<PAGE>
[60 YEARS INVESTMENT EXPERIENCE GRAPHIC]
[LOGO] WM VARIABLE TRUST
the difference is experience
[VARIOUS BUSINESS GRAPHICS]
Semi-Annual Report
for the period ended June 30, 2000
<PAGE>
[60 YEARS INVESTMENT EXPERIENCE GRAPHIC]
STRATEGIC ASSET MANAGEMENT
PORTFOLIO DIVISIONS
strategic growth
portfolio
conservative growth
portfolio
balanced portfolio
flexible income portfolio
income portfolio
EQUITY FUND DIVISIONS
bond & stock fund
growth & income fund
growth fund of the northwest
growth fund
mid cap stock fund
small cap stock fund
international growth fund
FIXED-INCOME
FUND DIVISIONS
income fund
u.s. government securities
fund
short term income fund
money market fund
CONTENTS
message from the president 1
statements of assets
and liabilities 2
statements of operations 6
statements of changes
in net assets 8
statements of changes
in net assets - capital
stock activity 12
financial highlights 15
portfolio of investments 31
notes to financial statements
(unaudited) 58
[BACKGROUND GRAPHICS]
<PAGE>
[GRAPHIC OMITTED]
DEAR CONTRACT OWNER,
The tides of the equity markets shifted in the past six months, as the prices of
many stocks that drove markets to new highs early in the year have retreated.
Even though earnings have been strong and most companies have healthy balance
sheets, prices of many growth stocks were overextended, peaking in early March.
This concentrated correction may be a healthy revaluation and could pave the way
for the return of broader market advances. Some of the "Old Economy" stocks
should continue to gain favor relative to higher-valued technology companies.
Market volatility has been unprecedented, as four of the technology-heavy NASDAQ
Index's ten worst historical days (on a percentage basis) were recorded in April
2000.
The recent divergence of market indices can create confusion when reported by
media sources. Historically, the Dow Jones Industrial Average (DJIA), which
dates back prior to 1900 and measures 30 of the country's largest companies
stock performance, has been the most closly followed index. But now, with
increased investment awareness and intensified financial news reporting,
additional indices are now being followed on a minute-by-minute basis around the
globe. For example, the Standard & Poor's 500 Index(S&P 500), a
capitalization-weighted compilation of 500 of the largest companies traded on
domestic market exchanges, has become the most common benchmark used by domestic
equity mutual funds. However, it is important to realize that the S&P 500 is
concentrated because the largest stocks actualy compare a large percentage of
the overall index. Another index that has grabbed recent headlines is the
NASDAQ. It has a much more significant exposure to small- and medium-sized
companies. Much of the NASDAQ's popularity can be attributed to its
concentration in technology holdings and its meteoric rise in the past several
years. No matter what index you track, it is important to keep the scope and
relative magnitude of the daily moves in perspective. While 100-point
fluctuations in the DJIA attracted headlines in the past, this now only
represents a 1% move and has become routine. For comparative purposes, a
100-point move on the NASDAQ index is approximately 3% and represents a
significant move-yet these moves have also become common. During the 12-month
period ended June 30, 2000, the weekly risk or volatility of the NASDAQ Index
was more than double that of the DJIA.1
Since the biggest advances in the past several years were narrowly focused,
portfolio managers who had stayed away from large concentrations in the hottest
sectors were stung by weaker relative performance. Now, as the markets appear to
be shifting, adherence to a long-term strategy and investment discipline becomes
crucial. The WM STRATEGIC ASSET MANAGER VARIABLE ANNUITY can offer a unique
focus and strict investment philosophy that could pay off with a broadening
market and a resurgence of some core value holdings that generate consistent
cash flows and earnings.
Because of the recent narrow focus, it is important to manage our expectations
of the equity markets. The five-year period ended December 31, 1999, was the
strongest ever, with the S&P 500 returning an average of over 28% per year.2 As
we have seen since this past March, these steep gains, particularly for the
largest growth stocks, will not continue forever. Therefore, we have to manage
our portfolios with that in mind. There are several strategies and solutions
that can help temper short-term market fluctuations including: regular
investments, diversified portfolios with multiple asset classes, and sticking
with a long-term plan.
During the period, we added the VT MID CAP STOCK FUND to help round out our Fund
family. The Fund will focus on taking advantage of the growth potential from
medium-sized companies. We also changed the names of a few of our Funds to more
closely match their investment objective, making it easier for you to understand
how the Funds could possibly fit your individual investment needs.
I again stress the importance of meeting with your Investment Representative and
maintaining a long-term diversified focus. Your Representative can assess your
risk tolerance and help you make any changes necessary to put you on track
toward meeting your long-term goals. At the WM Funds family, our experience has
proven that the key to successful investing is a long-term focus. Markets will
shift in response to short-term conditions, but long-term investing does not
depend on accurate predictions of short-term events.
We will continue to build, grow and leverage our experience and history to help
meet your investment needs - just as we have for over 60 years. Thank you for
your continued confidence in the WM Fund family.
Sincerely,
/S/SIGNATURE
William G. Papesh
President
1 SOURCE: NASDAQ AND DOW JONES. BOTH ARE UNMANAGED INDICES OF COMMON STOCKS.
RISK IS MEASURED BY STANDARD DEVIATION OR THE MOVEMENT AROUND THE MEAN RETURN.
2 SOURCE: IBBOTSON ASSOCIATES. THE S&P 500 IS AN UNMANAGED INDEX OF COMMON
STOCKS. RESULTS INCLUDE REINVESTMENT OF DIVIDENDS.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INDIVIDUALS CANNOT
INVEST DIRECTLY IN ANY INDEX.
1
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
WM VARIABLE TRUST
JUNE 30, 2000 (UNAUDITED)
<TABLE>
STRATEGIC CONSERVATIVE FLEXIBLE
GROWTH GROWTH BALANCED INCOME INCOME BOND & STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
----------- ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investments, at value
(See portfolios of investments):
Securities .............................. $74,782,985 $238,861,745 $244,289,771 $33,655,738 $7,542,127 $12,529,597
Repurchase Agreements .................... 157,000 521,000 88,000 222,000 121,000 1,983,000
----------- ------------ ------------ ----------- ---------- -----------
Total Investments (a) ................. 74,939,985 239,382,745 244,377,771 33,877,738 7,663,127 14,512,597
Cash and/or foreign currency (b) ........... 625 337 442 284 17 841
Cash and/or cash equivalents held as
collateral for loaned securities (note 6) - - - - - -
Dividends and/or interest receivable ....... 30,736 89,468 15 40 11,217 55,276
Receivable for investment securities sold .. - - - - - 34,227
Receivable for Fund shares sold ............ 522,492 498,182 864,794 53,494 - -
Net unrealized appreciation on forward
currency contracts (See portfolios
of investments) ......................... - - - - - -
Unamortized organizational costs and/or
offering costs .......................... 15,804 15,803 15,804 4,120 - -
Prepaid expenses and other assets .......... 812 2,912 3,155 495 133 250
----------- ------------ ------------ ----------- ---------- -----------
Total Assets .......................... 75,510,454 239,989,447 245,261,981 33,936,171 7,674,494 14,603,191
----------- ------------ ------------ ----------- ---------- -----------
LIABILITIES:
Payable for investment securities purchased 30,710 - - - - -
Collateral on securities loaned (note 6) ... - - - - - -
Payable for Fund shares redeemed ........... - - 8.203 - 1,272 67,365
Due to custodian ........................... - - - - - -
Dividends payable .......................... - - - - - -
Investment advisory fee payable ............ 6,412 19,221 19,571 3,352 628 7,461
Administration fee payable ................. 8,869 28,832 29,356 4,129 942 2,149
Accrued legal and audit fees ............... 9,872 16,814 17,404 8,572 7,386 12,152
Accrued printing and postage fees .......... 4,630 16,111 16,671 2,353 556 1,018
Custodian fee payable ...................... 811 372 213 262 176 735
Accrued expenses and other payables ........ 814 3,445 5,356 407 396 3,025
----------- ------------ ------------ ----------- ---------- -----------
Total Liabilities ...................... 62,118 84,795 96,774 19,075 11,356 93,905
----------- ------------ ------------ ----------- ---------- -----------
NETASSETS .................................. $75,448,336 $239,904,652 $245,165,207 $33,917,096 $7,663,138 $14,509,286
=========== ============ ============ =========== ========== ===========
------------------------
(a) Investments, at cost ................... $72,639,837 $237,152,357 $242,294,939 $34,128,517 $7,774,743 $14,390,180
=========== ============ ============ =========== ========== ===========
(b) Cash and/or foreign currency,
at cost ............................... $ 625 $ 337 $ 442 $ 284 $ 17 $ 841
=========== ============ ============ =========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
GROWTH & GROWTH FUND MID CAP SMALL CAP INTERNATIONAL
INCOME OF THE GROWTH STOCK STOCK GROWTH
FUND NORTHWEST FUND FUND FUND FUND
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investments, at value
(See portfolios of investments):
Securities .............................. $272,437,040 $47,971,007 $375,336,614 $35,531,078 $89,098,001 $68,585,629
Repurchase Agreements ................... 8,492,000 6,695,000 - 2,036,000 3,720,000 3,091,000
------------ ----------- ------------ ----------- ----------- -----------
Total Investments (a) ................. 280,929,040 54,666,007 375,336,614 37,567,078 92,818,001 71,676,629
Cash and/or foreign currency (b) ........... 153 299 87,219 941 30 153,876
Cash and/or cash equivalents held as
collateral for loaned securities (note 6) 4,387,100 1,925 11,581,554 - 963,540 853,730
Dividends and/or interest receivable ....... 149,480 26,663 71,212 18,639 3,704 198,076
Receivable for investment securities sold .. 648,571 44,290 1,569,468 59,266 - 1,165,183
Receivable for Fund shares sold ............ 222,352 20,429 500,327 16,414 10,126 3,573
Net unrealized appreciation on forward
currency contracts (See portfolios
of investments) ......................... - - 34,502 - - 38,665
Unamortized organizational costs and/or
offering costs .......................... - - - - - -
Prepaid expenses and other assets .......... 4,696 583 13,840 - 1,611 562
------------ ----------- ------------ ----------- ----------- -----------
Total Assets .......................... 286,341,392 54,760,196 389,194,736 37,662,338 93,797,012 74,090,294
------------ ----------- ------------ ----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased 1,023,076 34,979 115,363 140,748 1,115,676 805,274
Collateral on securities loaned (note 6) ... 4,387,100 1,925 11,581,554 - 963,540 853,730
Payable for Fund shares redeemed ........... 100,622 - 329,500 - 117,383 101,913
Due to custodian ........................... - - - - - -
Dividends payable .......................... - - - - - -
Investment advisory fee payable ............ 171,499 25,856 273,597 22,186 60,229 54,204
Administration fee payable ................. 40,938 7,447 55,967 5,324 12,537 10,611
Accrued legal and audit fees ............... 25,759 13,397 32,578 4,543 15,362 18,665
Accrued printing and postage fees .......... 19,707 3,375 28,791 1,110 5,870 5,366
Custodian fee payable ...................... 1,934 5,117 14,804 1,869 2,803 20,737
Accrued expenses and other payables ........ 4,334 968 7,139 827 5,061 4,774
------------ ----------- ------------ ----------- ----------- -----------
Total Liabilities ...................... 5,774,969 93,064 12,439,293 176,607 2,298,461 1,875,274
------------ ----------- ------------ ----------- ----------- -----------
NETASSETS .................................. $280,566,423 $54,667,132 $376,755,443 $37,485,731 $91,498,551 $72,215,020
============ =========== ============ =========== =========== ===========
------------------------
(a) Investments, at cost ................... $242,378,544 $47,420,640 $285,686,301 $37,714,218 $73,837,821 $56,161,239
============ =========== ============ =========== =========== ===========
(b) Cash and/or foreign currency,
at cost ............................... $ 153 $ 299 $ 87,175 $ 941 $ 30 $ 153,957
============ =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
U.S.
GOVERNMENT SHORT TERM MONEY
INCOME SECURITIES INCOME MARKET
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investments, at value
(See portfolios of investments):
Securities .............................. $100,684,415 $86,509,153 $42,236,390 $15,915,649
Repurchase Agreements ................... 2,011,000 5,651,000 2,400,000 562,000
------------ ----------- ----------- -----------
Total Investments (a) ................. 102,695,415 92,160,153 44,636,390 16,477,649
Cash and/or foreign currency (b) ........... 123 - - -
Cash and/or cash equivalents held as
collateral for loaned securities (note 6) 13,397,176 - 8,108,875 -
Dividends and/or interest receivable ....... 1,704,791 797,992 471,052 52,079
Receivable for investment securities sold .. - - 1,553 -
Receivable for Fund shares sold ............ - - 8,679 91,454
Net unrealized appreciation on forward
currency contracts (See portfolios
of investments) ......................... - - - -
Unamortized organizational costs and/or
offering costs .......................... - - - -
Prepaid expenses and other assets .......... 1,689 555 1,076 607
------------ ----------- ----------- -----------
Total Assets .......................... 117,799,194 92,958,700 53,227,625 16,621,789
------------ ----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased - - - -
Collateral on securities loaned (note 6) ... 13,397,176 - 8,108,875 -
Payable for Fund shares redeemed ........... 120,837 17,737 - 21,640
Due to custodian ........................... - 51,027 963 159,708
Dividends payable .......................... - - - 77,067
Investment advisory fee payable ............ 41,803 37,378 18,476 7,452
Administration fee payable ................. 15,049 13,456 6,651 2,425
Accrued legal and audit fees ............... 18,011 16,526 15,800 12,991
Accrued printing and postage fees .......... 7,260 6,557 3,407 2,117
Custodian fee payable ...................... - 1,677 1,647 1,672
Accrued expenses and other payables ........ 8,191 18,311 8,977 1,691
------------ ----------- ----------- -----------
Total Liabilities ...................... 13,608,327 162,669 8,164,796 286,763
------------ ----------- ----------- -----------
NETASSETS .................................. $104,190,867 $92,796,031 $45,062,829 $16,335,026
============ =========== =========== ===========
------------------------
(a) Investments, at cost ................... $104,474,866 $93,041,634 $45,335,599 $16,477,649
============ =========== =========== ===========
(b) Cash and/or foreign currency,
at cost ............................... $ 123 $ - $ - $ -
============ =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
2-3
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
WM VARIABLE TRUST
JUNE 30, 2000 (UNAUDITED)
<TABLE>
STRATEGIC CONSERVATIVE FLEXIBLE
GROWTH GROWTH BALANCED INCOME INCOME BOND & STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
----------- ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income/
(accumulated net investment loss) ........ $ 337,183 $ 1,923,436 $ 4,437 $ 238 $ 79 $ 227,087
Accumulated net realized gain/(loss)
on security transactions, futures contracts
forward foreign currency contracts, and
foreign currency transactions ............ 5,310,577 16,506,150 13,821,852 611,868 (90,910) 67,718
Net unrealized appreciation/(depreciation) on
securities, forward foreign currency
contracts, foreign currency and other
assets and liabilities ................... 2,300,148 2,230,388 2,082,832 (250,779) (111,616) 122,417
Paid-in capital ............................. 67,500,428 219,244,678 229,256,086 33,555,769 7,865,585 14,092,064
----------- ------------ ------------ ----------- ---------- -----------
Total Net Assets ........................ $75,448,336 $239,904,652 $245,165,207 $33,917,096 $7,663,138 $14,509,286
=========== ============ ============ =========== ========== ===========
NET ASSET VALUE, offering and
redemption price per share of beneficial
interest outstanding ..................... $ 19.93 $ 17.23 $ 14.95 $ 11.81 $ 9.88 $ 10.59
=========== ============ ============ =========== ========== ===========
Number of Fund/Portfolio shares
outstanding .............................. 3,786,394 13,920,558 16,403,222 2,871,420 775,794 1,369,822
=========== ============ ============ =========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
GROWTH & GROWTH FUND MID CAP SMALL CAP INTERNATIONAL
INCOME OF THE GROWTH STOCK STOCK GROWTH
FUND NORTHWEST FUND FUND FUND FUND
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income/
(accumulated net investment loss) ........ $ 395,240 $ 98,367 $ (1,498,602) $ 22,829 $ (260,226) $ (535,071)
Accumulated net realized gain/(loss)
on security transactions, futures contracts
forward foreign currency contracts, and
foreign currency transactions ............ 3,397,587 758,035 34,291,603 15,366 9,865,785 5,457,917
Net unrealized appreciation/(depreciation) on
securities, forward foreign currency
contracts, foreign currency and other
assets and liabilities ................... 38,550,496 7,245,367 89,684,859 (147,140) 18,980,180 15,554,269
Paid-in capital ............................. 238,223,100 46,565,363 254,277,583 37,594,676 62,912,812 51,737,905
------------ ----------- ------------ ----------- ----------- -----------
Total Net Assets ........................ $280,566,423 $54,667,132 $376,755,443 $37,485,731 $91,498,551 $72,215,020
============ =========== ============ =========== =========== ===========
NET ASSET VALUE, offering and
redemption price per share of beneficial
interest outstanding ..................... $ 18.26 $ 17.24 $ 28.69 $ 9.98 $ 20.57 $ 16.45
============ =========== ============ =========== =========== ===========
Number of Fund/Portfolio shares
outstanding .............................. 15,364,792 3,171,744 13,132,744 3,757,414 4,447,665 4,389,131
============ =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
U.S.
GOVERNMENT SHORT TERM MONEY
INCOME SECURITIES INCOME MARKET
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income/
(accumulated net investment loss) ........ $ 102,509 $ 326,780 $ 102,534 $ 23,539
Accumulated net realized gain/(loss)
on security transactions, futures contracts
forward foreign currency contracts, and
foreign currency transactions ............ (2,564,308) (1,452,292) (719,815) (892)
Net unrealized appreciation/(depreciation) on
securities, forward foreign currency
contracts, foreign currency and other
assets and liabilities ................... (1,779,451) (881,481) (699,209) -
Paid-in capital ............................. 108,432,117 94,803,024 46,379,319 16,312,379
------------ ----------- ----------- -----------
Total Net Assets ........................ $104,190,867 $92,796,031 $45,062,829 $16,335,026
============ =========== =========== ===========
NET ASSET VALUE, offering and
redemption price per share of beneficial
interest outstanding ..................... $ 9.37 $ 9.62 $ 2.38 $ 1.00
============ =========== =========== ===========
Number of Fund/Portfolio shares
outstanding .............................. 11,123,081 9,643,014 18,902,037 16,328,655
============ =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
4-5
<PAGE>
STATEMENTS OF OPERATIONS
WM VARIABLE TRUST
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
STRATEGIC CONSERVATIVE FLEXIBLE
GROWTH GROWTH BALANCED INCOME INCOME BOND & Stock
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
----------- ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ 417,679 $ 2,197,288 $ 3,314,735 $ 771,129 $ 234,491 $ 89,640
Foreign withholding tax on dividend income .... - - - - - -
Interest ....................................... 8,016 17,675 15,716 3,818 781 209,272
Security lending income (Note 6) .............. - - - - - 74
----------- ------------ ------------ ----------- ---------- -----------
Total investment income ..................... 425,695 2,214,963 3,330,451 774,947 235,272 298,986
----------- ------------ ------------ ----------- ---------- -----------
EXPENSES:
Investment advisory fee ........................ 26,440 97,750 102,660 14,789 3,628 39,916
Administration fee ............................. 39,660 146,628 153,989 22,183 5,442 11,496
Trustees' fees and expenses .................... 964 4,272 4,730 788 228 372
Legal and audit fees ........................... 8,112 18,159 19,074 6,810 5,107 12,151
Custodian fees ................................. 1,817 901 757 679 714 1,856
Amortization of organization costs ............. 4,109 4,109 4,109 947 - -
Printing and postage fees ...................... 3,324 11,130 10,994 1,312 237 424
Other .......................................... 1,834 4,194 8,282 1,329 3,295 7,051
Fees waived and/or expenses reimbursed
by the investment advisor ................... - - - - (5,420) -
----------- ------------ ------------ ----------- ---------- -----------
Total expenses ............................. 86,260 287,143 304,595 48,837 13,231 73,266
Credits allowed by the custodian ............... (14) (2) (87) (41) (357) (329)
----------- ------------ ------------ ----------- ---------- -----------
Net expenses ............................... 86,246 287,141 304,508 48,796 12,874 72,937
----------- ------------ ------------ ----------- ---------- -----------
NETINVESTMENTINCOME/(LOSS) ..................... 339,449 1,927,822 3,025,943 726,151 222,398 226,049
----------- ------------ ------------ ----------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN/
(LOSS) ON INVESTMENTS:
Realized gain/(loss) from:
Security transactions ....................... (75,430) 717,091 2,666,316 39,550 (82,002) 93,071
Foward foreign currency contracts and
foreign currency transactions ............. - - - - - -
Capital gain distributions received ......... 5,466,506 15,860,110 11,290,107 588,334 - -
----------- ------------ ------------ ----------- ---------- -----------
Net realized gain/(loss) on investment
transactions .............................. 5,391,076 16,577,201 13,956,423 627,884 (82,002) 93,071
----------- ------------ ------------ ----------- ---------- -----------
Change in unrealized appreciation /
(depreciation) of:
Securities .................................. (4,683,249) (15,104,418) (12,520,131) (536,096) 65,380 22,003
Forward foreign currency contracts .......... - - - - - -
Foreign currency, futures contracts and
other assets and liabilities .............. - - - - - -
----------- ------------ ------------ ----------- ---------- -----------
Net change in unrealized appreciation/
(depreciation) on investment transactions.. (4,683,249) (15,104,418) (12,520,131) (536,096) 65,380 22,003
----------- ------------ ------------ ----------- ---------- -----------
Net realized and unrealized gain/(loss)
on investments .............................. 707,827 1,472,783 1,436,292 91,788 (16,622) 115,074
----------- ------------ ------------ ----------- ---------- -----------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ..................................$ 1,047,276 $ 3,400,605 $ 4,462,235 $ 817,939 $ 205,776 $ 341,123
=========== ============ ============ =========== ========== ===========
</TABLE>
---------------------------
<PAGE>
<TABLE>
GROWTH & GROWTH FUND MID CAP SMALL CAP INTERNATIONAL
INCOME OF THE GROWTH STOCK STOCK GROWTH
FUND NORTHWEST FUND FUND(a) FUND FUND
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ 1,228,919 $ 178,433 $ 452,687 $ 58,205 $ 116,672 $ 547,411
Foreign withholding tax on dividend income ... (4,620) - (2,652) - - (57,617)
Interest ....................................... 339,973 95,935 1,118,151 25,534 43,107 75,735
Security lending income (Note 6) .............. 828 7,786 38,053 - 16,118 4,431
------------ ----------- ------------ ----------- ----------- -----------
Total investment income ..................... 1,565,100 282,154 1,606,239 83,739 175,897 569,960
------------ ----------- ------------ ----------- ----------- -----------
EXPENSES:
Investment advisory fee ........................ 912,623 118,923 1,714,359 42,303 334,086 336,148
Administration fee ............................. 215,494 34,250 350,750 10,153 69,431 65,919
Trustees' fees and expenses .................... 6,434 519 10,989 444 1,551 2,580
Legal and audit fees ........................... 24,138 15,208 32,620 4,543 15,031 13,068
Custodian fees ................................. 5,749 11,602 40,694 1,869 6,496 45,488
Amortization of organization costs ............. - 1,993 - - - -
Printing and postage fees ...................... 8,400 2,690 11,001 1,110 3,273 903
Other .......................................... 6,828 248 10,163 488 6,666 7,979
Fees waived and/or expenses reimbursed
by the investment advisor ................... - - - - - -
------------ ----------- ------------ ----------- ----------- -----------
Total expenses ............................. 1,179,666 185,433 2,170,576 60,910 436,534 472,085
Credits allowed by the custodian ............... (1,823) (588) (7,813) - (411) -
------------ ----------- ------------ ----------- ----------- -----------
Net expenses ............................... 1,177,843 184,845 2,162,763 60,910 436,123 472,085
------------ ----------- ------------ ----------- ----------- -----------
NETINVESTMENTINCOME/(LOSS) ..................... 387,257 97,309 (556,524) 22,829 (260,226) 97,875
------------ ----------- ------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN/
(LOSS) ON INVESTMENTS:
Realized gain/(loss) from:
Security transactions ....................... 3,415,642 866,913 32,160,722 15,366 9,884,798 5,100,157
Foward foreign currency contracts and
foreign currency transactions ............. - - 2,855,947 - - (264,640)
Capital gain distributions received ......... - - - - - -
------------ ----------- ------------ ----------- ----------- -----------
Net realized gain/(loss) on investment
transactions .............................. 3,415,642 866,913 35,016,669 15,366 9,884,798 4,835,517
------------ ----------- ------------ ----------- ----------- -----------
Change in unrealized appreciation /
(depreciation) of:
Securities .................................. 4,752,958 3,826,452 (44,741,509) (147,140) (1,080,715) (8,096,466)
Forward foreign currency contracts .......... - - (908,170) - - 287,531
Foreign currency, futures contracts and
other assets and liabilities .............. - - (623) - - 4,044
------------ ----------- ------------ ----------- ----------- -----------
Net change in unrealized appreciation/
(depreciation) on investment transactions.. 4,752,958 3,826,452 (45,650,302) (147,140) (1,080,715) (7,804,891)
------------ ----------- ------------ ----------- ----------- -----------
Net realized and unrealized gain/(loss)
on investments .............................. 8,168,600 4,693,365 (10,633,633) (131,774) 8,804,083 (2,969,374)
------------ ----------- ------------ ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS .................................. $8,555,857 $ 4,790,674 $(11,190,157) $ (108,945) $ 8,543,857 $(2,871,499)
============ =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
U.S.
