-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B8Djxf90l9fXW1jcvf1hkGA2PaU5WJJoaEorcEYgWjmu8oVKcvFRVP5o2x9JwSca RGDB3BvsM9zTMW6RBP6StA== 0000950148-06-000066.txt : 20060629 0000950148-06-000066.hdr.sgml : 20060629 20060629172811 ACCESSION NUMBER: 0000950148-06-000066 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060430 FILED AS OF DATE: 20060629 DATE AS OF CHANGE: 20060629 EFFECTIVENESS DATE: 20060629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WM TRUST II CENTRAL INDEX KEY: 0000846883 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05775 FILM NUMBER: 06935002 BUSINESS ADDRESS: STREET 1: WM GROUP OF FUNDS STREET 2: 1201 THIRD AVENUE, 22ND FLOOR CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 206-461-2413 MAIL ADDRESS: STREET 1: WM GROUP OF FUNDS STREET 2: 1201 THIRD AVENUE, 22ND FLOOR CITY: SEATTLE STATE: WA ZIP: 98101 FORMER COMPANY: FORMER CONFORMED NAME: SIERRA TRUST FUNDS DATE OF NAME CHANGE: 19931206 FORMER COMPANY: FORMER CONFORMED NAME: GW SIERRA TRUST FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GW INVESTMENT FUNDS DATE OF NAME CHANGE: 19890514 0000846883 S000000918 SMALL CAP GROWTH FUND C000002636 CLASS I C000002637 CLASS A SREMX C000002638 CLASS B SQEMX C000002639 CLASS C SSKCX C000018550 CLASS R-1 C000018551 CLASS R-2 0000846883 S000000919 INTERNATIONAL GROWTH FUND C000002640 CLASS I C000002641 CLASS A SRIGX C000002642 CLASS B SQIGX C000002643 CLASS C SIGCX C000018552 CLASS R-1 C000018553 CLASS R-2 0000846883 S000000920 CALIFORNIA MUNICIPAL FUND C000002644 CLASS A SRCMX C000002645 CLASS B SQCMX C000002646 CLASS C SRCCX 0000846883 S000000921 CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND C000002647 CLASS A SRIIX C000002648 CLASS B SQIIX C000002649 CLASS C SIICX 0000846883 S000000922 SHORT TERM INCOME FUND C000002650 CLASS I C000002651 CLASS A SRHQX C000002652 CLASS B SQHQX C000002653 CLASS C STCCX C000018554 CLASS R-1 C000018555 CLASS R-2 0000846883 S000000923 GROWTH FUND C000002654 CLASS I C000002655 CLASS A SRGFX C000002656 CLASS B SQGRX C000002657 CLASS C SGWCX C000018556 CLASS R-1 C000018557 CLASS R-2 N-CSRS 1 v21649nvcsrs.txt WM TRUST II UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05775 WM Trust II (Exact name of registrant as specified in charter) 1201 Third Avenue, 22nd Floor, Seattle, WA 98101 (Address of principal executive offices) (Zip code) Jeffrey L. Lunzer 1201 Third Avenue, 22nd Floor, Seattle, WA 98101 (Name and address of agent for service) Registrant's telephone number, including area code: (206) 461-3800 Date of fiscal year end: October 31, 2006 Date of reporting period: April 30, 2006 ITEM 1. REPORTS TO STOCKHOLDERS (WM GROUP OF FUNDS LOGO) WM GROUP OF FUNDS (GRAPHIC) Semiannual Report April 30, 2006 Common sense. Uncommon solutions.(R) WM Group of Funds AT THE WM GROUP OF FUNDS, OUR PASSION IS PIECING INDIVIDUAL INVESTMENTS TOGETHER INTO COMPREHENSIVE PORTFOLIOS TO MAKE YOUR FINANCIAL PLAN MORE EFFECTIVE. (GRAPHIC) Table of Contents 1 Letter from the President WM Group of Funds Performance and Composition: 2 REIT Fund 3 Equity Income Fund 4 Growth & Income Fund 5 West Coast Equity Fund 6 Mid Cap Stock Fund 7 Growth Fund 8 Small Cap Value Fund 9 Small Cap Growth Fund 10 International Growth Fund 11 Short Term Income Fund 12 U.S. Government Securities Fund 13 Income Fund 14 High Yield Fund 15 Tax-Exempt Bond Fund 16 California Municipal Fund 17 California Insured Intermediate Municipal Fund 18 Glossary 19 Expense Information 22 Financial Statements 108 Notes to Financial Statements 117 Supplemental Information
NOT FDIC INSURED MAY LOSE VALUE - NOT A DEPOSIT - NO BANK GUARANTEE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY Dear Shareholder, (PHOTO OF WILLIAM G. PAPESH) Securities markets have spent recent months reacting to a complicated mix of economic data that has generally been positive for equities but challenging for bonds. An upswing in economic growth, continuing strength in corporate profits, and elevated energy prices prompted the Federal Reserve to continue raising short-term interest rates in an effort to contain inflationary pressures. For the six months ended April 30, 2006, the S&P 500 climbed 9.64%, while the Lehman Brothers Aggregate Bond Index edged up 0.56%.(1) REACHING A COMPANY MILESTONE The past six months marked a significant accomplishment for the WM Group of Funds. In January, our assets under management exceeded $20 billion for the first time in the company's history. This growth has been building steadily over the last few years and is partly due to the strong performance of WM Funds shown on the following pages. ACHIEVING LOWER EXPENSES We take pride in our growth as a fund family but also note that this achievement benefits our shareholders. As we gain assets under management, the WM Funds can reach additional management fee breakpoints. This favorable consequence of growth is among the factors that have pushed 15 of the 16 Funds listed in this report to achieve lower expense ratios compared to their peers.(2) Shareholders can also take advantage of services that may help lower certain expenses. On the back cover, you'll find information about our e-delivery program. When you choose to receive documents like this report by e-mail, you gain the convenience of electronic delivery and storage while reducing printing and mailing costs. SHAPING OUR BOARD COMPOSITION From my perspective, you can certainly be proud of your Board of Trustees and the stewardship role they perform for your benefit. In November, Michael (Mike) Murphy, a Director of Washington Mutual, Inc., retired from the WM Group of Funds Board of Trustees after 11 years of diligent service. Concurrently, the Board elected independent Trustee Richard (Dick) Yancey to the position of chairman. Dick has been a tireless advocate of shareholder interests in the more than three decades that he has served on our Board. Both he and Mike have my gratitude for their many years of wise counsel.(3) Our Board is now composed of nine members, more than 75% of whom are not affiliated with Washington Mutual, Inc. I believe this structure, which emphasizes independence, supports strong fund oversight and governance. Underlying all of our efforts is the expectation that these steps can ultimately create value for our shareholders. On behalf of everyone at the WM Group of Funds, thank you for your support and confidence. Sincerely, /s/ William G. Papesh - ------------------------------------- William G. Papesh President (1) The S&P 500 is a broad-based index intended to represent the U.S. equity market. The Lehman Brothers Aggregate Bond Index is a broad-based index intended to represent the U.S. fixed-income market. Indices are unmanaged, and individuals cannot invest directly in an index. (2) Compares the Funds' expense ratios as of their most recent audited annual report (10/31/05) with the average expense ratio for each Fund's Lipper classification as of 4/30/06. Source of peer data: Lipper, Inc. (3) Lengths of service include board membership with Composite Funds, a predecessor to the WM Group of Funds. PORTFOLIO MANAGER (GRAPHIC) REIT Fund (PHOTO) David W. Simpson, CFA WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 5.5%; Class B shares: contingent deferred sales charge of 5%, which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year Since Inception Inception Date ------- ------ --------------- -------------- CLASS A SHARES Net Asset Value(3) 14.49% 24.37% 27.36% 3/1/03 With Sales Charge 8.21% 17.54% 25.11% CLASS B SHARES Net Asset Value(3) 14.04% 23.43% 26.41% 3/1/03 With Sales Charge 9.04% 18.43% 25.84% CLASS C SHARES Net Asset Value(3) 14.09% 23.52% 26.53% 3/1/03 With Sales Charge 13.09% 22.52% 26.53% CLASS R-1 SHARES Net Asset Value(3) 14.27% 23.77% 1.58% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 14.36% 24.03% 1.58% 3/1/06 NAREIT All REIT Index(4) 14.98% 23.63% 28.02%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 27.36% (1-year), 27.09% (since inception) Class B Shares: 28.65% (1-year), 27.87% (since inception) Class C Shares: 32.82% (1-year), 28.57% (since inception) Class R-1 Shares: 34.10% (1-year), 4.67% (since inception) Class R-2 Shares: 34.41% (1-year), 4.67% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Retail 26% 26% 0% Industrial/Office 22% 26% -4% Residential 11% 11% 0% Common Stocks 7% 6% +1% Lodging/Resorts 7% 6% +1% Health Care 5% 5% 0% Specialty 5% 8% -3% Hybrid 4% 1% +3% Diversified 3% 3% 0% Mortgage 2% 1% +1% Self Storage 2% 2% 0% Cash Equivalents 6% 5% +1%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1, and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 2 PORTFOLIO MANAGER Equity Income Fund* (GRAPHIC) Joseph T. Suty, CFA (PHOTO) WM Advisors, Inc. (5-5-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. * As of 8/1/00, the WM Bond & Stock Fund became the WM Equity Income Fund, and the Fund's objectives and strategies changed. This information should be considered when reviewing past performance. Please see the prospectus for detailed information. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year 5-Year 10-Year Since Inception Inception Date ------- ------ ------ ------- --------------- -------------- CLASS A SHARES Net Asset Value(3) 11.32% 18.55% 10.27% 11.14% 9.15% 5/31/39 With Sales Charge 5.19% 12.01% 9.03% 10.52% 9.06% CLASS B SHARES Net Asset Value(3) 10.85% 17.53% 9.29% 10.37% 11.43% 3/30/94 With Sales Charge 5.85% 12.53% 9.01% 10.37% 11.43% CLASS C SHARES Net Asset Value(3) 10.91% 17.58% 9.40% 10.27% 10.92% 3/1/02 With Sales Charge 9.91% 16.58% 9.40% 10.27% 10.92% CLASS R-1 SHARES Net Asset Value(3) 11.03% 17.82% 9.55% 10.44% 4.03% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 11.13% 18.06% 9.82% 10.71% 4.03% 3/1/06 S&P 500/Barra Value Index(4) 12.77% 20.02% 4.14% 9.48% -- S&P 500(4) 9.64% 15.42% 2.70% 8.94% 11.60%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 8.97% (1-year), 9.29% (5-year), 10.33% (10-year), 9.03% (since inception) Class B Shares: 9.28% (1-year), 9.26% (5-year), 10.19% (10-year), 11.29% (since inception) Class C Shares: 13.37% (1-year), 9.66% (5-year), 10.08% (10-year), 10.53% (since inception) Class R-1 Shares: 14.58% (1-year), 9.81% (5-year), 10.25% (10-year), 1.65% (since inception) Class R-2 Shares: 14.84% (1-year), 10.08% (5-year), 10.52% (10-year), 1.65% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Financials 26% 24% +2% Industrials 13% 11% +2% Energy 10% 11% -1% Health Care 10% 7% +3% Information Technology 9% 8% +1% Consumer Staples 7% 6% +1% Telecommunication Services 6% 3% +3% REITs 5% 7% -2% Consumer Discretionary 4% 6% -2% Materials 4% 3% +1% U.S. Treasuries 1% 2% -1% Utilities 1% 4% -3% Other 1% 3% -2% Cash Equivalents 3% 5% -2%
