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 811-05775
WM Trust II
(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
GroupofFunds
MONEY
MARKET
FUNDS
Common sense. Uncommon solutions.
photo: valley
photo: urban buildings
SEMI-ANNUAL REPORT
for the period ended
April 30, 2003
MONEY MARKET FUNDS
Money Market Fund
Tax-Exempt Money Market Fund
California Money Fund
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 .......................... 7
Financial Highlights ..................................... 8
Portfolio of Investments .................................10
Notes to Financial Statements (unaudited) ................18
NOT FDIC INSURED o May Lose Value o No Bank Guarantee
photo: William 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 GROUP OF FUNDS
APRIL 30, 2003 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ----------- ------------
ASSETS:
Investments, at amortized cost and value ............................... $923,935,392 $ 29,023,872 $ 26,341,421
Cash ................................................................... 237 -- --
Interest receivable .................................................... 3,675,791 143,520 104,892
Receivable for Fund shares sold ........................................ 1,677,390 33,402 1,024
Prepaid expenses ....................................................... 6,104 215 209
------------ ----------- ------------
Total Assets ........................................................ 929,294,914 29,201,009 26,447,546
------------ ----------- ------------
LIABILITIES:
Payable for Fund shares redeemed ....................................... 3,003,346 19,052 430,706
Payable for when-issued securities ..................................... -- 379,846 --
Payable for investment securities purchased ............................ 50,016,835 379,842 --
Investment advisory fee payable ........................................ 331,309 9,598 6,596
Shareholder servicing and distribution fees payable .................... 55,564 -- --
Transfer agent fees payable ........................................... 46,448 1,627 1,689
Dividends payable ...................................................... 111,977 -- 67
Accrued expenses and other payables .................................... 413,046 26,296 25,819
------------ ----------- ------------
Total Liabilities ................................................... 53,978,525 816,261 464,877
------------ ----------- ------------
NET ASSETS ............................................................. $875,316,389 $ 28,384,748 $ 25,982,669
============ =========== ============
See Notes to Financial Statements.
2
STATEMENTS of ASSETS and LIABILITIES (continued)
WM GROUP OF FUNDS
APRIL 30, 2003 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ----------- ------------
NET ASSETS CONSIST OF:
Accumulated net realized loss on investment transactions ............... $ (45,429) $ (163) $ (18,783)
Paid-in capital ........................................................ 875,361,818 28,384,911 26,001,452
------------ ----------- ------------
Total Net Assets .................................................... $ 875,316,389 $ 28,384,748 $ 25,982,669
============ =========== ============
NET ASSETS:
Class A Shares ......................................................... $ 710,905,804 $ 28,384,748 $ 25,982,669
============ =========== ============
Class B Shares ......................................................... $ 96,863,641 -- --
============
Class C Shares ......................................................... $ 4,422,730 -- --
============
Class I Shares ......................................................... $ 63,124,214 -- --
============
SHARES OUTSTANDING:
Class A Shares ......................................................... 710,925,697 28,384,637 26,028,141
============
Class B Shares ......................................................... 96,861,020 -- --
============
Class C Shares ......................................................... 4,422,747 -- --
============
Class I Shares ......................................................... 63,136,553 -- --
============
CLASS A SHARES:
Net asset value, offering and redemption price per share
of beneficial interest outstanding * ................................ $ 1.00 $ 1.00 $ 1.00
============ =========== ============
CLASS B SHARES:
Net asset value and offering price per share of beneficial interest
outstanding * ....................................................... $ 1.00 -- --
============
CLASS C SHARES:
Net asset value per share of beneficial interest
outstanding * ....................................................... $ 1.00 -- --
============
Maximum sales charge ................................................... 1.00% -- --
============
Maximum offering price per share of beneficial
interest outstanding ................................................ $ 1.01 -- --
============
CLASS I SHARES:
Net asset value, offering and redemption price per share
of beneficial interest outstanding .................................. $ 1.00 -- --
=============
- ----------
* 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 GROUP OF FUNDS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
----------- --------- ---------
INVESTMENT INCOME:
Interest ............................................................... $ 6,786,035 $ 200,343 $ 165,535
----------- --------- ---------
EXPENSES:
Investment advisory fee ................................................ 1,985,095 68,769 60,181
Custodian fees ......................................................... 24,340 1,442 1,132
Legal and audit fees ................................................... 32,787 14,469 14,353
Registration and filing fees ........................................... 34,090 9,156 5,620
Printing and postage expenses .......................................... 264,284 7,742 8,045
Other .................................................................. 87,349 8,948 5,863
Shareholder servicing and distribution fees:
Class B Shares ...................................................... 500,180 -- --
Class C Shares ...................................................... 21,794 -- --
Transfer agent fees:
Class A Shares ...................................................... 186,781 11,205 11,687
Class B Shares ...................................................... 68,434 -- --
Class C Shares ...................................................... 1,627 -- --
----------- --------- ---------
Total expenses .................................................... 3,206,761 121,731 106,881
Fees waived by the investment advisor
and/or the distributor .............................................. (103,439) (19,231) (22,587)
Fees reduced by custodian credits ...................................... (681) (28) (23)
----------- --------- ---------
Net expenses ...................................................... 3,102,641 102,472 84,271
----------- --------- ---------
NET INVESTMENT INCOME .................................................. 3,683,394 97,871 81,264
----------- --------- ---------
NET REALIZED GAIN FROM INVESTMENT
TRANSACTIONS ........................................................ -- 89 --
----------- --------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................................................... $ 3,683,394 $ 97,960 $ 81,264
=========== ========= =========
See Notes to Financial Statements.
4
STATEMENTS OF CHANGES IN NET ASSETS
WM GROUP OF FUNDS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ---------- ------------
Net investment income .................................................. $ 3,683,394 $ 97,871 $ 81,264
Net realized gain on investment transactions ........................... -- 89 --
------------ ----------- ------------
Net increase in net assets resulting from operations ................... 3,683,394 97,960 81,264
Distributions to shareholders from net investment income:
Class A Shares ...................................................... (3,218,534) (97,871) (81,264)
Class B Shares ...................................................... (27,599) -- --
Class C Shares ...................................................... (1,537) -- --
Class I Shares ...................................................... (435,724) -- --
Net increase/(decrease) in net assets from Fund share transactions:
Class A Shares ...................................................... 21,904,256 (4,914,960) (1,689,840)
Class B Shares ...................................................... (7,666,694) -- --
Class C Shares ...................................................... 747,198 -- --
Class I Shares ...................................................... (106,170,312) -- --
------------ ----------- ------------
Net decrease in net assets ............................................. (91,185,552) (4,914,871) (1,689,840)
NET ASSETS:
Beginning of period .................................................... 966,501,941 33,299,619 27,672,509
------------ ----------- ------------
End of period .......................................................... $875,316,389 $28,384,748 $ 25,982,669
============ =========== ============
See Notes to Financial Statements.
5
STATEMENTS of CHANGES in NET assets (continued)
WM GROUP OF FUNDS
FOR THE YEAR ENDED OCTOBER 31, 2002
TAX-EXEMPT
MONEY MONEY CALIFORNIA
MARKET MARKET MONEY
FUND FUND FUND
------------ ----------- -----------
Net investment income .................................................. $ 10,167,628 $ 320,465 $ 334,232
Net realized loss on investment transactions ........................... (3,396) -- --
------------ ----------- -----------
Net increase in net assets resulting from operations ................... 10,164,232 320,465 334,232
Distributions to shareholders from net investment income:
Class A Shares ...................................................... (9,281,873) (320,465) (334,317)
Class B Shares ...................................................... (246,921) -- --
Class C Shares ...................................................... (2,236) -- --
Class I Shares ...................................................... (640,873) -- --
Net increase/(decrease) in net assets from Fund share transactions:
Class A Shares ...................................................... 41,056,243 1,772,972 (14,885,593)
Class B Shares ...................................................... 29,928,362 -- --
Class C Shares ...................................................... 3,675,549 -- --
Class I Shares ...................................................... 151,540,600 -- --
------------ ----------- -----------
Net increase/(decrease) in net assets .................................. 226,193,083 1,772,972 (14,885,678)
NET ASSETS:
Beginning of year ...................................................... 740,308,858 31,526,647 42,558,187
------------ ----------- -----------
End of year ............................................................ $966,501,941 $33,299,619 $27,672,509
============ =========== ===========
See Notes to Financial Statements.
