997' 28.5
'1998' 0
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ). [For the period ended March 31, 1999 the Funds
return was %].

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES N/A N/A
STANDARD & POOR'S 500 COMPOSITE INDEX* N/A N/A
</TABLE>

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

9
<PAGE> 13

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

NORTHWEST fund

OBJECTIVE This Fund seeks to long-term growth of capital.

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

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

Among the principal risks of investing in the Fund are:

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

No performance information is available for the Northwest Fund because it has
not yet been in operation for a full year.

10
<PAGE> 14

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

GROWTH fund

OBJECTIVE This Fund seeks long-term capital appreciation.

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

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

Among the principal risks of investing in the Fund are:

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

YEARLY performance
[Yearly Performance Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 2.69
'1995' 37.34
'1996' 16.15
'1997' 11.24
'1998' 0
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (5/7/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
STANDARD & POOR'S 500 COMPOSITE INDEX* 28.58% 24.06% N/A
</TABLE>

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

11
<PAGE> 15

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

EMERGING GROWTH fund

OBJECTIVE This Fund seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in equity
securities, including FOREIGN INVESTMENTS, of companies with market
capitalizations of less than $1.4 billion. The Fund may also invest in
REPURCHASE AGREEMENTS and STRATEGIC TRANSACTIONS (derivatives), such as futures
and options on futures.

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

Among the principal risks of investing in the Fund are:

YEARLY performance
[Emerging Growth Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1995' 30.99
'1996' 10.04
'1997' 12.59
'1998' 0
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES N/A N/A
STANDARD & POOR'S 500 COMPOSITE INDEX* 28.58% N/A N/A
RUSSELL 2000 INDEX** -2.55% N/A N/A
</TABLE>

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

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

12
<PAGE> 16

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

INTERNATIONAL GROWTH fund

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

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

In selecting investments for the Fund, the Fund's sub-advisor seeks to identify
foreign stocks with high return on invested capital, excellent cash flow, strong
balance sheets, low institutional ownership, and strong owner management.

Among the principal risks of investing in the Fund are:

YEARLY performance
[International Growth Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 1.88
'1995' 6.61
'1996' 9.04
'1997' -2.64
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1998) One Year Five Years Ten Years (5/7/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX* 20.33% 9.50% N/A
</TABLE>

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

13
<PAGE> 17

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

STRATEGIC GROWTH portfolio

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests at least 75% of its net assets in the Bond & Stock, Growth &
Income, Northwest, Growth, Emerging Growth and International Growth Funds.

The Portfolio may invest up to 25% of its assets in each of the Money Market,
Short-Term High Quality Bond or High Yield Funds. It may also invest up to 50%
of its assets in each of the Growth & Income, Northwest, Growth, Emerging Growth
or International Growth Funds.

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

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

YEARLY performance*
[Strategic Growth Portfolio Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1998) One Year (6/1/97)
<S> <C> <C>
PORTFOLIO SHARES
STANDARD & POOR'S 500 COMPOSITE INDEX** 28.58%
RUSSELL 3000 INDEX***
</TABLE>

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

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

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

14
<PAGE> 18

- --------------------------------------------------------------------------------
CONSERVATIVE GROWTH PORTFOLIO

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests at least 60% of its net assets in the Bond & Stock, Growth &
Income, Northwest, Growth, Emerging Growth and International Growth Funds.

The Portfolio may invest up to 30% of its assets in each of the Money Market,
Short-Term High Quality Bond, U.S. Government Securities, Income or High Yield
Funds. It may also invest up to 40% of its assets in each of the Growth &
Income, Northwest, Growth, Emerging Growth or International Growth Funds.

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

YEARLY performance*
[Conservative Growth Portfolio Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past One Since Inception
(for periods ended December 31, 1998) Year (6/3/97)
<S> <C> <C>
PORTFOLIO SHARES
RUSSELL 3000 INDEX**
CAPITAL MARKET BENCHMARK***
</TABLE>

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

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

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

15
<PAGE> 19

- --------------------------------------------------------------------------------
BALANCED PORTFOLIO

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
investments among certain of the Funds to achieve their objectives. This
Portfolio invests at least 30% and no more than 70% of its net assets in the
Short Term High Quality Bond, U.S. Government Securities, Income, High Yield,
Bond & Stock, Growth & Income, Northwest, Growth, Emerging Growth and
International Growth Funds.

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

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

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

YEARLY performance*
[Balanced Portfolio Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998'
</TABLE>

During the periods shown above, the highest quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the quarter
ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past One Since Inception
(for periods ended December 31, 1998) Year (6/3/97)
<S> <C> <C>
PORTFOLIO SHARES
LEHMAN BROTHERS AGGREGATE BOND INDEX**
RUSSELL 3000 INDEX***
CAPITAL MARKET BENCHMARK****
</TABLE>

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

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

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

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

16
<PAGE> 20

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

FLEXIBLE INCOME portfolio

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests at no more than 30% of its net assets in the Bond & Stock,
Growth & Income, Northwest, Growth, Emerging Growth and International Growth
Funds.

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

YEARLY performance*
[Flexible Income Portfolio Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998'
</TABLE>

During the periods shown above, the higher quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the
quarter ended , 19 ).

PERFORMANCE CHART*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1998) One Year 9/9/97)
<S> <C> <C>
PORTFOLIO SHARES
LEHMAN BROTHERS AGGREGATE BOND INDEX**
CAPITAL MARKET BENCHMARK***
</TABLE>

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

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

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

17
<PAGE> 21

- --------------------------------------------------------------------------------
INCOME PORTFOLIO

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS All of the Portfolios allocate their
assets among certain of the Funds to achieve their objectives. This Portfolio
generally invests exclusively in the Short-Term High Quality Bond, U.S.
Government Securities, Income and High Yield Funds.

The Portfolio may invest up to 50% of its assets in each of the Money Market,
Short-Term High Quality Bond and U.S. Government Securities Funds. It may also
invest up to 40% of its assets in the Income Fund and 30% of its assets in the
High Yield Fund.

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

YEARLY Performance*
[INCOME PORTFOLIO BAR GRAPH]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998'
</TABLE>

During the periods shown above, the higher quarterly return was % (for the
quarter ended , 19 ), and the lowest was % (for the
quarter ended , 19 ).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1998) One Year (10/22/97)
<S> <C> <C>
PORTFOLIO SHARES
LEHMAN BROTHERS AGGREGATE BOND INDEX**
CAPITAL MARKET BENCHMARK***
</TABLE>

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

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

*** This is a blended mix of capital market indices that is intended to
represent a proxy for portfolio performance. The benchmark allocation is as
follows: 50% Salomon Bros. 90-day T-Bills, 30% Lehman Bros. Mutual Fund
Short (1-5) Gov/Corp Index, 10% Lehman Bros. Mortgage Index and 10% Lehman
Bros. BAA LT Corporate Bond indexes. A description of the components of the
Portfolio's Capital Market Index can be found in the Statement of Additional
Information, which you can obtain free of charge by calling 1-800-222-5852.

18
<PAGE> 22

SUMMARY OF PRINCIPAL RISKS

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

+ MARKET RISK. Each of the Funds and Portfolios is subject to market risk,
which is the general risk of unfavorable changes in the market value of a
Fund's portfolio securities. The Bond & Stock, Growth & Income, Growth,
Northwest, Emerging Growth and International Growth Funds, by investing in
equity securities, such as common stock and preferred stock, and convertible
securities, are exposed to the risk of changes in the value of equity
securities. Those risks include the risks of broader market declines as well
as more specific risks affecting the issuer, such as management performance,
financial leverage, industry problems and reduced demand for the issuer's
goods or services.

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

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

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

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

+ CURRENCY RISK. Funds such as the Short Term High Quality Bond, Income, High
Yield, Bond & Stock, Growth & Income, Growth, Emerging Growth and
International Growth Funds that invest in securities denominated in, and/or
receive revenues in, FOREIGN CURRENCIES will be subject to currency risk. This
is the risk that those currencies will decline in value relative to the U.S.
dollar, or,

19
<PAGE> 23

in the case of hedging positions, that the U.S. dollar will decline in value
relative to the currency hedged.

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

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

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

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

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

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

+ SMALLER COMPANY RISK. Market risk and liquidity risk are particularly
pronounced for stocks of companies with relatively small market
capitalizations. These companies may have limited product lines, markets or
financial resources or they may

20
<PAGE> 24

depend on a few key employees. The High Yield, Bond & Stock, Growth & Income,
Growth, Northwest, Emerging Growth and International Growth Funds (and the
Emerging Growth Fund in particular), generally have the greatest exposure to
this risk.

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

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

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

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

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

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

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

21
<PAGE> 25

PRINCIPAL RISKS by fund

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

<TABLE>
<CAPTION>
Foreign Geographic
Market Credit Currency Investment Leveraging Concentration Derivatives Liquidity Management
Fund Risk Risk Risk Risk Risk Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY
MARKET X X X X X
fund
SHORT TERM
HIGH QUALITY BOND X X X X X X X X
fund
U.S. GOVERNMENT
SECURITIES X X X X X X
fund
INCOME
fund X X X X X X X X
HIGH YIELD
fund X X X X X X X X
BOND &
STOCK X X X X X X X
fund
GROWTH &
INCOME X X X X X X X X
fund
NORTHWEST
fund X X X X X X X
GROWTH
fund X X X X X X X X
EMERGING
GROWTH X X X X X X X X
fund
INTERNATIONAL
GROWTH X X X X X X X X
fund

<CAPTION>
Smaller Money
Company Market
Fund Risk Risk
<S> <C> <S> <C> <C>
MONEY X
MARKET
fund
SHORT TERM
HIGH QUALITY BOND
fund
U.S. GOVERNMENT
SECURITIES
fund
INCOME
fund
HIGH YIELD
fund x
BOND &
STOCK x
fund
GROWTH &
INCOME x
fund
NORTHWEST
fund x
GROWTH
fund x
EMERGING
GROWTH X
fund
INTERNATIONAL
GROWTH X
fund

</TABLE>

<PAGE> 26

DESCRIPTION OF THE FUNDS

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

THE FUNDS

MONEY MARKET FUND. To accomplish its objective, the Money Market Fund invests
only in U.S. dollar-denominated short-term, money market securities. It will
only purchase obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or securities that are, or have issuers that are,

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

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

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

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

The Fund invests solely in money market instruments that are selected from the
following six general categories:

- - U.S. Government securities;

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

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

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

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

- - repurchase agreements.

SHORT TERM HIGH QUALITY BOND FUND. Although the Short Term High Quality Bond
Fund maintains a dollar-weighted average portfolio maturity of three years or
less, it may hold individual securities with remaining maturities of more than
three years. For purposes of the weighted average maturity calculation, a
mortgage instrument's average life will be considered to be its maturity, and
the date on which the interest rate of a floating rate security can next change
will be used in place of its maturity date.

The Fund will invest substantially all of its assets in debt securities that, at
the time of purchase, are rated in one of the top four rating categories by one
or more NRSROs or, if unrated, are judged to be of comparable quality by the
Advisor ("investment grade" securities). All debt securities purchased by the
Fund will be investment grade at the time of purchase. Under normal market
conditions, the Fund will invest at least 65% of its total assets in U.S.
Government securities, corporate debt obligations or mortgage-related securities
rated in one of the two highest categories by an NRSRO or determined by the
Advisor to be of comparable quality.

The Fund may invest in obligations issued or guaranteed by domestic and foreign
governments and government agencies and instrumentalities and in high-grade
corporate debt obligations, such as bonds, debentures,

23
<PAGE> 27

notes, equipment lease and trust certificates, mortgage-backed securities,
collateralized mortgage obligations and asset-backed securities.

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

U.S. GOVERNMENT SECURITIES FUND. The U.S. Government Securities Fund invests
primarily in a selection of obligations of the U.S. Government and its agencies.
The Fund may also invest in collateralized mortgage obligations or repurchase
agreements which are secured by those types of obligations. It is a policy of
the Fund to invest only in the following types of securities: (1) U.S.
Government securities, including mortgage-backed securities; (2) obligations
secured by the full faith and credit of the U.S. Government or its
instrumentalities; and (3) collateralized mortgage obligations and repurchase
agreements which are secured by obligations identified in (1) and (2) above. The
Fund may borrow up to 5% of its total net assets for emergency, non-investment
purposes and may enter into dollar roll transactions.

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

- - debt and convertible debt securities;

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

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

- - preferred stocks and convertible preferred stocks;

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

- - deposits in U.S. banks.

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

BOND & STOCK FUND. Under normal market conditions, at least 25% of the Bond &
Stock Fund's assets will be invested in fixed-income securities, including
preferred stocks and that portion of the value of convertible securities which
is not attributable to a conversion feature. The Fund may invest in money market
instruments for temporary or defensive purposes. The Fund may invest in
fixed-income securities of any maturity, including mortgage-backed securities,
U.S. Government securities and asset-backed securities, and may also invest up
to 35% of its assets, in below investment grade bonds (sometimes called junk
bonds). The Fund may purchase or sell U.S. Govern-

24
<PAGE> 28

ment securities or collateralized mortgage obligations on "when-issued" or
"delayed-delivery" basis in an aggregate of up to 20% of the market value of its
total net assets. The Fund may invest up to 25% of its assets in real estate
investment trusts, known as "REITs." The Fund may write (sell) covered call
options. The Fund may invest up to 25% of its assets in U.S. dollar-denominated
securities of foreign issuers.

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

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

NORTHWEST FUND. The Northwest Fund invests in common stocks of companies
located or doing business in the Northwest states of Alaska, Idaho, Montana,
Oregon and Washington. Under normal circumstances, at least 65% of the Fund's
total assets will be invested in companies whose principal executive offices are
located in one of those states.

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

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

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

The Fund may invest up to 25% of its assets in foreign securities, usually
foreign common stocks, and up to 5% of its assets in securities of companies in
(or governments of) developing or emerging countries (sometimes referred to as
"emerging markets"). The Fund may also engage in certain options transactions,
enter into financial futures contracts and related options for the purpose of
portfolio hedging and enter into currency forwards or futures contracts and
related options for the purpose of currency hedging.

EMERGING GROWTH FUND. The Emerging Growth Fund invests primarily in equity
securities of companies with market capitalization of less than $1.4 billion at
the time of purchase. In addition to common stock, the Fund's equity securities
may include convertible bonds, convertible preferred stock and warrants to
purchase common stock, as well as cash and cash equivalents. The Fund may invest
up to 25% of its assets in securities of foreign issuers and up to 5% of its
assets in securities in developing or emerging countries. The Fund may invest up
to 35% of its assets in non-investment-grade debt securities if the Advisor
believes that doing so will be consistent with the goal of capital appreciation.

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

The Fund invests in common stock and may invest in other securities with equity
characteristics, such as

25
<PAGE> 29

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

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

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

THE PORTFOLIOS

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

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

In order to satisfy the diversification requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), and Treasury Regulations applicable to
investments of insurance company separate accounts, no more than 55% of a
Portfolio's assets will be represented by investments in any one Fund, no more
than 70% of the Portfolio's assets will be represented by investments in any
three Underlying Funds and no more than 90% of the Portfolio's assets will be
represented by investments in any four Underlying Funds.

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

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

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

- - commercial paper, including master notes;

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

- - repurchase agreements.

At the time a Portfolio invests in any commercial paper, bank obligations or
repurchase agreements, the issuer must have outstanding debt rated A or higher
by Moody's or S&P; the issuer's parent corporation, if any, must have
outstanding commercial paper rated Prime-1 by Moody's or A-1 by S&P; or, if no
such ratings are available, the investment must be of comparable quality in the
opinion of the Advisor. In addition to purchasing shares of the Funds, a
Portfolio may use futures contracts and options in order to remain effectively
fully invested in proportions consistent with the Advisor's current asset
allocation strategy for the Portfolio. Specifically, each Portfolio may enter
into futures contracts and options thereon, provided that the aggregate deposits
required on these contracts do not exceed 5% of the Portfolio's total assets. A
Portfolio may also use futures contracts and options

26
<PAGE> 30

for bona fide hedging transactions. Futures contracts and options may also be
used to reallocate the Portfolio's assets among asset categories while
minimizing transaction costs, to maintain cash reserves while simulating full
investment, to facilitate trading, to seek higher investment returns, or to
simulate full investment when a futures contract is priced attractively or is
otherwise considered more advantageous than the underlying security or index. As
a fundamental policy, which may not be changed without shareholder vote, each
Portfolio will concentrate its investments in shares of the Funds.

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

NOTE: THE HIGH YIELD FUND IS NOT AVAILABLE FOR DIRECT PURCHASE THROUGH YOUR
VARIABLE ANNUITY CONTRACT. EACH OF THE PORTFOLIOS MAY, HOWEVER, INVEST SOME OF
ITS ASSETS IN THE HIGH YIELD FUND.

COMMON INVESTMENT PRACTICES

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

BORROWING. The Funds may borrow money from banks solely for temporary or
emergency purposes, subject to various limitations. If a Fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is paid
off. For the Money Market, Short Term High Quality Bond, U.S. Government
Securities, Income, High Yield, Growth, Growth & Income, International Growth
and Emerging Growth Funds, and for the Portfolios, such borrowings may not
exceed 30% of total assets. The Bond & Stock, and Northwest Funds may borrow up
to 5% of their total assets for emergency, non-investment purposes. The Short
Term High Quality Bond, U.S. Government Securities, Income, Growth & Income and
Emerging Growth Funds are prohibited from borrowing money or entering into
reverse repurchase agreements or dollar roll transactions (described below) in
the aggregate in excess of one-third of the Funds' total assets (after giving
effect to such borrowings and transactions). If a Fund makes additional leverage
investments while borrowings are outstanding, this will have the effect of
leveraging the Fund. The Short Term High Quality Bond, Growth, International
Growth and Emerging Growth Funds and the Portfolios may not purchase additional
securities when borrowings, including reverse repurchase agreements, for each of
these except the Short Term High Quality Bond Fund, exceed 5% of total assets.
Leveraging will magnify declines as well as increases in the NAV of a Fund's or
Portfolio's shares and in the yield on a Fund's or Portfolio's investments. Each
of the foregoing percentage limitations on borrowings is a fundamental policy of
the respective Funds and Portfolios.

The Income, Short Term High Quality Bond and U.S. Government Securities Funds
may enter into DOLLAR ROLLS. A Fund enters into a DOLLAR ROLL by selling
securities for delivery in the current month and simultaneously contracting to
repurchase, typically in 30 or 60 days, substantially similar (same type, coupon
and maturity) securities on a specified future date. Under the Investment
Company Act of 1940, as amended (the "1940 Act"), this may be considered
borrowing from the counterparty and may produce similar leveraging effects. The
proceeds of the initial sale of securities in the dollar roll transactions, for
example, may be used to purchase long-term securities which will be held during
the roll period. To the extent that the proceeds of the initial sale of
securities are invested in bonds, the Fund will be subject to market risk on
those bonds as well as similar risk with respect to the securities the Fund is
required to repurchase.

Each of the Short Term High Quality Bond, Growth, International Growth and
Emerging Growth Funds may engage in REVERSE REPURCHASE AGREEMENTS. Reverse
repurchase agreements involve the risk that the market value of the securities
sold by a Fund may decline

27
<PAGE> 31

below the repurchase price of the securities and, if the proceeds from the
reverse repurchase agreement are invested in securities, that the market value
of the securities bought may decline at the same time there is decline in the
securities sold (and required to be repurchased).

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

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

FLOATING RATE, INVERSE FLOATING RATE AND VARIABLE RATE INVESTMENTS. The Income,
U.S. Government Securities, Short Term High Quality Bond, High Yield and the
Growth & Income Funds may purchase floating rate, inverse floating rate and
variable rate investments, including participation interests therein.

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

The Short Term High Quality Bond, U.S. Government Securities, Income and High
Yield Funds may purchase mortgage-backed securities that are floating rate,
inverse floating rate and variable rate obligations. Although variable rate
demand notes are frequently not rated by credit rating agencies, a Fund may
purchase unrated notes that are determined by the Advisor or the Fund's
sub-advisor to be of comparable quality at the time of purchase to rated
instruments that may be purchased by the Fund. The absence of an active
secondary market could make it difficult for a Fund to dispose of these
securities in the event the issuer of the note were to default on its payment
obligations, and the Fund could, for this or other reasons, suffer a loss as a
result of the default.

These Funds may also invest in securities representing interests in tax-exempt
securities, known as inverse floating obligations or "residual interest bonds,"
which pay interest rates that vary inversely with changes in the interest rates
of specified short-term tax-exempt securities or an index of short-term
tax-exempt securities. The interest rates on inverse floating-rate obligations
or residual interest bonds will typically decline as short-term market interest
rates increase and increase as short-term market rates decline. These securities
have the effect of providing a degree of investment leverage. They will
generally respond to changes in market interest rates more rapidly than
fixed-rate long-term securities (typically twice as fast). As a result, the
market values of inverse floating-rate obligations and residual interest bonds
will generally be more volatile than the market values of fixed-rate tax-exempt
securities.

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

These Funds also may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between

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<PAGE> 32

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

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

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

While the foregoing actions are intended to protect the Fund from adverse
currency movements, there is a risk that currency movements involved will not be
properly anticipated, and there can be no assurance that such transactions will
be available or that the Funds will use such transactions even if they are
available. Use of currency hedging techniques may also be limited by the need to
protect the status of the Fund as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code").

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

- - fluctuations in currency exchange rates,

- - devaluation of currencies,

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

- - reduced availability of public information concerning issuers, and

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

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

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<PAGE> 33

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

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

GEOGRAPHIC CONCENTRATION. Potential investors in the Northwest Fund, should
consider the possibly greater risk arising from the geographic concentration of
their investments, as well as the current and past financial condition of the
States in the Northwest. See the SAI for a more detailed description of these
risks.

HOLDINGS IN OTHER INVESTMENT COMPANIES. When the Advisor or a Fund's
sub-advisor believes that it would be beneficial to the Fund, each of the Short
Term High Quality Bond, Emerging Growth, Growth and International Growth Funds
may invest up to 10% of its assets in securities of mutual funds that are not
affiliated with the Advisor or the Fund's sub-advisor. As a shareholder in any
such mutual fund, the Fund will bear its ratable share of the mutual fund's
expenses, including management fees, and will remain subject to the Fund's
advisory and administration fees with respect to the assets so invested. In
addition, the Growth Fund may invest Fund assets in money market funds
affiliated with Janus (its sub-advisor), provided that Janus remits to the Fund
the amount of any investment advisory and administrative services fees paid to
Janus as the investment manager of the money market fund.

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

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

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

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

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

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

- - securities the disposition of which is restricted under federal securities
laws (excluding certain Rule 144A securities, as described below).

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

Each of the Funds may also purchase RESTRICTED SECURITIES (provided such
securities are, in the case of the Money Market, Income, U.S. Government
Securities, Bond & Stock, Growth & Income and Northwest Funds, eligible for
resale pursuant to Rule 144A under the Securities Act of 1933, as amended).
Although

30
<PAGE> 34

recent and ongoing developments in the securities markets have resulted in
greater trading of restricted securities, making restricted securities, in many
instances, more liquid than they once were considered to be, investing in
restricted securities could increase the level of illiquidity of the portfolio
securities of a Fund. This could make it more difficult for a Fund to fulfill
shareholder redemption orders on a timely basis. If a Fund were required to sell
these securities on short notice, it might be unable to obtain fair market
value.