GOVERNMENT SHORT TERM MONEY
INCOME SECURITIES INCOME MARKET
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ - $ - $ - $ -
Foreign withholding tax on dividend income .... - - - -
Interest ...................................... 3,256,633 3,021,312 1,506,661 735,415
Security lending income (Note 6) .............. 3,889 - 608 -
------------ ----------- ----------- -----------
Total investment income .................... 3,260,522 3,021,312 1,507,269 735,415
------------ ----------- ----------- -----------
EXPENSES:
Investment advisory fee ....................... 214,712 209,298 117,511 54,315
Administration fee ............................ 77,296 75,347 42,304 21,726
Trustees' fees and expenses ................... 1,870 2,611 1,750 973
Legal and audit fees .......................... 17,194 16,538 14,684 12,264
Custodian fees ................................ 6,906 4,590 4,001 3,587
Amortization of organization costs ............ - - - -
Printing and postage fees ..................... 3,833 1,945 464 210
Other ......................................... 14,850 17,215 16,807 1,417
Fees waived and/or expenses reimbursed
by the investment advisor .................. - - - (4,532)
------------ ----------- ----------- -----------
Total expenses ............................ 336,661 327,544 197,521 89,960
Credits allowed by the custodian .............. (4,963) (873) (319) -
------------ ----------- ----------- -----------
Net expenses .............................. 331,698 326,671 197,202 89,960
------------ ----------- ----------- -----------
NETINVESTMENTINCOME/(LOSS) .................... 2,928,824 2,694,641 1,310,067 645,455
------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN/
(LOSS) ON INVESTMENTS:
Realized gain/(loss) from:
Security transactions ...................... (76,724) 11,691 (60,060) -
Foward foreign currency contracts and
foreign currency transactions ............ - - - -
Capital gain distributions received ........ - - - -
------------ ----------- ----------- -----------
Net realized gain/(loss) on investment
transactions ............................. (76,724) 11,691 (60,060) -
------------ ----------- ----------- -----------
Change in unrealized appreciation /
(depreciation) of:
Securities ................................. 227,811 46,500 (64,176)
Forward foreign currency contracts ......... - - - -
Foreign currency, futures contracts and
other assets and liabilities ............. - - - -
------------ ----------- ----------- -----------
Net change in unrealized appreciation/
(depreciation) on investment transactions. 227,811 46,500 (64,176) -
------------ ----------- ----------- -----------
Net realized and unrealized gain/(loss)
on investments ............................. 151,087 58,191 (124,236) -
------------ ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ................................. $ 3,079,911 $ 2,752,832 $ 1,185,831 $ 645,455
============ =========== =========== ===========
------------------------
(a) The Mid Cap Stock Fund commenced operations on May 1, 2000.
</TABLE>
See Notes to Financial Statements.
6-7
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
WM VARIABLE TRUST
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
STRATEGIC CONSERVATIVE FLEXIBLE
GROWTH GROWTH BALANCED INCOME INCOME BOND & STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
----------- ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .................. $ 339,449 $ 1,927,822 $ 3,025,943 $ 726,151 $ 222,398 $ 226,049
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the period (75,430) 717,091 2,666,316 39,550 (82,002) 93,071
Capital gain distributions received ........... 5,466,506 15,860,110 11,290,107 588,334 - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the period .......................... (4,683,249) (15,104,418) (12,520,131) (536,096) 65,380 22,003
----------- ------------ ------------ ----------- ---------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 1,047,276 3,400,605 4,462,235 817,939 205,776 341,123
Distributions to shareholders from:
Net investment income ...................... (415,552) (959,935) (3,602,726) (793,236) (222,319) (228,505)
Net realized gains on investments .......... (578,804) (2,111,858) (1,258,400) (155,105) (764) -
Net increase/(decrease) in net assets
from Fund share transactions ............... 39,895,670 83,785,595 75,036,795 8,201,936 474,758 2,599,987
----------- ------------ ------------ ----------- ---------- -----------
Net increase/(decrease) in net assets ......... 39,948,590 84,114,407 74,637,904 8,071,534 457,451 2,712,605
NET ASSETS:
Beginning of period ........................... 35,499,746 155,790,245 170,527,303 25,845,562 7,205,687 11,796,681
----------- ------------ ------------ ----------- ---------- -----------
End of period ................................. $75,448,336 $239,904,652 $245,165,207 $33,917,096 $7,663,138 $14,509,286
=========== ============ ============ =========== ========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of period .......................... $ 337,183 $ 1,923,436 $ 4,437 $ 238 $ 79 $ 227,087
=========== ============ ============ =========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
GROWTH & GROWTH FUND MID CAP SMALL CAP INTERNATIONAL
INCOME OF THE GROWTH STOCK STOCK GROWTH
FUND NORTHWEST FUND FUND FUND FUND
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .................. $ 387,257 $ 97,309 $ (556,524) $ 22,829 $ (260,226) $ 97,875
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the period 3,415,642 866,913 35,016,669 15,366 9,884,798 4,835,517
Capital gain distributions received ........... - - - - - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the period .......................... 4,752,958 3,826,452 (45,650,302) (147,140) (1,080,715) (7,804,891)
------------ ----------- ------------ ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 8,555,857 4,790,674 (11,190,157) (108,945) 8,543,857 (2,871,499)
Distributions to shareholders from:
Net investment income ...................... (511,265) (299,451) (230,774) - - (1,833,211)
Net realized gains on investments .......... (10,882,635) - (89,169,016) - (5,501,990) (625,248)
Net increase/(decrease) in net assets
from Fund share transactions ............... 77,444,040 29,746,714 107,393,436 37,594,676 34,841,060 (9,087,508)
------------ ----------- ------------ ----------- ----------- -----------
Net increase/(decrease) in net assets ......... 74,605,997 34,237,937 6,803,489 37,485,731 37,882,927 (14,417,466)
NET ASSETS:
Beginning of period ........................... 205,960,426 20,429,195 369,951,954 - 53,615,624 86,632,486
------------ ----------- ------------ ----------- ----------- -----------
End of period ................................. $280,566,423 $54,667,132 $376,755,443 $37,485,731 $91,498,551 $72,215,020
============ =========== ============ =========== =========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of period .......................... $ 395,240 $ 98,367 $ (1,498,602) $ 22,829 $ (260,226) $ (535,071)
============ =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
U.S.
GOVERNMENT SHORT TERM MONEY
INCOME SECURITIES INCOME MARKET
FUND FUND FUND FUND
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net investment income/(loss) .................. $ 2,928,824 $ 2,694,641 $ 1,310,067 $ 645,455
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the period (76,724) 11,691 (60,060) -
Capital gain distributions received ........... - - - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the period .......................... 227,811 46,500 (64,176) -
------------ ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 3,079,911 2,752,832 1,185,831 645,455
Distributions to shareholders from:
Net investment income ...................... (2,919,921) (2,724,527) (1,308,339) (645,455)
Net realized gains on investments .......... - - - -
Net increase/(decrease) in net assets
from Fund share transactions ............... 48,475,077 12,753,106 (7,959,045) (14,769,566)
------------ ----------- ----------- -----------
Net increase/(decrease) in net assets ......... 48,635,067 12,781,411 (8,081,553) (14,769,566)
NET ASSETS:
Beginning of period ........................... 55,555,800 80,014,620 53,144,382 31,104,592
------------ ----------- ----------- -----------
End of period ................................. $104,190,867 $92,796,031 $45,062,829 $16,335,026
============ =========== =========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of period .......................... $ 102,509 $ 326,780 $ 102,534 $ 23,539
============ =========== =========== ===========
-------------------------
(a) The Mid Cap Stock Fund commenced operations on May 1, 2000.
</TABLE>
See Notes to Financial Statements.
8-9
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
WM VARIABLE TRUST
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
STRATEGIC CONSERVATIVE FLEXIBLE
GROWTH GROWTH BALANCED INCOME INCOME BOND & Stock
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO FUND
----------- ------------ ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .................. $ 49,513 $ 333,820 $ 1,298,399 $ 542,556 $ 252,811 $ 230,614
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the year ...... (27,187) 1,169,719 260,950 20,610 (7,082) (25,419)
Capital gain distributions received ........... 920,547 1,548,689 1,453,326 190,885 - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the year ............................ 6,520,438 16,857,424 14,157,295 263,704 (168,546) 35,866
----------- ------------ ------------ ----------- ---------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 7,463,311 19,909,652 17,169,970 1,017,755 77,183 241,061
Distributions to shareholders from:
Net investment income ...................... (124,989) (284,451) (1,625,500) (559,028) (271,227) (18,789)
Net realized gains on investments .......... (84,670) (288,121) (245,866) (8,409) (1,867) -
Distributions in excess of net realized
gains on investments ...................... - - - - (178) -
Net increase/(decrease) in net assets from
Fund share transactions .................... 23,296,301 126,380,641 144,067,136 24,287,883 6,572,632 8,988,459
----------- ------------ ------------ ----------- ---------- -----------
Net increase/(decrease) in net assets ......... 30,549,953 145,717,721 159,365,740 24,738,201 6,376,543 9,210,731
NET ASSETS:
Beginning of year ............................. 4,949,793 10,072,524 11,161,563 1,107,361 829,144 2,585,950
----------- ------------ ------------ ----------- ---------- -----------
End of year ................................... $35,499,746 $155,790,245 $170,527,303 $25,845,562 $7,205,687 $11,796,681
=========== ============ ============ =========== ========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of year ............................ $ 413,286 $ 955,549 $ 581,220 $ 67,323 $ - $ 229,543
=========== ============ ============ =========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
GROWTH & GROWTH FUND SMALL CAP INTERNATIONAL
INCOME OF THE GROWTH STOCK GROWTH INCOME
FUND NORTHWEST FUND FUND FUND FUND
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income/(loss) .................. $ 528,565 $ (1,480) $ (1,816,874) $ (280,422) $ 538,936 $ 3,637,076
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the year ...... 10,887,284 201,317 89,776,539 6,206,614 7,014,385 (300,208)
Capital gain distributions received ........... - - - - - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the year ............................ 14,845,356 3,166,715 85,078,552 15,296,154 20,981,849 (4,338,814)
------------ ----------- ------------ ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 26,261,205 3,366,552 173,038,217 21,222,346 28,535,170 (1,001,946)
Distributions to shareholders from:
Net investment income ...................... (305,700) (259) - - (42,338) (3,615,253)
Net realized gains on investments .......... (11,096,092) (70,780) (27,262,135) (7,665,390) - -
Distributions in excess of net realized
gains on investments ...................... - - - - - -
Net increase/(decrease) in net assets from
Fund share transactions .................... 65,806,451 14,820,322 61,208,584 (4,321,174) (2,220,413) 10,519,241
------------ ----------- ------------ ----------- ----------- -----------
Net increase/(decrease) in net assets ......... 80,665,864 18,115,835 206,984,666 9,235,782 26,272,419 5,902,042
NET ASSETS:
Beginning of year ............................. 125,294,562 2,313,360 162,967,288 44,379,842 60,360,067 49,653,758
------------ ----------- ------------ ----------- ----------- -----------
End of year ................................... $205,960,426 $20,429,195 $369,951,954 $53,615,624 $86,632,486 $55,555,800
============ =========== ============ =========== =========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of year ............................ $ 519,248 $ 1,058 $ (711,304) $ - $ 1,825,513 $ 93,606
============ =========== ============ =========== =========== ===========
</TABLE>
<TABLE>
U.S.
GOVERNMENT SHORT TERM MONEY
SECURITIES INCOME MARKET
FUND FUND FUND
------------ ----------- -----------
<S> <C> <C> <C>
Net investment income/(loss) .................. $ 3,799,761 $ 2,286,367 $ 1,263,243
Net realized gain/(loss) on security
transactions, forward foreign currency
contracts, foreign currency transactions
and futures contracts during the year ...... 23,015 (140,607) (467)
Capital gain distributions received ........... - - -
Net unrealized appreciation/(depreciation)
on securities, forward foreign currency
contracts, foreign currency, futures
contracts and other assets and liabilities
during the year ............................ (3,397,768) (858,305) -
------------ ----------- -----------
Net increase/(decrease) in net assets
resulting from operations .................. 425,008 1,287,455 1,262,776
Distributions to shareholders from:
Net investment income ...................... (3,755,167) (2,187,980) (1,263,243)
Net realized gains on investments .......... - - -
Distributions in excess of net realized
gains on investments ...................... - - -
Net increase/(decrease) in net assets from
Fund share transactions .................... 41,430,385 16,645,610 (756,992)
------------ ----------- -----------
Net increase/(decrease) in net assets ......... 38,100,226 15,745,085 (757,459)
NET ASSETS:
Beginning of year ............................. 41,914,394 37,399,297 31,862,051
------------ ----------- -----------
End of year ................................... $ 80,014,620 $53,144,382 $31,104,592
============ =========== ===========
Undistributed net investment income/
(accumulated net investment loss)
at end of year ............................ $ 356,666 $ 100,806 $ 23,539
============ =========== ===========
</TABLE>
See Notes to Financial Statements.
10-11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
WM VARIABLE TRUST
<TABLE>
STRATEGIC GROWTH PORTFOLIO CONSERVATIVE GROWTH PORTFOLIO
---------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED) YEAR ENDED 12/31/99
---------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
AMOUNT
Sold ................................$ 40,587,936 $ 23,328,566 $ 91,177,896 $ 129,402,449
Issued as reinvestment of dividends.. 994,356 209,658 3,071,793 572,571
Redeemed ............................ (1,686,622) (241,923) (10,464,094) (3,594,379)
---------------- ------------------- ---------------- -------------------
Net increase ........................$ 39,895,670 $ 23,296,301 $ 83,785,595 $ 126,380,641
================ =================== ================ ===================
SHARES
Sold ................................ 2,007,396 1,447,111 5,233,747 8,487,813
Issued as reinvestment of dividends.. 49,892 13,329 178,282 40,294
Redeemed ............................ (82,705) (16,413) (600,026) (222,707)
---------------- ------------------- ---------------- -------------------
Net increase ........................ 1,974,583 1,444,027 4,812,003 8,305,400
================ =================== ================ ===================
</TABLE>
<TABLE>
BALANCED PORTFOLIO FLEXIBLE INCOME PORTFOLIO
---------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED) YEAR ENDED 12/31/99
---------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
AMOUNT
Sold ................................$ 81,911,776 $ 143,889,800 $ 9,116,824 $ 24,304,488
Issued as reinvestment of dividends.. 4,861,126 1,871,365 948,341 567,437
Redeemed ............................ (11,736,107) (1,694,029) (1,863,229) (584,042)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) .............$ 75,036,795 $ 144,067,136 $ 8,201,936 $ 24,287,883
================ =================== ================ ===================
SHARES
Sold ................................ 5,438,670 10,496,408 767,976 2,083,483
Issued as reinvestment of dividends.. 320,955 137,471 79,796 48,630
Redeemed ............................ (784,837) (120,120) (155,778) (49,956)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) ............. 4,974,788 10,513,759 691,994 2,082,157
================ =================== ================ ===================
</TABLE>
<TABLE>
INCOME PORTFOLIO
----------------------------------------
SIX MONTHS ENDED
06/30/00
(UNAUDITED) YEAR ENDED 12/31/99
----------------------------------------
<S> <C> <C>
AMOUNT
Sold ................................$ 2,016,656 $ 6,855,590
Issued as reinvestment of dividends.. 223,084 273,272
Redeemed ............................ (1,764,982) (556,230)
---------------- -------------------
Net increase/(decrease) .............$ 474,758 $ 6,572,632
================ ===================
SHARES
Sold ................................ 203,222 675,445
Issued as reinvestment of dividends.. 22,546 27,313
Redeemed ............................ (177,609) (54,730)
---------------- -------------------
Net increase/(decrease) ............. 48,159 648,028
================ ===================
</TABLE>
<PAGE>
<TABLE>
BOND & STOCK FUND GROWTH & INCOME FUND
---------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED) YEAR ENDED 12/31/99
---------------- ------------------- ---------------- -------------------
<S> <S> <C> <C> <C>
AMOUNT
Sold ................................$ 3,681,565 $ 10,566,110 $ 82,030,046 $ 123,760,622
Issued as reinvestment of dividends.. 228,505 18,789 11,393,899 11,401,792
Redeemed ............................ (1,310,083) (1,596,440) (15,979,905) (69,355,963)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) .............$ 2,599,987 $ 8,988,459 $ 77,444,040 $ 65,806,451
================ =================== ================ ===================
SHARES
Sold ................................ 350,499 1,020,144 4,503,173 6,867,884
Issued as reinvestment of dividends.. 21,597 1,791 631,941 650,787
Redeemed ............................ (125,512) (150,602) (856,956) (3,815,714)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) ............. 246,584 871,333 4,278,158 3,702,957
================ =================== ================ ===================
</TABLE>
<TABLE>
GROWTH FUND OF THE NORTHWEST FUND(a)
----------------------------------------
SIX MONTHS ENDED
06/30/00
(UNAUDITED) YEAR ENDED 12/31/99
---------------- -------------------
<S> <C> <C>
AMOUNT
Sold ................................$ 29,737,131 $ 15,542,865
Issued as reinvestment of dividends.. 299,451 71,039
Redeemed ............................ (289,868) (793,582)
---------------- -------------------
Net increase/(decrease) .............$ 29,746,714 $ 14,820,322
================ ===================
SHARES
Sold ................................ 1,824,032 1,195,360
Issued as reinvestment of dividends.. 17,793 5,837
Redeemed ............................ (19,008) (63,683)
---------------- -------------------
Net increase/(decrease) ............. 1,822,817 1,137,514
================ ===================
</TABLE>
<TABLE>
GROWTH FUND MID CAP STOCK FUND(b)
---------------------------------------- ----------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED)
---------------- ------------------- ----------------
<S> <C> <C> <C>
AMOUNT
Sold ................................$ 71,195,113 $ 120,364,521 $ 37,594,676
Issued as reinvestment of dividends.. 89,399,790 27,262,135 -
Redeemed ............................ (53,201,467) (86,418,072) -
---------------- ------------------- ----------------
Net increase/(decrease) .............$ 107,393,436 $ 61,208,584 $ 37,594,676
================ =================== ================
SHARES
Sold ................................ 1,788,733 4,039,838 3,757,414
Issued as reinvestment of dividends.. 3,079,566 1,111,833 -
Redeemed ............................ (1,335,496) (2,841,490) -
---------------- ------------------- ----------------
Net increase/(decrease) ............. 3,532,803 2,310,181 3,757,414
================ =================== ================
</TABLE>
<TABLE>
SMALL CAP STOCK FUND(c)
----------------------------------------
SIX MONTHS ENDED
06/30/00
(UNAUDITED) YEAR ENDED 12/31/99
---------------- -------------------
<S> <C> <C>
AMOUNT
Sold ................................$ 37,832,211 $ 3,656,523
Issued as reinvestment of dividends.. 5,501,990 7,665,390
Redeemed ............................ (8,493,141) (15,643,087)
---------------- -------------------
Net increase/(decrease) .............$ 34,841,060 $ (4,321,174)
================ ===================
SHARES
Sold ................................ 1,762,916 259,465
Issued as reinvestment of dividends.. 274,825 676,557
Redeemed ............................ (393,153) (1,174,376)
---------------- -------------------
Net increase/(decrease) ............. 1,644,588 (238,354)
================ ===================
</TABLE>
<TABLE>
INTERNATIONAL GROWTH FUND
----------------------------------------
SIX MONTHS ENDED
06/30/00
(UNAUDITED) YEAR ENDED 12/31/99
---------------- -------------------
<S> <C> <C>
AMOUNT
Sold ................................ $ 9,124,890 $ 38,311,889
Issued as reinvestment of dividends.. 2,458,459 42,338
Redeemed ............................ (20,670,857) (40,574,640)
---------------- -------------------
Net increase/(decrease) ............. $ (9,087,508) $ (2,220,413)
================ ===================
SHARES
Sold ................................ 537,024 2,654,883
Issued as reinvestment of dividends.. 150,181 3,350
Redeemed ............................ (1,212,802) (2,941,642)
---------------- -------------------
Net increase/(decrease) ............. (525,597) (283,409)
================ ===================
</TABLE>
--------------------------
(a) Formerly Northwest Fund.
(b) The Mid Cap Stock Fund commenced operations on May 1, 2000.
(c) Formerly Emerging Growth Fund.
See Notes to Financial Statements.
12-13
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY (CONTINUED)
WM VARIABLE TRUST
<TABLE>
INCOME FUND U.S. GOVERNMENT SECURITIES FUND
---------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED) YEAR ENDED 12/31/99
---------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
AMOUNT
Sold ................................$ 53,116,328 $ 24,462,002 $ 21,514,098 $ 67,362,181
Issued as reinvestment of dividends.. 2,919,922 3,615,253 2,724,526 3,755,166
Redeemed ............................ (7,561,173) (17,558,014) (11,485,518) (29,686,962)
---------------- ------------------- ---------------- -------------------
Net increase ........................$ 48,475,077 $ 10,519,241 $ 12,753,106 $ 41,430,385
================ =================== ================ ===================
SHARES
Sold ................................ 5,672,589 2,533,035 2,236,618 6,804,802
Issued as reinvestment of dividends.. 313,471 377,063 284,694 385,283
Redeemed ............................ (807,208) (1,814,490) (1,196,014) (3,019,225)
---------------- ------------------- ---------------- -------------------
Net increase ........................ 5,178,852 1,095,608 1,325,298 4,170,860
================ =================== ================ ===================
</TABLE>
<TABLE>
SHORT TERM INCOME FUND(a) MONEY MARKET FUND
---------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 06/30/00
(UNAUDITED) YEAR ENDED 12/31/99 (UNAUDITED) YEAR ENDED 12/31/99
---------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
AMOUNT
Sold ................................$ 2,029,030 $ 36,013,392 $ 26,749,805 $ 30,478,529
Issued as reinvestment of dividends.. 1,308,338 2,187,980 641,370 1,257,887
Redeemed ............................ (11,296,413) (21,555,762) (42,160,741) (32,493,408)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) .............$ (7,959,045) $ 16,645,610 $ (14,769,566) $ (756,992)
================ =================== ================ ===================
SHARES
Sold ................................ 846,549 14,893,459 26,749,805 30,478,529
Issued as reinvestment of dividends.. 549,722 911,275 641,370 1,257,887
Redeemed ............................ (4,718,282) (8,895,716) (42,160,741) (32,493,408)
---------------- ------------------- ---------------- -------------------
Net increase/(decrease) ............. (3,322,011) 6,909,018 (14,769,566) (756,992)
================ =================== ================ ===================
</TABLE>
-------------------------
(a) Formerly Short Term High Quality Bond Fund.
See Notes to Financial Statements.
14
<PAGE>
FINANCIAL HIGHLIGHTS
STRATEGIC GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97*
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................... $ 19.59 $ 13.46 $ 10.70 $ 10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................................................. 0.13++ 0.05++ 0.17++ 0.10
Net realized and unrealized gain on investments .................................... 0.48 6.35 2.63 0.60#
------- ------- ------- -------
Total from investment operations ................................................... 0.61 6.40 2.80 0.70
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................... (0.11) (0.16) (0.03) -
Distributions from net realized gains .............................................. (0.16) (0.11) (0.01) -
------- ------- ------- -------
Total distributions ................................................................ (0.27) (0.27) (0.04) -
------- ------- ------- -------
Net asset value, end of period ..................................................... $ 19.93 $ 19.59 $ 13.46 $10.70
------- ------- ------- -------
TOTAL RETURN+ ...................................................................... 3.10% 47.95% 26.19% 7.00%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............................................... $75,448 $35,500 $ 4,949 $ 591
Ratio of operating expenses to average net assets (a) (b) .......................... 0.33%** 0.35% 0.35% 0.35%**
Ratio of net investment income to average net assets ............................... 1.28%** 0.35% 1.42% 0.51%**
Portfolio turnover rate ............................................................ 16% 7% 39% 11%
Ratio of operating expenses to average net assets without
fee waivers, expenses reimbursed and fees
reduced by credits allowed by the custodian (b) .................................. 0.33%** 0.43% 0.80% 15.54%**
<FN>
----------------------------
* The Portfolio commenced operations on June 3, 1997.
** Annualized.
+ 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 expenses reimbursed by the investment advisor and/or administrator or if fees had not been
reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Portfolio shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
(b) The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</FN>
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS
CONSERVATIVE GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97*
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................... $ 17.10 $ 12.54 $ 10.49 $ 10.00
-------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................................................. 0.17++ 0.12++ 0.20++ 0.07
Net realized and unrealized gain on investments .................................... 0.18 4.76 1.89 0.42#
-------- ------- ------- -------
Total from investment operations ................................................... 0.35 4.88 2.09 0.49
-------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................... (0.07) (0.16) (0.03) -
Distributions from net realized gains .............................................. (0.15) (0.16) (0.01) -
-------- ------- ------- -------
Total distributions ................................................................ (0.22) (0.32) (0.04) -
-------- ------- ------- -------
Net asset value, end of period ..................................................... $ 17.23 $ 17.10 $ 12.54 $ 10.49
======== ======= ======= =======
TOTAL RETURN+ ...................................................................... 2.07% 39.36% 19.91% 4.90%
======== ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............................................... $239,905 $155,790 $10,072 $ 1,374
Ratio of operating expenses to average net assets (a) (b) .......................... 0.29%** 0.35% 0.35% 0.35%**
Ratio of net investment income to average net assets ............................... 1.97%** 0.85% 1.79% 1.24%**
Portfolio turnover rate ............................................................ 15% 12% 35% 42%
Ratio of operating expenses to average net assets without fee waivers,
expenses reimbursed and fees reduced by credits allowed
by the custodian (b) ............................................................. 0.29%** 0.36% 0.57% 6.67%**
<FN>
----------------------------------------
* The Portfolio commenced operations on June 3, 1997.
** Annualized.
+ 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 reimbursed by the investment advisor and/or administrator or if fees had not been
reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Portfolio shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
(b) The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</FN>
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
FINANCIAL HIGHLIGHTS
BALANCED PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97*
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................... $ 14.92 $ 12.20 $ 10.47 $ 10.00
-------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................................................. 0.22++ 0.34++ 0.31++ 0.13
Net realized and unrealized gain on investments .................................... 0.13 2.95 1.49 0.34#
-------- -------- ------- -------
Total from investment operations ................................................... 0.35 3.29 1.80 0.47
-------- -------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................... (0.24) (0.48) (0.07) -
Distributions from net realized gains .............................................. (0.08) (0.09) - -
-------- -------- ------- -------
Total distributions ................................................................ (0.32) (0.57) (0.07) -
-------- -------- ------- -------
Net asset value, end of period ..................................................... $ 14.95 $ 14.92 $ 12.20 $ 10.47
======== ======== ======= =======
TOTAL RETURN+ ...................................................................... 2.33% 27.71% 17.18% 4.70%
======== ======== ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............................................... $245,165 $170,527 $11,161 $ 2,354
Ratio of operating expenses to average net assets (a) (b) .......................... 0.30%** 0.35% 0.35% 0.35%**
Ratio of net investment income to average net assets ............................... 2.95%** 2.70% 2.79% 2.34%**
Portfolio turnover rate ............................................................ 18% 13% 33% 15%
Ratio of operating expenses to average net assets without fee waivers,
expenses reimbursed and fees reduced by credits
allowed by the custodian (b) ..................................................... 0.30%** 0.35% 0.54% 3.97%**
<FN>
----------------------------------------
* The Portfolio commenced operations on June 3, 1997.
