<PAGE> 1
811-8466
Registration Nos. 33-79978
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ___ /_/
Post-Effective Amendment No. 2 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 3 /X/
(Check appropriate box or boxes.)
SAFECO Advisor Series Trust
(Exact Name of Registrant as Specified in Charter)
SAFECO Plaza, Seattle, Washington 98185
(Address of Principal Executive Offices) ZIP Code
Registrant's Telephone Number, including
Area Code (206) 545-5269
Name and Address of Agent for Service
DAVID F. HILL
SAFECO Plaza
Seattle, Washington 98185
(206) 545-5269
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective
____ immediately upon filing pursuant to paragraph (b)
__x_ on April 29, 1996 pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
____ on ______________ pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on ______________ pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ]This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
================================================================================
Registrant is registering an indefinite number of its shares under the
Securities Act of 1933 by declaration made pursuant to Section 24(f) of the
Investment Company Act of 1940 (Act). Pursuant to Rule 24f-2 under the Act,
Registrant filed a Rule 24f-2 Notice on February 29, 1996.
================================================================================
The Exhibit Index is at page ____.
<PAGE> 2
SAFECO ADVISOR SERIES TRUST
Registration Statement on Form N-1A
Cross Reference Sheet
<TABLE>
<CAPTION>
Part A
------
Item No. Location in
- -------- -----------
Prospectus
----------
<S> <C> <C>
Item 1. Cover Page Cover page
Item 2. Synopsis Introduction to the
Trust and the Funds;
Fund Expenses
Item 3. Condensed Financial Information Financial Highlights;
Performance Information
Item 4. General Description of Registrant Investment Policies, Risk Factors and
Portfolio Managers;
General Fund Information
Item 5. Management of the Trust General Fund Information; Portfolio
Managers; Fund Expenses
Item 6. Capital Stock and Other Cover Page;
Securities Fund Distributions and How
They are Taxed;
General Fund Information;
Persons Controlling the Funds
Item 7. Purchase of Securities Alternative Purchase Arrangement
Being Offered; How to Purchase Shares;
How to Exchange Shares From One Fund to
Another; How to Systematically Purchase
or Redeem Shares; Share Valuation;
Tax-Deferred Retirement Plans;
Account Statements; Telephone Transactions
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C> <C>
Item 8. Redemption or Repurchase How to Redeem Shares;
How to Exchange Shares
From One Fund to Another; How to
Systematically Purchase or Redeem
Shares; Account Changes and
Signature Requirements;
Account Statements;
Telephone Transactions
Item 9. Pending Legal Proceedings Not applicable
Part B
------
Location in Statement
Item No. of Additional Information
- -------- -------------------------
Item 10. Cover Page Cover page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History Not applicable
Item 13. Investment Objectives and Policies Investment Policies; Additional
Investment Information; Special
Risks of Below Investment Grade
Bonds - Advisor Equity Fund;
Investment Risks of Concentration
in Washington Issuers
Item 14. Management of the Trust Trustees and Officers; Investment
Advisory and Other Services
Item 15. Control Persons and Principal Principal Shareholders
Holders of Securities of the Funds
Item 16. Investment Advisory and Other Investment Advisory and
Services Other Services
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
Item 17. Brokerage Allocation and Other Brokerage Practices
Practices
Item 18. Capital Stock and Other Additional Tax
Securities Information
Item 19. Purchase, Redemption and Pricing Conversion of Class B Shares;
Additional Information on Calculation
of Net Asset Value Per
Share; Redemption in Kind
Item 20. Tax Status Additional Tax
Information
Item 21. Underwriters Investment Advisory and Other
Services
Item 22. Calculation of Performance Data Additional Performance Information
Item 23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
4
<PAGE> 5
April 29, 1996
SAFECO ADVISOR EQUITY FUND
SAFECO ADVISOR NORTHWEST FUND
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND
SAFECO ADVISOR U.S. GOVERNMENT FUND
SAFECO ADVISOR GNMA FUND
SAFECO ADVISOR MUNICIPAL BOND FUND
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND
Each of the funds described in this Prospectus is a series of the SAFECO
Advisor Series Trust ("Trust"), an open-end, management investment company
consisting of eight separate series.
There are market risks in all securities transactions. This Prospectus sets
forth the information a prospective investor should know before investing.
PLEASE READ AND RETAIN THE PROSPECTUS FOR FUTURE REFERENCE. A Statement of
Additional Information, dated April 29, 1996 and incorporated herein by
reference, has been filed with the Securities and Exchange Commission and is
available at no charge upon request by calling the number listed on this page.
The Statement of Additional Information contains more information about most of
the topics in this Prospectus as well as information about the trustees and
officers of the Trust.
For additional assistance, please call or write your investment professional or
SAFECO Securities, Inc. ("SAFECO Securities"):
Nationwide 1-800-463-8791
SAFECO Advisor Series Trust
P.O. Box 34680
Seattle, WA 98124-1680
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
THE U.S. GOVERNMENT OR ANY BANK, NOR ARE FUND SHARES FEDERALLY INSURED OR
OTHERWISE PROTECTED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation, other than those contained in this
Prospectus, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the Trust or SAFECO
Securities. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy by the Trust or by SAFECO Securities in any
state in which such offer or solicitation may not lawfully be made.
<PAGE> 6
TABLE OF CONTENTS
INTRODUCTION TO THE TRUST AND THE FUNDS . . . . . . . . . . . . . . . . . .
The Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Adviser . . . . . . . . . . . . . . . . . . . . . . . . .
Alternative Purchase Arrangement . . . . . . . . . . . . . . . . . .
FUND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT POLICIES, RISK FACTORS AND PORTFOLIO MANAGERS . . . . . . . . . .
Advisor Equity Fund . . . . . . . . . . . . . . . . . . . . . . . .
Advisor Northwest Fund . . . . . . . . . . . . . . . . . . . . . . .
Advisor Intermediate Treasury Fund . . . . . . . . . . . . . . . . .
Advisor Government Fund . . . . . . . . . . . . . . . . . . . . . .
Advisor GNMA Fund . . . . . . . . . . . . . . . . . . . . . . . . .
Advisor Municipal, Advisor Intermediate Municipal
and Advisor Washington Municipal Funds . . . . . . . . . . . . . .
Common Investment Practices . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Portfolio Managers . . . . . . . . . . . . . . . . . . . . . . . . .
INFORMATION ABOUT INVESTING IN FUND SHARES . . . . . . . . . . . . . . . . .
Alternative Purchase Arrangement . . . . . . . . . . . . . . . . . .
How to Purchase Shares . . . . . . . . . . . . . . . . . . . . . . .
How to Exchange Shares from One Fund to Another . . . . . . . . . .
How to Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . .
How to Systematically Purchase or Redeem Shares . . . . . . . . . .
Account Changes and Signature Requirements . . . . . . . . . . . . .
Account Statements . . . . . . . . . . . . . . . . . . . . . . . . .
Telephone Transactions . . . . . . . . . . . . . . . . . . . . . . .
Share Valuation . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund Distributions and How They are Taxed . . . . . . . . . . . . .
Performance Information . . . . . . . . . . . . . . . . . . . . . .
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE
SERVICES TO THE TRUST . . . . . . . . . . . . . . . . . . . . . . .
General Fund Information . . . . . . . . . . . . . . . . . . . . . .
Tax-Deferred Retirement Plans . . . . . . . . . . . . . . . . . . .
Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . .
Persons Controlling the Funds . . . . . . . . . . . . . . . . . . .
RATINGS SUPPLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Debt Ratings . . . . . . . . . . . . . . . . . . . .
-2-
<PAGE> 7
- ---------------------------------------
INTRODUCTION TO THE TRUST AND THE FUNDS
- ---------------------------------------
The Trust is a series investment company that currently issues shares
representing eight mutual funds: SAFECO Advisor Equity Fund ("Advisor Equity
Fund"), SAFECO Advisor Northwest Fund ("Advisor Northwest Fund"), SAFECO
Advisor Intermediate-Term Treasury Fund ("Advisor Intermediate Treasury Fund"),
SAFECO Advisor U.S. Government Fund ("Advisor Government Fund"), SAFECO Advisor
GNMA Fund ("Advisor GNMA Fund"), SAFECO Advisor Municipal Bond Fund ("Advisor
Municipal Fund"), SAFECO Advisor Intermediate-Term Municipal Bond Fund
("Advisor Intermediate Municipal Fund") and SAFECO Advisor Washington Municipal
Bond Fund ("Advisor Washington Municipal Fund")(collectively the "Funds" or
"SAFECO Advisor Funds"). Each Fund is a diversified series of the Trust, an
open-end, management investment company which continuously offers to sell and
to redeem (buy back) its shares.
THE FUNDS
The ADVISOR EQUITY FUND has as its investment objective to seek long-term
growth of capital and reasonable current income. To pursue its objective, the
Fund invests principally in common stocks selected for appreciation and/or
dividend potential and from a long-range investment standpoint.
The ADVISOR NORTHWEST FUND has as its investment objective to seek long-term
growth of capital through investing primarily in Northwest companies. To
pursue its objective, the Fund will invest at least 65% of its total assets in
securities issued by companies with their principal executive offices located
in Alaska, Idaho, Montana, Oregon or Washington ("Northwest").
The ADVISOR INTERMEDIATE TREASURY FUND, ADVISOR GOVERNMENT FUND and ADVISOR
GNMA FUND each has as its investment objective to seek as high a level of
current income as is consistent with the preservation of capital.
To pursue its objective, the ADVISOR INTERMEDIATE TREASURY FUND,
during normal market conditions, will invest at least 65% of its total
assets in direct obligations of the U.S. Treasury and will maintain a
portfolio having an average dollar-weighted maturity of between three
and ten years.
To pursue its objective, the ADVISOR GOVERNMENT FUND, during normal
market conditions, will invest at least 65% of its total assets in
U.S. Government securities.
To pursue its objective, the ADVISOR GNMA FUND, during normal market
conditions, will invest at least 65% of its total assets in
mortgage-backed securities issued by the Government National Mortgage
Association ("GNMA").
The ADVISOR MUNICIPAL FUND, ADVISOR INTERMEDIATE MUNICIPAL FUND and ADVISOR
WASHINGTON MUNICIPAL FUND each has as its investment objective to provide as
high a level of current interest income exempt from federal income tax as is
consistent with prudent investment risk. During normal market conditions each
Fund will invest at least 80% of its net assets in municipal securities, the
interest on which is exempt from federal income
-3-
<PAGE> 8
tax, and will invest at least 65% of its total assets in investment
grade municipal bonds having a maturity of over one year.
To pursue its objective, the ADVISOR MUNICIPAL FUND will invest
primarily in investment grade municipal bonds whose interest is exempt
from federal income tax and seek to maintain a portfolio having an
average dollar-weighted maturity of between twenty and twenty-five
years.
To pursue its objective, the ADVISOR INTERMEDIATE MUNICIPAL FUND will
invest primarily in investment grade municipal bonds whose interest is
exempt from federal income tax and will maintain a portfolio having an
average dollar-weighted maturity of between three and ten years.
To pursue its objective, the ADVISOR WASHINGTON MUNICIPAL FUND will
invest primarily in investment grade municipal bonds whose interest is
exempt from federal income tax and that are issued by the State of
Washington or one of its political subdivisions, municipalities,
agencies, instrumentalities or public authorities and seek to maintain
a portfolio having an average dollar-weighted maturity of between
twenty and twenty-five years.
There is, of course, no assurance that a Fund will achieve its investment
objective. See "Investment Policies, Risk Factors and Portfolio Managers" at
pages ___ to ___ for more information.
RISK FACTORS
There is a risk that the market value of each Fund's portfolio securities may
decrease and result in a decrease in the value of a shareholder's investment.
The Advisor Equity Fund may invest up to 15% of its total assets in
below-investment grade convertible corporate bonds. These bonds are subject to
greater fluctuations in value and risk of loss of income and principal than
investment grade or high quality securities. Because the Advisor Northwest
Fund concentrates its investments primarily in the Northwest and the Advisor
Washington Municipal Fund concentrates its investments in Washington State,
these Funds may each be subject to special risks. Investors should carefully
consider the investment risks of such geographic concentration before
purchasing shares of these Funds. See "Risk Factors" on page ___ for more
information.
INVESTMENT ADVISER
Each Fund is managed by SAFECO Asset Management Company ("SAM"). SAM is
headquartered in Seattle, Washington and manages over $2 billion in mutual fund
assets as of March 31, 1996. SAM has been an adviser to mutual funds and other
investment portfolios since 1973 and its predecessors have been such advisers
since 1932. See "General Fund Information" on page ___ for more information.
ALTERNATIVE PURCHASE ARRANGEMENT
Each Fund issues three classes of shares. Class A shares are sold to investors
choosing the initial sales charge alternative with a service fee. Class B
shares are sold to investors choosing the contingent deferred sales charge
alternative with service and distribution fees and which convert automatically
to Class A shares approximately eight years after purchase. Class C shares are
sold to investors choosing the alternative with no initial or deferred sales
charge, but
-4-
<PAGE> 9
with service and distribution fees. See "Information About Investing in Fund
Shares" on page _____ for more information.
- -------------
FUND EXPENSES
- -------------
A. SHAREHOLDER TRANSACTION EXPENSES FOR EACH FUND
<TABLE>
<CAPTION>
Advisor Intermediate-
Advisor Advisor Northwest Term Treasury
Equity Fund Fund Fund
----------- ---- ----
Class A Class B Class C Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales
Charge on
Purchases (As a
Percentage of Offering
Price) 4.75% None None 4.75% None None 4.75% None None
Sales Charge on
Reinvested Dividends None None None None None None None None None
Maximum Contingent
Deferred Sales
Charge
(As a Percentage of
Redemption Proceeds)
None 5.0% None None 5.0% None None 5.0% None
Redemption Fee None None None None None None None None None
Exchange Fee None None None None None None None None None
</TABLE>
SAFECO Services Corporation, the transfer agent for the Funds, charges a $10
fee to wire redemption proceeds.
B. ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fee .75% .75% .75% .75% .75% .75% .60% .60% .60%
12b-1 Fees .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses .62% .63% .62% .51% .50% .50% .47% .46% .47%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Operating Expenses
After Reimbursement* 1.62% 2.38% 2.37% 1.51% 2.25% 2.25% 1.32% 2.06% 2.07%
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
-5-
<PAGE> 10
A. SHAREHOLDER TRANSACTION EXPENSES FOR EACH FUND
<TABLE>
<CAPTION>
Advisor Advisor
U.S. Government Advisor Municipal
Fund GNMA Fund Bond Fund
---- --------- ---------
Class A Class B Class C Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales
Charge on
Purchases (As a
Percentage of Offering
Price) 4.75% None None 4.75% None None 4.75% None None
Sales Charge on
Reinvested Dividends None None None None None None None None None
Maximum Contingent
Deferred Sales
Charge
(As a Percentage of
Redemption Proceeds) None 5.0% None None 5.0% None None 5.0% None
Redemption Fee None None None None None None None None None
Exchange Fee None None None None None None None None None
</TABLE>
SAFECO Services Corporation, the transfer agent for the Funds, charges a $10
fee to wire redemption proceeds.
B. ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fee .60% .60% .60% .60% .60% .60% .60% .60% .60%
12b-1 Fees .25% 1.00% 1.00% .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses .47% .47% .47% .49% .49% .49% .44% .44% .44%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Operating Expenses
After Reimbursement* 1.32% 2.07% 2.07% 1.34% 2.09% 2.09% 1.29% 2.04% 2.04%
===== ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
-6-
<PAGE> 11
A. SHAREHOLDER TRANSACTION EXPENSES FOR EACH FUND
<TABLE>
<CAPTION>
Advisor Advisor
Intermediate-Term Washington
Municipal Bond Fund Municipal Bond Fund
------------------- -------------------
Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales
Charge on
Purchases (As a
Percentage of Offering
Price) 4.75% None None 4.75% None None
Sales Charge on
Reinvested Dividends None None None None None None
Maximum Contingent
Deferred Sales
Charge
(As a Percentage of
Redemption Proceeds) None 5.0% None None 5.0% None
Redemption Fee None None None None None None
Exchange Fee None None None None None None
</TABLE>
SAFECO Services Corporation, the transfer agent for the Funds, charges a $10
fee to wire redemption proceeds.
B. ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Management Fee .60% .60% .60% .60% .60% .60%
12b-1 Fees .25% 1.00% 1.00% .25% 1.00% 1.00%
Other Expenses .46% .46% .46% .45% .45% .44%
---- ---- ---- ---- ---- ----
Total Operating Expenses
After Reimbursement* 1.31% 2.06% 2.06% 1.30% 2.05% 2.04%
===== ===== ===== ===== ===== =====
</TABLE>
*Certain expenses of the Funds were reimbursed by SAM. SAM may discontinue the
practice of reimbursing these expenses at any time, without prior notice. If
SAM
-7-
<PAGE> 12
had not reimbursed these expenses, total operating expenses as a percentage of
net assets would have been as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Advisor Equity 2.03% 2.79% 2.78%
Advisor Northwest 1.93% 2.67% 2.67%
Advisor Intermediate
Term Treasury 1.77% 2.51% 2.52%
Advisor U.S. Govern-
ment 1.76% 2.51% 2.51%
Advisor GNMA 1.78% 2.53% 2.53%
Advisor Municipal
Bond 1.70% 2.45% 2.45%
Advisor Intermediate
Term Municipal Bond 1.74% 2.49% 2.49%
Advisor Washington
Municipal Bond 1.71% 2.46% 2.45%
</TABLE>
The percentages shown represent actual expenses paid by shareholders for the
year ending December 31, 1995. See "General Fund Information" on page __ for
more information. Sales charge waivers are available for Class A and Class B
shares and reduced sales charge purchase plans are available for Class A
shares. See "How to Purchase Shares" on page ___ for more information. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase, declining in subsequent
years, and reaching 0% after six years. Class B shares convert automatically
into Class A shares of the same Fund approximately eight years after purchase.
See "Purchasing Class B Shares" on page ___ for more information. The
management fees paid by the Advisor Equity Fund and the Advisor Northwest Fund
are higher than the management fees paid by most other investment companies.
12b-1 fees have the following two components:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
12b-1 service fees 0.25% 0.25% 0.25%
12b-1 distribution fees 0.00% 0.75% 0.75%
</TABLE>
12b-1 distribution fees are asset-based sales charges. Long-term Class B and
Class C shareholders may pay more than the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
C. EXAMPLE OF EXPENSES
-8-
<PAGE> 13
You would pay the following expenses on a $1,000 investment assuming a 5%
annual return. The example assumes that all dividends and other distributions
are reinvested and that the percentage amounts listed in "Annual Operating
Expenses" above remain the same in the years shown.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Advisor Equity
Class A Shares (1) . . . . . . . . . . . . . . . . $63 $ 96 $ 131 $231
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 74 104 137 252
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 24 74 127 252
Class C Shares . . . . . . . . . . . . . . . . . . 24 74 127 271
Advisor Northwest
Class A Shares (1) . . . . . . . . . . . . . . . . 62 93 126 219
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 72 100 130 239
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 22 70 120 239
Class C Shares . . . . . . . . . . . . . . . . . . 23 70 120 258
Advisor Intermediate Treasury
Class A Shares (1) . . . . . . . . . . . . . . . . 60 87 116 199
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 95 121 219
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 65 111 219
Class C Shares . . . . . . . . . . . . . . . . . . 21 65 111 240
Advisor U.S. Government
Class A Shares (1) . . . . . . . . . . . . . . . . 60 87 116 199
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 95 121 221
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 65 111 221
Class C Shares . . . . . . . . . . . . . . . . . . 21 65 112 240
</TABLE>
-9-
<PAGE> 14
<TABLE>
<S> <C> <C> <C> <C>
Advisor GNMA
Class A Shares (1) . . . . . . . . . . . . . . . . 60 88 117 201
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 95 122 223
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 65 112 223
Class C Shares . . . . . . . . . . . . . . . . . . 21 65 112 242
Advisor Municipal
Class A Shares (1) . . . . . . . . . . . . . . . . 60 86 115 196
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 94 120 217
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 64 110 217
Class C Shares . . . . . . . . . . . . . . . . . . 21 64 110 237
Advisor Intermediate Municipal
Class A Shares (1) . . . . . . . . . . . . . . . . 60 87 116 198
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 95 121 219
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 64 111 219
Class C Shares . . . . . . . . . . . . . . . . . . 21 65 111 239
Advisor Washington Municipal
Class A Shares (1) . . . . . . . . . . . . . . . . 60 87 115 197
Class B Shares
Assuming shares are redeemed at
the end of the period (2) . . . . . . . . . . 71 94 120 218
</TABLE>
-10-
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C>
Assuming no redemption at the
end of the period . . . . . . . . . . . . . . 21 64 110 218
Class C Shares . . . . . . . . . . . . . . . . . . 21 64 110 238
</TABLE>
(1) Includes deduction at the time of purchase of the maximum sales charge.
(2) Includes deduction at the time of redemption of the applicable contingent
deferred sales charge.
The purpose of the tables is to assist you in understanding the various costs
and expenses that an investor in each Fund would bear, directly or indirectly.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. A FUND'S ACTUAL EXPENSES OR PERFORMANCE MAY BE GREATER OR LESS THAN
THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS REQUIRED BY SECURITIES AND
EXCHANGE COMMISSION REGULATIONS APPLICABLE TO ALL MUTUAL FUNDS AND IT IS NOT A
PREDICTION OF, NOR DOES IT REPRESENT, FUTURE PERFORMANCE OF ANY FUND.
-11-
<PAGE> 16
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - EQUITY FUND
-12-
<PAGE> 17
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - EQUITY FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Equity Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- --------------------- ---------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.76 $ 10.00 $ 9.76 $ 10.00 $ 9.76 $ 10.00
Income From Investment Operations
Net Investment Income 0.16 0.03 0.08 0.01 0.08 0.01
Net Realized and Unrealized Gain (Loss) on Investments 2.80 (0.24) 2.80 (0.24) 2.79 (0.24)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 2.96 (0.21) 2.88 (0.23) 2.87 (0.23)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.16) (0.03) (0.08) (0.01) (0.08) (0.01)
Net Realized Gain on Investments (1.21) --- (1.21) --- (1.21) ---
-------- --------- -------- --------- --------- --------
Total Distributions (1.37) (0.03) (1.29) (0.01) (1.29) (0.01)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 11.35 $ 9.76 $ 11.35 $ 9.76 $ 11.34 $ 9.76
======== ========= ======== ========= ========= ========
Total Return (a) 30.42% -2.10%** 29.44% -2.29%** 29.43% -2.29%**
Net Assets at End of Period (000's) $ 2,363 $ 1,628 $ 1,955 $ 1,629 $ 2,170 $ 1,635
Ratio of Expenses to Average Net Assets 1.62% 2.57%* 2.38% 3.31%* 2.37% 3.32%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 2.03% - 2.79% - 2.78% -
Ratio of Net Investment Income to Average Net Assets 1.44% 1.18%* 0.69% 0.44%* 0.69% 0.44%*
Portfolio Turnover Rate 120.09% 34.83%* 120.09% 34.83%* 120.09% 34.83%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 18
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - NORTHWEST FUND
-13-
<PAGE> 19
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - NORTHWEST FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Northwest Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.75 $ 10.00 $ 9.73 $ 10.00 $ 9.73 $ 10.00
Income From Investment Operations
Net Investment Income (0.04) (0.01) (0.12) (0.02) (0.12) (0.02)
Net Realized and Unrealized Gain (Loss) on Investments 0.86 (0.24) 0.86 (0.25) 0.86 (0.25)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 0.82 (0.25) 0.74 (0.27) 0.74 (0.27)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income --- --- --- --- --- ---
Net Realized Gain on Investments (0.19) --- (0.19) --- (0.19) ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.19) --- (0.19) --- (0.19) ---
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 10.38 $ 9.75 $ 10.28 $ 9.73 $ 10.28 $ 9.73
======== ========= ======== ========= ========= ========
Total Return (a) 8.38% -2.50%** 7.57% -2.70%** 7.57% -2.70%**
Net Assets at End of Period (000's) $ 1,850 $ 1,626 $ 1,740 $ 1,622 $ 1,745 $ 1,625
Ratio of Expenses to Average Net Assets 1.51% 2.28%* 2.25% 3.03%* 2.25% 3.03%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.93% - 2.67% - 2.67% -
Ratio of Net Investment Income to Average Net Assets -0.43% -0.20%* -1.17% -0.95%* -1.17% -0.95%*
Portfolio Turnover Rate 32.16% None 32.16% None 32.16% None
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 20
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - INTERMEDIATE-TERM TREASURY FUND
-14-
<PAGE> 21
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - INTERMEDIATE-TERM TREASURY FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Intermediate-Term Treasury Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.93 $ 10.00 $ 9.93 $ 10.00 $ 9.93 $ 10.00
Income From Investment Operations
Net Investment Income 0.53 0.11 0.45 0.09 0.45 0.09
Net Realized and Unrealized Gain (Loss) on Investments 1.02 (0.07) 1.03 (0.07) 1.03 (0.07)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 1.55 0.04 1.48 0.02 1.48 0.02
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.53) (0.11) (0.45) (0.09) (0.45) (0.09)
Net Realized Gain on Investments (0.16) --- (0.16) --- (0.16) ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.69) (0.11) (0.61) (0.09) (0.61) (0.09)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 10.79 $ 9.93 $ 10.80 $ 9.93 $ 10.80 $ 9.93
======== ========= ======== ========= ========= ========
Total Return (a) 16.03% 0.41%** 15.17% 0.22%** 15.16% 0.22%**
Net Assets at End of Period (000's) $ 1,946 $ 1,655 $ 1,799 $ 1,655 $ 1,847 $ 1,664
Ratio of Expenses to Average Net Assets 1.32% 1.86%* 2.06% 2.61%* 2.07% 2.61%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.77% - 2.51% - 2.52% -
Ratio of Net Investment Income to Average Net Assets 5.08% 4.42%* 4.33% 3.67%* 4.33% 3.67%*
Portfolio Turnover Rate 17.79% 346.43%* 17.79% 346.43%* 17.79% 346.43%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 22
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - U.S. GOVERNMENT FUND
-15-
<PAGE> 23
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - U.S. GOVERNMENT FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor U.S. Government Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.99 $ 10.00 $ 9.99 $ 10.00 $ 9.99 $ 10.00
Income From Investment Operations
Net Investment Income 0.51 0.11 0.43 0.09 0.43 0.09
Net Realized and Unrealized Gain (Loss) on Investments 0.95 (0.01) 0.95 (0.01) 0.95 (0.01)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 1.46 0.10 1.38 0.08 1.38 0.08
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.51) (0.11) (0.43) (0.09) (0.43) (0.09)
Net Realized Gain on Investments (0.38) --- (0.38) --- (0.38) ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.89) (0.11) (0.81) (0.09) (0.81) (0.09)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 10.56 $ 9.99 $ 10.56 $ 9.99 $ 10.56 $ 9.99
======== ========= ======== ========= ========= ========
Total Return (a) 14.92% 0.99%** 14.07% 0.79%** 14.07% 0.79%**
Net Assets at End of Period (000's) $ 1,761 $ 1,665 $ 1,760 $ 1,664 $ 1,760 $ 1,664
Ratio of Expenses to Average Net Assets 1.32% 1.85%* 2.07% 2.60%* 2.07% 2.60%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.76% - 2.51% - 2.51% -
Ratio of Net Investment Income to Average Net Assets 4.88% 4.29%* 4.13% 3.54%* 4.13% 3.54%*
Portfolio Turnover Rate 27.26% 445.09%* 27.26% 445.09%* 27.26% 445.09%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 24
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - GNMA FUND
-16-
<PAGE> 25
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - GNMA FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor GNMA Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.80 $ 10.00 $ 9.80 $ 10.00 $ 9.80 $ 10.00
Income From Investment Operations
Net Investment Income 0.64 0.13 0.56 0.11 0.56 0.11
Net Realized and Unrealized Gain (Loss) on Investments 0.82 (0.20) 0.82 (0.20) 0.82 (0.20)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 1.46 (0.07) 1.38 (0.09) 1.38 (0.09)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.64) (0.13) (0.56) (0.11) (0.56) (0.11)
Net Realized Gain on Investments --- --- --- --- --- ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.64) (0.13) (0.56) (0.11) (0.56) (0.11)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 10.62 $ 9.80 $ 10.62 $ 9.80 $ 10.62 $ 9.80
======== ========= ======== ========= ========= ========
Total Return (a) 15.28% -0.72%** 14.43% -0.90%** 14.43% -0.90%**
Net Assets at End of Period (000's) $ 1,838 $ 1,633 $ 1,770 $ 1,633 $ 1,782 $ 1,632
Ratio of Expenses to Average Net Assets 1.34% 1.98%* 2.09% 2.73%* 2.09% 2.73%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.78% - 2.53% - 2.53% -
Ratio of Net Investment Income to Average Net Assets 6.22% 5.11%* 5.47% 4.36%* 5.47% 4.36%*
Portfolio Turnover Rate 29.62% 2.74%* 29.62% 2.74%* 29.62% 2.74%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 26
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - MUNICIPAL BOND FUND
-17-
<PAGE> 27
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - MUNICIPAL BOND FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Municipal Bond Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.90 $ 10.00 $ 9.90 $ 10.00 $ 9.90 $ 10.00
Income From Investment Operations
Net Investment Income 0.50 0.08 0.42 0.06 0.42 0.06
Net Realized and Unrealized Gain (Loss) on Investments 1.88 (0.10) 1.88 (0.10) 1.88 (0.10)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 2.38 (0.02) 2.30 (0.04) 2.30 (0.04)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.50) (0.08) (0.42) (0.06) (0.42) (0.06)
Net Realized Gain on Investments --- --- --- --- --- ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.50) (0.08) (0.42) (0.06) (0.42) (0.06)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 11.78 $ 9.90 $ 11.78 $ 9.90 $ 11.78 $ 9.90
======== ========= ======== ========= ========= ========
Total Return (a) 24.54% -0.16%** 23.62% -0.35%** 23.63% -0.35%**
Net Assets at End of Period (000's) $ 1,964 $ 1,650 $ 1,989 $ 1,650 $ 1,977 $ 1,649
Ratio of Expenses to Average Net Assets 1.29% 1.92%* 2.04% 2.67%* 2.04% 2.67%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.70% - 2.45% - 2.45% -
Ratio of Net Investment Income to Average Net Assets 4.60% 3.33%* 3.85% 2.59%* 3.85% 2.59%*
Portfolio Turnover Rate 4.67% 492.95%* 4.67% 492.95%* 4.67% 492.95%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 28
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - INTERMEDIATE-TERM MUNICIPAL BOND FUND
-18-
<PAGE> 29
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - INTERMEDIATE-TERM MUNICIPAL BOND FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Intermediate-Term Municipal Bond Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.80 $ 10.00 $ 9.80 $ 10.00 $ 9.80 $ 10.00
Income From Investment Operations
Net Investment Income 0.44 0.07 0.36 0.05 0.36 0.05
Net Realized and Unrealized Gain (Loss) on Investments 0.91 (0.20) 0.91 (0.20) 0.91 (0.20)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 1.35 (0.13) 1.27 (0.15) 1.27 (0.15)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.44) (0.07) (0.36) (0.05) (0.36) (0.05)
Net Realized Gain on Investments --- --- --- --- --- ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.44) (0.07) (0.36) (0.05) (0.36) (0.05)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 10.71 $ 9.80 $ 10.71 $ 9.80 $ 10.71 $ 9.80
======== ========= ======== ========= ========= ========
Total Return (a) 13.93% -1.29%** 13.09% -1.48%** 13.09% -1.48%**
Net Assets at End of Period (000's) $ 1,786 $ 1,633 $ 1,785 $ 1,633 $ 1,825 $ 1,633
Ratio of Expenses to Average Net Assets 1.31% 1.87%* 2.06% 2.62%* 2.06% 2.62%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.74% - 2.49% - 2.49% -
Ratio of Net Investment Income to Average Net Assets 4.19% 2.85%* 3.44% 2.10%* 3.44% 2.10%*
Portfolio Turnover Rate 1.19% 513.36%* 1.19% 513.36%* 1.19% 513.36%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 30
FINANCIAL HIGHLIGHTS
SAFECO ADVISOR SERIES TRUST - WASHINGTON MUNICIPAL BOND FUND
-19-
<PAGE> 31
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
SAFECO ADVISOR SERIES TRUST - WASHINGTON MUNICIPAL BOND FUND
The supplemental financial information and performance data has been derived
from the Financial Statements and should be read in conjunction therewith.
