WM VARIABLE TRUST, 485APOS, 2000-02-15

WM VARIABLE TRUST
485APOS, 2000-02-15

Previous: MOTHERS WORK INC, SC 13G/A, 2000-02-15

Next: PRIVATE CAPITAL MANAGEMENT INC /FL, 13F-HR, 2000-02-15

<PAGE> 1

As filed with the Securities and Exchange Commission on February 15, 2000

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. 18

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X

Amendment No. 19

WM Variable Trust

(Exact name of Registrant as specified in Charter)

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

(Address of principal executive offices)

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

John T. West
1201 Third Avenue, 22nd Floor, Seattle, WA 98101
(Name and address of agent for service)

With a copy to:

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

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

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

X on May 1, 2000 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, 2000

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

FIXED-INCOME FUNDS

+ Money Market Fund
- -------------------------------------------------------

+ Short Term Income Fund

- -------------------------------------------------------
+ U.S. Government Securities Fund
- -------------------------------------------------------
+ Income Fund
- -------------------------------------------------------
EQUITY FUNDS

+ Bond & Stock Fund
- -------------------------------------------------------
+ Growth & Income Fund
- -------------------------------------------------------

+ Growth Fund of the Northwest

- -------------------------------------------------------
+ Growth Fund
- -------------------------------------------------------

+ Mid Cap Stock Fund

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

+ Small Cap Stock Fund

- -------------------------------------------------------
+ International Growth Fund
- -------------------------------------------------------

PORTFOLIOS

+ 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
Money Market Fund 3
Short Term Income Fund 4
U.S. Government Securities Fund 5
Income Fund 6
High Yield Fund 7
Bond & Stock Fund 7
Growth & Income Fund 8
Growth Fund of the Northwest 9
Growth Fund 10
Mid Cap Stock Fund 11
Small Cap Stock Fund 12
International Growth Fund 13
Strategic Growth Portfolio 14
Conservative Growth Portfolio 15
Balanced Portfolio 16
Flexible Income Portfolio 17
Income Portfolio 18
Summary of Principal Risks 19
Description of the Funds and Portfolios 23
Fixed-Income Funds 23
Equity Funds 25
Portfolios 26
Common Investment Practices 27
How Can I Invest in the Funds and Portfolios? 35
Dividends, Distributions and Taxes 36
Organization 37
Financial Highlights 40
Appendix A 55
</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
additional 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, Inc., also referred to as WM Advisors in this
Prospectus, 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. If insurance-
related charges or expenses had been included, the performance shown would have
been lower. 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
- - Foreign Investment Risk - Money Market Risk
</TABLE>

YEARLY performance*
[Money Market Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 3.71
'1995' 5.46
'1996' 4.97
'1997' 4.99
'1998' 5.01
</TABLE>

During the periods shown above, the highest quarterly return was 1.38% (for the
quarter ended 6/30/95), and the lowest was 0.60% (for the quarter ended
9/30/93).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) 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, 1999 has benefitted from the
agreement of WM Advisors and its affiliates to limit the Fund's expenses.
Performance of an investment in the Fund through a variable annuity contract
will be lower than that shown because the performance shown does not reflect
insurance-related charges or expenses. See the accompanying annuity contract
prospectus for more information.

** 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 INCOME fund

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests in short-term bonds
and other FIXED-INCOME SECURITIES which are rated in the top four categories by
a nationally recognized statistical rating organization ("investment grade") or
are of comparable quality. Under normal circumstances, the Fund maintains a
dollar-weighted average portfolio duration of three years or less. The Fund's
investments may include corporate securities, U.S. 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
- - 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' 5.28
</TABLE>

During the periods shown above, the highest quarterly return was 3.31% (for the
quarter ended 6/30/95), and the lowest was -1.15% (for the quarter ended
12/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES % N/A %
LEHMAN BROTHERS MUTUAL FUND SHORT (1-5
[YEAR]) INVESTMENT GRADE DEBT INDEX** % N/A %
</TABLE>

** 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 may
involve leverage.

Among the principal risks of investing in the Fund are:

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

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

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1993' 2.27
'1994' -4.04
'1995' 16.89
'1996' 3.69
'1997' 9.42
'1998' 7.03
</TABLE>

During the periods shown above, the highest quarterly return was 5.29% (for the
quarter ended 6/30/95), and the lowest was -2.99% (for the quarter ended
3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (5/6/93)
<S> <C> <C> <C> <C>
FUND SHARES % % N/A %
LEHMAN BROTHERS U.S. GOVERNMENT INDEX** % % N/A %
</TABLE>

** 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
- - Foreign Investment Risk - Management Risk
</TABLE>

YEARLY performance*
[Income Fund Bar Chart]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' -8.13
'1995' 25.09
'1996' 0.43
'1997' 11.35
'1998' 7.45
</TABLE>

During the periods shown above, the highest quarterly return was 8.47% (for the
quarter ended 6/30/95), and the lowest was -5.22% (for the quarter ended
3/31/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) 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
LEHMAN BROTHERS CORPORATE DEBT BBB-RATED INDEX*** N/A
</TABLE>

* Performance of an investment in the Fund through a variable annuity contract
will be lower than that shown because the performance shown does not reflect
insurance-related charges or expenses. See the accompanying annuity contract
prospectus for more information.

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

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

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
- - 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. THE HIGH YIELD FUND IS THEREFORE A "FUND" AS THAT TERM IS USED
IN THIS PROSPECTUS.

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
- - Foreign Investment Risk - Smaller Company Risk
</TABLE>

7
<PAGE> 11

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
- - 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' 28.50
'1998' 18.98
</TABLE>

During the periods shown above, the highest quarterly return was 21.74% (for the
quarter ended 12/31/98), and the lowest was -13.74% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES N/A
STANDARD & POOR'S 500 COMPOSITE INDEX** 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.

8
<PAGE> 12

GROWTH FUND OF THE NORTHWEST

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

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

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

Among the principal risks of investing in the Fund are:

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

9
<PAGE> 13

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 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 - Derivatives Risk
- - Credit Risk - Liquidity Risk
- - Currency Risk - Management Risk
- - Foreign Investment Risk - Smaller Company Risk
- - Leveraging 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' 59.04
</TABLE>

During the periods shown above, the highest quarterly return was 30.99% (for the
quarter ended 12/31/98), and the lowest was -7.29% (for the quarter ended
6/30/94).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (5/7/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
STANDARD & POOR'S 500 COMPOSITE INDEX** 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.

10
<PAGE> 14

MID CAP STOCK fund

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

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

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

Among the principal risks of investing in the Fund are:

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

NO PERFORMANCE INFORMATION IS AVAILABLE FOR THE MID CAP STOCK FUND BECAUSE IT
HAD NOT YET COMMENCED OPERATIONS AS OF THE DATE OF THIS PROSPECTUS.

11
<PAGE> 15

SMALL CAP STOCK fund

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

PRINCIPAL INVESTMENT STRATEGIES AND RISKS The Fund invests primarily in
"small-cap" equity securities of companies with market capitalizations of less
than $1.4 billion. The Fund's investments may also include FOREIGN INVESTMENTS,
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:

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

YEARLY performance*
[Emerging Growth Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1995' 30.99
'1996' 10.04
'1997' 12.59
'1998' 8.09
</TABLE>

During the periods shown above, the highest quarterly return was 31.14% (for the
quarter ended 12/31/98), and the lowest was -20.64% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (1/12/94)
<S> <C> <C> <C> <C>
FUND SHARES N/A
STANDARD & POOR'S 500 COMPOSITE INDEX** N/A
RUSSELL 2000 INDEX*** 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 in the Russell 3000 Index
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, Capital Guardian Trust Company seeks to
identify foreign stocks that it believes have an attractive valuation, high
return on invested capital, excellent cash flow, strong balance sheets, and
strong management. Capital Guardian utilizes a research driven "bottom-up"
approach in that decisions are made based upon extensive field research and
direct company contacts. Capital Guardian blends its basic value-oriented
approach with macroeconomic and political judgments on the outlook for
economies, industries, currencies, and markets.

Among the principal risks of investing in the Fund are:

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

YEARLY performance*
[International Growth Fund Bar Graph]

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1994' 1.80
'1995' 6.61
'1996' 9.04
'1997' -2.64
'1998' 5.20
</TABLE>

During the periods shown above, the highest quarterly return was 13.71% (for the
quarter ended 12/31/98), and the lowest was -17.33% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Past Past Since Inception
(for periods ended December 31, 1999) One Year Five Years Ten Years (5/7/93)
<S> <C> <C> <C> <C>
FUND SHARES N/A
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX** 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 the potential for a higher level of capital growth while exposing you to
corresponding levels of principal risk.

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

The Portfolio may invest up to 25% of its assets in each of the Money Market,
Short Term Income or High Yield Funds. It may also invest up to 50% of its
assets in each of the Growth & Income, Growth Fund of the Northwest, Growth, Mid
Cap Stock, Small Cap Stock 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' 26.19
</TABLE>

During the periods shown above, the highest quarterly return was 22.70% (for the
quarter ended 12/31/98), and the lowest was -11.32% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1999) One Year (6/3/97)
<S> <C> <C>
PORTFOLIO SHARES
STANDARD & POOR'S 500 COMPOSITE INDEX**
RUSSELL 3000 INDEX***
CAPITAL MARKET BENCHMARK****
</TABLE>

* The Portfolio's performance through December 31, 1999 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance of an investment in the Portfolio through a variable
annuity contract will be lower than that shown because the performance
shown does not reflect insurance-related charges or expenses. See the
accompanying annuity contract prospectus for more information.

** 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.

**** 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.

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 the potential for a low level of income and the potential for a
medium to high level of capital growth while exposing you to a medium level of
principal risk.

The Portfolio may invest up to 30% of its assets in each of the Money Market,
Short-Term Income, U.S. Government Securities, Income or High Yield Funds. It
may also invest up to 40% of its assets in each of the Growth & Income, Growth
Fund of the Northwest, Growth, Mid Cap Stock, Small Cap Stock 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' 19.910
</TABLE>

During the periods shown above, the highest quarterly return was 19.54% (for the
quarter ended 12/31/98), and the lowest was -11.25% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past One Since Inception
(for periods ended December 31, 1999) Year (6/3/97)
<S> <C> <C>
PORTFOLIO SHARES
RUSSELL 3000 INDEX**
CAPITAL MARKET BENCHMARK***
</TABLE>

* The Portfolio's performance through December 31, 1999 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance of an investment in the Portfolio through a variable
annuity contract will be lower than that shown because the performance shown
does not reflect insurance-related charges or expenses. See the accompanying
annuity contract prospectus for more information.

** 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 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 each of
(1) the Short Term Income, U.S. Government Securities, Income and High Yield
Funds and (2) the Equity Funds.

The Portfolio may invest up to 40% of its assets in each of the Money Market,
Short-Term Income, 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,
Growth Fund of the Northwest, Growth, Small Cap Stock, Mid Cap Stock and
International Growth Funds.

The Portfolio may also invest in U.S. GOVERNMENT SECURITIES, short-term debt
rated A or higher, commercial paper including master notes, 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' 17.18
</TABLE>

During the periods shown above, the highest quarterly return was 14.45% (for the
quarter ended 12/31/98), and the lowest was -8.02% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past One Since Inception
(for periods ended December 31, 1999) Year (6/3/97)
<S> <C> <C>
PORTFOLIO SHARES
LEHMAN BROTHERS AGGREGATE BOND INDEX**
RUSSELL 3000 INDEX***
CAPITAL MARKET BENCHMARK****
</TABLE>

** 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 the potential for a medium to high level of reinvestment income and the
potential for a low to medium level of capital growth, while exposing you to a
low to medium level of principal risk.

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

The Portfolio shares the principal risks of 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' 11.75
</TABLE>

During the periods shown above, the higher quarterly return was 6.14% (for the
quarter ended 12/31/98), and the lowest was -0.92% (for the quarter ended
9/30/98).

PERFORMANCE TABLE*

<TABLE>
<CAPTION>
Average Annual Total Returns Past Since Inception
(for periods ended December 31, 1999) One Year (9/8/97)
<S> <C> <C>
PORTFOLIO SHARES
LEHMAN BROTHERS AGGREGATE BOND INDEX**
CAPITAL MARKET BENCHMARK***
</TABLE>

* The Portfolio's performance through December 31, 1999 has benefitted from
the agreement of WM Advisors and its affiliates to limit the Portfolio's
expenses. Performance of an investment in the Portfolio through a variable
annuity contract will be lower than that shown because the performance shown
does not reflect insurance-related charges or expenses. See the accompanying
annuity contract prospectus for more information.

** 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 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 Income, 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 Income 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.

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. That section also
includes 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 Fund of
the Northwest, Growth, Mid Cap Stock, Small Cap Stock 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.

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

Even Funds such as the Short Term Income and U.S. Government Securities Funds
are subject to interest rate risk, 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 U.S. Government Securities and Income Funds that invest
significantly in MORTGAGE-BACKED or other ASSET-BACKED SECURITIES that may be
prepaid. These securities have variable maturities that tend to lengthen when
that is least desirable -- when interest rates are rising. Increased market
risk is also likely for Funds such as the Short Term Income and Income Funds
that invest in debt securities paying no interest, such as ZERO-COUPON and
pay-in-kind securities.

+ CREDIT RISK. Each of the Funds and Portfolios may be subject to credit risk
to the extent it invests in FIXED-INCOME SECURITIES. This is the risk that the
issuer or the guarantor of a debt security, or the counterparty to any of a
Fund's portfolio transactions (including without limitation REPURCHASE
AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, LENDING OF SECURITIES, and other
over-the-counter transactions), will be unable or unwilling to make timely
principal and/or interest payments, or to otherwise honor its obligations.
Varying degrees of credit risk, often reflected in CREDIT RATINGS, apply.
Credit risk is particularly significant for Funds such as the Income, High
Yield, Bond & Stock, Growth & Income, Growth, Mid Cap Stock and Small Cap
Stock Funds that invest significantly in LOWER-RATED SECURITIES. These
securities and similar unrated securities (commonly known as "junk bonds")
have speculative elements or are predominantly speculative credit risks. The
Short Term Income, Income, High Yield, Bond & Stock, Growth & Income, Growth
Fund of the Northwest, Growth, Small Cap Stock 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 Income, Income, High Yield, Bond
& Stock, Growth & Income, Growth, Mid Cap Stock, Small Cap Stock and
International Growth Funds that invest in securities denominated in, and/or
receive revenues in, FOREIGN CURRENCIES will be subject to currency risk. This
is the risk that those currencies will decline in value relative to the U.S.
dollar, or,

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 Short Term Income, Income, High Yield, Bond & Stock, Growth & Income,
Growth, Mid Cap Stock, Small Cap Stock and International Growth Funds, may
experience more rapid and extreme changes in value than Funds with investments
solely in securities of U.S. companies. This is because the securities markets
of many foreign countries are relatively small, with a limited number of
companies representing a small number of industries. Additionally, foreign
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 Growth Fund of the Northwest Funds may also make U.S.
dollar-denominated FOREIGN INVESTMENTS.

+ GEOGRAPHIC CONCENTRATION RISK. The Growth Fund of the Northwest Fund invests
significant portions of its assets in the concentrated geographic area 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 Short Term Income, U.S.
Government Securities, Income, Mid Cap Stock, Growth, Small Cap Stock and
International Growth Funds may achieve leverage by using REPURCHASE AGREEMENTS
and/or DOLLAR ROLLS. The Short Term Income, 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 Income, Mid Cap
Stock, Growth, Small Cap Stock 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 the
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

20
<PAGE> 24

lines, markets or financial resources or they may depend on a few key
employees. The High Yield, Bond & Stock, Growth & Income, Growth Fund of the
Northwest, Growth, Small Cap Stock and International Growth Funds (and the
Small Cap Stock 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,
as a result of a deterioration in the credit quality of issuers whose
securities the Fund holds or an increase in interest rates, may not be able to
maintain a net asset value of $1.00 per share. 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 adverse 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 WM Advisors and in accordance with the investment
restrictions discussed above. As a result, the Portfolios share the risks of
each of the Funds in which they invest, which are described above.

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

In addition to the expenses of the underlying Funds, which are indirectly
borne by investors in the Portfolio, investment in the Funds through the
Portfolios involves certain expenses 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 Funds and
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 other than
Market Risk, Credit Risk, Liquidity Risk and Management Risk, which apply to all
of the Funds. Risks not marked for a particular Fund may, however, still apply
to some extent to that Fund at various times.