** Annualized.
+ Total return represents aggregate total return for the periods less than one year. The total return would have been
lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor and/or administrator
or if fees had not been reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Portfolio shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
(b) The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</FN>
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS
FLEXIBLE INCOME PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97*
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................... $ 11.86 $ 11.38 $ 10.23 $ 10.00
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................................................. 0.29++ 0.58++ 0.48++ 0.04
Net realized and unrealized gain on investments .................................... 0.02 0.41 0.69 0.19#
------- ------- ------- -------
Total from investment operations .................................................. 0.32 0.99 1.17 0.23
------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................... (0.30) (0.50) (0.02) -
Distributions from net realized gains .............................................. (0.06) (0.01) - -
------- ------- ------- -------
Total distributions ............................................................... (0.36) (0.51) (0.02) -
------- ------- ------- -------
Net asset value, end of period .................................................... $ 11.81 $ 11.86 $ 11.38 $ 10.23
======= ======= ======= =======
TOTAL RETURN+ ...................................................................... 2.59% 8.58% 11.75% 2.30%
======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............................................... $33,917 $25,846 $ 1,107 $ 100
Ratio of operating expenses to average net assets (a) (b) .......................... 0.33%** 0.35% 0.35% 0.34%**
Ratio of net investment income to average net assets ............................... 4.91%** 5.09% 4.90% 7.04%**
Portfolio turnover rate ............................................................ 16% 4% 78% 5%
Ratio of operating expenses to average net assets without fee waivers,
expenses reimbursed and fees reduced by credits allowed
by the custodian (b) ............................................................. 0.33%** 0.41% 1.51% 116.19%**
<FN>
----------------------------------------
* The Portfolio commenced operations on September 9, 1997.
** Annualized.
+ 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 reimbursed by the investment advisor and/or administrator or if fees had not been
reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Portfolio shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
(b) The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</FN>
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
FINANCIAL HIGHLIGHTS
INCOME PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR PERIOD
06/30/00 ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97*
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................... $ 9.90 $ 10.42 $ 10.00 $ 10.00
------- ------- ------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................................................. 0.30++ 0.71++ 0.56++ -
Net realized and unrealized loss on investments .................................... (0.02) (0.52) (0.14) -
------- ------- ------- --------
Total from investment operations ................................................... 0.28 0.19 0.42 -
------- ------- ------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................... (0.30) (0.70) - -
Distributions from net realized gains .............................................. (0.00)## (0.01) - -
Distributions in excess of net realized gains ...................................... - (0.00)## - -
------- ------- ------- --------
Total distributions ................................................................ (0.30) (0.71) - -
------- ------- ------- --------
Net asset value, end of period ..................................................... $ 9.88 $ 9.90 $ 10.42 $ 10.00#
======= ======= ======= ========
TOTAL RETURN+ ...................................................................... 2.82% 1.88% 4.23% 0.00%
======= ======= ======= ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............................................... $ 7,663 $ 7,026 $ 829 $ 0
Ratio of operating expenses to average net assets (a) (b) .......................... 0.35%** 0.35% 0.35%** 0.35%**
Ratio of net investment income to average net assets ............................... 6.13%** 7.07% 7.39%** 0.00%**
Portfolio turnover rate ............................................................ 25% 17% 61% 99%
Ratio of operating expenses to average net assets without fee waivers,
expenses reimbursed and fees reduced by credits
allowed by the custodian (b) ..................................................... 0.51%** 0.59% 5.37%** 7,567.04%**
<FN>
---------------------------------------
* The Income Portfolio commenced operations on October 22, 1997, ceased operations on November 4, 1997, and
re-commenced operations on April 23, 1998.
** Annualized.
+ 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 reimbursed by the investment advisor and/or administrator or if fees had not been
reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# Represents offering share price.
## Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
(b) The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</FN>
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
FINANCIAL HIGHLIGHTS
BOND & STOCK FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR PERIOD
06/30/00 ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98*
---------- -------- ---------
<S> <C> <C> <C>
Net asset value, beginning of period ........................................................... $ 10.50 $ 10.27 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................................... 0.13 0.33++ 0.16++
Net realized and unrealized gain/(loss) on investments ........................................ 0.13 (0.07)# 0.14
------- ------- -------
Total from investment operations .............................................................. 0.26 0.26 0.30
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................................... (0.17) (0.03) (0.03)
------- ------- -------
Total distributions ........................................................................... (0.17) (0.03) (0.03)
------- ------- -------
Net asset value, end of period ................................................................ $ 10.59 $ 10.50 $10.27
======= ======= =======
TOTAL RETURN+ .................................................................................. 2.48% 2.49% 3.02%
======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......................................................... $14,509 $11,797 $ 2,586
Ratio of operating expenses to average net assets (a) ......................................... 1.14%** 1.17% 1.50%**
Ratio of net investment income to average net assets .......................................... 3.54%** 3.22% 2.26%**
Portfolio turnover rate ....................................................................... 18% 25% 28%
Ratio of operating expenses to average net assets without fee waivers
and fees reduced by credits allowed by the custodian ....................................... 1.15%** 1.19% 2.49%**
<FN>
----------------------------------------
* The Fund commenced operations on April 28, 1998.
** Annualized.
+ 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 by the investment
advisor or if fees had not been reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Portfolio shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
FINANCIAL HIGHLIGHTS
GROWTH & INCOME FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 18.58 $ 16.97 $ 16.92 $ 14.29 $ 12.83 $ 9.83
-------- -------- -------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.01 0.06++ 0.06 0.06 0.12++ 0.12
Net realized and unrealized gain on investments .............. 0.46 2.93 2.97 3.90 2.54 3.05
-------- -------- -------- -------- ------- -------
Total from investment operations ............................. 0.47 2.99 3.03 3.96 2.66 3.17
-------- -------- -------- -------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.04) (0.04) (0.09) (0.10) (0.12) (0.07)
Distributions from net realized gains ........................ (0.75) (1.34) (2.89) (1.23) (1.08) (0.10)
-------- -------- -------- -------- ------- -------
Total distributions .......................................... (0.79) (1.38) (2.98) (1.33) (1.20) (0.17)
-------- -------- -------- -------- ------- -------
Net asset value, end of period ............................... $ 18.26 $ 18.58 $ 16.97 $ 16.92 $ 14.29 $ 12.83
======== ======== ======== ======== ======= =======
TOTAL RETURN+ ................................................ 2.53% 18.11% 18.98% 28.50% 21.81% 32.41%
======== ======== ======== ======== ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......................... $280,566 $205,960 $125,295 $101,794 $62,445 $46,362
Ratio of operating expenses to average net assets (a) ........ 0.98%* 1.05% 1.06% 1.08% 1.13% 1.06%
Ratio of net investment income to average net assets ......... 0.32%* 0.34% 0.37% 0.55% 0.93% 1.31%
Portfolio turnover rate ...................................... 13% 38% 78% 109% 83% 70%
Ratio of operating expenses to average net assets without
fee waivers, and/or fees reduced by credits allowed by
the custodian .............................................. 0.99%* 1.05% 1.06% 1.08% 1.13% 1.16%
<FN>
----------------------------------------
* Annualized.
+ 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 by the investment
advisor or if fees had not been reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
FINANCIAL HIGHLIGHTS
GROWTH FUND OF THE NORTHWEST
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR PERIOD
06/30/00 ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98*
---------- -------- ---------
<S> <C> <C> <C>
Net asset value, beginning of period ............................................................ $ 15.14 $ 10.94 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................................................................... 0.13 (0.00)# 0.00#
Net realized and unrealized gain on investments ................................................ 2.07 4.37 0.94
------- ------- -------
Total from investment operations ............................................................... 2.20 4.37 0.94
------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ........................................................... (0.10) (0.00)# -
Distributions from net realized gains .......................................................... - (0.17) -
------- ------- -------
Total distributions ............................................................................ (0.10) (0.17) -
------- ------- -------
Net asset value, end of period ................................................................. $ 17.24 $ 15.14 $10.94
======= ======= =======
TOTAL RETURN+ ................................................................................... 14.46% 40.37% 9.40%
======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................................... $54,667 $20,429 $ 2,313
Ratio of operating expenses to average net assets (a) .......................................... 0.97%** 1.27% 1.50%**
Ratio of net investment income/(loss) to average net assets .................................... 0.51%** (0.02)% 0.03%**
Portfolio turnover rate ........................................................................ 15% 36% 28%
Ratio of operating expenses to average net assets without fee waivers
and fees reduced by credits allowed by the custodian ......................................... 0.97%** 1.28% 2.76%**
<FN>
----------------------------------------
* The Fund commenced operations on April 28, 1998.
** Annualized.
+ 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 by the investment
advisor or if fees had not been reduced by credits allowed by the custodian.
# Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
FINANCIAL HIGHLIGHTS
GROWTH FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 38.54 $ 22.36 $ 15.41 $ 16.01 $ 15.72 $ 11.48
-------- -------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) ................................. (0.02) (0.19) (0.09) 0.07 0.00++# 0.04++
Net realized and unrealized gain/(loss) on investments ....... (0.92) 19.89 8.81 1.60 2.42 4.24
-------- -------- -------- -------- -------- -------
Total from investment operations ............................. (0.94) 19.70 8.72 1.67 2.42 4.28
-------- -------- -------- -------- -------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.02) - (0.07) (0.02) - (0.04)
Distributions from net realized gains ........................ (8.89) (3.52) (1.70) (2.25) (2.13) (0.00)#
-------- -------- -------- -------- -------- -------
Total distributions .......................................... (8.91) (3.52) (1.77) (2.27) (2.13) (0.04)
-------- -------- -------- -------- -------- -------
Net asset value, end of period ............................... $ 28.69 $ 38.54 $ 22.36 $ 15.41 $ 16.01 $ 15.72
======== ======== ======== ======== ======== =======
TOTAL RETURN+ ................................................. (2.71)% 97.09% 59.04% 11.24% 16.15% 37.34%
======== ======== ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......................... $376,755 $369,952 $162,967 $121,766 $116,064 $99,699
Ratio of operating expenses to average net assets (a) ........ 1.11%* 1.15% 1.16% 1.18% 1.22% 1.24%
Ratio of net investment income/(loss) to average net assets .. (0.29)%* (0.78)% (0.55)% 0.07% 0.01% 0.29%
Portfolio turnover rate ...................................... 38% 129% 112% 158% 169% 187%
Ratio of operating expenses to average net assets
without fee waivers, expenses reimbursed and/or fees
reduced by credits allowed by the custodian ................ 1.11%* 1.15% 1.17% 1.19% 1.22% 1.24%
<FN>
------------------------------------------------
* Annualized.
+ 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 by the investment advisor or if fees had not been reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
FINANCIAL HIGHLIGHTS
MID CAP STOCK FUND(a)
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
PERIOD
ENDED
06/30/00
(UNAUDITED)
---------
<S> <C>
Net asset value, beginning of period .......................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.01
Net realized and unrealized loss on investments .............. (0.03)
-------
Total from investment operations ............................. (0.02)
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... -
Distributions from net realized gains ........................ -
-------
Total distributions .......................................... -
-------
Net asset value, end of period ............................... $ 9.98
=======
TOTAL RETURN+ ................................................. (0.20)%
=======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net asset value, end of period (in 000's) .................... $37,486
Ratio of operating expenses to average net assets (a) ........ 1.08%*
Ratio of net investment income to average net assets ......... 0.40%*
Portfolio turnover rate ...................................... 0%#
Ratio of operating expenses to average net assets............. 1.08%*
-------------------------------
(a) The Fund commenced operations on May 1, 2000.
+ Total return is not annualized.
* Annualized.
# Amount represents less than 1%.
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
FINANCIAL HIGHLIGHTS
SMALL CAP STOCK FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 19.13 $ 14.59 $ 15.63 $ 14.70 $ 13.74 $ 10.53
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .......................................... (0.06) (0.10)++ (0.07) (0.03) (0.12)++ (0.01)
Net realized and unrealized gain on investments .............. 2.85 8.07 1.21 1.80 1.52 3.26
------- ------- ------- ------- ------- -------
Total from investment operations ............................. 2.79 7.97 1.14 1.77 1.40 3.25
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... - - - - - (0.04)
Distributions from net realized gains ........................ (1.35) (3.43) (2.18) (0.84) (0.44) (0.00)#
------- ------- ------- ------- ------- -------
Total distributions .......................................... (1.35) (3.43) (2.18) (0.84) (0.44) (0.04)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 20.57 $ 19.13 $ 14.59 $ 15.63 $ 14.70 $ 13.74
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................................. 14.75% 71.09% 8.09% 12.59% 10.04% 30.99%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net asset value, end of period (in 000's) .................... $91,499 $53,616 $44,380 $45,362 $55,887 $46,058
Ratio of operating expenses to average net assets (a) ........ 1.13%* 1.19% 1.19% 1.20% 1.20% 1.20%
Ratio of net investment loss to average net assets ........... (0.67)%* (0.75)% (0.48)% (0.58)% (0.82)% (0.35)%
Portfolio turnover rate ...................................... 32% 52% 108% 116% 97% 135%
Ratio of operating expenses to average net assets without
fee waivers expenses reimbursed and/or fees reduced by
credits allowed by the custodian ........................... 1.13%* 1.19% 1.20% 1.21% 1.21% 1.28%
<FN>
-------------------------------------------
* Annualized.
+ 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 by the investment
advisor or if fees had not been reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
FINANCIAL HIGHLIGHTS
INTERNATIONAL GROWTH FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 17.63 $ 11.61 $ 12.26 $ 13.02 $ 12.11 $ 11.47
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ (0.06) 0.12 0.07++ 0.71 0.07++ 0.18
Net realized and unrealized gain/(loss) on investments ....... (0.54) 5.91 0.64 (0.97) 1.01 0.58
------- ------- ------- ------- ------- -------
Total from investment operations ............................. (0.60) 6.03 0.71 (0.26) 1.08 0.76
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.43) (0.01) (0.72) (0.26) (0.17) (0.00)#
Distributions from net realized gains ........................ (0.15) - (0.64) (0.24) - (0.12)
------- ------- ------- ------- ------- -------
Total distributions .......................................... (0.58) (0.01) (1.36) (0.50) (0.17) (0.12)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 16.45 $ 17.63 $ 11.61 $ 12.26 $ 13.02 $ 12.11
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................................. (3.40)% 51.96% 5.20% (2.64)% 9.04% 6.61%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......................... $72,215 $86,632 $60,360 $49,636 $62,355 $45,909
Ratio of operating expenses to average net assets (a) ........ 1.29%* 1.39% 1.36% 1.35% 1.39% 1.47%
Ratio of net investment income to average net assets ......... 0.27%* 0.87% 0.61% 0.52% 0.56% 0.91%
Portfolio turnover rate ...................................... 16% 161% 118% 84% 98% 72%
Ratio of operating expenses to average net assets without
fee waivers, expenses reimbursed and/or fees reduced by
credits allowed by the custodian ........................... 1.29%* 1.40% 1.48% 1.36% 1.39% 1.48%
<FN>
----------------------------------------------------
* Annualized.
+ 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 reimbursed by the investment advisor or if fees had not been reduced by credits
allowed by the custodian.
++ Per share numbers have been calculated using the average shares method.
# Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
FINANCIAL HIGHLIGHTS
INCOME FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 9.35 $ 10.24 $ 10.19 $ 9.82 $ 10.48 $ 9.06
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.28 0.67 0.70 0.70 0.68 0.70
Net realized and unrealized gain/(loss) on investments ....... 0.03 (0.89) 0.04 0.37 (0.66) 1.50
------- ------- ------- ------- ------- -------
Total from investment operations ............................. 0.31 (0.22) 0.74 1.07 0.02 2.20
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.29) (0.67) (0.69) (0.70) (0.68) (0.78)
------- ------- ------- ------- ------- -------
Total distributions .......................................... (0.29) (0.67) (0.69) (0.70) (0.68) (0.78)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 9.37 $ 9.35 $ 10.24 $ 10.19 $ 9.82 $ 10.48
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................................. 3.35% (2.16)% 7.45% 11.35% 0.43% 25.09%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......................... $104,191 $55,556 $49,654 $51,670 $59,883 $60,676
Ratio of operating expenses to average net assets (a) ........ 0.77%* 0.85% 0.96% 0.96% 0.98% 0.99%
Ratio of net investment income to average net assets ......... 6.82%* 6.84% 6.69% 6.95% 6.92% 7.00%
Portfolio turnover rate ...................................... 1% 12% 4% 36% 30% 42%
Ratio of operating expenses to average net assets without
fee waivers, expenses reimbursed and/or fees reduced by
credits allowed by the custodian ........................... 0.78%* 0.85% 0.96% 0.96% 0.98% 0.99%
Ratio of operating expenses to average net assets including
interest expense ........................................... - - - - - 0.99%
<FN>
---------------------------------------------------
* Annualized.
+ 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 reimbursed by the investment advisor or if fees had not been reduced by credits
allowed by the custodian.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 9.62 $ 10.11 $ 10.04 $ 9.77 $ 10.00 $ 9.13
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.29 0.54 0.63 0.63 0.58 0.64
Net realized and unrealized gain/(loss) on investments ....... 0.01 (0.49) 0.06 0.26 (0.23) 0.87#
------- ------- ------- ------- ------- -------
Total from investment operations ............................. 0.30 0.05 0.69 0.89 0.35 1.51
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.30) (0.54) (0.62) (0.62) (0.58) (0.64)
------- ------- ------- ------- ------- -------
Total distributions .......................................... (0.30) (0.54) (0.62) (0.62) (0.58) (0.64)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 9.62 $ 9.62 $ 10.11 $ 10.04 $ 9.77 $ 10.00
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................................. 3.29% 0.51% 7.03% 9.42% 3.69% 16.89%
======= ======= ======= ======= ======= =======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) ......................... $92,796 $80,015 $41,914 $61,656 $66,563 $52,303
Ratio of operating expenses to average net assets (a) ........ 0.78%* 0.83% 0.89% 0.90% 0.94% 1.00%
Ratio of net investment income to average net assets ......... 6.44%* 6.02% 5.85% 6.28% 6.18% 6.68%
Portfolio turnover rate ...................................... 4% 15% 22% 194% 282% 273%
Ratio of operating expenses to average net assets without
fee waivers,expenses reimbursed and/or fees reduced by
credits allowed by the custodian ........................... 0.78%* 0.83% 1.03% 0.91% 0.94% 1.03%
Ratio of operating expenses to average net assets including
interest expense ........................................... - - 1.02% 1.54% 1.08% 1.76%
<FN>
-------------------------------------------
* Annualized.
+ 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 reimbursed by the investment advisor or if fees had not been reduced by
credits allowed by the custodian.
# The amount shown may not accord with the change in the aggregate gains and losses of portfolio securities due to
timing of sales and redemptions of Fund shares.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
FINANCIAL HIGHLIGHTS
SHORT TERM INCOME FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $ 2.39 $ 2.44 $ 2.43 $ 2.43 $ 2.49 $ 2.39
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................................... 0.07 0.12 0.12 0.14 0.15 0.12
Net realized and unrealized gain/(loss) on investments ......... (0.01) (0.05) 0.01 0.00# (0.06) 0.10
------- ------- ------- ------- ------- -------
Total from investment operations ............................... 0.06 0.07 0.13 0.14 0.09 0.22
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ........................... (0.07) (0.12) (0.12) (0.14) (0.15) (0.12)
------- ------- ------- ------- ------- -------
Total distributions ............................................ (0.07) (0.12) (0.12) (0.14) (0.15) (0.12)
------- ------- ------- ------- ------- -------
Net asset value, end of period ................................. $ 2.38 $ 2.39 $ 2.44 $ 2.43 $ 2.43 $ 2.49
======= ======= ======= ======= ======= =======
TOTAL RETURN+ .................................................. 2.49% 2.89% 5.28% 5.90% 3.74% 9.30%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................... $45,063 $53,144 $37,399 $11,944 $12,402 $12,365
Ratio of operating expenses to average net assets (a) .......... 0.84%* 0.80% 0.85% 1.00% 0.98% 0.85%
Ratio of net investment income to average net assets ........... 5.56%* 5.26% 5.45% 6.04% 6.08% 6.14%
Portfolio turnover rate ........................................ 5% 42% 27% 43% 125% 188%
Ratio of operating expenses to average net assets without
fee waivers and/or fees reduced by credits allowed
by the custodian ............................................ 0.84%* 0.81% 0.89% 1.03% 1.06% 1.01%
<FN>
---------------------------------------------
* Annualized.
+ 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 by the investment advisor or if fees had not been reduced by credits allowed by the custodian.
# Amount represents less than $0.01 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
06/30/00 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
--------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.027 0.045 0.049 0.049 0.049 0.053
Net realized gain/(loss) on investments ...................... - (0.000)# (0.000)# 0.000# 0.000# (0.000)#
------- ------- ------- ------- ------- -------
Total from investment operations ............................. 0.027 0.045 0.049 0.049 0.049 0.053
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......................... (0.027) (0.045) (0.049) (0.049) (0.049) (0.053)
Distributions from net realized gains ........................ - - - - (0.000)# -
------- ------- ------- ------- ------- -------
Total distributions .......................................... (0.027) (0.045) (0.049) (0.049) (0.049) (0.053)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
TOTAL RETURN+ ................................................. 2.70% 4.56% 5.01% 4.99% 4.97% 5.46%
======= ======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......................... $16,335 $31,105 $31,862 $32,864 $23,266 $20,373
Ratio of operating expenses to average net assets (a) ........ 0.75%* 0.71% 0.65% 0.75% 0.58% 0.50%
Ratio of net investment income to average net assets ......... 5.35%* 4.47% 4.90% 4.88% 4.86% 5.30%
Ratio of operating expenses to average net assets without
fee waivers, expenses reimbursed and/or fees reduced by
credits allowed by the custodian ........................... 0.78%* 0.78% 0.81% 0.85% 0.88% 1.01%
<FN>
-----------------------------------------
* Annualized.
+ 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 reimbursed by the investment advisor or if fees had not been reduced by credits
allowed by the custodian.
# Amount represents less than $0.001 per share.
(a) Ratio of operating expenses to average net assets includes expenses paid indirectly.
</FN>
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
PORTFOLIO OF INVESTMENTS
STRATEGIC GROWTH PORTFOLIO
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES - 99.1%
590,068 WM VT Growth Fund .................... $ 16,929,059
334,166 WM VT Growth Fund of the Northwest.... 5,761,025
1,442,620 WM VT Growth & Income Fund ........... 26,342,241
433,336 WM High Yield Fund ................... 3,822,027
453,688 WM VT International Growth Fund ...... 7,463,166
746,219 WM VT Mid Cap Stock Fund ............. 7,447,262
341,186 WM VT Small Cap Stock Fund ........... 7,018,205
------------
Total Investment Company Securities
(Cost $72,482,837) ................. 74,782,985
------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT - 0.2%
(Cost $157,000)
$ 157,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased
at $157,079 on 07/03/2000, collateralized by
$128,009 U.S. Treasury Note, 8.125%
08/15/2021 (Market Value $160,617).. 157,000
------------
TOTAL INVESTMENTS (Cost $72,639,837*) .... 99.3% 74,939,985
OTHER ASSETS AND LIABILITIES (NET) ....... 0.7 508,351
----- ------------
NET ASSETS ............................... 100.0% $ 75,448,336
===== ============
---------------------
* Aggregate cost for federal tax purposes.
CONSERVATIVE GROWTH PORTFOLIO
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES - 99.6%
1,743,743 WM VT Growth Fund .................... $ 50,027,980
760,299 WM VT Growth Fund of the Northwest ... 13,107,550
4,248,657 WM VT Growth & Income Fund ........... 77,580,486
1,357,164 WM High Yield Fund ................... 11,970,190
2,583,529 WM VT Income Fund .................... 24,207,668
1,177,112 WM VT International Growth Fund ...... 19,363,493
1,660,576 WM VT Mid Cap Stock Fund ............. 16,572,544
675,373 WM VT Small Cap Stock Fund ........... 13,892,422
1,260,583 WM VT U.S. Government Securities Fun.. 12,139,412
------------
Total Investment Company Securities
(Cost $236,631,357) ................ 238,861,745
------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT - 0.2%
(Cost $521,000)
$ 521,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased
at $521,260 on 07/03/2000, collateralized by
$424,795 U.S. Treasury Note, 8.125%
08/15/2021 (Market Value $533,004).. 521,000
------------
TOTAL INVESTMENTS (COST $237,152,357*) ... 99.8% 239,382,745
OTHER ASSETS AND LIABILITIES (NET) ....... 0.2 521,907
----- ------------
NET ASSETS ............................... 100.0% $239,904,652
===== ============
-----------------------
* Aggregate cost for federal tax purposes.
BALANCED PORTFOLIO
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
Investment Company Securities - 99.7%
1,193,451 WM VT Growth Fund .................... $ 34,240,112
740,754 WM VT Growth Fund of the Northwest ... 12,770,592
3,413,178 WM VT Growth & Income Fund ........... 62,324,627
1,359,275 WM High Yield Fund ................... 11,988,805
3,289,091 WM VT Income Fund .................... 30,818,781
777,094 WM VT International Growth Fund ...... 12,783,200
1,232,641 WM VT Mid Cap Stock Fund ............. 12,301,757
8,165,562 WM VT Short Term Income Fund ......... 19,434,037
507,722 WM VT Small Cap Stock Fund ........... 10,443,831
3,861,270 WM VT U.S. Government Securities Fun.. 37,184,029
------------
Total Investment Company Securities
(Cost $242,206,939) ................ 244,289,771
------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT - 0.0%#
(Cost $88,000)
$ 88,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased
at $88,044 on 07/03/2000, collateralized by
$71,750 U.S. Treasury Note, 8.125% 08/15/2021
(Market Value $90,028) ............. 88,000
------------
TOTAL INVESTMENTS (Cost $242,294,939*) ... 99.7% 244,377,771
OTHER ASSETS AND LIABILITIES (NET) ....... 0.3 787,436
----- ------------
NET ASSETS ............................... 100.0% $245,165,207
===== ============
--------------------
* Aggregate cost for federal tax purposes.
# Amount represents less than 0.1% of net assets.
See Notes to Financial Statements.