<TABLE>
<CAPTION>
SAFECO Advisor Washington Municipal Bond Fund
-------------------------------------------------------------------
Class A Class B Class C
------------------- -------------------- --------------------
1995 + 1994 ++ 1995 + 1994 ++ 1995 + 1994 ++
------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value at Beginning of Period $ 9.82 $ 10.00 $ 9.82 $ 10.00 $ 9.82 $ 10.00
Income From Investment Operations
Net Investment Income 0.50 0.09 0.42 0.07 0.42 0.07
Net Realized and Unrealized Gain (Loss) on Investments 1.40 (0.18) 1.39 (0.18) 1.40 (0.18)
-------- --------- -------- --------- --------- --------
Total from Investment Operations 1.90 (0.09) 1.81 (0.11) 1.82 (0.11)
-------- --------- -------- --------- --------- --------
Distributions to Shareholders from
Net Investment Income (0.50) (0.09) (0.42) (0.07) (0.42) (0.07)
Net Realized Gain on Investments (0.02) --- (0.02) --- (0.02) ---
-------- --------- -------- --------- --------- --------
Total Distributions (0.52) (0.09) (0.44) (0.07) (0.44) (0.07)
-------- --------- -------- --------- --------- --------
Net Asset Value at End of Period $ 11.20 $ 9.82 $ 11.19 $ 9.82 $ 11.20 $ 9.82
======== ========= ======== ========= ========= ========
Total Return (a) 19.75% -0.93%** 18.76% -1.12%** 18.87% -1.12%**
Net Assets at End of Period (000's) $ 1,911 $ 1,636 $ 1,970 $ 1,667 $ 1,934 $ 1,694
Ratio of Expenses to Average Net Assets 1.30% 1.90%* 2.05% 2.64%* 2.04% 2.64%*
Ratio of Expenses to Average Net Assets
Before Expense Reimbursement 1.71% - 2.46% - 2.45% -
Ratio of Net Investment Income to Average Net Assets 4.74% 3.48%* 3.99% 2.72%* 3.99% 2.72%*
Portfolio Turnover Rate 13.86% 510.18%* 13.86% 510.18%* 13.86% 510.18%*
</TABLE>
(a) Total return excludes the effects of sales charges. If sales charges were
included, the total return for Class A and Class B would be lower.
** Not Annualized.
* Annualized.
+ For the year ended December 31, 1995.
++ For the period from September 30,1994 (Commencement of Operations) to
December 31, 1994.
<PAGE> 32
- --------------------------------------------------------
INVESTMENT POLICIES, RISK FACTORS AND PORTFOLIO MANAGERS
- --------------------------------------------------------
The Trust is a Delaware business trust established by a Trust Instrument dated
March 31, 1994. The Trust currently consists of eight mutual funds: Advisor
Equity Fund, Advisor Northwest Fund, Advisor Intermediate Treasury Fund,
Advisor Government Fund, Advisor GNMA Fund, Advisor Municipal Fund, Advisor
Intermediate Municipal Fund and Advisor Washington Municipal Fund, each of
which is a diversified series of the Trust.
The investment objective and investment policies for each Fund are described
below. The Trust's Board of Trustees may change a Fund's investment objective
without shareholder vote, but no such change will be made without 30 days'
prior written notice to shareholders of that Fund. In the event a Fund changes
its investment objective, the new objective may not meet the investment needs
of every shareholder and may be different from the objective a shareholder
considered appropriate at the time of initial investment.
Unless otherwise stated, the investment policies and limitations described
below under each Fund's description and "Common Investment Practices" are
non-fundamental and may be changed by the Board of Trustees without shareholder
vote.
ADVISOR EQUITY FUND
The investment objective of the Advisor Equity Fund is to seek long-term growth
of capital and reasonable current income. The Fund does not seek to achieve
both growth and income with every portfolio investment. Rather, the Fund
attempts to manage the portfolio as a whole so as to achieve a reasonable
balance between growth and income on an overall basis.
To pursue its objective, the Advisor Equity Fund:
1. WILL INVEST, DURING NORMAL MARKET CONDITIONS, AT LEAST 65% OF ITS
TOTAL ASSETS IN EQUITY SECURITIES (WHICH INCLUDE COMMON STOCKS,
PREFERRED STOCKS AND SECURITIES CONVERTIBLE INTO COMMON STOCKS).
2. WILL INVEST PRINCIPALLY IN COMMON STOCKS SELECTED BY SAM PRIMARILY FOR
APPRECIATION AND/OR DIVIDEND POTENTIAL AND FROM A LONG-RANGE
INVESTMENT STANDPOINT.
3. MAY INVEST UP TO 15% OF ITS TOTAL ASSETS IN SECURITIES CONVERTIBLE
INTO COMMON STOCK, E.G., CONVERTIBLE PREFERRED STOCK AND CONVERTIBLE
CORPORATE BONDS. Convertible securities are senior in rank to common
stock in a corporation's capital structure and, therefore, generally
present less risk than a corporation's common stock, although the
extent of such a reduction in risk is dependent on the credit quality
of the issuer. SAM will purchase convertible securities for the Fund
if such securities offer a higher yield than an issuer's common stock
and provide reasonable potential for capital appreciation. In periods
of rising interest rates, a corporation's common stock may increase in
value more than its convertible securities because of investors'
demand to maintain the convertible securities yield with the market.
-20-
<PAGE> 33
The Advisor Equity Fund may invest up to 15% of its total assets in
convertible corporate bonds that are rated below investment grade (Ba
or below by Moody's Investors Service, Inc. ("Moody's") or BB and
below by Standard & Poor's Ratings Group ("S&P")) or in unrated bonds
determined by SAM to be of comparable quality to such rated bonds
(commonly referred to as high-yield or "junk" bonds). The Fund will
not purchase a convertible corporate bond rated below Ca by Moody's or
CC by S&P or which is in default on payment of principal and interest.
Bonds rated Ca or CC are highly speculative and have greater
uncertainties or major risk exposures.
Below-investment grade bonds are speculative and involve greater
investment risks than investment grade bonds due to the issuer's
reduced creditworthiness and increased likelihood of default and
bankruptcy. During periods of economic uncertainty or change, the
market prices of below-investment grade bonds may experience increased
volatility. Below-investment grade bonds tend to reflect short-term
economic and corporate developments to a greater extent than higher
quality bonds.
After purchase by the Advisor Equity Fund, a corporate bond may be
downgraded or, if unrated, may cease to be comparable to a rated
security. Neither event will require the Fund to dispose of that
security, but SAM will take a downgrade or loss of comparability into
account in determining whether the Fund should continue to hold the
security in its portfolio. The Fund will not hold more than 3% of its
total assets in bonds that go into default on the payment of principal
and interest after purchase. In the event that an amount in excess of
15% of the Fund's net assets is held in securities rated below
investment grade due to a downgrade of one or more corporate bonds,
SAM will engage in an orderly disposition of such securities to the
extent necessary to ensure that the Fund's holdings of such securities
do not exceed 15% of the Fund's net assets.
SAM uses S&P and Moody's ratings only as a preliminary indicator of
investment quality. SAM will determine the quality of bonds by
evaluating such factors as the issuer's capital structure, earnings
power and quality of management. Unrated securities are not
necessarily of lower quality than rated securities, but may not be as
attractive to as many investors. In addition, SAM will periodically
monitor the issuer's creditworthiness whether rated or not rated.
4. MAY INVEST UP TO 10% OF ITS TOTAL ASSETS IN REAL ESTATE INVESTMENT
TRUSTS ("REITS"). REITs purchase real property, which is then leased,
and make mortgage investments. REITs are dependent upon the
successful operation of the properties owned and the financial
condition of lessees and mortgagors. The value of REIT shares will
fluctuate depending on the underlying value of the real property and
mortgages owned and the amount of cash flow (net income plus
depreciation) generated and paid out. In addition, REITs typically
borrow to increase funds available for investment. Generally there is
a greater risk associated with highly leveraged REITs.
5. MAY INVEST IN AMERICAN DEPOSITARY RECEIPTS ("ADRS"), WHICH REPRESENT
SECURITIES ISSUED BY A FOREIGN ISSUER. THE ADVISOR EQUITY FUND ALSO
MAY INVEST UP TO 10% OF ITS TOTAL ASSETS IN FOREIGN SECURITIES. (THE
10% LIMITATION DOES NOT APPLY TO FOREIGN SECURITIES DENOMINATED IN
U.S. DOLLARS.) Foreign securities and ADRs may be affected by
political or economic developments in foreign countries. Foreign
companies may not be
-21-
<PAGE> 34
subject to accounting standards or governmental supervision comparable
to U.S. companies, and there may be less public information about
their operations. In addition, foreign markets may be less liquid or
more volatile than U.S. markets and may offer less protection to
investors. Investments in foreign securities may also be subject to
special risks, such as governmental regulation of foreign exchange
transactions and changes in rates of exchange with the U.S. dollar.
6. MAY INVEST UP TO 5% OF ITS TOTAL ASSETS IN RESTRICTED SECURITIES
ELIGIBLE FOR RESALE UNDER RULE 144A ("RULE 144A SECURITIES"), PROVIDED
THAT SAM HAS DETERMINED THAT SUCH SECURITIES ARE LIQUID UNDER
GUIDELINES ADOPTED BY THE BOARD OF TRUSTEES. Restricted securities
may be sold only in offerings registered under the Securities Act of
1933 ("1933 Act") or in transactions exempt from the registration
requirements under the 1933 Act. Rule 144A under the 1933 Act
provides an exemption for the resale of certain restricted securities
to qualified institutional buyers. Investing in Rule 144A securities
may increase the Advisor Equity Fund's illiquidity to the extent that
qualified institutional buyers or other buyers are unwilling to
purchase the securities.
ADVISOR NORTHWEST FUND
The investment objective of the Advisor Northwest Fund is to seek long-term
growth of capital through investing primarily in Northwest companies. During
normal market conditions, the Fund will invest at least 65% of its total assets
in securities issued by companies whose principal executive offices are located
in the Northwest.
To pursue its objective, the Advisor Northwest Fund:
1. WILL ORDINARILY INVEST PRINCIPALLY IN COMMON STOCKS SELECTED BY SAM
PRIMARILY FOR POTENTIAL LONG-TERM APPRECIATION. In determining those
common stocks which have the potential for long-term appreciation,
SAM will evaluate the issuer's financial strength, quality of
management and earnings power.
2. MAY INVEST IN SECURITIES CONVERTIBLE INTO COMMON STOCK WHEN, IN THE
OPINION OF SAM, THE EXPECTED TOTAL RETURN OF A CONVERTIBLE SECURITY
EXCEEDS THE EXPECTED TOTAL RETURN OF COMMON STOCK ELIGIBLE FOR
PURCHASE BY THE FUND. The Fund may purchase convertible bonds or
convertible preferred stock which may be exchanged for a stated number
of shares of the issuer's common stock at a certain price. The Fund
will purchase those convertible securities which, in SAM's opinion,
have underlying common stock with potential for long-term growth. The
Fund will purchase convertible securities which are investment grade,
i.e., rated in the top four categories by either S&P or Moody's.
Moody's deems securities rated in the fourth category (Baa) to have
speculative characteristics. The Fund may retain a debt security that
is downgraded to below investment grade after purchase. In the event
that an amount in excess of 5% of the Fund's net assets is held in
securities rated below investment grade due to a downgrade of one or
more convertible securities, SAM will engage in an orderly disposition
of such securities to the extent necessary to ensure that the Fund's
holdings of such securities do not exceed 5% of the Fund's net assets.
For a description of ratings, see "Ratings Supplement" on page ___ and
"Description of Preferred Stock Ratings" in the Trust's combined
Statement of Additional Information. The value of convertible
-22-
<PAGE> 35
securities will normally vary with the value of the underlying common
stock and fluctuate inversely with interest rates.
ADVISOR INTERMEDIATE TREASURY FUND
The investment objective of the Advisor Intermediate Treasury Fund is to seek
as high a level of current income as is consistent with the preservation of
capital. The Fund will seek to maintain a portfolio of U.S. Treasury
obligations with an average dollar-weighted maturity of between three and ten
years. Although the average dollar-weighted maturity of the portfolio will
fall within a range of three to ten years, individual obligations held by the
Fund may have maturities outside that range.
To pursue its objective, the Advisor Intermediate Treasury Fund:
1. WILL INVEST, DURING NORMAL MARKET CONDITIONS, AT LEAST 65% OF ITS
TOTAL ASSETS IN DIRECT OBLIGATIONS OF THE U.S. TREASURY, SUCH AS U.S.
TREASURY BILLS, NOTES AND BONDS. These securities are supported by
the full faith and credit of the U.S. Government.
2. MAY INVEST UP TO 35% OF ITS TOTAL ASSETS IN:
- OTHER U.S. GOVERNMENT SECURITIES, including (a) securities
supported by the full faith and credit of the U.S. Government
but that are not direct obligations of the U.S. Treasury, (b)
securities that are not supported by the full faith and
credit of the U.S. Government but are supported by the
issuer's ability to borrow from the U.S. Treasury, such as
securities issued by the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC"), and (c) securities supported solely by the
creditworthiness of the issuer, such as securities issued by
the Tennessee Valley Authority ("TVA"). While U.S. Government
securities are considered to be of the highest credit quality
available, they are subject to the same market risks as
comparable debt securities.
- CORPORATE DEBT SECURITIES that at the time of purchase are
rated in the top three grades (A or higher) by either S&P or
Moody's, or, if unrated, determined by SAM to be of comparable
quality to such rated debt securities. In addition to
reviewing ratings, SAM will analyze the quality of rated and
unrated corporate bonds for purchase by the Fund by evaluating
various factors that may include the issuer's capital
structure, earnings power and quality of management. See
"Ratings Supplement" on page ____.
3. MAY INVEST UP TO 5% OF ITS TOTAL ASSETS IN EACH OF THE FOLLOWING:
- YANKEE SECTOR DEBT SECURITIES, which are securities issued and
traded in the U.S. by foreign issuers. These debt securities
have investment risks that are different from those of
domestic issuers. SAM will attempt, to the extent possible,
to analyze potential investments in foreign issuers on the
same basis as the rating services analyze domestic issuers.
- EURODOLLAR BONDS, which are bonds issued by either U.S. or
foreign issuers that are traded in European bond markets and
denominated in
-23-
<PAGE> 36
U.S. dollars. The Fund will purchase Eurodollar bonds through
U.S. securities dealers and hold such bonds in the U.S.
- MUNICIPAL SECURITIES, if in the opinion of SAM, the potential
for appreciation or yield is comparable to or greater than
similarly-rated taxable securities.
ADVISOR GOVERNMENT FUND
The investment objective of the Advisor Government Fund is to seek as high a
level of current income as is consistent with the preservation of capital.
To pursue its objective, the Advisor Government Fund:
1. WILL INVEST, DURING NORMAL MARKET CONDITIONS, AT LEAST 65% OF ITS
TOTAL ASSETS IN U.S. GOVERNMENT SECURITIES. While U.S. Government
securities are considered to be of the highest credit quality
available, they are subject to the same market risks as comparable
debt securities. Examples of U.S. Government securities supported by
the full faith and credit of the U.S. Government that the Fund may
purchase are U.S. Treasury bills, notes, and bonds and GNMA
mortgage-backed securities. Examples of U.S. Government securities
that the Fund may purchase that are not supported by the full faith
and credit of the U.S. Government but are supported by the issuer's
ability to borrow from the U.S. Treasury are securities issued by FNMA
and FHLMC. Examples of U.S. Government securities supported solely by
the creditworthiness of the issuer are securities issued by the TVA.
2. MAY INVEST UP TO 35% OF ITS TOTAL ASSETS IN MARKETABLE STRAIGHT-DEBT
CORPORATE SECURITIES WHICH ARE OF INVESTMENT GRADE.
ADVISOR GNMA FUND
The investment objective of the Advisor GNMA Fund is to seek as high a level of
current interest income as is consistent with the preservation of capital.
To pursue its objective, the Advisor GNMA Fund:
1. DURING NORMAL MARKET CONDITIONS, WILL INVEST AT LEAST 65% OF ITS TOTAL
ASSETS IN MORTGAGE-BACKED SECURITIES ISSUED BY GNMA INCLUDING
COLLATERALIZED MORTGAGE OBLIGATIONS ("CMOS"). The GNMA securities in
which the Advisor GNMA Fund will invest represent ownership in a pool
of mortgage loans. Each mortgage loan in the pool is either insured
by the Federal Housing Administration or Farmers Home Administration
or guaranteed by the Veterans Administration. Once approved by GNMA,
the timely payment of principal and interest by each mortgage pool is
guaranteed by GNMA. The GNMA guarantee represents a general
obligation of the U.S. Treasury.
GNMA securities in which the Advisor GNMA Fund will invest will be
"modified pass-through" securities and CMOs, including interests in
real estate mortgage investment conduits. "Pass-through" means that
the scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. (See the
following section for description of CMOs.) Unlike conventional
bonds, the principal with respect to GNMA securities is paid back over
the life of
-24-
<PAGE> 37
the loan rather than at maturity. Consequently, the Fund will receive
monthly scheduled payments of both principal and interest.
Since the Advisor GNMA Fund must reinvest scheduled and unscheduled
principal payments at prevailing interest rates at the time of such
investment, and such interest rates may be higher or lower than the
current yield of the Fund's portfolio, GNMA securities may not be an
effective means to lock in long-term interest rates. In addition,
while prices of GNMA securities, like conventional bonds, are
inversely affected by changes in interest rate levels, because of the
likelihood of increased prepayments of mortgages in times of declining
interest rates, they have less potential for capital appreciation than
comparable fixed-income securities and may in fact decrease in value
when interest rates fall.
2. MAY INVEST UP TO 35% OF ITS TOTAL ASSETS IN:
- OTHER U.S. GOVERNMENT SECURITIES, including (a) securities
backed by the full faith and credit of the U.S. Government
such as U.S. Treasury bills, notes and bonds, and securities
issued by the Farmers Home Administration; (b) securities
issued by U.S. Government agencies or instrumentalities that
are not backed by the full faith and credit of the U.S.
Government but are supported by the issuer's right to borrow
from the U.S. Treasury, such as securities issued by FNMA and
FHLMC; and (c) securities supported solely by the
creditworthiness of the issuer, such as securities issued by
the TVA. While U.S. Government securities are considered to
be of the highest credit quality available, they are subject
to the same market risks as comparable debt securities.
- OTHER COLLATERALIZED MORTGAGE OBLIGATIONS issued by the U.S.
Government or one of its agencies or instrumentalities (such
as FNMA or FHLMC) or by private issuers which are
collateralized by securities issued by the U.S. Government or
one of its agencies or instrumentalities (such as GNMA, FNMA
or FHLMC). CMOs issued by private issuers are not treated as
U.S. Government securities. CMOs are securities
collateralized by a portfolio of mortgages or mortgage-backed
securities. The issuer's obligation to make interest and
principal payments on the CMO is secured by the underlying
portfolio of mortgages or mortgage-backed securities. CMOs
are issued with a number of classes or series that have
different maturities and that may represent interests in some
or all of the interest or principal of the underlying
collateral or a combination thereof.
- CORPORATE DEBT SECURITIES that are of investment grade.
Corporate debt securities that are investment grade are rated
in one of the four highest grades assigned by Moody's or S&P
or, if unrated, determined by SAM to be of comparable quality
to such rated debt securities. Moody's deems securities rated
in the fourth category (Baa) to have speculative
characteristics. The Advisor GNMA Fund may retain a debt
security which is downgraded to below investment grade after
purchase. In the event that, due to a downgrade of one or
more debt securities, an amount in excess of 5% of the Fund's
net assets is held in securities rated below investment grade,
SAM will engage in an orderly disposition of such securities
to the extent necessary to ensure that the Fund's holdings of
such securities do
-25-
<PAGE> 38
not exceed 5% of the Fund's net assets. For an explanation of
ratings, see "Ratings Supplement" on page ____.
ADVISOR MUNICIPAL, ADVISOR INTERMEDIATE MUNICIPAL AND ADVISOR WASHINGTON
MUNICIPAL FUNDS
The Advisor Municipal, Advisor Intermediate Municipal and Advisor Washington
Municipal Funds (together the "Municipal Bond Funds") each has as its
investment objective to provide as high a level of current interest income
exempt from federal income tax as is consistent with prudent investment risk.
To pursue its objective, each Municipal Bond Fund:
1. WILL INVEST, DURING NORMAL MARKET CONDITIONS, AS A MATTER OF
FUNDAMENTAL POLICY AT LEAST 80% OF ITS NET ASSETS IN SECURITIES, THE
INTEREST ON WHICH IS EXEMPT FROM FEDERAL INCOME TAX. Each Municipal
Bond Fund will invest at least 65% of its total assets in municipal
bonds having a maturity in excess of one year which at the time
acquired are investment grade, i.e., rated in one of the four highest
grades assigned by Moody's or S&P or, if unrated, determined by SAM to
be of comparable quality. The term "municipal bonds" as used in this
Prospectus means those debt obligations issued by or on behalf of
states, territories or possessions of the U.S. and the District of
Columbia or their political subdivisions, municipalities, agencies,
instrumentalities or public authorities, the interest on which in the
opinion of bond counsel is exempt from federal income tax. A Fund may
invest up to 20% of its total assets in unrated municipal bonds
determined by SAM to be of comparable quality to bonds rated
investment grade. A Fund will invest no more than 35% of its total
assets in municipal bonds rated in the fourth highest grade or in
comparable unrated bonds. Such bonds are of medium grade, have
speculative characteristics and are more likely to have a weakened
capacity to make principal and interest payments under changing
economic conditions or upon deterioration in the financial condition
of the issuer.
In addition to reviewing ratings, SAM may analyze the quality of rated
and unrated municipal bonds for purchase by a Municipal Bond Fund by
evaluating various factors that may include the issuer's or
guarantor's financial resources and liquidity, economic feasibility of
revenue bond project financing and general purpose borrowings, cash
flow and ability to meet anticipated debt service requirements,
quality of management, sensitivity to economic conditions, operating
history and any relevant political or regulatory matters. SAM may
also evaluate trends in the economy, the financial markets or specific
geographic areas in determining whether to purchase a bond. For a
description of municipal bond ratings, see the "Ratings Supplement" on
page ______.
After purchase by a Municipal Bond Fund, a municipal bond may be
downgraded to below-investment grade or, if unrated, may cease to be
comparable to a rated investment grade security (such below-investment
grade securities are commonly referred to as high-yield or "junk"
bonds). Neither event will require a Municipal Bond Fund to dispose
of that security, but SAM will take a downgrade or loss of
comparability into account in determining whether the Fund should
continue to hold the security in its portfolio. A Fund will not hold
more than 5% of its net assets in such below-investment grade
securities.
-26-
<PAGE> 39
The anticipated ranges of the average dollar-weighted maturities of
the investment portfolios of the Advisor Municipal Fund, Advisor
Intermediate Municipal Fund and the Advisor Washington Municipal Fund
are, respectively, 20 to 25 years, 3 to 10 years, and 20 to 25 years.
Individual bonds held in a Fund's portfolio may have maturities that
are longer or shorter than the expected average dollar-weighted
maturity of that Fund.
2. MAY INVEST IN ANY OF THE FOLLOWING TYPES OF MUNICIPAL BONDS:
- REVENUE BONDS, which are "limited obligation" bonds that
provide financing for specific projects or public facilities.
These bonds are backed by revenues generated by a particular
project or facility or by a special tax. A "resource recovery
bond" is a type of revenue bond issued to build waste
facilities or plants. An "industrial development bond" is a
type of revenue bond that is backed by the credit of a private
issuer, which generally does not have access to the resources
or taxing authority of a municipality for payment and may
involve greater risk. If a Municipal Bond Fund invests in
revenue bonds, they will primarily be bonds issued to finance
various projects, including but not limited to education,
hospital, housing, waste treatment and utilities. Each
Municipal Bond Fund will not purchase private activity bonds
or any other type of revenue bonds, the interest on which may
be subject to the alternative minimum tax.
- GENERAL OBLIGATION BONDS, which are bonds that provide general
purpose financing for state and local governments and are
backed by the taxing power of the state or local government as
the case may be. Payment of principal and interest to a
Municipal Bond Fund holding such a bond may be dependent on an
appropriation by the issuer's legislative body. The taxes or
special assessments that can be levied for the payment of
principal and interest on general obligation bonds may be
either limited or unlimited as to rate or amount.
- VARIABLE AND FLOATING RATE OBLIGATIONS, which are municipal
obligations that carry variable or floating rates of interest.
Variable rate instruments bear interest at rates which are
readjusted at periodic intervals. Floating rate instruments
bear interest at rates that vary automatically with changes in
specified market rates or indices, such as the bank prime
rate. Accordingly, as interest rates fluctuate, the potential
for capital appreciation or depreciation of these obligations
is less than those for fixed rate obligations. Floating and
variable rate obligations carry demand features that permit a
Fund to tender (sell) them back to the issuer at par prior to
maturity and on short notice. A Fund's ability to obtain
payment from the issuer at par may be affected by events
occurring between the date the Fund elects to tender the
obligation to the issuer and the date redemption proceeds are
payable to the Fund. A Fund will purchase floating and
variable rate obligations only if at the time of purchase
there is a secondary market for such instruments. For
purposes of calculating average weighted maturity, each
Municipal Fund will treat variable and floating rate
obligations as having a maturity equal to the
-27-
<PAGE> 40
period remaining until the date it can next exercise the
demand feature by selling the security back to the issuer.
- PUT BONDS, which are municipal bonds that give the holder the
unconditional right to sell the bond back to the issuer at a
specified price and exercise date, and PUT BONDS WITH DEMAND
FEATURES. The obligation to purchase the bond on the exercise
date may be supported by a letter of credit or other
arrangement from a bank, insurance company or other financial
institution, the credit standing of which affects the credit
quality of the bond. A demand feature is a put that entitles
the holder to repayment of the principal amount of the
underlying security on no more than 30 days' notice at any
time or at specified intervals.
- MUNICIPAL LEASE OBLIGATIONS, which are obligations issued by
or on behalf of state or local government authorities to
acquire land, equipment or facilities and may be subject to
annual budget appropriations. These obligations themselves
are not typically backed by the credit of the municipality or
the state but are secured by rent payments made by the
municipality or state pursuant to a lease. If the lease is
assigned, the interest on the obligation may become taxable.
The leases underlying certain municipal lease obligations
provide that lease payments are subject to partial or full
abatement if, because of material damage or destruction of the
lease property, there is substantial interference with the
lessee's use or occupancy of such property. This "abatement
risk" may be reduced by the existence of insurance covering
the leased property, the maintenance by the lessee of reserve
funds or the provision of credit enhancements such as letters
of credit. Certain municipal lease obligations also contain
"non-appropriation" clauses that provide that the
municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Some municipal lease
obligations of this type are insured as to timely payment of
principal and interest, even in the event of a failure by the
municipality to appropriate sufficient funds to make payments
under the lease. However, in the case of an uninsured
municipal lease obligation, a Fund's ability to recover under
the lease in the event of a non-appropriation or default will
be limited solely to the repossession of leased property
without recourse to the general credit of the lessee, and
disposition of the property in the event of foreclosure might
prove difficult. If rent is abated because of damage to the
leased property or if the lease is terminated because monies
are not appropriated for the following year's lease payments,
the issuer may default on the obligation causing a loss to a
Fund.
Certificates of participation in municipal lease obligations,
which are certificates issued by state or local governments
that entitle the holder of the certificate to a proportionate
interest in the lease purchase payments made. The Municipal
Bond Funds will invest in only those municipal lease
obligations (including certificates of
-28-
<PAGE> 41
participation) that are, in the opinion of SAM, liquid
securities under guidelines adopted by the Trust's Board of
Trustees. Generally, municipal lease obligations and
certificates of participation will be determined to be liquid
if they have a readily available market after an evaluation of
all relevant factors. The Municipal Bond Funds do not
presently intend to purchase municipal lease obligations that
are not rated by Moody's or S&P.
- PARTICIPATION INTERESTS, which are interests in municipal
bonds and floating and variable rate obligations that are
owned by banks. These interests carry a demand feature that
permits a Municipal Bond Fund holding an interest to tender
(sell) it back to the bank. Generally, the bank will accept
tender of the participation interest with same day notice, but
may require up to 5 days' advance notice. The demand feature
is usually backed by an irrevocable letter of credit or
guarantee of the bank. The credit rating of the bank affects
the credit quality of the participation interest.
- MUNICIPAL NOTES, which are notes generally issued to provide
for short-term capital needs and generally have maturities of
one year or less. A Fund may purchase municipal notes as a
medium for its short-term investments. Notes include tax
anticipation, revenue anticipation and bond anticipation notes
and tax-exempt commercial paper. A Fund will invest only in
those municipal notes that at the time of purchase are rated
within one of the three highest grades by Moody's or S&P or,
if unrated by these agencies, determined by SAM, to be of
comparable quality.
3. WILL INVEST, DURING NORMAL MARKET CONDITIONS, AT LEAST 65% OF
ITS TOTAL ASSETS IN MUNICIPAL BONDS ISSUED BY THE STATE OF
WASHINGTON OR ONE OF ITS POLITICAL SUBDIVISIONS,
MUNICIPALITIES, AGENCIES, INSTRUMENTALITIES OR PUBLIC
AUTHORITIES. (Advisor Washington Municipal Fund only) The
Advisor Washington Municipal Fund may not be suitable for
every eligible investor. Since the State of Washington
currently has no personal income tax, there are no tax
benefits at the state level to an investor. An investor in
the Advisor Washington Municipal Fund will generally earn
dividend income free from federal income taxes as does an
investor in the Advisor Municipal and Advisor Intermediate
Municipal Funds. However, an investment in the Advisor
Washington Municipal Fund may be subject to greater risks than
an investment in the Advisor Municipal and Advisor
Intermediate Municipal Funds due to the concentration of its
portfolio investments in a single state. See "Risk Factors"
on page ___ for further information.
COMMON INVESTMENT PRACTICES
Each of the Funds may follow the investment practices (unless otherwise
indicated) described below:
1. HOLD CASH OR INVEST TEMPORARILY IN HIGH-QUALITY, SHORT-TERM SECURITIES
ISSUED BY AN AGENCY OR INSTRUMENTALITY OF THE U.S. GOVERNMENT, HIGH-
QUALITY COMMERCIAL PAPER, CERTIFICATES OF DEPOSIT AND SHARES OF
NO-LOAD, OPEN-END MONEY MARKET FUNDS. A Fund may purchase these
short-term securities as a cash management technique under those
circumstances where it has cash to manage for a short time period, for
example, after receiving proceeds from the sale of securities,
dividend distributions from portfolio securities or cash from the sale
of Fund shares to investors. Interest earned from these short-term
securities will be
-29-
<PAGE> 42
taxable to investors as ordinary income when distributed. SAM will
waive its advisory fees for Fund assets invested in money market
funds.
2. INVEST FOR SHORT-TERM PURPOSES WHEN SAM BELIEVES SUCH ACTION TO BE
DESIRABLE AND CONSISTENT WITH SOUND INVESTMENT PRACTICES. Each Fund,
however, will not engage primarily in trading for the purpose of
short-term profits. A Fund may dispose of its portfolio securities
whenever SAM deems advisable, without regard to the length of time the
securities have been held. The portfolio turnover rates for each Fund
is not expected to exceed 50%.
3. PURCHASE OR SELL SECURITIES ON A "WHEN-ISSUED" OR "DELAYED-DELIVERY"
BASIS. Under this procedure, a Fund agrees to acquire or sell
securities that are to be delivered against payment in the future,
normally 30 to 45 days. The price, however, is fixed at the time of
commitment. When a Fund purchases when-issued or delayed-delivery
securities, it will earmark liquid, high-quality securities in an
amount equal in value to the purchase price of the security. Use of
this technique may affect a Fund's share price in a manner similar to
leveraging.
4. INVEST UP TO 5% OF NET ASSETS IN REPURCHASE AGREEMENT TRANSACTIONS.
5. INVEST UP TO 5% OF NET ASSETS IN WARRANTS, BUT WILL LIMIT INVESTMENTS
IN WARRANTS WHICH ARE NOT LISTED ON THE NEW YORK OR AMERICAN STOCK
EXCHANGE TO NO MORE THAN 2% OF NET ASSETS. (Advisor Equity and
Advisor Northwest Funds only.)