LENDING OF SECURITIES. The Short Term High Quality Bond, Emerging Growth,
Growth and International Growth Funds each may lend portfolio securities up to
20% of total assets to brokers and other financial organizations. The Bond &
Stock, Growth & Income and Northwest Funds may lend portfolio securities up to
33% of total assets. These transactions involve a risk of loss to the Fund if
the counterparty should fail to return such securities to the Fund upon demand.

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

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

The following table shows, for each indicated Fund, the average percentage of
its total assets that was invested during the past fiscal year in securities
assigned to the various rating categories by S&P, or if unrated by S&P, assigned
to comparable rating categories by another NRSRO, and in unrated securities
determined by the Advisor to be of comparable quality:

<TABLE>
<CAPTION>
Income Bond & Stock
S&P RATING Fund Fund
- -----------------------------------------------------------------
<S> <C> <C>
AAA (or US Treasury).....................
AA.......................................
A........................................
BBB......................................
BB.......................................
B........................................
Not Rated................................
</TABLE>

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Income, Short Term High
Quality Bond, High Yield, and U.S. Government Securities Funds may also invest
in GOVERNMENT STRIPPED MORTGAGE-BACKED SECURITIES issued or guaranteed by GNMA,
FNMA or FHLMC. These securities represent beneficial ownership interests in
either periodic principal distributions (PRINCIPAL-ONLY SECURITIES OR "PO
STRIPS") or interest distributions (INTEREST-ONLY SECURITIES OR "IO STRIPS") on
mortgage-backed certificates issued by GNMA, FNMA or FHLMC, as the case may be.
The mortgages backing GNMA certificates include conventional 30-year fixed-rate
mortgages, 15-year fixed-rate mortgages, graduated payment mortgages, and
adjustable-rate mortgages.

The U.S. Government guarantees the timely payment of interest and principal for
these securities. However, the guarantees do not extend to the securities' yield
or value, which are likely to vary inversely with fluctuations in interest
rates. Also the guarantees do not extend to the yield or value of the Fund's
shares. Investing in government stripped mortgage-backed securities involves the
risks normally associated with investing in mortgage-backed securities issued by
government or government-related entities. In addition, the yields on PO and IO
strips are extremely sensitive to prepayments on the underlying PO and IO
strips, mortgage loans. If a decline in the level of prevailing interest rates
results in a higher than anticipated rate of principal prepayment, distributions
of principal will be accelerated, thereby reducing the yield to maturity on IO
strips and increasing the yield to maturity on PO strips. Conversely, if an
increase in the level of prevailing interest rates results in a rate of
principal prepayments lower than anticipated, distributions of principal will be
deferred, thereby increasing the yield to maturity on IO strips and decreasing
the yield to maturity on PO strips. Sufficiently high prepayment rates could
result in the Fund losing some or all of its

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<PAGE> 35

initial investment in an IO strip. The Funds will acquire government stripped
mortgage-backed securities only if a liquid secondary market for the securities
exists at the time of acquisition. However, there can be no assurance that the
Funds will be able to effect a trade of a government stripped mortgage-backed
security at a time when it wishes to do so.

The Income, Bond & Stock and Growth & Income Funds may also invest in commercial
mortgage-backed securities, which are similar to government stripped
mortgage-backed securities, except that they are not issued or guaranteed by
governmental entities. Commercial mortgage-backed securities include
collateralized mortgage obligations and real estate mortgage investment conduits
("REMICs"). While commercial mortgage-backed securities are generally structured
with one or more types of credit enhancement, they typically lack a guarantee by
an entity having the credit status of a governmental agency or instrumentality.

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

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

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

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

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

STRATEGIC TRANSACTIONS. Subject to the investment limitations and restrictions
stated elsewhere in this Prospectus and the SAI, each of the Funds and

32
<PAGE> 36

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

Strategic Transactions may be used

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

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

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

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

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

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

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

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

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

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

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

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

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

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

33
<PAGE> 37

When-issued securities may include bonds purchased on a "when, as and if issued"
basis, under which the issuance of the securities depends on the occurrence of a
subsequent event, such as approval of a proposed financing by appropriate
municipal authorities. A significant commitment of a Fund's assets to the
purchase of securities on a "when, as and if issued" basis may increase the
volatility of the Fund's NAV.

YEAR 2000. Many computer software systems in use today cannot properly process
date-related information from and after January 1, 2000. Should any of the
computer systems employed by the Fund's or Portfolio's major service providers
fail to process this type of information properly, that could have a negative
impact on the Fund's or Portfolio's operations and the services that are
provided to the Fund's or Portfolio's shareholders. WM Advisors and WM
Shareholder Services have advised the Funds and Portfolios that they are
reviewing all of their computer systems with the goal of modifying or replacing
such systems prior to January 1, 2000 to the extent necessary to avoid any such
negative impact. In addition, the Advisor has been advised by the Custodian that
it is also in the process of reviewing its systems with the same goal. As of the
date of this prospectus, the Funds and Portfolios and the Advisor have no reason
to believe that these goals will not be achieved. Similarly, the values of
certain of the Funds' or Portfolio's assets may be adversely affected by the
inability of their issues or third parties to properly process date-related
information from and after January 1, 2000.

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

34
<PAGE> 38

HOW CAN I INVEST IN THE FUNDS
AND PORTFOLIOS?

Shares of the Funds and Portfolios are currently offered only to American
General Life Insurance Company ("AGL") for the purpose of providing investment
choices under its variable annuity contracts. The Funds (other than the Bond &
Stock and Northwest Funds) are investment choices under the WM Advantage
variable annuity contract issued by AGL (the "WM Advantage Contract"). All of
the Funds and Portfolios are investment choices under the WM Strategic Asset
Manager variable annuity contract issued by AGL (the "WM Strategic Asset Manager
Contract," and together with the WM Advantage Contract, the "Contracts").
Although each of the Portfolios may invest in shares of the High Yield Fund,
such shares are not available for direct purchase through the Contracts.

PURCHASE AND REDEMPTION

The shares of the Funds and Portfolios are sold in a continuous offering to
insurance companies for their separate accounts to fund Contracts. Net purchase
payments under the Contracts are placed in one or more of the divisions of the
insurance company separate accounts and are invested in the shares of the Funds
corresponding to such divisions. Shares of the Funds and Portfolios are
purchased and redeemed by the insurance company at net asset value without sales
or redemption charges.

For each day on which a Fund's or Portfolio's net asset value is calculated,
each separate account transmits to the Trust any orders to purchase or redeem
shares of the Fund(s) and Portfolio(s) based on the purchase payments,
redemption (surrender) requests and transfer requests from Contract owners,
annuitants or beneficiaries which are priced as of that day. Purchases and
redemptions are effected at the net asset value next-determined after receipt by
the Trust of a properly completed purchase or redemption order.

All purchase and redemption orders will be processed in accordance with
applicable regulations. The Trust may also suspend redemption, if permitted
under the 1940 Act, for any period during which the New York Stock Exchange is
closed or during which trading is restricted by the SEC or the SEC declares that
an emergency exists. Redemption may also be suspended during other periods
permitted by the SEC for the protection of the Trust's shareholders.

PURCHASE THROUGH THE SAM PROGRAM. Owners of the WM Advantage Contract may elect
to participate in the WM Strategic Asset Management Program, which is referred
to as the SAM Program in this Prospectus. The SAM Program is an active
investment management service offered through WM Advisors that allocates
separate account values across a number of investment divisions selected to meet
different long-term investment objectives. Depending on market conditions, WM
Advisors from time to time changes or reallocates the combination of separate
account divisions, or the amount invested in each, to implement the various SAM
strategies. In addition, account balances of Contract owners participating in
the SAM Program will be periodically rebalanced to maintain the chosen
strategy's current asset allocation mix, if and when Fund performance unbalances
the strategy's mix. Normally, WM Advisors will reallocate once a quarter.

The SAM Program is currently being offered at no additional cost to Contract
owners, although WM Advisors has reserved the right to impose a charge for this
service in the future. All of the Funds and Portfolios are available through the
SAM Program.

WM Advisors may restrict or terminate the participation of WM Advantage Contract
owners in the SAM Program at any time. In addition, AGL has reserved the right
to place restrictions on transactions permitted by the WM Advantage Contract
that could result in restrictions or terminations of the SAM Program.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The tax consequences of your investment in the Trust depend upon the specific
provisions of your Contract. For more tax information regarding your Contract,
see the attached prospectus for that Contract. The following discussion is only
a brief summary of the federal income tax consequences to the Funds and
Portfolios and their insurance company shareholders based on current tax laws
and regulations, which may be changed by subsequent legislative, judicial, or
administrative action.

35
<PAGE> 39

Each Fund and Portfolio intends to distribute all or substantially all of its
net investment income and net realized capital gains to its shareholders. Very
generally, an insurance company which is a shareholder of a Fund or Portfolio
will determine its federal income tax liability with respect to distributions
from that Fund or Portfolio pursuant to the special rules of Subchapter L of the
Code.

Although the Trust intends that it and each Fund and Portfolio will be operated
so that they will have no federal income tax liability, if any such liability is
nevertheless incurred, the investment performance of the Fund or Portfolio
incurring such liability will be adversely affected. In addition, Funds or
Portfolios investing in foreign securities and currencies may be subject to
foreign taxes. These taxes would reduce the investment performance of such Funds
or Portfolios.

Because the Trust funds certain types of variable annuities, each Fund or
Portfolio is also subject to the investment diversification requirements of the
Code. Were any Fund or Portfolio to fail to comply with those requirements,
owners of annuity contracts (other than certain tax-qualified retirement
Contracts) funded through the Trust would be taxed on investment earnings under
their Contracts and would thereby lose any benefit of tax deferral. Accordingly,
the Trust will carefully monitor compliance with the diversification
requirements. For additional tax information, see "Taxes" in the SAI.

The amounts of dividends of net investment income (i.e., all income other than
capital gains) and distributions of net realized capital gains on securities
held for less than one year ("short-term capital gain"), at least one year but
less than 18 months ("28% Rate Gain"), and longer than 18 months ("20% Rate
Gain") payable to shareholders will be determined separately for each Fund and
Portfolio. Dividends and distributions paid by a Fund or Portfolio will be
automatically reinvested (at current net asset value) in addition full and
fractional shares of that Fund or Portfolio. The Money Market Fund intends to
distribute its net income as dividends for each day that net asset value is
determined. Such dividends will be declared daily and paid monthly. The Short
Term High Quality Bond, U.S. Government Securities and Income Funds will declare
and pay quarterly dividends from net investment income, and the Bond & Stock,
Northwest, Growth & Income, Growth, Emerging Growth and International Growth
Funds will declare and pay such dividends annually. Each of the Balanced,
Flexible Income and Income Portfolios will declare and pay dividends quarterly.
Both the Strategic Growth Portfolio and Conservative Growth Portfolio will
declare and pay dividends annually. All Funds and Portfolios will distribute any
net long-term capital gains, annually. Distributions of any net short-term
capital gains earned by a Fund or Portfolio will be distributed no less
frequently than annually at the discretion of the Board of Trustees.

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

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

ORGANIZATION

HOW NAV IS DETERMINED

Investment securities and other assets are valued primarily on the basis of
market quotations or, if quotations are not readily available, by a method that
the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates. As a result, changes in the value of those
currencies in relation to the U.S. dollar may affect the Funds' NAV. Because
foreign markets may be open at different times than the New York Stock Exchange,
the value of the Funds' shares may change on days when shareholders are not able
to buy or sell them. If events materially

36
<PAGE> 40

affecting the values of the Funds' foreign investments occur between the closed
foreign markets and the close of regular trading on the New York Stock Exchange,
those investments may be valued at their fair value. The NAVs are determined at
the end of each business day of the New York Stock Exchange or at 1:00 p.m.
Pacific time, whichever is earlier.

ADVISOR AND SUB-ADVISORS

The Funds and Portfolios are managed by WM Advisors, Inc., which is referred to
as the Advisor in this Prospectus. The Advisor's address is 1201 Third Avenue,
Suite 1400, Seattle, Washington 98101. The Advisor has delegated portfolio
management responsibilities in respect of the Growth, and International Growth
Funds to a sub-advisor. Each Fund and Portfolio may, to the extent permitted
under the 1940 Act, place portfolio transactions with (and pay brokerage
commissions to) affiliates of the Advisor and the sub-advisors to the Funds
indicated below. For more information see the SAI.

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

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

JANUS, 100 Fillmore Street, Denver, Colorado 80206, acts as sub-advisor to the
Growth Fund. Janus is an indirectly majority owned subsidiary of Kansas City
Southern Industries, Inc., a publicly traded holding company whose primary
subsidiaries are engaged in transportation, information processing and financial
services. Janus has been providing investment advice to mutual funds or other
large institutional clients since 1970. As of March 27, 1998, Janus' assets
under management were in excess of $67.8 billion.

WARBURG, 466 Lexington Avenue, New York, New York 10017, acts as sub-advisor to
the International Growth Fund. Warburg is a professional investment counseling
firm which provides investment services to investment companies, employee
benefit plans, endowment funds, foundations and other institutions and
individuals. As of March 30, 1998, Warburg managed approximately $15 billion of
assets. Incorporated in 1970, Warburg is indirectly controlled by Warburg,
Pincus & Co. ("WP & Co."), which has no business other than being a holding
company of Warburg and its affiliates. Lionel I. Pincus, the managing partner of
WP & Co., may be deemed to control both WP & Co. and Warburg.

INDIVIDUAL FUND MANAGERS

Gary J. Pokrzywinski, CFA, Vice President and Senior Portfolio Manager of the
Advisor, is primarily responsible for the day-to-day management of the High
Yield, Income, Short Term High Quality Bond and Target Maturity 2002 Funds. He
has managed such Funds since March 1998, January 1998 and January 1998,
respectively, and has been employed by the Advisor since 1992. Effective
November 1, 1998, Craig V. Sosey, Vice President and Portfolio Manager of the
Advisor, is primarily responsible for the day-to-day management of the U.S.
Government Securities Fund. He has been employed by the Advisor since May 1998.
Prior to that he was the Assistant Treasurer of California Federal Bank, where
he worked for over eight years. Since February 9, 1999, Randall L. Yoakum,
Chairman of the Investment Committee, has had primary responsibility for the
day-to-day management of the Growth & Income Fund. Prior to assuming these
duties, Mr. Yoakum was Chief Investment Officer for D.A. Davison & Co. (DADCO)
for 2 years. From September 1994 until he joined DADCO, Mr. Yoakum was the
Senior Vice President and Managing Director of Portfolio Manage-

37
<PAGE> 41

ment for Boatmen's Trust Company, and, prior to that, Mr. Yoakum was Senior Vice
President and Chief Equity Officer for Composite Research & Management Co. (the
predecessor to WM Advisors, Inc.). Jeffrey D. Huffman, CFA, Vice President and
Senior Portfolio Manager of the Advisor, has had primary responsibility for the
day-to-day management of the Bond & Stock Fund since 1995. Prior to 1995, Mr.
Huffman was Vice President of Trust Investments for First Interstate Bank since
1994 and a portfolio manager at Safeco since 1992. David W. Simpson, CFA, Vice
President and Senior Portfolio Manager of the Advisor, has had primary
responsibility for the day-to-day management of the Northwest Fund since 1993
and he and Linda C. Walk, CFA, who is Vice President and Portfolio Manager of
the Advisor, have been co-managers of the Emerging Growth Fund since March 1998.
Mr. Simpson has been employed by the Advisor since 1993. Prior to 1997, Ms. Walk
was a portfolio manager at Laird Norton Trust Company since 1996, a valuation
consultant for Ernst & Young LLP since 1994. Audrey S. Quaye, CPA, Vice
President and Portfolio Manager of the Advisor, is primarily responsible for the
day-to-day management of the Money Market Fund. She has managed that Fund since
March 1998 and has been employed at the Advisor since 1996. Prior to 1996, Ms.
Quaye worked at the Benham Group as a municipal credit analyst. Stephen C.
Scott, Senior Portfolio Manager, has had primary responsibility for the
day-to-day management of the Strategic Growth Portfolio, the Conservative Growth
Portfolio, the Balanced Portfolio, the Flexible Income Portfolio and the Income
Portfolio since their inception. Mr. Scott has been employed by WM Advisors, Inc
since March of 1998, prior to that date he was employed by Sierra Investment
Services Corporation with essentially identical responsibility for the
Portfolios.

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

The following people are primarily responsible for the day-to-day management of
the International Growth Fund: Harold W. Ehrlich, CFA, CIC, Managing Director of
Warburg, has 14 years of investment experience. Prior to 1998, Mr. Ehrlich was a
senior vice president, portfolio manager and analyst at Templeton Investment
Counsel Inc. Todd Jacobson, CFA, Vice President of Warburg. Prior to joining
Warburg in 1997, Mr. Jacobson was an analyst at Brown Brothers Harriman.

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

MANAGEMENT FEES

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

<TABLE>
<CAPTION>
Fees Paid as a Percentage
FUNDS of Net Assets
- -------------------------------------------------------------------
<S> <C>
Money Market Fund.................
Short Term High Quality Bond
Fund............................
U.S. Government Securities Fund...
Income Fund.......................
High Yield Fund...................
Bond & Stock Fund.................
Growth & Income Fund..............
Northwest Fund....................
Growth Fund.......................
Emerging Growth Fund..............
International Growth Fund.........
</TABLE>

*The High Yield Fund has not completed a full fiscal year. These numbers
represent the percentages of net assets the Fund has agreed to pay the Advisor
in its first full fiscal year.

[The Advisor has voluntarily undertaken, through October 31, 1999, to waive a
portion of its management fees for the following Funds and Portfolios to the
extent that total Fund operating expenses would otherwise exceed the indicated
annual rates:

<TABLE>
<CAPTION>
Total Fund
FUNDS Operating Expenses
- ------------------------------------------------------------------
<S> <C>
Money Market Fund............................. 0.73%
Short-Term High Quality Bond Fund............. 0.82%
Growth & Income Fund.......................... 1.01%
Growth Fund................................... 1.30%
Income Portfolio.............................. 1.00%
Flexible Income Portfolio..................... 1.00%]
</TABLE>

In addition, the Advisor has undertaken, through October 31, 1999, to waive all
of its management fees for the High Yield Fund.

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<PAGE> 42

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

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<PAGE> 43

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

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

MONEY MARKET FUND(A)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1998 1997 1996 1995 1994
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $ - $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... - 0.049 0.049 0.053 0.037
------- ------- ------- ------- -------
Total From Investment Operations........................ - 0.049 0.049 0.053 0.037
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... - (0.049) (0.049) (0.053) (0.037)
Distributions from Net Realized Gains..................... - - (0.000)(1)(6) - -
------- ------- ------- ------- -------
Total Distributions..................................... - (0.049) (0.049) (0.053) (0.037)
------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $ - $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return(1)............................................. -% 4.99% 4.97% 5.46% 3.69%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $ - $32,864 $23,266 $20,373 $6,159
Ratio of Operating Expenses to Average Net Assets(2)...... -% 0.75% 0.58% 0.50% 0.49%
Ratio of Net Investment Income to Average Net Assets...... -% 4.88% 4.86% 5.30% 3.84%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ -% 0.85% 0.88% 1.01% 1.25%
</TABLE>

Footnotes appear on page 51

40
<PAGE> 44
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

SHORT TERM HIGH QUALITY BOND FUND

<TABLE>
<CAPTION>
JANUARY 12,
YEAR ENDED DECEMBER 31, 1994 TO
------------------------------------------------------- DECEMBER 31,
1998 1997 1996 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.................. $ - $2.43 $2.49 $2.39 $2.50
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............................. - 0.14 0.15 0.12 0.08
Net Realized & Unrealized Gain/(Loss) on
Investments...................................... - 0.00(6) (0.06) 0.10 (0.12)
------- ------- ------- ------- -------
Total From Investment Operations................ - 0.14 0.09 0.22 (0.04)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.............. - (0.14) (0.15) (0.12) (0.07)
Distributions in Excess of Net Investment
Income...........................................
Distributions from Net Realized Gains.............
Distributions in Excess of Net Realized Gains.....
Distributions from Capital........................
------- ------- ------- ------- -------
Total Distributions............................. - (0.14) (0.15) (0.12) (0.07)
------- ------- ------- ------- -------
Net Asset Value, End of Year........................ $ - $2.43 $2.43 $2.49 $2.39
======= ======= ======= ======= =======
Total Return(1)..................................... -% 5.90% 3.74% 9.30% (1.62)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).............. $ - $11,944 $12,402 $12,365 $15,547
Ratio of Operating Expenses to Average Net
Assets(2)........................................ -% 1.00% 0.98% 0.85% 0.77%(4)
Ratio of Net Investment Income to Average Net
Assets........................................... -% 6.04% 6.08% 6.14% 5.63%(4)
Portfolio Turnover Rate........................... -% 43% 125% 188% 80%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or
Credit Allowed by the Custodian.................. -% 1.03% 1.06% 1.01% 1.10%(4)
</TABLE>

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41
<PAGE> 45
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

U.S. GOVERNMENT SECURITIES FUND(B)

Net Realized & Unrealized Gain/(Loss) on Investments...... 0.26 (0.23) 0.87(10) (0.90)(10)
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.89 0.35 1.51 (0.40)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.62) (0.58) (0.64) (0.50)
Distributions from Net Realized Gains..................... - - - (0.01)
------- ------- ------- ------- -------
Total Distributions..................................... (0.62) (0.58) (0.64) (0.51)
------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $10.04 $9.77 $10.00 $9.13
======= ======= ======= ======= =======
Total Return(1)............................................. 9.42% 3.69% 16.89% (4.04)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $61,656 $66,563 $52,303 $43,582
Ratio of Operating Expenses to Average Net Assets(2)...... 0.90% 0.94% 1.00% 0.85%
Ratio of Net Investment Income to Average Net Assets...... 6.28% 6.18% 6.68% 5.75%
Portfolio Turnover Rate................................... 194% 282% 273% 74%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.91%(8) 0.94%(8) 1.03%(8) 1.02%
Ratio of Operating Expenses to Average Net Assets
Including Interest Expense............................... 1.54%(8) 1.08%(8) 1.76%(8) 0.86%
</TABLE>

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42
<PAGE> 46
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INCOME FUND(C)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1998 1997 1996 1995 1994
------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year:......................... $9.82 $10.48 $9.06 $10.34
-------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.70 0.68 0.70 0.47
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.37 (0.66) 1.50 (1.30)
-------- ------- ------- ------- -------
Total From Investment Operations........................ 1.07 0.02 2.20 (0.83)
-------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.70) (0.68) (0.78) (0.40)
Distributions from Net Realized Gains..................... - - - (0.05)
-------- ------- ------- ------- -------
Total Distributions..................................... (0.70) (0.68) (0.78) (0.45)
-------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $10.19 $9.82 $10.48 $9.06
======== ======= ======= ======= =======
Total Return(1)............................................. 11.35% 0.43% 25.09% (8.13)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $51,670 $59,883 $60,676 $54,705
Ratio of Operating Expenses to Average Net Assets(2)...... 0.96% 0.98% 0.99% 0.93%
Ratio of Net Investment Income to Average Net Assets...... 6.95% 6.92% 7.00% 7.28%
Portfolio Turnover Rate................................... 36% 30% 42% 23%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.96% 0.98% 0.99% 1.07%
Ratio of Operating Expenses to Average Net Assets
Including Interest Expense............................... - - 0.99% -
</TABLE>