(4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the NAREIT ALL REIT Index is calculated from 2/28/03. The since-inception return shown for the S&P 500 is calculated from 5/31/39. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 3 PORTFOLIO MANAGER (GRAPHIC) Growth & Income Fund (PHOTO) Stephen Q. Spencer, CFA WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852.Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 5.5%; Class B shares: contingent deferred sales charge of 5%, which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 8.35% 10.73% 1.96% 8.69% 10.13% 10/31/49 With Sales Charge 2.41% 4.66% 0.81% 8.07% 10.02% CLASS B SHARES Net Asset Value(3) 7.78% 9.58% 0.94% 7.92% 10.12% 3/30/94 With Sales Charge 2.77% 4.58% 0.55% 7.92% 10.12% CLASS C SHARES Net Asset Value(3) 7.96% 9.79% 1.02% 7.74% 4.43% 3/1/02 With Sales Charge 6.96% 8.79% 1.02% 7.74% 4.43% CLASS R-1 SHARES Net Asset Value(3) 8.09% 10.08% 1.28% 8.00% 2.93% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 8.18% 10.31% 1.52% 8.26% 2.93% 3/1/06 S&P 500(4) 9.64% 15.42% 2.70% 8.94% 12.05%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 1.28% (1-year), 1.38% (5-year), 8.11% (10-year), 9.99% (since inception) Class B Shares: 1.05% (1-year), 1.14% (5-year), 7.96% (10-year), 10.02% (since inception) Class C Shares: 5.26% (1-year), 1.59% (5-year), 7.78% (10-year), 4.04% (since inception) Class R-1 Shares: 6.47% (1-year), 1.84% (5-year), 8.03% (10-year), 0.94% (since inception) Class R-2 Shares: 6.71% (1-year), 2.09% (5-year), 8.30% (10-year), 0.94% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Financials 22% 22% 0% Health Care 14% 11% +3% Industrials 13% 11% +2% Information Technology 13% 13% 0% Energy 12% 9% +3% Consumer Staples 8% 10% -2% Consumer Discretionary 7% 10% -3% Materials 3% 2% +1% Utilities 3% 5% -2% Telecommunication Services 2% 1% +1% Cash Equivalents 3% 6% -3%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1,and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The West Coast Equity Fund's performance in 1997 benefited from the agreement of WM Advisors and its affiliates to limit the Fund's expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 4 PORTFOLIO MANAGER West Coast Equity Fund (GRAPHIC) Philip M. Foreman, CFA (PHOTO) WM Advisors, Inc. (5-5-4-3-2-0%);Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. West Coast Equity Fund: Small-cap and mid-cap stocks may have additional risks, including greater price volatility. There may be additional investment risks due to the Fund's concentration in West Coast companies. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 11.76% 24.32% 8.29% 15.25% 14.90% 11/24/86 With Sales Charge 5.61% 17.48% 7.08% 14.60% 14.56% CLASS B SHARES Net Asset Value(3) 11.24% 23.19% 7.27% 14.42% 14.93% 3/30/94 With Sales Charge 6.24% 18.19% 6.97% 14.42% 14.93% CLASS C SHARES Net Asset Value(3) 11.29% 23.29% 7.35% 14.25% 8.93% 3/1/02 With Sales Charge 10.29% 22.29% 7.35% 14.25% 8.93% CLASS R-1 SHARES Net Asset Value(3) 11.50% 23.61% 7.64% 14.59% 2.27% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 11.59% 23.86% 7.90% 14.87% 2.27% 3/1/06 Russell 3000(R) Index(4) 10.70% 18.08% 3.94% 9.10% 11.45%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 13.32% (1-year), 9.27% (5-year), 15.44% (10-year), 14.64% (since inception) Class B Shares: 13.78% (1-year), 9.18% (5-year), 15.27% (10-year), 15.07% (since inception) Class C Shares: 17.89% (1-year), 9.54% (5-year), 15.09% (10-year), 9.21% (since inception) Class R-1 Shares: 19.15% (1-year), 9.83% (5-year), 15.43% (10-year), 2.55% (since inception) Class R-2 Shares: 19.43% (1-year), 10.10% (5-year), 15.72% (10-year), 2.55% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Financials 17% 18% -1% Information Technology 17% 16% +1% Health Care 16% 17% -1% Industrials 16% 15% +1% Consumer Discretionary 12% 12% 0% Energy 7% 7% 0% Consumer Staples 5% 5% 0% Materials 4% 3% +1% REITs 3% 3% 0% Telecommunication Services 0% 1% -1% Cash Equivalents 3% 3% 0%
(4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the S&P 500 is calculated from 10/31/49. The since-inception return shown for the Russell 3000(R) Index is calculated from 11/30/86. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 5 PORTFOLIO MANAGER (GRAPHIC) Mid Cap Stock Fund (PHOTO) Daniel R. Coleman WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 5.5%; Class B shares: contingent deferred sales charge of 5%,which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year Inception Date ------- ------ ------ --------- --------- CLASS A SHARES Net Asset Value(3) 14.43% 26.25% 11.07% 15.08% 3/1/00 With Sales Charge 8.13% 19.33% 9.82% 14.03% CLASS B SHARES Net Asset Value(3) 13.88% 25.06% 10.01% 14.00% 3/1/00 With Sales Charge 8.88% 20.06% 9.73% 14.00% CLASS C SHARES Net Asset Value(3) 13.97% 25.20% 10.06% 11.78% 3/1/02 With Sales Charge 12.97% 24.20% 10.06% 11.78% CLASS R-1 SHARES Net Asset Value(3) 14.16% 25.51% 10.43% 5.11% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 14.25% 25.77% 10.70% 5.11% 3/1/06 S&P MidCap 400(4) 15.26% 28.32% 10.73% 10.62%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 14.68% (1-year), 10.78% (5-year), 14.04% (since inception) Class B Shares: 15.14% (1-year), 10.68% (5-year), 14.01% (since inception) Class C Shares: 19.28% (1-year), 11.01% (5-year), 11.76% (since inception) Class R-1 Shares: 20.55% (1-year), 11.38% (5-year), 4.02% (since inception) Class R-2 Shares: 20.82% (1-year), 11.66% (5-year), 4.02% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Financials 19% 18% +1% Industrials 17% 15% +2% Consumer Discretionary 13% 12% +1% Information Technology 12% 12% 0% Health Care 11% 12% -1% Energy 8% 8% 0% Materials 5% 5% 0% Utilities 4% 6% -2% REITs 2% 2% 0% Consumer Staples 1% 3% -2% Telecommunication Services 1% 0% +1% Cash Equivalents 7% 7% 0%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1,and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The Growth Fund's performance between 1999 and 2000 benefited from the agreement of WM Advisors and its affiliates to limit the Fund's expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 6 PORTFOLIO MANAGERS Alan Blake, CFA Growth Fund (GRAPHIC) Salomon Brothers Asset Management, Inc E. Marc Pinto, CFA Janus Capital Management LLC William L. Wilby, CFA & Marc L. Baylin, CFA Oppenheimer Funds, Inc. (5-5-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. Mid Cap Stock Fund: Small-cap and mid-cap stocks may have additional risks, including greater price volatility. Growth Fund: International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 5.39% 13.45% -4.49% 6.69% 10.03% 4/5/93 With Sales Charge -0.42% 7.23% -5.56% 6.09% 9.56% CLASS B SHARES Net Asset Value(3) 4.89% 12.37% -5.35% 6.01% 9.91% 7/1/94 With Sales Charge -0.11% 7.37% -5.85% 6.01% 9.91% CLASS C SHARES Net Asset Value(3) 4.98% 12.57% -5.18% 5.88% 2.60% 3/1/02 With Sales Charge 3.98% 11.57% -5.18% 5.88% 2.60% CLASS R-1 SHARES Net Asset Value(3) 5.23% 13.02% -4.81% 6.35% 0.24% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 5.31% 13.26% -4.59% 6.58% 0.24% 3/1/06 Russell 1000(R) Growth Index(4) 7.06% 15.18% -0.76% 6.21% 8.44%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 6.54% (1-year), -2.19% (5-year), 6.75% (10-year), 9.70% (since inception) Class B Shares: 6.72% (1-year), -2.41% (5-year), 6.67% (10-year), 10.07% (since inception) Class C Shares: 10.93% (1-year), -1.81% (5-year), 6.53% (10-year), 2.91% (since inception) Class R-1 Shares: 12.31% (1-year), -1.43% (5-year), 7.01% (10-year), 1.21% (since inception) Class R-2 Shares: 12.56% (1-year), -1.20% (5-year), 7.24% (10-year), 1.21% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Information Technology 30% 27% +3% Health Care 19% 21% -2% Consumer Discretionary 16% 20% -4% Financials 11% 9% +2% Consumer Staples 8% 8% 0% Energy 6% 4% +2% Industrials 5% 6% -1% Materials 2% 2% 0% Telecommunication Services 1% 1% 0% Cash Equivalents 2% 2% 0%
(4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the S&P MidCap 400 is calculated from 2/29/00. The since-inception return shown for the Russell 1000(R) Growth Index is calculated from 3/31/93. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 7 PORTFOLIO MANAGER (GRAPHIC) Small Cap Value Fund (PHOTO) David W. Simpson, CFA WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 5.5%; Class B shares: contingent deferred sales charge of 5%, which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year Inception Date ------- ------ --------- --------- CLASS A SHARES Net Asset Value(3) 11.24% 11.33% 13.28% 3/1/04 With Sales Charge 5.12% 5.21% 10.38% CLASS B SHARES Net Asset Value(3) 10.79% 10.31% 12.27% 3/1/04 With Sales Charge 5.78% 5.31% 10.65% CLASS C SHARES Net Asset Value(3) 10.92% 10.54% 12.43% 3/1/04 With Sales Charge 8.92% 8.54% 12.43% CLASS R-1 SHARES Net Asset Value(3) 11.00% 10.76% 1.91% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 11.09% 10.98% 1.91% 3/1/06 Russell 2000(R) Value Index(4) 17.52% 30.85% 16.08%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 3.41% (1-year), 11.67% (since inception) Class B Shares: 3.39% (1-year), 12.04% (since inception) Class C Shares: 6.44% (1-year), 13.83% (since inception) Class R-1 Shares: 8.78% (1-year), 3.58% (since inception) Class R-2 Shares: 9.03% (1-year), 3.58% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Financials 14% 13% +1% Industrials 14% 14% 0% Materials 11% 11% 0% Consumer Discretionary 10% 11% -1% Energy 10% 11% -1% Information Technology 10% 11% -1% Consumer Staples 8% 7% +1% Health Care 7% 6% +1% REITs 5% 4% +1% Telecommunication Services 4% 3% +1% Options 1% 3% -2% Utilities 1% 1% 0% Cash Equivalents 5% 5% 0%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1,and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The Small Cap Growth Fund's performance between 1998 and 1999 benefited from the agreement of WM Advisors and its affiliates to limit the Fund's expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 