6. INVEST UP TO 10% OF ITS NET ASSETS IN ILLIQUID SECURITIES, WHICH ARE
SECURITIES THAT CANNOT BE SOLD WITHIN SEVEN DAYS IN THE ORDINARY
COURSE OF BUSINESS FOR APPROXIMATELY THE AMOUNT AT WHICH THEY ARE
VALUED. Due to the absence of an active trading market, a Fund may
experience difficulty in valuing or disposing of illiquid securities.
SAM determines the liquidity of the securities under guidelines
adopted by the Trust's Board of Trustees.
Each Fund has adopted a number of investment restrictions. If a Fund follows a
percentage limitation at the time of investment, a later increase or decrease
in values, net assets or other circumstances will not be considered in
determining whether a Fund complies with the applicable policy. The following
restrictions are fundamental policies which cannot be changed without
shareholder vote.
1. EACH FUND, WITH RESPECT TO 75% OF THE VALUE OF ITS TOTAL ASSETS, MAY
NOT INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN THE SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES).
2. EACH FUND, WITH RESPECT TO 75% OF THE VALUE OF ITS TOTAL ASSETS, MAY
NOT PURCHASE MORE THAN 10% OF THE OUTSTANDING VOTING SECURITIES OF ANY
ONE ISSUER (OTHER THAN U.S. GOVERNMENT SECURITIES).
3. EACH FUND MAY BORROW MONEY ONLY FOR TEMPORARY OR EMERGENCY PURPOSES
FROM A BANK OR AFFILIATES OF SAFECO CORPORATION AT AN INTEREST RATE
NOT GREATER THAN THAT AVAILABLE FROM COMMERCIAL BANKS. A Fund will
not borrow amounts in excess of 20% of its total assets (including
borrowings) less liabilities (other than borrowings) immediately after
such borrowings. As a non-fundamental policy, a Fund will not
purchase securities if outstanding borrowings are equal to or greater
than 5% of its total
-30-
<PAGE> 43
assets. Each Fund intends to exercise its borrowing authority
primarily to meet shareholder redemptions under circumstances where
redemption requests exceed available cash.
For more information, see the "Investment Objectives and Policies" and
"Additional Investment Information" sections of the Trust's Statement of
Additional Information.
RISK FACTORS
Various factors may cause the value of a shareholder's investment in a Fund to
fluctuate. The principal risk factor associated with an investment in a mutual
fund like any of the Funds is that the market value of the portfolio securities
may decrease resulting in a decrease in the value of a shareholder's
investment.
The value of the Advisor Intermediate Treasury, Advisor Government, Advisor
GNMA, Advisor Municipal, Advisor Intermediate Municipal and Advisor Washington
Municipal Funds' portfolios will normally fluctuate inversely with changes in
market interest rates. Generally, when market interest rates rise, the price
of bonds will fall, and when market interest rates fall, the price of bonds
will rise. Also, there is a risk that the issuer of a bond or other debt
security will fail to make timely payments of principal and interest to the
Funds. For a description of the risks of investing in certain types of
instruments, see generally pages ___ to ___ herein.
Advisor Northwest Fund
- ----------------------
An investment in the Advisor Northwest Fund may be subject to different risks
than a mutual fund whose investments are more geographically diverse. Since
the Fund invests primarily in companies whose principal executive offices are
located in the Northwest, the number of issuers whose securities are eligible
for purchase is significantly less than for many other mutual funds. Also,
some companies whose securities are held in the Fund's portfolio may primarily
distribute products or provide services in a specific locale or in the
Northwest region. The long-term growth of these companies can be significantly
affected by business trends in and the economic health of those geographic
areas. Other companies whose securities are held by the Fund may have a
predominately national or partially international market for their products or
services and are more likely to be impacted by national or international
trends. As a result, the performance of the Fund may be influenced by business
trends or economic conditions not only in a specific locale or in the Northwest
region but also on a national or international level, depending on the
companies whose securities are held in its portfolio at any particular time.
Advisor Washington Municipal Fund
- ---------------------------------
Because the Advisor Washington Municipal Fund concentrates its investments in a
single state, there is a greater risk of fluctuation in the values of its
portfolio securities than with mutual funds whose investments are more
geographically diverse. Investors should carefully consider the investment
risks of such concentration. The Fund's share price may be affected by
political and economic developments within Washington State and by the
financial condition of Washington State and its public authorities and
political subdivisions. See "Investment Risks of Concentration in Washington
Issuers" in the Trust's Statement of Additional Information for more
information.
-31-
<PAGE> 44
The information in the following discussion is drawn primarily from official
statements relating to state securities offerings which are dated prior to the
date of this Prospectus. The Advisor Washington Municipal Fund has not
independently verified any of the information in the discussion below.
The economy of the State of Washington consists of both export and local
industries. The State's leading export industries are aerospace,
manufacturing, timber and agriculture. The State's manufacturing base consists
primarily of aircraft manufacture. The Boeing Company, a major aerospace firm,
is the largest commercial employer in the State and has a significant impact on
the State in terms of production, employment and labor earnings. Financial
performance of Boeing has been strong in recent years as measured by increased
sales, airplane deliveries and backlogs of orders. In January 1993, Boeing
announced production cuts and is expected to substantially trim jobs over the
next several years. Such cuts may have an adverse effect on the Washington
economy. Forest products rank second behind aerospace in value of total
production. Although productivity in the forest products industry has
increased steadily in recent years, declines in production are expected in the
future. Although unemployment in the timber industry is anticipated in certain
regions, the impact is not expected to affect the State's overall economic
performance. Growth in agriculture has been an important factor in the State's
economic growth over the past decade. The State is the home of many technology
firms of which approximately half are computer related. Microsoft, the world's
largest microcomputer software company, is headquartered in Redmond,
Washington.
State law requires a balanced budget. The Governor has a statutory
responsibility to reduce expenditures across the board to avoid any cash
deficit at the end of a biennium. In addition, state law prohibits state tax
revenue growth from exceeding the growth rate of state personal income. To
date, Washington State tax revenue increases have remained substantially below
the applicable limit. At any given time, there are numerous lawsuits against
the State which could affect its revenues and expenditures.
PORTFOLIO MANAGERS
Advisor Equity Fund
- -------------------
The portfolio manager for the Advisor Equity Fund is Richard D. Meagley, Vice
President, SAM. Mr. Meagley began serving as portfolio manager for the Fund in
January, 1995. He is also the portfolio manager for other SAFECO funds. Prior
to these positions, he served as a portfolio manager and analyst for Kennedy
Associates, Inc., an investment advisory firm located in Seattle, Washington,
from 1992 through 1994. He was an Assistant Vice President of SAM and the
portfolio manager of a SAFECO fund from 1991 to 1992.
Advisor Northwest Fund
- ----------------------
The portfolio manager for the Advisor Northwest Fund is Charles R. Driggs, Vice
President, SAM. Mr. Driggs has served as portfolio manager of a similar mutual
fund since 1992. From 1984 through 1992, Mr. Driggs was a securities analyst
for SAM specializing in the banking and insurance industries.
-32-
<PAGE> 45
Advisor Intermediate Treasury and Advisor Government Funds
- ----------------------------------------------------------
The portfolio manager for the Advisor Intermediate Treasury and Advisor
Government Funds is Michael C. Knebel, Vice President, SAM. Mr. Knebel has
served as portfolio manager for various SAFECO funds since 1988.
Advisor GNMA Fund
- -----------------
The portfolio manager for the Advisor GNMA Fund is Paul A. Stevenson, Vice
President, SAM. Mr. Stevenson has served as portfolio manager for another
SAFECO fund since 1988. In addition, he is an Assistant Vice President of
SAFECO Life Insurance Company.
Advisor Municipal, Advisor Intermediate Municipal and Advisor Washington
- ------------------------------------------------------------------------
Municipal Funds
- ---------------
The portfolio manager for the Advisor Municipal, Advisor Intermediate Municipal
and Advisor Washington Municipal Funds is Stephen C. Bauer, President, SAM.
Mr. Bauer has been a portfolio manager for other SAFECO municipal bond funds
since 1972.
- ------------------------------------------
INFORMATION ABOUT INVESTING IN FUND SHARES
- ------------------------------------------
ALTERNATIVE PURCHASE ARRANGEMENT
Each Fund issues three classes of shares. Class A shares are sold to investors
choosing the initial sales charge alternative with a service fee. Class B
shares are sold to investors choosing the contingent deferred sales charge
alternative with service and distribution fees and which convert automatically
to Class A shares approximately eight years after purchase. Class C shares are
sold to investors choosing the alternative with no initial or deferred sales
charge, but with service and distribution fees.
The alternative purchase arrangement permits an investor to choose the method
of purchasing shares that is most beneficial given the amount of the purchase,
the length of time the investor expects to hold the shares, and other
circumstances. Investors should consider whether, during the anticipated life
of their investment in a Fund, the accumulated distribution and service fees
and contingent deferred sales charges on Class B shares prior to conversion, or
the accumulated distribution and service fees on Class C shares, would be less
than the initial sales charge and accumulated service fee on Class A shares
purchased at the same time.
Class A shares will normally be more beneficial than Class B or Class C shares
to investors who qualify for reduced initial sales charges or a sales load
waiver on Class A shares. Class A shares are subject to a service fee (but not
a distribution fee) and, accordingly, pay correspondingly higher dividends per
share than Class B shares or Class C shares. However, because initial sales
charges are deducted at the time of purchase, investors purchasing Class A
shares would not have all their funds invested initially and, therefore, would
initially own fewer shares.
-33-
<PAGE> 46
Investors not qualifying for reduced initial sales charges who expect to
maintain their investment for an extended period of time might consider
purchasing Class B shares because Class B shares redeemed more than six years
after their purchase are not subject to a contingent deferred sales charge and
a shareholder's Class B shares automatically convert to Class A shares (which
are subject to lower continuing charges) approximately eight years after the
date of issuance. Class B shares, however, are subject to a contingent
deferred sales charge for an initial six-year period.
Other investors, especially those who do not qualify for a reduced sales charge
and who expect to maintain their investment for a shorter period of time than
six years, might determine that it would be more advantageous to purchase Class
C shares so that their funds will be fully invested from the date of purchase,
although those shares are subject to higher continuing distribution charges.
For example, based on current fees and expenses, an investor subject to the
4.75% initial sales charge on Class A shares would have to hold his or her
investment approximately seven years for the Class C distribution and service
fees to exceed the initial sales charge plus the accumulated service fees of
Class A shares. This example does not take into account the time value of
money which further reduces the impact of the Class C distribution and service
fees on the investment or fluctuations in net asset value, which will affect
the actual amount of service and distribution fees paid.
HOW TO PURCHASE SHARES
When placing purchase orders, investors should specify whether the order is for
Class A, Class B or Class C shares of a Fund. All share purchase orders that
fail to specify a class will automatically be invested in Class A shares.
The minimum initial investment is $1,000 (IRA $250). The minimum additional
investment is $100 (except dividend reinvestment plans). Minimum initial
investments are negotiable for retirement accounts other than IRAs. No minimum
initial investment is required to establish an Automatic Investment Plan.
Shares of the Funds are available for purchase through investment professionals
who work at broker-dealers, banks and other financial institutions with which
SAFECO Securities, the distributor of the shares of the Funds, has entered into
selling agreements. Orders received by such financial institutions before 1:00
p.m. Pacific Time on any day the New York Stock Exchange is open for regular
trading will be effected that day, provided that such order is transmitted to
SAFECO Services Corporation ("SAFECO Services"), the transfer agent for the
Funds, prior to 2:00 p.m. Pacific Time on such day. Investment professionals
will be responsible for forwarding the investor's order to SAFECO Services so
that it will be received prior to such time.
Broker-dealers, banks and other financial institutions that do not have selling
agreements with SAFECO Securities also may offer to place orders for the
purchase of Fund shares. Purchases made through these investment firms will be
effected at the public offering price next determined after the order is
received by SAFECO Services. Such financial institutions may charge the
investor a transaction fee as determined by the financial institution. That
fee will be in addition to the sales charge payable by the investor with
respect to Class A shares, and may be avoided by purchasing shares through a
broker-dealer, bank or other financial institution that has a selling agreement
with SAFECO Securities.
-34-
<PAGE> 47
Broker-dealers, banks, financial institutions and any other person entitled to
receive compensation for selling or servicing Fund shares may receive different
levels of compensation with respect to one particular class of Fund shares over
another. Salespersons of broker-dealers, banks and other financial
institutions that sell Advisor Fund shares are eligible to receive special
compensation, the amount of which varies depending on the amount of shares
sold.
The Funds reserve the right to refuse any offer to purchase shares of any
class.
Purchasing Class A Shares
- -------------------------
The public offering price of the Class A shares of each Fund is the next
determined net asset value per share (see "Share Valuation" on page ___ for
additional information) plus any sales charge which will vary with the size of
the purchase as shown in the following schedule:
<TABLE>
<CAPTION>
Sale Charge as
Percentage of
-----------------
Broker
Reallowance as
Amount of Purchase Percentage of
at the Public Offering Net the Offering
Offering Price Price Investment Price
------------------- --------- ---------- -------------
<S> <C> <C> <C>
Less than $50,000 4.75% 4.99% 4.00%
$50,000 but less than
$100,000 4.25% 4.44% 3.50%
$100,000 but less than
$250,000 3.75% 3.90% 3.00%
$250,000 but less than
$500,000 3.00% 3.09% 2.25%
$500,000 but less than
$1,000,000 2.25% 2.30% 1.50%
$1,000,000 or more 1.00% 1.01% .50%
</TABLE>
From time to time, SAFECO Securities may reallow to broker-dealers, banks and
other financial institutions the full amount of the sales charge on Class A
shares. In some instances, SAFECO Securities may offer these reallowances only
to those financial institutions that have sold or may sell significant amounts
of Class A shares. These commissions also may be paid to financial
institutions that initiate purchases made pursuant to sales charge waivers (1)
and (8), described below under "Sales Charge Waivers -- Class A Shares." To
the extent that SAFECO Securities reallows 90% or more of the sales charge to a
financial institution, such financial institution may be deemed to be an
underwriter under the 1933 Act.
The following describes purchases that may be aggregated for purposes of
determining the amount of purchase:
1. Individual purchases on behalf of a single purchaser and the
purchaser's spouse and their children under the age of 21 years. This
includes shares purchased in connection with an employee benefit
plan(s) exclusively for the benefit of such individual(s), such as an
IRA, individual plans under Section 403(b) of the Internal Revenue
Code of 1986, as amended ("Code")
-35-
<PAGE> 48
or single-participant Keogh-type plans. This also includes purchases
made by a company controlled by such individual(s);
2. Individual purchases by a trustee or other fiduciary purchasing shares
for a single trust estate or a single fiduciary account, including an
employee benefit plan (such as employer-sponsored pension,
profit-sharing and stock bonus plans, including plans under Code
Section 401(k), and medical, life and disability insurance trusts)
other than a plan described in (1) above; or
3. Individual purchases by a trustee or other fiduciary purchasing shares
concurrently for two or more employee benefit plans of a single
employer or of employers affiliated with each other (excluding an
employee benefit plan described in (2) above).
Sales Charge Waivers -- Class A Shares
- --------------------------------------
Class A shares are sold at net asset value per share without imposition of
sales charges for the following investments:
1. Registered representatives or full-time employees of broker-dealers,
banks and other financial institutions that have entered into selling
agreements with SAFECO Securities, and the children, spouse and
parents of such representatives and employees, and employees of
financial institutions that directly, or through their affiliates,
have entered into selling agreements with SAFECO Securities;
2. Companies exchanging shares with or selling assets to one or more of
the Funds pursuant to a merger, acquisition or exchange offer;
3. Any of the companies affiliated with SAFECO Securities;
4. Purchases made through the automatic investment of dividends and
distributions paid by another SAFECO Advisor Fund;
5. Clients of administrators or consultants to tax-qualified employee
benefit plans which have entered into agreements with affiliates of
SAFECO Securities;
6. Retirement plan participants who borrow from their retirement
accounts by redeeming Fund shares and subsequently repay such loans
via a purchase of Fund shares;
7. Retirement plan participants who receive distributions from a
tax-qualified employer-sponsored retirement plan, which is invested
in Fund shares, the proceeds of which are reinvested in Fund shares;
8. Accounts as to which a broker-dealer, bank or other financial
institution charges an account management fee, provided the financial
institution has entered into an agreement with SAFECO Securities
regarding such accounts; and
9. Current or retired officers, directors, trustees or employees of the
Trust or SAFECO Corporation or affiliated companies of SAFECO
Corporation and the children, spouse and parents of such persons.
-36-
<PAGE> 49
10. Investments made with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end sales charge.
Reinstatement Privilege
- -----------------------
Shareholders who redeem their Class A shares in a Fund have a one-time
privilege to reinstate their investment by investing the proceeds of the
redemption at net asset value per share without a sales charge in Class A
shares of the Fund and/or one or more of the other Funds. SAFECO Services must
receive from the investor or the investor's broker-dealer, bank or other
financial institution within 60 days after the date of the redemption both a
written request for reinvestment and a check not exceeding the amount of the
redemption proceeds. The reinstatement purchase will be effected at the net
asset value per share next determined after such receipt.
Reduced Sales Charge Plans -- Class A Shares
- --------------------------------------------
Class A shares of the Funds may be purchased at reduced sales charges either
through the Right of Accumulation or under a Letter of Intent. For more
details on these plans, investors should contact their broker-dealer, bank or
other financial institution or SAFECO Services.
Pursuant to the RIGHT OF ACCUMULATION, investors are permitted to purchase
Class A shares of the Funds at the sales charge applicable to the total of (a)
the dollar amount then being purchased plus (b) the dollar amount equal to the
total purchase price of the investor's concurrent purchases of the other SAFECO
Advisor Funds plus (c) the dollar amount equal to the current public offering
price of all shares of SAFECO Advisor Funds already held by the investor. To
receive the Right of Accumulation, at the time of purchase investors must give
their broker-dealers, banks or other financial institutions sufficient
information to permit confirmation of qualification. THE FOREGOING RIGHT OF
ACCUMULATION APPLIES ONLY TO CLASS A SHARES OF THE FUNDS.
In executing a LETTER OF INTENT ("LOI"), an investor should indicate an
aggregate investment amount he or she intends to invest in Class A shares of
SAFECO Advisor Funds in the following thirteen months. The LOI is included as
part of the Account Application. The sales charge applicable to that aggregate
amount then becomes the applicable sales charge on all purchases made
concurrently with the execution of the LOI and in the thirteen months following
that execution. If an investor executes an LOI within 90 days of a prior
purchase of Class A shares, the prior purchase may be included under the LOI
and an appropriate adjustment, if any, with respect to the sales charges paid
by the investor in connection with the prior purchase will be made, based on
the then-current net asset value(s) of the pertinent Fund(s).
If at the end of the thirteen-month period covered by the LOI, the total amount
of purchases does not equal the amount indicated, the investor will be required
to pay the difference between the sales charges paid at the reduced rate and
the sales charges applicable to the purchases actually made. Shares having a
value equal to 5% of the amount specified in the LOI will be held in escrow
during the thirteen month period (while remaining registered in the investor's
name) and are subject to redemption to assure any necessary payment to SAFECO
Securities of a higher applicable sales charge.
-37-
<PAGE> 50
AN LOI WILL APPLY ONLY TO CLASS A SHARES OF THE FUNDS. The value of Class B or
Class C shares of any SAFECO Advisor Fund will not be counted toward the
fulfillment of an LOI.
Purchasing Class B Shares
- -------------------------
The public offering price of the Class B shares of each Fund is the next
determined net asset value per share. No initial sales charge is imposed.
However, a contingent deferred sales charge is imposed on certain redemptions
of Class B shares. Because the Class B shares are sold without an initial
sales charge, the investor receives Fund shares equal to the full amount of the
investment.
Class B shares of a Fund that are redeemed will not be subject to a contingent
deferred sales charge to the extent that the value of such shares represents:
(a) reinvestment of dividends or other distributions or (b) shares redeemed
more than six years after their purchase.
Redemptions of most other Class B shares will be subject to a contingent
deferred sales charge. See "Contingent Deferred Sales Charge Waivers." The
amount of any applicable contingent deferred sales charge will be calculated by
multiplying the lesser of the original purchase price or the net asset value of
such shares at the time of redemption by the applicable percentage shown in the
table below. Accordingly, no charge is imposed on increases in the net asset
value above the original purchase price:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
THE LESSER OF NET ASSET
VALUE AT REDEMPTION
OR THE ORIGINAL
REDEMPTION DURING PURCHASE PRICE
----------------- --------------
<S> <C>
1st Year Since Purchase 5%
2nd Year Since Purchase 4%
3rd Year Since Purchase 3%
4th Year Since Purchase 3%
5th Year Since Purchase 2%
6th Year Since Purchase 1%
Thereafter 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to a
redemption, the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; and then of amounts representing the cost of shares held for the
longest period of time.
-38-
<PAGE> 51
For example, assume an investor purchased 100 shares at $10 per share at a cost
of $1,000. Subsequently, the shareholder acquired 15 additional shares through
dividend reinvestment. During the second year after the purchase, the investor
decided to redeem $500 of his or her investment. Assuming at the time of the
redemption a net asset value of $11 per share, the value of the investor's
shares would be $1,265 (115 shares at $11 per share). The contingent deferred
sales charge would not be applied to the value of the reinvested dividend
shares. Therefore, the 15 shares currently valued at $165.00 would be sold
without a contingent deferred sales charge. The number of shares needed to
fund the remaining $335.00 of the redemption would equal 30.455. Using the
lower of cost or market price to determine the contingent deferred sales
charge, the original purchase price of $10.00 per share would be used. The
contingent deferred sales charge calculation would therefore be 30.455 shares
times $10.00 per share at a contingent deferred sales charge rate of 4% (the
applicable rate in the second year after purchase) for a total contingent
deferred sales charge of $12.18.
For federal income tax purposes, the amount of the contingent deferred sales
charge will reduce the gain or increase the loss, as the case may be, on the
amount recognized on the redemption of shares. The amount of any contingent
deferred sales charge will be paid to SAFECO Securities.
Contingent Deferred Sales Charge Waivers
- ----------------------------------------
The contingent deferred sales charge will be waived in the following
circumstances: (a) total or partial redemptions made within one year
following the death or disability of a shareholder; (b) redemptions made
pursuant to any systematic withdrawal plan based on the shareholder's life
expectancy including substantially equal periodic payments prior to age 59 1/2
which are described in Code section 72(t) and required minimum distributions
after age 70 1/2 including those required minimum distributions made in
connection with customer accounts under Section 403(b) of the Code and other
retirement plans; (c) total or partial redemption resulting from a distribution
following retirement in the case of a tax-qualified employer-sponsored
retirement plan; (d) when a redemption results from a tax-free return of an
excess contribution pursuant to Section 408(d)(4) or (5) of the Code; (e)
reinvestment in Class B shares of the Fund within 60 days of prior redemption;
(f) redemptions pursuant to the Fund's right to liquidate a shareholder's
account involuntarily; and (g) redemptions pursuant to distributions from a
tax-qualified employer-sponsored retirement plan, that are invested in SAFECO
Advisor Funds, and that are permitted to be made without penalty pursuant to
the Code (other than tax-free rollovers or transfers of asset).
Conversion of Class B Shares
- ----------------------------
A shareholder's Class B shares will automatically convert to Class A shares in
the same Fund approximately eight years after the date of issuance, together
with a pro rata portion of all Class B shares representing dividends and other
distributions paid in additional Class B shares. The Class B shares so
converted will no longer be subject to the higher expenses borne by Class B
shares. The conversion will be effected at the relative net asset values per
share of the two classes on the first business day of the month in which the
eighth anniversary of the issuance of the Class B shares occurs. If a
shareholder effects one or more exchanges among Class B shares of the Funds
during the eight-year period, the holding periods for the shares so exchanged
will be counted toward the eight-year period. Because the net asset value per
share of the Class A shares may be higher than that of the Class B shares at
the time of conversion, a
-39-
<PAGE> 52
shareholder may receive fewer Class A shares than the number of Class B shares
converted, although the dollar value will be the same.
Purchasing Class C Shares
- -------------------------
The public offering price of Class C shares of each Fund is the next determined
net asset value per share. Neither an initial sales charge on purchase nor a
contingent deferred sales charge on redemptions will be charged. Because the
Class C shares are sold without an initial sales charge, the investor receives
shares equal to the full amount of the investment. The Class C distribution
and service fees enable the Funds to sell Class C shares without either an
initial or contingent deferred sales charge. Class C shares do not convert to
any other class of shares of the Funds and incur higher combined ongoing
distribution and service fees than Class A shares. Such shares therefore have
a higher expense ratio and pay correspondingly lower dividends than Class A
shares.
HOW TO EXCHANGE SHARES FROM ONE FUND TO ANOTHER
Shares of one class of a Fund may be exchanged for shares of the same class of
shares of any other Fund, based on their next-determined respective net asset
values, without imposition of any sales charges, provided that the shareholder
account registration remains identical. CLASS A SHARES MAY BE EXCHANGED ONLY
FOR CLASS A SHARES OF OTHER SAFECO ADVISOR FUNDS. CLASS B SHARES MAY BE
EXCHANGED ONLY FOR CLASS B SHARES OF OTHER SAFECO ADVISOR FUNDS. CLASS C
SHARES MAY BE EXCHANGED ONLY FOR CLASS C SHARES OF OTHER SAFECO ADVISOR FUNDS.
The exchange of Class B shares will not be subject to a contingent deferred
sales charge. For purposes of computing the contingent deferred sales charge,
the length of time of ownership of Class B shares will be measured from the
date of original purchase and will not be affected by the exchange. EXCHANGES
ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS
THE CASE MAY BE, FOR TAX PURPOSES. See "Fund Distributions and How They Are
Taxed" on page ___ for more information. A shareholder may purchase shares of
a SAFECO Advisor Fund by exchanges only if it is registered for sale in the
state where the shareholder resides.
Exchanges by Telephone
- ----------------------
A shareholder may give exchange instructions to the shareholder's
broker-dealer, bank or other financial institution or to SAFECO Services by
telephone at the appropriate toll-free number provided on the cover of this
Prospectus. Exchange orders will be accepted by telephone provided that the
exchange involves only uncertificated shares or certificated shares for which
certificates previously have been deposited in the shareholder's account. See
"Telephone Transactions" on page ___ for more information.
Exchanges by Mail
- -----------------
Exchange orders should be sent by mail to the investor's broker-dealer, bank or
other financial institution. If a shareholder has an account at SAFECO
Services, exchange orders may be sent to the address set forth on the cover of
this Prospectus.
Share Exchange Price and Processing
- -----------------------------------
The shares of the SAFECO Advisor Fund you are exchanging from will be redeemed
at the price next computed after your exchange request is received. Normally
the
-40-
<PAGE> 53
purchase of the SAFECO Advisor Fund you are exchanging into is executed on the
same day. However, each Fund reserves the right to delay the payment of
proceeds and, hence, the purchase in an exchange for up to seven days if making
immediate payment could adversely affect the portfolio of the Fund whose shares
are redeemed. The exchange offer may be modified or terminated with respect to
a Fund at anytime, upon at least 60 days' notice to shareholders.
HOW TO REDEEM SHARES
As described below, shares of the Funds may be redeemed at their
next-determined net asset value (subject to any applicable contingent deferred
sales charge for Class B shares) and redemption proceeds will be sent to
shareholders within seven days of the receipt of a redemption request.
Shareholders who have purchased shares through broker-dealers, banks or other
financial institutions that sell shares may redeem shares through such firms;
if the shares are held in the "street name" of the broker-dealer, bank or
other financial institution, the redemption must be made through such firm.
Please note the following:
- If your shares were purchased by wire, redemption proceeds
will be available immediately. If shares were purchased other
than by wire, each Fund reserves the right to hold the
proceeds of your redemption for up to 15 business days after
investment or until such time as the Fund has received
assurance that your investment will be honored by the bank on
which it was drawn, whichever occurs first.
- SAFECO Services charges a $10 fee to wire redemption proceeds.
In addition, some banks may charge a fee to receive wires.
- If shares are issued in certificate form, the certificates
must accompany a redemption request and be duly endorsed.
- Under some circumstances (e.g., a change in corporate officer
or death of an owner), SAFECO Services may require certified
copies of supporting documents before a redemption can be
made.
Redemptions Through Broker-Dealers, Banks and Other Financial Institutions
- --------------------------------------------------------------------------
Shareholders with accounts at broker-dealers, banks and other financial
institutions that sell shares of the Funds may submit redemption requests to
such firms. Broker-dealers, banks or other financial institutions may honor a
redemption request either by repurchasing shares from a redeeming shareholder
at the shares' net asset value per share next computed after the firm receives
the request or by forwarding such requests to SAFECO Services. Redemption
proceeds (less any applicable contingent deferred sales charge for Class B
shares) normally will be paid by check. Broker-dealers, banks and other
financial institutions may impose a service charge for handling redemption
transactions placed through them and may impose other requirements concerning
redemptions. Accordingly, shareholders should contact the investment
professional at their broker-dealer, bank or other financial institution for
details.
Redemption requests may also be transmitted to SAFECO Services by telephone
(for amounts of less than $100,000) or by mail.
-41-
<PAGE> 54
Share Redemption Price and Processing
- -------------------------------------
Your shares will be redeemed at the net asset value per share (subject to any
applicable contingent deferred sales charge) next calculated after receipt of
your request which meets the redemption requirements of the Funds. The value
of the shares you redeem may be more or less than the dollar amount you
purchased, depending on the market value of the shares at the time of
redemption. See "Share Valuation" on page ____ for more information.
Redemption proceeds will normally be sent on the next business day following
receipt of your redemption request. If your redemption request is received
after the close of trading on the New York Stock Exchange (normally 1:00 p.m.
Pacific time), proceeds will normally be sent on the second business day
following receipt. Each Fund, however, reserves the right to postpone payment
of redemption proceeds for up to seven days if making immediate payment could
adversely affect its portfolio. In addition, redemptions may be suspended or
payment dates postponed if the New York Stock Exchange is closed or its trading
is restricted or if the SEC declares an emergency.
Due to the high cost of maintaining small accounts, your account may be closed
upon 60 days' written notice if at the time of any redemption or exchange the
total value falls below $100. Your shares will be redeemed at the net asset
value per share calculated on the day your account is closed and the proceeds
will be sent to you.
HOW TO SYSTEMATICALLY PURCHASE OR REDEEM SHARES
Call your investment professional or SAFECO Services at 1-800-463-8791 for more
information.
Automatic Investment Method (AIM)
- ---------------------------------
AIM enables you to make regular monthly investments by authorizing SAFECO
Services to withdraw a specific amount (minimum of $100 per withdrawal per
Fund) from your bank account and invest the amount in any Fund.
Payroll Deduction Plan
- ----------------------
An employer or other entity using group billing may establish a
self-administered payroll deduction plan in any Fund. Payroll deduction
amounts are negotiable.
Systematic Withdrawal Plan
- --------------------------
This plan enables you to receive a portion of your investment on a monthly
basis. A Fund automatically redeems shares in your account and sends you a
withdrawal check (minimum amount $50 per Fund) on or about the fifth business
day of every month. Because Class A shares are subject to sales charges,
shareholders should not concurrently purchase Class A shares with respect to an
account which is utilizing a systematic withdrawal plan. Class B shares are
not available for a systematic withdrawal plan.
ACCOUNT CHANGES AND SIGNATURE REQUIREMENTS
Changes to your account registration or the services you have selected must be
in writing and signed by the number of owners specified on your account
application as having authority to make these changes. Send written changes to
-42-
<PAGE> 55
the broker-dealer, bank or other financial institution where your account is
maintained. (Changes made to accounts maintained at SAFECO Services should be
sent to the address on the Prospectus cover.) Certain changes to the Automatic
Investment Method and Systematic Withdrawal Plan can be made via telephone
request if you have previously selected single signature authorization for your
account.
You must specify on your account application the number of signatures required
to authorize redemptions and exchanges and to change account registration or
the services selected. Authorizing fewer than all account owners has important
implications. For example, one owner of a joint tenant account can redeem money
or change the account registration to single ownership without the co-owner's
signature. If you do not indicate otherwise on the application, the signatures
of all account owners will be required to effect a transaction. Your selection
of fewer than all account owner signatures may be revoked by any account owner
who writes to SAFECO Services or the financial institution where your account
is maintained.