31
<PAGE>
PORTFOLIO OF INVESTMENTS
FLEXIBLE INCOME PORTFOLIO
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
Investment Company Securities - 99.2%
53,205 WM VT Growth Fund .....................$ 1,526,440
32,871 WM VT Growth Fund of the Northwest .... 566,701
268,451 WM VT Growth & Income Fund ............ 4,901,921
249,991 WM High Yield Fund .................... 2,204,925
1,076,033 WM VT Income Fund ..................... 10,082,430
78,502 WM VT Mid Cap Stock Fund .............. 783,453
1,945,879 WM VT Short Term Income Fund .......... 4,631,192
25,079 WM VT Small Cap Stock Fund ............ 515,872
876,719 WM VT U.S. Government Securities Fund.. 8,442,804
------------
Total Investment Company Securities
(Cost $33,906,517) .................. 33,655,738
------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT - 0.7%
(Cost $222,000)
$ 222,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased
at $222,111 on 07/03/2000, collateralized by
$181,007 U.S. Treasury Note, 8.125%
08/15/2021 (Market Value $227,115)... 222,000
------------
TOTAL INVESTMENTS (COST $34,128,517*) .... 99.9% 33,877,738
OTHER ASSETS AND LIABILITIES (NET) ....... 0.1 39,358
----- ------------
NET ASSETS ............................... 100.0% $ 33,917,096
===== ============
-----------------------
* Aggregate cost for federal tax purposes.
INCOME PORTFOLIO
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
Investment Company Securities - 98.4%
93,968 WM High Yield Fund ....................$ 828,794
234,099 WM VT Income Fund ..................... 2,193,506
1,015,569 WM VToney Market Fund ................. 1,015,568
613,696 WM VT Short Term Income Fund .......... 1,460,597
212,218 WM VT U.S. Government Securities Fund.. 2,043,662
------------
Total Investment Company Securities
(Cost $7,653,743) ................... 7,542,127
------------
PRINCIPAL
AMOUNT
---------
Repurchase Agreement - 1.6%
(Cost $121,000)
$ 121,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased
at $121,061 on 07/03/2000, collateralized by
$98,657 U.S. Treasury Note, 8.125%
08/15/2021 (Market Value $123,788)... 121,000
------------
total investments (Cost $7,774,743*) ..... 100.0% 7,663,127
other assets and liabilities (Net) ....... 0.0# 11
----- ------------
Net Assets ............................... 100.0% $ 7,663,138
===== ============
-----------------------
* Aggregate cost for federal tax purposes.
# Amount represents less than 0.1% of net assets.
See Notes to Financial Statements.
32
<PAGE>
PORTFOLIO OF INVESTMENTS
BOND & STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 56.9%
BANKS/SAVINGS & LOANS - 7.7%
4,000 Bank of America Corporation ............. $ 172,000
4,000 Bank One Corporation .................... 106,250
3,000 Chase Manhattan Corporation ............. 138,187
3,000 Citigroup Inc. .......................... 180,750
6,000 First Union Corporation ................. 148,875
5,000 Mellon Financial Corporation ............ 182,187
5,000 Wells Fargo & Company ................... 193,750
------------
1,121,999
------------
REAL ESTATE INVESTMENT TRUSTS - 5.7%
3,000 Arden Realty Inc. ....................... 70,500
4,000 CarrAmerica Realty Corporation .......... 106,000
2,000 Essex Property Trust Inc. ............... 84,000
4,000 Franchise Finance Corporation of America. 92,000
2,000 Health Care Property Investors Inc. ..... 54,500
4,000 Hospitality Properties Trust ............ 90,250
4,000 Shurgard Storage Centers Inc., Class A .. 90,000
4,000 Simon Property Group Inc. ............... 88,750
3,000 Storage USA Inc. ........................ 88,500
5,000 Taubman Centers Inc. .................... 55,000
------------
819,500
------------
CONSUMER STAPLES - 5.2%
5,300 Albertson's Inc. ........................ 176,225
4,450 Fort James Corporation .................. 102,906
5,000 PepsiCo Inc. ............................ 222,187
2,250 Philip Morris Companies Inc. ............ 59,766
5,000 Ralston-Ralston Purina Group ............ 99,687
5,000 Supervalu Inc. .......................... 95,313
------------
756,084
------------
HEALTH CARE PRODUCTS - 5.0%
1,800 Abbott Laboratories ..................... 80,213
1,550 Baxter International Inc. ............... 108,984
5,000 Becton Dickinson & Company .............. 143,438
2,000 Cardinal Health Inc. .................... 148,000
3,000 DENTSPLY International Inc. ............. 92,438
800 Johnson & Johnson ....................... 81,500
4,000 Mylan Laboratories Inc. ................. 73,000
------------
727,573
------------
OIL & GAS - 4.2%
2,500 Ashland Inc. ............................ 87,656
6,000 Repsol, Sponsored ADR ................... 118,875
6,000 Tosco Corporation ....................... 171,750
2,600 Ultramar Diamond Shamrock Corporation ... 64,513
5,000 Valero Energy Corporation ............... 158,750
------------
601,544
------------
RETAIL SALES - 3.7%
7,250 Blockbuster Inc., Class A+ .............. 70,234
6,000 Limited Inc. ............................ 129,750
SHARES VALUE
------ -----
RETAIL SALES - (CONTINUED)
6,500 May Department Stores Company ........... $156,000
10,000 Penney (J.C.) Company Inc. .............. 184,375
------------
540,359
------------
COMPUTER SYSTEMS - 3.5%
2,425 Compaq Computer Corporation ............. 61,989
6,000 Diebold Inc. ............................ 167,250
1,300 Hewlett-Packard Company ................. 162,337
1,000 International Business Machines Corporation 109,562
------------
501,138
------------
FINANCIAL SERVICES - 3.3%
4,000 Fannie Mae .............................. 208,750
3,000 Finova Group Inc. ....................... 39,000
2,500 Franklin Resources Inc. ................. 75,938
1,500 Price (T. Rowe) Associates Inc. ......... 63,750
1,000 Providian Financial Corporation ......... 90,000
------------
477,438
------------
HEALTH CARE SERVICES - 3.2%
2,000 Aetna Inc. .............................. 128,375
3,000 HCA - The Healthcare Company ............ 91,125
8,400 HEALTHSOUTH Corporation+ ................ 60,375
1,100 PacifiCare Health Systems Inc.+ ......... 66,206
1,400 UnitedHealth Group Inc. ................. 120,050
------------
466,131
------------
COMPUTER SOFTWARE/SERVICES - 2.5%
4,500 Autodesk Inc. ........................... 156,094
4,000 Computer Associates International Inc. .. 204,750
------------
360,844
------------
UTILITIES/TELECOMMUNICATIONS - 2.4%
1,170 Alltel Corporation ...................... 72,467
2,000 AT&T Corporation ........................ 63,250
1,825 SBC Communications Inc. ................. 78,931
2,500 Sprint Corporation, FON Group ........... 127,500
13 Winstar Communications Inc.+ ............ 440
------------
342,588
------------
BASIC INDUSTRY - 2.2%
2,000 Bemis Company Inc. ...................... 67,250
2,900 Engelhard Corporation ................... 49,481
6,725 Republic Services Inc.+ ................. 107,600
5,200 Waste Management Inc. ................... 98,800
------------
323,131
------------
AEROSPACE/DEFENSE - 1.8%
2,000 Boeing Company .......................... 83,625
1,850 General Dynamics Corporation ............ 96,662
4,000 Raytheon Company, Class B ............... 77,000
------------
257,287
------------
See Notes to Financial Statements.
33
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
BOND & STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
MEDIA - 1.6%
2,600 Harcourt General Inc. ................... $141,375
1,400 Viacom Inc., Class A+ ................... 95,725
------------
237,100
------------
INSURANCE - 1.2%
900 John Hancock Financial Services Inc.+ ... 21,319
3,500 MGIC Investment Corporation ............. 159,250
------------
180,569
------------
CAPITAL GOODS - 1.1%
3,000 Crane Company ........................... 72,937
1,200 Grainger (W.W.) Inc. .................... 36,975
2,720 Xerox Corporation ....................... 54,400
------------
164,312
------------
CONSUMER CYCLICALS - 1.0%
2,400 Liz Claiborne Inc. ...................... 84,600
8,400 The Warnaco Group Inc. .................. 65,100
------------
149,700
------------
BUSINESS SERVICES - 1.0%
4,200 Cendant Corporation+ .................... 58,800
2,850 Dun & Bradstreet Corporation ............ 81,581
------------
140,381
------------
LODGING & RESTAURANTS - 0.6%
2,900 Starwood Hotels & Resorts Worldwide Inc. 93,706
------------
Total Common Stocks (Cost $8,007,402) ... 8,261,384
------------
CONVERTIBLE PREFERRED STOCKS - 3.0%
1,060 Bank United Corporation, Conv. Pfd.,
8.000% due 08/16/2004 ................. 49,290
1,500 DECS Trust VI, Conv. Pfd.,
6.250% due 11/15/2002 ................. 102,938
230 Global Crossing Holdings Ltd., Conv. Pfd.,
6.375% due 11/05/2004++ ............... 41,803
1,300 Loral Space & Communications, Ltd., Series C,
Conv. Pfd.,
6.000% due 11/01/2006++ ............... 30,225
1,350 PSINet Inc., Conv. Pfd. , Series C,
6.750% due 05/05/2002 ................. 65,981
175 TCI Pacific Communications Inc., Conv. Pfd.,
5.000% due 07/31/2006 ................. 33,688
4,950 Tribune Company, Conv. Pfd.,
6.250% due 08/15/2001 ................. 82,913
35 Winstar Communications Inc., Conv. Pfd.,
7.250% due 06/22/2002++ ............... 34,475
------------
Total Convertible Preferred Stocks
(Cost $455,233) ....................... 441,313
------------
PRINCIPAL
AMOUNT VALUE
------ -----
FIXED INCOME SECURITIES - 26.4%
U.S. TREASURY OBLIGATIONS - 10.9%
U.S. TREASURY NOTES - 8.2%
$ 300,000 5.875% due 11/30/2001 ................. $297,469
380,000 6.500% due 05/15/2005 ................. 384,275
225,000 6.500% due 10/15/2006 ................. 227,602
300,000 5.625% due 05/15/2008 ................. 289,406
------------
1,198,752
------------
U.S. TREASURY BOND - 2.7%
300,000 9.000% due 11/15/2018 ................... 388,969
------------
Total U.S. Treasury Obligations
(Cost $1,614,551) ..................... 1,587,721
------------
CONVERTIBLE BONDS AND NOTES - 7.8%
200,000 Chiquita Brands International Inc., Conv. Note,
7.000% due 03/28/2001++ ............... 168,000
62,000 EXCITE@HOME, Conv. Sub. Note,
4.750% due 12/15/2006++ ............... 43,633
1,000,000 Network Associates Inc., Conv. Bond,
Zero coupon due 02/13/2018 ............ 356,250
280,000 Orbital Sciences Corporation, Conv. Sub.
Note,
5.000% due 10/01/2002++ ............... 189,700
300,000 Veterinary Centers of America, Conv. Sub. Deb.,
5.250% due 05/01/2006 ................. 273,750
100,000 Waste Management Inc., Conv. Deb.,
4.000% due 02/01/2002 ................. 93,250
------------
Total Convertable Bonds and Notes
(Cost $1,135,119) ..................... 1,124,583
------------
CORPORATE BONDS AND NOTES - 6.8%
100,000 Aetna Services Inc., Company Guarantee,
7.125% due 08/15/2006 ................. 94,962
300,000 CBS Corporation, Sr. Note,
7.150% due 05/20/2005 ................. 295,270
40,000 Cendant Corporation, Note,
7.750% due 12/01/2003 ................. 38,658
50,000 CNA Financial Corporation, Note,
6.600% due 12/15/2008 ................. 42,247
45,000 Baxter International Inc., Note,
7.125% due 02/01/2007 ................. 43,554
50,000 HEALTHSOUTH Corporation, Sr. Note,
6.875% due 06/15/2005 ................. 42,892
100,000 Merrill Lynch & Company Inc., Note,
6.000% due 02/17/2009 ................. 88,621
100,000 Philip Morris Companies Inc., Note,
7.500% due 01/15/2002 ................. 99,209
100,000 Raytheon Corporation, Note,
6.150% due 11/01/2008 ................. 88,891
100,000 Texas-New Mexico Power Company, Sr. Note,
6.250% due 01/15/2009 ................. 86,559
250,000 V2 Music Holdings Plc, Step coupon, Sr.
Discount Note, Zero coupon to 4/15/2003;
Zero coupon due 04/15/2008++ .......... 69,063
------------
Total Corporate Bonds and Notes
(Cost $1,064,024) ..................... 989,926
------------
See Notes to Financial Statements.
34
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
BOND & STOCK FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
U.S. Government Agency Mortgage-Backed Security - 0.9%
(Cost $130,848)
$ 130,000 Federal Home Loan Mortgage Corporation,
Series 1638, Class K,
6.500% due 03/15/2023 ................. $ 124,667
------------
Total Fixed Income Securities
(Cost $3,944,542) ..................... 3,826,897
------------
SHARES
------
WARRANT - 0.0%#
(Cost $3)
250 V2 Music Holdings Plc, Expires
04/15/2008+,++ ........................ 3
------------
REPURCHASE AGREEMENT - 13.7%
(Cost $1,983,000)
$ 1,983,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$1,983,992 on 07/03/2000, collateralized by
$1,616,830 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $2,028,689) .. $ 1,983,000
------------
TOTAL INVESTMENTS (COST $14,390,180*) ....... 100.0% 14,512,597
OTHER ASSETS AND LIABILITIES (NET) .......... (0.0)# (3,311)
----- ------------
NET ASSETS .................................. 100.0% $ 14,509,286
===== ============
-------------------------------
* Aggregate cost for federal tax purposes.
# Amount represents less than 0.1% of net assets.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
See Notes to Financial Statements.
35
<PAGE>
PORTFOLIO OF INVESTMENTS
GROWTH & INCOME FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 96.4%
BANKS/SAVINGS & LOANS - 10.4%
140,000 Bank of America Corporation ............. $6,020,000
75,000 Chase Manhattan Corporation ............. 3,454,687
100,000 Citigroup Inc. .......................... 6,025,000
125,000 First Union Corporation ................. 3,101,562
90,000 Mellon Financial Corporation ............ 3,279,375
185,001 Wells Fargo & Company ................... 7,168,789
------------
29,049,413
------------
HEALTH CARE PRODUCTS - 10.0%
33,000 Abbott Laboratories ..................... 1,470,563
50,000 American Home Products Corporation ...... 2,937,500
53,000 Bristol-Meyers Squibb Company ........... 3,087,250
105,000 Cardinal Health Inc. .................... 7,770,000
38,000 Johnson & Johnson ....................... 3,871,250
27,000 Merck & Company Inc. .................... 2,068,875
225,000 Mylan Laboratories Inc. ................. 4,106,250
56,000 Pfizer Inc. ............................. 2,688,000
------------
27,999,688
------------
CONSUMER STAPLES - 9.4%
128,000 Avon Products Inc. ...................... 5,696,000
58,000 Kimberly-Clark Corporation .............. 3,327,750
400,000 Kroger Company+ ......................... 8,825,000
95,000 PepsiCo Inc. ............................ 4,221,562
47,000 Procter & Gamble Company ................ 2,690,750
88,000 Sara Lee Corporation .................... 1,699,500
------------
26,460,562
------------
COMPUTER SOFTWARE/SERVICES - 9.2%
29,000 Adobe Systems Inc. ...................... 3,770,000
165,000 BMC Software Inc.+,** ................... 6,019,922
100,000 Computer Associates International Inc. .. 5,118,750
41,000 First Data Corporation .................. 2,034,625
60,000 Microsoft Corporation+ .................. 4,800,000
49,000 Oracle Corporation+ ..................... 4,119,062
------------
25,862,359
------------
UTILITIES/TELECOMMUNICATIONS - 7.7%
145,000 AT&T Corporation ........................ 4,585,625
135,000 Comcast Corporation, Special Class A .... 5,467,500
60,000 SBC Communications Inc. ................. 2,595,000
75,000 Sprint Corporation, FON Group ........... 3,825,000
110,000 Worldcom Inc. ........................... 5,046,250
------------
21,519,375
------------
COMPUTER SYSTEMS - 7.4%
52,000 Cisco Systems Inc.+ ..................... 3,305,250
170,000 Compaq Computer Corporation ............. 4,345,625
68,000 EMC Corporation+ ........................ 5,231,750
30,000 Hewlett-Packard Company ................. 3,746,250
38,000 International Business Machines Corporation 4,163,375
------------
20,792,250
------------
SHARES VALUE
------ -----
OIL & GAS - 5.9%
14,194 BP Amoco Plc, Sponsored ADR ............. $ 802,848
50,000 Exxon Mobil Corporation ................. 3,928,125
103,000 Halliburton Company ..................... 4,860,313
40,000 Royal Dutch Petroleum ................... 2,462,500
66,300 Tosco Corporation ....................... 1,897,838
80,000 Unocal Corporation ...................... 2,650,000
------------
16,601,624
------------
AEROSPACE/DEFENSE - 4.9%
160,000 Boeing Company .......................... 6,690,000
85,000 Honeywell International Inc. ............ 2,863,437
220,000 Raytheon Company, Class B ............... 4,235,000
------------
13,788,437
------------
MEDIA - 4.4%
205,092 AT&T Corporation-Liberty Media Group,
Class A+ .............................. 4,973,481
30,000 News Corporation Ltd., Sponsored ADR .... 1,635,000
45,000 Viacom Inc., Class A+ ................... 3,076,875
65,000 Walt Disney Company ..................... 2,522,813
------------
12,208,169
------------
HEALTH CARE SERVICES - 3.9%
95,000 Aetna Inc. .............................. 6,097,813
80,000 PacifiCare Health Systems Inc.+ ......... 4,815,000
------------
10,912,813
------------
RETAIL SALES - 3.6%
200,000 Intimate Brands Inc. .................... 3,950,000
70,000 Target Corporation ...................... 4,060,000
34,000 Wal-Mart Stores Inc. .................... 1,959,250
------------
9,969,250
------------
CAPITAL GOODS - 3.0%
180,000 Tyco International Ltd. ................. 8,527,500
------------
INSURANCE - 3.0%
115,000 Allstate Corporation .................... 2,558,750
50,000 American International Group Inc. ....... 5,875,000
------------
8,433,750
------------
FINANCIAL SERVICES - 2.9%
120,000 Freddie Mac ............................. 4,860,000
14,000 Merrill Lynch & Company Inc. ............ 1,610,000
20,000 Providian Financial Corporation ......... 1,800,000
------------
8,270,000
------------
ELECTRONICS/SEMICONDUCTORS - 2.0%
43,000 Intel Corporation ....................... 5,748,563
------------
CONSUMER DURABLES - 1.8%
130,000 Federal-Mogul Corporation ............... 1,243,125
285,000 Mattel Inc. ............................. 3,758,437
------------
5,001,562
------------
See Notes to Financial Statements.
36
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
GROWTH & INCOME FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
ELECTRICAL EQUIPMENT - 1.5%
84,000 General Electric Company ................ $ 4,284,000
------------
COMMUNICATION EQUIPMENT - 1.3%
63,000 Lucent Technologies Inc. ................ 3,732,750
------------
BASIC INDUSTRY - 1.1%
160,000 Waste Management Inc. ................... 3,040,000
------------
LODGING & RESTAURANTS - 1.0%
10,000 Sunburst Hospitality Corporation+ ....... 44,375
100,000 Tricon Global Restaurants Inc.+ ......... 2,825,000
------------
2,869,375
------------
UTILITIES/GAS & ELECTRIC - 1.0%
42,800 Enron Corporation ....................... 2,760,600
------------
TRANSPORTATION - 0.6%
80,000 Carnival Corporation .................... 1,560,000
------------
BUSINESS SERVICES - 0.4%
40,000 Dun & Bradstreet Corporation ............ 1,145,000
------------
Total Common Stocks
(Cost $232,440,444) ................... 270,537,040
------------
PREFERRED STOCK - 0.7%
(Cost $1,446,100)
40,000 News Corporation Ltd., Sponsored ADR .... 1,900,000
------------
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 3.0%
(Cost $8,492,000)
$ 8,492,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$8,496,246 on 07/03/2000, collateralized by
$6,923,914 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $8,687,657) .. $ 8,492,000
------------
TOTAL INVESTMENTS (COST $242,378,544*) ...... 100.1% 280,929,040
OTHER ASSETS AND LIABILITIES (Net) .......... (0.1) (362,617)
----- ------------
NET ASSETS .................................. 100.0% $280,566,423
===== ============
-----------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$4,169,338 represent 1.5% of the total net assets of the Fund (Note 6).
+ Non-income producing security.
-------------------------------------------------------------------------------
GLOSSARY OF TERMS
ADR - American Depositary Receipt
-------------------------------------------------------------------------------
See Notes to Financial Statements.
37
<PAGE>
PORTFOLIO OF INVESTMENTS
GROWTH FUND OF THE NORTHWEST
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 87.8%
COMPUTER SOFTWARE/SERVICES - 7.2%
4,170 Adobe Systems Inc. ...................... $ 542,100
49,425 ARIS Corporation+ ....................... 135,919
4,800 BSQUARE Corporation + ................... 107,700
12,885 Click2Learn.com Inc.+ ................... 227,098
13,000 F5 Networks Inc.** ...................... 709,312
27,685 Mentor Graphics Corporation+ ............ 550,239
15,565 Microsoft Corporation+ .................. 1,245,200
13,400 ONYX Software Corporation+ .............. 397,812
------------
3,915,380
------------
HEALTH CARE PRODUCTS - 10.6%
41,555 Corixa Corporation+ ..................... 1,784,268
5,700 Dendreon Corporation+ ................... 94,406
50,900 Epitope Inc.+ ........................... 699,875
19,955 ICOS Corporation+ ....................... 878,020
8,680 Immunex Corporation+ .................... 429,118
36,200 NeoRx Corporation+ ...................... 683,275
43,025 SonoSite Inc.+ .......................... 1,239,658
------------
5,808,620
------------
BANKS/SAVINGS & LOANS - 9.5%
25,950 Bank of America Corporation ............. 1,115,850
33,025 First Washington Bancorp Inc. ........... 460,286
21,775 Interwest Bancorp Inc. .................. 304,850
30,500 KeyCorp ................................. 537,562
8,320 Sterling Financial Corporation + ........ 95,680
43,475 U.S. Bancorp ............................ 836,894
57,212 Washington Federal Inc. ................. 1,044,119
20,900 Wells Fargo & Company ................... 809,875
------------
5,205,116
------------
COMPUTER SYSTEMS - 8.3%
45,300 Advanced Digital Information Corporation+ 721,969
21,705 Apex Inc.+ .............................. 949,594
39,505 In Focus Systems Inc.+ .................. 1,271,567
27,990 RadiSys Corporation + ................... 1,588,432
------------
4,531,562
------------
ELECTRICAL EQUIPMENT - 8.0%
16,400 Electro Scientific Industries Inc.+ ..... 722,112
74,390 FEI Company+ ............................ 2,268,895
5,910 Flir Systems Inc.+ ...................... 38,415
15,590 Microvision Inc.+ ....................... 763,910
8,080 Tektronix Inc. .......................... 587,820
------------
4,381,152
------------
ELECTRONICS/SEMICONDUCTORS - 6.7%
11,910 Credence Systems Corporation+ ........... 657,283
3,415 Intel Corporation ....................... 456,543
16,240 Lattice Semiconductor Corporation+ ...... 1,122,590
8,820 Micron Technology Inc.+ ................. 776,711
SHARES VALUE
------ -----
ELECTRONICS/SEMICONDUCTORS - (CONTINUED)
35,000 Semitool Inc.+ .......................... $ 605,938
400 TriQuint Semiconductor Inc.+ ............ 38,275
------------
3,657,340
------------
CONSUMER CYCLICALS - 5.6%
79,085 Building Materials Holding Corporation+.. 696,937
13,549 Columbia Sportswear Company+ ............ 364,129
69,995 Cutter & Buck Inc.+ ..................... 555,585
97,576 K2 Inc. ................................. 811,100
15,825 Nike Inc., Class B ...................... 630,033
------------
3,057,784
------------
BASIC INDUSTRY - 4.5%
8,875 Boise Cascade Corporation ............... 229,641
76,200 Louisiana-Pacific Corporation ........... 828,675
102,150 Oregon Steel Mills Inc. ................. 197,916
30,910 Schnitzer Steel Industries Inc., Class A 490,696
9,435 Weyerhaeuser Company .................... 405,705
11,055 Willamette Industries Inc. .............. 301,249
------------
2,453,882
------------
CONSUMER STAPLES - 3.9%
24,490 Albertson's Inc. ........................ 814,292
59,241 Kroger Company+ ......................... 1,307,005
------------
2,121,297
------------
AEROSPACE/DEFENSE - 3.3%
28,640 Boeing Company .......................... 1,197,510
13,400 Precision Castparts Corporation ......... 606,350
------------
1,803,860
------------
HEALTH CARE SERVICES - 3.2%
81,480 Foundation Health Systems Inc., Class A+ 1,059,240
11,830 PacifiCare Health Systems Inc.+ ......... 712,018
------------
1,771,258
------------
RETAIL SALES - 3.0%
13,920 Costco Wholesale Corporation+ ........... 459,360
126,600 Hollywood Entertainment Corporation+ .... 996,975
8,295 Nordstrom Inc. .......................... 200,117
------------
1,656,452
------------
TRANSPORTATION - 3.0%
29,680 Airborne Freight Corporation ............ 562,065
6,560 Alaska Air Group Inc.+ .................. 177,940
18,905 Expeditors International of Washington Inc. 897,988
------------
1,637,993
------------
CAPITAL GOODS - 2.5%
73,770 Greenbrier Companies Inc. ............... 534,832
21,045 PACCAR Inc. ............................. 835,223
------------
1,370,055
------------
See Notes to Financial Statements.