8 PORTFOLIO MANAGERS Small Cap Growth Fund (GRAPHIC) Emerging Growth Team Delaware Management Company James W. Oberweis, CFA Oberweis Asset Management, Inc. (5-5-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. Small-cap and mid-cap stocks may have additional risks, including greater price volatility. Small Cap Value Fund: International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year 5-Year 10-Year Since Inception Inception Date ------- ------ ------ ------- --------------- -------------- CLASS A SHARES Net Asset Value(3) 14.93% 35.91% -0.43% 4.18% 8.57% 7/18/90 With Sales Charge 8.62% 28.39% -1.54% 3.59% 8.19% CLASS B SHARES Net Asset Value(3) 14.33% 34.50% -1.49% 3.42% 7.42% 7/1/94 With Sales Charge 9.33% 29.50% -1.92% 3.42% 7.42% CLASS C SHARES Net Asset Value(3) 14.54% 34.80% -1.16% 3.51% 4.99% 3/1/02 With Sales Charge 13.54% 33.80% -1.16% 3.51% 4.99% CLASS R-1 SHARES Net Asset Value(3) 14.73% 35.28% -0.89% 3.76% 2.56% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 14.83% 35.56% -0.65% 4.00% 2.56% 3/1/06 Russell 2000(R) Growth Index(4) 20.31% 36.13% 6.05% 4.70% 8.39%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 19.17% (1-year), 1.39% (5-year), 3.98% (10-year), 8.30% (since inception) Class B Shares: 19.73% (1-year), 1.07% (5-year), 3.81% (10-year), 7.56% (since inception) Class C Shares: 24.13% (1-year), 1.79% (5-year), 3.90% (10-year), 5.35% (since inception) Class R-1 Shares: 25.51% (1-year), 2.05% (5-year), 4.14% (10-year), 3.52% (since inception) Class R-2 Shares: 25.79% (1-year), 2.30% (5-year), 4.39% (10-year), 3.52% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Health Care 24% 28% -4% Consumer Discretionary 15% 14% +1% Industrials 12% 11% +1% Energy 10% 6% +4% Semiconductors & Semiconductor Equipment 8% 6% +2% Communications Equipment 6% 7% -1% Financials 5% 4% +1% Internet Software & Services 5% 9% -4% Software 5% 5% 0% IT Services 3% 2% +1% Computers & Peripherals 1% 1% 0% Consumer Staples 1% 2% -1% REITs 1% 1% 0% Telecommunication Services 0% 1% -1% Cash Equivalents 4% 3% +1%
(4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the Russell 2000(R) Value Index is calculated from 2/29/04. The since-inception return shown for the Russell 2000(R) Growth Index is calculated from 7/31/90. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 9 PORTFOLIO MANAGERS (GRAPHIC) International Growth Fund Non-U.S. Equity Team & Emerging Market Equity Team Capital Guardian Trust Company (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 5.5% (for the International Growth Fund) or 3.5% (for the Short Term Income Fund); Class B shares: AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year 5-Year 10-Year Since Inception Inception Date ------- ------ ------ ------- --------------- -------------- CLASS A SHARES Net Asset Value(3) 21.77% 35.53% 7.02% 5.19% 4.47% 7/18/90 With Sales Charge 15.02% 28.09% 5.81% 4.60% 4.09% CLASS B SHARES Net Asset Value(3) 21.11% 34.08% 5.88% 4.44% 4.50% 7/1/94 With Sales Charge 16.11% 29.08% 5.56% 4.44% 4.50% CLASS C SHARES Net Asset Value(3) 21.32% 34.45% 6.11% 4.28% 13.00% 3/1/02 With Sales Charge 20.32% 33.45% 6.11% 4.28% 13.00% CLASS R-1 SHARES Net Asset Value(3) 21.53% 34.91% 6.75% 4.95% 7.06% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 21.63% 35.19% 6.92% 5.14% 7.06% 3/1/06 MSCI All Country World Index ex-USA(4) 25.04% 38.14% 11.43% 7.57% 7.34% MSCI EAFE Index(4) 23.10% 34.00% 9.59% 7.03% 6.89%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 19.76% (1-year), 6.72% (5-year), 4.32% (10-year), 3.84% (since inception) Class B Shares: 20.46% (1-year), 6.51% (5-year), 4.18% (10-year), 4.16% (since inception) Class C Shares: 24.60% (1-year), 7.02% (5-year), 4.00% (10-year), 12.15% (since inception) Class R-1 Shares: 26.15% (1-year), 7.67% (5-year), 4.66% (10-year), 2.74% (since inception) Class R-2 Shares: 26.44% (1-year), 7.85% (5-year), 4.85% (10-year), 2.74% (since inception) GEOGRAPHIC BREAKDOWN(5) As of 4/30/06 (PIE CHART)
As of As of Country 4/30/06 10/31/05 Change - ------- ------- -------- ------ Japan 24% 29% -5% United Kingdom 13% 16% -3% France 8% 9% -1% Switzerland 6% 8% -2% Canada 5% 4% +1% Germany 5% 7% -2% Netherlands 4% 6% -2% South Korea 4% 1% +3% South Africa 3% 1% +2% Spain 3% 5% -2% Other Countries 22% 11% +11% Cash Equivalents 3% 3% 0%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1, and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The Short Term Income Fund's performance between 1995 and 2005 benefited from the agreement of WM Advisors and its affiliates to limit the Fund's expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 10 PORTFOLIO MANAGER Short Term Income Fund (GRAPHIC) Craig V. Sosey (PHOTO) WM Advisors, Inc. contingent deferred sales charge of 5% (for the International Growth Fund), which declines over 5 years (5-5-4-3-2-0%), or 4% (for the Short Term Income Fund), which declines over 4 years (4-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. International Growth Fund: International investing, especially in emerging markets, involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. Short Term Income Fund: Fixed-income investments are subject to interest rate risk, and their value will decline as interest rates rise. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 1.36% 1.88% 3.71% 4.90% 4.52% 11/1/93 With Sales Charge -2.03% -1.48% 2.93% 4.54% 4.23% CLASS B SHARES Net Asset Value(3) 0.99% 1.13% 2.94% 4.27% 4.32% 7/1/94 With Sales Charge -3.01% -2.87% 2.94% 4.27% 4.32% CLASS C SHARES Net Asset Value(3) 1.00% 1.14% 2.93% 4.05% 2.37% 3/1/02 With Sales Charge 0.00% 0.14% 2.93% 4.05% 2.37% CLASS R-1 SHARES Net Asset Value(3) 0.48% 0.61% 2.86% 4.06% -0.43% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 0.56% 0.82% 3.11% 4.31% -0.43% 3/1/06 Citigroup Broad Investment-Grade Credit 1-3 Years Index(4) 1.69% 2.79% 4.46% 5.72% 5.70%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: -1.09% (1-year), 2.97% (5-year), 4.47% (10-year), 4.23% (since inception) Class B Shares: -2.46% (1-year), 2.97% (5-year), 4.20% (10-year), 4.32% (since inception) Class C Shares: 1.00% (1-year), 3.06% (5-year), 4.03% (10-year), 2.46% (since inception) Class R-1 Shares: 1.26% (1-year), 2.95% (5-year), 4.01% (10-year), -0.43% (since inception) Class R-2 Shares: 1.49% (1-year), 3.20% (5-year), 4.27% (10-year), -0.43% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Domestic Corporate Bonds 52% 49% +3% Mortgage-Backed Bonds 17% 18% -1% U.S. Government Agency 10% 10% 0% U.S. Treasuries 6% 6% 0% Asset-Backed Bonds 5% 5% 0% Foreign Corporate Bonds (U.S.$) 5% 5% 0% Cash Equivalents 5% 7% -2%
(4) See page 18 for definitions of indices. Effective 3/1/06, the Morgan Stanley Capital International (MSCI) All Country World Index ex-USA replaced the MSCI EAFE Index because WM Advisors and the Fund's subadvisor believe the new benchmark more accurately reflects the International Growth Fund's performance characteristics. Returns shown for the indices assume reinvestment of all dividends and distributions. Since-inception returns shown for the MSCI All Country World Index ex-USA and the MSCI EAFE Index are calculated from 7/31/90. The since-inception return shown for the Citigroup Broad Investment-Grade Credit 1-3 Years Index is calculated from 10/31/93. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 11 PORTFOLIO MANAGER (GRAPHIC) U.S. Government Securities Fund (PHOTO) Craig V. Sosey WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 4.5%; Class B shares: contingent deferred sales charge of 5%, which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 0.82% 0.82% 3.97% 5.57% 7.46% 5/4/84 With Sales Charge -3.75% -3.74% 3.02% 5.08% 7.24% CLASS B SHARES Net Asset Value(3) 0.45% 0.09% 3.22% 4.91% 5.16% 3/30/94 With Sales Charge -4.55% -4.91% 2.86% 4.91% 5.16% CLASS C SHARES Net Asset Value(3) 0.46% 0.18% 3.22% 4.89% 2.42% 3/1/02 With Sales Charge -0.54% -0.82% 3.22% 4.89% 2.42% CLASS R-1 SHARES Net Asset Value(3) -0.16% -0.48% 3.18% 4.89% -1.61% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) -0.07% -0.28% 3.43% 5.15% -1.61% 3/1/06 Citigroup Mortgage Index(4) 1.23% 1.60% 4.88% 6.27% 9.00%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: -2.61% (1-year), 3.00% (5-year), 5.01% (10-year), 7.27% (since inception) Class B Shares: -3.80% (1-year), 2.85% (5-year), 4.84% (10-year), 5.19% (since inception) Class C Shares: 0.20% (1-year), 3.20% (5-year), 4.82% (10-year), 2.48% (since inception) Class R-1 Shares: 0.96% (1-year), 3.23% (5-year), 4.86% (10-year), -1.23% (since inception) Class R-2 Shares: 1.19% (1-year), 3.48% (5-year), 5.11% (10-year), -1.23% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ FHLMC/FGLMC 34% 33% +1% FNMA 30% 29% +1% CMOs 20% 18% +2% GNMA 5% 7% -2% U.S. Government Agency 4% 4% 0% U.S. Treasuries 4% 5% -1% Cash Equivalents 3% 4% -1%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1, and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The U.S. Government Securities Fund's performance between 1998 and 2000 and the Income Fund's performance in 1999 benefited from the agreement of WM Advisors and its affiliates to limit the Funds' expenses. On 3/1/04, the investment policies of the U.S. Government Securities Fund were modified. As a result, the Fund's performance for periods prior to that date may not be representative of the performance it would have achieved had its current investment policies been in place. (2) Periods of less than one year are not annualized. 12 PORTFOLIO MANAGERS Income Fund (GRAPHIC) John R. Friedl, CFA and (PHOTO) Gary J. Pokrzywinski, CFA (PHOTO) WM Advisors, Inc. (5-5-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. Fixed-income investments are subject to interest rate risk, and their value will decline as interest rates rise. U.S. Government Securities Fund: Neither the principal of government bond funds nor their yields are guaranteed by the U.S. government. Income Fund: Lower-rated securities are subject to additional credit and default risks. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year 5-Year 10-Year Since Inception Inception Date ------- ------ ------ ------- --------------- -------------- CLASS A SHARES Net Asset Value(3) 1.68% 2.02% 5.84% 6.56% 8.32% 12/15/75 With Sales Charge -2.94% -2.60% 4.86% 6.07% 8.16% CLASS B SHARES Net Asset Value(3) 1.19% 1.18% 5.08% 5.93% 6.16% 3/30/94 With Sales Charge -3.81% -3.82% 4.75% 5.93% 6.16% CLASS C SHARES Net Asset Value(3) 1.18% 1.15% 5.07% 5.88% 4.46% 3/1/02 With Sales Charge 0.18% 0.15% 5.07% 5.88% 4.46% CLASS R-1 SHARES Net Asset Value(3) 0.53% 0.54% 5.00% 5.86% -1.65% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 0.61% 0.75% 5.26% 6.12% -1.65% 3/1/06 Citigroup Broad Investment-Grade Bond Index(4) 0.55% 0.78% 5.21% 6.36% --