The broker-dealer, bank or financial institution where your account is
maintained or SAFECO Services may require a signature guarantee for a signature
which cannot be verified by comparison to the signature(s) on your account
application. A signature guarantee may be obtained from most financial
institutions including banks, savings and loans and broker-dealers.
ACCOUNT STATEMENTS
Periodically, you will receive an account statement indicating your current
fund holdings and transactions affecting your account. Confirmation statements
will be sent to you after every transaction (except reinvestments) that affects
your account balance. Please review the information on each confirmation
statement for accuracy immediately upon receipt. If you do not notify us
within 30 days of any processing error, SAFECO Services will consider the
transactions listed on the confirmation statement to be correct.
TELEPHONE TRANSACTIONS
To redeem or exchange shares by telephone, call 1-800-463-8791 between 6:00
a.m. and 5:00 p.m. Pacific time, Monday through Friday, except certain
holidays. All telephone calls are tape-recorded for your protection. During
times of drastic or unusual market volatility, it may be difficult for you to
exercise the telephone transaction privileges.
To use the telephone redemption and exchange privileges, you must have
previously selected these services either on your account application or by
submitting a request in writing to SAFECO Services at the address on the
Prospectus cover. Redeeming or exchanging shares by telephone allows the Funds
and SAFECO Services to accept telephone instructions from an account owner or a
person preauthorized in writing by an account owner.
Each of the Funds and SAFECO Services reserve the right to refuse any telephone
transaction when a Fund or SAFECO Services, in its sole discretion, is unable
to confirm to its satisfaction that a caller is the account owner or a person
preauthorized by the account owner.
The Funds and SAFECO Services will not be liable for the authenticity of
instructions received by telephone that a Fund or SAFECO Services, in its
-43-
<PAGE> 56
discretion, believes to be delivered by an account owner or preauthorized
person, provided that the Fund or SAFECO Services follows reasonable
procedures to identify the caller. The shareholder will bear the risk of any
resulting loss. The Funds and SAFECO Services will follow certain procedures
designed to make sure that telephone instructions are genuine. These
procedures may include requiring the account owner to select the telephone
privilege in writing prior to first use, and to designate persons authorized to
deliver telephone instructions. SAFECO Services tape-records telephone
transactions and may request certain identifying information from the caller.
The telephone transaction privileges may be suspended, limited, modified or
terminated at any time without prior notice by the Funds or SAFECO Services.
SHARE VALUATION
The net asset value per share ("NAV") of each class of each Fund is computed at
the close of regular trading on the New York Stock Exchange (normally 1:00 p.m.
Pacific time) each day that Exchange is open for trading. The NAV is
calculated by subtracting a Fund's liabilities from its assets and dividing the
result by the number of outstanding shares. NAV is determined separately for
each class of shares of each Fund.
In general, portfolio securities are valued at the last reported sale price on
the national exchange on which the securities are primarily traded, unless
there are no transactions in which case they shall be valued at the last
reported bid price. Securities traded over-the-counter are valued at the last
sale price, unless there is no reported sale price in which case the last
reported bid price will be used. Portfolio securities that are traded on a
stock exchange and over-the-counter are valued according to the broadest and
most representative market. Securities not traded on a national exchange are
valued based on consideration of information with respect to transactions in
similar securities, quotations from dealers and various relationships between
securities. Other assets for which a representative value cannot be
established are valued at their fair value as determined in good faith by or
under the direction of the Trust's Board of Trustees. The values of certain
portfolio securities may be computed on the basis of valuations provided by a
pricing service, unless the Board of Trustees (directly or through its Pricing
Committee) determines such valuations do not represent fair value.
The NAV of the Class B and Class C shares of each Fund will generally be lower
than that of its Class A shares because of the higher expenses borne by the
Class B and Class C shares. The NAVs of the three Classes of a Fund's shares
also may differ slightly due to differing allocations of Class-specific
expenses. The NAVs of the three Classes of each Fund's shares will tend to
converge, however, immediately after the payment of dividends.
Call 1-800-463-8794 for 24-hour price information.
FUND DISTRIBUTIONS AND HOW THEY ARE TAXED
Dividends and Other Distributions
- ---------------------------------
The Advisor Equity and Advisor Northwest Funds declare dividends on the last
business day of each calendar quarter, and each other Fund declares dividends
on the last business day of each month, from its net investment income (which
includes accrued interest, earned discount, and other income earned on
portfolio
-44-
<PAGE> 57
securities less expenses) and such shares become entitled to declared dividends
on the next business day after shares are purchased in your account. If you
request redemption of all your shares at any time during a month, you will
receive all declared dividends through the date of redemption, together with
the proceeds of the redemption.
Dividends paid by a Fund on its Class A, Class B and Class C shares are
calculated at the same time in the same manner. However, because of the higher
service and distribution charges associated with Class B and Class C shares,
the dividends paid by a Fund on its Class B and Class C shares will be lower
than those paid on that Fund's Class A shares.
A shareholder's dividends and other distributions are reinvested in additional
shares of the distributing Fund at NAV (without sales charge) generally
determined as of the close of business on the ex-distribution date, unless the
shareholder elects in writing to receive dividends and/or other distributions
in cash and that election is provided to your broker-dealer, bank or other
financial institution or SAFECO Services at the address on the Prospectus
cover. The election remains in effect until revoked by written notice by the
shareholder in the same manner as the distribution election. For retirement
accounts, all dividends and other distributions declared by a Fund must be
invested in additional shares of that Fund.
Please remember that if you purchase shares shortly before a Fund pays a
taxable dividend or other distribution, you will pay the full price for the
shares, then receive part of the price back as a taxable distribution.
Taxes
- -----
Each Fund intends to qualify for treatment as a regulated investment company
under the Internal Revenue Code. By so qualifying, a Fund will not be subject
to federal income taxes to the extent it distributes its net investment income
and realized capital gains to its shareholders.
Each Fund will inform you as to the amount and nature of dividends and other
distributions to your account. Dividends and other distributions declared in
December, but received by shareholders in January, are taxable to shareholders
in the year in which declared. Special rules apply when you dispose of Class A
shares through a redemption or exchange within 90 days after your purchase
thereof and subsequently reacquire Class A shares of the same Fund or acquire
Class A shares of another Fund without paying a sales charge due to the
exchange privilege or reinstatement privilege. See "How to Purchase Shares -
Reinstatement Privilege" on page ___ for more information. In these cases, any
gain on the disposition of the original Class A shares will be increased, or
any loss decreased, by the amount of the sales charge paid when you acquired
those shares, and that amount will increase the basis of the shares
subsequently acquired. In addition, if you purchase shares of a Fund (whether
pursuant to the reinstatement privilege or otherwise) within thirty days before
or after redeeming other shares of that Fund (regardless of class) at a loss,
all or part of that loss will not be deductible and will increase the basis of
the newly purchased shares.
-45-
<PAGE> 58
Advisor Municipal, Advisor Intermediate Municipal and Advisor Washington
- ------------------------------------------------------------------------
Municipal Funds
- ---------------
A portion of a Municipal Bond Fund's assets may from time to time be
temporarily invested in fixed-income obligations, the interest on which when
distributed to the Fund's shareholders will be subject to federal income taxes.
As a matter of non-fundamental investment policy, the Municipal Bond Funds will
not purchase so-called "non-essential or private activity" bonds, the interest
on which would constitute a preference item for shareholders in determining
their alternative minimum tax.
Substantially all dividends are expected to be exempt from federal income tax,
but may be subject to state or local taxes; however, distributions of net
realized capital gains are fully taxable. Shareholders may lose the tax-exempt
status on the accrued income of a municipal bond if they redeem their shares
before a dividend has been declared. Shareholders of each Municipal Bond Fund
may want to consult their tax advisers regarding their investments in a
Municipal Bond Fund.
Currently the State of Washington has no state personal income tax. When and
if Washington State enacts a personal income tax, there can be no assurance
that distributions from the Advisor Washington Municipal Fund would be exempt
from such a tax.
Advisor Intermediate Treasury and Advisor Government Funds
- ----------------------------------------------------------
All states treat the pass-through of interest earned on U.S. Treasury
securities as tax-free income in the calculation of their state income tax.
This treatment may be dependent upon the maintenance of certain percentages of
Fund ownership of these securities. The Advisor Intermediate Treasury Fund
will invest primarily in these securities while the Advisor Government Fund can
but is not obligated to primarily invest in those securities.
Tax Withholding Information
- ---------------------------
You will be asked to certify on your account application or on a separate form
that the taxpayer identification number you provide is correct and that you are
not subject to, or are exempt from, backup withholding for previous
underreporting to the Internal Revenue Service.
Retirement plan distributions may be subject to federal income tax withholding.
However, you may elect to not have any distributions withheld by checking the
appropriate box on the Redemption Request form or by instructing your
broker-dealer, bank or other financial institution or SAFECO Services in
writing at the address on the Prospectus cover.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting each Fund and its shareholders; see the
Trust's Statement of Additional Information for a further discussion. There
may be other federal, state or local tax considerations applicable to a
particular investor. You therefore are urged to consult your tax adviser.
PERFORMANCE INFORMATION
Each Fund's yield, tax-equivalent yield (for the Municipal Bond Funds), total
return and average annual total return may be quoted in advertisements.
-46-
<PAGE> 59
From time to time, a Fund may advertise its ranking. Rankings are calculated
by independent companies that monitor mutual fund performance (e.g., CDA
Investment Technologies, Lipper Analytical Services, Inc., and Morningstar,
Inc.) and are reported periodically in national financial publications such as
Barron's, Business Week, Forbes, Investor's Business Daily, Money Magazine, and
The Wall Street Journal. In addition, non-standardized performance figures may
accompany the standardized figures described above. Non-standardized figures
may be calculated in a variety of ways including, but not necessarily limited
to, different time periods and different initial investment amounts.
Non-standardized return does not reflect initial or contingent sales charges
and would be lower if such charges were included. Each Fund may also compare
its performance to the percentage increase in the Standard & Poor's 500 or
other relevant indices.
Performance information and quoted rankings are indicative only of past
performance and are not intended to represent future investment results. Each
Fund's yield and share price will fluctuate and your shares, when redeemed, may
be worth more or less than you originally paid for them.
- -------------------------------------------------------------
INFORMATION ABOUT SHARE OWNERSHIP AND COMPANIES THAT PROVIDE
SERVICES TO THE TRUST
- -------------------------------------------------------------
GENERAL FUND INFORMATION
Each Fund is a series of SAFECO Advisor Series Trust, a Delaware business
trust, which issues an unlimited number of shares of beneficial interest. The
Board of Trustees may establish additional series of shares or classes of
shares of the Trust without approval of shareholders.
Shares of each Fund class represent equal proportionate interests in the assets
of that Fund class only and have identical voting, dividend, redemption,
liquidation and other rights. All shares issued are fully paid and
non-assessable, and shareholders have no preemptive or other right to subscribe
to any additional shares.
The Trust does not intend to hold annual meetings of shareholders of the Funds.
The Trustees will call a special meeting of shareholders of a Fund only if
required under the 1940 Act, in their discretion or upon the written request of
holders of 10% or more of the outstanding shares of the Fund entitled to vote.
Under Delaware law, the shareholders of the Funds will not be personally liable
for the obligations of any Fund; a shareholder is entitled to the same
limitation of personal liability extended to shareholders of corporations. To
guard against the risk that Delaware law might not be applied in other states,
the Trust Instrument requires that every written obligation of the Trust or
Fund contain a statement that such obligation may be enforced only against the
assets of the Trust or Fund and generally provides for indemnification out of
Trust or Fund property of any shareholder nevertheless held personally liable
for Trust or Fund obligations, respectively.
SAM is the investment adviser for each Fund under an agreement with the Trust.
Under the agreement, SAM is responsible for the overall management of the
Trust's and each Fund's business affairs. SAM provides investment research,
advice,
-47-
<PAGE> 60
management and supervision to the Trust and each Fund. Consistent with each
Fund's investment objectives' and policies, SAM determines what securities will
be purchased, retained or sold by each Fund and implements those decisions by
placing orders for the purchase or sale of each Fund's portfolio securities.
Each Fund pays SAM an annual management fee based on a percentage of that
Fund's net assets ascertained each business day and paid monthly in accordance
with the schedules below. A reduction in the fees paid by a Fund occurs only
when that Fund's net assets reach the dollar amounts of the breakpoints and
applies only to the assets that fall within the specified range:
ADVISOR EQUITY AND ADVISOR NORTHWEST FUNDS
<TABLE>
<CAPTION>
NET ASSETS ANNUAL FEE
<S> <C>
$0 - $500,000,000 .75 of 1%
$500,000,001 - $1,000,000,000 .65 of 1%
Over $1,000,000,000 .55 of 1%
</TABLE>
ADVISOR INTERMEDIATE TREASURY, ADVISOR GOVERNMENT, ADVISOR GNMA, ADVISOR
MUNICIPAL, ADVISOR INTERMEDIATE MUNICIPAL
AND ADVISOR WASHINGTON MUNICIPAL FUNDS
<TABLE>
<CAPTION>
NET ASSETS ANNUAL FEE
<S> <C>
$0 - $500,000,000 .60 of 1%
$500,000,001 - $1,000,000,000 .50 of 1%
Over $1,000,000,000 .40 of 1%
</TABLE>
The distributor of each Fund's shares under an agreement with the Trust is
SAFECO Securities, Inc. ("SAFECO Securities"), a broker-dealer registered
under the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc.
The transfer, dividend and distribution disbursement and shareholder servicing
agent for each Fund under an agreement with the Trust is SAFECO Services
Corporation ("SAFECO Services"). SAFECO Services receives a fee from each Fund
for each shareholder transaction processed for that Fund.
SAM, SAFECO Securities and SAFECO Services are wholly-owned subsidiaries of
SAFECO Corporation (a holding company whose primary subsidiaries are engaged in
the insurance and related financial services businesses) and are each located
at SAFECO Plaza, Seattle, Washington 98185.
-48-
<PAGE> 61
TAX-DEFERRED RETIREMENT PLANS
SAFECO offers a variety of tax-deferred retirement plans for individuals and
businesses. An account may be established under one of the following plans
which allow you to defer investment income from federal income tax while you
save for retirement. The SAFECO Advisor Funds, with the exception of the
Municipal Funds, may be used as investment vehicles for these plans.
- INDIVIDUAL RETIREMENT ACCOUNTS (IRAS). IRAs are tax-deferred
retirement accounts for anyone under age 70 1/2 with earned
income. The maximum annual contribution is $2,000 per person
($2,250 for you and a non-working spouse). An annual
custodial fee will be charged for any part of a calendar year
in which you have an IRA investment in a Fund.
- SIMPLIFIED EMPLOYEE PENSION IRA (SEP-IRAS). SEP-IRAs are
easily administered retirement plans for small businesses and
self-employed individuals. Annual contributions up to $30,000
may be made to SEP-IRA accounts. SEP-IRAs have the same
investment minimums and custodial fees as regular IRAs.
For information about establishing a SAFECO IRA or SEP-IRA, please call your
investment professional.
DISTRIBUTION PLANS
The Trust on behalf of each Class has entered into a Distribution Services
Agreement (each an "Agreement") with SAFECO Securities. The Trust has also
adopted a plan pursuant to Rule 12b-1 under the Investment Company Act of 1940
with respect to each Class (the "Plans"). Pursuant to the Plans, each Class
pays SAFECO Securities a quarterly service fee, at the annual rate of 0.25% of
the aggregate average daily net assets of a Class. Class B and C shares each
pay SAFECO Securities a quarterly distribution fee at the annual rate of 0.75%
of the aggregate average daily net assets of a Class.
Under all three plans, SAFECO Securities will use the service fees primarily to
compensate persons selling shares of the Funds for the provision of personal
service and/or the maintenance of shareholder accounts.
SAFECO Securities will use the distribution fees under the Class B and Class C
Plans to offset the commissions it pays to broker-dealers, banks or other
financial institutions for selling the Funds' Class B and Class C shares. In
addition, SAFECO Securities will use the distribution fees under the Class B
and Class C Plans to offset each Fund's marketing costs attributable to such
Classes, such as preparation of sales literature, advertising and printing and
distributing prospectuses and other shareholder materials to prospective
investors. SAFECO Securities also may use the distribution fees to pay other
costs allocated to SAFECO Securities' distribution activities, including acting
as shareholder of record, maintaining account records and other overhead
expenses.
SAFECO Securities will receive the proceeds of the initial sales charge paid
upon the purchase of Class A shares and the contingent deferred sales charge
paid upon applicable redemptions of Class B shares, and may use these proceeds
for any of the distribution expenses described above. The amount of sales
charge reallowed to broker-dealers, banks or other financial institutions who
sell Class A shares
-49-
<PAGE> 62
will equal the percentage of the amount invested in accordance with the
schedule set forth in "Purchasing Class A Shares" on page ___. SAFECO
Securities, out of its own resources, will pay a brokerage commission equal to
(i) 3.00% of the amount invested to broker-dealers, banks and other financial
institutions who sell Class B shares and (ii) 1.00% of the amount invested to
broker-dealers, banks and other financial institutions who sell Class C
shares.
During the period they are in effect, the Plans and related Agreements obligate
the Funds to pay service and distribution fees to SAFECO Securities as
compensation for its service and distribution activities, not as reimbursement
for specific expenses incurred. Thus, even if SAFECO Securities' expenses
exceed its service or distribution fees for any Fund, the Fund will not be
obligated to pay more than those fees and, if SAFECO Securities' expenses are
less than such fees, it will retain its full fees and realize a profit. Each
Fund will pay the service and distribution fees to SAFECO Securities until
either the applicable Plan or Agreement is terminated or not renewed.
As interpreted by courts and administrative agencies, the Glass-Steagall Act
and other applicable laws and regulations limit the ability of a bank or other
depository institution to become an underwriter or distributor of securities.
However, in the opinion of the Trust's management, based on the advice of
counsel, these laws and regulations do not prohibit such depository
institutions from providing services for investment companies. The State of
Texas requires that shares of the Fund may be sold in that state only by
dealers or other financial institutions that are registered there as
broker-dealers.
PERSONS CONTROLLING THE FUNDS
At March 31, 1996, SAFECO Corporation controlled the Advisor Equity Fund,
Advisor Northwest Fund, Advisor Intermediate Treasury Fund, Advisor Government
Fund and Advisor GNMA Fund. At March 31, 1996, SAM, a wholly-owned subsidiary
of SAFECO Corporation, controlled the Advisor Municipal Fund, Advisor
Intermediate Municipal Fund and Advisor Washington Municipal Fund. SAFECO
Corporation and SAM have their principal place of business at SAFECO Plaza,
Seattle, Washington 98185.
- ------------------
RATINGS SUPPLEMENT
- ------------------
DESCRIPTION OF DEBT RATINGS
Ratings by Moody's and S&P represent their respective opinions as to the
investment quality of the rated obligations. Investors should realize these
ratings do not constitute a guarantee that the principal and interest payable
under these obligations will be paid when due.
Excerpts from Moody's description of its ratings:
Investment Grade:
- -----------------
Aaa -- Judged to be of the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes
-50-
<PAGE> 63
as can be anticipated are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Judged to be of high quality by all standards. Together with the Aaa
group, they comprise what are generally known as high grade bonds. They are
rated lower than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A -- Have many favorable investment attributes and are to be considered as
upper medium grade obligations. Factors giving security to principal and
interest are considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa -- Considered as medium grade obligations, i.e., they are neither highly
protected nor poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
characteristics as well.
Below-Investment Grade:
- -----------------------
Ba -- Judged to have speculative elements; their future cannot be considered as
well assured. Often the protection of interest and principal payments may be
very moderate and thereby not well safeguarded during both good and bad times
over the future.
B -- Generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of contract
over any long period of time may be small.
Caa -- Have poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca -- Represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings.
C -- The lowest rated class of bonds and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its ratings:
Investment Grade:
- -----------------
AAA -- The highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.
AA -- Very strong capacity to pay interest and repay principal and differs from
the highest rated issues only in small degree.
A -- Strong capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories.
-51-
<PAGE> 64
BBB -- Have an adequate capacity to pay interest and repay principal. Whereas
it normally exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this category than in
higher rated categories.
Below-Investment Grade:
- -----------------------
BB, B, CCC, CC -- Predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the obligation.
"BB" indicates the lowest degree of speculation and "CC" the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
C -- Reserved for income bonds on which no interest is being paid.
D -- In default, and payment of interest and/or repayment of principal is in
arrears.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
DESCRIPTION OF RATINGS OF STATE AND MUNICIPAL NOTES AND OTHER SHORT-TERM LOANS:
Excerpts from Moody's description of its ratings:
Moody's ratings for state and municipal notes and other short-term loans are
designated "Moody's Investment Grade" ("MIG" or, for variable or floating rate
obligations, "VMIG"). Such ratings recognize the differences between
short-term credit risk and long-term risk. Factors affecting the liquidity of
the borrower and short-term cyclical elements are critical in short-term
ratings. Symbols used will be as follows:
MIG-1/VMIG-1. This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2. This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3. This designation denotes favorable quality. All security
elements are accounted for but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and market
access for refinancing is likely to be less well established.
MIG-4/VMIG-4. This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.
Excerpts from S&P's description of its ratings:
Standard & Poor's tax-exempt note ratings are generally given to such notes
that mature in three years or less. The three rating categories are as
follows:
SP-1. Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given
a plus (+) designation.
-52-
<PAGE> 65
SP-2. Satisfactory capacity to pay principal and interest.
SP-3. Speculative capacity to pay principal and interest.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Excerpts from Moody's description of its ratings:
Commercial paper rated Prime-1 by Moody's are judged by Moody's to be of the
best quality. Their short-term debt obligations carry the smallest degree of
investment risk. Margins of support for current indebtedness are large or
stable with cash flow and asset protection well assured. Current liquidity
provides ample coverage of near-term liabilities and unused alternative
financing arrangements are generally available. While protective elements may
change over the intermediate or longer term, such changes are most unlikely to
impair the fundamentally strong position of short-term obligations.
Excerpts from S&P's description of its ratings:
Commercial paper rated A by S&P have the following characteristics. Liquidity
ratios are better than industry average. Long-term debt rating is A or better.
The issuer has access to at least two additional channels of borrowing. Basic
earnings and cash flow are in an upward trend. Typically, the issuer is a
strong company in a well-established industry and has superior management.
Issuers rated A are further refined by use of numbers 1, 2, and 3 to denote
relative strength within this highest classification. Those issues rated A-1
that are determined by S&P to possess overwhelming safety characteristics are
denoted with a plus (+) sign designation.
-53-
<PAGE> 66
SAFECO Securities, Inc.
Distributor
PROSPECTUS
April 29, 1996
SAFECO Advisor Series Trust:
SAFECO Advisor Equity Fund
SAFECO Advisor Northwest Fund
SAFECO Advisor Intermediate-Term
Treasury Fund
SAFECO Advisor U.S. Government Fund
SAFECO Advisor GNMA Fund
SAFECO Advisor Municipal Bond Fund
SAFECO Advisor Intermediate-Term
Municipal Bond Fund
SAFECO Advisor Washington
Municipal Bond Fund
-54-
<PAGE> 67
SAFECO ADVISOR SERIES TRUST:
SAFECO ADVISOR EQUITY FUND
SAFECO ADVISOR NORTHWEST FUND
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND
SAFECO ADVISOR U.S. GOVERNMENT FUND
SAFECO ADVISOR GNMA FUND
SAFECO ADVISOR MUNICIPAL BOND FUND
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND
STATEMENT OF ADDITIONAL INFORMATION
This combined Statement of Additional Information is not a prospectus and
should be read in conjunction with the combined Prospectus for the Funds. A
copy of the Prospectus may be obtained by writing SAFECO Mutual Funds, P.O. Box
34890, Seattle, Washington 98124-1680, or by calling toll free 1-800-463-8791.
The date of the Prospectus of the Funds to which this Statement of Additional
Information relates is April 29, 1996.
The date of this Statement of Additional Information is April 29, 1996.
- -----------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Investment Policies Additional Performance
Information
Additional Investment Principal Shareholders of the
Information Funds
Special Risks of Below Trustees and Officers
Investment Grade Bonds -
Advisor Equity Fund Investment Advisory and
Other Services
Investment Risks of
Concentration in Washington Brokerage Practices
Issuers
Redemption in Kind
Additional Tax Information
Financial Statements
Conversion of Class B Shares
Description of Preferred
Additional Information on Stock Ratings
Calculation of Net Asset
Value Per Share
</TABLE>
<PAGE> 68
INVESTMENT POLICIES
SAFECO Advisor Equity Fund ("Advisor Equity Fund"), SAFECO Advisor Northwest
Fund ("Advisor Northwest Fund"), SAFECO Advisor Intermediate-Term Treasury Fund
("Advisor Intermediate Treasury Fund"), SAFECO Advisor U.S. Government Fund
("Advisor Government Fund"), SAFECO Advisor GNMA Fund ("Advisor GNMA Fund"),
SAFECO Advisor Municipal Bond Fund ("Advisor Municipal Fund"), SAFECO Advisor
Intermediate-Term Municipal Bond Fund ("Advisor Intermediate Municipal Fund")
and SAFECO Advisor Washington Municipal Bond Fund ("Advisor Washington
Municipal Fund") (collectively, the "Funds") are each a series of the SAFECO
Advisor Series Trust ("Trust"). The investment policies of each Fund are
described in the Prospectus and this Statement of Additional Information.
These policies state the investment practices that the Funds will follow, in
some cases limiting investments to a certain percentage of assets, as well as
those investment activities which are prohibited. The types of securities a
Fund may invest in are also disclosed in the Prospectus. Before a Fund
purchases a security which the following policies permit but which is not
currently described in the Prospectus, the Prospectus will be amended or
supplemented to describe the security. If a policy's percentage limitation is
adhered to immediately after and as a result of the investment, a later
increase or decrease in values, net assets or other circumstances will not be
considered in determining whether a Fund complies with the applicable
limitation.
FUNDAMENTAL INVESTMENT POLICIES
Each Fund's fundamental policies may not be changed without approval of a
majority of its outstanding voting securities as defined in the Investment
Company Act of 1940 ("1940 Act"). For purposes of such approval, the vote of a
majority of the outstanding voting securities of a Fund means the vote, at a
meeting of the shareholders of such Fund duly called, (i) of 67% or more of the
voting securities present at such meeting if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (ii)
of more than 50% of the outstanding voting securities, whichever is less.
1. BORROWING. No Fund may borrow money, except from banks or affiliates
of SAFECO Corporation at an interest rate not greater than that
available to the Fund from commercial banks for temporary or emergency
purposes and in amounts not in excess of twenty percent (20%) of its
total assets (including borrowings) less liabilities (other than
borrowings) immediately after such borrowing.
2. COMMODITIES. No Fund may purchase physical commodities or contracts
thereon unless acquired as a result of the ownership of securities or
instruments, but this restriction shall not prohibit a Fund from
purchasing futures contracts or options (including options on futures
contracts, but excluding options or futures contracts on physical
commodities) or from investing in securities of any kind.
3. DIVERSIFICATION. No Fund may, with respect to 75% of the value of its
total assets, purchase the securities of any issuer (other than U.S.
Government securities) if, as a result, (i) more than 5% of the value
of the Fund's total assets would be invested in the securities of that
issuer or (ii) the Fund would hold more than 10% of the outstanding
voting securities of that issuer.
2
<PAGE> 69
4. INDUSTRY CONCENTRATION. No Fund may purchase any security if, as a
result, 25% or more of its total assets (taken at current value) would
be invested in the securities of issuers having their principal
business activities in the same industry. This limitation does not
apply to U.S. Government securities.
5. LENDING. No Fund may lend any security or make any other loan if, as
result, more than 33-1/3% of its total assets (taken at current value)
would be lent to other parties, except in accordance with its
investment objective, policies, and limitations (i) through the
purchase of a portion of an issue of debt securities or (ii) by
engaging in repurchase agreements.
6. REAL ESTATE. No Fund may purchase or sell real estate (but this
restriction shall not prevent a Fund from investing in securities
issued by companies or entities such as real estate investment trusts
that own or deal in real estate or interests therein, securities or
participation interests in pools of real estate mortgage loans, and
securities or instruments secured by real estate or interests therein.
7. SENIOR SECURITIES. No Fund may issue senior securities, except as
permitted under the 1940 Act.
8. UNDERWRITING. No Fund may underwrite securities of other issuers,
except to the extent that a Fund, in disposing of portfolio
securities, may be deemed to be an underwriter within the meaning of
the Securities Act of 1933 ("1933 Act").
In addition to the foregoing fundamental investment policies, which apply to
each Fund, the following fundamental investment policies apply to the Advisor
Municipal, Advisor Intermediate Municipal and Advisor Washington Municipal
Funds:
1. PROJECTS. No Fund may purchase a security if, as a result, 25% or
more of its total assets (taken at current value) would be invested in
obligations, the interest of which is payable from revenues on similar
types of projects. As a matter of operating policy, similar types of
projects may include sports, convention or trade show facilities,
airports or mass transportation, sewage or solid waste disposal
facilities, and air or water pollution control projects.
2. STATE CONCENTRATION. No Fund may purchase a security if, as a result,
25% or more of its total assets (taken at current value) would be
invested in securities whose issuers are located in the same state.
(This limitation does not apply to the Advisor Washington Municipal
Fund.)
NON-FUNDAMENTAL INVESTMENT POLICIES
In addition to the policies described in the Prospectus, each Fund has adopted
the following non-fundamental investment policies which may be changed by the
Trust's Board of Trustees without shareholder approval:
1. BORROWING. A Fund may not purchase securities if outstanding
borrowings equal or exceed 5% of its total assets.
2. LENDING. A Fund may not make any loans except for the purchase of
debt securities and engaging in repurchase agreements.
3
<PAGE> 70
3. INVESTMENTS IN OTHER INVESTMENT COMPANIES. No Fund may purchase
securities of other investment companies, except to the extent
permitted by the 1940 Act and in the open market at no more than
customary brokerage commission rates. This limitation does not apply
to securities received or acquired as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or
merger.
4. MARGIN TRANSACTIONS. No Fund may purchase securities on margin from
brokers or other lenders, except that a Fund may obtain such
short-term credits as are necessary for the clearance of securities
transactions. Margin payments in connection with transactions in
futures contracts and options on futures contracts shall not
constitute the purchase of securities on margin and shall not be
deemed to violate the foregoing limitation.
5. SHORT SALES. No Fund may sell securities short, unless it owns or has
the right to obtain without payment of additional consideration
securities equivalent in kind and amount to the securities sold.
Transactions in futures contracts and options shall not constitute
selling securities short.
6. OWNERSHIP OF FUND SECURITIES BY OFFICERS AND TRUSTEES. No Fund may
purchase or retain the securities of any issuer if, to the knowledge
of the Fund's management, those officers and trustees of the Trust and
officers and directors of SAFECO Asset Management Company ("SAM"), the
investment adviser for each Fund, who each own individually more than
1/2 of 1% of the outstanding securities of such issuer, together own
more than 5% of such securities.
7. UNSEASONED ISSUERS. No Fund may purchase the securities of any issuer
(other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more
than 5% of the Fund's total assets would be invested in the securities
of business enterprises that, including predecessors, have a record of
less than three years of continuous operation.
8. ILLIQUID SECURITIES. No Fund may purchase any security if, as a
result, more than 10% of its net assets would be invested in illiquid
securities. Illiquid securities include securities that cannot be
sold within seven days in the ordinary course of business for
approximately the amount at which the Fund has valued the securities,
such as repurchase agreements maturing in more than seven days.
9. FOREIGN SECURITIES. No Fund may invest more than 10% of the value of
its total assets in securities of foreign issuers, provided that this
limitation shall not apply to foreign securities denominated in U.S.
dollars.
10. OIL AND GAS PROGRAMS. No Fund may invest in participation or other
direct interests in oil, gas, or other mineral leases or exploration
or development programs, but each Fund may purchase securities of
companies that own interests in any of the foregoing.
11. REAL ESTATE. No Fund may purchase or sell interests in real estate
limited partnerships; and no Fund may purchase any security if, as a
4
<PAGE> 71
result, more than 10% of its total assets would be invested in
securities of real estate investment trusts.
