As filed with the Securities and Exchange Commission on November 6, 1998 Registration No. ____ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________ FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x] Pre-Effective Amendment No. 1 [ ] Post-Effective Amendment No. __ WM Trust II (Exact name of Registrant as Specified in Charter) 1201 Third Avenue, Suite 1400 Seattle, Washington 98101 (Address of Principal Executive Offices) (206) 461-3800 (Area Code and Telephone Number) ____________ John T. West 1201 Third Avenue, Suite 1400 Seattle, Washington 98101 (Name and Address of Agent for Service) Copies to: Lawrence R. Small, Esq. Joseph B. Kittredge, Esq. Paine, Hamblen, Coffin, Ropes & Gray Brooke & Miller One International Place 717 West Sprague Avenue, Suite 1200 Boston, MA 02110 Spokane, WA 99201 ____________ Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective. ____________ It is proposed that this filing will become effective on December 6, 1998 pursuant to Rule 488. ____________ The Registrant has registered an indefinite amount of its securities under the Securities Act of 1933, pursuant to Rule 24f-2 under the Investment Company Act of 1940. In reliance upon Rule 24f-2, no filing fee is being paid at this time. WM TRUST II The Cross-Reference Sheet and Part A (the Prospectus/Proxy Statement) of the Registrant's Registration Statement on Form N-14, which was filed with the Securities and Exchange Commission on October 30, 1998 (Accession Number 0001021408-98-000818), are hereby incorporated by reference as the Cross- Reference Sheet and Part A, respectively, of this Pre-Effective Amendment No. 1 to such Registration Statement. WM TRUST II FORM N-14 PART A Appendix A-1 FORM OF PROXY _________________________ FUND A SERIES OF THE GRIFFIN FUNDS, INC. PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR SPECIAL MEETING OF SHAREHOLDERS -- ___________________ __, 1999 The undersigned hereby appoints ________________, ______________ and ________________, and each of them separately, proxies with power of substitution to each, and hereby authorizes them to represent and to vote, as designated below, at the Special Meeting (the "Meeting") of Shareholders of the Fund indicated above to be held at the offices of Griffin Financial Investment Advisers, 5000 Rivergrade Road, Irwindale, California, on ___________________ __, 1999 at [ ] (Pacific Time) and at any adjournment thereof, all of the shares of the Fund which the undersigned would be entitled to vote if personally present. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH PROPOSAL. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Meeting. The Directors recommend a vote FOR the proposals. TO VOTE BY MAIL, PLEASE VOTE, SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. TO VOTE BY FAX, PLEASE VOTE, SIGN AND DATE ON THE REVERSE SIDE AND FAX THE PROXY CARD TO ________________________________. NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY CARD. All joint owners should sign. When signing as executor, administrator, attorney, trustee or guardian or as custodian for a minor, please give full title as such. If a corporation, please sign in full corporate name and indicate the signer's office. If a partner, sign in the partnership name. ------------------------------------ Signature ------------------------------------ Signature (if held jointly) ------------------------------------ Date FOR AGAINST ABSTAIN [ ] [ ] [ ] I. Proposal to approve the Merger of the Fund named on the reverse side of this card, as described in the Prospectus/Proxy Statement and the relevant Agreement and Plan of Reorganization. PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. WM TRUST I WM TRUST II FORM N-14 PART B STATEMENT OF ADDITIONAL INFORMATION October 30, 1998 This Joint Statement of Additional Information (the "SAI") relates to proposed mergers (the "Mergers") of the Money Market Fund (the "Griffin Money Market Fund"), the Tax-Free Money Market Fund (the "Griffin Tax-Free Money Market Fund"), the Short-Term Bond Fund (the "Griffin Short-Term Bond Fund"), the U.S. Government Income Fund (the "Griffin U.S. Government Fund"), the Municipal Bond Fund (the "Griffin Municipal Bond Fund"), the California Tax-Free Fund (the "Griffin California Tax-Free Fund"), the Bond Fund (the "Griffin Bond Fund"), the Growth & Income Fund (the "Griffin Growth & Income Fund") and the Growth Fund, (the "Griffin Growth Fund") (each an "Acquired Fund"), each a series of The Griffin Funds, Inc., a Maryland corporation, into, respectively, the Money Market Fund (the "WM Money Market Fund"), the Tax-Exempt Money Market Fund (the "WM Tax-Exempt Money Market Fund"), the Short Term High Quality Bond Fund (the "WM Short Term Fund"), the U.S. Government Securities Fund (the "WM U.S. Government Fund"), the Tax-Exempt Bond Fund (the "WM Tax-Exempt Bond Fund"), the California Municipal Fund (the WM California Fund"), the Income Fund (the "WM Income Fund"), the Growth & Income Fund (the "WM Growth & Income Fund") and the Growth Fund (the "WM Growth Fund") (each an "Acquiring Fund"), each a series of WM Trust I or WM Trust II, each a Massachusetts business trust. This SAI contains information which may be of interest to shareholders but which is not included in the Prospectus/Proxy Statement dated _______ __, 1998 (the "Prospectus/Proxy Statement") of the Acquiring Funds which relates to the Mergers. As described in the Prospectus/Proxy Statement, the Mergers would involve the transfer of all the assets of each Acquired Fund in exchange for shares of the corresponding Acquiring Fund and the assumption of all the liabilities of the Acquired Fund. Each Acquired Fund would distribute the Acquiring Fund shares it receives to its shareholders in complete liquidation of the Acquired Fund. This SAI is not a prospectus and should be read in conjunction with the Prospectus/Proxy Statement. The Prospectus/Proxy Statement has been filed with the Securities and Exchange Commission and is available upon request and without charge by writing to the WM Group of Funds, P.O. Box 5118, Westborough, MA 01581-5118 or by calling 1-800-222-5852. Table of Contents Item Page - ------ ----- I. Additional Information about the Acquiring and the Acquired Funds.................. II. Financial Statements............................................................... I. Additional Information about the Acquiring and the Acquired Funds. Incorporated by reference to the Registration Statements of each of WM Trust I and WM Trust II on Form N-14 (Accession No.0001021408-98-000819 (WM Trust I) and Accession No. 0001021408-98-000818 (WM Trust II) filed on October 30, 1998). II. Financial Statements. This Statement of Additional Information is accompanied by (a) the Semi-Annual Report for the period ended April 30, 1998 and the Annual Reports for the year ended December 31, 1997 of the WM Money Market Fund, WM Tax-Exempt Money Market Fund, WM U.S. Government Fund, WM Tax-Exempt Bond Fund and WM Income Fund, (b) the Semi-Annual Report for the period ended April 30, 1998 and the Annual Report for the year ended October 31, 1997 of the WM Growth & Income Fund, (c) the Annual Report for the year ended June 30, 1998 of the WM Short Term Fund, WM California Fund and WM Growth Fund, and (d) the Annual Report for the year ended October 31, 1997 of the Acquiring Funds (collectively, the "WM Annual Reports"), which respectively contain historical financial information regarding such Funds. Such reports have been filed with the Securities and Exchange Commission and are incorporated herein by reference. The Annual Reports of the Acquired Funds for the fiscal years ended September 30, 1997 and September 30, 1998 and the Semi-Annual Report of the Acquired Funds for period ended March 30, 1998 (collectively, the "Griffin Annual Reports") which respectively contain historical financial information regarding such Funds, have been filed with the Securities and Exchange Commission and are incorporated herein by reference. Pro forma financial statements are provided on the following pages for each of the Acquiring Funds. WM MONEY MARKET FUND AND GRIFFIN MONEY MARKET FUND PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM MONEY MONEY PRO FORMA PRO FORMA MARKET FUND MARKET FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $ 228,112,250 $462,721,142 $ 690,833,392 --------------------------------------------------------------- Total Investments 228,112,250 462,721,142 - 690,833,392 Cash/Cash Equivalents - 2,784,902 2,784,902 Receivable for dollar roll fee income - - Dividends and/or interest receivable 856,910 1,753,805 2,610,715 Receivable for Fund shares Sold 1,992,430 1,992,430 Receivable for investment securities sold - - Unamortized organization costs 8,021 - 8,021 Receivable from investment advisor - - Prepaid expenses and other assets 91,280 91,280 --------------------------------------------------------------- Total Assets 228,977,181 469,343,559 - 698,320,740 LIABILITIES: Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 6,317,015 6,317,015 Payable for investment securities purchased - 10,000,000 10,000,000 Investment advisory fee payable 175,564 175,564 Administration fee payable - - Shareholder servicing and distribution fees payable 77,111 77,111 Dividends payable 929,035 12,673 941,708 Accrued legal and audit fees 4,800 4,800 Accrued Trustees' fees and expenses 2,101 2,101 Accrued registration and filing fees payable 813 813 Due to Custodian - - Net unrealized depreciation of fwd for curr cts - Accrued Expenses and other payables 217,835 336,491 554,326 --------------------------------------------------------------- Total Liabilities 1,146,870 16,926,568 - 18,073,438 --------------------------------------------------------------- --------------------------------------------------------------- TOTAL NET ASSETS $ 227,830,311 $452,416,991 $ - $ 680,247,302 =============================================================== NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) - - - Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions $ (196) $ 24,896 $ 24,700 Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities - - - Paid-in capital 227,830,507 452,392,095 680,222,602 --------------------------------------------------------------- TOTAL NET ASSETS $ 227,830,311 $452,416,991 $ - $ 680,247,302 =============================================================== NET ASSETS: Class A Shares $ 227,830,311 $354,347,547 $ 582,177,858 =============================================================== Class B Shares $ 3,216,131 $ 3,216,131 =============================================================== Class S Shares $ 7,020,240 $ 7,020,240 =============================================================== Class I Shares $ 87,833,073 $ 87,833,073 =============================================================== SHARES OUTSTANDING: Class A Shares 227,830,507 354,328,956 (12,149) (A) 582,147,314 =============================================================== Class B Shares 3,215,931 - 3,215,931 =============================================================== Class S Shares 7,019,731 - 7,019,731 =============================================================== Class I Shares 87,827,477 - 87,827,477 =============================================================== NET ASSET VALUE PER SHARE: Class A Shares $ 1.00 $ 1.00 $ 1.00 =============================================================== Class B Shares $ 1.00 $ 1.00 =============================================================== Class S Shares $ 1.00 $ 1.00 =============================================================== Class I Shares $ 1.00 $ 1.00 =============================================================== See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Money Market Fund shares into WM Money Market Fund shares based upon the net asset value of WM Money Market Fund shares at April 30, 1998. WM Money Market Fund and Griffin Money Market Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM MONEY MONEY PRO FORMA PRO FORMA MARKET FUND MARKET FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - - Foreign w/holding tax on dividend income - Interest Income $ 4,281,137 $ 6,246,427 $10,527,564 Fee Income - - ----------------------------------------------------------- Total Investment Income 4,281,137 6,246,427 $10,527,564 ----------------------------------------------------------- EXPENSES: Investment Advisory Fees 381,440 492,639 (22,401) (A) 851,678 Administration Fees 152,576 - (152,576) (B) - Custodian Fees 38,565 26,286 64,851 Legal and audit fees 17,383 4,800 22,183 Trustees' fees and expenses 2,604 2,101 4,705 Amortization of Organization Costs 5,578 - 5,578 Registration and filing fees 6,372 813 7,185 Other 17,663 180,293 197,956 ----------------------------------------------------------- Subtotal 622,181 706,932 (174,977) 1,154,136 Shareholder servicing and distribution Fees Class A Shares 152,576 67,066 (70,137) (C) 149,505 Class B Shares 4,165 4,165 Class S Shares 9,451 9,451 Interest expense - - Fees waived and/or expenses absorbed by investment Advisor (224,885) - 224,885 (D) - ----------------------------------------------------------- Subtotal 549,872 787,614 (20,229) 1,317,257 Fees Reduced by credits allowed by the custodian (17,619) (17,619) ----------------------------------------------------------- Net expenses 549,872 769,995 (20,229) 1,299,638 ----------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 3,731,265 5,476,432 20,229 9,227,926 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions - 24,896 24,896 Forward foreign currency contracts and Foreign currency transactions - - - Futures contracts - - - Net unrealized appreciation/(depreciation) of: Securities - - - Forward foreign currency contracts - - - Foreign currency, written options, futures contracts and other assets and liabilities - - - ----------------------------------------------------------- Net Realized and unrealized Gain/(Loss) on investment - 24,896 - 24,896 ----------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,731,265 $ 5,501,328 $ 20,229 $ 9,252,822 =========================================================== (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .45% of average daily net assets up to $1,000,000,000 and .40% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Elimination of Griffin 12b-1 fees and addition of shareholder servicing fee at a monthly rate of $1.85 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor has been eliminated. WM Money Market Fund and Griffin Money Market Fund Pro Forma Combined Statement of Operations For the Year Ended 12/31/97 (Unaudited) GRIFFIN WM MONEY MONEY PRO FORMA PRO FORMA MARKET FUND MARKET FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - Foreign w/holding tax on dividend income - Interest Income $11,954,635 $14,420,370 $26,375,005 Fee Income - - ------------------------------------------------------------- Total Investment Income 11,954,635 14,420,370 - 26,375,005 ------------------------------------------------------------- EXPENSES: Investment Advisory Fee 1,068,226 1,148,906 (106,855) (A) 2,110,277 Administration Fee 427,290 - (427,290) (B) - Custodian Fee 111,001 120,711 231,712 Legal and audit fees 32,560 10,537 43,097 Trustees' fees and expenses 8,213 8,499 16,712 Amortization of Org. Cost 17,108 - 17,108 Registration and filing fees 21,017 147,863 168,880 Other 44,272 155,875 200,147 ------------------------------------------------------------- Subtotal 1,729,687 1,592,391 (534,145) 2,787,933 Shareholder servicing and distribution fees: Class A Shares 427,290 526,840 (179,948) (C) 774,182 Class B Shares 2,660 2,660 Class S Shares - - Interest expense - - Fees waived and /or expenses absorbed by investment advisor (923,459) (198,432) 1,121,891 (D) - ------------------------------------------------------------- Subtotal 1,233,518 1,923,459 407,798 3,564,775 Fees reduced by credits allowed by the custodian - (88,033) (88,033) ------------------------------------------------------------- Net expenses 1,233,518 1,835,426 407,798 3,476,742 ------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 10,721,117 12,584,944 (407,798) 22,898,263 NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions (241) - (241) Forward foreign currency contracts and foreign currency transactions - - - Futures contracts - - - Net unrealized appreciation/(depreciation) of: Securities - - - Forward foreign currency contracts - - - Foreign currency, written options, futures contracts and other assets and liabilities - - - ------------------------------------------------------------- Net Real. And unreal G/(L) on investments (241) - - (241) ------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $10,720,876 $12,584,944 $ (407,798) $22,898,022 ============================================================= (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .45% of average daily net assets up to $1,000,000,000 and .40% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Elimination of Griffin 12b-1 fees and addition of shareholder servicing fee at a monthly rate of $1.85 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor has been eliminated. Portfolio of Investments WM Money Market Fund and Griffin Money Market Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value - ----------------------------------------- -------------------------------------------- WM Griffin WM Griffin Money Market Money Market Pro Forma Money Market Money Market Pro Forma Fund Fund Combined Fund Fund Combined CERTIFICATE OF DEPOSIT - 2.9% Bankers Trust New York Corporation, 5,000,000 - 5,000,000 5.970% due 08/28/1998................ 4,999,844 - 4,999,844 5,000,000 - 5,000,000 5.940% due 09/10/1998................ 4,998,946 - 4,998,946 5,000,000 - 5,000,000 PNC Bank National, - - - - - - 5.25% due 06/05/1998................. 5,000,230 - 5,000,230 - 5,000,000 5,000,000 Morgan Guaranty, 5.71%, 01/08/99....... - 4,998,688 4,998,688 -------------------------------------------- Total Certificates of Deposit 14,999,020 4,998,688 19,997,708 CERTIFICATE OF DEPOSIT (YANKEE) - 7.2% 2,000,000 - 2,000,000 Bank of Nova Scotia, - - - - - - 5.675% due 03/04/1999................ 1,999,433 - 1,999,433 3,000,000 - 3,000,000 Barclays Bank PLC, - - - - - - 5.940% due 06/19/1998................ 2,999,135 - 2,999,135 7,000,000 - 7,000,000 Credit Anstalt NU YC, - - - - - - 5.890% due 11/17/1998................ 7,005,355 - 7,005,355 7,000,000 - 7,000,000 Credit Suisse First Boston, NY, - - - - - - 5.740% due 01/07/1999................ 7,000,000 - 7,000,000 - 7,000,000 7,000,000 Dresdner U.S. Bank, 5.51%, 01/15/99.... - 6,998,093 6,998,093 5,000,000 - 5,000,000 Societe Generale, New York, - - - - - - 5.665% due 03/23/1999................ 4,997,101 - 4,997,101 5,000,000 - 5,000,000 Swiss Bank, - - - - - - 5.825% due 04/29/1999................ 4,998,765 - 4,998,765 - 11,000,000 11,000,000 Swiss Bank Corporation, New York, 5.69%, 01/07/99............................ - 10,997,825 10,997,825 2,000,000 - 2,000,000 Swiss Bank Corporation, New York, - - - - - - 5.820% due 06/04/1998................ 2,000,424 - 2,000,424 -------------------------------------------- Total Certificates of Deposit (Yankee) 31,000,213 17,995,918 48,996,131 COMMERCIAL PAPER (YANKEE) - 18.0% American Honda Finance Corporation, - - - 7,000,000 - 7,000,000 5.520% due 05/15/1998................ 6,984,973 - 6,984,973 6,500,000 - 6,500,000 5.500% due 05/21/1998................ 6,480,139 - 6,480,139 3,700,000 - 3,700,000 British Gas Capital Inc., - - - - - - 5.520% due 08/24/1998................ 3,634,747 - 3,634,747 7,500,000 - 7,500,000 Caisse D'Amortissement de la ette Sociale (CADES) - - - - - - 5.450% due 08/03/1998................ 7,393,256 - 7,393,256 - - - Den Norske Stats Oljeselskap A/S, - - - 5,000,000 - 5,000,000 5.500% due 05/18/1998................ 4,987,014 - 4,987,014 7,500,000 - 7,500,000 5.520% due 06/04/1998................ 7,460,900 - 7,460,900 - 11,000,000 11,000,000 Deustche Bank, 5.50%, 06/12/98 (D)..... - 10,929,481 10,929,481 8,000,000 - 8,000,000 Halifax Building Society, - - - - - - 5.690% due 05/15/1998................ 7,982,308 - 7,982,308 - - - Sharp Electronics Corporation, - - - 5,000,000 - 5,000,000 5.570% due 05/06/1998................ 4,996,132 - 4,996,132 5,000,000 - 5,000,000 5.550% due 05/14/1998................ 4,989,979 - 4,989,979 5,000,000 - 5,000,000 Societe Generale North America, Inc., - - - - - - 5.510% due 05/27/1998................ 4,980,103 - 4,980,103 - - - Toshiba International, - - - 1,800,000 - 1,800,000 5.550% due 05/07/1998................ 1,798,335 - 1,798,335 5,000,000 - 5,000,000 5.550% due 05/26/1998................ 4,980,729 - 4,980,729 - - - Toyota Motor Credit Corporation, - - - - 11,000,000 11,000,000 5.46%, 06/24/98 (D).................. - 10,909,910 10,909,910 - - - Toyota Motor Credit Corporation, - - - 4,080,000 - 4,080,000 5.550% due 05/01/1998................ 4,080,000 - 4,080,000 5,000,000 - 5,000,000 5.500% due 05/18/1998................ 4,987,014 - 4,987,014 3,500,000 - 3,500,000 5.500% due 05/21/1998................ 3,489,306 - 3,489,306 10,500,000 - 10,500,000 5.510% due 05/29/1998................ 10,454,982 - 10,454,982 - 11,000,000 11,000,000 UBS Financial, 5.48%, 06/02/98 (D)..... - 10,946,418 10,946,418 -------------------------------------------- Total Commercial Paper (Yankee) 89,679,917 32,785,809 122,465,726 WM Money Market Fund and Griffin Money Market Fund Principal Amount Pro Forma Combined Portfolio of Investments Market Value - ----------------------------------------- ------------------------------------------ WM Griffin April 30, 1998 (Unaudited) WM Griffin Money Market Money Market Pro Forma Money Market Money Market Pro Forma Fund Fund Combined Fund Fund Combined COMMERCIAL PAPER (DOMESTIC) - 51.9% - 11,000,000 11,000,000 Abbey National, 5 49%, 07/02/98 (D) - 10,895,995 10,895,995 - 11,000,000 11,000,000 American Express Credit, 5.52%, 06/18/98 (D) - 11,000,000 11,000,000 - - - American General Finance Corporation, - - - - 11,000,000 11,000,000 5.55%, 05/12/98 (D)............................. - 11,000,000 11,000,000 7,500,000 - 7,500,000 Bear Sterns Companies Inc., - - - - - - 5.550% due 05/08/1998........................ 7,491,906 - 7,491,906 - - - Bell Atlantic Financial Services Inc., - - - - 11,000,000 11,000,000 5.48%, 05/19/98 (D)............................. - 10,969,860 10,969,860 5,000,000 - 5,000,000 Beneficial Corporation, - - - - - - 5.520% due 06/16/1998........................ 4,964,733 - 4,964,733 - - - Caterpillar Finance Corporation, - - - - 11,000,000 11,000,000 5.44%, 07/23/98 (D)............................. - 10,862,036 10,862,036 - - - Caterpillar Financial Services Inc., - - - 7,500,000 - 7,500,000 5.520% due 05/14/1998........................ 7,485,050 - 7,485,050 - 11,000,000 11,000,000 Chevron Oil Finance, 5.50%, 06/02/98 (D)........ - 11,000,000 11,000,000 - - - Chrysler Financial Corporation, - - - 5,000,000 - 5,000,000 5.510% due 05/18/1998........................ 4,986,990 - 4,986,990 7,500,000 - 7,500,000 5.530% due 06/11/1998........................ 7,452,765 - 7,452,765 2,000,000 - 2,000,000 Columbia University, - - - - - - 5.530% due 05/08/1998........................ 1,997,849 - 1,997,849 5,000,000 - 5,000,000 Dean Witter Discover & Company, - - - - - - 6.000% due 08/10/1998........................ 5,001,083 - 5,001,083 5,000,000 - 5,000,000 Deere & Company, - - - - - - 5.500% due 05/15/1998........................ 4,989,306 - 4,989,306 - 11,000,000 11,000,000 Dupont E.I. Nemour, 5.47%, 05/26/98 (D)......... - 10,958,215 10,958,215 - 11,000,000 11,000,000 Emerson Electric, 5.47%, 06/04/98 (D) - 10,943,173 10,943,173 - 11,100,000 11,100,000 First of America Bank, 5.52%, 05/11/98 (D)...... - 11,100,000 11,100,000 - - - Ford Motor Credit Company, - - - 3,500,000 - 3,500,000 5.510% due 05/13/1998........................ 3,493,572 - 3,493,572 4,900,000 - 4,900,000 5.500% due 05/20/1998........................ 4,885,776 - 4,885,776 - - - Ford Motor Credit Corporation, - - - - 11,000,000 11,000,000 5.55%, 05/12/98 (D)............................. - 11,000,000 11,000,000 - 11,500,000 11,500,000 GECC, 5.52%, 06/05/98 (D) - 11,500,000 11,500,000 5,000,000 - 5,000,000 General Electric Capital Corporation, - - - - - - 5.500% due 05/14/1998........................ 4,990,069 - 4,990,069 - - - General Electric Company, - - - 5,000,000 - 5,000,000 5.530% due 05/18/1998........................ 4,986,943 - 4,986,943 8,000,000 - 8,000,000 5.380% due 08/19/1998........................ 7,866,725 - 7,866,725 - - - General Motors Acceptance Corporation, - - - 5,000,000 - 5,000,000 5.510% due 05/08/1998........................ 4,994,643 - 4,994,643 5,000,000 - 5,000,000 5.510% due 05/18/1998........................ 4,986,990 - 4,986,990 - - - General Motors Acceptance Corporation, - - - - 11,000,000 11,000,000 5.53%, 06/19/98 (D)............................. - 11,000,000 11,000,000 10,000,000 - 10,000,000 Goldman Sachs & Company, - - - - - - 5.510% due 05/15/1998........................ 9,978,592 - 9,978,592 5,000,000 - 5,000,000 Hitachi America Limited, - - - - - - 5.520% due 05/13/1998........................ 4,990,800 - 4,990,800 12,000,000 - 12,000,000 Household Finance Corporation, - - - - - - 5.520% due 05/22/1998........................ 11,961,378 - 11,961,378 - - - International Business Machines Credit - - - - 11,000,000 11,000,000 Corporation, 5.44%, 06/19/98 (D)................ - 10,918,551 10,918,551 7,500,000 - 7,500,000 International Business Machines Credit Corporation, - - - - - - 5.500% due 05/14/1998........................ 7,485,104 - 7,485,104 - - - International Lease Finance Corporation, - - - 3,000,000 - 3,000,000 5.520% due 05/06/1998........................ 2,997,700 - 2,997,700 4,234,000 - 4,234,000 6.500% due 07/15/1998........................ 4,240,722 - 4,240,722 5,000,000 - 5,000,000 John Deere Capital Corp. - - - 5.500% due 05/22/1998........................ 4,983,958 - 4,983,958 Merrill Lynch & Company Inc., - - - 5,000,000 - 5,000,000 5.500% due 06/15/1998........................ 4,965,313 - 4,965,313 7,500,000 - 7,500,000 Monsanto Company, - - - 5.500% due 05/14/1998........................ 7,485,104 - 7,485,104 7,500,000 - 7,500,000 Morgan Stanley, Dean Witter, Discover, - - - 5.500% due 05/27/1998........................ 7,470,208 - 7,470,208 Sears Roebuck Acceptance Corporation, - - - 5,000,000 - 5,000,000 5.520% due 05/20/1998........................ 4,985,433 - 4,985,433 7,500,000 - 7,500,000 5.540% due 06/15/1998........................ 7,448,063 - 7,448,063 8,700,000 - 8,700,000 Trident Capital Inc., - - - 5.660% due 06/12/1998(C)..................... 8,642,589 - 8,642,589 Weyerhauser Real Estate Company, - - - 5,000,000 - 5,000,000 5.550% due 05/04/1998........................ 5,000,000 - 5,000,000 5,000,000 - 5,000,000 5.500% due 05/22/1998........................ 4,983,958 - 4,983,958 8,700,000 - 8,700,000 Windmill Funding Corporation, - - - 5.090% due 05/15/1998(C)..................... 8,626,231 - 8,626,231 Xerox Credit Corporation, 5.46%, - - - - 8,000,000 8,000,000 05/04/98 (D).................................... - 7,996,360 7,996,360 7,500,000 - 7,500,000 Xerox Corporation, - - - - - - 5.500% due 05/21/1998........................ 7,477,083 - 7,477,083 7,500,000 - 7,500,000 Xerox Credit Corporation, - - - 5.510% due 06/12/1998........................ 7,451,788 - 7,451,788 ----------------------------------------- Total Commercial Paper (Domestic) 201,748,424 151,144,190 352,892,614 U.S. GOVERNMENT AGENCY OBLIGATIONS - 9.4% Federal Farm Credit Bank $5,000,000 - $ 5,000,000 5.510% due 08/03/1998........................... $ 5,000,000 - $ 5,000,000 Federal Home Loan Bank (FHLB) 3,000,000 - 3,000,000 5.645% due 10/02/1998........................... 2,997,606 - 2,997,606 1,500,000 - 1,500,000 5.605% due 01/29/1999........................... 1,500,000 - 1,500,000 2,500,000 - 2,500,000 5.625% due 03/02/1999........................... 2,500,000 - 2,500,000 5,000,000 - 5,000,000 5.605% due 03/12/1999........................... 4,999,461 - 4,999,461 3,000,000 - 3,000,000 5.650% due 03/12/1999........................... 3,000,000 - 3,000,000 2,000,000 - 2,000,000 5.625% due 03/16/1999........................... 2,000,000 - 2,000,000 3,000,000 - 3,000,000 5.700% due 03/17/1999........................... 3,000,000 - 3,000,000 7,500,000 - 7,500,000 5.750% due 04/27/1999........................... 7,500,000 - 7,500,000 Federal Home Loan Mortgage Corporation (FHLMC) 2,529,000 - 2,529,000 Discount Note, 5.430% due 05/28/1998............ 2,518,389 - 2,518,389 - $16,150,000 16,150,000 5.35% due 05/01/1998............................ - $ 16,150,000 16,150,000 Federal National Mortgage Association (FNMA) 1,000,000 - 1,000,000 Discount Note, 5.410% due 06/17/1998............ 992,773 - 992,773 7,500,000 - 7,500,000 Discount Note, 5.530% due 03/11/1999............ 7,492,375 - 7,492,375 2,000,000 - 2,000,000 Floating Rate Note, 5.538% due 10/20/1998(B).... 1,999,586 - 1,999,586 2,000,000 - 2,000,000 Floating Rate Note, 5.588% due 11/04/1998(B).... 1,999,273 - 1,999,273 U.S. Government Agency Obligations.............. 47,499,463 16,150,000 63,649,463 MEDIUM TERM NOTE - 10.1% 3,000,000 - 3,000,000 Bank of America, Note........................... - - - 5.630% due 02/26/1999........................ 2,999,046 - 2,999,046 5,000,000 - 5,000,000 Bank Boston NA, FRN............................. - - - - - - 5.500% due 10/06/1998(B)..................... 4,998,826 - 4,998,826 9,000,000 - 9,000,000 Bayerische Landesbank Gironzentrale, FRN........ - - - - - - 5.490% due 06/26/1998(B)..................... 8,998,903 - 8,998,903 - - - Bear Sterns Companies Inc., FRN................. - - - 5,000,000 - 5,000,000 5.626% due 10/15/1998(B)..................... 5,000,000 - 5,000,000 5,000,000 - 5,000,000 5.950% due 10/15/1998(B)..................... 5,000,000 - 5,000,000 1,000,000 - 1,000,000 Caterpillar Financial Services Inc.............. - - - - - - 6.770% due 03/15/1999........................ 1,009,444 - 1,009,444 3,000,000 - 3,000,000 General Electric Capital Corporation............ - - - - - - 5.000% due 09/10/1998........................ 2,992,001 - 2,992,001 1,000,000 - 1,000,000 General Motors Acceptance Corporation........... - - - - - - 6.150% due 05/11/1998........................ 1,000,052 - 1,000,052 2,883,000 - 2,883,000 International Lease Finance Corporation......... - - - - - - 6.220% due 10/01/1998........................ 2,888,364 - 2,888,364 9,000,000 - 9,000,000 Keybank National, FRN........................... - - - - - - 5.550% due 07/31/1998(B)..................... 8,998,444 - 8,998,444 4,000,000 - 4,000,000 Keystone Group, Sr. Note, (Pre-Refunded)........ - - - - - - 9.750% due 09/01/2003........................ 4,210,980 - 4,210,980 - - - Merrill Lynch & Company, Inc.................... - - - 5,000,000 - 5,000,000 5.606% due 07/28/1998, FRN (B)............... 5,000,000 - 5,000,000 2,000,000 - 2,000,000 5.638% due 08/03/1998, FRN (B)............... 2,000,000 - 2,000,000 5,000,000 - 5,000,000 5.790% due 04/28/1998........................ 5,000,000 - 5,000,000 1,000,000 - 1,000,000 5.905% due 10/21/1998........................ 1,000,112 - 1,000,112 - 5,000,000 5,000,000 Norwest Corporation, 6.00%, 10/13/1998.......... - 5,003,180 5,003,180 - - - Toyota Motor Credit Corporation................. - - - 2,500,000 - 2,500,000 5.875% due 06/26/1998........................ 2,500,539 - 2,500,539 ----------------------------------------- Total Medium Term Notes......................... 63,596,711 5,003,180 68,599,891 MUNICIPAL BOND - 1.2% 5,000,000 - 5,000,000 Texas State, Veterans Land Board, Taxable Bonds - - - 5.700% due 12/01/1998........................ 4,999,394 - 4,999,394 3,000,000 - 3,000,000 Everett Clinic PS............................... - - - 5.670% due 12/01/2018(A)..................... 3,000,000 - 3,000,000 ----------------------------------------- Total Municipal Bonds........................... 7,999,394 - 7,999,394 REPURCHASE AGREEMENT - 0.9% 6,198,000 - 6,198,000 Agreement with Goldman Sachs, 5.30% dated 4/30/98, to be repurchased at $6,201,285 on 5/1/98, collateralized by $6,161,746 U.S. Treasury Note, 6.50% due 8/15/05 (Market Value $6,518,153).. 6,198,000 - 6,198,000 - 34,466 34,466 State Street Bank & Trust Co., Master Repurchase Agreement, 4.25%, dated 4/30/98 due 5/1/98, Collateralized by U.S. Government Securities (delivery value $34,466)..................... - 34,465 34,465 ----------------------------------------- Total Repurchase Agreements..................... 6,198,000 34,465 6,232,465 ----------------------------------------- TOTAL INVESTMENTS - 101.6% (COST $) $462,721,142 $228,112,250 $690,833,392 OTHER ASSETS AND LIABILITIES, NET (1.6%) (10,304,151) (281,939) (10,586,090) ----------------------------------------- TOTAL NET ASSETS - 100.0% $452,416,991 $227,830,311 $680,247,302 ----------------------------------------- (A) Variable rate securities payable upon not more than seven calendar days' notice. The interest rate shown reflects the rate currently in effect. (B) Floating rate security whose interest rate is reset periodically based on an index. (C) Securities exempt from registration under Section 4(2) of the Securities Act of 1993, as amended. These securities may be resold to qualified institutional buyers. (D) Rate represents annualized yield to maturity at April 30, 1998. WM MONEY MARKET FUND & GRIFFIN MONEY MARKET FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Money Market Fund and the Griffin Money Market Fund at April 30, 1998 and the pro forma combined results of operations for the year ended December 31, 1997 and the four month period ended April 30, 1998 as though the reorganization had occurred on January 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statements of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Money Market Fund in exchange for shares of WM Money Market Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Money Market Fund shares into WM Money Market Fund shares based upon the net asset value of the WM Money Market Fund shares at April 30, 1998. WM Tax-Exempt Money Market Fund and Griffin Tax-Free Money Market Fund PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM TAX-FREE TAX-EXEMPT MONEY MONEY PRO FORMA PRO FORMA MARKET FUND MARKET FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $26,518,425 $28,730,172 $55,248,597 - ------------------------------------------------------------ Total Investments 26,518,425 28,730,172 - 55,248,597 Cash/Cash Equivalents 609 211,908 212,517 Receivable for dollar roll fee income - - Dividends and/or interest receivable 301,676 274,864 576,540 Receivable for Fund shares Sold 138,756 138,756 Receivable for investment securities sold - - Unamortized organization costs 8,021 - 8,021 Prepaid expenses and other assets 15,887 15,887 ------------------------------------------------------------ Total Assets 26,828,731 29,371,587 - 56,200,318 LIABILITIES: Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 230,658 230,658 Payable for investment securities purchased - 1,691,103 1,691,103 Investment advisory fee payable 10,620 10,620 Administration fee payable - Shareholder servicing and distribution fees payable 2,284 2,284 Dividends payable 64,923 79,434 144,357 Accrued legal and audit fees 5,235 5,235 Accrued transfer agent fees - - Accrued Trustees' fees and expenses 5,182 5,182 Accrued registration and filing fees payable 136 136 Due to Custodian - Net unrealized depreciation of fwd for curr cts - - Accrued Expenses and other payables 32,626 5,172 37,798 ------------------------------------------------------------ Total Liabilities 97,549 2,029,824 - 2,127,373 ------------------------------------------------------------ ------------------------------------------------------------ TOTAL NET ASSETS $26,731,182 $27,341,763 - $54,072,945 ============================================================ NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ - $ - $ - Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions (4,692) - (4,692) Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities - - - Paid-in capital 26,735,874 27,341,763 54,077,637 ------------------------------------------------------------ TOTAL NET ASSETS $26,731,182 $27,341,763 - $54,072,945 ============================================================ NET ASSETS: Class A Shares $26,731,182 $27,329,668 $54,060,850 ============================================================ Class B Shares $ 12,095 $ 12,095 ============================================================ SHARES OUTSTANDING: Class A Shares 26,736,874 27,329,668 (5,692) (A) 54,060,850 ============================================================ Class B Shares 12,095 - 12,095 ============================================================ NET ASSET VALUE PER SHARE: Class A Shares $ 1.00 $ 1.00 $ 1.00 ============================================================ Class B Shares $ 1.00 $ 1.00 ============================================================ See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Tax-Free Money Market Fund shares into WM Tax-Exempt Money Market Fund shares based upon the net asset value of WM Tax-Exempt Money Market Fund shares at April 30, 1998. WM Tax-Exempt Money Market Fund and Griffin Tax-Free Money Market Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM TAX-FREE TAX-EXEMPT PRO FORMA PRO FORMA MONEY MARKET MONEY MARKET ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income $ - $ - $ - $ - Foreign Withholding Tax on Dividend Income - - - - Interest Income 267,938 367,152 - 635,090 Fee Income - - - - ----------------------------------------------------------- Total Investment Income 267,938 367,152 - 635,090 ----------------------------------------------------------- EXPENSES: Investment Advisory Fees 37,414 45,025 (3,414) (A) 79,025 Administration Fees 14,966 - (14,966) (B) - Custodian Fees 9,243 2,683 - 11,926 Legal and Audit Fees 9,018 4,993 - 14,011 Trustees' Fees and Expenses 2,604 4,823 - 7,427 Amortization of Organization Costs 5,577 - - 5,577 Registration and Filing Fees 1,257 4,694 - 5,951 Other 1,925 6,589 - 8,514 ----------------------------------------------------------- Subtotal 82,004 68,807 (18,380) 132,431 Shareholder Servicing and Distribution Fees Class A Shares 14,966 6,787 (6,730) (C) 15,023 Class B Shares - 56 - 56 Class S Shares - - - - Interest Expense - - - - Fees Waived and/or Expenses Absorbed by Investment Advisor (43,451) (19,515) 12,748 (D) (50,218) ----------------------------------------------------------- Subtotal 53,519 56,135 (12,362) 97,292 Fees Reduced by Credits Allowed by the Custodian - (705) - (705) ----------------------------------------------------------- Net Expenses 53,519 55,430 (12,362) 96,587 ----------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 214,419 311,772 12,362 538,503 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains/(Loss) from: Security Transactions - - - - Forward Foreign Currency Contracts and Foreign Currency Transactions - - - - Futures Contracts - - - - Net Unrealized Appreciation/(Depreciation) of: Securities - - - - Forward Foreign Currency Contracts - - - - Foreign Currency, Written Options, Futures - Contracts and Other Assets and Liabilities - - - - ----------------------------------------------------------- Net Realized and Unrealized Gain/(Loss) on Investment - - - - ----------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 214,419 $ 311,722 $ 12,362 $ 538,503 =========================================================== (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .45% of average daily net assets up to $100,000,000 and .40% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Elimination of Griffin 