6
STATEMENTS OF CHANGES IN NET ASSETS -- CAPITAL STOCK ACTIVITY
WM GROUP OF FUNDS
Since the Funds have sold, issued as reinvestment of dividends and redeemed
shares only at a constant net asset value of $1.00 per share, the number of
shares represented by such sales, reinvestments and redemptions is the same as
the amounts shown below for such transactions.
MONEY MARKET FUND TAX-EXEMPT MONEY MARKET FUND CALIFORNIA MONEY FUND
---------------------------- ---------------------------- ---------------------------
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
------------- ------------- ------------ ------------ ------------- ------------
CLASS A:
Sold .............................. $ 262,291,404 $ 651,389,983 $ 20,751,942 $ 60,798,797 $ 13,605,613 $ 43,920,297
Issued as reinvestment
of dividends .................... 2,502,990 8,782,474 95,304 310,701 80,721 326,567
Redeemed .......................... (242,890,138) (619,116,214) (25,762,206) (59,336,526) (15,376,174) (59,132,457)
------------- ------------- ------------ ------------ ------------- ------------
Net increase/(decrease) ........... $ 21,904,256 $ 41,056,243 $ (4,914,960) $ 1,772,972 $ (1,689,840) $(14,885,593)
============= ============= ============ ============ ============= ============
CLASS B:
Sold .............................. $ 38,048,151 $ 118,259,643 -- -- -- --
Issued as reinvestment
of dividends .................... 26,204 230,721 -- -- -- --
Redeemed .......................... (45,741,049) (88,562,002) -- -- -- --
------------- -------------
Net increase/(decrease) ........... $ (7,666,694) $ 29,928,362 -- -- -- --
============= =============
CLASS C:
Sold .............................. $ 5,173,589 $ 6,003,195 -- -- -- --
Issued as reinvestment
of dividends .................... 1,453 2,054 -- -- -- --
Redeemed .......................... (4,427,844) (2,329,700) -- -- -- --
------------- -------------
Net increase ...................... $ 747,198 $ 3,675,549 -- -- -- --
============= =============
CLASS I:
Sold .............................. $ 18,436,000 $ 265,034,485 -- -- -- --
Issued as reinvestment
of dividends .................... 435,738 640,376 -- -- -- --
Redeemed .......................... (125,042,050) (114,134,261) -- -- -- --
------------- -------------
Net increase/(decrease) ........... $(106,170,312) $ 151,540,600 -- -- -- --
============= =============
See Notes to Financial Statements.
7
FINANCIAL highlights
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
NET DIVIDENDS
ASSET VALUE, NET FROM NET NET
BEGINNING OF INVESTMENT INVESTMENT ASSET VALUE, TOTAL
PERIOD INCOME INCOME END OF PERIOD RETURN(1)
------------ ---------- ---------- ------------- ---------
MONEY MARKET FUND
CLASS A
04/30/03 (unaudited) $1.00 $0.005 $(0.005) $1.00 0.46%
10/31/02 1.00 0.014 (0.014) 1.00 1.42%
10/31/01 1.00 0.043 (0.043) 1.00 4.40%
10/31/00 1.00 0.056 (0.056) 1.00 5.79%
10/31/99 1.00 0.044 (0.044) 1.00 4.52%
10/31/98(3) 1.00 0.041 (0.041) 1.00 4.19%
12/31/97 1.00 0.049 (0.049) 1.00 5.04%
CLASS B
04/30/03 (unaudited) 1.00 0.000(7) (0.000)(7) 1.00 0.03%
10/31/02 1.00 0.003 (0.003) 1.00 0.34%
10/31/01 1.00 0.033 (0.033) 1.00 3.32%
10/31/00 1.00 0.046 (0.046) 1.00 4.68%
10/31/99 1.00 0.034 (0.034) 1.00 3.44%
10/31/98(3) 1.00 0.035 (0.035) 1.00 3.52%
12/31/97 1.00 0.041 (0.041) 1.00 4.15%
CLASS C
04/30/03 (unaudited) 1.00 0.000(7) (0.000)(7) 1.00 0.04%
10/31/02(4) 1.00 0.002 (0.002) 1.00 0.17%
CLASS I
04/30/03 (unaudited) 1.00 0.005 (0.005) 1.00 0.49%
10/31/02 1.00 0.015 (0.015) 1.00 1.47%
10/31/01 1.00 0.044 (0.044) 1.00 4.46%
10/31/00 1.00 0.057 (0.057) 1.00 5.90%
10/31/99 1.00 0.046 (0.046) 1.00 4.66%
10/31/98(5) 1.00 0.031 (0.031) 1.00 3.17%
TAX-EXEMPT MONEY MARKET FUND
CLASS A
04/30/03 (unaudited) $1.00 $0.003 $(0.003) $1.00 0.32%
10/31/02 1.00 0.010 (0.010) 1.00 1.00%
10/31/01 1.00 0.025 (0.025) 1.00 2.57%
10/31/00 1.00 0.033 (0.033) 1.00 3.39%
10/31/99 1.00 0.026 (0.026) 1.00 2.65%
10/31/98(3) 1.00 0.026 (0.026) 1.00 2.60%
12/31/97 1.00 0.031 (0.031) 1.00 3.18%
CALIFORNIA MONEY FUND
CLASS A
04/30/03 (unaudited) $1.00 $0.003 $(0.003) $1.00 0.30%
10/31/02 1.00 0.009 (0.009) 1.00 0.89%
10/31/01 1.00 0.023 (0.023) 1.00 2.32%
10/31/00 1.00 0.028 (0.028) 1.00 2.79%
10/31/99 1.00 0.022 (0.022) 1.00 2.24%
10/31/98(6) 1.00 0.008 (0.008) 1.00 0.99%
06/30/98 1.00 0.027 (0.027) 1.00 2.73%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
----------------------------------------------
RATIO OF OPERATING
EXPENSES TO AVERAGE NET
RATIO OF RATIO OF ASSETS WITHOUT FEE WAIVERS,
OPERATING NET INVESTMENT EXPENSES REIMBURSED
NET ASSETS, EXPENSES TO INCOME TO AND FEES REDUCED BY
END OF PERIOD AVERAGE NET AVERAGE NET CREDITS ALLOWED BY THE
(IN 000'S) ASSETS ASSETS CUSTODIAN(2)
------------- ----------- -------------- ---------------------------
MONEY MARKET FUND
CLASS A
04/30/03 (unaudited) $710,906 0.60%(8) 0.94%(8) 0.60%(8)
10/31/02 689,002 0.59% 1.41% 0.59%
10/31/01 647,951 0.64% 4.21% 0.64%
10/31/00 458,368 0.65% 5.62% 0.65%
10/31/99 460,444 0.72% 4.43% 0.73%
10/31/98(3) 403,443 0.66%(8) 4.94%(8) 0.67%(8)
12/31/97 260,877 0.75% 4.93% 0.83%
CLASS B
04/30/03 (unaudited) 96,864 1.49%(8) 0.05%(8) 1.69%(8)
10/31/02 104,530 1.67% 0.33% 1.67%
10/31/01 74,603 1.69% 3.16% 1.69%
10/31/00 23,469 1.71% 4.56% 1.71%
10/31/99 20,452 1.77% 3.38% 1.78%
10/31/98(3) 6,619 1.64%(8) 3.96%(8) 1.65%(8)
12/31/97 471 1.59% 4.15% 1.80%
CLASS C
04/30/03 (unaudited) 4,423 1.46%(8) 0.08%(8) 1.63%(8)
10/31/02(4) 3,676 1.64%(8) 0.36%(8) 1.64%(8)
CLASS I
04/30/03 (unaudited) 63,124 0.55%(8) 0.99%(8) 0.55%(8)
10/31/02 169,295 0.54% 1.46% 0.54%
10/31/01 17,755 0.58% 4.27% 0.58%
10/31/00 15,885 0.55% 5.72% 0.55%
10/31/99 102,760 0.62% 4.53% 0.63%
10/31/98(5) 108,720 0.54%(8) 5.06%(8) 0.55%(8)
TAX-EXEMPT MONEY MARKET FUND
CLASS A
04/30/03 (unaudited) $28,385 0.67%(8) 0.64%(8) 0.80%(8)
10/31/02 33,300 0.67% 0.99% 0.78%
10/31/01 31,527 0.74% 2.52% 0.74%
10/31/00 28,596 0.72% 3.33% 0.88%
10/31/99 31,353 0.57% 2.63% 0.89%
10/31/98(3) 25,441 0.55%(8) 3.09%(8) 0.72%(8)
12/31/97 32,134 0.57% 3.14% 0.71%
CALIFORNIA MONEY FUND
CLASS A
04/30/03 (unaudited) $25,983 0.63%(8) 0.61%(8) 0.80%(8)
10/31/02 27,673 0.63% 0.89% 0.70%
10/31/01 42,558 0.62% 2.27% 0.70%
10/31/00 35,407 0.69% 2.76% 0.69%
10/31/99 34,216 0.81% 2.22% 0.81%
10/31/98(6) 37,167 0.73%(8) 2.31%(8) 0.87%(8)
06/30/98 37,403 0.82% 2.71% 0.99%
- ----------
(1) Total return is not annualized for periods less than one year and does not
reflect any applicable sales charges. The total returns would have been
lower if certain fees had not been waived and expenses reimbursed by the
investment advisor or if fees had not been reduced by credits allowed by the
custodian.