38
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
GROWTH FUND OF THE NORTHWEST
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
MEDIA - 2.2%
62,300 Bowne & Company Inc. .................... $ 626,894
15,400 Getty Images Inc.+ ...................... 570,763
------------
1,197,657
------------
CONSUMER DURABLES - 1.8%
71,675 Monaco Coach Corporation+ ............... 976,572
------------
LODGING & Restaurants - 1.8%
9,145 Starbucks Corporation+ .................. 349,225
87,860 WestCoast Hospitality Corporation+ ...... 615,020
------------
964,245
------------
INSURANCE - 1.4%
5,670 SAFECO Corporation ...................... 112,691
20,300 StanCorp Financial Group Inc. ........... 652,138
------------
764,829
------------
UTILITIES/TELECOMMUNICATIONS - 1.0%
10,515 General Communication Inc., Class A+ .... 53,889
37,820 Metro One Telecommunications Inc.+ ...... 475,114
------------
529,003
------------
REAL ESTATE INVESTMENT TRUSTS - 0.3%
7,420 Shurgard Storage Centers Inc., Class A .. 166,950
------------
Total Common Stocks
(Cost $40,725,640) .................... 47,971,007
------------
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 12.2%
(Cost $6,695,000)
$ 6,695,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$6,698,348 on 07/03/2000, collateralized by
$5,458,738 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $6,849,254) $ 6,695,000
------------
TOTAL INVESTMENTS (COST $47,420,640*) ....... 100.0% 54,666,007
OTHER ASSETS AND LIABILITIES (NET) .......... 0.0# 1,125
----- ------------
NET ASSETS .................................. 100.0% $ 54,667,132
===== ============
--------------------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$1,862, represent less than 0.1% of the total net assets of the Fund (Note
6).
# Amount represents less than 0.1% of net assets.
+ Non-income producing security.
See Notes to Financial Statements.
39
<PAGE>
PORTFOLIO OF INVESTMENTS
GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 86.1%
UTILITIES/TELECOMMUNICATIONS - 29.9%
17,420 AT&T Corporation ........................ $ 550,908
628,000 China Telecom (Hong Kong), Ltd.+ ........ 5,538,786
260,215 China Unicom, Ltd., Sponsored ADR+ ...... 5,529,569
145,310 Comcast Corporation, Special Class A+ ... 5,885,055
63,690 Cox Communications Inc., Class A+ ....... 2,901,876
6,340 E-Tek Dynamics Inc.+ .................... 1,672,571
113,008 Ericsson LM, B Shares ................... 2,248,378
308,560 Ericsson LM, Sponsored ADR .............. 6,171,200
71,595 Level 3 Communications Inc.+ ............ 6,300,360
5,836 Nokia Oyj ............................... 299,017
779,150 Nokia Oyj, Sponsored ADR ................ 38,908,803
33,560 NTL Inc.+ ............................... 2,009,405
1,060 NTT DoCoMo Inc. ......................... 2,875,384
61,460 QUALCOMM Inc.+ .......................... 3,687,600
66,195 Sprint Corporation, PCS Group+ .......... 3,938,603
156,899 Telefonica SA+,** ....................... 3,384,041
92,875 Telefonos de Mexico SA, Class L, Sponsored
ADR ................................... 5,305,484
1,777,644 Vodafone AirTouch Plc ................... 7,185,438
48,520 Vodafone AirTouch Plc, Sponsored ADR .... 2,010,548
37,230 VoiceStream Wireless Corporation+ ....... 4,329,733
49,418 Winstar Communications Inc.+ ............ 1,674,018
------------
112,406,777
------------
COMPUTER SOFTWARE/SERVICES - 16.2%
159,625 Amazon.com Inc.+ ........................ 5,796,383
65,380 DoubleClick Inc.+ ....................... 2,492,612
53,520 eBay Inc.+ .............................. 2,906,805
96,320 Electronic Arts Inc.+ ................... 7,025,340
72,450 Exodus Communications Inc.+ ............. 3,337,228
18,440 GoTo.com Inc.+ .......................... 282,362
73,580 i2 Technologies Inc.+ ................... 7,671,865
31,090 InfoSpace Inc.+ ......................... 1,717,722
14,965 Inktomi Corporation+ .................... 1,769,611
42,410 Lycos Inc.+ ............................. 2,290,140
66,598 MarchFirst Inc.+ ........................ 1,215,413
40,880 Microsoft Corporation+ .................. 3,270,400
21,140 NetZero Inc.+ ........................... 110,324
42,280 Phone.com Inc.+ ......................... 2,753,485
60,825 Priceline.com Inc.+ ..................... 2,310,400
7,045 Scient Corporation+ ..................... 310,861
47,275 Software.com Inc.+ ...................... 6,139,841
4,885 Ticketmaster Online-CitySearch Inc.,
Class B+ .............................. 77,855
27,435 Verio Inc.+ ............................. 1,522,214
28,535 VeriSign Inc.+ .......................... 5,036,427
27,745 VERITAS Software Corporation+ ........... 3,135,619
------------
61,172,907
------------
SHARES VALUE
------ -----
MEDIA - 11.8%
645,510 AT&T Corporation-Liberty Media Group,
Class A+ .............................. $ 15,653,617
51,205 Cablevision Systems Corporation, Class A+ 3,475,539
138,635 Charter Communications Inc., Class A+ ... 2,278,813
79,763 Infinity Broadcasting Corporation, Class A+ 2,906,364
18,732 Lamar Advertising Company+ .............. 811,330
10,495 Liberty Digital Inc., Class A+ .......... 314,850
166,425 Time Warner Inc.** ...................... 12,648,300
55,090 TMP Worldwide Inc.+ ..................... 4,066,331
49,950 UnitedGlobalCom Inc., Class A+ .......... 2,335,162
------------
44,490,306
------------
COMPUTER SYSTEMS - 6.9%
94,930 3Com Corporation+ ....................... 5,470,341
107,310 ASM Lithography Holding NV (F)+ ......... 4,735,054
120,220 Cisco Systems Inc.+ ..................... 7,641,484
104,065 EMC Corporation+ ........................ 8,006,501
------------
25,853,380
------------
ELECTRONICS/SEMICONDUCTORS - 5.5%
54,890 Analog Devices Inc.+ .................... 4,171,640
19,770 JDS Uniphase Corporation+ ............... 2,369,929
23,955 Maxim Integrated Products Inc.+ ......... 1,627,443
12,470 Samsung Electronics ..................... 4,126,887
36,300 Sony Corporation ........................ 3,396,643
75,270 Texas Instruments Inc. .................. 5,170,108
------------
20,862,650
------------
OIL & GAS - 4.9%
284,885 Enron Corporation ....................... 18,375,082
------------
HEALTH CARE PRODUCTS - 2.7%
156,970 Medtronic Inc. .......................... 7,819,068
19,365 MiniMed Inc.+ ........................... 2,285,070
------------
10,104,138
------------
FINANCIAL SERVICES - 1.8%
81,525 American Express Company ................ 4,249,491
149,920 E*TRADE Group Inc.+ ..................... 2,473,680
------------
6,723,171
------------
BANKS/SAVINGS & Loans - 1.8%
70,010 Fifth Third Bancorp ..................... 4,428,132
105,424 Firstar Corporation ..................... 2,220,493
------------
6,648,625
------------
CAPITAL GOODS - 1.5%
63,430 Applied Materials Inc.+ ................. 5,748,344
------------
TECHNOLOGY - 1.2%
44,680 iGATE Capital Corporation + ............. 614,350
60,180 PE Biosystems Group ..................... 3,964,358
------------
4,578,708
------------
See Notes to Financial Statements.
40
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
BUSINESS SERVICES - 1.0%
36,190 Sapient Corporation+ .................... $ 3,870,068
------------
RETAIL SALES - 0.9%
69,535 Home Depot Inc. ......................... 3,472,404
------------
Total Common Stocks (Cost $234,656,247).. 324,306,560
------------
PRINCIPAL
AMOUNT
---------
U.S. GOVERNMENT AGENCY DISCOUNT NOTES - 11.9%
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 6.6%
$15,000,000 6.410% due 08/21/2000++ ............... 14,863,788
10,000,000 5.990% due 07/18/2000++ ............... 9,971,715
------------
Total FNMAs (Cost $24,835,503) .......... 24,835,503
------------
FEDERAL HOME LOAN BANK (FHLB) - 5.3%
10,000,000 5.900% due 08/01/2000++ ............... 9,949,195
10,000,000 6.270% due 07/31/2000++ ............... 9,947,750
------------
Total FHLBs (Cost $19,896,945) .......... 19,896,945
------------
Total U.S. Government Agency Discount Notes
(Cost $44,732,448) .................... 44,732,448
------------
COMMERCIAL PAPER - 1.6%
(Cost $6,297,606)
6,300,000 CIT Group Holdings Inc.,
6.840% due 07/03/2000++ ............... 6,297,606
------------
TOTAL INVESTMENTS (COST $285,686,301*) ...... 99.6% 375,336,614
OTHER ASSETS AND LIABILITIES (NET) .......... 0.4 1,418,829
----- ------------
NET ASSETS .................................. 100.0% $376,755,443
===== ============
------------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$11,244,284, represent 3.0% of the total net assets of the Fund (Note 6).
+ Non-income producing security.
++ Rate represents annualized yield at date of purchase.
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
U.S. FORWARD FOREIGN CURRENCY CONTRACTS TO BUY
CONTRACTS TO RECEIVE NET
--------------------------------------------------- UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------ ---------- ------------- -------------
09/08/2000 EMU 8,100,000 7,797,789 7,658,065 $ 139,724
09/08/2000 JPY 30,000,000 287,208 286,482 726
09/14/2000 JPY 8,000,000 76,671 75,847 824
09/22/2000 JPY 55,000,000 527,868 514,747 13,121
10/05/2000 JPY 147,000,000 1,414,302 1,393,542 20,760
01/26/2001 EMU 2,200,000 2,135,188 2,088,866 46,322
-----------
221,477
-----------
U.S. FORWARD FOREIGN CURRENCY CONTRACTS TO SELL
NET
CONTRACTS TO DELIVER UNREALIZED
--------------------------------------------------- APPRECIATION/
EXPIRATION LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------ ---------- ------------- -------------
05/11/2000 JPY 35,942,129 339,711 330,227 (9,484)
09/08/2000 EMU 19,700,000 18,964,993 18,739,014 (225,979)
09/08/2000 JPY 240,000,000 2,297,664 2,344,985 47,321
09/14/2000 JPY 31,600,000 302,851 297,105 (5,746)
09/22/2000 EMU 10,750,000 10,356,443 10,373,858 17,415
09/22/2000 JPY 55,000,000 527,868 538,379 10,511
10/05/2000 EMU 1,000,000 964,400 961,000 (3,400)
10/05/2000 JPY 147,000,000 1,414,302 1,452,562 38,260
01/26/2001 EMU 6,000,000 5,823,240 5,767,354 (55,886)
03/16/2001 HKD 7,000,000 898,645 898,659 14
06/27/2001 HKD 34,000,000 4,366,229 4,366,228 (1)
-----------
(186,975)
-----------
Net Unrealized Appreciation of Forward Foreign Currency
Contracts .................................................... $ 34,502
===========
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
ADR - American Depositary Receipt
EMU - European Monetary Unit
HKD - Hong Kong Dollar
JPY - Japanese Yen
--------------------------------------------------------------------------------
See Notes to Financial Statements.
41
<PAGE>
PORTFOLIO OF INVESTMENTS
MID CAP STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 94.8%
COMPUTER SOFTWARE/SERVICES - 11.3%
21,000 Acxiom Corporation + .................... $ 572,250
20,000 BMC Software Inc.+ ...................... 729,687
57,000 PeopleSoft Inc.+ ........................ 954,750
55,000 Sykes Enterprises Inc.+ ................. 708,125
17,000 Synopsys, Inc.+ ......................... 587,562
33,000 Systems & Computer Technology Corporation+ 660,000
------------
4,212,374
------------
HEALTH CARE SERVICES - 11.2%
12,000 Aetna Inc. .............................. 770,250
66,000 Covance Inc.+ ........................... 581,625
13,000 Express Scripts Inc., Class A+ .......... 807,625
76,000 Foundation Health Systems Inc., Class A+. 988,000
21,000 IMS Health Inc. ......................... 378,000
11,000 PacifiCare Health Systems Inc.+ ......... 662,063
------------
4,187,563
------------
HEALTH CARE PRODUCTS - 8.6%
14,000 ALZA Corporation+ ....................... 827,750
37,000 AmeriSource Health Corporation, Class A+. 1,147,000
25,000 ICN Pharmaceuticals Inc. ................ 695,313
30,000 Mylan Laboratories Inc. ................. 547,500
------------
3,217,563
------------
BANKS/SAVINGS & LOANS - 7.6%
21,000 Bank United Corporporation, Class A ..... 738,938
31,000 Charter One Financial, Inc. ............. 713,000
16,000 Comerica Inc. ........................... 718,000
26,000 TCF Financial Corporation ............... 667,875
------------
2,837,813
------------
CONSUMER STAPLES - 6.9%
20,000 Avon Products Inc. ...................... 890,000
8,000 Beringer Wine Estates Holdings Inc.,
Class B+ .............................. 282,500
15,000 Hershey Foods Corporation ............... 730,312
14,000 Suiza Foods Corporation+ ................ 684,250
------------
2,587,062
------------
BASIC INDUSTRY - 6.0%
43,000 Federal Signal Corporation .............. 731,000
56,000 Republic Services Inc.+ ................. 896,000
17,000 Teleflex Inc. ........................... 630,062
------------
2,257,062
------------
ELECTRONICS/SEMICONDUCTORS - 5.6%
20,000 Arrow Electronics Inc.+ ................. 620,000
13,000 Microchip Technology Inc.+ .............. 757,453
45,000 Sensormatic Electronics Corporation+ .... 711,562
------------
2,089,015
------------
SHARES VALUE
------ -----
FINANCIAL SERVICES - 4.6%
13,000 A.G. Edwards Inc. ....................... $ 507,000
11,000 Ambac Financial Group Inc. .............. 602,938
7,000 Providian Financial Corporation ......... 630,000
------------
1,739,938
------------
OIL & GAS - 4.2%
16,000 Baker Hughes Inc. ....................... 512,000
20,000 Ocean Energy Inc.+ ...................... 283,750
8,000 Tosco Corporation ....................... 229,000
16,000 Unocal Corporation ...................... 530,000
------------
1,554,750
------------
CONSUMER DURABLES - 3.8%
58,000 Federal-Mogul Corporation ............... 554,625
66,000 Mattel Inc. ............................. 870,375
------------
1,425,000
------------
RETAIL SALES - 3.4%
33,000 Intimate Brands Inc. .................... 651,750
33,000 Penney (J.C.) Company Inc. .............. 608,438
------------
1,260,188
------------
UTILITIES/TELECOMMUNICATIONS - 3.3%
25,000 COMSAT Corporation ...................... 617,188
10,000 United States Cellular Corporation+ ..... 630,000
------------
1,247,188
------------
LODGING & RESTAURANTS - 2.9%
15,000 Papa John's International Inc.+ ......... 367,500
26,000 Tricon Global Restaurants Inc.+ ......... 734,500
------------
1,102,000
------------
CONSUMER CYCLICALS - 2.7%
18,000 Jones Apparel Group Inc.+ ............... 423,000
15,000 Nike Inc., Class B ...................... 597,187
------------
1,020,187
------------
CAPITAL GOODS - 2.5%
23,000 CommScope Inc.+ ......................... 943,000
------------
MEDIA - 2.2%
18,000 Houghton Mifflin Company ................ 840,375
------------
COMPUTER SYSTEMS - 2.2%
32,000 Electronics for Imaging Inc.+ ........... 810,000
------------
INSURANCE - 2.0%
16,000 The PMI Group Inc. ...................... 760,000
------------
See Notes to Financial Statements.
42
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
MID CAP STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
AEROSPACE/DEFENSE - 1.9%
17,000 Litton Industries Inc.+ ................. $ 714,000
------------
BUSINESS SERVICES - 1.9%
33,000 ACNielsen Corporation+ .................. 726,000
------------
Total Common Stocks
(Cost $35,678,218) .................... 35,531,078
------------
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 5.4%
(Cost $2,036,000)
$ 2,036,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$2,037,018 on 07/03/2000, collateralized by
$1,660,043 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $2,082,910) .. $ 2,036,000
------------
TOTAL INVESTMENTS (COST $37,714,218*) ....... 100.2% 37,567,078
OTHER ASSETS AND LIABILITIES (NET) .......... (0.2) (81,347)
----- ------------
NET ASSETS .................................. 100.0% $ 37,485,731
===== ============
--------------------------
* Aggregate cost for federal tax purposes.
+ Non-income producing security.
See Notes to Financial Statements.
43
<PAGE>
PORTFOLIO OF INVESTMENTS
SMALL CAP STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 97.4%
COMPUTER SOFTWARE/SERVICES - 24.0%
279,350 ARIS Corporation+ ....................... $ 768,212
91,100 AVT Corporation+ ........................ 671,862
86,000 BSQUARE Corporation + ................... 1,929,625
192,353 Carreker-Antinori Inc.+ ................. 1,731,177
168,012 Click2Learn.com Inc.+ ................... 2,961,211
128,600 Intraware Inc.+** ....................... 2,065,637
104,948 Made2Manage Systems Inc.+ ............... 590,332
46,342 NetIQ Corporation+ ...................... 2,763,142
93,500 ONYX Software Corporation+ .............. 2,775,781
106,508 Peregrine Systems Inc.+ ................. 3,694,505
45,500 Primus Knowledge Solutions Inc.+ ........ 2,047,500
------------
21,998,984
------------
HEALTH CARE PRODUCTS - 21.9%
99,500 ChiRex Inc.+ ............................ 1,990,000
66,850 Corixa Corporation+ ..................... 2,870,372
49,000 Dendreon Corporation+ ................... 811,563
48,400 DUSA Pharmaceuticals Inc.+ .............. 1,427,800
24,100 Emisphere Technologies Inc.+ ............ 1,026,886
28,280 ICOS Corporation+ ....................... 1,244,320
34,000 Incyte Genomics Inc.+ ................... 2,794,375
56,275 NeoRx Corporation+ ...................... 1,062,191
24,300 Novoste Corporation+ .................... 1,482,300
24,250 Pharmacyclics Inc.+ ..................... 1,479,250
47,837 Shire Pharmaceuticals Group Plc, ADR+ ... 2,481,544
48,509 SonoSite Inc.+ .......................... 1,397,666
------------
20,068,267
------------
ELECTRONICS/SEMICONDUCTORS - 7.3%
18,205 ATMI Inc.+ .............................. 846,532
26,640 Credence Systems Corporation+ ........... 1,470,195
19,750 Lattice Semiconductor Corporation+ ...... 1,365,219
21,000 NVIDIA Corporation+ ..................... 1,334,812
72,900 Pixelworks Inc.+ ........................ 1,658,475
------------
6,675,233
------------
ELECTRICAL EQUIPMENT - 5.8%
16,630 Electro Scientific Industries Inc.+ ..... 732,240
104,720 FEI Company+ ............................ 3,193,960
28,665 Microvision Inc.+ ....................... 1,404,585
------------
5,330,785
------------
COMPUTER SYSTEMS - 7.1%
108,200 Advanced Digital Information Corporation+ 1,724,438
42,000 Apex Inc.+ .............................. 1,837,500
20,282 In Focus Systems Inc.+ .................. 652,827
40,401 RadiSys Corporation + ................... 2,292,757
------------
6,507,522
------------
SHARES VALUE
------ -----
MEDIA - 4.9%
119,650 Bowne & Company Inc. .................... $ 1,203,978
49,400 Getty Images Inc.+ ...................... 1,830,888
33,200 Sirius Satellite Radio Inc.+ ............ 1,471,175
------------
4,506,041
------------
UTILITIES/TELECOMMUNICATIONS - 4.7%
38,900 Gilat Satellite Networks Ltd.+ .......... 2,698,688
141,200 Latitude Communications Inc.+ ........... 1,579,675
------------
4,278,363
------------
CONSUMER CYCLICALS - 4.4%
94,369 Building Materials Holding Corporation+.. 832,546
102,800 Cutter & Buck Inc.+ ..................... 815,975
237,200 J. Jill Group Inc.+ ..................... 1,541,800
103,335 K2 Inc. ................................. 858,972
------------
4,049,293
------------
FINANCIAL SERVICES - 4.3%
103,008 American Captial Strategies Ltd. ........ 2,459,316
69,945 Heller Financial Inc. ................... 1,433,873
------------
3,893,189
------------
BUSINESS SERVICES - 3.9%
39,400 Cognizant Technology Solutions Corporation+ 1,307,587
234,277 First Consulting Group Inc.+ ............ 1,303,166
342,400 ZapMe! Corporation+ ..................... 941,600
------------
3,552,353
------------
OIL & GAS - 2.5%
60,328 Hanover Compressor Company+ ............. 2,292,464
------------
TRANSPORTATION - 2.5%
35,956 Airborne Freight Corporation ............ 680,917
33,314 Expeditors International of Washington Inc. 1,582,415
------------
2,263,332
------------
CONSUMER STAPLES - 1.9%
48,000 Beringer Wine Estates Holding Inc., Class B+ 1,695,000
------------
CONSUMER DURABLES - 1.3%
86,650 Monaco Coach Corporation+ ............... 1,180,606
------------
LODGING & Restaurants - 0.7%
90,051 WestCoast Hospitality Corporation+ ...... 630,357
------------
See Notes to Financial Statements.
44
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
SMALL CAP STOCK FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
BASIC INDUSTRY - 0.2%
11,100 Schnitzer Steel Industries Inc., Class A $ 176,212
------------
WARRANT - 0.0%#
71 Per-Se Technologies Inc.,
Expires 07/08/2003+ ................... 0
------------
Total Common Stocks
(Cost $70,117,821) .................... 89,098,001
------------
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 4.0%
(Cost $3,720,000)
$ 3,720,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$3,721,860 on 07/03/2000, collateralized by
$3,033,085 U.S. Treasury Note, 8.125%
08/15/2021 (Market Value $3,805,709) .. $ 3,720,000
------------
TOTAL INVESTMENTS (COST $73,837,821*) ....... 101.4% 92,818,001
OTHER ASSETS AND LIABILITIES (NET) .......... (1.4) (1,319,450)
----- ------------
NET ASSETS .................................. 100.0% $ 91,498,551
===== ============
----------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$903,319, represent 1.0% of the total net assets of the Fund (Note 6).
+ Non-income producing security.
# Amount represents less than 0.1% of net assets.
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
ADR - American Depositary Receipt
--------------------------------------------------------------------------------
See Notes to Financial Statements.
45
<PAGE>
PORTFOLIO OF INVESTMENTS
INTERNATIONAL GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 94.4%
JAPAN - 25.7%
4,200 Advantest Corporation ................... $ 938,833
2,200 Aiful Corporation ....................... 203,362
8,000 Bridgestone Corporation ................. 169,752
11,000 Chugai Pharmaceutical Company Ltd. ...... 208,456
2,500 DDI Corporation ......................... 241,017
4,000 Fanuc Ltd. .............................. 407,934
2,000 Fuji Soft ABC Inc. ...................... 118,902
1,100 Fujitsu Support and Service Inc. ........ 109,167
47,000 Hitachi Ltd. ............................ 679,669
17,000 Jusco Company Ltd. ...................... 322,963
8,000 Kao Corporation ......................... 244,987
880 Keyence Corporation ..................... 291,111
74,000 Mitsubishi Heavy Industries Ltd. ........ 328,729
66,000 Mitsubishi Motors Corporation ........... 282,586
36,000 Mitsui Chemicals Inc. ................... 252,132
52,000 Mitsui Marine and Fire Insurance Company
Ltd. .................................. 250,658
5,000 Murata Manufacturing Company Ltd. ....... 719,271
61,000 NEC Corporation ......................... 1,919,916
4,000 Nichicon Corporation .................... 98,297
32,000 Nikon Corporation ....................... 1,188,641
3,200 Nintendo Company Ltd. ................... 560,143
2,300 Nippon Telegraph & Telephone Corporation 306,517
76,000 Nissan Motor Company Ltd.+ .............. 448,954
14,000 Nomura Securities Company Ltd. .......... 343,379
5,700 NTT DoCoMo Inc. ......................... 1,546,197
2,100 Rohm Company Ltd. ....................... 615,303
35,000 Sakura Bank Ltd. ........................ 242,482
11,000 Sankyo Company Ltd. ..................... 249,004
18,000 Sekisui House Ltd. ...................... 166,897
4,000 Shin-Etsu Chemical Company Ltd. ......... 203,400
11,000 Shionogi & Company Ltd. ................. 209,496
20,043 Sony Corporation ........................ 1,875,406
21,000 Suzuki Motor Corporation ................ 271,527
5,000 Taiyo Yuden Company Ltd. ................ 313,795
14,000 Tokyo Electron Ltd. ..................... 1,921,334
400 Tokyo Seimitsu Company, Ltd. ............ 53,685
41,000 Toray Industries Inc. ................... 166,633
4,000 Ushio Inc. .............................. 110,395
------------
18,580,930
------------
UNITED KINGDOM - 14.6%
3,600 AstraZeneca Group Plc ................... 168,287
2,600 AstraZeneca Group Plc, ADR .............. 120,900
28,000 BG Plc .................................. 181,002
44,800 British Aerospace Plc ................... 279,430
22,300 British Airways Plc ..................... 128,288
12,300 Cable & Wireless Plc .................... 208,369
59,000 Cadbury Schweppes Plc ................... 387,649
85,000 Coca-Cola Beverages Plc+ ................ 133,185
800 COLT Telecom Group Plc+ ................. 26,645
SHARES VALUE
------ -----
UNITED KINGDOM - (CONTINUED)
11,700 Compass Group Plc ....................... $ 149,473
23,600 Enterprise Oil Plc ...................... 199,273
24,800 GKN Plc ................................. 316,502
19,000 Halifax Group Plc ....................... 182,364
20,100 Laporte Plc ............................. 145,605
321,600 Laporte Plc, Class B .................... 3,652
105,013 Lloyds TSB Group Plc .................... 992,030
46,148 New Dixons Group Plc .................... 187,931
28,500 Reuters Group Plc ....................... 486,257
19,900 Royal Bank of Scotland Group Plc ........ 333,200
49,300 Shell Transport & Trading Company Plc ... 411,614
156,700 Invensys Plc ............................ 588,326
36,000 Tate & Lyle Plc ......................... 180,124
63,000 TI Group Plc ............................ 340,014
689,718 Vodafone AirTouch Plc ................... 2,787,918
34,300 Zeneca Group ............................ 1,601,941
------------
10,539,979
------------
GERMANY - 7.2%
1,200 Aixtron AG .............................. 163,229
400 Allianz AG .............................. 142,753
14,300 Bayerische Motoren Werke (BMW) AG ....... 437,280
4,000 DaimlerChrysler AG ...................... 213,190
2,600 Degussa-Huels AG+ ....................... 73,150
1,200 Deutsche Bank AG ........................ 100,709
6,600 Deutsche Telekom AG ..................... 382,132
2,300 Epcos AG+ ............................... 234,145
6,600 Infineon Technologies, ADR+ ............. 523,050
15,200 Infineon Technologies AG+ ............... 1,244,326
400 Intershop Communications AG+ ............ 183,666
8,700 Siemens AG .............................. 1,307,670
3,900 T-Online International AG ............... 127,670
5,100 Thyssen Krupp AG+ ....................... 81,496
------------
5,214,466
------------
FRANCE - 6.7%
1,280 Bouygues SA+ ............................ 858,897
2,500 Carrefour SA ........................... 171,588
800 Christian Dior SA ....................... 182,132
2,500 Compagnie de Saint Gobain ............... 339,341
1,200 Dassault Systemes SA .................... 112,385
3,100 Groupe Danone ........................... 413,056
200 LVMH (Louis Vitton Moet Hennessy) ....... 82,803
1,900 Michelin (CGDE), Class B ................ 62,206
1,000 PSA Peugeot Citroen ..................... 201,496
14,500 Sanofi-Synthelabo SA+ ................... 693,588
6,300 Societe BIC SA .......................... 309,807
16,500 STMicroelectronics NV ................... 1,059,094
3,600 Vivendi ................................. 319,038
------------
4,805,431
------------
See Notes to Financial Statements.