<TABLE>
<CAPTION>
Foreign Geographic Smaller Money Portfolio
Currency Investment Leveraging Concentration Derivatives Company Market Reallocation
Fund Risk Risk Risk Risk Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY
MARKET X X X
fund
SHORT TERM INCOME X X X X X
fund
U.S. GOVERNMENT
SECURITIES X X X
fund
INCOME
fund X X X X X
HIGH YIELD
fund X X X X X X
BOND &
STOCK X X X X
fund
GROWTH &
INCOME X X X X X X
fund
GROWTH FUND OF
THE NORTHWEST
fund X X X X X
GROWTH
fund X X X X X X
MID CAP STOCK
fund X X X X X X
SMALL CAP
STOCK X X X X X X
fund
INTERNATIONAL
GROWTH X X X X X X
fund
</TABLE>

22
<PAGE> 26

DESCRIPTION OF THE FUNDS AND PORTFOLIOS

This section provides a more complete description of the principal investment
strategies and risks of each Fund and Portfolio. The "Common Investment
Practices" section that follows provides additional information about the
principal investment strategies of the Funds and identifies the Funds and
Portfolios that may engage in such practices to a significant extent. The Funds
may undertake other strategies for temporary defensive purposes. These
strategies may cause the Funds to miss out on investment opportunities, and may
prevent the Funds from achieving their goals. You can find additional
descriptions of the Funds' and Portfolios' 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.

FIXED INCOME 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 securities 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 the Money Market Fund (except U.S. Government securities subject to
repurchase agreements and variable rate demand notes) will have a maturity
exceeding 397 days, and the Fund's average portfolio maturity will not exceed 90
days. The Money Market Fund 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 securities rated in one of the two highest rating
categories by Moody's or S&P; and

- - repurchase agreements.

SHORT TERM INCOME FUND. The Short Term Income Fund maintains a portfolio
duration of three years or less and it may not hold individual securities with
remaining maturities of more than five years. Duration is a measure that relates
the price volatility of a security to changes in interest rates. The duration of
a debt security is the weighted average term to maturity, expressed in years of
the present value of future cash flows, income, coupon payments and purchase
repayments. Thus, duration involves WM Advisors judgment with respect to both
interest rates and expected cash flows.

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

The Fund may invest in securities issued or guaranteed by domestic and foreign
governments and government agencies and instrumentalities and in high-grade cor-

23
<PAGE> 27

porate debt securities, such as bonds, debentures, notes, equipment lease and
trust certificates, mortgage-backed securities, collateralized mortgage
obligations and asset-backed securities.

The Fund may invest up to 10% of its assets in foreign fixed-income securities,
primarily bonds of foreign governments or their political subdivisions, foreign
companies and supranational organizations, including non-U.S. dollar-denominated
securities and U.S. dollar-denominated debt securities issued by foreign issuers
and foreign branches of U.S. banks. Investment in foreign securities is subject
to special risks. The Fund may invest up to 5% of its assets in preferred stock.
The Fund may engage in certain options transactions, enter into financial
futures contracts and related options for the purpose of portfolio hedging and
enter into currency forwards or futures contracts and related options for the
purpose of currency hedging. The Fund may invest in certain illiquid
investments, such as privately placed securities, 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 securities issued by 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) securities
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;

- - Commercial mortgage-backed securities;

- - 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 securities 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 20% of its assets in
lower-rated fixed-income securities (sometimes called "junk bonds").

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

24
<PAGE> 28

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. THE HIGH YIELD FUND IS THEREFORE A "FUND" AS
THAT TERM IS USED IN THIS PROSPECTUS.

EQUITY FUNDS

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

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

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

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

GROWTH FUND. The Growth Fund invests primarily in common stocks believed to
have significant appreciation potential. The Fund also may invest in debt
securities, bonds, convertible bonds, preferred stock and convertible preferred
stock, including up to 20% of its assets in non-investment-grade debt
securities.

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

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

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

25
<PAGE> 29

(sell) covered call options. The Fund may invest up to 25% of its assets in U.S.
dollar-denominated securities of foreign issuers.

SMALL CAP STOCK FUND. The Small Cap Stock Fund invests primarily in equity
securities of companies with market capitalization of less than $1.4 billion at
the time of purchase. In addition to common stock, the Fund's equity securities
may include convertible bonds, convertible preferred stock and warrants to
purchase common stock. The Fund may also invest in money market instruments for
temporary or defensive purposes. The Fund may invest up to 25% of its assets in
securities of foreign issuers and up to 5% of its assets in securities in
developing or emerging countries. The Fund may invest up to 35% of its assets in
non-investment-grade debt securities if WM Advisors 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 market countries). The Fund will emphasize established
companies, although it may invest in companies of varying sizes as measured by
assets, sales and capitalization.

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

The Fund 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. WM Advisors 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, WM Advisors' outlook for
the economy and the financial markets, and the relative market valuations of the
Funds.

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

- - short-term securities issued by 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 WM Advisors;

- - commercial paper, including master notes;

26
<PAGE> 30

- - 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 WM Advisors. 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 WM Advisors' current asset
allocation strategy for the Portfolio. Specifically, each Portfolio may enter
into futures contracts and options thereon, provided that the aggregate deposits
required on these contracts do not exceed 5% of the Portfolio's total assets. A
Portfolio may also use futures contracts and options for bona fide hedging
transactions. Futures contracts and options may also be used to reallocate the
Portfolio's assets among asset categories while minimizing transaction costs, to
maintain cash reserves while simulating full investment, to facilitate trading,
to seek higher investment returns, or to simulate full investment when a futures
contract is priced attractively or is otherwise considered more advantageous
than the underlying security or index. As a fundamental policy, which may not be
changed without shareholder vote, each Portfolio will concentrate its
investments in shares of the Funds.

COMMON INVESTMENT PRACTICES

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

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

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

Each of the Short Term Income, Growth, Mid Cap Stock, Small Cap Stock and
International 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 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

27
<PAGE> 31

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, securities
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)
and below 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 Short
Term Income, U.S. Government Securities, Income, High Yield and 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 Income, 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 WM Advisors 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
Income, Income, High Yield, Growth, Small Cap Stock and International Growth
Funds 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 the U.S. dollar. These
Funds either enter into these transactions on a spot (i.e., cash) basis at the
spot rate prevailing in the foreign currency exchange market, or use forward
contracts to purchase or sell foreign currencies.

These Funds also may enter into foreign currency hedging transactions in an
attempt to protect against changes in foreign currency exchange rates between
the trade and settlement dates of specific securities transactions or changes in
foreign currency exchange rates that would adversely affect a portfolio position
or an anticipated portfolio position. These transactions tend to limit any
potential gain that might be realized should the value of the hedged currency
increase. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of these securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of currency market
movements is extremely difficult, and the successful execution of a hedging
strategy is highly uncertain. In addition, when WM Advisors or a Fund's
sub-advisor believes that the currency of a specific country may deteriorate
against another currency, it

28
<PAGE> 32

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

While the foregoing actions are intended to protect the Fund from adverse
currency movements, there is a risk that currency movements involved will not be
properly anticipated, and there can be no assurance that such transactions will
be available or that the Funds will use such transactions even if they are
available. Use of currency hedging techniques may also be limited by 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 Growth
Fund of the Northwest Funds may invest in securities of foreign issuers if such
securities are denominated in U.S. dollars. The Short Term Income, Income, High
Yield, Growth, Mid Cap Stock, Small Cap Stock and International Growth Funds may
invest in both U.S. dollar denominated and non-U.S. dollar denominated foreign
securities. There are certain risks involved in investing in foreign securities,
including those resulting from

- - fluctuations in currency exchange rates,

- - devaluation of currencies,

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

- - reduced availability of public information concerning issuers, and

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

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

In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains well below
that of the New York Stock Exchange. Accordingly, the Funds' foreign investments
may be less liquid and their prices may be more volatile than comparable
investments in securities of U.S. companies. Moreover, the settlement periods
for foreign securities, which are often longer than those for securities of U.S.
issuers, may affect portfolio liquidity. In buying and selling securities on
foreign exchanges, the Funds normally pay fixed commissions that are generally
higher than the negotiated commissions charged in the United States. In
addition, there is generally less governmental supervision and regulation of
securities exchanges, brokers

29
<PAGE> 33

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 Income, Income, High Yield, Bond & Stock, Growth & Income, Growth
Fund of the Northwest, Growth, Mid Cap Stock, Small Cap Stock and International
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 U.S. securities markets, and EDRs,
in bearer form, are designed for use in European securities markets.

GEOGRAPHIC CONCENTRATION. Potential investors in the Growth Fund of the
Northwest should consider the 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 WM Advisors or a Fund's
sub-advisor believes that it would be beneficial to the Fund, each of the Short
Term Income, Growth, Mid Cap Stock, Small Cap Stock and International Growth
Funds may invest up to 10% of its assets in securities of mutual funds that are
not affiliated with WM Advisors 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, U.S. Government Securities,
Income, Bond & Stock, Growth & Income and Growth Fund of the Northwest Funds,
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, as
amended). Although recent and ongoing developments in the securities markets
have resulted in greater trading of restricted securities, making restricted
securities, in many instances, more liquid than they once were considered to be,
investing in restricted securities could increase the level of illiquidity of
the portfolio securities of a Fund. This could make it more difficult for a Fund
to fulfill shareholder redemption orders on a timely basis. If a Fund were
required to sell these securities on short notice, it might be unable to obtain
fair market value.

LENDING OF SECURITIES. The Short Term Income, Growth, Small Cap Stock and
International Growth Funds each may lend portfolio securities up to 20% of

30
<PAGE> 34

total assets to brokers and other financial organizations. The Bond & Stock,
Growth & Income and Growth Fund of the 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, Mid Cap Stock and Small Cap
Stock Funds may each invest up to 35% of their total assets,
funds may invest up to 20% 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.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Short Term Income, U.S.
Government Securities, Income, High Yield, Bond & Stock and Growth & Income
Funds may invest in mortgage-backed securities, which represent participations
in, or are secured by mortgage loans and include collateralized mortgage
obligations and stripped mortgage-backed securities.

Traditional debt investments typically pay a fixed rate of interest until
maturity, when the entire principal amount is due. By contrast, payments on
mortgage-backed securities typically include both interest and a partial payment
of principal. Principal may also be prepaid voluntarily, or as a result of
refinancing or foreclosure. The fund may have to invest the proceeds from
prepaid investments under less attractive terms and yields.

Prepayments are particularly common during periods of declining interest rates,
when property owners seek to refinance their mortgages on more favorable terms;
the reverse is true during periods of rising interest rates. Mortgage-backed
securities are therefore less likely to increase in value during periods of
declining interest rates than other debt of comparable maturities. In addition,
they have a higher risk of decline in value during periods of rising interest
rates because declining prepayment rates effectively increase the average
maturity of the fund's investments (and, therefore, its sensitivity to changes
in interest rates) at times when that is least desirable. These investments can
increase the volatility of the fund.

The Short Term Income, U.S. Government Securities, Income and High Yield 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 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

31
<PAGE> 35

IO strips and decreasing the yield to maturity on PO strips. Sufficiently high
prepayment rates could result in the Fund losing some or all of its initial
investment in an IO strip. The Funds will acquire government stripped
mortgage-backed securities only if a liquid secondary market for the securities
exists at the time of acquisition. However, there can be no assurance that the
Funds will be able to effect a trade of a government stripped mortgage-backed
security at a time when it wishes to do so.

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

REAL ESTATE INVESTMENT TRUSTS. The Income, Bond & Stock, Growth & Income, Mid
Cap Stock and Growth Fund of the 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 securities from financial institutions,
such as banks and broker-dealers, subject to the seller's agreement to
repurchase the securities 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 securities. 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 WM Advisors 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 securities issued or guaranteed by U.S.
Government agencies or instrumentalities. Some securities issued or guaranteed
by agencies or instrumentalities of the U.S. Government are backed by the full
faith and credit of the U.S. Government (such as GNMA bonds), others are backed
only by the right of the issuer to borrow from the U.S. Treasury (such as
securities of Federal Home Loan Banks) and still others are backed only by the
credit of the instrumentality (such as FNMA and FHLMC bonds).

WHEN-ISSUED SECURITIES, FORWARD COMMITMENTS AND DELAYED-DELIVERY
TRANSACTIONS. In order to secure yields or prices deemed advantageous at the
time, the Funds may purchase or sell securities on a when-issued or a
delayed-delivery basis but 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.

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

33
<PAGE> 37

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.

PORTFOLIO TRANSACTIONS AND TURNOVER. Each Fund's and Portfolio'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. WM Advisors 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. AGL is the sole record Shareholder
of the Funds and Portfolios (except for certain "seed money" holdings by WM
Shareholder Services, Inc. an affiliate of WM Advisers). AGL therefore may be
deemed to control the Funds and Portfolios, and WM Shareholder Services, Inc.
may be deemed to control the Growth Fund of the Northwest and Bond & Stock
Funds, of which if owns 43.39% and 33.29% respectively. The Funds (other than
the High Yield, Bond & Stock and Growth Fund of the Northwest Funds) are
investment choices under the WM Advantage variable annuity contract issued by
AGL (the "WM Advantage Contract"). All of the Funds (other than the High Yield
Fund) 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 AGL
for its separate account to fund Contracts. Net purchase payments under the
Contracts are placed in one or more of the divisions of the insurance company
separate account and are invested in the shares of the Funds corresponding to
such divisions. Shares of the Funds and Portfolios are purchased and redeemed by
AGL at net asset value without sales or redemption charges. Shares may, in the
future, be sold to other insurance companies for their separate accounts on
similar terms.

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 (other than the High Yield, Bond & Stock
and Growth Fund of the Northwest Funds) are available through the SAM Program.
The Portfolios are not 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.

35
<PAGE> 39

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.

Each Fund and Portfolio intends to qualify separately each year as a "regulated
investment company" and, thus, does not expect to pay any federal income tax on
income and capital gain distributed to shareholders.

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 also intends to meet the investment diversification requirements of
subchapter L 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
immediately on investment earnings, including accumulated 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.

Distributions of net investment income (i.e., all income other than capital
gains) and of net realized capital gains on securities held for less than one
year ("short-term capital gain") 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 Income, U.S. Government Securities and Income Funds will declare and pay
quarterly dividends from net investment income, and the Bond & Stock, Growth
Fund of the Northwest, Growth & Income, Growth, Mid Cap Stock, Small Cap Stock
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 realized capital gains on securities held for more than one
year ("long-term capital gain"), 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.

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.

36
<PAGE> 40

ORGANIZATION

HOW NAV IS DETERMINED

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

ADVISOR AND SUB-ADVISORS

The Funds and Portfolios are managed by WM Advisors. WM Advisors' address is
1201 Third Avenue, 22nd Floor, Seattle, Washington 98101. WM Advisors 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 WM Advisors and the sub-advisors to the
Funds indicated below. For more information, see the SAI.

WM Advisors 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, WM Advisors 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 WM Advisors 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. WM Advisors 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 WM Advisors, act as
sub-advisors to the Funds indicated below, and are responsible for continuously
reviewing, supervising and administering such Funds' respective investment
programs:

JANUS CAPITAL CORPORATION, 100 Fillmore Street, Denver, Colorado 80206, also
called "Janus" in this Prospectus, 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 31, 1999, Janus' assets under management were in excess
of $ billion.

INDIVIDUAL FUND MANAGERS

Gary J. Pokrzywinski, CFA, Vice President and Senior Portfolio Manager of WM
Advisors, is primarily responsible for the day-to-day management of the High
Yield and Income Funds. He has managed these Funds since March 1998 and 1992,
respectively, and has been employed by WM Advisors since 1992. Craig V. Sosey,
CFA, Vice President and Portfolio Manager of WM Advisors, has been primarily
responsible for the day-to-day management of the U.S. Government Securities and
Short Term Income Funds since November 1998 and January 2000, respectively. He
has been employed by WM Advisors since May 1998. Prior to that, he was the
Assistant Treasurer of California Federal Bank, where he worked for over eight
years. Randall L. Yoakum, CFA, First Vice President, and Chairman of the
Investment Committee of the Advisor and Stephan Spencer, CFA, are primary
responsibility for the day-to-day management of the Growth & Income and Mid Cap
Stock Funds.

37
<PAGE> 41

Mr. Yoakum has been Portfolio Manager of the Growth & Income Funds since
February 1999 and beginning April 2000 he will co-manage the Mid Cap Stock Fund
with Mr. Spencer. ??? Advisors since September 1999. Prior to that, Mr. Spencer
was a portfolio manager and Senior Equity Analyst for Smoot, Miller, Chaney and
Co. since 1985. Prior to assuming these duties, Mr. Yoakum was Chief Investment
Officer for D.A. Davison & Co. (DADCO) for 2 years. From September 1994 until he
joined DADCO, Mr. Yoakum was the Senior Vice President and Managing Director of
Portfolio Management for Boatmen's Trust Company, and, prior to that, Mr. Yoakum
was Senior Vice President and Chief Equity Officer for Composite Research &
Management Co. (the predecessor to WM Advisors). Mr. Simpson has been employed
by the Advisor since 1993. Jeffrey D. Huffman, CFA, Vice President and Senior
Portfolio Manager of WM Advisors, 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 WM Advisors, has had primary
responsibility for the day-to-day management of the Growth Fund of the Northwest
since 1993. Linda C. Walk, CFA, who is Vice President and Portfolio Manager of
WM Advisors, has had primary responsibility for the day-to-day management of the
Small Cap Stock Fund since January 2000. She shared that responsibility with Mr.
Simpson from March 1998 to January 2000. Prior to 1997, Ms. Walk was a portfolio
manager at Laird Norton Trust Company since 1996, a valuation consultant for
Ernst & Young LLP since 1994. Audrey S. Quaye, CPA, Vice President and Portfolio
Manager of WM Advisors, has been primarily responsible for the day-to-day
management of the Money Market Tax-Exempt Management Market and California Money
Funds since March 1998. She has managed such funds since 1997, 1997, and March
1999, respectively, and has been employed by WM Advisors since 1996. Prior to
1996, Ms. Quaye worked at the Benham Group as a municipal credit analyst.