12. WARRANTS. No Fund may invest more than 5% of its net assets in
warrants, including warrants that are not listed on the New York or
American Stock Exchanges, or more than 2% of its net assets in
unlisted warrants. For purposes of this limitation, warrants are
valued at the lower of cost or market value and warrants acquired by a
Fund in units or attached to securities may be deemed to be without
value.
13. COMMODITIES. No Fund currently intends to invest in commodities
(including future contracts or options thereon).
14. OPTIONS. No Fund currently intends to purchase or write put or call
options or enter into straddles.
ADDITIONAL INVESTMENT INFORMATION
Each Fund may make the following investments, among others, although they may
not buy all of the types of securities that are described.
1. RESTRICTED SECURITIES AND RULE 144A SECURITIES. Restricted securities
are securities that may be sold only in a public offering with respect
to which a registration statement is in effect under the 1933 Act or,
if they are unregistered, in a privately negotiated transaction or
pursuant to an exemption from registration. In recognition of the
increased size and liquidity of the institutional markets for
unregistered securities and the importance of institutional investors
in the formation of capital, the Securities and Exchange Commission
("SEC") has adopted Rule 144A under the 1933 Act, which is designed to
further facilitate efficient trading among institutional investors by
permitting the sale of Rule 144A securities to qualified institutional
buyers. To the extent privately placed securities held by a Fund
qualify under Rule 144A and an institutional market develops for those
securities, the Fund likely will be able to dispose of the securities
without registering them under the 1933 Act. SAM, acting under
guidelines established by the Trustees, may determine that certain
securities qualified for trading under Rule 144A are liquid.
Where registration is required, a Fund may be obligated to pay all or
part of the registration expenses, and a considerable period may
elapse between the decision to sell and the time the Fund may be
permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were
to develop, the Fund might obtain a less favorable price than
prevailed when it decided to sell. To the extent privately placed
securities are illiquid, purchases thereof will be subject to any
limitations on investments in illiquid securities. Restricted
securities for which no market exists are priced at fair value as
determined in accordance with procedures approved and periodically
reviewed by the Trustees.
2. WARRANTS. A warrant is an option issued by a corporation that gives
the holder the right to buy a stated number of shares of common stock
of the corporation at a specified price within a designated time
period. Warrants may be purchased and sold separately or attached to
stocks or bonds as part of a unit offering. The term of a warrant may
run from two to five years and in some cases the term may be longer.
The exercise
5
<PAGE> 72
price carried by the warrant is usually well above the prevailing
market price of the underlying common stock at the time the warrant is
issued. The holder of a warrant has no voting rights and receives no
dividends. Warrants are freely transferable and may trade on the
major national exchanges.
Warrants may be speculative. Generally, the value of a warrant will
fluctuate by greater percentages than the value of the underlying
common stock. The primary risk associated with a warrant is that the
term of the warrant may expire before the exercise price of the common
stock has been reached. Under these circumstances, a Fund could lose
all of its principal investment in the warrant.
A Fund will invest in a warrant only if the Fund has the authority to
hold the underlying common stock. Additionally, if a warrant is part
of a unit offering, a Fund will purchase the warrant only if it is
attached to a security in which the Fund has authority to invest. In
all cases, a Fund will purchase warrants only after SAM determines
that the exercise price for the underlying common stock is likely to
be achieved within the required time-frame and for which an actively
traded market exists. SAM will make this determination by analyzing
the issuer's financial health, quality of management and any other
factors deemed to be relevant.
3. FOREIGN SECURITIES. Each Fund may invest in U.S. dollar-denominated
securities issued by foreign issuers (including governments and
quasi-governments) and foreign branches of U.S. banks, including
negotiable certificates of deposit ("CDs") and commercial paper.
These investments are subject to each Fund's quality standards. While
investments in foreign securities are intended to reduce risk by
providing further diversification, such investments involve sovereign
and other risks, in addition to the credit and market risks normally
associated with domestic securities. These additional risks include
the possibility of adverse political and economic developments
(including political instability) and the potentially adverse effects
of unavailability of public information regarding issuers, reduced
governmental supervision regarding financial markets, reduced
liquidity of certain financial markets, and the lack of uniform
accounting, auditing, and financial standards or the application of
standards that are different or less stringent than those applied in
the U.S.
Each Fund also may invest in equity, debt, or other income-producing
securities of issuers in countries whose governments are considered
stable by SAM that are denominated in or indexed to foreign
currencies, including (1) common and preferred stocks, (2) CDs,
commercial paper, fixed time deposits, and bankers' acceptances issued
by foreign banks, (3) obligations of other corporations, and (4)
obligations of foreign governments, or their subdivisions, agencies,
and instrumentalities, international agencies, and supranational
entities. Investing in these securities includes the special risks
associated with investing in non-U.S. issuers described in the
preceding paragraph and the additional risks of (1) nationalization,
expropriation, or confiscatory taxation and (2) adverse changes in
investment or exchange control regulations (which could prevent cash
from being brought back to the U.S.). Additionally, dividends and
interest payable on foreign securities may be subject to foreign
taxes, including taxes withheld from those payments, and there are
generally higher commission rates on foreign fund transactions.
6
<PAGE> 73
Foreign securities often trade with less frequency and volume than
domestic securities and therefore may exhibit greater price
volatility. Additional costs associated with an investment in foreign
securities may include higher custodian fees than apply to domestic
custodial arrangements, and transaction costs of foreign currency
conversions. Changes in foreign exchange rates may also affect the
value of the foreign securities denominated.
In order to limit the risk inherent in investing in foreign
currency-denominated securities, a Fund may not purchase any such
security if after such purchase more than 10% of its total assets
(taken at market value) would be invested in such securities. Within
such limitation, however, no Fund is restricted in the amount it may
invest in securities denominated in any one foreign currency.
4. REPURCHASE AGREEMENTS. Repurchase agreements are transactions in
which a Fund purchases securities from a bank or recognized securities
dealer and simultaneously commits to resell the securities to the bank
or dealer at an agreed-upon date and price reflecting a market rate of
interest unrelated to the coupon rate or maturity of the purchased
securities. No Fund currently intends to invest more than 5% of its
net assets in repurchase agreement transactions. A Fund maintains
custody of the underlying securities prior to their repurchase; thus,
the obligation of the bank or dealer to pay the repurchase price on
the date agreed to is, in effect, secured by such securities. If the
value of these securities is less than the repurchase price, plus any
agreed-upon additional amount, the other party to the agreement must
provide additional collateral so that at all times the collateral is
at least equal to the repurchase price, plus any agreed-upon
additional amount.
Repurchase agreements carry certain risks not associated with direct
investments in securities, including possible declines in the market
value of the underlying securities and delays and costs to a Fund if
the other party to a repurchase agreement becomes bankrupt. Each Fund
intends to enter into repurchase agreements only with banks and
dealers in transactions believed by SAM to present minimum credit
risks in accordance with guidelines established by the Trust's board
of trustees. SAM will review and monitor the creditworthiness of
those institutions under the board's general supervision.
SPECIAL RISKS OF BELOW INVESTMENT GRADE BONDS - ADVISOR EQUITY FUND
Below investment grade bonds (commonly referred to as high-yield or "junk"
bonds) have certain additional risks associated with them. Yields on below
investment grade bonds will fluctuate over time. These bonds tend to reflect
short-term economic and corporate developments to a greater extent than higher
quality bonds which primarily react to fluctuations in interest rates. During
an economic downturn or period of rising interest rates, issuers of below
investment grade bonds may experience financial difficulties which adversely
affect their ability to make principal and interest payments, meet projected
business goals and obtain additional financing. In addition, issuers often
rely on cash flow to service debt. Failure to realize projected cash flows may
seriously impair the issuer's ability to service its debt load which in turn
might cause a Fund to lose all or part of its investment in that security. SAM
will seek to minimize these additional risks through diversification, careful
assessment of the issuer's financial structure, business plan and management
team and monitoring of the issuer's progress toward its financial goals.
7
<PAGE> 74
The liquidity and price of below investment grade bonds can be affected by a
number of factors, including investor perceptions and adverse publicity
regarding major issues, underwriters or dealers of lower-quality corporate
obligations. These effects can be particularly pronounced in a thinly-traded
market with few participants and may adversely impact the Fund's ability to
dispose of the bonds as well as make valuation of the bonds more difficult.
Because there tend to be fewer investors in below investment grade bonds, it
may be difficult for the Fund to sell these securities at an optimum time.
Consequently, these bonds may be subject to more price changes, fluctuations in
yield and risk to principal and income than higher-rated bonds of the same
maturity.
Credit ratings evaluate the likelihood that an issuer will make principal and
interest payments, but may not reflect market value risks associated with
lower-rated bonds. Credit rating agencies may not timely revise ratings to
reflect subsequent events affecting an issuer's ability to pay principal and
interest.
INVESTMENT RISKS OF CONCENTRATION IN WASHINGTON ISSUERS
WASHINGTON STATE
A discussion of certain economic, financial and legal matters regarding the
State of Washington follows. Since, during normal market conditions, the
Advisor Washington Municipal Fund plans to invest at least 80% of its net
assets in bonds issued by Washington and its political subdivisions,
municipalities, agencies, instrumentalities or public authorities, the
investment risk of such concentration should be carefully considered. The
information in the discussion is drawn primarily from official statements
relating to securities offerings of the State which are dated prior to the date
of this Statement of Additional Information. This information may be relevant
in evaluating the economic and financial position of the State, but is not
intended to provide all relevant data necessary for a complete evaluation of
the State's economic and financial position. Discussions regarding the
financial health of the State government may not be relevant to municipal
obligations issued by a political subdivision of the State. Furthermore,
general economic conditions discussed may or may not affect issuers of the
obligations of the State. The Advisor Washington Municipal Fund has not
independently verified any of the information presented in this section.
GENERAL INFORMATION
According to the U.S. Census Bureau's 1990 Census, Washington State's
population is ranked 18th of the 50 states. During the ten year time period
from 1980-1990, the State's population increased at an average annual rate of
1.8% while the U.S. population grew at an average annual rate of 1.1%.
The State's largest city, Seattle, is part of a strong international trade,
manufacturing, high technology and business service corridor which extends
along Puget Sound from Everett to Tacoma. The State's Pacific Coast-Puget
Sound region includes 75% of its population, the major portion of its
industrial activity and the major part of the forests important to its timber
and paper industries. The remainder of the State has rich agricultural areas
primarily devoted to grain, fruit orchard and dairy operations.
The State's economy has recently diversified with employment in the trade and
service sectors representing an increasing portion of total employment relative
to the manufacturing sector. Both employment and personal income growth
compare favorably with the national averages. The rate of economic growth as
measured by
8
<PAGE> 75
employment in the State has increased from 2.0% in 1992 and 1.3% in 1993 to
2.6% in 1995.
The State operates on a July 1 to June 30 fiscal year and on a biennial budget
basis. Fiscal controls are exercised during the biennium through an allotment
process which requires each agency to submit a monthly expenditure plan. The
plan must be approved by the Office of Financial Management, which is the
Governor's budget agency. It provides the authority for agencies to spend funds
within statutory maximums specified in a legislatively adopted budget. State
law requires a balanced biennial budget. Whenever it appears that
disbursements will exceed the aggregate of estimated receipts plus beginning
cash surplus, the Governor is required to reduce allotments, thereby reducing
expenditures of appropriated funds.
As interpreted by the State Supreme Court, Washington's Constitution prohibits
the imposition of personal income taxes.
The State's tax revenues are primarily comprised of excise and ad valorem
taxes. By constitutional provision, the aggregate of all regular (unvoted) tax
levies on real and personal property by state and local taxing districts cannot
exceed one percent of the true and fair value. Excess levies are subject to
voter approval. For the fiscal year ending June 30, 1994, approximately 77.3%
of the State's tax revenues came from general and selective sales and gross
receipts taxes, of which the retail sales tax and its companion use tax
represented 46% of total collections. Business and occupation tax collections
represented about 16.3% and the motor vehicle fuel tax represented
approximately 7.0% of total State taxes for the year. Ad valorem taxes
represented 10.6% of State revenues for the year.
Expenditures of State revenues are made in accordance with constitutional and
statutory mandates.
STATE EXPENDITURE LIMITATION - INITIATIVE 601
Initiative 601, which was voted into law in November 1993, limits increases in
General Fund-State government expenditures to the average rate of population
and inflation growth, and sets forth a series of guidelines for limiting tax
and expenditure increases and stabilizing long range budget planning.
Provisions of Initiative 601 establish a procedure for computing a fiscal year
growth factor based on a lagged, three-year average of population and inflation
growth. This growth factor is used to determine a state spending limit for
programs and expenditures supported by the state General Fund. The initiative
creates two new reserve funds (the Emergency Reserve Fund and the Education
Construction Fund) for depositing revenues in excess of the spending limit and
abolishes the current Budget Stabilization Account. In addition, restrictions
are placed on the addition or transfer of functions to local government unless
there is reimbursement by the State.
The Initiative's requirement for voter approval for new tax measures has
expired. Effective July 1, 1995, taxes can be enacted with a two-thirds
majority of both houses of the State Legislature if resulting General
Fund-State expenditures do not exceed the spending limit.
The State Constitution and enabling statutes authorize the incurrence of State
general obligation debt to the payment of which the State's full faith and
credit and taxing power are pledged. With certain exceptions, the amount of
State
9
<PAGE> 76
general obligation debt which may be incurred is limited by constitutional and
statutory restrictions. These limitations are imposed by prohibiting the
issuance of new debt if the new debt would cause the maximum annual debt
service on all thereafter outstanding general obligation debt to exceed a
specified percentage of the arithmetic mean of general State revenues for the
preceding three years. These limitations apply to the incurrence of new debt
and are not limitations on the amount of debt service which may be paid by the
State in future years.
The State Legislature is obligated to appropriate money for State debt service
requirements. Generally, on or before June 30 of each year, the State Finance
Committee certifies to the State Treasurer the amount required for payment of
bond interest and principal for the coming year. Some general obligation bond
statutes provide that the general fund will be reimbursed from discrete
revenues which are not considered general State revenues. Other bonds are
limited obligation bonds not payable from the general fund.
For the 1993-95 Biennium, General Fund-State revenues are projected to be
$16.626 billion, an increase of 11.9% over the 1991-93 Biennium, plus a
carry-forward of $234 million. Since passage of the 1994 Supplemental budget,
estimates of General Fund-State revenue collections have increased in four
successive forecasts. Revenues are expected to be $344 million higher than
expected at the time of enactment of the 1994 Supplemental Budget. The outlook
for the remainder of the biennium is unchanged.
The 1993-95 Biennium Budget was passed into law by the Governor on May 28,
1993, and contains $650 million in general tax increases, $163 million in other
revenues, $700 million in program and administrative reductions, and $622
million in fund shifts (such as to federal funding sources). The 1994
Supplemental Budget passed into law on April 6, 1994, includes $48 million in
tax costs, an $11 million revenue increase from a variety of sources and $168
million in additional expenditures, many of which represent one time
investments.
On December 19, 1994, Governor Lowry announced his recommendations for a 1995
Supplemental Budget. The 1995 Supplemental Budget makes adjustments to
expenditure authority for State agencies for the remainder of the current
biennium, reflecting the most recent enrollment and caseload estimates and
addressing significant unexpected expenses, including extraordinary cuts of $48
million incurred in one of the worst forest fire years since 1970. In addition
to these revisions, the Governor also proposed several one- time expenditures,
most notably set-aside and the investment of $127 million in preparation for
payment of debt service on currently authorized capital bonds coming due in the
next biennium. Interest gained on the investment of those funds until the
payment dates will also be used to meet debt service costs. The entire 1995
Supplemental Budget recommendation is for an additional $163 million in General
Fund expenditures.
For most municipalities in the State, the fiscal year is the calendar year
except that school districts have a September 1 - August 31 fiscal year. All
municipalities must maintain balanced budgets. Depending on the type of
municipality, local revenues are derived from ad valorem taxes, excise and
gross receipts taxes, special assessments, fees, user charges and State and
federal grants.
Municipalities incur debt by the issuance of general obligations or other
borrowings which are payable from taxes, though other revenue sources may be
used. Revenue obligations do not constitute debt under constitutional and
10
<PAGE> 77
statutory limitations as long as taxes are not pledged or used to pay debt
service. Only nontax revenue from the operation of a project or enterprise
financed by the revenue obligations (and sometimes special assessments on
property benefitted from the financed improvements) may be used to pay that
debt service. Usually, revenue bonds are secured by a reserve funded in an
amount based on a factor of debt service. Many municipalities may issue
improvement district obligations payable only from special assessments on
benefitted property, but some of those obligations also may be secured by a
special guaranty fund.
ECONOMIC OVERVIEW
Over the past few years, the State's economic performance has remained
relatively strong compared to the U.S. as a whole. From 1990-1994, preliminary
figures show that, after adjusting for inflation, growth in per capita income
has outperformed the national economy each year. This recent growth is broadly
based, having taken place throughout various segments of the State's economy.
The State's economic base includes manufacturing and service industries as well
as agricultural and timber production. During 1987-1993, the State
experienced growth in both the manufacturing and non-manufacturing industries.
Growth in employment in the durable and non-durable goods manufacturing,
services and government sectors have exceeded comparable figures for the U.S.
Washington's economy consists of both export and local industries. Leading
export industries are aerospace, forest products, agriculture and food
processing. The aerospace, timber and food processing industries together
employ approximately 9% of the State's non-farm workers. However, the
non-manufacturing sector has played an increasingly significant role in
contributing to the State's economy in recent years.
Below is a summary of key industry segments of the State's economy as well as
of selected economic and employment data.
Manufacturing. The State's manufacturing base consists primarily of aircraft
manufacturing. The Boeing Company, a major aerospace firm, is the largest
commercial employer in the State and has a significant impact on the State in
terms of production, employment and labor earnings. Financial performance of
Boeing has been strong in recent years as measured by increased sales, airplane
deliveries and backlogs of orders. In January 1993, Boeing announced
production cuts and is expected to substantially trim jobs over the next
several years. Such cuts may have an adverse affect on the Washington economy.
Exclusive of aerospace, manufacturing jobs have shown steady growth.
Technology-Related Industries. The State ranks fourth among 12 leading states
in the percentage of its work force employed by technology-related industries.
It ranks third among the largest software development centers. The State is
the home of approximately 1,000 advanced technology firms of which
approximately 50% are computer related. Microsoft, headquartered in Redmond,
Washington, is the largest microcomputer software company in the world. In
addition, several biotechnical firms located in the State have attained
international acclaim for their research and development.
Timber. Natural forests cover more than 40% of the State's land area and forest
products rank second behind aerospace in terms of total production. The
primary employer in the timber industry is The Weyerhaeuser Company.
Productivity in the State's forest products industry has been increasing
steadily in recent years.
11
<PAGE> 78
However, in 1991 productivity declined primarily because of the recession.
Overall production in the timber industry is expected to decline over the next
few years due to various factors, including difficulty in maintaining the
recent record levels of production increases. Some unemployment is anticipated
in certain regions, but the impact is not expected to materially affect the
State's overall economic performance.
Agriculture and Food Processing. Agriculture and food processing is the State's
most important industry by most measures. Growth in agricultural products was
an integral factor in the State's economic growth in the late 1980s and early
1990s.
Finance, Insurance and Real Estate. Employment in finance, insurance and real
estate is estimated to represent 5.4% of the State's wage and salary employment
in 1993. Since 1987, annual growth in employment in this sector has averaged
2.3% compared to 1.3% for the U.S.
Trade. International trade plays an important role in the State's employment
base and one in six jobs are related to this area. During the past 20 years
the State has consistently ranked number one or number two in international
exports per capita. Seattle-Tacoma International Airport is the focus of the
region's air traffic and trade. The State, particularly the Puget Sound
Corridor, is a trade center for the Northwest and the State of Alaska. A
system of public ports, the largest of which are the Ports of Seattle and
Tacoma, handle waterborne trade primarily to and from the Far East. These two
Ports each rank among the top 20 ports in the world based on volume of
containerized cargo shipped. Approximately 70% of the cargo entering the
Ports of Seattle and Tacoma has an ultimate destination outside the Pacific
Northwest. Therefore, trade levels depend largely on national and world rather
than local economic conditions.
Trade employment experienced the fourth highest growth in the State between
1989 and 1995. Growth in retail sales in the State between 1990 and 1994 was
25.2% compared to that of 19.1% in the U.S.
Services/Tourism. The highest employment growth since 1981 has taken place in
the services sector although rate of growth has shown small but consistent
decline since 1990 from 7% to 3.5% forecast for 1994. Seattle is the location
for the Washington State Convention and Trade Center which opened in June 1988.
The State also has many tourist attractions such as the Olympic and Cascade
mountain ranges, ocean beaches and local wineries.
Construction. Employment in the construction sector in the Puget Sound area
increased 69.2% between 1981 and 1991. The increase in employment in the late
1980s was due in part to the affordability of housing compared to other areas
of the country. Construction employment growth flattened between 1991 through
1993, but is estimated to show a modest increase in 1994. Commercial building,
while not increasing at the pace of the 1980s, remains stable.
Federal, State and Local Government. Employment in the government sector
represents approximately 19% of all wage and salary employment in the State on
a combined basis. Seattle is the regional headquarters for a number of federal
government agencies and the State receives an above-average share of
defense expenditures. Employment in the government sector has expanded in the
State since 1987 at a more rapid rate than in the U.S. as a whole. State and
local government employment has increased at a faster pace than employment by
the federal government.
12
<PAGE> 79
LITIGATION
At any given time, including the present, there are numerous lawsuits pending
against the State of Washington which could affect the State's revenues and
expenditures. However, none of the lawsuits are expected to have a material
adverse impact on either State revenues or expenditures.
ADDITIONAL TAX INFORMATION
GENERAL
Each Fund is treated as a separate corporation for federal income tax purposes.
In order to qualify for treatment as a regulated investment company under the
Internal Revenue Code of 1986, as amended ("Code"), a Fund must distribute to
its shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of taxable net investment income and net
short-term capital gain) plus, in the case of a Municipal Bond Fund, its net
interest income excludable from gross income under section 103(a) of the Code
and must meet several additional requirements.
If shares of a Fund are sold at a loss after being held for six months or less,
the loss will be treated as long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
Investors also should be aware that if shares are purchased shortly before the
record date for any distribution (other than an "exempt-interest dividend," see
below), the shareholder will pay full price for the shares and receive some
portion of the purchase price back as a taxable dividend or capital gain
distribution.
Each Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Each Fund is required to withhold 31% of all taxable dividends, capital gain
distributions and redemption proceeds payable to individuals and certain other
noncorporate shareholders who do not furnish the Fund with a correct taxpayer
identification number. Withholding at that rate also is required from
dividends and those distributions for shareholders who otherwise are subject to
backup withholding.
MUNICIPAL BOND FUNDS
Dividends paid by a Municipal Bond Fund will qualify as exempt-interest
dividends as defined in the Prospectus, and thus will be excludable from gross
income by its shareholders, if the Fund satisfies the requirement that, at the
close of each quarter of its taxable year, at least 50% of the value of its
total assets consists of securities the interest on which is excludable from
gross income under section 103(a)of the Code; each Municipal Bond Fund intends
to satisfy this requirement. The aggregate dividends excludable from
shareholders' gross income of such a Fund may not exceed the Fund's net
tax-exempt income. The shareholders' treatment of dividends from these Funds
under local and state income tax laws may differ from the treatment thereof
under the Code.
Interest on indebtedness incurred or continued to purchase or carry shares of a
Municipal Bond Fund will not be deductible for federal income tax purposes to
the extent that Fund's distributions consist of exempt-interest dividends.
Each
13
<PAGE> 80
Municipal Bond Fund will not invest in private activity bonds the interest on
which is treated as a tax preference item for investors in determining their
liability for the alternative minimum tax.
Each Municipal Bond Fund may invest in municipal bonds that are purchased,
generally not on their original issue, with market discount (that is, at a
price less than the principal amount of the bond or, in the case of a bond that
was issued with original issue discount, at a price less than the amount of the
issue price plus accrued original issue discount) ("municipal market discount
bonds"). Gain on the disposition of a municipal market discount bond (other
than a bond with a fixed maturity date within one year from its issuance),
generally is treated as ordinary (taxable) income, rather than capital gain, to
the extent of the bond's accrued market discount at the time of disposition.
Market discount on such a bond generally is accrued ratably, on a daily basis,
over the period from the acquisition date to the date of maturity. In lieu of
treating the disposition gain as above, a Municipal Bond Fund may elect to
include market discount in its gross income currently, for each taxable year to
which it is attributable.
Proposals may be introduced before Congress for the purpose of restricting or
eliminating the federal income tax exemption for interest on municipal bonds.
If such a proposal were enacted, the availability of municipal bonds for
investment by each Municipal Bond Fund and the value of their portfolios would
be affected. In such event, each Municipal Bond Fund would reevaluate its
investment objective and policies.
If shares of a Municipal Bond Fund are sold at a loss after being held for six
months or less, the loss will be disallowed to the extent of any
exempt-interest dividends received on those shares.
Exempt-interest dividends received by a corporate shareholder also may be
indirectly subject to income tax without regard to whether a Municipal Bond
Fund's tax-exempt interest was attributable to those bonds.
Up to 85% of social security and railroad retirement benefits may be included
in taxable income for recipients whose adjusted gross income (including income
from tax-exempt sources such as a Municipal Bond Fund) plus 50% of their
benefits exceeds certain base amounts. Exempt-interest dividends still are
tax-exempt to the extent described in the Prospectus; they are only included in
the calculation of whether a recipient's income exceeds the established
amounts.
If a Municipal Bond Fund invests in any instruments that generate taxable
income, under the circumstances described in the Prospectus, distributions of
the interest earned thereon will be taxable to the Fund's shareholders as
ordinary income to the extent of the Fund's earnings and profits. Moreover, if
a Municipal Bond Fund realizes capital gain as a result of market transactions,
any distribution of that gain will be taxable to its shareholders. There also
may be collateral federal income tax consequences regarding the receipt of
exempt-interest dividends by shareholders such as S corporations, financial
institutions and property and casualty insurance companies. Shareholders
falling into any such category should consult their tax adviser concerning any
investment in shares of a Municipal Bond Fund.
CONVERSION OF CLASS B SHARES
Class B shares of each Fund will automatically convert to Class A shares, based
on the relative net asset values of each of the Classes, as of the close of
14
<PAGE> 81
business on the first business day of the month in which the eighth anniversary
of the shareholder's purchase of such Class B shares of the Fund occurs. For
the purpose of calculating the holding period required for conversion of Class
B shares, the date of initial purchase shall mean (1) the date on which such
Class B shares were purchased, or (2) for Class B shares obtained through an
exchange, or a series of exchanges, the date on which the original Class B
shares were purchased. For purposes of conversion to Class A, Class B shares
purchased through the reinvestment of dividends and other distributions paid in
respect of Class B shares will be held in a separate sub-account. Each time
any Class B shares in the shareholder's regular account (other than those in
the sub-account) convert to Class A, a pro rata portion of the Class B shares
in the sub-account will also convert to Class A. The portion will be
determined by the ratio that the shareholder's Class B shares converting to
Class A bears to the shareholder's total Class B shares not acquired through
dividends and other distributions.
The availability of the conversion feature is subject to the continuing
applicability of a ruling of the Internal Revenue Service that (1) the
dividends and other distributions paid on Class A and Class B shares will not
result in "preferential dividends" under the Code and (2) the conversion of
shares does not constitute a taxable event. If the conversion feature ceased
to be available, the Class B shares of each Fund would not be converted and
would continue to be subject to the higher ongoing expenses of the Class B
shares beyond eight years from the date of purchase. SAM has no reason to
believe that these conditions for the availability of the conversion feature
will not continue to be met.
ADDITIONAL INFORMATION ON CALCULATION OF NET ASSET VALUE PER SHARE
Each Fund determines its net asset value per share ("NAV") by subtracting the
Fund's liabilities (including accrued expenses and dividends payable) from its
total assets (the market value of the securities the Fund holds plus cash and
other assets, including interest accrued but not yet received) and dividing the
result by the total number of shares outstanding. The NAV of each Fund is
calculated as of the close of regular trading on the New York Stock Exchange
("Exchange") every day the Exchange is open for trading. The Exchange is
closed on the following days: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Each Fund has selected a pricing service to assist in computing the value of
its securities. There are a number of pricing services available and the
decision as to whether, or how, a pricing service should be used by a Fund will
be subject to review by the Trust's Board of Trustees.
Short-term debt securities held by each Fund having a remaining maturity of
less than 60 days when purchased, and securities originally purchased with
maturities in excess of 60 days but which currently have maturities of 60 days
or less, may be valued at cost adjusted for amortization of premiums or accrual
of discounts, or under such other methods as the Board of Trustees may from
time to time deem to be appropriate. The cost of those securities that had
original maturities in excess of 60 days shall be determined by their fair
market value as of the 61st day prior to maturity. All other securities and
assets in the portfolios will be appraised in accordance with those procedures
established by the Board of Trustees in good faith in computing the fair market
value of those assets.
ADDITIONAL PERFORMANCE INFORMATION
15
<PAGE> 82
The yield and total return calculations set forth below are for the dates
indicated and are not a prediction of future results.
The yields for the 30-day period ended December 31, 1995, for the Funds were as
follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Advisor Intermediate-Term
Treasury Fund 4.40% 3.87% 3.85%
Advisor U.S. Government Fund 4.50% 3.96% 3.96%
Advisor GNMA Fund 6.07% 5.63% 5.62%
Advisor Municipal Bond Fund 4.06% 3.52% 3.52%
Advisor Intermediate-Term
Municipal Bond Fund 3.47% 2.90% 2.89%
Advisor Washington Municipal
Bond Fund 4.16% 3.63% 3.63%
</TABLE>
"Yield" is computed using the following formula:
Yield = 2[(a-b +1) 6-1]
---
cd
<TABLE>
<S> <C>
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the period
</TABLE>
The tax equivalent yields for the 30 day period ended December 31, 1995, at the
maximum federal tax rate of 39.6% for the Funds were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Advisor Municipal Bond Fund 6.72% 5.83% 5.83%
Advisor Intermediate-Term
Municipal Bond Fund 5.75% 4.80% 4.78%
Advisor Washington Municipal
Bond Fund 6.89% 6.01% 6.01%
</TABLE>
16
<PAGE> 83
"Tax-equivalent yield" is computed using the following formula:
Tax-equivalent yield = [ eg ] + [e(1-g)]
----
(1-f)
<TABLE>
<S> <C>
Where: e = "yield" as calculated above
f = tax rate
g = percentage of "yield" which is tax-free
</TABLE>
TOTAL RETURN
The total returns for the Funds, expressed as a percentage, for the fiscal
year ended December 31, 1995, and since the initial public offering ("IPO") on
September 30, 1994 (15 months) were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Year Ended Year Ended Year Ended
December 31, Since December 31, Since December 31, Since
1995 IPO 1995 IPO 1995 IPO
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Advisor Equity Fund 24.23 21.62 24.44 22.48 29.43 26.47
Advisor
Northwest Fund 3.23 .65 2.57 .67 7.57 4.67
Advisor
Intermediate-
Term Treasury
Fund 10.51 10.97 10.17 11.43 15.16 15.42
Advisor U.S.
Government Fund 9.46 10.54 9.07 10.98 14.07 14.98
Advisor GNMA Fund 9.80 9.02 9.43 9.40 14.43 13.39
Advisor
Municipal Bond
Fund 18.63 18.44 18.62 19.19 23.62 23.19
Advisor
Intermediate-
Term Bond Fund 8.52 7.12 8.09 7.42 13.09 11.42
Advisor
Washington
Municipal Bond
Fund 14.06 13.00 13.76 13.43 18.87 17.54
</TABLE>
17
<PAGE> 84
The total returns for the Funds, expressed in dollars and assuming a $10,000
initial investment, for the fiscal year ending December 31, 1995 and since the
initial public offering ("IPO") on September 30, 1994 (15 months), were as
follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Year Ended Year Ended Year Ended
December 31, Since December 31, Since December 31, Since
1995 IPO 1995 IPO 1995 IPO
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Advisor Equity
Fund $12,423 $12,162 $12,444 $12,248 $12,943 $12,647
Advisor
Northwest Fund $10,323 $10,065 $10,257 $10,067 $10,757 $10,467
Advisor
Intermediate-
Term Treasury
Fund $11,051 $11,097 $11,017 $11,143 $11,516 $11,542
Advisor U.S.
