January 26, 1998



Dear Shareholder:

As you are aware, Composite Fund shareholders were  asked to vote on a number of
proposals  recently.  We are happy to announce  that four of the five  proposals
have been approved by the  shareholders of all the Composite Funds and are being
implemented with the  distribution of the attached  Prospectus  Supplement.  The
fifth  proposal,  which would  change the corporate structure  of the Funds to a
Massachusetts  business  trust, requires  the  approval of two-thirds  of share-
holders  of each Fund.  Most of the  Funds have approved this.  We are confident
that the change will be approved in the remaining Funds very soon.  Please  vote
promptly if you have not yet done so.

Although the proposals approved by shareholders are not specifically  related to
the  merger of the Sierra Funds with  our Composite Funds, many  of the  changes
will support a combined Fund group with a greatly expanded shareholder  base and
enhanced operating efficiencies.  It is our  belief that the Fund  families will
provide shareholders with additional investment  opportunities while maintaining
or reducing fund expenses to benefit shareholders.

We will  continue to be  associated with Washington Mutual - the largest  thrift
institution  in the country.  We are proud  it is also now the  eleventh largest
bank in the United States with more than 700 financial centers and  total assets
of more than $96 billion.  This provides us with a significant base of financial
strength  and a greatly expanded  distribution channel  for our Funds.

We look  forward to the opportunities  that the changes will offer to all share-
holders and we appreciate your continued support. This supplement is designed to
complement the current prospectus. It should not be viewed as a replacement.  We
encourage you to retain it for future reference.


                                                    Sincerely,


                                                    /s/ William G. Papesh   
                                                    William G. Papesh, President