(2) Ratio of operating expenses to average net assets includes expenses paid
indirectly.
(3) Fiscal year end changed to October 31 from December 31.
(4) On March 1, 2002 the Money Market Fund commenced selling Class C shares.
(5) On March 23, 1998 the Money Market Fund commenced selling Class I shares.
(6) Fiscal year end changed to October 31 from June 30.
(7) Amount represents less than $0.001 per share.
(8) Annualized.
See Notes to Financial Statements.
spread pp 8-9
PORTFOLIO of INVESTMENTS
MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
COMMERCIAL PAPER (DOMESTIC) - 19.4%
$ 9,952,000 American Express Credit Corporation,
1.600% due 06/02/2003+++ ........ $ 9,937,846
35,000,000 Bristol-Myers Squibb Company,
1.460% due 07/23/2003+++** ...... 35,000,000
14,228,000 Caterpillar Financial Services
Corporation,
1.270% due 08/04/2003+++ ........ 14,180,316
Cooperative Association of Tractor
Dealers Inc.:
Series A, (MBIA Insured):
8,800,000 1.260% due 05/30/2003+++ ........ 8,791,068
10,100,000 1.260% due 09/15/2003+++ ........ 10,051,571
3,200,000 1.280% due 07/03/2003+++ ........ 3,192,832
1,800,000 1.280% due 08/27/2003+++ ........ 1,792,448
Series B, (AMBAC Insured):
15,000,000 1.270% due 10/21/2003+++ ........ 14,910,571
2,900,000 1.330% due 05/07/2003+++ ........ 2,899,357
33,677,000 International Business Machines
Corporation,
1.770% due 05/05/2003+++ ........ 33,670,377
Windmill Funding Corporation,
(LOC: ABN AMRO Bank NV):
15,596,000 1.250% due 05/07/2003+++** ...... 15,592,751
19,734,000 1.255% due 05/09/2003+++** ...... 19,728,496
------------
Total Commercial Paper (Domestic)
(Cost $169,747,633) ............. 169,747,633
------------
COMMERCIAL PAPER (YANKEE) - 9.9%
ING (U.S.) Funding LLC:
15,000,000 1.330% due 05/12/2003+++ ........ 14,993,904
12,000,000 1.330% due 05/13/2003+++ ........ 11,994,680
16,593,000 Sharp Electronics Corporation,
1.280% due 05/20/2003+++ ........ 16,581,790
19,150,000 Shell Finance (U.K.) PLC,
1.280% due 09/18/2003+++** ...... 19,054,676
24,070,000 TotalFinaElf Capital SA,
1.360% due 05/02/2003+++ ........ 24,069,091
------------
Total Commercial Paper (Yankee)
(Cost $86,694,141) 86,694,141
------------
MEDIUM TERM NOTES - 21.0%
American Honda Finance Corporation:
10,000,000 1.290% due 09/16/2003++** ....... 10,000,715
10,000,000 1.300% due 02/20/2004++** ....... 10,000,000
15,000,000 1.490% due 05/20/2004++** ....... 15,027,030
6,000,000 1.540% due 02/17/2004++** ....... 6,011,759
7,500,000 Bank One Corporation, Sr. Note,
Series C,
1.460% due 06/16/2003++ ......... 7,502,692
16,100,000 Cargill Inc.,
1.540% due 08/26/2003++** ....... 16,111,438
Caterpillar Financial Services
Corporation,
Series F:
20,000,000 1.489% due 08/05/2003++ ......... 20,011,980
6,780,000 6.590% due 05/01/2003 ........... 6,780,000
4,225,000 Citigroup Inc., Sr. Note, Series E,
1.410% due 07/17/2003++ ......... 4,226,323
PRINCIPAL
AMOUNT VALUE
- ---------- ------
General Electric Capital Corporation,
Series A:
$15,000,000 1.320% due 01/28/2004++ ......... $ 15,005,736
4,000,000 7.250% due 05/03/2004 ........... 4,234,839
3,500,000 8.090% due 04/01/2004 ........... 3,712,379
20,000,000 MBIA Global Funding LLC,
1.318% due 01/02/2004++** ....... 20,000,000
Merrill Lynch & Company, Series B:
10,000,000 1.600% due 10/01/2003++ ......... 10,013,590
6,000,000 1.610% due 08/15/2003++ ......... 6,005,892
2,000,000 1.720% due 05/30/2003++ ......... 2,000,322
8,500,000 Salomon Smith Barney Holdings Inc.,
Series K,
1.489% due 12/19/2003++ ......... 8,509,773
15,000,000 Toyota Motor Credit Corporation,
1.261% due 01/16/2004++ ......... 15,000,000
3,170,000 Wells Fargo & Company, Sr. Note,
Series C,
4.250% due 08/15/2003 ........... 3,196,595
------------
Total Medium Term Notes
(Cost $183,351,063) 183,351,063
------------
CORPORATE BONDS AND NOTES - 26.8%
3,000,000 ASSK Properties LC, Note,
(LOC: Wells Fargo & Company),
1.500% due 12/01/2017+ .......... 3,000,000
Associates Corporation NA, Sr. Note:
10,000,000 1.600% due 05/08/2003++ ......... 10,000,509
12,060,000 5.800% due 04/20/2004 ........... 12,567,260
12,500,000 Bank of America Corporation, Sr. Note,
7.000% due 05/15/2003 ........... 12,525,247
20,000,000 Bayerische Landesbank NY, Note,
Series CD,
1.440% due 02/04/2004++ ......... 20,015,368
20,000,000 BP Capital Markets PLC, Bond,
1.435% due 09/11/2003++ ......... 20,002,192
2,309,000 Citigroup Inc., Sr. Note,
5.800% due 03/15/2004 ........... 2,396,724
1,500,000 Corporate Finance Managers, Note,
(LOC: Wells Fargo & Company),
1.400% due 02/02/2043+ .......... 1,500,000
3,300,000 DBSI First Mortgage 1998, Note,
(LOC: U.S. Bancorp),
1.400% due 07/01/2023+ .......... 3,300,000
32,000,000 Everett Clinic, P.S., Bond,
(LOC: Bank of America Corporation),
1.420% due 05/01/2022+ .......... 32,000,000
14,700,000 Heller Financial Inc., Note,
7.875% due 05/15/2003 ........... 14,733,820
2,000,000 Marsh Enterprises LLC, Note,
(LOC: Fifth Third Bancorp),
1.310% due 01/01/2028+ .......... 2,000,000
4,500,000 Medical Properties Inc., Revenue Bonds,
(Dakota Clinic Ltd. Project),
(LOC: ABN AMRO Bank NV),
1.520% due 12/15/2024+ .......... 4,500,000
7,800,000 Norwest Financial Inc., Sr. Note,
6.125% due 08/01/2003 ........... 7,881,314
See Notes to Financial Statements.