Government Fund $10,946 $11,054 $10,907 $11,098 $11,407 $11,498
Advisor GNMA Fund $10,980 $10,902 $10,943 $10,940 $11,443 $11,339
Advisor Municipal
Bond Fund $11,863 $11,844 $11,862 $11,957 $12,362 $12,320
Advisor
Intermediate-
Term Bond Fund $10,852 $10,712 $10,809 $10,742 $11,309 $11,142
Advisor
Washington
Municipal Bond
Fund $11,406 $11,300 $11,376 $11,343 $11,887 $11,754
</TABLE>
18
<PAGE> 85
AVERAGE ANNUAL RETURN
The average annual returns for the Funds, expressed as a percentage, for the
fiscal year ended December 31, 1995, and since the initial public offering
("IPO") on September 30, 1994 (15 months) were as follows:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Year Ended Year Ended Year Ended
December 31, Since December 31, Since December 31, Since
1995 IPO 1995 IPO 1995 IPO
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Advisor Equity
Fund 24.23 16.95 24.44 17.61 29.43 20.67
Advisor Northwest
Fund 3.23 .52 2.57 .54 7.57 3.72
Advisor
Intermediate-
Term Treasury
Fund 10.51 8.68 10.17 9.04 15.16 12.16
Advisor U.S.
Government Fund 9.46 8.35 9.07 8.69 14.07 11.81
Advisor GNMA
Fund 9.80 7.15 9.43 7.45 14.43 10.58
Advisor Municipal
Bond Fund 18.63 14.50 18.62 15.08 23.62 18.16
Advisor
Intermediate-
Term Bond Fund 8.52 5.66 8.09 5.89 13.09 9.04
Advisor
Washington
Municipal Bond
Fund 14.06 10.27 13.76 10.61 18.87 13.80
</TABLE>
The total return is computed using the following formula:
T = ERV-P x 100
-----
P
19
<PAGE> 86
The average annual total return is computed using the following formula:
<TABLE>
<S> <C>
A = (n as the exponent of the square root of ERV/P - 1) x 100)
Where: T = total return
A = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
P = a hypothetical initial investment of $1,000
</TABLE>
In making the above calculations, all dividends and other distributions are
assumed to be reinvested at a Fund's NAV on the reinvestment date, and the
maximum sales charge for each Class is applied.
In addition to performance figures, the Funds may advertise their rankings as
calculated by independent rating services which monitor mutual funds'
performance (e.g. CDA Investment Technologies, Lipper Analytical Services,
Inc., Morningstar, Inc. and Wiesenberger Investment Companies Service). These
rankings may be among mutual funds with similar objectives and/or size or with
mutual funds in general. In addition, the Funds may advertise rankings which
are in part based upon subjective criteria developed by independent rating
services to measure relative performance. Such criteria may include methods to
account for levels of risk and potential tax liability, sales commissions and
expense and turnover ratios. These rating services may also base the measure
of relative performance on time periods deemed by them to be representative of
up and down markets.
The Funds may occasionally reproduce articles or portions of articles about the
Funds written by independent third parties such as financial writers, financial
planners and financial analysts, which have appeared in financial publications
of general circulation or financial newsletters (including but not limited to
Barrons, Business Week, Forbes, Fortune, Investor's Daily, Kiplinger's, Money
Magazine, Newsweek, Pensions & Investments, Time Magazine, U.S. News and World
Report and The Wall Street Journal).
Each Fund may also present in its advertisements and sales literature (i) a
biography or the credentials of its portfolio manager (including but not
limited to educational degrees, professional designations, work experience,
work responsibilities and outside interests), (ii) descriptions, including
quotations attributable to the portfolio manager, of the investment style used
to manage a Fund's portfolio, the research methodologies underlying securities
selection and a Fund's investment objective, (iii) current facts (including but
not limited to number of employees, number of shareholders, business
characteristics) about the Fund's investment adviser (SAM), the investment
adviser's parent company (SAFECO Corporation), or the SAFECO Family of Funds
and (iv) information about particular securities held in a Fund's portfolio.
20
<PAGE> 87
PRINCIPAL SHAREHOLDERS OF THE FUNDS
At March 31, 1996, SAFECO Corporation owned 500,000 shares each of the Advisor
Equity Fund, Advisor Northwest Fund, Advisor Intermediate Treasury Fund,
Advisor Government Fund and the Advisor GNMA Fund, which represented 87%, 97%,
97%, 100% and 99%, respectively, of each Fund's outstanding shares. SAFECO
Corporation is a holding company whose primary subsidiaries are engaged in the
insurance and related financial services businesses. SAFECO Corporation is a
Washington corporation with its principal place of business at SAFECO Plaza,
Seattle, Washington 98185.
At March 31, 1996, SAM owned 500,000 shares each of the Advisor Municipal Fund,
Advisor Intermediate Municipal Fund and Advisor Washington Municipal Fund,
which represented 94%, 99% and 96%, respectively, of each Fund's outstanding
shares. SAM is the investment advisor of each Fund and a wholly-owned
subsidiary of SAFECO Corporation.
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
Position Held with Principal Occupation
Name, Address and Age the Trust During Past 5 Years
--------------------- ----------------- --------------------
<S> <C> <C>
Boh A. Dickey* Chairman Executive Vice President, Chief Financial
SAFECO Plaza and Trustee Officer and Director of SAFECO
Seattle, Washington 98185 Corporation; Director of First SAFECO
(51) National Life Insurance Company of
New York. He has been an executive
officer of SAFECO Corporation and its
subsidiaries since 1982. See table under
"Investment Advisory and Other Services."
Barbara J. Dingfield Trustee Manager, Corporate Contributions and
Microsoft Corporation Community Programs for Microsoft
One Microsoft Way Corporation, Redmond, Washington, a
Redmond, Washington 98052 computer software company; Director and
(50) former Executive Vice President of Wright
Runstad & Co., Seattle, Washington, a real
estate development company; Director of
First SAFECO National Life Insurance
Company of New York;
</TABLE>
21
<PAGE> 88
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
Position Held with Principal Occupation
Name, Address and Age the Trust During Past 5 Years
--------------------- ----------------- --------------------
<S> <C> <C>
Richard W. Hubbard* Trustee Retired Vice President and Treasurer of
1270 NW Blakely Ct. the Trust and other SAFECO Trusts; retired
Seattle, Washington 98177 Senior Vice President and Treasurer of
(67) SAFECO Corporation; former President of
SAFECO Asset Management Company; Director
of First SAFECO National Life Insurance
Company of New York.
Richard E. Lundgren Trustee Director of Marketing and Customer
764 S. 293rd Street Relations, Building Materials
Federal Way, Washington 98032 Distribution, Weyerhaeuser Company,
(58) Tacoma, Washington; Director of First
SAFECO National Life Insurance Company of
New York.
L. D. McClean* Trustee Retired Assistant Secretary of SAFECO
7231 91st Avenue SE Corporation and its property and casualty
Mercer Island, WA 98040 and life insurance affiliates; Director of
(69) First SAFECO National Life Insurance
Company of New York; former President of
the SAFECO Mutual Funds; former Director
of SAFECO Asset Management Company, SAFECO
Securities, Inc. and SAFECO Services
Corporation.
Larry L. Pinnt Trustee Retired Vice President and Chief Financial
1600 Bell Plaza Officer of US WEST Communications,
Room 1802 Seattle, Washington; Director of Key Bank
Seattle, Washington of Washington; Director of University of
98191 Washington Medical Center, Seattle,
(61) Washington; Director of First SAFECO
National Life Insurance Company of New
York; Director of Cascade Natural Gas
Corporation, Seattle, Washington.
John W. Schneider Trustee President of Wallingford Group, Inc.,
1808 N 41st St. Seattle, Washington; former President of
Seattle, Washington 98103 Coast Hotels, Inc., Seattle, Washington;
(54) Director of First SAFECO National Life
Insurance Company of New York.
</TABLE>
22
<PAGE> 89
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
Position Held with Principal Occupation
Name, Address and Age the Trust During Past 5 Years
--------------------- ----------------- --------------------
<S> <C> <C>
David F. Hill President President of SAFECO Securities, Inc. and
SAFECO Plaza SAFECO Services Corporation; Senior Vice
Seattle, Washington 98185 President of SAFECO Asset Management
(47) Company. See table under "Investment
Advisory and Other Services."
Neal A. Fuller Vice President Vice President, Controller, Assistant
SAFECO Plaza Controller, Assistant Secretary and Treasurer of SAFECO
Seattle, Washington 98185 Secretary Securities, Inc. and SAFECO Services
(33) Corporation; Vice President, Controller,
Secretary and Treasurer of SAFECO Asset
Management Company. See Table under
"Investment Advisory and Other Services."
Ronald L. Spaulding Vice President Vice Chairman of SAFECO Asset Management
SAFECO Plaza Treasurer Company; Vice President and Treasurer of
Seattle, WA 98185 SAFECO Corporation; Director and Vice
(52) President of SAFECO Life Insurance
Company; former Senior Portfolio Manager
of SAFECO insurance companies' taxable
bond portfolios; former Portfolio Manager
for several SAFECO mutual funds.
See Table under "Investment Advisory and
Other Services."
</TABLE>
* Trustees who are interested persons as defined by the 1940 Act.
For the fiscal period ended December 31, 1995, the Trustees of the Trust not
employed by SAFECO Corporation or its affiliates, as a group, received $3,432
per Fund for their services as Trustees. The officers received no compensation
for their services as officers or, if applicable, as Trustees.
At March 31, 1996, the Trustees and officers of the Trust as a group owned less
than 1% of the outstanding shares of each Fund.
23
<PAGE> 90
COMPENSATION TABLE
<TABLE>
<CAPTION>
Pension or
Retirement Total Compensation
Aggregate Benefits Accrued Estimated Annual From Registrant and
Compensation As Part of Fund Benefits Upon Fund Complex Paid to
Trustee from Registrant Expenses Retirement Trustees
------- --------------- -------- ---------- --------
<S> <C> <C> <C> <C>
Barbara J.
Dingfield $4,643 $0 $0 $23,875
Richard E.
Lundgren $4,643 $0 $0 $23,875
L.D. McClean $4,443 $0 $0 $22,000
Larry L. Pinnt $4,643 $0 $0 $23,875
John W.
Schneider $4,643 $0 $0 $23,875
Boh A. Dickey $0 $0 $0 $0
Richard W. Hubbard $4,443 $0 $0 $26,900
</TABLE>
Currently, there is no pension, retirement, or other plan or any arrangement
pursuant to which Trustees or officers of the Trust are compensated by the
Trust. Each Trustee also serves as Trustee for six other registered open-end,
management investment companies that have, in the aggregate, twenty three
series companies managed by SAM.
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISORY SERVICES
SAM, SAFECO Securities, Inc. ("SAFECO Securities") and SAFECO Services
Corporation ("SAFECO Services") are wholly-owned subsidiaries of SAFECO
Corporation. SAFECO Securities is the principal underwriter of each Fund and
SAFECO Services is the transfer, dividend and distribution disbursement and
shareholder servicing agent of each Fund under agreements with the Trust.
24
<PAGE> 91
The following individuals have the following positions and offices with the
Trust, SAM, SAFECO Securities and SAFECO Services:
<TABLE>
<CAPTION>
SAFECO SAFECO
Name Trust SAM Securities Services
---- ----- --- ---------- --------
<S> <C> <C> <C> <C>
B. A. Dickey Chairman Chairman Director
Trustee Director
D. F. Hill President Senior Vice President President
President Director Director
Director Secretary Secretary
N. A. Fuller Vice President Vice President Vice President Vice President
Controller Controller Controller Controller
Assistant Secretary Assistant Assistant
Secretary Treasurer Secretary Secretary
Treasurer Treasurer
R.L. Spaulding Vice President Vice Chairman Director Director
Treasurer Director
S.C. Bauer President
Director
</TABLE>
Mr. Dickey is Executive Vice President, Chief Financial Officer and a director
of SAFECO Corporation and Mr. Spaulding is Treasurer of SAFECO Corporation.
Mssrs. Dickey and Spaulding are also directors of other SAFECO Corporation
subsidiaries.
In connection with its investment advisory contract with the Trust, SAM
provides, without cost, office space, equipment and facilities and personnel
necessary to perform executive, administrative, and clerical functions and pays
all salaries, expenses and fees of the officers, trustees and employees of the
Trust who are officers, directors and employees of SAM.
The Trust's Trust Instrument provides that the Trust will indemnify its
Trustees and its officers against liabilities and expenses reasonably incurred
in connection with litigation in which they may be involved because of their
offices with the Trust, unless it is adjudicated that they engaged in bad
faith, wilful misfeasance, gross negligence, or reckless disregard of the
duties involved in the conduct of their offices. In the case of settlement,
such indemnification will not be provided unless it has been determined -- by a
court or other body approving the settlement or other disposition, or by a
majority of disinterested Trustees, based upon a review of readily available
facts, or in a written opinion of independent counsel -- that such officers or
Trustees have not engaged in wilful misfeasance, bad faith, gross negligence,
or reckless disregard of their duties.
SAM also serves as the investment adviser for other investment companies in
addition to the Funds. Several of these investment companies have investment
objectives similar to those of certain Funds. It is therefore possible that
the same securities will be purchased for both a Fund and another investment
company advised by SAM. When two or more funds advised by SAM are
simultaneously engaged in the purchase or sale of the same security, the prices
and amounts will be allocated in accordance with a formula considered by the
officers of the funds involved to be equitable to each fund. In some cases
this system could have a detrimental effect on the price or value of the
security as far as
25
<PAGE> 92
a Fund is concerned. In other cases, however, the ability of a Fund to
participate in volume transactions will produce better executions and prices
for the Fund.
For the services and facilities furnished by SAM, each Fund has agreed to pay
an annual fee computed on the basis of the average market value of the net
assets of each Fund ascertained each business day and paid monthly in
accordance with the following schedules. The reduction in fees occurs only at
such time as the respective Fund's net assets reach the dollar amounts of the
break points and applies only to those assets which fall within the specified
range:
ADVISOR EQUITY AND ADVISOR NORTHWEST FUNDS
<TABLE>
<CAPTION>
NET ASSETS ANNUAL FEE
<S> <C>
For assets up to and including $500,000,000 .75 of 1%
For assets in excess of $500,000,000 and .65 of 1%
up to and including $1,000,000,000
For assets over $1,000,000,000 .55 of 1%
</TABLE>
ADVISOR INTERMEDIATE TREASURY, ADVISOR GOVERNMENT, ADVISOR GNMA,
ADVISOR MUNICIPAL, ADVISOR INTERMEDIATE MUNICIPAL AND
ADVISOR WASHINGTON MUNICIPAL FUNDS
<TABLE>
<CAPTION>
NET ASSETS ANNUAL FEE
<S> <C>
For assets up to and including $500,000,000 .60 of 1%
For assets in excess of $500,000,000 and .50 of 1%
up to and including $1,000,000,000
For assets over $1,000,000,000 .40 of 1%
</TABLE>
SAM shall reimburse each Fund for the amount by which a Fund's expenses in any
full fiscal year (excluding interest expense, taxes, brokerage expense,
distribution fees, certain expenses attributable to investing outside the
United States and extraordinary expenses) exceed the limits prescribed by any
state in which a Fund's shares are qualified for sale. Presently, the most
restrictive expense ratio limitation imposed by any such state is 2.5% of the
first $30 million of a Fund's average daily net assets, 2.0% of the next $70
million of such assets, and 1.5% of the remaining net assets. For the purpose
of determining whether a Fund is entitled to reimbursement, the expenses of the
Fund are calculated on a monthly basis. If a Fund is entitled to a
reimbursement, that month's advisory fee will be reduced or postponed, with any
adjustment made after the end of the fiscal year.
The following table states the total amount of compensation in the form of
advisory fees paid to SAM for the year ended December 31, 1995:
26
<PAGE> 93
Fees Paid to SAM
<TABLE>
<CAPTION>
(000s omitted)
Fiscal Period Ended
Fund December 31, 1995
- ---- ----------------
<S> <C>
Advisor Equity Fund $43
Advisor Northwest Fund $39
Advisor Intermediate-Term
Treasury Fund $32
Advisor U.S. Government Fund $30
Advisor GNMA Fund $30
Advisor Municipal Bond Fund $32
Advisor Intermediate-Term
Municipal Bond Fund $30
Advisor Washington Municipal
Bond Fund $32
</TABLE>
DISTRIBUTION ARRANGEMENTS. SAFECO Securities is the principal underwriter for
each Fund and acts as the distributor of the Class A, Class B and Class C
shares of each Fund under a Distribution Services Agreement with the Trust
dated September 20, 1994 that requires SAFECO Securities to use its best
efforts, consistent with its other businesses, to sell shares of the Funds.
Shares of the Funds are offered continuously.
Under separate plans of distribution pertaining to the Class A, Class B and
Class C shares of each Fund adopted by the Trust in the manner prescribed under
Rule 12b-1 under the 1940 Act (each a "Plan"), each Class pays fees described
in the Prospectus.
For the fiscal period ended December 31, 1995, the Funds paid (or accrued) the
following fees to SAFECO Securities under the Plans (in thousands):
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate Term U.S.
Equity Northwest Treasury Government
Fund Fund Fund Fund
-------------- --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Class A Service Fees $ 6 $ 6 $ 4 $ 4
Class B Service Fees $ 4 $ 4 $ 4 $ 4
Class B Distribution Fees $14 $13 $13 $13
Class C Service Fees $ 4 $ 4 $ 5 $ 5
</TABLE>
27
<PAGE> 94
<TABLE>
<S> <C> <C> <C> <C>
Class C Distribution Fees $14 $13 $13 $13
-------------- --------------- -------------------- ---------------
$42 $40 $39 $39
============== =============== ==================== ===============
</TABLE>
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate Term Washington
GNMA Municipal Municipal Municipal
Fund Bond Fund Bond Fund Bond Fund
-------------- --------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Class A Service Fees $ 4 $ 4 $ 4 $ 4
Class B Service Fees $ 5 $ 5 $ 4 $ 5
Class B Distribution Fees $13 $14 $13 $14
Class C Service Fees $ 4 $ 5 $ 5 $ 5
Class C Distribution Fees $13 $13 $13 $13
-------------- --------------- -------------------- ---------------
$39 $41 $39 $41
============== =============== ==================== ===============
</TABLE>
SAFECO Securities estimates that it and its affiliate, SAM, incurred
the following shareholder service-related and distribution-related expenses
with respect to the Funds during the fiscal year ended December 31, 1995 (in
thousands):
CLASS A
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate- U.S.
Equity Northwest Term Treasury Government
Fund Fund Fund Fund
------------------ --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) $ 1 $ 1 $ 1 $ 1
Commissions -- -- -- --
------------------ --------------- -------------------- ---------------
$19 $19 $19 $19
================== =============== ==================== ===============
</TABLE>
28
<PAGE> 95
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate- Washington
GNMA Municipal Term Municipal Municipal
Fund Bond Fund Bond Fund Bond Fund
---------------- ---------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) $ 1 $ 1 $ 1 $ 1
Commissions -- -- -- --
---------------- ---------------- -------------------- ---------------
$19 $19 $19 $19
================ ================ ==================== ===============
</TABLE>
CLASS B
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate- U.S.
Equity Northwest Term Treasury Government
Fund Fund Fund Fund
---------------- ---------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) $ 1 $ 1 $ 1 $ 1
Commissions $ 2 $ 1 -- --
---------------- ---------------- -------------------- ---------------
$21 $20 $19 $19
================ ================ ==================== ===============
</TABLE>
29
<PAGE> 96
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate- Washington
GNMA Municipal Term Municipal Municipal
Fund Bond Fund Bond Fund Bond Fund
-------------- --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) $ 1 $ 1 $ 1 $ 1
Commissions -- -- -- --
-------------- --------------- -------------------- ---------------
$19 $19 $19 $19
============== =============== ==================== ===============
</TABLE>
CLASS C
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor Intermediate- U.S.
Equity Northwest Term Treasury Government
Fund Fund Fund Fund
-------------- --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) N/A N/A N/A N/A
Commissions $ 3 -- $ 1 --
-------------- --------------- -------------------- ---------------
$21 $18 $19 $18
============== =============== ==================== ===============
</TABLE>
30
<PAGE> 97
<TABLE>
<CAPTION>
SAFECO SAFECO
SAFECO SAFECO Advisor Advisor
Advisor Advisor IntermediateTerm Washington
GNMA Municipal Municipal Municipal
Fund Bond Fund Bond Fund Bond Fund
-------------- --------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Marketing and Advertising $15 $15 $15 $15
Printing and Mailing of Prospectuses $ 3 $ 3 $ 3 $ 3
Compensation to dealers:
Trail (Service Fees) N/A N/A N/A N/A
Commissions -- -- -- --
-------------- --------------- -------------------- ---------------
$18 $18 $18 $18
============== =============== ==================== ===============
</TABLE>
Among other things, each Plan provides that (1) SAFECO Securities will submit
to the Trust's board of trustees at least quarterly, and the Trustees will
review, reports regarding all amounts expended under the Plan and the purposes
for which such expenditures were made, (2) the Plan will continue in effect so
long as it is approved at least annually and any material amendment thereto is
approved, by the trust's board of Trustees, including those Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or any agreement related to the
Plan, acting in person at a meeting called for that purpose, (3) payments by a
Fund under the Plan shall not be materially increased without the affirmative
vote of the holders of a majority of the outstanding voting securities of the
relevant Class of that Fund and (4) while the Plan remains in effect, the
selection and nomination of Trustees who are not "interested persons" of the
Trust shall be committed to the discretion of the Trustees who are not
"interested persons" of the Trust.
In reporting amounts expended under the Plans to the Trustees, SAFECO
Securities will allocate expenses attributable to the sale of each Class of
Fund shares to such Class based on the ratio of sales of shares of such Class
to the sales of all three Classes of shares. Expenses attributable to a
specific Class will be allocated to that Class.
In approving the adoption of each Plan, the Trustees determined that the
adoption was in the best interests of the Fund's shareholders. Each Plan also
was approved by SAFECO Corporation, the initial sole shareholder of the Advisor
Equity Fund and the Advisor Intermediate Treasury Fund, on September 27, 1994
and SAM, the initial sole shareholder of the Advisor Northwest Fund, the
Advisor Government Fund, the Advisor GNMA Fund, the Advisor Intermediate
Municipal Fund, and the Advisor Washington Municipal Fund on September 27,
1994.
In the event that a Plan is terminated or not continued with respect to the
Class A shares, Class B shares or Class C shares, (i) no fees would be owed by
a Fund to SAFECO Securities with respect to that class, and (ii) a Fund would
not be obligated to pay SAFECO Securities for any amounts expended under the
Plan not previously recovered by SAFECO Securities.
31
<PAGE> 98
The Plans comply with rules of the National Association of Securities Dealers,
Inc. which limit the annual asset-based sales charges and service fees that a
mutual fund may impose on a class of shares to .75% and .25%, respectively, of
the average annual net assets attributable to that class. The rules also limit
the aggregate of all front-end, deferred and asset-based sales charges imposed
with respect to a class of shares by a mutual fund that also charges a service
fee to 6.25% of cumulative gross sales of shares of that class, plus interest
at the prime rate plus 1% per annum.
CUSTODIAN AND INDEPENDENT AUDITORS
U.S. Bank of Washington, N.A., 1420 Fifth Avenue, Seattle, Washington 98101, is
the custodian of the securities, cash and other assets of each Fund under an
agreement with the Trust. Ernst & Young LLP, 999 Third Avenue, Suite 3500,
Seattle, Washington 98104, are the independent auditors which audit the
financial statements of the Trust.
TRANSFER, DIVIDEND AND DISTRIBUTION DISBURSING AND SHAREHOLDER SERVICING AGENT
SAFECO Services, SAFECO Plaza, Seattle, Washington 98185, is the transfer,
dividend and distribution disbursement and shareholder servicing agent for each
Fund under an agreement with the Trust. SAFECO Services is responsible for all
required transfer agent activity, including maintenance of records of each
Fund's shareholders, records of transactions involving each Fund's shares, and
the compilation, distribution, or reinvestment of income dividends or capital
gains distributions. SAFECO Services is paid a fee of $3.10 per each
shareholder transaction. The following table states the total amount of
compensation paid by each Fund to SAFECO Services for the fiscal year ended
December 31, 1995:
Fees Paid to SAFECO Services
<TABLE>
<CAPTION>
Fiscal Period Ended
Fund December 31, 1995
- ---- -----------------
<S> <C>
Advisor Equity $422
Advisor Northwest $360
Advisor Intermediate-
Term Treasury $380
Advisor Government $225
Advisor GNMA $330
Advisor Municipal $275
Advisor Intermediate
Municipal Bond $250
Advisor Washington
Municipal Bond $420
</TABLE>
BROKERAGE PRACTICES
SAM places orders for the purchase or sale of each Fund's portfolio securities.
In deciding which broker to use in a given transaction, SAM uses the following
criteria:
32
<PAGE> 99
(1) Which broker gives the best execution (i.e., which broker is able to
trade the securities in the size and at the price desired and on a
timely basis);
(2) Whether the broker is known to SAM as being reputable;
(3) Whether the broker has sold shares of the Funds; and
(4) All other things being equal, which broker has provided useful
research services to SAM.
Such research services as are furnished to SAM during the year, (e.g., written
reports analyzing economic and financial characteristics of industries and
companies, telephone conversations between brokerage security analysts and
members of SAM's staff and personal visits by such analysts and brokerage
strategists and economists to SAM's office) are used by SAM to advise all of
its clients including the Funds, but not all such research services furnished
to SAM are used by it to advise the Funds. SAM will not pay excess commissions
or mark-ups to any broker or dealer for research services or for any other
reason.
REDEMPTION IN KIND
If the Trust concludes that cash payment upon redemption to a shareholder would
be prejudicial to the best interest of the other shareholders of a Fund, a
portion of the payment may be made in kind. The Trust has elected to be
governed by Rule 18(f)(1) under the 1940 Act, pursuant to which the Trust must
redeem shares tendered by a shareholder solely in cash up to the lesser of
$250,000 or 1% of the net asset value of a Fund during any 90-day period. Any
shares tendered by the shareholder in excess of the above-mentioned limit may
be redeemed through distribution of a Fund's assets. Any securities or other
property so distributed in kind shall be valued by the same method as is used
in computing NAV. Distributions in kind will be made in readily marketable
securities unless the investor elects otherwise. Investors may incur brokerage
costs in disposing of securities received in such a distribution in kind.
FINANCIAL STATEMENTS
The following financial statement and the report thereon of Ernst & Young LLP,
independent auditors, are incorporated herein by reference to the Trust's
Annual Report for the year ended December 31, 1995:
Portfolio of Investments as of December 31, 1995
Statement of Assets and Liabilities as of December 31, 1995
Statement of Operations for the year ended December 31, 1995
Statement of Changes in Net Assets for the period from September 30,
1994 (commencement of operations) through December 31,
1994, and the year ended December 31, 1995
Notes to the Financial Statements
A copy of the Trust's Annual Report accompanies this Statement of Additional
Information. Additional copies may be obtained by calling SAFECO Services at
1-800-426-6730 nationwide or 206-545-5530 in Seattle or by writing to the
address on the Prospectus cover.
33
<PAGE> 100
DESCRIPTION OF PREFERRED STOCK RATINGS
Generally, a preferred stock rating is an assessment of the capacity and
willingness of an issuer to pay preferred stock dividends. A preferred stock
rating differs from a bond rating since it is assigned to an equity issue which
is different from, and subordinated to, a debt issue.
Excerpts from the description by Moody's Investors Service, Inc. ("Moody's") of
its preferred stock ratings:
aaa - Top-quality preferred stock. This rating indicates good asset protection
and the least risk of dividend impairment within the universe of preferred
stocks.
aa - High-grade preferred stock. This rating indicates that there is a
reasonable assurance that earnings and asset protection will remain relatively
well maintained in the foreseeable future.
a - Upper-medium grade preferred stock. While risks are judged to be
somewhat greater than in the "aaa" and "aa" classifications, earnings and asset
protections are, nevertheless, expected to be maintained at adequate levels.
baa - Medium grade preferred stock, neither highly protected nor poorly
secured. Earnings and asset protection appear adequate at present but may be
questionable over any great length of time.
ba - Considered to have speculative elements and its future cannot be
considered well assured. Earnings and asset protection may be very moderate
and not well safeguarded during adverse periods. Uncertainty of position
characterizes preferred stocks in this class.
b - Generally lacks the characteristics of a desirable investment. Assurance
of dividend payments and maintenance of other terms of the issue over any long
period of time may be small.
caa - Likely to be in arrears on dividend payments. This rating designation
does not purport to indicate the future status of payments.
ca - Speculative in a high degree and is likely to be in arrears on dividends
with little likelihood of eventual payments.
c - Lowest rated class of preferred or preference stock. Issues so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.
34
<PAGE> 101
Excerpts from the description by Standard & Poor's Ratings Group ("S&P") of its
preferred stock ratings:
AAA - The highest rating that may be assigned by S&P to a preferred stock issue
and indicates an extremely strong capacity to pay the preferred stock
obligations.
AA - Qualifies as a high-quality fixed-income security. The capacity to pay
preferred stock obligations is very strong, although not as overwhelming as for
issues rated "AAA."
A - Backed by a sound capacity to pay the preferred stock obligations,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB - Backed by an adequate capacity to pay the preferred stock obligations.
Whereas it normally exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to make payments for a preferred stock in this category than for
issues in the "A" category.
BB, B, CCC - Preferred stock rated "BB", "B", and "CCC" are regarded, on
balance, as predominately speculative with respect to the issuer's capacity to
pay preferred stock obligations. "BB" indicates the lowest degree of
speculation and "CCC" the highest degree of speculation. While such issues
will likely have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to adverse
conditions.
CC - The rating "CC" is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments but that is currently paying.
C - A preferred stock rated "C" is a non-paying issue.
D - A preferred stock rated "D" is a non-paying issue with issuer in default on
debt instruments.
NR indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy.
Plus (+) or Minus (-) To provide more detailed indications of preferred stock
quality, the ratings from "AA" to "CCC" may be modified by the addition of a
plus or minus sign to show relative standing within the major rating
categories.
35
<PAGE> 102
SAFECO ADVISOR SERIES TRUST
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) The following financial statements for each series of Registrant for the
fiscal year ending December 31, 1995 and the report thereon of Ernst &
Young LLP, independent auditors, are incorporated in the Statement of
Additional Information by reference to Registrant's Annual Report which
was filed with the SEC on February 29, 1996:
Portfolio of Investments as of December 31, 1995
Statement of Assets and Liabilities as of December 31, 1995
Statement of Operations for the Year ended December 31, 1995
Statement of Changes in Net Assets for the Period September 30,
1994 (commencement of operations) through December 31, 1994 and
the Year ended December 31, 1995
Notes to the Financial Statements
Financial Statements from the Registrant's Annual Report are filed as
Exhibit 12.
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------- ----------- ----
<S> <C> <C>
(27.1-24) Financial Data Schedules
(1) Trust Instrument/Certificate of Trust *
(2) Bylaws *
(3) Voting Trust Agreement None
(4) Form of Share Certificate *
(5) Investment Advisory and Management *
Contract
(6)(i) Distribution Agreement *
(ii) Selling Agreement
(7) Bonus, profit sharing or pension plan None
(8) Custody Agreement *
(9) Transfer Agent Agreement *
(10) Opinion of Counsel *
(99.11) Consent of Independent Auditors
(99.12) Registrant's Annual Report for the
Fiscal Year Ended December 31, 1995+
including financial statements
(13) Share Purchase Agreement *
</TABLE>
<PAGE> 103
<TABLE>
<S> <C> <C>
(14) Prototype 401(k)/Profit Sharing Plan *
(15) 12b-1 Plans *
(99.16) Calculation of Performance
Information
</TABLE>
* Filed as an exhibit to Post-Effective Amendment No. 1 dated March 31, 1995
and filed with the SEC on March 31, 1995.
+ Registrant's Annual Report was filed with the SEC on or about February 29,
1996. The Report contains the Financial Statements incorporated by reference
in Registrant's Statement of Additional Information.
Item 25. Persons Controlled by or Under Common Control With Registrant
SAFECO Corporation, a Washington corporation, owns 100% of SAFECO Asset
Management Company (SAM), SAFECO Services Corporation (SAFECO Services) and
SAFECO Securities, Inc. (SAFECO Securities), each a Washington corporation.