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43
<PAGE> 47
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

GROWTH & INCOME FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, JANUARY 12, 1994
--------------------------------------- TO
1998(5) 1997 1996 1995 DECEMBER 31, 1994
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $14.29 $12.83 $9.83 $10.00
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.06 0.12(7) 0.12 0.07
Net Realized & Unrealized Gain/(Loss) on Investments...... 3.90 2.54 3.05 (0.24)
-------- -------- ------- ------- -------
Total From Investment Operations........................ 3.96 2.66 3.17 (0.17)
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.10) (0.12) (0.07) -
Distributions from Net Realized Gains..................... (1.23) (1.08) (0.10) -
-------- -------- ------- ------- -------
Total Distributions..................................... (1.33) (1.20) (0.17) -
-------- -------- ------- ------- -------
Net Asset Value, End of Year................................ $16.92 $14.29 $12.83 $9.83
======== ======== ======= ======= =======
Total Return(1)............................................. 28.50% 21.81% 32.41% (1.70)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $101,794 $62,445 $46,362 $24,905
Ratio of Operating Expenses to Average Net Assets(2)...... 108% 1.13% 1.06% 1.20%(4)
Ratio of Net Investment Income to Average Net Assets...... 0.55% 0.93% 1.31% 1.63%(4)
Portfolio Turnover Rate................................... 109% 83% 70% 44%
Ratio of Operating Expenses to Average Net Assets Without
Credits Allowed by the Custodian......................... 1.08%(8) 1.13%(8) 1.06%(8) N/A
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers and/or Credits Allowed by the Custodian...... 1.08%(8) 1.13%(8) 1.16%(8) 1.55%(4)
</TABLE>

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44
<PAGE> 48
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1998(5) 1997 1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................ $16.01 $15.72 $11.48 $11.19
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).................... 0.07 0.00(6)(7) 0.04(7) 0.04
Net Realized & Unrealized Gain on Investments... 1.60 2.42 4.24 0.26
------ ------ ------ ------
Total From Investment Operations.............. 1.67 2.42 4.28 0.30
------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............ (0.02) - (0.04) (0.01)
Distributions in Excess of Net Investment
Income.........................................
Distributions from Net Realized Gains........... (2.25) (2.13) (0.00)(6) -
Distributions in Excess of Net Realized Gains...
Distributions from Capital......................
------ ------ ------ ------
Total Distributions........................... (2.27) (2.13) (0.04) (0.01)
------ ------ ------ ------
Net Asset Value, End of Year...................... $15.41 $16.01 $15.72 $11.48
====== ====== ====== ======
Total Return(1)................................... 11.24% 16.15% 37.34% 2.69%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's).............. $121,766 $116,064 $99,699 $62,763
Ratio of Operating Expenses to Average Net
Assets......................................... 1.18% 1.22% 1.24% 1.26%
Ratio of Net Investment Income to Average Net
Assets......................................... 0.07% 0.01% 0.29% 0.74%
Portfolio Turnover Rate......................... 158% 169% 187% 257%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian........ 1.19%(2) 1.22%(2) 1.24%(2) 1.32%
</TABLE>

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45
<PAGE> 49
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

EMERGING GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, JANUARY 12, 1994
---------------------------------------------------- TO
1998 1997 1996 1995 DECEMBER 31, 1994
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year............. $14.70 $13.74 $10.53 $10.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss.......................... (0.03) (0.12)(7) (0.01) (0.06)
Net Realized & Unrealized Gain on
Investments................................. 1.80 1.52 3.26 0.47
------- ------- ------- ------- -------
Total From Investment Operations........... 1.77 1.40 3.25 0.53
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income......... - - (0.04) -
Distributions in Excess of Net Investment
Income......................................
Distributions from Net Realized Gains........ (0.84) (0.44) (0.00)(6) -
Distributions in Excess of Net Realized
Gains.......................................
Distributions from Capital...................
------- ------- ------- ------- -------
Total Distributions........................ (0.84) (0.44) (0.04) -
------- ------- ------- ------- -------
Net Asset Value, End of Year................... $15.63 $14.70 $13.74 $10.53
======= ======= ======= ======= =======
Total Return(1)................................ 12.59% 10.04% 30.99% 5.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........... $45,362 $55,887 $46,058 $19,885
Ratio of Operating Expenses to Average Net
Assets(2)................................... 1.20% 1.20% 1.20% 1.23%(4)
Ratio of Net Investment Loss to Average Net
Assets...................................... (0.58)% (0.82)% (0.35)% 1.03%(4)
Portfolio Turnover Rate...................... 116% 97% 135% 192%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses
Absorbed and/or Credits Allowed by the
Custodian................................... 1.21% 1.21% 1.28% 1.38%(4)
</TABLE>

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46
<PAGE> 50
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INTERNATIONAL GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1998 1997 1996 1995 1994
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $13.02 $12.11 $11.47 $11.31
------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.71 0.07(7) 0.18 0.01

Net Realized & Unrealized Gain/(Loss) on Investments...... (0.97) 1.01 0.58 0.19(10)
------- -------- ------- ------- -------
Total From Investment Operations........................ (0.26) 1.08 0.76 0.20
------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.26) (0.17) (0.00)(6) (0.03)
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... (0.24) - (0.12) (0.01)
Distributions in Excess of Net Realized Gains.............
------- -------- ------- ------- -------
Total Distributions..................................... (0.50) (0.17) (0.12) (0.04)
------- -------- ------- ------- -------
Net Asset Value, End of Year................................ $12.26 $13.02 $12.11 $11.47
======= ======== ======= ======= =======
Total Return(1)............................................. (2.64)% 9.04% 6.61% 1.88%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $49,636 $62,355 $45,909 $46,529
Ratio of Operating Expenses to Average Net Assets(2)...... 1.35% 1.39% 1.47% 1.34%
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 0.52% 0.56% 0.91% 0.83%
Portfolio Turnover Rate................................... 84% 98% 72% 51%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.36% 1.39% 1.48% 1.50%
</TABLE>

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47
<PAGE> 51
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

STRATEGIC GROWTH PORTFOLIO(D)

<TABLE>
<CAPTION>
YEAR ENDED JUNE 3,TO
DECEMBER 31, DECEMBER 31,
1998 1997
----------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).............................. 0.10
Net Realized & Unrealized Gain on Investments............. 0.60(10)
------- -------
Total From Investment Operations........................ 0.70
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... -
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... -
------- -------
Total Distributions..................................... -
------- -------
Net Asset Value, End of Year................................ $10.70
======= =======
Total Return(1)............................................. 7.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $591
Ratio of Operating Expenses to Average Net Assets(11)..... 0.35%(4)
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 0.51%(4)
Portfolio Turnover Rate................................... 11%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 15.54%(4)
</TABLE>

CONSERVATIVE GROWTH PORTFOLIO(E)

<TABLE>
<CAPTION>
YEAR ENDED JUNE 3,TO
DECEMBER 31, DECEMBER 31,
1998(5) 1997(3)
----------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.07

Net Realized & Unrealized Gain on Investments............. 0.42(10)
------- -------
Total From Investment Operations........................ 0.49
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... -
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... -
------- -------
Total Distributions..................................... -
------- -------
Net Asset Value, End of Year................................ $10.49
======= =======
Total Return(1)............................................. 4.90%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $1,374
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.35%(4)
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 1.24%(4)
Portfolio Turnover Rate................................... 42%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 6.67%(4)
</TABLE>

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48
<PAGE> 52
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

BALANCED PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED JANUARY 3 TO
DECEMBER 31, DECEMBER 31,
1998(5) 1997(3)
<S> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.13

Net Realized & Unrealized Gain on Investments............. 0.34(10)
------- --------
Total From Investment Operations........................ 0.47
------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... -
Distributions in Excess of Net Investment Income.......... -
Distributions from Net Realized Gains..................... -
------- --------
Total Distributions..................................... -
------- --------
Net Asset Value, End of Year................................ $10.47
======= ========
Total Return(1)............................................. 4.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $2,354
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.35%(4)
Ratio of Net Investment Income/Loss to Average Net
Assets................................................... 2.34%(4)
Portfolio Turnover Rate................................... 15%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 3.97%(4)
</TABLE>

FLEXIBLE INCOME PORTFOLIO(F)

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 9 TO
DECEMBER 31, DECEMBER 31,
1998(5) 1997(3)
<S> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00
------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.04
Net Realized & Unrealized Gain on Investments............. 0.19(10)
------ -------
Total From Investment Operations........................ 0.23
------ -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... -
Distributions in Excess of Net Investment Income.......... -
Distributions from Net Realized Gains..................... -
------ -------
Total Distributions..................................... -
------ -------
Net Asset Value, End of Year................................ $10.23
====== =======
Total Return(1)............................................. 2.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period ($1,000's)....................... $100
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.34%(4)
Ratio of Net Investment Income to Average Net Assets...... 7.04%(4)
Portfolio Turnover Rate................................... 5%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 116.19%(4)
</TABLE>

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49
<PAGE> 53
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INCOME PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 22 TO
DECEMBER 31, DECEMBER 31,
1998(5) 1997(3)
-----------------------------
<S> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00
------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.00
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.00
------- ---------
Total From Investment Operations........................ 0.00
------- ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... --
Distributions in Excess of Net Investment Income.......... --
Distributions from Net Realized Gains..................... --
------- ---------
Total Distributions..................................... --
------- ---------
Net Asset Value, End of Year................................ $10.00(12)
======= =========
Total Return(1)............................................. 0.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $0
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.35%(4)
Ratio of Net Investment Income/Loss to Average Net
Assets................................................... 0.00%(4)
Portfolio Turnover Rate................................... 99%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 7,567.04%(4)
</TABLE>

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50
<PAGE> 54
- --------------------------------------------------------------------------------

FOOTNOTES TO FINANCIAL HIGHLIGHTS

<TABLE>
<C> <S>
(1) Total return is not annualized for periods less than one
year and does not reflect any applicable sales charges. The
total return would have been lower if certain fees had not
been waived and/or expenses absorbed by the investment
advisor or if fees had not been reduced by credits allowed
by the custodian.
(2) Ratio of operating expenses to average net assets includes
expenses paid indirectly beginning in fiscal 1995.
(3) From the commencement of offering shares.
(4) Annualized.
(5) On March 23, 1998, WM Advisors, Inc. replaced Sierra
Investment Advisers Corporation as investment adviser to the
Fund. In the case of the portfolios, on March 23, 1998, WM
Advisors, Inc. replace Sierra Investment Services
Corporation as investment advisor to the portfolio.
(6) Amount represents less than $0.01 per share.
(7) Per share numbers have been calculated using the average
shares method.
(8) The ratio and per share numbers include custodian fees
before reduction by credits allowed by the custodian as
required by amended disclosure requirements effective
September 1, 1995.
(9) Total returns do not reflect a sales charge and are not
annualized.
(10) The amount shown may not accord with the change in aggregate
gains and losses of portfolio securities due to the timing
of sales and redemptions of Fund shares.
(11) The Portfolios will indirectly incur their pro rata share of
the expenses of the Funds when they purchase. Such
underlying Fund expenses are not included in the table.
(a) Formerly, Sierra Global Money Fund.
(b) Formerly, Sierra U.S. Government Fund.
(c) Formerly, Sierra Corporate Income Fund.
(d) Formerly, Sierra Capital Growth Portfolio.
(e) Formerly, Sierra Growth Portfolio.
(f) Formerly, Sierra Value Portfolio.
</TABLE>

51
<PAGE> 55
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1999

WM VARIABLE TRUST
1201 THIRD AVENUE, SUITE 1400
SEATTLE, WASHINGTON 98101

MONEY MARKET FUND GROWTH & INCOME FUND
SHORT TERM HIGH QUALITY BOND FUND GROWTH FUND
U.S. GOVERNMENT SECURITIES FUND NORTHWEST FUND
INCOME FUND EMERGING GROWTH FUND
BOND & STOCK FUND INTERNATIONAL GROWTH FUND

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

INCOME PORTFOLIO * FLEXIBLE INCOME PORTFOLIO * BALANCED PORTFOLIO
CONSERVATIVE GROWTH PORTFOLIO * STRATEGIC GROWTH PORTFOLIO

This Statement of Additional Information ("SAI") is not a prospectus
but supplements the information contained in the Prospectus relating to the
Money Market Fund, Short Term High Quality Bond Fund, U.S. Government Securities
Fund, Income Fund, Bond & Stock Fund, Growth & Income Fund, Growth Fund,
Northwest Fund, Emerging Growth Fund and International Growth Fund (the
"Funds"), and Income Portfolio, Flexible Income Portfolio, Balanced Portfolio,
Conservative Growth Portfolio and Strategic Growth Portfolio (the "Portfolios")
of WM Variable Trust (the "Trust"), dated May 1, 1999, as revised from time to
time. The SAI should be read in conjunction with the Prospectus, as amended or
supplemented from time to time. The Trust's Annual Reports for the years ended
December 31, 1997 and December 31, 1998 are incorporated by reference into this
SAI. The Trust's Prospectus and Annual Reports may be obtained without charge by
writing to American General Life Insurance Company ("AGL"), Attention: Annuity
Administration, P.O. Box 1401, Houston, Texas 77251-1401 or by calling AGL
at 800-247-6584.
<PAGE> 56
TABLE OF CONTENTS

GENERAL INFORMATION AND HISTORY...................................3

MANAGEMENT OF THE TRUST...........................................3

INVESTMENT ADVISOR...............................................10

CUSTODIAN, ADMINISTRATOR, TRANSFER AGENT AND DISTRIBUTOR.........13

INVESTMENT OBJECTIVES AND POLICIES...............................15

INVESTMENT RESTRICTIONS..........................................30

PERFORMANCE......................................................41

TAXES ........................................................44

FINANCIAL STATEMENTS.............................................46

DESCRIPTION OF S&P, MOODY'S, DUFF AND FITCH RATINGS..............47

-2-
<PAGE> 57
GENERAL INFORMATION AND HISTORY

The Trust is an open-end management investment company. Some of the
information required to be in this SAI is also included in the Trust's current
Prospectus relating to the Funds and Portfolios. As discussed in the Prospectus,
the five Portfolios invest in the Funds (except the Bond & Stock Fund), the High
Yield Fund, a series of WM Trust I (the "High Yield Fund"). To avoid unnecessary
repetition, reference is made to related sections of the Prospectus. Copies of
the Registration Statement as filed, including Part C, may be obtained from the
Securities and Exchange Commission (the "SEC") by paying the charges prescribed
under its rules and regulations.

MANAGEMENT OF THE TRUST

TRUSTEES AND OFFICERS OF THE TRUST

The names of the Trustees and executive officers of the Trust, together with
information as to their dates of birth and principal business occupations during
the past five years, are set forth below. The executive officers of the Trust
are employees of organizations that provide services to the Trust. Each Trustee
who is an "interested person" of the Trust, as defined in the Investment Act of
1940, as amended (the "1940 Act"), is indicated by an asterisk.

TRUSTEES:

DAVID E. ANDERSON (11/17/26)
Trustee
17960 Seabreeze Drive
Pacific Palisades, California 90272

Former President and CEO of GTE California, Inc. from 1979 to 1988, retired in
1988. Director of Barclay's Bank of California until 1988. Currently involved in
the following charitable organizations as a director on the following boards:
Board chairman, Children's Bureau Foundation; Board member, Upward Bound House
of Santa Monica; Past campaign chairman of United Way, former chairman, Los
Angeles Area Chamber of Commerce.

WAYNE L. ATTWOOD, MD (1/28/29)
Trustee
2931 S. Howard
Spokane, Washington 99203

Retired doctor of internal medicine and gastroenterology. Former president,
Medical Staff - Sacred Heart Medical Center; former president of Spokane Society
of Internal Medicine; and former president of Spokane Physicians for Social
Responsibility.

ARTHUR H. BERNSTEIN, ESQ. (6/8/25)
Trustee
11661 San Vicente Blvd., Suite 701
Los Angeles, California 90049

President of Bancorp Capital Group, Inc., and Bancorp Venture Capital, Inc.
Previously served on the board of directors of Great Western Leasing
Corporation, subsidiary of Great Western Financial Corporation ("GWFC"), until
the subsidiary was sold in 1987. Director of Ryder System, Inc., chairman of the
board of trustees of the California Family Studies Center and Phillips Graduate
Institute since 1984.

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<PAGE> 58
KRISTIANNE BLAKE (1/22/54)
Trustee
705 W. 7th, Suite D
Spokane, Washington 99204

CPA specializing in personal financial and tax planning since 1975. Served as a
partner with the accounting firm of Deloitte, Haskins & Sells prior to starting
own firm in 1987. Community activities include: board chair, United Way of
Spokane County; treasurer, YMCA of the Inland Northwest; past president, Junior
League of Spokane; board member, Spokane Intercollegiate Research & Technology
Institute Foundation; board member, Spokane Joint Center for Higher Education;
board member, Spokane Area Chamber of Commerce; and board member, St. George's
School.

EDMOND R. DAVIS, ESQ. (9/24/28)
Trustee
550 South Hope Street, 21st Floor
Los Angeles, California 90071-2604

Joined the law firm of Brobeck, Phleger & Harrison as a partner in 1987 and
responsible for estate planning, and trusts and estate matters in the Los
Angeles office. Prior to joining the firm, had a similar position for 20 years
with the law firm of Overton, Lyman & Prince in Los Angeles. His expertise has
been recognized in Who's Who in California, the Best Lawyers of America, and
Who's Who in American Law.

JOHN W. ENGLISH (3/27/33)
Trustee
50 H New England Ave.
P.O. Box 640
Summit, New Jersey 07902-0640

Retired vice president and chief investment officer of the Ford Foundation (a
non-profit charitable organization). Chairman of the board and director, the
China Fund, Inc., (closed-end mutual fund). Director, Paribas Trust for
Institutions (an open-end mutual fund). Trustee, Retail Property Trust (a
company providing management services for a shopping center).

*ANNE V. FARRELL (07/17/35)
Trustee
425 Pike Street, Suite 510
Seattle, Washington 98101

Joined the Seattle Foundation (a charitable foundation) in 1980 as executive
vice president. Became president in 1984. Also serves on the board of Washington
Mutual, Inc. ("Washington Mutual") and Blue Cross of Washington and Alaska.
Listed in Who's Who in America. Currently a Regent at Seattle University and
president of the Rainier Club in Seattle. Past President of the Nature
Conservancy of Washington Lakeside School and Seattle Rotary Club.

CARROL R. MCGINNIS, Age: 54
Trustee
9225 Katy Freeway, Suite 205
Houston, TX 77024

Term to commmence upon the completion of the transactions contemplated in the
plan of reorganization filed with the SEC with the WM Trust I and WM Trust II
Registration Statement on Form N-14 on November 6, 1998.

Founder, McGinnis Investments, since 1994. Prior thereto, served in various
positions with Transamerica Fund Management Company and its predecessor
companies from 1969-1993, including as president and chief operating officer.

*MICHAEL K. MURPHY (1/14/37)
Trustee
PO Box 3366
Spokane, Washington 99220-3366

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<PAGE> 59
Chairman and CEO of CPM Development Corporation (a holding company which
includes Central Pre-mix Concrete Company) and president of Inland Asphalt
Company. Member of the board of directors for Washington Mutual, and Momentum,
Inc. Former president and director of Inland Empire Chapter - Associated General
Contractors, and former director of National Aggregates Associates.

ALFRED E. OSBORNE, JR. PH.D. (12/7/44)
Trustee
110 Westwood Plaza, Suite C305
Los Angeles, California 90095-1481

University professor, researcher and administrator at University of California
Los Angeles since 1972. Director, Times Mirror Company (newspaper publisher),
United States Filer Corporation, Nordstrom Inc. (clothing retailer) and
Greyhound Lines, Inc. (bus company). Independent general partner, Technology
Funding Venture Partners V, and former Governor of the National Association of
Securities Dealers, Inc.

*WILLIAM G. PAPESH (1/21/43)
President and Trustee
1201 Third Avenue
Suite 1400
Seattle, WA 98101

President and director of WM Advisors, Inc. ("WM Advisors" or the "Advisor") and
WM Shareholder Services, Inc. ("Shareholder Services"), WM Funds Distributor,
Inc. (the "Distributor") and WM Services, Inc., (a registered Investment Advisor
and broker/dealer). Currently Governor of the Investment Company Institute;
member of the Washington State Securities Advisory Committee; former Governor of
the National Association of Securities Dealers, Inc. (Vice-Chairman, Finance
Committee); former Governor of the Securities Industry Association.

DANIEL L. PAVELICH (9/12/44)
Trustee
Two Prudential Plaza
180 North Stetson Avenue, Suite 4300
Chicago, Illinois 60601

Chairman and CEO of BDO Seidman, a leading national accounting and consulting
firm. Worked in Seidman's Spokane office for 27 years and is a former presiding
member of the firm's board of directors. A member of the American Institute of
CPAs and served as a vice president of the Washington Society of CPAs board of
directors.

JAY ROCKEY (1/5/28)
Trustee
2121 Fifth Avenue
Seattle, Washington 98121

Founder and chairman of The Rockey Company, a public relations and marketing
communications consulting firm with headquarters in Seattle and offices in
Portland and Spokane. Founder and director of RXL Pulitzer, an international
multimedia company that is a joint venture with Pulitzer Publishing Co. of St.
Louis. History includes managing New York City public relations for Aluminum
Company of America, director of public relations for the Seattle World's Fair
and the presidency of the Public Relations Society of America.

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<PAGE> 60
MORTON O. SCHAPIRO, Age: 45
Trustee
4535 Lenox Avenue
Sherman Oaks, CA 91423

Term to commence upon the completion of the transactions contemplated in the
plan of reorganization file with the SEC with the WM Trust I and WM Trust II
Registration Statement on Form N-14 on November 6, 1998.

Dean of the College of Letters, Arts and Sciences and Professor of Economics,
University of Southern California, since 1991. Prior thereto, Professor of
Economics, Williams College, 1980-1991.

RICHARD C. YANCEY (5/28/26)
Trustee
535 Madison Avenue
New York, New York 10022

Investment Banker - SBC Warburg, Dillion, Read & Co., Inc., New York City, 1952
through 1992. Served as vice president, managing director and director and
senior advisor at Dillion, Read & Co. Member of the boards of directors of
AdMedia Partners Inc. (business and financial advisory services company), CapMAC
Holdings Inc. (financial guarantee and reinsurance company), Fiberite, Inc
(manufacturer of high temperature composite materials), The Scoreboard, Inc.
(sports and entertainment products distributor), and Czech and Slovak American
Enterprise Fund (investment fund).