12b-1 fees and addition of shareholder servicing fee at a monthly rate of $1.85 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor adjusted to .14% of average daily net assets. WM Tax-Exempt Money Market Fund and Griffin Tax-Free Money Market Fund Pro Forma Combined Statement of Operations For the Year Ended 12/31/97 (Unaudited) GRIFFIN WM TAX-FREE TAX-EXEMPT MONEY MONEY PRO FORMA PRO FORMA MARKET FUND MARKET FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income $ - $ - $ - $ - Foreign w/holding tax on dividend income - - - - Interest Income 562,713 1,186,528 - 1,749,241 Fee Income - - - - -------------------------------------------------------------------------------- Total Investment Income 562,713 1,186,528 - 1,749,241 -------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 75,566 143,965 (6,670) (A) 212,861 Administration Fee 30,226 - (30,226) (B) - Custodian Fee 26,015 13,859 - 39,874 Legal and audit fees 12,623 6,331 - 18,954 Trustees' fees and expenses 8,213 8,499 - 16,712 Amortization of Org. Cost 17,107 - - 17,107 Registration and filing fees 2,007 18,754 - 20,761 Other 4,865 11,996 - 16,861 -------------------------------------------------------------------------------- Subtotal 176,622 203,404 (36,896) 343,130 Shareholder servicing and distribution fees: Class A Shares 30,226 26,630 (5,517) (C) 51,339 Class B Shares - 149 - 149 Class S Shares - - - - Interest expense - - - - Fees waived and /or expenses absorbed by investment advisor (101,804) (45,307) 20,408 (D) (126,703) -------------------------------------------------------------------------------- Subtotal 105,044 184,876 (22,005) 267,915 Fees reduced by credits allowed by the custodian - (7,751) - (7,751) -------------------------------------------------------------------------------- Net expenses 105,044 177,125 (22,005) 260,164 ------------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 457,669 1,009,403 22,005 1,489,077 NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions - - - - Forward foreign currency contracts and foreign currency transactions - - - - Futures contracts - - - - Net unrealized appreciation/(depreciation) of: Securities - - - - Forward foreign currency contracts - - - - Foreign currency, written options, futures contracts and other assets and liabilities - - - - -------------------------------------------------------------------------------- Net Real. And unreal G/(L) on investments - - - - -------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 457,669 $ 1,009,403 $ 22,005 $ 1,489,077 ================================================================================ (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .45% of average daily net assets up to $1,000,000,000 and .40% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Elimination of Griffin 12b-1 fees and addition of shareholder servicing fee at a monthly rate of $1.85 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor adjusted to reflect current WM Tax-exempt Money Market waivers. WM Tax-Exempt Money Market Fund and Griffin Tax-Free Money Market Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value - ------------------------------------------- ------------------------------------------- WM Tax-Exempt Griffin Tax-Free WM Tax-Exempt Griffin Tax-Free Money Market Money Market Pro Forma Money Market Money Market Pro Forma Fund Fund Combined Fund Fund Combined STATE AND MUNICIPAL SECURITIES - (100.9%) ALABAMA 500,000 - 500,000 Alabama State Special Care Authority Facilities Financing (Montgomery Hospital Depreciable Assets), Series 1985, 4.10% , due 4/01/2015, (A) 500,000 - 500,000 500,000 - 500,000 Athens, AL, Industrial Development Board - - - (Coilplus, Inc. Project), 500,000 - 500,000 Series 1984, 4.75% , due 9/19/1999, (A) -------------------------------------- 1,000,000 _ 1,000,000 ALASKA Alaska Municipal Power _ 340,000 340,000 5.00%, 12/01/26............. - 340,000 340,000 ARIZONA Phoenix, Arizona Industrial Development _ 300,000 300,000 Authority - 4.00%, 10/15/06.......... - 300,000 300,000 300,000 - 300,000 Arizona State Health Facilities Authority 300,000 - 300,000 Revenue (Pooled Loan Program), Series 1985, 4.10%, due 10/01/2015, (A) 500,000 - 500,000 Tempe, AZ, Unified High School District Unlimited Tax Note, 14.35%, - - - due 7/01/1998 508,457 - 508,457 -------------------------------------- 808,457 300,000 1,108,457 CALIFORNIA - California State Revenue Anticipation - 1,000,000 1,000,000 Notes, 4.50%, 06/30/98 .......... - 1,001,502 1,001,502 - Los Angeles County, California Tax & Revenue - - - - Anticipation Notes, Series A, - - - - 600,000 600,000 4.50%, 06/30/98 ...................... - Santa Clara Tax & Revenue Anticipation Notes, - 600,617 600,617 - 800,000 800,000 4.75%, 10/01/98 ...................... - 802,880 802,880 500,000 - 500,000 Auburn, CA, Unified School District, 1997 Tax and Revenue - - - Anticipation Notes, 4.25%, due 10/13/1998 500,932 500,932 300,000 - 300,000 Los Angeles Regional Airport (American Airlines/LA International), - - - - - - Series E, 3.95%, due 12/01/2024, (A) 300,000 - 300,000 100,000 - 100,000 Los Angeles Regional Airport (American Airlines/LA International), - - - - - - Series G, 3.95%, due 12/01/2024, (A) 100,000 - 100,000 200,000 - 200,000 Los Angeles Regional Improvement Corporation Sublease Revenue (LA - - - - - - International), LAX2, 3.95%, due 12/01/2025, (A) 200,000 - 200,000 245,000 - 245,000 Monterey County, CA, Natividad Medical Center, Series E, - - - - - - 4.00%, due 8/01/1998 245,182 - 245,182 500,000 - 500,000 Oxnard, CA, School District 1997 Tax and Revenue Anticipation Notes, - - - - - - 4.50%, due 8/13/1998 500,891 - 500,891 -------------------------------------- 1,847,005 2,404,999 4,252,004 COLORADO 210,000 - 210,000 University of Northern Colorado, Refunding Revenue Bonds (Auxiliary Facilities - - - System) Series A, 3.50%, due 6/1/1998 210,000 _ 210,000 DISTRICT OF COLUMBIA 1,500,000 - 1,500,000 District of Columbia Revenue Bonds, Georgetown University, Series B - - - 3.75%, due 4/1/1999 1,500,000 _ 1,500,000 FLORIDA - - - Citrus Park Community Development District, - 600,000 600,000 Capital Improvements, 3.35%, 11/01/16..... - 600,000 600,000 - - - State of Florida Board of Regents University System - - - - 470,000 470,000 Improvement Revenue, 7.00%, 07/01/98 ..... - 472,718 472,187 -------------------------------------- - 1,072,187 1,072,187 GEORGIA - - - Municipal Electric Authority of Georgia, - 700,000 700,000 5.00%, 06/01/20......... - 700,000 700,000 - - - Municipal Gas Authority of Georgia, - - - - 1,000,000 1,000,000 Gas Revenue, 3.50%, 07/08/98 ........... - 1,000,000 1,000,000 200,000 - 200,000 Albany/Dougherty County Hospital Authority, GA, Hospital - - - Revenue Anticipation Certificates, Series 1990A, - - - - - - 6.70%, due 9/01/1998. 201,834 - 201,834 200,000 - 200,000 Georgia State Unlimited General Obligation, Series C, - - - - - - 4.50%, due 8/01/1998 200,328 - 200,328 -------------------------------------- 402,162 1,700,000 2,102,162 ILLINOIS - - - Illinois Development Financing Authority - 800,000 800,000 Revenue, 5.00%, 09/01/08 ............... - 800,000 800,000 - - - Illinois Health System, Sherman Health - - - - 720,000 720,000 Facilities Revenue, 3.90%, 08/01/98 .... - 720,000 720,000 - - - Will County, Illinois Exempt Facilities - - - - 800,000 800,000 Revenue, 5.00%, 03/01/28 ............... - 800,000 800,000 400,000 - 400,000 Chicago O'Hare International Airport General Airport Second Lien Revenue - - - - - - Bonds, 1984 Series B, 4.10%, due 1/01/2015, (A) 400,000 - 400,000 800,000 - 800,000 Illinois State Health Facilities Authority (Hospital Sisters Services), - - - 800,000 - - - Series 1985E, 3.70%, due 12/01/2015, (a) 800,000 - 800,000 200,000 - 200,000 Illinois Unlimited Tax General Obligation, Series of February 1997, - - - - - - 4.75%, due 8/01/1998 200,545 - 200,545 200,000 - 200,000 Sauget Illinois Pollution Control Revenue Bonds, Monsanto Company Project, - - - - - - 4.20%, due 9/01/2014, (a), (b) 200,000 - 200,000 -------------------------------------- 2,200,545 2,320,000 4,520,545 INDIANA 500,000 - 500,000 Indiana State Office Building Commission Capital Complex Revenue - - - Bonds, (Indiana Government Center - State Office Building I), Series 1988 512,980 - 512,980 - - - 7.75%, due 7/1/2009, Pre-refunded at 102 - - - 300,000 - 300,000 Indiana State Development Authority, Education Facilities Project Revenue - - - - - - Bonds (Lutheran High School), 4.25%, due 10/01/2017, (a) 300,000 - 300,000 500,000 - 500,000 Indianapolis Industrial Economic Development Revenue, Visiting Nurse - - - - - - Service Foundation, 4.20%, due 3/01/2013, (a) 500,000 - 500,000 410,000 - 410,000 Lafayette Indiana Redevelopment Authority Economic Development - - - - - - Lease Rental, 7.10%, due 2/01/2009, Pre-refunded at 102 428,227 - 428,227 --------------------------------------- 1,741,207 - 1,741,207 KANSAS - - - Kansas State Department of Transportation - - - Highway Revenue, Series B, - 500,000 500,000 5.00%, 09/01/14 ......... - 500,000 500,000 KENTUCKY 500,000 - 500,000 Kentucky Infrastructure Authority, Governmental Agencies (BANS), - - - Series B, 4.15%, due 6/30/1998, (a) 500,000 - 500,000 200,000 - 200,000 Kentucky Infrastructure Authority, Governmental Agencies (BANS) - - - - - - Series A, 4.15%, due 6/30/1998, (a) 200,000 - 200,000 --------------------------------------- 700,000 - 700,000 LOUSIANA - - - Calcasieu Parish, Louisiana Industrial - - - Development Board Pollution Control Revenue, - 500,000 500,000 5.00%, 08/01/04 - 500,000 500,000 - - - Louisiana Public Facilities Authority Revenue, - - - - - - Multi-Family Housing, Emberwood Project, - - - - 1,000,000 1,000,000 5.00%, 10/01/22 ......... - 1,000,000 1,000,000 - - - Louisiana State Offshore Terminal Authority - - - - 300,000 300,000 Deep Water Port Revenue, 5.00%, 09/01/08 - 300,000 300,000 - - - South Louisiana Port Commission Marine - - - - - - Terminal Facilities Revenue, - - - - 500,000 500,000 5.00%, 07/01/21 ....... - 500,000 500,000 --------------------------------------- - 2,300,000 2,300,000 MARYLAND - - - Maryland State General Obligation, - 1,000,000 1,000,000 5.90%, 03/15/99........ - 1,019,577 1,019,577 - - - Montgomery County, Maryland Solid Waste - - - - 700,000 700,000 Disposal, 4.80%, 06/01/98 - 700,482 700,482 250,000 - 250,000 Howard County, MD, Metropolitan District Bonds, 1989 Series A, - - - - - - 7.40%, due 2/15/2009, Pre-refunded at 101 258,104 - 258,104 150,000 - 150,000 Washington Suburban Sanitary District, General Construction, - - - - - - 7.00%, due 12/01/99, Pre-refunded at 102 155,804 - 155,804 500,000 - 500,000 Washington Suburban Sanitary District, (Sewage Disposal Bonds of 1994) - - - - - - 5.75%, due 6/1/1998 500,759 - 500,759 --------------------------------------- 914,667 1,720,059 2,634,726 MASSACHUSETTS 100,000 - 100,000 Massachusetts State Housing, Residential Development, FNMA Collateral - - - Series A, 5.60%, due 11/15/1998 100,948 - 100,948 MICHIGAN - - - Charter County of Wayne, Michigan, - 1,000,000 1,000,000 Airport Revenue, 5.00%, 12/01/16 - 1,000,000 1,000,000 - - - Michigan State General Obligation, - - - - 790,000 790,000 4.50%, 09/30/98 - 792,522 792,522 300,000 - 300,000 Michigan State Hospital Finance Authority (Equipment Loan Program Bonds), - - - - - - 4.15%, due 12/01/2023, (a) 300,000 - 300,000 300,000 - 300,000 Michigan State Hospital Finance Authority (Equipment Loan Program Bonds), - - - - - - Series A, 4.15% , due 12/01/2023, (a) 300,000 - 300,000 300,000 - 300,000 Michigan State Job Development Authority Revenue (East Lansing Residence), 3.85%, due 12/01/2014, (a) 300,000 - 300,000 200,000 - 200,000 Michigan State Job Development Authority Revenue (Kentwood Residence), 3.85%, due 11/01/2014, (a) 200,000 - 200,000 250,000 - 250,000 Reed City, Michigan, Public School District, Unlimited Tax General Obligation Bonds, 5.40%, due 5/01/1998 250,000 - 250,000 --------------------------------------- 1,350,000 1,792,522 3,142,522 MISSOURI City of Columbia Missouri Special Obligation Insurance Reserve, Series A, - 200,000 200,000 5.00%, 06/01/08 - 200,000 200,000 - - - Missouri Higher Education Loan Authority - - - - - - Student Loan Revenue, Series B, - - - - 400,000 400,000 5.00%, 06/01/20 - 400,000 400,000 - - - Health & Education Facilities Authority of the - 300,000 300,000 State of Missouri, 5.00%, 06/01/06 - 300,000 300,000 400,000 - 400,000 Missouri Environmental Improvement and Energy Resources Authority, Pollution Control Revenue Bonds (Monsanto Company), 4.20%, due 6/01/2023, (a) 400,000 - 400,000 --------------------------------------- 400,000 900,000 1,300,000 WM TAX-EXEMPT MONEY MARKET FUND AND GRIFFIN TAX-FREE MONEY MARKET FUND Pro Forma Combined Portfolio of Investments April 30, 1938 (Unaudited) WM Griffin WM Griffin Tax-Exempt Tax-Free Tax-Exempt Tax-Free Money Market Money Market Pro Forma Money Market Money Market Pro Forma Fund Fund Combined Fund Fund Combined NEBRASKA - - - Nebraska Higher Education Loan Program, - 400,000 400,000 5.00%, 12/01/16................................ - 400,000 400,000 - 350,000 350,000 3.95%, 08/01/18................................ - 350,000 350,000 --------------------------------- - 750,000 750,000 NEVADA - - - Clark County, Nevada Airport System - - - Subordinated Lien Revenue, Series A-1, - 800,000 800,000 5.00%, 07/01/25................................ - 800,000 800,000 NEW JERSEY 250,000 - 250,000 New Jersey Housing and Mortgage Finance Agency, (Multifamily 250,000 - 250,000 - - - Housing Revenue Bonds) 1995 Series A, 4.15%, due 5/01/1998 - - - 100,000 - 100,000 New Jersey State Transportation Trust Fund, Series A - - - - - - 5.00%, due 12/15/1998 100,757 - 100,757 --------------------------------- 350,757 - 350,757 NEW MEXICO - - - New Mexico State Tax & Revenue Anticipation - 480,000 480,000 Notes, 4.50%, 06/30/98 ........................ - 480,484 480,484 NEW YORK 300,000 - 300,000 Jefferson County, N.Y., Industrial Development Agency, Watertown-Carthage TV, - - - 3.60%, due 12/01/2012, (A) 300,000 - 300,000 300,000 - 300,000 New York, N.Y. Series B, Subseries B4, - - - - - - 3.90%, due 8/15/2023, (A) 300,000 - 300,000 130,000 - 130,000 Shenendehowa Central School District, N.Y. Clifton Park - - - - - - 5.30%, due 8/15/1998 130,610 - 130,610 --------------------------------- 730,610 - 730,610 NORTH CAROLINA - - - North Carolina Educational Facilities Finance - - - Agency Bowman Gray School, - 400,000 400,000 5.00%, 09/01/20................................ - 400,000 400,000 200,000 - 200,000 Cumberland County NC Industrial Facility & Pollution Control, - - - - - - (Monsanto Company Project), 4.10%, due 6/1/2012, (A) 200,000 - 200,000 --------------------------------- 200,000 400,000 600,000 NORTH DAKOTA 125,000 - 125,000 Grand Forks, ND, Sales Tax Revenue, Aurora Project, Series A, - - - 3.90%, due 12/15/1998 125,074 - 125,074 OHIO - - - Student Loan Funding Corporation Cincinnati, - - - Ohio Student Loan Revenue, Series A, - 200,000 200,000 5.00%, 01/01/07................................ - 200,000 200,000 100,000 - 100,000 Columbus, OH, Limited General Obligation, Series A, - - - 3.60%, due 5/15/98 100,000 - 100,000 100,000 - 100,000 Columbus Ohio, Unlimited General Obligation, Series 1, - - - - - - 3.90%, due 6/01/2016* 100,000 - 100,000 145,000 - 145,000 Little Miami, OH, Local School District - - - - - - 3.60%, due 12/01/1998 145,000 - 145,000 505,000 - 505,000 Toledo, OH, Limited Tax General Obligation Bonds, Various Purpose - - - - - - Improvement Bonds, Series 1997, 3.90%, due 12/01/1998 505,223 - 505,223 --------------------------------- 850,223 200,000 1,050,223 OREGON - - - Oregon State General Obligation, - 880,000 880,000 4.50%, 08/01/98 ............................... - 881,910 881,910 100,000 - 100,000 Klamath Falls, OR, Electric Revenue, Salt Caves Hydroelectric, Series C - - - - - - 3.80%, due 5/1/2023 (Mandatory Put Bonds) 100,000 - 100,000 500,000 - 500,000 Oregon State, Series 73E, 4.15%, due 12/01/2016, (A) 500,000 - 500,000 200,000 - 200,000 Portland, OR, Limited Tax Improvement Bonds, 1995 Series A 8.00%, due 6/01/98 200,699 - 200,699 350,000 - 350,000 Portland, OR, Water System Revenue Bonds, Series 1995, 4.10%, due 8/01/1998 350,250 - 501,301 500,000 - 500,000 Washington County, OR, School District # 48J (Beaverton), Unlimited Tax - - - - - - General Obligation, 7.40%, due 6/01/1998, Pre-refunded at 100 501,301 - 501,301 --------------------------------- 1,652,250 881,910 2,534,160 PENNSYLVANIA - - - Allegheny County, Pennsylvania Hospital - - - Development Authority Hospital Revenue, - 500,000 500,000 Series B, 5.00%, 09/01/20 ..................... - 500,000 500,000 - - - Delaware Valley, Pennsylvania Regional - - - - - - Finance Authority, Local Government - - - - 300,000 300,000 Revenue, 5.00%, 12/01/18 ...................... - 300,000 300,000 - 500,000 500,000 5.00%, 12/01/20................................ - 500,000 500,000 100,000 - 100,000 Pennsylvania State Unlimited General Obligation Bonds, - - - - - - Second Series A of 1988, 6.80%, due 5/15/1998 100,111 - 100,111 --------------------------------- 100,111 1,300,000 1,400,111 RHODE ISLAND 250,000 - 250,000 Providence, RI, Unlimited Tax General Obligation Refunding Bonds, - - - 6.10%, due 9/01/1998 251,833 - 251,833 TENNESSEE - - - Health & Educational Facilities Board of the - - - Metropolitan Government of Nashville & - 350,000 350,000 Davidson County, 4.50%, 07/01/98 .............. - 350,311 350,311 570,000 - 570,000 Hendersonville Industrial Development Board, Multifamily Housing Revenue - - - - - - Bonds (Windsor Park), 4.15%, due 2/15/2028, (A) 570,000 - 570,000 600,000 - 600,000 Metro Government Nashville/Davidson County, TN, Industrial Development - - - - - - Multifamily Housing Revenue Bonds (Chimneytop II), - - - - - - 4.375%, due 9/01/2006, (A) 600,000 - 600,000 --------------------------------- 1,170,000 350,311 1,520,311 TEXAS - - - Guadalupe Blanco River Authority Texas - - - Pollution Control Revenue, Central Power & - 600,000 600,000 Light Project, 5.00%, 11/01/15 ......... - 600,000 600,000 - - - Panhandle-Plains, Texas Higher Education - - - - - - Authority Student Loan Revenue, Series A, - - - - 600,000 600,000 4.50%, 06/01/25......................... - 600,000 600,000 - - - Texas State Tax & Revenue Anticipation Notes, - - - - 600,000 600,000 Series A, 4.75%, 08/31/98 .............. - 601,756 601,756 500,000 - 500,000 Austin County, TX, Industrial Development Corporation (Justin Industries, - - - - - - Inc. Project), 4.05%, due 12/01/2014, (A) (B) 500,000 - 500,000 500,000 - 500,000 Brazos River, TX, Pollution Control Revenue Refunding Bonds - - - - - - (Monsanto Company Project), 4.20%, due 11/01/2000, (A) (B) 500,000 - 500,000 400,000 - 400,000 Harris County Texas Health Facility (Sisters of Charity), Series C, - - - - - - 4.125%, due 7/01/2023, (A) 400,000 - 400,000 190,000 - 190,000 Judson, TX, Independent School District, Unlimited Tax General Obligation Bonds - - - - - - 3.80%, due 2/1/1999 190,000 - 190,000 - - - Lower Neches Valley, TX, Industrial Development Corporation, Pollution - - - - - - Control Revenue Bonds (Neches River Treatment Corporation Project), - - - - - - Series 1994A, 4.10%, due 2/01/2004 (Guaranteed By Mobil Corp.), (A) (B) 600,000 - 600,000 420,000 - 420,000 Pflugerville, TX, Independent School District Unlimited Tax School - - - - - - Building and Refunding Bonds, 4.25%, due 8/15/1998 420,533 - 420,533 ----------------------------------- 2,610,533 1,801,756 4,412,289 UTAH 620,000 - 620,000 Cache County, UT, School District (General Obligation School Building Bonds), Series 1997, 4.00%, due 6/15/1998 620,107 - 620,107 250,000 - 250,000 Ogden City, UT, Unlimited General Obligation Bonds - - - - - - 4.20%, due 12/15/1998 250,600 - 250,600 250,000 - 250,000 Utah State Board of Regents Refunding Hospital Revenue Bonds (University of Utah), Series 1997, 4.75%, due 8/01/1987 250,583 - 250,583 ----------------------------------- 1,121,290 - 1,121,290 VIRGINIA - - - Newport News, Virginia General Obligation, - 1,000,000 1,000,000 6.88%, 12/01/98 ............................ - 1,043,530 1,043,530 100,000 - 100,000 Virginia Public Building Authority (State Building Revenue - - - - - - Refunding Bonds), Series 1992B, 5.20%, due 8/01/1998 100,319 - 100,319 ----------------------------------- 100,319 1,043,530 1,143,849 WASHINGTON - - - Seattle, Washington General Obligation, - 500,000 500,000 4.50%, 03/01/99 ............................ - 503,641 503,641 185,000 - 185,000 King & Snohomish Counties, WA, School District No. 417 (Northshore) Unlimited Tax General Obligation Bonds, 3.60%, due 6/01/1998 185,000 - 185,000 115,000 - 115,000 Mason County, WA, Public Utility District No. 003, Electric Revenue Bonds, 3.75%, due 12/01/1998 115,000 - 115,000 1,000,000 - 1,000,000 Richland, WA, Golf Enterprise Revenue Bonds, 1996, - - - 4.30%, due 12/01/2021, (A) 1,000,000 - 1,000,000 500,000 - 500,000 Seattle, WA Water System Revenue Bonds, 4.40%, due 6/01/1998 500,328 - 500,328 1,430,000 - 1,430,000 Seattle, WA, Housing Authority Low Income Housing Assistance Revenue - - - - - - (Bayview Manor Project), Series B, 4.20%, due 5/01/2019, (A) 1,430,000 - 1,430,000 500,000 - 500,000 Seattle, WA, Unlimited General Obligation Bonds, Series A - - - - - - 4.50%, due 9/01/1998 501,545 - 501,545 300,000 - 300,000 Seattle, WA, Unlimited General Obligation Refunding Bonds, Series A 4.50%, due 3/01/1999 301,435 - 301,435 100,000 - 100,000 State of Washington Unlimited Tax General Obligation Refunding Bonds, Series R-93B, 4.40%, due 10/01/1998 100,218 - 100,218 300,000 - 300,000 Washington State, Unlimited Tax General Obligation Bonds, Series R-89A, 7.50%, due 9/01/2003, Pre-refunded at 100 303,602 - 303,602 160,000 - 160,000 Washington State, Unlimited Tax General Obligation Bonds, 7.40%, due 12/01/2000 163,362 - 163,362 ----------------------------------- 4,600,490 503,641 5,104,131 WEST VIRGINIA - - - Marion County, West Virginia Solid Waste - - - Disposal Facilities Revenue, - 700,000 700,000 5.00%, 10/01/17. - 700,000 700,000 WISCONSIN - - - Wisconsin State General Obligation, 4.75%, - 500,000 500,000 4.75%, 05/01/98 ............................ - 500,000 500,000 - 200,000 200,000 6.90%, 05/01/98 ............................ - 200,000 200,000 220,000 - 220,000 Wisconsin Health and Education Facilities Authority Revenue Bonds, - - - - - - (Waukesha Memorial Hospital), Series 1995A, 4.30%, due 8/15/1998 220,216 - 220,216 200,000 - 200,000 Wisconsin Unlimited Tax General Obligation Bonds of 1986, Series C, - - - - - - 5.25%, due 5/01/1998 200,000 - 200,000 900,000 - 900,000 Wisconsin State Health and Educational Facilities Authority - - - - - - Facilities Revenue Bonds (SSM Health Care Project), - - - - - - Series 1990A, 4.40%, due 6/01/2006, (A) 900,000 - 900,000 200,000 - 200,000 Wisconsin State Health Facilities Authority (Hospital - - - - - - Sisters Obligation), Series G, 4.125%, due 12/01/2001, (A) 200,000 - 200,000 ----------------------------------- 1,520,216 700,000 2,220,216 WYOMING - - - City of Kemmerer, Wyoming Pollution Control - 900,000 900,000 Revenue, 5.00%, 11/01/14 ............... - 900,000 900,000 Total State and Municipal Securities 28,558,697 26,161,399 54,720,096 INVESTMENT COMPANY SECURITIES - (1.0%) 171,475 - 171,475 Nuveen Tax Exempt Money Market Fund, 3.42% (Cost $171,475) 171,475 - 171,475 Seven Seas Tax Free Money Market Fund, - - - - 357,026 357,026 3.40%, 05/01/98...... - 357,026 357,026 ----------------------------------- Total Investment Co. Securities 171,475 357,026 528,501 Total Investments - (101.9%) (Cost $55,248,597) 28,730,172 26,518,425 55,248,597 Other Assets and Liabilities, Net - (-1.9%) (1,216,934) 212,757 (1,004,177) TOTAL NET ASSETS - (100.00%) 27,341,763 26,731,182 54,244,420 (A) Floating rate security. The interest rate shown reflects the rate currently in effect. (B) Obligations of various corporations and are not supported by other third party credit agreements. WM TAX-EXEMPT MONEY MARKET FUND & GRIFFIN TAX-FREE MONEY MARKET FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Tax-Exempt Money Market Fund and the Griffin Tax-Free Money Market Fund at April 30, 1998 and the pro forma combined results of operations for the year ended December 31, 1997 and the four month period ended April 30, 1998 as though the reorganization had occurred on January 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statements of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Tax-Free Money Market Fund in exchange for shares of the WM Tax-Exempt Money Market Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Tax-Free Money Market Fund shares into WM Tax-Exempt Money Market Fund shares based upon the net asset value of the WM Tax-Exempt Money Market Fund shares at April 30, 1998. WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 1998 (Unaudited) WM GRIFFIN SHORT TERM SHORT-TERM HIGH QUALITY PRO FORMA PRO FORMA BOND FUND BOND FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $94,148,234 $42,544,286 $136,692,520 ------------------------------------------------------------ Total Investments 94,148,234 42,544,286 - 136,692,520 Cash/Cash Equivalents 138,548 138,548 Receivable for dollar roll fee income - - Dividends and/or interest receivable 1,508,905 444,756 1,953,661 Receivable for Fund shares Sold 2,000 2,000 Receivable for investment securities sold 19,132 19,132 Unamortized organization costs 1,182 1,182 Receivable from investment advisor 23,039 23,039 Prepaid expenses and other assets 8,594 1,397 9,991 ------------------------------------------------------------ Total Assets 95,665,733 43,174,340 - 138,840,073 LIABILITIES: Payable for dollar roll transactions - - Variation margin payable 1,688 1,688 Reverse repurchase agreements - - Payable for Fund shares redeemed - 82,015 82,015 Payable for investment securities purchased - - - Investment advisory fee payable - - Administration fee payable - - Shareholder servicing and distribution fees payable 11,029 11,029 Dividends payable 388,722 66,483 455,205 Accrued legal and audit fees - - Accrued transfer agent fees - - Accrued Trustees' fees and expenses - - Accrued registration and filing fees payable - - Due to Custodian 96,860 - 96,860 Net unrealized depreciation of fwd for curr cts - - Accrued Expenses and other payables 79,199 50,349 129,548 ------------------------------------------------------------ Total Liabilities 564,781 211,564 - 776,345 ------------------------------------------------------------ ------------------------------------------------------------ TOTAL NET ASSETS $95,100,952 $42,962,776 $ - $138,063,728 ============================================================ NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ - $ (650) $ (650) Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions 14,746 (1,743,719) (1,728,973) Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 508,300 158,236 666,536 Paid-in capital 94,577,906 44,548,909 139,126,815 ------------------------------------------------------------ TOTAL NET ASSETS $95,100,952 $42,962,776 $ - $138,063,728 ============================================================ NET ASSETS: Class A Shares $94,954,919 $35,551,039 $130,505,958 ============================================================ Class B Shares $ 146,033 $ 3,458,674 $ 3,604,707 ============================================================ Class S Shares $ 850,463 $ 850,463 ============================================================ Class I Shares $ 3,102,600 $ 3,102,600 ============================================================ SHARES OUTSTANDING: Class A Shares 9,369,850 15,300,501 31,496,968 (A) 56,167,319 ============================================================ Class B Shares 14,420 1,488,540 48,430 (A) 1,551,390 ============================================================ Class S Shares 366,038 - 366,038 ============================================================ Class I Shares 1,335,530 - 1,335,530 ============================================================ NET ASSET VALUE PER SHARE: Class A Shares $ 10.13 $ 2.32 $ 2.32 ============================================================ Class B Shares $ 10.13 $ 2.32 $ 2.32 ============================================================ Class S Shares $ 2.32 $ 2.32 ============================================================ Class I Shares $ 2.32 $ 2.32 ============================================================ See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Short-Term Bond Fund shares into WM Short Term High Quality Bond Fund shares based upon the net asset value of WM Short Term High Quality Bond Fund shares at June 30, 1998. WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund Pro Forma Combined Statement of Operations For the Year Ended June 30, 1998 (Unaudited) WM GRIFFIN SHORT TERM SHORT-TERM HIGH QUALITY PRO FORMA PRO FORMA BOND FUND BOND FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - Foreign w/holding tax on dividend income - Interest Income $ 3,734,214 $ 1,898,116 $ 5,632,330 Fee Income - - ---------------------------------------------------------- Total Investment Income 3,734,214 1,898,116 - 5,632,330 ---------------------------------------------------------- EXPENSES: Investment Advisory Fee 308,099 145,180 453,279 Administration Fee 123,240 33,910 (157,150) (A) - Custodian Fee 75,696 8,438 84,134 Legal and audit fees 29,852 23,529 53,381 Trustees' fees and expenses 7,943 3,790 11,733 Amortization of Org. Cost 5,103 3,545 8,648 Registration and filing fees 13,915 25,417 39,332 Transfer agent fee - 19,227 203,412 (B) 222,689 Other 35,990 44,537 80,527 ---------------------------------------------------------- Subtotal 599,838 288,346 (46,262) 953,723 Shareholder servicing and distribution fees: Class A Shares 153,647 55,796 209,448 Class B Shares 1,610 30,496 32,106 Class S Shares 6,400 6,400 Interest expense - - Fees waived and /or expenses absorbed by investment advisor (347,704) (133,982) 27,957 (C) (453,729) ---------------------------------------------------------- Subtotal 407,391 266,333 74,219 747,943 Fees reduced by credits allowed by the custodian (428) (428) ---------------------------------------------------------- Net expenses 407,391 265,905 74,219 747,515 ---------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 3,326,823 1,632,211 (74,219) 4,884,815 ---------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions 59,758 (108,783) (49,025) Forward foreign currency contracts and foreign currency transactions - - Futures contracts (105,817) (105,817) Net unrealized appreciation/(depreciation) of: Securities 524,692 63,850 588,542 Forward foreign currency contracts - - Foreign currency, written options, futures contracts and other assets and liabilities 8,262 8,262 ---------------------------------------------------------- Net Real. And unreal G/(L) on investments 584,450 (142,488) - 441,962 ---------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,911,273 $ 1,489,723 $ (74,219) $ 5,326,777 ========================================================== (A) Elimination of the administration fees, now incorporated in the management fee structure. (B) Addition of transfer agent fee at a monthly rate of $1.45 per Class A shareholder account and $1.55 per Class B and Class S shareholder account. (C) Fees waived and/or expense absorbed by investment advisor adjusted to .50% of average daily net assets. WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund Portfolio of Investments Pro Forma Combined Portfolio of Investments 30-Jun-98 Principal Amount (Unaudited) Market Value - -------------------------------------------------- ------------------------------------------- WM Griffin WM Griffin Short Term High Short-Term Pro Forma Short Term High Short-Term Pro Forma Quality Bond Fund Bond Fund Combined Quality Bond Fund Bond Fund Combined CORPORATE BONDS - 22 9% Banking - 470,000 470,000 Bankers Trust - New York, 9.50%, 06/14/00.... - 498,788 498,788 - 30,000 30,000 First Chicago, 9.00%, 06/15/99........... - 30,788 30,788 - - - MBNA Corporation - - - - 450,000 450,000 6.10%, 12/15/00................. - 448,313 448,313 - 210,000 210,000 6.88%, 10/01/99................. - 211,838 211,838 - - - Northern Trust - - - - 1,000,000 1,000,000 6.50%, 05/01/03................. - 1,018,750 1,018,750 ----------------------------------- - 2,208,477 2,208,477 Financial Services Associates Corporation, N.A......... - - - - 250,000 250,000 6.00%, 03/15/00............. - 250,313 250,313 - 16,000 16,000 6.75%, 10/15/99............. - 16,141 16,141 - 1,000,000 1,000,000 Bear Stearns Company, 6.20%, 03/30/03...... - 996,250 996,250 - 1,000,000 1,000,000 CIT Group Holdings, 6.38%, 11/15/02....... - 1,011,250 1,011,250 - - - Donaldson Lufkin & Jennrette, - - - - 1,000,000 1,000,000 6.38%, 05/26/00................... - 1,005,000 1,005,000 - 1,000,000 1,000,000 Fairfax Financial Holdings, 7.75%, 12/15/03 - 1,055,000 1,055,000 - 1,000,000 1,000,000 Finova Capital Corporation, 6.28%, 11/01/99 - 1,003,000 1,003,000 - - - General Motors Acceptance Corporation - - - - 200,000 200,000 5.63%, 02/15/01.................... - 198,750 198,750 - 500,000 500,000 7.75%, 01/15/99.................... - 505,310 505,310 - 255,000 255,000 Golden West Financial, 10.25%, 12/01/00... - 278,906 278,906 - 100,000 100,000 Heller Financial, 9.13%, 08/01/99...... - 103,171 103,171 - - - Lehman Brothers Holdings Corporation, - - - - 150,000 150,000 8.88%, 11/01/98.................... - 151,325 151,325 - 717,000 717,000 Paine Webber Group, 9.25%, 12/15/01...... - 780,634 780,634 - 1,200,000 1,200,000 PDVSA Finance 144A, 6.45%, 02/15/04 - 1,185,000 1,185,000 - 750,000 750,000 Penske Truck Leasing, 6.65%, 11/01/00... - 762,188 762,188 - 1,000,000 1,000,000 Salomon Smith Barney Hld, 6.13%, 01/15/03 - 990,000 990,000 ----------------------------------- - 10,292,238 10,292,238 Food Products - 1,000,000 1,000,000 Tyson Foods Incorporated, 6.00%, 01/15/03.. - 991,250 991,250 Industrial Conglomerate - 100,000 100,000 Anheuser Busch Company, 8.75%, 12/01/99... - 103,875 103,875 - 603,000 603,000 Boise Cascade Company, 9.90%, 03/15/00.... - 634,658 634,658 - 600,000 600,000 Continental Cablevision, 8.50%, 09/15/01.. - 639,000 639,000 - - - Cox Communications Incorporated - New, - - - - 40,000 40,000 8.55%, 06/01/00................... - 41,750 41,750 - - - Cox Communications Incorporated, - - - - 100,000 100,000 6.38%, 06/15/00................... - 100,625 100,625 - 750,000 750,000 Eaton Off Shore, 9.00%, 02/15/01........ - 805,313 805,313 - 710,000 710,000 Enron Corporation, 9.13%, 04/01/03.... - 793,425 793,425 - - - General Motors Acceptance Corporation, - - - - 300,000 300,000 6.88%, 07/15/01.................. - 306,375 306,375 - 1,000,000 1,000,000 Hertz Corporation, 7.38%, 06/15/01..... - 1,030,000 1,030,000 - 1,000,000 1,000,000 Ingersoll-Rand, 6.26%, 02/15/01...... - 1,007,500 1,007,500 - - - International Paper Company, - - - - 150,000 150,000 9.70%, 03/15/00.................. - 159,000 159,000 - 1,000,000 1,000,000 Lehman Brothers Inc , 6.13%, 02/01/01 - 998,750 998,750 - 71,000 71,000 Lockheed Corporation, 9.38%, 10/15/99... - 73,840 73,840 - 100,000 100,000 Pepsico Incorporated, 7.75%, 10/01/98.. - 100,330 100,330 - 2,000,000 2,000,000 Philip Morris, 7.50%, 04/01/04....... - 2,105,000 2,105,000 - 1,000,000 1,000,000 Sony Corporation, 6.13%, 03/04/03..... - 1,003,750 1,003,750 - 65,000 65,000 Texaco Capital Incorporated, 9.00%, 12/15/99 - 67,763 67,763 ----------------------------------- - 9,970,954 9,970,954 Retailing - 450,000 450,000 Penney J C & Company, 6.95%, 04/01/00...... - 457,875 457,875 - 100,000 100,000 Wal-Mart Stores, 6.75%, 05/15/02......... - 103,000 103,000 ----------------------------------- - 560,875 560,875 Transportation - 1,000,000 1,000,000 Praxair, 6.15%, 0?/15/03 - 997,500 997,500 - 150,000 150,000 Southwest Airlines, 9.40%, 07/01/01...... - 162,930 162,930 - 1,000,000 1,000,000 Union Pacific Co , 9.63%, 12/15/02 - 1,125,000 1,125,000 ----------------------------------- - 2,285,430 2,285,430 Utilities - 30,000 30,000 Alabama Power Company, 6.38%, 08/01/99...... - 30,150 30,150 - 100,000 100,000 Baltimore Gas & Electric, 8.93%, 07/16/98.. - 100,125 100,125 - 465,000 465,000 Consolidated Natural Gas, 8.75%, 06/01/99.. - 476,044 476,044 - 300,000 300,000 National Rural Utilities, 6.75%, 09/01/01.. - 306,750 306,750 - 275,000 275,000 Orange & Rockland Utility, 9.38%, 03/15/00. - 289,781 289,781 - 1,000,000 1,000,000 Philadelphia Electric, 8.00%, 04/01/02... - 1,062,500 1,062,500 - 1,000,000 1,000,000 Potomac Capital Investment, 6.80%, 09/12/01 - 1,007,500 1,007,500 - - - Public Service Electric & Gas, - - - - 1,000,000 1,000,000 8.75%, 07/01/99................. - 1,026,250 1,026,250 - 60,000 60,000 Southern California Edison, 8 25%, 02/01/00 - 62,100 62,100 - 1,000,000 1,000,000 Union Texas Petroleum, 6 60%, 12/04/02 - 1,002,500 1,002,500 ----------------------------------- - 5,363,700 5,363,700 Total Corporate Bonds - 31,672,924 31,672,924 Portfolio of Investments WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund Pro Forma Combined Portfolio of Investments 30-Jun-98 (Unaudited) Principal Amount Market Value - -------------------------------------------------- ----------------------------------------------- WM Griffin WM Griffin Short Term High Short-Term Pro Forma Short Term High Short-Term Pro Forma Quality Bond Fund Bond Fund Combined Quality Bond Fund Bond Fund Combined CORPORATE NOTES - 9.3% 400,000 - 400,000 Colonial Realty, Sr. Note, - - - - - - 7.500% due 07/15/2001............................ 414,000 - 414,000 1,000,000 - 1,000,000 Crane Company, Note, - - - - - - 7.250% due 06/15/1999............................ 1,011,510 - 1,011,510 1,220,000 - 1,220,000 CSX Corp, Deb., - - - - - - 9.500% due 08/01/2000............................ 1,298,666 - 1,298,666 400,000 - 400,000 ERP Operating LP, - - - - - - 8.500% due 05/15/1999(C)......................... 407,544 - 407,544 500,000 - 500,000 Federated Department Stores, - - - - - - 6.790% due 07/15/2027............................ 511,525 - 511,525 1,500,000 - 1,500,000 General Electric Capital Corporation, Series A, MTN, - - - - - - 5.800% due 04/24/2000............................ 1,500,000 - 1,500,000 1,500,000 - 1,500,000 McDonald Douglas Finance Corp., Series X, MTN, - - - - - - 6.710% due 07/19/2000............................ 1,516,215 - 1,516,215 1,500,000 - 1,500,000 Merrill Lynch Finance Corp., Series B, MTN, - - - - - - 6.100% due 10/04/1999............................ 1,506,870 - 1,506,870 200,000 - 200,000 Nabisco Inc., Industrial Note, - - - - - - 6.300% due 08/26/1999(C)......................... 199,840 - 199,840 1,500,000 - 1,500,000 Sun Communities Inc., Sr. Note, - - - - - - 7.625% due 05/01/2003............................ 1,554,210 - 1,554,210 - - - Taubman Realty Corporation, MTN: - - - 300,000 - 300,000 7.400% due 06/10/2002............................ 314,037 - 314,037 500,000 - 500,000 7.500% due 06/15/2002............................ 516,395 - 516,395 100,000 - 100,000 Time Warner Inc., - - - - - - 7.950% due 02/01/2000............................ 102,756 - 102,756 1,500,000 - 1,500,000 Travelers Inc., Notes, - - - - - - 6.125% due 06/15/2000............................ 1,507,500 - 1,507,500 500,000 - 500,000 US West Capital Funding Inc., - - - - - - 6.125% due 07/15/2002............................ 500,010 - 500,010 --------------------------------------- Total Corporate Notes 12,861,078 - 12,861,078 COLLATERALIZED MORTGAGE OBLIGATIONS - 2.8% 29,058 - 29,058 Chemical Mortgage Securities Inc., 1993-1-A4, - - - - - - 7.450% due 02/25/2023............................ 29,022 - 29,022 92,587 - 92,587 Countrywide Funding Corporation, 1994-1-A3, - - - - - - 6.250% due 03/25/2024............................ 