46
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
INTERNATIONAL GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
NETHERLANDS - 6.6%
26,748 ABN-Amro Holding NV ..................... $ 657,932
25,444 Aegon NV ................................ 909,029
9,000 ASM Lithography Holding NV+ ............. 388,401
21,000 ASM Lithography Holding NV (F)+ ......... 926,625
10,824 DSM NV .................................. 348,626
4,000 Heineken Holding NV, Class A ............ 156,442
10,300 Heineken NV ............................. 629,434
4,400 ING Groep NV+ ........................... 298,620
6,500 Koninklijke Luchtvaart Maatschappij NV
(KLM) ................................. 175,710
4,000 Unilever NV ............................. 184,241
3,200 United Pan-Europe Communications NV+ .... 84,018
------------
4,759,078
------------
SWITZERLAND - 4.5%
234 Adecco SA ............................... 199,453
200 Compagnie Financiere Richemont AG, Units 540,567
430 Holderbank Financiere Glarus AG ......... 528,883
175 Nestle SA ............................... 351,384
395 Novartis AG ............................. 627,697
16 Roche Holding AG ........................ 156,254
59 Schweizerische Rueckversicherungs-
Gesellschaft .......................... 120,644
901 Swisscom AG ............................ 313,065
2,580 UBS AG .................................. 379,209
------------
3,217,156
------------
CANADA - 3.8%
12,000 Bank of Nova Scotia ..................... 293,993
23,000 Bombardier Inc., Class B ................ 624,026
13,000 Clarica Life Insurance Company .......... 265,849
11,000 Inco Ltd.+ .............................. 168,526
5,200 Nortel Networks Corporation ............. 360,431
7,600 Rogers Communications Inc.+ ............. 215,176
20,000 Thomson Corporation ..................... 683,688
6,000 Toronto Dominion Bank Ontario ........... 159,145
------------
2,770,834
------------
FINLAND - 3.4%
39,900 Nokia Oyj ............................... 2,044,342
17,000 UPM-Kymmene Oyj** ....................... 423,696
------------
2,468,038
------------
AUSTRALIA - 3.2%
52,000 Australia & New Zealand Banking Group Ltd. 399,952
56,957 Broken Hill Proprietary Company Ltd. .... 675,413
10,300 Coles Myer Ltd. ......................... 39,666
85,000 Fosters Brewing Group Ltd. .............. 239,868
23,788 Lend Lease Corporation Ltd. ............. 304,338
77,200 Santos Ltd. ............................. 235,934
55,727 Westpac Banking Corporation Ltd. ........ 403,188
------------
2,298,359
------------
SHARES VALUE
------ -----
SOUTH KOREA - 3.0%
17,690 Hyundai Motor Company Ltd., GDR + ....... $ 114,100
200 Korea Telecom Corporation, Sponsored ADR+ 9,675
9,700 Pohang Iron & Steel Company Ltd.,
Sponsored ADR ......................... 232,800
1,875 Samsung Electronics ..................... 620,522
5,300 Samsung Electronics, Sponsored GDR ...... 1,022,900
14,000 Shinhan Bank ............................ 131,840
------------
2,131,837
------------
TAIWAN - 2.8%
31,960 Asustek Computer Inc., GDR .............. 293,233
7,400 Hon Hai Precision Industry Company Ltd.,
GDR++ ................................. 183,890
40,758 Taiwan Semiconductor Manufacturing
Company Ltd., Sponsored ADR+ .......... 1,579,388
------------
2,056,511
------------
HONG KONG - 2.3%
425,000 Amoy Properties Ltd. .................... 286,240
86,000 Cable & Wireless HKT Ltd. ............... 189,210
55,000 Hutchison Whampoa Ltd. .................. 691,466
27,500 Johnson Electric Holdings Ltd. .......... 260,182
98,000 Legend Holdings Ltd. .................... 94,919
98,000 Shangri-La Asia Ltd. .................... 115,663
------------
1,637,680
------------
SWEDEN - 1.9%
16,000 Ericsson LM, B Shares ................... 318,332
18,400 Ericsson LM, Sponsored ADR .............. 368,000
26,000 ForeningsSparbanken AB .................. 382,409
22,200 Svenska Handlesbanken AB, A Shares ...... 323,987
------------
1,392,728
------------
SPAIN - 1.8%
20,500 Banco Bilbao Vizcaya Argentaria SA+ ..... 307,540
47,280 Telefonica SA+ .......................... 1,019,748
------------
1,327,288
------------
ITALY - 1.7%
7,100 Assicurazioni Generali .................. 244,335
100,500 ENI Spa** ............................... 582,847
5,400 Fiat Spa** .............................. 140,694
48,000 UniCredito Italiano, Spa ................ 230,522
------------
1,198,398
------------
MEXICO - 1.6%
1,000 Telefonica SA, Sponsored ADR+ ........... 64,062
19,200 Telefonos de Mexico SA, Sponsored ADR ... 1,096,800
------------
1,160,862
------------
See Notes to Financial Statements.
47
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
INTERNATIONAL GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - (CONTINUED)
SINGAPORE - 1.6%
5,000 Chartered Semiconductor Manufacturing Ltd.$ 43,667
2,000 Creative Technology Ltd. ................ 48,237
27,000 DBS Group Holdings Ltd. ................. 346,678
20,000 Singapore Press Holdings Ltd. ........... 312,323
268,000 Singapore Technologies Engineering Ltd... 393,712
------------
1,144,617
------------
PORTUGAL - 0.8%
16,800 Portugal Telecom SA ..................... 189,387
1,400 PT Multimedia.com ....................... 10,776
1,400 PT Multimedia Servicos de Telecomunicacoes e
Multimedia SGPS SA+ ................... 69,785
20,000 Telecel-Comunicacaoes Pessoais SA ....... 304,832
------------
574,780
------------
IRELAND - 0.5%
15,000 Allied Irish Banks Plc .................. 135,161
14,000 CRH Plc ................................. 253,643
------------
388,804
------------
NORWAY - 0.5%
8,000 Norsk Hydro ASA ......................... 336,942
------------
UNITED STATES - 0.2%
6,000 Creative Technology Ltd, Ord. ........... 143,250
------------
BRAZIL - 0.0%#
2,000 Telecomunicacoes de Sao Paulo SA, Sponsored
ADR ................................... 37,000
------------
Total Common Stocks (Cost $52,677,591) .. 68,184,968
------------
PREFERRED STOCK - 0.2%
(Cost $115,358)
ITALY - 0.2%
6,790 Fiat Spa ................................ 110,975
------------
CONVERTIBLE PREFERRED STOCK - 0.4%
(Cost $272,856)
JAPAN - 0.4%
30,000,000 Sanwa International Finance Bermuda Trust,
Conv. Pfd.,
1.250% due 08/01/2005 (F) ............. 285,676
------------
PRINCIPAL
AMOUNT
----------
CORPORATE BONDS - 0.0%#
BG Transco Holdings Plc, Bond:
$ 888 4.188% due 12/14/2022++ ............... 1,331
888 7.000% due 12/16/2024++ ............... 1,319
888 7.057% due 12/14/2009++ ............... 1,360
------------
Total Corporate Bonds (Cost $4,434) ..... 4,010
------------
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 4.3%
(Cost $3,091,000)
$ 3,091,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$3,092,545, on 07/03/2000, collateralized by
$2,520,233 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $3,162,217) .. $ 3,091,000
------------
TOTAL INVESTMENTS (COST $56,161,239*) ....... 99.3% 71,676,629
OTHER ASSETS AND LIABILITIES (NET) .......... 0.7 538,391
----- ------------
NET ASSETS .................................. 100.0% $ 72,215,020
===== ============
---------------------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$814,691, represent 1.1% of the total net assets of the Fund (Note 6).
# Amount represents less than 0.1% of net assets.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
As of June 30, 2000 sector diversification was as follows:
% OF
SECTOR DIVERSIFICATION NET ASSETS VALUE
---------------------- ---------- ------
COMMON STOCKS
Technology ............................... 21.4% $15,482,738
Telecommunications ....................... 16.8 12,112,873
Financial Services ....................... 13.9 10,039,079
Materials & Processing ................... 7.6 5,492,692
Health Care .............................. 5.6 4,035,623
Autos & Transportation ................... 4.2 3,006,632
Producer Durables ........................ 4.0 2,889,221
Consumer Staples ......................... 3.7 2,638,808
Retail ................................... 3.6 2,603,352
Energy ................................... 2.7 1,947,612
Other .................................... 11.1 8,047,313
----- -----------
TOTAL COMMON STOCKS ...................... 94.6 68,295,943
CONVERTIBLE PREFERRED STOCKS ............. 0.4 285,676
CORPORATE BONDS .......................... 0.0# 4,010
REPURCHASE AGREEMENT ..................... 4.3 3,091,000
----- -----------
TOTAL INVESTMENTS ........................ 99.3 71,676,629
OTHER ASSETS AND LIABILITIES (Net) ....... 0.7 538,391
----- -----------
NET ASSETS ............................... 100.0% $72,215,020
===== ===========
--------------------------
# Amount represents less than 0.1% of net assets.
See Notes to Financial Statements.
48
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
INTERNATIONAL GROWTH FUND
JUNE 30, 2000 (UNAUDITED)
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
U.S. FORWARD FOREIGN CURRENCY CONTRACTS TO BUY
NET
CONTRACTS TO RECEIVE UNREALIZED
--------------------------------------------------- APPRECIATION/
EXPIRATION LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------ ---------- ------------- -------------
07/03/2000 SEK 669,913 76,381 75,928 $ 453
07/05/2000 GBP 38,920 58,925 59,091 (166)
07/05/2000 JPY 4,201,312 39,744 39,691 53
07/06/2000 GBP 19,289 29,204 29,286 (82)
07/19/2000 EMU 1,389,823 1,333,840 1,338,860 (5,020)
07/31/2000 EMU 486,026 466,872 459,138 7,734
08/10/2000 EMU 39,423 37,877 35,957 1,920
08/10/2000 EMU 742,664 713,767 672,832 40,935
08/28/2000 EMU 329,728 317,195 321,568 (4,373)
09/01/2000 EMU 401,931 386,794 376,193 10,601
09/05/2000 EMU 73,099 70,361 71,934 (1,573)
09/07/2000 EMU 130,258 125,392 123,849 1,543
11/27/2000 EMU 343,595 332,387 305,735 26,652
02/20/2001 EMU 753,358 732,106 713,505 18,601
----------
$ 97,278
----------
U.S. FORWARD FOREIGN CURRENCY CONTRACTS TO SELL
NET
CONTRACTS TO DELIVER UNREALIZED
--------------------------------------------------- APPRECIATION/
EXPIRATION LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS
---------- ------------------ ---------- ------------- -------------
07/03/2000 AUD 33,289 19,988 20,045 $ 57
07/03/2000 EMU 37,789 36,230 35,907 (323)
07/03/2000 GBP 10,478 15,862 15,780 (82)
07/03/2000 JPY 2,609,345 24,676 24,735 59
07/05/2000 AUD 68,172 40,935 40,859 (76)
07/05/2000 EMU 149,521 143,376 142,594 (782)
07/05/2000 GPB 71,455 108,182 108,434 252
07/05/2000 JPY 37,738,447 357,005 358,389 1,384
07/05/2000 SGD 92,998 53,787 53,714 (73)
07/05/2000 ZAR 708,171 104,454 103,841 (613)
07/06/2000 GPB 21,768 32,957 33,050 93
07/19/2000 AUD 494,353 296,864 328,424 31,560
07/19/2000 JPY 105,262,365 998,550 1,010,432 11,882
07/31/2000 GPB 116,692 176,766 184,338 7,572
08/04/2000 GPB 23,054 34,925 35,957 1,032
08/10/2000 AUD 566,329 340,205 332,719 (7,486)
08/10/2000 CAD 403,383 272,524 270,255 (2,269)
08/10/2000 GBP 45,632 69,133 69,860 727
08/28/2000 JPY 74,878,710 715,457 686,566 (28,891)
09/01/2000 GPB 251,769 381,578 376,193 (5,385)
09/05/2000 GPB 45,380 68,783 71,935 3,152
09/07/2000 CAD 183,000 123,720 123,849 129
11/27/2000 JPY 32,892,440 319,527 305,731 (13,796)
02/20/2001 JPY 78,025,330 770,234 713,498 (56,736)
----------
(58,613)
----------
Net Unrealized Appreciation of Forward Foreign Currency
Contracts ......................................................$ 38,665
==========
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
ADR - American Depositary Receipt
AUD - Australian Dollar
CAD - Canadian Dollar
EMU - European Monetary Unit
(F) - Foreign Shares
GBP - Great Britain Pound Sterling
GDR - Global Depositary Receipt
HKD - Hong Kong Dollar
JPY - Japanese Yen
SEK - Swedish Krona
SGD - Singapore Dollar
ZAR - South African Rand
--------------------------------------------------------------------------------
See Notes to Financial Statements.
49
<PAGE>
PORTFOLIO OF INVESTMENTS
INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
CORPORATE BONDS AND NOTES - 52.1%
TRANSPORTATION - 11.4%
$ 1,000,000 Boeing Company, Deb.,
8.750% due 08/15/2021 ................. $ 1,110,652
2,000,000 Burlington Northern Santa Fe, Deb.,
8.125% due 04/15/2020 ................. 2,017,113
1,000,000 Conrail, Inc., Deb.,
9.750% due 06/15/2020 ................. 1,154,493
864,699 Continental Airlines Inc., Pass-through
Certificates, Series 974C,
6.800% due 07/02/2007 ................. 818,130
Norfolk Southern Corporation:
1,000,000 Bond,
7.800% due 05/15/2027 ................. 964,149
2,500,000 Sr. Notes,
6.200% due 04/15/2009 ................. 2,244,803
2,000,000 Southwest Airlines Company, Pass-through
Certificates, 94-A, Class A-4,
9.150% due 07/01/2016 ................. 2,232,290
1,300,000 United Air Lines Inc.,
Pass-through Certificates,
9.560% due 10/19/2018 ................. 1,311,759
------------
11,853,389
------------
INDUSTRIAL - 6.0%
663,000 Caterpillar Inc., Sinking Fund Deb.,
9.750% due 06/01/2019 ................. 694,210
Lockheed Martin Corporation, Note:
1,500,000 7.250% due 05/15/2006 ................. 1,457,246
2,000,000 8.200% due 12/01/2009 ................. 2,022,255
200,000 Ogden Corporation, Deb.,
9.250% due 03/01/2022 ................. 221,540
1,800,000 Praxair Inc., Deb.,
8.700% due 07/15/2022 ................. 1,835,251
------------
6,230,502
------------
FOREIGN (U.S. DOLLAR DENOMINATED) - 5.6%
1,000,000 Abbey National Plc, Global Note,
6.690% due 10/17/2005 ................. 959,958
250,000 HIH Capital Ltd., Conv. Note,
7.500% due 09/25/2006 ................. 154,851
1,700,000 Northern Telecom Capital, Sub. Note,
7.400% due 06/15/2006 ................. 1,664,718
500,000 Petro-Canada, Deb.,
9.250% due 10/15/2021 ................. 543,476
500,000 Trans-Canada Pipeline Corporation, Deb.,
8.500% due 03/20/2023 ................. 511,800
2,000,000 Vodafon Airtouch,
7.750% due 02/15/2010 ................. 1,986,201
------------
5,821,004
------------
PRINCIPAL
AMOUNT VALUE
------ -----
RETAIL SALES - 4.8%
$ 1,000,000 Fred Meyer Inc.,
7.450% due 03/01/2008 ................. $ 956,394
May Department Stores Company, Deb.:
1,000,000 8.375% due 10/01/2022 ................. 1,027,709
600,000 8.375% due 08/01/2024 ................. 608,502
2,500,000 Safeway Inc., Note,
7.500% due 09/15/2009 ................. 2,451,075
------------
5,043,680
------------
AUTO - 4.3%
400,000 Ford Holdings Inc., Deb.,
9.300% due 03/01/2030 ................. 453,770
Ford Motor Company, Deb.:
600,000 8.875% due 11/15/2022 ................. 623,117
250,000 8.900% due 01/15/2032 ................. 273,121
2,000,000 Ford Motor Credit Company, Note,
7.375% due 10/28/2009 ................. 1,940,021
1,000,000 General Motors Corporation, Deb.,
9.400% due 07/15/2021 ................. 1,154,022
------------
4,444,051
------------
BANKS - 4.1%
400,000 Banc One Corporation, Sub. Note,
10.000% due 08/15/2010 ................ 447,385
82,000 Barnett Banks, Florida, Inc., Sub. Note,
10.875% due 03/15/2003 ................ 88,106
230,000 Citicorp, Sub. Note,
8.625% due 12/01/2002 ................. 235,955
First Chicago Corporation, Sub. Note:
600,000 11.250% due 02/20/2001 ................ 614,216
100,000 9.250% due 11/15/2001 ................. 102,355
1,040,000 Fleet/Norstar Financial Group, Inc., Sub. Note,
9.900% due 06/15/2001 ................. 1,063,552
1,100,000 NCNB Corporation, Sub. Note,
9.375% due 09/15/2009 ................. 1,197,546
516,000 Security Pacific Corporation, Sub. Note,
11.500% due 11/15/2000 ................ 523,595
------------
4,272,710
------------
FINANCIAL - 4.1%
500,000 American General Corporation,
Sinking Fund Deb.,
7.500% due 07/15/2025 ................. 469,724
1,000,000 Barclays North American Capital
Corporation, Capital Note,
9.750% due 05/15/2021 ................. 1,059,221
1,000,000 Hartford Life Insurance Company, Deb.,
7.650% due 06/15/2027 ................. 950,689
2,000,000 Merrill Lynch & Company Inc., Note,
6.000% due 02/17/2009 ................. 1,772,306
------------
4,251,940
------------
See Notes to Financial Statements.
50
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
MEDIA/TELECOMMUNICATIONS - 3.8%
$ 2,500,000 Cox Communications Inc., Note,
7.875% due 08/15/2009 ................. $ 2,498,807
1,200,000 News America Holdings Inc., Sr. Deb.,
8.000% due 10/17/2016 ................. 1,140,915
300,000 Time Warner Inc., Deb.,
9.150% due 02/01/2023 ................. 329,753
------------
3,969,475
------------
OIL & GAS - 3.2%
1,200,000 ANR Pipeline Company, Deb.,
9.625% due 11/01/2021 ................. 1,363,729
1,000,000 Enron Corporation, Note,
6.450% due 11/15/2001 ................. 989,537
1,000,000 Phillips Petroleum Company, Deb.,
9.180% due 09/15/2021 ................. 1,037,753
------------
3,391,019
------------
UTILITIES - 2.3%
200,000 Duke Power Company,
First and Refundable
Mortgage,
6.875% due 08/01/2023 ................. 173,803
700,000 Florida Power & Light Company, First
Mortgage,
7.050% due 12/01/2026 ................. 629,722
Texas Utilities Electric Company:
150,000 First and Collateral Mortgage,
8.500% due 08/01/2024 ................. 148,533
1,500,000 First Mortgage,
7.875% due 04/01/2024 ................. 1,416,882
------------
2,368,940
------------
CONSUMER PRODUCTS/SERVICES - 1.9%
1,750,000 Carnival Corporation, Deb.,
7.200% due 10/01/2023 ................. 1,524,971
500,000 Waste Management Inc., Conv. Sub. Note,
4.000% due 02/01/2002** ............... 466,136
------------
1,991,107
------------
HEALTH CARE - 0.4%
150,000 Mariner Post-Acute Network, Sr. Sub. Note,
9.500% due 11/01/2007+ ................ 1,125
500,000 Medical Care International Inc.
(Columbia),
Conv. Sub. Deb.,
6.750% due 10/01/2006++ ............... 439,969
------------
441,094
------------
GAMING - 0.2%
250,000 Riviera Holdings Corporation, Company
Guarantee,
10.000% due 08/15/2004 ................ 226,250
------------
Total Corporate Bonds and Notes
(Cost $56,199,423) .................... 54,305,161
------------
PRINCIPAL
AMOUNT VALUE
------ -----
U.S. TREASURY OBLIGATIONS - 22.3%
U.S. Treasury Notes - 18.0%
$ 7,000,000 5.500% due 05/31/2003 ................. $ 6,844,587
1,500,000 6.125% due 08/15/2007** ............... 1,491,563
8,000,000 5.625% due 05/15/2008** ............... 7,717,246
2,650,000 6.000% due 08/15/2009** ............... 2,629,278
------------
18,682,674
------------
U.S. TREASURY BONDS - 4.3%
2,000,000 13.750% due 08/15/2004 ................ 2,530,626
2,000,000 6.000% due 02/15/2026 ................. 1,955,611
------------
4,486,237
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $23,292,690) .................... 23,168,911
------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
SECURITIES - 17.0%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 6.7%
6,959,571 # 2882,
7.000% due 02/20/2030 ................. 6,730,085
191,979 # 386671,
9.000% due 02/15/2025 ................. 198,765
------------
Total GNMAs (Cost $6,815,434) ........... 6,928,850
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 6.1%
137,787 # C00385, GOLD,
9.000% due 01/01/2025 ................. 142,423
2,394,281 # C00785,
6.500% due 06/01/2029 ................. 2,261,459
4,224,469 # C29918,
6.500% due 08/01/2029 ................. 3,990,113
------------
Total FHLMCs (Cost $6,340,536) .......... 6,393,995
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 4.2%
2,000,000 # 460308,
7.630% due 02/01/2010 ................. 2,034,502
2,470,782 # 529010,
7.000% due 01/01/2030 ................. 2,386,176
------------
Total FNMAs (Cost $4,388,852) ........... 4,420,678
------------
Total U.S. Government Agency Mortgage-
Backed Securities (Cost $17,544,822) .. 17,743,523
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.3%
Federal Home Loan Mortgage Corporation
(FHLMC), Notes:
2,500,000 6.875% due 01/15/2005** ............... 2,486,944
3,000,000 7.000% due 03/15/2010** ............... 2,979,876
------------
Total U.S. Government Agency Obligations
(Cost $5,426,931) ..................... 5,466,820
------------
See Notes to Financial Statements.
51
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 1.9%
(Cost $2,011,000)
$ 2,011,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$2,012,006 on 07/03/2000, collateralized by
$1,639,660 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $2,057,334) .. $ 2,011,000
------------
TOTAL INVESTMENTS (COST $104,474,866*) ...... 98.6% 102,695,415
OTHER ASSETS AND LIABILITIES (NET) .......... 1.4 1,495,452
----- ------------
NET ASSETS .................................. 100.0% $104,190,867
===== ============
-------------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$13,208,033, represent 12.7% of the total net assets of the Fund (Note 6).
+ In default as to interest payments.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
GOLD - Payments are on an accelerated 45-day payment cycle
instead of a 75-day payment cycle.
--------------------------------------------------------------------------------
See Notes to Financial Statements.
52
<PAGE>
PORTFOLIO OF INVESTMENTS
U.S. GOVERNMENT SECURITIES FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
SECURITIES - 58.3%
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 22.8%
$ 6,459,149 6.500% due 11/01/2028 - 04/01/2029 .... $ 6,098,675
6,187,516 7.000% due 08/01/2028 - 04/01/2029 .... 5,992,263
2,187,815 7.500% due 11/01/2029 ................. 2,163,532
3,222,616 8.000% due 05/01/2022 - 09/01/2027 .... 3,253,131
3,155,423 8.500% due 02/01/2023 - 10/01/2027 .... 3,221,317
404,413 8.700% due 12/25/2019 ................. 415,043
------------
Total FNMAs (Cost $21,648,285) .......... 21,143,961
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 21.4%
945,293 6.000% due 02/20/2029 ................. 866,211
7,332,621 7.000% due 01/15/2028 - 08/20/2029 .... 7,123,713
4,710,763 7.500% due 01/15/2023 - 11/15/2023 .... 4,701,302
2,595,679 7.750% due 12/15/2029 ................. 2,588,484
4,533,567 8.000% due 07/15/2026 - 06/20/2030 .... 4,565,515
29,097 9.000% due 08/15/2021 ................. 30,194
------------
Total GNMAs (Cost $20,229,081) .......... 19,875,419
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 14.1%
GOLD:
733,929 5.500% due 12/01/2008 ................. 693,340
1,953,017 6.000% due 01/01/2013 ................. 1,856,329
2,970,390 6.500% due 05/01/2023 - 03/01/2029 .... 2,827,190
5,000,983 7.000% due 04/01/2008 - 07/01/2029 .... 4,866,591
2,337,727 8.500% due 07/01/2029 ................. 2,387,779
456,720 8.750% due 01/01/2013 ................. 471,439
------------
Total FHLMCs (Cost $13,470,544) ......... 13,102,668
------------
Total U.S. Government Agency Mortgage-
Backed Securities (Cost $55,347,910).. 54,122,048
------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMO) - 18.3%
Federal National Mortgage Association,
REMIC, Pass-through Certificates:
5,868,510 Series 1992-55, Class DZ,
8.000% due 04/25/2022 ................. 5,902,743
6,950,760 Series 1992-83, Class X,
7.000% due 02/25/2022 ................. 6,676,762
45,319 Series 1993-159, Class PA, (P/O),
Zero coupon due 01/25/2021 ............ 45,093
516,083 Residential Funding Mortgage Security,
Series 1992-S39, Class A8,
7.500% due 11/25/2007 ................. 514,733
3,853,000 Vendee Mortgage Trust,
Series 2000-2, Class G,
7.500% due 10/15/2009 ................. 3,861,428
------------
Total CMO (Cost $16,072,137) ............ 17,000,759
------------
PRINCIPAL
AMOUNT VALUE
------ -----
U.S. GOVERNMENT AGENCY OBLIGATIONS - 13.0%
Federal Farm Credit Bank, Note:
$ 1,500,000 5.730% due 04/14/2003 ................. $ 1,451,038
2,000,000 5.700% due 06/18/2003 ................. 1,930,420
Federal Home Loan Bank, Bond:
2,000,000 5.305% due 03/26/2001 ................. 1,978,280
2,000,000 7.350% due 02/28/2003 ................. 1,996,720
1,000,000 6.810% due 08/20/2007 ................. 961,027
1,000,000 6.135% due 02/17/2009 ................. 917,970
1,000,000 Federal Home Loan Bank, MTN,
5.705% due 03/19/2003 ................. 969,440
2,000,000 Housing Urban Development, Series 99-A,
Government Guarantee,
6.160% due 08/01/2011 ................. 1,824,180
------------
Total U.S. Government Agency Obligations
(Cost $12,591,275) .................... 12,029,075
------------
U.S. TREASURY OBLIGATIONS - 3.6%
U.S. TREASURY BONDS - 1.8%
1,300,000 6.250% due 08/15/2023 ................. 1,308,530
300,000 12.750% due 11/15/2010 ................ 384,469
------------
1,692,999
------------
U.S. TREASURY NOTES - 1.8%
1,000,000 4.875% due 03/31/2001 ................. 988,123
325,000 6.625% due 03/31/2002 ................. 325,711
350,000 6.250% due 02/15/2007 ................. 350,438
------------
1,664,272
------------
Total U.S. Treasury Obligations
(Cost $3,379,312) ..................... 3,357,271
------------
REPURCHASE AGREEMENT - 6.1%
(Cost $5,651,000)
5,651,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$5,653,826 on 07/03/2000, collateralized by
$4,607,517 U.S. Treasury Note, 8.125% due
08/15/2021 (Market Value $5,781,200) .. 5,651,000
------------
total investments (Cost $93,041,634*) ....... 99.3% 92,160,153
other assets and liabilities (Net) .......... 0.7 635,878
----- ------------
Net Assets .................................. 100.0% $ 92,796,031
===== ============
------------------------
* Aggregate cost for federal tax purposes.