OFFICERS:

GENE G. BRANSON (12/26/45)
Vice President
601 W. Main Street, Suite 1100
Spokane, Washington 99201

Mr. Branson is a senior vice president and director of the Distributor and
Shareholder Services, and a vice president and director of WM Advisors.

MONTE D. CALVIN, CPA (1/22/44)
Senior Vice President and Chief Financial Officer
1201 Third Avenue
Suite 1400
Seattle, WA 98101

Mr. Calvin is an executive vice president of Shareholder Services, and serves as
the chief financial officer of the Trust.

SANDY CAVANAUGH (5/10/54)
Senior Vice President
1631 Broadway
Sacramento, CA 95818

Ms. Cavanaugh is a senior vice president of the Distributor.

THERESE M. HOGAN (__/__/__)
Assistant Secretary
First Data Investor Services Group
One Exchange Place
53 State Street
Boston, MA 02109

Ms. Hogan is a vice president of First Data Investor Services Group.

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<PAGE> 61
WILLIAM G. PAPESH (1/21/43)
President
1201 Third Avenue
Suite 1400
Seattle, WA 98101

Please refer to the biographical description in the section above.

RICHARD H. ROSE (7/8/55)
Assistant Treasurer
First Data Investor Services Group
One Exchange Place
53 State Street
Boston, MA 02109

Mr. Rose currently acts as Senior Vice President of First Data Investor Services
Group, Inc., a subsidiary of First Data Corp. (prior to May 6, 1994, a
subsidiary of The Boston Company Advisors, Inc.

JOHN T. WEST (1/21/55)
Vice President, Secretary and Compliance Officer
1201 Third Avenue
Suite 1400
Seattle, WA 98101

Mr. West is a vice president of Shareholder Services.

The Trustees and certain officers of the Trust are also trustees or
officers of WM Trust I and WM Trust II, WM Strategic Asset Management Portfolios
("SAMP") and the Composite Deferred Series, Inc. ("Composite Deferred"). WM
Trust I, WM Trust II, SAMP and Composite Deferred are investment companies
advised by WM Advisors.

REMUNERATION. No director, officer or employee of WM Advisors, the advisor to
the Funds and Portfolios, the sub-advisors of the Funds (the "sub-advisors"), or
any of their affiliates will receive any compensation from the Trust for serving
as an officer or Trustee of the Trust. The Trust pays each Trustee who is not a
director, officer or employee of WM Advisors, the sub-advisors, or any of their
affiliates, a fee of $3,000 per day for each Board meeting attended (except that
the lead Trustee, presently Mr. Yancey, receives an additional $6,000 per annum
and each committee chairman receives $500 per committee meeting attended), and
reimburses them for travel and out-of-pocket expenses.

As of December 31, 1998, the Trustees and officers of the Trust owned, in the
aggregate, less than 1% of the outstanding shares of each of the Funds and
Portfolios.

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<PAGE> 62
The following Compensation Table shows aggregate compensation paid to each of
the Trust's Trustees by the Trust and the WM Group of Funds, respectively,
during the year ended December 31, 1998.

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<PAGE> 63
COMPENSATION TABLE

<TABLE>
<CAPTION>
Pension or
Aggregate Compensation Retirement
Name of Person From the Trust for Benefits Accrued as Estimated Total Compensation From the WM
fiscal year ended Part of Fund Benefits Upon Group of Funds* Paid to Trustees
December 31, 1998 Expenses Retirement for fiscal year ended December 31,1998
<S> <C> <C> <C> <C>
David E. Anderson+ $_____ $0 $0 $_____
Wayne L. Attwood, M.D. $_____ $0 $0 $_____
Arthur H. Bernstein, Esq. $_____ $0 $0 $_____
Kristianne Blake $_____ $0 $0 $_____
Edmond R. Davis, Esq. $_____ $0 $0 $_____
John W. English $_____ $0 $0 $_____
Anne V. Farrell** $_____ $0 $0 $_____
Michael K. Murphy** $_____ $0 $0 $_____
Alfred E. Osborne, Jr., Ph.D. $_____ $0 $0 $_____
William G. Papesh** $_____ $0 $0 $_____
Daniel L. Pavelich $_____ $0 $0 $_____
Jay Rockey $_____ $0 $0 $_____
Richard C. Yancey $_____ $0 $0 $_____
</TABLE>

* The WM Group of Funds consists of the Trust, WM Trust I, WM Trust II
and SAMP.

** A Trustee who is an "interested person" of the Trust as defined in the
1940 Act.

+ Mr. Anderson was paid $1,000 for Audit Committee Meetings held by the
Trust.

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<PAGE> 64
INVESTMENT ADVISOR

WM Advisors serves as investment advisor to each of the Funds and
Portfolios, and each sub-advisor serves as investment sub-advisor to one or more
Funds, pursuant to separate written agreements. Certain of the services provided
by, and the fees paid to, WM Advisors and the sub-advisors, are described in the
Prospectus under "MANAGEMENT OF THE TRUST - INVESTMENT MANAGEMENT." WM Advisors
and the sub-advisors each (i) compensates its respective directors and pays the
salaries of its respective officers and employees, (ii) compensates its
respective officers and employees that are employed by the Trust, and (iii)
maintains office facilities for the Trust.

The tables below show the investment advisory fees paid for the periods ended
December 31, 1996, 1997 and 1998. WM Advisors received investment advisory
fees from the Funds and Portfolios for the fiscal year ended December 31, 1998,
while for the fiscal years ended December 31, 1996 and 1997 the Funds paid
to Sierra Investment Advisors Corporation ("Sierra Advisors"), the investment
advisor to the Funds prior to January 30, 1998, and the Portfolios paid Sierra
Investment Services Corporation, the investment advisor to the Portfolios prior
to January 30, 1998, for the period ended December 31, 1997, the following
advisory fees*:

<TABLE>
<CAPTION>
1998
EXPENSES
FEES PAID FEES WAIVED REIMBURSED
--------- ----------- ----------
<S> <C> <C> <C>
Money Market Fund
Short Term High Quality Bond Fund
U.S. Government Securities Fund
Income Fund
Growth & Income Fund
Growth Fund
Emerging Growth Fund
International Growth Fund
Strategic Growth Portfolio
Conservative Growth Portfolio
Balanced Portfolio
Flexible Income Portfolio
Income Portfolio
</TABLE>

<TABLE>
<CAPTION>
1997
EXPENSES
FEES PAID FEES WAIVED REIMBURSED
--------- ----------- ----------

<S> <C> <C> <C>
Money Market Fund $ 121,580 $29,077 $ 0
Short Term High Quality Bond Fund $ 57,289 $ 3,755 $ 0
U.S. Government Securities Fund $ 376,599 $ 0 $ 0
Income Fund $ 345,006 $ 0 $ 0
Growth & Income Fund $ 697,411 $ 0 $ 0
Growth Fund $1,055,947 $ 0 $ 0
Emerging Growth Fund $ 419,081 $ 0 $ 0
International Growth Fund $ 567,918 $ 0 $ 0
Strategic Growth Portfolio $ 177 $ 0 $ 0
Conservative Growth Portfolio $ 433 $ 0 $ 0
Balanced Portfolio $ 849 $ 0 $ 0
Flexible Income Portfolio $ 17 $ 0 $ 0
Income Portfolio $ ----- $ 0 $ 0
</TABLE>

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<PAGE> 65

<TABLE>
<CAPTION>
1996
EXPENSES
FEES PAID FEES WAIVED REIMBURSED
<S> <C> <C> <C>
Money Market Fund $ 40,314 $61,700 $ 0
Short Term High Quality Bond Fund $ 56,022 $10,732 $ 0
U.S. Government Securities Fund $363,268 $ 0 $ 0
Income Fund $381,643 $ 0 $ 0
Growth & Income Fund $436,358 $ 0 $ 0
Growth Fund $961,131 $ 0 $ 0
Emerging Growth Fund $461,791 $ 0 $ 0
International Growth Fund $524,048 $ 0 $ 0
</TABLE>

Sub-advisory fees were paid by Sierra Advisors for the fiscal years ended
December 31, 1996, and 1997, and by WM Advisors for the fiscal year ended
December 31 1998 to the sub-advisors in the following amounts*:

<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
FEES FEES FEES FEES FEES FEES
PAID WAIVED PAID WAIVED PAID WAIVED

<S> <C> <C> <C> <C> <C> <C>
Money Market Fund $45,197 $0 $30,604 $0

Short Term High $18,313 $0 $20,026 $0
Quality
Bond Fund

U.S. Government
Securities Fund
BlackRock $116,118 $0 $112,008 $0

Income Fund $159,233 $0 $176,143 $0

Growth & Income Fund $392,279 $0 $245,451 $0

Growth Fund $605,184 $0 $551,003 $0

Emerging Growth Fund $251,665 $0 $276,789 $0

International Growth
Fund
J.P. Morgan $0 $0 $81,007 $0
Warburg, Pincus** $304,657 $0 $211,192 $0
</TABLE>

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<PAGE> 66
- ----------

* Each of the Strategic Growth, Conservative Growth and Balanced Portfolios
commenced operations on June 3, 1997. The Flexible Income Portfolio and the
Income Portfolio commenced operations on September 9, 1997 and October 22, 1997,
respectively. The Bond & Stock and Northwest Funds commenced operations on
____________________.

** On April 8, 1996 Warburg, Pincus Counsellors, Inc. replaced J.P. Morgan
Investment Management Inc. as the sub-advisor for the International Growth Fund.

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<PAGE> 67
CUSTODIAN, ADMINISTRATOR, TRANSFER AGENT AND DISTRIBUTOR

The assets of the Trust are held under bank custodianship in accordance
with the 1940 Act. Boston Safe Deposit and Trust Company, located at One Boston
Place, Boston, Massachusetts 02108, serves as custodian for the Funds (the
"Custodian"). In addition, the Trust may employ foreign sub-custodians that are
approved by the Board of Trustees to hold foreign assets. Shareholder Services,
located at 1201 Third Avenue, Suite 1400, Seattle, Washington 98101, serves as
the Trust's administrator and transfer agent. Prior to December 23, 1997, Sierra
Fund Administration Corporation ("Sierra Administration") served as the
administrator to the Trust.

For the fiscal years ended December 31, 1996 and 1997 the Funds paid to
Sierra Administration, the administrator for the Funds and the Portfolios prior
to January 30, 1998, and for the fiscal year ended December 31, 1998 the funds
paid to Shareholder Services the following administration fees*:

<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
FEES FEES FEES FEES FEES FEES
PAID WAIVED PAID WAIVED PAID WAIVED
---- ------ ---- ------ ---- ------

<S> <C> <C> <C> <C> <C> <C>
Money Market Fund $54,236 $ 0 $36,725 $ 0

Short Term High $21,976 $ 0 $24,031 $ 0
Quality Bond Fund

U.S. Government $112,980 $ 0 $108,980 $ 0
Securities Fund

Income Fund $95,540 $ 0 $105,686 $ 0

Growth & Income Fund $156,925 $ 0 $98,181 $ 0

Growth Fund $213,366 $ 0 $193,861 $ 0

Emerging Growth Fund $86,099 $ 0 $95,144 $ 0

International Growth $109,677 $ 0 $100,408 $ 0
Fund
Strategic Growth $ 0 $265 ------ ------
Portfolio**

Conservative Growth $ 0 $665 ------ ------
Portfolio**

Balanced Portfolio** $ 0 $1,274 ------ ------

Flexible Income $ 0 $25 ------ ------
Portfolio**

Income Portfolio** ------ ------ ------ ------
</TABLE>

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<PAGE> 68
*Each of the Strategic Growth, Conservative Growth and Balanced Portfolios
commenced operations on June 3, 1997. The Flexible Income Portfolio and the
Income Portfolio commenced operations on September 9, 1997 and October 22, 1997,
respectively. The Bond & Stock and Northwest Funds commenced operations on
_________________ 1998.

** In addition, Sierra Administration absorbed expenses for each of the
Portfolios for the year ended December 31, 1997, as follows: Strategic Growth --
$26,463, Conservative Growth -- $27,116, Balanced Portfolio -- $29,258, Flexible
Income Portfolio -- $19,620, and the Income Portfolio -- $5,469.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Ropes & Gray, located at One International Place, Boston, Massachusetts
02110 serve as counsel to the Trust.

Deloitte & Touche LLP, located at 50 Fremont Street, San Francisco, CA
94105, serves as independent accountants to the Trust. Price Waterhouse LLP,
located at 160 Federal Street, Boston, Massachusetts 02110, served as
independent accountants to the Trust prior to March 24, 1998.

ORGANIZATION OF THE TRUST

The Trust is organized as an unincorporated business trust under the
laws of The Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust dated January 27, 1993, as amended from time to time (the
"Declaration of Trust"). Prior to March 20, 1998, the Trust was known as The
Sierra Variable Trust. Certificates representing shares in the Trust are not
physically issued. The Trust's custodian and the Trust's transfer agent maintain
a record of each shareholder's ownership of Trust shares. Shares do not have
cumulative voting rights, which means that holders of more than 50% of the
shares voting for the election of Trustees can elect all Trustees. Shares are
transferable but have no preemptive, conversion or subscription rights.
Shareholders generally vote by Fund or Portfolio except with respect to the
election of Trustees and the selection of independent accountants.

Under normal circumstances, there will be no meetings of shareholders
for the purpose of electing Trustees unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders, at
which time the Trustees then in office promptly will call a shareholders'
meeting for the election of Trustees. Under the 1940 Act, shareholders of record
of no less than two-thirds of the outstanding shares of the Trust may remove a
Trustee through a declaration in writing or by vote cast in person or by proxy
at a meeting called for that purpose. Under the Declaration of Trust, the
Trustees are required to call a meeting of shareholders for the purpose of
voting upon the question of removal of any such Trustee when requested in
writing to do so by the shareholders of record of not less than 10% of the
Trust's outstanding shares.

The record owner of all the Trust's shares is Separate Account D of
AGL. Thus, AGL may be deemed to control the Trust. However, Contract owners may
be deemed to have beneficial ownership

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<PAGE> 69
of shares allocable to their Contracts. [As of December 31, 1998, to the Trust's
knowledge, no Contract owner had shares allocable to Contracts equal to more
than five percent of any Fund.]

Massachusetts law provides that the shareholders, under certain
circumstances, could be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust
or a Trustee. The Declaration of Trust provides for indemnification from the
Trust's property for all losses and expenses of any shareholder held personally
liable for the obligations of the Trust. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust would be unable to meet its obligations, a
possibility that the Trust's management believes is remote. Upon payment of any
liability incurred by the Trust, the shareholder paying the liability will be
entitled to reimbursement from the assets of the relevant Fund or Portfolio. The
Trustees intend to conduct the operations of the Trust in such a way so as to
avoid, to the extent possible, ultimate liability of the shareholders for
liabilities of the Trust.

INVESTMENT OBJECTIVES AND POLICIES

The Prospectus discusses the investment objective or objectives of each
of the Funds, the High Yield Fund and the Portfolios and the policies to be
employed to achieve such objectives. This section contains supplemental
information concerning the types of securities and other instruments in which
the Funds, the High Yield Fund and the Portfolios may invest, the investment
policies and portfolio strategies that each may utilize and certain risks
attendant to such investments, policies and strategies. For this "Investment
Objectives and Policies" section only, the High Yield Fund shall also be
referred to as a "Fund."

STRATEGIES AVAILABLE TO ALL FUNDS AND PORTFOLIOS

RATINGS AS INVESTMENT CRITERIA. In general, the ratings of nationally
recognized statistical rating organizations ("NRSROs"), such as Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's ("S&P"), and Duff and
Fitch, represent the opinions of these agencies as to the quality of securities
which they rate. It should be emphasized, however, that such ratings are
relative and subjective and are not absolute standards of quality. These ratings
will be used by the Funds and the Portfolios as initial criteria for the
selection of portfolio securities, but the Funds and the Portfolios will also
rely upon the independent advice of WM Advisors or their respective sub-advisors
to evaluate potential investments. The Appendix to this SAI contains further
information concerning the ratings of these services and their significance.

To the extent that the rating given by an NRSRO for securities may
change as a result of changes in such organization or its rating system, each of
the Funds and the Portfolios will attempt to use comparable ratings as standards
for its investments in accordance with the investment policies contained in the
Prospectus and in this SAI.

U.S. GOVERNMENT SECURITIES. U.S. Government Securities include debt
obligations of varying maturities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.

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<PAGE> 70
U.S. Government Securities include direct obligations of the U.S. Treasury, and
securities issued or guaranteed by the Federal Housing Administration, Farmers
Home Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association ("GNMA"), General
Services Administration, Central Bank for Cooperatives, Federal Farm Credit
Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation
("FHLMC"), Federal Intermediate Credit Banks, Resolution Trust Corporation,
Federal Land Banks, Federal National Mortgage Association ("FNMA"), Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory Board
and Student Loan Marketing Association. Direct obligations of the U.S. Treasury
include a variety of securities that differ in their interest rates, maturities
and dates of issuance. Because the U.S. Government is not obligated by law to
provide support to an instrumentality it sponsors, a Fund or Portfolio will
invest in obligations issued by such an instrumentality only if WM Advisors or
the relevant sub-advisor determines that the credit risk with respect to the
instrumentality does not make its securities unsuitable for investment.

BANK OBLIGATIONS. Domestic commercial banks organized under federal law
are supervised and examined by the Comptroller of the Currency and are required
to be members of the Federal Reserve System and to be insured by the Federal
Deposit Insurance Corporation (the "FDIC"). Domestic banks organized under state
law are supervised and examined by state banking authorities but are members of
the Federal Reserve System only if they elect to join. Most state banks are
insured by the FDIC (although such insurance may not be of material benefit to a
Fund or Portfolio, depending upon the principal amount of certificates of
deposit ("CDs") of each state bank held by a Fund or Portfolio) and are subject
to federal examination and to a substantial body of federal law and regulation.
As a result of federal and state laws and regulations, domestic branches of
domestic banks are, among other things, generally required to maintain specific
levels of reserves, and are subject to other supervision and regulation designed
to promote financial soundness.

Obligations of foreign branches of U.S. banks and of foreign branches
of foreign banks, such as CDs and time deposits ("TDs"), may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and governmental regulation.
Obligations of foreign branches of U.S. banks and foreign banks are subject to
the risks associated with investing in foreign securities generally. Foreign
branches of U.S. banks and foreign branches of foreign banks are not necessarily
subject to the same or similar regulatory requirements that apply to U.S. banks,
such as mandatory reserve requirements, loan limitations, and accounting,
auditing and financial recordkeeping requirements. In addition, less information
may be publicly available about a foreign branch of a U.S. bank or about a
foreign bank than about a U.S. bank.

Obligations of U.S. branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation as well as governmental action in the country in which the foreign
bank has its head office. A U.S. branch of a foreign bank may or may not be
subject to reserve requirements imposed by the Federal Reserve System or by the
state in which the branch is located if the branch is licensed in that state.
The deposits of branches licensed by certain states may not necessarily be
insured by the FDIC.

In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign banks and foreign branches of U.S. banks, WM Advisors
or the relevant sub-advisors will carefully evaluate such investments on a
case-by-case basis.

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<PAGE> 71
A Fund or a Portfolio may purchase a CD, TD or bankers' acceptances
issued by a bank, savings and loan association or other banking institution with
less than $1 billion in assets (a "Small Issuer Bank Obligation") only so long
as the issuer is a member of the FDIC or supervised by the Office of Thrift
Supervision (the "OTS") and so long as the principal amount of the Small Issuer
Bank Obligation is fully insured by the FDIC and is no more than $100,000. Each
of the Funds and Portfolios will at any one time hold only one Small Issuer Bank
Obligation from any one issuer.

MORTGAGE-BACKED SECURITIES. The mortgage-backed securities in which the
Funds and Portfolios may invest may be classified as governmental or
government-related, depending on the issuer or guarantor. Governmental
mortgage-backed securities are backed by the full faith and credit of the United
States. GNMA, the principal U.S. guarantor of such securities, is a wholly-owned
U.S. Government corporation within the Department of Housing and Urban
Development. Government-related mortgage-backed securities which are not backed
by the full faith and credit of the United States include those issued by FNMA
and FHLMC. FNMA is a government-sponsored corporation owned entirely by private
stockholders, which is subject to general regulation by the Secretary of Housing
and Urban Development. Pass-through securities issued by FNMA are guaranteed as
to timely payment of principal and interest by FNMA. FHLMC is a corporate
instrumentality of the United States, the stock of which is owned by the Federal
Home Loan Banks. Participation certificates representing interests in mortgages
from FHLMC's national portfolio are guaranteed as to the timely payment of
interest and ultimate collection of principal by FHLMC. In addition, the Income,
Bond & Stock and Growth & Income Funds may invest in commercial mortgage-backed
securities. While these securities generally are structured with one or more
types of credit enhancement, they are issued by non-governmental entities and
are not guaranteed by a governmental agency or instrumentality.

Entities may create mortgage loan pools offering pass-through
investments in addition to those described above. The mortgages underlying these
securities may be alternative mortgage instruments, that is, mortgage
instruments in which principal or interest payments may vary or terms to
maturity may be shorter than previously customary. As new types of
mortgage-backed securities are developed and offered to investors, the Funds and
the Portfolios will, consistent with their respective investment objectives and
policies, consider making investments in such new types of securities.

The average maturity of pass-through pools of mortgage-backed
securities varies with the maturities of the underlying mortgage instruments. In
addition, a pool's stated maturity may be shortened by unscheduled payments on
the underlying mortgages. Factors affecting mortgage prepayments include the
level of interest rates, general economic and social conditions, the location of
the mortgaged property and the age of the mortgage. Because prepayment rates of
individual mortgage pools vary widely, it is not possible to accurately predict
the average life of a particular pool. Common industry practice, for example, is
to assume that prepayments will result in a 7- to 9-year average life for pools
of fixed-rate 30-year mortgages. Pools of mortgages with other maturities of
different characteristics will have varying average life assumptions.

REPURCHASE AGREEMENTS. Each Fund and Portfolio may invest in repurchase
agreements without limitation. The Money Market, U.S. Government Securities,
Income, Bond & Stock, Growth & Income and Northwest Funds may enter into
repurchase agreements with brokers, dealers and banks to temporarily invest cash
reserves provided that repurchase agreements maturing in greater than 7 days
cannot exceed 10% of each Fund's total assets.

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STRATEGIES AVAILABLE TO ALL FUNDS (EXCEPT THE MONEY MARKET FUND) AND
THE PORTFOLIOS WHERE NOTED

OVER-THE-COUNTER OPTIONS. An over-the-counter option (an option not
traded on a national securities exchange) may be closed out only with the other
party to the original option transaction. While a Fund will seek to enter into
over-the-counter options only with dealers who agree to or are expected to be
capable of entering into closing transactions with the Fund, there can be no
assurance that the Fund will be able to liquidate an over-the-counter option at
a favorable price at any time prior to its expiration. Accordingly, the Fund
might have to exercise an over-the-counter option it holds in order to realize
any profit thereon and thereby would incur transactions costs on the purchase or
sale of the underlying assets. If the Fund cannot close out a covered call
option written by it, it will not be able to sell the underlying security until
the option expires or is exercised. Furthermore, over-the-counter options are
not subject to the protections afforded purchasers of listed options by the
Options Clearing Corporation or other clearing organizations.