91,747 - 91,747 170,000 - 170,000 1994-C-A5, - - - - - - 6.375% due 03/25/2024............................ 169,308 - 169,308 353,610 - 353,610 Federal Home Loan Mortgage Corporation (FHLMC), P/O, - - - - - - REMIC, #1719-C, - - - - - - Zero coupon due 04/15/1999................... 43,002 - 343,002 - - - General Electric Capital Mortgage Association: - - - 296,558 - 296,558 1994-27-A1, - - - - - - 6.500% due 07/25/2024............................ 295,942 - 295,942 1,850,000 - 1,850,000 1996-HE3-A3, - - - - - - 7.150% due 09/25/2026............................ 1901,295 - 1,901,295 580,220 - 580,220 Norwest Asset Securities Corporation, 1996-5-A13, - - - - - - 7.500% due 11/25/2026............................ 583,665 - 583,665 427,049 - 427,049 Prudential Home Mortgage Securities, - - - - - - 1993-43-A1, - - - - - - 5.400% due 10/25/2023............................ 23,978 - 423,978 31,654 - 31,654 Ryland Acceptance Corporation, - - - - - - 8.950% due 08/20/2019............................ 31,683 - 31,683 --------------------------------------- Total Collateralized Mortgage Obligations 3,869,642 - 3,869,642 ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES - 1.6% 412,145 - 412,145 Federal Home Loan Mortgage Corporation (FHLMC), #845988, - - - - - - 7.859% due 11/01/2021(B)......................... 428,824 - 428,824 - - - Federal National Mortgage Association (FNMA): - - - 404,600 - 404,600 #82247, - - - - - - 6.250% due 04/01/2019(B)......................... 407,129 - 407,129 178,197 - 178,197 #124571, - - - - - - 7.649% due 11/01/2022(B)......................... 184,323 - 184,323 219,707 - 219,707 #152205, - - - - - - 7.398% due 01/01/2019(B)......................... 226,812 - 226,812 294,219 - 294,219 #141461, - - - - - - 7.577% due 11/01/2021(B)......................... 299,229 - 299,229 592,492 - 592,492 #313257, - - - - - - 6.258% due 11/01/2035(B)......................... 596,195 - 596,195 ----------------------------------------- Total Adjusted Rate Mortgage- Backed Securities 2,142,512 - 2,142,512 Portfolio of Investments WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund Pro Forma Combined Portfolio of Investments Principal Amount June 30, 1998 (Unaudited) Market Value - ----------------------------------------------- ------------------------------------------ WM Short Term Griffin WM Short Term Griffin High-Quality Bond Short-Term Bond Pro Forma High-Quality Bond Short-Term Bond Pro Forma Fund Fund Combined Fund Fund Combined ASSET-BACKED SECURITIES - 5 2% 300,000 - 300,000 Conti-Mortgage Home Equity Loan Trust, - - - - - - 1996-4-A6, - - - - - - 6.710% due 06/15/2014...................... 302,529 - 302,529 300,000 - 300,000 Green Tree Financial Corporation, - - - - - - 1995-6-B1, - - - - - - 7.700% due 09/15/2026...................... 305,413 - 305,413 300,000 - 300,000 Green Tree Home Equity Loan Trust, 1997-B-A5, - - - - - - 7.150% due 04/15/2027...................... 306,500 - 306,500 1,962,628 - 1,962,628 Green Tree Security Mortgage Trust, 1994-A, - - - - - - 6.900% due 02/15/2004...................... 1,968,761 - 1,968,761 300,000 - 300,000 H & T Master Trust, - - - - - - 8.430% due 08/15/2002(C)................... 300,422 - 300,422 600,000 - 600,000 MBNA Master Credit Card Trust, 1995-E-A, - - - - - - 5.876% due 01/15/2005(B)................... 602,808 - 602,808 - - - Merrill Lynch Mortgage Investors, Inc : - - - 13,787 - 13,787 1991-B-A, - - - - - - 9.200% due 04/15/2011...................... 13,858 - 13,858 269,248 - 269,248 1992-B-A4, - - - - - - 7.850% due 04/15/2012...................... 276,528 - 276,528 71,120 - 71,120 Old Stone Credit Corporation, 1992-4A, - - - - - - 6.550% due 11/15/2007...................... 71,009 - 71,009 1,000,000 - 1,000,000 Standard Credit Card Master Trust, 1994-4A, - - - - - - 8.250% due 11/07/2003...................... 1,065,620 - 1,065,620 1,200,000 - 1,200,000 The Money Store Home Equity Trust, 1997-C-AF, - - - - - - 6.307% due 08/15/2012...................... 1,201,500 - 1,201,500 696,423 - 696,423 World Omni Automobile Lease Securitization, 1996-B, - - - - - - 6.850% due 11/15/2002(C)................... 707,305 - 707,305 -------------------------------------- Total Asset-Backed Securities 7,122,253 - 7,122,253 U S GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 7 0% FEDERAL HOME LOAN BANK - 200,000 200,000 5.89%, 07/24/00.............................. - 200,874 200,874 - 200,000 200,000 5.94%, 06/13/00.............................. - 201,046 201,046 FEDERAL HOME LOAN MORTGAGE CORPORATION 326,612 - 326,612 #A01226, Seasoned, - - - - - - 9.500% due 08/01/2016........................ 354,051 - 354,051 - 188,613 188,613 5.50% due 05/01/01........................... - 186,137 186,137 - 172,018 172,018 5.50% due 06/01/01........................... - 169,760 169,760 - 87,781 87,781 6.00% due 06/01/01........................... - 87,836 87,836 - 358,975 358,975 6.00% due 06/01/01........................... - 359,198 359,198 - 107,783 107,783 6.00% due 04/01/99........................... - 107,851 107,851 - 331,179 331,179 6.50% due 05/01/01........................... - 334,509 334,509 - 296,179 296,179 6.50% due 12/01/99........................... - 300,897 300,897 - 256,631 256,631 7.00% due 09/01/01........................... - 260,720 260,720 - 175,000 175,000 7.13% due 07/21/99........................... - 177,599 177,599 - 50,000 50,000 7.75% due 11/07/01........................... - 53,080 53,080 FEDERAL NATIONAL MORTGAGE ASSOCIATION 250,657 - 250,657 #250235, 7 Year Balloon, - - - - - - 8.500% due 02/01/2002...................... 256,266 - 256,266 317,745 - 317,745 #313030, Seasoned, - - - - - - 10.000% due 05/01/2022**................... 349,265 - 349,265 588,127 - 588,127 #313641,Seasoned - - - - - - 8.500% due 11/01/2017...................... 617,163 - 617,163 - 989,211 989,211 6.00% due 03/01/05........................... - 986,422 986,422 - 1,500,000 1,500,000 7.50% due 02/11/02........................... - 1,588,350 1,588,350 - 225,000 225,000 8.25% due 12/18/00........................... - 238,111 238,111 - 475,000 475,000 9.05% due 04/10/00........................... - 501,833 501,833 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 169,725 - 169,725 #038720, Seasoned, - - - - - - 11.000% due 02/15/2010 (A)................. 189,479 - 189,479 52,647 - 52,647 #130183, Seasoned, - - - - - - 11.000% due 05/15/2015 (A)................. 59,171 - 59,171 171,295 - 171,295 #131917, Seasoned, - - - - - - 11.000% due 10/15/2015 (A)................. 192,522 - 192,522 22,348 - 22,348 #132833, Seasoned, - - - - - 11.000% due 12/15/2015 (A)................. 25,167 - 25,167 54,327 - 54,327 #139704, Seasoned, - - - - - - 11.000% due 11/15/2015 (A)................. 61,059 - 61,059 174,076 - 174,076 #140835, Seasoned, - - - - - - 11.000% due 11/15/2015 (A)................. 195,287 - 195,287 134,075 - 134,075 #153965, Seasoned, - - - - - - 10.000% due 02/15/2019..................... 147,243 - 147,243 64,698 - 64,698 #189482, Seasoned, - - - - - - 11.000% due 04/15/2020 (A)................. 72,962 - 72,962 709,111 - 709,111 #262996, Seasoned, - - - - - - 10.000% due 01/15/2019..................... 778,072 - 778,072 152,846 - 152,846 #291375, Seasoned, - - - - - - 11.000% due 08/15/2020 (A)................. 172,943 - 172,943 84,676 - 84,676 #377550, Seasoned, - - - - - - 8.000% due 03/15/2012...................... 87,745 - 87,745 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION II 250,190 - 250,190 9.000% due 04/20/2025...................... 266,243 - 266,243 Total U S Government Agency Mortgage-Backed Securities 3,824,638 5,754,223 9,578,861 WM Short Term High Quality Bond Fund and Griffin Short-Term Bond Fund Portfolio of Investments Pro Forma Combined Portfolio of Investments 30-Jun-98 Principal Amount (Unaudited) Market Value ---------------------------------------------- --------------------------------------------- WM Griffin WM Griffin Short Term High Short-Term Pro Forma Short Term High Short-Term Pro Forma Quality Bond Fund Bond Fund Combined Quality Bond Fund Bond Fund Combined U.S. TREASURY BONDS - 0 8% - 1,100,000 1,100,000 5 75% due 10/31/00....................... - 1,105,115 1,105,115 U.S. TREASURY NOTES - 46 3% - 600,000 600,000 5 13% due 11/30/98....................... - 599,562 599,562 650,000 - 650,000 5 250% due 01/31/2001.................... 645,938 - 645,938 - 1,600,000 1,600,000 5 50% due 04/15/00....................... - 1,600,384 1,600,384 - 2,800,000 2,800,000 5 50% due 12/31/00....................... - 2,798,040 2,798,040 3,000,000 - 3,000,000 5 625% due 02/15/2006.................... 3,012,180 - 3,012,180 500,000 - 500,000 5 625% due 02/28/2001.................... 501,250 - 501,250 2,000,000 - 2,000,000 5 625% due 11/30/1999.................... 2,002,500 - 2,002,500 3,000,000 - 3,000,000 5 750% due 11/15/2000.................... 3,015,000 - 3,015,000 - 5,200,000 5,200,000 5 88% due 11/15/99....................... - 5,223,608 5,223,608 - 1,750,000 1,750,000 6 00% due 08/15/99....................... - 1,759,240 1,759,240 500,000 - 500,000 6 000% due 08/15/2000.................... 504,765 - 504,765 - 3,500,000 3,500,000 6 13% due 07/31/00....................... - 3,540,880 3,540,880 - 4,300,000 4,300,000 6 25% due 04/30/01....................... - 4,378,561 4,378,561 - 4,000,000 4,000,000 6 25% due 10/31/01....................... - 4,081,280 4,081,280 2,000,000 - 2,000,000 6 250% due 04/30/2001.................... 2,037,180 - 2,037,180 - 5,500,000 5,500,000 6 63% due 04/30/02....................... - 5,697,065 5,697,065 - 5,650,000 5,650,000 6 63% due 06/30/01....................... - 5,812,381 5,812,381 - 550,000 550,000 6 88% due 03/31/00....................... - 562,106 562,106 - 1,200,000 1,200,000 7 00% due 04/15/99....................... - 1,213,644 1,213,644 - 650,000 650,000 7 13% due 02/29/00....................... - 666,166 666,166 - 4,550,000 4,550,000 7 50% due 05/15/02....................... - 4,853,258 4,853,258 - 650,000 650,000 7 50% due 10/31/99....................... - 666,081 666,081 - 1,950,000 1,950,000 7 75% due 01/31/00....................... - 2,014,604 2,014,604 - 1,500,000 1,500,000 7 75% due 12/31/99....................... - 1,547,295 1,547,295 - 700,000 700,000 8 50% due 02/15/00....................... - 731,750 731,750 - 1,150,000 1,150,000 8 88% due 05/15/00....................... - 1,218,230 1,218,230 - 3,200,000 3,200,000 9 13% due 05/15/99....................... - 3,297,376 3,297,376 ------------------------------------- Total U.S. Treasury Notes 11,718,813 52,261,511 63,980,324 FOREIGN GOVERNMENT BONDS - 0 7% 1,000,000 - 1,000,000 Ontario (Province of Canada), 6 125% due 06/28/2000.................. 1,005,350 - 1,005,350 REPURCHASE AGREEMENT - 2 4% State Street Bank & Trust Co , Master Repurchase Agreement, 4 25%, Dated 3/31/98 due 4/1/98, Collateralized by U S Government Securities - 3,354,461 3,354,461 (delivery value $392,493)............... - 3,354,461 3,354,461 TOTAL INVESTMENTS - 99.0%, (COST $136,019,255) 42,544,286 94,148,234 136,692,520 OTHER ASSETS AND LIABILITIES, NET - 1.0% 418,490 952,718 1,371,208 TOTAL NET ASSETS - 100.0% 42,962,776 95,100,952 138,063,728 _____________________________________ (A) A portion or all of these securities are pledged as collateral for futures contracts. (B) Variable rate security. The interest rate shown reflects the rate currently in effect. (C) Security exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. WM SHORT TERM HIGH QUALITY BOND FUND & GRIFFIN SHORT-TERM BOND FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Short Term High Quality Bond Fund and the Griffin Short-Term Bond Fund at June 30, 1998 and the pro forma combined results of operations for the year ended June 30, 1998 as though the reorganization had occurred on July 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statement of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Short-Term Bond Fund in exchange for shares of WM Short Term High Quality Bond Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Short-Term Bond Fund shares into WM Short Term High Quality Bond Fund shares based upon the net asset value of the WM Short Term High Quality Bond Fund shares at June 30, 1998. WM U.S. Government Securities Fund and Griffin U.S. Government Income Fund PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM US GOVERNMENT US GOVERNMENT PRO FORMA PRO FORMA INCOME FUND SECURITIES FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $123,818,655 $465,802,730 $589,621,385 - ------------------------------------------------------------------- Total Investments 123,818,655 465,802,730 - 589,621,385 Cash/Cash Equivalents 264,292 315,010 579,302 Receivable for dollar roll fee income 2,406 2,406 Dividends and/or interest receivable 1,109,878 3,877,005 4,986,883 Receivable for Fund shares Sold 7,334 310,533 317,867 Receivable for investment securities sold - - Unamortized organization costs - - Receivable from investment advisor - - Prepaid expenses and other assets 4,812 19,656 24,468 ------------------------------------------------------------------- Total Assets 125,204,971 470,327,340 - 595,532,311 LIABILITIES: Payable for dollar roll transactions 6,114,042 6,114,042 Variation margin payable 114,844 114,844 Reverse repurchase agreements 80,498,224 80,498,224 Payable for Fund shares redeemed - 925,923 925,923 Payable for investment securities purchased 17,287,840 - 17,287,840 Investment advisory fee payable 162,374 162,374 Administration fee payable - - Shareholder servicing and distribution fees payable 120,598 120,598 Dividends payable 491,309 879,523 1,370,832 Accrued legal and audit fees 5,335 5,335 Accrued Trustees' fees and expenses 2,101 2,101 Accrued registration and filing fees payable - - Due to Custodian - - Net unrealized depreciation of fwd for curr cts - - Accrued Expenses and other payables 126,142 244,271 370,413 ------------------------------------------------------------------- Total Liabilities 17,905,291 89,067,235 - 106,972,526 ------------------------------------------------------------------- ------------------------------------------------------------------- TOTAL NET ASSETS $107,299,680 $381,260,105 - $488,559,785 =================================================================== NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ - $ 41,000 $ 41,000 Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions (27,002) (7,136,028) (7,163,030) Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 1,815,354 10,153,451 11,968,805 Paid-in capital 105,511,328 378,201,682 483,713,010 ------------------------------------------------------------------- TOTAL NET ASSETS $107,299,680 $381,260,105 $ - $488,559,785 =================================================================== NET ASSETS: Class A Shares $103,063,684 $294,038,697 $397,102,381 =================================================================== Class B Shares $ 4,235,996 $ 22,081,393 $ 26,317,389 =================================================================== Class S Shares $ 6,748,647 $ 6,748,647 =================================================================== Class I Shares $ 58,391,368 $ 58,391,368 =================================================================== SHARES OUTSTANDING: Class A Shares 11,046,945 27,148,122 (1,531,240) (A) 36,663,827 =================================================================== Class B Shares 453,649 2,039,590 (62,383) (A) 2,430,856 =================================================================== Class S Shares 622,636 622,636 =================================================================== Class I Shares 5,386,588 5,386,588 =================================================================== NET ASSET VALUE PER SHARE: Class A Shares $ 9.33 $ 10.83 $ 10.83 =================================================================== Class B Shares $ 9.34 $ 10.83 $ 10.83 =================================================================== Class S Shares $ 10.84 $ 10.84 =================================================================== Class I Shares $ 10.84 $ 10.84 =================================================================== See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin U.S. Government Income Fund shares into WM U.S. Government Securities Fund shares based upon the net asset value of WM U.S. Government Securities Fund shares at April 30, 1998. WM U.S. Government Securities Fund and Griffin U.S. Government Income Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM US GOVERNMENT US GOVERNMENT PRO FORMA PRO FORMA INCOME FUND SECURITIES FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - Foreign w/holding tax on dividend income - Interest Income $2,086,469 $ 4,835,822 $ 6,922,291 Fee Income 69,825 69,825 ---------------------------------------------------------------------------------- Total Investment Income 2,086,469 4,905,647 - 6,992,116 ---------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 157,785 428,132 39,447 (A) 625,364 Administration Fee 63,114 - (63,114) (B) - Custodian Fee 24,427 9,279 33,706 Legal and audit fees 11,988 5,335 17,323 Trustees' fees and expenses 2,604 2,101 4,705 Amortization of Org. Cost 5,578 - 5,578 Registration and filing fees 4,197 - 4,197 Other 11,363 - 11,363 ---------------------------------------------------------------------------------- Subtotal 281,056 444,847 (23,667) 702,236 Shareholder servicing and distribution fees: Class A Shares 75,452 172,323 49,590 (C) 297,365 Class B Shares 13,763 35,009 933 (D) 49,705 Class S Shares 9,666 9,666 Interest expense 188,227 188,227 Fees waived and /or expenses absorbed by investment advisor (125,129) (35,103) 35,159 (E) (125,073) ---------------------------------------------------------------------------------- Subtotal 245,142 814,969 62,015 1,122,126 Fees reduced by credits allowed by the custodian (690) ---------------------------------------------------------------------------------- Net expenses 245,142 814,279 62,015 1,122,126 ---------------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 1,841,327 4,091,368 (62,015) 5,869,990 NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions 186,854 192,670 379,524 Forward foreign currency contracts and foreign currency transactions - - Futures contracts - - Net unrealized appreciation/(depreciation) of: Securities (166,179) 6,701,181 6,535,002 Forward foreign currency contracts - - Foreign currency, written options, futures contracts and other assets and liabilities 2,732 2,732 ---------------------------------------------------------------------------------- Net Real. And unreal G/(L) on investments 20,675 6,896,583 - 6,917,258 ---------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $1,862,002 $10,987,951 $(62,015) $12,787,248 ================================================================================== (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor adjusted to .13% of average daily net assets. WM U.S. Government Securities and Griffin U.S. Government Income Fund Pro Forma Combined Statement of Operations For the Year Ended 12/31/97 (Unaudited) GRIFFIN WM US GOVERNMENT US GOVERNMENT PRO FORMA PRO FORMA INCOME FUND SECURITIES FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - Foreign w/holding tax on dividend income - Interest Income $4,819,481 $ 8,575,819 $13,395,300 Fee Income - - ------------------------------------------------------------------------------- Total Investment Income 4,819,481 8,575,819 - 13,395,300 ------------------------------------------------------------------------------- EXPENSES: Investment Advisory Fee 350,449 769,591 87,600 (A) 1,207,640 Administration Fee 140,180 - (140,180) (B) - Custodian Fee 76,972 43,651 120,623 Legal and audit fees 22,793 11,787 34,580 Trustees' fees and expenses 8,213 8,499 16,712 Amortization of Org. Cost 17,108 - 17,108 Registration and filing fees 12,114 22,077 34,191 Other 28,507 73,838 102,345 ------------------------------------------------------------------------------- Subtotal 656,336 929,443 (52,580) 1,533,199 Shareholder servicing and distribution fees: Class A Shares 165,827 352,539 148,770 (C) 667,136 Class B Shares 37,591 32,614 2,800 (D) 73,005 Class S Shares - - Interest expense - - Fees waived and /or expenses absorbed by investment advisor (360,340) - 118,812 (E) (241,528) ------------------------------------------------------------------------------- Subtotal 499,414 1,314,596 217,802 2,031,812 Fees reduced by credits allowed by the custodian (2,671) ------------------------------------------------------------------------------- Net expenses 499,414 1,311,925 217,802 2,031,812 ------------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 4,320,067 7,263,894 (217,802) 11,363,488 NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains from: Security transactions 463,908 (493,856) (29,948) Forward foreign currency contracts and foreign currency transactions - - Futures contracts - - Net unrealized appreciation/(depreciation) of: Securities 1,667,350 4,371,425 6,038,775 Forward foreign currency contracts - - Foreign currency, written options, futures contracts and other assets and liabilities - - ------------------------------------------------------------------------------- Net Real. And unreal G/(L) on investments 2,131,258 3,877,569 - 6,008,827 ------------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $6,451,325 $11,141,463 $(217,802) $17,372,315 =============================================================================== (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor adjusted to .13% of average daily net assets. Portfolio of Investments WM U.S. Government Securities Fund and Griffin U.S. Government Income Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value - -------------------------------------------------- ----------------------------------------------- WM Griffin WM Griffin US Government US Government Pro Forma US Government US Government Pro Forma Securities Fund Income Fund Combined Securities Fund Income Fund Combined U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 77.3% Federal Home Loan Mortgage Corporation (FHLMC) 2,958,745 2,958,745 6.01% due 05/15/26................. - 2,963,68 2,963,368 21,632,862 - 21,632,862 6.500% due 02/01/2011 - 02/01/2028 ........................ 21,739,953 - 21,739,953 - 3,550,000 3,550,000 6.59% due 02/15/21 .................. - 3,639,859 3,639,859 - 2,000,000 2,000,000 7.00% due 01/15/24 .................. - 2,045,360 2,045,360 1,909,896 - 1,909,896 7.000% due 07/01/2024 - 2/01/2026 ......................... 1,935,561 - 1,935,561 59,809,141 - 59,809,141 7.500% due 01/01/2007 - 03/01/2013 ........................ 61,663,037 - 61,663,037 962,942 - 962,942 8.750% due 01/01/2013 ............... 1,010,058 - 1,010,058 1,614,792 - 1,614,792 9.000% due 12/01/2008 - 08/01/2022 ........................ 1,706,663 - 1,706,663 677,141 - 677,141 9.500% due 06/01/2016 - 05/01/2017 ........................ 720,944 - 720,944 1,769,573 - 1,769,573 15 Year Converted GOLD, 7.500% due 05/01/2003 ...................... 1,824,320 - 1,824,320 - - - GOLD: 247,057 - 247,057 6.500% due 04/01/2027 ............... 245,127 - 245,127 63,854,459 - 63,854,459 7.500% due 07/01/2002 - 04/01/2013 ........................ 65,839,108 - 65,839,108 3,179,841 - 3,179,841 8.500% due 04/01/2019 ............... 3,322,934 - 3,322,934 ---------------------------------------------------- Total Federal Home Loan Mortgage Corporation (FHLMC) 160,007,675 8,648,587 168,656,262 Government National Mortgage Association (GNMA) 4,706,279 - 4,706,279 6.000% due 04/20/2026 ............... 4,529,794 - 4,529,794 13,999,033 - 13,999,033 6.500% due 08/15/2023 - 03/15/2024 ........................ 13,889,700 - 13,889,700 - 7,000,000 7,000,000 7.00% due 02/15/28 (C) .............. - 7,072,170 7,072,170 15,791,208 - 15,791,208 7.000% due 07/15/2008 - 08/15/2023 ........................ 16,019,161 - 16,019,161 - 2,861,271 2,861,271 7.50% due 03/15/24 .................. - 2,950,686 2,950,686 - 828,110 828,110 7.50% due 03/15/26 .................. - 850,884 850,884 - 3,528,199 3,528,199 7.50% due 06/15/27 .................. - 3,625,224 3,625,224 67,479,707 - 67,479,707 7.500% due 12/15/2022 - 12/15/2023 ........................ 69,405,254 - 69,405,254 - 1,730,590 1,730,590 8.00% due 02/15/27 .................. - 1,796,024 1,796,024 - 1,486,106 1,486,106 8.00% due 05/15/26 .................. - 1,542,296 1,542,296 - 720,152 720,152 8.00% due 06/15/26 .................. - 747,382 747,382 - 319,602 319,602 8.00% due 10/15/24 .................. - 331,687 331,687 - 228,579 228,579 8.00% due 12/15/24 .................. - 237,222 237,222 1,380,873 - 1,380,873 8.000% due 04/15/2022 ............... 1,433,954 - 1,433,954 1,525,813 - 1,525,813 8.500% due 05/15/2022 ............... 1,610,210 - 1,610,210 6,868,536 - 6,868,536 9.000% due 10/15/2008 - 06/15/2022 ........................ 7,362,212 - 7,362,212 6,237,702 - 6,237,702 9.500% due 04/15/2016 - 09/15/2020 ........................ 6,754,265 - 6,754,265 15,734 - 15,734 11.500% due 07/15/2015 .............. 17,705 - 17,705 - 28,985 28,985 12.50% due 06/15/14 ................. - 33,749 33,749 - 16,803 16,803 12.50% due 06/15/15 ................. - 19,566 19,566 - 24,185 24,185 12.50% due 12/15/10 ................. - 28,161 28,161 - 28,544 28,544 13.00% due 08/15/12 ................. - 33,380 33,380 40,496 - 40,496 13.500% due 09/15/2014 - 12/15/2014 ........................ 46,951 - 46,951 17,580 - 17,580 14.000% due 06/15/2011 .............. 20,426 - 20,426 6,000,000 - 6,000,000 30 Year TBA, 13.500% due 6,076,878 - 6,076,878 12/17/2020 .......................... Total Government National Mortgage ---------------------------------------------------- Association (GNMA) 127,166,510 19,268,431 146,434,941 Federal National Mortgage Association (FNMA) 34,304 - 34,304 5.500% due 02/01/2009 ............... 33,146 - 33,146 2,230,000 - 2,230,000 6.000% due 08/25/2007 ............... 2,224,392 - 2,224,392 - 2,000,000 2,000,000 6.50% due 03/01/28 .................. - 1,976,240 1,976,240 - 3,000,000 3,000,000 6.50% due 05/01/13................... - 3,010,290 3,010,290 - 6,000,000 6,000,000 6.75% due 07/18/19 .................. - 6,067,680 6,067,680 - 4,789,189 4,789,189 7.00% due 03/01/27 .................. - 4,855,041 4,855,041 4,476,046 - 4,476,046 7.000% due 06/01/2010 -05/01/2012 ......................... 4,562,769 - 4,562,769 - 5,000,000 5,000,000 7.50% due 02/01/28 (C) .............. - 5,129,650 5,129,650 1,950,000 - 1,950,000 7.500% due 08/25/2001 ............... 2,003,598 - 2,003,598 4,499,374 - 4,499,374 8.000% due 05/01/2022 -01/01/2025 ......................... 4,665,289 - 4,665,289 - 1,000,000 1,000,000 8.10% due 08/12/19 .................. - 1,215,940 1,215,940 707,927 - 707,927 8.500% due 02/01/2023 -09/01/2025 ......................... 740,447 - 740,447 - 3,000,000 3,000,000 9.00% due 05/25/20................... - 3,240,330 3,240,330 437,908 - 437,908 9.000% due 06/01/2016 -06/01/2021 ......................... 463,635 - 463,635 825,342 - 825,342 ACES, 13.500% due 12/15/2014 ........ 835,539 - 835,539 12,445,920 - 12,445,920 STRIP, Zero Coupon due 10/01/2025 .......................... 10,056,602 - 10,056,602 ---------------------------------------------------- Total Federal National Mortgage Association (FNMA) 25,585,417 25,495,171 51,080,588 Government National Mortgage Association II (GNMA II) 1,036,681 - 1,036,681 9.500% due 02/20/2017 -03/20/2021 ......................... 1,113,461 - 1,113,461 - - - Adjustable Rate Mortgage (ARM): - - - 8,596,869 - 8,596,869 7.000% due 03/20/2022 -12/20/2022(B) ...................... 8,829,878 - 8,829,878 1,507,395 - 1,507,395 7.375% due 05/20/2022(B) ........... 1,554,501 - 1,554,501 ---------------------------------------------------- Government National Mortgage Association II (GNMA II) 11,497,840 - 11,497,840 Total U.S. Government Agency Mortgage-Backed Securities 324,257,442 53,412,189 377,669,631 WM U.S. Government Securities Fund and Griffin Government Income Fund Pro Forma Combined Portfolio of Investments April 30, 1998 (Unaudited) WM Griffin WM Griffin US Government US Government Pro Forma US Government US Government Pro Forma Securities Fund Income Fund Combined Securities Fund Income Fund Combined COLLATERALIZED MORTGAGE OBLIGATIONS - 8.5% - - - REMIC, Pass-through certificates: 4,000,000 - 4,000,000 Trust 89-18, Class-C, - - - - - - 9.500% due 04/25/2004 ..................... 4,245,664 - 4,245,664 1,493,811 - 1,493,811 Trust 92-83, Class X, - - - - - - 7.000% due 02/25/2022 ..................... 1,493,391 - 1,493,391 5,255,853 - 5,255,853 Trust 93-162, Class E, - - - - - - 6.000% due 08/25/2023 ..................... 5,113,388 - 5,113,388 2,527,000 - 2,527,000 Federal Home Loan Mortgage Corp., Series 1288, Class HA, 5.500% due 11/15/2020... 2,479,505 - 2,479,505 8,500,000 - 8,500,000 Federal Home Loan Mortgage Corp., 6.850% due 07/25/2018 ......................... 8,555,803 - 8,555,803 4,900,000 - 4,900,000 Merrill Lynch Trust, 6.50% due 8/25/15 ........ 4,908,036 - 4,908,036 683,251 - 683,251 Mortgage Capital Trust, 9.25% due 6/1/17 ...... 692,283 - 692,283 - 2,947,362 2,947,362 Federal Home Loan Mortgage Corp., 6.35%, 03/15/25 ............................... - 2,960,717 2,960,717 - 4,200,000 4,200,000 Federal National Mortgage Association, 6.25%, 06/25/19 ............................... - 4,198,992 4,198,992 - 1,439,787 1,439,787 Federal National Mortgage Association, 6.20%, 06/25/19 ............................... - 1,446,122 1,446,122 - 4,183,207 4,183,207 Federal National Mortgage Association, 6.35%, 04/25/27 (C) ........................... - 4,227,654 4,227,654 - 1,118,777 1,118,777 L. F. Rothschild Mortgage Trust, Series 3, Class Z, 9.95%, 09/01/17 ...................... - 1,242,369 1,242,369 ------------------------------------- Total Collateralized Mortgage Obligations 27,488,070 14,075,854 41,563,924 U.S. TREASURY OBLIGATIONS - 33.7% U.S. Treasury Notes - 2,400,000 2,400,000 5.75% due 11/15/00 ............................ - 2,407,752 2,407,752 2,000,000 - 2,000,000 5.750% due 08/15/2003 ......................... 2,006,252 - 2,006,252 - 5,000,000 5,000,000 6.13% due 08/15/07 ............................ - 5,132,950 5,132,950 - 4,000,000 4,000,000 6.13% due 12/31/01 ............................ - 4,061,720 4,061,720 - 1,000,000 11,000,000 6.25% due 08/31/02 ............................ - 11,240,900 11,240,900 350,000 - 350,000 6.250% due 02/15/2007 ......................... 361,922 - 361,922 400,000 - 400,000 6.250% due 06/30/2002.......................... 408,375 - 408,375 21,400,000 - 21,400,000 6.375% due 09/30/2001 ......................... 21,868,144 - 21,868,144 4,750,000 - 4,750,000 6.500% due 10/15/2006 ......................... 4,981,567 - 4,981,567 - 2,500,000 2,500,000 7.00% due 07/15/06 ............................ - 2,698,425 2,698,425 30,000,000 - 30,000,000 7.000% due 07/15/2006 (A) ..................... 32,400,027 - 32,400,027 ------------------------------------- Total U.S. Treasury Notes 62,026,287 25,541,747 87,568,034 U.S. Treasury Bonds - 10,850,000 10,850,000 12.00% due 08/15/13 ........................... - 15,908,815 15,908,815 1,500,000 - 1,500,000 6.000% due 02/15/2026 ........................ 1,496,719 - 1,496,719 5,285,000 - 5,285,000 6.125% due 11/15/2027.......................... 5,413,827 - 5,413,827 - 5,000,000 5,000,000 6.25% due 08/15/23 ............................ - 5,141,150 5,141,150 15,195,000 - 15,195,000 6.250% due 08/15/2023.......................... 15,636,611 - 15,636,611 1,888,000 - 1,888,000 6.625% due 02/15/2027.......................... 2,045,531 - 2,045,531 12,000,000 - 12,000,000 7.250% due 05/15/2016.......................... 13,631,255 - 13,631,255 3,250,000 - 3,250,000 7.250% due 08/15/2022.......................... 3,746,642 - 3,746,642 6,500,000 - 6,500,000 7.500% due 11/15/2016 (A)...................... 7,562,346 - 7,562,346 - 5,000,000 5,000,000 8.13% due 08/15/19 ............................ - 6,238,900 6,238,900 ------------------------------------- Total U.S. Treasury Bonds 49,532,931 27,288,865 76,821,796 Total U.S. Treasury Obligations 111,559,218 52,830,612 164,389,830 SHORT-TERM SECURITIES - 0.7% - 3,500,000 3,500,000 Federal Home Loan Mortgage Corporation, 5.45% due 05/01/98............................. - 3,500,000 3,500,000 PURCHASE AGREEMENT - 0.5% 2,498,000 - 2,498,000 Agreement with Goldman Sachs, 5.30% dated 4/30/98, to be repurchased at $2,498,36 on 5/1/98, collateralized by $2,430,053 U.S. Treasury Note, 6.50% due 8/15/05 (Market Value $2,570,612)........ 2,498,000 - 2,498,000 TOTAL INVESTMENTS (120.7%), (COST $) 465,802,730 123,818,655 589,621,385 OTHER ASSETS AND LIABILITIES, NET ( -20.7%) (84,542,625) (16,518,975)(101,061,600) TOTAL NET ASSETS (100.00%) 381,260,105 107,299,680 488,559,785 ___________________________ (A) A portion or all of these securities are pledged as collateral for futures contracts and dollar roll transactions. (B) Variable rate security. The interest rate shown reflects the rate currently in effect. (C) Rate represents annualized yield to maturity at April 30, 1998. WM U.S. GOVERNMENT SECURITIES FUND & GRIFFIN U.S. GOVERNMENT INCOME FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM U.S. Government Securities Fund and the Griffin U.S. Government Income Fund at April 30, 1998 and the pro forma combined results of operations for the year ended December 31, 1997 and the four month period ended April 30, 1998 as though the reorganization had occurred on January 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statements of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin U.S. Government Income Fund in exchange for shares of WM U.S. Government Securities Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin U.S. Government Income Fund shares into WM U.S. Government Securities Fund shares based upon the net asset value of the WM U.S. Government Securities Fund shares at April 30, 1998. WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM MUNICIPAL TAX-EXEMPT PRO FORMA PRO FORMA BOND FUND BOND FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $16,050,011 $326,874,303 $342,924,314 ------------------------------------------------------------- Total Investments 16,050,011 326,874,303 - 342,924,314 Cash/Cash Equivalents 113,191 - 113,191 Receivable for dollar roll fee income - - Dividends and/or interest receivable 201,916 5,397,398 5,599,314 Receivable for Fund shares Sold 66,816 66,816 Receivable for investment securities sold - - Unamortized organization costs - - Receivable from investment advisor - - Prepaid expenses and other assets 12,360 37,997 50,357 ------------------------------------------------------------- Total Assets 16,377,478 332,376,514 - 348,753,992 LIABILITIES: Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 815,566 815,566 Payable for investment securities purchased 488,870 509 489,379 Investment advisory fee payable 138,740 138,740 Administration fee payable - - Shareholder servicing and distribution fees payable 29,231 29,231 Dividends payable 48,756 459,121 507,877 Accrued legal and audit fees 2,128 2,128 Accrued transfer agent fees - - Accrued Trustees' fees and expenses 2,101 2,101 Accrued registration and filing fees payable 5,502 5,502 Due to Custodian 53,829 53,829 Net Unrealized Depreciation of Fwd For Curr Cts - - Accrued Expenses and other payables 16,953 169,156 186,109 ------------------------------------------------------------- Total Liabilities 554,579 1,675,883 - 2,230,462 TOTAL NET ASSETS $15,822,899 $330,700,631 $ - $346,523,530 ============================================================= NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ - $ (1,632) $ (1,632) Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions (106,519) 784,442 677,923 Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 344,577 30,033,786 30,378,363 Paid-in capital 15,584,841 299,884,035 315,468,876 ------------------------------------------------------------- TOTAL NET ASSETS $15,822,899 $330,700,631 - $346,523,530 ============================================================= NET ASSETS: Class A Shares $15,287,168 $316,112,406 $331,399,574 ============================================================= Class B Shares $ 535,731 $ 14,585,662 $ 15,121,393 ============================================================= Class S Shares $ 1,409 $ 1,409 ============================================================= Class I Shares $ 1,154 $ 1,154 ============================================================= SHARES OUTSTANDING: Class A Shares 1,640,269 39,703,825 279,804 (A) 41,623,898 ============================================================= Class B Shares 57,465 1,831,801 9,817 (A) 1,899,083 ============================================================= Class S Shares 177 - 177 ============================================================= Class I Shares 145 - 145 ============================================================= NET ASSET VALUE PER SHARE: Class A Shares $ 9.32 $ 7.96 $ 7.96 ============================================================= Class B Shares $ 9.32 $ 7.96 $ 7.96 ============================================================= Class S Shares $ 7.96 $ 7.96 ============================================================= Class I Shares $ 7.96 $ 7.96 ============================================================= See accompanying notes to pro forma financial statements - ------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Municipal Bond Fund shares into WM Tax-Exempt Bond Fund shares based upon the net asset value of WM Tax-Exempt Bond Fund shares at April 30, 1998. WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM MUNICIPAL TAX-EXEMPT PRO FORMA PRO FORMA BOND FUND BOND FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - - - Interest Income $ 204,396 $ 4,682,293 $ 4,886,689 Fee Income - - ------------------------------------------------------------ Total Investment Income 204,396 4,682,293 - 4,886,689 ------------------------------------------------------------ EXPENSES: Investment Advisory Fees 21,111 398,621 419,732 Administration Fees 8,444 - (8,444) (A) - Custodian Fees 5,985 8,427 14,412 Legal and Audit Fees 9,085 2,128 11,213 Trustees' Fees and Expenses 2,604 2,101 4,705 Amortization of Organization Costs 5,578 - 5,578 Registration and Filing Fees 663 5,502 6,165 Other 1,905 965 2,870 ------------------------------------------------------------ Subtotal 55,375 417,744 (8,444) 464,675 Shareholder Servicing and Distribution Fees Class A Shares 10,168 191,079 5,965 (B) 207,212 Class B Shares 1,548 34,623 87 (C) 36,258 Class S Shares 2 2 Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (36,629) - 36,629 (D) - ------------------------------------------------------------ Subtotal 30,462 643,448 34,237 708,147 Fees Reduced by Credits Allowed by the Custodian (596) (596) ------------------------------------------------------------ Net Expenses 30,462 642,852 34,237 707,551 ------------------------------------------------------------ NET INVESTMENT INCOME/(LOSS) 173,934 4,039,441 (34,237) 4,179,138 ------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN/ - (LOSS) ON INVESTMENTS - Realized Gains/(Loss) from: - Security Transactions 3,983 784,442 788,425 Forward Foreign Currency Contracts and - Foreign Currency Transactions - - Futures Contracts 2,577 - 2,577 Net Unrealized Appreciation/(Depreciation) of: - Securities (196,851) 10,844,992 10,648,141 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures - Contracts and Other Assets and - - Liabilities ------------------------------------------------------------ Net Realized and Unrealized Gain/(Loss) on Investments (190,291) 11,629,434 - 11,439,143 ------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS $ (16,357) $15,668,875 $ (34,237) $15,618,281 ============================================================ (A) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (B) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (C) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor has been eliminated. WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Statement of Operations For the Year Ended 12/31/97 (Unaudited) GRIFFIN WM MUNICIPAL TAX-EXEMPT PRO FORMA PRO FORMA BOND FUND BOND FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - - - Interest Income $ 439,683 $ 11,310,385 $ 11,750,068 Fee Income - - ----------------------------------------------------------- Total Investment Income 439,683 $ 11,310,385 - $ 11,750,068 ----------------------------------------------------------- EXPENSES: - Investment Advisory Fees 43,603 987,356 1,030,959 Administration Fees 17,441 - (17,441) (A) - Custodian Fees 14,921 18,650 33,571 Legal and Audit Fees 12,071 12,426 24,497 Trustees' Fees and Expenses 8,213 8,499 16,712 Amortization of Organization Costs 17,107 - 17,107 Registration and Filing Fees 1,666 18,037 19,703 Other 5,201 60,994 66,195 ---------------------------------------------------------- Subtotal 120,223 1,105,962 (17,441) 1,208,744 Shareholder Servicing and Distribution Fees Class A Shares 20,793 487,713 17,896 (B) 526,402 Class B Shares 4,031 70,823 260 (C) 75,114 Class S Shares - - Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (89,645) - 89,645 (D) - ----------------------------------------------------------- Subtotal 55,402 1,664,498 90,360 1,810,260 Fees Reduced by Credits Allowed by the Custodian (3,033) (3,033) ----------------------------------------------------------- Net Expenses 55,402 1,661,465 90,360 1,807,227 ----------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 384,281 9,648,920 (90,360) 9,942,841 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains/(Loss) from: Security Transactions 8,768 2,286,826 2,295,594 Forward Foreign Currency Contracts and Foreign Currency Transactions Futures Contracts 15,098 - 15,098 Net Unrealized Appreciation/(Depreciation) of: Securities 368,238 4,270,931 4,639,169 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures Contracts and Other Assets and Liabilities - - ----------------------------------------------------------- Net Realized and Unrealized Gain/(Loss) on Investments 392,104 6,557,757 - 6,949,861 ----------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 776,385 $ 16,206,677 $ (90,360) $ 16,892,702 =========================================================== (A) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (B) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (C) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (D) Fees waived and/or expense absorbed by investment advisor has been eliminated. WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Portfolio of Investments April 30, 1998 (Unaudited) Principal Amount Market Value - -------------------------------------------- -------------------------------------------- WM Griffin WM Griffin Tax-Exempt Bond Municipal Bond Pro Forma Tax-Exempt Bond Municipal Bond Pro Forma Fund Fund Combined Fund Fund Combined LONG-TERM STATE AND MUNICIPAL SECURITIES - 94.8% ALABAMA 4,000,000 - 4,000,000 Courtland, Industrial Development Board of Solid Waste, (Champion International Corporation Project), Disposal Revenue, AMT, 7.750% due 01/01/2020................ 