UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07577
WM Strategic Asset Management Portfolios, LLC
(Exact name of registrant as specified in charter)
1201 Third Avenue, 22nd Floor, Seattle, WA
98101 (Address of principal executive offices)
(Zip code)
John T. West
1201 Third Avenue, 22nd Floor, Seattle, WA 98101
(Name and address of agent for service)
Registrant's telephone number, including area code: (206) 461-3800
Date of fiscal year end: October 31st
Date of reporting period: April 30, 2003
LOGO: WM GROUP OF FUNDS
STRATEGIC
ASSET
MANAGEMENT
PORTFOLIOS
Common sense. Uncommon solutions.
1st Photo: House on a hill, overlooking a mountain top.
2nd Photo: Night photo of city and bridge.
SEMI-ANNUAL REPORT
for the period ended
April 30, 2003
WM Strategic Asset Management Portfolios
Flexible Income Portfolio
Conservative Balanced Portfolio
Balanced Portfolio
Conservative Growth Portfolio
Strategic Growth Portfolio
Table of Contents
Message from the President ........................ 1
Statements of Assets and Liabilities .............. 2
Statements of Operations .......................... 4
Statements of Changes in Net Assets ............... 5
Statements of Changes in Net
Assets - Capital Stock Activity ................... 6
Financial Highlights .............................. 8
Portfolio of Investments .......................... 14
Notes to Financial Statements (unaudited) ......... 17
NOT FDIC INSURED
o May Lose Value
o No Bank Guarantee
PHOTO of Willima G. Papesh
Dear Shareholder,
The first half of our fiscal year closed with a set of decisive geopolitical
events and late-period equity market gains.1 The military conflict in Iraq
commenced in March and concluded shortly after period-end, brevity that we hope
will inspire a tempering of global tensions. We also saw encouraging signs of
improvement in economic and market conditions. Equity markets rallied to
conclude the six-month period ended April 30, 2003 as the Standard & Poor's 500
Index gained 4.47%.2 Corporate earnings also showed some signs of change for the
better, but true revenue-driven profit growth remains somewhat elusive and
difficult to garner for many firms. With these conditions in mind, we feel that
time is still needed before we can declare a full economic recovery.
Corporate bonds, particularly lower-rated issues, were among the strongest
performing major asset classes during the period. Interest rates continued their
slide to 40-year lows, while Treasury yields actually dropped slightly during
the period. These factors helped to boost the performance of bond investments,
where prices generally move in the opposite direction of yields. In fact, bonds
have outperformed stocks in each of the past three calendar years, averaging
more than 10% per year from 2000 to 2002. Conversely, stocks declined by an
average of more than 14% per year over the same time period.3
As a result of positive bond market performance, bond fund investments continued
to gain in popularity compared to equity funds during the period, as measured by
cash inflows. However, investors should be aware of the pitfalls associated with
chasing short-term past performance. Assets that have shown the best results in
a certain period may not necessarily repeat this strong performance in the next.
For this reason, we have always recommended a strategy that utilizes
diversification and asset allocation to help protect investor assets through a
variety of financial market conditions. We also suggest that investors regularly
elicit the expertise of a financial advisor. With the guidance of these
investment professionals, investors can take the actions necessary to keep their
investment portfolios aligned with their goals regardless of market
fluctuations.
To provide additional opportunities for diversification, we introduced the WM
REIT Fund in March. The Fund invests primarily in real estate investment trust
(REIT) securities and seeks to take advantage of their dividend-producing
potential. We believe that the WM REIT Fund adds depth and breadth to the
overall WM Group of Funds family and that it has the capability of enhancing
risk management opportunities available through the WM Strategic Asset
Management Portfolios.
At the WM Group of Funds, our focus on risk management has remained in place
throughout the past three years of significantly volatile equity market
performance. It is a fundamental aspect of our investment philosophy, and we
will continue to stress this approach as economic conditions and equity markets
change. Our firm and our investment products have evolved over the years, and
yet our commitment to a risk management discipline remains at the core of the
investment options we offer.
As we look toward the second half of our fiscal year, we are unwavering in our
belief that the strict investment discipline that has guided us for more than 60
years is the right course through the current market uncertainty. We thank you
for your continued confidence and trust in the WM Group of Funds.
Sincerely,
/s/ William G. Papesh
William G. Papesh
President
1 As measured by the Standard & Poor's 500 Index.
2 Source: Ibbotson Associates. Index performance information represents total
return from November 1, 2002 through April 30, 2003 and includes the
reinvestment of dividends and capital gains.
3 Source: Ibbotson Associates. Stocks are measured by the S&P 500 Index.
Bonds are measured by the Lehman Brothers Aggregate Bond Index. Index
performance information represents average annual total returns from
January 1, 2000 through December 31, 2002, and includes the reinvestment of
dividends and capital gains.
Note: Indices are unmanaged, and an investment cannot be made directly in an
index.
1
STATEMENTS of ASSETS and LIABILITIES
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
APRIL 30, 2003 (UNAUDITED)
FLEXIBLE CONSERVATIVE CONSERVATIVE STRATEGIC
INCOME BALANCED BALANCED GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- -------------- --------------
ASSETS:
Investments, at value (a) ................. $ 544,405,137 $ 156,170,863 $1,452,933,824 $1,136,918,345 $ 602,669,919
Receivable for Portfolio shares sold ...... 4,533,381 2,226,918 7,873,197 4,194,283 1,731,061
Prepaid expenses and other assets ......... 578 340 2,108 246 231
-------------- -------------- -------------- -------------- --------------
Total Assets ........................... 548,939,096 158,398,121 1,460,809,129 1,141,112,874 604,401,211
-------------- -------------- -------------- -------------- --------------
LIABILITIES:
Payable for Portfolio shares redeemed ..... 1,917,241 129,574 2,141,889 1,205,744 1,014,989
Payable for investment securities purchased 706,000 1,177,000 2,369,000 721,000 830,000
Investment advisory fee payable ........... 282,580 66,728 729,083 579,528 307,873
Shareholder servicing and distribution
fees payable ........................... 328,327 92,688 845,537 662,530 362,971
Transfer agent fees payable ............... 26,832 6,131 99,027 135,859 115,108
Accrued expenses and other payables ....... 60,757 26,419 203,086 240,210 162,760
-------------- -------------- -------------- -------------- --------------
Total Liabilities ...................... 3,321,737 1,498,540 6,387,622 3,544,871 2,793,701
-------------- -------------- -------------- -------------- --------------
NET ASSETS ................................ $ 545,617,359 $ 156,899,581 $1,454,421,507 $1,137,568,003 $ 601,607,510
============== ============== ============== ============== ==============
(a) Investments, at cost .................. $ 538,589,426 $ 154,554,800 $1,545,732,311 $1,297,900,465 $ 755,282,123
============== ============== ============== ============== ==============
See Notes to Financial Statements.
2
STATEMENTS of ASSETS and LIABILITIES (continued)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
APRIL 30, 2003 (UNAUDITED)
FLEXIBLE CONSERVATIVE CONSERVATIVE STRATEGIC
INCOME BALANCED BALANCED GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
Undistributed net investment income/
(accumulated net investment loss) ...... $ 1,826,669 $ 385,264 $ 1,696,927 $ 40,430 $ (2,036,360)
Accumulated net realized loss on
investment transactions ................ (6,483,488) (2,860,421) (57,066,659) (55,004,512) (42,578,734)
Net unrealized appreciation/
(depreciation) of investments .......... 5,815,711 1,616,063 (92,798,487) (160,982,120) (152,612,204)
Paid-in capital ........................... 544,458,467 157,758,675 1,602,589,726 1,353,514,205 798,834,808
-------------- --------------- --------------- --------------- ---------------
Total Net Assets ....................... $ 545,617,359 $ 156,899,581 $ 1,454,421,507 $ 1,137,568,003 $ 601,607,510
============== =============== =============== =============== ===============
NET ASSETS:
Class A Shares ............................ $ 177,390,816 $ 48,828,929 $ 510,223,965 $ 400,513,230 $ 188,383,493
============== =============== =============== =============== ===============
Class B Shares ............................ $ 320,691,572 $ 82,611,806 $ 836,893,295 $ 651,997,503 $ 369,092,257
============== =============== =============== =============== ===============
Class C Shares ............................ $ 47,534,971 $ 25,458,846 $ 107,304,247 $ 85,057,270 $ 44,131,760
============== =============== =============== =============== ===============
SHARES OUTSTANDING:
Class A Shares ............................ 16,849,320 5,316,369 47,949,156 37,194,921 17,118,134
============== =============== =============== =============== ===============
Class B Shares ............................ 30,505,275 9,006,780 78,812,265 61,920,029 34,551,088
============== =============== =============== =============== ===============
Class C Shares ............................ 4,536,276 2,782,334 10,134,991 8,111,301 4,128,850
============== =============== =============== =============== ===============
CLASS A SHARES:
Net asset value per share of beneficial
interest outstanding * ................. $ 10.53 $ 9.18 $ 10.64 $ 10.77 $ 11.00
============== =============== =============== =============== ===============
Maximum sales charge ...................... 4.50% 5.50% 5.50% 5.50% 5.50%
============== =============== =============== =============== ===============
Maximum offering price per share
of beneficial interest outstanding ..... $ 11.03 $ 9.71 $ 11.26 $ 11.40 $ 11.64
============== =============== =============== =============== ===============
CLASS B SHARES:
Net asset value and offering price
per share of beneficial
interest outstanding * ................. $ 10.51 $ 9.17 $ 10.62 $ 10.53 $ 10.68
============== =============== =============== =============== ===============
CLASS C SHARES:
Net asset value per share of beneficial
interest outstanding * ................. $ 10.48 $ 9.15 $ 10.59 $ 10.49 $ 10.69
============== =============== =============== =============== ===============
Maximum sales charge ...................... 1.00% 1.00% 1.00% 1.00% 1.00%
============== =============== =============== =============== ===============
Maximum offering price per share
of beneficial interest outstanding ..... $ 10.59 $ 9.24 $ 10.70 $ 10.60 $ 10.80
============== =============== =============== =============== ===============
- ------------------------
* Redemption price per share is equal to net asset value per share less any
applicable contingent deferred sales charge.