REVERSE REPURCHASE AGREEMENTS AND BORROWING. Each of the Funds other
than the Money Market Fund may engage in reverse repurchase agreements, subject
to the percentage restrictions on borrowing, because under the 1940 Act, reverse
repurchase agreements may be considered borrowings by the seller. Accordingly,
for the Short Term High Quality Bond, Growth, International Growth and Emerging
Growth Funds and for the Portfolios, borrowing may not exceed 30% of total
assets. In addition, the Portfolios may not purchase additional securities when
borrowing exceeds 5% of total assets. The Money Market, U. S. Government
Securities, Income, Bond & Stock, Growth & Income and Northwest Funds may borrow
up to 5% of total assets for emergency purposes. In addition, the Money Market
Fund may borrow up to 33-1/3% of total assets to meet redemption requests. The
Short Term High Quality Bond Fund is prohibited from borrowing money or entering
into reverse repurchase agreements or dollar roll transactions in the aggregate
in excess of 33-1/3% of the Fund's total assets (after giving effect to such
borrowings). A Fund will not engage in reverse repurchase transactions for the
purpose of leverage.

WHEN-ISSUED SECURITIES AND DELAYED DELIVERY TRANSACTIONS. In order
to secure yields or prices deemed advantageous at the time, each of the Funds
(other than the Money Market Fund) may purchase or sell securities on a
when-issued or a delayed-delivery basis. The Fund will enter into when-issued
transactions for the purpose of acquiring portfolio securities and not for the
purpose of leverage. Due to fluctuations in the value of securities purchased on
a when-issued or a delayed-delivery basis, the yields obtained on such
securities may be higher or lower than the yields available in the market on the
dates when the securities are actually delivered to the Fund. Similarly, the
sale of securities for delayed delivery can involve the risk that the prices
available in the market when delivery is made may actually be higher than those
obtained in the transaction itself.

A segregated account in the name of the Fund consisting of cash or
other liquid assets equal to the amount of when-issued or delayed-delivery
commitments will be established at the Custodian. For the purpose of determining
the adequacy of the securities in the accounts, the deposited securities will be
valued at market or fair value. If the market or fair value of the securities
declines, additional cash or securities will be placed in the account daily so
that the value of the account will equal the amount of such commitments by the
Fund. On the settlement date, the Fund will meet its obligations from
then-available cash flow, the sale of securities held in the segregated account,
the sale of other securities or, although it would not normally expect to do so,
from the sale of securities purchased on a

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when-issued or delayed-delivery basis themselves (which may have a greater or
lesser value than the Fund's payment obligations).

STRATEGIC TRANSACTIONS. Subject to the investment limitations and
restrictions stated elsewhere in this SAI and in the Prospectus, each of the
Funds, except for the Money Market Fund, may utilize various other investment
strategies as described below to hedge various market risks, to manage the
effective maturity or duration of fixed-income securities or for other bona fide
hedging purposes. None of the Funds currently intends to enter into strategic
transactions, excluding strategic transactions that are "covered" or entered
into for bona fide hedging purposes, that are in the aggregate principal amount
in excess of 15% of the Fund's net assets.

Strategic transactions have associated risks including possible default
by the other party to the transaction, illiquidity and, to the extent that WM
Advisors or the sub-advisor's view as to certain market movements is incorrect,
losses greater than if they had not been used. Use of put and call options,
currency transactions or options and futures transactions entails certain risks
as described herein and in the Prospectus in sections relating to such
investment or instruments. Losses resulting from the use of strategic
transactions would reduce net asset value, and possibly income, and such losses
can be greater than if the strategic transactions had not been utilized.

The use of strategic transactions for portfolio management purposes
involves special considerations and risks. Additional risks pertaining to
particular strategies that make up strategic transactions are described in other
sections of this SAI. Successful use of most strategic transactions depends upon
WM Advisors' or the sub-advisor's ability to predict movements of the overall
securities and interest rate markets, which requires different skills than
predicting changes in the prices of individual securities. There can be no
assurance that any particular strategy adopted will succeed. There may be
imperfect correlation, or even no correlation, between price movements of
strategic transactions and price movements of the related portfolio or currency
positions. Such a lack of correlation might occur due to factors unrelated to
the value of the related portfolio or currency positions, such as speculative or
other pressures on the markets in which strategic transactions are traded.
Strategic transactions, if successful, can reduce risk of loss or enhance
income, by wholly or partially offsetting the negative effect of, or accurately
predicting, unfavorable price movements or currency fluctuations in the related
portfolio or currency position. However, strategic transactions can also reduce
the opportunity for gain by offsetting the positive effect of favorable price
movements in the positions. In addition, a Fund might be required to maintain
assets as "cover," maintain segregated accounts or make margin payments when it
takes positions in strategic transactions involving obligations to third parties
(i.e., strategic transactions other than purchased options). These requirements
might impair the Fund's ability to sell a portfolio security or currency
position or make an investment at a time when it would otherwise be favorable to
do so, or require that the Fund sell a portfolio security or currency position
at a disadvantageous time. Certain provisions of the Internal Revenue Code of
1986, as amended (the "Code") may accelerate or adversely impact the character
of certain strategic transactions.

SWAPS, CAPS, FLOORS AND COLLARS. Among the strategic transactions into
which a Fund may enter, to the extent consistent with its investment policies
and restrictions, are interest rate, currency and index swaps and the purchase
or sale of related caps, floors and collars. A Fund would enter into these
transactions primarily to preserve a return or spread on a particular investment
or portion of its portfolio, to protect against currency fluctuations, as a
duration management technique or

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to protect against any increase in the price of securities the Fund anticipates
purchasing at a later date. A Fund will use these transactions as hedges and not
speculative investments and will not sell interest rate caps or floors where it
does not own securities or other instruments providing the income stream the
Fund may be obligated to pay. Interest rate swaps involve the exchange by a Fund
with another party of their respective commitments to pay or receive interest,
e.g., an exchange of floating rate payments for fixed rate payments with respect
to a notional amount of principal. A currency swap is an agreement to exchange
cash flows on a notional amount of two or more currencies based on the relative
value differential among them and an index swap is an agreement to swap cash
flows on a notional amount based on changes in the values of the reference
indices. The purchase of a cap entitles the purchaser to receive payments on a
notional principal amount from the party selling such cap to the extent that a
specified index exceeds a predetermined interest rate or amount. The purchase of
a floor entitles the purchaser to receive payments on a notional principal
amount from the party selling such floor to the extent that a specified index
falls below a predetermined interest rate or amount. A collar is a combination
of a cap and a floor that preserves a certain return within a predetermined
range of interest rates or value.

A Fund will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Fund receiving or paying, as the case may
be, only the net amount of the two payments. Inasmuch as these swaps, caps,
floors and collars are entered into for good faith hedging purposes, WM Advisors
and the Trusts believe that such obligations do not constitute senior securities
under the 1940 Act and, accordingly, will not treat them as being subject to the
Fund's borrowing restrictions. The swap market has grown substantially in recent
years with a large number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation. Caps, floors
and collars are more recent innovations for which standardized documentation has
not yet been fully developed and, accordingly, they are less liquid than swaps.

FUTURES ACTIVITIES. Each of the Funds is permitted to engage in
strategic transactions and each of the Portfolios may enter into futures
contracts and options on futures contracts that are traded on a U.S. exchange or
board of trade. These investments may be made for the purpose of hedging against
changes in the value of its portfolio securities due to anticipated changes in
interest rates and market conditions, and for otherwise permitted strategic
transactions.

FUTURES CONTRACTS. An interest rate futures contract provides for the
future sale by one party and the purchase by the other party of a certain amount
of a specific financial instrument (debt security) at a specified price, date,
time and place. A bond index futures contract is an agreement pursuant to which
two parties agree to take or make delivery of an amount of cash equal to the
difference between the value of the index at the close of the last trading day
of the contract and the price at which the index contract was originally
written. No physical delivery of the underlying securities in the index is made.

The purpose of entering into a futures contract is to protect the Fund
or Portfolio from fluctuations in the value of its securities caused by
anticipated changes in interest rates or market conditions without necessarily
buying or selling the securities.

No consideration is paid or received by a Fund or Portfolio upon
entering into a futures contract. Initially, a Fund or Portfolio would be
required to deposit with the broker an amount of cash

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or cash equivalents equal to approximately 1% to 10% of the contract amount
(this amount is subject to change by the board of trade on which the contract is
traded and members of such board of trade may charge a higher amount). This
amount is known as "initial margin" and is the equivalent of a performance bond
or good faith deposit on the contract, which is returned to the Fund or
Portfolio upon termination of the futures contract, assuming all contractual
obligations have been satisfied. Subsequent payments, known as "variation
margin," to and from the broker, will be made daily as the price of the index or
securities underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known as
"marking-to-market." At any time prior to the expiration of a futures contract,
a Fund or Portfolio may elect to close the position by taking an opposite
position, which will operate to terminate its existing position in the contract.

There are several risks in connection with the use of futures contracts
as a hedging device. Successful use of futures contracts is subject to the
ability of WM Advisors or the relevant sub-advisor to correctly predict
movements in the direction of interest rates or changes in market conditions.
These predictions involve skills and techniques that may be different from those
involved in the management of the portfolio being hedged. In addition, there can
be no assurance that there will be a correlation between movements in the price
of the underlying index or securities and movements in the price of the
securities which are the subject of the hedge. The decision as to whether, when
and how to hedge involves the exercise of skill and judgment, and even a
well-conceived hedge may be unsuccessful to some degree because of market
behavior or unexpected trends in interest rates.

Although the Funds and Portfolios intend to enter into futures
contracts only if there is an active market for such contracts, there is no
assurance that an active market will exist for the contracts at any particular
time. Most U.S. futures exchanges and boards of trade limit the amount of
fluctuation permitted in futures contract prices during a single trading day.
Once the daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit. It is possible that futures contract
prices would move to the daily limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of futures positions
and subjecting some futures traders to substantial losses. In such event, and in
the event of adverse price movements, a Fund or Portfolio would be required to
make daily cash payments of variation margin. In such circumstances, an increase
in the value of the portion of the portfolio being hedged, if any, may partially
or completely offset losses on the futures contract. However, as described
above, there is no guarantee that the price of the securities being hedged will,
in fact, correlate with the price movements in a futures contract and thus
provide an offset to losses on the futures contract.

To ensure that transactions constitute bona fide hedges in instances
involving the purchase or sale of a futures contract, the Funds and the
Portfolios will be required to either (i) segregate sufficient cash or liquid
assets to cover the outstanding position or (ii) cover the futures contract by
either owning the instruments underlying the futures contract or by holding a
portfolio of securities with characteristics substantially similar to the
underlying index or stock index comprising the futures contract or by holding a
separate option permitting it to purchase or sell the same futures contract.
Because of the imperfect correlation between the movements in the price of
underlying indexes or stock indexes of various futures contracts and the
movement of the price of securities in their portfolios, the Funds and the
Portfolios will periodically make adjustments to its index futures contracts
positions to appropriately reflect the relationship between the underlying
portfolio and the indexes. The Funds and the Portfolios will not maintain short
positions in index or stock index futures contracts, options written on index or
stock index futures contracts and options written on indexes or stock indexes,
if in the

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aggregate, the value of these positions exceeds the current market value of
their portfolios plus or minus the unrealized gain or loss on those positions.

OPTIONS ON FUTURES CONTRACTS. An option on a futures contract, as
contrasted with the direct investment in such a contract, gives the purchaser
the right, in return for the premium paid, to assume a position in the futures
contract at a specified exercise price at any time prior to the expiration date
of the option. Upon exercise of an option, the delivery of the futures position
by the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's futures margin account,
which represents the amount by which the market price of the futures contract
exceeds, in the case of a call, or is less than, in the case of a put, the
exercise price of the option on the futures contract. The potential loss related
to the purchase of an option on futures contracts is limited to the premium paid
for the option (plus transaction costs). Because the price of the option to the
purchaser is fixed at the point of sale, there are no daily cash payments to
reflect changes in the value of the underlying contract. The value of the option
does however change daily and that change would be reflected in the net asset
value of the Fund or the Portfolio holding the option.

When engaging in strategic transactions, the Funds and the Portfolios
may purchase and write put and call options on futures contracts that are traded
on a U.S. exchange or board of trade as a hedge against changes in the value of
its portfolio securities, and may enter into closing transactions with respect
to such options to terminate existing positions. There is no guarantee that such
closing transactions can be effected.

There are several risks relating to options on futures contracts. The
ability to establish and close out positions on such options will be subject to
the existence of a liquid market. In addition, the purchase of put or call
options will be based upon predictions as to anticipated interest rate and
market trends by WM Advisors or the relevant sub-advisor, which could prove to
be inaccurate. Even if the expectations of WM Advisors or the sub-advisors are
correct, there may be an imperfect correlation between the change in the value
of the options and the portfolio securities hedged.

STRATEGIES AVAILABLE TO THE SHORT TERM HIGH QUALITY BOND, BOND & STOCK, GROWTH &
INCOME, GROWTH, INTERNATIONAL GROWTH, NORTHWEST AND EMERGING GROWTH FUNDS

OPTIONS ON SECURITIES. The Short Term High Quality Bond, Bond & Stock,
Growth & Income, Growth, International Growth, Northwest and Emerging Growth
Funds may write covered put options and covered call options on securities,
purchase put and call options on securities and enter into closing transactions.

Options written by these Funds will normally have expiration dates
between one and nine months from the date written. The exercise price of the
options may be below, equal to or above the market values of the underlying
securities at the times the options are written. In the case of call options,
these exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively. The Funds may write (1) in-the-money call
options when WM Advisors or their sub-advisor expects that the price of the
underlying security will remain flat or decline moderately during the option
period, (2) at-the-money call options when WM Advisors or their sub-advisor
expects that the price of the underlying security will remain flat or advance
moderately during the option period and (3) out-of-the-money call options when
WM Advisors or their sub-advisor

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expects that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. In any of the preceding situations, if the market price of the
underlying security declines and the security is sold at this lower price, the
amount of any realized loss will be offset wholly or in part by the premium
received. Out-of-the-money, at-the-money and in-the-money put options (the
reverse of call options as to the relation of exercise price to market price)
may be utilized in the same market environments as such call options described
above.

So long as the Fund's obligation as the writer of an option continues,
each of the Short Term High Quality Bond, Bond & Stock, Growth & Income, Growth,
International Growth, Northwest and Emerging Growth Funds may be assigned an
exercise notice by the broker-dealer through which the option was sold,
requiring the Fund to deliver, in the case of a call, or take delivery of, in
the case of a put, the underlying security against payment of the exercise
price. This obligation terminates when the option expires or the relevant Fund
effects a closing purchase transaction. The Fund can no longer effect a closing
purchase transaction with respect to an option once it has been assigned an
exercise notice. To secure its obligation to deliver the underlying security
when it writes a call option, or to pay for the underlying security when it
writes a put option, each Fund will be required to deposit in escrow the
underlying security or other assets in accordance with the rules of the Options
Clearing Corporation (the "OCC") and of the securities exchange on which the
option is written.

An option may be closed out only when there exists a secondary market
for an option of the same series on a recognized securities exchange or in the
over-the-counter market. In light of this fact, and current trading conditions,
each Fund expects to purchase or write call or put options issued by the OCC,
except that options on U.S. Government Securities may be purchased or written in
the over-the-counter market. Over-the-counter options can be closed out only by
agreement with the primary dealer in the transaction. National securities
exchanges on which options are traded are: The Chicago Board Options Exchange
(CBOE), The Board of Trade of the City of Chicago (CBT), American Stock Exchange
(AMEX), Philadelphia Stock Exchange (PHLX), Pacific Stock Exchange (PSE) and the
New York Stock Exchange (NYSE). Any over-the-counter option written by the Fund
will be with a qualified dealer pursuant to an agreement under which the Fund
would have the absolute right to repurchase an over-the-counter option it has
sold. Such options will be considered illiquid in an amount equal to the formula
price, less the amount by which the option is "in-the-money." In the event of
the insolvency of the primary dealer, the Fund may not be able to liquidate its
position in over-the-counter options, or to enter into closing purchase
transactions on options written by it.

The Fund may realize a profit or loss upon entering into closing
transactions. In cases where the Fund has written an option, it will realize a
profit if the cost of the closing purchase transaction is less than the premium
received upon writing the original option, and will incur a loss if the cost of
the closing purchase transaction exceeds the premium received upon writing the
original option. Similarly, when the Fund has purchased an option and engages in
a closing sale transaction, it will realize a profit or loss to the extent that
the amount received in the closing sale transaction is more or less than the
premium it initially paid for the original option plus the related transaction
costs.

To facilitate closing transactions, the Fund will generally purchase or
write only those options for which WM Advisors or its sub-advisor believes there
is an active secondary market although there is no assurance that sufficient
trading interest to create a liquid secondary market on a securities exchange
will exist for any particular option or at any particular time, and for some
options no such secondary market may exist. A liquid secondary market in an
option may cease to exist for a variety of

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reasons. In the past, for example, higher than anticipated trading activity or
order flow, or other unforeseen events, have at times rendered certain of the
facilities of the OCC and the securities exchanges inadequate and resulted in
the institution of special procedures, such as trading rotations, restrictions
on certain types of orders or trading halts or suspensions in one or more
options. There can be no assurance that similar events, or events that may
otherwise interfere with the timely execution of customers' orders, will not
recur. In such events, it might not be possible to effect closing transactions
in particular options. If as a covered call option writer the Fund is unable to
effect a closing purchase transaction in a secondary market, it will not be able
to sell the underlying security until the option expires or it delivers the
underlying security upon exercise.

Securities exchanges have established limitations governing the maximum
number of calls and puts of each class which may be held or written, or
exercised within certain time periods, by an investor or group of investors
acting in concert (regardless of whether the options are written on the same or
different securities exchanges or are held, written or exercised in one or more
accounts or through one or more brokers). It is possible that the particular
Fund and other clients of WM Advisors and its sub-advisors and certain of their
affiliates may be considered to be such a group. A securities exchange may order
the liquidation of positions found to be in violation of these limits and it may
impose certain other sanctions.

In the case of options written by a Fund that are deemed covered by
virtue of the Fund's holding convertible or exchangeable preferred stock or debt
securities, the time required to convert or exchange and obtain physical
delivery of the underlying security with respect to which the Fund has written
options may exceed the time within which it must make delivery in accordance
with an exercise notice. In these instances, the Fund may purchase or
temporarily borrow the underlying securities for purposes of physical delivery.
By so doing, the Fund will not bear any market risk, since the Fund will have
the absolute right to receive from the issuer of the underlying security an
equal number of shares to replace the borrowed stock. The Fund may however,
incur additional transaction costs or interest expenses in connection with any
such purchase or borrowing.

Additional risks exist with respect to mortgage-backed U.S. Government
Securities for which the Fund may write covered call options. If the Fund writes
covered call options on a mortgage-backed security, the security that it holds
as cover may, because of scheduled amortization of unscheduled prepayments,
cease to be sufficient cover. In such an instance, the Fund will compensate by
purchasing an appropriate additional amount of mortgage-backed securities.

STRATEGIES AVAILABLE TO SHORT TERM HIGH QUALITY BOND, GROWTH,
INTERNATIONAL GROWTH AND EMERGING GROWTH FUNDS

OPTIONS ON SECURITIES INDEXES. The Short Term High Quality Bond,
Growth, International Growth and Emerging Growth Funds may also purchase and
sell call and put options on securities indexes. Such options give the holder
the right to receive a cash settlement during the term of the option based upon
the difference between the exercise price and the value of the index.

Options on securities indexes entail risks in addition to the risks of
options on securities. Because exchange trading of options on securities indexes
is relatively new, the absence of a liquid secondary market to close out an
option position is more likely to occur, although the Fund generally will
purchase or write such an option only if WM Advisors or its sub-advisor believes
the option can be closed out.

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Use of options on securities indexes also entails the risk that trading
in such options may be interrupted if trading in certain securities included in
the index is interrupted. The Fund will not purchase such options unless WM
Advisors or its sub-advisor believes the market is sufficiently developed for
the risk of trading in such options to be no greater than the risk of trading in
options on securities.

Price movements in the Fund's portfolio may not correlate precisely
with movements in the level of an index and, therefore, the use of options on
securities indexes cannot serve as a complete hedge. Because options on
securities indexes require settlement in cash, the Fund may be forced to
liquidate portfolio securities to meet settlement obligations.

STRATEGIES AVAILABLE TO SHORT TERM HIGH QUALITY BOND, INCOME,
GROWTH, INTERNATIONAL GROWTH AND EMERGING GROWTH FUNDS

FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Short Term High Quality
Bond, Income Growth, International Growth and Emerging Growth Funds may engage
in currency exchange transactions to protect against uncertainty in the level of
future exchange rates. The Funds' dealings in forward currency exchange
contracts will be limited to hedging involving either specific transactions or
portfolio positions. Transaction hedging is the purchase or sale of forward
foreign currency with respect to specific receivables or payables of the Fund
generally arising in connection with the purchase or sale of its portfolio
securities. Position hedging is the sale of forward foreign currency with
respect to portfolio security positions denominated or quoted in such foreign
currency. A Fund may not position hedge with respect to a particular currency to
an extent greater than the aggregate market value (at the time of making such
sale) of the securities held in its portfolio denominated or quoted in or
currently convertible into that particular currency.

If a Fund enters into a position hedging transaction, the Custodian
will, except in circumstances where segregated accounts are not required by the
1940 Act and the rules adopted thereunder, place cash or other liquid assets in
a segregated account for the Fund in an amount at least equal to the value of
the Fund's total assets committed to the consummation of the forward contract.
For each forward foreign currency exchange contract that is used to hedge a
securities position denominated in a foreign currency, but for which the hedging
position no longer provides, in the opinion of WM Advisors or the sub-advisor,
sufficient protection to consider the contract to be a hedge, the Fund maintains
with the Custodian a segregated account of cash or other liquid assets in an
amount at least equal to the portion of the contract that is no longer
sufficiently covered by such hedge. If the value of the securities placed in the
segregated account declines, additional cash or securities will be placed in the
account so that the value of the account will equal the amount of the Fund's
unhedged exposure (in the case of securities denominated in a foreign currency)
or commitment with respect to the contract. Hedging transactions may be made
from any foreign currency into U.S. dollars or into other appropriate
currencies.

At or before the maturity of a forward contract, a Fund may either sell
a portfolio security and make delivery of the currency, or retain the security
and offset its contractual obligation to deliver the currency by purchasing a
second contract pursuant to which the Fund will obtain, on the same maturity
date, the amount of the currency that it is obligated to deliver. If the Fund
retains the portfolio security and engages in an offsetting transaction, the
Fund, at the time of execution of the offsetting transaction, will incur a gain
or a loss to the extent that movement has occurred in forward contract prices.
Should forward prices decline during the period between the Fund's entering into
a forward contract for the sale of currency and the date it enters into an
offsetting contract for the purchase of the currency, the

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Fund will realize a gain to the extent the price of the currency it has agreed
to sell exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, the Fund will suffer a loss to the extent the price of
the currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell.