10
PORTFOLIO of INVESTMENTS (continued)
MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
CORPORATE BONDS AND NOTES - (CONTINUED)
$ 5,000,000 Pineview Estates LC, Note,
(LOC: Fifth Third Bancorp),
1.310% due 01/01/2023+** ........ $ 5,000,000
15,000,000 Portland Clinic LLP, Bond,
(LOC: U.S. Bancorp),
1.520% due 11/20/2027+ .......... 15,000,000
15,955,000 Presbyterian Homes & Services of
New Jersey Obligated Group,
Revenue Bonds, Series 1998-B1,
(LOC: PNC Financial Services
Group, Inc.),
1.350% due 12/01/2028+ .......... 15,955,000
4,750,000 Rise Inc., Note, (LOC: Wells Fargo &
Company),
1.500% due 11/01/2022+ .......... 4,750,000
5,000,000 Rockwood Quarry LLC, Note,
(LOC: Fifth Third Bancorp),
1.310% due 12/01/2022+ .......... 5,000,000
3,500,000 Salomon Smith Barney Holdings Inc., Note,
6.250% due 05/15/2003 ........... 3,505,701
3,000,000 Tacoma Goodwill Industries, Bond,
(LOC: Bank of America Corporation),
1.350% due 02/01/2023+ .......... 3,000,000
12,000,000 Toyota Motor Credit Corporation, Note,
5.625% due 11/13/2003 ........... 12,273,299
1,558,000 Watts Brothers Frozen Foods, Bond,
(LOC: U.S. Bancorp),
1.400% due 07/01/2013+ .......... 1,558,000
15,272,000 Wells Fargo & Company, Sr. Note,
7.200% due 05/01/2003 ........... 15,272,000
6,500,000 Wells Fargo Financial Inc., Sr. Note,
7.250% due 07/14/2003 ........... 6,576,689
------------
Total Corporate Bonds and Notes
(Cost $234,313,123) 234,313,123
------------
TAXABLE MUNICIPAL BONDS - 23.4%
2,000,000 ABAG, California, Finance Authority
for Nonprofit Corporations,
Revenue Bonds, (Public Policy
Institute of California Project),
Series B, (LOC: Bank of New York
Company, Inc.),
1.450% due 11/01/2031+ .......... 2,000,000
3,725,000 Acworth, Georgia, Downtown Development
Authority, IDR, (City of Acworth Cable
Fiber Optic Project), (AMBAC Insured),
1.350% due 01/01/2017+ .......... 3,725,000
5,600,000 California Educational Facilities
Authority, Loan Agreement Revenue,
(University of Judaism), Series B,
(LOC: Allied Irish Bank PLC),
1.420% due 12/01/2028+ .......... 5,600,000
43,460,000 California Housing Finance Agency,
Home Mortgage Revenue, Series K,
(FSA Insured),
1.280% due 08/01/2031+ .......... 43,460,000
Connecticut State Housing Finance
Authority, Housing Revenue,
(AMBAC Insured):
25,000,000 Subseries B-6,
1.300% due 11/15/2027+ .......... 25,000,000
PRINCIPAL
AMOUNT VALUE
- ---------- ------
(Housing Mortgage Finance Program):
$14,000,000 Series A-4,
1.320% due 05/15/2032+ .......... $ 14,000,000
1,900,000 Series F-1,
1.320% due 11/15/2016+ .......... 1,900,000
6,100,000 Illinois Health Facilities Authority, Health
Care Revenue, (Silver Cross Hospital
Project), Series B, (LOC: Fifth Third
Bancorp),
1.350% due 08/15/2017+ .......... 6,100,000
3,550,000 Kit Carson County, Colorado, Agricultural
Development Revenue, (Midwest Farms
LLC), (LOC: Wells Fargo & Company),
1.350% due 06/01/2027+ .......... 3,550,000
20,000,000 New York City, GO, Subseries A-11,
(FGIC Insured),
1.290% due 11/01/2020+ .......... 20,000,000
14,000,000 New York State Housing Finance Agency,
Housing Revenue, (350 West 43rd Street
Project), Series B, (LOC: Fleet National
Bank),
1.320% due 11/01/2034+ .......... 14,000,000
3,900,000 North Carolina Medical Care Commission,
Health Facilities Revenue, (1st Mortgage-
Baptist Retirement Homes of North
Carolina Inc.), Series C,
(LOC: Wachovia Corporation),
1.510% due 10/01/2008+ .......... 3,900,000
25,800,000 Oakland-Alameda County, California,
Coliseum Authority, Lease Revenue,
(Coliseum Project), Series D,
(LOC: Wachovia Corporation),
1.280% due 02/01/2011+ .......... 25,800,000
2,495,000 Plymouth, Minnesota, Health Facilities
Revenue, (Westhealth Project), Series B,
(FSA Insured),
1.350% due 06/01/2024+ .......... 2,495,000
7,735,000 San Diego County, California, Pension
Obligation Revenue, Series A, (FSA
Insured),
6.380% due 08/15/2003+ .......... 7,842,357
9,485,000 Santa Rosa, California, Wastewater
Revenue, Series A,
(LOC: Westdeutsche Landesbank),
1.450% due 09/01/2028+ .......... 9,485,000
11,100,000 South Fulton, Georgia, Municipal
Regional Jail Authority, Lease
Revenue, (Union City
Justice Center Project),
(MBIA Insured),
1.320% due 11/01/2017+ .......... 11,100,000
Washington State Housing Finance
Commission, MFHR, Series B:
2,010,000 (Boardwalk Apartments Project),
(FNMA Collateral),
1.350% due 09/01/2028+ .......... 2,010,000
1,830,000 (Cedar Landing Project),
(LOC: U.S. Bancorp),
1.400% due 12/01/2028+ .......... 1,830,000
1,160,000 (Oxford Square Project),
(LOC: U.S. Bancorp),
1.400% due 12/01/2028+ .......... 1,160,000
------------
Total Taxable Municipal Bonds
(Cost $204,957,357) ............. 204,957,357
------------
See Notes to Financial Statements.
11
PORTFOLIO of INVESTMENTS (continued)
MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
U.S. GOVERNMENT AGENCY OBLIGATION - 1.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FHLMC) - 1.1%
(Cost $9,872,075)
$10,000,000 1.290% due 04/22/2004+++ .......... $ 9,872,075
------------
FUNDING AGREEMENT - 4.0%
(Cost $35,000,000)
35,000,000 New York Life Insurance Company,
1.380% due 08/05/2003++ ......... 35,000,000
------------
TOTAL INVESTMENTS (Cost $923,935,392*) ....105.6% 923,935,392
OTHER ASSETS AND LIABILITIES (NET) .........(5.6) (48,619,003)
----- ------------
NET ASSETS ................................100.0% $875,316,389
===== ============
- ----------
* Aggregate cost for federal tax purposes.
** Security exempt from registration under Rule 144A of the Securities Act of
1933.
+ Variable rate securities payable upon demand with not more than five
business days' notice, and secured by bank letters of credit or guarantees
by certain corporations. The interest rate shown reflects the rate in
effect at April 30, 2003.
++ Floating rate security whose interest rate is reset periodically based on
an index.
+++ Rate represents discount rate at the date of purchase.