See Notes to Financial Statements.
3
STATEMENTS of OPERATIONS
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
FLEXIBLE CONSERVATIVE CONSERVATIVE STRATEGIC
INCOME BALANCED BALANCED GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Dividends from investment company securities .. $ 11,975,533 $ 2,790,898 $ 23,312,856 $ 15,484,126 $ 5,867,091
Interest ...................................... 13,012 5,863 265,029 12,874 9,729
------------ ------------ ------------ ------------ ------------
Total investment income .................... 11,988,545 2,796,761 23,577,885 15,497,000 5,876,820
------------ ------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fee ....................... 1,514,141 396,067 4,149,373 3,415,002 1,813,575
Custodian fees ................................ 1,396 1,450 2,048 2,115 1,982
Legal and audit fees .......................... 20,000 13,516 36,740 33,708 24,815
Registration and filing fees .................. 38,977 30,796 60,809 61,614 42,206
Other ......................................... 108,395 36,595 331,380 312,985 223,963
Shareholder servicing and distribution fees:
Class A Shares ............................. 196,253 46,624 566,092 454,703 214,166
Class B Shares ............................. 1,381,573 336,622 3,853,247 3,135,395 1,762,719
Class C Shares ............................. 162,861 86,217 384,765 324,221 170,735
Transfer agent fees:
Class A Shares ............................. 48,744 14,465 171,585 188,262 155,831
Class B Shares ............................. 97,865 30,962 350,590 377,532 303,023
Class C Shares ............................. 7,386 4,123 20,164 22,551 15,670
------------ ------------ ------------ ------------ ------------
Total expenses ............................. 3,577,591 997,437 9,926,793 8,328,088 4,728,685
Fees waived by the investment advisor ......... -- (40,720) -- -- --
Fees reduced by custodian credits ............. (5) (1) (68) -- --
------------ ------------ ------------ ------------ ------------
Net expenses ............................... 3,577,586 956,716 9,926,725 8,328,088 4,728,685
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME ......................... 8,410,959 1,840,045 13,651,160 7,168,912 1,148,135
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized loss on investment transactions .. (2,900,183) (1,862,319) (23,365,149) (27,792,209) (18,516,023)
Net change in unrealized depreciation of
investments ................................ 20,733,822 7,124,033 75,564,620 71,712,826 42,229,976
------------ ------------ ------------ ------------ ------------
Net realized and unrealized gain on investments 17,833,639 5,261,714 52,199,471 43,920,617 23,713,953
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................. $ 26,244,598 $ 7,101,759 $ 65,850,631 $ 51,089,529 $ 24,862,088
============ ============ ============ ============ ============
See Notes to Financial Statements.
4
STATEMENTS of CHANGES in NET assets
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
FLEXIBLE CONSERVATIVE
INCOME BALANCED BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ---------------
Net investment income .............................. $ 8,410,959 $ 1,840,045 $ 13,651,160
Net realized loss on investment transactions ....... (2,900,183) (1,862,319) (23,365,149)
Net change in unrealized depreciation of investments 20,733,822 7,124,033 75,564,620
--------------- --------------- ---------------
Net increase in net assets resulting from operations 26,244,598 7,101,759 65,850,631
Distributions to shareholders from:
Net investment income:
Class A Shares ................................. (3,130,708) (629,725) (5,878,811)
Class B Shares ................................. (4,538,181) (878,695) (7,231,206)
Class C Shares ................................. (542,006) (235,690) (747,789)
Net realized gains on investments:
Class A Shares ................................. (232,618) -- --
Class B Shares ................................. (399,521) -- --
Class C Shares ................................. (38,190) -- --
Net increase in net assets from
Portfolio share transactions:
Class A Shares ................................. 26,885,854 16,058,476 68,380,975
Class B Shares ................................. 65,447,634 21,712,567 62,855,617
Class C Shares ................................. 25,534,193 14,141,203 49,015,512
--------------- --------------- ---------------
Net increase in net assets ......................... 135,231,055 57,269,895 232,244,929
NET ASSETS:
Beginning of period ................................ 410,386,304 99,629,686 1,222,176,578
--------------- --------------- ---------------
End of period ...................................... $ 545,617,359 $ 156,899,581 $ 1,454,421,507
=============== =============== ===============
Undistributed net investment income/
(accumulated net investment loss)
at end of period ................................ $ 1,826,669 $ 385,264 $ 1,696,927
=============== =============== ===============
FOR THE YEAR ENDED OCTOBER 31, 2002
Net investment income/(loss) ....................... $ 12,423,025 $ 1,989,699 $ 24,563,106
Net realized loss on investment transactions ....... (2,592,240) (496,892) (26,955,744)
Capital gain distributions received ................ 1,289,622 323,765 13,163,931
Net change in unrealized depreciation
of investments .................................. (13,461,089) (4,349,613) (118,704,007)
--------------- --------------- ---------------
Net decrease in net assets resulting
from operations ................................. (2,340,682) (2,533,041) (107,932,714)
Distributions to shareholders from:
Net investment income:
Class A Shares ................................. (4,941,692) (584,187) (12,177,297)
Class B Shares ................................. (6,337,732) (1,184,982) (16,952,948)
Class C Shares ................................. (194,560) (86,030) (350,721)
Net realized gains on investments:
Class A Shares ................................. (820,545) -- (8,666,628)
Class B Shares ................................. (1,134,171) -- (15,401,167)
Net increase in net assets from
Portfolio share transactions:
Class A Shares ................................. 40,129,172 19,943,641 98,182,081
Class B Shares ................................. 107,929,014 30,512,768 177,184,385
Class C Shares ................................. 20,861,722 10,751,291 57,292,851
--------------- --------------- ---------------
Net increase in net assets ......................... 153,150,526 56,819,460 171,177,842
NET ASSETS:
Beginning of year .................................. 257,235,778 42,810,226 1,050,998,736
--------------- --------------- ---------------
End of year ........................................ $ 410,386,304 $ 99,629,686 $ 1,222,176,578
=============== =============== ===============
Undistributed net investment income/
(accumulated net investment loss)
at end of year .................................. $ 1,626,605 $ 289,329 $ 1,903,573
=============== =============== ===============
CONSERVATIVE STRATEGIC
GROWTH GROWTH
PORTFOLIO PORTFOLIO
--------------- ---------------
Net investment income .............................. $ 7,168,912 $ 1,148,135
Net realized loss on investment transactions ....... (27,792,209) (18,516,023)
Net change in unrealized depreciation of investments 71,712,826 42,229,976
--------------- ---------------
Net increase in net assets resulting from operations 51,089,529 24,862,088
Distributions to shareholders from:
Net investment income:
Class A Shares ................................. (3,324,777) --
Class B Shares ................................. (3,560,866) --
Class C Shares ................................. (394,618) --
Net realized gains on investments:
Class A Shares ................................. (1,207,378) (1,363,712)
Class B Shares ................................. (2,172,745) (2,912,460)
Class C Shares ................................. (189,450) (239,793)
Net increase in net assets from
Portfolio share transactions:
Class A Shares ................................. 39,049,475 15,062,807
Class B Shares ................................. 4,861,914 6,176,209
Class C Shares ................................. 33,844,233 16,041,185
--------------- ---------------
Net increase in net assets ......................... 117,995,317 57,626,324
NET ASSETS:
Beginning of period ................................ 1,019,572,686 543,981,186
--------------- ---------------
End of period ...................................... $ 1,137,568,003 $ 601,607,510
=============== ===============
Undistributed net investment income/
(accumulated net investment loss)
at end of period ................................ $ 40,430 $ (2,036,360)
=============== ===============
FOR THE YEAR ENDED OCTOBER 31, 2002
Net investment income/(loss) ....................... $ 9,708,842 $ (1,762,837)
Net realized loss on investment transactions ....... (22,354,871) (19,276,417)
Capital gain distributions received ................ 16,146,584 11,335,484
Net change in unrealized depreciation
of investments .................................. (157,996,634) (102,508,118)
--------------- ---------------
Net decrease in net assets resulting
from operations ................................. (154,496,079) (112,211,888)
Distributions to shareholders from:
Net investment income:
Class A Shares ................................. (6,666,523) (1,747,932)
Class B Shares ................................. (7,958,370) (1,410,113)
Class C Shares ................................. (166,866) --
Net realized gains on investments:
Class A Shares ................................. (10,695,459) (5,806,231)
Class B Shares ................................. (21,727,603) (14,696,936)
Net increase in net assets from
Portfolio share transactions:
Class A Shares ................................. 95,094,711 52,002,496
Class B Shares ................................. 117,499,855 58,617,939
Class C Shares ................................. 52,961,138 30,810,756
--------------- ---------------
Net increase in net assets ......................... 63,844,804 5,558,091
NET ASSETS:
Beginning of year .................................. 955,727,882 538,423,095
--------------- ---------------
End of year ........................................ $ 1,019,572,686 $ 543,981,186
=============== ===============
Undistributed net investment income/
(accumulated net investment loss)
at end of year .................................. $ 151,779 $ (3,184,495)
=============== ===============
See Notes to Financial Statements.