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.

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

38
<PAGE> 42

by The Capital Group Organization for 26 years. Mr. Sauvage is a Senior Vice
President and portfolio manager for Capital and a Vice President for Capital
International Research, Inc. Mr. Sauvage has been employed by The Capital Group
Organization for 12 years. Ms. Sikorsky is President and Managing Director of
Capital International S.A., Chairman of Capital International Perspective, S.A.,
Managing Director-Europe and a Director of Capital Group International, Inc., as
well as serving as a Director of the Capital Group Companies, Inc., Capital
International Limited and Capital International K.K. Ms. Sikorsky has been
employed by The Capital Group Organization for 36 years. Mr. Staehelin is a
Senior Vice President and Director of Capital International Research, Inc. and
Capital International S.A., and has been employed by The Capital Group
Organization for 17 years.

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 and Portfolios paid
management fees to WM Advisors at the following rates:

<TABLE>
<CAPTION>
Fees Paid as a Percentage
FUNDS of Net Assets
- -------------------------------------------------------------------
<S> <C>
Money Market Fund................. 0.50%
Short Term High Quality Bond
Fund............................ 0.50%
U.S. Government Securities Fund... 0.60%
Income Fund....................... 0.65%
High Yield Fund................... 0.625%
Bond & Stock Fund................. 0.625%
Growth & Income Fund.............. 0.796%
Northwest Fund.................... 0.625%
Growth Fund....................... 0.889%
Emerging Growth Fund.............. 0.879%
International Growth Fund......... 0.935%
Strategic Growth Portfolio........ 0.10%
Conservative Growth Portfolio..... 0.10%
Balanced Portfolio................ 0.10%
Flexible Income Portfolio......... 0.10%
Income Portfolio.................. 0.10%
</TABLE>

*The High Yield, Bond & Stock and Northwest Funds have not completed a full
fiscal year. These numbers represent the percentages of net assets the Funds
have agreed to pay WM Advisors in their first full fiscal year.

39
<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, 1999 for each of the Funds and Portfolios except the High Yield
Fund has been audited by PricewaterhouseCoopers LLP. The information for periods
ended December 31, 1999, and the fiscal period ended October 31, 1999 for the
High Yield Fund, 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,
---------------------------------------------------
1999 1998(5) 1997 1996 1995
---------------------------------------------------
<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 0.049 0.053
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.049 0.049 0.049 0.053
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.049) (0.049) (0.049) (0.053)
Distributions from Net Realized Gains..................... - - (0.000)(1)(6) -
------- ------- ------- ------- -------
Total Distributions..................................... (0.049) (0.049) (0.049) (0.053)
------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total Return(1)............................................. 5.01% 4.99% 4.97% 5.46%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $31,862 $32,864 $23,266 $20,373
Ratio of Operating Expenses to Average Net Assets(2)...... 0.65% 0.75% 0.58% 0.50%
Ratio of Net Investment Income to Average Net Assets...... 4.90% 4.88% 4.86% 5.30%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.81% 0.85% 0.88% 1.01%
</TABLE>

Footnotes appear on page 54

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

SHORT TERM INCOME FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
1999 1998(5) 1997 1996 1995
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.................. $2.43 $2.43 $2.49 $2.39
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income............................. 0.12 0.14 0.15 0.12
Net Realized & Unrealized Gain/(Loss) on
Investments...................................... 0.01 0.00(6) (0.06) 0.10
------- ------- ------- ------- -------
Total From Investment Operations................ 0.13 0.14 0.09 0.22
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.............. (0.12) (0.14) (0.15) (0.12)
Distributions in Excess of Net Investment
Income...........................................
Distributions from Net Realized Gains.............
Distributions in Excess of Net Realized Gains.....
Distributions from Capital........................
------- ------- ------- ------- -------
Total Distributions............................. (0.12) (0.14) (0.15) (0.12)
------- ------- ------- ------- -------
Net Asset Value, End of Year........................ $2.44 $2.43 $2.43 $2.49
======= ======= ======= ======= =======
Total Return(1)..................................... 5.28% 5.90% 3.74% 9.30%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's).............. $37,399 $11,944 $12,402 $12,365
Ratio of Operating Expenses to Average Net
Assets(2)........................................ 0.85% 1.00% 0.98% 0.85%
Ratio of Net Investment Income to Average Net
Assets........................................... 5.45% 6.04% 6.08% 6.14%
Portfolio Turnover Rate........................... 27% 43% 125% 188%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or
Credit Allowed by the Custodian.................. 0.89% 1.03% 1.06% 1.01%
</TABLE>

Footnotes appear on page 54

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

U.S. GOVERNMENT SECURITIES FUND(b)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1999 1998(5) 1997 1996 1995
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.04 $9.77 $10.00 $9.13
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.63 0.63 0.58 0.64
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.06 0.26 (0.23) 0.87(10)
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.69 0.89 0.35 1.51
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.62) (0.62) (0.58) (0.64)
Distributions from Net Realized Gains..................... - - - -
------- ------- ------- ------- -------
Total Distributions..................................... (0.62) (0.62) (0.58) (0.64)
------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $10.11 $10.04 $9.77 $10.00
======= ======= ======= ======= =======
Total Return(1)............................................. 7.03% 9.42% 3.69% 16.89%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $41,914 $61,656 $66,563 $52,303
Ratio of Operating Expenses to Average Net Assets(2)...... 0.89% 0.90% 0.94% 1.00%
Ratio of Net Investment Income to Average Net Assets...... 5.85% 6.28% 6.18% 6.68%
Portfolio Turnover Rate................................... 22% 194% 282% 273%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.03% 0.91%(8) 0.94%(8) 1.03%(8)
Ratio of Operating Expenses to Average Net Assets
Including Interest Expense............................... 1.02% 1.54%(8) 1.08%(8) 1.76%(8)
</TABLE>

Footnotes appear on page 54

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

INCOME FUND(c)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998(5) 1997 1996 1995
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year:......................... $10.19 $9.82 $10.48 $9.06
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.70 0.70 0.68 0.70
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.04 0.37 (0.66) 1.50
------- ------- ------- ------- -------
Total From Investment Operations........................ 0.74 1.07 0.02 2.20
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.69) (0.70) (0.68) (0.78)
Distributions from Net Realized Gains..................... - - - -
------- ------- ------- ------- -------
Total Distributions..................................... (0.69) (0.70) (0.68) (0.78)
------- ------- ------- ------- -------
Net Asset Value, End of Year................................ $10.24 $10.19 $9.82 $10.48
======= ======= ======= ======= =======
Total Return(1)............................................. 7.45% 11.35% 0.43% 25.09%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $49,654 $51,670 $59,883 $60,676
Ratio of Operating Expenses to Average Net Assets(2)...... 0.96% 0.96% 0.98% 0.99%
Ratio of Net Investment Income to Average Net Assets...... 6.69% 6.95% 6.92% 7.00%
Portfolio Turnover Rate................................... 4% 36% 30% 42%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 0.96% 0.96% 0.98% 0.99%
Ratio of Operating Expenses to Average Net Assets
Including Interest Expense............................... - - - 0.99%
</TABLE>

Footnotes appear on page 54

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

HIGH YIELD FUND CLASS I SHARES*

<TABLE>
<CAPTION>
YEAR ENDED FISCAL PERIOD
OCTOBER 31, JULY 27, 1998 TO
1999 OCTOBER 31, 1998
------------------- -------------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investments Income.................................... 0.22
Net Realized & Unrealized Loss on Investments............. (1.13)
------- -------
Total from Investment Operations........................ (0.91)
------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.23)
Distributions in Excess of Net Investment Income.......... (0.01)
Distributions from Net Realized Gains..................... -
Distributions in Excess of Net Realized Gains............. -
Distributions from Capital................................ -
------- -------
Total Distributions..................................... (0.24)
------- -------
Net Asset Value, End of Period.............................. $8.85
======= =======
Total Return................................................ (9.13)%

RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period ($1,000's)....................... $1,309
Ratio of Operating Expenses to Average Net Assets......... 0.48%(2)
Ratio of Net Investment Income to Average Net Assets...... 9.10%
Portfolio Turnover Rate................................... 54%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers or Fees Reduced by Credits Allowed by the
Custodian................................................ 0.97%(2)
</TABLE>

Footnotes appear on page 54

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

BOND & STOCK FUND

<TABLE>
<CAPTION>
YEAR ENDED APRIL 28, 1998
DECEMBER 31, TO
1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
Net Asset Value, Beginning of Period........................ $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.16(7)
Net Realized & Unrealized Gain on Investments............. 0.14
------ ------
Total From Investment Operations........................ 0.30
------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.03)
Distributions from Net Realized Gains..................... -
------ ------
Total Distributions..................................... (0.03)
------ ------
Net Asset Value, End of Period.............................. $10.27
====== ======
Total Return(1)............................................. 3.02%

RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's)...................... $2,586
Ratio of Operating Expenses to Average Net Assets......... 1.50%(4)
Ratio of Net Investment Income to Average Net Assets...... 2.26%(4)
Portfolio Turnover Rate................................... 28%
Ratio of Operating Expenses to Average Net Assets Without
Credits Allowed by the Custodian......................... -
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers and Credits Allowed by the Custodian......... 2.49%(4)
</TABLE>

Footnotes appear on page 54

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

GROWTH & INCOME FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1999 1998(5) 1997 1996 1995
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $16.92 $14.29 $12.83 $9.83
-------- -------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.06 0.06 0.12(7) 0.12
Net Realized & Unrealized Gain/(Loss) on Investments...... 2.97 3.90 2.54 3.05
-------- -------- -------- ------- -------
Total From Investment Operations........................ 3.03 3.96 2.66 3.17
-------- -------- -------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.09) (0.10) (0.12) (0.07)
Distributions from Net Realized Gains..................... (2.89) (1.23) (1.08) (0.10)
-------- -------- -------- ------- -------
Total Distributions..................................... (2.98) (1.33) (1.20) (0.17)
-------- -------- -------- ------- -------
Net Asset Value, End of Year................................ $16.97 $16.92 $14.29 $12.83
======== ======== ======== ======= =======
Total Return(1)............................................. 18.98% 28.50% 21.81% 32.41%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $125,295 $101,794 $62,445 $46,362
Ratio of Operating Expenses to Average Net Assets(2)...... 1.06% 1.08% 1.13% 1.06%
Ratio of Net Investment Income to Average Net Assets...... 0.37% 0.55% 0.93% 1.31%
Portfolio Turnover Rate................................... 78% 109% 83% 70%
Ratio of Operating Expenses to Average Net Assets Without
Credits Allowed by the Custodian......................... - 1.08%(8) 1.13%(8) 1.06%(8)
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers and/or Credits Allowed by the Custodian...... 1.06% 1.08%(8) 1.13%(8) 1.16%(8)
</TABLE>

Footnotes appear on page 54

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

GROWTH FUND OF THE NORTHWEST

<TABLE>
<CAPTION>
YEAR ENDED APRIL 28, 1998
DECEMBER 31, 1999 TO
----------------- DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
Net Asset Value, Beginning of Period.............. $10.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income........................... 0.00(6)
Net Realized & Unrealized Gain on Investments... 0.94
------ ------
Total From Investment Operations.............. 0.94
------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............ -
Distributions from Net Realized Gains........... -
------ ------
Total Distributions........................... -
------ ------
Net Asset Value, End of Period.................... $10.94
====== ======
Total Return(1)................................... 9.40%

RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's)............ $2,313
Ratio of Operating Expenses to Average Net
Assets......................................... 1.50%(4)
Ratio of Net Investment Income to Average Net
Assets......................................... 0.03%(4)
Portfolio Turnover Rate......................... 28%
Ratio of Operating Expenses to Average Net
Assets Without Credits Allowed by the
Custodian...................................... -
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers and Credits Allowed
by the Custodian............................... 2.76%(4)
</TABLE>

Footnotes appear on page 54

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

GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1999 1998(5) 1997 1996 1995
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year................ $15.41 $16.01 $15.72 $11.48
------ ------- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).................... (0.09) 0.07 0.00(6)(7) 0.04(7)
Net Realized & Unrealized Gain on Investments... 8.81 1.60 2.42 4.24
------ ------- ------ ------ ------
Total From Investment Operations.............. 8.72 1.67 2.42 4.28
------ ------- ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income............ (0.07) (0.02) - (0.04)
Distributions in Excess of Net Investment
Income.........................................
Distributions from Net Realized Gains........... (1.70) (2.25) (2.13) (0.00)(6)
Distributions in Excess of Net Realized Gains...
Distributions from Capital......................
------ ------- ------ ------ ------
Total Distributions........................... (1.77) (2.27) (2.13) (0.04)
------ ------- ------ ------ ------
Net Asset Value, End of Year...................... $22.36 $15.41 $16.01 $15.72
====== ======= ====== ====== ======
Total Return(1)................................... 59.04% 11.24% 16.15% 37.34%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's).............. $162,967 $121,766 $116,064 $99,699
Ratio of Operating Expenses to Average Net
Assets......................................... 1.16% 1.18% 1.22% 1.24%
Ratio of Net Investment Income/(Loss) to Average
Net Assets..................................... (0.55)% 0.07% 0.01% 0.29%
Portfolio Turnover Rate......................... 112% 158% 169% 187%
Ratio of Operating Expenses to Average Net
Assets Without Fee Waivers, Expenses Absorbed
and/or Credits Allowed by the Custodian........ 1.17% 1.19%(2) 1.22%(2) 1.24%(2)
</TABLE>

Footnotes appear on page 54

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

SMALL CAP STOCK FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1999 1998(5) 1997 1996 1995
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year........................ $15.63 $14.70 $13.74 $10.53
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss..................................... (0.07) (0.03) (0.12)(7) (0.01)
Net Realized & Unrealized Gain on Investments........... 1.21 1.80 1.52 3.26
------- ------- ------- ------- -------
Total From Investment Operations...................... 1.14 1.77 1.40 3.25
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income.................... - - - (0.04)
Distributions in Excess of Net Investment Income........
Distributions from Net Realized Gains................... (2.18) (0.84) (0.44) (0.00)(6)
Distributions in Excess of Net Realized Gains...........
Distributions from Capital..............................
------- ------- ------- ------- -------
Total Distributions................................... (2.18) (0.84) (0.44) (0.04)
------- ------- ------- ------- -------
Net Asset Value, End of Year.............................. $14.59 $15.63 $14.70 $13.74
======= ======= ======= ======= =======
Total Return(1)........................................... 8.09% 12.59% 10.04% 30.99%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)...................... $44,380 $45,362 $55,887 $46,058
Ratio of Operating Expenses to Average Net Assets(2).... 1.19% 1.20% 1.20% 1.20%
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................. (0.48)% (0.58)% (0.82)% (0.35)%
Portfolio Turnover Rate................................. 108% 116% 97% 135%
Ratio of Operating Expenses to Average Net Assets
Without Fee Waivers, Expenses Absorbed and/or Credits
Allowed by the Custodian............................... 1.20% 1.21% 1.21% 1.28%
</TABLE>

Footnotes appear on page 54

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

INTERNATIONAL GROWTH FUND

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1999 1998(5) 1997 1996 1995
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $12.26 $13.02 $12.11 $11.47
------- ------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.07(7) 0.71 0.07(7) 0.18
Net Realized & Unrealized Gain/(Loss) on Investments...... 0.64 (0.97) 1.01 0.58
------- ------- -------- ------- -------
Total From Investment Operations........................ 0.71 (0.26) 1.08 0.76
------- ------- -------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.72) (0.26) (0.17) (0.00)(6)
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... (0.64) (0.24) - (0.12)
Distributions in Excess of Net Realized Gains.............
------- ------- -------- ------- -------
Total Distributions..................................... (1.36) (0.50) (0.17) (0.12)
------- ------- -------- ------- -------
Net Asset Value, End of Year................................ $11.61 $12.26 $13.02 $12.11
======= ======= ======== ======= =======
Total Return(1)............................................. 5.20% (2.64)% 9.04% 6.61%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year ($1,000's)........................ $60,360 $49,636 $62,355 $45,909
Ratio of Operating Expenses to Average Net Assets(2)...... 1.36% 1.35% 1.39% 1.47%
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 0.61% 0.52% 0.56% 0.91%
Portfolio Turnover Rate................................... 118% 84% 98% 72%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian............................................ 1.48% 1.36% 1.39% 1.48%
</TABLE>