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: -1.78% (1-year), 4.81% (5-year), 5.99% (10-year), 8.18% (since inception) Class B Shares: -3.07% (1-year), 4.66% (5-year), 5.86% (10-year), 6.20% (since inception) Class C Shares: 0.90% (1-year), 5.01% (5-year), 5.80% (10-year), 4.57% (since inception) Class R-1 Shares: 1.70% (1-year), 5.03% (5-year), 5.83% (10-year), -1.21% (since inception) Class R-2 Shares: 1.93% (1-year), 5.28% (5-year), 6.09% (10-year), -1.21% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Domestic Corporate Bonds 58% 57% +1% Mortgage-Backed Bonds 24% 23% +1% U.S. Treasuries 7% 7% 0% Foreign Corporate Bonds (U.S.$) 6% 6% 0% Foreign Government Bonds (U.S.$) 1% 1% 0% Equities 0% 1% -1% Cash Equivalents 4% 5% -1%
(3) Net asset value is not adjusted for sales charge. (4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the Citigroup Mortgage Index is calculated from 4/30/84. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. 13 (GRAPHIC) High Yield Fund PORTFOLIO MANAGER (PHOTO) Gary J. Pokrzywinski, CFA WM Advisors, Inc. (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 4.5%; Class B shares: contingent deferred sales charge of 5%, which declines over 5 years (5-5-4-3-2-0%); Class C shares: contingent deferred sales charge of 1% on redemptions AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
6-Month 1-Year 5-Year Since Inception Inception Date ------- ------ ------ --------------- -------------- CLASS A SHARES Net Asset Value(3) 8.23% 14.84% 11.00% 7.74% 4/8/98 With Sales Charge 3.34% 9.65% 9.99% 7.13% CLASS B SHARES Net Asset Value(3) 7.80% 13.95% 10.20% 7.10% 5/5/98 With Sales Charge 2.80% 8.94% 9.93% 7.10% CLASS C SHARES Net Asset Value(3) 7.81% 13.96% 10.17% 11.30% 3/1/02 With Sales Charge 6.81% 12.96% 10.17% 11.30% CLASS R-1 SHARES Net Asset Value(3) 7.27% 13.41% 10.18% 1.08% 3/1/06 CLASS R-2 SHARES Net Asset Value(3) 6.82% 13.09% 10.34% 0.58% 3/1/06 Citigroup High Yield Market Index(4) 4.56% 8.61% 8.70% 5.27%
Average annual total returns(1, 2) (with sales charge for Class A, B, and C shares) as of 3/31/06: Class A Shares: 7.47% (1-year), 9.61% (5-year), 6.98% (since inception) Class B Shares: 6.64% (1-year), 9.53% (5-year), 6.96% (since inception) Class C Shares: 10.66% (1-year), 9.80% (5-year), 11.11% (since inception) Class R-1 Shares: 11.17% (1-year), 9.83% (5-year), -0.47% (since inception) Class R-2 Shares: 11.42% (1-year), 10.10% (5-year), -0.47% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06
As of As of Asset Class 4/30/06 10/31/05 Change - ----------- ------- -------- ------ Domestic Corporate Bonds 83% 81% +2% Equities 8% 10% -2% Foreign Government Bonds (Non-U.S.$) 3% 1% +2% U.S. Treasuries 2% 0% +2% Foreign Corporate Bonds (U.S.$) 1% 4% -3% Foreign Corporate Bonds (Non-U.S.$) 1% 1% 0% Foreign Government Bonds (U.S.$) 1% 2% -1% Cash Equivalents 1% 1% 0%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C, R-1, and R-2 shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The High Yield Fund's performance between 1998 and 1999 and the Tax-Exempt Bond Fund's performance in 2000 benefited from the agreement of WM Advisors and its affiliates to limit the Funds' expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 14 PORTFOLIO MANAGER Tax-Exempt Bond Fund (GRAPHIC) Thomas M. Byron (PHOTO) Van Kampen Asset Management made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. Fixed-income investments are subject to interest rate risk, and their value will decline as interest rates rise. High Yield Fund: Lower-rated securities are subject to additional credit and default risks. International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. Tax-Exempt Bond Fund: A portion of the Fund's income may be subject to state and/or local taxes, and it may be subject to federal alternative minimum tax (AMT) for certain investors. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 2.13% 2.74% 5.21% 5.19% 5.87% 1/3/77 With Sales Charge -2.44% -1.90% 4.25% 4.71% 5.70% CLASS B SHARES Net Asset Value(3) 1.75% 1.97% 4.43% 4.54% 4.86% 3/30/94 With Sales Charge -3.25% -3.03% 4.09% 4.54% 4.86% CLASS C SHARES Net Asset Value(3) 1.72% 1.93% 4.43% 4.38% 3.92% 3/1/02 With Sales Charge 0.72% 0.93% 4.43% 4.38% 3.92% Lehman Brothers Municipal Bond Index(4) 1.56% 2.17% 5.39% 5.89% --
Average annual total returns(1) (with sales charge) as of 3/31/06: Class A Shares: -0.17% (1-year), 3.93% (5-year), 4.64% (10-year), 5.72% (since inception) Class B Shares: -1.30% (1-year), 3.78% (5-year), 4.47% (10-year), 4.90% (since inception) Class C Shares: 2.66% (1-year), 4.12% (5-year), 4.32% (10-year), 4.02% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Rating 4/30/06 10/31/05 Change - ------ ------- -------- ------ Aaa 61% 64% -3% Aa 13% 15% -2% A 7% 8% -1% Baa 10% 8% +2% Ba or lower 3% 2% +1% Not Rated/Other 6% 3% +3%
(4) See page 18 for definitions of indices. Returns shown for the indices assume reinvestment of all dividends and distributions. The since-inception return shown for the Citigroup High Yield Market Index is calculated from 3/31/98. Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. See page 18 for an explanation of bond ratings. 15 PORTFOLIO MANAGER (GRAPHIC) California Municipal Fund (PHOTO) Joseph A. Piraro Van Kampen Asset Management (GRAPHIC) Data shown is past performance and does not guarantee future results. Current performance, including the most recent month-end results, which may be higher or lower than the data shown, can be obtained by calling 800-222-5852. Your investment's return and principal value will fluctuate, so it may be worth more or less upon redemption. A sales charge may apply as follows: Class A shares: maximum up-front sales charge of 4.5%; Class B shares: contingent deferred sales charge of 5%,which declines over 5 years AVERAGE ANNUAL TOTAL RETURNS (1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 2.09% 2.78% 5.26% 5.60% 6.19% 7/25/89 With Sales Charge -2.51% -1.87% 4.30% 5.12% 5.90% CLASS B SHARES Net Asset Value(3) 1.71% 2.01% 4.48% 4.97% 5.31% 7/1/94 With Sales Charge -3.29% -2.99% 4.15% 4.97% 5.31% CLASS C SHARES Net Asset Value(3) 1.70% 2.00% 4.48% 4.88% 3.84% 3/1/02 With Sales Charge 0.70% 1.00% 4.48% 4.88% 3.84% Lehman Brothers Municipal Bond Index(4) 1.56% 2.17% 5.39% 5.89% 6.63%
Average annual total returns(1) (with sales charge) as of 3/31/06: Class A Shares: -0.10% (1-year), 3.97% (5-year), 5.12% (10-year), 5.94% (since inception) Class B Shares: -1.17% (1-year), 3.81% (5-year), 4.97% (10-year), 5.36% (since inception) Class C Shares: 2.82% (1-year), 4.15% (5-year), 4.88% (10-year), 3.96% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Rating 4/30/06 10/31/05 Change - ------ ------- -------- ------ Aaa 55% 65% -10% Aa 1% 1% 0% A 11% 11% 0% Baa 23% 14% +9% Not Rated/Other 10% 9% +1%
(1) Performance reflects ongoing fund expenses, which may have been waived, and assumes reinvestment of all dividends and capital gains. For Class C shares, performance for periods prior to inception is hypothetical, based on Class A share returns adjusted for the respective expenses of the share class. Performance does not reflect the impact of federal, state, or municipal taxes. If it did, performance would be lower. The California Municipal Fund's performance between 1995 and 1999 and the California Insured Intermediate Municipal Fund's performance between 1995 and 2003 benefited from the agreement of WM Advisors and its affiliates to limit the Funds' expenses. (2) Periods of less than one year are not annualized. (3) Net asset value is not adjusted for sales charge. 16 PORTFOLIO MANAGER Joseph A. Piraro California Insured Intermediate (GRAPHIC) Van Kampen Asset Management Municipal Fund (5-5-4-3-2-0%);Class C shares: contingent deferred sales charge of 1% on redemptions made during the first 12 months. See the prospectus for details. Performance listed with sales charge reflects the maximum sales charge. Fixed-income investments are subject to interest rate risk, and their value will decline as interest rates rise. A portion of the Funds' income may be subject to state and/or local taxes, and it may be subject to federal alternative minimum tax (AMT) for certain investors. AVERAGE ANNUAL TOTAL RETURNS(1, 2) AS OF APRIL 30, 2006
Since Inception 6-Month 1-Year 5-Year 10-Year Inception Date ------- ------ ------ ------- --------- --------- CLASS A SHARES Net Asset Value(3) 1.22% 1.08% 4.25% 4.73% 5.30% 4/4/94 With Sales Charge -3.32% -3.47% 3.29% 4.24% 4.90% CLASS B SHARES Net Asset Value(3) 0.84% 0.31% 3.46% 4.10% 4.68% 7/1/94 With Sales Charge -4.16% -4.69% 3.11% 4.10% 4.68% CLASS C SHARES Net Asset Value(3) 0.85% 0.33% 3.48% 4.03% 2.61% 3/1/02 With Sales Charge -0.16% -0.67% 3.48% 4.03% 2.61% Lehman Brothers Municipal Bond Index(4) 1.56% 2.17% 5.39% 5.89% 6.16%
Average annual total returns(1) (with sales charge) as of 3/31/06: Class A Shares: -1.86% (1-year), 3.03% (5-year), 4.24% (10-year), 4.94% (since inception) Class B Shares: -3.04% (1-year), 2.85% (5-year), 4.09% (10-year), 4.72% (since inception) Class C Shares: 0.97% (1-year), 3.23% (5-year), 4.02% (10-year), 2.70% (since inception) PORTFOLIO COMPOSITION(5) As of 4/30/06 (PIE CHART)
As of As of Rating 4/30/06 10/31/05 Change - ------ ------- -------- ------ Aaa 88% 92% -4% Aa 1% 2% -1% A 1% 0% +1% Baa 8% 5% +3% Not Rated 2% 1% +1%