5
STATEMENTS of CHANGES in NET assets-- CAPITAL stock ACTIVITY
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
CONSERVATIVE
FLEXIBLE INCOME PORTFOLIO BALANCED PORTFOLIO BALANCED PORTFOLIO
----------------------------- ------------------------------ ------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
04/30/03 YEAR ENDED 04/30/03 YEAR ENDED 04/30/03 YEAR ENDED
(UNAUDITED) 10/31/02 (UNAUDITED) 10/31/02 (UNAUDITED) 10/31/02
-------------- ------------- ------------- ------------- ------------- -------------
AMOUNT
CLASS A:
Sold........................ $ 47,290,747 $ 84,412,208 $ 23,461,624 $ 26,561,725 $ 123,445,691 $ 208,700,548
Issued as reinvestment
of dividends............. 3,074,070 5,430,181 597,423 545,400 5,699,823 20,362,056
Redeemed.................... (23,478,963) (49,713,217) (8,000,571) (7,163,484) (60,764,539) (130,880,523)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ $ 26,885,854 $ 40,129,172 $ 16,058,476 $ 19,943,641 $ 68,380,975 $ 98,182,081
============= ============= ============= ============= ============= =============
CLASS B:
Sold........................ $ 97,309,568 $167,150,115 $ 32,728,955 $ 47,338,465 $ 151,953,696 $ 364,028,978
Issued as reinvestment
of dividends............. 4,544,722 6,883,675 833,827 1,120,605 7,009,958 31,578,926
Redeemed.................... (36,406,656) (66,104,776) (11,850,215) (17,946,302) (96,108,037) (218,423,519)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ $ 65,447,634 $107,929,014 $ 21,712,567 $ 30,512,768 $ 62,855,617 $ 177,184,385
============= ============= ============= ============= ============= =============
CLASS C:
Sold........................ $ 31,378,363 $ 24,293,018 $ 17,385,618 $ 13,027,528 $ 56,544,767 $ 61,849,073
Issued as reinvestment
of dividends............. 541,526 186,408 225,121 82,212 723,659 339,699
Redeemed.................... (6,385,696) (3,617,704) (3,469,536) (2,358,449) (8,252,914) (4,895,921)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ $ 25,534,193 $ 20,861,722 $ 14,141,203 $ 10,751,291 $ 49,015,512 $ 57,292,851
============= ============= ============= ============= ============= =============
SHARES
CLASS A:
Sold........................ 4,594,991 8,154,853 2,625,077 2,941,946 11,949,404 18,913,717
Issued as reinvestment
of dividends............. 300,813 520,200 67,246 59,724 554,808 1,789,576
Redeemed.................... (2,278,523) (4,778,917) (894,354) (782,349) (5,892,888) (12,103,718)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ 2,617,281 3,896,136 1,797,969 2,219,321 6,611,324 8,599,575
============= ============= ============= ============= ============= =============
CLASS B:
Sold........................ 9,471,188 16,178,625 3,662,518 5,217,185 14,721,913 32,803,008
Issued as reinvestment
of dividends............. 444,908 660,627 93,899 122,074 682,834 2,763,071
Redeemed.................... (3,537,650) (6,398,520) (1,332,227) (1,995,076) (9,354,694) (20,505,876)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ 6,378,446 10,440,732 2,424,190 3,344,183 6,050,053 15,060,203
============= ============= ============= ============= ============= =============
CLASS C:
Sold........................ 3,064,066 2,380,884 1,952,455 1,453,867 5,502,051 5,812,421
Issued as reinvestment
of dividends............. 53,159 18,439 25,408 9,292 70,722 32,960
Redeemed.................... (622,497) (357,775) (388,699) (269,989) (804,511) (478,652)
------------- ------------- ------------- ------------- ------------- -------------
Net increase................ 2,494,728 2,041,548 1,589,164 1,193,170 4,768,262 5,366,729
============= ============= ============= ============= ============= =============
See Notes to Financial Statements.
6
CONSERVATIVE GROWTH
PORTFOLIO STRATEGIC GROWTH PORTFOLIO
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
04/30/03 YEAR ENDED 04/30/03 YEAR ENDED
(UNAUDITED) 10/31/02 (UNAUDITED) 10/31/02
------------- ------------ ------------- -------------
AMOUNT
CLASS A:
Sold........................ $ 78,769,868 $176,718,838 $ 39,045,894 $ 88,781,158
Issued as reinvestment
of dividends............. 4,442,836 17,034,761 1,343,689 7,459,192
Redeemed.................... (44,163,229) (98,658,888) (25,326,776) (44,237,854)
------------- ------------ ------------- -------------
Net increase................ $ 39,049,475 $ 95,094,711 $ 15,062,807 $ 52,002,496
============= ============ ============= =============
CLASS B:
Sold........................ $ 81,477,678 $270,723,102 $ 41,972,426 $153,986,321
Issued as reinvestment
of dividends............. 5,613,113 29,089,982 2,862,520 15,823,064
Redeemed.................... (82,228,877) (182,313,229) (38,658,737) (111,191,446)
------------- ------------ ------------- -------------
Net increase................ $ 4,861,914 $117,499,855 $ 6,176,209 $ 58,617,939
============= ============ ============= =============
CLASS C:
Sold........................ $ 41,664,210 $ 57,059,145 $ 18,726,152 $ 32,857,698
Issued as reinvestment
of dividends............. 566,268 163,114 236,442 --
Redeemed.................... (8,386,245) (4,261,121) (2,921,409) (2,046,942)
------------- ------------ ------------- -------------
Net increase................ $ 33,844,233 $ 52,961,138 $ 16,041,185 $ 30,810,756
============= ============ ============= =============
SHARES
CLASS A:
Sold........................ 7,539,697 15,125,354 3,666,448 7,241,116
Issued as reinvestment
of dividends............. 425,978 1,389,290 123,956 553,561
Redeemed.................... (4,275,798) (8,885,639) (2,382,533) (3,832,603)
------------- ------------ ------------- -------------
Net increase................ 3,689,877 7,629,005 1,407,871 3,962,074
============= ============ ============= =============
CLASS B:
Sold........................ 7,978,754 23,374,623 4,050,135 12,524,785
Issued as reinvestment
of dividends............. 547,939 2,391,976 271,029 1,202,834
Redeemed.................... (8,132,175) (16,829,157) (3,783,536) (9,806,674)
------------- ------------ ------------- -------------
Net increase................ 394,518 8,937,442 537,628 3,920,945
============= ============ ============= =============
CLASS C:
Sold........................ 4,098,346 5,198,735 1,811,609 2,779,004
Issued as reinvestment
of dividends............. 55,578 15,672 22,391 --
Redeemed.................... (834,904) (422,126) (287,264) (196,890)
------------- ------------ ------------- -------------
Net increase................ 3,319,020 4,792,281 1,546,736 2,582,114
============= ============ ============= =============
See Notes to Financial Statements.