The cost to a Fund of engaging in currency transactions with factors
such as, the currency involved, the length of the contract period and the
prevailing market conditions. Because transactions in currency exchange are
usually conducted on a principal basis, no fees or commissions are involved. The
use of forward currency contracts does not eliminate fluctuations in the
underlying prices of the securities, but it does establish a rate of exchange
that can be achieved in the future. In addition, forward currency contracts may
limit the risk of loss due to a decline in the value of the hedged currency
increase.

If a devaluation of a currency is generally anticipated, a Fund may not
be able to contract to sell the currency at a price above the devaluation level
it anticipates.

The Funds, in addition, may combine forward currency exchange contracts
with investments in securities denominated in other currencies in an attempt to
create a combined investment position, the overall performance of which will be
similar to that of a security denominated in a Fund's underlying currency. For
instance, a Fund could purchase a U.S. dollar-denominated security and at the
same time enter into a forward currency exchange contract to exchange U.S.
dollars for its underlying currency at a future date. By matching the amount of
U.S. dollars to be exchanged with the anticipated value of the U.S.
dollar-denominated security, the Fund may be able to "lock in" the foreign
currency value of the security and adopt a synthetic investment position whereby
the Fund's overall investment return from the combined position is similar to
the return from purchasing a foreign currency-denominated instrument.

There is a risk in adopting a synthetic investment position. It is
impossible to forecast with absolute precision what the market value of a
particular security will be at any given time. If the value of a security
denominated in the U.S. dollar or other foreign currency is not exactly matched
with a Fund's obligation under a forward currency exchange contract on the date
of maturity, the Fund may be exposed to some risk of loss from fluctuations in
that currency. Although WM Advisors and each sub-advisor will attempt to hold
such mismatching to a minimum, there can be no assurance that WM Advisors or the
Fund's sub-advisor will be able to do so.

Although the foreign currency market is not believed to be necessarily
more volatile than the market in other commodities, there is less protection
against defaults in the forward trading to currencies than there is in trading
such currencies on an exchange because such forward contracts are not guaranteed
by an exchange or clearing house. The CFTC has indicated that it may assert
jurisdiction over forward contracts in foreign currencies and attempt to
prohibit certain entities from engaging in such transactions. In the event that
such prohibition included the Fund, it would cease trading such contracts.
Cessation of trading might adversely affect the performance of a Fund.

STRATEGIES AVAILABLE TO SHORT TERM HIGH QUALITY BOND, GROWTH,
INTERNATIONAL GROWTH AND EMERGING GROWTH FUNDS

OPTIONS ON FOREIGN CURRENCIES. The Short Term High Quality Bond,
Growth, International Growth and Emerging Growth Funds may purchase and write
put and call options on

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foreign currencies for the purpose of hedging against declines in the U.S.
dollar value of foreign currency-denominated portfolio securities and against
increases in the U.S. dollar cost of such securities to be acquired. Such
hedging includes cross hedging and proxy hedging where the options to buy or
sell currencies involve other currencies besides the U.S. dollar. As one
example, a decline in the U.S. dollar value of a foreign currency in which
securities are denominated will reduce the U.S. dollar value of the securities,
even if their value in the foreign currency remains constant. To protect against
diminutions in the value of securities held by a Fund in a particular foreign
currency, the Fund may purchase put options on the foreign currency. If the
value of the currency does decline, the Fund will have the right to sell the
currency for a fixed amount in U.S. dollars and will thereby offset, in whole or
in part, the adverse effect on its portfolio that otherwise would have resulted.
When an increase in the U.S. dollar value of a currency in which securities to
be acquired are denominated is projected, thereby increasing the cost of the
securities, the Fund conversely may purchase call options on the currency. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to the Fund deriving from purchases of foreign currency
options will be reduced by the amount of the premium and related transaction
costs. In addition, if currency exchange rates do not move in the direction, or
to the extent anticipated, the Fund could sustain losses on transactions in
foreign currency options that would require it to forego a portion or all of the
benefits of advantageous changes in the rates.

The Funds may also write covered call options on foreign currencies for
the types of hedging purposes described above. As one example, when WM Advisors
or a sub-advisor anticipates a decline in the U.S. dollar value of foreign
currency-denominated securities due to adverse fluctuations in exchange rates it
could, instead of purchasing a put option, write a covered call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised, and the diminution in value of portfolio securities will be
offset by the amount of the premium received. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium, and only if rates move in the
expected direction. If this does not occur, the option may be exercised and the
Fund would be required to purchase or sell the underlying currency at a loss
that may not be offset-by the amount of the premium. Through the writing of
options on foreign currencies, the Fund may also be required to forego all or a
portion of the benefits that might otherwise have been obtained from favorable
movements in exchange rates.

A call option written on a foreign currency by a Fund is "covered" if
the Fund owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire the foreign currency without additional
cash consideration (or for additional cash consideration held in a segregated
account by the Custodian upon conversion or exchange of other foreign currency
held by the Fund. A call option also is covered if the Fund has a call on the
same foreign currency and in the same principal amount as the call written when
the exercise price of the call held (1) is equal to or less than the exercise
price of the call written or (2) is greater than the exercise price of the call
written if the difference is maintained by the Fund in cash, U.S. Government
Securities and other liquid debt securities in a segregated account with the
Custodian.

The purchase and sale of exchange-traded foreign currency options are
subject to the risks of the availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events. In addition, exercise and settlement of exchange-traded foreign
currency options must be made exclusively

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through the OCC, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions on exercise.

SPECIAL CONSIDERATIONS RELATING TO BOND & STOCK, GROWTH,
INTERNATIONAL GROWTH AND EMERGING GROWTH FUNDS

SECURITIES IN DEVELOPING COUNTRIES. Although most of the investments of
the Bond & Stock, Growth, International Growth and Emerging Growth Funds are
made in securities of companies in (or governments of) developed countries, each
may invest in securities of companies in (or governments of) developing or
emerging countries (sometimes referred to as "emerging markets") as well. The
Growth and Emerging Growth Funds may invest up to 5% of their total assets in
emerging markets and the International Growth Fund may invest up to 5% of total
assets in emerging markets and up to 5% of total assets in any one country. A
developing or emerging country is generally considered to be a country that is
in the initial stages of its industrialization cycle. Investing in the equity
and fixed-income markets of developing or emerging countries involves exposure
to economic structures that are generally less diverse and mature, and to
political systems that can be expected to have less stability than those of
developed countries. Historical experience indicates that the markets of
developing or emerging countries have been more volatile than the markets of the
more mature economies of developed countries; however, such markets often have
provided higher rates of return to investors.

STRATEGY AVAILABLE TO SHORT TERM HIGH QUALITY BOND, INCOME, GROWTH,
BOND & STOCK, GROWTH & INCOME, NORTHWEST, INTERNATIONAL GROWTH,
AND EMERGING GROWTH FUNDS

LENDING OF PORTFOLIO SECURITIES. Each of the Short Term High Quality
Bond, Income, Growth, Bond & Stock, Growth & Income, Northwest, International
Growth and Emerging Growth Funds will adhere to the following conditions
whenever its portfolio securities are loaned: (1) the Fund must receive at least
100% cash collateral or equivalent securities from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities rises above the level of the collateral; (3) the Fund must be able to
terminate the loan at any time; (4) the Fund must receive reasonable interest on
the loan, as well as any dividends, interest or other distributions on the
loaned securities and any increase in market value; (5) the Fund may pay only
reasonable custodian fees in connection with the loan; and (6) voting rights on
the loaned securities may pass to the borrower, provided that if a material
event adversely affecting the investment occurs, the Trust's Board of Trustees
must terminate the loan and regain the right to vote the securities. From time
to time, the Funds may pay a part of the interest earned from the investment of
the collateral received for securities loaned to the borrower and/or a third
party that is unaffiliated with the Trust and that is acting as a "finder." The
Funds will not lend more than 20% of their respective total assets.

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<PAGE> 83
SPECIAL CONSIDERATIONS RELATING TO INCOME, HIGH YIELD, BOND & STOCK,
GROWTH & INCOME, GROWTH AND EMERGING GROWTH FUNDS

LOWER-RATED SECURITIES. The Income, Bond & Stock, Growth & Income,
Growth and Emerging Growth Funds may each invest up to 35% of its total assets,
respectively, in non-investment grade securities (rated Ba and lower by Moody's
and BB and lower by Standard & Poor's) or unrated securities of comparable
quality ("junk bonds"). The High Yield Fund may invest entirely in junk bonds
and will generally invest at least 65% of its assets in junk bonds. Such
securities carry a high degree of risk (including the possibility of default or
bankruptcy of the issuer of such securities), generally involve greater
volatility of price and risk of principal and income, and may be less liquid,
than securities in the higher rating categories and are considered speculative.
See the Appendix to this Statement of Additional Information for a more complete
description of the ratings assigned by ratings organizations and their
respective characteristics.

Historically, economic downturns have disrupted the high yield market
and impaired the ability of issuers to repay principal and interest. Also, an
increase in interest rates could adversely affect the value of such obligations
held by any of the Funds. Prices and yields of high yield securities will
fluctuate over time and may affect a Fund's net asset value. In addition,
investments in high yield zero coupon or pay-in-kind bonds, rather than
income-bearing high yield securities, may be more speculative and may be subject
to greater fluctuations in value due to changes in interest rates.

The trading market for high yield securities may be thin to the extent
that there is no established retail secondary market or because of a decline in
the value of such securities. A thin trading market may limit the ability of the
Trustees to accurately value high yield securities in the Fund's portfolio and
to dispose of those securities. Adverse publicity and investor perceptions may
decrease the value and liquidity of high yield securities. These securities may
also involve special registration responsibilities, liabilities and costs.

Credit quality in the high yield securities market can change suddenly
and unexpectedly, and even recently-issued credit ratings may not fully reflect
the actual risks posed by a particular high yield security. For these reasons,
it is the policy of WM Advisors and the sub-advisor of each of the Funds not to
rely exclusively on ratings issued by established credit rating agencies, but to
supplement such ratings with its own independent and ongoing review of credit
quality. The achievement of a Fund's investment objectives by investment in such
securities may be more dependent on WM Advisors or its sub-advisor's credit
analysis than is the case for higher quality bonds. Should the rating of a
portfolio security be downgraded WM Advisors or the Fund's sub-advisor will
determine whether it is in the best interest of the Fund to retain or dispose of
the security.

Prices for below investment-grade securities may be affected by
legislative and regulatory developments. For example, new federal rules require
savings and loan institutions to gradually reduce their holdings of this type of
security. Also, Congress from time to time has considered legislation which
would restrict or eliminate the corporate tax deduction for interest payments on
these securities and would regulate corporate restructurings. Such legislation
may significantly depress the prices of outstanding securities of this type.

INVESTMENT RESTRICTIONS

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The following section discusses the investment policies and
restrictions of the Funds and Portfolios. A fundamental policy affecting a
particular Fund or Portfolio may not be changed without the vote of a majority
of the outstanding shares of the affected Fund or Portfolio. Majority is defined
in the 1940 Act as the lesser of (a) 67% or more of the shares present at a
shareholder meeting, if the holders of more than 50% of the outstanding shares
of the relevant Fund or Portfolio are present or represented by proxy, or (b)
more than 50% of the outstanding shares.

INVESTMENT RESTRICTIONS OF THE FUNDS, OTHER THAN THE NORTHWEST AND
BOND & STOCK FUNDS

The investment restrictions numbered 1 through 15 below have been
adopted by the Trust with respect to the Funds (other than the Bond & Stock and
Northwest Funds) as fundamental policies. The investment policies adopted by the
Trust prohibit a Fund (other than the Bond & Stock and Northwest Funds) from:

1. Purchasing the securities of any issuer (other than U.S.
Government securities) if as a result more than 5% of the
value of the Fund's total assets would be invested in the
securities of the issuer (the "5% Limitation"), except that up
to 25% of the value of the Fund's total assets may be invested
without regard to the 5% Limitation; provided that the entire
investment portfolio of the Money Market Fund is subject to
the 5% Limitation. However, the Money Market Fund will be able
to invest more than 5% of its total assets in the securities
of a single issuer for a period of up to three Business Days
after the purchase thereof; provided that the Money Market
Fund may not hold more than one such investment at any time.

2. Purchasing more than 10% of the securities of any class of any
one issuer; provided that this limitation shall not apply to
investments in U.S. Government securities; provided further
that this restriction shall not apply to the Growth Fund; and
provided further that the Growth Fund shall not own more than
10% of the outstanding voting securities of a single issuer.

3. Purchasing securities on margin, except that the Fund may
obtain any short-term credits necessary for the clearance of
purchases and sales of securities. For purposes of this
restriction, the deposit or payment of initial or variation
margin in connection with futures contracts or related options
will not be deemed to be a purchase of securities on margin.

4. Making short sales of securities or maintaining a short
position; provided that this restriction shall not apply to
the Growth and International Growth Funds.

5. Borrowing money, except that (a) the Fund may (i) enter into
reverse repurchase agreements or (ii) borrow from banks for
temporary (not leveraging) purposes, including the meeting of
redemption requests that might otherwise require the untimely
disposition of securities or pending settlement of securities
transactions or for emergency or extraordinary purposes in an
aggregate amount not exceeding 30% of the value of the Fund's
total assets (including the amount borrowed) valued at market
less liabilities (not including the amount borrowed) at the
time the borrowing is made, (b) all of the Funds except the
Money Market Fund may enter into (i) futures contracts,

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and (ii) dollar roll transactions. Whenever borrowings
pursuant to (a) above (except that with respect to the Short
Term High Quality Bond, U.S. Government Securities, Income,
Growth & Income and Emerging Growth Funds, pursuant to (a)(ii)
above) exceed 5% of the value of a Fund's total assets, (w)
continuous asset coverage of at least 300% is required; (x) in
the event such asset coverage falls below 300% due to market
fluctuations or otherwise, the Fund must within 3 days reduce
the amount of its borrowings so that asset coverage will again
be at least 300%, even if disadvantageous from an investment
standpoint; (y) borrowing pursuant to (a) over 5% must be
repaid before making additional investments; and (z) any
interest paid on such borrowings will reduce income. The Short
Term High Quality Bond, U.S. Government Securities, Income,
Growth & Income and Emerging Growth Funds may not borrow money
or enter into reverse repurchase agreements or dollar roll
transactions in the aggregate in excess of 33 1/3% of the
Fund's total assets (after giving effect to any such
transaction).

6. Pledging, hypothecating, mortgaging or otherwise encumbering
more than 30% of the value of the Fund's total assets. For
purposes of this restriction, (a) the deposit of assets in
escrow in connection with the writing of covered put or call
options and the purchase of securities on a when-issued or
delayed-delivery basis and (b) collateral arrangements with
respect to (i) the purchase and sale of options on securities,
options on indexes and options on foreign currencies, and (ii)
initial or variation margin for futures contracts will not be
deemed to be pledges of a Fund's assets.

7. Underwriting the securities of other issuers, except insofar
as the Fund may be deemed an underwriter under the Securities
Act of 1933, as amended, by virtue of disposing of portfolio
securities.

8. Purchasing or selling real estate or interests in real estate,
except that the Fund may purchase and sell securities that are
secured, directly or indirectly, by real estate and may
purchase securities issued by companies that invest or deal in
real estate.

9. Investing in commodities, except that all of the Funds except
the Money Market Fund may invest in futures contracts and
options on futures contracts. The entry into forward foreign
currency exchange contracts is not and shall not be deemed to
involve investing in commodities.

10. Investing in oil, gas or other mineral exploration or
development programs.

11. Making loans to others, except through the purchase of
qualified debt obligations, loans of portfolio securities
(except in the case of the U.S. Government Securities Fund)
and the entry into repurchase agreements.

12. Purchasing any securities that would cause more than 25% of
the value of the Fund's total assets at the time of purchase
to be invested in the securities of issuers conducting their
principal business activities in the same industry, except in
the case of the Money Market Fund, which under normal market
conditions shall have at least 25% of its total assets
invested in bank obligations; provided that this limitation
shall not apply to the purchase of U.S. Government Securities.

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<PAGE> 86
13. With respect to the Money Market Fund, purchasing, writing or
selling puts, calls, straddles, spreads or combinations
thereof.

14. With respect to the Growth and Emerging Growth Funds,
investing more than 35% of the Fund's assets in non-investment
grade debt securities.

15. With respect to the Short Term High Quality Bond Fund, having
a dollar-weighted average portfolio maturity in excess of five
years.

In addition, each of the Funds (other than the Bond & Stock and
Northwest Funds) has adopted non-fundamental investment limitations as stated
below and in its prospectus. Such limitations may be changed without shareholder
approval. Each of the Funds (other than the Bond & Stock and Northwest Funds)
may not:

1. With respect to the Growth and Emerging Growth Funds, invest
more than 25% of the Fund's assets in foreign securities.

2. Purchase securities that are not readily marketable if more
than 10% of the total assets of the Money Market Fund, or more
than 15% of the total assets of the Short Term High Quality
Bond, U.S. Government Securities, Income, Growth & Income,
Growth, Emerging Growth and International Growth Funds, would
be invested in such securities, including, but not limited to:
(1) repurchase agreements with maturities greater than seven
calendar days; (2) time deposits maturing in more than seven
calendar days; (3) to the extent a liquid secondary market
does not exist for the instruments, futures contracts and
options thereon; (4) certain over-the-counter options; (5)
certain variable rate demand notes having a demand period of
more than seven days; and (6) certain Rule 144A restricted
securities that are deemed to be illiquid.

3. Make investments for the purpose of exercising control or
management.

4. Purchase or sell interests in real estate limited
partnerships.

The percentage limitations contained in the restrictions listed above,
except with respect to "illiquid securities," apply at the time of purchases of
securities.

INVESTMENT RESTRICTIONS OF THE BOND & STOCK AND NORTHWEST FUNDS

The Bond & Stock and Northwest Funds have adopted the fundamental investment
restrictions below. Each of the Bond & Stock and Northwest Funds may not:

1. Invest more than 5%* of its total assets in securities of any
single issuer other than U.S. Government Securities, except
that up to 25% of a Fund's assets may be invested without
regard to this 5% limitation.

2. Acquire more than 10%* of the voting securities of any one
company.

3. Invest in real estate (except publicly traded real estate
investment trusts) or commodities.

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<PAGE> 87
4. Invest in oil, gas or other mineral leases.

5. Invest more than 25%* of its total assets in any single
industry.

6. Act as underwriter of securities issued by others.

7. Buy securities on margin, mortgage or pledge its securities.

8. Borrow money for investment purposes (it may borrow up to 5%
of its total net assets for emergency, non-investment
purposes).

9. Lend money (except for the execution of repurchase
agreements).

10. Issue senior securities (as defined in the 1940 Act) except as
permitted by rule, regulation or order of the SEC.

* Percentage at the time the investment is made.

INVESTMENT RESTRICTIONS OF THE PORTFOLIOS

The following investment restrictions have been adopted by the Trust
with respect to the Portfolios as fundamental policies. Each Portfolio will not:

1. Purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (except
this shall not prevent the Portfolio from purchasing or
selling options or futures contracts or from investing in
securities or other instruments backed by physical
commodities);

2. Purchase or sell real estate including limited partnership
interests, although it may purchase and sell securities of
companies that deal in real estate and may purchase and sell
securities that are secured by interests in real estate;

3. Make loans to any person, except loans of portfolio securities
to the extent that no more than 33 1/3% of its total assets
would be lent to other parties, but this limitation does not
apply to purchases of debt securities or repurchase
agreements;

4. (i) Purchase more than 10% of any class of the outstanding
voting securities of any issuer (except other investment
companies as defined in the 1940 Act) and (ii) purchase
securities of an issuer (except obligations of the U.S.
Government and its agencies and instrumentalities and
securities of other investment companies as defined in the
1940 Act) if as a result, with respect to 75% of its total
assets, more than 5% of the Portfolio's total assets, at
market value, would be invested in the securities of such
issuer;

5. Issue senior securities (as defined in the 1940 Act) except as
permitted by rule, regulation or order of the SEC;

6. Will not borrow, except from banks for temporary or emergency
(not leveraging) purposes including the meeting of redemption
requests that might otherwise require the untimely disposition
of securities in an aggregate amount not exceeding 30% of the
value of the Portfolio's total assets (including the amount
borrowed) valued at market less liabilities (not including the
amount borrowed) at the time the borrowing is made;

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<PAGE> 88
and whenever borrowings by a Portfolio, including reverse
repurchase agreements, exceed 5% of the value of a Portfolio's
total assets, the Portfolio will not purchase any securities;

7. Underwrite securities issued by others, except to the extent
that the Portfolio may be considered an underwriter within the
meaning of the 1933 Act in the disposition of restricted
securities; and

8. Write or acquire options or interests in oil, gas or other
mineral exploration or development programs.

In addition, each Portfolio has adopted non-fundamental investment
limitations as stated below and in its prospectus. Such limitations may be
changed without shareholder approval. Each Portfolio will not:

1. Pledge, mortgage, or hypothecate any of its assets except to
secure borrowings permitted by the Portfolio's fundamental
limitation on borrowing;

2. Invest for the purpose of exercising control over management
of any company;

3. Invest its assets in securities of any investment company,
except (i) by purchase in the open market involving only
customary brokers' commissions; (ii) in connection with
mergers, acquisitions of assets or consolidations; (iii) as
permitted by SEC exemptive order; or (iv) as otherwise
permitted by the 1940 Act;

4. Purchase warrants if, by reason of such purchase, more than 5%
of the value of the Portfolio's net assets (taken at market
value) would be invested in warrants, valued at the lower of
cost or market; included within this amount, but not to exceed
2% of the value of the Fund's net assets, may be warrants that
are not listed on a recognized stock exchange;

5. Purchase or hold illiquid securities, which are securities
that cannot be disposed of for their approximate market value
in seven days or less (which terms include repurchase
agreements and time deposits maturing in more than seven days)
if, in the aggregate, more than 15% of its net assets would be
invested in illiquid securities; and

6. Purchase securities on margin, except that a Portfolio may
obtain any short-term credits necessary for the clearance of
purchases and sales of securities. For purposes of this
restriction, the deposit or payment of initial or variation
margin in connection with futures contracts or related options
will not be deemed to be a purchase of securities on margin.

PORTFOLIO TURNOVER

Portfolio turnover considerations for the Portfolios are addressed in the
Trust's prospectus.

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<PAGE> 89
The Money Market Fund, attempts to increase yields by trading to take
advantage of short-term market variations, which results in high portfolio
turnover. Because purchases and sales of money market instruments are usually
effected as principal transactions, this policy does not result in high
brokerage commissions to the Fund. The Growth & Income, Bond & Stock, Northwest,
Growth, Emerging Growth and International Growth Funds (together, the "Equity
Funds") and the Short Term High Quality Bond, the U.S. Government Securities and
Income Funds (collectively, the "Bond Funds") do not intend to seek profits
through short-term trading. Nevertheless, the Funds will not consider portfolio
turnover rate a limiting factor in making investment decisions.