(4) See page 18 for a definition of the index. Returns shown for the index assume reinvestment of all dividends and distributions. Since-inception returns shown for the index are calculated from 7/31/89 (California Municipal Fund) and 3/31/94 (California Insured Intermediate Municipal Fund). Indices are unmanaged, and individuals cannot invest directly in an index. (5) May not reflect the current portfolio composition. See page 18 for an explanation of bond ratings. 17 (GRAPHIC) Glossary DEFINITIONS OF INDICES CITIGROUP BROAD INVESTMENT-GRADE BOND INDEX: Measures the performance of bonds, including U.S. and non-U.S. corporate securities and non-U.S. sovereign and provincial securities. It includes institutionally traded U.S. Treasury, government-sponsored, mortgage, asset-backed, and investment-grade securities. CITIGROUP BROAD INVESTMENT-GRADE CREDIT 1-3 YEARS INDEX: Measures the performance of bonds, including U.S. and non-U.S.corporate securities and non-U.S. sovereign and provincial securities, with maturities between one and three years. CITIGROUP HIGH YIELD MARKET INDEX: Measures the performance of below-investment-grade debt issued by corporations domiciled in the U.S. or Canada. CITIGROUP MORTGAGE INDEX: Represents the mortgage-backed securities component of Citigroup's Broad Investment-Grade Bond Index. It consists of 30- and 15-year agency-issued (GNMA, FNMA, and FHLMC) pass-through securities as well as FNMA and FHLMC balloon mortgages. LEHMAN BROTHERS AGGREGATE BOND INDEX: A broad-based index intended to represent the U.S. fixed-income market. LEHMAN BROTHERS MUNICIPAL BOND INDEX: A total return performance benchmark for the long-term, investment-grade, tax-exempt bond market. MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) ALL COUNTRY WORLD INDEX EX-USA: A float-adjusted market-capitalization index that is designed to measure equity market performance in the global developed and emerging markets, excluding the United States. The index consists of 48 developed and emerging market country indices. MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EAFE INDEX: A broad-based, capitalization-weighted index of equity markets representing 21 countries in Europe, Australasia, and the Far East. NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUST (NAREIT) ALL REIT INDEX: Reflects the aggregate performance of all publicly traded REITs that own, develop, and manage properties. RUSSELL 1000(R) GROWTH INDEX: Measures the performance of those Russell 1000(R) Index securities with higher price-to-book ratios and higher forecasted growth values. RUSSELL 2000(R) GROWTH INDEX: Measures the performance of those Russell 2000(R) Index securities with higher price-to-book ratios and higher forecasted growth values. RUSSELL 2000(R) VALUE INDEX: Measures the performance of those Russell 2000(R) Index securities with lower price-to-book ratios and lower forecasted growth values. RUSSELL 3000(R) INDEX: Measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. S&P 500: A broad-based index intended to represent the U.S. equity market. S&P 500/BARRA VALUE INDEX: An index constructed by ranking the securities in the S&P 500 by price-to-book ratio and including the securities with the lowest price-to-book ratios that represent approximately half of the market capitalization of the S&P 500. S&P MIDCAP 400: A weighted index of the common stocks of 400 mid-size companies. DEFINITIONS OF TERMS BOND RATINGS: Provided by Moody's Investors Service (Moody's). If an issue is not rated by Moody's, its Standard & Poor's rating or Fitch rating is converted to the equivalent Moody's rating and incorporated (non-rated issues are not classified by these rating services). The ratings represent the company's opinion of the credit quality of securities and are intended to reflect the issuer's ability to pay back principal and interest. 18 Expense Information WM GROUP OF FUNDS As a shareholder of the REIT Fund, Equity Income Fund, Growth & Income Fund, West Coast Equity Fund, Mid Cap Stock Fund, Growth Fund, Small Cap Value Fund, Small Cap Growth Fund, International Growth Fund, Short Term Income Fund, U.S. Government Securities Fund, Income Fund, High Yield Fund, Tax-Exempt Bond Fund, California Municipal Fund, or California Insured Intermediate Municipal Fund (collectively, the "Funds"), you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase of Class A shares, and, if applicable, contingent deferred sales charges on redemption of shares and redemption fees and (2) ongoing costs, including management fees, distribution and/or service fees, and other Fund expenses. The example below is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005, to April 30, 2006. ACTUAL EXPENSES: The first section of the table below provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply the result by the number in the third column under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES: The second section of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses (rather than each Fund's actual rate of return). The hypothetical account values and expenses may not be used to estimate the actual ending balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the hypothetical section of the table is useful in comparing ongoing costs only, and will not help you compare the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, the cost shown would have been higher.
HYPOTHETICAL ACTUAL EXPENSES (5% RETURN BEFORE EXPENSES) --------------------------------- --------------------------------- EXPENSES EXPENSES BEGINNING ENDING PAID DURING BEGINNING ENDING PAID DURING ACCOUNT ACCOUNT PERIOD* ACCOUNT ACCOUNT PERIOD* VALUE VALUE 11/1/05- VALUE VALUE 11/1/05- EXPENSE 11/1/05 4/30/06 4/30/06 11/1/05 4/30/06 4/30/06 RATIO --------- ------- ----------- --------- ------- ----------- ------- REIT Fund Class A ............... $1,000 $1,145 $ 6.97 $1,000 $1,018 $ 6.56 1.31% Class B ............... 1,000 1,140 11.20 1,000 1,014 10.54 2.11% Class C ............... 1,000 1,141 10.62 1,000 1,015 9.99 2.00% Class I ............... 1,000 1,148 4.58 1,000 1,021 4.31 0.86% Class R-1 ............. 1,000 1,016 9.55 1,000 1,015 9.54 1.91% Class R-2 ............. 1,000 1,016 8.30 1,000 1,017 8.30 1.66% Equity Income Fund Class A ............... $1,000 $1,113 $ 4.61 $1,000 $1,020 $ 4.41 0.88% Class B ............... 1,000 1,109 9.10 1,000 1,016 8.70 1.74% Class C ............... 1,000 1,109 8.63 1,000 1,017 8.25 1.65% Class I ............... 1,000 1,115 2.88 1,000 1,022 2.76 0.55% Class R-1 ............. 1,000 1,040 8.09 1,000 1,008 8.00 1.60% Class R-2 ............. 1,000 1,040 6.83 1,000 1,009 6.76 1.35% Growth & Income Fund Class A ............... $1,000 $1,084 $ 4.49 $1,000 $1,020 $ 4.36 0.87% Class B ............... 1,000 1,078 9.69 1,000 1,015 9.39 1.88% Class C ............... 1,000 1,080 9.33 1,000 1,016 9.05 1.81% Class I ............... 1,000 1,085 2.79 1,000 1,022 2.71 0.54% Class R-1 ............. 1,000 1,029 8.00 1,000 1,008 7.95 1.59% Class R-2 ............. 1,000 1,029 6.74 1,000 1,009 6.71 1.34%
19 Expense Information (continued) WM GROUP OF FUNDS
HYPOTHETICAL ACTUAL EXPENSES (5% RETURN BEFORE EXPENSES) --------------------------------- --------------------------------- EXPENSES EXPENSES BEGINNING ENDING PAID DURING BEGINNING ENDING PAID DURING ACCOUNT ACCOUNT PERIOD* ACCOUNT ACCOUNT PERIOD* VALUE VALUE 11/1/05- VALUE VALUE 11/1/05- EXPENSE 11/1/05 4/30/06 4/30/06 11/1/05 4/30/06 4/30/06 RATIO --------- ------- ----------- --------- ------- ----------- ------- West Coast Equity Fund Class A ....................... $1,000 $1,118 $ 4.57 $1,000 $1,020 $ 4.36 0.87% Class B ....................... 1,000 1,112 9.32 1,000 1,016 8.90 1.78% Class C ....................... 1,000 1,113 8.91 1,000 1,016 8.50 1.70% Class I ....................... 1,000 1,119 2.84 1,000 1,022 2.71 0.54% Class R-1 ..................... 1,000 1,023 7.97 1,000 1,008 7.95 1.59% Class R-2 ..................... 1,000 1,023 6.72 1,000 1,009 6.71 1.34% Mid Cap Stock Fund Class A ....................... $1,000 $1,144 $ 5.85 $1,000 $1,019 $ 5.51 1.10% Class B ....................... 1,000 1,139 10.87 1,000 1,015 10.24 2.05% Class C ....................... 1,000 1,140 10.29 1,000 1,015 9.69 1.94% Class I ....................... 1,000 1,146 4.20 1,000 1,021 3.96 0.79% Class R-1 ..................... 1,000 1,051 9.36 1,000 1,008 9.20 1.84% Class R-2 ..................... 1,000 1,051 8.09 1,000 1,008 7.95 1.59% Growth Fund Class A ....................... $1,000 $1,054 $ 6.47 $1,000 $1,018 $ 6.36 1.27% Class B ....................... 1,000 1,049 11.33 1,000 1,014 11.13 2.23% Class C ....................... 1,000 1,050 10.32 1,000 1,015 10.14 2.03% Class I ....................... 1,000 1,057 3.77 1,000 1,021 3.71 0.74% Class R-1 ..................... 1,000 1,002 8.89 1,000 1,008 8.95 1.79% Class R-2 ..................... 1,000 1,002 7.65 1,000 1,009 7.70 1.54% Small Cap Value Fund Class A ....................... $1,000 $1,112 $ 7.02 $1,000 $1,018 $ 6.71 1.34% Class B ....................... 1,000 1,108 11.81 1,000 1,014 11.28 2.26% Class C ....................... 1,000 1,109 10.88 1,000 1,014 10.39 2.08% Class I ....................... 1,000 1,116 4.72 1,000 1,020 4.51 0.90% Class R-1 ..................... 1,000 1,019 9.76 1,000 1,008 9.74 1.95% Class R-2 ..................... 1,000 1,019 8.51 1,000 1,008 8.50 1.70% Small Cap Growth Fund Class A ....................... $1,000 $1,149 $ 7.46 $1,000 $1,018 $ 7.00 1.40% Class B ....................... 1,000 1,143 13.44 1,000 1,012 12.62 2.53% Class C ....................... 1,000 1,145 11.49 1,000 1,014 10.79 2.16% Class I ....................... 1,000 1,152 4.96 1,000 1,020 4.66 0.93% Class R-1 ..................... 1,000 1,026 9.94 1,000 1,007 9.89 1.98% Class R-2 ..................... 1,000 1,026 8.69 1,000 1,008 8.65 1.73% International Growth Fund Class A ....................... $1,000 $1,218 $ 7.15 $1,000 $1,018 $ 6.51 1.30% Class B ....................... 1,000 1,211 12.88 1,000 1,013 11.73 2.35% Class C ....................... 1,000 1,213 11.47 1,000 1,014 10.44 2.09% Class I ....................... 1,000 1,220 5.06 1,000 1,020 4.61 0.92% Class R-1 ..................... 1,000 1,071 10.11 1,000 1,008 9.84 1.97% Class R-2 ..................... 1,000 1,071 8.83 1,000 1,008 8.60 1.72% Short Term Income Fund Class A ....................... $1,000 $1,014 $ 4.74 $1,000 $1,020 $ 4.76 0.95% Class B ....................... 1,000 1,010 8.42 1,000 1,016 8.45 1.69% Class C ....................... 1,000 1,010 8.32 1,000 1,017 8.35 1.67% Class I ....................... 1,000 1,016 2.75 1,000 1,022 2.76 0.55% Class R-1 ..................... 1,000 996 7.92 1,000 1,008 8.00 1.60% Class R-2 ..................... 1,000 996 6.68 1,000 1,009 6.76 1.35% U.S. Government Securities Fund Class A ....................... $1,000 $1,008 $ 4.48 $1,000 $1,020 $ 4.51 0.90% Class B ....................... 1,000 1,005 8.15 1,000 1,017 8.20 1.64% Class C ....................... 1,000 1,005 8.05 1,000 1,017 8.10 1.62% Class I ....................... 1,000 1,010 2.59 1,000 1,022 2.61 0.52% Class R-1 ..................... 1,000 984 7.72 1,000 1,009 7.85 1.57% Class R-2 ..................... 1,000 984 6.49 1,000 1,009 6.61 1.32% Income Fund Class A ....................... $1,000 $1,017 $ 4.45 $1,000 $1,020 $ 4.46 0.89% Class B ....................... 1,000 1,012 8.18 1,000 1,017 8.20 1.64% Class C ....................... 1,000 1,012 8.23 1,000 1,017 8.25 1.65% Class I ....................... 1,000 1,018 2.65 1,000 1,022 2.66 0.53% Class R-1 ..................... 1,000 984 7.77 1,000 1,008 7.90 1.58% Class R-2 ..................... 1,000 984 6.54 1,000 1,009 6.66 1.33%