SAM is the investment advisor, SAFECO Services is the transfer agent and SAFECO
Securities is the principal underwriter for each of the SAFECO Mutual Funds.
The SAFECO Mutual Funds consist of seven Delaware business trusts: SAFECO
Common Stock Trust, SAFECO Taxable Bond Trust, SAFECO Tax-Exempt Bond Trust,
SAFECO Advisor Series Trust, SAFECO Money Market Trust, SAFECO Institutional
Series Trust and SAFECO Resource Series Trust. The SAFECO Common Stock Trust
consists of seven mutual funds: SAFECO Growth Fund, SAFECO Equity Fund, SAFECO
Income Fund, SAFECO Northwest Fund, SAFECO International Stock Fund, SAFECO
Balanced Fund and SAFECO Small Company Stock Fund. The SAFECO Taxable Bond
Trust consists of three mutual funds: SAFECO Intermediate-Term U.S. Treasury
Fund, SAFECO GNMA Fund and SAFECO High-Yield Bond Fund. The SAFECO Tax-Exempt
Bond Trust consists of five mutual funds: SAFECO Intermediate-Term Municipal
Bond Fund, SAFECO Insured Municipal Bond Fund, SAFECO Municipal Bond Fund,
SAFECO California Tax-Free Income Fund and SAFECO Washington State Municipal
Bond Fund. The SAFECO Advisor Series Trust consists of eight mutual funds:
Advisor Equity Fund, Advisor Northwest Fund, Advisor Intermediate-Term Treasury
Fund, Advisor GNMA Fund, Advisor U.S. Government Fund, Advisor Municipal Bond
Fund, Advisor Intermediate-Term Municipal Bond Fund and Advisor Washington
Municipal Bond Fund. The SAFECO Money Market Fund consists of two mutual
funds: SAFECO Money Market Fund and SAFECO Tax-Free Money Market Fund. The
SAFECO Institutional Series Trust consists of one mutual fund: Fixed-Income
Portfolio. The SAFECO Resource Series Trust consists of five mutual funds:
Equity Portfolio, Growth Portfolio, Northwest Portfolio, Bond Portfolio and
Money Market Portfolio.
SAFECO Corporation, a Washington Corporation, owns 100% of the following
Washington corporations: SAFECO Insurance Company of America, General Insurance
Company of America, First National Insurance Company of America, SAFECO Life
Insurance Company of America, SAFECO Assigned Benefits Service Company, SAFECO
Administrative Services, Inc., SAFECO Properties Inc., SAFECO Credit Company,
Inc., SAFECO Asset Management Company, SAFECO Securities, Inc., SAFECO Services
Corporation, SAFECO Trust Company and General America Corporation. SAFECO
Corporation owns 100% of SAFECO National Insurance Company, a Missouri
corporation, and SAFECO Insurance Company of Illinois, an Illinois corporation.
SAFECO Corporation owns 20% of Agena, Inc., a Washington corporation. SAFECO
Insurance Company of America owns 100% of SAFECO Management Corp., a New York
corporation, and SAFECO Surplus Lines Insurance Company, a Washington
corporation. SAFECO Life Insurance Company owns 100% of SAFECO National Life
Insurance Company, a Washington corporation, and First SAFECO National Life
Insurance Company of New York, a New York corporation. SAFECO Administrative
Services, Inc. owns 100% of Employee Benefit Claims of Wisconsin, Inc. and
Wisconsin Pension and Group Services, Inc., each a Wisconsin corporation.
General America Corporation owns 100% of COMAV Managers, Inc., an Illinois
<PAGE> 104
corporation, F.B. Beattie & Co., Inc., a Washington corporation, General
America Corp. of Texas, a Texas corporation, Talbot Financial Corporation, a
Washington corporation and SAFECO Select Insurance Services, Inc., a California
corporation. F.B. Beattie & Co., Inc. owns 100% of F.B. Beattie Insurance
Services, Inc., a California corporation. General America Corp. of Texas is
Attorney-in-fact for SAFECO Lloyds Insurance Company, a Texas corporation.
Talbot Financial Corporation owns 100% of Talbot Agency, Inc., a New Mexico
corporation. Talbot Agency, Inc. owns 100% of PNMR Securities, Inc., a
Washington corporation. SAFECO Properties Inc. owns 100% of the following,
each a Washington corporation: RIA Development, Inc., SAFECARE Company, Inc.
and Winmar Company, Inc. SAFECARE Company, Inc. owns 100% of the following,
each a Washington corporation: S.C. Bellevue, Inc., S.C. Everett, Inc., S.C.
Marysville, Inc., S.C. Simi Valley, Inc. and S.C. Vancouver, Inc. SAFECARE
Company, Inc. owns 50% of Lifeguard Ventures, Inc., a California corporation.
S.C. Simi Valley, Inc. owns 100% of Simi Valley Hospital, Inc., a Washington
corporation. Winmar Company, Inc. owns 50% of C-W Properties, Inc., a
Washington corporation. Winmar Company, Inc. owns 100% of the following:
Barton Street Corp., Gem State Investors, Inc., Kitsap Mall, Inc., WNY
Development, Inc., Winmar Cascade, Inc., Winmar Metro, Inc., Winmar Northwest,
Inc., Winmar Redmond, Inc. and Winmar of Kitsap, Inc., each a Washington
corporation, and Capitol Court Corp., a Wisconsin corporation, SAFECO
Properties of Boise, Inc., an Idaho corporation, SCIT, Inc., a Massachusetts
corporation, Valley Fair Shopping Centers, Inc., a Delaware corporation, WDI
Golf Club, Inc., a California corporation, Winmar Oregon, Inc., an Oregon
corporation, Winmar of Texas, Inc., a Texas corporation, Winmar of Wisconsin,
Inc., a Wisconsin corporation, and Winmar of the Desert, Inc., a California
corporation. Winmar Oregon, Inc. owns 100% of the following, each an Oregon
corporation: North Coast Management, Inc., Pacific Surfside Corp., Winmar of
Jantzen Beach, Inc. and W-P Development, Inc., and 100% of the following, each
a Washington corporation: Washington Square, Inc. and Winmar Pacific, Inc.
Item 26. Number of Holders of Securities
At December 31, 1995, Registrant had 60, 33, 14, 6, 10, 9, 8, and 12
shareholders of record in its Advisor Equity Fund, Advisor Northwest Fund,
Advisor Intermediate-Term Treasury Fund, Advisor U.S. Government Fund, Advisor
GNMA Fund, Advisor Municipal Bond Fund, Advisor Intermediate-Term Municipal
Bond Fund and Advisor Washington Municipal Bond Fund, respectively.
Item 27. Indemnification
Under the Trust Instrument of the Registrant, the Registrant's trustees,
officers, employees and agents are indemnified against certain liabilities,
subject to specified conditions and limitations.
Under the indemnification provisions in the Registrant's Trust Instrument and
subject to the limitations described in the paragraph below, every person who
is, or has been, a trustee, officer, employee or agent of the Registrant shall
be indemnified by the Registrant or the appropriate series of the Registrant to
the fullest extent permitted by law against liability and against all expenses
reasonably incurred or paid by him or her in connection with any claim, action,
suit or proceeding in which he or she becomes involved as a party or otherwise
by virtue of his or her being, or having been, a trustee, officer, employee or
agent and against amounts paid or incurred by him or her in the settlement
thereof. As used in this paragraph, "claim," "action," "suit" or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened, and the words, "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgements, amounts paid in settlement, fines, penalties and other liabilities.
No indemnification will be provided to a trustee, officer, employee or agent:
(i) who shall have been adjudicated by a court or body before which the
<PAGE> 105
proceeding was brought (a) to be liable to the Registrant or its shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office, or (b)
not to have acted in good faith in the reasonable belief that his or her action
was in the best interest of the Registrant; or (ii) in the event of settlement,
unless there has been a determination that such trustee, officer, employee or
agent did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office,
(a) by the court or other body approving the settlement, (b) by the vote of at
least a majority of a quorum of those trustees who are neither interested
persons, as that term is defined by the Investment Company Act of 1940, of the
Registrant nor are the parties to the proceeding based upon a review of readily
available facts (as opposed to a full trial type inquiry), or (c) by written
opinion of independent legal counsel based upon a review of readily available
facts (as opposed to a full trial type inquiry).
To the maximum extent permitted by applicable law, expenses incurred in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described above may be paid by the
Registrant or applicable series from time to time prior to final disposition
thereof upon receipt of an undertaking by or on behalf of such trustee,
officer, employee or agent that such amount will be paid over by him or her to
the Registrant or the applicable Series if it is ultimately determined that he
or she is not entitled to indemnification under the Trust Instrument; provided,
however, that either (i) such trustee, officer, employee or agent shall have
provided appropriate security for such undertaking, (ii) the Registrant is
insured against such losses arising out of such advance payments or (iii)
either a majority of the trustees who are neither interested persons, as that
term is defined by the Investment Company Act of 1940, of the Registrant nor
parties to the proceeding, or independent legal counsel in a written opinion,
shall have determined, based on a review of readily available facts (as opposed
to full trial type inquiry), that there is reason to believe that such trustee,
officer, employee or agent, will not be disqualified from indemnification under
Registrant's Trust Instrument.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 ("1933 Act") may be permitted to trustees, officers, employees and agents
of the Registrant pursuant to such provisions of the Trust Instrument or
statutes or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer,
employee or agent of the Registrant in the successful defense of any such
action, suit or proceeding) is asserted by such trustee, officer, employee or
agent in connection with the shares of the Registrant, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in said Act
and will be governed by the final adjudication of such issue.
Under an agreement with its distributor ("Distribution Agreement"), Registrant
has agreed to indemnify, defend and hold the distributor, the distributor's
several directors, officers and employees, and any person who controls the
distributor within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
distributor, its directors, officers or employees, or any such controlling
person may incur, under the 1933 Act or under common law or otherwise, arising
out of or based upon any alleged untrue statement of a material fact contained
in the Registration
<PAGE> 106
Statement or arising out of or based upon any alleged omission to state a
material fact required to be stated or necessary to make the Registration
Statement not misleading, provided that in no event shall anything contained in
the Distribution Agreement be construed so as to protect the distributor
against any liability to the Registrant or its shareholders to which the
distributor would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under the Distribution
Agreement, and further provided that the Registrant shall not indemnify the
distributor for conduct set forth in this subparagraph.
Under an agreement with its transfer agent, Registrant has agreed to indemnify
and hold the transfer agent harmless against any losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and expenses)
resulting from: (1) any claim, demand, action or suit brought by any person
other than the Registrant, including by a shareholder, which names the transfer
agent and/or the Registrant as a party, and is not based on and does not result
from the transfer agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with the
transfer agent's performance hereunder; or (2) any claim, demand, action or
suit (except to the extent contributed to by the transfer agent's willful
misfeasance, bad faith or negligence or reckless disregard of duties) which
results from the negligence of the Registrant, or from the transfer agent
acting upon any instruction(s) reasonably believed by it to have been executed
or communicated by any person duly authorized by the Registrant, or as a result
of the transfer agent acting in reliance upon advice reasonably believed by the
transfer agent to have been given by counsel for the Registrant, or as a result
of the transfer agent acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
The investment adviser to the Registrant, SAM, serves as an adviser to: (a)
thirty-one series (portfolios) of the Registrant and of seven registered
investment companies, including five series of an investment company that
serves as the investment vehicle for variable insurance products, and (b) a
number of pension funds not affiliated with SAFECO Corporation or its
affiliates. The directors and officers of SAM serve in similar capacities with
SAFECO Corporation or its affiliates. The information set forth under
"Investment Advisory and Other Services" in the Registrant's Statement of
Additional Information is incorporated herein by reference.
Item 29. Principal Underwriters
(a) SAFECO Securities, Inc., the principal underwriter for Registrant,
acts also as the principal underwriter for each series of SAFECO
Common Stock Trust, SAFECO Tax-Exempt Bond Trust, and SAFECO Taxable
Bond Trust, SAFECO Money Market Trust, SAFECO Institutional Series
Trust and SAFECO Resource Series Trust. In addition SAFECO Securities
is the principal underwriter for SAFECO Separate Account C, SAFECO
Variable Account B and SAFECO Separate Account SL, all of which are
variable insurance products.
(b) The information set forth under "Investment Advisory and Other
Services" of the Registrant's Statement of Additional Information is
incorporated herein by reference.
Item 30. Location of Accounts and Records
<PAGE> 107
U.S. Bank of Washington, N.A., 1420 Fifth Avenue, Seattle, Washington 98101
will maintain physical possession of the accounts, books and documents of the
Registrant relating to its activities as custodian of the Registrant. SAFECO
Asset Management Company, SAFECO Plaza, Seattle, Washington 98185, will
maintain physical possession of all other accounts, books or documents of the
Registrant required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the rules promulgated thereunder.
Item 31. Management Services
Inapplicable.
Item 32. Undertakings
Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual report to shareholders, upon
request and without charge.
<PAGE> 108
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereto duly
authorized, in the City of Seattle, and State of Washington on the ____ day of
April, 1996.
SAFECO ADVISOR SERIES TRUST
By /S/ DAVID F. HILL
-------------------------------
David F. Hill, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
President
/S/ DAVID F. HILL Principal Executive Officer _________
- -----------------
David F. Hill
Vice President
RONALD L. SPAULDING* and Treasurer _________
- -----------------------
Ronald L. Spaulding
Vice President
Controller
NEAL A FULLER* Assistant Secretary _________
- -----------------------
Neal A. Fuller (Principal Financial Officer)
/S/ BOH A. DICKEY Chairman and Trustee _________
- -----------------
Boh A. Dickey
BARBARA J. DINGFIELD* Trustee _________
- ----------------------------
Barbara J. Dingfield
RICHARD W. HUBBARD* Trustee _________
- -----------------------
Richard W. Hubbard
RICHARD E. LUNDGREN* Trustee _________
- -----------------------
Richard E. Lundgren
L.D. MCCLEAN* Trustee _________
- -------------------------
L.D. McClean
LARRY L. PINNT* Trustee _________
- -------------------------
Larry L. Pinnt
JOHN W. SCHNEIDER* Trustee _________
- -------------------------
John W. Schneider
*By /S/ BOH A. DICKEY
-----------------
Boh A. Dickey
Attorney-in-Fact
*By /S/ DAVID F. HILL
-----------------
David F. Hill
Attorney-in-Fact
</TABLE>
<PAGE> 109
POWER OF ATTORNEY
SAFECO ADVISOR SERIES TRUST, a Delaware business trust (the "Trust"), and each
of its undersigned officers and trustees, hereby nominates, constitutes and
appoints Boh A. Dickey and David F. Hill (with full power to each of them to
act alone) its/his/her true and lawful attorney-in-fact and agent, for
it/him/her and on its/his/her behalf and in its/his/her name, place and stead
in any and all capacities, to make, execute and sign any and all amendments to
the Trust's registration statement on Form N-1A under the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as amended, as well
as any and all registration statements on Form N-4, and to file with the
Securities and Exchange Commission and any other regulatory authority having
jurisdiction over the offer and sale of shares of beneficial interest of the
Trust, any such amendment or registration statement and any and all supplements
thereto or to any prospectus or statement of additional information forming a
part of the registration statement, as well as any and all exhibits and other
documents necessary or desirable to the amendment or supplement process,
granting to such attorneys and each of them, full power and authority to do and
perform each and every act requisite and necessary and/or appropriate as fully
and with all intents and purposes as the Trust itself and the undersigned
officers and trustees themselves might or could do.
IN WITNESS WHEREOF, SAFECO ADVISOR SERIES TRUST has caused this power of
attorney to be executed in its name by its President and attested by its
Assistant Secretary, and the undersigned officers and trustees have each
executed such power of attorney, on this 15th day of January, 1995.
SAFECO ADVISOR
SERIES TRUST
By:/S/ DAVID F. HILL
-----------------------
David F. Hill
President
ATTEST:
/S/ NEAL A. FULLER
- ------------------
Neal A. Fuller
Assistant Secretary
(Signatures Continue on Next Page)
<PAGE> 110
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
President
/S/ DAVID F. HILL Principal Executive Officer
- -----------------
David F. Hill
Vice President
/S/ RONALD L. SPAULDING And Treasurer
- -----------------------
Ronald L. Spaulding
Vice President
/S/ NEAL A. FULLER Controller
- ------------------ Assistant Secretary
Neal A. Fuller (Principal Financial Officer)
/S/ BOH A. DICKEY Chairman and Trustee
- -----------------
Boh A. Dickey
/S/ BARBARA J. DINGFIELD Trustee
- ------------------------
Barbara J. Dingfield
/S/ RICHARD W. HUBBARD Trustee
- ----------------------
Richard W. Hubbard
/S/ RICHARD E. LUNDGREN Trustee
- -----------------------
Richard E. Lundgren
/S/ L.D. MCCLEAN Trustee
- ----------------
L. D. McClean
/S/ LARRY L. PINNT Trustee
- ------------------
Larry L. Pinnt
/S/ JOHN W. SCHNEIDER Trustee
- ---------------------
John W. Schneider
</TABLE>
<PAGE> 111
Registration Nos. 811-8466
33-79978
=============================================================================
EXHIBITS
to
FORM N-1A
REGISTRATION STATEMENT
POST-EFFECTIVE AMENDMENT NO. 2
Under
The Securities Act of 1933
and
POST-EFFECTIVE AMENDMENT NO. 3
Under
The Investment Company Act of 1940
---------
SAFECO Advisor Series Trust
(Exact Name of Registrant as Specified in Charter)
SAFECO Plaza
Seattle, Washington 98185
(Address of Principal Executive Offices)
206-545-5269
(Registrant's Telephone Number, including Area Code)
=============================================================================
<PAGE> 112
SAFECO ADVISOR SERIES TRUST
Form N-1A
Registration Statement
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------- ----------- ----
<S> <C> <C>
(27.1-23) Financial Data Schedules
(99.11) Consent of Independent Auditors
(99.12) Registrant's Annual Report for the Year Ended
December 31, 1995+ including Financial Statements
(99.16) Calculation of Performance Information
</TABLE>
+ Registrant's Annual Report was filed with the SEC on or about
February 29, 1996.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 1
<NAME> SAFECO ADVISOR EQUITY - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 6,622
<INVESTMENTS-AT-VALUE> 7,305
<RECEIVABLES> 60
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 7,387
<PAYABLE-FOR-SECURITIES> 239
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 660
<TOTAL-LIABILITIES> 899
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,804
<SHARES-COMMON-STOCK> 572
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 683
<NET-ASSETS> 6,488
<DIVIDEND-INCOME> 163
<INTEREST-INCOME> 18
<OTHER-INCOME> 0
<EXPENSES-NET> 124
<NET-INVESTMENT-INCOME> 57
<REALIZED-GAINS-CURRENT> 678
<APPREC-INCREASE-CURRENT> 802
<NET-CHANGE-FROM-OPS> 1,537
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (57)
<DISTRIBUTIONS-OF-GAINS> (677)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 1,596
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 43
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148
<AVERAGE-NET-ASSETS> 5,922
<PER-SHARE-NAV-BEGIN> 9.76
<PER-SHARE-NII> 0.16
<PER-SHARE-GAIN-APPREC> 2.80
<PER-SHARE-DIVIDEND> (0.16)
<PER-SHARE-DISTRIBUTIONS> (1.21)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.35
<EXPENSE-RATIO> 1.62
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 2
<NAME> SAFECO ADVISOR EQUITY - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 6,622
<INVESTMENTS-AT-VALUE> 7,305
<RECEIVABLES> 60
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 7,387
<PAYABLE-FOR-SECURITIES> 239
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 660
<TOTAL-LIABILITIES> 899
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,804
<SHARES-COMMON-STOCK> 572
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 683
<NET-ASSETS> 6,488
<DIVIDEND-INCOME> 163
<INTEREST-INCOME> 18
<OTHER-INCOME> 0
<EXPENSES-NET> 124
<NET-INVESTMENT-INCOME> 57
<REALIZED-GAINS-CURRENT> 678
<APPREC-INCREASE-CURRENT> 802
<NET-CHANGE-FROM-OPS> 1,537
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (57)
<DISTRIBUTIONS-OF-GAINS> (677)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 1,596
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 43
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148
<AVERAGE-NET-ASSETS> 5,922
<PER-SHARE-NAV-BEGIN> 9.76
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 2.80
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (1.21)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.35
<EXPENSE-RATIO> 2.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 3
<NAME> SAFECO ADVISOR EQUITY - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 6,622
<INVESTMENTS-AT-VALUE> 7,305
<RECEIVABLES> 60
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 7,387
<PAYABLE-FOR-SECURITIES> 239
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 660
<TOTAL-LIABILITIES> 899
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,804
<SHARES-COMMON-STOCK> 572
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 683
<NET-ASSETS> 6,488
<DIVIDEND-INCOME> 163
<INTEREST-INCOME> 18
<OTHER-INCOME> 0
<EXPENSES-NET> 124
<NET-INVESTMENT-INCOME> 57
<REALIZED-GAINS-CURRENT> 678
<APPREC-INCREASE-CURRENT> 802
<NET-CHANGE-FROM-OPS> 1,537
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (57)
<DISTRIBUTIONS-OF-GAINS> (677)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 1,596
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 43
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148
<AVERAGE-NET-ASSETS> 5,922
<PER-SHARE-NAV-BEGIN> 9.76
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 2.79
<PER-SHARE-DIVIDEND> (0.08)
<PER-SHARE-DISTRIBUTIONS> (1.21)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.34
<EXPENSE-RATIO> 2.37
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 4
<NAME> SAFECO ADVISOR NORTHWEST - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,281
<INVESTMENTS-AT-VALUE> 5,442
<RECEIVABLES> 59
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,523
<PAYABLE-FOR-SECURITIES> 54
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 134
<TOTAL-LIABILITIES> 188
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,174
<SHARES-COMMON-STOCK> 517
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 161
<NET-ASSETS> 5,335
<DIVIDEND-INCOME> 44
<INTEREST-INCOME> 14
<OTHER-INCOME> 0
<EXPENSES-NET> 107
<NET-INVESTMENT-INCOME> (49)
<REALIZED-GAINS-CURRENT> 145
<APPREC-INCREASE-CURRENT> 283
<NET-CHANGE-FROM-OPS> 379
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (96)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 462
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 39
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130
<AVERAGE-NET-ASSETS> 5,365
<PER-SHARE-NAV-BEGIN> 9.75
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> 0.86
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.38
<EXPENSE-RATIO> 1.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 5
<NAME> SAFECO ADVISOR NORTHWEST - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,281
<INVESTMENTS-AT-VALUE> 5,442
<RECEIVABLES> 59
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,523
<PAYABLE-FOR-SECURITIES> 54
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 134
<TOTAL-LIABILITIES> 188
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,174
<SHARES-COMMON-STOCK> 517
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 161
<NET-ASSETS> 5,335
<DIVIDEND-INCOME> 44
<INTEREST-INCOME> 14
<OTHER-INCOME> 0
<EXPENSES-NET> 107
<NET-INVESTMENT-INCOME> (49)
<REALIZED-GAINS-CURRENT> 145
<APPREC-INCREASE-CURRENT> 283
<NET-CHANGE-FROM-OPS> 379
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (96)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 462
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 39
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 130
<AVERAGE-NET-ASSETS> 5,365
<PER-SHARE-NAV-BEGIN> 9.73
<PER-SHARE-NII> (0.12)
<PER-SHARE-GAIN-APPREC> 0.86
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.19)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.28
<EXPENSE-RATIO> 2.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 6
<NAME> SAFECO ADVISOR INTERMEDIATE-TERM TREASURY - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,206
<INVESTMENTS-AT-VALUE> 5,615
<RECEIVABLES> 96
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,733
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141
<TOTAL-LIABILITIES> 141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,183
<SHARES-COMMON-STOCK> 518
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 409
<NET-ASSETS> 5,592
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 340
<OTHER-INCOME> 0
<EXPENSES-NET> 96
<NET-INVESTMENT-INCOME> 244
<REALIZED-GAINS-CURRENT> 86
<APPREC-INCREASE-CURRENT> 443
<NET-CHANGE-FROM-OPS> 773
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (244)
<DISTRIBUTIONS-OF-GAINS> (84)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23
<NUMBER-OF-SHARES-REDEEMED> (7)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 618
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120
<AVERAGE-NET-ASSETS> 5,323
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 0.53
<PER-SHARE-GAIN-APPREC> 1.02
<PER-SHARE-DIVIDEND> (0.53)
<PER-SHARE-DISTRIBUTIONS> (0.16)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.79
<EXPENSE-RATIO> 1.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 7
<NAME> SAFECO ADVISOR INTERMEDIATE-TERM TREASURY - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,206
<INVESTMENTS-AT-VALUE> 5,615
<RECEIVABLES> 96
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,733
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141
<TOTAL-LIABILITIES> 141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,183
<SHARES-COMMON-STOCK> 518
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 409
<NET-ASSETS> 5,592
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 340
<OTHER-INCOME> 0
<EXPENSES-NET> 96
<NET-INVESTMENT-INCOME> 244
<REALIZED-GAINS-CURRENT> 86
<APPREC-INCREASE-CURRENT> 443
<NET-CHANGE-FROM-OPS> 773
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (244)
<DISTRIBUTIONS-OF-GAINS> (84)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23
<NUMBER-OF-SHARES-REDEEMED> (7)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 618
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120
<AVERAGE-NET-ASSETS> 5,323
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 0.45
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> (0.45)
<PER-SHARE-DISTRIBUTIONS> (0.16)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.80
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 8
<NAME> SAFECO ADVISOR INTERMEDIATE-TERM TREASURY - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,206
<INVESTMENTS-AT-VALUE> 5,615
<RECEIVABLES> 96
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,733
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141
<TOTAL-LIABILITIES> 141
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,183
<SHARES-COMMON-STOCK> 518
<SHARES-COMMON-PRIOR> 501
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 409
<NET-ASSETS> 5,592
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 340
<OTHER-INCOME> 0
<EXPENSES-NET> 96
<NET-INVESTMENT-INCOME> 244
<REALIZED-GAINS-CURRENT> 86
<APPREC-INCREASE-CURRENT> 443
<NET-CHANGE-FROM-OPS> 773
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (244)
<DISTRIBUTIONS-OF-GAINS> (84)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23
<NUMBER-OF-SHARES-REDEEMED> (7)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 618
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 120
<AVERAGE-NET-ASSETS> 5,323
<PER-SHARE-NAV-BEGIN> 9.93
<PER-SHARE-NII> 0.45
<PER-SHARE-GAIN-APPREC> 1.03
<PER-SHARE-DIVIDEND> (0.45)
<PER-SHARE-DISTRIBUTIONS> (0.16)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.80
<EXPENSE-RATIO> 2.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 9
<NAME> SAFECO ADVISOR US GOVERNMENT - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,168
<INVESTMENTS-AT-VALUE> 5,449
<RECEIVABLES> 54
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,525
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 244
<TOTAL-LIABILITIES> 244
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,000
<SHARES-COMMON-STOCK> 500
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 281
<NET-ASSETS> 5,281
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 321
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 227
<REALIZED-GAINS-CURRENT> 191
<APPREC-INCREASE-CURRENT> 285
<NET-CHANGE-FROM-OPS> 703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (226)
<DISTRIBUTIONS-OF-GAINS> (189)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 288
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,178
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> 0.51
<PER-SHARE-GAIN-APPREC> 0.95
<PER-SHARE-DIVIDEND> (0.51)
<PER-SHARE-DISTRIBUTIONS> (0.38)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> 1.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 10
<NAME> SAFECO ADVISOR US GOVERNMENT - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,168
<INVESTMENTS-AT-VALUE> 5,449
<RECEIVABLES> 54
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,525
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 244
<TOTAL-LIABILITIES> 244
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,000
<SHARES-COMMON-STOCK> 500
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 281
<NET-ASSETS> 5,281
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 321
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 227
<REALIZED-GAINS-CURRENT> 191
<APPREC-INCREASE-CURRENT> 285
<NET-CHANGE-FROM-OPS> 703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (226)
<DISTRIBUTIONS-OF-GAINS> (189)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 288
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,178
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> 0.43
<PER-SHARE-GAIN-APPREC> 0.95
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> (0.38)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> 2.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 11
<NAME> SAFECO ADVISOR US GOVERNMENT - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,168
<INVESTMENTS-AT-VALUE> 5,449
<RECEIVABLES> 54
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,525
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 244
<TOTAL-LIABILITIES> 244
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,000
<SHARES-COMMON-STOCK> 500
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 281
<NET-ASSETS> 5,281
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 321
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 227
<REALIZED-GAINS-CURRENT> 191
<APPREC-INCREASE-CURRENT> 285
<NET-CHANGE-FROM-OPS> 703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (226)
<DISTRIBUTIONS-OF-GAINS> (189)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 288
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,178
<PER-SHARE-NAV-BEGIN> 9.99
<PER-SHARE-NII> 0.43
<PER-SHARE-GAIN-APPREC> 0.95
<PER-SHARE-DIVIDEND> (0.43)
<PER-SHARE-DISTRIBUTIONS> (0.38)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> 2.07
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 12
<NAME> SAFECOR ADVISOR GNMA - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,067
<INVESTMENTS-AT-VALUE> 5,399
<RECEIVABLES> 31
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,452
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,074
<SHARES-COMMON-STOCK> 507
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 332
<NET-ASSETS> 5,390
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 393
<OTHER-INCOME> 0
<EXPENSES-NET> 95
<NET-INVESTMENT-INCOME> 298
<REALIZED-GAINS-CURRENT> (16)
<APPREC-INCREASE-CURRENT> 434
<NET-CHANGE-FROM-OPS> 716
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (298)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 492
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 118
<AVERAGE-NET-ASSETS> 5,200
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.64
<PER-SHARE-GAIN-APPREC> 0.82
<PER-SHARE-DIVIDEND> (0.64)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 13
<NAME> SAFECO ADVISOR GNMA - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,067
<INVESTMENTS-AT-VALUE> 5,399
<RECEIVABLES> 31
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,452
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,074
<SHARES-COMMON-STOCK> 507
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 332
<NET-ASSETS> 5,390
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 393
<OTHER-INCOME> 0
<EXPENSES-NET> 95
<NET-INVESTMENT-INCOME> 298
<REALIZED-GAINS-CURRENT> (16)
<APPREC-INCREASE-CURRENT> 434
<NET-CHANGE-FROM-OPS> 716
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (298)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 492
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 118
<AVERAGE-NET-ASSETS> 5,200
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.82
<PER-SHARE-DIVIDEND> (0.56)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 14
<NAME> SAFECO ADVISOR GNMA - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,067
<INVESTMENTS-AT-VALUE> 5,399
<RECEIVABLES> 31
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,452
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 62
<TOTAL-LIABILITIES> 62
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,074
<SHARES-COMMON-STOCK> 507
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (16)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 332
<NET-ASSETS> 5,390
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 393
<OTHER-INCOME> 0
<EXPENSES-NET> 95
<NET-INVESTMENT-INCOME> 298
<REALIZED-GAINS-CURRENT> (16)
<APPREC-INCREASE-CURRENT> 434
<NET-CHANGE-FROM-OPS> 716
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (298)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 492
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 118
<AVERAGE-NET-ASSETS> 5,200
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.56
<PER-SHARE-GAIN-APPREC> 0.82
<PER-SHARE-DIVIDEND> (0.56)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 15
<NAME> SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,944
<INVESTMENTS-AT-VALUE> 5,858
<RECEIVABLES> 107
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,987
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,035
<SHARES-COMMON-STOCK> 503
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 914
<NET-ASSETS> 5,930
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 322
<OTHER-INCOME> 0
<EXPENSES-NET> 98
<NET-INVESTMENT-INCOME> 224
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 938
<NET-CHANGE-FROM-OPS> 1,170
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (224)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 981
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 121
<AVERAGE-NET-ASSETS> 5,476
<PER-SHARE-NAV-BEGIN> 9.90
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 1.88
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.78
<EXPENSE-RATIO> 1.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 16
<NAME> SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,944
<INVESTMENTS-AT-VALUE> 5,858
<RECEIVABLES> 107
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,987
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,035
<SHARES-COMMON-STOCK> 503
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 914
<NET-ASSETS> 5,930
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 322
<OTHER-INCOME> 0
<EXPENSES-NET> 98
<NET-INVESTMENT-INCOME> 224
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 938
<NET-CHANGE-FROM-OPS> 1,170
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (224)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 981
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 121
<AVERAGE-NET-ASSETS> 5,476
<PER-SHARE-NAV-BEGIN> 9.90
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 1.88
<PER-SHARE-DIVIDEND> (0.42)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.78
<EXPENSE-RATIO> 2.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 17
<NAME> SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,944
<INVESTMENTS-AT-VALUE> 5,858
<RECEIVABLES> 107
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,987
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,035
<SHARES-COMMON-STOCK> 503
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (19)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 914
<NET-ASSETS> 5,930
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 322
<OTHER-INCOME> 0
<EXPENSES-NET> 98
<NET-INVESTMENT-INCOME> 224
<REALIZED-GAINS-CURRENT> 8
<APPREC-INCREASE-CURRENT> 938
<NET-CHANGE-FROM-OPS> 1,170
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (224)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 981
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 121
<AVERAGE-NET-ASSETS> 5,476
<PER-SHARE-NAV-BEGIN> 9.90
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 1.88
<PER-SHARE-DIVIDEND> (0.42)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.78
<EXPENSE-RATIO> 2.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 18
<NAME> SAFECO ADVISOR INTERMEDIATE MUNICIPAL BOND FUND - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,972
<INVESTMENTS-AT-VALUE> 5,353
<RECEIVABLES> 75
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,450
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54
<TOTAL-LIABILITIES> 54
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,039
<SHARES-COMMON-STOCK> 504
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 381
<NET-ASSETS> 5,396
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 286
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 192
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 458
<NET-CHANGE-FROM-OPS> 650
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (192)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,204
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.44
<PER-SHARE-GAIN-APPREC> 0.91
<PER-SHARE-DIVIDEND> (0.44)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.71
<EXPENSE-RATIO> 1.31
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 19
<NAME> SAFECO ADVISOR INTERMEDIATE MUNICIPAL BOND FUND - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,972
<INVESTMENTS-AT-VALUE> 5,353
<RECEIVABLES> 75
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,450
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54
<TOTAL-LIABILITIES> 54
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,039
<SHARES-COMMON-STOCK> 504
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 381
<NET-ASSETS> 5,396
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 286
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 192
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 458
<NET-CHANGE-FROM-OPS> 650
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (192)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,204
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> 0.91
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.71
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 20
<NAME> SAFECO ADVISOR INTERMEDIATE MUNICIPAL BOND FUND - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 4,972
<INVESTMENTS-AT-VALUE> 5,353
<RECEIVABLES> 75
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,450
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54
<TOTAL-LIABILITIES> 54
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,039
<SHARES-COMMON-STOCK> 504
<SHARES-COMMON-PRIOR> 500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 381
<NET-ASSETS> 5,396
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 286
<OTHER-INCOME> 0
<EXPENSES-NET> 94
<NET-INVESTMENT-INCOME> 192
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 458
<NET-CHANGE-FROM-OPS> 650
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (192)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 30
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117
<AVERAGE-NET-ASSETS> 5,204
<PER-SHARE-NAV-BEGIN> 9.80
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> 0.91
<PER-SHARE-DIVIDEND> (0.36)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.71
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 21
<NAME> SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS A
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,158
<INVESTMENTS-AT-VALUE> 5,778
<RECEIVABLES> 97
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,897
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82
<TOTAL-LIABILITIES> 82
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,194
<SHARES-COMMON-STOCK> 520
<SHARES-COMMON-PRIOR> 509
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 620
<NET-ASSETS> 5,815
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 332
<OTHER-INCOME> 0
<EXPENSES-NET> 99
<NET-INVESTMENT-INCOME> 233
<REALIZED-GAINS-CURRENT> 32
<APPREC-INCREASE-CURRENT> 689
<NET-CHANGE-FROM-OPS> 954
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (233)
<DISTRIBUTIONS-OF-GAINS> (10)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 122
<AVERAGE-NET-ASSETS> 5,502
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> 0.50
<PER-SHARE-GAIN-APPREC> 1.40
<PER-SHARE-DIVIDEND> (0.50)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.20
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 22
<NAME> SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS B
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,158
<INVESTMENTS-AT-VALUE> 5,778
<RECEIVABLES> 97
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,897
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82
<TOTAL-LIABILITIES> 82
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,194
<SHARES-COMMON-STOCK> 520
<SHARES-COMMON-PRIOR> 509
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 620
<NET-ASSETS> 5,815
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 332
<OTHER-INCOME> 0
<EXPENSES-NET> 99
<NET-INVESTMENT-INCOME> 233
<REALIZED-GAINS-CURRENT> 32
<APPREC-INCREASE-CURRENT> 689
<NET-CHANGE-FROM-OPS> 954
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (233)
<DISTRIBUTIONS-OF-GAINS> (10)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 122
<AVERAGE-NET-ASSETS> 5,502
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 1.39
<PER-SHARE-DIVIDEND> (0.42)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.19
<EXPENSE-RATIO> 2.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000921371
<NAME> SAFECO ADVISOR SERIES TRUST
<SERIES>
<NUMBER> 23
<NAME> SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS C
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> DEC-31-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 5,158
<INVESTMENTS-AT-VALUE> 5,778
<RECEIVABLES> 97
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 22
<TOTAL-ASSETS> 5,897
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82
<TOTAL-LIABILITIES> 82
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,194
<SHARES-COMMON-STOCK> 520
<SHARES-COMMON-PRIOR> 509
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 620
<NET-ASSETS> 5,815
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 332
<OTHER-INCOME> 0
<EXPENSES-NET> 99
<NET-INVESTMENT-INCOME> 233
<REALIZED-GAINS-CURRENT> 32
<APPREC-INCREASE-CURRENT> 689
<NET-CHANGE-FROM-OPS> 954
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (233)
<DISTRIBUTIONS-OF-GAINS> (10)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11
<NUMBER-OF-SHARES-REDEEMED> (1)
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 32
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 122
<AVERAGE-NET-ASSETS> 5,502
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 1.40
<PER-SHARE-DIVIDEND> (0.42)
<PER-SHARE-DISTRIBUTIONS> (0.02)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.20
<EXPENSE-RATIO> 2.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<PAGE> 1
EXHIBIT NO. 99.11
CONSENT OF INDEPENDENT AUDITORS
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Investment Advisory
and Other Services" and "Financial Statements" in Post-Effective Amendment No.