- --------------------------------------------------------------------------------
GLOSSARY OF TERMS
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Federal Guaranty Insurance Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GO -- General Obligation Bond
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MFHR -- Multi-family Housing Revenue
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
12
PORTFOLIO of INVESTMENTS
TAX-EXEMPT MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
MUNICIPAL BONDS AND NOTES - 102.3%
ALABAMA - 5.3%
$ 1,500,000 Daphne-Villa Mercy, Special Care
Facilities Finance Authority,
Health Care Revenue,
(Mercy Medical Project),
(LOC: SouthTrust Bank NA),
1.310% due 12/01/2030+ .......... $ 1,500,000
------------
ARIZONA - 1.6%
455,000 Arizona Health Facilities Authority,
Health Care Revenue, (Pooled Loan
Program),(FGIC Insured),
1.360% due 10/01/2015+ .......... 455,000
------------
ARKANSAS - 5.6%
1,600,000 Saline County, PCR, (Alcoa Inc. Project),
1.810% due 08/01/2010+ .......... 1,600,000
------------
COLORADO - 1.1%
320,000 Metropolitan Football Stadium District,
Sales Tax Revenue, Series B, (MBIA
Insured),
Zero coupon due 01/01/2004 ...... 316,926
------------
DISTRICT OF COLUMBIA - 1.1%
300,000 District of Columbia, IDR,
(Resources for the Future Inc.
Project), (LOC: Wachovia
Corporation),
1.400% due 08/01/2029++ ......... 300,000
------------
FLORIDA - 5.3%
200,000 Florida State Board of Regents,
Housing Revenue, (University of
Central Florida
Project), (MBIA Insured),
2.500% due 10/01/2003 ........... 201,041
500,000 Orange County, Health Facilities
Authority, Health Care Revenue,
(Presbyterian Retirement Project),
(LOC: Bank of
America Corporation),
1.400% due 11/01/2028+ .......... 500,000
800,000 Orange County, IDR, (Central Florida YMCA
Project), Series A, (LOC: Bank of America
Corporation),
1.400% due 05/01/2027+ .......... 800,000
------------
1,501,041
------------
GEORGIA - 2.6%
750,000 Dahlonega, Downtown Development
Authority, Student Housing Revenue,
(North Georgia Student Housing LLC
Project), Series A, (LOC: Wachovia
Corporation),
1.400% due 06/01/2028+ .......... 750,000
------------
HAWAII - 2.0%
565,000 Hawaii State, UTGO, Series CE, ETM,
8.000% due 06/01/2003 ........... 568,074
------------
ILLINOIS - 3.9%
150,000 Calumet City, UTGO, (Corporate Purpose
Bonds), Series B, (FGIC Insured),
(Pre-refunded to 01/01/2004 @ $100),
6.200% due 01/01/2006 ........... 154,948
PRINCIPAL
AMOUNT VALUE
- ---------- ------
$ 250,000 Hoffman Estates, Tax Increment &
Allocation Revenue, (Economic
Development Project),
(AMBAC Insured),
5.000% due 11/15/2003 ........... $ 255,138
350,000 IIlinois Health Facilities Authority,
Health Care Revenue, (Blessing
Hospital Project), Series B,
(FSA Insured),
1.400% due 11/15/2029+ .......... 350,000
350,000 Metropolitan Pier & Exposition
Authority, Dedicated State Tax
Revenue, Series A,
ETM, 5.900% due 06/15/2003 ...... 351,929
------------
1,112,015
------------
INDIANA - 8.4%
180,000 Indiana State Educational Facilities
Authority, College & University
Revenue, (Franklin College Project),
(LOC: Bank One Corporation),
1.400% due 10/01/2019+ .......... 180,000
Marion, Economic Development Revenue,
(Indiana Wesleyan University Project),
(LOC: Bank One Corporation):
500,000 1.350% due 06/01/2030+ .......... 500,000
1,000,000 1.350% due 06/01/2030+ .......... 1,000,000
700,000 Miami County, Economic Development
Revenue, (Dukes Memorial Hospital
Project), (LOC: Wells Fargo &
Company),
1.350% due 10/01/2030+ .......... 700,000
------------
2,380,000
------------
IOWA - 2.1%
600,000 Webster County, Educational Facilities
Revenue, (State Edmond Project),
(LOC: Wells Fargo & Company),
1.350% due 07/01/2020+ .......... 600,000
------------
KANSAS - 6.0%
200,000 Anderson County, Unified School
District No. 365, UTGO, Series A,
(FSA Insured),
3.000% due 09/01/2003 ........... 201,021
1,500,000 Shawnee, IDR, (Shawnee Village
Association LP), (LOC: J.P. Morgan
Chase & Company),
1.400% due 12/01/2009+ .......... 1,500,000
------------
1,701,021
------------
MASSACHUSETTS - 3.4%
575,000 Massachusetts State Health & Educational
Facilities Authority, Revenue Bonds,
(Capital Asset Program), Series M-2,
(LOC: Fleet National Bank),
1.360% due 07/01/2031+ 575,000
390,000 Massachusetts State, Capital Appreciation,
UTGO, (Consolidated Loan), Series A,
(FGIC Insured),
Zero coupon due 03/01/2004 385,902
------------
960,902
------------
See Notes to Financial Statements.
13
PORTFOLIO of INVESTMENTS (continued)
TAX-EXEMPT MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
MUNICIPAL BONDS AND NOTES - (CONTINUED)
MICHIGAN - 4.6%
$ 200,000 Detroit, Sewer Disposal System Revenue,
Series A, (MBIA Insured),
4.700% due 07/01/2003 ........... $ 201,171
900,000 Michigan State Hospital Finance Authority,
Health Care Revenue, (Hospital Equipment
Loan Program), Series A,
(LOC: National City Corporation),
1.370% due 12/01/2023+ .......... 900,000
200,000 Portage, Public Schools, UTGO, (Building
& Site Project), (FSA Insured),
2.000% due 05/01/2003 ........... 200,000
------------
1,301,171
------------
MINNESOTA - 1.1%
300,000 Golden Valley, IDR, (Unicare Homes Inc.
Project), (LOC: Bank of America
Corporation),
1.380% due 09/01/2014+ .......... 300,000
------------
NEBRASKA - 0.9%
250,000 Nebraska Educational Finance Authority,
College & University Revenue,
(Creighton University Project), Series A,
(AMBAC Insured),
3.800% due 09/01/2003 ........... 251,949
------------
NEVADA - 1.3%
370,000 Henderson, Special Assessment Revenue,
(Local Improvement District No. T-10),
Senior Series A, (FSA Insured),
4.000% due 08/01/2003 ........... 372,309
------------
NEW JERSEY - 1.2%
150,000 Essex County, UTGO, Series A-1,
(FGIC Insured),
5.000% due 11/15/2003 ........... 153,051
200,000 Keansburg, UTGO, Series A,
(MBIA Insured),
2.500% due 12/01/2003 ........... 201,502
------------
354,553
------------
NEW YORK - 4.0%
100,000 Nassau County, UTGO, (General
Improvements Project), Series A, (FGIC
Insured),
4.500% due 05/01/2003 ........... 100,000
150,000 New York State Dormitory Authority,
College & University Revenue, (Fordham
University Project), (MBIA Insured),
4.250% due 07/01/2003 ........... 150,778
220,000 New York State Housing Finance Agency,
Revenue Bonds, (Nursing Home and
Health Care Project), Series A,
(MBIA Insured),
4.250% due 11/01/2003 ........... 223,333
250,000 New York, UTGO, Series E, (MBIA-IBC
Insured),
6.000% due 08/01/2003 ........... 253,053
100,000 Rotterdam-Mohonasen, Central
School District,
UTGO, (FGIC Insured),
4.750% due 06/15/2003 ........... 100,383
PRINCIPAL
AMOUNT VALUE
- ---------- ------
$ 305,000 Williamson, Central School District, UTGO,
(FGIC Insured),
5.000% due 06/15/2003 ........... $ 306,310
------------
1,133,857
------------
NORTH CAROLINA - 1.6%
250,000 Brunswick County, COP, (Water Line
Extension Project), (FSA Insured),
6.300% due 05/01/2003 ........... 250,000
200,000 Duplin County, COP, (AMBAC Insured),
2.500% due 09/01/2003 ........... 200,913
------------
450,913
------------
NORTH DAKOTA - 4.4%
1,240,000 Grand Forks, Hospital Facilities Revenue,
(The United Hospital Obligated Group
Project), (LOC: ABN AMRO Bank NV),
1.310% due 12/01/2016+ .......... 1,240,000
------------
OHIO - 3.2%
250,000 Ohio State Building Authority, Lease
Revenue, (Vern Riffe Center Project),
Series A, (AMBAC Insured),
4.500% due 10/01/2003 ........... 253,107
645,000 Warren County, Health Care Facilities
Authority, Health Care Revenue,
(Otterbein Homes Project), Series A,
(LOC: Fifth Third Bancorp),
1.390% due 07/01/2021+ .......... 645,000
------------
898,107
------------
OKLAHOMA - 1.8%
500,000 Oklahoma State Industrial Authority, Health
Care Revenue, (Tealridge Manor
Corporation Project), (LOC: Bank of
America Corporation),
1.400% due 11/01/2018+ .......... 500,000
------------
PENNSYLVANIA - 4.4%
390,000 Fleetwood, Area School District, UTGO,
(FGIC Insured),
2.000% due 05/01/2003 ........... 390,000
300,000 Pennsylvania State, UTGO,
(AMBAC Insured),
5.125% due 09/15/2003 ........... 303,916
250,000 Philadelphia, School District, UTGO,
Series A, (MBIA Insured),
5.200% due 07/01/2003 ........... 251,423
300,000 Trinity, Area School District,
UTGO, (FGIC Insured),
(Pre-refunded to 05/01/2003
@ $100),
5.500% due 05/01/2014 ........... 300,000
------------
1,245,339
------------
TENNESSEE - 3.5%
1,000,000 Metropolitan Government Nashville &
Davidson County, Industrial
Development Board, MFHR,
(Chimneytop II Project),
(LOC: Bank of America Corporation),
1.410% due 09/01/2006+ .......... 1,000,000
------------
See Notes to Financial Statements.