Footnotes appear on page 54

50
<PAGE> 54
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

STRATEGIC GROWTH PORTFOLIO(d)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED JUNE 3 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998(5) 1997
--------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.70 $10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income/(Loss).............................. 0.17(7) 0.10
Net Realized & Unrealized Gain on Investments............. 2.63 0.60(9)
------- ------- -------
Total From Investment Operations........................ 2.80 0.70
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.03) -
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... (0.01) -
------- ------- -------
Total Distributions..................................... (0.04) -
------- ------- -------
Net Asset Value, End of Year................................ $13.46 $10.70
======= ======= =======
Total Return(1)............................................. 26.19% 7.00%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $4,949 $591
Ratio of Operating Expenses to Average Net Assets(10)..... 0.35% 0.35%(4)
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 1.42% 0.51%(4)
Portfolio Turnover Rate................................... 39% 11%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(10)........................................ 0.80% 15.54%(4)
</TABLE>

CONSERVATIVE GROWTH PORTFOLIO(e)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED JUNE 3 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998(5) 1997(3)
--------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.49 $10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.20(7) 0.07
Net Realized & Unrealized Gain on Investments............. 1.89 0.42(9)
------- ------- -------
Total From Investment Operations........................ 2.09 0.49
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.03) -
Distributions in Excess of Net Investment Income..........
Distributions from Net Realized Gains..................... (0.01) -
------- ------- -------
Total Distributions..................................... (0.04) -
------- ------- -------
Net Asset Value, End of Year................................ $12.54 $10.49
======= ======= =======
Total Return(1)............................................. 19.91% 4.90%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $10,072 $1,374
Ratio of Operating Expenses to Average Net
Assets(2)(10)............................................ 0.35% 0.35%(4)
Ratio of Net Investment Income/(Loss) to Average Net
Assets................................................... 1.79% 1.24%(4)
Portfolio Turnover Rate................................... 35% 42%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(10)........................................ 0.57% 6.67%(4)
</TABLE>

Footnotes appear on page 54

51
<PAGE> 55
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

BALANCED PORTFOLIO

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED JANUARY 3 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998(5) 1997(3)
----------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.47 $10.00
------ ------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.31(7) 0.13
Net Realized & Unrealized Gain on Investments............. 1.49 0.34(10)
------ ------- --------
Total From Investment Operations........................ 1.80 0.47
------ ------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.07) -
Distributions in Excess of Net Investment Income.......... -
Distributions from Net Realized Gains..................... -
------ ------- --------
Total Distributions..................................... (0.07) -
------ ------- --------
Net Asset Value, End of Year................................ $12.20 $10.47
====== ======= ========
Total Return(1)............................................. 17.18% 4.70%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $11,161 $2,354
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.35% 0.35%(4)
Ratio of Net Investment Income/Loss to Average Net
Assets................................................... 2.79% 2.34%(4)
Portfolio Turnover Rate................................... 33% 15%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 0.54% 3.97%(4)
</TABLE>

FLEXIBLE INCOME PORTFOLIO(f)

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED SEPTEMBER 9 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998(5) 1997(3)
----------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.23 $10.00
------ ------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.48(7) 0.04
Net Realized & Unrealized Gain on Investments............. 0.69 0.19(10)
------ ------ -------
Total From Investment Operations........................ 1.17 0.23
------ ------ -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income...................... (0.02) -
Distributions in Excess of Net Investment Income.......... -
Distributions from Net Realized Gains..................... -
------ ------ -------
Total Distributions..................................... (0.02) -
------ ------ -------
Net Asset Value, End of Year................................ $11.38 $10.23
====== ====== =======
Total Return(1)............................................. 11.75% 2.30%

RATIOS/SUPPLEMENTAL DATA:
Net Assets End of Period ($1,000's)....................... $1,107 $100
Ratio of Operating Expenses to Average Net
Assets(2)(11)............................................ 0.35% 0.34%(4)
Ratio of Net Investment Income to Average Net Assets...... 4.90% 7.04%(4)
Portfolio Turnover Rate................................... 78% 5%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(11)........................................ 1.51% 116.19%(4)
</TABLE>

Footnotes appear on page 54

52
<PAGE> 56
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

INCOME PORTFOLIO(g)

<TABLE>
<CAPTION>
YEAR ENDED APRIL 23 TO PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998(5) 1997(3)
--------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $10.00 $10.00
------ ------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income..................................... 0.56(7) -
Net Realized & Unrealized Gain/(Loss) on Investments...... (0.14) -
------ ------- ---------
Total From Investment Operations........................ 0.42 -
------ ------- ---------
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................................ $10.42 $10.00
====== ======= =========
Total Return(1)............................................. 4.23% 0.00%

RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period ($1,000's)...................... $829 $0
Ratio of Operating Expenses to Average Net
Assets(2)(10)............................................ 0.35%(4) 0.35%(4)
Ratio of Net Investment Income/Loss to Average Net
Assets................................................... 7.39%(4) 0.00%(4)
Portfolio Turnover Rate................................... 61% 99%
Ratio of Operating Expenses to Average Net Assets Without
Fee Waivers, Expenses Absorbed and/or Credits Allowed by
the Custodian(10)........................................ 5.37%(4) 7,567.04%(4)
</TABLE>

Footnotes appear on page 54

53
<PAGE> 57
- --------------------------------------------------------------------------------

FOOTNOTES TO FINANCIAL HIGHLIGHTS

<TABLE>
<C> <S>
(1) Total return is not annualized for periods less than one
year. 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 advisor to the
Fund. In the case of the Portfolios, on March 23, 1998, WM
Advisors, Inc. replaced 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) 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.
(10) The Portfolios will indirectly incur their pro rata share of
the expenses of the Funds 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.
(g) The Income Portfolio commenced operations on October 22,
1997, ceased operations on November 4, 1997 and re-commenced
operations on April 23, 1998.
* 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 Class
I shares (information relating to which is shown in the
table) of the High Yield Fund.
</TABLE>

54
<PAGE> 58
- --------------------------------------------------------------------------------

APPENDIX A

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

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

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

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

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

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

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

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

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

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

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

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

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

55
<PAGE> 59
- --------------------------------------------------------------------------------

FOR MORE INFORMATION ABOUT THE WM VARIABLE TRUST

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

You may review and copy information about WM Variable Trust, including the SAI,
at the Securities and Exchange Commission's public reference room in Washington,
D.C. You may call the Commission at 1-800-SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about WM Variable Trust on the Commission's Internet site at
http://www.sec.gov. You may obtain copies of this information, with payment of a
duplication fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the file number below:

FILE NO. 33-57732
<PAGE> 60

WM VARIABLE TRUST
1201 THIRD AVENUE, 22ND FLOOR
SEATTLE, WASHINGTON 98101
STATEMENT OF ADDITIONAL INFORMATION

APRIL 30, 2000

<TABLE>
<S> <C>
MONEY MARKET FUND GROWTH FUND
SHORT TERM INCOME FUND MID CAP STOCK
U.S. GOVERNMENT SECURITIES FUND GROWTH FUND OF THE
INCOME FUND NORTHWEST
BOND & STOCK FUND SMALL CAP STOCK FUND
GROWTH & INCOME FUND INTERNATIONAL GROWTH FUND
</TABLE>

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 Income Fund, U.S. Government Securities Fund, Income
Fund, Bond & Stock Fund, Growth & Income Fund, Growth Fund, Growth Fund of the
Northwest, Small Cap Stock 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 April 30, 2000, 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. With respect to the High Yield Fund, which is a series of WM Trust I, the
Annual Report for WM Trust I for the year ended October 31, 1998 is incorporated
by reference into this SAI. The Trust's Prospectus and Annual Reports
incorporated by reference 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> 61

TABLE OF CONTENTS

<TABLE>
<S> <C>
GENERAL INFORMATION AND HISTORY............................. 3
MANAGEMENT OF THE TRUST..................................... 3
INVESTMENT ADVISOR.......................................... 8
CUSTODIAN, ADMINISTRATOR, TRANSFER AGENT AND DISTRIBUTOR.... 12
INVESTMENT OBJECTIVES AND POLICIES.......................... 14
INVESTMENT RESTRICTIONS..................................... 28
PERFORMANCE................................................. 37
TAXES....................................................... 41
FINANCIAL STATEMENTS........................................ 43
DESCRIPTION OF S&P, MOODY'S, DUFF & PHELPS AND FITCH IBCA
RATINGS................................................... 44
</TABLE>

2
<PAGE> 62

GENERAL INFORMATION AND HISTORY

The Trust is an open-end management investment company, and each Fund is
diversified. Except for "seed money" held by WM Shareholder Services, Inc.
(representing 43.39% of the Growth Fund of the Northwest Fund and 33.29% of the
Bond & Stock Fund), American General Life is the sole record holder of shares of
the Trust, and to the knowledge of the Trust, no other person is the beneficial
holder of more than 5% of the shares of the Trust. As discussed in the
Prospectus, the five Portfolios invest in various of the Funds. Certain of the
Portfolios may also invest in the High Yield Fund, a series of WM Trust I (the
"High Yield Fund").

MANAGEMENT OF THE TRUST

TRUSTEES AND OFFICERS OF THE TRUST
The Trust is governed by a Board of Trustees which oversees the Trust's
activities and is responsible for protecting the interests of shareholders. The
names of the Trustees and executive officers of the Trust, together with
information as to their ages 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 (Age: 72)
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 (Age: 70)
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. (Age: 73)
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.

3
<PAGE> 63

KRISTIANNE BLAKE (Age: 45)
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. (Age: 70)
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 (Age: 66)
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 (Age: 63)
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, Texas 77024
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.

4
<PAGE> 64

*MICHAEL K. MURPHY (Age: 62)
Trustee
PO Box 3366
Spokane, Washington 99220-3366
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. (Age: 54)
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 (Age: 56)
President and Trustee
1201 Third Avenue
22nd Floor
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 (Age: 54)
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 (Age: 71)
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

5
<PAGE> 65

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.
MORTON O. SCHAPIRO (Age: 45)
Trustee
4535 Lenox Avenue
Sherman Oaks, California 91423
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 (Age: 72)
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 (Age: 53)
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 (Age: 55)
Senior Vice President and Chief Financial Officer
1201 Third Avenue
22nd Floor
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 (Age: 44)
Senior Vice President
1631 Broadway
Sacramento, CA 95818
Ms. Cavanaugh is a senior vice president of the Distributor.

6
<PAGE> 66

WILLIAM G. PAPESH (Age: 56)
President
1201 Third Avenue
22nd Floor
Seattle, WA 98101
Please refer to the biographical description in the section above.
RICHARD H. ROSE (Age: 43)
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 (Age: 44)
Vice President, Secretary and Compliance Officer
1201 Third Avenue
22nd Floor
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 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.
The Compensation Table which follows shows the 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.

7
<PAGE> 67

COMPENSATION TABLE

<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION FROM
AGGREGATE COMPENSATION RETIREMENT THE WM GROUP OF FUNDS*
FROM THE TRUST FOR BENEFITS ACCRUED AS ESTIMATED PAID TO TRUSTEES
FISCAL YEAR ENDED PART OF FUND BENEFITS UPON FOR FISCAL YEAR ENDED
NAME OF PERSON DECEMBER 31, 1999 EXPENSES RETIREMENT DECEMBER 31, 1999
- -------------- ---------------------- ------------------- ------------- -----------------------
<S> <C> <C> <C> <C>
David E. Anderson............
Wayne L. Attwood, M.D. ......
Arthur H. Bernstein, Esq. ...
Kristianne Blake.............
Edmond R. Davis, Esq. .......
John W. English..............
Anne V. Farrell***...........
Carrol R. McGinnis**.........
Michael K. Murphy***.........
Alfred E. Osborne, Jr.,
Ph.D. .....................
William G. Papesh***.........
Daniel L. Pavelich...........
Jay Rockey...................
Morton O. Schapiro**.........
Richard C. Yancey............
</TABLE>

- ---------------
* The WM Group of Funds consists of the Trust, WM Trust I, WM Trust II and
SAMP.
** Messrs. McGinnis and Schapiro began serving as Trustees of the Trust, WM
Trust I, WM Trust II and WM SAMP on March 5, 1999.
*** A Trustee who is an "interested person" of the Trust as defined in the 1940
Act.
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 "Organization." 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 serve as officers of the Trust, and (iii) maintains office facilities for
the Trust.
MANAGEMENT FEES
Each Fund and Portfolio pays a management fee to the Advisor. The management fee
is calculated and paid every month. It is based upon a percentage of the average
net assets of the Fund or Portfolio. Absent fee waivers, the total management
fee for each Fund and Portfolio as provided in the investment advisory agreement
of the Fund or Portfolio is as follows:

<TABLE>
<CAPTION>
FUND FEES
- ---- -----------------------------------
<S> <C>
Money Market Fund........................................... 0.50% of the first $500 million
0.40% thereafter
Short Term Income Fund...................................... 0.50% of the first $200 million
0.45% on the next $300 million
0.40% thereafter
U.S. Government Securities Fund............................. 0.60% of the first $500 million
0.50% thereafter
Income Fund................................................. 0.65% of the first $500 million
0.45% thereafter
Bond & Stock Fund........................................... 0.625% of the first $500 million
0.50% thereafter
</TABLE>

8
<PAGE> 68

<TABLE>
<CAPTION>
FUND FEES
- ---- -----------------------------------
<S> <C>
Growth & Income Fund........................................ 0.80% of the first $100 million
0.75% of the next $100 million
0.70% of the next $200 million
0.65% of the next $100 million
0.575% thereafter
Mid Cap Stock Fund..........................................
Growth Fund................................................. 0.95% of the first $25 million
0.875% thereafter
Growth Fund of the Northwest................................ 0.625% of the first $500 million
0.50% thereafter
Small Cap Stock Fund........................................ 0.90% of the first $25 million
0.85% of the next $475 million
0.75% thereafter
International Growth Fund................................... 0.95% of the first $50 million
0.85% of the next $75 million
0.75% thereafter
</TABLE>

SUB-ADVISORY FEES
The Advisor retains only the net amount of the management fees paid to it after
the sub-advisory fees described below are paid to the sub-advisors. The Advisor
pays to the sub-advisors for the funds listed below a monthly fee at an annual
rate of the following percentages of the average net assets of each such fund.

<TABLE>
<CAPTION>
SUBADVISOR/FUNDS FEES
- ---------------- ---------------------------------
<S> <C>
JANUS
Growth Fund............................................... 0.55% of the first $25 million
0.50% thereafter
CAPITAL GUARDIAN TRUST COMPANY
International Growth Fund................................. 0.75% of the first $25 million
0.60% of the next $25 million
0.425% of the next $200 million
0.375% thereafter
</TABLE>

FEE AGGREGATION POLICIES
Fee aggregation will apply to all account managed by Capital Group companies,
except for emerging markets equity investments and investments in funds with
internally charged fees ("Eligible Accounts"). In order to achieve the benefit
of fee aggregation, the combined actual fees must exceed the combined total of
the minimum fee applicable to each of the client's Eligible Accounts.
For additional Eligible Accounts with the same investment objectives and
guidelines, all assets for these Eligible Accounts will be aggregated for fee
calculation purposes.
For additional Eligible Accounts with Different investment objectives and
guidelines:
1. Each account will be charged on the first $10 million at the
initial breakpoint rate for the appropriate mandate. Any Incremental assets
over $10 million will be aggregated and charged at the incremental rate for
the appropriate mandate.
2. Assets invested in commingled funds will be aggregated and charged
at the incremental rate for the appropriate mandate.
3. The first additional account within a new country will be charged
on the first $15 million at the initial breakpoint rate for the appropriate
mandate. Any incremental assets over $15 million will be aggregated and
charged at the incremental rate for the appropriate mandate.