7
FINANCIAL highlights
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
---------------------------------------- ------------------------------------------
NET REALIZED
AND DIVIDENDS DISTRIBUTIONS
NET ASSET VALUE, NET UNREALIZED TOTAL FROM FROM NET FROM
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT NET REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME(1) CAPITAL GAINS DISTRIBUTIONS
--------------- ---------- ------------ ---------- ---------- ------------- -------------
FLEXIBLE INCOME PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.17 $0.21(7) $0.37 $0.58 $(0.21) $(0.01) $(0.22)
10/31/02 10.71 0.45(7) (0.48) (0.03) (0.43) (0.08) (0.51)
10/31/01 11.06 0.50(7) (0.04) 0.46 (0.61) (0.20) (0.81)
10/31/00 10.75 0.47(7) 0.42 0.89 (0.55) (0.03) (0.58)
10/31/99 10.63 0.40(7) 0.57(8) 0.97 (0.48) (0.37) (0.85)
10/31/98(5) 10.79 0.12 (0.15) (0.03) (0.13) -- (0.13)
06/30/98 10.57 0.45 0.67 1.12 (0.66) (0.24) (0.90)
CLASS B
04/30/03 (unaudited) 10.15 0.17(7) 0.37 0.54 (0.17) (0.01) (0.18)
10/31/02 10.71 0.38(7) (0.50) (0.12) (0.36) (0.08) (0.44)
10/31/01 11.06 0.42(7) (0.04) 0.38 (0.53) (0.20) (0.73)
10/31/00 10.75 0.39(7) 0.42 0.81 (0.47) (0.03) (0.50)
10/31/99 10.63 0.33(7) 0.56(8) 0.89 (0.40) (0.37) (0.77)
10/31/98(5) 10.79 0.10 (0.16) (0.06) (0.10) -- (0.10)
06/30/98 10.57 0.31 0.73 1.04 (0.58) (0.24) (0.82)
CLASS C
04/30/03 (unaudited) 10.13 0.17(7) 0.37 0.54 (0.18) (0.01) (0.19)
10/31/02(6) 10.54 0.24(7) (0.43) (0.19) (0.22) -- (0.22)
CONSERVATIVE BALANCED PORTFOLIO
CLASS A
04/30/03 (unaudited) $ 8.83 $0.16(7) $0.34 $0.50 $(0.15) $-- $(0.15)
10/31/02 9.43 0.33 (0.61) (0.28) (0.32) -- (0.32)
10/31/01 9.96 0.34(7) (0.44) (0.10) (0.43) -- (0.43)
10/31/00 9.94 0.51(7) 0.02(8) 0.53 (0.50) (0.01) (0.51)
10/31/99 10.25 0.56 (0.27) 0.29 (0.58) (0.02) (0.60)
10/31/98(5) 10.34 0.19 (0.09) 0.10 (0.19) -- (0.19)
06/30/98 10.13 0.64 0.22 0.86 (0.65) -- (0.65)
CLASS B
04/30/03 (unaudited) 8.82 0.12(7) 0.35 0.47 (0.12) -- (0.12)
10/31/02 9.43 0.27 (0.62) (0.35) (0.26) -- (0.26)
10/31/01 9.96 0.27(7) (0.44) (0.17) (0.36) -- (0.36)
10/31/00 9.94 0.44(7) 0.02(8) 0.46 (0.43) (0.01) (0.44)
10/31/99 10.25 0.50 (0.29) 0.21 (0.50) (0.02) (0.52)
10/31/98(5) 10.34 0.16 (0.09) 0.07 (0.16) -- (0.16)
06/30/98 10.13 0.56 0.22 0.78 (0.57) -- (0.57)
CLASS C
04/30/03 (unaudited) 8.80 0.12(7) 0.36 0.48 (0.13) -- (0.13)
10/31/02(6) 9.39 0.16 (0.60) (0.44) (0.15) -- (0.15)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
----------------------------------------------------------------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
WITHOUT FEE
WAIVERS, EXPENSES
RATIO OF RATIO OF REIMBURSED
OPERATING NET INVESTMENT AND/OR FEES
NET NET ASSETS, EXPENSES TO INCOME TO PORTFOLIO REDUCED BY CREDITS
ASSET VALUE, TOTAL END OF PERIOD AVERAGE NET AVERAGE NET TURNOVER ALLOWED BY THE
END OF PERIOD RETURN(2) (IN 000'S) ASSETS(3) ASSETS RATE CUSTODIAN(3)(4)
------------- --------- ------------- ------------ ------------- --------- -----------------
FLEXIBLE INCOME PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.53 5.80% $177,391 1.03%(9) 4.11%(9) 2% 1.03%(9)
10/31/02 10.17 (0.37)% 144,710 1.06% 4.41% 9% 1.06%
10/31/01 10.71 3.67% 110,680 1.06% 4.61% 7% 1.06%
10/31/00 11.06 8.56% 129,386 1.06% 4.28% 27% 1.06%
10/31/99 10.75 9.39% 194,404 1.00% 3.86% 31% 1.06%
10/31/98(5) 10.63 (0.26)% 9,766 0.95%(9) 3.62%(9) 15% 1.37%(9)
06/30/98 10.79 11.07% 8,808 0.95% 4.07% 24% 1.23%
CLASS B
04/30/03 (unaudited) 10.51 5.33% 320,692 1.79%(9) 3.35%(9) 2% 1.79%(9)
10/31/02 10.15 (1.08)% 244,999 1.81% 3.66% 9% 1.81%
10/31/01 10.71 2.92% 146,555 1.79% 3.88% 7% 1.79%
10/31/00 11.06 7.76% 77,238 1.80% 3.54% 27% 1.80%
10/31/99 10.75 8.60% 46,821 1.75% 3.11% 31% 1.81%
10/31/98(5) 10.63 (0.51)% 11,142 1.70%(9) 2.87%(9) 15% 2.12%(9)
06/30/98 10.79 10.24% 7,684 1.70% 3.32% 24% 1.98%
CLASS C
04/30/03 (unaudited) 10.48 5.42% 47,535 1.77%(9) 3.37%(9) 2% 1.77%(9)
10/31/02(6) 10.13 (1.78)% 20,677 1.81%(9) 3.66%(9) 9% 1.81%(9)
CONSERVATIVE BALANCED
PORTFOLIO
CLASS A
04/30/03 (unaudited) $ 9.18 5.74% $48,829 1.05%(9) 3.54%(9) 4% 1.11%(9)
10/31/02 8.83 (3.06)% 31,070 1.05% 3.67% 9% 1.17%
10/31/01 9.43 (0.99)% 12,257 1.16% 3.65% 18% 1.30%
10/31/00 9.96 5.52% 4,557 1.32% 5.16% 59% 1.32%
10/31/99 9.94 2.89% 7,297 1.00% 5.57% 51% 1.24%
10/31/98(5) 10.25 0.96% 7,611 0.95%(9) 5.40%(9) 22% 1.53%(9)
06/30/98 10.34 8.71% 7,793 0.95% 6.23% 14% 1.25%
CLASS B
04/30/03 (unaudited) 9.17 5.36% 82,612 1.81%(9) 2.78%(9) 4% 1.87%(9)
10/31/02 8.82 (3.77)% 58,054 1.80% 2.92% 9% 1.92%
10/31/01 9.43 (1.71)% 30,554 1.89% 2.92% 18% 2.03%
10/31/00 9.96 4.76% 10,947 2.04% 4.44% 59% 2.04%
10/31/99 9.94 2.05% 13,443 1.74% 4.83% 51% 1.98%
10/31/98(5) 10.25 0.70% 5,698 1.70%(9) 4.65%(9) 22% 2.28%(9)
06/30/98 10.34 7.90% 4,084 1.70% 5.48% 14% 2.01%
CLASS C
04/30/03 (unaudited) 9.15 5.46% 25,459 1.77%(9) 2.82%(9) 4% 1.83%(9)
10/31/02(6) 8.80 (4.70)% 10,505 1.78%(9) 2.94%(9) 9% 1.90%(9)
See Notes to Financial Statements.