Under certain market conditions, the Equity Funds and the Bond Funds
may experience increased portfolio turnover as a result of such Fund's options
activities. For instance, the exercise of a substantial number of options
written by the Fund (due to appreciation of the underlying security in the case
of call options or depreciation of the underlying security in the case of put
options) could result in a turnover rate in excess of 100%. A portfolio turnover
rate of 100% would occur if all of the Fund's securities that are included in
the computation of turnover were replaced once during a period of one year. The
portfolio turnover rate is calculated by dividing the lesser of purchases or
sales of portfolio securities for the year by the monthly average value of
portfolio securities. Securities with remaining maturities of one year or less
at the date of acquisition are excluded from the calculation.

Certain other practices that may be employed by the Funds could result
in high portfolio turnover. For example, portfolio securities may be sold in
anticipation of a rise in interest rates (market decline) or purchased in
anticipation of a decline in interest rates (market rise) and later sold. In
addition, a security may be sold and another of comparable quality purchased at
approximately the same time to take advantage of what WM Advisors or a Fund's
sub-advisor believes to be a temporary disparity in the normal yield
relationship between the two securities. These yield disparities may occur for
reasons not directly related to the investment quality of particular issues or
the general movement of interest rates, such as changes in the overall demand
for, or supply of, various types of securities.

PORTFOLIO TRANSACTIONS

Purchases and sales of Fund shares by a Portfolio are effected directly
through the Distributor. In addition, all decisions to buy and sell securities,
including Fund shares, are made by WM Advisors, subject to the overall review of
the Trustees.

Most of the purchases and sales of securities for a Fund, whether
transacted on a securities exchange or over-the-counter, will be effected in the
primary trading market for the securities. Decisions to buy and sell securities
for a Fund are made by WM Advisors or the Fund's sub-advisor, which also is
responsible for placing these transactions, subject to the overall review of the
Trust's Trustees. Although investment decisions for each Fund are made
independently from those of the other accounts managed by WM Advisors or its
sub-advisor, those other accounts may make investments of the same type as the
Fund. When a Fund and one or more other accounts managed by WM Advisors or its
sub-advisor are prepared to invest in, or desire to dispose of, the same
security, available investments or opportunities for sales will be allocated in
a manner believed by WM Advisors or the sub-advisor to be equitable to each. In
some cases, this procedure may adversely affect the price paid or received by a
Fund or the size of the position obtained or disposed of by the Fund. In other
cases, however, it is believed that the coordination and the ability to
participate in volume transactions will be to the benefit of the Fund.

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Transactions on U.S. exchanges involve the payment of negotiated
brokerage commissions. With respect to exchanges on which commissions are
negotiated, the cost of transactions may vary among different brokers. There is
generally no stated commission in the case of securities traded in the
over-the-counter markets, but the prices of those securities include undisclosed
commissions or concessions, and the prices at which securities are purchased
from and sold to dealers include a dealer's mark-up or mark-down. U.S.
Government Securities may be purchased directly from the U.S.
Treasury or from the issuing agency or instrumentality.

In selecting brokers or dealers to execute portfolio transactions on
behalf of a Fund, WM Advisors or the Fund's sub-advisor seeks the best overall
terms available. In assessing the best overall terms available for any
transaction, WM Advisors or the sub-advisor will consider the factors WM
Advisors or the sub-advisor deems relevant, including the breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of the
commission, if any, for the specific transaction and on a continuing basis. In
addition, each Advisory agreement between the Trust and WM Advisors and each
sub-advisory agreement between WM Advisors and a sub-advisor authorizes WM
Advisors or sub-advisor, in selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, to consider the
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) provided to the Trust, the
other Funds and/or other accounts over which WM Advisors or the sub-advisors or
its affiliates exercise investment discretion. Research services provided to WM
Advisors include, for example, written and electronic reports analyzing economic
and financial characteristics, telephone conversations between brokerage
securities analysts and members of WM Advisor's staff, and personal visits by
such analysts, brokerage strategists and economists to WM Advisor's office. Some
of these services are useful to WM Advisors in advising clients, although not
all of these services are necessarily useful and of value in managing the Funds
and Portfolios.

WM Advisors or a sub-advisor may cause a Fund to pay a broker-dealer,
which provides brokerage and research services to WM Advisors or the
sub-advisor, an amount of disclosed commission for effecting a securities
transaction in excess of the commission that another broker-dealer would have
charged for effecting that transaction. The fees under the Advisory agreements
between the Trust and WM Advisors are not reduced by reason of the receipt by WM
Advisors or sub-advisors of brokerage and research services. The Trust's
Trustees will periodically review the commissions paid by the Funds to determine
if the commissions paid over representative periods of time were reasonable in
relation to the benefits received by the Trust.

Over-the-counter purchases and sales are transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere.

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<PAGE> 91
For the fiscal years ended December 31, 1996, 1997 and 1998 the Funds
paid the following brokerage commissions(1):

<TABLE>
<CAPTION>
1998
---------------------------------
Aggregate
Brokerage Transaction
Fund Commissions Amount
- ---- ------------ ------------

<S> <C> <C>
Money Market Fund
Short Term High Quality Bond Fund
U.S. Government Securities Fund
Income Fund
Growth & Income Fund
Growth Fund
Emerging Growth Fund
International Growth Fund

Total for Trust

Amount Paid to Affiliated
Broker-Dealers
</TABLE>

<TABLE>
<CAPTION>
1997
---------------------------------
Aggregate
Brokerage Transaction
Fund Commissions Amount
- ---- ----------- ------------

<S> <C> <C>
Money Market Fund $0 $0
Short Term High Quality Bond Fund $3,690 $ 46,498,326
U.S. Government Securities Fund $0 $0
Income Fund $0 $0
Growth & Income Fund $159,577 $160,277,446
Growth Fund $277,280 $271,503,994
Emerging Growth Fund $104,980 $ 78,329,505
International Growth Fund $307,998 $ 90,930,692

Total for Trust $853,465 $647,539,963

Amount Paid to Affiliated
Broker-Dealers $0 $0
</TABLE>

- --------

(1) During the 1997 fiscal year, the Funds and Portfolios paid no
commissions to brokers providing research services.

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<PAGE> 92
-38-
<PAGE> 93

<TABLE>
<CAPTION>
1996
-------------------------------
Aggregate
Brokerage Transaction
Fund Commissions Amount
- ---- ----------- ------------

<S> <C> <C>
Money Market Fund $0 $0
Short Term High Quality Bond Fund $3,514 $20,845,613
Short Term Global Government Fund $1,000 $49,500
U.S. Government Securities Fund $9,844 $206,916,397
Income Fund $0 $0
Growth & Income Fund $106,187 $78,909,538
Growth Fund $215,458 $226,603,698
Emerging Growth Fund $79,295 $48,481,530
International Growth Fund $345,365 $99,133,129

Total for Trust $760,663 $680,939,405

Amount Paid to Affiliated
Broker-Dealers $6,031 $3,405,755
</TABLE>

The Trust is required to identify any securities of its "regular
brokers or dealers" (as such term is defined in the 1940 Act) which the Trust
has acquired during its most recent fiscal year. [As of December 31, 1998, the
Growth Fund held common stock of Charles Schwab Corporation, valued at
approximately $__________, and the International Growth Fund held common stock
of Societe Generale valued at approximately $__________.]

REDEMPTIONS

The right of redemption of shares of a Fund may be suspended or the
date of payment postponed (1) for any periods during which the NYSE is closed
(other than for customary weekend and holiday closings), (2) when trading in the
markets a Fund normally utilizes is restricted, or an emergency, as defined by
the rules and regulations of the SEC, exists making disposal of the Fund's
investments or determination of its net asset value not reasonably practicable
or (3) for such other periods as the SEC by order may permit for protection of
the Fund's shareholders.

DISTRIBUTIONS IN KIND. If the Board of Trustees determines that it
would be detrimental to the best interests of the shareholders of a Fund to make
a redemption payment wholly in cash, the Trust may pay any portion of a
redemption by distribution in kind of portfolio securities in lieu of cash.
Securities issued in a distribution in kind will be readily marketable, although
shareholders receiving distributions in kind may incur brokerage commissions
when subsequently redeeming shares of those securities.

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<PAGE> 94
NET ASSET VALUE

The Trust will not calculate the net asset value of the Funds and
Portfolios on certain holidays. On those days, securities held by a Fund may
nevertheless be actively traded, and the value of the Fund's or Portfolio's
shares could be significantly affected.

The assets of each Fund and Portfolio are valued according to generally accepted
accounting principles and applicable law. Generally, a Fund's or Portfolio's
investments are valued at market value or, in the absence of a market value with
respect to any portfolio securities, at fair value as determined by or under the
direction of the Trust's Board of Trustees:

- A security that is primarily traded on a U.S. or foreign
exchange (including securities traded through the National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ")) is valued at the last sale price on that
exchange or, if there were no sales during the day, at the
current quoted bid price.

- Securities that are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such
securities on their respective exchanges, except that when an
occurrence subsequent to the time a value was so established
is determined by the Trust's Board of Trustees or its
delegates.

- Over-the-counter securities that are not reported on the
NASDAQ System and securities listed or traded on certain
foreign exchanges whose operations are similar to the U.S.
over-the-counter market are valued on the basis of the bid
price at the close of business on each day.

- An option is generally valued at the last sale price or, in
the absence of a last sale price, the last offer price.

- Investments in U.S. Government securities (other than
short-term securities) are valued at the average of the quoted
bid and asked prices in the over-the-counter market.

- Short-term investments that mature in 60 days or less are
valued at amortized cost when the Board of Trustees determines
that this constitutes fair value; assets of the Money Market
Fund are also valued at amortized cost.

- The value of a futures contract equals the unrealized gain or
loss on the contract, which is determined by marking the
contract to the current settlement price for a like contract
acquired on the day on which the futures contract is being
valued. A settlement price may not be used if the market makes
a limited move with respect to the security or index
underlying the futures contract. In such event, the futures
contract will be valued at a fair market price to be
determined by or under the direction of the Trust's Board of
Trustees.

- Shares of open-end investment companies are valued at the net
asset value per share last or contemporaneously calculated.

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<PAGE> 95
In carrying out the Board's valuation policies, First Data Investor
Services Group, Inc. ("FDISG"), a wholly-owned subsidiary of First Data
Corporation, as sub-administrator, may consult with one or more independent
pricing services ("Pricing Services") retained by the Trust. Debt securities of
U.S. issuers (other than U.S. Government securities and short-term investments)
are valued by FDISG, as sub-administrator, after consultation with a Pricing
Service. The procedures of the Pricing Services are reviewed periodically by the
officers of the Trust under the general supervision and responsibility of the
Board of Trustees.

VALUATION OF THE MONEY MARKET FUND. The valuation of the portfolio
securities of the Money Market Fund is based upon amortized costs, which does
not take into account unrealized capital gains or losses. Amortized cost
valuation involves initially valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the Fund would receive if it sold the instrument.

The use by the Money Market Fund of the amortized cost method of
valuing its respective portfolio securities is permitted by a rule adopted by
the SEC. Under this rule, the Money Market Fund must maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of thirteen months or less and invest only in securities
determined by the Board of Trustees of the Trust to present minimal credit risks
and meet certain rating criteria described in the Prospectus above. Pursuant to
the rule, the Board of Trustees also has established procedures designed to
stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of sales and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Board of Trustees, at
such intervals as it may deem appropriate, to determine whether the Fund's net
asset values calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost.

The rule also provides that the extent of any deviation between the
Fund's net asset values based upon available market quotations or market
equivalents and the $1.00 per share net asset values based on amortized cost
must be examined by the Board of Trustees. In the event the Board of Trustees
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, pursuant to the rule
the Board of Trustees must cause the Trust to take such corrective action as the
Board deems necessary and appropriate including: selling portfolio instruments
prior to maturity to realize capital gains or losses or shorten average
portfolio maturity; withholding dividends or paying distributions from capital
or capital gains; redeeming shares in kind; or establishing a net asset value
per share by using available market quotations.

PERFORMANCE

From time to time, the Trust may quote the performance of a Portfolio
or Fund in terms of yield, effective yield, actual distributions, total return
or capital appreciation in reports or other communications to shareholders or in
advertising material. Fund or Portfolio performance will be advertised only if
accompanied by the comparable performance for the corresponding separate
account.

ANNUITY CONTRACT OWNER VALUES WILL DEPEND NOT ONLY ON THE
PERFORMANCE OF THE FUNDS AND PORTFOLIOS, BUT ALSO ON THE MORTALITY
AND EXPENSE RISK CHARGES, THE ADMINISTRATIVE CHARGES, AND ANY

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<PAGE> 96
APPLICABLE SALES CHARGES UNDER THE ANNUITY CONTRACTS. THE TOTAL RETURNS OF THE
FUNDS AND PORTFOLIOS REFLECT THE AGREEMENT OF THE FUNDS' AND PORTFOLIOS'
INVESTMENT ADVISOR TO VOLUNTARILY WAIVE FEES AND BEAR CERTAIN EXPENSES. TOTAL
RETURNS WOULD HAVE BEEN LOWER IF THESE FEES AND EXPENSES HAD NOT BEEN WAIVED.

MONEY MARKET FUND YIELD INFORMATION

The "yield" of the Money Market Fund refers to the income generated by
an investment in the Fund over a 7-day period (which period will be stated in
the advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during that week is assumed to be generated
each week over a 52-week period and is shown as a percentage of the investment.
The "effective yield" is calculated similarly but, when annualized, the income
earned by an investment in an Underlying Fund is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because of the
compounding effect of this assumed reinvestment.

The yield for the Money Market Fund is computed by: (1) determining the
net change, exclusive of capital changes, in the value of a hypothetical
pre-existing account in the Fund having a balance of one share at the beginning
of a seven calendar day period for which yield is to be quoted, (2) subtracting
a hypothetical charge reflecting deductions from shareholder accounts, (3)
dividing the net change by the value of the account at the beginning of the
period to obtain the base period return, and (4) annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value of the
account reflects the value of additional share purchased with dividends declared
on the original share and any such additional shares and income received or
accrued but not declared as a dividend, but does not include realized gains and
losses or unrealized appreciation or depreciation. In addition, the Money Market
Fund may calculate a compounded effective annualized yield by adding 1 to the
base period return (calculated as described above), raising the sum to a power
equal to 365/7 and subtracting 1.

Based upon the foregoing calculation, for the 7-day period ended
December 31, 1998, the yield for the Money Market Fund was _____%, and the
effective yield for the Money Market Fund for the same period was _____%.

The Money Market Fund yield may be compared with the yields of other
investments. It should not, however, be compared to the return on fixed rate
investments which guarantee rates of interest for specified periods, such as the
interest guarantees in an annuity contract or bank deposits.

TOTAL RETURN INFORMATION

From time to time, a Fund, other than the Money Market Fund, or
Portfolio may advertise its "average annual total return" or "aggregate total
return" over various periods of time. Such average annual total return figures
show the average percentage change in value of an investment in the Fund or
Portfolio from the beginning date of the measuring period to the end of the
measuring period. These figures reflect changes in the price of the Fund's or
Portfolio's shares and assume that any income dividends and/or capital gains
distributions made by the Fund or Portfolio during the period were

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<PAGE> 97
reinvested in shares of that Fund or Portfolio. Figures will be given for recent
one-, five- and ten-year periods (if applicable), and may be given for other
periods as well (such as from commencement of the Fund's or Portfolio's
operations, or on a year-by-year basis).

When considering "average" total return figures for periods longer than
one year, it is important to note that the relevant Fund's or Portfolio's annual
total return for any one year in the period might have been greater or less than
the average for the entire period. An Fund or Portfolio may also use "aggregate"
total return figures for various periods representing the cumulative change in
value of an investment in the Fund or Portfolio for a specific period (again
reflecting changes in the Fund's or Portfolio's share prices and assuming
reinvestment of dividends and distributions). Aggregate total returns may be
shown by means of schedules, charts or graphs and may indicate subtotals of the
various components of total return (i.e., change in value of initial investment,
income dividends and capital gains distributions).

Average annual total return is computed according to a formula
prescribed by the SEC. The formula can be expressed as follows: P(1 + T)n = ERV,
where P = a hypothetical initial payment of $1,000; T = average annual total
return; n = number of years; and ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the designated time period as of the end
of such period or the life of the fund. The formula for calculating aggregate
total return can be expressed as (ERV/P)-1.

Based on the foregoing, the average annual total returns for the fiscal
year ended December 31, 1998 and from inception through December 31, 1998 and
the aggregate total returns for the Funds from inception through December 31,
1998, were as follows*:

<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURN AVERAGE AGGREGATE
FOR FISCAL ANNUAL TOTAL TOTAL RETURN
YEAR ENDED RETURN SINCE SINCE
Fund* 12/31/98 INCEPTION INCEPTION
- ------- -------------- ------------- ------------

<S> <C> <C> <C>
Money Market Fund ----% ----% ----%
Emerging Growth Fund ----% ----% ----%
Bond & Stock Fund --- --- ---
International Growth Fund ----% ----% ----%
Short Term High Quality Bond Fund ----% ----% ----%
U.S. Government Securities Fund ----% ----% ----%
Income Fund ----% ----% ----%
Growth & Income Fund ----% ----% ----%
Growth Fund ----% ----% ----%
Northwest Fund --- --- ---
Strategic Growth Portfolio N/A N/A ----%
Conservative Growth Portfolio N/A N/A ----%
Balanced Portfolio N/A N/A ----%
Value Portfolio N/A N/A ----%
Income Portfolio N/A N/A ----%
</TABLE>

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

* AS OF DECEMBER 31, 1998, THE BOND & STOCK AND NORTHWEST FUNDS HAD NOT
COMPLETED ONE FULL YEAR OF OPERATIONS.

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<PAGE> 98
The total returns shown for the Funds are not an estimate or guarantee
of future performance and do not take into account charges at the annuity and
separate account level.

The performance of any or all of the Funds may be compared in
advertisements and sales literature to the performance of other variable annuity
issuers in general and to the performance of particular types of variable
annuities investing in mutual funds, or series of mutual funds, with investment
objectives similar to each of the Funds. Lipper Analytical Services, Inc.
("Lipper") and the Variable Annuity Research and Data Service ("VARDS(R)") are
independent services which monitor and rank the performance of variable annuity
issuers in each of the major categories of investment objectives on an industry-
wide basis. Lipper's rankings include variable life issuers as well as variable
annuity issuers. VARDS(R) rankings compare only variable annuity issuers. The
performance analyses prepared by Lipper and VARDS(R) rank such issuers on the
basis of total return, assuming reinvestment of dividends and distributions, but
do not take sales charges, redemption fees or certain expense deductions at the
separate account level into consideration. In addition, VARDS(R) prepares risk
adjusted rankings, which consider the effects of market risk on total return
performance.

In addition, performance of each Fund may be compared in advertisements
and sales literature to the following benchmarks: (1) the Standard & Poor's 500
Index, which represents an unmanaged weighted index of 500 industrial,
transportation, utility and financial companies that represent approximately 80%
of the market capitalization of the U.S. equity markets, widely regarded by
investors as representative of the stock market; (2) the Consumer Price Index,
published by the U.S. Bureau of Labor Statistics, a statistical measure of
change, over time, in the prices of goods and services in major expenditure
groups and generally considered to be a measure of inflation; (3) the Lehman
Brothers Mutual Fund Short World Multi-Market Index, which includes all debt
instruments of the United States and 12 major countries (determined by Lehman)
denominated in dollars with maturities of one to five years; (4) the Lehman
Brothers Mutual Fund U.S. Mortgage Index, which includes all agency
mortgage-backed securities; (5) the Lehman Brothers Mutual Fund Debt BBB-Rated
Index, which represents all investment-grade corporate debt securities; (6) the
Morgan Stanley Capital International EAFE (Europe, Australia, Far East) Index,
which includes 1050 companies representing the stock markets of Europe,
Australia, New Zealand and the Far East; and (7) the U.S. Government 90-Day
Treasury Bill rate. Generally, an index represents the market value of an
unmanaged group of securities, regarded by investors as representative of a
particular market. An index does not reflect any asset-based charges for
investment management or other expenses. The performance information may also
include evaluations of the funds published by nationally recognized ranking
services and by financial publications that are nationally recognized, such as
Business Week, Forbes, Institutional Investor, Money and The Wall Street
Journal.

TAXES

The following discussion of federal income tax consequences is based on
the Code and the regulations issued thereunder as in effect on the date of this
SAI. New legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein and may have a retroactive
effect with respect to the transactions contemplated herein.

Each of the Funds and Portfolios intends to qualify as a "regulated
investment company" ("RIC") under Subchapter M of the Code. A Fund or Portfolio
that is a RIC and distributes to its

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<PAGE> 99
shareholders at least 90% of its taxable net investment income (including, for
this purpose, its net realized short-term capital gains) and 90% of its
tax-exempt interest income (reduced by certain expenses), will not be liable for
federal income taxes to the extent its taxable net investment income and its net
realized long-term and short-term capital gains, if any, are distributed to its
shareholders.

A number of technical rules are prescribed for computing net investment
income and net capital gains. For example, the Fund or Portfolio is generally
treated as receiving dividends on the ex-dividend date. Also, certain foreign
currency losses and capital losses arising after October 31 of a given year may
be treated as if they arise on the first day of the next taxable year.

In order to qualify as a RIC under the Code, in addition to satisfying
the distribution requirement described above, each Fund or Portfolio must (a)
derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities, or foreign currencies, and certain other
related income, including, generally, certain gains from options, futures, and
forward contracts; and (b) diversify its holdings so that, at the end of each
fiscal quarter of the Fund's or Portfolio's taxable year, (i) at least 50% of
the market value of the Fund's or Portfolio's assets is represented by cash and
cash items, U.S. Government Securities, securities of other RICs, and other
securities, with such other securities limited, in respect of any one issuer, to
an amount that does not exceed 10% of the voting securities of such issuer or 5%
of the value of the Fund's or Portfolio's total assets; and (ii) not more than
25% of the value of its assets is invested in the securities (other than U.S.
Government Securities and securities of other RICs) of any one issuer or two or
more issuers which the Fund or Portfolio controls and which are engaged in the
same, similar or related trades or businesses.

If a Fund or Portfolio fails to qualify as a RIC for any year, all of
its income will be subject to tax at corporate rates, and its distributions
(including capital gain distributions) will be taxable as ordinary income
dividends to its shareholders to the extent of the Fund's or Portfolio's current
and accumulated earnings and profits.

In addition to qualifying under subchapter M by meeting the
requirements described above, each Fund and Portfolio intends to meet the
diversification requirements of Subchapter L of the Code so that non-qualified
variable annuity contracts funded by the Trust will not fail to qualify as
annuities for tax purposes. In general, for a Fund or Portfolio to meet the
investment diversification requirements of Subchapter L of the Code, Treasury
regulation 1.817-5 requires that no more than 55% of the total value of the
assets of the Fund or Portfolio be represented by any one investment, no more
than 70% by any two investments, no more than 80% by three investments and no
more than 90% by four investments. Generally, for purposes of the regulations,
all securities of the same issuer are treated as one investment. In the context
of U.S. Government securities (including any security that is issued, guaranteed
or insured by the United States or an instrumentality of the United States),
each U.S. Government agency or instrumentality is treated as a separate issuer.
In the context of shares of registered investment companies (including shares of
the Trust), each series, fund or portfolio is treated as a separate issuer.
Compliance with the Subchapter L regulations is tested on the last day of each
calendar year quarter.