9
<PAGE> 69

For fee aggregation purposes, Eligible Accounts will be aggregated in the
following order: balanced, equity-developed markets, convertible,
fixed-income -- high yield, fixed-income -- emerging markets, and
fixed-income -- developed markets.
Unless otherwise requested, the benefit from fee aggregation for clients with
multiple accounts will be calculated by comparing total aggregated fees to total
unaggregated fees for all Eligible Accounts. The resulting percentage discount
will be applied to each Eligible Account's unaggregated fees.
If all Eligible Accounts are not denominated in the same currency, the local
currency assets of each Eligible Account and the related fees calculated on any
unaggregated basis will be converted to a designated base currency using the
applicable foreign exchange rate. The total of such fees will be compared to the
Eligible Accounts' total aggregated fees. The resulting percentage discount will
then be applied to each Eligible Account's unaggregated fee as determined in the
applicable currency.
FEE DISCOUNTS AND ELIMINATION OF FEE BREAKPOINTS
The following Fee discount will be applied based upon the total aggregated fees:

<TABLE>
<S> <C>
Clients between $1.25 million to $4 million................. 5% discount
Clients between $4 million to $8 million.................... 7.5% discount
Clients between $8 million to $12 million................... 10% discount
Clients over $12 million.................................... 12.5% discount
</TABLE>

For this purpose, aggregated fees will include all fees from separate accounts,
commingled funds, and funds internally charged fees managed by Capital Group
companies, except for investments in American-Funds' mutual funds. The resulting
fee discount percentage will be applied to each account's fees (excluding fees
related to investments in funds with internally charged fees).
For clients whose total aggregated fees (before discounts) exceed $3 million,
fee breakpoints will be eliminated and each account will be charged at the
lowest marginal fee rate applicable to the account's fee schedule.
To determine the applicable fee discount level and breakpoint elimination
threshold, the total aggregated fees for the quarter will be annualized. For
this purpose, all local currency fees will be converted to a designated base
currency.
Fees related to investments in funds with internally charged fees will be
estimated by multiplying the quarter end value of the Investment (adjusted on a
prorated basis for any contributions or withdrawals during the quarter) by the
fund's effective fee. For this purpose, the effective fee will be based on the
value of the fund's quarter end assets and the fund's current fee schedule.
Applicable discount levels and the elimination of fee breakpoints will be
effective beginning the first quarter a discount threshold is exceeded and will
remain in effect unless the total fees fall below the discount threshold due to
a significant withdrawal of assets. A decline in the market alone will not cause
the reinstatement of a lower discount level or fee breakpoints.

10
<PAGE> 70

The tables below show the investment advisory fees paid for the years ended
December 31, 1996, 1997 and 1998. WM Advisors received investment advisory fees
from the Funds and Portfolios for periods after January 30, 1998, while prior to
that time, the Funds paid 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, the following advisory
fees*:

<TABLE>
<CAPTION>
1999 1998 1997
------------------------ ------------------------ ------------------------
FEES PAID FEES WAIVED FEES PAID FEES WAIVED FEES PAID FEES WAIVED
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund........... ......... $ 174,936 $55,203 $ 121,580 $29,077
Short Term Income Fund...... ......... $ 141,693 $ 0 $ 57,289 $ 3,755
U.S. Government Securities
Fund...................... ......... $ 324,028 $ 0 $ 376,599 $ 0
Income Fund................. ......... $ 325,996 $ 0 $ 345,006 $ 0
Bond & Stock Fund........... ......... $ 6,017 $ 9,347 N/A N/A
Growth & Income Fund........ ......... $ 874,439 $ 0 $ 697,411 $ 0
Growth Fund of the
Northwest................. ......... $ 5,624 $11,191 N/A N/A
Growth Fund................. $1,175,431 $ 0 $1,055,947 $ 0
Mid Cap Stock...............
Small Cap Stock Fund........ $ 365,112 $ 0 $ 419,081 $ 0
International Growth Fund... $ 537,004 $63,408 $ 567,918 $ 0
Strategic Growth
Portfolio................. $ 2,303 $ 9,366 $ 177 $ 0
Conservative Growth
Portfolio................. $ 4,897 $ 8,854 $ 433 $ 0
Balanced Portfolio.......... $ 5,610 $ 9,201 $ 849 $ 0
Flexible Income Portfolio... $ 329 $ 3,655 $ 17 $ 0
Income Portfolio............ $ 240,000 $ 0 N/A N/A
</TABLE>

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

* Each of the Strategic Growth, Conservative Growth and Balanced Portfolios
commenced operations on June 3, 1997. The Flexible Income Portfolio commenced
operations on September 9, 1997. The Income Portfolio commenced operations on
October 22, 1997, ceased operations on November 4, 1997 and re-commenced
operations on April 23, 1998. The Bond & Stock and Growth Fund of the
Northwest Funds commenced operations on April 28, 1998.

Sub-advisory fees were paid by the Funds' advisor for the fiscal years ended
December 31, 1996, 1997 and 1998 in the following amounts*:

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

* The sub-advisory agreements for the Money Market, Short Term Income, U.S.
Government Securities, Income, Growth & Income and Small Cap Stock Funds
which required the payment of the fees shown in this table are no longer in
effect. The only sub-advisory agreements in effect as of April 30, 1999 are
those for the Growth and International Growth Funds described at the
beginning of this section.

11
<PAGE> 71

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, 22nd Floor, 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 periods prior to January 30, 1998, the Funds and Portfolios paid to Sierra
Administration, the administrator for the Funds and the Portfolios at that time,
and for periods after January 30, 1998 the Funds and Portfolios paid to
Shareholder Services, the following administration fees*:

<TABLE>
<CAPTION>
1999 1998 1997
----------------------- ----------------------- -----------------------
FEES PAID FEES WAIVED FEES PAID FEES WAIVED FEES PAID FEES WAIVED
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund.............. $ 62,977 $ 0 $ 54,236 $ 0
Short Term Income Fund......... $ 51,010 $ 0 $ 21,976 $ 0
U.S. Government Securities
Fund......................... $ 97,208 $ 0 $112,980 $ 0
Income Fund.................... $ 90,276 $ 0 $ 95,540 $ 0
Bond & Stock Fund.............. $ 1,733 $ 0 N/A N/A
Growth & Income Fund........... $197,865 $ 0 $156,925 $ 0
Growth Fund of the Northwest
Fund......................... $ 1.620 $ 0 N/A N/A
Growth Fund.................... $237,946 $ 0 $213,366 $ 0
Mid Cap Stock..................
Small Cap Stock Fund........... $ 74,671 $ 0 $ 86,099 $ 0
International Growth Fund...... $103,148 $ 0 $109,677 $ 0
Strategic Growth Portfolio**... $ 3,455 $ 0 $ 0 $ 265
Conservative Growth
Portfolio**.................. $ 7,343 $ 0 $ 0 $ 665
Balanced Portfolio**........... $ 8,416 $ 0 $ 0 $1,274
Flexible Income Portfolio**.... $ 496 $ 0 $ 0 $ 25
Income Portfolio**............. $ 360 $ 0 N/A N/A
</TABLE>

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

** 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.
WM Funds Distributor, Inc. (the Distributor) will purchase and resell shares of
the Funds' and Portfolios' capital stock to fill orders placed with it by the
Accounts. Currently, shares of the Funds and Portfolios may only be sold to the
WM Advantage Contract and the WM Strategic Asset Manager Contract or to any
future separate account developed by AGL.
The Distributor has not received any earnings or profits from the redemption of
Fund or Portfolio shares. No brokerage fees were paid by the Funds or Portfolios
to the Distributor during the year. The Distributor may act as broker or
portfolio purchases are sales should it become a member of a national securities
exchange.

12
<PAGE> 72

COUNSEL AND INDEPENDENT ACCOUNTANTS
Ropes & Gray, located at One International Place, Boston, Massachusetts 02110
serves as counsel to the Trust.
Deloitte & Touche LLP, located at 50 Fremont Street, San Francisco, CA 94105,
serves as independent accountants to the Trust. PricewaterhouseCoopers 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 an open-end management investment company that is organized as a
"Massachusetts 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 Trust has the power to issue separate series of shares and has authorized
the following fifteen separate series: Money Market Fund, Short Term Income
Fund, U.S. Government Securities Fund, Income Fund, Bond & Stock Fund, Growth &
Income Fund, Growth Fund of the Northwest, Growth Fund, Mid Cap Stock, Small Cap
Stock Fund, International Growth Fund, Strategic Growth Portfolio, Conservative
Growth Portfolio, Balanced Portfolio, Flexible Income Portfolio and Income
Portfolio. The Trust offers shares of beneficial interest, each without par
value. Additional series may be established. Prior to January 30, 1998, the
Money Market Fund was known as the Global Money Fund. Prior to March 20, 1998,
the U.S. Government Securities Fund was known as the U.S. Government Fund, the
Income Fund was known as the Corporate Income Fund, the Growth & Income Fund was
known as the Growth and Income Fund, the Strategic Growth Portfolio was known as
the Capital Growth Portfolio, the Conservative Growth Portfolio was known as the
Growth Portfolio and the Flexible Income Portfolio was known as the Value
Portfolio.

Currently, the shares of the Funds and Portfolios are sold only to AGL and its
separate accounts to fund Contracts, or to other series of the Trust, which are
sold to AGL and its separate accounts. In the future, the Trust may, subject to
receipt of an order from the Securities and

13
<PAGE> 73

Exchange Commission, offer its shares to separate accounts funding variable
annuities of insurance companies affiliated or unaffiliated with AGL and to
separate accounts which fund variable life insurance or other variable funding
arrangements. Should shares ever be sold to anyone other than AGL and its
separate accounts, the Trust's Board of Trustees will monitor potential
conflicts between variable life insurance policies and variable annuity
contracts or among insurance company shareholders and will determine what, if
any, action should be taken to resolve any conflicts.

Until other insurance companies have made investments in the series of the
Trust, AGL will be, directly or indirectly, the sole shareholder of the Trust
and therefore may be deemed to control the Trust (except in the case of the
Growth Fund of the Northwest and Bond & Stock Funds in which WM Shareholder
Services, Inc. has invested "seed money" giving it ownership of 43.39% and
33.29% of the funds, respectively, and as a result, control of those funds).
However, Contract owners may be deemed to have beneficial ownership 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 5% 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 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. Although the High Yield Fund is not mentioned specifically below
because it is not available for direct investment through the Contracts, some of
the strategies discussed below may apply to the High Yield 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 &
Phelps and Fitch IBCA, 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

14
<PAGE> 74

respective sub-advisors to evaluate potential investments. Additional
information concerning the ratings of these services and their significance can
be found beginning on page 46 of this SAI.
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. 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.

15
<PAGE> 75

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.
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

16
<PAGE> 76

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. The Short Term Income, Growth, Mid Cap Stock, Small Cap
Stock and International Growth Funds and the Portfolios may invest in repurchase
agreements without limitation. The Money Market, U.S. Government Securities,
Income, Bond & Stock, Growth & Income and Growth Fund of the 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.

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.
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 when-issued or delayed-

17
<PAGE> 77

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 to protect against any increase in the price of
securities the Fund

18
<PAGE> 78

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 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

19
<PAGE> 79

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 aggregate,
the value of

20
<PAGE> 80

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 INCOME, BOND & STOCK, GROWTH & INCOME,
GROWTH, INTERNATIONAL GROWTH, GROWTH FUND OF THE NORTHWEST AND SMALL CAP STOCK
FUNDS

OPTIONS ON SECURITIES. The Short Term Income, Bond & Stock, Growth & Income,
Growth, International Growth, Growth Fund of the Northwest and Small Cap Stock
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 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

21
<PAGE> 81

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 Income, Bond & Stock, Growth & Income, Growth, Mid Cap Stock,
International Growth, Growth Fund of the Northwest and Small Cap Stock 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

22
<PAGE> 82

to exist for a variety of 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 INCOME, GROWTH, MID CAP STOCK, INTERNATIONAL
GROWTH AND SMALL CAP STOCK FUNDS

OPTIONS ON SECURITIES INDEXES. The Short Term Income, Growth, Mid Cap Stock,
International Growth and Small Cap Stock 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.

23
<PAGE> 83

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 INCOME, INCOME, GROWTH, MID CAP STOCK,
INTERNATIONAL

GROWTH AND SMALL CAP STOCK FUNDS

FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Short Term Income, Income, Growth,
Mid Cap Stock, International Growth and Small Cap Stock 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

24
<PAGE> 84

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
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 INCOME, GROWTH, MID CAP STOCK, INTERNATIONAL
GROWTH AND SMALL CAP STOCK FUNDS

OPTIONS ON FOREIGN CURRENCIES. The Short Term Income, Growth, Mid Cap Stock,
International Growth and Small Cap Stock Funds may purchase and write put and
call options on foreign currencies for the purpose of hedging against declines
in the U.S. dollar value of foreign

25
<PAGE> 85

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,

26
<PAGE> 86

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 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, MID CAP STOCK,
INTERNATIONAL GROWTH AND SMALL CAP STOCK FUNDS

Securities in Developing Countries. Although most of the investments of the
Bond & Stock, Growth, Mid Cap Stock, International Growth and Small Cap Stock
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 Small Cap Stock 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 INCOME, GROWTH, BOND & STOCK, GROWTH & INCOME,
GROWTH FUND OF THE NORTHWEST, INTERNATIONAL GROWTH, AND SMALL CAP STOCK FUNDS

Lending of Portfolio Securities. Each of the Short Term Income, Growth, Bond &
Stock, Growth & Income, Growth Fund of the Northwest, International Growth and
Small Cap Stock 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 Bond & Stock, Growth & Income
and Growth Fund of the Northwest Funds will not lend more than 33% of their
respective total assets, and the remaining Funds will not lend more than 20% of
their respective total assets.

27
<PAGE> 87

SPECIAL CONSIDERATIONS RELATING TO INCOME, BOND & STOCK, GROWTH & INCOME,
GROWTH, MID CAP STOCK AND SMALL CAP STOCK FUNDS

Lower-Rated Securities. The Income, Bond & Stock, Growth & Income, Growth, Mid
Cap Stock and Small Cap Stock 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 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
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.

28
<PAGE> 88

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.
The 1940 Act prohibits a registered open-end investment company such as the
Trust from issuing "senior securities" other than borrowings from a bank.

INVESTMENT RESTRICTIONS OF THE FUNDS, OTHER THAN THE GROWTH FUND OF 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 Funds) as
fundamental policies. The investment policies adopted by the Trust prohibit a
Fund (other than the Bond & Stock and Growth Fund of the 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, and (ii) dollar roll transactions. Whenever
borrowings pursuant to (a) above (except that with respect to the Short
Term Income, U.S. Government Securities, Income, Growth & Income and Small
Cap Stock 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

29
<PAGE> 89

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 Income, U.S. Government Securities,
Income, Growth & Income, Mid Cap Stock and Small Cap Stock 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.
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 Small Cap Stock Funds, investing more than
35% of the Fund's assets in non-investment grade debt securities.

15. With respect to the Short Term Income 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 Growth Fund of
the Northwest Funds) has adopted non-fundamental investment limitations as
stated below and in its prospectus. Such limitations may be changed without
shareholder approval.

30
<PAGE> 90

EACH OF THE FUNDS (OTHER THAN THE BOND & STOCK AND GROWTH FUND OF THE NORTHWEST
FUNDS) MAY NOT:

1. With respect to the Growth, Mid Cap Stock and Small Cap Stock 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 Income, U.S. Government Securities, Income, Growth &
Income, Growth, Mid Cap Stock, Small Cap Stock 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 GROWTH FUND OF THE NORTHWEST
FUNDS

The Bond & Stock and Growth Fund of the Northwest Funds have adopted the
fundamental investment restrictions below.

EACH OF THE BOND & STOCK AND GROWTH FUND OF THE 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.
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

31
<PAGE> 91

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. 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; 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

32
<PAGE> 92

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. 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, Growth
Fund of the Northwest, Growth, Mid Cap Stock, Small Cap Stock and International
Growth Funds (together, the "Equity Funds") and the Short Term Income, 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

33
<PAGE> 93

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.
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.

34
<PAGE> 94

For the past three fiscal years, the Portfolios paid no brokerage commissions.
During the 1997 and 1998 fiscal years, the Funds paid no commissions to
affiliated broker-dealers. In 1998, the Fund placed transactions with
broker-dealers who provided research services to WM Advisers as follows:

<TABLE>
<CAPTION>
BROKERAGE PERCENTAGE OF TOTAL AGGREGATE
FUND COMMISSIONS TRANSACTIONS TRANSACTION AMOUNT
- ---- ----------- ------------------- ------------------
<S> <C> <C> <C>
Money Market Fund............................ $ 0 0% $ 0
Short Term Income Fund....................... $ 0 0% $ 0
U.S. Government Securities Fund.............. $ 0 0% $ 0
Income Fund.................................. $ 0 0% $ 0
Bond & Stock Fund............................ $ 1,445 47.80% $ 793,478
Growth & Income Fund......................... $37,474 3.18% $ 5,524,142
Growth Fund of the Northwest Fund............ $ 1,630 41.76% $ 968,185
Growth Fund.................................. $65,905 68.98% $218,453,870
Mid Cap Stock................................
Small Cap Stock Fund......................... $ 6,874 7.48% $ 6,585,764
International Growth Fund.................... $53,141 1.06% $ 1,491,625
</TABLE>

For the fiscal years ended December 31, 1996, 1997 and 1998 the Funds paid the
following brokerage commissions:

<TABLE>
<CAPTION>
1998 1997
BROKERAGE BROKERAGE
FUND COMMISSIONS COMMISSIONS
- ---- ----------- ------------
<S> <C> <C>
Money Market Fund........................................... $ 0 $ 0
Short Term Income Fund...................................... $ 0 $ 3,690
U.S. Government Securities Fund............................. $ 0 $ 0
Income Fund................................................. $ 0 $ 0
Bond & Stock................................................ $ 1,725 N/A
Growth & Income............................................. $ 42,231 $ 159,577
Growth Fund of the Northwest................................ $ 1,758 N/A
Mid Cap Stock...............................................
Growth Fund................................................. $ 65,905 $ 277,280
Small Cap Stock Growth Fund................................. $ 12,200 $ 104,980
International Growth Fund................................... $ 53,141 $ 307,998
</TABLE>

<TABLE>
<CAPTION>
1996
---------------------------
AGGREGATE
BROKERAGE TRANSACTION
FUND COMMISSIONS AMOUNT
- ---- ----------- ------------
<S> <C> <C>
Money Market Fund........................................... $ 0 $ 0
Short Term Income 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
Small Cap Stock 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 defined in the 1940 Act) which the Trust has acquired during its
most recent fiscal year. As of December 31, 1998, the Short Term Income Fund
held common stock of Merrill Lynch & Co. valued at approximately $1,004,297.