4,244,680 - 4,244,680 1,000,000 - 1,000,000 Mobile, Industrial Development Board, Solid Waste Disposal Revenue, 6.950% due 01/01/2020.................... 1,109,880 - 1,109,880 -------------------------------------------- 5,354,560 - 5,354,560 ALASKA Alaska Student Loan Revenue, - 500,000 500,000 5.25%, 07/01/07 .......................... - 515,625 515,625 1,235,000 - 1,235,000 Anchorage Alaska Electric Utility, (MBIA Insured) - - - 6.500% due 12/01/2013.................... 1,439,701 - 1,439,701 -------------------------------------------- 1,439,701 515,625 1,955,326 ARIZONA Arizona State University Revenue System, - 250,000 250,000 7.00%, Pre-refunded to 07/01/02........... - 276,875 276,875 - - - Phoenix, Arizona, Series A, General - - - - 200,000 200,000 Obligation, 6.25%, 07/01/17 .............. - 227,750 227,750 - - - Salt River Project Agricultural Improvement & Power District, - - - 3,000,000 - 3,000,000 Series A, - - - - - - 5.750% due 01/01/2009.................... 3,263,040 - 3,263,040 5,000,000 - 5,000,000 Series C, - - - - - - 6.250% due 01/01/2019.................... 5,344,100 - 5,344,100 740,000 - 740,000 Tucson, Airport Authority Inc., Supplemental Facilities Revenue, AMT, - - - - - - 8.700% due 09/01/2019.................... 822,621 - 822,621 -------------------------------------------- 9,429,761 504,625 9,934,386 CALIFORNIA 15,000,000 - 15,000,000 Anaheim California Public Financing Authority Lease, - - - Capital Appreciation Subordinated Public Improvements, Project-C, (FSA Insured) - - - Zero coupon due 09/01/2034............... 2,102,850 - 2,102,850 - - - California State Department of Water - - - - 100,000 100,000 Resources, 5.00%, 12/01/22................ - 95,250 95,250 5,000,000 - 5,000,000 California State General Obligation, (FGIC Insured), - - - - - - 5.625% due 10/01/2023................... 5,120,550 - 5,120,550 - - - California State General Obligation, - - - - 500,000 500,000 5.00%, 10/01/18 .......................... - 481,250 481,250 1,250,000 - 1,250,000 California State Public Works Board Lease, - - - - - - Department of Corrections , State Prison, Series E, - - - - - - 5.500% due 06/01/2015................... 1,305,050 - 1,305,050 2,000,000 - 2,000,000 Center Unified School District California, - - - - - - Capital Appreciation-Series C, (MBIA Insured), GO, - - - - - - Zero coupon, due 09/01/2018.............. 675,420 - 675,420 2,000,000 - 2,000,000 Foothill/Eastern Corridor Agency, California Toll Road, - - - - - - Sr. Lien-Series A, - - - - - - 5.000% due 01/01/2035.................... 1,839,960 - 1,839,960 550,000 - 550,000 Los Angeles, Regional Airport Improvement, Series A, AMT, - - - - - - 6.700% due 01/01/2022.................... 586,872 - 586,872 3,000,000 - 3,000,000 Orange County Recovery Certificate of Participation, Series A, (MBIA Insured) - - - - - - 6.000% due 07/01/2026.................... 3,204,570 - 3,204,570 1,173,000 - 1,173,000 Sacramento, California Certificate of Participation, - - - - - - Centrex System Lease, Series A, - - - - - - 5.550% due 09/15/2004.................... 1,178,478 - 1,178,478 5,000,000 - 5,000,000 San Francisco, California City & County Airport Commission, International Airport, - - - - - - Second Series-Issue 12-B, (FGIC Insured), - - - - - - 5.625% due 05/01/2021.................... 5,107,950 - 5,107,950 5,000,000 - 5,000,000 San Joaquin Hills, California Transportation Corridor, Agency Toll Road, - - - - - - 5.000% due 01/01/2033.................... 4,628,850 - 4,628,850 800,000 - 800,000 Simi Valley, California Unified School District Certificate of Participation, - - - Refunding & Capital Improvement Projects, (AMBAC Insured), - - - 5.250% due 08/01/2022... 804,312 - 804,312 -------------------------------------------- 26,554,862 576,500 27,131,362 COLORADO Arapahoe County, Colorado Capital Improvement Trust Fund Highway Revenue, - 125,000 125,000 6.90%, Pre-refunded to 08/31/03 .......... - 146,250 146,250 2,225,000 - 2,225,000 Colorado Springs Utilities System Revenue, Prerefunded, - - - - - - 6.750% due 11/15/2021.................... 2,447,878 - 2,447,878 2,775,000 - 2,775,000 Colorado Springs Utilities System, Series C, Unrefunded - - - - - - 6.750% due 11/15/2021.................... 3,010,376 - 3,010,376 - - - Denver City and County, Airport Revenue, AMT: - - - - - - Series A: Prerefunded, - - - 530,000 - 530,000 8.875% due 11/15/2012.................... 618,070 - 618,070 95,000 - 95,000 8.500% due 11/15/2023.................... 106,587 - 106,587 165,000 - 165,000 8.000% due 11/15/2025.................... 183,155 - 183,155 - - - Series A: Unrefunded, - - - 1,470,000 - 1,470,000 8.875% due 11/15/2012.................... 1,682,591 - 1,682,591 1,045,000 - 1,045,000 8.500% due 11/15/2023.................... 1,154,976 - 1,154,976 1,835,000 - 1,835,000 8.000% due 11/15/2025.................... 2,004,095 - 2,004,095 1,920,000 - 1,920,000 Series C, - - - - - - 6.600% due 11/15/2004.................... 2,080,838 - 2,080,838 4,500,000 - 4,500,000 Meridian Metropolitan District, GO, - - - 7.500% due 12/01/2011 ................... 4,890,240 - 4,890,240 -------------------------------------------- 18,178,806 146,250 18,325,056 WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value -------------------------------------- --------------------------------------- WM Griffin WM Griffin Tax-Exempt Municipal Pro Forma Tax-Exempt Municipal Pro Forma Bond Fund Bond Fund Combined Bond Fund Bond Fund Combined LONG-TERM STATE AND MUNICIPAL SECURITIES - 94.8% Connecticut 995,000 - 995,000 Mashantucket Western Pequot Tribe, Special Revenue, Series A, Prerefunded, - - - 6.500% due 09/01/2005(B) .................. 1,112,490 - 1,112,490 1,005,000 - 1,005,000 Mashantucket Western Pequot Tribe, Special Revenue, Series A, Unrefunded, - - - 6.500% due 09/01/2005(B)................... 1,106,254 - 1,106,254 ------------------------------------- 2,218,744 - 2,218,744 DIST OF COLUMBIA - - - District of Columbia Water & Sewer Authority - - - Public Utility Revenue Bond, - 517,500 517,500 - 500,000 500,000 5.50%, 10/01/17 .............................. - - - - - - District of Columbia, American Association - - - - - - for the Advancement of Science, Revenue, - 164,813 164,813 - 150,000 150,000 6.00%, 01/01/09 .............................. - - - 990,000 - 990,000 District of Columbia, COP, - - - - - 6.875% due 01/01/2003...................... 1,034,114 - 1,034,114 1,500,000 - 1,500,000 Metropolitan District, Washington D.C., Airport Authority, General Airport - - - Revenue, Series A, AMT, (MBIA Insured), - - - 6.625% due 10/01/2019...................... 1,629,600 - 1,629,600 ------------------------------------- 2,663,714 682,313 3,346,027 FLORIDA Dade County, Florida Aviation Revenue, - 200,000 200,000 5.50%, 10/01/07 .............................. - 211,250 211,250 - - - Dade County, Florida General Obligation, - - - - 200,000 200,000 7.70%, 10/01/08 .............................. - 249,750 249,750 22,520,000 - 22,520,000 Dade County, Guaranteed Entitlement Revenue, Capital Appreciation, - - - - - - Series A, (MBIA Insured), - - - - - - Zero coupon due 02/01/2018................. 7,381,606 - 7,381,606 425,000 - 425,000 Dade County, Seaport Authority, Refunding, (MBIA Insured), - - - - - - 6.500% due 10/01/2008...................... 487,624 - 487,624 - - - Florida State Board of Education Capital - - - - 150,000 150,000 Outlay Public Education, 5.75%, 06/01/15 ..... - 157,688 157,688 5,000,000 - 5,000,000 Orlando Utilities Commission Water & Electric, - - - 6.000% due 10/01/2010...................... 5,591,050 - 5,591,050 ------------------------------------- 13,460,280 618,688 14,078,968 GEORGIA 1,000,000 - 1,000,000 Atlanta, Airport Facilities Revenue, AMT, - - - 7.250% due 01/01/2017 ..................... 1,079,800 - 1,079,800 6,000,000 - 6,000,000 Georgia Municipal Electric Authority Power, Series Z, (MBIA Insured), - - - - - - 5.500% due 01/01/2020...................... 6,231,900 - 6,231,900 - - - Georgia State General Obligation, - - - - 150,000 150,000 7.20%, 03/01/08 .............................. - 179,813 179,813 5,000,000 - 5,000,000 Georgia State, Series B, GO, - - - - - - 6.300% due 03/01/2009...................... 5,711,700 - 5,711,700 - - - Monroe, PCR, (Oglethorpe Power Company): - - - 5,000,000 - 5,000,000 6.700% due 01/01/2009...................... 5,724,800 - 5,724,800 3,410,000 - 3,410,000 6.750% due 01/01/2010...................... 3,934,080 - 3,934,080 ------------------------------------- 22,682,280 179,813 22,862,093 HAWAII 5,555,000 - 5,555,000 Hawaii State, Series BW, GO, - - - 6.400% due 03/01/2009...................... 6,281,150 - 6,281,150 2,000,000 - 2,000,000 Honolulu, Hawaii City & County, Series A, GO, - - - - - - 6.000% due 01/01/2012...................... 2,192,020 - 2,192,020 - - - State of Hawaii, General Obligation, - - - - 150,000 150,000 6.00%, 09/01/09 .............................. - 165,188 165,188 ------------------------------------- 8,473,170 165,188 8,638,358 IDAHO 2,000,000 - 2,000,000 Idaho Health Facilities Authority Revenue, (Inverse Floater), - - - Escrowed to Maturity, - - - 7.820% due 02/15/2021 (A).................. 2,384,540 - 2,384,540 - - - Idaho Housing & Finance Association, Single - - - - 200,000 200,000 Family Mortgage, 5.20%, 07/01/27 ............. - 203,000 203,000 ------------------------------------- 2,384,540 203,000 2,587,540 ILLINOIS 3,665,000 - 3,665,000 Chicago Gas Supply (People Gas), - - - 6.875% due 03/01/2015...................... 3,994,740 - 3,994,740 - - - Chicago, O'Hare Airport Supplemental Facilities, AMT: - - - 700,000 - 700,000 American Airlines, Special Series A, - - - - - - 7.875% due 11/01/2025...................... 761,936 - 761,936 6,000,000 - 6,000,000 International Term, (MBIA Insured), - - - - - - 6.750% due 01/01/2012 ..................... 6,451,800 - 6,451,800 - - - United Air Lines: - - - 615,000 - 615,000 8.400% due 05/01/2004 ..................... 662,380 - 662,380 775,000 - 775,000 8.950% due 05/01/2018 ..................... 870,255 - 870,255 150,000 - 150,000 Special Series B, - - - - - - 8.500% due 05/01/2018...................... 162,996 - 162,996 4,000,000 - 4,000,000 Chicago Wastewater Transmission Revenue, Prerefunded, - - - - - - 6.750% due 11/15/2020...................... 4,326,760 - 4,326,760 - Cook County, Community High School, Number 217, (AMBAC Insured): - - - 1,090,000 - 1,090,000 6.400% due 12/01/2003..................... 1,161,918 - 1,161,918 1,130,000 - 1,130,000 6.500% due 12/01/2004..................... 1,208,264 - 1,208,264 1,370,000 - 1,370,000 6.600% due 12/01/2005..................... 1,469,394 - 1,469,394 - - - Cook County, School District, Number 026, (MBIA Insured): - - - 1,445,000 - 1,445,000 Zero coupon due 12/01/2003................. 1,118,372 - 1,118,372 1,020,000 - 1,020,000 Zero coupon due 12/01/2004................. 751,628 - 751,628 - - - Du Page County, Illinois General Obligation - - - - - - Revenue Bond, Stormwater Project, - - - - 250,000 250,000 5.60%, 01/01/21 .............................. - 266,563 266,563 - - - Illinois Educational Facilities Authority - - - - - - Revenue, Northwestern University, - - - - 450,000 450,000 5.10%, 11/01/32 .............................. - 457,875 457,875 - - - Illinois Health Facilities Authority Revenue: - - - - - - Glenoak Medical Center, Series D, Pre-refunded, - - - 210,000 - 210,000 9.500% due 11/15/2015 ..................... 240,603 - 240,603 260,000 - 260,000 Glenoak Medical Center, Series D, Escrowed to Maturity, - - - - - - 9.500% due 11/15/2015 ..................... 302,338 - 302,338 4,570,000 - 4,570,000 Hindsdale Hospital, Series B, Escrowed to Maturity, - - - - - - 9.000% due 11/15/2015...................... 5,208,658 - 5,208,658 300,000 - 300,000 Riverside Senior Living Center Project, Prerefunded, - - - - - - 7.500% due 11/01/2020...................... 328,734 - 328,734 3,000,000 - 3,000,000 Rush Presbyterian - St. Luke's Medical, Residual Interest Bond, (MBIA Insured), - - - - - - 9.615% due 10/01/2024 (A)................. 3,517,500 - 3,517,500 1,230,000 - 1,230,000 Servantcor, Series A, Prerefunded, - - - - - - 8.000% due 08/15/2021...................... 1,386,112 - 1,386,112 5,000,000 - 5,000,000 Sister Services Hospital, Residual Interest Bond, (MBIA Insured), - - - - - - 9.267% due 06/19/2015 (A).................. 5,912,500 - 5,912,500 365,000 - 365,000 Illinois Housing Development Authority, Series A, AMT, - - - - - - 7.350% due 08/01/2010 ..................... 384,122 - 384,122 5,000,000 - 5,000,000 Illinois State Sales Tax Revenue, Series N, Prerefunded, - - - - - - 7.000% due 06/15/2020...................... 5,487,150 - 5,487,150 - - - Metropolitan Pier and Exposition Authority Dedicated State Tax, (FGIC Insured), - - - 4,000,000 - 4,000,000 Zero coupon due 06/15/2008................. 2,440,480 - 2,440,480 6,000,000 - 6,000,000 Zero coupon due 06/15/2009................. 3,459,960 - 3,459,960 - - - Metropolitan Pier & Exposition Authority - - - - - - Dedicated State Tax Revenue, - - - - 400,000 400,000 4.30%, 06/15/01 (C) .......................... - 348,500 348,500 ------------------------------------- 51,608,600 1,072,938 52,681,538 Portfolio of Investments WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value - ----------------------------------------- -------------------------------------------- WM Griffin WM Griffin Tax-Exempt Bond Municipal Bond Pro Forma Tax-Exempt Bond Municipal Bond Pro Forma Fund Fund Combined Fund Fund Combined Indiana 6,000,000 - 6,000,000 Indiana Municipal Power Agency, Series A, (MBIA Insured) - - - 6.125% due 01/01/2013 6,721,920 - 6,721,920 2,000,000 - 2,000,000 Indianapolis, Public Improvement Board, Series D, (LOC INB National Bank), - - - - - - 6.500% due 02/01/2022 2,003,520 - 2,003,520 - - - Wa-Nee Elementary/High School Building - - - - - - Corporation, Revenue, 6.50%, - - - - 100,000 100,000 pre-refunded to 01/15/04 - 111,250 111,250 --------------------------------------- 8,725,440 111,250 8,836,690 Kentucky 3,000,000 - 3,000,000 Jefferson County, Hospital Revenue, Residual Interest Bond, (MBIA Insured), 8.607% due 10/01/2008 (A) 3,506,250 - 3,506,250 Louisiana 1,500,000 - 1,500,000 Louisiana Public Facility Authority Revenue, Series B, ETM, Zero coupon due 12/01/2019 473,370 - 473,370 Maryland 5,000,000 - 5,000,000 Mayor & City Council of Baltimore Port Facility (DuPont), - - - 6.500% due 10/01/2011 5,439,750 - 5,439,750 930,000 - 930,000 State of Maryland, Community Development Administration, Department of Housing Revenue, Single Family Project, AMT, 7.450% due 04/01/2032 979,671 - 979,671 --------------------------------------- 6,419,421 - 6,419,421 Massachusetts 750,000 - 750,000 Commonwealth of Massachusetts, GO, Consolidated Loan, Series A, Prerefunded, 7.625% due 06/01/2008 836,130 - 836,130 Commonwealth of Massachusetts, Health and Educational - - - Facilities Authority Revenue: - - - 500,000 - 500,000 Framingham Union Hospital, Series B, - - - - - - 8.500% due 07/01/2010 553,725 - 553,725 2,000,000 - 2,000,000 Saint Memorial Medical Center, Series A, - - - - - - 6.000% due 10/01/2023................... 2,002,240 - 2,002,240 250,000 - 250,000 Commonwealth of Massachusetts, GO, Pre-refunded, - - - - - - 7.500% due 12/01/2007 .................. 275,210 - 275,210 - - - Massachusetts Bay Transportation Authority - - - - - - General Transportation System, - - - - 200,000 200,000 5.60%, 03/01/08 ......................... - 213,750 213,750 - - - Massachusetts State General Obligation, - - - - 500,000 500,000 5.00%, 06/01/10 ......................... - 507,500 507,500 - - - Massachusetts State Water Resources Authori - - - - 100,000 100,000 6.00%, 08/01/14 ......................... - 109,500 109,500 1,000,000 - 1,000,000 Plymouth County, COP, Series A, - - - 7.000% due 04/01/2022 ................... 1,115,140 - 1,115,140 ---------------------------------------- 4,782,445 830,750 5,613.195 Michigan Michigan Municipal Bond Authority Revenue, - 200,000 200,000 6.00%, 10/01/07 ........................... - 222,500 222,500 - - - Michigan State Hospital Financing Authority - - - - 75,000 75,000 Metropolitan Hospital, 5.88%, 07/01/14 .... - 77,906 77,906 1,500,000 - 1,500,000 Michigan State Hospital Finance Authority Revenue, - - - Detroit Medical, Series A, Prerefunded, - - - 7.500% due 08/15/2011..................... 1,673,040 - 1,673,040 Michigan State Underground Storage Tank - - - Financial Assurance Authority Revenue, - - - - 300,000 300,000 6.00%, 05/01/05 ........................... - 325,875 325,875 ---------------------------------------- 1,673,040 626,281 2,299,321 Minnesota Minnesota Public Facilities Authority Water - 200,000 200,000 Pollution Control Revenue, 6.00%, 03/01/07 - 222,250 222,250 University of Minnesota, Series A, Revenue - - - - 200,000 200,000 Bond, 4.75%, 07/01/03 ..................... - 203,750 203,750 --------------------------------------- - 426,000 426,000 Mississippi Lowndes County, Solid Waste Disposal, PCR, Residual Interest Bond, (Weyerhauser Company), 4,000,000 - 4,000,000 6.800% due 04/01/2022.................... 4,796,840 - 4,796,840 5,000,000 - 5,000,000 8.200% due 04/01/2022.................... 5,888,550 - 5,888,550 200,000 - 200,000 Warren County, Solid Waste Disposal Revenue, - - - (International Paper Project), Series A, AMT, - - - 7.700% due 11/15/2009 ....................... 212,102 - 212,102 --------------------------------------- 10,897,492 - 10,897,492 Missouri 1,000,000 - 1,000,000 Missouri State, Health and Educational Facilities Authority Revenue, - - - Bethesda Eye Institute, Prerefunded, - - - 6.800% due 11/01/2016..................... 1,098,100 - 1,098,100 3,000,000 - 3,000,000 St. Louis, Parking Facilities Revenue, - - - Prerefunded, 6.625% due 12/15/2021..................... 3,311,250 - 3,311,250 --------------------------------------- 4,490,350 - 4,409,350 Portfolio of Investments WM Tax-Exempt Bond Fund and Griffin Municipal Bond Fund Pro Forma Combined Portfolio of Investments Principal Amount April 30, 1998 (Unaudited) Market Value - ------------------------------------------- -------------------------------------------- WM Griffin WM Griffin Tax-Exempt Bond Municipal Bond Pro Forma Tax-Exempt Bond Municipal Bond Pro Forma Fund Fund Combined Fund Fund Combined MONTANA 1,000,000 - 1,000,000 Forsyth, PCR, Series B, AMT, Puget Sound Power & Light, (AMBAC Insured), 7.250% due 08/01/2021...................... 1,090,640 - 1,090,640 NEBRASKA Douglas County, Hospital Authority Revenue, Alegent Health, Immanuel Medical Center: 1,000,000 - 1,000,000 5.250% due 09/01/2021...................... 982,760 - 982,760 600,000 - 600,000 Nebraska Investment Finance Authority, Single Family Housing Revenue, - - - Residual Interest Bond, AMT, (GNMA Insured), - - - 9.159% due 09/15/2024 (A).................. 670,500 - 670,500 Omaha Public Power District Electric, - - - 7,000,000 - 7,000,000 Series B, Escrowed to Maturity, - - - 6.150% due 02/01/2012...................... 7,823,970 - 7,823,970 Series C, - - - 5.500% due 02/01/2014...................... 2,107,960 - 2,107,960 ----------------------------------------- 11,585,190 - 11,585,190 NEVADA 4,000,000 - 4,000,000 Clark County, IDR, Series A, Nevada Power Company, AMT, (FGIC Insured), 6.700% due 06/01/2022...................... 4,324,480 - 4,324,480 Nevada State General Obligation, - - - - 100,000 100,000 5.80%, 07/15/08.............................. - 106,625 106,625 ----------------------------------------- 4,324,480 106,625 4,431,105 NEW JERSEY New Jersey State General Obligation, - 350,000 350,000 6.00%, 02/15/11.............................. - 387,625 387,625 NEW MEXICO 1,000,000 - 1,000,000 Bernaillo County New Mexico, Gross Receipts of Tax Revenue, 5.250% due 04/01/2027...................... 1,013,400 - 1,013,400 1,500,000 - 1,500,000 Lordsburg Pollution Control (Phelps Dodge), - - - 6.500% due 04/01/2013...................... 1,639,365 - 1,639,365 1,500,000 - 1,500,000 Santa Fe County, New Mexico Correctional System, (FSA Insured), - - - 6.000% due 02/01/2027...................... 1,682,730 - 1,682,730 ----------------------------------------- 4,335,495 - 4,335,495 NEW YORK 1,265,000 - 1,265,000 Metropolitan Transportation Authority, Service Contract Transportation Facilities, Series 7, 4.750% due 07/01/2019...................... 1,145,635 - 1,145,635 New York, GO, Unrefunded: - - - Series B, (FSA Insured), - - - 1,000,000 - 1,000,000 7.000% due 06/01/2014...................... 1,083,410 - 1,083,410 160,000 - 160,000 8.250% due 11/15/2018...................... 180,197 - 180,197 1,000,000 - 1,000,000 New York, NY, Series B, (FGIC Insured) - - - 6.000% due 08/01/2007...................... 1,091,850 - 1,091,850 New York State Medical Care Facilities Finance Agency Revenue, - - - 170,000 - 170,000 Prerefunded, - - - 7.750% due 08/15/2011...................... 188,705 - 188,705 105,000 - 105,000 Refunded, - - - 7.750% due 08/15/2011...................... 115,266 - 115,266 2,000,000 - 2,000,000 New York State Housing Finance Agency Revenue, Multi-family Housing, - - - Second Mortgage, Series F, AMT, - - - 6.625% due 08/15/2012...................... 2,122,540 - 2,122,540 New York State Environmental Facilities - - - Corporation Pollution Control Revenue, - - - - 200,000 200,000 5.50%, 06/15/09.............................. - 211,750 211,750 New York State Environmental Facilities, - - - State Clean Water & Drinking, Revolving - - - - 500,000 500,000 Funds, Series C, 500%, 06/15/19.............. - 480,625 480,625 New York, New York General Obligation, - - - - 200,000 200,000 6.00%, 02/01/04.............................. - 212,250 212,250 New York City TFA Future, - - - - 500,000 500,000 5.00%, 05/01/ 18............................. - 479,375 479,375 ----------------------------------------- 5,927,603 1,384,000 7,311,603 NORTH CAROLINA 5,000,000 - 5,000,000 North Carolina Eastern Municipal Power Agency, Power Systems Revenue, Series A, 5.700% due 01/01/2013...................... 5,701,200 - 5,701,200 NORTH DAKOTA 4,370,000 - 4,370,000 Mercer County Pollution Control (Otter Trail Power), 6.900% due 02/01/2019...................... 4,676,774 - 4,676,774 OHIO Cleveland, Ohio General Obligation, - - - - 350,000 350,000 5.38%, 09/01/09.............................. - 370,563 370,563 Franklin County, Ohio Hospital Revenue, Holy - - - Cross Health Systems Corporation, - - - - 300,000 300,000 5.50%, 06/01/01.............................. - 310,500 310,500 1,240,000 - 1,240,000 Lorain County, Hospital Revenue, Series B, Humility of Mary Health Care, - - - Escrowed to Maturity, - - - 7.200% due 12/15/2011...................... 1,381,596 - 1,381,596 Ohio State Water Department Authority Revenue - - - Fresh Water Series, Revenue, - - - - 200,000 200,000 5.70%, 06/01/09.............................. - 213,250 213,250 University of Cincinnati, General Receipts, - - - - 500,000 500,000 Series AA, 5.00%, 06/01/18................... - 480,625 480,625 ----------------------------------------- 1,381,596 1,374,938 2,756,534 OKLAHOMA 1,810,000 - 1,810,000 Oklahoma Housing and Finance Authority, Single Family Revenue, Series B, AMT, (GNMA Insured), 7.997% due 08/01/2018............................. 2,080,921 - 2,080,921 200,000 - 200,000 Tulsa, Municipal Airport Revenue, American Airlines Project, AMT, - - - 7.600% due 12/01/2030...................... 218,634 - 218,634 ----------------------------------------- 2,299,555 - 2,299,555 OREGON Oregon State Department of Transportation Revenue, Regional Light Rail Fund - Westside 100,000 100,000 Project, 6.25%, 06/01/09 .................... - 110,125 110,125 6,230,000 - 6,230,000 Washington County, Oregon, (Criminal Justice Facilities), Prerefunded, - - - 6.000% due 12/01/2012...................... 6,766,528 - 6,766,528 ----------------------------------------- 6,766,528 110,125 6,876,653 PENNSYLVANIA Allegheny County, Hospital Development Revenue, (Ohio Valley General Hospital): 700,000 - 700,000 5.100% due 04/01/2001...................... 708,575 - 708,575 735,000 - 735,000 5.300% due 04/01/2002...................... 750,192 - 750,192 625,000 - 625,000 5.400% due 04/01/2003...................... 641,644 - 641,644 Beaver County, IDR, PCR, (Edison Project), Series A: - - - 300,000 - 300,000 7.750% due 09/01/2024 ..................... 315,015 - 315,015 3,675,000 - 3,675,000 (FGIC Insured), - - - 7.000% due 06/01/2021...................... 3,975,358 - 3,975,358 Commonwealth of Pennsylvania General - - - - 250,000 250,000 Obligation, 5.20%, 06/15/04 ................. - 260,313 260,313 600,000 - 600,000 Lehigh County, General Purpose Authority, Muhlenberg Hospital Center, Series A, - - - Prerefunded, - - - 8.100% due 07/15/2010 ..................... 640,794 - 640,794 500,000 - 500,000 McKean County, Hospital Authority Revenue, Bradford Hospital, - - - Pottstown Memorial Medical Center, - - - 8.875% due 10/01/2020 ..................... 560,100 - 560,100 1,250,000 - 1,250,000 Montgomery County, Higher Education Revenue, - - - 6.875% due 11/15/2020 ..................... 1,343,425 - 1,343,425 Pennsylvania State Higher Education Revenue, Student Loan, - - - 3,000,000 - 3,000,000 Residual Interest Bond, AMT, (AMBAC Insured), - - - 9.368% due 09/01/2026 (A).................. 3,450,000 - 3,450,000 1,890,000 - 1,890,000 Pennsylvania State Higher Educational Facilities Authority, Series B, Prerefunded, - - - 7.250% due 03/01/2005...................... 2,073,651 - 2,073,651 Pennsylvania State Industrial Development - - - - 250,000 250,000 Authority Revenue, 7.00%, 07/01/06 .......... - 288,750 288,750 1,000,000 - 1,000,000 Philadelphia, Municipal Authority Revenue, Series B, (FGIC Insured), Prerefunded, - - - 7.125% due 11/15/2018...................... 1,110,990 - 1,110,990 1,000,000 - 1,000,000 Philadelphia, Water and Sewer Revenue, Prerefunded, - - - 7.500% due 08/01/2010...................... 1,115,270 - 1,115,270 ----------------------------------------- 16,685,014 549,063 17,234,077 PUERTO RICO Puerto Rico Electric Power Authority, - 200,000 200,000 Electric Revenue, 6.13%, 07/01/08 ........... - 223,000 223,000 Puerto Rico Industrial Tourist Educational - - - Medical & Environmental Central Facilities, - - - Inter American University, Series A, - - - - 500,000 500,000 5.00%, 10/01/15 ............................. - 492,500 492,500 ----------------------------------------- - 715,500 715,500 RHODE ISLAND 2,000,000 - 2,000,000 Rhode Island State Health and Education Revenue, Residual Interest Bond, (FGIC Insured), Escrowed to Maturity, 9.715% due 08/15/2021 (A).................. 2,377,500 - 2,377,500 SOUTH CAROLINA Columbia, South Carolina Water Works & Sewer - 200,000 200,000 Systems Revenue, 5.38%, 02/01/12 ............ - 209,250 209,250 SOUTH DAKOTA South Dakota Housing Development Authority, - 100,000 100,000 Homeownership Mortgage, 6.65%, 05/01/14 - 108,125 108,125 TENNESSEE Kingsport, Tennessee General Obligation, - 200,000 200,000 5.60%, 09/01/03 ............................. - 210,750 210,750 TEXAS Austin, Texas General Obligation, - 200,000 200,000 5.70%, 09/01/07 ............................. - 216,250 216,250 415,000 - 415,000 Brazos, Higher Educational Facilities Authority, Series C-2, AMT, - - - 7.100% due 11/01/2004...................... 457,674 - 457,674 1,290,000 - 1,290,000 Crowley Texas Independent School District, (FGIC Insured), GO, - - - Zero coupon, due 08/01/2016................ 486,898 - 486,898 5,000,000 - 5,000,000 Dallas-Fort Worth International Airport, (Facility Improvement - - - Corporate Revenue), (American Airlines, Inc.), AMT, - - - 7.500% due 11/01/2025...................... 5,395,000 - 5,395,000 Harris County, Texas Tax and Revenue - - - - 200,000 200,000 Certificate of Obligation, 6.00%, 12/15/10 .. - 223,500 223,500 San Antonio, Texas Electric & Gas Revenue, - - - - 100,000 100,000 5.00%, 02/01/14 ............................. - 98,250 98,250 Texas Municipal Power Agency Revenue, - - - - 200,000 200,000 5.25%, 09/01/08 ............................. - 208,250 208,250 574,000 - 574,000 Texas State, Higher Education Coordinating Board, Student Loan, AMT, - - - 7.700% due 10/01/2025 ..................... 615,678 - 615,678 500,000 - 500,000 West Side Calhoun County, Solid Waste Revenue Bond, (Union Carbide Project), AMT, - - - 8.200% due 03/15/2021 ..................... 552,905 - 552,905 ----------------------------------------- 7,508,155 746,250 8,254,405 VERMONT Vermont Housing Finance Agency, Single Family, Series 1, AMT: 140,000 - 140,000 6.800% due 05/01/2025...................... 145,702 - 145,702 220,000 - 220,000 8.150% due 05/01/2025 ..................... 232,375 - 232,375 ----------------------------------------- 378,077 - 378,077 VIRGINIA Virginia State Transportation Board Revenue, North Virginia Transportation District - 120,000 120,000 Program, 6.25%, 05/15/12 .................... - 131,850 131,850 WASHINGTON 4,500,000 - 4,500,000 King County Washington School District #415 Kent, Series C, GO, 6.300% due 12/01/2008...................... 5,080,815 - 5,080,815 950,000 - 950,000 Port Anacortes Washington Revenue, Series A, - - - 5.125% due 09/01/2009...................... 935,665 - 935,665 Seattle, Washington Water System Revenue, - - - - 250,000 250,000 5.25%, 12/01/23 ........................... - 249,688 249,688 2,750,000 - 2,750,000 Snohomish County School District #2- Everett General Obligation, Series B, - - - Prerefunded, - - - 7.200% due 12/01/2010...................... 2,980,698 - 2,980,698 University of Washington Revenue Bond, (MBIA Insured), - - - 3,400,000 - 3,400,000 Prerefunded, - - - 7.000% due 12/01/2021...................... 3,766,894 - 3,766,894 785,000 - 785,000 Unrefunded, - - - 7.000% due 12/01/2021...................... 859,104 - 859,104 3,500,000 - 3,500,000 Washington Public Power Supply System Nuclear Project #2 Revenue, Series C, - - - Prerefunded, - - - 7.625% due 07/01/2010...................... 3,859,730 - 3,859,730 7,570,000 - 7,570,000 Washington State, Series B, GO, - - - 5.000% due 05/01/2017...................... 7,335,330 - 7,335,330 4,900,000 - 4,900,000 Washington State, Series B & AT-7, GO, - - - 6.400% due 06/01/2017...................... 5,687,479 - 5,687,479 Washington State Health Care Facilities Authority, Fred Hutchinson Cancer Center, - - - LOC, - - - 1,750,000 - 1,750,000 7.200% due 01/01/2007...................... 1,899,923 - 1,899,923 1,750,000 - 1,750,000 7.375% due 01/01/2018...................... 1,905,225 - 1,905,225 Washington State General Obligation, - - - - 200,000 200,000 5.75%, 09/01/09 ........................... - 216,500 216,500 ----------------------------------------- 34,310,863 466,188 34,777,051 WEST VIRGINIA 2,500,000 - 2,500,000 Harrison County, Solid Waste Disposal, (Monongahela Power), Series A, AMT, 6.875% due 04/15/2022 ..................... 2,707,025 - 2,707,025 150,000 - 150,000 Kanawha County, IDR, (Union Carbide Project), Series A, AMT, - - - 8.000% due 08/01/2020...................... 161,918 - 161,918 750,000 - 750,000 South Charleston, IDR, (Union Carbide Project), Series A, AMT, - - - 8.000% due 08/01/2020 ..................... 807,420 - 807,420 West Virginia State, General Obligation, - - - - 500,000 500,000 5.00%, 11/01/21 ........................... - 480,625 480,625 ----------------------------------------- 3,676,363 480,625 4,156,988 WISCONSIN 1,000,000 - 1,000,000 Madison, IDR, (Madison Gas & Electric Company), (Project A), AMT, 6.750% due 04/01/2027...................... 1,069,520 - 1,069,520 1,000,000 - 1,000,000 Wisconsin Health & Education Facility Authority, - - - Refunding Waukesha Memorial Hospital, Series A, (AMBAC Insured) - - - 7.125% due 08/15/2007...................... 1,080,520 - 1,080,520 Wisconsin State General Obligation, - - - - 200,000 200,000 5.13%, 11/01/07 ........................... - 207,250 207,250 Wisconsin State Transportation Revenue, - - - - 200,000 200,000 5.50%, 07/01/14 ........................... - 203,750 203,750 ----------------------------------------- 2,150,040 411,000 2,561,040 Total Long-Term State and Municipal Securities 320,510,899 14,051,135 334,562,034 WM TAX-EXEMPT BOND FUND AND GRIFFIN MUNICIPAL BOND FUND PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS PRINCIPAL AMOUNT APRIL 30, 1998 (Unaudited) MARKET VALUE ------------------------------------------ -------------------------------------------- WM TAX-EXEMPT GRIFFIN MUNICIPAL PRO FORMA WM TAX-EXEMPT GRIFFIN MUNICIPAL PRO FORMA BOND FUND BOND FUND COMBINED BOND FUND BOND FUND COMBINED SHORT-TERM STATE AND MUNICIPAL SECURITIES - 0.6% FLORIDA Citrus Park Community Development District Florida, Capital Improvements, - 400,000 400,000 3.35%, 11/01/16............................... - 400,000 400,000 KANSAS Kansas City, Kansas Industrial Revenue, - 100,000 100,000 5.00%, 08/01/15............................... - 100,000 100,000 LOUISIANA Louisiana Loops VRUM UG - 100,000 100,000 5.00%, 09/01/08............................... - 100,000 100,000 MICHIGAN Michigan State Hospital Financing Authority, - 400,000 400,000 Kent Hospital, 5.00%, 01/15/20................ - 400,000 400,000 NEW MEXICO Albuquerque, New Mexico lodgers tax, - 100,000 100,000 3.00%, 07/01/22............................... - 100,000 100,000 OHIO Ohio State Water Development Authority, - 200,000 200,000 5.00%, 07/01/32............................... - 200,000 200,000 TEXAS Guadalupe Blanco River Authority Texas Pollution Control Revenue, Central Power & - 300,000 300,000 Light Project, 5.00%, 11/01/15................ - 300,000 300,000 WYOMING Kemerer County, Wyoming Pollution Control - 100,000 100,000 Revenue, 5.00%, 11/01/14 ..................... - 100,000 100,000 Kemerer County, Wyoming Pollution Control - 200,000 200,000 Revenue, 5.00%, 11/01/14 ..................... - 200,000 200,000 Total Short-Term State and Municipal Securities - 1,900,000 1,900,000 INVESTMENT COMPANIES - 1.8% Seven Seas Tax Free Money Market Fund, - 98,879 98,879 3.39%, 05/01/98 .............................. - 98,876 98,876 6,363,404 - 6,363,404 Nuveen Tax Exempt Money Market Fund (Cost $6,363,404)............................. 6,363,404 - 6,363,404 --------------------------------------- 6,363,404 98,876 6,462,280 TOTAL INVESTMENTS - 97.2% (COST $312,545,951) 326,874,303 16,050,011 342,924,314 OTHER ASSETS AND LIABILITIES, NET - 2.8% 3,826,328 (227,112) 3,599,216 TOTAL NET ASSETS - 100.0% 330,700,631 15,822,899 346,523,530 - -------------------------------------------------------------------------------- (A) Floating rate note. The interest rate shown reflects the rate currently in effect. (B) Securities exempt from registration under section 4(2) of the Securities Act of 1993, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (C) Rate on this zero coupon bonds represents annualized yield to maturity at April 30, 1998. WM TAX-EXEMPT BOND FUND & GRIFFIN MUNICIPAL BOND FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Tax-Exempt Bond Fund and the Griffin Municipal Bond Fund at April 30, 1998 and the pro forma combined results of operations for the year ended December 31, 1997 and the four month period ended April 30, 1998 as though the reorganization had occurred on January 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statement of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Municipal Bond Fund in exchange for shares of WM Tax-Exempt Bond Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Report. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Municipal Bond Fund shares into WM shares based upon the asset value of the WM Tax-Exempt Bond Fund shares at April 30, 1998. WM California Municipal Fund & Griffin California Tax-Free Fund Pro Forma Statement of Assets and Liabilities at June 30, 1998 (Unaudited) GRIFFIN WM CALIFORNIA CALIFORNIA PRO FORMA PRO FORMA TAX-FREE FUND MUNICIPAL FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $ 46,256,980 $ 331,858,243 $ 378,115,223 ---------------------------------------------------------------------- Total Investments 46,256,980 331,858,243 - 378,115,223 Cash/Cash Equivalents 308,408 - 308,408 Receivable for dollar roll fee income - - Dividends and/or interest receivable 725,260 5,043,338 5,768,598 Receivable for Fund shares Sold - 773,513 773,513 Receivable for investment securities sold - 9,172,268 9,172,268 Unamortized organization costs - - - Receivable from investment advisor - - - Prepaid expenses and other assets 8,203 2,984 11,187 ---------------------------------------------------------------------- Total Assets 47,298,851 346,850,346 - 394,149,197 ====================================================================== LIABILITIES: Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 182,853 182,853 Payable for investment securities purchase 1,511,595 19,646,770 21,158,365 Investment advisory fee payable 178,669 178,669 Administration fee payable - - Shareholder servicing and distribution fees payable 86,945 86,945 Dividends payable 148,984 492,746 641,730 Accrued legal and audit fees - - Accrued transfer agent fees - - Accrued Trustees' fees and expenses - - Accrued registration and filing fees payable - - Due to Custodian 1,262,975 1,262,975 Net unrealized depreciation of fwd for cur cts - - Accrued Expenses and other payables 42,914 125,434 168,348 ---------------------------------------------------------------------- Total Liabilities 1,703,493 21,976,392 23,679,885 TOTAL NET ASSETS $ 45,595,358 $ 324,873,954 $ - $ 370,469,312 ====================================================================== NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ - $ (6,864) $ (6,864) Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions (132,408) 581,668 449,260 Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 1,637,081 24,496,679 26,133,760 Paid-in capital 44,090,358 299,802,471 343,893,156 ---------------------------------------------------------------------- TOTAL NET ASSETS $ 45,595,358 $ 324,873,954 $ - $ 370,469,312 ====================================================================== NET ASSETS: Class A Shares $ 38,503,430 $ 290,328,335 $ 328,831,765 ====================================================================== Class B Shares $ 7,091,928 $ 34,536,784 $ 41,628,712 ====================================================================== Class S Shares $ 7,645 $ 7,645 ====================================================================== Class I Shares $ 1,190 $ 1,190 ====================================================================== SHARES OUTSTANDING: Class A Shares 4,593,384 25,624,319 (1,195,079) (A) 29,022,624 ====================================================================== Class B Shares 845,712 3,048,310 (219,759) (A) 3,674,263 ====================================================================== Class S Shares 675 675 ====================================================================== Class I Shares 105 105 ====================================================================== NET ASSET VALUE PER SHARE: Class A Shares $ 8.38 $ 11.33 $ 11.33 ====================================================================== Class B Shares $ 8.39 $ 11.33 $ 11.33 ====================================================================== Class S Shares $ 11.33 $ 11.33 ====================================================================== Class I Shares $ 11.33 $ 11.33 ====================================================================== See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin California Tax-Free Fund shares into WM California Municipal Fund based upon the net asset value of WM California Municipal Fund shares at June 30, 1998. WM California Municipal Fund and Griffin California Tax-Free Fund Pro Forma Combined Statement of Operations For the Year Ended June 30, 1998 (Unaudited) GRIFFIN CALIFORNIA WM CALIFORNIA PRO FORMA PRO FORMA TAX-FREE FUND MUNICIPAL FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - Foreign withholding tax on dividend income - - Interest Income 1,735,944 20,795,207 22,531,151 Fee Income - - --------------------------------------------------------------------------- Total Investment Income 1,735,944 20,795,207 - 22,531,151 --------------------------------------------------------------------------- EXPENSES: Investment Advisory fee 173,723 2,010,319 416,614 (A) 2,600,656 Administration fee 69,489 860,498 (929,987) (B) - Custodian fee 15,635 17,049 32,684 Legal and Audit fees 24,073 37,650 61,723 Trustees' fees and expenses 8,198 25,532 33,730 Amortization of organization costs 17,108 - 17,108 Registration and filing fees 5,143 15,775 20,918 Transfer agent fees - 34,691 108,554 (C) 143,245 Other 3,929 180,228 184,157 --------------------------------------------------------------------------- Subtotal 317,298 3,147,051 (513,373) 2,950,976 Shareholder servicing and distribution fees - Class A Shares 73,250 771,965 845,215 Class B Shares 54,446 279,831 334,277 Class S Shares 75 75 Interest expense - Fees waived and/or expenses absorbed by investment advisor (177,998) (656,426) (317,295) (D) (1,151,719) --------------------------------------------------------------------------- Subtotal 266,996 3,577,187 (722,114) 3,122,069 Fees reduced by credits allowed by the custodian (13,157) (13,157) --------------------------------------------------------------------------- Net expenses 266,996 3,564,030 (722,114) 3,108,912 --------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 1,468,948 17,231,177 722,114 19,422,239 NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized gain from security transactions Security transactions 243,856 7,849,255 8,093,111 Forward foreign currency contracts and foreign currency transactions - - Futures contracts 51,511 994,551 1,046,062 Net unrealized appreciation/(depreciation) of: Securities 792,224 3,864,365 4,656,589 Forward foreign currency contracts - - Foreign currency, written options, futures contracts and other assets and liabilities - - --------------------------------------------------------------------------- Net realized/unrealized gains/(losses) on invsts 1,087,591 12,708,171 - 13,795,762 --------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS 2,556,539 29,939,348 722,114 33,218,001 =========================================================================== (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .70% of average daily net assets up to $500,000,000 and .55% of average daily net assets over that amount. (B) Elimination of the administration fees, now incorporated in the management fee structure. (C) Addition of transfer agent fee at a monthly rate of $1.45 per Class A shareholder account and $1.55 per Class B shareholder account. (D) Fees waived and/or expense absorbed by investment advisor adjusted to .31% of average daily net assets. WM CALIFORNIA MUNICIPAL FUND AND GRIFFIN CALIFORNIA TAX-FREE FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS VALUE - -------------------------------------------- -------------------------------------- WM GRIFFIN JUNE 30, 1998 (Unaudited) WM GRIFFIN CALIFORNIA CALIFORNIA PRO FORMA CALIFORNIA CALIFORNIA PRO FORMA MUNICIPAL FUND TAX-FREE FUND COMBINED MUNICIPAL FUND TAX-FREE FUND COMBINED LONG-TERM MUNICIPAL BONDS AND NOTES - 100.6% CALIFORNIA - 99.7% $ 5,360,000 - $ 5,360,000 Alhambra, Improvement Board Act of 1915, - - - Assessment District No. 1, Public Works, (MBIA Insured), - - - 6.125% due 09/02/2018......................... $ 5,755,300 - $ 5,755,300 2,000,000 - 2,000,000 Anaheim, Public Financing Authority Revenue, Residual Interest - - - Bond, (MBIA Insured), - - - 8.930% due 12/28/2018 (A)..................... 2,565,000 - 2,565,000 1,000,000 - 1,000,000 Arcadia, Hospital Revenue Authority, (Methodist Hospital), - - - 6.500% due 11/15/2012......................... 1,070,000 - 1,070,000 2,000,000 - 2,000,000 Barstow Redevelopment Agency, Central - - - Redevelopment Project, Tax Allocation, Series - - - A, (MBIA Insured), 7.000% due 09/01/2014...... 2,465,000 - 2,465,000 1,000,000 - 1,000,000 Brawley, Wastewater Treatment Facility, - - - (AMBAC Insured), - - - 5.000% due 07/01/2016......................... 1,006,250 - 1,006,250 1,000,000 - 1,000,000 Brea & Olinda, Unified School District, (High - - - School Refinancing Project), COP, Series A, (FSA Insured), - - - 6.000% due 08/01/2009......................... 1,076,250 - 1,076,250 - $1,100,000 1,100,000 CA ABAG COP Episcopal Ho - - - 5.00%, 07/01/07 ......................... - $1,116,500 1,116,500 - 500,000 500,000 California Educational Facilities Authority - - - Revenue Bond, Pooled College & University - - - Project, Series A, 5.15%, 12/01/04............ - 520,000 520,000 4,715,000 - 4,715,000 California Educational Facilities Authority - - - Revenue, (College of Osteopathic Medicine), (Pre-refunded to 06/01/2003), - - - 7.500% due 06/01/2018......................... 5,428,144 - 5,428,144 - 1,000,000 1,000,000 California Educational Facilities Authority - - - Revenue, University of San Diego, - - - 5.00%, 10/01/22 - 976,250 976,250 - - - California Health Facilities Authority Revenue: 1,000,000 - 1,000,000 (Kaiser Permanent), Series A, (FSA Insured) - - - 7.000% due 12/01/2010......................... 1,080,000 - 1,080,000 10,250,000 - 10,250,000 (Enloe Health Systems), Series A, - - - - 5.000% due 11/15/2028......................... 9,916,875 - 9,916,875 - 500,000 500,000 California Health Facilities Financing - - - Authority Revenue, Downey Community - - - Hospital, 5.20%, 05/15/03.................... - 514,375 514,375 - 300,000 300,000 California Health Facilities Financing - - - Authority Revenue, Kaiser Permanente, - - - Series C, 5.60%, 05/01/33.................... - 301,500 301,500 - - - California Housing Finance Agency, Home Mortgage, AMT: - - - Series A, (Multi-family Housing III), (MBIA Insured): 1,000,000 - 1,000,000 5.850% due 08/01/2017........................ 1,056,250 - 1,056,250 3,000,000 - 3,000,000 5.950% due 08/01/2028........................ 3,153,750 - 3,153,750 - - - Series B, (MBIA Insured): - 500,000 500,000 5.200% due 08/01/2026........................ - 510,625 510,625 1,000,000 - 1,000,000 6.000% due 08/01/2016........................ 1,062,500 - 1,062,500 2,000,000 - 2,000,000 6.100% due 02/01/2028........................ 2,122,500 - 2,122,500 1,000,000 - 1,000,000 Series N, (FHA/VA Insured), - - - 6.375% due 02/01/2027........................ 1,078,750 - 1,078,750 - - - California Housing Finance Agency, Home - - - Ownership & Improvement Revenue: 1,500,000 - 1,500,000 Series 1988G, AMT, (FHA Insured), - - - 8.150% due 08/01/2019....................... 1,531,305 - 1,531,305 2,150,000 - 2,150,000 Series 1989D, AMT, (FHA Insured), - - - 7.500% due 08/01/2020....................... 2,227,701 - 2,227,701 5,010,000 - 5,010,000 Series C, AMT, (FHA Insured), - - - 6.650% due 08/01/2014....................... 5,423,325 - 5,423,325 665,000 - 665,000 Series D, AMT, (MBIA Insured), - - - 6.300% due 08/01/2014....................... 709,888 - 709,888 2,630,000 - 2,630,000 Series F, AMT, (MBIA Insured), - - - 6.800% due 08/01/2014....................... 2,889,712 - 2,889,712 3,385,000 - 3,385,000 Series F-2, (FHA Insured), - - - 7.250% due 08/01/2016....................... 3,698,113 - 3,698,113 - - - California, Pollution Control Financing Authority, 1,000,000 - 1,000,000 PCR (Keller Canyon Landfill Company Project), AMT, - - - 6.875% due 11/01/2027............................ 1,101,250 - 1,101,250 2,890,000 - 2,890,000 (Mobile Oil Corporation Project), - - - 5.500% due 12/01/2029............................ 2,944,188 - 2,944,188 2,500,000 - 2,500,000 (San Diego Gas and Electric), Series A, AMT, (AMBAC Insured), - - - 5.850% due 06/01/2021.......................... 2,621,875 - 2,621,875 - - - (Southern California Edison Company): 13,250,000 - 13,250,000 Series B, AMT, (AMBAC Insured), - - - 6.400% due 12/01/2024.......................... 14,492,188 - 14,492,188 5,000,000 - 5,000,000 Series B, AMT, (FGIC Insured), - - - 6.400% due 12/01/2024.......................... 5,468,750 - 5,468,750 6,565,000 - 6,565,000 (Tracy Material Recovery Project), Series A, AMT, - - - 6.600% due 08/01/2014.......................... 6,664,854 - 6,664,854 5,000,000 - 5,000,000 (Waste Management), Series A, AMT, - - - 7.150% due 02/01/2011.......................... 5,425,000 - 5,425,000 3,100,000 - 3,100,000 (Waste Removal Systems), Series A, AMT, - - - 7.100% due 11/01/2009.......................... 3,266,625 - 3,266,625 2,250,000 - 2,250,000 California Residential Efficiency Financing - - - Authority (First Resource Efficiency), - - - (AMBAC Insured), 6.000% due 07/01/2017......... 2,424,375 - 2,424,375 1,355,000 - 1,355,000 California Rural Home Mortgage Finance Authority, - - - SFM Mortgage-Backed Securities Project, Series A-2, AMT, (GNMA Insured), - - - 7.950% due 12/01/2024.......................... 1,549,781 - 1,549,781 - - - California State Department of Water - - - - - Resources, - 300,000 300,000 5.00%, 12/01/22 - 292,875 292,875 - 500,000 500,000 6.00%, 12/01/06 - 556,875 556,875 - 500,000 500,000 6.00%, 12/01/09 - 566,875 566,875 415,000 - 415,000 California State, GO, (MBIA Insured), - - - 6.000% due 10/01/2014.......................... 448,200 - 448,200 - - - California Statewide Communities Development Authority COP: 3,000,000 - 3,000,000 (Cedars-Sinai Medical Center), (MBIA Insured), - - - 6.500% due 08/01/2012.......................... 3,483,750 - 3,483,750 735,000 - 735,000 (Childrens Campus), - - - 6.500% due 09/01/2022.......................... 790,125 - 790,125 14,800,000 - 14,800,000 California Statewide Communities Development Authority Revenue, - - - (Sherman Oaks Project), Series A, (AMBAC Insured), - - - 5.000% due 08/01/2022.......................... 14,467,000 - 14,467,000 5,715,000 - 5,715,000 Carson, Improvement Board Act of 1915, GO, - - - 7.375% due 09/02/2022.......................... 6,150,769 - 6,150,769 4,675,000 - 4,675,000 Chula Vista, IDR, (San Diego Gas and Electric), Series A, AMT, WM CALIFORNIA MUNICIPAL FUND AND GRIFFIN CALIFORNIA TAX-FREE FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS VALUE - -------------------------------------------- -------------------------------------- WM GRIFFIN JUNE 30, 1998 (Unaudited) WM GRIFFIN CALIFORNIA CALIFORNIA PRO FORMA CALIFORNIA CALIFORNIA PRO FORMA MUNICIPAL FUND TAX-FREE FUND COMBINED MUNICIPAL FUND TAX-FREE FUND COMBINED - - - (AMBAC Insured), - - - 6.400% due 12/01/2027.......................... 5,113,281 - 5,113,281 2,950,000 - 2,950,000 Chula Vista, Redevelopment Agency, Tax Allocation Revenue, - - - 8.625% due 09/01/2024.......................... 3,606,375 - 3,606,375 - - - Contra Costa County, Finance Authority, Tax Allocation Revenue, - - - Series A: $1,595,000 - $1,595,000 7.000% due 08/01/2009.......................... $1,746,525 - $1,746,525 1,000,000 - 1,000,000 7.100% due 08/01/2022.......................... 1,092,500 - 1,092,500 - $ 500,000 500,000 Contra Costa, California Transportation - - - Authority Sales Tax Revenue, - - - 6.00%, 03/01/07 - $ 556,250 556,250 2,500,000 - 2,500,000 Davis, Public Facilities Finance Authority, - - - Mace Ranch Area, Series A, - - - 6.600% due 09/01/2025......................... 2,609,375 - 2,609,375 3,215,000 - 3,215,000 Delano, COP, Series A, - - - 9.250% due 01/01/2022......................... 3,721,363 - 3,721,363 8,985,000 - 8,985,000 East Bay Regional Parks District, GO, Series D, - - - 5.000% due 09/01/2023.......................... 8,906,381 - 8,906,381 1,985,000 - 1,985,000 El Cajon, COP, (Helix View Nursing Hospital), - - - Limited Obligation, Series 1990, AMT, (FHA Insured), - - - 7.750% due 02/01/2029......................... 2,020,333 - 2,020,333 4,785,000 - 4,785,000 Fairfield Housing Authority Revenue, Mortgage Revenue, - - - (Creekside Estates Project), - - - 7.875% due 02/01/2015......................... 5,000,325 - 5,000,325 - 300,000 300,000 Folsom, California School Facilities Project - - - - Series B, 6.00%, 08/01/10 - 329,625 329,625 5,000,000 - 5,000,000 Foothill Eastern Transportation Corridor Agency, Series A, - - - Zero coupon due 01/01/2008.................... 3,775,000 - 3,775,000 2,000,000 - 2,000,000 Gilroy, Unified School District, COP, - - - (Measure J Capital Projects), (FSA Insured), - - - 6.250% due 09/01/2012......................... 2,225,000 - 2,225,000 - 1,060,000 1,060,000 Home Mortgage, Series F-1, 6.50%, 02/01/08..... - 1,168,650 1,168,650 2,000,000 - 2,000,000 Huntington Park, Public Financing Authority Lease Revenue, - - - (Waste Water System Project), - - - 6.200% due 10/01/2025......................... 2,027,500 - 2,027,500 5,000,000 - 5,000,000 Imperial Irrigation District, Electric Revenue, (MBIA Insured) - - - 5.000% due 11/01/2018........................ 4,931,250 - 4,931,250 2,000,000 - 2,000,000 Irvine, Meadows Mobile Home Park Revenue, Series A, (GNMA Collateral) - - - 5.700% due 03/01/2018......................... 2,000,000 - 2,000,000 1,250,000 - 1,250,000 Kings County, Waste Management Authority, Solid Waste Revenue, AMT, - - - 7.200% due 10/01/2014........................ 1,396,875 - 1,396,875 1,500,000 - 1,500,000 La Verne, Public Financing Authority, Capital Improvement, - - - 7.250% due 09/01/2026........................ 1,642,500 - 1,642,500 - 250,000 250,000 Los Angeles, California Harbor Department - - - Revenue, 5.38%, 11/01/23..................... - 251,250 251,250 - 1,000,000 1,000,000 Long Beach, California Harbor Revenue, - - - 5.25%, 05/15/25 - 997,500 997,500 - 1,000,000 1,000,000 Los Angeles, California Unified School - - - District, 6.00%, 07/01/11.................... - 1,132,500 1,132,500 - 1,445,000 1,445,000 Los Angeles, California Unified School - - - District, 6.00%, 07/01/13.................... - 1,631,044 1,631,044 - - - Los Angeles, Community Redevelopment Agency, AMT: 1,425,000 - 1,425,000 5.850% due 12/01/2026......................... 1,425,000 - 1,425,000 2,055,000 - 2,055,000 (Hollywood Redevelopment Project), Series C, (MBIA Insured), - - - 5.000% due 07/01/2022......................... 2,008,762 - 2,008,762 3,490,000 - 3,490,000 Series C, (AMBAC Insured), - - - 6.750% due 07/01/2014......................... 3,804,100 - 3,804,100 - 1,000,000 1,000,000 Los Angeles, California Department of - - - Airports, 5.50%, 05/15/08.................... - 1,067,500 1,067,500 - 600,000 600,000 Los Angeles, California Department of Water & - - - Power, Water Works Revenue, - - - 6.20%, 07/01/12 - 666,750 666,750 1,000,000 - 1,000,000 Los Angeles County, Master Refunding Project, (Inverse Floater), - - - 9.330% due 06/01/2015(A)..................... 1,192,500 - 1,192,500 - - - Los Angeles County, MFHR, AMT, (GNMA Insured): 3,000,000 - 3,000,000 (Park Parthenia Project), - - - 7.400% due 01/20/2022........................ 3,076,560 - 3,076,560 1,000,000 - 1,000,000 (Ridgecroft Apartments Project), Series E, (GNMA Collateral), - - - 6.250% due 09/20/2039........................ 1,058,750 - 1,058,750 - - - Los Angeles County, Residual Interest Bond: 3,740,000 - 3,740,000 (Edmund D. Edelman Children's Center), COP, (AMBAC Insured), - - - 6.000% due 04/01/2012........................ 3,997,125 - 3,997,125 6,110,000 - 6,110,000 (Pension Obligation), COP, (MBIA Insured), - - - 6.900% due 06/30/2008........................ 7,309,087 - 7,309,087 1,360,000 - 1,360,000 Los Angeles County, Single Family Housing Revenue, Series B, (GNMA Insured), - - - 7.600% due 08/01/2016........................ 1,513,000 - 1,513,000 - 1,000,000 1,000,000 Los Angeles County Transportation, - - - 7.00%, 07/01/19 ............................ - 1,052,450 1,052,450 395,000 - 395,000 Los Angeles Home Mortgage Revenue, Mortgage-Backed Securities Project, - - - (GNMA Insured), - - - 8.100% due 05/01/2017.............................. 445,856 - 445,856 - 1,000,000 1,000,000 Los Angeles Pub Sp Cos - - - 5.00%, 10/01/16 ........................ - 987,500 987,500 415,000 - 415,000 Los Angeles, SFMR, Program 1990, Issue A, AMT, GNMA collateralized, - - - 7.550% due 12/01/2023.............................. 432,638 - 432,638 - - - Metropolitan Water District of Southern California: - 200,000 200,000 5.00%, 07/01/10 - 206,250 206,250 - 750,000 750,000 5.75%, 07/01/09 - 830,625 830,625 - 100,000 100,000 6.00%, 07/01/07 - 112,000 112,000 - 1,000,000 1,000,000 Monterey County, California Certificate of - - - Participation, Natividad Medical Center - - - Improvements, Series E, 4.75%, 08/01/17............ - 952,500 952,500 - 500,000 500,000 Multi-Unit Rental Housing, 6.88%, 08/01/24.......... - 531,875 531,875 2,785,000 - 2,785,000 Needles, Public Utilities Authority Revenue, - - - (Utilities System Aquisition Project), Series A, - - - 6.500% due 02/01/2022.............................. 2,913,806 - 2,913,806 3,500,000 - 3,500,000 Novato, Special Tax Revenue, (Community Facilities District), - - - 7.200% due 08/01/2015.............................. 3,775,625 - 3,775,625 2,000,000 - 2,000,000 Oakland, Revenue Bonds, (YMCA East Bay Project), - - - 7.100% due 06/01/2010............................... 2,202,500 - 2,202,500 - - - Oakland, Unified School District: 2,645,000 - 2,645,000 7.000% due 11/15/2011.............................. 2,892,969 - 2,892,969 3,445,000 - 3,445,000 COP, Energy Retrofit, - - - 6.750% due 11/15/2014.............................. 3,711,988 - 3,711,988 4,500,000 - 4,500,000 Palm Desert, Financing Authority, Tax Allocation Revenue, - - - (MBIA Insured), (Inverse Floater), - - - 8.705% due 04/01/2022 (A)......................... 5,315,625 - 5,315,625 1,150,000 - 1,150,000 Palm Springs, Financing Authority, (Convention Center Project), WM CALIFORNIA MUNICIPAL FUND AND GRIFFIN CALIFORNIA TAX-FREE FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS VALUE - -------------------------------------------- JUNE 30, 1998 (Unaudited) ---------------------------------------- WM GRIFFIN WM WM CALIFORNIA CALIFORNIA PRO FORMA CALIFORNIA CALIFORNIA PRO FORMA MUNICIPAL FUND TAX-FREE FUND COMBINED MUNICIPAL FUND TAX-FREE FUND COMBINED - - - Series A, (MBIA Insured), - - - 6.750% due 11/01/2021.......................... 1,256,375 - 1,256,375 - - - Port Oakland, AMT, - - - (Mitsu Osk Lines Ltd.), Series A: 3,030,000 - 3,030,000 6.750% due 01/01/2012.......................... 3,242,100 - 3,242,100 2,300,000 - 2,300,000 6.800% due 01/01/2019.......................... 2,452,375 - 2,452,375 3,000,000 - 3,000,000 Rancho, Water District Financing Authority, Residual Interest Bond, - - - (AMBAC Insured), (Pre-refunded to 09/11/2001), - - - 9.024% due 08/17/2021 (A)...................... 3,521,250 - 3,521,250 2,750,000 - 2,750,000 Redding, Electrical Systems Revenue, COP, (Inverse Floater), (MBIA Insured), - - - 8.670% due 07/08/2022 (A)...................... 3,746,875 - 3,746,875 1,000,000 - 1,000,000 Redondo Beach, Public Financing Authority - - - Revenue, (South Bay Center Redevelopment - - - Project), 7.125% due 07/01/2026................$ 1,116,250 - $ 1,116,250 - $ 500,000 $ 500,000 Riverside County, California Transportation - - - Community Sales Tax Revenue, Series A, - - - 5.75%, 06/01/08................................ - $ 551,250 551,250 $ 1,500,000 - 1,500,000 Riverside, School District, Special Project, - - - 7.250% due 09/01/2018.......................... 1,620,000 - 1,620,000 - 1,000,000 1,000,000 Sacramento CA Mun Util D, - - - 5.13%, 07/01/22 ............................... - 987,500 987,500 6,500,000 - 6,500,000 Sacramento County, Airport System Revenue, - - - Series 1989, AMT, (AMBAC Insured), - - - 7.000% due 07/01/2020.......................... 6,804,525 - 6,804,525 - 750,000 750,000 Sacramento, California Certificate of - - - Participation, Public Facilities Project, - - - 6.00%, 07/01/12................................ - 793,125 793,125 1,000,000 - 1,000,000 Salinas, California Improvement Board, - - - Act 1915, Special Assesment District #90-1, - - - Series C-185, 5.400% due 09/02/2012............ 990,000 - 990,000 - 1,500,000 1,500,000 San Bernardino County CA, - - - 4.50%, 09/30/99 ............................... - 1,510,905 1,510,905 10,000,000 - 10,000,000 San Bernardino County, COP, (MBIA Insured), - - - Residual Interest Bond, - - - 7.450% due 07/01/2016 (A)...................... 10,675,000 - 10,675,000 - 765,000 765,000 San Diego County, California Regional - - - Transportation Commission Sales Tax - - - Revenue, Series A, 4.75%, 04/01/08............. - 782,213 782,213 4,000,000 - 4,000,000 San Diego County, Residual Interest Bond, COP, - - - Series B, (MBIA Insured), (Pre-refunded to - - - 04/27/2006), 8.520% due 04/08/2021 (A)......... 5,200,000 - 5,200,000 1,000,000 - 1,000,000 San Dimas, Housing Authority Revenue, - - - (Charter Oak Mobile Home Project), Series A, (FNMA Collateral) - - - 5.700% due 07/01/2028.......................... 970,000 - 970,000 - - - San Francisco, California Bay Area Rapid - - - Transit District Sales Tax Revenue: - 1,000,000 1,000,000 5.00%, 07/01/28................................ - 975,000 975,000 - 500,000 500,000 5.35%, 07/01/07................................ - 531,250 531,250 - 705,000 705,000 San Francisco, California City & County - - - Airports, Second Series Issue 12-B, - - - 5.50%, 05/01/09................................ - 755,231 755,231 - 1,000,000 1,000,000 San Francisco, California City & County - - - Airport Commission, International Airport - - - Revenue Bonds, Series 15A, - - - 5.00%, 05/01/21................................ - 968,750 968,750 - - - San Francisco, City and County, Multi-family - - - Mortgage Revenue, Series A, (FNMA Insured): 1,000,000 - 1,000,000 6.350% due 02/15/2012.......................... 1,046,250 - 1,046,250 1,250,000 - 1,250,000 6.450% due 02/15/2024.......................... 1,301,563 - 1,301,563 - - - San Francisco, City and County, Redevelopment Agency, Lease Revenue, Capital - - - Appreciation, (George R. Moscone Project): 3,750,000 - 3,750,000 Zero coupon due 07/01/2011.................... 1,964,062 - 1,964,062 4,250,000 - 4,250,000 Zero coupon due 07/01/2013.................... 1,960,313 - 1,960,313 - 600,000 600,000 San Francisco, California City & County Sewer - - - Revenue, 5.90%, 10/01/08....................... - 645,750 645,750 270,000 - 270,000 San Francisco, City and County, SFMR, AMT, - - - GNMA and FNMA Mortgage-Backed Securities - - - Program, 7.450% due 01/01/2024................. 282,487 - 282,487 - 1,000,000 1,000,000 San Joaquin Hills, California Transportation - - - Corridor Agency Toll Road Revenue, - - - 4.90%, 01/15/07................................ - 680,000 680,000 - - - San Jose, California Redevelopment Agency Tax Allocation: - 250,000 250,000 5.38%, 08/01/11................................ - 264,063 264,063 - 1,000,000 1,000,000 6.00%, 08/01/10................................ - 1,133,750 1,133,750 2,370,000 - 2,370,000 San Jose, Financing Authority Revenue, - - - Series C, 7.000% due 09/02/2015................ 2,424,036 - 2,424,036 - 500,000 500,000 Santa Barbara County, California Certificate - - - of Participation, 6.40%, pre-refunded - - - to 02/01/01.................................... - 538,125 538,125 3,000,000 - 3,000,000 Santa Clarita, Community Development - - - Authority, 7.500% due 11/15/2012............... 3,195,000 - 3,195,000 4,765,000 - 4,765,000 Santa Rosa, Mortgage Revenue, (Channate Lodge), - - - (FHA Insured), 6.700% due 12/01/2024........... 5,128,331 - 5,128,331 3,050,000 - 3,050,000 Shasta, Joint Powers Financing Authority, Lease Revenue, (County Courthouse Improvement - - - Project), Series A, (MBIA Insured), - - - 5.000% due 06/01/2023.......................... 2,981,375 - 2,981,375 2,000,000 - 2,000,000 Shasta Lake, COP, (FSA Insured), - - - 6.000% due 04/01/2016.......................... 2,167,500 - 2,167,500 5,000,000 - 5,000,000 Sierra View, Healthcare District Revenue, - - - (ACA Insured), 5.250% due 07/01/2018........... 4,900,000 - 4,900,000 - 500,000 500,000 South Orange County, California Public - - - Financing Authority Special Tax Revenue, - - - 7.00%, 09/01/08 ............................... - 602,500 602,500 5,000,000 - 5,000,000 South Orange County, Public Financing Authority, - - - Special Tax Revenue, Sr. Lien, Series A, - - - (MBIA Insured), 6.200% due 09/01/2013.......... 5,468,750 - 5,468,750 - - - Southern California, Housing Finance Agency, - - - SFMR, GNMA and FNMA Mortgage-Backed Securities - - - Program: 1,035,000 - 1,035,000 Series 1988A, AMT, GNMA collateralized, - - - 8.125% due 02/01/2021.......................... 1,183,781 - 1,183,781 1,545,000 - 1,545,000 Series A, (GNMA Collateral), - - - 7.350% due 09/01/2024.......................... 1,622,250 - 1,622,250 195,000 - 195,000 Series B, (GNMA Collateral), - - - 6.900% due 10/01/2024.......................... 206,944 - 206,944 - - - State of California: - 2,000,000 2,000,000 5.50%, 04/01/13................... - 2,147,500 2,147,500 - 1,000,000 1,000,000 6.60%, 02/01/10................... - 1,181,250 1,181,250 - 1,000,000 1,000,000 6.75%, 02/01/08................... - 1,181,250 1,181,250 WM CALIFORNIA MUNICIPAL FUND AND GRIFFIN CALIFORNIA TAX-FREE FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS VALUE - -------------------------------------------- ---------------------------------- WM GRIFFIN JUNE 30, 1998 (Unaudited) WM GRIFFIN CALIFORNIA CALIFORNIA PRO FORMA CALIFORNIA CALIFORNIA MUNICIPAL FUND TAX-FREE FUND COMBINED MUNICIPAL FUND TAX-FREE FUND - 1,500,000 1,500,000 5.00%, 10/01/18 ...... - 1,477,500 55,000 - 55,000 Stockton, Community Facilities Supplemental Tax #90-2, SFMR, - - - GNMA Mortgage-Backed Securities Program, - - - (Brookside Estates), AMT, - - - 7.450% due 08/01/2010 ...... 61,325 - 1,305,000 - 1,305,000 Stockton, Community Facilities Supplemental Tax #90-1, - - - (Mello Roos-Weston Ranch), Series A, - - - 6.000% due 09/01/2018 ...... 1,303,369 - - 1,250,000 1,250,000 Turlock, California Irrigation District - - - Revenue Bond, Series A, 5.00%, 01/01/17 ...... - 1,235,938 - 400,000 400,000 University of California Certificate of - - - Participation, UCLA Center Chiller/ - - - Cogeneration Project, 6.00%, 11/01/21 ...... - 431,500 - - - University of California, Refunding Revenue: 10,000,000 - 10,000,000 Multi-Purpose Projects, Series F, (FGIC - - - Insured), 5.000% due 09/01/2022 ...... 9,775,000 - 5,760,000 - 5,760,000 Research Facilities, Series C, (FSA Insured), - - - 5.000% due 09/01/2024 ...... 5,630,400 - $ 7,885,000 - 7,885,000 Research Facilities, Series D, (FSA Insured), - - - 5.000% due 09/01/2024 ...... $ 7,707,587 - 2,025,000 - 2,025,000 Vallejo, Public Financing Authority Revenue, - - - (Fairgrounds Drive Assesment District), - - - 5.700% due 09/02/2011 ...... 2,004,750 - - - - West & Central Basin Financing Authority Revenue: - $ 1,035,000 $ 1,035,000 5.00%, 08/01/09 ...... - $ 1,078,988 - 1,500,000 $ 1,500,000 5.13%, 08/01/22 ...... 1,490,625 ---------------------------------- 329,415,640 39,774,107 PUERTO RICO - 0.9% 1,647,018 - 1,647,018 Centro de Recaudaciones de Ingresos Municipales, 6.850% due 10/17/2003 ...... 1,737,603 - - 750,000 750,000 Puerto Rico Electric Power Authority Revenue, Series U, 6.00%, 07/01/14 ...... - 811,873 - 800,000 800,000 Puerto Rico Commonwealth, 5.65%, 07/01/15 ...... - 871,000 ---------------------------------- 1,737,603 1,682,873 Total Long-Term Municipal Bonds and Notes 331,153,243 41,456,980 SHORT-TERM MUNICIPAL BONDS AND NOTES - 1.5% California Pollution Control, Shell Proj A, - 100,000 100,000 5.00%, 10/01/08 ..... - 100,000 - 100,000 100,000 5.00%, 10/01/10 ... - 100,000 - 100,000 100,000 5.00%, 10/01/06 ... - 100,000 - 300,000 300,000 California Pollution Control Financing, Shell, 5.00%, 10/01/11 ... - 300,000 - 300,000 300,000 CA PCR Shell Oil Project, 5.00%, 11/01/00 ... - 300,000 CA Pollution Control Financing, - 600,000 600,000 5.00%, 12/01/12 ... - 600,000 - 500,000 500,000 5.00%, 12/01/16 ... - 500,000 - 500,000 500,000 California Statewide Communities Development Authority, Certificate of Participation, 5.00%, 04/01/28 ... - 500,000 - 1,100,000 1,100,000 CA Statewide Community Development, 5.00%, 12/01/15 ... - 1,100,000 - 200,000 200,000 CA Statewide Community Development Corp, 5.00%, 03/01/03 ... - 200,000 700,000 - 700,000 Irvine Ranch, Water District Revenue, 3.300% due 04/01/2033 (A)...... 700,000 - - 100,000 100,000 Ontario, California, Winsford Partners Revenue, 5.00%, 09/01/08 ...... - 100,000 - 200,000 200,000 CA San Jose Mtg, 5.00%, 11/01/17 ...... - 200,000 - 200,000 200,000 CA Foothill East Corr, 3.75%, 01/02/35 ..... - 200,000 - 300,000 300,000 Los Angeles Multirev, 5.00%, 11/01/09 ...... - 300,000 5,000 - 5,000 Los Angeles, Regional Airports Improvement, Corporate Lease Revenue, (Los Angeles International Airport), 4.000% due 12/01/2025 (A) ...... 5,000 - - 200,000 200,000 Simi Vy Calif Mf Hsg Rev, - - 5.00%, 07/01/23 ...... - 200,000 ---------------------------------- Total Short-Term Municipal Bonds and Notes 705,000 4,800,000 TOTAL INVESTMENTS - 102.1% (COST $351,978,586) $ 331,858,243 $ 46,256,980 OTHER ASSETS AND LIABILITIES, NET - (2.1%) (6,984,289) (661,622) ---------------------------------- TOTAL NET ASSETS - 100.0% $ 324,873,954 $ 45,595,358 ================================== WM CALIFORNIA MUNICIPAL FUND AND GRIFFIN CALIFORNIA TAX-FREE FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS -------------------------------------------- ---------------- WM GRIFFIN JUNE 30, 1998 (Unaudited) CALIFORNIA CALIFORNIA PRO FORMA PRO FORMA MUNICIPAL FUND TAX-FREE FUND COMBINED COMBINED - 1,500,000 1,500,000 5.00%, 10/01/18 ....................................... 1,477,500 55,000 - 55,000 Stockton, Community Facilities Supplemental Tax #90-2, SFMR, - - - GNMA Mortgage-Backed Securities Program, - - - (Brookside Estates), AMT, - - - 7.450% due 08/01/2010 ................................. 61,325 1,305,000 - 1,305,000 Stockton, Community Facilities Supplemental Tax #90-1, - - - (Mello Roos-Weston Ranch), Series A, - - - 6.000% due 09/01/2018 ................................. 1,303,369 - 1,250,000 1,250,000 Turlock, California Irrigation District - - - Revenue Bond, Series A, 5.00%, 01/01/17 ............... 1,235,938 - 400,000 400,000 University of California Certificate of - - - Participation, UCLA Center Chiller/ - - - Cogeneration Project, 6.00%, 11/01/21 ................. 431,500 - - - University of California, Refunding Revenue: 10,000,000 - 10,000,000 Multi-Purpose Projects, Series F, (FGIC Insured) - - - 5.000% due 09/01/2022 ................................. 9,775,000 5,760,000 - 5,760,000 Research Facilities, Series C, (FSA Insured), - - - 5.000% due 09/01/2024 ................................. 5,630,400 $ 7,885,000 - 7,885,000 Research Facilities, Series D, (FSA Insured), - - - 5.000% due 09/01/2024 ................................. $ 7,707,587 2,025,000 - 2,025,000 Vallejo, Public Financing Authority Revenue, - - - (Fairgrounds Drive Assesment District), - - - 5.700% due 09/02/2011 ................................. 2,004,750 - - - West & Central Basin Financing Authority Revenue: - $ 1,035,000 $ 1,035,000 5.00%, 08/01/09 ....................................... 1,078,988 - 1,500,000 $ 1,500,000 5.13%, 08/01/22 ....................................... 1,490,625 ------------- 369,189,747 99.7% PUERTO RICO - 0.9% 1,647,018 - 1,647,018 Centro de Recaudaciones de Ingresos Municipales, 6.850% due 10/17/2003 ................................. 1,737,603 - 750,000 750,000 Puerto Rico Electric Power Authority Revenue, Series U, 6.00%, 07/01/14 .................... 811,873 - 800,000 800,000 Puerto Rico Commonwealth, 5.65%, 07/01/15 .............. 871,000 ------------- 3,420,476 0.9% Total Long-Term Municipal Bonds and Notes 372,610,223 100.6% SHORT-TERM MUNICIPAL BONDS AND NOTES - 1.5% California Pollution Control, Shell Proj A, - 100,000 100,000 5.00%, 10/01/08 ....................................... 100,000 - 100,000 100,000 5.00%, 10/01/10 ....................................... 100,000 - 100,000 100,000 5.00%, 10/01/06 ....................................... 100,000 - 300,000 300,000 California Pollution Control Financing, Shell, 5.00%, 10/01/11 ....................................... 300,000 - 300,000 300,000 CA PCR Shell Oil Project, 5.00%, 11/01/00 ....................................... 300,000 CA Pollution Control Financing, - 600,000 600,000 5.00%, 12/01/12 ....................................... 600,000 - 500,000 500,000 5.00%, 12/01/16 ... 500,000 - 500,000 500,000 California Statewide Communities Development Authority, Certificate of Participation, 5.00%, 04/01/28 ....................................... 500,000 - 1,100,000 1,100,000 CA Statewide Community Development, 5.00%, 12/01/15 ....................................... 1,100,000 - 200,000 200,000 CA Statewide Community Development Corp, 5.00%, 03/01/03 ....................................... 200,000 700,000 - 700,000 Irvine Ranch, Water District Revenue, 3.300% due 04/01/2033 (A)...... 700,000 - 100,000 100,000 Ontario, California, Winsford Partners Revenue, 5.00%, 09/01/08 ...... 100,000 - 200,000 200,000 CA San Jose Mtg, 5.00%, 11/01/17 ....................................... 200,000 - 200,000 200,000 CA Foothill East Corr, 3.75%, 01/02/35 ....................................... 200,000 - 300,000 300,000 Los Angeles Multirev, 5.00%, 11/01/09 ....................................... 300,000 5,000 - 5,000 Los Angeles, Regional Airports Improvement, Corporate Lease Revenue, (Los Angeles International Airport), 4.000% due 12/01/2025 (A) ...... 5,000 - 200,000 200,000 Simi Vy Calif Mf Hsg Rev, - 5.00%, 07/01/23 ....................................... 