14
PORTFOLIO of INVESTMENTS (continued)
TAX-EXEMPT MONEY MARKET FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
MUNICIPAL BONDS AND NOTES - (CONTINUED)
TEXAS - 8.5%
$ 225,000 Brownsville, Naval District, UTGO,
(AMBAC Insured),
2.500% due 03/01/2004 ........... $ 227,225
200,000 Caddo Mills, Independent School
District,
UTGO, (PSF Guaranteed),
5.750% due 08/15/2003 ........... 202,446
260,000 Coppell, Independent School District,
UTGO, (PSF Guaranteed),
Zero coupon due 08/15/2003 ...... 258,877
375,000 Deer Park, Waterworks & Sewer System
Revenue, (FSA Insured),
2.500% due 03/01/2004*** ........ 378,596
275,000 Hidalgo County, LTGO, (County Buildings
Construction & Renovation), (FGIC
Insured),
2.000% due 08/15/2003 ........... 275,395
195,000 Mission Bend, Municipal Utility
District No.2, Capital Appreciation,
UTGO, (FSA Insured),
Zero coupon due 09/01/2003 ...... 194,226
310,000 Rockwall, Certificates of Obligation,
(Combination Tax and Waterworks &
Sewer System), (FSA Insured),
3.000% due 08/01/2003 ........... 311,199
300,000 Texas Public Building Authority,
Building Revenue, (MBIA Insured), ETM,
Zero coupon due 08/01/2003 ...... 298,792
280,000 Trinity, River Authority, Contract
Revenue, (Livingston Regional Water Supply
System Project), (MBIA Insured),
3.000% due 08/01/2003 ........... 281,053
------------
2,427,809
------------
WASHINGTON - 12.7%
500,000 Benton County, Public Utility
District No. 1,
Electric Power & Light Revenue,
(AMBAC Insured),
6.000% due 11/01/2003** ......... 512,082
1,000,000 King County, Economic Enterprise
Corporation Revenue, (Puget
Sound Blood Center Project),
(LOC: U.S. Bancorp),
1.400% due 04/01/2023+ .......... 1,000,000
600,000 Port Seattle, Industrial Development
Corporation, Airport Revenue, (Alaska
Airlines Inc. Project), (LOC: Bank of
New York Company, Inc.),
1.400% due 12/01/2009+ .......... 600,000
1,045,000 Seattle, Low Income Housing Assistance
Authority, Health Care Revenue,
(Bayview Manor Homes Project),
Series B, (LOC: U.S. Bancorp),
1.400% due 05/01/2019+ .......... 1,045,000
440,000 Washington State Housing Finance
Commission, Elderly Housing Revenue,
(Riverview Retirement Project),
(LOC: U.S. Bancorp),
1.400% due 07/01/2022+ .......... 440,000
------------
3,597,082
------------
PRINCIPAL
AMOUNT VALUE
- ---------- ------
WYOMING - 0.7%
$ 200,000 Albany County Improvements Statutory
Trust, COP, (MBIA Insured),
3.000% due 07/15/2003 $ 200,569
------------
Total Municipal Bonds and Notes
(Cost $29,018,637) 29,018,637
------------
SHARES
- ---------
INVESTMENT COMPANY SECURITY - 0.0% +++
(Cost $5,235)
5,235 Dreyfus Tax-Exempt Cash
Management Fund 5,235
------------
TOTAL INVESTMENTS (Cost $29,023,872*) .....102.3% 29,023,872
OTHER ASSETS AND LIABILITIES (NET) .........(2.3) (639,124)
----- ------------
NET ASSETS ................................100.0% $28,384,748
===== ============
- ----------
* Aggregate cost for federal tax purposes.
** Security segregated as collateral for when-issued securities.
*** Security purchased on a when-issued basis.
+ Variable rate securities payable upon demand with not more than five
business days' notice, and secured by bank letters of credit or guarantees
by certain corporations. The interest rate shown reflects the rate in
effect at April 30, 2003.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933.
+++ Amount represents less than 0.1% of net assets.
- --------------------------------------------------------------------------------
GLOSSARY OF TERMS
AMBAC -- American Municipal Bond Assurance Corporation
COP -- Certificate of Participation
ETM -- Escrowed to Maturity
FGIC -- Federal Guaranty Insurance Corporation
FSA -- Financial Security Assurance
IBC -- Insured Bond Certificate
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
LTGO -- Limited Tax General Obligation Bond
MBIA -- Municipal Bond Investors Assurance
MFHR -- Multi-family Housing Revenue
PCR -- Pollution Control Revenue
PSF -- Permanent School Fund Guarantee Program
UTGO -- Unlimited Tax General Obligation Bond
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
15
PORTFOLIO of INVESTMENTS
CALIFORNIA MONEY FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
MUNICIPAL BONDS AND NOTES - 100.3%
CALIFORNIA - 96.1%
ABAG Financing Authority For Nonprofit
Corporation, Revenue Bonds:
$ 1,000,000 (Hamlin School Project), Series A,
(LOC: BNP Paribas SA),
1.400% due 08/01/2032+ .......... $ 1,000,000
1,000,000 (Point Loma Nazarene University Project),
(LOC: Allied Irish Bank PLC),
1.450% due 10/01/2033+ .......... 1,000,000
1,000,000 (Public Policy Institute of
California Project), Series A,
(LOC: California State Teachers
Retirement System),
1.400% due 11/01/2031+ .......... 1,000,000
Alameda County, IDR, Series A, AMT,
(LOC: Wells Fargo & Company):
800,000 (Heat and Control Inc. Project),
1.450% due 11/01/2025+ .......... 800,000
400,000 (JMS Family Partnership Project),
1.400% due 10/01/2025+ .......... 400,000
115,000 Brea Redevelopment Agency, Tax Allocation
Revenue, (Redevelopment Project AB),
Series A, (AMBAC Insured),
4.000% due 08/01/2003 ........... 115,685
200,000 California Community College Financing
Authority, Lease Revenue, Series A,
(AMBAC Insured),
1.400% due 08/01/2003 ........... 200,000
1,000,000 California Pollution Control
Financing Authority, Solid Waste
Disposal Revenue, (Waste Management
Project), Series A,
AMT, (LOC: ABN AMRO Bank NV),
1.360% due 01/01/2022+ .......... 1,000,000
California State Economic Development
Financing Authority, IDR, AMT,
(LOC: Wells Fargo & Company):
100,000 (Calco Project),
1.500% due 04/01/2027+ .......... 100,000
1,050,000 (Wesflex Pipe Manufacturing Project),
1.500% due 04/01/2018+ .......... 1,050,000
150,000 California State Public Works Board,
Lease Revenue, (Various Community
College Projects), (Pre-refunded
to 03/01/2004 @ $102),
7.000% due 03/01/2014 ........... 160,216
125,000 California State University, Housing System
Revenue, (FGIC Insured),
4.900% due 11/01/2003 ........... 127,324
1,000,000 California State, UTGO, Series B-2,
(LOC: Bank of New York Company, Inc.),
1.190% due 05/01/2033+ .......... 1,000,000
California Statewide Communities
Development Authority, College &
University Revenue:
1,000,000 (Biola University Project), Series A,
(LOC: Allied Irish Bank PLC),
1.450% due 10/01/2032+ .......... 1,000,000
1,000,000 (Masters College), (LOC: U.S. Bancorp),
1.350% due 02/01/2032+ .......... 1,000,000
PRINCIPAL
AMOUNT VALUE
- ---------- ------
$ 700,000 California Statewide Communities
Development Authority, COP, (John Muir/