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
MTN - Medium Term Note
REMIC - Real Estate Mortgage Investment Conduit
P/O - Principal Only
GOLD - Payments are on an accelerated 45-day payment cycle
instead of 75-day payment cycle.
--------------------------------------------------------------------------------
See Notes to Financial Statements.
53
<PAGE>
PORTFOLIO OF INVESTMENTS
SHORT TERM INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
CORPORATE BONDS AND NOTES - 34.7%
FINANCIAL - 10.7%
$ 985,000 McDonnell Douglas,
6.710% due 07/19/2000 ................. $ 984,913
2,250,000 Freddie Mac, Note,
6.875% due 01/15/2005 ................. 2,238,289
1,000,000 Goldman Sachs Group LP, Note,
7.800% due 07/15/2002++ ............... 1,004,969
325,000 Merrill Lynch & Company, Note,
8.300% due 11/01/2002 ................. 332,106
250,000 US West Capital Funding Inc., Company
Guarantee,
6.125% due 07/15/2002 ................. 244,701
------------
4,804,978
------------
BANKS - 7.2%
250,000 Southern National, Sub.,
7.050% due 05/23/2003 ................. 246,194
1,000,000 Chase Manhattan Corporation, Note,
5.500% due 02/15/2001 ................. 990,355
1,000,000 First Chicago Corporation, Sub. Note,
9.250% due 11/15/2001 ................. 1,023,553
1,000,000 Wachovia Corporation, Sr. Unsub. Note,
6.700% due 06/21/2004 ................. 976,576
------------
3,236,678
------------
UTILITIES - 4.3%
1,000,000 United Illuminating Company, Note,
6.000% due 12/15/2003 ................. 941,574
1,000,000 Wisconsin Electric Power Company, Deb,
6.625% due 12/01/2002 ................. 991,647
------------
1,933,221
------------
MEDIA - 3.3%
1,500,000 Times Mirror Company, Note,
6.650% due 10/15/2001 ................. 1,489,162
------------
RETAIL SALES - 2.7%
250,000 Federated Department Stores Inc., Bond,
6.790% due 07/15/2007 ................. 240,192
1,000,000 Wal-Mart Stores Inc.,
6.150% due 08/10/2001 ................. 990,659
------------
1,230,851
------------
REAL ESTATE INVESTMENT TRUSTS - 2.3%
100,000 Colonial Realty LP, Note,
7.500% due 07/15/2001 ................. 99,094
250,000 Oasis Residential Inc,
6.750% due 11/15/2001 ................. 245,522
600,000 Sun Communities Inc., Sr. Note,
7.625% due 05/01/2003 ................. 586,784
100,000 SUSA Partnership LP, Note,
7.125% due 11/01/2003 ................. 95,325
------------
1,026,725
------------
TRANSPORTATION - 2.2%
1,000,000 CSX Corporation, Deb.,
9.500% due 08/01/2000 ................. 1,001,113
------------
PRINCIPAL
AMOUNT VALUE
------ -----
OIL & GAS - 1.1%
$ 500,000 Occidental Petroleum Company, Sr. Note,
6.400% due 04/01/03 ................... $ 479,546
------------
CHEMICAL - 0.5%
100,000 Equistar Chemicals LP, Note,
9.125% due 03/15/2002 ................. 99,981
150,000 Lyondell Petrochemical Company, MTN,
9.750% due 09/04/2003++ ............... 152,809
------------
252,790
------------
AEROSPACE/DEFENSE - 0.4%
200,000 Lockheed Martin Corporation,
Company Guarantee,
6.850% due 05/15/2001 ................. 199,126
------------
Total Corporate Bonds and Notes
(Cost $15,897,128) .................... 15,654,190
------------
U.S. TREASURY NOTES - 19.8%
3,500,000 4.000% due 10/31/2000** ............... 3,473,750
5,000,000 5.250% due 05/31/2001** ............... 4,946,875
500,000 5.625% due 02/15/2006** ............... 485,000
------------
Total U.S. Treasury Notes
(Cost $8,976,901) ..................... 8,905,625
------------
ASSET-BACKED SECURITIES - 17.8%
2,000,000 ANRC Auto Owner Trust, 1999-A A3,
6.750% due 12/15/2003 ................. 1,986,210
1,500,000 California Infrastructure PG&E, AB,
6.320% due 09/25/2005 ................. 1,472,453
127,368 Carco Auto Loan Master Trust, 1997-1 A,
6.689% due 08/15/2004 ................. 126,974
943,484 FFCA Secured Lending Corporation,
1999-2 WA1A,
7.130% due 05/15/2026++ ............... 926,089
500,000 First USA Credit Card Master Trust,
1997-6 A,
6.420% due 03/17/2005 ................. 493,913
76,902 General Electric Capital Mortgage
Association, 1996-HE3 A3,
7.150% due 09/25/2026 ................. 76,587
Green Tree Financial Corporation:
250,000 1995-1 B2,
9.200% due 06/15/2025 ................. 173,571
159,053 1995-6 B1,
7.700% due 10/15/2026 ................. 157,972
34,570 Green Tree Home Equity Loan Trust,
1997-B A5,
7.150% due 06/15/2028 ................. 34,590
165,000 Green Tree Home Improvement, 1995-D B2,
7.450% due 09/15/2025 ................. 156,883
14,154 Green Tree Recreational, Equipment &
Consumer, 1996-A A1,
5.550% due 02/15/2018 ................. 13,708
1,462 Merrill Lynch Mortgage Investors Inc.,
1991-I A,
7.650% due 01/15/2012 ................. 1,459
See Notes to Financial Statements.
54
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
SHORT TERM INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
ASSET-BACKED SECURITIES - (CONTINUED)
$ 231,035 Mid-State Trust, Series 4-A,
8.330% due 04/01/2030 ................. $ 231,100
1,500,000 Providian Master Trust, 1997-4 A,
6.250% due 06/15/2007 ................. 1,473,668
700,000 Standard Credit Card Master Trust, 1994-4 A,
8.250% due 11/07/2003 ................. 708,306
------------
Total Asset-Backed Securities
(Cost $8,231,739) ..................... 8,033,483
------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
SECURITIES - 10.5%
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 6.7%
840,639 # 252214,
6.500% due 01/01/2014 ................. 811,404
116,060 # 313257,
6.132% due 11/01/2035 ................. 112,910
177,574 # 313641,
8.500% due 11/01/2017 ................. 181,807
866,993 # 456445,
6.500% due 01/01/2014 ................. 836,841
1,075,592 # 523795,
8.000% due 05/01/2027 ................. 1,085,918
------------
Total FNMAs (Cost $3,111,489) ........... 3,028,880
------------
ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES (ARMS) - 0.6%
Federal Home Loan Mortgage Corporation
(FHLMC):
96,403 # 082247,
6.125% due 04/01/2019 ................. 93,970
65,370 # 845988,
7.512% due 11/01/2021+ ................ 65,006
Federal National Mortgage Association
(FNMA):
13,485 # 124571,
7.411% due 11/01/2022+ ................ 13,604
63,492 # 141461,
7.466% due 11/01/2021+ ................ 64,097
36,915 # 152205,
7.204% due 01/01/2019+ ................ 37,135
------------
Total ARMS (Cost $279,175) .............. 273,812
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 2.9%
46,942 # 001991,
9.000% due 04/20/2025 ................. 48,263
31,926 # 140834,
11.000% due 12/15/2015 ................ 34,820
12,252 # 144538,
11.000% due 12/15/2015 ................ 13,363
44,476 # 151670,
11.000% due 12/15/2015 ................ 48,508
100,468 # 213862,
10.000% due 09/15/2018 ................ 105,981
50,602 # 225305,
10.000% due 02/15/2018 ................ 53,379
15,729 # 234561,
10.000% due 12/15/2017 ................ 16,597
PRINCIPAL
AMOUNT VALUE
------ -----
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) - (CONTINUED)
$ 19,762 # 254937,
10.000% due 06/15/2019 ................ $ 20,842
41,951 # 257814,
10.000% due 09/15/2018 ................ 44,253
124,380 # 264735,
10.000% due 02/15/2019 ................ 131,181
78,983 # 289333,
10.000% due 05/15/2020 ................ 83,279
101,321 # 291116,
10.000% due 06/15/2020 ................ 106,832
28,033 # 293511,
10.000% due 07/15/2020 ................ 29,558
123,078 # 400224,
8.000% due 06/15/2009 ................. 125,265
167,786 # 453963,
8.000% due 08/15/2012 ................. 170,632
88,013 # 780081,
10.000% due 02/15/2025 ................ 92,997
18,927 # 780121,
10.000% due 04/15/2025 ................ 19,999
19,804 # 780141,
10.000% due 12/15/2020 ................ 20,881
129,644 # 780317,
9.000% due 12/15/2020 ................. 134,670
------------
Total GNMAs (Cost $1,332,511) ........... 1,301,300
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 0.3%
(Cost $116,430)
108,549 # A01226,
9.500% due 08/01/2016 ................. 113,742
------------
Total U.S. Government Agency Mortgage-Backed
Securities (Cost $4,839,605) .......... 4,717,734
------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMO) - 6.9%
15,826 Countrywide Funding Corporation, 1994-1 A3,
6.250% due 03/25/2024 ................. 15,220
2,072,000 Prudential Home Mortgage Securities,
1993-18 A6,
7.000% due 06/25/2023 ................. 2,024,624
350,000 Residential Asset Securitization Trust,
1997-A6 A5,
7.250% due 09/25/2012 ................. 349,260
714,668 Residential Funding Mortgage Security I,
1995-S14 A8,
7.500% due 09/25/2025 ................. 713,028
------------
Total CMO (Cost $3,140,810) ............. 3,102,132
------------
COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS) - 4.1%
960,924 GMAC Commercial Mortgage
Securities Inc., 1999-CTL1A,
7.151% due 02/15/2008++ ............... 949,663
888,756 Morgan Stanley Capital I, 1999-CAMI A1,
6.540% due 04/15/2004 ................. 873,563
------------
Total CMBS (Cost $1,849,416) ............ 1,823,226
------------
See Notes to Financial Statements.
55
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
SHORT TERM INCOME FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
REPURCHASE AGREEMENT - 5.3%
(Cost $ 2,400,000)
$ 2,400,000 Agreement with Goldman Sachs & Company,
6.000% dated 06/30/2000, to be repurchased at
$2,401,200 on 06/30/2000, collateralized by
1,956,829 U.S. Treasury Note, 8.125% due
07/03/2000 (Market Value $2,455,296)... $ 2,400,000
------------
TOTAL INVESTMENTS (COST $45,335,599*) ....... 99.1% 44,636,390
OTHER ASSETS AND LIABILITIES (NET) .......... 0.9 426,439
----- ------------
NET ASSETS .................................. 100.0% $ 45,062,829
===== ============
--------------------------------
* Aggregate cost for federal tax purposes.
** Security on loan at June 30, 2000, which have an aggregate market value of
$7,960,696, represent 17.7% of the total net assets of the Fund (Note 6).
+ Variable rate securities payable upon not more than seven calendar days'
notice, and secured by bank letters of credit. The interest rate shown
reflects the rate currently in effect.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
--------------------------------------------------------------------------------
GLOSSARY OF TERMS
MTN - Medium Term Note
--------------------------------------------------------------------------------
See Notes to Financial Statements.
56
<PAGE>
PORTFOLIO OF INVESTMENTS
MONEY MARKET FUND
JUNE 30, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
------ -----
COMMERCIAL PAPER (DOMESTIC) - 55.3%
$ 650,000 American Express Credit Corporation,
6.520% due 07/14/2000+ ................ $ 648,470
650,000 AT&T Corporation,
6.530% due 08/28/2000+ ................ 643,162
650,000 Citicorp,
6.500% due 07/28/2000+ ................ 646,831
650,000 Columbia University in New York,
6.530% due 08/11/2000+ ................ 645,166
650,000 DaimlerChrysler NA Holding Corporation,
6.580% due 07/27/2000+ ................ 646,911
650,000 Ford Motor Credit Corporation,
6.540% due 07/24/2000+ ................ 647,283
650,000 General Electric Capital Corporation,
6.540% due 08/18/2000+ ................ 644,332
650,000 Goldman Sachs Group Inc.,
6.600% due 08/18/2000+ ................ 644,280
650,000 Household Finance Corporation,
6.610% due 08/03/2000+ ................ 646,062
650,000 IBM Credit Corporation,
6.520% due 07/27/2000+ ................ 646,939
650,000 John Deere Capital Corporation,
6.560% due 08/23/2000+ ................ 643,722
650,000 Merrill Lynch & Company Inc.,
6.590% due 08/31/2000+ ................ 642,742
650,000 Wells Fargo & Company,
6.530% due 08/18/2000+ ................ 644,341
650,000 Windmill Funding Corporation,
6.560% due 07/13/2000+,++ ............. 648,579
------------
Total Commercial Paper (Domestic)
(Cost $9,038,820) ..................... 9,038,820
------------
COMMERCIAL PAPER (YANKEE) - 15.8%
650,000 American Honda Finance Corporation,
6.580% due 09/13/2000+ ................ 641,208
650,000 Bank of Nova Scotia,
6.550% due 09/07/2000+ ................ 641,959
650,000 Barclays U.S. Funding Corporation,
6.540% due 07/21/2000+ ................ 647,638
650,000 Toyota Motor Credit Corporation,
6.550% due 07/20/2000+ ................ 647,753
------------
Total Commercial Paper (Yankee)
(Cost $2,578,558) ..................... 2,578,558
------------
CORPORATE BONDS AND NOTES - 12.3%
1,000,000 First Union National Bank, Note,
6.338% due 09/25/2000+++ .............. 1,000,000
1,000,000 National City Bank, Note,
6.381% due 10/16/2000+++ .............. 1,000,143
------------
Total Corporate Bonds and Notes
(Cost $2,000,143) ..................... 2,000,143
------------
PRINCIPAL
AMOUNT VALUE
------ -----
CERTIFICATES OF DEPOSIT - 4.0%
(Cost $648,128)
$ 650,000 Bank of America Corporation,
6.480% due 07/17/2000 ................. $ 648,128
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 10.1%
FEDERAL HOME LOAN BANK (FHLB) - 10.1%
1,000,000 6.720% due 03/13/2001+ ................ 1,000,000
650,000 7.000% due 06/14/2001+ ................ 650,000
------------
Total FHLBs (Cost $1,650,000) ........... 1,650,000
------------
Total U.S. Government Agency Obligations
(Cost $1,650,000) ..................... 1,650,000
------------
REPURCHASE AGREEMENT - 3.4%
(Cost $ 562,000)
562,000 Agreement with Goldman Sachs & Company,
6.000% dated 6/30/2000, to be repurchased at
$562,281, on 07/03/2000, collateralized by
$458,224 U.S. Treasury Note, 8.125% due
8/15/2001 (Market Value $574,949) ..... 562,000
------------
TOTAL INVESTMENTS (Cost $16,477,649*) ....... 100.9% 16,477,649
OTHER ASSETS AND LIABILITIES (NET) .......... (0.9) (142,623)
----- ------------
NET ASSETS ................................. 100.0% $ 16,335,026
===== ============
---------------------------------
* Aggregate cost for federal tax purposes.
+ Rate represents discount rate at the date of purchase (unaudited).
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
+++ Floating rate security whose interest rate is reset periodically based on
an index.
See Notes to Financial Statements.
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
WM VARIABLE TRUST
1. ORGANIZATION AND BUSINESS
The WM Variable Trust (the "Trust") was organized under the laws of the
Commonwealth of Massachusetts on January 29, 1993 as a business entity commonly
known as a "Massachusetts business trust." The Trust is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. The Trust offers sixteen managed investment
funds, consisting of five portfolios: Strategic Growth, Conservative Growth,
Balanced, Flexible Income and Income Portfolios (individually a "Portfolio" and
collectively the "Portfolios"), and eleven funds: the Bond & Stock, Growth &
Income, Growth Fund of the Northwest, Growth, Mid Cap Stock, Small Cap Stock and
International Growth Funds (the "Equity Funds"); the Income, U.S. Government
Securities and Short Term Income Funds (the "Bond Funds"); the Money Market Fund
(the "Money Fund") (collectively the "Funds"); to the public through certain
variable annuity contracts offered by American General Life Insurance Company
("AG Life"). Through investment in certain of the Funds and WM High Yield Fund
(collectively, the "Underlying Funds"), the Portfolios offer a range of asset
allocation strategies designed to accommodate different investment philosophies
and goals.
WM Advisors, Inc. (the "Advisor" or "WM Advisors"), a wholly-owned subsidiary of
Washington Mutual, Inc. ("Washington Mutual"), a publicly owned financial
services company, serves as investment advisor to the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Portfolios and
Funds in the preparation of their financial statements.
PORTFOLIO VALUATION:
A security that is primarily traded on a U.S. exchange (including securities
traded through the Nasdaq National Market System) is valued at the last sale
price on that exchange or, if there were no sales during the day, at the mean of
the current day's bid and asked prices. Securities traded only on
over-the-counter markets (other than the Nasdaq National Market System and U.S.
Government Securities) are valued at the over-the-counter bid prices, or if no
sale occurred on such day, at the mean of the current bid and asked prices. An
option is generally valued at the last sale price or, in the absence of a last
sale price, at the mean of the current day's bid and asked prices. Short term
debt securities that mature in 60 days or less are valued at amortized cost. The
value of a foreign security is determined in its national currency as of the
close of trading on the foreign exchange on which it is traded or as of 4:00
p.m. Eastern time, if that is earlier. That value is then converted into its
U.S. dollar equivalent at the foreign exchange rate in effect at noon, Eastern
time, on the day the value of the foreign security is determined. 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.
Debt securities of U.S. issuers (other than U.S. Government securities and
short-term investments) are valued by one or more independent pricing services
(each a "Pricing Service") retained by the Trust. When, in the judgment of a
Pricing Service, market quotations for these securities are readily available,
they are valued at the mean between the quoted bid prices and asked prices.
Securities for which market quotations are not readily available are valued at
fair value as determined by or under the direction of the Trust's Board of
Trustees (the "Board of Trustees"), which may rely on the assistance of one or
more Pricing Services. The procedures of each Pricing Service are reviewed
periodically by the officers of the Trust under the general supervision and
responsibility of the Board of Trustees.
MONEY FUND:
The investments of the Money Fund are valued on the basis of amortized cost,
which approximates market value, so long as the Board of Trustees determines
that this method constitutes fair value. Amortized cost valuation involves
initially valuing a portfolio 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.
Restricted securities and certain other assets are valued by the investment
advisor under the supervision of the Board of Trustees. The Money Fund attempts
to maintain a constant net asset value of $1.00 per share.
58
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
THE PORTFOLIOS:
Underlying Funds are valued at their net asset value per share determined as of
the close of the New York Stock Exchange on the valuation date.
REPURCHASE AGREEMENTS:
Each Portfolio or Fund may engage in repurchase agreement transactions. A
repurchase agreement is a purchase of an underlying debt obligation subject to
an agreement by the seller to repurchase the obligation at an agreed upon price
and time. The value of the collateral is at all times at least equal to the
total amount of the repurchase obligation. In the event of counterparty default,
the Portfolio or Fund would seek to use the collateral to offset losses
incurred. There is potential loss in the event the Portfolio or Fund is delayed
or prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Portfolio or Fund seeks to assert its
rights. WM Advisors, acting under the supervision of the Board of Trustees,
reviews the value of the collateral and the creditworthiness of those banks and
dealers with whom each Portfolio or Fund enters into repurchase agreements.
REVERSE REPURCHASE AGREEMENTS:
Each Portfolio or Fund, except for the Bond & Stock Fund, the Growth Fund of the
Northwest and the Mid Cap Stock Fund may engage in reverse repurchase
agreements. Reverse repurchase agreements are the same as repurchase agreements
except that, in this instance, the Portfolio or Fund would assume the role of
seller/borrower in the transaction. A Portfolio or Funds may use reverse
repurchase agreements to borrow short-term funds. The value of the reverse
repurchase agreements that a Portfolio or Fund has committed to sell is
reflected in its respective Statement of Assets and Liabilities. The Portfolios
or Funds require the Trust's custodian to segregate liquid assets that at all
times are in an amount equal to their obligations under reverse repurchase
agreements. Reverse repurchase agreements involve the risks that the market
value of the securities sold by a Portfolio or 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 below the repurchase price of the securities sold.
OPTIONS CONTRACTS:
All Portfolios and Funds, except the Money Fund, may engage in option contract
transactions. The Portfolios and Funds may use option contracts to manage their
exposure to the stock and bond markets and to interest rate and currency value
fluctuations. If applicable, the underlying principal amounts and option values
are shown in the respective Portfolio of Investments under various captions
including "Put Options Purchased", "Call Options Purchased", "Put Options
Written" and/or "Call Options Written". If applicable, these amounts reflect (as
of the date on the Portfolio of Investments) each contract's exposure to the
underlying instrument. Writing puts and buying calls tends to increase a
Portfolios' or Funds' exposure to the underlying instrument. Buying puts and
writing calls tends to decrease a Portfolios' or Funds' exposure to the
underlying instruments or to hedge other Portfolio or Fund investments.
Upon the purchase of a put option or call option by a Portfolio or Fund, the
premium paid is recorded as an investment, the value of which is
marked-to-market daily. When a purchased option expires, the Portfolio or Fund
will realize a loss in the amount of the cost of the option. When a closing sale
transaction is entered, the Portfolio or Fund will realize a gain or loss
depending on whether the sales proceeds from the closing sale transaction are
greater or less than the cost of the option. When a Portfolio or Fund exercises
a put option, it will realize a gain or loss from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. When a Portfolio or Fund exercises a call option, the cost of
the security purchased will be increased by the premium originally paid.
When a Portfolio or Fund writes a call option or a put option, an amount equal
to the premium received by the Portfolio or Fund is recorded as a liability, the
value of which is marked-to-market daily. When a written option expires, the
Portfolio or Fund realizes a gain equal to the amount of the premium received.
When a Portfolio or Fund enters into a closing purchase transaction, the
Portfolio or Fund realizes a gain (or loss if the cost of the closing purchase
transaction exceeds the premium received when the option was sold) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is eliminated. When a written call option is
exercised, a Portfolio or Fund realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the premium
originally received. When a written put option is exercised, the amount of the
premium originally received will reduce the cost of the security that the
Portfolio or Fund purchased upon exercise.
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
The risk associated with purchasing options is limited to the premium originally
paid. Options written by a Portfolio or Fund involve, to varying degrees, risk
of loss in excess of the option value reflected in the Statements of Assets and
Liabilities. The risk in writing a covered call option is that the Portfolios
and/or Funds may forego the opportunity to profit if the market price of the
underlying security increases and the option is exercised. The risk in writing a
covered put option is that the Portfolios and/or Funds may incur a loss if the
market price of the underlying security decreases and the option is exercised.
In addition, there is the risk the Portfolios and/or Funds may not be able to
enter into a closing transaction because of an illiquid secondary market or, for
over-the-counter options, because of a counterparty's inability to perform.
The Portfolios and the Funds, except the Money Fund, may engage in options on
foreign currency and options on interest rate futures for hedging transactions.
Options on foreign currency and options on interest rate futures act as a hedge
to provide protection against adverse movements in the value of foreign
securities in the portfolio.
Certain risks are associated with the use of options on foreign currency and
options on interest rate futures contracts as hedging devices. The predominant
risk is that the movement in the price of the instrument underlying such options
may not correlate perfectly with the movement in the prices of the assets being
hedged. The lack of correlation could render the Portfolios' and Funds' hedging
strategy unsuccessful and could result in a loss to the Portfolios and Funds. In
addition, there is the risk that the Portfolios and Funds may not be able to
enter into a closing transaction because of an illiquid secondary market or, for
over-the-counter options, because of the counterparty's inability to perform.
Options written by Portfolios or Funds involve, to varying degrees, risk of loss
in excess of the option value reflected in the Statements of Assets and
Liabilities.