35
<PAGE> 95

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.
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 ("NASDAQ")) System 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

36
<PAGE> 96

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.

In carrying out the Board's valuation policies, PFPC Inc., 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

37
<PAGE> 97

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 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 4.65%, and the effective yield for
the Money Market Fund for the same period was 4.76%.
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.
PORTFOLIO YIELD INFORMATION
In the Risk/Return Summary of the Prospectus, each of the Portfolio's
performance is compared to a Capital Market Benchmark. Each such benchmark is a
blended mix of component indices. descriptions of each such component index are
as follows:
-- The Salomon Brothers U.S. 90-Day T-Bill Index measures performance of
U.S. Treasury Bills with maturities of three months.
-- The Lehman Brothers Mutual Fund (1-5) Government/Corporate Index is
represented by all U.S. Government agency and Treasury securities and
all investment-grade corporate debt securities with maturities of one to
five years.

38
<PAGE> 98

-- The Lehman Brothers Mortgage-Backed Securities Index includes 15- and
30-year fixed rate securities backed by mortgage pools of the Government
National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC), and Federal National Mortgage Association (FNMA).
Balloons are included in the index; graduated payment mortgages (GPMs),
buydowns, manufactured home mortgages, and graduated equity mortgages
(GEMs) are not.
-- The Lehman Brothers BAA Long-Term Corporate Bond Index includes all
publicly issued, fixed rate, nonconvertible BAA rated,
dollar-denominated, SEC-registered corporate debt with maturities
greater than ten years.
-- The Lehman Brothers Aggregate Index is an all-inclusive bond index which
contains government, corporate, mortgage and asset-backed securities.
-- The Standard & Poor's 500 Composite Index is a capitalization-weighted
index of 500 stocks designed to measure performance of the broad
domestic economy and all economic sectors.
-- The Russell 2000 Index measures the performance of the 2,000 smallest
companies (approximately 10% of the total market capitalization) of the
Russell 3000 Index.
-- The Russell 2000 Growth Index measures the performance of the companies
with higher price-to-book ratios and higher forecasted growth values
within the Russell 2000 Index.
-- The Russell 3000 Index is comprised of the 3,000 largest U.S. companies
based on total market capitalization, which represents approximately 98%
of the investable U.S. equity market.
-- The Morgan Stanley Capital International (MSCI) Europe, Australasia, and
The Far East Plus Emerging Markets Free Index is a market capitalization
weighted index composed of companies representative of the market
structure of 48 developed and emerging market countries. The index is
calculated with gross dividends reinvested and in United States dollars.
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 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

39
<PAGE> 99

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

<TABLE>
<S> <C> <C> <C>
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
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.
</TABLE>

The formula for calculating aggregate total return can be expressed as
(ERV/P) -- 1.
Based on the foregoing, the average annual total returns through December 31,
1998, were as follows*:

<TABLE>
<CAPTION>
ONE FIVE SINCE
FUND YEAR YEARS INCEPTION
- ---- ------- ------ ---------
<S> <C> <C> <C>
Money Market Fund...........................................
Short Term Income Fund......................................
U.S. Government Securities Fund.............................
Income Fund.................................................
Growth & Income Fund........................................
Growth Fund.................................................
Mid Cap Stock...............................................
Small Cap Stock.............................................
International Growth Fund...................................
Strategic Growth Portfolio..................................
Conservative Growth Portfolio...............................
Balanced Portfolio..........................................
Flexible Income Portfolio...................................
Income Portfolio............................................
</TABLE>

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

* THE BOND & STOCK AND GROWTH FUND OF THE NORTHWEST FUNDS COMMENCED OPERATIONS
ON APRIL 28, 1998. THE SHORT TERM INCOME, GROWTH & INCOME AND SMALL CAP STOCK
FUNDS COMMENCED OPERATIONS ON JANUARY 12, 1994. THE STRATEGIC GROWTH AND
CONSERVATIVE GROWTH PORTFOLIOS COMMENCED OPERATIONS ON JUNE 3, 1997, THE
BALANCED PORTFOLIO COMMENCED OPERATIONS ON JUNE 3, 1997 AND THE FLEXIBLE
INCOME PORTFOLIO COMMENCED OPERATIONS ON SEPTEMBER 9, 1997. THE INCOME
PORTFOLIO COMMENCED OPERATIONS ON OCTOBER 22, 1997, CEASED OPERATIONS ON
NOVEMBER 4, 1997 AND RE-COMMENCED OPERATIONS ON APRIL 23, 1998.

The total returns shown for the Funds and Portfolios 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 and Portfolios 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

40
<PAGE> 100

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 or Portfolio 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 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

41
<PAGE> 101

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 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.

42
<PAGE> 102

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 PricewaterhouseCoopers LLP,
Independent Accountants, dated February 20, 1998, along with the Trust's
financial statements for the fiscal year ended December 31, 1998, including
notes thereto and the Report of Deloitte & Touche LLP, Independent Accountants,
dated February 5, 1999 are incorporated by reference to the Trust's Annual
Reports, as filed with the Securities and Exchange Commission by the Trust. With
respect to the High Yield Fund, the financial statements for the fiscal year
ended October 31, 1998, including notes thereto and the Report of Deloitte &
Touche LLP, Independent Accountants, dated December 11, 1998 are incorporated by
reference to the Annual Report of WM Trust I as filed with the Securities and
Exchange Commission by that 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.

43
<PAGE> 103

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.
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.

44
<PAGE> 104

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.
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 & PHELPS 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.

45
<PAGE> 105

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.
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 IBCA 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.

46
<PAGE> 106

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.
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 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

47
<PAGE> 107

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 & PHELPS COMMERCIAL PAPER RATINGS
HIGH GRADE
D-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.
D-1 -- Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.
D-1- -- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
GOOD GRADE
D-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
D-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
D-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
D-5 -- Issuer failed to meet scheduled principal and/or interest payments.
DESCRIPTION OF FITCH IBCA COMMERCIAL PAPER RATINGS
F1 -- Highest Credit Quality. Indicates the strongest capacity for timely
payment of financial commitments; may have an added "+" to denote any
exceptionally strong credit feature.
F2 -- Good Credit Quality. A satisfactory capacity for timely payment, but the
margin of safety is not as great as in the case of the higher ratings.
F3 -- Fair Credit Quality. The capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.
B -- Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.
C -- High Default Risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favourable business
and economic environment.
D -- Default. Denotes actual or imminent payment default.

48
<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,
1993 -- 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. (formerly
known as Composite Research & Management Co.) --
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
-- incorporated by reference to PEA No. 13, filed on
February 27, 1998.

(3) Sub-Adviser Agreement dated December 7, 1999 between
WM Advisors, Inc. and Janus Capital Corporation
("Janus") with respect to the Growth Fund.

(4) Sub-Adviser Agreement, dated as of June 23, 1999
between WM Advisers, Inc. and with respect to the
International Growth Fund --.

<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 July 12, 1999. (To be
filed by amendment).

(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 September 14,
1999. (To be filed by amendment).

(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 - Not Applicable.

(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 criminal, before any
court or administrative or legislative body, in which such Covered

-3-
<PAGE> 111
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 court of competent
jurisdiction to have been liable to the Trust or its Shareholders by

-4-
<PAGE> 112

Item 26. Business and Other Connections of Investment Advisor.

(a) WM Advisors, Inc.
Directors/Officers Past Two Fiscal Years
- ------------------ ---------------------

Monte D. Calvin WM Shareholder Services, Inc.
First Vice President, Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

First Vice President, WM Advisors, Inc.
Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

First Vice President, WM Funds Distributor, Inc.
Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Sandra A. Cavanaugh WM Advisors, Inc.
First Vice President, Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

First Vice President, Director WM Shareholder Services, Inc.
1201 Third Ave., 22nd Floor, Seattle, WA 98101

First Vice President, Director WM Funds Distributor, Inc.
1201 Third Ave., 22nd Floor, Seattle, WA 98101

Craig S. Davis WM Funds Distributor, Inc.
Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Director WM Shareholder Services, Inc.
1201 Third Ave., 22nd Floor, Seattle, WA 98101

Director WM Advisors, Inc.
1201 Third Ave., 22nd Floor, Seattle, WA 98101

Executive Vice President Washington Mutual, Inc.
1201 Third Ave., Seattle, WA 98101

-5-
<PAGE> 113
Chairman January 1996 - July 1997
ASB Financial Services, Irvine, CA

Sharon L. Howells WM Advisors, Inc.
First Vice President, 1201 Third Ave., 22nd Floor, Seattle, WA 98101
Corporate Secretary
Director

-6-
<PAGE> 114
First Vice President, WM Funds Distributor, Inc.
Corporate Secretary, 1201 Third Avenue, 22nd Floor, Seattle, WA 98101
Director

First Vice President WM Shareholder Services, Inc.
Corporate Secretary, 1201 Third Avenue, 22nd Floor, Seattle, WA 98101
Director

Jeffrey D. Huffman WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Joel King March 1998 - present
Vice President WM Advisors, Inc.
1201 Third Ave., 22nd Floor, Seattle, WA 98101

Vice President January 1996 - February 1998
Bennington Capital Management
1420 Fifth Ave., Seattle, WA 98101

Suzanne M. Krahling March 1999 - present
First Vice President, WM Advisors, Inc.
Treasurer 1201 Third Avenue, 22nd Floor, Seattle, WA 98101

First Vice President, WM Shareholder Services, Inc.
Treasurer 1201 Third Avenue, 22nd Floor, Seattle, WA 98101

First Vice President, WM Funds Distributor, Inc.
Treasurer 1201 Third Avenue, 22nd Floor, Seattle, WA 98101

First Vice President, WM Financial Services,
Secretary, Treasurer 1201 Third Avenue, Suite 780, Seattle, WA 98101

Joel Calvo WM Advisors, Inc.
Chairman 1201 Third Ave., 22nd Floor, Seattle, WA 98101

President and Chairman WM Shareholder Services, Inc.
1201 Third Avenue, 22nd Floor, Seattle, WA 98101

WM Financial Services,
1201 Third Avenue, Suite 780, Seattle, WA 98101

William G. Papesh WM Advisors, Inc.
President, Director 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Director Will Shareholder Services, Inc.
1201 Third Ave., Seattle, WA 98101

Director WM Insurance Services
1201 Third Ave., Seattle, WA 98101

President, Director WM Group of Funds
1201 Third Avenue, 22nd Floor, Seattle, WA 98101

President, Director July 1997 - present
WM Funds Distributor, Inc.
1201 Third Avenue, 22nd Floor, Seattle, WA 98101

Brian L. Placzek WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Gary J. Pokrzywinski WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Audrey S. Quaye WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Brian Applegate November 1998 - present
Assistant Vice President WM Avisors
1201 Third Ave., 22nd Floor, Seattle, WA 98101

July 1997 - November 1998
Freeman Wellwood, Seattle, WA

Jamellah MacLean May 1999 - present
Assistant Vice President WM Advisors
1201 Third Ave., 22nd Floor, Seattle, WA 98101

July 1997 - May 1999
Piper Jaffray, Seattle, WA

-7-
<PAGE> 115

Michael D. Meighan WM Advisors, Inc.
Assistant Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

David W. Simpson WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Craig V. Sosey WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Stephen Q. Spencer WM Advisors, Inc.
Vice President 1201 Third Ave., 22nd Floor, Seattle, WA 98101

Linda C. Walk December 1997 - present
Vice President WM Advisors, Inc.
1201 Third Ave., 22nd Floor, 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

Randall L. Yoakum February 1999 - present
Vice President, WM Advisors, Inc.
Chairman of Investment 1201 Third Ave., 22nd Floor, Seattle, WA 98101
Committee
April 1997 - February 1999
D.A. Davidson & Co., Great Falls, MT

-8-
<PAGE> 116

(d) Capital Guardian Trust Company

Directors/Officers Past Two Years
- -------------------- --------------
<S> <C>

Timothy D. Amour Director, Capital Guardian Trust Company,
Capital Research and Management Company and
Capital Management Services, Inc.; Chairman
and Chief Executive Officer, Capital
Research Company

Donnalisa Barnum Senior Vice President, Capital Guardian Trust
Company; Vice President, Capital
International Limited

Andrew F. Barth Director, Capital Guardian Trust Company;
Executive Vice President and Research
Manager, Capital Guardian Research Company

Michael D. Beckman Senior Vice President, Treasurer and
Director, Capital Guardian Trust Company;
Director, Capital Guardian Trust Company of
Nevada; Treasurer, Capital Guardian Research
Company

Michael A. Burik Senior Counsel, The Capital Group Companies,
Inc.

Elizabeth A. Burns Senior Vice President, Capital Guardian Trust
Company

Larry P. Clemmensen Director, Capital Guardian Trust Company and
American Funds Distributors, Inc.; Chairman
of the Board, American Funds Service Company;
Director and President, The Capital Group
Companies, Inc.; Senior Vice President and
Director, Capital Research and Management
Company; President and Director, Capital
Management Services, Inc.; Treasurer, Capital
Strategy Research, Inc.; Senior Vice
President, Capital Income Builder, Inc. and
Capital World Growth & Income Fund, Inc.

Kevin G. Clifford Director and President, American Funds
Distributors, Inc.; Director, Capital
Guardian Trust Company

Roberta A. Conroy Senior Vice President, Director and Counsel,
Capital Guardian Trust Company; Senior Vice
President and Secretary, Capital
International, Inc. and Emerging Markets
Growth Fund, Inc.; Assistant General Counsel,
The Capital Group Companies, Inc.; Secretary,
Capital Management Services, Inc.

John B. Emerson Senior Vice President, Capital Guardian Trust
Company; Deputy Assistant to the President
for Intergovernmental Affairs, Deputy
Director of Presidential Personnel, The White
House

Michael E. Erickson Senior Vice President, Capital Guardian Trust
Company; Senior Vice President, Capital
International, Limited

David I. Fisher Chairman and Director, The Capital Group
Companies, Inc. and Capital Guardian Trust
Company; Vice Chairman and Director, Capital
International, Inc., Capital International
K.K., Capital International Limited and
Emerging Markets Growth Fund, Inc.; President
and Director, Capital Group International,
Inc. and Capital International Limited
(Bermuda); Presidente du Conseil, Capital
International S.A., Director, Capital Group
Research, Inc., Capital Research
International, EuroPacific Growth Fund and
New Perspective Fund

Richard N. Havas Senior Vice President, Capital Guardian Trust
Company, Capital International Limited,
Capital Research International and Capital
Guardian Canada, Inc.

Frederick M. Hughes, Jr. Senior Vice President, Capital Guardian Trust
Company

William H. Hurt Senior Vice President and Director, Capital
Guardian Trust Company; Chairman, Capital
Guardian Trust Company of Nevada and Capital
Strategy Research, Inc.

Peter C. Kelly Senior Vice President, Capital Guardian
Trust Company; Chairman and Director,
Capital Guardian Trust Company of Nevada and
Capital Strategy Research, Inc.; formerly,
Director, The Capital Group Companies, Inc.

Robert G. Kirby Chairman Emeritus, Capital Guardian Trust
Company; Senior Partner, The Capital Group
Partners L.P.

Nancy J. Kyle Senior Vice President and Director, Capital
Guardian Trust Company; President, Capital
Guardian Canada, Inc. and Vice President,
Emerging Markets Growth Fund, Inc.