200,000 ------------- Total Short-Term Municipal Bonds and Notes 5,505,000 1.5% TOTAL INVESTMENTS - 102.1% (COST $351,978,586) $378,115,223 102.1% OTHER ASSETS AND LIABILITIES, NET - (2.1%) (7,645,911) -2.1% ------------- TOTAL NET ASSETS - 100.0% $370,469,312 100.0% ============= - -------------------------------------------------------------------------------- (A) Floating rate security. The interest rate shown reflects the rate currently in effect. WM CALIFORNIA MUNICIPAL FUND & GRIFFIN CALIFORNIA TAX-FREE FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM California Municipal Fund and the Griffin California Tax-Free Fund at June 30, 1998 and the pro forma combined results of operations for the year ended June 30, 1998 as though the reorganization had occurred on July 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statement of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin California Tax-Free Fund in exchange for shares of WM California Municipal Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin California Tax-Free Fund shares into WM California Municipal Fund shares based upon the net asset value of the WM California Municipal Fund shares at June 30, 1998. WM INCOME FUND AND GRIFFIN BOND FUND PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM PRO FORMA PRO FORMA BOND FUND INCOME FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $ 87,316,676 $259,977,644 $347,294,320 - --------------------------------------------------------------- Total Investments 87,316,676 259,977,644 - 347,294,320 Cash/Cash Equivalents 249,040 130,468 379,508 Receivable for dollar roll fee income - - Dividends and/or interest receivable 1,273,317 4,338,150 5,611,467 Receivable for Fund shares Sold 3,903 483,097 487,000 Receivable for investment securities sold 419,319 - 419,319 Unamortized organization costs - - Receivable from investment advisor - - Prepaid expenses and other assets 5,895 158,036 163,931 --------------------------------------------------------------- Total Assets 89,268,150 265,087,395 - 354,355,545 LIABILITIES: Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 1,290,359 1,290,359 Payable for investment securities purchased 4,770,480 278,663 5,049,143 Investment advisory fee payable 187,543 187,543 Administration fee payable - - Shareholder servicing and distribution fees payable 108,328 108,328 Dividends payable 370,264 551,524 921,788 Accrued legal and audit fees 4,133 4,133 Accrued Trustees' fees and expenses 2,101 2,101 Accrued registration and filing fees payable 5,502 5,502 Due to Custodian - - Net Unrealized Depreciation of Fwd For Curr Cts - - Accrued Expenses and other payables 99,297 134,618 233,915 --------------------------------------------------------------- Total Liabilities 5,240,041 2,562,771 - 7,802,812 TOTAL NET ASSETS $ 84,028,109 $262,524,624 $ - $346,552,733 =============================================================== NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) - - - Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions $ 449,592 $ (9,939,629) $ (9,490,037) Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 796,827 18,088,461 18,885,288 Paid-in capital 82,781,690 254,375,792 337,157,482 --------------------------------------------------------------- TOTAL NET ASSETS $ 84,028,109 $262,524,624 $ - $346,552,733 =============================================================== NET ASSETS: Class A Shares $ 83,338,025 $223,059,662 $306,397,687 =============================================================== Class B Shares $ 690,084 $ 31,311,087 $ 32,001,171 =============================================================== Class S Shares $ 1,778,697 $ 1,778,697 =============================================================== Class I Shares $ 6,375,178 $ 6,375,178 =============================================================== SHARES OUTSTANDING: Class A Shares 9,191,290 23,445,893 (431,596) (A) 32,205,587 =============================================================== Class B Shares 76,163 3,287,948 (3,698) (A) 3,360,413 =============================================================== Class S Shares 186,812 - 186,812 =============================================================== Class I Shares 670,315 - 670,315 =============================================================== NET ASSET VALUE PER SHARE: Class A Shares $ 9.07 $ 9.51 $ 9.51 =============================================================== Class B Shares $ 9.06 $ 9.52 $ 9.52 =============================================================== Class S Shares $ 9.52 $ 9.52 =============================================================== Class I Shares $ 9.51 $ 9.51 =============================================================== See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Bond Fund shares into WM Income Fund shares based upon the net asset value of WM Income Fund shares at April 30, 1998. WM Income Fund and Griffin Bond Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM PRO FORMA PRO FORMA BOND FUND INCOME FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income $ 26,728 26,728 - - Interest Income 1,517,210 3,700,523 5,217,733 Fee Income - - ------------------------------------------------------------------------- Total Investment Income 1,517,210 3,727,251 - 5,244,461 ------------------------------------------------------------------------- EXPENSES: Investment Advisory Fees 118,446 308,288 31,025 (A) 457,759 Administration Fees 47,378 - (47,378) (B) - Custodian Fees 25,711 8,562 34,273 Legal and Audit Fees 11,142 4,133 15,275 Trustees' Fees and Expenses 2,604 2,101 4,705 Amortization of Organization Costs 5,578 - 5,578 Registration and Filing Fees 3,618 5,502 9,120 Other 10,054 21,942 31,996 ------------------------------------------------------------------------- Subtotal 224,531 350,528 (16,353) 558,706 Shareholder Servicing and Distribution Fees Class A Shares 58,745 135,987 47,974 (C) 242,706 Class B Shares 1,914 62,743 329 (D) 64,986 Class S Shares 2,412 2,412 Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (109,865) - 109,865 (E) - ------------------------------------------------------------------------- Subtotal 175,325 551,670 141,815 868,810 Fees Reduced by Credits Allowed by the Custodian (731) (731) ------------------------------------------------------------------------- Net Expenses 175,325 550,939 141,815 868,079 ------------------------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 1,341,885 3,176,312 (141,815) 4,376,383 ------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ - (LOSS) ON INVESTMENTS - Realized Gains/(Loss) from: - Security Transactions 305,222 3,598,084 3,903,306 Forward Foreign Currency Contracts and - Foreign Currency Transactions - - Futures Contracts - - Net Unrealized Appreciation/(Depreciation) of: - Securities (279,147) 14,279,432 14,000,285 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures - Contracts and Other Assets and - - Liabilities ------------------------------------------------------------------------- Net Realized and Unrealized Gain/(Loss) on Investments 26,075 17,877,516 - 17,903,591 ------------------------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS $1,367,960 $21,053,828 $(141,815) $22,279,974 ========================================================================= (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor has been eliminated. WM Income Fund and Griffin Bond Fund Pro Forma Combined Statement of Operations For the Year Ended 12/31/97 (Unaudited) GRIFFIN WM PRO FORMA PRO FORMA BOND FUND INCOME FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income - - - - Interest Income 3,223,440 $ 6,681,231 9,904,671 Fee Income - - ----------------------------------------------------------- Total Investment Income 3,223,440 $ 6,681,231 9,904,671 ----------------------------------------------------------- EXPENSES: Investment Advisory Fees 240,899 553,562 60,213 (A) 854,674 Administration Fees 96,359 - (96,359) (B) - Custodian Fees 81,076 23,081 104,157 Legal and Audit Fees 19,831 11,192 31,023 Trustees' Fees and Expenses 8,213 8,499 16,712 Amortization of Organization Costs 17,108 - 17,108 Registration and Filing Fees 9,493 22,666 32,159 Other 31,433 55,224 86,657 ----------------------------------------------------------- Subtotal 504,412 674,224 (36,146) 2,142,490 Shareholder Servicing and Distribution Fees Class A Shares 119,332 254,139 143,924 (C) 517,395 Class B Shares 4,471 86,531 986 (D) 91,988 Class S Shares - - Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (302,697) - 302,697 (E) - ----------------------------------------------------------- Subtotal 325,518 1,014,894 411,461 1,751,873 Fees Reduced by Credits Allowed by the Custodian (2,840) (2,840) ----------------------------------------------------------- Net Expenses 325,518 1,012,054 411,461 1,749,033 ----------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 2,897,922 5,669,177 (411,461) 8,155,638 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains/(Loss) from: Security Transactions 592,366 1,059,244 1,651,610 Forward Foreign Currency Contracts and - Foreign Currency Transactions - - Futures Contracts - - Net Unrealized Appreciation/(Depreciation) of: Securities 928,173 1,919,907 2,848,080 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures Contracts and Other Assets and Liabilities - - ----------------------------------------------------------- Net Realized and Unrealized Gain/(Loss) on Investment 1,520,539 2,979,151 - 4,499,690 ----------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS $ 4,418,461 $ 8,648,328 $(411,461) $ 12,655,328 =========================================================== (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.45 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.55 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor has been eliminated. WM INCOME FUND AND GRIFFIN BOND FUND PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS PRINCIPAL AMOUNT APRIL 30, 1998 (Unaudited) MARKET VALUE --------------------------------------- ----------------------------------------- GRIFFIN PRO FORMA GRIFFIN PRO FORMA WM INCOME FUND BOND FUND COMBINED WM INCOME FUND BOND FUND COMBINED CORPORATE BONDS AND NOTES - 80.5% AUTOS Ford Motor Credit Corp. - 825,000 825,000 7.40%, 11/01/46....................... - 874,500 874,500 - 500,000 500,000 8.20%, 01/15/02....................... - 533,750 533,750 - 250,000 250,000 6.85%, 08/15/00....................... - 254,375 254,375 - 820,000 820,000 6.13%, 04/28/03....................... - 815,900 815,900 - - - General Motors Acceptance Corporation - - - - 455,000 455,000 6.63%, 09/19/02....................... - 460,688 460,688 - 100,000 100,000 9.63%, 05/15/00....................... - 106,625 106,625 - 215,000 215,000 6.88%, 07/15/01....................... - 219,300 219,300 - 2,110,000 2,110,000 7.13%, 05/01/01....................... - 2,165,388 2,165,388 - 690,000 690,000 6.13%, 01/22/08....................... - 673,613 673,613 - 350,000 350,000 9.63%, 12/01/00....................... - 378,875 378,875 ----------------------------------------- - 6,483,014 6,483,014 BANKS - - - Abbey National First Capital Corporation, - 175,000 175,000 8.20%, 10/15/04 (A) .......................... - 192,063 192,063 - 200,000 200,000 Abitibi-Consolidated, 7.50%, 04/01/28 - 200,000 200,000 - - - BankAmerica Corporation - - - - 1,000,000 1,000,000 6.63%, 08/01/07 .............................. - 1,017,500 1,017,500 - 95,000 95,000 6.63%, 10/15/07 .............................. - 96,069 96,069 - 150,000 150,000 7.50%, 10/15/02 .............................. - 157,125 157,125 400,000 - 400,000 Banc One Corporation, Sub. Note, - - - - - - 10.000% due 08/15/2010..................... 513,336 - 513,336 1,000,000 - 1,000,000 Bank of New York, Sub Note, - - - - - - 7.875% due 11/15/2002......................... 1,064,942 - 1,064,942 1,000,000 - 1,000,000 Barnett Banks, Florida, Inc , Sub Note, - - - - - - 10.875% due 03/15/2003........................ 1,188,190 - 1,188,190 - 690,000 690,000 Branch Banking & Trust, 7.25%, 06/15/07....... - 723,638 723,638 - 300,000 300,000 Capital One Bank, 6 83%, 08/16/99............. - 301,500 301,500 - 400,000 400,000 Chase Manhattan Bank, 7.13%, 03/01/05......... - 414,000 414,000 - 1,000,000 1,000,000 Citicorp, 8 00%, 02/01/03..................... - 1,066,250 1,066,250 - 440,000 440,000 Equitable COS, 7.00%, 04/01/28................ - 438,350 438,350 1,100,000 - 1,100,000 First Interstate Bancorp, Sub Note,........... - - - - - - 9.125% due 02/01/2004...................... 1,244,802 - 1,244,802 1,000,000 - 1,000,000 First Nationwide Bank, Sub. Deb., - - - - - - 10.000% due 10/01/2006..................... 1,199,370 - 1,199,370 - 270,000 270,000 First National Bank of Boston, 7.38%, 09/15/06 - 286,200 286,200 - 155,000 155,000 First Security Corporation, 6.88%, 11/15/06 - 158,294 158,294 200,000 - 200,000 First State Banc, Conv Sub. Deb., - - - - - - 7.500% due 04/30/2017...................... 294,500 - 294,500 - 246,000 246,000 First Union Corporation, 9.45%, 08/15/01 - 269,985 269,985 - 335,000 335,000 Fleet Financial Group, 7.13%, 04/15/06 - 347,563 347,563 - 250,000 250,000 Golden West Financial, 7.88%, 01/15/02 - 262,188 262,188 1,000,000 - 1,000,000 Manufacturers and Trade Trust Company, Sub Note, - - - - - - 8.125% due 12/01/2002...................... 1,065,839 - 1,065,839 - 495,000 495,000 MBNA Corporation, 6.92%, 05/30/00 - 501,188 501,188 1,000,000 - 1,000,000 Mellon Financial Company, Sub. Deb., - - - - - - 9.750% due 06/15/2001...................... 1,102,678 - 1,102,678 500,000 - 500,000 Mercantile Bank, Sub. Note, - - - - - - 7.625% due 10/15/2002...................... 526,370 - 526,370 - - - Morgan J.P. & Company - - - - 250,000 250,000 7.63%, 09/15/04....................... - 266,250 266,250 - 250,000 250,000 7.63%, 11/15/98....................... - 251,995 251,995 - - - NationsBank Corporation - - - - 300,000 300,000 5.38%, 04/15/00....................... - 296,250 296,250 - 680,000 680,000 6.38%, 02/15/08....................... - 678,300 678,300 - 465,000 465,000 6.80%, 03/15/28....................... - 463,838 463,838 - 275,000 275,000 7.25%, 10/15/25....................... - 290,469 290,469 1,000,000 - 1,000,000 Norwest Bancorp, Sub Deb., - - - - - - 6.650% due 10/15/2023...................... 978,293 - 978,293 - 500,000 500,000 PNC Institute Capital Cl.B, 8.32%, 05/15/27... - 540,625 540,625 - 400,000 400,000 Shawmut Bank, 8.63%, 02/15/05................. - 448,500 448,500 500,000 - 500,000 Summit Bancorp, Sub. Notes, - - - - - - 8.625% due 12/10/2002...................... 545,577 - 545,577 ----------------------------------------- 9,723,897 9,668,140 19,392,037 COMMUNICATIONS - - - 360 Communications Company, 7.60%, - 100,000 100,000 04/01/09...................................... - 107,375 107,375 - - - Cable & Wireless Communications, 6.38%, - - - - 180,000 180,000 03/06/03...................................... - 179,775 179,775 - 250,000 250,000 GTE South, 6.00%, 02/15/08.................... - 242,188 242,188 - - - WorldCom Incorporated - - - - 675,000 675,000 7.55%, 04/01/04............................... - 707,906 707,906 - 390,000 390,000 7.75%, 04/01/07............................... - 420,225 420,225 ----------------------------------------- - 1,657,469 1,657,469 WM INCOME FUND AND GRIFFIN BOND FUND PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (Unaudited) WM Griffin Pro Forma WM Griffin Pro Forma Income Fund Bond Fund Combined Income Fund Bond Fund Combined Electric - - - Avon Energy Partners Holdings, 6.73%, - 300,000 300,000 12/11/02 ...................... - 303,000 303,000 5,000,000 - 5,000,000 Mississippi Power & Light Company, First and Refundable Mortgage, - - - - - - 8.650% due 01/15/2023...........................5,322,835 - 5,322,835 - - - Niagara Mohawk Power, Deb.: - - - 1,000,000 - 1,000,000 9.750% due 11/01/2005...........................1,180,716 - 1,180,716 1,430,000 - 1,430,000 8.770% due 10/01/2018...........................1,520,046 - 1,520,046 2,000,000 - 2,000,000 Philadelphia Electric Company, First and Refundable Mortgage, - - - - - - 8.250% due 09/01/2022...........................2,109,502 - 2,109,502 - - - Texas Utilities Electric Company, First Mortgage: - - - 1,200,000 - 1,200,000 9.500% due 08/01/1999...........................1,243,335 - 1,243,335 1,200,000 - 1,200,000 8.875% due 02/01/2022...........................1,318,724 - 1,318,724 3,000,000 - 3,000,000 8.750% due 11/01/2023...........................3,264,849 - 3,264,849 --------------------------------------- 15,960,007 303,000 16,263,007 Financial - 314,000 314,000 Aegon, 8.00%, 08/15/06 (A)................ - 345,793 345,793 - - - American Telephone & Telegraph Capital - - - - 390,000 390,000 Corporation, 5.65%, 01/15/99.......... - 388,729 388,729 - - - Associates Corporation, N.A............... - - - - 80,000 80,000 6.63%, 05/15/01................ - 81,200 81,200 - 104,000 104,000 6.75%, 07/15/01................ - 105,950 105,950 9,000,000 - 9,000,000 Barclays North American Capital Corporation, Capital Note, - - - - - - 9.750% due 05/15/2021..........................10,202,597 - 10,202,597 - - - Bear Stearns Company - - - - 225,000 225,000 6.50%, 06/15/00................ - 226,969 226,969 - 250,000 250,000 7.63%, 09/15/99................ - 255,043 255,043 2,000,000 - 2,000,000 Continental Corporation, - - - - - - 7.250% due 03/01/2003...........................2,047,932 - 2,047,932 500,000 - 500,000 Developers Diversified Realty, MTN, Sr. Note, - - - - - - 6.580% due 02/06/2001.............................502,686 - 502,686 - 294,000 294,000 Donaldson Lufkin & Jenrette, 6.88%, 11/01/05 - 301,350 301,350 - - - Finova Capital Corporation - - - - 1,146,000 1,146,000 5.98%, 02/27/01................ - 1,137,405 1,137,405 - 745,000 745,000 6.22%, 03/01/00................ - 745,000 745,000 - - - Franchise Finance Corporation, - - - 900,000 - 900,000 7.000% due 11/30/2000, Sr. Note...................909,999 - 909,999 1,100,000 - 1,100,000 7.875% due 11/30/2005, Sr Note..................1,165,896 - 1,165,896 3,000,000 - 3,000,000 7.070% due 01/15/2008 MTN, Note.................3,000,000 - 3,000,000 1,000,000 - 1,000,000 GATX Leasing Corporation, MTN, - - - - - - 10.000% due 03/21/2001..........................1,102,656 - 1,102,656 - 435,000 435,000 Household Finance Company, 6.58%, 05/17/99 - 436,827 436,827 - - - Jefferson-Pilot Capital Trust Cl A, 8.14%, - - - - 500,000 500,000 01/15/46....................... - 523,125 523,125 - - - Jefferson-Pilot Capital Trust Cl B, 8.29%, - - - - 100,000 100,000 03/01/46....................... - 106,375 106,375 1,250,000 - 1,250,000 Kemper Corporation, Note, - - - - - - 6.875% due 09/15/2003...........................1,276,929 - 1,276,929 - - - Lehman Brothers Incorporated - - - - 550,000 550,000 6.13%, 02/01/01................ - 549,313 549,313 - 502,000 502,000 6.65%, 11/08/00................ - 508,275 508,275 - 950,000 950,000 8.50%, 05/01/07................ - 1,075,875 1,075,875 - 165,000 165,000 Lincoln National Corporation, 7.25%, 05/15/05... - 173,044 173,044 3,750,000 - 3,750,000 MBI Metrobank Finance Ltd., Conv. Bond, - - - - - - Zero coupon due 12/18/2001......................2,400,000 - 2,400,000 - - - Merrill Lynch & Company Incorporated - - - - 1,000,000 1,000,000 6.00%, 02/12/03................ - 992,500 992,500 - 230,000 230,000 6.25%, 01/15/06................ - 228,563 228,563 - 200,000 200,000 7.38%, 08/17/02................ - 208,250 208,250 - 300,000 300,000 Morgan Stanley Group, 8.88%, 10/15/01.......... - 324,375 324,375 - - - Paine Webber Group - - - - 375,000 375,000 6.79%, 07/01/03................ - 378,281 378,281 - 415,000 415,000 7.39%, 10/16/17................ - 424,856 424,856 - 40,000 40,000 7.63%, 10/15/08................ - 42,450 42,450 - 165,000 165,000 7.81%, 02/13/17................ - 175,313 175,313 - 255,000 255,000 8.06%, 01/17/17................ - 279,544 279,544 - 200,000 200,000 8.25%, 05/01/02................ - 212,250 212,250 - 500,000 500,000 Safeco Capital Trust, 8.07%, 07/15/37.......... - 523,750 523,750 - - - Salomon Incorporated - - - - 182,000 182,000 6.50%, 03/01/00................ - 183,365 183,365 - 280,000 280,000 7.00%, 05/15/99................ - 282,822 282,822 - 300,000 300,000 7.59%, 01/28/00................ - 307,500 307,500 - - - Salomon Smith Barney Holdings, 7.13%, - - - - 345,000 345,000 10/01/06....................... - 359,231 359,231 - 1,075,000 1,075,000 Sears Roebuck Acceptance, 6.00%, 03/20/03......... - 1,061,563 1,061,563 2,500,000 - 2,500,000 Superior Financial Acquisition Corporation, Sr. Note, - - - - - - 8.650% due 04/01/2003...........................2,486,915 - 2,486,915 - - - Travelers Property Casualty Corp........... - - - - 500,000 500,000 6.75%, 04/15/01................ - 508,750 508,750 - 230,000 230,000 6.75%, 11/15/06................ - 234,888 234,888 - 505,000 505,000 US Leasing International, 8.75%, 12/01/01.... - 546,663 546,663 - 575,000 575,000 USF&G Corporation, 8.38%, 06/15/01............ - 605,906 605,906 - 665,000 665,000 Zurich Capital Trust I, 8.38%, 06/01/37.... - 725,681 725,681 --------------------------------- 25,095,610 15,566,774 40,662,384 WM Income Fund and Griffin Bond Fund Pro Forma Combined Portfolio of Investments PPRINCIPAL AMOUNT April 30, 1998 (Unaudited) MARKET VALUE ----------------------------------------- -------------------------------------- WM Griffin Pro Forma WM Griffin Pro Forma Income Fund Bond Fund Combined Income Fund Bond Fund Combined Industrial 1,500,000 - 1,500,000 Aetna Services Inc., - - - 7.625% due 08/15/26.......................... 1,563,468 - 1,563,468 1,500,000 - 1,500,000 American Home Products Corporation, Deb., - - - - - - 7.25% due 03/01/23........................... 1,594,342 - 1,594,342 1,000,000 - 1,000,000 AMR Corporation, Deb., - - - - - - 9.75% due 03/15/2000......................... 1,063,763 - 1,063,763 250,000 - 250,000 Battle Mountain Gold Company, - - - - - - 6.000% due 01/04/2005........................ 200,000 - 200,000 - 525,000 525,000 B F Goodrich, 7.00%, 04/15/38 - 525,000 525,000 - - - Black & Decker - - - - 50,000 50,000 7.00%, 02/01/06................................. - 51,438 51,438 - 185,000 185,000 7.50%, 04/01/03................................. - 193,094 193,094 - 700,000 700,000 Brunswick Corporation, 7.13%, 08/01/27.......... - 712,250 712,250 - 500,000 500,000 Burlington Industries, 7.25%, 08/01/27.......... - 510,625 510,625 1,500,000 - 1,500,000 Burlington Northern, Note, - - - - - - 8.750% due 02/25/2022........................ 1,839,246 - 1,839,246 1,600,000 - 1,600,000 Burlington Resources, Deb., - - - - - - 9.125% due 10/01/2021........................ 2,043,692 - 2,043,692 1,000,000 - 1,000,000 CII Financial, Conv., - - - - - - 7.500% due 09/15/01.......................... 961,250 - 961,250 - 165,000 165,000 Coastal Corporation, 8 13%, 09/15/02............ - 175,725 175,725 - 200,000 200,000 Coca Cola Company, 7.88%, 09/15/98.............. - 201,248 201,248 - - - Columbia/HCA Healthcare - - - - 300,000 300,000 6.91%, 06/15/05................................. - 283,125 283,125 - 250,000 250,000 7.15%, 03/30/04................................. - 239,688 239,688 - 210,000 210,000 Comdisco Incorporated, 6 36%, 01/25/99.......... - 210,263 210,263 - - - Conagra Inc., Sr Note, - - - 750,000 - 750,000 9.750% due 03/01/2021........................ 970,221 - 970,221 500,000 - 500,000 6.700% due 08/01/2027........................ 520,368 - 520,368 - 343,000 343,000 ConAgra Incorporated, 6 70%, 08/01/27........... - 350,718 350,718 - - - CPC International Incorporated, 6.15%, - - - - 350,000 350,000 01/15/06........................................ - 346,500 346,500 3,030,000 - 3,030,000 Conrail Inc., Deb., - - - - - - 9.750% due 06/15/2020........................ 3,974,804 - 3,974,804 2,000,000 - 2,000,000 Corporate Express Inc., - - - - - - 4.500% due 07/01/2000........................ 1,817,500 - 1,817,500 - - - Crane Company, Note: - - - 1,000,000 - 1,000,000 7.250% due 06/15/1999........................ 1,013,379 - 1,013,379 500,000 - 500,000 8.500% due 03/15/2004........................ 553,854 - 553,854 - 300,000 300,000 CSR America Incorporated, 6.88%, 07/21/05....... - 308,625 308,625 2,000,000 - 2,000,000 Dart & Kraft finance NV, - - - - - - 7.750% due 11/30/1998........................ 2,022,514 - 2,022,514 5,000,000 - 5,000,000 du Pont (E I ) de Nemours & Company, Deb., - - - - - - 8.250% due 01/15/2022........................ 5,435,429 - 5,435,429 - 560,000 560,000 Embotelladora Andina SA, 7.00%, 10/01/07 (A).... - 547,400 547,400 250,000 - 250,000 Equimar Shipholdings, - - - - - - 9.875% due 07/01/2007........................ 235,625 - 235,625 - 355,000 355,000 Federated Department Stores, 8.13%, 10/15/02.... - 378,963 378,963 3,000,000 - 3,000,000 FHP International Corporation, Sr Note, - - - - - - 7.000% due 09/15/2003........................ 3,073,236 - 3,073,236 1,000,000 - 1,000,000 Fleming Companies, Inc , MTN, Note, - - - - - - 5.770% due 08/06/1998........................ 997,596 - 997,596 2,000,000 - 2,000,000 Ford Holdings, Inc. Deb., - - - - - - 9.375% due 03/01/2020........................ 2,561,148 - 2,561,148 3,750,000 - 3,750,000 Ford Motor Company, Deb., - - - - - - 8.875% due 01/15/2022........................ 4,597,395 - 4,597,395 - 615,000 615,000 Fort James Corporation, 6.88%, 09/15/07......... - 624,225 624,225 - 120,000 120,000 Fortune Brands Incorporated, 7.50%, 05/15/99..... - 121,650 121,650 8,000,000 - 8,000,000 General Motors Corporation, Deb., - - - - - - 9.400% due 07/15/2021........................ 10,472,566 - 10,472,566 850,000 - 850,000 Golden Books Publishing, Sr Note, - - - - - - 7.650% due 09/15/2002........................ 818,125 - 818,125 - - - Hearst-Argyle Television Incorporated, 7.50%, - - - - 725,000 725,000 11/15/27........................................ - 734,969 734,969 2,500,000 - 2,500,000 HIH Capital Ltd , Conv., - - - - - - 7.500% due 09/25/2006........................ 1,975,000 - 1,975,000 - 369,000 369,000 Hilton Hotels Corporation, 7.38%, 06/01/02...... - 374,996 374,996 - 400,000 400,000 Honeywell Incorporated, 6 60%, 04/15/01......... - 406,000 406,000 - 1,000,000 1,000,000 Hyder PLC, 6.75%, 12/15/04 (A).................. - 1,003,750 1,003,750 - 675,000 675,000 Ingersoll-Rand, 6.26%, 02/15/01................. - 677,531 677,531 1,400,000 - 1,400,000 Integrated Device Technology Inc., Conv. Sub. Note - - - - - - 5..00% due 06/01/2002........................ 1,225,000 - 1,225,000 - - - International Business Machines Corporation, - - - - 200,000 200,000 6.38%, 06/15/00................................. - 201,750 201,750 - 160,000 160,000 International Paper Company, 9.70%, 03/15/00.... - 170,400 170,400 - 600,000 600,000 Interpool Incorporated, 7.20%, 08/01/07......... - 600,000 600,000 6,000,000 - 6,000,000 James River Corporation, Deb., - - - - - - 9.250% due 11/15/2021........................ 7,418,105 - 7,418,105 1,000,000 - 1,000,000 Jackson Products Inc., - - - - - - 9.500% due 04/15/2005........................ 1,012,500 - 1,012,500 - - - Lockheed Martin Corporation - - - - 145,000 145,000 7.25%, 05/15/06................................. - 152,613 152,613 - 520,000 520,000 7.75%, 05/01/26................................. - 580,450 580,450 - - - Loral Corporation, Deb., - - - 1,000,000 - 1,000,000 8.375% due 06/15/2024........................ 1,181,220 - 1,181,220 1,000,000 - 1,000,000 7.625% due 06/15/2025........................ 1,087,832 - 1,087,832 1,800,000 - 1,800,000 Medical Care International (Columbia), Conv Sub Deb., - - - - - - 6.750% due 10/01/2006........................ 1,644,750 - 1,644,750 - 540,000 540,000 Nabisco Incorporated, 6.00%, 02/15/11........... - 535,275 535,275 - 325,000 325,000 News America Holdings, 7.50%, 03/01/00.......... - 332,719 332,719 - 625,000 625,000 Noble Drilling Corporation, 9.13%, 07/01/06..... - 692,188 692,188 - 120,000 120,000 Norcen Energy Resources, 7.38%, 05/15/06........ - 126,000 126,000 - 65,000 65,000 Occidental Petroleum, 7.09%, 09/08/99........... - 65,731 65,731 8,700,000 - 8,700,000 Occidental Petroleum Corporation, Sr Deb., - - - - - - 11.125% due 08/01/2010....................... 11,786,836 - 11,786,836 6,500,000 - 6,500,000 Ogden Corporation, Deb., - - - - - - 9.250% due 03/01/2022........................ 8,181,575 - 8,181,575 2,500,000 - 2,500,000 Panhandle Eastern Pipe Line Company, Deb., - - - - - - 8.625% due 04/15/2025........................ 2,781,497 - 2,781,497 - 300,000 300,000 Pepsico Incorporated, 7.75%, 10/01/98........... - 301,818 301,818 5,950,000 - 5,950,000 Phillips Petroleum Company, Deb., - - - - - - 9.180% due 09/15/2021........................ 6,659,536 - 6,659,536 - - - Potash Corporation Saskatchewan, 7.13%, - - - - 330,000 330,000 06/15/07 (A).................................... - 337,838 337,838 6,860,000 - 6,860,000 Praxair, Inc, Deb., - - - - - - 8.700% due 07/15/2022........................ 7,468,159 - 7,468,159 - - - Raytheon Co - - - - 730,000 730,000 5.95%, 03/15/01................................. - 727,263 727,263 - 1,070,000 1,070,000 6.45%, 08/15/02................................. - 1,078,025 1,078,025 750,000 - 750,000 Raytheon Company, First Mortgage, Deb., - - - - - - 7.200% due 8/15/2027............................ 778,394 - 778,394 500,000 - 500,000 Riviera Holdings Corporation, - - - - - - 10.000% 8/15/2004............................ 502,500 - 502,500 WM INCOME FUND AND GRIFFIN BOND FUND Principal Amount Pro Forma Combined Portfilo Of Investments Market Value --------------------------------- ------------------------------------------ April 30, 1998 (Unaudited) WM Griffin Pro Forma WM Griffin Pro Forma Income Fund Bond Fund Combined Income Fund Bond Fund Combined 1,400,000 - 1,400,000 Riviera Holdings Corporation, DFSD, First Mortgage, - - - - - - 11.000% due 12/31/2002............................. 1,470,000 - 1,470,000 - - - Royal Caribbean Cruises - - - - 426,000 426,000 7.13%, 09/18/02....................................... - 434,520 434,520 - 111,000 111,000 7.25%, 08/15/06....................................... - 115,301 115,301 - 850,000 850,000 7.50%, 10/15/27....................................... - 864,875 864,875 - - - Sears Roebuck & Company - - - - 100,000 100,000 9.35%, 07/06/98....................................... - 100,505 100,505 1,500,000 - 1,500,000 SoftKey International, Conv., Sr. Note, - - - - - - 5.500% due 11/01/2000.............................. 1,438,125 - 1,438,125 - 100,000 100,000 Sony Corporation, 6.13%, 03/04/03..................... - 99,875 99,875 4,675,000 - 4,675,000 Spectrum Holobyt, Microprose Inc., Conv. Sub. Note, - - - - - - 6.500% due 09/15/2002.............................. 3,132,250 - 3,132,250 2,290,000 - 2,290,000 Ssangyong Oil Refining, Conv. Deb., - - - - - - 3.750% due 12/31/2008.............................. 1,912,150 - 1,912,150 - 775,000 775,000 Staples Incorporated, 7.13%, 08/15/07................. - 795,344 795,344 1,500,000 - 1,500,000 Tatneft Finance, - - - - - - 9.000% due 10/29/2002.............................. 1,357,500 - 1,357,500 7,800,000 - 7,800,000 Textron Inc., Deb., - - - - - - 8.750% due 07/01/2022.............................. 8,578,580 - 8,578,580 8,260,000 - 8,260,000 Time Warner Inc., Deb., - - - - - - 9.150% due 02/01/2023.............................. 10,162,920 - 10,162,920 - - - United Air Lines Inc.: - - - 5,000,000 - 5,000,000 Equipment Trust certificates, - - - - - - 10.850% due 07/05/2014............................ 6,467,815 - 6,467,815 - - - Pass-through certificates: - - - 3,000,000 - 3,000,000 9.080% due 10/26/2015.............................. 3,563,730 - 3,563,730 5,500,000 - 5,500,000 9.560% due 10/19/2018.............................. 6,801,630 - 6,801,630 - 1,012,000 1,012,000 USG Corporation, 9.25%, 09/15/01...................... - 1,098,020 1,098,020 - 495,000 495,000 U.S.A Waste Services, 7.13%, 10/01/07................ - 513,563 513,563 300,000 - 300,000 US West Capital Funding, Inc., - - - - - - 6.950% due 01/15/2037.............................. 315,901 - 315,901 1,200,000 - 1,200,000 Veterinary Centers of America, Conv. Sub. Deb , - - - - - - 5.250% due 05/01/2006.............................. 1,032,000 - 1,032,000 1,000,000 - 1,000,000 V.F. Corporation, Note, - - - - - - 9.500% due 05/01/2001.............................. 1,094,796 - 1,094,796 - 350,000 350,000 Wal-Mart Stores, 8.63%, 04/01/01...................... - 374,500 374,500 - - - WMX Technology Incorporated - - - - 1,145,000 1,145,000 7.70%, 10/01/02....................................... - 1,195,094 1,195,094 - 200,000 200,000 8.25%, 11/15/99....................................... - 205,000 205,000 --------------------------------------- 149,359,822 20,676,450 170,036,272 Transportation - 200,000 200,000 Southwest Airlines, 7.88%, 09/01/07................... - 219,250 219,250 - - Union Pacific Corporation - - - - 250,000 250,000 7.38%, 05/15/01....................................... - 258,125 258,125 - 200,000 200,000 9.63%, 12/15/02....................................... - 224,250 224,250 --------------------------------------- - 701,625 701,625 Utilities - 305,000 305,000 Florida Power & Light, 5.38%, 04/01/00................ - 301,950 301,950 - 125,000 125,000 Virginia Electric & Power, 8.88%, 06/01/99............ - 128,750 128,750 --------------------------------------- - 430,700 430,700 Yankee (U S Dollar Denominated) 1,000,000 - 1,000,000 Alberta Province, - - - 9.250% due 04/01/2000.............................. 1,061,880 - 1,061,880 8,500,000 - 8,500,000 Petro-Canada, Deb., - - - - - - 9.250% due 10/15/2021.............................. 10,778,340 - 10,778,340 500,000 - 500,000 Peregrine Investment Finance, - - - - - - 4.500% due 12/01/2000.............................. 52,500 - 52,500 1,650,000 - 1,650,000 Republic of Korea, Unsub., - - - - - - 8.875% due 04/15/2008.............................. 1,622,722 - 1,622,722 1,750,000 - 1,750,000 SB Treasury Company, - - - - - - 9.400% due 12/29/2049.............................. 1,779,713 - 1,779,713 1,500,000 - 1,500,000 Tokai PFD Capital company, - - - - - - 9.980% due 12/29/2049.............................. 1,481,865 - 1,481,865 500,000 - 500,000 Total Access Communications, - - - - - - 2.000% due 05/31/2006.............................. 412,500 - 412,500 5,750,000 - 5,750,000 Trans-Canada Pipeline Corporation, Deb., - - - - - - 8.500% due 03/20/2023.............................. 6,331,095 - 6,331,095 --------------------------------------- 23,520,615 - 23,520,615 Total Corporate Bonds and Notes 223,659,951 55,487,172 279,147,123 MORTGAGE-BACKED SECURITIES - 9 2% Government Agency Federal Home Loan Mortgage Corporation (FHLMC) 386,241 - 386,241 8.750% due 06/15/2005.............................. 391,457 - 391,457 1,000,000 - 1,000,000 7.500% due 07/15/2020.............................. 1,013,998 - 1,013,998 - - - GOLD: - - - 1,438,160 - 1,438,160 #C00362, - - - - - - 9.000% due 06/01/2024............................. 1,519,956 - 1,519,956 727,003 - 727,003 #C80253, - - - - - - 9.000% due 01/01/2025............................. 768,351 - 768,351 2,886,671 - 2,886,671 Weyerhauser 1982-C FHA Putable, - - - 7.430% due 06/01/2022.............................. 2,946,881 - 2,946,881 --------------------------------------- 6,640,643 - 6,640,643 WM INCOME FUND AND GRIFFIN BOND FUND PRO FORMA COMBINED PORTFOLIO INVESTMENTS PRINCIPAL AMOUNT APRIL 30, 1998 (Unaudited) MARKET VALUE --------------------------------------- ----------------------------------------- WM GRIFFIN PRO FORMA WM GRIFFIN PRO FORMA INCOME FUND BOND FUND COMBINED INCOME FUND BOND FUND COMBINED CORPORATE BONDS AND NOTES - 80.5% FEDERAL NATIONAL MORTGAGE ASSOCIATION - 350,382 350,382 6.00%, 04/01/04................................ - 347,755 347,755 - 1,057,000 1,057,000 6.50%, 04/01/13 (B)............................ - 1,060,626 1,060,626 - 150,000 150,000 6.86%, 06/17/11................................ - 153,281 153,281 - 74,904 74,904 7.00%, 07/01/22................................ - 75,723 75,723 - 212,595 212,595 7.00%, 07/01/23................................ - 214,919 214,919 - 93,853 93,853 7.00%, 08/01/26................................ - 94,879 94,879 - 159,877 159,877 7.00%, 09/01/26................................ - 161,625 161,625 - 23,768 23,768 7.00%, 11/01/26................................ - 24,028 24,028 - 78,437 78,437 7.50%, 09/01/11................................ - 80,667 80,667 - 320,499 320,499 7.54%, 06/01/16................................ - 339,128 339,128 - 1,609,000 1,609,000 7.00%, 05/01/13................................ - 1,635,645 1,635,645 -------------------------------------- - 4,188,276 4,188,276 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) 2,382,790 - 2,382,790 6.000% due 02/15/2024.......................... 2,309,066 - 2,309,066 1,961,789 - 1,961,789 6.500% due 03/15/2024.......................... 1,946,467 - 1,946,467 1,723,504 - 1,723,504 6.500% due 07/15/2024.......................... 1,717,401 - 1,717,401 718,135 - 718,135 6.500% due 08/15/2023.......................... 712,527 - 712,527 1,972,532 - 1,972,532 6.500% due 12/15/2023.......................... 1,957,126 - 1,957,126 - 310,659 310,659 7.00%, 11/15/23................................ - 314,347 314,347 1,399,007 - 1,399,007 7.000% due 07/15/2023.......................... 1,417,376 - 1,417,376 - 1,607,000 1,607,000 7.50%, 05/01/28................................ - 1,648,670 1,648,670 - 548,024 548,024 7.50%, 12/15/23................................ - 565,151 565,151 - 233,804 233,804 8.00%, 06/15/27................................ - 242,644 242,644 - 313,051 313,051 8.00%, 07/15/17................................ - 326,062 326,062 - 1,877,536 1,877,536 8.00%, 08/15/27................................ - 1,948,526 1,948,526 181,726 - 181,726 9.000% due 12/01/2004.......................... 189,960 - 189,960 -------------------------------------- 10,249,923 5,045,400 15,295,323 Total Government Agency............................ 16,890,566 9,233,676 26,124,242 Collateralized Mortgage Obligations (CMO) - 519,000 519,000 Capital Equipment Receivable Trust, 6 28%, 06/15/00..................................... - 522,062 522,062 - 504,000 504,000 CIT Revenue Trust, 6.20%, 10/15/06............ - 505,562 505,562 1,750,000 - 1,750,000 Donaldson, Lufkin & Jenrette, Acceptance Corporation, 1993-MF17,...................... - - - - - - 7.350% due 12/18/2003...................... 1,789,979 - 1,789,979 1,403,751 - 1,403,751 Donaldson, Lufkin & Jenrette, Acceptance Corporation, 1995-Q10,....................... - - - - - - 8.3534% due 01/25/2026..................... 1,305,489 - 1,305,489 851,443 - 851,443 Resolution Trust Corporation-1991-M2 - A-2,... - - - - - - 7.5062% due 09/25/2020..................... 724,659 - 724,659 850,000 - 850,000 Ryland Mortgage Securities Corporation - 1992-12A,.................................... - - - - - - 6.500% due 09/25/2023...................... 837,305 - 837,305 -------------------------------------- Total Collateralized Mortgage Obligations..... 4,657,432 1,027,624 5,685,056 Total Mortgage-Backed Securities.............. 21,547,998 10,261,300 31,809,298 U.S. TREASURY OBLIGATIONS - 7.0% U.S. Treasury Bonds 2,500,000 - 2,500,000 6.250% due 08/15/2023......................... 2,572,657 - 2,572,657 5,000,000 - 5,000,000 6.125% due 11/15/2027......................... 5,121,880 - 5,121,880 - 4,936,000 4,936,000 7.25%, 08/15/22............................... - 5,684,150 5,684,150 -------------------------------------- 7,694,537 5,684,150 13,378,687 U.S. Treasury Notes - 3,636,000 3,636,000 5.88%, 11/15/99............................... - 3,651,453 3,651,453 500,000 - 500,000 6.375% due 03/31/2001......................... 509,844 - 509,844 - 419,000 419,000 6.38%, 08/15/02............................... - 417,609 417,609 - 1,514,000 1,514,000 6.50%, 10/15/06............................... - 1,587,051 1,587,051 - 3,738,000 3,738,000 6.75%, 05/31/99............................... - 3,784,650 3,784,650 1,000,000 - 1,000,000 9.000% due 05/15/1998......................... 1,001,876 - 1,001,876 -------------------------------------- 1,511,720 9,440,763 10,952,483 Total U.S. Treasury Obligations.................... 9,206,257 15,124,913 24,331,170 PREFERRED STOCK - 1.2% 2,000 - 2,000 California Federal Bank, Series B............. 217,813 - 217,813 15,100 - 15,100 First Industrial Realty Trust, Series A....... 396,375 - 396,375 28,000 - 28,000 Microsoft Corporation, Conv................... 2,607,500 - 2,607,500 15,000 - 15,000 Penncorp Financial Group...................... 903,750 - 903,750 -------------------------------------- Total Preferred Stock......................... 4,125,438 - 4,125,438 REPURCHASE AGREEMENT - 2.3% 1,438,000 - 1,438,000 Agreement with Goldman Sachs, 5.30% dated 4/30/98, to be repurchased at $1,438,212 on 5/1/98, collateralized by $1,398,886 U.S. Treasury Note, 6.50% due 8/15/05 (Market Value $1,479,800)..... 