2 to the Registration Statement (Form N-1A, No. 33-79978) and related
Prospectus of SAFECO Advisor Series Trust dated April 29, 1996.
We also consent to the incorporation by reference therein of our report dated
January 26, 1996 with respect to the financial statements of the SAFECO Advisor
Series Trust (comprising, respectively, the Equity, Northwest,
Intermediate-Term Treasury, U.S. Government, GNMA, Municipal Bond,
Intermediate-Term Municipal Bond and Washington Municipal Bond Funds) as of and
for the year ended December 31, 1995 included in the 1995 Annual Report, filed
with the Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
- ---------------------
Seattle, Washington
April 25, 1996
<PAGE> 1
EXHIBIT NO. 99.16
CALCULATION OF
PERFORMANCE INFORMATION
<PAGE> 2
SAFECO ADVISOR EQUITY FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Equity Fund - Class A Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
181,308 - 124,788 6
Yield = 2[(------------------+1) -1] = ERR
0 0.00
Where: $181,308 = dividends and interest (as defined in the instructions
to Item 22(b)(ii) of Form N-1A) earned during the period
$124,788 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 3
SAFECO ADVISOR EQUITY FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Equity Fund - Class A Shares for 1
year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.2423) = $12,423
1,242.30 -1,000.00
Total return = (-----------------------) = 24.23%
1,000.00
___________ ____________
Average Annual Total Return = (1 \/ 1,242.30 / 1,000.00 -1) = 24.23%
Where: 1 number of years
$1,242.30 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.2423 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.1695) = $12,162
1,216.20 -1,000.00
Total return = (-----------------------) = 21.62%
1,000.00
___________ ____________
Average Annual Total Return = (1.25 \/ 1,216.20 / 1,000.00 -1) = 16.95%
Where: 1.25 number of years
$1,216.20 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.1695 the average annual total return
<PAGE> 4
SAFECO ADVISOR EQUITY FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Equity Fund - Class B Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
0 - 0 6
Yield = 2[(---------------+1) -1] = ERR
0 0.00
Where: $0 = dividends and interest (as defined in the instructions
to Item 22(b)(ii) of Form N-1A) earned during the period
$0 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 5
SAFECO ADVISOR EQUITY FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Equity Fund - Class B Shares for 1
year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.2444) = $12,444
1,244.40 -1,000.00
Total return = (-----------------------) = 24.44%
1,000.00
_____________ ____________
Average Annual Total Return = (1 \/ 1,244.40 / 1,000.00 -1) = 24.44%
Where: 1 number of years
$1,244.40 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.2444 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.1761) = $12,248
1,224.80 -1,000.00
Total return = (-----------------------) = 22.48%
1,000.00
_______________ _____________
Average Annual Total Return = (1.25 \/ 1,224.80 / 1,000.00 -1) 17.61%
Where: 1.25 number of years
$1,224.80 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.1761 the average annual total return
<PAGE> 6
SAFECO ADVISOR EQUITY FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Equity Fund - Class C Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
0 - 0 6
Yield = 2[(---------------+1) -1] = ERR
0 0.00
Where: $0 = dividends and interest (as defined in the instructions
to Item 22(b)(ii) of Form N-1A) earned during the period
$0 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 7
SAFECO ADVISOR EQUITY FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Equity Fund - Class C Shares for 1
year and from September 30, 1994, (initial effective date of Registration
Statement) to is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.2943) = $12,943
1,294.30 -1,000.00
Total return = (-----------------------) = 29.43%
1,000.00
_______________ ____________
Average Annual Total Return = (1 \/ 1,294.30 / 1,000.00 -1) 29.43%
Where: 1 number of years
$1,294.30 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.2943 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.2067) = $12,647
1,264.70 -1,000.00
Total return = (-----------------------) = 26.47%
1,000.00
______________ ______________
Average Annual Total Return = (1.25 \/ 1,264.70 /1,000.00 -1) = 20.67%
Where: 1.25 number of years
$1,264.70 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.2067 the average annual total return
<PAGE> 8
SAFECO ADVISOR NORTHWEST FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Northwest Fund - Class A Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
0 - 0 6
Yield = 2[(---------------+1) -1] = ERR
0 0.00
Where: $0 = dividends and interest (as defined in the instructions
to Item 22(b)(ii) of Form N-1A) earned during the period
$0 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 9
SAFECO ADVISOR NORTHWEST FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Northwest Fund - Class A Shares for 1
year and from September 30, 1994, (initial effective date of Registration
Statement) is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.0323) = $10,323
1,032.30 -1,000.00
Total return = (-----------------------) = 3.23%
1,000.00
________ ______________
Average Annual Total Return = (1 \/ 1,032.30 / 1,000.00 -1) = 3.23%
Where: 1 number of years
$1,032.30 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0323 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0052) = $10,065
1,006.50 -1,000.00
Total return = (-----------------------) = 0.65%
1,000.00
__________ ______________
Average Annual Total Return = (1.25 \/1,006.50 / 1,000.00 -1) = 0.52%
Where: 1.25 number of years
$1,006.50 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0052 the average annual total return
<PAGE> 10
SAFECO ADVISOR NORTHWEST FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Northwest Fund - Class B Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
0 - 0 6
Yield = 2[(----------------+1) -1] = ERR
0 0.00
Where: $0 = dividends and interest (as defined in the instructions to
Item 22(b)(ii) of Form N-1A) earned during the period
$0 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 11
SAFECO ADVISOR NORTHWEST FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Northwest Fund - Class B Shares for
1 year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.0257) = $10,257
1,025.70 -1,000.00
Total return = (-----------------------) = 2.57%
1,000.00
___________ _____________
Average Annual Total Return = (1 \/ 1,025.70 / 1,000.00 -1) = 2.57%
Where: 1 number of years
$1,025.70 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0257 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0054) = $10,067
1,006.70 -1,000.00
Total return = (-----------------------) = 0.67%
1,000.00
__________ _____________
Average Annual Total Return = (1.25 \/1,006.70 / 1,000.00 -1)= 0.54%
Where: 1.25 number of years
$1,006.70 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0054 the average annual total return
<PAGE> 12
SAFECO ADVISOR NORTHWEST FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Northwest Fund - Class C Shares for the
30-day period ended December 31, 1995 is calculated as follows:
0 - 0 6
Yield = 2[(------------------+1) -1] = ERR
0 0.00
Where: $0 = dividends and interest (as defined in the instructions
to Item 22(b)(ii) of Form N-1A) earned during the period
$0 = expenses accrued during the period
0 = average daily number of shares outstanding during the
period
$0.00 = offering price per share on December 31, 1995
<PAGE> 13
SAFECO ADVISOR NORTHWEST FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Northwest Fund - Class C Shares for 1
year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.0757) = $10,757
1,075.70 -1,000.00
Total return =(-----------------------) = 7.57%
1,000.00
____________ ______________
Average Annual Total Return (1 \/ 1,075.70 / 1,000.00 -1) = 7.57%
Where: 1 number of years
$1,075.70 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0757 the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0372) = $10,467
1,046.70 -1,000.00
Total return =(------------------------) = 4.67%
1,000.00
__________ ______________
Average Annual Total Return (1.25 \/1,046.70 / 1,000.00 -1) = 3.72%
Where: 1.25 number of years
$1,046.70 ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 a hypothetical investment of $1,000
$10,000.00 a hypothetical investment of $10,000
.0372 the average annual total return
<PAGE> 14
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Washington Municipal Bond Fund - Class A
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
9,057 - 2,098 6
Yield = 2[(-------- ----------+1) -1] = 4.16%
171,988 11.76
Where: $9,057 = dividends and interest (as defined in the
instructions to the Item 22(b)(ii) of Form N-1A)
earned during the period
$2,098 = expenses accrued during the period
171,988 = average daily number of shares outstanding during
the period
$11.76 = offering price per share on December 31, 1995
<PAGE> 15
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Washington Municipal Bond Fund - Class
A Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1406) = $11,406
1,140.60 - 1,000.00
Total return =( ----------------------) = 14.06%
1,000.00
___________________________
Average Annual Total Return = (1 \/ 1,140.60 / 1,000.00 -1) = 14.06%
Where: 1 = number of years
$1,140.60 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1406 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1027) = $11,300
1,130.00 - 1,000.00
Total return =( ----------------------) = 13.00%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,130.00 / 1,000.00 -1) 10.27%
Where: 1.25 = number of years
$1,130.00 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1027= the average annual total return
<PAGE> 16
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Washington Municipal Bond Fund - Class B
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
9,264 - 3,356 6
Yield = 2[(-- ---------- --------+1) -1] = 3.63%
175,958 11.19
Where: $9,264 = dividends and interest (as defined in the
instructions to item 22(b)(ii) of Form N-1A)
earned during the period
$3,356 = expenses accrued during the period
175,958 = average daily number of shares outstanding during
the period
$11.19 = offering price per share on December 31, 1995
<PAGE> 17
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Washington Municipal Bond Fund - Class B
Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1376) = $11,376
1,137.60 - 1,000.00
Total return =( -------------------------) = 13.76%
1,000.00
___________________________
Average Annual Total Return = (1 \/ 1,137.60 / 1,000.00 -1) = 13.76%
Where: 1 = number of years
$1,137.60 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1376 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1061) = $11,343
1,134.30 - 1,000.00
Total return =( -----------------------) = 13.43%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,134.30 / 1,000.00 -1) = 10.61%
Where: 1.25 = number of years
$1,134.30 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1061 = the average annual total return
<PAGE> 18
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Washington Municipal Bond Fund - Class C Shares
for the 30-day period ended December 31, 1995 is calculated as follows:
9,098 - 3,290 6
Yield = 2[(--------------------+1) -1] =3.63%
172,758 11.20
Where: $9,098 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,290 = expenses accrued during the period
172,758 = average daily number of shares outstanding during
the period
$11.20 = offering price per share on December 31, 1995
<PAGE> 19
SAFECO ADVISOR WASHINGTON MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Washington Municipal Bond Fund - Class C
Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1887) = $11,887
1,188.70 - 1,000.00
Total return =( ----------------------) = 18.87%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,188.70 / 1,000.00 -1) 18.87%
Where: 1 = number of years
$1,188.70 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1887 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1380) = $11,754
1,175.40 - 1,000.00
Total return =( ----------------------) = 17.54%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,175.40 / 1,000.00 -1) = 13.80%
Where: 1.25 = number of years
$1,175.40 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1380 = the average annual total return
<PAGE> 20
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Municipal Bond Fund - Class
A Shares for the 30-day period ended December 31, 1995 is calculated as follows:
7,321 - 1,935 6
Yield = 2[(----------------------+1) -1] = 3.47%
166,667 11.24
Where: $7,321 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$1,935 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$11.24 = offering price per share on December 31, 1995
<PAGE> 21
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Municipal Bond Fund -
Class A Shares for one year and from September 30, 1994, (initial effective
date of Registration Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.0852) = $10,852
1,085.20 - 1,000.00
Total return =( ----------------------) = 8.52%
1,000.00
___________________________
Average Annual Total Return = (1 \/ 1,085.20 / 1,000.00 -1) = 8.52%
Where: 1 = number of years
$1,085.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0852 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.0566) = $10,712
1,071.20 - 1,000.00
Total return =( ----------------------) = 7.12%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,071.20 / 1,000.00 -1) = 5.66%
Where: 1.25 = number of years
$1,071.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0566 = the average annual total return
<PAGE> 22
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Municipal Bond Fund - Class B
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
7,321 - 3,033 6
Yield = 2[(---------------------+1) -1] = 2.90%
166,667 10.71
Where: $7,321 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,033 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$10.71 = offering price per share on December 31, 1995
<PAGE> 23
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Municipal Bond Fund -
Class B Shares from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.0809) = $10,809
1,080.90 - 1,000.00
Total return =( ----------------------) = 8.09%
1,000.00
_____________________________
Average Annual Total Return = (1 \/ 1,080.90 / 1,000.00 -1) = 8.09%
Where: 1 = number of years
$1,080.90 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0809 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.0589) = $10,742
1,074.20 - 1,000.00
Total return =( ----------------------) = 7.42%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,074.20 / 1,000.00 -1) = 5.89%
Where: 1.25 = number of years
$1,074.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0589 = the average annual total return
<PAGE> 24
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Municipal Bond Fund - Class C
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
7,474 - 3,109 6
Yield = 2[(----------------------+1) -1] = 2.89%
170,149 10.71
Where: $7,474 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,109 = expenses accrued during the period
170,149 = average daily number of shares outstanding during
the period
$10.71 = offering price per share on December 31, 1995
<PAGE> 25
SAFECO ADVISOR INTERMEDIATE-TERM MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Municipal Bond Fund -
Class C Shares for one year and from September 30, 1994, (initial effective date
of Registration Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1309) = $11,309
1,130.90 - 1,000.00
Total return =( ----------------------) = 13.09%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,130.90 / 1,000.00 -1) = 13.09%
Where: 1 = number of years
$1,130.90 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1309 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.0904) = $11,142
1,114.20 - 1,000.00
Total return =( ----------------------) = 11.42%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,114.20 / 1,000.00 -1) = 9.04%
Where: 1.25 = number of years
$1,114.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0904 = the average annual total return
<PAGE> 26
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Municipal Bond Fund - Class A Shares for the
30-day period ended December 31, 1995 is calculated as follows:
9,033 - 2,109 6
Yield = 2[(--------------------- +1) -1] = 4.06%
166,667 12.37
Where: $9,033 = dividends and interest (as defined in the
instructions to item 22(b)(ii) of Form N-1A) earned
during the period
$2,109 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$12.37 = offering price per share on December 31, 1995
<PAGE> 27
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Municipal Bond Fund - Class A Shares
for 1 year and from September 30, 1994, (initial effective date of Registration
Statement) to Decemmber 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1863) = $11,863
1,186.30 - 1,000.00
Total return =( ----------------------) = 18.63%
1,000.00
_____________________________
Average Annual Total Return = (1 \/ 1,186.30 / 1,000.00 -1) = 18.63%
Where: 1 = number of years
$1,186.30 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1863 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1450) = $11,844
1,184.40 - 1,000.00
Total return =( ----------------------) = 18.44%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,184.40 / 1,000.00 -1) = 14.50%
Where: 1.25 = number of years
$1,184.40 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1450 = the average annual total return
<PAGE> 28
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Municipal Bond Fund - Class B Shares for the
30-day period ended December 31, 1995 is calculated as follows:
9,149 - 3,357 6
Yield = 2[(--------------------+1) -1] =3.52%
168,813 11.78
Where: $9,149 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,357 = expenses accrued during the period
168,813 = average daily number of shares outstanding during
the period
$11.78 = offering price per share on December 31, 1995
<PAGE> 29
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Municipal Bond Fund - Class B Shares for
1 year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1862) = $11,862
1,186.20 - 1,000.00
Total return =( ----------------------) = 18.62%
1,000.00
_____________________________
Average Annual Total Return = (1 \/ 1,186.20 / 1,000.00 -1) = 18.62%
Where: 1 = number of years
$1,186.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1862 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1508) = $11,919
1,191.90 - 1,000.00
Total return =( ----------------------) = 19.19%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,191.90 / 1,000.00 -1) = 15.08%
Where: 1.25 = number of years
$1,191.90 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1508 = the average annual total return
<PAGE> 30
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Municipal Bond Fund - Class C Shares for the
30-day period ended December 31, 1995 is calculated as follows:
9,092 - 3,333 6
Yield = 2[(--------------------+1) -1] = 3.52%
167,758 11.78
Where: $9,092 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,333 = expenses accrued during the period
167,758 = average daily number of shares outstanding during
the period
$11.78 = offering price per share on December 31, 1995
<PAGE> 31
SAFECO ADVISOR MUNICIPAL BOND FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Municipal Bond Fund - Class C Shares
from September 30, 1994, (initial effective date of Registration Statement) to
December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.2362) = $12,362
1,236.20 - 1,000.00
Total return =( ----------------------) = 23.62%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,236.20 / 1,000.00 -1) = 23.62%
Where: 1 = number of years
$1,236.20 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.2362 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1816) = $12,319
1,231.90 - 1,000.00
Total return =( ----------------------) = 23.19%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,231.90 / 1,000.00 -1) = 18.16%
Where: 1.25 = number of years
estment at $1,231.90 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1816 = the average annual total return
<PAGE> 32
SAFECO ADVISOR GNMA FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor GNMA Fund - Class A Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
11,810 - 2,171 6
Yield = 2[(---------------------+1) -1] =6.07%
172,976 11.15
Where: $11,810 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$2,171 = expenses accrued during the period
172,976 = average daily number of shares outstanding during
the period
$11.15 = offering price per share on December 31, 1995
<PAGE> 33
SAFECO ADVISOR GNMA FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor GNMA Fund - Class A Shares for 1 year
and from September 30, 1994, (initial effective date of Registration Statement)
to December 31, 1995 is calculated as follows:
1 - Year
1
Total return = $10,000.00 ( 1 +.0980) = $10,980
1,098.00 - 1,000.00
Total return =( ------------------------) = 9.80%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,098.00 / 1,000.00 -1) = 9.80%
Where: 1 = number of years
$1,098.00 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0980 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.0715) = $10,902
1,090.20 - 1,000.00
Total return =( ------------------------) = 9.02%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,090.20 / 1,000.00 -1) = 7.15%
Where: 1.25 = number of years
$1,090.20 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0715 = the average annual total return
<PAGE> 34
SAFECO ADVISOR GNMA FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor GNMA Fund - Class B Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
11,380 - 3,171 6
Yield = 2[(---------------------+1) -1] = 5.63%
166,667 10.62
Where: $11,380 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,171 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$10.62 = offering price per share on December 31, 1995
<PAGE> 35
SAFECO ADVISOR GNMA FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor GNMA Fund - Class B Shares for 1 year
and from September 30, 1994, (initial effective date of Registration Statement)
to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.0943) = $10,943
1,094.30 - 1,000.00
Total return =( ------------------------) = 9.43%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,094.30 / 1,000.00 -1) = 9.43%
Where: 1 = number of years
$1,094.30 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0943 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.0745) = $10,940
1,094.00 - 1,000.00
Total return = (------------------------) = 9.40%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,094.00 / 1,000.00 -1) = 7.45%
Where: 1.25 = number of years
$1,094.00 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0745 = the average annual total return
<PAGE> 36
SAFECO ADVISOR GNMA FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor GNMA Fund - Class C Shares for the 30-day
period ended December 31, 1995 is calculated as follows:
11,451 - 3,201 6
Yield = 2[(-- ------------------ +1) -1] = 5.62%
167,721 10.62
Where: $11,451 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,201 = expenses accrued during the period
167,721 = average daily number of shares outstanding during
the period
$10.62 = offering price per share on December 31, 1995
<PAGE> 37
SAFECO ADVISOR GNMA FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor GNMA Fund - Class C Shares for 1 year
and from September 30, 1994, (initial effective date of Registration Statement)
to December 31, 1995 is calculated as follows:
1 - Year
- --------
1
Total return = $10,000.00 ( 1 +.1443) = $11,443
1,144.30 - 1,000.00
Total return =( ------------------------) = 14.43%
1,000.00
___________________________
Average Annual Total Return = (1 \/ 1,144.30 / 1,000.00 -1) = 14.43%
Where: 1 = number of years
$1,144.30 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1443 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 ( 1 +.1058) = $11,339
1,133.90 - 1,000.00
Total return = ( ------------------------) = 13.39%
1,000.00
___________________________
Average Annual Total Return = (1.25 \/ 1,133.90 / 1,000.00 -1) = 10.58%
Where: 1.25 = number of years
$1,133.90 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1058 = the average annual total return
<PAGE> 38
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor U.S. Government Fund - Class A Shares for the
30-day period ended December 31, 1995 is calculated as follows:
8,798 - 1,929 6
Yield = 2[(---------------------- +1) -1] = 4.50%
166,667 11.09
Where: $8,798 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$1,929 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$11.09 = offering price per share on December 31, 1995
<PAGE> 39
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor U.S. Government Fund - Class A Shares
for 1 year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.0946) = $10,946
1,094.60 - 1,000.00
Total return = ( -----------------------) = 9.46%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,094.60 / 1,000.00 -1) = 9.46%
Where: 1 = number of years
$1,094.60 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0946 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0835) = $11,054
1,105.40 - 1,000.00
Total return = ( -----------------------) = 10.54%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,105.40 / 1,000.00 -1) = 8.35%
Where: 1.25 = number of years
$1,105.40 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0835 = the average annual total return
<PAGE> 40
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor U.S. Government Fund - Class B Shares for the
30-day period ended December 31, 1995 is calculated as follows:
8,798 - 3,042 6
Yield = 2[(-- ------------------+1) -1] = 3.96%
166,667 10.56
Where: $8,798 = dividends and interest (as defined in the
instructions to item 22(b)(ii) of Form N-1A) earned
during the period
$3,042 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$10.56 = offering price per share on December 31, 1995
<PAGE> 41
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor U.S. Government Fund - Class B Shares
for 1 year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.0907) = $10,907
1,090.70 - 1,000.00
Total return = ( -----------------------) = 9.07%
1,000.00
___________________________
Average Annual Total Return = (1 \/ 1,090.70 / 1,000.00 -1) = 9.07%
Where: 1 = number of years
$1,090.70 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0907 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0869) = $11,098
1,109.80 - 1,000.00
Total return = ( -----------------------) = 10.98%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,109.80 / 1,000.00 -1) = 8.69%
Where: 1.25 = number of years
$1,109.80 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0869 = the average annual total return
<PAGE> 42
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor U.S. Government Fund - Class C Shares for the
30-day period ended December 31, 1995 is calculated as follows:
8,798 - 3,042 6
Yield = 2[(----------------------+1) -1] = 3.96%
166,666 10.56
Where: $8,798 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A)
earned during the period
$3,042 = expenses accrued during the period
166,666 = average daily number of shares outstanding during
the period
$10.56 = offering price per share on December 31, 1995
<PAGE> 43
SAFECO ADVISOR U.S. GOVERNMENT FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor U.S. Government Fund - Class C Shares
for 1 year and from September 30, 1994, (initial effective date of Registration
Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.1407) = $11,407
1,140.70 - 1,000.00
Total return = ( ----------------------) = 14.07%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,140.70 / 1,000.00 -1) = 14.07%
Where: 1 = number of years
$1,140.70 = ending redeemable value of a hypothetical
$1,000 investment at the end of a specified
period of time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1407 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.1181) = $11,498
1,149.80 - 1,000.00
Total return = ( ----------------------) = 14.98%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,149.80 / 1,000.00 -1) = 11.81%
Where: 1.25 = number of years
$1,149.80 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1181 = the average annual total return
<PAGE> 44
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS A SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Treasury Fund - Class A
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
9,359 - 2,065 6
Yield = 2[(------------------- +1) -1] = 4.40%
177,016 11.33
Where: $9,359 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$2,065 = expenses accrued during the period
177,016 = average daily number of shares outstanding during
the period
$11.33 = offering price per share on December 31, 1995
<PAGE> 45
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS A SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Treasury Fund - Class
A Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.1051) = $11,051
1,105.10 - 1,000.00
Total return = (----------------------) = 10.51%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,105.10 / 1,000.00 -1) = 10.51%
Where: 1 = number of years
$1,105.10 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1051 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0868) = $11,097
1,109.70 - 1,000.00
Total return = (----------------------) = 10.97%
1,000.00
_________________________
Average Annual Total Return = (1.25 \/ 1,109.70 / 1,000.00 -1) = 8.68%
Where: 1.25 = number of years
$1,109.70 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0868 = the average annual total return
<PAGE> 46
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS B SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Treasury Fund - Class B
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
8,812 - 3,054 6
Yield = 2[(-------------------+1) -1] = 3.87%
166,667 10.80
Where: $8,812 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,054 = expenses accrued during the period
166,667 = average daily number of shares outstanding during
the period
$10.80 = offering price per share on December 31, 1995
<PAGE> 47
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS B SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Treasury Fund - Class
B Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.1017) = $11,017
1,101.70 - 1,000.00
Total return = (----------------------) = 10.17%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,101.70 / 1,000.00 -1) = 10.17%
Where: 1 = number of years
$1,101.70 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1017 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.0904) = $11,143
1,114.30 - 1,000.00
Total return = (----------------------) = 11.43%
1,000.00
_________________________
Average Annual Total Return = (1.25 \/ 1,114.30 / 1,000.00 -1) = 9.04%
Where: 1.25 = number of years
$1,114.30 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.0904 = the average annual total return
<PAGE> 48
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS C SHARES
Calculation of Performance Quotations
The yield for the SAFECO Advisor Intermediate-Term Treasury Fund - Class C
Shares for the 30-day period ended December 31, 1995 is calculated as follows:
9,038 - 3,151 6
Yield = 2[(---------------------- +1) -1] = 3.85%
171,344 10.80
Where: $9,038 = dividends and interest (as defined in the
instructions to Item 22(b)(ii) of Form N-1A) earned
during the period
$3,151 = expenses accrued during the period
171,344 = average daily number of shares outstanding during
the period
$10.80 = offering price per share on December 31, 1995
<PAGE> 49
SAFECO ADVISOR INTERMEDIATE-TERM TREASURY FUND - CLASS C SHARES
Calculation of Performance Quotations (continued)
The total return for the SAFECO Advisor Intermediate-Term Treasury Fund - Class
C Shares for 1 year and from September 30, 1994, (initial effective date of
Registration Statement) to December 31, 1995, is calculated as follows:
1 Year
- ------
1
Total return = $10,000.00 (1 +.1516) = $11,516
1,151.60 - 1,000.00
Total return = ( ----------------------) = 15.16%
1,000.00
__________________________
Average Annual Total Return = (1 \/ 1,151.60 / 1,000.00 -1) = 15.16%
Where: 1 = number of years
$1,151.60 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1516 = the average annual total return
Since Inception - 15 Months
- ---------------------------
1.25
Total return = $10,000.00 (1 +.1216) = $11,542
1,154.20 - 1,000.00
Total return = ( ----------------------) = 15.42%
1,000.00
__________________________
Average Annual Total Return = (1.25 \/ 1,154.20 / 1,000.00 -1) = 12.16%
Where: 1.25 = number of years
$1,154.20 = ending redeemable value of a hypothetical $1,000
investment at the end of a specified period of
time
$1,000.00 = a hypothetical investment of $1,000
$10,000.00 = a hypothetical investment of $10,000
.1216 = the average annual total return