Karin L. Larson Director, Capital Guardian Trust Company and
The Capital Group Companies, Inc.; President,
Director and Director of Research, Capital
Guardian Research Company; Chairperson,
President and Director, Capital Group
Research, Inc.; President, Director and
Director of International Research, Capital
Research International

James R. Mulally Senior Vice President and Director, Capital
Guardian Trust Company; Senior Vice
President, Capital International Limited;
Director, Capital Guardian Research Company;
Vice President, Capital Research Company

Shelby Notkin Senior Vice President, Capital Guardian Trust
Company; Director, Capital Guardian Trust
Company of Nevada

Mary M. O'Hern Senior Vice President, Capital Guardian Trust
Company and Capital International Limited;
Vice President, Capital International, Inc.

Jeffrey C. Paster Senior Vice President, Capital Guardian Trust
Company

Robert V. Pennington Senior Vice President, Capital Guardian Trust
Company; President, Capital Guardian Trust
Company of Nevada

Jason M. Pilalas Director, Capital Guardian Trust Company;
Senior Vice President and Director, Capital
Guardian Research Company

Robert Ronus President and Director, Capital Guardian
Trust Company; Chairman and Director, Capital
Guardian Canada, Inc., Capital Guardian
Research Company and Capital Research
International; Director, The Capital Group
Companies, Inc., Capital Group International,
Inc. and Capital International Fund S.A.;
Directeur, Capital International S.A.; Senior
Vice President, Capital International Limited

James F. Rothenberg Director, American Funds Distributors, Inc.,
American Funds Service Company, The Capital
Group Companies, Inc., Capital Group
Research, Inc., Capital Guardian Trust
Company and Capital Management Services,
Inc.; Director and President Capital
Research and Management, Inc.; formerly,
Director of Capital Guardian Trust Company,
a Nevada Corporation, and Capital Research
Company

Theodore R. Samuels Senior Vice President and Director, Capital
Guardian Trust Company; Director, Capital
Guardian Research Company

Lionel A. Sauvage Senior Vice President, Capital Guardian Trust
Company; Director, Capital Guardian Research
Company; Vice President, Capital
International Research, Inc.

John H. Seiter Executive Vice President of Client Relations
& Marketing and Director, Capital Guardian
Trust Company; Senior Vice President, Capital
Group International, Inc.; Vice President,
The Capital Group Companies, Inc.

Karen Skinner-Twoney Vice President, Capital Guardian Trust
Company; Director, Vice President and
Treasurer, Capital Guardian Trust Company of
Nevada

Eugene P. Stein Executive Vice President and Director,
Capital Guardian Trust Company; Director,
Capital Guardian Research Company

Philip A. Swan Senior Vice President, Capital Guardian Trust
Company

Shaw B. Wagener Director, Capital Guardian Trust Company,
Capital International Asia Pacific Management
Company, S.A., Capital International
Management Company, Capital International
Emerging Countries Fund and Capital
International Latin American Fund; President
and Director, Capital International, Inc.;
Senior Vice President, Capital Group
International, Inc. and Emerging Markets
Growth Fund, Inc.

Eugene M. Waldron Senior Vice President, Capital Guardian Trust
Company; Vice President, Loomis, Sayles &
Company

Joanne Weckbacher Senior Vice President, Capital Guardian
Trust Company
</TABLE>

-9-
<PAGE> 117

(b) Janus Capital Corporation

<TABLE>
<CAPTION>
Directors Past Two Fiscal Years
- --------- ---------------------
<S> <C>
Thomas H. Bailey March 1996 - present
Director Axis Capital
41-46 Piccadilly, London, U.K.

President, Chairman of Trustees May 1993 - present
Janus Aspen Series
100 Fillmore Street, Denver, CO

Director Idex Management, Incorporated
201 Highland Avenue, Largo, Fl

President, Director, Chairman of June 1978 - present
Board, CEO Janus Capital Corporation
100 Fillmore Street, Denver, CO

President, Chairman of Trustees February 1970 - present
Janus Investment Fund
100 Fillmore Street, Denver, CO
</TABLE>

-10-
<PAGE> 118
<TABLE>
<S> <C>
James P. Craig, III December 1997 - present
Vice Chairman Janus Capital Corporation
100 Fillmore Street, Denver, CO

Chief Investment Officer June 1995 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Director April 1995 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Executive Vice President May 1993 - present
Janus Aspen Series
100 Fillmore Street, Denver, CO

Vice President October 1984 - December 1997
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Executive Vice President June 1984 - present
Janus Investment Fund
100 Fillmore Street, Denver, CO

Trustee June 1995 - present
Janus Aspen Series
100 Fillmore Street, Denver, CO

Trustee June 1995 - present
Janus Investment Fund
100 Fillmore Street, Denver, CO

Portfolio Manager May 1983 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO
</TABLE>

-11-
<PAGE> 119
<TABLE>
<S> <C>
Thomas A. Early
Director November 1998 - present
Janus World Funds PLC
100 Fillmore Street, Denver, CO

Vice President, General Counsel September 1998 - present
Janus Service Corporation
3773 Cherry Creek Drive North, Denver, CO

Vice President, General Counsel February 1998 - present
Janus Aspen Series
100 Fillmore Street, Denver, CO

Vice President, General Counsel, February 1998 - present
Secretary Janus Capital Corporation
100 Fillmore Street, Denver, CO

Vice President, General Counsel February 1998 - present
Janus Capital International Ltd.
76 Shoe Lane, 15th Floor, London, U.K.

Vice President, General Counsel February 1998 - present
Janus Distributors, Incorporated
100 Fillmore Street, Denver, CO

Vice President, General Counsel February 1998 - present
Janus Investment Fund
100 Fillmore Street, Denver, CO

Executive Vice President, General January 1997 - January 1998
Counsel Prudential Investments Fund
100 Mulberty Street, Newark, NJ
</TABLE>

-12-
<PAGE> 120
<TABLE>
<S> <C>
Steven R. Goodbarn
Director November 1998 - present
Janus World Funds, PLC
100 Fillmore Street, Denver, CO

Vice President, CFO December 1995 - present
Janus Aspen Series
100 Fillmore Street, Denver, CO

Vice President, CFO December 1995 - present
Janus Investment Fund
100 Fillmore Street, Denver, CO

Vice President of Finance June 1995 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Vice President of Finance June 1995 - present
Janus Capital International Ltd.
76 Shoe Lane, 15th Floor, London, U.K.

Director, Vice President of Finance June 1995 - Present
Janus Distributors, Incorporated,
100 Fillmore Street, Denver, CO

Director, Vice President of Finance June 1995 - present
Janus Service Corporation
3773 Cherry Creek Drive North, Denver, CO

Director May 1995 - June 1998
Idex Management, Incorporated
201 Highland Avenue, Largo, FL

Treasurer, CFO, Director September 1994 - present
Janus Capital International Ltd.
76 Shoe Lane, 15th floor, London, U.K.

Treasurer, CFO May 1992- present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Treasurer, CFO April 1992 - present
Janus Distributors, Incorporated
100 Fillmore Street, Denver, CO
</TABLE>

-13-
<PAGE> 121
<TABLE>
<S> <C>
Treasurer, CFO April 1992 - present
Janus Service Corporation
3773 Cherry Creek Drive North, Denver, CO
Michael E. Herman
President August 1993 - present
Kansas City Royals Baseball Team
Kansas City, MO

Chairman of Finance Committee May 1990 - present
Ewing Marion Kauffman Foundation
9300 Ward Parkway, Kansas City, MO

Director June 1984 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Marjorie G. Hurd November 1996 - present
Chief Operations Officer Janus Capital Corporation
100 Fillmore Street, Denver, CO

Vice President July 1995 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

President July 1995 - present
Janus Service Corporation
3773 Cherry Creek Drive North, Denver, CO

Thomas A. McDonnell
President November 1993 - present
DST Technologies, Incorporated
1055 Broadway, Kansas City, MO

Director October 1990 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

President April 1987 - present
DST Systems, Incorporated
333 West 11th Street, Kansas City, MO

Chief Executive Officer October 1984 - present
DST Systems, Incorporated
333 West 11th Street, Kansas City, MO
</TABLE>

-14-
<PAGE> 122
<TABLE>
<S> <C>
Landon H. Rowland
Director January 1996 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Chairman, President, Chief Executive April 1980 - present
Officer Kansas City Southern Industries, Incorporated
114 West 11th Street, Kansas City, MO

Stephen Lamar Stieneker
Assistant Vice President and March 1999 - present
Secretary Janus Investment Fund
100 Fillmore Street, Denver, CO

Assistant Vice President and March 1999 - present
Secretary Janus Aspen Series
100 Fillmore Street, Denver, CO

Assistant General Counsel, Chief January 1996 - present
Compliance Officer, V.P. Janus Capital Corporation
Compliance 100 Fillmore Street, Denver, CO

Michael N. Stolper
Director February 1994 - present
Pasadena Capital
101 Munson Street, Greenfield, MA

Director December 1985 - present
BDI Investment Corporation
990 Solano Beach, Solano Beach, CA

Director June 1984 - present
Janus Capital Corporation
100 Fillmore Street, Denver, CO

Director April 1984 - present
Meridian Funds
60 East Sir Francis Drake Boulevard, Lakespur, CA

President August 1975 - present
Stolper & Company
600 West Broadway, San Diego, CA
</TABLE>

-15-
<PAGE> 123
<TABLE>
<S> <C>
Mark B. Whiston
Director November 1998 - present
Janus World Funds PLC
100 Fillmore Street, Denver, CO

Director June 1995 - present
Janus Capital International Ltd.
76 Shoe Lane, 15th Floor, London, U.K.

U.K.
President September 1994 - present
Janus Capital International Ltd.
76 Shoe Lane, 15th Floor, London, U.K.

Vice President, Chief Marketing March 1997 - present
Officer Janus Capital Corporation
100 Fillmore Street, Denver, CO
</TABLE>

-16-
<PAGE> 124

Item 27. Principal Underwriters.

(a) The principal underwriter for the Registrant is WM Funds
Distributor, Inc. WM Funds Distributor, Inc. also serves as
principal underwriter for WM Trust I, WM Trust II and
WM Strategic Asset Management Portfolios.

-17-
<PAGE> 125
(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, 22nd Floor,
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,
Treasurer Senior 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, 22nd
Floor, 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 Capital Guardian Trust Company, 383 South
Hope Street, Los Angeles, CA 90071.

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.

-18-
<PAGE> 126
(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.

-19-
<PAGE> 127
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Seattle in the State of Washington on the 15th day of
February, 2000.

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 15, 2000
- ----------------------------------
William G. Papesh

MONTE D. CALVIN Chief Financial Officer February 15, 2000
- ----------------------------------
Monte D. Calvin

DAVID E. ANDERSON* Trustee February 15, 2000
- ----------------------------------
David E. Anderson

WAYNE L. ATTWOOD, M.D.* Trustee February 15, 2000
- ----------------------------------
Wayne L. Attwood, M.D.

ARTHUR H. BERNSTEIN* Trustee February 15, 2000
- ----------------------------------
Arthur H. Bernstein

KRISTIANNE BLAKE* Trustee February 15, 2000
- ----------------------------------
Kristianne Blake

EDMOND R. DAVIS* Trustee February 15, 2000
- ----------------------------------
Edmond R. Davis
</TABLE>

-20-
<PAGE> 128
Signature Title Date
--------- ----- ----

JOHN W. ENGLISH* Trustee February 15, 2000
- ----------------------------------
John W. English

ANNE V. FARRELL* Trustee February 15, 2000
- ----------------------------------
Anne V. Farrell

CARROL R. MCGINNIS** Trustee February 15, 2000
- ----------------------------------
Carrol R. McGinnis

MICHAEL K. MURPHY* Trustee February 15, 2000
- ----------------------------------
Michael K. Murphy

ALFRED E. OSBORNE, JR.* Trustee February 15, 2000
- ----------------------------------
Alfred E. Osborne, Jr.

DANIEL PAVELICH* Trustee February 15, 2000
- ----------------------------------
Daniel Pavelich

JAY ROCKEY* Trustee February 15, 2000
- ----------------------------------
Jay Rockey

MORTON O. SCHAPIRO** Trustee February 15, 2000
- ----------------------------------
Morton O. Schapiro

RICHARD C. YANCEY* Trustee February 15, 2000
- ------------------------------------
Richard C. Yancey

* By WILLIAM G. PAPESH Pursuant to Powers of Attorney previously filed.

-21-

<PAGE> 1
AMENDMENT TO SUB-ADVISORY AGREEMENT

This Amendment to the Sub-Advisory Agreement ("Agreement") dated January
30, 1998, between WM Advisors, Inc. ("WM Advisors"), a corporation organized
under the laws of the state of Washington, and Janus Capital Corporation (the
"Sub-Advisor"), a corporation organized under the laws of the state of Colorado,
is effective as of December 7th, 1999.

AMENDMENT

WHEREAS, Sub-Advisor furnishes investment advisory and management services
to the Growth Fund ("Fund"), a portfolio of WM Variable Trust, pursuant to the
Agreement;

NOW THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree to amend the Amendment as follows:

1. Section 6 of the Agreement is hereby deleted and replaced with the
following:

In consideration of the services rendered pursuant to this Agreement, WM
Advisors will pay the Sub-Advisor on the first business day of each
month the pro rata portion attributable to the Fund (based on the ratio
of the Fund's average daily net assets to the combined average daily net
assets, including cash and cash equivalents, of the Fund and the Growth
Fund of WM Trust II ("Combined Assets")) of a fee for the previous month
at the annual rate of .55% of Combined Assets of less than $25 million,
.50% of Combined Assets equal to or in excess of $25 million but less
than $500 million, and .45% of Combined Assets equal to or in excess of
$500 million. Upon any termination of this Agreement before the end of a
month, the fee for such part of that month shall be prorated according
to the proportion that such period bears to the full monthly period and
shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Sub-Advisor, the value of the
Fund's net assets shall be computed at the times and in the manner
specified in the Fund's Prospectus or Statement of Additional
Information relating to the Fund as from time to time in effect.

With respect to the period from July 1, 1999, until the date of this
Amendment, WM Advisors shall calculate the difference between the fee
payable under the Agreement before this amendment and the fee that would
have been payable had this amendment been in effect as of July 1, 1999.
WM Advisors shall retain fees otherwise payable after the date of this
amendment in such amount, until such amount is recouped by WM Advisors.
Thereafter, WM Advisors shall pay the fees specified herein.

2. WM Advisors represents and warrants that approval of the Fund's
shareholders is not required for this amendment; that the Trustees of WM
Variable Trust have authorized this amendment, and that WM Advisors is duly
authorized to execute this amendment. All other terms of the Agreement
shall remain in full force and effect.
<PAGE> 2
3. Sub-Advisor shall continue to provide the same quality and quantity of
services as previously provided pursuant to the Agreement, provided that
this shall not be interpreted to imply that the same level of investment
performance results previously achieved will be achieved in the future.

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the effective date referenced above.

WM ADVISORS, INC.

By: /s/ WILLIAM G. PAPESH
--------------------------------

Name: William G. Papesh
Title: Pres.

JANUS CAPITAL CORPORATION

By: /s/ BONNIE M. HOWE
--------------------------------

Name: Bonnie M. Howe
Title: Assistant Vice President
<PAGE> 3
[JANUS CAPITAL CORPORATION LETTERHEAD]

December 15, 1999

VIA FEDERAL EXPRESS
- -------------------

Mr. Joe King
WM Advisors, Inc.
1201 3rd Avenue, Suite 1220
Seattle, Washington 98101

Dear Mr. King:

Enclosed for your records are fully executed copies of each of the revised
amendments to the Sub-Advisory Agreements between WM Advisors, Inc. and Janus
Capital Corporation. We have retained an original of each amendment for our
files.

If you have any questions or if I can be of additional assistance, please call
me at (303) 336-7995.

Sincerely,

/s/ BONNIE M. HOWE
- ------------------
Bonnie M. Howe
Associate Counsel

BMH:vm

Enc.

cc: Alisa Aceto
Dave Agostine
John Mari
Emily Reistad (w/o enc.)

<PAGE> 1
INVESTMENT SUB-ADVISORY AGREEMENT

WM VARIABLE TRUST

INTERNATIONAL GROWTH FUND

EFFECTIVE AS OF JUNE 23, 1999

Capital Guardian Trust Company
333 South Hope Street
Los Angeles, CA 90071

Ladies and Gentlemen:

WM Advisors, Inc. ("WM Advisors"), a corporation organized under the laws
of the state of Washington, hereby agrees with Capital Guardian Trust Company,
(the "Sub-Advisor"), a trust company organized under the laws of the state of
California, as follows:

1. INVESTMENT DESCRIPTION; APPOINTMENT

WM Advisors desires to employ the capital of the International Growth Fund
(the "Fund"), a series of WM Variable Trust (the "Trust"), by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in the Trust's Master Trust Agreement, as amended, and in the
Prospectus and Statement of Additional Information relating to the Fund as in
effect and which may be amended from time to time, and in such manner and to
such extent as may from time to time be approved by the Board of Trustees of the
Trust. Copies of the Fund's Prospectus and Statement of Additional Information
and the Trust's Master Trust Agreement, as amended, have been or will be
submitted to the Sub-Advisor. WM Advisors agrees to provide copies of all
amendments to the Fund's Prospectus and Statement of Additional Information and
the Trust's Master Trust Agreement to the Sub-Advisor on an on-going basis. WM
Advisors desires to employ and hereby appoints the Sub-Advisor to act as
investment sub-advisor to the Fund. The Sub-Advisor accepts the appointment and
agrees to furnish the services described herein for the compensation set forth
below.