Mt. Diablo Health Center),
(AMBAC Insured),
1.260% due 08/15/2027+ .......... $ 700,000
500,000 California Statewide Communities
Development Authority, Limited
Obligation Revenue, (The Painted
Turtle Gang Camp Foundation),
(LOC: Allied Irish Bank PLC),
1.400% due 04/01/2033+ .......... 500,000
1,000,000 California Statewide Communities
Development Authority, MFHR,
(Ivy Hill Apartments Project),
Series I, AMT,
(LOC: Bank of America Corporation),
1.400% due 02/01/2033+ .......... 1,000,000
180,000 Castro Valley, Unified School District, UTGO,
(Election of 2002), (FSA Insured),
6.500% due 08/01/2003 ........... 182,196
280,000 Corona-Norco, Unified School District
Public Financing Authority,
Special Tax Revenue,(Community
Facilities Districts Refinancing),
Series A, (MBIA Insured),
5.000% due 09/01/2003 ........... 283,384
175,000 East Bay, Regional Park District, UTGO,
Series C, (FGIC Insured),
(Pre-refunded to 09/01/2003 @ $102),
6.000% due 09/01/2020 ........... 181,306
200,000 El Dorado, Unified High School District,
UTGO, Series A, (FGIC Insured),
8.000% due 08/01/2003 ........... 203,459
1,200,000 Los Angeles County, Industrial
Development Authority, IDR,
(Tulip Corporation Project),
Series A, AMT, (LOC: California State
Teachers Retirement System),
1.450% due 07/01/2014+,++ ....... 1,200,000
1,000,000 Los Angeles, Wastewater System Revenue,
(Multimodal Project), Series C,
(FGIC Insured),
1.250% due 12/01/2031+ .......... 1,000,000
330,000 Merced County, COP, (Juvenile Justice
Correction Facilities Project),
(AMBAC Insured),
3.000% due 06/01/2003 ........... 330,345
1,200,000 Novato, MFHR, (Nova-Ro III Senior Housing
Project), (LOC: BNP Paribas SA),
1.400% due 10/01/2032+ .......... 1,200,000
1,000,000 Paramount, Redevelopment Agency, Tax
Allocation Revenue, (Redevelopment
Project Area No. 1), Series B,
(MBIA Insured),
(Pre-refunded to 08/01/2003
@ $21.4282),
Zero coupon due 08/01/2026 ...... 213,473
Pasadena, COP:
500,000 (City Hall & Park Improvement
Projects), (AMBAC Insured),
1.350% due 02/01/2033+ .......... 500,000
800,000 (Rose Bowl Improvements Project),
(LOC: California State Teachers
Retirement System),
1.350% due 12/01/2016+ .......... 800,000
1,200,000 Rancho Mirage, Joint Powers Financing
Authority, Health Care Revenue,
(Eisenhower Medical Center
Project), Series A,
(LOC: Bank of New York
Company, Inc.),
1.280% due 01/01/2026+ .......... 1,200,000
See Notes to Financial Statements.
16
PORTFOLIO of INVESTMENTS (continued)
CALIFORNIA MONEY FUND
APRIL 30, 2003 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- ---------- ------
MUNICIPAL BONDS AND NOTES - (CONTINUED)
CALIFORNIA - (CONTINUED)
$ 1,000,000 San Diego, MFHR, Issue A, (LOC: Fifth
Third Bancorp),
1.350% due 02/01/2009+ .......... $ 1,000,000
200,000 San Diego, Public Facilities Financing
Authority, Sewer Revenue,
(FGIC Insured),
4.375% due 05/15/2003 ........... 200,227
San Francisco City and County
International Airports Commission,
Airport Revenue,
Second Series:
400,000 Issue 8B, (FGIC Insured),
5.000% due 05/01/2003 ........... 400,000
Issue 15B, (FSA Insured):
250,000 3.900% due 05/01/2003 ........... 250,000
320,000 4.000% due 05/01/2004 ........... 329,043
250,000 Issue 26B, (FGIC Insured),
5.000% due 05/01/2003 ........... 250,000
665,000 San Joaquin Hills, Transportation Corridor
Agency, Toll Road Revenue, Series A,
(MBIA Insured),
Zero coupon due 01/15/2004 ...... 659,436
1,000,000 San Jose, Unified School District,
UTGO, (Santa Clara County Project),
Series A, (FSA Insured),
4.000% due 08/01/2003 ........... 1,006,482
140,000 San Marcos, Unified School District,
Special Tax Revenue, (Community
Facilities District
No. 4), (FSA Insured),
3.000% due 09/01/2003 ........... 140,698
490,000 San Ramon Valley, Unified School District,
UTGO, Series A, (FGIC Insured),
Zero coupon due 07/01/2003 ...... 488,900
800,000 Walnut Creek, MFHR, (Creekside Drive
Apartments Project), (LOC: Bank of
America Corporation),
1.350% due 04/01/2007+ .......... 800,000
------------
24,972,174
------------
PUERTO RICO - 4.2%
Puerto Rico Commonwealth, UTGO, (Public
Improvement Project):
675,000 (AMBAC Insured),
4.500% due 07/01/2003 ........... 678,473
400,000 (MBIA Insured),
5.000% due 07/01/2003 ........... 402,250
------------
1,080,723
------------
Total Municipal Bonds and Notes
(Cost $26,052,897) .............. 26,052,897
------------
SHARES VALUE
- ---------- ------
INVESTMENT COMPANY SECURITY - 1.1%
(Cost $288,524)
288,524 Dreyfus Basic California Municipal
Money Market Fund ............... $ 288,524
------------
TOTAL INVESTMENTS (Cost $26,341,421*) .... 101.4% 26,341,421
OTHER ASSETS AND LIABILITIES (NET) ........ (1.4) (358,752)
----- ------------
NET ASSETS ................................100.0% $ 25,982,669
===== ============
- ----------
* Aggregate cost for federal tax purposes.
+ Variable rate securities payable upon demand with not more than five
business days' notice, and secured by bank letters of credit or guarantees
by certain corporations. The interest rate shown reflects the rate in
effect at April 30, 2003.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933.
- --------------------------------------------------------------------------------
GLOSSARY OF TERMS
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
COP -- Certificate of Participation
FGIC -- Federal Guaranty Insurance Corporation
FSA -- Financial Security Assurance
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MFHR -- Multi-family Housing Revenue
UTGO -- Unlimited Tax General Obligation Bond
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
17
NOTES to FINANCIAL statements (unaudited)
WM GROUP OF FUNDS
1. ORGANIZATION AND BUSINESS
WM Trust I ("Trust I") and WM Trust II ("Trust II") (collectively, the "Trusts")
were organized as Massachusetts business trusts on September 19, 1997 and
February 22, 1989, respectively. The Trusts are registered under the Investment
Company Act of 1940 (the "1940 Act"), as open-end management investment
companies. The Money Market Fund and Tax-Exempt Money Market Fund are
diversified series of WM Trust I. The California Money Fund is a non-diversified
series of WM Trust II. Information presented in this report pertains only to the
three named "Funds". Financial statements for the other funds included in the
Trusts are presented in a separate report. WMAdvisors, Inc. (the "Advisor" or
"WM Advisors") serves as investment manager to the Funds. The Advisor is a
wholly-owned subsidiary of Washington Mutual, Inc. ("Washington Mutual"), a
publicly owned financial services company.