20 Expense Information (continued) WM GROUP OF FUNDS
HYPOTHETICAL ACTUAL EXPENSES (5% RETURN BEFORE EXPENSES) --------------------------------- --------------------------------- EXPENSES EXPENSES BEGINNING ENDING PAID DURING BEGINNING ENDING PAID DURING ACCOUNT ACCOUNT PERIOD* ACCOUNT ACCOUNT PERIOD* VALUE VALUE 11/1/05- VALUE VALUE 11/1/05- EXPENSE 11/1/05 4/30/06 4/30/06 11/1/05 4/30/06 4/30/06 RATIO --------- ------- ----------- --------- ------- ----------- ------- High Yield Fund Class A ....................... $1,000 $1,082 $4.65 $1,000 $1,020 $4.51 0.90% Class B ....................... 1,000 1,078 8.60 1,000 1,017 8.35 1.67% Class C ....................... 1,000 1,078 8.50 1,000 1,017 8.25 1.65% Class I ....................... 1,000 1,084 2.95 1,000 1,022 2.86 0.57% Class R-1 ..................... 1,000 1,011 8.08 1,000 1,008 8.10 1.62% Class R-2 ..................... 1,000 1,006 6.81 1,000 1,009 6.85 1.37% Tax-Exempt Bond Fund Class A ....................... $1,000 $1,021 $4.31 $1,000 $1,021 $4.31 0.86% Class B ....................... 1,000 1,018 8.05 1,000 1,017 8.05 1.61% Class C ....................... 1,000 1,017 8.25 1,000 1,017 8.25 1.65% California Municipal Fund Class A ....................... $1,000 $1,021 $4.21 $1,000 $1,021 $4.21 0.84% Class B ....................... 1,000 1,017 7.95 1,000 1,017 7.95 1.59% Class C ....................... 1,000 1,017 8.00 1,000 1,017 8.00 1.60% California Insured Intermediate Municipal Fund Class A ....................... $1,000 $1,012 $4.29 $1,000 $1,021 $4.31 0.86% Class B ....................... 1,000 1,008 8.07 1,000 1,017 8.10 1.62% Class C ....................... 1,000 1,009 8.02 1,000 1,017 8.05 1.61%
* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days in the most recent fiscal half-year, divided by 365 days in the year (to reflect the one-half year period). 21 Financial Statements: Portfolio of Investments REIT FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 86.4% DIVERSIFIED - 4.7% 259,200 iStar Financial, Inc.** ................... $ 9,917 122,200 Vornado Realty Trust ...................... 11,687 ----------- Total Diversified ......................... 21,604 ----------- HEALTH CARE - 7.2% 394,300 Health Care Property Investors, Inc.** .... 10,812 68,800 Health Care REIT, Inc.** .................. 2,394 265,200 Healthcare Realty Trust, Inc.** ........... 10,043 439,000 Nationwide Health Properties, Inc.** ...... 9,447 ----------- Total Health Care ......................... 32,696 ----------- INDUSTRIAL/OFFICE - 22.4% INDUSTRIAL - 6.4% 183,200 AMB Property Corporation .................. 9,158 115,600 EastGroup Properties, Inc. ................ 5,164 303,000 ProLogis .................................. 15,217 ----------- 29,539 ----------- MIXED - 2.0% 253,300 Duke Realty Corporation** ................. 8,967 ----------- OFFICE - 14.0% 194,500 Alexandria Real Estate Equities, Inc. ..... 17,621 142,800 Boston Properties, Inc. ................... 12,605 407,400 Corporate Office Properties Trust ......... 16,907 170,300 SL Green Realty Corporation** ............. 16,860 ----------- 63,993 ----------- Total Industrial/Office ................... 102,499 ----------- LODGING/RESORTS - 6.9% 559,300 Equity Inns, Inc. ......................... 9,061 209,700 Hospitality Properties Trust .............. 9,038 415,000 Host Hotels & Resorts Inc.** .............. 8,723 435,600 Winston Hotels, Inc.** .................... 4,691 ----------- Total Lodging/Resorts ..................... 31,513 ----------- MORTGAGE/FINANCIAL - 2.1% 224,900 Redwood Trust, Inc.** ..................... 9,552 ----------- RESIDENTIAL - 10.9% APARTMENTS - 10.9% 117,100 AvalonBay Communities, Inc. ............... 12,612 381,100 Equity Residential ........................ 17,100 98,700 Mid-America Apartment Communities, Inc. ... 5,231 541,000 United Dominion Realty Trust, Inc.** ...... 14,710 ----------- Total Residential ......................... 49,653 ----------- RETAIL - 25.1% FREESTANDING - 1.7% 367,800 Commercial Net Lease Realty, Inc.** ....... 7,742 ----------- REGIONAL MALLS - 10.7% 332,500 General Growth Properties, Inc. ........... $ 15,611 229,300 Macerich Company .......................... 16,789 204,000 Simon Property Group, Inc. ................ 16,704 ----------- 49,104 ----------- SHOPPING CENTERS - 12.7% 313,000 Developers Diversified Realty Corporation** .......................... 16,652 180,000 Equity One, Inc. .......................... 4,136 440,300 Kimco Realty Corporation .................. 16,348 165,800 Pan Pacific Retail Properties, Inc. ....... 11,049 252,600 Weingarten Realty Investors** ............. 9,955 ----------- 58,140 ----------- Total Retail .............................. 114,986 ----------- SELF STORAGE - 1.7% 103,800 Public Storage, Inc.** .................... 7,980 ----------- SPECIALTY - 5.4% 263,200 Entertainment Properties Trust ............ 10,757 124,500 Global Signal, Inc. ....................... 6,188 215,000 Plum Creek Timber Company, Inc. ........... 7,804 ----------- Total Specialty ........................... 24,749 ----------- Total REITs (Cost $252,601) ........................ 395,232 ----------- COMMON STOCKS - 5.6% CONSUMER DISCRETIONARY - 0.8% CONSUMER DURABLES & APPAREL - 0.8% 127,566 D.R. Horton, Inc. ......................... 3,829 ----------- FINANCIALS - 4.8% BANKS - 1.6% 181,000 Countrywide Financial Corporation ......... 7,359 ----------- DIVERSIFIED FINANCIALS - 0.7% 54,000 St. Joe Company** ......................... 3,033 ----------- INSURANCE - 2.5% 138,700 Fidelity National Financial, Inc.** ....... 5,823 258,547 Fidelity National Title Group, Inc., Class A ................................ 5,600 ----------- 11,423 ----------- Total Financials .......................... 21,815 ----------- Total Common Stocks (Cost $21,380) ......................... 25,644 ----------- CANADIAN INCOME TRUSTS - 1.8% ENERGY - 1.8% 98,300 Enerplus Resources Fund (F)** ............. 5,268 87,100 Harvest Energy Trust (F)** ................ 2,679 ----------- 7,947 ----------- Total Canadian Income Trusts (Cost $6,734) .......................... 7,947 -----------
22 See Notes to Financial Statements. Portfolio of Investments (continued) REIT FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- PREFERRED REAL ESTATE INVESTMENT TRUST (REIT) - 0.6% (Cost $2,613) 115,100 Mills Corporation, Series E ............... $ 2,763 -----------
PRINCIPAL AMOUNT (000S) - ---------- REPURCHASE AGREEMENT - 6.3% (Cost $28,811) $28,811 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $28,822,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $29,424,000) .............................. 28,811 ----------- SHORT-TERM INVESTMENT - 9.6% (Cost $43,913) 43,913 Mellon GSL DBT II Collateral Fund+ .......................... 43,913 ----------- TOTAL INVESTMENTS (Cost $356,052*) ....................... 110.3% 504,310 OTHER ASSETS (LIABILITIES) (NET) ......................... (10.3) (47,013) ----- ----------- NET ASSETS 100.0% $ 457,297 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $42,824,000, representing 9.4% of the total net assets of the Fund (collateral value $43,913,000). (See Note 7 to Financial Statements.) + Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS (F) -- Foreign Shares See Notes to Financial Statements. 23 Portfolio of Investments EQUITY INCOME FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 90.8% CONSUMER DISCRETIONARY - 4.4% AUTOMOBILES & COMPONENTS - 0.9% 401,500 Johnson Controls, Inc. .................... $ 32,742 ----------- CONSUMER DURABLES & APPAREL - 0.7% 283,000 NIKE Inc., Class B ........................ 23,161 ----------- CONSUMER SERVICES - 1.5% 689,000 Hilton Hotels Corporation ................. 18,561 961,200 McDonald's Corporation .................... 33,229 ----------- 51,790 ----------- RETAILING - 1.3% 1,351,600 Gap, Inc. ................................. 24,450 276,300 Nordstrom, Inc.** ......................... 10,591 336,100 Tiffany & Company ......................... 11,727 ----------- 46,768 ----------- Total Consumer Discretionary .............. 154,461 ----------- CONSUMER STAPLES - 7.2% FOOD & STAPLES RETAILING - 1.3% 532,200 CVS Corporation ........................... 15,817 981,700 Sysco Corporation** ....................... 29,343 ----------- 45,160 ----------- FOOD, BEVERAGE & TOBACCO - 3.3% 906,600 Anheuser-Busch Companies, Inc. ............ 40,416 169,500 Cadbury Schweppes PLC, Sponsored ADR** .... 6,773 290,300 Coca-Cola Enterprises Inc. ................ 5,670 396,300 Diageo PLC, Sponsored ADR** ............... 26,255 661,700 Hershey Company ........................... 35,295 ----------- 114,409 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 2.6% 257,700 Clorox Company ............................ 16,539 653,800 Colgate-Palmolive Company ................. 38,653 573,500 Procter & Gamble Company .................. 33,383 ----------- 88,575 ----------- Total Consumer Staples .................... 248,144 ----------- ENERGY - 10.3% 706,300 Baker Hughes Inc.** ....................... 57,090 240,500 BP PLC, Sponsored ADR ..................... 17,730 330,000 Chevron Corporation 20,137 611,800 ConocoPhillips Company .................... 40,929 149,400 Enterprise Products Partners LP** ......... 3,696 695,000 GlobalSantaFe Corporation** ............... 42,541 93,800 Kinder Morgan Energy Partners LP** ........ 4,355 224,600 Kinder Morgan, Inc. ....................... 19,769 812,300 Marathon Oil Corporation .................. 64,464 427,200 Peabody Energy Corporation ................ 