8-9 spread
FINANCIAL highlights
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------------- -----------------------------------------
NET REALIZED
AND DIVIDENDS DISTRIBUTIONS
NET ASSET VALUE, NET UNREALIZED TOTAL FROM FROM NET FROM
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT NET REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME(1) CAPITAL GAINS DISTRIBUTIONS
--------------- ---------- -------------- ---------- ---------- -------------- ------------
BALANCED PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.24 $0.13 $0.41 $0.54 $(0.14) $-- $(0.14)
10/31/02 11.63 0.28 (1.08) (0.80) (0.33) (0.26) (0.59)
10/31/01 13.55 0.33(7) (1.27) (0.94) (0.51) (0.47) (0.98)
10/31/00 12.22 0.28(7) 1.53 1.81 (0.48) -- (0.48)
10/31/99 11.02 0.19(7) 2.39 2.58 (0.44) (0.94) (1.38)
10/31/98(5) 11.63 0.05 (0.61) (0.56) (0.05) -- (0.05)
06/30/98 10.95 0.22 1.25 1.47 (0.68) (0.11) (0.79)
CLASS B
04/30/03 (unaudited) 10.22 0.09 0.41 0.50 (0.10) -- (0.10)
10/31/02 11.62 0.20 (1.09) (0.89) (0.25) (0.26) (0.51)
10/31/01 13.54 0.23(7) (1.27) (1.04) (0.41) (0.47) (0.88)
10/31/00 12.21 0.18(7) 1.55 1.73 (0.40) -- (0.40)
10/31/99 11.02 0.11(7) 2.38 2.49 (0.36) (0.94) (1.30)
10/31/98(5) 11.63 0.02 (0.61) (0.59) (0.02) -- (0.02)
06/30/98 10.95 0.17 1.22 1.39 (0.60) (0.11) (0.71)
CLASS C
04/30/03 (unaudited) 10.20 0.09 0.41 0.50 (0.11) -- (0.11)
10/31/02(6) 11.35 0.13 (1.15) (1.02) (0.13) -- (0.13)
CONSERVATIVE GROWTH
PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.37 $0.10 $0.43 $0.53 $(0.10) $(0.03) $(0.13)
10/31/02 12.35 0.16(7) (1.52) (1.36) (0.22) (0.40) (0.62)
10/31/01 15.52 0.20(7) (2.34) (2.14) (0.58) (0.45) (1.03)
10/31/00 13.43 0.12(7) 2.40 2.52 (0.43) -- (0.43)
10/31/99 10.97 0.06(7) 3.70 3.76 (0.42) (0.88) (1.30)
10/31/98(5) 11.84 0.01 (0.88) (0.87) -- -- --
06/30/98 10.86 0.13(7) 1.42 1.55 (0.51) (0.06) (0.57)
CLASS B
04/30/03 (unaudited) 10.14 0.05 0.43 0.48 (0.06) (0.03) (0.09)
10/31/02 12.10 0.08(7) (1.50) (1.42) (0.14) (0.40) (0.54)
10/31/01 15.17 0.09(7) (2.28) (2.19) (0.43) (0.45) (0.88)
10/31/00 13.21 0.00(7)(10) 2.37 2.37 (0.38) -- (0.41)
10/31/99 10.85 (0.03)(7) 3.61 3.58 (0.13) (0.88) (1.22)
10/31/98(5) 11.74 (0.03) (0.86) (0.89) -- -- --
06/30/98 10.80 0.04(7) 1.43 1.47 (0.08) (0.06) (0.53)
CLASS C
04/30/03 (unaudited) 10.10 0.06 0.43 0.49 (0.07) (0.03) (0.10)
10/31/02(6) 11.79 0.05(7) (1.66) (1.61) (0.08) -- (0.08)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE
NET ASSETS
WITHOUT FEE
WAIVERS, EXPENSES
RATIO OF RATIO OF REIMBURSED
OPERATING NET INVESTMENT AND/OR FEES
NET NET ASSETS, EXPENSES TO INCOME TO PORTFOLIO REDUCED BY CREDITS
ASSET VALUE, END OF PERIOD AVERAGE NET AVERAGE NET TURNOVER ALLOWED BY THE
END OF PERIOD TOTAL RETURN(2) (IN 000'S) ASSETS(3) ASSETS RATE CUSTODIAN(3)(4)
------------- --------------- ------------- ------------ --------------- --------- ------------------
BALANCED PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.64 5.28% $510,224 1.03%(9) 2.60%(9) 6% 1.03%(9)
10/31/02 10.24 (7.32)% 423,478 1.04% 2.55% 19% 1.04%
10/31/01 11.63 (7.28)% 380,681 1.02% 2.63% 6% 1.02%
10/31/00 13.55 15.11% 391,655 1.03% 2.05% 22% 1.03%
10/31/99 12.22 25.16% 333,639 1.03% 1.66% 39% 1.04%
10/31/98(5) 11.02 (4.85)% 93,491 0.95%(9) 1.22%(9) 3% 1.02%(9)
06/30/98 11.63 14.32% 101,726 0.95% 2.14% 29% 1.00%
CLASS B
04/30/03 (unaudited) 10.62 4.90% 836,893 1.80%(9) 1.83%(9) 6% 1.80%(9)
10/31/02 10.22 (8.03)% 743,953 1.80% 1.79% 19% 1.80%
10/31/01 11.62 (7.98)% 670,318 1.78% 1.87% 6% 1.78%
10/31/00 13.54 14.26% 549,849 1.77% 1.31% 22% 1.77%
10/31/99 12.21 24.22% 237,438 1.77% 0.92% 39% 1.78%
10/31/98(5) 11.02 (5.09)% 110,626 1.70%(9) 0.47%(9) 3% 1.77%(9)
06/30/98 11.63 13.47% 114,944 1.70% 1.39% 29% 1.75%
CLASS C
04/30/03 (unaudited) 10.59 4.89% 107,304 1.76%(9) 1.87%(9) 6% 1.76%(9)
10/31/02(6) 10.20 (9.00)% 54,745 1.80%(9) 1.79%(9) 19% 1.80%(9)
CONSERVATIVE GROWTH
PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.77 5.16% $400,513 1.08%(9) 1.86%(9) 8% 1.08%(9)
10/31/02 10.37 (11.72)% 347,297 1.06% 1.41% 14% 1.06%
10/31/01 12.35 (14.31)% 319,583 1.03% 1.45% 5% 1.03%
10/31/00 15.52 18.89% 341,685 1.02% 0.76% 17% 1.02%
10/31/99 13.43 36.54% 249,650 1.02% 0.48% 16% 1.03%
10/31/98(5) 10.97 (7.35)% 100,024 0.95%(9) 0.05%(9) 9% 1.03%(9)
06/30/98 11.84 15.18% 114,946 0.95% 1.17% 28% 1.00%
CLASS B
04/30/03 (unaudited) 10.53 4.78% 651,998 1.85%(9) 1.09%(9) 8% 1.85%(9)
10/31/02 10.14 (12.46)% 623,852 1.82% 0.65% 14% 1.82%
10/31/01 12.10 (14.93)% 636,145 1.79% 0.69% 5% 1.79%
10/31/00 15.17 18.07% 604,460 1.77% 0.01% 17% 1.77%
10/31/99 13.21 34.98% 263,911 1.77% (0.27)% 16% 1.78%
10/31/98(5) 10.85 (7.58)% 155,064 1.70%(9) (0.70)%(9) 9% 1.78%(9)
06/30/98 11.74 14.44% 169,269 1.70% 0.40% 28% 1.74%
CLASS C
04/30/03 (unaudited) 10.49 4.90% 85,057 1.79%(9) 1.15%(9) 8% 1.79%(9)
10/31/02(6) 10.10 (13.72)% 48,424 1.82%(9) 0.65%(9) 14% 1.82%(9)
See Notes to Financial Statements.