1,438,000 - 1,438,000 - 6,443,304 6,443,304 State Street Bank & Trust Co., Master Repurchase Agreement, 4.25%, Dated 4/30/98 due 5/1/98, Collateralized by U.S. Government Securities - 6,443,291 6,443,291 -------------------------------------- Total Repurchase Agreement 1,438,000 6,443,291 7,881,291 Total Investments - 100.2%, (Cost $) 259,977,644 87,316,676 347,294,320 Other Assets and Liabilities, Net - (0.2%) 2,546,980 (3,288,567) (741,587) TOTAL NET ASSETS - 100.0% 262,524,624 84,028,109 346,552,733 - -------------------------------------------------------------------------------- (A) U.S. dollar denominated securities issued by foreign corporations and/or governments (B) Settlement is on a delayed delivery or when issued basis with final maturity to be announced (TBA) in the future The total cost basis of such securities is $1,155,096. WM INCOME FUND & GRIFFIN BOND FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Income Fund and the Griffin Bond Fund at April 30, 1998 and the pro forma combined results of operations for the year ended December 31, 1997 and the four month period ended April 30, 1998 as though the reorganization had occurred on January 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statements of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Bond Fund in exchange for shares of WM Income Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Bond Fund shares into WM shares based upon the net asset value of the WM Income Fund shares at April 30, 1998. WM GROWTH & INCOME FUND AND GRIFFIN GROWTH & INCOME FUND PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 1998 (Unaudited) GRIFFIN WM GROWTH & GROWTH & PROFORMA PRO FORMA INCOME FUND INCOME FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $358,552,211 $851,615,589 $1,210,167,800 - ---------------------------------------------------------------- Total Investments 358,552,211 851,615,589 - 1,210,167,800 Cash/Cash Equivalents 628,677 97,112 725,789 Receivable for dollar roll fee income - - Dividends and/or interest receivable 329,687 575,668 905,355 Receivable for Fund shares Sold 273,792 1,803,374 2,077,166 Receivable for investment securities sold 5,135,137 4,056,290 9,191,427 Unamortized organization costs - - Prepaid expenses and other assets 40,894 55,086 95,980 ---------------------------------------------------------------- Total Assets 364,960,398 858,203,119 - 1,223,163,517 LIABILITIES: - Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 1,427,330 1,427,330 Payable for investment securities purchased 8,090,892 8,118,105 16,208,997 Investment advisory fee payable 507,092 507,092 Administration fee payable - - Shareholder servicing and distribution fees payable 147,766 147,766 Dividends payable - 14,192 14,192 Accrued legal and audit fees 15,000 15,000 Accrued Trustees' fees and expenses 4,556 4,556 Accrued registration and filing fees payable 67,000 67,000 Due to Custodian - - Net Unrealized Depreciation of Fwd For Curr Cts - - Accrued Expenses and other payables 360,179 425,671 785,850 ---------------------------------------------------------------- Total Liabilities 8,451,071 10,726,712 - 19,177,783 TOTAL NET ASSETS $356,509,327 $847,476,407 - $1,203,985,734 ================================================================ NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ 113,589 $ (139,329) $ (25,740) Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions 23,572,875 14,101,909 37,674,784 Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 41,224,259 185,565,186 226,789,445 Paid-in capital 291,598,604 647,948,641 939,547,245 ---------------------------------------------------------------- TOTAL NET ASSETS $356,509,327 $847,476,407 $ - $1,203,985,734 ================================================================ NET ASSETS: Class A Shares $302,118,157 $515,796,138 $ 817,914,295 ================================================================ Class B Shares $ 54,391,170 $118,479,313 $ 172,870,483 ================================================================ Class S Shares $ - $ 15,138,449 $ 15,138,449 ================================================================ Class I Shares $ - $198,062,507 $ 198,062,507 ================================================================ SHARES OUTSTANDING: Class A Shares 14,866,688 23,965,982 (829,052) (A) 38,003,618 ================================================================ Class B Shares 2,686,109 5,552,497 (137,083) (A) 8,101,523 ================================================================ Class S Shares 708,785 - 708,785 ================================================================ Class I Shares 9,182,243 - 9,182,243 ================================================================ NET ASSET VALUE PER SHARE: Class A Shares $ 20.32 $ 21.52 $ 21.52 ================================================================ Class B Shares $ 20.25 $ 21.34 $ 21.34 ================================================================ Class S Shares $ 21.36 $ 21.36 ================================================================ Class I Shares $ 21.57 $ 21.57 ================================================================ See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Growth & Income Fund shares into WM Growth & Income Fund shares based upon the net asset value of WM Growth & Income Fund shares at April 30, 1998. WM Growth & Income Fund and Griffin Growth & Income Fund Pro Forma Combined Statement of Operations For the Period Ended 4/30/98 (Unaudited) GRIFFIN WM GROWTH & GROWTH & PRO FORMA PRO FORMA INCOME FUND INCOME FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income 2,500,784 $ 3,125,551 5,626,335 Foreign Withholding Tax on Dividend Income - - Interest Income 286,452 $ 61,677 348,129 Fee Income - - ----------------------------------------------------------- Total Investment Income 2,787,236 3,187,228 - 5,974,464 ----------------------------------------------------------- EXPENSES: Investment Advisory Fees 887,355 1,454,583 (266,264) (A) 2,075,674 Administration Fees 295,785 - (295,785) (B) - Custodian Fees 65,218 81,674 146,892 Legal and Audit Fees 31,684 15,700 47,384 Trustees' Fees and Expenses 3,919 11,600 15,519 Amortization of Organization Costs 8,390 - 8,390 Registration and Filing Fees 20,722 67,000 87,722 Other 54,117 371,262 425,379 ---------------------------------------------------------- Subtotal 1,367,190 2,001,819 (562,049) 2,806,960 Shareholder Servicing and Distribution Fees Class A Shares 314,902 241,491 90,814 (C) 647,207 Class B Shares 219,316 192,380 25,783 (D) 437,479 Class S Shares 19,027 19,027 Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (507,185) - 353,528 (E) (153,657) ----------------------------------------------------------- Subtotal 1,394,223 2,454,717 (91,925) 3,757,016 Fees Reduced by Credits Allowed by the Custodian (5,633) (5,633) ----------------------------------------------------------- Net Expenses 1,394,223 2,449,084 (91,925) 3,751,383 ----------------------------------------------------------- NET INVESTMENT INCOME/(LOSS) 1,393,013 738,144 91,925 2,223,082 ----------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains/(Loss) from: Security Transactions 23,225,718 29,807,768 53,033,486 Forward Foreign Currency Contracts and Foreign Currency Transactions - - Futures Contracts - - Net Unrealized Appreciation/(Depreciation) of: Securities 23,374,245 99,087,021 122,461,266 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures - Contracts and Other Assets and Liabilities - - ----------------------------------------------------------- Net Realized and Unrealized Gain/(Loss) on Investment 46,599,963 128,894,789 - 175,494,752 ----------------------------------------------------------- NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS $47,992,976 $129,632,933 $ 91,925 $177,717,834 =========================================================== (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.25 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.35 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor adjusted to .04% of average daily net assets. WM Growth & Income Fund and Griffin Growth & Income Fund Pro Forma Combined Statement of Operations For the Year Ended 10/31/97 (Unaudited) GRIFFIN WM GROWTH & GROWTH & PRO FORMA PRO FORMA INCOME FUND INCOME FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income 3,216,803 $4,332,639 7,549,442 Foreign Withholding Tax on Dividend Income - - Interest Income 414,585 $ 188,590 603,175 Fee Income - - ------------------------------------------------------------ Total Investment Income 3,631,388 4,521,229 - 8,152,617 ------------------------------------------------------------ EXPENSES: Investment Advisory Fees 1,180,997 1,630,777 (185,014) (A) 2,626,760 Administration Fees 393,666 - (393,666) (B) - Custodian Fees 115,440 55,954 171,394 Legal and Audit Fees 49,825 15,587 65,412 Trustees' Fees and Expenses 8,128 8,745 16,873 Amortization of Organization Costs 17,201 - 17,201 Registration and Filing Fees 33,872 80,933 114,805 Other 105,067 128,843 233,910 ------------------------------------------------------------ Subtotal 1,904,196 1,920,839 (578,680) 3,246,355 Shareholder Servicing and Distribution Fees - Class A Shares 423,312 752,248 181,628 (C) 1,357,188 Class B Shares 275,080 422,208 51,565 (D) 748,853 Class S Shares - - Interest Expense - - Fees Waived and/or Expenses Absorbed by Investment - Advisor (971,544) - 786,403 (E) (185,141) ------------------------------------------------------------ Subtotal 1,631,044 3,095,295 440,915 5,167,254 Fees Reduced by Credits Allowed by the Custodian (10,113) (10,113) ------------------------------------------------------------ Net Expenses 1,631,044 3,085,182 440,915 5,157,141 ------------------------------------------------------------ NET INVESTMENT INCOME/(LOSS) 2,000,344 1,436,047 (440,915) 2,995,476 ------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized Gains/(Loss) from: Security Transactions 33,527,632 26,629,017 60,156,649 Forward Foreign Currency Contracts and - Foreign Currency Transactions - - Futures Contracts - - Net Unrealized Appreciation/(Depreciation) of: - Securities 8,827,962 37,406,069 46,234,031 Forward Foreign Currency Contracts - - Foreign Currency, Written Options, Futures - Contracts and Other Assets and - - Liabilities ------------------------------------------------------------ Net Realized and Unrealized Gain/(Loss) on Investments 42,355,594 64,035,086 - 106,390,680 ------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $44,355,938 $65,471,133 $(440,915) $109,386,156 ============================================================ (A) Decrease in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on .625% of average daily net assets up to $250,000,000 and .50% of average daily net assets over that amount. (B) Elimination of the Griffin administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.25 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.35 per shareholder account. (E) Fees waived and/or expense absorbed by investment advisor adjusted to .04% of average daily net assets. WM Growth & Income Fund and Griffin Growth & Income Fund PRINCIPAL AMOUNT Pro Forma Combined Portfolio of Investments MARKET VALUE ---------------------------------------------- ----------------------------------------- WM GRIFFIN APRIL 30, 1998 (Unaudited) WM GRIFFIN GROWTH & GROWTH & PRO FORMA GROWTH & GROWTH & PRO FORMA INCOME FUND INCOME FUND COMBINED INCOME FUND INCOME FUND COMBINED COMMON STOCK - 94 3% AEROSPACE / DEFENSE 50,000 - 50,000 Boeing Company............................ 2,503,125 -- 2,503,125 71,719 - 71,719 Lockheed Martin Corporation............... 7,987,704 -- 7,987,704 127,900 - 127,900 Northrop Grumman Corporation.............. 13,517,431 -- 13,517,431 - 30,900 30,900 Raytheon Company, Series A................ -- 1,705,294 1,705,294 ----------------------------------------- 24,008,260 1,705,294 25,713,554 BANKS / SAVING & LOANS - 50,100 50,100 BankAmerica Corp.......................... -- 4,258,500 4,258,500 62,800 - 62,800 Bank of New York Company Inc.............. 3,709,125 -- 3,709,125 - 27,600 27,600 Chase Manhattan........................... -- 3,824,325 3,824,325 57,400 - 57,400 Citicorp.................................. 8,638,700 -- 8,638,700 240,000 - 240,000 First Union Corporation................... 14,490,000 -- 14,490,000 92,500 - 92,500 KeyCorp................................... 3,671,094 -- 3,671,094 74,000 - 74,000 Mellon Bank Corporation................... 5,328,000 -- 5,328,000 159,924 - 159,924 Norwest Corporation....................... 6,346,984 -- 6,346,984 240,000 - 240,000 Prime Bancshares Inc...................... 6,420,000 -- 6,420,000 15,025 - 15,025 Wells Fargo & Company..................... 5,536,713 -- 5,536,713 ---------------------------------------- BASIC INDUSTRIES 54,140,616 8,082,825 62,223,441 102,900 - 102,900 Albemarle Corporation..................... 2,559,638 -- 2,559,638 267,100 - 267,100 Allegheny Teledyne Inc.................... 6,777,650 -- 6,777,650 - 123,400 123,400 Bethlehem Steel Corp (A)................ -- 1,920,413 1,920,413 - 67,200 67,200 British Steel PLC......................... -- 1,827,000 1,827,000 - 128,000 128,000 Broken Hill Proprietary Company Limited ADR -- 2,528,000 2,528,000 94,165 - 94,165 Commscope Inc (A)........................ 1,530,186 -- 1,530,186 - 79,600 79,600 Crown Cork & Seal......................... -- 4,144,175 4,144,175 62,100 - 62,100 Du Pont (E I ) de Nemours & Company....... 4,521,656 -- 4,521,656 - 75,400 75,400 IMC Global Inc............................ -- 2,714,400 2,714,400 - 75,900 75,900 Inco Limited.............................. -- 1,332,994 1,332,994 - 111,500 111,500 Louisiana Pacific Corp.................... -- 2,439,063 2,439,063 - 31,100 31,100 Phelps Dodge.............................. -- 2,087,588 2,087,588 - 45,600 45,600 Reynolds Metals Co........................ -- 3,009,600 3,009,600 - 64,500 64,500 Union Carbide............................. -- 3,128,250 3,128,250 614,000 226,400 840,400 Waste Management Inc...................... 20,569,000 7,584,400 28,153,400 98,600 - 98,600 Weyerhaeuser Company...................... 5,681,825 - 5,681,828 ----------------------------------------- 41,639,955 32,715,883 74,355,838 BUSINESS SERVICES 200,733 - 200,733 ACNielson Corporation..................... 5,620,524 - 5,620,524 257,829 - 257,829 Cendant Corporation....................... 6,445,725 - 6,445,725 110,000 - 110,000 Cognizant Corporation..................... 5,658,125 - 5,658,125 ---------------------------------------- 17,724,374 - 17,724,374 CAPITAL GOODS - 87,600 87,600 Alcatel Alsthom ADR....................... - 3,175,500 3,175,500 135,700 - 135,700 Allied Signal Inc......................... 5,945,355 - 5,945,355 - 18,500 18,500 Case Corporation.......................... - 1,175,906 1,175,906 80,000 - 80,000 Cooper Industries Inc..................... 5,350,000 - 5,350,000 81,450 - 81,450 Crane Company............................. 4,383,028 - 4,383,028 297,848 - 297,848 Donaldson Company Inc..................... 7,557,893 - 7,557,893 153,000 - 153,000 International Game Technology............. 4,255,313 - 4,255,313 - 43,200 43,200 Litton Industries Inc (A)............... - 2,592,000 2,592,000 - 31,100 31,100 Lockheed Martin Corp...................... - 3,463,763 3,463,763 - 47,100 47,100 LucasVarity PLC........................... - 2,119,500 2,119,500 - 26,900 26,900 Northrop Grumman Corporation.............. - 2,842,994 2,842,994 180,001 - 180,001 Tyco International Limited................ 9,810,031 - 9,810,031 - 41,200 41,200 United Technologies....................... - 4,055,625 4,055,625 ----------------------------------------- 37,301,620 19,425,288 56,726,908 COMPUTER / SYSTEMS 235,800 - 235,800 Bay Networks Inc (A)..................... 5,526,563 - 5,526,563 120,800 - 120,800 Cabletron Systems, Inc (A)............... 1,600,600 - 1,600,600 97,250 - 97,250 Cisco Systems Inc (A)..................... 7,123,563 - 7,123,563 193,500 - 193,500 EMC Corporation (A)....................... 8,925,189 - 8,925,189 62,000 - 62,000 Hewlett-Packard Company................... 4,669,375 - 4,669,375 71,600 - 71,600 International Business Machines Corporation 8,296,650 - 8,296,650 ----------------------------------------- 36,141,940 - 36,141,940 COMPUTER SOFTWARE 124,700 - 124,700 Adobe Systems Inc (A)..................... 6,242,794 - 6,242,794 385,950 - 385,950 Barra Inc................................. 9,262,800 - 9,262,800 67,000 - 67,000 Computer Associates International Inc..... 3,923,687 - 3,923,687 259,000 - 259,000 First Data Corporation.................... 8,773,625 - 8,773,625 173,000 - 173,000 Microsoft Corporation..................... 15,591,624 - 15,591,624 260,000 - 260,000 Oracle Corporation(A)..................... 6,727,500 - 6,727,500 ----------------------------------------- 50,522,030 - 50,522,030 CONSUMER DURABLES 50,800 - 50,800 Goodyear Tire & Rubber Company............ 3,556,000 - 3,556,000 - 48,900 48,900 Hasbro Inc................................ - 1,800,134 1,800,134 - 82,900 82,900 Lear Corporation (A)..................... - 4,440,331 4,440,331 29,500 - 29,500 Miller Industries, Inc.................... 226,781 - 226,781 - 52,500 52,500 Philips Electronics N V ADR.............. - 4,725,000 4,725,000 161,900 - 161,900 Sony Corporation, ADR..................... 13,751,381 - 13,751,381 - 69,700 69,700 Whirlpool Corporation..................... - 5,018,400 5,018,400 252,400 - 252,400 Zurn Industries Inc....................... 10,884,750 - 10,884,750 ---------------------------------------- 28,418,912 15,983,865 44,402,777 WM GROWTH & INCOME FUND AND GRIFFIN GROWTH & INCOME FUND PRINCIPAL AMOUNT PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS MARKET VALUE ------------------------------------- -------------------------------------------- WM GRIFFIN APRIL 30, 1998 (Unaudited) WM GRIFFIN GROWTH & GROWTH & PRO FORMA GROWTH & GROWTH & PRO FORMA INCOME FUND INCOME FUND COMBINED INCOME FUND INCOME FUND COMBINED COMMON STOCK - 94.3% CONSUMER SERVICES - 117,566 117,566 ACNielsen Corporation (A)............... - 3,291,848 3,291,848 - 140,300 140,300 American Stores Company.................. - 3,367,200 3,367,200 - 132,700 132,700 Circuit City Stores Inc.................. - 5,390,938 5,390,938 - 69,500 69,500 Deluxe Corp.............................. - 2,328,250 2,328,250 - 75,400 75,400 Federated Department Stores (A)......... - 3,708,738 3,708,738 - 115,800 115,800 Limited.................................. - 3,886,538 3,886,538 - 74,800 74,800 McDonald's Corp.......................... - 4,628,250 4,628,250 - 23,053 23,053 Reuters Holdings PLC ADR................. - 1,494,123 1,494,123 - 123,800 123,800 Toys R Us Holdings (A).................. - 3,412,238 3,412,238 - 166,000 166,000 Tricon Global Restaurants (A)........... - 5,270,500 5,270,500 - 71,900 71,900 Viacom Inc - Class B (A)................ - 4,170,200 4,170,200 - 152,500 152,500 Woolworth (A)........................... - 3,507,500 3,507,500 ------------------------------------------ - 44,456,323 44,456,323 CONSUMER STAPLES 39,150 - 39,150 Alberto Culver Company, Class A.......... 1,047,263 - 1,047,263 157,800 - 157,800 Anheuser-Busch Companies Inc............. 7,229,213 - 7,229,213 87,300 - 87,300 Campbell Soup Company.................... 4,479,581 - 4,479,581 34,700 - 34,700 General Mills Inc........................ 2,344,419 - 2,344,419 121,900 - 121,900 Kimberly Clark Corporation............... 6,186,425 - 6,186,425 436,600 - 436,600 Kimberly Clark De Mexico, ADR............10,715,608 - 10,715,608 230,000 - 230,000 Pepsico Inc.............................. 9,128,125 - 9,128,125 170,000 - 170,000 Philip Morris Companies Inc.............. 6,343,125 - 6,343,125 90,000 - 90,000 Procter & Gamble Company................. 7,396,875 - 7,396,875 88,400 - 88,400 Ralston Purina Company................... 9,370,400 - 9,370,400 97,000 - 97,000 Sara Lee Corporation..................... 5,777,563 - 5,777,563 117,200 - 117,200 Unilever NV.............................. 8,746,050 - 8,746,050 ------------------------------------------ 78,764,647 - 78,764,647 CONSUMER/STAPLES - 171,780 171,780 Archer Daniels Midland................... - 3,693,270 3,693,270 - 132,200 132,200 Harcourt General......................... - 6,899,188 6,899,188 - 67,600 67,600 Kimberly-Clark Corp...................... - 3,430,700 3,430,700 - 69,900 69,900 Loews Corp............................... - 6,994,369 6,994,369 - 177,600 177,600 Philip Morris Companies Inc.............. - 6,626,700 6,626,700 - 136,000 136,000 RJR Nabisco Holdings Corp................ - 3,782,500 3,782,500 ------------------------------------------ - 31,426,727 31,426,727 ELECTRICAL EQUIPMENT 116,850 - 116,850 Emerson Electric Company................. 7,434,581 - 7,434,581 106,000 - 106,000 General Electric Company................. 9,023,250 - 9,023,250 ------------------------------------------ 16,457,831 - 16,457,831 ELECTRONICS / SEMICONDUCTORS 337,425 - 337,425 General Semiconductor, Inc............... 4,618,505 - 4,618,505 180,800 - 180,800 Intel Corporation........................14,610,900 - 14,610,900 ------------------------------------------ 19,229,405 - 19,229,405 ENERGY - 18,000 18,000 British Petroleum ADR.................... - 1,701,000 1,701,000 - 77,608 77,608 Burlington Resources..................... - 3,647,200 3,647,200 - 58,900 58,900 ELF Aquitaine ADR........................ - 3,824,819 3,824,819 - 87,800 87,800 Mobil Corp............................... - 6,936,200 6,936,200 - 66,600 66,600 Oryx Energy (A)......................... - 1,739,925 1,739,925 - 103,800 103,800 Phillips Petroleum....................... - 5,144,588 5,144,588 - 130,900 130,900 Tosco Corp............................... - 4,663,313 4,663,313 - 115,300 115,300 Unocal Corp.............................. - 4,720,094 4,720,094 ------------------------------------------ - 32,377,139 32,377,139 FINANCIAL SERVICES - 42,000 42,000 Allmerica Financial Corp................. - 2,630,250 2,630,250 63,900 - 63,900 AMBAC Financial Group Inc................ 3,622,331 - 3,622,331 24,300 - 24,300 Capital One Financial Corporation........ 2,334,319 - 2,334,319 - 24,200 24,200 CIGNA Corp............................... - 5,007,888 5,007,888 - 49,100 49,100 Equitable Companies...................... - 3,013,513 3,013,513 - 86,500 86,500 Everest Reinsurance Hold................. - 3,568,125 3,568,125 208,000 - 208,000 Federal Home Loan Mortgage Corporation... 9,633,000 - 9,633,000 144,400 - 144,400 Federal National Mortgage Association.... 8,645,950 - 8,645,950 - 87,070 87,070 First Union Corporation.................. - 5,256,851 5,256,851 - 14,100 14,100 General RE Corporation................... - 3,152,231 3,152,231 267,850 - 267,850 Green Tree Financial Corporation.........10,914,888 - 10,914,888 68,650 - 68,650 Heller Financial Inc..................... 1,853,550 - 1,853,550 - 16,100 16,100 ITT Hartford Group....................... - 1,783,075 1,783,075 227,950 - 227,950 Liberty Financial Companies.............. 9,132,247 - 9,132,247 69,600 - 69,600 Marsh and McLennan Companies, Inc........ 6,342,300 - 6,342,300 - 89,112 89,112 NationsBank Corp......................... - 6,750,234 6,750,234 90,000 - 90,000 Providian Financial Corporation.......... 5,416,875 - 5,416,875 - 17,300 17,300 Republic New York Corp................... - 2,313,875 2,313,875 - 70,800 70,800 SAFECO Corp.............................. - 3,535,575 3,535,575 - 74,150 74,150 SLM Holding Corp......................... - 3,165,278 3,165,278 137,499 - 137,499 Travelers Group Inc...................... 8,413,220 - 8,413,220 - 48,330 48,330 Washington Mutual Inc.................... - 3,386,121 3,386,121 ------------------------------------------ 66,308,680 43,563,016 109,871,696 WM Growth & Income Fund and Griffin Growth & Income Fund Principal Amount Pro Forma Combined Portfolio of Investments Market Value --------------------------------------- ------------------------------------------ April 30, 1998 (Unaudited) WM Griffin WM Griffin Growth & Growth & Pro Forma Growth & Growth & Pro Forma Income Fund Income Fund Combined Income Fund Income Fund Combined 66,308,680 43,563,016 109,871,696 Health Care 150,100 - 150,100 Abbott Laboratories........................ 10,976,063 - 10,976,063 - 36,200 36,200 Aetna Inc.................................. - 2,925,413 2,925,413 100,000 - 100,000 ALZA Corporation (A)....................... 4,793,750 - 4,793,750 40,000 - 40,000 American Home Products Corporation......... 3,725,000 - 3,725,000 - 60,300 60,300 Amgen (A)................................. - 3,595,388 3,595,388 95,600 - 95,600 Bristol-Myers Squibb Company............... 10,121,650 - 10,121,650 183,750 - 183,750 Columbia HCA Healthcare Corporation........ 6,052,266 - 6,052,266 - 238,300 238,300 Columbia/HCA Healthcare.................... - 7,849,006 7,849,006 - 127,550 127,550 Foundation Health Systems (A)............. - 3,690,978 3,690,978 341,500 81,100 422,600 Humana Inc. (A)............................ 9,220,500 2,189,700 11,410,200 146,550 - 146,550 Johnson & Johnson.......................... 10,460,006 - 10,460,006 97,400 - 97,400 Manor Care Inc............................. 3,415,087 - 3,415,087 275,000 - 275,000 Medpartners Inc............................ 2,818,750 - 2,818,750 117,000 - 117,000 Merck & Company, Inc....................... 14,098,500 - 14,098,500 123,033 - 123,033 Pacificare Health Systems-A................ 8,643,068 - 8,643,068 20,000 - 20,000 Pacificare Health Systems-B................ 1,432,500 - 1,432,500 80,000 - 80,000 Perkin Elmer Corporation................... 5,470,000 - 5,470,000 - 49,000 49,000 Pharmacia & Upjohn Inc..................... - 2,061,063 2,061,063 - 71,300 71,300 Tenet Healthcare Inc. (A)................. - 2,669,294 2,669,294 35,000 - 35,000 United Healthcare Corporation.............. 2,458,750 - 2,458,750 60,000 - 60,000 Warner Lambert Company..................... 11,351,250 - 11,351,250 Insurance 77,598 - 77,598 American International Group, Inc (A)..... 10,208,987 - 10,208,987 161,400 - 161,400 Penncorp Financial Group Inc............... 4,196,400 - 4,196,400 ----------------------------------------- 14,405,387 - 14,405,387 Lodging 523,515 - 523,515 Choice Hotels International Inc............ 8,965,194 - 8,965,194 374,505 - 374,505 Sunburst Hospitality Corporation........... 3,019,447 - 3,019,447 ----------------------------------------- 11,984,641 - 11,984,641 Media 194,800 72,200 267,000 Dun & Bradstreet Corporation............... 6,915,400 2,563,100 9,478,500 119,600 - 119,600 Lee Enterprises Inc........................ 3,744,975 3,744,975 205,000 - 205,000 Seagram Company Limited.................... 8,750,938 - 8,750,938 765,601 - 765,601 Tele-Communications TCI Ventures Group..... 12,488,866 - 12,488,866 191,075 - 191,075 Viacom Inc., Class A....................... 11,034,581 - 11,034,581 ----------------------------------------- 42,934,760 2,563,100 45,497,860 Real Estate Investment Trusts (REITS) 117,500 - 117,500 CCA Prison Realty Trust.................... 4,163,906 - 4,163,906 90,000 - 90,000 Corrections Corporation of American........ 2,497,500 - 2,497,500 83,199 - 83,199 Equity Office Properties Trust (A)......... 2,365,974 - 2,365,974 136,600 - 136,600 Health Care Property Investors Inc......... 4,610,250 - 4,610,250 152,900 - 152,900 Starwood Hotel & Resort.................... 7,673,669 - 7,673,669 ----------------------------------------- 21,311,299 - 21,311,299 Retail Sales 84,600 - 84,600 Federated Department Stores, Inc. (A)...... 4,177,125 - 4,177,125 311,500 - 311,500 Intimate Brands Inc........................ 9,033,500 - 9,033,500 51,000 - 51,000 Wal-Mart Stores Inc........................ 2,578,688 - 2,578,688 ----------------------------------------- 15,789,313 - 15,789,313 Technology - 92,000 92,000 Adaptec Incorporated (A).................. - 2,179,250 2,179,250 - 110,700 110,700 Applied Materials Inc. (A)................ - 3,999,038 3,999,038 - 138,000 138,000 Compaq Computer Corp....................... - 3,872,625 3,872,625 - 88,100 88,100 DSC Communications (A).................... - 1,585,800 1,585,800 - 118,800 118,800 First Data................................. - 4,024,350 4,024,350 - 70,800 70,800 Intel Corporation.......................... - 5,721,525 5,721,525 - 57,100 57,100 International Business Machines Corporation - 6,616,463 6,616,463 - 141,100 141,100 Lam Research Corp. (A).................... - 4,374,100 4,374,100 - 168,300 168,300 National Semiconductor (A)................ - 3,702,600 3,702,600 - 84,900 84,900 Sun Microsystems Inc....................... - 3,496,819 3,496,819 - 92,200 92,200 Teradyne (A).............................. - 3,365,300 3,365,300 ----------------------------------------- - 42,937,870 42,937,870 Transportation - 105,200 105,200 Canadian Pacific Limited ORD PAR........... - 3,096,825 3,096,825 219,200 - 219,200 Expeditors International of Washington Inc. 9,316,000 - 9,316,000 - 122,800 122,800 Republic Industries Inc.................... - 3,415,375 3,415,375 - 130,300 130,300 Union Pacific.............................. - 7,133,925 7,133,925 130,100 - 130,100 Union Pacific Corporation.................. 7,122,975 - 7,122,975 ----------------------------------------- 16,438,975 13,646,125 30,085,100 Utilities - 51,000 51,000 A T & T Corporation........................ - 3,063,188 3,063,188 - 32,172 32,172 Bell Atlantic.............................. - 3,010,093 3,010,093 49,472 - 49,472 British Petroleum ADR...................... 4,675,058 - 4,675,058 - 64,600 64,600 CMS Energy Corp............................ - 2,822,213 2,822,213 120,900 - 120,900 Comcast Corporation-Special Class A........ 4,329,731 - 4,329,731 - 35,900 35,900 Duke Power................................. - 2,077,713 2,077,713 - 82,300 82,300 Edison International....................... - 2,453,569 2,453,569 222,900 - 222,900 Enron Corporation.......................... 10,963,894 - 10,963,894 143,660 - 143,660 Exxon Corporation.......................... 10,478,201 - 10,478,201 - 55,300 55,300 GTE Corporation............................ - 3,231,594 3,231,594 - 86,100 86,100 Illinova Corp.............................. - 2,631,431 2,631,431 97,400 - 97,400 Mobil Corporation.......................... 7,694,600 - 7,694,600 103,800 - 103,800 Pennzoil Company........................... 6,649,687 - 6,649,687 - 60,400 60,400 Pinnacle West Capital Corp................. - 2,672,700 2,672,700 145,600 - 145,600 Royal Dutch Petroleum...................... 8,235,500 - 8,235,500 182,900 - 182,900 SBC Communications Inc..................... 7,578,919 - 7,578,919 - 89,000 89,000 Southern Company........................... - 2,358,500 2,358,500 249,600 - 249,600 Sprint Corporation......................... 17,050,800 - 17,050,800 333,700 - 333,700 Tosco Corporation.......................... 11,888,062 - 11,888,062 230,000 - 230,000 WorldCom Inc. (A).......................... 9,839,687 - 9,839,687 ----------------------------------------- 99,384,139 24,321,001 123,705,140 Total Common Stocks 797,943,924 338,185,298 1,136,129,222 WM GROWTH & INCOME FUND AND GRIFFIN GROWTH & INCOME FUND Principal Amount Pro Forma Combined Portfolio of Investments Market Value -------------------------------------- --------------------------------------- WM Griffin April 30, 1998 (Unaudited) WM Griffin Growth & Growth & Pro Forma Growth & Growth & Income Fund Income Fund Combined Income Fund Income Fund CONVERTIBLE NOTES - 0.5% 580,000 - 580,000 Alberto-Culver Corporation - - - 5.500% due 06/30/2005............................. 960,625 - 2,662,000 - 2,662,000 Berkshire Hathaway, Conv. Sr. Note, - - - - - 1.000% due 12/03/2001............................. 4,934,683 - 1,000 - 1,000 Lehman Brothers Holdings, - - - - - 5.000% due 02/26/2001............................. 69,000 - ------------- ------------ Total Convertible Notes 5,964,308 - PREFERRED STOCK - 3.5% 36,000 - 36,000 Cendant Corporation, Conv. Pfd., - - - 7.500% due 02/16/2001............................. 1,482,750 - 110,000 - 110,000 Loral Space & Communication, 3.000%.................. 9,267,500 - 220,500 - 220,500 Medpartners Inc -"TAPS".............................. 2,907,844 - - 109,500 109,500 News Corporation, Ltd. ADR........................... - 2,552,719 135,000 - 135,000 Nextlink Communications, Conv. Pfd., - - - - - 6.500% due 03/31/2010............................. 6,361,875 - 128,900 - 128,900 Pacificare Health Systems-Pfd........................ 3,560,863 - 158,100 - 158,100 Penncorp Financial Group, $3.375, Series............. 9,525,525 - 94,600 - 94,600 Sinclair Broadcast Group............................. 6,149,000 - ----------------------------- Total Preferred Stocks 39,255,357 2,552,719 REPURCHASE AGREEMENT - 2.2% 8,452,000 - 8,452,000 Agreement with Goldman Sachs, 5.30% dated 4/30/98, to be repurchased at $8,453,244 on 5/1/98, collateralized by $8,222,101 U.S. Treasury Note, 6.50% due 8/15/05 (value $8,697,682)............... 8,452,000 - - 17,814,208 17,814,208 Agreement withi State Street Bank & Trust Co. Master Repurchase Agreement, 4.25%, dated 4/30/98 due 5/1/98, Collateralized by U.S. Government Securities (delivery value $17,814,208)......................... - 17,814,208 ----------------------------- Total Repurchase Agreements 8,452,000 17,814,208 Total Investments - 100.5% (Cost $983,378,354) 851,615,589 358,552,225 Other Assets and Liabilities, Net - (0.5%) (4,139,182) (2,042,898) TOTAL NET ASSETS - 100.0% 847,476,407 356,509,327 PRO FORMA COMBINED CONVERTIBLE NOTES - 0.5% 580,000 - 580,000 Alberto-Culver Corporation - - - 5.500% due 06/30/2005............................. 960,625 2,662,000 - 2,662,000 Berkshire Hathaway, Conv. Sr. Note, - - - - 1.000% due 12/03/2001............................. 4,934,683 1,000 - 1,000 Lehman Brothers Holdings, - - - - 5.000% due 02/26/2001............................. 69,000 ------------- Total Convertible Notes 5,964,308 PREFERRED STOCK - 3.5% 36,000 - 36,000 Cendant Corporation, Conv. Pfd., - - - 7.500% due 02/16/2001............................. 1,482,750 110,000 - 110,000 Loral Space & Communication, 3.000%.................. 9,267,500 220,500 - 220,500 Medpartners Inc -"TAPS".............................. 2,907,844 - 109,500 109,500 News Corporation, Ltd. ADR........................... 2,552,719 135,000 - 135,000 Nextlink Communications, Conv. Pfd.,................. - - - - 6.500% due 03/31/2010 6,361,875 128,900 - 128,900 Pacificare Health Systems-Pfd. 3,560,863 158,100 - 158,100 Penncorp Financial Group, $3.375, Series 9,525,525 94,600 - 94,600 Sinclair Broadcast Group 6,149,000 -------------- Total Preferred Stocks 41,808,076 REPURCHASE AGREEMENT - 2.2% 8,452,000 - 8,452,000 Agreement with Goldman Sachs, 5.30% dated 4/30/98, to be repurchased at $8,453,244 on 5/1/98, collateralized by $8,222,101 U.S. Treasury Note, 6.50% due 8/15/05 (value $8,697,682) 8,452,000 - 17,814,208 17,814,208 Agreement withi State Street Bank & Trust Co. Master Repurchase Agreement, 4.25%, dated 4/30/98 due 5/1/98, Collateralized by U.S. Government Securities (delivery value $17,814,208) 17,814,208 -------------- Total Repurchase Agreements 26,266,208 TOTAL INVESTMENTS - 100.5% (COST $983,378,354) 1,210,167,800 OTHER ASSETS AND LIABILITIES, NET - (0.5%) (6,182,066) TOTAL NET ASSETS - 100.0% 1,203,985,734 - -------------------------------------------------------------------------------- (A) Non-Income Producing Security WM GROWTH & INCOME FUND AND GRIFFIN GROWTH & INCOME FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Growth & Income Fund and the Griffin Growth & Income Fund at April 30, 1998 and the pro forma combined results of operations for the year ended October 31, 1997 and the six month period ended April 30, 1998 as though the reorganization had occurred on November 1, 1996. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statement of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Growth & Income Fund in exchange for shares of WM Growth & Income Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Report. Historical cost amounts represent the combined cost basis of the securities. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Growth & Income Fund shares into WM shares based upon the net asset value of the WM Growth & Income Fund shares at April 30, 1998. WM GROWTH FUND AND GRIFFIN GROWTH FUND PRO FORMA STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 1998 (Unaudited) GRIFFIN WM PRO FORMA PRO FORMA GROWTH FUND GROWTH FUND ADJUSTMENTS COMBINED ASSETS: Investments at value $98,207,349 $279,047,749 $377,255,098 - -------------------------------------------------------------- Total Investments 98,207,349 279,047,749 - 377,255,098 Cash/Cash Equivalents 90,910 - 90,910 Receivable for dollar roll fee income - - Dividends and/or interest receivable 36,088 78,502 114,590 Receivable for Fund shares Sold 6,955 124,357 131,312 Receivable for investment securities sold 65,721 3,837,149 3,902,870 Unamortized organization costs - - Receivable from investment advisor - - Prepaid expenses and other assets 13,091 3,648 16,739 -------------------------------------------------------------- Total Assets 98,420,114 283,091,405 - 381,511,519 ============================================================== LIABILITIES: - Payable for dollar roll transactions - - Variation margin payable - - Reverse repurchase agreements - - Payable for Fund shares redeemed - 1,343,140 1,343,140 Payable for investment securities purchased 890,591 431,425 1,322,016 Investment advisory fee payable 264,023 264,023 Administration fee payable - - Shareholder servicing and distribution fees payable 9,924 9,924 Dividends payable - 204 204 Accrued legal and audit fees - - Accrued transfer agent fees - - Accrued Trustees' fees and expenses - - Accrued registration and filing fees payable - - Due to Custodian 1,225,485 1,225,485 Net unrealized depreciation of fwd for cur cts 37,644 37,644 Accrued Expenses and other payables 102,717 225,391 328,108 -------------------------------------------------------------- Total Liabilities 993,308 3,537,236 - 4,530,544 -------------------------------------------------------------- -------------------------------------------------------------- TOTAL NET ASSETS $97,426,806 $279,554,169 $ - $376,980,975 ============================================================== NET ASSETS: Undistributed net investment income/ (accumulated net investment loss/distributions in excess of net investment income) $ (437,403) $ (12,382) $ (449,785) Accumulated net realized gain/(loss) on investments sold, futures contracts, closed written options, forward foreign currency contracts and foreign currency transactions (3,841,529) 45,367,823 41,526,294 Net unrealized app./(dep.) of investments, foreign currency, written options, futures contracts, forward foreign currency contracts and other assets and liabilities 24,497,727 66,535,577 91,033,304 Paid-in capital 77,208,011 167,663,151 244,871,162 -------------------------------------------------------------- TOTAL NET ASSETS $97,426,806 $279,554,169 $ - $376,980,975 ============================================================== NET ASSETS: Class A Shares $90,836,380 $112,153,051 $202,989,431 ============================================================== Class B Shares $ 6,590,426 $ 38,389,530 $ 44,979,956 ============================================================== Class S Shares $ 13,282,870 $ 13,282,870 ============================================================== Class I Shares $115,728,718 $115,728,718 ============================================================== SHARES OUTSTANDING: Class A Shares 5,000,777 6,075,731 (79,846) (A) 10,996,662 ============================================================== Class B Shares 368,221 2,154,124 1,583 (A) 2,523,928 ============================================================== Class S Shares 745,165 - 745,165 ============================================================== Class I Shares 6,234,430 - 6,234,430 ============================================================== NET ASSET VALUE PER SHARE: Class A Shares $18.16 $18.46 $18.46 ============================================================== Class B Shares $17.90 $17.82 $17.82 ============================================================== Class S Shares $17.83 $17.83 ============================================================== Class I Shares $18.56 $18.56 ============================================================== See accompanying notes to pro forma financial statements - -------------------------------------------------------------------------------- (A) Shares outstanding have been adjusted to reflect the conversion of Griffin Growth Fund shares into WM Growth Fund shares based upon the net asset value of WM Growth Fund shares at June 30, 1998. WM Growth Fund and Griffin Growth Fund Pro Forma Combined Statement of Operations For the Year Ended June 30, 1998 (Unaudited) GRIFFIN WM PRO FORMA PRO FORMA GROWTH FUND GROWTH FUND ADJUSTMENTS COMBINED INVESTMENT INCOME: Dividend Income $ 322,886 $ 1,382,894 $ 1,705,780 Foreign withholding tax on dividend income (16,446) (16,446) Interest Income 59,579 774,473 834,052 Fee Income - - ------------------------------------------------------------------------ Total Investment Income 382,465 2,140,921 - 2,523,386 ------------------------------------------------------------------------ EXPENSES: Investment Advisory fee 434,066 2,739,222 586,044 (A) 3,759,332 Administration fee 144,689 723,887 (868,576) (B) - Custodian fee 94,870 64,008 158,878 Legal and Audit fees 37,738 34,992 72,730 Trustees' fees and expenses 7,943 18,682 26,625 Amortization of organization costs 5,103 9,110 14,213 Registration and filing fees 9,309 33,132 42,441 Other 43,457 257,676 301,133 ------------------------------------------------------------------------ Subtotal 777,175 3,880,709 (282,532) 4,375,352 Shareholder servicing and distribution fees Class A Shares 168,889 326,313 271,822 (C) 767,024 Class B Shares 47,886 350,784 84,990 (D) 483,660 Class S Shares 142,061 3,890 (E) 145,951 Interest expense - - Fees waived and/or expenses absorbed by - investment advisor (223,015) - (1,062,214) (F) (1,285,229) ------------------------------------------------------------------------ Subtotal 770,935 4,699,867 (984,044) 4,486,758 Fees reduced by credits allowed by the custodian (6,149) (6,149) ------------------------------------------------------------------------ Net expenses 770,935 4,693,718 (984,044) 4,480,609 ------------------------------------------------------------------------ NET INVESTMENT INCOME/(LOSS) (388,470) (2,552,797) 984,044 (1,957,223) ------------------------------------------------------------------------ NET REALIZED AND UNREALIZED GAIN/ (LOSS) ON INVESTMENTS Realized gain from security transactions Security transactions (2,148,446) 57,657,686 55,509,240 Forward foreign currency contracts and - foreign currency transactions 776,368 776,368 Futures contracts - Net unrealized appreciation/(depreciation) of: Securities 15,830,547 33,821,257 49,651,804 Forward foreign currency contracts (333,137) (333,137) Foreign currency, written options, futures contracts and other assets and liabilities 13,146 13,146 ------------------------------------------------------------------------ Net realized/unrealized gains/(losses) on invsts 13,682,101 91,935,320 - 105,617,421 ------------------------------------------------------------------------ NET INCREASE/(DECREASE) IN NET ASSETS - RESULTING FROM OPERATIONS $ 13,293,631 $ 89,382,523 984,044 $ 103,660,198 ======================================================================== (A) Increase in management fees for Griffin shareholders to reflect the new fee structure. Fees are based on 1.10% of average daily net assets up to $100,000,000 and 1.05% of average daily net assets up to $200,000,000 and 1.025% over that amount. (B) Elimination of the administration fees, now incorporated in the management fee structure. (C) Addition of shareholder servicing fee at a monthly rate of $1.25 per shareholder account. (D) Addition of shareholder servicing fee at a monthly rate of $1.35 per shareholder account. (E) Addition of shareholder servicing fee at a monthly rate of $1.35 per shareholder account. (F) Fees waived and/or expense absorbed by investment advisor adjusted to .36% of average daily net assets. WM GROWTH FUND AND GRIFFIN GROWTH FUND PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS JUNE 30, 1998 (Unaudited) SHARES MARKET VALUE - ---------------------------------- ------------------------------------------ WM GRIFFIN PRO FORMA WM GRIFFIN PRO FORMA GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED COMMON STOCK - 99.6% BANKS / SAVINGS & LOANS 12,690 - 12,690 Ambanc Holding Company, Inc............. 225,247 - 225,247 44,580 - 44,580 Bank of New York Company, Inc........... 2,705,449 - 2,705,449 62,035 - 62,035 BankAmerica Corporation................. 