27,281 415,600 Schlumberger Ltd. ......................... 28,735 465,768 Valero Energy Corporation ................. 30,154 ----------- Total Energy .............................. 356,881 ----------- FINANCIALS - 25.9% BANKS - 6.2% 901,096 Bank of America Corporation ............... $ 44,983 571,300 Countrywide Financial Corporation ......... 23,229 410,700 Mellon Financial Corporation .............. 15,455 821,700 North Fork Bancorporation, Inc. ........... 24,758 344,300 PNC Financial Services Group, Inc. ........ 24,607 176,500 SunTrust Banks, Inc. ...................... 13,649 560,000 U.S. Bancorp .............................. 17,606 744,000 Wells Fargo & Company ..................... 51,105 ----------- 215,392 ----------- DIVERSIFIED FINANCIALS - 9.6% 629,200 Allied Capital Corporation** .............. 19,543 180,000 Ameriprise Financial, Inc. ................ 8,827 545,400 Bank of New York Company, Inc. ............ 19,171 178,600 Capital One Financial Corporation** ....... 15,474 1,035,333 Citigroup Inc. ............................ 51,715 262,500 Franklin Resources, Inc. .................. 24,444 310,000 Freddie Mac ............................... 18,929 270,600 Goldman Sachs Group, Inc.** ............... 43,375 550,500 ING Groep N.V., Sponsored ADR ............. 22,339 1,054,700 JPMorgan Chase & Company 47,862 535,900 Morgan Stanley ............................ 34,458 311,300 T. Rowe Price Group, Inc. ................. 26,208 ----------- 332,345 ----------- INSURANCE - 10.1% 986,000 ACE Ltd.** ................................ 54,762 793,000 AFLAC Inc. ................................ 37,699 505,900 Allstate Corporation ...................... 28,578 816,100 American International Group, Inc. 53,251 276,800 Chubb Corporation ......................... 14,266 750,000 Fidelity National Financial, Inc. ......... 31,485 341,400 Hartford Financial Services Group, Inc. ... 31,385 444,100 HCC Insurance Holdings, Inc.** ............ 14,873 240,200 Lincoln National Corporation .............. 13,951 168,900 Loews Corporation ......................... 17,929 676,300 Marsh & McLennan Companies, Inc.** ........ 20,742 500,700 MetLife, Inc. ............................. 26,087 96,400 Prudential Financial, Inc. ................ 7,532 ----------- 352,540 ----------- Total Financials .......................... 900,277 ----------- HEALTH CARE - 10.2% HEALTH CARE EQUIPMENT & SERVICES - 4.6% 375,000 Becton, Dickinson & Company ............... 23,640 292,400 Cardinal Health, Inc. ..................... 19,693 387,000 Caremark Rx, Inc.+ ........................ 17,628 253,300 Roche Holding Ltd., Sponsored ADR ......... 19,419 982,500 UnitedHealth Group Inc. ................... 48,869 597,900 Wyeth ..................................... 29,100 ----------- 158,349 -----------
24 See Notes to Financial Statements. Portfolio of Investments (continued) EQUITY INCOME FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) HEALTH CARE (CONTINUED) PHARMACEUTICALS & BIOTECHNOLOGY - 5.6% 410,900 Abbott Laboratories ....................... $ 17,562 324,500 AstraZeneca PLC, Sponsored ADR ............ 17,890 675,100 Bristol-Myers Squibb Company .............. 17,134 285,300 Eli Lilly & Company ....................... 15,098 375,600 GlaxoSmithKline PLC, Sponsored ADR ........ 21,364 818,300 Johnson & Johnson ......................... 47,961 1,615,900 Pfizer Inc. ............................... 40,931 896,700 Schering-Plough Corporation ............... 17,324 ----------- 195,264 ----------- Total Health Care ......................... 353,613 ----------- INDUSTRIALS - 12.6% CAPITAL GOODS - 9.8% 674,000 3M Company ................................ 57,580 266,000 Boeing Company ............................ 22,198 490,600 Caterpillar Inc. .......................... 37,158 776,300 Dover Corporation ......................... 38,621 270,500 Emerson Electric Company .................. 22,979 121,200 General Dynamics Corporation .............. 7,953 966,200 General Electric Company .................. 33,421 499,200 Honeywell International Inc. .............. 21,216 716,700 ITT Industries, Inc. ...................... 40,300 329,500 Northrop Grumman Corporation** ............ 22,043 340,000 PACCAR Inc.** ............................. 24,456 185,000 Rockwell Automation, Inc. ................. 13,405 ----------- 341,330 ----------- COMMERCIAL SERVICES & SUPPLIES - 0.6% 555,000 Waste Management Inc. ..................... 20,790 ----------- TRANSPORTATION - 2.2% 361,800 Union Pacific Corporation ................. 33,000 527,700 United Parcel Service, Inc., Class B ...... 42,781 ----------- 75,781 ----------- Total Industrials ......................... 437,901 ----------- INFORMATION TECHNOLOGY - 9.4% COMMUNICATIONS EQUIPMENT - 1.8% 587,000 Harris Corporation** ...................... 27,337 1,553,200 Nokia Oyj, Sponsored ADR .................. 35,195 ----------- 62,532 ----------- COMPUTERS & PERIPHERALS - 2.3% 805,000 Hewlett-Packard Company ................... 26,138 666,900 International Business Machines Corporation ............................ 54,913 ----------- 81,051 ----------- IT SERVICES - 1.5% 812,600 Automatic Data Processing, Inc. ........... $ 35,819 295,400 First Data Corporation .................... 14,088 ----------- 49,907 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.1% 1,873,200 Applied Materials, Inc. ................... 33,624 398,200 Linear Technology Corporation** ........... 14,136 765,000 Microchip Technology Inc.** ............... 28,504 40,800 Samsung Electronics Company Ltd., GDR++ ... 13,929 499,800 Texas Instruments Inc. .................... 17,348 ----------- 107,541 ----------- SOFTWARE - 0.7% 989,300 Microsoft Corporation ..................... 23,891 ----------- Total Information Technology .............. 324,922 ----------- MATERIALS - 3.5% 282,600 Alcan Inc. (F)** .......................... 14,769 1,179,000 Anglo American PLC, Unsponsored ADR ....... 25,408 550,000 Cemex SA de CV, Sponsored ADR ............. 37,136 418,300 PPG Industries, Inc. ...................... 28,076 80,800 Temple-Inland Inc. ........................ 3,752 164,200 Weyerhaeuser Company ...................... 11,571 ----------- Total Materials ........................... 120,712 ----------- TELECOMMUNICATION SERVICES - 6.3% 957,500 Alltel Corporation ........................ 61,634 1,606,800 AT&T Inc.** ............................... 42,114 407,400 BellSouth Corporation** ................... 13,762 674,500 Sprint Nextel Corporation** ............... 16,728 1,596,900 Verizon Communications Inc.** ............. 52,746 1,404,200 Vodafone Group PLC, Sponsored ADR ......... 33,279 ----------- Total Telecommunication Services .......... 220,263 ----------- UTILITIES - 1.0% 637,900 FPL Group, Inc.** ......................... 25,261 422,800 Xcel Energy, Inc.** ....................... 7,965 ----------- Total Utilities ........................... 33,226 ----------- Total Common Stocks (Cost $2,623,278) ...................... 3,150,400 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 4.5% 208,100 AMB Property Corporation .................. 10,403 238,500 Archstone-Smith Trust ..................... 11,658 123,400 Developers Diversified Realty Corporation ............................ 6,565 131,000 Duke Realty Corporation** ................. 4,637 398,000 Equity Residential** ...................... 17,858 119,600 General Growth Properties, Inc. ........... 5,615 275,400 Health Care Property Investors, Inc.** .... 7,551 918,700 Host Hotels & Resorts Inc.** .............. 19,311 177,100 Kimco Realty Corporation** ................ 6,576 81,000 Macerich Company .......................... 5,931 285,000 Plum Creek Timber Company, Inc. ........... 10,346
See Notes to Financial Statements. 25 Portfolio of Investments (continued) EQUITY INCOME FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- REAL ESTATE INVESTMENT TRUSTS (REITS)(CONTINUED) 421,300 ProLogis .................................. $ 21,158 124,100 Public Storage, Inc.** .................... 9,541 127,100 Simon Property Group, Inc.** .............. 10,407 102,000 Vornado Realty Trust** .................... 9,755 ----------- Total REITs (Cost $109,118) ........................ 157,312 -----------
PRINCIPAL AMOUNT (000S) - ---------- CONVERTIBLE SECURITY - 0.3% (Cost $11,466) CONVERTIBLE BONDS AND NOTES - 0.3% (Cost $11,466) $ 11,650 Echostar Communications, Conv. Sub. Note, 5.750% due 05/15/2008 .................. 11,548 ----------- FIXED-INCOME SECURITIES - 1.7% U.S. TREASURY NOTES - 1.3% 30,000 3.000% due 12/31/2006 ..................... 29,621 15,000 4.250% due 11/15/2014 ..................... 14,184 ----------- Total U.S. Treasury Notes (Cost $44,972) ......................... 43,805 ----------- CORPORATE BONDS AND NOTES - 0.4% 1,250 American Home Products Corporation, Deb., 7.250% due 03/01/2023 .................. 1,362 4,000 ERAC USA Finance Company, Note, 7.350% due 06/15/2008++ ................ 4,145 500 Merrill Lynch & Company, Inc., Note, 6.375% due 10/15/2008 .................. 513 4,000 TELUS Corporation, Note, 8.000% due 06/01/2011 .................. 4,395 2,000 Texas-New Mexico Power Company, Sr. Note, 6.250% due 01/15/2009 .................. 2,018 1,000 Westinghouse Electric Corporation, Deb., 7.875% due 09/01/2023 .................. 1,055 ----------- Total Corporate Bonds and Notes (Cost $12,844) ......................... 13,488 ----------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 0.0% FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 0.0% 211 6.500% due 09/01/2030 ..................... 215 103 7.000% due 09/01/2030 ..................... 106 ----------- Total U.S. Government Agency Mortgage- Backed Securities (Cost $305) ............................ 321 ----------- COLLATERALIZED MORTGAGE OBLIGATION (CMO) - 0.0% (Cost $250) 249 Reilly Mortgage FHA, Series 1982, (Partial default), 7.430% due 08/01/2022 .................. 249@ ----------- Total Fixed-Income Securities (Cost $58,371) ......................... 57,863 ----------- VALUE SHARES (000S) - ------ ----------- WARRANTS - 0.0% (Cost $0) 4,500 V2 Music Holdings PLC, Expires 05/07/2008+,++ ................. $ 0 -----------