The Trusts are authorized to issue an unlimited number of shares of beneficial
interest, each without par value. Each Fund may offer four classes of shares:
Class A shares, Class B shares, Class C shares and Class I shares. Class A and
Class I shares are not subject to an initial sales charge or, generally, to a
contingent deferred sales charge ("CDSC"). Certain Class A shares purchased by
exchange from another fund within the Trusts may be subject to a 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. Class I shares are
currently only offered to the WM Strategic Asset Management Portfolios, LLC, an
open-end management investment company, and affiliates of Washington Mutual, and
are not available for direct purchase by investors. The Tax-Exempt Money Market
and California Money Funds are not currently offering Class B, Class C or Class
I shares.
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 Funds in the
preparation of their financial statements.
PORTFOLIO VALUATION:
Securities are valued on the basis of amortized cost, which approximates market
value. Amortized cost valuation involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, as long as the amoritized cost fairly reflects the market-based net
asset value per share. Certain other assets may be valued by the Advisor under
the supervision of the Board of Trustees.
REPURCHASE AGREEMENTS:
Each Fund 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 Fund would
seek to use the collateral to offset losses incurred. There is potential loss to
the Fund in the event the Fund is delayed or prevented from exercising its right
to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights. WM Advisors, acting under the supervision of
the Board of Trustees, reviews the value of the collateral and the
creditworthiness of those banks and broker-dealers with whom each Fund enters
into repurchase agreements.
ILLIQUID INVESTMENTS:
Each Fund may invest a portion of its net assets in securities that are not
readily marketable, including: (1) repurchase agreements with maturities greater
than seven calendar days; (2) time deposits maturing in more than seven calendar
days; (3) certain futures contracts and options; (4) certain variable rate
demand notes having a demand period of more than seven days; and (5) securities,
the disposition of which are restricted under Federal securities laws, excluding
certain Rule 144A securities, as defined in the following paragraph.
Illiquid securities generally cannot be sold or disposed of in the ordinary
course of business (within seven days) at approximately the value at which the
Funds have valued the investments. This may have an adverse effect on the Fund's
ability to dispose of particular illiquid securities at fair market value and
may limit the Fund's ability to obtain accurate market quotations for purposes
of valuing the securities and calculating the net asset value of shares of the
Fund. The Funds may also purchase securities that are not registered under the
Securities Act of 1933, as amended (the "Act"), but that can be sold to
18
NOTES to FINANCIAL statements (unaudited) (continued)
WM GROUP OF FUNDS
qualified institutional buyers in accordance with Rule 144A under the Act ("Rule
144A Securities"). Rule 144A Securities generally may be resold only to other
qualified institutional buyers. If a particular investment in Rule 144A
Securities is not determined to be liquid under the guidelines established by
the Board of Trustees, that investment will be included within a Fund's
limitation on investments in illiquid securities.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded on a trade date basis (the date the order
to buy or sell is executed). Realized gains and losses from securities sold are
recorded on the identified cost basis. Securities purchased or sold on a
when-issued or delayed-delivery basis may be settled a month or more after the
trade date; interest income is not accrued until settlement date. Each Fund
instructs the custodian to segregate assets of the Fund with a current value at
least equal to the amount of its when-issued purchase commitments.
Interest income on debt securities is accrued daily. Premiums and discounts are
amortized using the interest method. Dividend income is recorded on the
ex-dividend date. Each Fund's investment income and realized and unrealized
gains and losses are allocated among the classes of that Fund based upon the
relative average net assets of each class.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Funds are declared daily and paid
monthly. Distributions of any net capital gains earned by a Fund 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
Fund 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 timing differences and
differing characterizations of distributions made by each Fund.
FEDERAL INCOME TAXES:
It is each Fund'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 Trusts are allocated to all the Funds based upon the
relative average net assets of each Fund except printing and postage expenses,
which are allocated to all the Funds based upon the relative number of
shareholder accounts of each Fund. Operating expenses directly attributable to a
class of shares are charged to the operations of that class of shares. Expenses
of each Fund 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 Funds. The Advisor is entitled
to a monthly fee at an annual rate based upon on a percentage of the average
daily net assets of each Fund at the following rates:
FEES ON NET ASSETS
EXCEEDING
FEES ON NET ASSETS $500 MILLION AND FEES ON NET ASSETS
UP TO EQUAL TO OR LESS THAN EXCEEDING
NAME OF FUND $500 MILLION $1 BILLION $1 BILLION
------------- ------------------ ------------ -----------
Money Market Fund.................. 0.45% 0.45% 0.40%
Tax-Exempt Money Market Fund....... 0.45% 0.45% 0.40%
California Money Fund.............. 0.45% 0.40% 0.40%
The Advisor has voluntarily waived $19,231 and $22,587 of its advisory fees for
the Tax-Exempt Money Market and California Money Funds for the six months ended
April 30, 2003, respectively.
19
NOTES to FINANCIAL statements (unaudited) (continued)
WM GROUP OF FUNDS
WM Shareholder Services, Inc. (the "Transfer Agent"), a wholly-owned subsidiary
of Washington Mutual, serves as the transfer agent of the Funds. 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 $25.01 for Class A,
Class B and Class C shareholder accounts. Prior to December 1, 2002, the
authorized annual shareholder servicing fee was $21.42 for Class A, Class B and
Class C shareholder accounts. Class I shares are not subject to shareholder
servicing fees.
Custodian fees for certain Funds have been reduced by credits allowed by the
custodian for uninvested cash balances. The Funds 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 Trusts for serving as an officer or Trustee of the Trusts.
The Trusts, together with other mutual funds advised by WM Advisors, pay 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 Trusts. 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. For the six months ended April 30, 2003, the
Distributor received no commisions (front-end sales charges) on Class C shares
and $494,399 representing CDSC fees from Class A, Class B and Class C shares.
Each of the Funds 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
Fund (each, a "Rule 12b-1 Plan"), respectively. There are no 12b-1 Plans
applicable to the Class I shares of the Funds. 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. The Trustees have not authorized,
and the Funds do not currently pay, service fees with respect to Class A shares.
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 Fund 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 Trusts, 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.
The Distributor has voluntarily waived $99,776 and $3,663 of its distribution
fees for Class B and Class C shares of the Money Market Fund for the six months
ended April 30, 2003, respectively.
6. SHARES OF BENEFICIAL INTEREST OWNED BY AFFILIATES
As of April 30, 2003, WM Financial Services, Inc., a wholly-owned subsidiary of
Washington Mutual, owns 43,591,274 shares of the Money Market Fund which is
approximately 5% of the shares outstanding.
7. GEOGRAPHIC AND INDUSTRY CONCENTRATION RISK FACTORS
There are certain risks arising from the concentration of California Money
Fund's investments in California municipal securities. The California Money Fund
is more susceptible to factors adversely affecting issuers of California
municipal securities than a fund that is not concentrated in these issuers to
the same extent. Uncertain economic conditions or governmental developments may
affect the ability of California municipal securities issuers to meet their
financial obligations.
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
GroupofFunds
P.O. Box 9757
Providence, RI 02940-9757
PRSRT STD
U.S. Postage
PAID
N. READING, MA
PERMIT #105
logo: recycled paper
Printed on recycled paper
WMMMSAR (06/27/03)
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
GroupofFunds
P.O. Box 9757
Providence, RI 02940-9757
PRSRT STD
U.S. Postage
PAID
Los Angeles, CA
PERMIT #30835
logo: recycled paper
Printed on recycled paper
WMMMSAR (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 Trust I and Trust II
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 Trust I and Trust II
/s/John T. West
Chief Financial Officer
June 30, 2003
/s/William G. Papesh
President
June 30, 2003