FUTURES CONTRACTS:
Except for the Money Fund, all Portfolios and Funds may engage in futures
transactions. The Portfolios and Funds may use futures contracts to manage their
exposure to the stock and bond markets and to fluctuations in interest rates and
currency values. The underlying value of a futures contract is incorporated
within the unrealized appreciation/(depreciation) shown in the Portfolio of
Investments under the caption "Futures Contracts." This amount reflects each
contract's exposure to the underlying instrument at June 30, 2000. Buying
futures contracts tends to increase the Portfolio's or Fund's exposure to the
underlying instrument. Selling futures contracts tends to either decrease the
Portfolio's or Fund's exposure to the underlying instrument, or to hedge other
Portfolio or Fund investments.
Upon entering into a futures contract, the Portfolio or Fund is required to
deposit with the broker an amount of cash or cash equivalents equal to a certain
percentage of the contract amount. This is known as the "initial margin."
Subsequent payments ("variation margin") are made or received by the Portfolio
or Fund each day, depending on the daily fluctuation of the value of the
contract. The daily changes in contract value are recorded as unrealized gains
or losses and the Portfolio or Fund recognizes a realized gain or loss when the
contract is closed.
There are several risks in connection with the use of futures contracts as a
hedging device. Futures contracts involve, to varying degrees, risk of loss in
excess of the futures variation margin reflected in the Statements of Assets and
Liabilities. The change in the value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in the value of the hedged instruments. In addition, there is the risk
that the Portfolio or Fund may not be able to enter into a closing transaction
because of an illiquid secondary market.
FOREIGN CURRENCY:
The books and records of the Portfolios and Funds are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of the
period. Purchases and sales of investment securities, income and expenses are
translated on the respective dates of such transactions. It is not practicable
to isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the portion arising from changes in
market prices of investments during the period. Accordingly, all such changes
have been reflected as realized and unrealized net gain/(loss) from security
transactions in the Statements of Operations.
Unrealized gains and losses, not relating to securities, which result from
changes in foreign currency exchange rates have been included in unrealized
appreciation/(depreciation) of foreign currency and other assets and
liabilities. Unrealized gains and losses of securities, which result from
changes in foreign currency exchange rates as well as changes in market prices
of securities, have been included in unrealized appreciation/(depreciation) of
securities. Net realized foreign currency gains and losses include foreign
currency gains and losses resulting from changes in exchange rates between trade
date and settlement date on investment securities transactions, gains and losses
on foreign currency transactions and the difference between the amounts
60
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
of interest and dividends recorded on the books of the Portfolios or Funds and
the amount actually received. The portion of foreign currency gains and losses
related to fluctuation in exchange rates between the initial purchase trade date
and subsequent sale trade date is included in realized gains/(losses) from
security transactions.
FORWARD FOREIGN CURRENCY CONTRACTS:
The Growth, Small Cap Stock, International Growth, Short Term Income, Income and
Mid Cap Stock Funds may enter into forward foreign currency contracts. Forward
foreign currency contracts are agreements to exchange one currency for another
at a future date and at a specified price. These Funds may use forward foreign
currency contracts to facilitate transactions in foreign securities and to
manage the Funds' foreign currency exposure. The U.S. dollar market value,
contract value and the foreign currencies the Funds have committed to buy or
sell are shown in the Portfolio of Investments under the caption "Schedule of
Forward Foreign Currency Contracts." These amounts represent the aggregate
exposure to each foreign currency the Funds have acquired or hedged through
forward foreign currency contracts at June 30, 2000. Forward foreign currency
contracts are reflected as both a forward foreign currency contract to buy and a
forward foreign currency contract to sell. Forward foreign currency contracts to
buy generally are used to acquire exposure to foreign currencies, while forward
foreign currency contracts to sell are used to hedge the Funds' investments
against currency fluctuations. Also, a forward foreign currency contract to buy
or sell can offset a previously acquired opposite forward foreign currency
contract.
Forward foreign currency contracts are marked-to-market daily using foreign
currency exchange rates supplied by an independent pricing service. The change
in a contract's market value is recorded by the Funds as an unrealized gain or
loss. When the contract is closed or delivery is taken, the Funds record a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's securities, but it does establish a rate of
exchange that can be achieved in the future. These forward foreign currency
contracts involve market risk in excess of the unrealized
appreciation/(depreciation) of forward foreign currency contracts reflected in
the Funds' Statements of Assets and Liabilities. Although forward foreign
currency contracts used for hedging purposes limit the risk of loss due to a
decline in the value of the hedged currency, they also limit any potential gain
that might result should the value of the currency increase. In addition, the
Funds could be exposed to risks if the counterparties to the contracts are
unable to meet the terms of their contracts.
DOLLAR ROLL TRANSACTIONS:
The Bond Funds, in order to seek a high level of current income, may enter into
dollar roll transactions with financial institutions to take advantage of
opportunities in the mortgage market. The value of the dollar roll transactions
are reflected in the Funds' Statements of Assets and Liabilities. A dollar roll
transaction involves a sale by the Funds of securities that they hold with an
agreement by the Funds to repurchase similar securities at an agreed upon price
and date. The securities repurchased will bear the same interest as those sold,
but generally will be collateralized at time of delivery by different pools of
mortgages with different prepayment histories than those securities sold. The
Funds are paid a fee for entering into a dollar roll transaction that is accrued
as income over the life of the dollar roll contract. During the period between
the sale and repurchase, the Funds will not be entitled to receive interest and
principal payments on the securities sold. Management anticipates that the
proceeds of the sale will be invested in additional instruments for the Funds,
and the income from these investments, together with any additional fee income
received on the dollar roll transaction, will generate income for the Funds
exceeding the interest that would have been earned on the securities sold.
Dollar roll transactions involve the risk that the market value of the
securities sold by the Funds may decline below the repurchase price of those
similar securities which the Fund is obligated to purchase or that the return
earned by the Fund with the proceeds of a dollar roll may not exceed transaction
costs.
INDEXED SECURITIES:
Each of the Funds, except for the Money Fund, may invest in indexed securities
whose value is linked either directly or inversely to changes in foreign
currencies, interest rates, commodities, inflation, indices, or other reference
instruments. Indexed securities may be more volatile than the reference
instrument itself, but any loss is limited to the amount of the original
investment.
61
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
ILLIQUID INVESTMENTS:
Up to 15% of the net assets of each Equity and Bond Fund, and up to 10% of the
net assets of the Money Fund, may be invested in securities that are not readily
marketable, including: (1) repurchase agreements with maturities greater than
seven calendar days; (2) time deposits maturing in more than seven calendar
days; (3) except for the Money Fund, futures contracts and options, 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) securities, the disposition of which are restricted under Federal securities
laws, excluding certain Rule 144A securities as defined below.
Illiquid securities generally cannot be sold or disposed of in the ordinary
course of business (within seven days) at approximately the value at which the
Funds have valued the investments. This may have an adverse effect on the Fund's
ability to dispose of particular illiquid securities at fair market value and
may limit the Fund's ability to obtain accurate market quotations for purposes
of valuing the securities and calculating the net asset value of shares of the
Fund. The Funds may also purchase securities that are not registered under the
Securities Act of 1933, as amended (the "Act"), but that can be sold to
qualified institutional buyers in accordance with Rule 144A under the Act ("Rule
144A Securities"). Rule 144A Securities generally may be resold only to other
qualified institutional buyers. If a particular investment in Rule 144A
Securities is not determined to be liquid under the guidelines established by
the Board of Trustees, that investment will be included within the 15%/10%
limitation, as applicable, on investments in illiquid securities.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date (the date the order to
buy or sell is executed). Realized gains and losses from securities sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis and consists of interest accrued and, if applicable, discount
accreted less premiums amortized. Premiums on bonds can be amortized on the
basis of any of the following methods: yield-to-maturity, straight-line, or
yield-to-call. Discounts can be accreted using yield-to-maturity or
straight-line methods. Premiums and discounts on mortgage-backed securities are
amortized or accreted using only the straight-line method. Dividend income is
recorded on the ex-dividend date, except certain dividends from foreign
securities are recorded as soon as the Funds are informed of the ex-dividend
date.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. Each Fund instructs the custodian to segregate assets of
the Fund with a current value at least equal to the amount of its when-issued
purchase commitments.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Money Fund are declared daily and
paid monthly. Dividends from net investment income of the Balanced, Flexible
Income and Income Portfolios and of the Bond Funds are declared and paid
quarterly. Dividends from net investment income of the Strategic Growth and
Conservative Growth Portfolios and of the Equity Funds are declared and paid
annually. Distributions of any net long-term capital gains earned by a Portfolio
or Fund are made annually. Distributions of any net short-term capital gains
earned by a Portfolio or Fund are distributed no less frequently than annually
at the discretion of the Board of Trustees. Income distributions and capital
gains distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments of income and gains on
various investment securities held by the Portfolios or Funds, organizational
costs, dividends payable, redesignated distributions and differing
characterizations of distributions made by each Portfolio or Fund as a whole.
FEDERAL INCOME TAXES:
It is the policy of each Portfolio and Fund to qualify as a regulated investment
company by complying with the requirements of the Internal Revenue Code of 1986,
as amended, applicable to regulated investment companies by, among other things,
distributing substantially all of its taxable earnings to its shareholders.
Therefore, no Federal income tax provision is required.
EXPENSES:
Expenses that are directly related to one of the Portfolios or Funds are charged
directly to that Portfolio or Fund. General expenses of the Trust are allocated
to all the Portfolios or Funds based upon the relative net assets of each
Portfolio or Fund. In addition, the Portfolios will indirectly bear their
prorated share of expenses of the Underlying Funds.
62
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
OTHER:
The Growth & Income and Bond Funds may purchase floating rate, inverse floating
rate and variable rate obligations, including participation interests therein.
Floating rate obligations have an interest rate that changes whenever there is a
change in the external interest rate, while variable rate obligations provide
for a specified periodic adjustment in the interest rate. The interest rate on
an inverse floating rate obligation (an "inverse floater") can be expected to
move in the opposite direction from the market rate of interest to which the
inverse floater is indexed. The Fund may purchase floating rate, inverse
floating rate and variable rate obligations that carry a demand feature which
would permit the Fund to tender them back to the issuer or remarketing agent at
par value prior to maturity. Frequently, floating rate, inverse floating rate
and variable rate obligations are secured by letters of credit or other credit
support arrangements provided by banks. The Bond Funds may purchase
mortgage-backed securities that are floating rate, inverse floating rate and
variable rate obligations. The Money Fund may purchase floating rate obligations
and variable rate demand notes. Although variable rate demand notes are
frequently not rated by credit rating agencies, unrated notes purchased by the
Funds will be of comparable quality at the time of purchase to rated instruments
that may be purchased by such Fund, as determined by the Advisor. Moreover,
while there may be no active secondary market with respect to a particular
variable rate demand note purchased by a Fund, the Fund may, upon the notice
specified in the note, demand payment of the principal and accrued interest on
the note at any time and may resell the note at any time to a third party. The
absence of such an active secondary market, however, could make it difficult for
a Fund to dispose of a particular variable rate demand note in the event the
issuer of the note defaulted on its payment obligations, and the Fund could, for
this or other reasons, suffer a loss to the extent of the default.
An inverse floater may be considered to be leveraged to the extent that its
interest rate varies by a magnitude that exceeds the magnitude of the change in
the index rate of interest. The higher degree of leverage inherent in inverse
floaters is associated with greater volatility in their market values.
Accordingly, the duration of an inverse floater may exceed its stated final
maturity.
3. INVESTMENT ADVISORY, ADMINISTRATION FEES AND OTHER TRANSACTIONS
WM Advisors serves as investment advisor to the Trust. The Advisor is entitled
to a monthly fee based upon a percentage of the average daily net assets of each
Fund at the following rates:
FEES ON
NAME OF FUND NET ASSETS
------------ -------------
Mid Cap Stock Fund ........................ .750%
Income Fund ............................... .500%
U.S. Government Securities Fund ........... .500%
Money Market Fund ......................... .450%
FEES ON FEES ON
NET ASSETS EQUAL TO OR NET ASSETS
LESS THAN EXCEEDING
$500 MILLION $500 MILLION
------------- ------------
Bond & Stock Fund ......................... .625% .500%
Growth Fund of the Northwest .............. .625% .500%
FEES ON FEES ON
NET ASSETS EQUAL TO OR NET ASSETS
LESS THAN EXCEEDING
$25 MILLION $25 MILLION
------------- ------------
Growth Fund ............................... .950% .875%
63
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
<TABLE>
FEES ON
NET ASSETS EXCEEDING
FEES ON $25 MILLION FEES ON
NET ASSETS EQUAL TO AND EQUAL TO NET ASSETS
OR LESS THAN OR LESS THAN EXCEEDING
NAME OF FUND $25 MILLION $500 MILLION $500 MILLION
------------ ----------- ------------- ------------
<S> <C> <C> <C>
Small Cap Stock Fund ....................... .900% .850% .750%
</TABLE>
<TABLE>
FEES ON
NET ASSETS EXCEEDING
FEES ON $50 MILLION FEES ON
NET ASSETS EQUAL TO AND EQUAL TO NET ASSETS
OR LESS THAN OR LESS THAN EXCEEDING
$50 MILLION $125 MILLION $125 MILLION
----------- ------------- ------------
<S> <C> <C> <C>
International Growth Fund .................. .950% .850% .750%
</TABLE>
<TABLE>
FEES ON
NET ASSETS EXCEEDING
FEES ON $200 MILLION FEES ON
NET ASSETS EQUAL TO AND EQUAL TO NET ASSETS
OR LESS THAN OR LESS THAN EXCEEDING
$200 MILLION $500 MILLION $500 MILLION
----------- ------------- ------------
<S> <C> <C> <C>
Short Term Income Fund ..................... .500% .450% .400%
</TABLE>
<TABLE>
FEES ON FEES ON FEES ON
NET ASSETS NET ASSETS NET ASSETS
FEES ON EXCEEDING EXCEEDING EXCEEDING
NET ASSETS $100 MILLION $200 MILLION $400 MILLION FEES ON
EQUAL TO AND EQUAL TO AND EQUAL TO AND EQUAL TO NET ASSETS
OR LESS THAN OR LESS THAN OR LESS THAN OR LESS THAN EXCEEDING
$100 MILLION $200 MILLION $400 MILLION $500 MILLION $500 MILLION
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Growth & Income Fund .............. .800% .750% .700% .650% .575%
</TABLE>
As investment advisor to the Portfolios, WM Advisors provides its proprietary
asset allocation services to the Portfolios, formulates the Portfolios'
investment policies, analyzes economic and market trends, exercises investment
discretion over the assets of the Portfolios and monitors the allocation of each
Portfolio's assets and each Portfolio's performance. For its investment advisory
services to the Portfolios, WM Advisors is entitled to a fee, which is
calculated daily and paid monthly, at an annual rate of 0.10% of each
Portfolio's average daily net assets.
WM Shareholder Services, Inc. (the "Administrator"), an indirect wholly-owned
subsidiary of Washington Mutual, serves as administrator to each Portfolio and
Fund. For it's services as administrator, each Portfolio or Fund pays the
Administrator a monthly fee of 0.15% and 0.18% respectively, of the value of
each Portfolio or Fund's average daily net assets.
The Advisor has agreed to waive a portion of its management fees and/or
reimburse expenses. Fees waived and/or expenses reimbursed by the Advisor for
the six months ended June 30, 2000 were as follows:
<TABLE>
Name of Fund/Portfolio Fees Waived Expenses Reimbursed
---------------------- ----------- -------------------
<S> <C> <C>
Income Portfolio ...................................................... $3,628 $1,792
Money Market Fund ..................................................... 4,532 -
</TABLE>
Custodian fees for certain Portfolios and Funds have been reduced by credits
allowed by the custodian for uninvested cash balances. These Portfolios and
Funds could have invested this cash in income producing securities. Fees reduced
by credits allowed by the custodian for the six months ended June 30, 2000 are
shown separately in the Statements of Operations.
64
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
4. TRUSTEES' FEES
No director, officer or employee of Washington Mutual or its subsidiaries
receives any compensation from the Trust for serving as an officer or Trustee of
the Trust. The Trust, together with other mutual funds advised by WM Advisors,
Inc., pays each Trustee who is not an officer or employee of Washington Mutual
or its subsidiaries, $18,000 per annum plus $3,000 per board meeting attended or
$1,000 per board meeting attended by telephone. The Lead Trustee receives an
additional $6,000 per annum. Trustees are also reimbursed for travel and
out-of-pocket expenses. The Chairman of each committee receives $500 per
committee meeting attended.
Pursuant to an exemptive order granted by the Securities and Exchange
Commission, the Trust's eligible Trustees may participate in a deferred
compensation plan (the "Plan") which may be terminated at any time. Under the
Plan, Trustees may elect to defer receipt of all or a portion of their fees
which, in accordance with the Plan, are invested in mutual fund shares. Upon
termination of the Plan, Trustees that have deferred accounts under the Plan
will be paid benefits no later than the time the payments would otherwise have
been made without regard to such termination. All benefits provided under these
Plans are funded and any payments to Plan participants are paid solely out of
the Trust's assets.
5. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, excluding
U.S. Government and short-term investments, for the six months ended June 30,
2000 were as follows:
<TABLE>
NAME OF FUND/PORTFOLIO PURCHASES SALES
---------------------- --------- -----
<S> <C> <C>
Strategic Growth Portfolio ........................ $ 53,404,185 $ 8,549,773
Conservative Growth Portfolio ..................... 127,406,109 29,760,213
Balanced Portfolio ................................ 120,378,976 36,376,111
Flexible Income Portfolio ......................... 13,165,529 4,763,287
Income Portfolio .................................. 2,163,095 1,858,000
Bond & Stock Fund ................................. 4,414,098 1,999,508
Growth & Income Fund .............................. 95,884,754 30,578,244
Growth Fund of the Northwest ...................... 29,975,019 5,276,106
Growth Fund ....................................... 136,179,463 143,789,612
Mid Cap Stock Fund ................................ 35,722,118 59,266
Small Cap Stock Fund .............................. 51,147,154 23,687,470
International Growth Fund ......................... 11,528,440 23,260,589
Income Fund ....................................... 17,820,685 948,262
Short Term Income Fund ............................ - 8,172,248
</TABLE>
The aggregate cost of purchases and proceeds from sales of U.S. Government
securities, excluding short-term investments, for the six months ended June 30,
2000 were as follows:
<TABLE>
NAME OF FUND PURCHASES SALES
------------ --------- -----
<S> <C> <C>
Bond & Stock Fund ................................. $ 368,749 $ 92,611
Income Fund ....................................... 31,241,222 186,223
U.S. Government Securities Fund ................... 13,464,475 3,372,133
Short Term Income Fund ............................ 2,235,586 2,770,957
</TABLE>
65
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
At June 30, 2000, aggregate gross unrealized appreciation for all securities in
which there was an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
value were as follows:
<TABLE>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
NAME OF FUND/PORTFOLIO APPRECIATION DEPRECIATION
---------------------- ------------ ------------
<S> <C> <C>
Strategic Growth Portfolio ........................ $ 2,524,179 $ 224,031
Conservative Growth Portfolio ..................... 5,433,127 3,202,739
Balanced Portfolio ................................ 4,406,963 2,324,131
Flexible Income Portfolio ......................... 189,050 439,829
Income Portfolio .................................. - 111,616
Bond & Stock Fund ................................. 998,963 876,546
Growth & Income Fund .............................. 60,744,283 22,193,787
Growth Fund of the Northwest ...................... 10,197,843 2,952,476
Growth Fund ....................................... 115,198,832 25,548,519
Mid Cap Stock Fund ................................ 2,499,477 2,646,617
Small Cap Stock Fund .............................. 31,257,973 12,277,793
International Growth Fund ......................... 18,487,023 2,971,633
Income Fund ....................................... 1,087,018 2,866,469
U.S. Government Securities Fund ................... 1,018,093 1,899,574
Short Term Income Fund ............................ 9,396 708,605
</TABLE>
6. LENDING OF PORTFOLIO SECURITIES
Certain Funds may lend securities to brokers, dealers and other financial
organizations. Each security loan is collateralized with collateral assets in an
amount equal to the current market value of the loaned securities. There is a
risk of delay in receiving collateral or in recovering the securities loaned or
even a loss of rights in collateral should the borrower fail financially.
At June 30, 2000, the Funds had outstanding loans of securities to certain
brokers, dealers or other financial institutions for which each Fund has
segregated cash equivalent to 100% of the market value of securities loaned with
the Funds' custodian. At June 30, 2000, the following Funds had securities on
loan:
<TABLE>
MARKET VALUE
OF LOANED MARKET VALUE
NAME OF FUND SECURITIES OF COLLATERAL
------------ ------------ -------------
<S> <C> <C>
Growth & Income Fund .............................. $ 4,169,338 $ 4,387,100
Growth Fund of the Northwest ...................... 1,862 1,925
Growth Fund ....................................... 11,244,284 11,581,854
Small Cap Stock Fund .............................. 903,319 963,540
International Growth Fund ......................... 814,691 853,730
Income Fund ....................................... 13,208,033 13,397,176
Short Term Income Fund ............................ 7,960,696 8,108,875
</TABLE>
7. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest, each
without par value.
66
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
8. ORGANIZATION COSTS
Expenses incurred in connection with the organization of the Portfolios,
including the fees and expenses of registering and qualifying each Portfolio's
shares for distribution under Federal and state securities regulations, are
being amortized on a straight-line basis over a period of five years from
commencement of operations of each Portfolio. In the event any of the initial
shares of a Portfolio are redeemed by any holder thereof during the amortization
period, the proceeds of such redemptions will be reduced by an amount equal to
the pro-rata portion of unamortized deferred organizational expenses in the same
proportion as the number of shares being redeemed bears to the number of initial
shares of such Portfolio outstanding at the time of such redemption.
9. GEOGRAPHIC AND INDUSTRY CONCENTRATION AND RISK FACTORS
All Funds, except the U.S. Government Securities Fund, may invest in securities
of foreign companies and foreign governments. There are certain risks involved
in investing in foreign securities. These risks include those resulting from
future adverse political and economic developments and the possible imposition
of currency exchange restrictions or other foreign laws or restrictions.
In addition, the Money Fund invests at least 25% of its assets in bank
obligations. As a result of this concentration policy, the Fund's investments
may be subject to greater risk than a fund that does not concentrate in the
banking industry. In particular, bank obligations may be subject to the risks
associated with interest rate volatility, changes in Federal and state laws and
regulations governing the banking industry and the inability of borrowers to pay
principal and interest when due. In addition, foreign banks present risks
similar to those investing in foreign securities generally and are not subject
to the same reserve requirements and other regulations as U.S. banks.
Investing in the Underlying Funds through the Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Funds. Under certain circumstances, an Underlying
Fund may determine to make payment of a redemption request by a Portfolio wholly
or partly by a distribution in kind of securities from its portfolio, instead of
cash, in accordance with the rules of the Securities and Exchange Commission. In
such cases, the Portfolios may hold securities distributed by an Underlying Fund
until WM Advisors determines that it is appropriate to dispose of such
securities.
Certain Underlying Funds may: invest a portion of their assets in foreign
securities; enter into forward foreign currency transactions; lend their
portfolio securities; enter into stock index, interest rate and currency futures
contracts, and options on such contracts; enter into interest rate swaps or
purchase or sell interest rate caps or floors; engage in other types of options
transactions; make short sales; purchase zero coupon and payment-in-kind bonds;
engage in repurchase or reverse repurchase agreements; purchase and sell
"when-issued" securities and engage in "delayed-delivery" transactions; and
engage in various other investment practices each with inherent risks.
The Growth Fund of the Northwest concentrates its investments in companies
located or doing business in the Northwest region of the United States. The
Growth Fund of the Northwest is not intended as a complete investment program
and could be adversely impacted by economic trends within the region.
The Strategic Growth Portfolio can invest as much as 50% of its total assets in
the Growth Fund and as much as 50% of its total assets in the Small Cap Stock
Fund, each of which Underlying Funds may invest as much as 35% of its total
assets in lower-rated bonds. Securities rated below investment grade generally
involve greater price volatility and risk of principal and income and may be
less liquid than higher rated securities.
Certain Portfolios invest as much as 50% of their total assets in the Growth or
Small Cap Stock Funds, each of which may invest up to 25% of its total assets in
foreign equity securities and as much as 5% of its total assets in securities in
developing or emerging markets countries. Certain Portfolios invest as much as
50% of their total assets in the International Growth Fund, which invests
primarily in the foreign equity securities, and may invest as much as 30% of its
total assets in securities in developing or emerging market countries. These
investments will subject such Portfolios to risks associated with investing in
foreign securities including those resulting from future adverse political and
economic developments and the possible imposition of currency exchange blockages
or other foreign governmental laws or restrictions.
67
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
WM VARIABLE TRUST
The officers and Trustees of the Trust also serve as officers and Trustees of
the Underlying Funds. In addition, WM Advisors serves as the investment advisor
of each Underlying Fund and Portfolio. Conflicts may arise as the Advisor seeks
to fulfill its fiduciary responsibilities to both the Portfolios and the
Underlying Funds.
From time to time, one or more of the Underlying Funds used for investment by a
Portfolio may experience relatively large investments or redemptions due to
reallocations or rebalancings by the Portfolios as recommended by the Advisor.
These transactions will affect the Underlying Funds, since the Underlying Funds
that experience redemptions as a result of the reallocations or rebalancings may
have to sell portfolio securities and Underlying 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 Underlying Funds may be required
to sell securities or invest cash at times when they would not otherwise do so.
These transactions could also have tax consequences if sales of securities
resulted in gains and could also increase transaction costs. The Advisor is
committed to minimizing the impact of Portfolio transactions on the Underlying
Funds.
68
<PAGE>
<PAGE>
This material is not an offer to sell nor a solicitation to buy the WM Strategic
Asset Manager Variable Annuity, WM Advantage Variable Annuity or shares of the
WM Variable Trust. It is not authorized for distribution unless preceded or
accompanied by a current prospectus(es) that includes information regarding the
risk factors, expenses, policies and objectives of the WM Advantage Variable
Annuity and WM Strategic Asset Manager Variable Annuity programs. Please read it
carefully before investing. WM Advantage and WM Strategic Asset Manager may not
be available for sale in all states.
Shares of the WM Variable Trust are not insured by the FDIC. They are not
deposits or obligations of, nor are they guaranteed by the depository
institution or any other agency. These securities are subject to investment
risk, including possible loss of principal amount invested.
Distributed by WM Funds Distributor, Inc.
Member NASD
Presorted
Standard
POSTAGE
PAID
Los Angeles, CA
Permit #30835
[WM Variable Trust LOGO]
WM Funds Distributor, Inc.
1300 21st Street, 2nd Floor
Sacramento, CA 95814
[Recycle Logo] Printed on recycled paper
VTSAR (8/24/00)