10-11 spread
FINANCIAL highlights
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
----------------------------------------- -----------------------------------------
NET REALIZED
AND DIVIDENDS DISTRIBUTIONS
NET ASSET VALUE, NET UNREALIZED TOTAL FROM FROM NET FROM
BEGINNING INVESTMENT GAIN/(LOSS) ON INVESTMENT INVESTMENT NET REALIZED TOTAL
OF PERIOD INCOME/LOSS INVESTMENTS OPERATIONS INCOME(1) CAPITAL GAINS DISTRIBUTIONS
--------------- ---------- -------------- ---------- ---------- -------------- -------------
STRATEGIC GROWTH PORTFOLIO
CLASS A
04/30/03 (unaudited) $10.59 $0.05(7) $0.45 $0.50 $-- $(0.09) $(0.09)
10/31/02 13.10 0.03(7) (1.92) (1.89) (0.14) (0.48) (0.62)
10/31/01 17.11 0.05(7) (3.21) (3.16) (0.47) (0.38) (0.85)
10/31/00 14.61 (0.04)(7) 3.07 3.03 (0.53) -- (0.53)
10/31/99 11.67 (0.03)(7) 4.36 4.33 (0.41) (0.98) (1.39)
10/31/98(5) 12.66 (0.02)(7) (0.97) (0.99) -- -- --
06/30/98 11.26 0.00(7)(10) 2.12 2.12 (0.68) (0.04) (0.72)
CLASS B
04/30/03 (unaudited) 10.32 0.01(7) 0.44 0.45 -- (0.09) (0.09)
10/31/02 12.78 (0.06)(7) (1.88) (1.94) (0.04) (0.48) (0.52)
10/31/01 16.75 (0.06)(7) (3.14) (3.20) (0.39) (0.38) (0.77)
10/31/00 14.40 (0.16)(7) 3.02 2.86 (0.51) -- (0.51)
10/31/99 11.52 (0.13)(7) 4.31 4.18 (0.32) (0.98) (1.30)
10/31/98(5) 12.53 (0.05)(7) (0.96) (1.01) -- -- --
06/30/98 11.19 (0.09)(7) 2.11 2.02 (0.64) (0.04) (0.68)
CLASS C
04/30/03 (unaudited) 10.32 0.01(7) 0.45 0.46 -- (0.09) (0.09)
10/31/02(6) 12.50 (0.04)(7) (2.14) (2.18) -- -- --
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------
RATIO OF
OPERATING
EXPENSES TO
AVERAGE NET
ASSETS WITHOUT FEE
WAIVERS, EXPENSES
RATIO OF RATIO OF REIMBURSED
OPERATING NET INVESTMENT AND/OR FEES
NET NET ASSETS, EXPENSES TO INCOME/(LOSS)TO PORTFOLIO REDUCED BY CREDITS
ASSET VALUE, END OF PERIOD AVERAGE NET AVERAGE NET TURNOVER ALLOWED BY THE
END OF PERIOD TOTAL RETURN(2) (IN 000'S) ASSETS(3) ASSETS RATE CUSTODIAN(3)(4)
------------ --------------- -------------- ------------ -------------- --------- ------------------
STRATEGIC GROWTH
PORTFOLIO
CLASS A
04/30/03 (unaudited) $11.00 4.69% $188,383 1.19%(9) 0.92%(9) 8% 1.19%(9)
10/31/02 10.59 (15.45)% 166,354 1.13% 0.23% 10% 1.13%
10/31/01 13.10 (19.03)% 153,857 1.08% 0.34% 2% 1.08%
10/31/00 17.11 20.84% 142,241 1.06% (0.21)% 15% 1.06%
10/31/99 14.61 39.55% 74,678 1.07% (0.21)% 20% 1.09%
10/31/98(5) 11.67 (7.82)% 19,690 0.95%(9) (0.53)%(9) 10% 1.13%(9)
06/30/98 12.66 20.11% 18,330 0.94% 0.01% 23% 1.08%
CLASS B
04/30/03 (unaudited) 10.68 4.32% 369,092 1.93%(9) 0.18%(9) 8% 1.93%(9)
10/31/02 10.32 (16.04)% 350,982 1.87% (0.51)% 10% 1.87%
10/31/01 12.78 (19.70)% 384,566 1.84% (0.42)% 2% 1.84%
10/31/00 16.75 19.95% 363,910 1.81% (0.96)% 15% 1.81%
10/31/99 14.40 38.60% 130,522 1.83% (0.97)% 20% 1.85%
10/31/98(5) 11.52 (8.06)% 51,752 1.70%(9) (1.28)%(9) 10% 1.88%(9)
06/30/98 12.53 19.24% 51,173 1.68% (0.74)% 23% 1.83%
CLASS C
04/30/03 (unaudited) 10.69 4.42% 44,132 1.85%(9) 0.26%(9) 8% 1.85%(9)
10/31/02(6) 10.32 (17.44)% 26,645 1.85%(9) (0.49)%(9) 10% 1.85%(9)
- ------------------------
(1) Includes dividends paid from the short-term portion of capital gain
distributions received from the Underlying Funds.
(2) Total return is not annualized for periods less than one year and does not
reflect any applicable sales charges. The total return would have been
lower if certain fees had not been waived and/or expenses reimbursed by the
investment advisor or if fees had not been reduced by credits allowed by
the custodian.
(3) The Portfolio also will indirectly bear its prorated share of expenses of
the Underlying Funds.
(4) Ratio of operating expenses to average net assets includes expenses paid
indirectly.
(5) Fiscal year end changed to October 31 from June 30.
(6) All Portfolios commenced offering Class C shares on March 1, 2002.
(7) Per share numbers have been calculated using the average shares method.
(8) The amount shown may not agree with the change in the aggregate gains and
losses of portfolio securities due to the timing of sales and redemptions
of Portfolio shares.
(9) Annualized.
(10) Amount represents less than $0.01 per share.
See Notes to Financial Statements.
12-13 spread
PORTFOLIOS of INVESTMENTS
FLEXIBLE INCOME PORTFOLIO
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES -- 99.5%
1,298,874 WM Equity Income Fund .................. $17,430,886
2,265,827 WM Growth & Income Fund ................ 43,435,900
1,846,191 WM Growth Fund ......................... 22,468,141
5,501,485 WM High Yield Fund ..................... 40,931,052
17,728,929 WM Income Fund ......................... 167,715,668
1,029,834 WM Mid Cap Stock Fund .................. 13,408,443
539,616 WM REIT Fund ........................... 5,644,388
29,515,096 WM Short Term Income Fund .............. 71,131,382
1,187,812 WM Small Cap Stock Fund ................ 10,607,165
12,726,996 WM U.S. Government Securities Fund ..... 141,906,008
321,834 WM West Coast Equity Fund .............. 8,020,104
-----------
Total Investment Company Securities
(Cost $536,883,426) ................... 542,699,137
-----------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT-- 0.3%
(Cost $1,706,000)
$ 1,706,000 Agreement with Goldman Sachs Group, Inc.,
1.080% dated 04/30/2003, to be
repurchased at $1,706,051 on
05/01/2003, collateralized by
$1,616,837 U.S. Treasury Notes,
having various interest rates and
maturities
(Market Value $1,740,843) ........... 1,706,000
-----------
TOTAL INVESTMENTS
(Cost $538,589,426*) ..................... 99.8% 544,405,137
OTHER ASSETS AND LIABILITIES (NET) ............ 0.2 1,212,222
----- ------------
NET ASSETS .................................... 100.0% $545,617,359
===== ============
- --------------
* Aggregate cost for federal tax purposes.
CONSERVATIVE BALANCED PORTFOLIO
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
NVESTMENT COMPANY SECURITIES -- 98.5%
653,656 WM Equity Income Fund .................. $ 8,772,057
777,926 WM Growth & Income Fund ................ 14,912,848
899,538 WM Growth Fund ......................... 10,947,383
1,609,639 WM High Yield Fund ..................... 11,975,712
4,596,939 WM Income Fund ......................... 43,487,043
617,477 WM International Growth Fund ........... 4,174,142
412,998 WM Mid Cap Stock Fund .................. 5,377,230
295,906 WM REIT Fund ........................... 3,095,178
4,682,192 WM Short Term Income Fund .............. 11,284,082
417,190 WM Small Cap Stock Fund ................ 3,725,505
2,875,243 WM U.S. Government Securities Fund ..... 32,058,955
191,963 WM West Coast Equity Fund .............. 4,783,728
-----------
Total Investment Company Securities
(Cost $152,977,800) ................. 154,593,863
-----------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT-- 1.0%
(Cost $1,577,000)
$ 1,577,000 Agreement with Goldman Sachs Group, Inc.,
1.080% dated 04/30/2003, to be
repurchased at $1,577,047 on
05/01/2003, collateralized by
$1,494,579 U.S. Treasury Notes,
having various interest rates and
maturities
(Market Value $1,609,208) ........... 1,577,000
-----------
TOTAL INVESTMENTS
(Cost $154,554,800*) ..................... 99.5% 156,170,863
OTHER ASSETS AND LIABILITIES (NET) ............ 0.5 728,718
----- ------------
NET ASSETS .................................... 100.0% $156,899,581
===== ============
- -------------
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
14
PORTFOLIOS of INVESTMENTS
BALANCED PORTFOLIO
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES -- 96.8%
9,989,453 WM Equity Income Fund .................. $134,058,460
10,827,116 WM Growth & Income Fund ................ 207,555,807
13,039,082 WM Growth Fund ......................... 158,685,630
13,013,072 WM High Yield Fund ..................... 96,817,255
26,998,559 WM Income Fund ......................... 255,406,364
10,717,955 WM International Growth Fund ........... 72,453,373
6,058,338 WM Mid Cap Stock Fund .................. 78,879,565
4,158,357 WM REIT Fund ........................... 43,496,410
8,722,295 WM Short Term Income Fund .............. 21,020,731
6,640,872 WM Small Cap Stock Fund ................ 59,302,989
18,661,962 WM U.S. Government Securities Fund .... 208,080,872
2,921,644 WM West Coast Equity Fund .............. 72,807,368
-------------
Total Investment Company Securities
(Cost $1,501,363,311) ............... 1,408,564,824
-------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT-- 3.1%
(Cost $44,369,000)
$ 44,369,000 Agreement with Goldman Sachs Group, Inc.,
1.080% dated 04/30/2003, to be
repurchased at $44,370,331 on
05/01/2003, collateralized by
$42,050,076 U.S. Treasury Notes,
having various interest rates and
maturities
(Market Value $45,275,175) .......... 44,369,000
-------------
TOTAL INVESTMENTS
(Cost $1,545,732,311*) .................. 99.9% 1,452,933,824
OTHER ASSETS AND LIABILITIES (NET) ........... 0.1 1,487,683
----- --------------
NET ASSETS ................................... 100.0% $1,454,421,507
===== ==============
- --------------
* Aggregate cost for federal tax purposes.