2. SERVICES AND INVESTMENT SUB-ADVISOR

Subject to the supervision of the Board of Trustees of the Trust and of WM
Advisors, the Fund's investment adviser, the Sub-Advisor will, to the extent
related to the scope of its duties reasonably contemplated under this
Agreement, (a) act in conformity with the Trust's Master Trust Agreement, the
Investment Company Act of 1940 (the "1940 Act"), the Investment Advisers Act
of 1940 (to the extent applicable to the Sub-Advisor) and the Internal Revenue
Code of 1986, as the same may from time to time be amended; (b) make investment
decisions for the Fund in accordance with the Fund's investment objectives and
policies as stated in the Fund's Prospectus and Statement of Additional
Information as in effect and, after notice to the Sub-Advisor, and which may
be amended from time to time; (c) place purchase and sale orders on behalf of
the Fund to effectuate the investment decisions made; (d) maintain appropriate
records with respect to the securities transactions of the Fund and will
furnish to the Trust's Board of Trustees such periodic, regular and special
reports (including presentations by the Sub-Advisor's personnel primarily
responsible for the day-to-day management of the Fund's portfolio) as the
Board may reasonably request; (e) provide WM Advisors and its affiliates with
such support with respect to the Fund as they may reasonably request; and (f)
treat confidentially and as proprietary information of the Trust, all records
and other information relative to the Trust and prior, present or potential
shareholders; and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Trust, which
<PAGE> 2
approval shall not be unreasonably withheld and such records may not be withheld
where the Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust. In providing those
services, the Sub-Advisor will supervise the Fund's investments and conduct a
continuous program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Sub-Advisor will furnish the
Fund or WM Advisors with whatever market, economic, and transactional
information that the Trust or WM Advisors may reasonably request relating to the
investments that the Fund may hold or contemplate purchasing.

3. BROKERAGE

In executing transactions for the Fund and selecting brokers or dealers,
the Sub-Advisor will use its best efforts to seek the best overall terms
available and shall execute or direct the execution of all such transactions in
a manner permitted by law and in a manner that is in the best interest of the
Fund and their shareholders. In assessing the best overall terms available for
any Fund transactions, the Sub-Advisor will consider all factors it deems
relevant including, but not limited to, 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 any commission for the specific
transaction and on a continuing basis. Pursuant to its investment determinations
for the Fund, in placing orders with brokers and dealers, the Sub-Advisor will
attempt to obtain the best net price and the most favorable execution of its
orders. Consistent with this obligation, when the execution and price offered by
two or more brokers or dealers are comparable, the Sub-Advisor may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Trust with research advice and other services.

4. INFORMATION PROVIDED TO THE TRUST

The Sub-Advisor will keep the Trust and WM Advisors informed of
developments materially affecting the Fund, and will on its own initiative,
furnish the Trust and WM Advisors on at least a quarterly basis with whatever
information the Sub-Advisor believes is appropriate for this purpose.

5. STANDARD OF CARE

The Sub-Advisor shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. The Sub-Advisor shall not be liable for
any error or judgment or mistake of law or for any loss suffered by the Fund or
WM Advisors in connection with the matters to which this Agreement relates,
except (a) a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), or (b) a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement (each such
breach, act or omission described in (a) or (b) shall be referred to as
"Disqualifying Conduct").

6. COMPENSATION

In consideration of the services rendered pursuant to this Agreement, WM
Advisors will pay the Sub-Advisor on the first business day of each quarter a
fee for the previous quarter according to the schedule of fees detailed in Annex
A attached to this Agreement. The Sub-Advisor shall have no right to obtain
compensation directly from the Fund or the Trust for services provided hereunder
and agrees to look solely to WM Advisors for payment of fees due. Upon any
termination of this Agreement before the end of a quarter, the fee for such part
of that quarter shall be prorated according to the proportion that such period
bears to the full quarterly period and shall be payable upon the date of
termination of this Agreement.

-2-

<PAGE> 3
7. EXPENSES

The Sub-Advisor will bear all expenses in connection with the performance
of its services under this Agreement, which expenses shall not include brokerage
fees or commissions in connection with the effectuation of securities
transactions. The Trust will bear certain other expenses to be incurred in its
operation, including but not limited to: organizational expenses, taxes,
interest, brokerage fees and commissions, if any; fees of trustees of the Trust
who are not officers, directors or employees of the Sub-Advisor, WM Advisors, or
any of their affiliates; Securities and Exchange Commission fees and state Blue
Sky qualification fees; out-of-pocket expenses of custodians, transfer and
dividend disbursing agents and transaction charges of custodians; insurance
premiums; outside auditing and legal expenses; costs of maintenance of the
Trust's existence; costs attributable to investor services, including without
limitation, telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for regulatory purposes
and for distribution to existing shareholders; costs of shareholders' reports
and meetings of the shareholders of the Fund and of the officers or Board of
Trustees of the Trust; and any other operating expenses of the Fund. In
addition, the Fund may pay a distribution fee pursuant to the terms of a
Distribution Plan adopted under Rule 12b-1 of the 1940 Act.

8. SERVICES TO OTHER COMPANIES OR ACCOUNTS

WM Advisors understands that the Sub-Advisor now acts, will continue to act
and may act in the future as investment adviser to fiduciary and other managed
accounts and as investment adviser to one or more other investment companies or
series of investment companies, and WM Advisors has no objection to the
Sub-Advisor so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with procedures mutually believed to be equitable to each entity.
Similarly, opportunities to sell securities will be allocated in an equitable
manner. WM Advisors recognizes that in some cases this procedure may limit the
size of the position that may be acquired or disposed of for the Fund. In
addition, WM Advisors understands that the persons employed by the Sub-Advisor
to assist in the performance of the Sub-Advisor's duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the Sub-Advisor or any affiliate of the
Sub-Advisor to engage in and devote time and attention to other business or to
render services of whatever kind or nature.

9. TERM OF AGREEMENT

This Agreement shall become effective as of the date first written above,
shall continue for a period of two years thereafter, and shall continue in
effect for a period of more than two years thereafter only so long as such
continuance is specifically approved at least annually by (a) the Board of
Trustees of the Trust or (b) a vote of a "majority" (as defined in the 1940 Act)
of the Fund's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Trustees who are not
"interested persons" (as defined in the 1940 Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty, on 60 days'
written notice, by WM Advisors, the Board of Trustees for the Trust or by vote
of holders of a majority of the Fund's shares, or upon 60 days' written notice
by the Sub-Advisor and will terminate automatically upon any termination of the
advisory agreement between the Trust and WM Advisors. In addition, this
Agreement will also terminate automatically in the event of its assignment (as
defined in said Act). The Sub-Advisor agrees to notify the Trust of any
circumstances that might result in this Agreement being deemed to be assigned.

10. REPRESENTATIONS OF WM ADVISORS AND THE SUB-ADVISOR

WM Advisors represents that (a) a copy of the Trust's Master Trust
Agreement, dated January 29, 1993, together with all amendments thereto, is on
file in the office of the Secretary of the Commonwealth of Massachusetts, (b)
the

-3-

<PAGE> 4
appointment of the Sub-Advisor has been duly authorized, (c) it has acted and
will continue to act in conformity with the 1940 Act and other applicable laws,
and (d) it is authorized to perform the services herein.

The Sub-Advisor represents that it is authorized to perform the services
described herein.

11. INDEMNIFICATION

WM Advisors shall indemnify and hold harmless the Sub-Advisor and its
affiliates and their respective officers, directors and employees from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising from or in
connection with this Agreement or the performance by the Sub-Advisor or its
duties hereunder; provided, however, that nothing contained herein shall
require that the Sub-Advisor be indemnified for Disqualifying Conduct.

12. AMENDMENT OF THIS AGREEMENT

No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.

13. USE OF NAMES

a. It is understood that the name "Capital Guardian Trust Company," the
names of the Sub-Advisor's affiliates within The Capital Group Companies, Inc.
(including, but not limited to the American Funds Group of mutual funds), and
any derivative thereof or logo associated with such names are the valuable
property of the Sub-Advisor and its affiliates and that the Trust and/or the
Fund have the right to use such name (or derivative or logo) in offering
materials of the Trust and/or Fund only with the prior written approval of the
Sub-Advisor and for so long as the Sub-Advisor is an investment sub-advisor to
the Trust and/or the Fund; provided that the Trust and the Fund may use such
name (or derivative or logo) without such prior written approval in offering
materials of the Trust to the extent that (i) such materials simply list the
Sub-Advisor as the Sub-Advisor to the Fund as part of a listing of the
investment sub-advisers to the series or portfolios of the Trust with a
pre-approved standard description of the Sub-Advisor's experience and duties
hereunder; (ii) such materials include such name (or derivative or logo) and any
related information that has been previously approved by the Sub-Advisor or that
is required to be disclosed by applicable law or regulation, such as information
disclosed in the Trust's registration statement; or (iii) such materials are
intended for internal use by the Trust and WM Advisors. In using information
about the Sub-Advisor where pre-approval is not required, it shall be WM
Advisors' responsibility to seek updates to such materials as it deems
necessary. Such prior written approval of the Sub-Advisor shall not be
unreasonably withheld or delayed. Upon termination of this Agreement, the Trust
and the Fund shall forthwith cease to use such name (or derivative or logo) as
soon as reasonably practicable.

b. It is understood that the names "WM Variable Trust," and "WM Advisors,
Inc." or any derivatives thereof or logos associated with such names are the
valuable property of the Trust and/or WM Advisors and their affiliates and that
the Sub-Advisor or its affiliates have the right to use such names (or
derivatives or logos) in marketing materials of the Sub-Advisor or its
affiliates only with the prior written approval of WM Advisors or the Trust, as
applicable, and for so long as the Sub-Advisor is an investment sub-advisor to
the Trust and/or the Fund; provided that the Sub-Advisor or its affiliates may
use such names (or derivatives or logos) without such prior written approval in
marketing materials of the Sub-Advisor or its affiliates to the extent that (i)
such materials simply list the Trust or the Fund as part of a listing of the
investment companies advised by the Sub-Advisor or its affiliates with a brief
description of the Trust or the Fund; (ii) such materials include such names (or
derivatives or logos) and any related information that has been previously
approved by the Trust or WM Advisors, as applicable, or that is required to be
disclosed by applicable law or regulation; or (iii) such materials are intended
for internal use by the Sub-Advisor. Such prior written approval of WM Advisors
or the Trust, as applicable, shall not be unreasonably withheld or

-4-
<PAGE> 5
delayed. Upon termination of this Agreement, the Sub-Advisor and its
affiliates shall forthwith cease to use such names (or derivatives or logos) as
soon as reasonably practicable.

14. PROXY VOTING

Except as specifically instructed by the Trustees of the Trust or WM
Advisors, the Sub-Advisor shall exercise or procure the exercise of any voting
rights attaching to investments of the Fund on behalf of the Fund.

15. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties
hereto.

16. GOVERNING LAW

This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.

If the foregoing accurately sets forth our agreement, kindly indicate your
acceptance hereof by signing and returning the enclosed copy hereof.

Very truly yours,

WM Advisors, Inc.

Dated: 6/24/99 By /s/ WILLIAM C. PAPESH
-------------------------- ---------------------------------
Name: William C. Papesh
Title: President

Accepted:

Capital Guardian Trust Company

By /s/ MICHAEL BURIK Dated: June 23, 1999
------------------------------ --------------------------------
Name: Michael Burik
Title: Vice President

-5-
<PAGE> 6
ANNEX A

1. STANDARD FEE

The minimum annual fee payable under this Agreement shall be $200,000.

The fee payable under this Agreement shall be determined by reference to
the following schedule based upon the average daily net assets of the Fund (as
determined by the Trust's accounting agent pursuant to the Fund's pricing
procedures) subject to reduction as described below:

<TABLE>
<S> <C>
On the first $25 million .................................. .75 of 1%
$25 million to $50 million.................................. .60 of 1%
$50 million to $250 million................................. .425 of 1%
Over $250 million*.......................................... .375 of 1%
</TABLE>

- ---------------
* This breakpoint will be applied to the extent the aggregate
non-U.S./global, regional, single country (excluding U.S.) equity, and
fixed-income (emerging markets) assets of (i) the Fund, (ii) any other
investment company advised by WM Advisors or any of its affiliates, (iii)
any person or employee plan sponsored by WM Advisors or any of its
affiliates or (iv) WM Advisors or its affiliates that are managed by
Sub-Advisors or its affiliates exceed $250 million.

2. Asset Fee Aggregation Policies

For fee purposes, asset aggregation will apply to all accounts of (i) the
Fund, (ii) any other investment company advised by WM Advisors or any of its
affiliates, (iii) any pension or employee benefit plan sponsored by WM Advisors
or any of its affiliates or (iv) WM Advisors or its affiliates that are managed
by Sub-Advisors or its affiliates, except for emerging market equity
investments and investments in other funds with internally charged fees
("Eligible Accounts)". In order to achieve the benefit of asset aggregation, the
combined total of the minimum fee applicable to each Eligible Account.

For Eligible Accounts with the same investment objectives and guidelines,
all assets for these Eligible Accounts will be aggregated for fee calculation
purposes.

For Eligible Accounts with different investment objectives and guidelines:

o Each Eligible Account will be charged on the first $10 million at the
initial breakpoint rate for the appropriate mandate. Any incremental
assets over $10 million will be aggregated and charged at the
incremental rate for the appropriate mandate.

o Assets invested in commingled funds will be aggregated and charged at
the incremental rate for the appropriate mandate.

o The first additional account within a new country will be charged on
the first $15 million at the initial breakpoint rate for the
appropriate mandate. Any incremental assets over $15 million will be
aggregated and charged at the incremental rate for the appropriate
mandate.

A-1
<PAGE> 7
For asset aggregation purposes, Eligible Accounts will be aggregated in
the following order: balanced, equity-developed markets, convertible,
fixed-income -- high yield, fixed-income -- emerging markets, and
fixed-income -- developed markets.

The benefit from asset aggregation, if any, will be calculated by
comparing total aggregated fees to total unaggregated fees for all Eligible
Accounts. The resulting percentage discount will be applied to each Eligible
Account's unaggregated fees.

If all Eligible Accounts are not denominated in the same currency, the
local currency assets of each Eligible Account and the related fees calculated
on an unaggregated basis will be converted to U.S. dollars using the applicable
foreign exchange rate. The total of such fees will be compared to the Eligible
Accounts' total aggregated fees. The resulting percentage discount will then be
applied to each Eligible Account's unaggregated fee as determined in U.S.
dollars.

3. FEE DISCOUNTS AND ELIMINATION OF FREE BREAKPOINTS

The following fee discount will be applied based upon the total aggregated
fees paid by all accounts of (i) the Fund, (ii) any other investment company
advised by WM Advisors or any of its affiliates, (iii) any pension or employee
benefit plan sponsored by WM Advisors or any of its affiliates or (iv) WM
Advisors or its affiliates that are managed by Sub-Advisor or its affiliates:

Aggregated fees between $1.25 million to $4 million.... 5% discount
Aggregated fees between $4 million to $8 million....... 7.5% discount
Aggregated fees between $8 million to $12 million...... 10% discount
Aggregated fees over $12 million....................... 12.5% discount

For this purpose, aggregated fees will include all fees from separate
accounts, commingled funds, and funds with internally charged fees managed by
Sub-Advisor and its affiliates (except for investments in American Funds'
mutual funds). The resulting fee discount percentage will be applied to each
account's fees (excluding fees related to investments in funds with internally
charged fees).

If total aggregated fees (before discounts) exceed $3 million, fee
breakpoints will be eliminated and each account will be charged at the lowest
marginal fee rate applicable to the account's fee schedule.

To determine the applicable fee discount level and breakpoint elimination
threshold, the total aggregated fees for the quarter will be annualized. For
this purpose, all local currency fees will be converted to a designated base
currency.

Fees related to investments in funds with internally charged fees will be
estimated by multiplying the quarter end value of the account (adjusted on a
prorated basis for any contributions or withdrawals during the quarter) by the
fund's effective fee. For this purpose, the effective fee will be based on the
value of the fund's quarter end assets and the fund's current fee schedule.

Applicable discount levels and the elimination of fee breakpoints will be
effective beginning with the first quarter a discount threshold is exceeded and
will remain in effect unless the total fees fall below the discount threshold
due to a significant withdrawal of assets. A decline in market values alone
will not cause the reinstatement of a lower discount level or fee breakpoints.

A-2