Notwithstanding the distribution requirement described above, which
only requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a regulated investment company is generally subject to a

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<PAGE> 100
nondeductible 4% excise tax to the extent it fails to distribute by the end of
any calendar year at least 98% of its ordinary income for that year and 98% of
its capital gain net income for the one-year period ending on October 31 of that
year, plus certain other amounts.

The excise tax is inapplicable to any RIC all of the shareholders of
which are either tax-exempt pension trusts or separate accounts of life
insurance companies funding variable contracts. Although each Fund and Portfolio
believes that it is not subject to the excise tax, each Fund and Portfolio
intends to make the distributions required to avoid the imposition of the tax,
provided such payments and distributions are determined to be in the best
interest of such Fund's or Portfolio's shareholders.

Dividends declared by Fund or Portfolio in October, November, or
December of any year and payable to shareholders of record on a date in such
month will be deemed to have been paid by the Fund or Portfolio and received by
the shareholders on December 31 of that year if paid by the Fund at any time
during the following January.

ADDITIONAL CONSIDERATIONS FOR SHAREHOLDERS OF THE INTERNATIONAL
GROWTH FUND

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

FINANCIAL STATEMENTS

The Trust's financial statements for the fiscal year ended December 31, 1997,
including notes thereto and the Report of Price Waterhouse LLP, Independent
Accountants, dated February 20, 1998, along with the financial statements for
the fiscal year ended December 31, 1998, including notes thereto and the Report
of Deloitte & Touche LLP, Independent Accountants dated __________, 1998, are
incorporated herein by reference to the Trust's Annual Reports, as filed with
the Securities and Exchange Commission by the Trust. The audited financial
statements incorporated by reference into this SAI and the financial highlights
included in Part A of this registration statement and incorporated by reference
into this SAI have been so included and incorporated in reliance upon the
reports of the independent accountants, given on their authority as experts in
auditing and accounting.

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<PAGE> 101
DESCRIPTION OF S&P, MOODY'S, DUFF AND FITCH RATINGS

DESCRIPTION OF S&P CORPORATE BOND RATINGS

AAA-Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.

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

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

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

BB Debt rated 'BB' has less near-term vulnerability to default than
other speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could lead
to inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.

B Debt rate 'B' has greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions would likely impair capacity or
willingness to pay interest and repay principal. The 'B' rating category also is
used for debt subordinated to senior debt that is assigned an actual or implied
'BB' or 'BB-' rating.

CCC Debt rated 'CCC' has a current identifiable vulnerability to
default, and is dependent on favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial, or economic conditions, it is not likely
to have the capacity to pay interest and repay principal. The 'CCC' rating
category also is used for debt subordinated to senior debt that is assigned an
actual or implied 'B' or 'B-' rating.

CC The rating 'CC' is typically applied to debt subordinated to senior
debt which is assigned an actual or implied 'CCC' rating.

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<PAGE> 102
C The rating 'C' is typically applied to debt subordinated to senior
debt which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued.

C1-Debt rated C1 is reserved for income bonds on which no interest is
being paid.

D- Debt is rated D when the issue is in payment default, or the obligor
has filed for bankruptcy. The D rating is used when interest or principal
payments are not made on the date due, even if the applicable grace period has
not expired, unless S&P believes that such payments will be made during such
grace period.

Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

DESCRIPTION OF MOODY'S CORPORATE BOND RATINGS

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

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

A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.

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

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

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

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<PAGE> 103
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.

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

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

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the security ranks in the lower end of its generic rating
category.

DESCRIPTION OF DUFF CORPORATE BOND RATINGS

AAA-Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA-High credit quality. Protection factors are strong. Risk is modest
but may vary slightly from time to time because of economic conditions.

A-Protection factors are average but adequate. However, risk factors
are more variable and greater in periods of economic stress.

BBB-Below average protection factors but still considered sufficient
for prudent investment. Considerable variability in risk during economic cycles.

BB+ Below investment grade but deemed likely to meet obligations when
due.

BB Present or prospective financial protection factors fluctuate
according to industry conditions or company fortunes.

BB- Overall quality may move up or down frequently within this
category.

B+ Below investment grade and possessing risk that obligations will not
be met when due.

B Financial protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes.

B- Potential exists for frequent changes in the rating within this
category or into a higher or lower rating grade.

CCC Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred dividends.

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<PAGE> 104
Protection factors are narrow and risk can be substantial with
unfavorable economic/industry conditions, and/or with unfavorable company
developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments.

DP Preferred stock with dividend arrearages.

DESCRIPTION OF FITCH CORPORATE BOND RATINGS

AAA-Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA-Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated F-1+.

A-Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and to repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB-Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and to repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have an adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

BB Bonds are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.

B Bonds are considered highly speculative. While bonds in this class
are currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity throughout
the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C Bonds are in imminent default in payment of interest or principal.

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<PAGE> 105
DDD, DD, and D Bonds are in default on interest and/or principal
payments. Such bonds are extremely speculative and should be valued on the basis
of their ultimate recovery value in liquidation or reorganization of the
obligor. 'DDD' represents the highest potential for recovery on these bonds, and
'D' represents the lowest potential for recovery.

PLUS (+) MINUS (-)

Plus and minus signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs,
however, are not used in the DDD, DD, or D categories.

DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS

A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Debt determined to possess extremely strong safety
characteristics is denoted with a plus sign (+) designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated 'A-1'.

A-3 Debt carrying this designation has an adequate capacity for timely
payment. It is, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.

B Debt rated 'B' is regarded as having only speculative capacity for
timely payment.

C This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.

D This rating indicates that the obligation is in payment default.

DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS

PRIME-1 Issuers rated Prime-1 (or supporting institutions) have
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:

-- Leading market positions in well established industries. -- High
rates of return on funds employed. -- Conservative capitalization structure
with moderate reliance on debt and ample asset protection. -- Broad margins in
earnings coverage of fixed financial charges and high internal cash generation.
- -- Well-established access to a range of financial markets and assured sources
of alternate liquidity.

PRIME-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more

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<PAGE> 106
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

PRIME-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

NOT PRIME Issuers rate Not Prime do not fall within any of the Prime
rating categories.

DESCRIPTION OF DUFF'S COMMERCIAL PAPER RATINGS

Duff 1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources of
funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.

Duff 1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk factors are
minor.

Duff 1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk factors are very
small.

GOOD GRADE

Duff 2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

SATISFACTORY GRADE

Duff 3 Satisfactory liquidity and other protection factors qualify
issue as to investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.

NON-INVESTMENT GRADE

Duff 4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service. Operating factors and
market access may be subject to a high degree of variation.

DEFAULT

Duff 5 Issuer failed to meet scheduled principal and/or interest
payments.

DESCRIPTION OF FITCH'S COMMERCIAL PAPER RATINGS

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<PAGE> 107
F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
'F-1+'.

F-2 Good Credit Quality. Issues assigned this rating have a
satisfactory degree of assurance for timely payment, but the margin of safety is
not as great as for issues assigned 'F-1+' and 'F-1' ratings.

F-3 Fair Credit Quality. Issues assigned this rating have
characteristics suggesting that the degree of assurance for timely payment is
adequate, however, near-term adverse changes could cause these securities to be
rated below investment grade.

F-S Weak Credit Quality. Issues assigned this rating have
characteristics suggesting a minimal degree of assurance for timely payment and
are vulnerable to near-term adverse changes in financial and economic
conditions.

D Default. Issues assigned this rating are in actual or imminent
payment default.

LOC The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.

-53-

<PAGE> 108
WM VARIABLE TRUST
FORM N-1A

PART C
OTHER INFORMATION

Item 23. Exhibits

(a) Agreement and Declaration of Trust,

(1) Agreement and Declaration of Trust, dated January 29,
19993 -- incorporated by reference to Post-Effective
Amendment ("PEA") No. 7 to the Registrant's
Registration Statement, filed with the SEC on
February 28, 1997.

(2) Amendment No. 1 to the Trust's Agreement and
Declaration of Trust dated April 27, 1993 --
incorporated by reference to PEA No. 7 to the
Registrant's Registration Statement, filed on
February 28, 1997.

(3) Amendment No. 2 to the Trust's Agreement and
Declaration of Trust dated September 22, 1993--
incorporated by reference to PEA No. 7 to the
Registrant's Registration Statement filed on February
28, 1997.

(b) Bylaws of the Trust -- incorporated by reference to PEA No. 7
filed on February 28, 1997.

(d) Investment Advisory Contracts

(1) Management Agreement, dated as of January 30, 1998,
between the Trust and WM Advisors, Inc. incorporated
by reference to PEA No. 13, filed on February 27,
1998

(2) Sub-Adviser Agreement, dated as of January 30, 1998
between WM Advisors, Inc. and Janus Capital
Corporation ("Janus") with respect to the Growth Fund
and the Emerging Growth Fund -- incorporated by
reference to PEA No. 13, filed on February 27, 1998.

(3) Sub-Adviser Agreement, dated as of January 30, 1998
between WM Advisers, Inc. and Warburg, Pincus
Counsellors, Inc. ("Warburg") with respect to the
International Growth Fund -- incorporated by
reference to PEA No. 13, filed on February 27, 1998.
<PAGE> 109
(e) Underwriting Contracts.

(1) Distribution Agreement, dated January 30, 1998
between the Trust and WM Funds Distributor, Inc.
(formerly known as Composite Funds Distributor, Inc.)
-- incorporated by reference to PEA No. 13 to the
Registrant's Registration Statement filed on February
27, 1998.

(2) Participation Agreement among the Trust, WM Advisors,
Inc., WM Shareholder Services, Inc. (formerly known
as Murphey Favre Security Services, Inc.)
("Shareholder Services"), American General Life
Insurance Company ("American General") and American
General Securities Incorporated ("American General
Securities"), dated as of January 30, 1998 --
incorporated by reference to PEA No. 13 to the
Registrant's Registration Statement filed on February
27, 1998.

(f) Bonus or Profit Sharing Plans -- Not Applicable.

(g) Custody Agreement, dated as of March 20, 1998, between the
Trust and Boston Safe Deposit & Trust Company -- incorporated
by reference to PEA No. 7 to the Registrant's Registration
Statement filed on February 28, 1997.

(h) Other Material Contracts

(1) Transfer Agent Contract, dated as of March 20, 1998
-- incorporated by reference to PEA No. 14 to the
Registrant's Registration Statement filed on March
26, 1998.

(2) Administration Agreement dated January 30, 1998 --
incorporated by reference to PEA No. 13 to the
Registrant's Registration Statement filed on February
27, 1998.

(i) Legal Opinion -- incorporated by reference to PEA No. 15 to
the Registrant's Registration Statement filed on April 1,
1998.

(j) Other Opinions -- Not Applicable.

(k) Omitted Financial Statements -- Not Applicable.

(l) Initial Capital Agreements -- Not Applicable.

(m) 12b-1 Plan -- Not Applicable.

-2-
<PAGE> 110
(n) Financial Data Schedules for the year ended December 31, 1998
-- To be filed by Amendment.

(o) Rule 18f-3 Plan -- Not Applicable.

Item 24. Persons Controlled by or Under Common Control with Registrant.

The Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts. Prior to March 20, 1998, the Trust was known as
the Sierra Variable Trust. Separate Account D of American General Life Insurance
Company is the sole shareholder of, and may be deemed to control, the Trust.
American General Life Insurance Company is a subsidiary of American General
Corporation.

The list of American General Corporation's active subsidiaries is
hereby incorporated by reference to Item 26 of the Form N-4 registration
statement of American General Life Insurance Company and its Separate Account D,
File Nos. 33-57730 and 811-2441.

The Registrant is operated under the supervision of WM Advisors. WM
Advisors is affiliated with Shareholder Services, which serves as transfer agent
for the Registrant. An affiliate of WM Advisors, WM Funds Distributor, Inc. ("WM
Funds Distributor") serves as the principal underwriter and distributor for the
Registrant. WM Advisors, Shareholder Services and WM Funds Distributor serve in
their same capacities for the four other registered investment companies.

WM Advisors, Shareholder Services and WM Funds Distributor are all
wholly-owned subsidiaries of Washington Mutual, Inc. and are all incorporated
under the laws of the State of Washington.

Item 25. Indemnification.

Article VIII of the Registrant's Agreement and Declaration of Trust
provides in relevant part:

The Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as
a shareholder, creditor or otherwise) (hereinafter referred to as a
"Covered Person") against all liabilities and expenses, including but
not limited to amounts paid in satisfaction of judgments, in compromise
or as fines and penalties, and counsel fees reasonably incurred by any
Covered Person in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or

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<PAGE> 111
criminal, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party
or otherwise or with which such Covered Person may be or may have been
threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any
such action, suit or other proceeding to be liable to the Trust to its
Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties),
shall be paid from time to time by the Trust in advance of the final
disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so
paid to the Trust if it is ultimately determined that indemnification
of such expenses is not authorized under this Article; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust shall be
insured against losses arising from any such advance payments or (c)
either a majority of the disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees then in office
act on the matter), or independent legal counsel in a written opinion,
shall have determined, based upon a review of readily available facts
(as opposed to a full trial type inquiry) that there is reason to
believe that such Covered Person will be found entitled to
indemnification under this Article.

As to any matter disposed of (whether by a compromise payment, pursuant
to a consent decree or otherwise) without an adjudication by a court,
or by any other body before which the proceeding is brought, that such
Covered Person is liable to the Trust or its Shareholders by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved, after notice that it
involves such indemnification, by at least a majority of the
disinterested Trustees acting on the matter (provided that a majority
of the disinterested Trustees then in office act on the matter) upon a
determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry) that such Covered Person is not
liable to the Trust or its Shareholders by reasons of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office, or (b) there has
been obtained an opinion in writing of independent legal counsel, based
upon a review of readily available facts (as opposed to a full trial
type inquiry) to the effect that such indemnification would not protect
such Person against any liability to the Trust to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office. Any approval pursuant to this Section shall not prevent
the recovery from any Covered Person of any amount paid to such Covered
Person in accordance with this Section as indemnification if such
Covered Person is subsequently adjudicated by a

-4-
<PAGE> 112
court of competent jurisdiction to have been liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of such Covered Person's office.

Item 26. Business and Other Connections of Investment Advisor.

(a) WM Advisors, Inc.

<TABLE>
<CAPTION>
Directors Past Two Fiscal Years
- --------- ---------------------
<S> <C>
Monte D. Calvin WM Shareholder Services, Inc.
First Vice President, Director 601 West Main Ave., Suite 300, Spokane, WA 98201

Treasurer, Director April 1997 - present
WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

Vice President, Treasurer July 1997 - present
Director WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Craig S. Davis July 1997 - present
Director WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Director WM Shareholder Services, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Director April 1997 - present
WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

Executive Vice President December - present
Washington Mutual, Inc.
1201 Third Ave., Seattle, WA 98101

Chairman January 1996 - July 1997
ASB Financial Services, Irvin, CA

J. Pamela Dawson July 1997 - present
Director WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Director WM Shareholder Services, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201
</TABLE>

-5-
<PAGE> 113
<TABLE>
<S> <C>
Director April 1997 - present
WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

President March 1997 - present
WM Financial Services
1201 Third Ave., 7th Floor, Seattle, WA 98101

President December 1996 - July 1997
ASB Financial Services, Irvine, CA

Senior Vice President/Regional Manager November 1996 - December 1996
Wells Fargo Securities/First Interstate, Houston, TX

Kerry K. Killinger WM Advisors, Inc.
Director 1201 Third Ave., Suite 1400, Seattle, WA 98101

CEO, Chairman, Director Washington Mutual Bank
1201 Third Avenue, Seattle, WA 98101

Director July 1997 - present
WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Director WM Shareholder Services, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Randall L. Yoakum WM Advisors, Inc.
Chairman of Investment 1201 Third Ave., Suite 1400, Seattle, WA 98101
Committee

Sharon L. Howells WM Advisors, Inc.
First Vice President, 1201 Third Ave., Suite 1400, Seattle, WA 98101
Corporate Secretary

Vice President, July 1997 - present
Corporate Secretary WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Corporate Secretary WM Shareholder Services, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Jeffrey D. Huffman WM Advisors, Inc.
Vice President 1201 Third Ave., Suite 1400, Seattle, WA 98101
</TABLE>

-6-
<PAGE> 114
<TABLE>
<S> <C>
B. Joel King March 1998 - present
Vice President WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

Vice President January 1996 - February 1998
Bennington Capital Management
1420 Fifth Ave., Seattle, WA 98101

William G. Papesh WM Advisors, Inc.
President, Director 1201 Third Ave., Suite 1400, Seattle, WA 98101

President, Director WM Shareholder Services, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Director WM Insurance Services
1201 Third Ave., Seattle, WA 98101

President, Director WM Group of Funds
601 West Main Ave., Suite 300, Spokane, WA 98201

President, Director July 1997 - present
WM Funds Distributor, Inc.
601 West Main Ave., Suite 300, Spokane, WA 98201

Brian L. Placzek WM Advisors, Inc.
Vice President 1201 Third Ave., Suite 1400, Seattle, WA 98101

Gary J. Pokrzywinski WM Advisors, Inc.
Vice President 1201 Third Ave., Suite 1400, Seattle, WA 98101

Audrey S. Quaye February 1996 - present
Vice President WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

Credit Analyst January 1996 - February 1996
Tandem Computers, Cupertino, CA

Stephen C. Scott March 1998 - present
Vice President WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

Senior Investment Advisor Sierra Investment Services Corporation
9301 Corbin Ave., Northridge, CA 91324

President Sierra Investment Services Corporation
9301 Corbin Ave., Northridge, CA 91324
</TABLE>

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<PAGE> 115
<TABLE>
<S> <C>
David W. Simpson WM Advisors, Inc.
Vice President 1201 Third Ave., Suite 1400, Seattle, WA 98101

Linda C. Walk December 1997 - present
Vice President WM Advisors, Inc.
1201 Third Ave., Suite 1400, Seattle, WA 98101

November 1996 - November 1997
Laid Norton Trust Company
Norton Building, Suite 1600, Seattle, WA 98104

January 1996 - July 1996
Ernst & Young LLP
2001 Market Street, 41st Floor, Philadelphia, PA 19103
</TABLE>

(b) Janus Capital Corporation

Janus Capital Corporation ("Janus") is an investment advisor
registered under the Advisers Act, and acts as investment advisor for registered
investment companies, foreign investment companies and for individual,
charitable, corporate and retirement accounts. Janus, and its affiliates,
provide a variety of trust, investment management and investment advisory
services.

The list required by this Item 28 of officers and directors of
Janus, together with information as to any other business, profession, vocation
or employment of a substantial nature engaged in by such officers and directors
during the past two years, is incorporated by reference to Schedules A and D of
Form ADV, filed by Janus pursuant to the Advisers Act (SEC File No. 801-13991).

Warburg, Pincus Asset Management, Inc. ("Warburg") is an
investment advisor registered under the Advisers Act, and acts as investment
advisor for registered investment companies and foreign investment companies.
Warburg provides investment services to investment endowment funds, foundations
and other institutions and individuals.

The list required by this Item 28 of officers and directors of
Warburg, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV, filed by Warburg, pursuant to the Advisers Act (SEC File No.
801-07321).

Item 27. Principal Underwriters.

-8-
<PAGE> 116
(a) The principal underwriter for each Registrant is WM Funds Distributor,
Inc.

(b) The Directors and Officers of WM Funds Distributor, Inc., their
positions with WM Funds Distributor, Inc. and the WM Group of Funds are
set forth in the table below. The principal business address of WM
Funds Distributor, Inc. and each of its directors and officers is 1201
Third Avenue, Suite 1400, Seattle, Washington 98101.

<TABLE>
<CAPTION>
Name and Position And Positions And
Principal Business Offices With Offices With
Address Underwriter Registrant
------- ----------- ----------

<S> <C> <C>
William G. Papesh President President

Sandra A. Cavanaugh First Vice President Senior Vice President

Monte D. Calvin Vice President, Chief Financial Officer, Senior
Treasurer Vice President

Sharon L. Howells Vice President, Senior Vice President
Corporate Secretary
</TABLE>

Item 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules thereunder
will be maintained at the offices of the Registrants, at 1201 Third Avenue,
Suite 1400, Seattle, WA 98101, the offices of the Registrants' custodian, Boston
Safe Deposit and Trust Company, One Boston Place, Boston, MA 02108 and the
offices of the Registrants' sub-advisors, Janus Capital Corporation, 100
Fillmore Street, Suite 300, Denver, Colorado 80206 and Warburg Pincus Asset
Management, Inc., 466 Lexington Avenue, New York, New York 10017-3147.

Item 29. Management Services.

The Registrant is not a party to any management related contract, other
than as set forth in the Prospectus.

Item 30. Undertakings.

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

-9-
<PAGE> 117
-10-
<PAGE> 118
Exhibit Index

-11-
<PAGE> 119
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Seattle in the State of Washington on
the 12th day of February, 1999.

WM VARIABLE TRUST

WILLIAM G. PAPESH*
----------------------------
William G. Papesh, President

Pursuant to the requirement of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date

<S> <C> <C>
WILLIAM G. PAPESH* President and Trustee February 12, 1999
- --------------------
William G. Papesh

MONTE D. CALVIN Chief Financial Officer February 12, 1999
- --------------------
Monte D. Calvin

DAVID E. ANDERSON* Trustee February 12, 1999
- --------------------
David E. Anderson

WAYNE L. ATTWOOD, M.D.* Trustee February 12, 1999
- --------------------
Wayne L. Attwood, M.D.

ARTHUR H. BERNSTEIN* Trustee February 12, 1999
- --------------------
Arthur H. Bernstein

KRISTIANNE BLAKE* Trustee February 12, 1999
- --------------------
Kristianne Blake

EDMOND R. DAVIS* Trustee February 12, 1999
- --------------------
Edmond R. Davis

JOHN W. ENGLISH* Trustee February 12, 1999
- --------------------
John W. English
</TABLE>

-12-
<PAGE> 120
<TABLE>
<CAPTION>
Signature Title Date

<S> <C> <C>
ANNE V. FARRELL* Trustee February 12, 1999
- ------------------------
Anne V. Farrell

MICHAEL K. MURPHY* Trustee February 12, 1999
- ------------------------
Michael K. Murphy

ALFRED E. OSBORNE, JR.* Trustee February 12, 1999
- ------------------------
Alfred E. Osborne, Jr.

DANIEL PAVELICH* Trustee February 12, 1999
- ------------------------
Daniel Pavelich

JAY ROCKEY* Trustee February 12, 1999
- ------------------------
Jay Rockey

RICHARD C. YANCEY* Trustee February 12, 1999
- ------------------------
Richard C. Yancey
</TABLE>

* By WILLIAM G. PAPESH Pursuant to Powers of Attorney previously filed.

-13-