CONSERVATIVE GROWTH PORTFOLIO
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES -- 99.7%
9,915,583 WM Equity Income Fund .................. $133,067,117
11,698,322 WM Growth & Income Fund ................ 224,256,825
13,938,005 WM Growth Fund ......................... 169,625,523
9,448,941 WM High Yield Fund ..................... 70,300,124
12,585,277 WM Income Fund ......................... 119,056,724
11,267,520 WM International Growth Fund ........... 76,168,435
6,417,918 WM Mid Cap Stock Fund .................. 83,561,296
4,309,716 WM REIT Fund ........................... 45,079,630
7,353,221 WM Small Cap Stock Fund ................ 65,664,262
6,193,386 WM U.S. Government Securities Fund ..... 69,056,250
3,164,573 WM West Coast Equity Fund .............. 78,861,159
-------------
Total Investment Company Securities
(Cost $1,295,679,465) ............... 1,134,697,345
-------------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT-- 0.2%
(Cost $2,221,000)
$ 2,221,000 Agreement with Goldman Sachs Group, Inc.,
1.080% dated 04/30/2003, to be
repurchased at $2,221,067 on
05/01/2003, collateralized by
$2,104,921 U.S. Treasury Notes,
having various interest rates and
maturities
(Market Value $2,266,361) ........... 2,221,000
-------------
TOTAL INVESTMENTS
(Cost $1,297,900,465*) ................ 99.9% 1,136,918,345
----- -------------
OTHER ASSETS AND LIABILITIES (NET) ......... 0.1 649,658
----- -------------
NET ASSETS ................................. 100.0% $1,137,568,003
===== =============
- --------------
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
15
PORTFOLIO of INVESTMENTS
STRATEGIC GROWTH PORTFOLIO
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
INVESTMENT COMPANY SECURITIES -- 99.9%
5,417,477 WM Equity Income Fund .................. $72,702,536
7,728,535 WM Growth & Income Fund ................ 148,156,018
8,330,549 WM Growth Fund ......................... 101,382,787
4,933,322 WM High Yield Fund ..................... 36,703,919
7,662,540 WM International Growth Fund ........... 51,798,770
5,215,291 WM Mid Cap Stock Fund ................. 67,903,090
2,265,903 WM REIT Fund .......................... 23,701,347
4,971,869 WM Small Cap Stock Fund ................ 44,398,789
2,162,627 WM West Coast Equity Fund ............. 53,892,663
-----------
Total Investment Company Securities
(Cost $753,252,123) ................. 600,639,919
-----------
PRINCIPAL
AMOUNT
---------
REPURCHASE AGREEMENT-- 0.3%
(Cost $2,030,000)
$ 2,030,000 Agreement with Goldman Sachs Group, Inc.,
1.080% dated 04/30/2003, to be
repurchased at $2,030,061 on
05/01/2003, collateralized by
$1,923,903 U.S. Treasury Notes,
having various interest rates and
maturities
(Market Value $2,071,460) ........... 2,030,000
-----------
TOTAL INVESTMENTS
(Cost $755,282,123*) .................... 100.2% 602,669,919
OTHER ASSETS AND LIABILITIES (NET) ........... (0.2) (1,062,409)
----- ------------
NET ASSETS ................................... 100.0% $601,607,510
===== ============
- --------------
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
16
NOTES to FINANCIAL statements (unaudited)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
1. ORGANIZATION AND BUSINESS
WM Strategic Asset Management Portfolios, LLC (the "LLC") was organized under
the laws of the Commonwealth of Massachusetts on March 12, 1999 as a limited
liability company. The LLC is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company.
The LLC offers five portfolios; Flexible Income, Conservative Balanced,
Balanced, Conservative Growth and Strategic Growth Portfolios (each a
"Portfolio" and collectively, the "Portfolios").
The LLC is authorized to issue an unlimited number of shares of beneficial
interest, each without par value. Each Portfolio offers three classes of shares:
Class A shares, Class B shares and Class C shares. Class A shares are subject to
an initial sales charge at the time of purchase. Certain Class A shares
purchased without an initial sales charge may be subject to a contingent
deferred sales charge ("CDSC") if redeemed within eighteen months from the date
of purchase. Class B shares are not subject to an initial sales charge although
they are generally subject to a CDSC if redeemed within five years from the date
of purchase. Class C shares are subject to an initial sales charge at the time
of purchase and are subject to a CDSC if redeemed within one year from the date
of purchase.
Each of the Portfolios invests, within certain percentage ranges, in Class I
shares of various funds in the WM Group of Funds (collectively, the "Underlying
Funds"). WM Advisors, Inc. (the "Advisor" or "WM Advisors"), a wholly-owned
subsidiary of Washington Mutual, Inc. ("Washington Mutual"), a publicly owned
financial services company, serves as investment advisor to the Portfolios. The
Advisor may alter these percentage ranges when it deems appropriate. The assets
of each Portfolio will be allocated among the Underlying Funds in accordance
with its investment objective based on the Advisor's outlook for the economy,
the financial markets and the relative market valuations of the Underlying
Funds. In addition, in order to meet liquidity needs or for temporary defensive
purposes, each Portfolio may invest its assets directly in cash, stock or bond
index futures, options, money market securities and certain short-term debt
instruments.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America ("generally accepted
accounting principles") requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Portfolios in the
preparation of their financial statements.
PORTFOLIO VALUATION:
Investments in the Underlying Funds are valued at net asset value per Class I
share of the respective Underlying Funds determined as of the close of the New
York Stock Exchange on each valuation date. Short-term debt securities that
mature in 60 days or less are valued at amortized cost which approximates market
value.
REPURCHASE AGREEMENTS:
Each Portfolio may enter into repurchase agreement transactions. A repurchase
agreement is a purchase of an underlying debt obligation subject to an agreement
by the seller to repurchase the obligation at an agreed upon price and time. The
value of the collateral is at all times at least equal to the total amount of
the repurchase obligation. In the event of counterparty default, the Portfolio
would seek to use the collateral to offset losses incurred. There is potential
loss to the Portfolio in the event the Portfolio is delayed or prevented from
exercising its right to dispose of the collateral securities, including the risk
of a possible decline in the value of the underlying securities during the
period while the Portfolio seeks to assert its rights. WM Advisors, acting under
the supervision of the Board of Trustees, reviews the value of the collateral
and the creditworthiness of those banks and broker-dealers with whom each
Portfolio enters into repurchase agreements.
17
NOTES to FINANCIAL statements (unaudited) (continued)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis. Realized gains and
losses from securities sold are recorded on the identified cost basis.
Interest income on debt securities is accrued daily. Dividend income is recorded
on the ex-dividend date. Each Portfolio's investment income and realized and
unrealized gains and losses are allocated among the classes of that Portfolio
based upon the relative average net assets of each class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Flexible Income, Conservative
Balanced, Balanced and Conservative Growth Portfolios are declared and paid
quarterly. Dividends from any net investment income of the Strategic Growth
Portfolio are declared and paid annually. Distributions of any net capital gains
earned by a Portfolio are distributed no less frequently than annually at the
discretion of the Board of Trustees. Additional distributions of net investment
income and capital gains for each Portfolio may be made at the discretion of the
Board of Trustees in order to avoid the application of a 4% non-deductible
excise tax on certain undistributed amounts of ordinary income and capital
gains.
Distributions from income and capital gains are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investments held by the Portfolios, redesignated
distributions and differing characterization of distributions made by each
Portfolio.
FEDERAL INCOME TAXES:
It is each Portfolio's policy to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and by, among other
things, distributing substantially all of its earnings to its shareholders.
Therefore, no federal income or excise tax provision is required.
EXPENSES:
General expenses of the LLC are allocated to all the Portfolios based upon the
relative average net assets of each Portfolio except printing and postage
expenses, which are allocated to all the Portfolios based upon the relative
number of shareholder accounts of each Portfolio. In addition, the Portfolios
will indirectly bear their prorated share of expenses of the Underlying Funds.
Operating expenses directly attributable to a class of shares are charged to the
operations of that class of shares. Expenses of each Portfolio not directly
attributable to the operations of any class of shares are prorated among the
classes to which the expenses relate based on the relative average net assets of
each class of shares.