5,362,150 - 5,362,150 18,615 - 18,615 First Defiance Financial Corporation.... 260,610 - 260,610 11,050 - 11,050 Provident Financial Holdings, Inc. (A).. 229,287 - 229,287 28,245 - 28,245 Star Banc Corporation................... 1,804,149 - 1,804,149 66,255 - 66,255 U.S. Bancorp (A)........................ 2,848,965 - 2,848,965 - 6,000 6,000 Zions Bancorporation - 318,750 318,750 ---------------------------------------- 13,435,857 318,750 13,754,607 BUSINESS SERVICES - 8,500 8,500 AccuStaff Inc. (A)..................... - 265,625 265,625 - 11,600 11,600 Air Express International............... - 310,300 310,300 15,640 10,500 26,140 Apollo Group Incorporated (A).......... 517,098 347,156 864,254 - 14,600 14,600 Carnival Corp........................... - 578,525 578,525 - 5,100 5,100 Catalina Marketing Corp. (A)........... - 264,881 264,881 - 19,191 19,191 Cendant Corporation (A)................ - 400,612 400,612 48,940 7,300 56,240 Cognizant Corporation................... 3,089,338 459,900 3,549,238 - 15,025 15,025 Comair Holdings Inc..................... - 463,897 463,897 - 9,200 9,200 Equifax Inc............................. - 334,075 334,075 - 7,200 7,200 Equity Corporation International (A)... - 172,800 172,800 - 8,700 8,700 Interim Services Incorporated (A)...... - 279,488 279,488 - 6,500 6,500 Interpublic Group of Companies Inc...... - 394,469 394,469 - 9,800 9,800 Kansas City Southern Industries Inc..... - 486,325 486,325 58,030 - 58,030 Lamar Advertising Company (A)........... 2,081,826 - 2,081,826 - 11,300 11,300 LaSalle Partners Incorporated (A)...... - 502,850 502,850 - 5,900 5,900 Manpower Inc............................ - 169,256 169,256 - 18,200 18,200 Mutual Risk Management LTD.............. - 663,163 663,163 - 7,200 7,200 Omnicom Group Incorporated.............. - 359,100 359,100 93,309 - 93,309 Outdoor Systems, Inc. (A)............... 2,612,652 - 2,612,652 - 10,050 10,050 Paychex Inc............................. - 408,909 408,909 - 8,400 8,400 Primark Corporation (A)................ - 263,025 263,025 - 7,600 7,600 Quintiles Transnational Corporation (A). - 373,825 373,825 - 2,686 2,686 Reuters Holdings PLC ADR................ - 183,991 183,991 - 10,850 10,850 Robert Half International Inc (A)...... - 606,244 606,244 - 14,900 14,900 Romac International (A)................ - 452,588 452,588 36,605 - 36,605 Sapient Corporation (A)................. 1,930,914 - 1,930,914 - 14,200 14,200 Security Capital Group, Series B (A)... - 378,075 378,075 - 8,000 8,000 Service Corporation International....... - 343,000 343,000 35,600 - 35,600 Snyder Communications (A)............... 1,566,400 - 1,566,400 - 10,300 10,300 Superior Services (A).................. - 309,644 309,644 - 6,525 6,525 Sylvan Learning Systems (A)............ - 213,694 213,694 - 10,250 10,250 The Vincam Group (A)................... - 201,156 201,156 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 11,300 11,300 U.S.A. Waste Services (A).................... - 557,938 557,938 - 10,437 10,437 Werner Enterprise Inc. ...................... - 198,955 198,955 --------------------------------------- 11,798,228 10,943,466 22,741,694 X CAPITAL GOODS - 7,400 7,400 Agco Corp.................................... - 152,163 152,163 - 8,950 8,950 Cable Design Technologies (A)............... - 184,594 184,594 - 11,800 11,800 Danaher Corp................................. - 432,913 432,913 - 11,700 11,700 Donaldson Company, Inc....................... - 276,413 276,413 - 5,000 5,000 EVI Weatherford Corporation - 185,625 185,625 68,620 - 68,620 Federal-Mogul Corporation.................... 4,631,850 - 4,631,850 - 8,050 8,050 IDEX Corporation............................. - 277,725 277,725 - 4,900 4,900 Kennametal Inc............................... - 204,575 204,575 - 7,000 7,000 Littlelfuse Inc. (A)........................ - 176,750 176,750 85,210 - 85,210 Monsanto Company............................. 4,761,109 - 4,761,109 - 11,800 11,800 MSC Industrial Direct Company................ - 336,300 336,300 - 6,950 6,950 Parker-Hannifin.............................. - 264,969 264,969 - 9,300 9,300 Roper Industries............................. - 242,963 242,963 82,150 - 82,150 Solutia Inc.................................. 2,356,678 - 2,356,678 - 4,000 4,000 SPX Corporation.............................. - 257,500 257,500 59,085 - 59,085 Tyco International Ltd....................... 3,722,355 - 3,722,355 - 5,200 5,200 U.S. Filter Corporation...................... - 145,925 145,925 --------------------------------------- 15,471,992 3,138,415 18,610,407 X COMMUNICATIONS EQUIPMENT - 7,600 7,600 Ascend Communications Inc.................... - 376,675 376,675 - 8,500 8,500 Aspect Telecommunications Corp. (A)......... - 232,688 232,688 - 8,300 8,300 Coherent Communications Systems Corp. (A)... - 388,544 388,544 - 6,300 6,300 Comverse Technology Incorporated (A)........ - 326,813 326,813 - 8,200 8,200 DSP Communications Incorporated (A)......... - 112,750 112,750 - 11,200 11,200 Ericsson L.M. Telephone Co. ADR.............. - 320,600 320,600 - 11,200 11,200 Powertel Incorporated (A)................... - 207,200 207,200 - 10,200 10,200 WorldCom Incorporated (A)................... - 494,063 494,063 --------------------------------------- - 2,459,333 2,459,333 X COMPUTER / SYSTEMS 13,862 7,400 121,262 Cisco Systems Inc. (A)...................... 10,482,420 681,263 11,163,683 47,090 - 47,090 Dell Computer Corporation (A)................ 4,370,541 - 4,370,541 65,045 - 65,045 General Instrument Corporation (A)........... 1,768,411 - 1,768,411 74,475 - 74,475 HBO & Company................................ 2,625,244 - 2,625,244 - 11,400 11,400 Intermedia Communications (A)............... - 478,088 478,088 --------------------------------------- 19,246,616 1,159,351 20,405,967 X COMPUTER SOFTWARE / SERVICES - 8,800 8,800 ABR Information Services Incorporated (A)... - 209,000 209,000 - 5,800 5,800 Adobe Systems Inc............................ - 246,138 246,138 - 10,700 10,700 Affiliated Computer Services (A)............ - 411,950 411,950 29,700 - 29,700 Amazon.com, Inc. (A)......................... 2,962,575 - 2,962,575 91,527 7,600 99,127 America Online Delaware Inc. (A)............ 9,701,862 805,600 10,507,462 7,035 - 7,035 Aspect Development, Inc. (A)................. 532,022 - 532,022 115,910 - 115,910 Aspen Technology, Inc. (A)................... 5,853,455 - 5,853,455 - 16,800 16,800 BMC Software Inc. (A)....................... - 872,550 872,550 161,765 16,600 178,365 Cadence Design Systems (A).................. 5,055,156 518,750 5,573,906 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 8,700 8,700 Cambridge Technology Partners................ - 475,238 475,238 - 7,600 7,600 CBT Group PLC ADR (A)....................... - 406,600 406,600 - 8,200 8,200 Citrix Systems (A).......................... - 560,675 560,675 - 15,500 15,500 Compuware Corp. (A)......................... - 792,438 792,438 - 6,400 6,400 DST Systems Incorporated (A)................ - 358,400 358,400 - 9,000 9,000 Electronic Arts (A)......................... - 486,000 486,000 - 24,600 24,600 HBO & Co..................................... - 867,150 867,150 - 7,400 7,400 IDX Systems Corporation (A)................. - 340,863 340,863 57,145 7,500 64,645 Intuit (A).................................. 3,500,131 459,375 3,959,506 50,905 - 50,905 JDA Software Group, Inc. (A)................. 2,227,094 - 2,227,094 122,070 - 122,070 Microsoft Corporation (A).................... 13,229,336 - 13,229,336 - 13,287 13,287 Network Associates Incorporated (A)......... - 636,115 636,115 - 10,750 10,750 Oracle Corp. (A)............................ - 264,047 264,047 359,935 10,200 370,135 Parametric Technology Company (A)............ 9,763,237 276,675 10,039,912 58,170 12,400 70,570 People Soft Inc. (A)........................ 2,733,990 582,800 3,316,790 - 12,200 12,200 Saville Systems Ireland PLC.................. - 611,525 611,525 - 5,500 5,500 Shared Medical Systems Corp.................. - 403,906 403,906 - 10,500 10,500 Sterling Commerce Inc. (A).................. - 509,250 509,250 48 - 48 Structural Dynamics Research Corporation (A). 1,110 - 1,110 - 8,000 8,000 SunGard Data Systems Incorporated (A)....... - 307,000 307,000 - 11,300 11,300 Symantec Corp. (A).......................... - 295,213 295,213 - 4,800 4,800 Synopsys Inc. (A)........................... - 219,600 219,600 - 8,000 8,000 Visio Corporation (A)....................... - 382,000 382,000 41,917 - 41,917 Wind River Systems (A)....................... 1,503,772 - 1,503,772 ----------------------------------- 57,063,740 12,298,858 69,362,598 COMPUTER/ELECTRONIC EQUIPMENT - 9,940 9,940 Dionex Corporation (A)...................... - 262,168 262,168 - 8,000 8,000 Sanmina Corporation (A)..................... - 347,000 347,000 - 15,450 15,450 Symbol Technologies.......................... - 583,238 583,238 - 9,600 9,600 Tellabs (A)................................. - 687,600 687,600 - 4,600 4,600 Teradyne Inc. (A)........................... - 123,050 123,050 - 5,650 5,650 Thermo Electron Corporation.................. - 193,159 193,159 - 10,500 10,500 Vitesse Semiconductor - 324,188 324,188 ----------------------------------- - 2,520,403 2,520,403 CONSUMER CYCLICALS - 10,700 10,700 Bed Bath & Beyond (A)....................... - 554,394 554,394 - 7,100 7,100 Gulfstream Aerospace Corporation (A)........ - 330,150 330,150 - 8,800 8,800 Harley-Davidson Inc.......................... - 341,000 341,000 - 5,000 5,000 Harman International - 192,500 192,500 - 14,000 14,000 Leggett & Platt Inc. - 350,000 350,000 - 6,400 6,400 Lennar Corp.................................. - 188,800 188,800 - 11,800 11,800 Lilly Industries Inc......................... - 255,175 255,175 - 6,900 6,900 LNR Property Corporation..................... - 176,813 176,813 - 5,600 5,600 National Health Investors.................... - 186,200 186,200 - 10,700 10,700 Oakwood Homes Corp........................... - 321,000 321,000 - 6,700 6,700 Rouse Company................................ - 210,631 210,631 - 9,500 9,500 Security Capital Pacific Trust............... - 213,750 213,750 - 9,600 9,600 Sherwin-Williams Co.......................... - 318,000 318,000 - 6,500 6,500 TCA Cable TV Inc. - 390,000 390,000 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 9,000 9,000 Univision Communications - 335,250 335,250 - 12,300 12,300 Valspar...................................... - 487,388 487,388 - 15,000 15,000 Williams-Sonoma Inc. (A).................... - 477,188 477,188 ----------------------------------- - 5,328,239 5,328,239 CONSUMER STAPLES 53,660 - 53,660 Delta and Pine Land Company.................. 2,387,870 - 2,387,870 260,340 - 260,340 Raisio Group Plc. (A)........................ 4,731,684 - 4,731,684 ----------------------------------- 7,119,554 - 7,119,554 CONSUMER/ DURABLE - 6,100 6,100 American Standard Companies (A)............. - 272,594 272,594 CONSUMER/ NON-DURABLE - 6,200 6,200 Alberto-Culver Company....................... - 179,800 179,800 - 7,500 7,500 Harcourt General............................. - 446,250 446,250 - 8,500 8,500 International Multifoods Corporation......... - 233,750 233,750 - 9,200 9,200 Jones Apparel Group Inc...................... - 336,375 336,375 - 9,447 9,447 Lancaster Colony Inc......................... - 357,805 357,805 - 9,525 9,525 Mattel Inc................................... - 403,027 403,027 - 8,300 8,300 Nautica Enterprises Inc. (A)................ - 222,544 222,544 - 8,800 8,800 Pioneer Hi-Bred International................ - 364,100 364,100 - 12,000 12,000 Quiksilver Incorporated (A)................. - 239,250 239,250 - 4,800 4,800 Sealed Air Corporation (A).................. - 176,400 176,400 - 5,753 5,753 Tootsie Roll Industries Inc.................. - 441,543 441,543 - 6,500 6,500 Unifi Inc.................................... - 222,625 222,625 - 6,600 6,600 Warnaco Group Inc............................ - 280,088 280,088 - 8,500 8,500 Westwood One Inc. (A)....................... - 214,359 214,359 - 9,600 9,600 Wolverine World Wide......................... - 208,200 208,200 ----------------------------------- - 4,326,116 4,326,116 ELECTRONICS / SEMICONDUCTORS - 9,100 9,100 Altera Corporation (A)...................... - 269,019 269,019 - 10,500 10,500 Applied Materials Inc. - 309,750 309,750 27,989 10,800 38,789 Analog Devices (A).......................... 687,480 265,275 952,755 - 7,500 7,500 Gateway 2000 Incorporated (A)............... - 379,688 379,688 - 7,000 7,000 Hubbell Incorporated, Series B............... - 291,375 291,375 - 4,000 4,000 Lattice Semiconductor Co. - 113,625 113,625 - 8,200 8,200 Linear Technology Corp....................... - 494,563 494,563 66,845 18,200 85,045 Maxim Integrated Products Inc. (A).......... 2,118,151 576,713 2,694,864 - 6,400 6,400 Microchip Technology Inc. (A)............... - 167,200 167,200 - 11,726 11,726 Molex Inc CL A............................... - 274,095 274,095 123,140 - 123,140 Nokia Corporation, Class A, Sponsored ADR.... 8,935,346 - 8,935,346 - 7,300 7,300 Raychem Corp................................. - 215,806 215,806 - 8,700 8,700 SCI Systems Inc. (A)........................ - 327,338 327,338 - 7,100 7,100 SDL Incorporated (A)........................ - 169,513 169,513 - 7,700 7,700 Tyco International........................... - 485,100 485,100 - 7,500 7,500 Xilinx Inc. (A)............................. - 255,000 255,000 ----------------------------------- 11,740,977 4,594,060 16,335,037 FINANCIAL SERVICES - 13,300 13,300 ACE Limited.................................. - 518,700 518,700 - 7,700 7,700 Ambac Financial Group Inc.................... - 450,450 450,450 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) 55,750 - 55,750 Associates First Capital Corporation, Class A 4,285,781 - 4,285,781 - 8,100 8,100 Bank of New York Co. Inc..................... - 491,569 491,569 - 8,500 8,500 Charter One Financial Securities - 286,344 286,344 - 11,100 11,100 City National Corp........................... - 410,006 410,006 - 9,100 9,100 Finova Group Inc............................. - 515,288 515,288 - 11,600 11,600 First American Corp., Tennessee.............. - 558,250 558,250 - 14,100 14,100 Franklin Resources Inc....................... - 761,400 761,400 58,335 - 58,335 Household International...................... 2,902,166 - 2,902,166 - 11,500 11,500 Investment Technology Group (A)............. - 316,250 316,250 - 7,200 7,200 JSB Financial Inc............................ - 421,650 421,650 - 5,100 5,100 Legg Mason Inc. - 293,569 293,569 - 4,868 4,868 Mercantile Bancorporation Inc................ - 245,226 245,226 - 7,900 7,900 Mercury General Corporation.................. - 508,069 508,069 - 6,400 6,400 MGIC Investment Corporation.................. - 365,200 365,200 - 7,400 7,400 Northern Trust Corporation................... - 564,250 564,250 - 4,500 4,500 Progressive Corporation...................... - 634,500 634,500 - 12,700 12,700 Protective Life Corporation.................. - 465,931 465,931 - 6,500 6,500 Providian Financial Corporation - 510,656 510,656 - 14,925 14,925 Raymond James Financial lnc.................. - 446,817 446,817 - 13,800 13,800 Schwab (Charles) Corp........................ - 448,500 448,500 - 14,000 14,000 Silicon Valley Bancshares (A)............... - 498,313 498,313 - 9,300 9,300 State Street Boston Corporation.............. - 646,350 646,350 - 9,900 9,900 SunAmerica Incorporated...................... - 568,631 568,631 - 10,000 10,000 TCF Financial................................ - 295,000 295,000 - 11,500 11,500 U.S. Bancorp................................. - 494,500 494,500 - 6,400 6,400 UICI (A).................................... - 174,400 174,400 ----------------------------------- 7,187,947 11,889,819 19,077,766 HEALTH CARE PRODUCTS - 5,100 5,100 Agouron Pharmaceuticals Incorporated (A).... - 154,594 154,594 82,330 - 82,330 ALZA Corporation (A)......................... 3,560,772 - 3,560,772 - 4,600 4,600 Amgen (A)................................... - 300,725 300,725 - 10,600 10,600 Arterial Vascular Engineering Inc. (A)...... - 378,950 378,950 - 7,000 7,000 Biochem Pharma Inc. (A)..................... - 185,500 185,500 - 6,400 6,400 Biogen Inc. (A)............................. - 313,600 313,600 - 4,500 4,500 Boston Scientific Corporation (A)........... - 322,313 322,313 - 6,050 6,050 Cardinal Health Inc.......................... - 567,188 567,188 35,275 - 35,275 Centocor, Inc. (A)........................... 1,278,719 - 1,278,719 - 175 175 Clinichen Development Inc. - 1,006 1,006 - 5,600 5,600 Elan PLC ADR (A)............................ - 360,150 360,150 83,350 - 83,350 Eli Lilly and Company (A).................... 5,506,309 - 5,506,309 - 5,800 5,800 Gilead Sciences Inc. (A).................... - 185,963 185,963 - 9,300 9,300 Guidant Corporation.......................... - 663,206 663,206 - 5,700 5,700 Guilford Pharmaceuticals Inc. (A)........... - 100,463 100,463 - 7,200 7,200 Henry Schein Incorporated.................... - 332,100 332,100 - 6,000 6,000 Human Genome Sciences Inc. (A).............. - 214,125 214,125 - 7,800 7,800 Incyte Pharmaceuticals Incorporated (A)..... - 266,175 266,175 - 5,800 5,800 Isis Pharmaceuticals (A).................... - 79,388 79,388 - 7,700 7,700 Life Technologies Inc........................ - 241,588 241,588 - 6,000 6,000 Medtronic Inc................................ - 382,500 382,500 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 15,000 15,000 Millennium Pharmaceuticals Inc (A).......... - 211,875 211,875 75,104 11,000 86,104 Omnicare Inc................................. 2,863,340 419,375 3,282,715 46,725 - 46,725 Pfizer Inc. (A).............................. 5,078,423 - 5,078,423 - 9,900 9,900 Physio-Control International Corp. (A)...... - 260,494 260,494 - 5,700 5,700 Protein Design Labs Incorporated (A)........ - 137,334 137,334 43,400 - 43,400 Sofamor Danek Group, Inc. (A)................ 3,756,813 - 3,756,813 - 5,700 5,700 Sola International Inc. (A)................. - 186,319 186,319 - 8,900 8,900 Teleflex Inc................................. - 338,200 338,200 2,070 - 2,070 United States Surgical Corporation........... 94,444 - 94,444 208,175 - 208,175 Warner Lambert Company....................... 14,442,141 - 14,442,141 - 8,000 8,000 Watson Pharmaceuticals Incorporated (A)..... - 373,500 373,500 ----------------------------------- 36,580,961 6,976,631 43,557,592 HMO/HOSPITAL MANAGEMENT - 10,500 10,500 Concentra Managed Care Incorporated (A)..... - 273,000 273,000 - 6,100 6,100 Genesis Health Ventures (A)................. - 152,500 152,500 - 16,662 16,662 Health Management Association CL A (A)...... - 557,136 557,136 - 8,950 8,950 Healthcare & Retirement Corp. (A)........... - 352,966 352,966 - 14,300 14,300 HealthSouth Corp. (A)....................... - 381,631 381,631 - 9,400 9,400 Lincare Holdings Incorporated (A)........... - 395,388 395,388 - 11,500 11,500 Orthodontic Centers of America Inc (A)...... - 240,781 240,781 - 2,100 2,100 PacifiCare Health Systems (A)............... - 185,588 185,588 - 8,600 8,600 PhyCor Inc. (A)............................. - 142,438 142,438 - 12,150 12,150 Quorum Health Group Incorporated (A)........ - 321,975 321,975 - 8,915 8,915 Tenet Healthcare Corp. (A).................. - 278,594 278,594 - 18,279 18,279 Total Renal Care Holdings Incorporated (A).. - 630,626 630,626 - 6,100 6,100 United HealthCare Corp....................... - 387,350 387,350 - 7,800 7,800 Universal Health Services (A)............... - 455,325 455,325 ----------------------------------- - 4,755,298 4,755,298 MEDIA - 9,000 9,000 360 Communications Company (A).............. - 288,000 288,000 - 12,200 12,200 Belo (A.H.) Corp............................. - 297,375 297,375 126,430 - 126,430 CBS Corporation (A).......................... 4,014,153 - 4,014,153 - 5,100 5,100 Centennial Cellular Corp. (A)............... - 190,294 190,294 - 3,600 3,600 Central Newspaper Inc........................ - 251,100 251,100 59,405 9,200 68,605 Chancellor Media Corporation (A)............ 2,949,830 456,838 3,406,668 - 9,300 9,300 Clear Channel Communications Inc. (A)....... - 1,014,863 1,014,863 - 9,800 9,800 Cox Communications (A)...................... - 474,688 474,688 - 6,400 6,400 Emmis Broadcasting Corp. (A)................ - 306,000 306,000 - 7,600 7,600 Jacor Communications Inc. (A)............... - 448,400 448,400 - 9,000 9,000 Meredith Corporation......................... - 422,438 422,438 - 27,600 27,600 Outdoor Systems.............................. - 772,800 772,800 328,421 - 328,421 TCI Ventures, Class A (A).................... 6,588,943 - 6,588,943 173,702 - 173,702 Time Warner Inc.............................. 14,840,665 - 14,840,665 - 3,900 3,900 U.S. Cellular Corp. (A)..................... - 119,925 119,925 7,295 - 7,295 United International Holdings, Inc. (A)...... 116,720 - 116,720 - 8,700 8,700 Valassis Communications (A)................. - 335,494 335,494 - 7,100 7,100 Vodafone Group PLC ADR....................... - 895,044 895,044 ------------------------------------ 28,510,311 6,273,259 34,783,570 OIL & GAS WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 3,500 3,500 Cooper Cameron Corporation - 178,500 178,500 1,731,236 - 1,731,236 Ocean Rig ASA (A)...................... 1,287,668 1,287,668 - 4,500 4,500 Sonat Inc. - 173,813 173,813 - 6,000 6,000 Veritas DGC Inc. - 299,625 299,625 ------------------------------- 1,287,668 651,938 1,939,606 X OTHER TECHNOLOGY - 8,500 8,500 BE Aerospace (A)...................... - 247,563 247,563 - 7,500 7,500 Cognex Corp. (A)...................... - 138,750 138,750 - 6,500 6,500 Diebold Incorporated................... - 187,688 187,688 - 13,200 13,200 EMC Corp-Mass (A)..................... - 591,525 591,525 - 5,500 5,500 First Data Corporation - 183,219 183,219 - 13,200 13,200 Sun Microsystems Inc. (A)............. - 573,375 573,375 ------------------------------- - 1,922,120 1,922,120 X RESOURCES - 11,600 11,600 AES Corp. (A)......................... - 609,725 609,725 - 6,800 6,800 Apache Corp............................ - 214,200 214,200 - 9,300 9,300 B J Services Co. (A).................. - 270,281 270,281 - 5,900 5,900 Barrett Resources Corporation Inc. (A) - 220,881 220,881 - 6,100 6,100 Camco International Inc................ - 475,038 475,038 - 6,600 6,600 Devon Energy Corporation............... - 230,588 230,588 - 11,900 11,900 Ecolab................................. - 368,900 368,900 - 6,700 6,700 Noble Affiliates....................... - 254,600 254,600 - 10,000 10,000 Noble Drilling Corporation............. - 240,625 240,625 - 4,600 4,600 Nuevo Energy Co. (A).................. - 147,775 147,775 - 8,000 8,000 Ocean Energy Incorporated (A)......... - 156,500 156,500 - 12,000 12,000 Pride International Inc. (A).......... - 203,250 203,250 - 12,000 12,000 Sigma-Aldrich Corporation.............. - 421,500 421,500 - 8,200 8,200 Smith International (A)............... - 285,463 285,463 - 17,200 17,200 Sybron International Corp. (A)........ - 434,300 434,300 - 11,100 11,100 Tosco Corp............................. - 326,063 326,063 - 7,500 7,500 Waters Corporation (A)................ - 442,031 442,031 ------------------------------- - 5,301,720 5,301,720 X RETAIL SALES - 12,900 12,900 Autozone Inc. - 411,994 411,994 - 9,000 9,000 BJS Wholesale Club Inc. - 365,625 365,625 - 9,400 9,400 CVS Corporation - 366,013 366,013 - 12,100 12,100 Borders Group Incorporated (A)........ - 447,700 447,700 - 4,000 4,000 CDW Computer Centers Inc............... - 200,000 200,000 - 8,700 8,700 Circuit City Stores Inc................ - 407,813 407,813 - 9,500 9,500 CompUSA Inc. (A)...................... - 171,594 171,594 - 7,600 7,600 Consolidated Stores (A)............... - 275,500 275,500 51,335 - 51,335 Costco Companies, Inc. (A)............. 3,237,313 - 3,237,313 - 22,891 22,891 Dollar General Corp.................... - 905,625 905,625 - 8,030 8,030 Fred Meyer Incorporated (A)........... - 341,275 341,275 - 10,800 10,800 Host Marriott (A)..................... - 192,375 192,375 - 9,000 9,000 Kohls Corporation - 466,875 466,875 - 10,800 10,800 Land's End Inc. (A)................... - 341,550 341,550 - 8,700 8,700 Mirage Resorts (A)................... - 185,419 185,419 WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) - 9,000 9,000 Office Depot Inc. - 284,063 284,063 - 14,300 14,300 OfficeMax Incorporated (A)........... - 235,950 235,950 - 6,800 6,800 Outback Steakhouse Inc. (A).......... - 265,200 265,200 - 9,600 9,600 Richfood Holdings..................... - 198,600 198,600 - 13,400 13,400 Safeway Inc. (A)..................... - 545,213 545,213 - 6,200 6,200 Starbucks Corp. (A).................. - 331,313 331,313 - 13,650 13,650 The Men's Wearhouse Inc. (A)......... - 450,450 450,450 - 9,100 9,100 Tiffany & Company..................... - 436,800 436,800 - 19,600 19,600 TJX Companies......................... - 472,850 472,850 - 10,200 10,200 Viking Office Products (A)........... - 320,025 320,025 - 10,500 10,500 Zale Corp. (A)....................... - 334,031 334,031 ---------------------------------- 3,237,313 8,953,853 12,191,166 X TECHNOLOGY - 6,900 6,900 McLeod USA Inc. - 268,238 268,238 - 9,000 9,000 Nextel Communication Inc. - 223,875 223,875 25,675 - 25,675 Orbital Sciences Corporation (A)...... 959,603 - 959,603 80,570 - 80,570 Pittway Corporation, Class A.......... 5,952,109 - 5,952,109 - 5,000 5,000 Sofamor Danex Group - 432,813 432,813 114,710 - 114,710 UNUM Corporation...................... 6,366,405 - 6,366,405 - 8,000 8,000 VISX Inc. - 476,000 476,000 ---------------------------------- 13,278,117 1,400,926 14,679,043 X UTILITIES / TELECOMMUNICATIONS 77,790 - 77,790 At Home Corporation (A)............... 3,680,439 - 3,680,439 335,745 - 335,745 Comcast Corporation, Class A.......... 13,629,149 - 13,629,149 77,665 - 77,665 Cox Communications, Inc., Class A (A). 3,761,898 - 3,761,898 60,920 - 60,920 Liberty Media Group (A)............... 2,364,458 - 2,364,458 266,790 - 266,790 MediaOne Group Inc. (A)............... 11,722,086 - 11,722,086 337,589 - 337,589 Tele-Communications, Inc., Class A (A) 12,976,080 - 12,976,080 362,722 - 362,722 Telecom Italia SPA.................... 2,671,292 - 2,671,292 1 - 1 US West, Inc.......................... 23 - 23 114,510 - 114,510 Western Wireless Corporation (A)...... 2,283,043 - 2,283,043 ---------------------------------- 53,088,468 - 53,088,468 X MISCELLANEOUS - 13,000 13,000 Allied Waste Industries Inc. - 312,000 312,000 - 8,300 8,300 ASA Holding Inc. - 411,857 411,857 ---------------------------------- - 723,857 723,857 X Total Common Stocks 279,047,749 96,209,006 375,256,755 PRINCIPAL AMOUNT REPURCHASE AGREEMENT - 0.5% - 1,998,343 1,998,343 State Street Bank & Trust Co. Master Repurchase Agreement, 4.25%, dated 6/30/98 due 7/1/98, Collateralized by U.S. Government Securities - 1,998,343 1,998,343 TOTAL INVESTMENTS - 100.1% (COST $286,195,572) 279,047,749 98,207,349 377,255,098 OTHER ASSETS AND LIABILITIES, NET - (0.1%) 506,420 (780,543) (274,123) WM Growth Fund and Griffin Growth Fund Pro Forma Combined Portfolio of Investments June 30, 1998 (Unaudited) TOTAL NET ASSETS - 100.0% 279,554,169 97,426,806 376,980,975 (A) Non-Income producing security. WM GROWTH FUND & GRIFFIN GROWTH FUND Notes to Pro Forma Combined Financial Statements (Unaudited) 1. Basis of Combination The pro forma combined financial statements reflect the pro forma combined financial position of the WM Growth Fund and the Griffin Growth Fund at June 30, 1998 and the pro forma combined results of operations for the year ended June 30, 1998 as though the reorganization had occurred on July 1, 1997. The pro forma combined financial statements are presented for the information of the reader and may not necessarily be representative of how the pro forma combined financial statements would have appeared had the reorganization actually occurred. The Pro Forma Combined Portfolio of Investments, Statement of Assets and Liabilities, and the Statement of Operations should be read in conjunction with the historical financial statements of the funds which are incorporated by reference in the Statement of Additional Information. The pro forma combined statements give effect to the proposed transfer of the assets and stated liabilities of the Griffin Growth Fund in exchange for shares of WM Growth Fund. Under generally accepted accounting principles, the historical cost of investment securities will be carried forward to the surviving entity. The pro forma combined statements do not reflect the expenses of either fund in carrying out its obligations under the proposed Agreement and Plan of Reorganization. 2. Pro Forma Combined Portfolio of Investments Securities held by the two funds have been combined in the accompanying Combined Portfolio of Investments. Securities are valued using the pricing procedures and policies of the respective Acquiring Fund or Acquired Fund, as applicable. For more information, see the WM Annual Reports or the Griffin Annual Reports. Historical cost amounts represent the combined cost basis of the securities. A substantial portion of the Griffin Growth Fund's portfolio securities are expected to be sold in connection with the Merger. 3. Pro Forma Combined Statements of Assets and Liabilities Shares outstanding have been adjusted to reflect the conversion of Griffin Growth Fund shares into WM Growth Fund shares based upon the net asset value of the WM Growth Fund shares at June 30, 1998. WM TRUST II FORM N-14 PART C OTHER INFORMATION Item 15. Indemnification --------------- Incorporated by reference to Post-Effective Amendment No. 28 to the Registrant's Registration Statement Form N-1A (filed on March 27, 1998) (Registration Nos. 033-27489 and 811-05775). Item 16. Exhibits -------- 1 (a) Master Trust Agreement, dated February 22, 1989.(1) 1 (b)-1 Amendment No. 1 to the Trust's Master Trust Agreement, dated May 10, 1989.(1) 1 (b)-2 Amendment No. 2 to the Trust's Master Trust Agreement, dated May 22, 1989.(1) 1 (b)-3 Amendment No. 3 to the Trust's Master Trust Agreement dated May 24, 1989.(1) 1 (b)-4 Amendment No. 4 to the Trust's Master Trust Agreement dated May 7, 1990.(1) 1 (b)-5 Amendment No. 5 to the Trust's Master Trust Agreement dated December 4, 1991.(1) 1 (b)-6 Amendment No. 6 to the Trust's Master Trust Agreement dated January 30, 1992.(1) 1 (b)-7 Amendment No. 7 to the Trust's Master Trust Agreement dated September 10, 1992.(1) 1 (b)-8 Amendment No. 8 to the Trust's Master Trust Agreement dated September 22, 1993.(1) 1 (b)-9 Amendment No. 9 to the Trust's Master Trust Agreement dated March 13, 1994.(1) 1 (b)-10 Amendment No. 10 to the Trust's Master Trust Agreement dated January 20, 1995.(1) 1 (b)-11 Amendment No. 11 to the Trust's Master Trust Agreement dated July 19, 1996.(1) 1 (b)-12 Amendment No. 12 to the Trust's Agreement and Declaration of Trust, dated March 20, 1998.(2) 2 By-Laws of the Trust.(1) 1 3 Not Applicable. 4 Form of Agreement and Plan of Reorganization, filed as Appendix A to the Prospectus/Proxy Statement. (4) 5 Article V, Shareholders' Voting Powers and Meetings, of the Agreement and Declaration of Trust, as amended and Article 11, Shareholders' Voting Powers and Meetings, of the By-laws.(1) 6 (a)-1 Investment Management Agreement, dated January 30, 1998, between the Trust and WM Advisors, Inc. ("WM Advisors"), with respect to the Short Term High Quality Bond, California Money and Target Maturity 2002 Funds.(2) 6 (a)-2 Investment Management Agreement, dated March 20, 1998, between the Trust and WM Advisors, with respect to the Growth, Emerging Growth, International Growth, California Municipal, California Insured Intermediate Municipal and Florida Insured Municipal Funds.(2) 6 (b)-1 Investment Sub-Advisory Agreement between WM Advisors and Janus Capital Corporation, dated March 20, 1998 with respect to the Growth Fund.(2) 6 (b)-2 Investment Sub-Advisory Agreement, dated March 20, 1998 between the Trust and Van Kampen American Capital Management, Inc., with respect to the California Municipal Fund, Florida Insured Municipal Fund and California Insured Intermediate Municipal Fund.(2) 7 (a) Distribution Agreement, dated March 20, 1998, between the Trust and WM Funds Distributor, Inc.(2) 7 (b) Transfer Agent Contract, dated March 20, 1998, between the Trust, WM Strategic Asset Management Portfolios, and WM Prime Income Funds and WM Shareholder Services, Inc.(2) 8 Not Applicable. 9 (a)-1 Custody Agreement, dated as of March 20, 1998, between the Trust and Boston Safe Deposit & Trust Company.(2) 10 (a) Distribution Plan for Class A shares dated March 24, 1998.(3) 10 (b) Distribution Plan for Class B shares dated March 24, 1998.(2) 11 Opinion and Consent of Counsel as to legality of securities being registered.(4) -2- 12 Opinion of counsel as to tax matters to be filed by amendment. 13 Not Applicable. 14(a) Consent of KPMG Peat Marwick LLP.(4) 14(b) Consent of PricewaterhouseCoopers LLP is filed herewith. 15 Not Applicable. 16 Powers of Attorney.(4) _______ (1) Incorporated by reference to Post-Effective Amendment No. 26 to the Registrant's Registration Statement on Form N-1A (File Nos. 033-27489 and 811-05775), filed on August 28, 1997. (2) Incorporated by reference to Post-Effective Amendment No. 28 to the Registrant's Registration Statement on Form N-1A (File Nos. 033-27489 and 811-05775), filed on March 27, 1998. (3) Incorporated by reference to Post-Effective Amendment No. 24 to the Registrant's Registration Statement on Form N-1A (File Nos. 033-27489 and 811-05775), filed on October 30, 1996. (4) Incorporated by reference to the Registrant's Registration Statement on Form N-14 (Accession No. 0001021408-98-000818) filed on October 30, 1998. Item 17. Undertakings ------------ (1) The registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post- effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned Registrant agrees to file, by post- effective amendment, an opinion of counsel or a copy of an Internal Revenue Service ruling supporting the tax consequences of the proposed mergers described in this Registration Statement within a reasonable time after receipt of such opinion or ruling. -3- SIGNATURES ---------- As required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the Registrant, in the City of Seattle and State of Washington on the 5th day of November, 1998. WM TRUST II By: /s/ William G. Papesh -------------------------------- William G. Papesh President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title(s) Date --------- ----- ---- /s/ William G. Papesh President and November 5, 1998 - ------------------------ Trustee William G. Papesh /s/ Monte D. Calvin Vice President and November 5, 1998 - ------------------------ Treasurer Monte D. Calvin /s/ David E. Anderson* Trustee November 5, 1998 - ------------------------ David E. Anderson /s/ Wayne L. Attwood* Trustee November 5, 1998 - ------------------------ Wayne L. Attwood, M.D. /s/ Arthur H. Bernstein, Esq.* Trustee November 5, 1998 - ------------------------------ Arthur H. Bernstein /s/ Kristianne Blake* Trustee November 5, 1998 - ------------------------ Kristianne Blake /s/ Edmond R. Davis* Trustee November 5, 1998 - --------------------- Edmond R. Davis -4- Trustee November 5, 1998 - ---------------------- John W. English /s/ Anne V. Farrell* Trustee November 5, 1998 - ---------------------- Anne V. Farrell /s/ Michael K. Murphy* Trustee November 5, 1998 - ---------------------- Michael K. Murphy /s/ Daniel L. Pavelich* Trustee November 5, 1998 - ----------------------- Daniel L. Pavelich /s/ Alfred E. Osborne, Jr. Ph.D.* Trustee November 5, 1998 - --------------------------------- Alfred E. Osborne, Jr. Ph.D. Trustee November 5, 1998 - ----------------------- Jay Rockey /s/ Richard C. Yancey* Trustee November 5, 1998 - ----------------------- Richard C. Yancey *By: /s/ Monte D. Calvin --------------------------------- Monte D. Calvin Attorney-in-Fact, pursuant to the Power of Attorney filed previously. -5- EXHIBIT INDEX ------------- Exhibit No. Exhibit Name - ----------- ------------ 14(a) Consent of KPMG Peat Marwick LLP