3. INVESTMENT ADVISORY AND OTHER TRANSACTIONS
WM Advisors serves as investment advisor to the LLC. As such, WM Advisors
provides its proprietary asset allocation services to the Portfolios, formulates
the Portfolios' investment policies, analyzes economic and market trends,
exercises investment discretion over the assets of the Portfolios and monitors
the allocation of each Portfolio's assets and each Portfolio's performance. For
its investment advisory services to the Portfolios, WM Advisors is entitled to a
monthly fee at an annual rate based upon a percentage of the average daily net
assets of each Portfolio at the following rates:
FROM
$1 BILLION
FROM $0 TO OVER
NAME OF PORTFOLIO TO $1 BILLION $3 BILLION $3 BILLION
------------- ------------ -----------
Flexible Income Portfolio ........ 0.650% 0.600% 0.550%
Conservative Balanced Portfolio .. 0.650% 0.600% 0.550%
Balanced Portfolio ............... 0.650% 0.600% 0.550%
Conservative Growth Portfolio .... 0.650% 0.600% 0.550%
Strategic Growth Portfolio ....... 0.650% 0.600% 0.550%
18
NOTES to FINANCIAL statements (unaudited) (continued)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
The Advisor has voluntarily waived $40,720 of its advisory fees for the
Conservative Balanced Portfolio for the six months ended April 30, 2003. WM
Shareholder Services, Inc. (the "Transfer Agent"), a wholly-owned subsidiary of
Washington Mutual, serves as the transfer agent of the Portfolios. Fees were
paid to the Transfer Agent for services related to the issuance and transfer of
shares, maintaining shareholder lists, and issuing and mailing distributions and
reports. The authorized annual shareholder servicing fee is $19.68 for Class A,
Class B and Class C shareholder accounts, with the exception of the Flexible
Income Portfolio, which is $20.21. Prior to December 1, 2002, the authorized
annual shareholder servicing fee was $20.52 for Class A, Class B and Class C
shareholder accounts, with the exception of the Flexible Income Portfolio, which
was $22.70.
Custodian fees for certain Portfolios have been reduced by credits allowed by
the custodian for uninvested cash balances. These Portfolios could have invested
this cash in income producing investments. Fees reduced by credits allowed by
the custodian for the six months ended April 30, 2003 are shown separately in
the Statements of Operations.
4. TRUSTEES' FEES
No officer or employee of Washington Mutual or its subsidiaries receives any
compensation from the LLC for serving as an officer or Trustee of the LLC. The
LLC, together with other mutual funds advised by WM Advisors, pays each Trustee
who is not an officer or employee of Washington Mutual or its subsidiaries, a
per annum retainer plus attendance fees for each meeting at which they are
present. The Lead Trustee, Committee Chairs and Committee Members receive
additional remuneration for these services to the LLC. Trustees are also
reimbursed for travel and out-of-pocket expenses. Each Trustee serves in the
same capacity for all 39 funds within the WM Group of Funds.
5. DISTRIBUTION PLANS
WM Funds Distributor, Inc. (the "Distributor"), a registered broker-dealer and a
wholly-owned subsidiary of Washington Mutual, serves as distributor for Class A,
Class B and Class C shares of the Portfolios. For the six months ended April 30,
2003, the Distributor received $906,050 representing commissions (front end
sales charges) on Class A and Class C shares and $2,793,718 representing CDSC
fees from Class A, Class B and Class C shares.
Each of the Portfolios has adopted three distribution plans, pursuant to Rule
12b-1 under the 1940 Act, applicable to Class A, Class B and Class C shares of
the Portfolio (each, a "Rule 12b-1 Plan"), respectively. Under the applicable
Rule 12b-1 Plans, the Distributor may receive a service fee at an annual rate of
0.25% of the average daily net assets of each class. In addition, the
Distributor is paid a fee as compensation in connection with the offering and
sale of Class B and Class C shares at an annual rate of 0.75% of the average
daily net assets of each class. These fees may be used to cover the expenses of
the Distributor primarily intended to result in the sale of such shares,
including payments to the Distributor's representatives or others for selling
shares. The service fee is paid by the Portfolio to the Distributor, which in
turn, pays a portion of the service fee to broker/dealers that provide services,
such as accepting telephone inquiries and transaction requests and processing
correspondences, new account applications and subsequent purchases by check for
the shareholders. Under their terms, each Rule 12b-1 plan shall remain in effect
from year to year, provided such continuance is approved annually by vote of the
Board of Trustees, including a majority of those Trustees who are not
"interested persons" of the LLC, as defined in the 1940 Act, and who have no
direct or indirect financial interest in the operation of such distribution
plans, or any agreements related to such plans, respectively.
6. PURCHASES AND SALES OF INVESTMENTS
The aggregate cost of purchases and proceeds from sales of Underlying Funds for
the six months ended April 30, 2003, were as follows:
NAME OF PORTFOLIO PURCHASES SALES
----------------- --------- -----
Flexible Income Portfolio ................. $126,075,532 $ 9,980,000
Conservative Balanced Portfolio ........... 55,581,899 4,550,000
Balanced Portfolio ........................ 244,034,855 71,072,000
Conservative Growth Portfolio ............. 157,700,126 85,378,800
Strategic Growth Portfolio ................ 78,129,191 43,569,000
19
NOTES to FINANCIAL statements (unaudited) (continued)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
At April 30, 2003 aggregate gross unrealized appreciation for all Underlying
Funds in which there was an excess of value over tax cost and aggregate gross
unrealized depreciation for all Underlying Funds in which there was an excess of
tax cost over value were as follows:
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
NAME OF PORTFOLIO APPRECIATION DEPRECIATION
---------------- ------------- -------------
Flexible Income Portfolio ............ $13,609,883 $ 7,794,172
Conservative Balanced Portfolio ...... 2,907,168 1,291,105
Balanced Portfolio ................... 36,053,458 128,851,945
Conservative Growth Portfolio ........ 26,147,072 187,129,192
Strategic Growth Portfolio ........... 10,244,704 162,856,908
7. RISK FACTORS OF THE PORTFOLIOS
Investing in the Underlying Funds through the Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Funds. For example, under certain circumstances, an
Underlying Fund may determine to make payment of a redemption request by a
Portfolio wholly or partly by a distribution in kind of securities from its
portfolio, instead of cash, in accordance with the rules of the Securities and
Exchange Commission. In such cases, the Portfolios may hold securities
distributed by an Underlying Fund until the Advisor determines that it is
appropriate to dispose of such securities.
Certain Underlying Funds may invest a portion of their assets in foreign
securities; enter into forward foreign currency transactions; lend their
portfolio securities; enter into stock index, interest rate and currency futures
contracts, and options on such contracts; enter into interest rate swaps or
purchase or sell interest rate caps or floors; engage in other types of options
transactions; make short sales; purchase zero coupon and payment-in-kind bonds;
engage in repurchase or reverse repurchase agreements; purchase and sell
"when-issued" securities and engage in "delayed-delivery" transactions; and
engage in various other investment practices, each with inherent risks.
The officers and Trustees, the Advisor, the Distributor and Transfer Agent of
the Portfolios serve in the same capacity for the Underlying Funds. Conflicts
may arise as these persons and companies seek to fulfill their fiduciary
responsibilities to both the Portfolios and the Underlying Funds.
From time to time, one or more of the Underlying Funds used for investment by a
Portfolio may experience relatively large investments or redemptions due to
reallocations or rebalancings by the Portfolios. These transactions will affect
the Underlying Funds, since the Underlying Funds that experience redemptions as
a result of the reallocations or rebalancings may have to sell portfolio
securities and the Underlying Funds that receive additional cash will have to
invest such cash. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on portfolio management
to the extent that the Underlying Funds may be required to sell securities or
invest cash at times when they would not otherwise do so. These transactions
could also have tax consequences if sales of securities resulted in gains and
could also increase transaction costs. The Advisor is committed to minimizing
such impact on the Underlying Funds to the extent it is consistent with pursuing
the investment objectives of the Portfolios. The Advisor may nevertheless face
conflicts in fulfilling its responsibilities. The Advisor will, at all times,
monitor the impact on the Underlying Funds of transactions by the Portfolios.
20
This Semi-Annual Report is published for the general information of the
shareholders of the WM Group of Funds. It is authorized for distribution to
prospective investors only when preceded or accompanied by a current WM Group of
Funds prospectus. A mutual fund's share price and investment return will vary
with market conditions, and the principal value of an investment when you sell
your shares may be more or less than the original cost.
The WM Group of Funds are not insured by the FDIC. They are not deposits or
obligations of, nor are they guaranteed by, any bank. These securities are
subject to investment risk, including possible loss of principal amount
invested.
Distributed by:
WM Funds Distributor, Inc.
Member NASD
- -------------------------------------------------------------------------------
LOGO: WM PRSRT STD
GroupofFunds U.S. Postage
P.O. Box 9757 PAID
Providence, RI 02940-9757 N. READING, MA
PERMIT #105
LOGO:
Printed on recycled paper
WMSAMSAR (06/27/03)
Item 9. Controls and Procedures:
The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the effectiveness of the design and
operation of the registrant's disclosure controls and procedures as of a date
within 90 days of the filing date of this report on Form N-CSR, that the design
and operation of such procedures are effective to provide reasonable assurance
that information required to be disclosed by the registrant in the reports that
it files or submits on Form N-CSR is recorded, processed, summarized, and
reported within the time periods specified in the Commission's rules and forms.
There have been no significant changes in the registrant's internal controls or
in other factors that could significantly affect those controls subsequent to
the date of their evaluation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WM Strategic Asset Management Portfolios, LLC
By: /s/William G. Papesh
President
June 30, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WM Strategic Asset Management Portfolios, LLC
/s/John T. West
Chief Financial Officer
June 30, 2003
/s/William G. Papesh
President
June 30, 2003