PRINCIPAL AMOUNT (000S) - ---------- REPURCHASE AGREEMENT - 2.3% (Cost $79,492) $ 79,492 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at 79,523,000 on 05/01/2006 (collateralized by U.S. Treasury obligations having various interest rates and maturities, market value $81,182,000) .............................. 79,492 ----------- SHORT-TERM INVESTMENT - 5.8% (Cost $200,715) 200,715 Mellon GSLDBT II Collateral Fund+++ ..................... 200,715 ----------- TOTAL INVESTMENTS (Cost $3,082,440*) ..................... 105.4% 3,657,330 OTHER ASSETS (LIABILITIES) (NET) ......................... (5.4) (188,418) ----- ----------- NET ASSETS ............................................... 100.0% $ 3,468,912 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $194,406,000, representing 5.6% of the total net assets of the Fund (collateral value $200,715,000). (See Note 7 to Financial Statements.) + Non-income producing security. ++ Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. +++ Represents investment purchased with cash collateral for securities loaned. @ Represents fair value as determined in good faith under the direction of the Board of Trustees. GLOSSARY OF TERMS ADR -- American Depositary Receipt (F) -- Foreign Shares FHA -- Federal Housing Authority GDR -- Global Depositary Receipt 26 See Notes to Financial Statements. Portfolio of Investments GROWTH & INCOME FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 96.8% CONSUMER DISCRETIONARY - 6.5% CONSUMER SERVICES - 2.3% 1,151,000 Carnival Corporation** .................... $ 53,890 ----------- MEDIA - 3.0% 699,500 CBS Corporation, Class B .................. 17,816 1,072,999 Comcast Corporation, Class A+** ........... 33,209 514,500 Viacom Inc., Class B+ ..................... 20,493 ----------- 71,518 ----------- RETAILING - 1.2% 484,000 Kohl's Corporation+ ....................... 27,026 ----------- Total Consumer Discretionary .............. 152,434 ----------- CONSUMER STAPLES - 8.3% FOOD & STAPLES RETAILING - 3.5% 512,000 Costco Wholesale Corporation .............. 27,868 1,157,800 Kroger Company ............................ 23,457 695,000 Wal-Mart Stores, Inc. ..................... 31,296 ----------- 82,621 ----------- FOOD, BEVERAGE & TOBACCO - 3.1% 510,100 Hershey Company ........................... 27,209 793,000 PepsiCo, Inc. ............................. 46,184 ----------- 73,393 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 1.7% 677,000 Procter & Gamble Company .................. 39,408 ----------- Total Consumer Staples .................... 195,422 ----------- ENERGY - 11.8% 617,000 BP PLC, Sponsored ADR ..................... 45,485 595,000 ENSCO International Inc. .................. 31,827 852,000 ExxonMobil Corporation .................... 53,744 1,127,000 GlobalSantaFe Corporation** ............... 68,984 318,000 National-Oilwell Varco Inc.+** ............ 21,932 806,000 Schlumberger Ltd. ......................... 55,727 ----------- Total Energy .............................. 277,699 ----------- FINANCIALS - 22.4% BANKS - 7.1% 1,448,000 Bank of America Corporation ............... 72,284 764,000 Wachovia Corporation ...................... 45,726 719,000 Wells Fargo & Company ..................... 49,388 ----------- 167,398 ----------- DIVERSIFIED FINANCIALS - 7.3% 1,135,000 Citigroup Inc. ............................ 56,693 755,000 Freddie Mac ............................... 46,100 1,481,000 JPMorgan Chase & Company .................. 67,208 ----------- 170,001 ----------- INSURANCE - 8.0% 984,800 ACE Ltd. .................................. $ 54,696 1,063,000 Allstate Corporation ...................... 60,049 594,000 American International Group, Inc. ........ 38,758 319,000 Fidelity National Financial, Inc. ......... 13,392 231,000 Hartford Financial Services Group, Inc. ... 21,236 ----------- 188,131 ----------- Total Financials .......................... 525,530 ----------- HEALTH CARE - 13.9% HEALTH CARE EQUIPMENT & SERVICES - 6.9% 601,000 Baxter International Inc. ................. 22,658 172,000 Becton, Dickinson & Company ............... 10,843 560,000 Cardinal Health, Inc. ..................... 37,716 943,000 Medtronic, Inc.** ......................... 47,263 458,300 Omnicare, Inc.** .......................... 25,990 263,000 WellPoint Inc.+ ........................... 18,673 ----------- 163,143 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 7.0% 551,000 Bristol-Myers Squibb Company** ............ 13,984 714,000 Johnson & Johnson ......................... 41,848 1,270,000 Pfizer Inc. ............................... 32,169 1,463,000 Teva Pharmaceutical Industries Ltd., Sponsored ADR** ........................ 59,251 352,000 Wyeth ..................................... 17,132 ----------- 164,384 ----------- Total Health Care ......................... 327,527 ----------- INDUSTRIALS - 13.0% CAPITAL GOODS - 11.8% 484,000 Boeing Company ............................ 40,390 346,000 Caterpillar Inc. .......................... 26,206 1,887,000 General Electric Company .................. 65,271 1,327,000 Honeywell International Inc. .............. 56,397 529,000 Lockheed Martin Corporation** ............. 40,151 221,000 Rockwell Automation, Inc.** ............... 16,014 1,274,000 Tyco International Ltd. ................... 33,570 ----------- 277,999 ----------- COMMERCIAL SERVICES & SUPPLIES - 0.5% 329,000 Waste Management Inc. ..................... 12,325 ----------- TRANSPORTATION - 0.7% 658,000 AMR Corporation+** ........................ 16,213 ----------- Total Industrials ......................... 306,537 ----------- INFORMATION TECHNOLOGY - 13.3% COMMUNICATIONS EQUIPMENT - 2.4% 2,020,000 Motorola, Inc. ............................ 43,127 252,000 QUALCOMM Inc. ............................. 12,938 ----------- 56,065 -----------
See Notes to Financial Statements. 27 Portfolio of Investments (continued) GROWTH & INCOME FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) COMPUTERS & PERIPHERALS - 4.3% 180,000 Apple Computer, Inc.+ ..................... $ 12,670 1,451,000 Hewlett-Packard Company ................... 47,114 517,000 International Business Machines Corporation ............................ 42,570 ----------- 102,354 ----------- IT SERVICES - 2.3% 1,133,000 First Data Corporation .................... 54,033 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 1.7% 1,222,000 Intel Corporation ......................... 24,415 437,000 Microchip Technology Inc. ................. 16,283 ----------- 40,698 ----------- SOFTWARE - 2.6% 410,000 Autodesk, Inc.+ ........................... 17,236 1,798,000 Microsoft Corporation ..................... 43,422 ----------- 60,658 ----------- Total Information Technology .............. 313,808 ----------- MATERIALS - 3.0% 1,231,000 Alcoa Inc. ................................ 41,583 525,000 Anglo American PLC, Unsponsored ADR ....... 11,314 387,000 E.I. du Pont de Nemours & Company** ....... 17,067 ----------- Total Materials ........................... 69,964 ----------- TELECOMMUNICATION SERVICES - 2.1% 1,160,000 AT&T Inc. ................................. 30,404 546,000 Verizon Communications Inc. ............... 18,034 ----------- Total Telecommunication Services .......... 48,438 ----------- UTILITIES - 2.5% 874,000 FPL Group, Inc.** ......................... 34,610 616,000 Pinnacle West Capital Corporation ......... 24,702 ----------- Total Utilities ........................... 59,312 ----------- Total Common Stocks (Cost $1,688,705) ...................... 2,276,671 -----------
PRINCIPAL AMOUNT VALUE (000S) (000S) - ---------- ----------- REPURCHASE AGREEMENT - 2.5% (Cost $57,890) $ 57,890 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $57,912,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities. market value $59,121,000) ................. $ 57,890 ----------- SHORT-TERM INVESTMENT - 6.4% (Cost $150,151) 150,151 Mellon GSL DBT II Collateral Fund++ ....... 150,151 ----------- TOTAL INVESTMENTS (Cost $1,896,746*) ..................... 105.7% 2,484,712 OTHER ASSETS (LIABILITIES) (NET) ......................... (5.7) (133,357) ----- ----------- NET ASSETS ............................................... 100.0% $ 2,351,355 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $146,454,000 representing 6.2% of the total net assets of the Fund (collateral value $150,151,000). (See Note 7 to Financial Statements.) + Non-income producing security. ++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS ADR -- American Depositary Receipt 28 See Notes to Financial Statements. Portfolio of Investments WEST COAST EQUITY FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 93.8% CONSUMER DISCRETIONARY - 12.1% AUTOMOBILES & COMPONENTS - 1.7% 799,000 Monaco Coach Corporation** ................ $ 11,122 174,700 Toyota Motor Corporation, Sponsored ADR ... 20,463 ----------- 31,585 ----------- CONSUMER DURABLES & APPAREL - 1.8% 128,700 Columbia Sportswear Company+** ............ 6,549 112,700 KB Home** ................................. 6,939 266,400 Mattel, Inc. .............................. 4,310 208,000 NIKE Inc., Class B ........................ 17,023 ----------- 34,821 ----------- CONSUMER SERVICES - 3.8% 131,315 Ambassadors Group, Inc. ................... 3,506 763,300 Hilton Hotels Corporation** ............... 20,563 1,253,785 Red Lion Hotels Corporation+*** ........... 15,046 892,700 Starbucks Corporation+** .................. 33,271 ----------- 72,386 ----------- MEDIA - 4.2% 278,700 Getty Images, Inc.+** ..................... 17,839 124,300 Knight-Ridder, Inc.** ..................... 7,707 201,000 McClatchy Company, Class A** .............. 9,085 25,700 Pixar+ .................................... 1,652 753,700 Univision Communications Inc., Class A+** ................................... 26,899 581,400 Walt Disney Company** ..................... 16,256 ----------- 79,438 ----------- RETAILING - 0.6% 144,500 Blue Nile, Inc.+** ........................ 5,028 178,450 Building Materials Holding Corporation** .. 5,964 25,300 Nordstrom, Inc.** ......................... 970 ----------- 11,962 ----------- Total Consumer Discretionary ............... 230,192 ----------- CONSUMER STAPLES - 5.5% FOOD & STAPLES RETAILING - 1.9% 556,940 Costco Wholesale Corporation** ............ 30,314 339,600 Kroger Company ............................ 6,880 ----------- 37,194 ----------- FOOD, BEVERAGE & TOBACCO - 0.8% 94,300 Archer Daniels Midland Company ............ 3,427 199,000 PepsiCo, Inc. ............................. 11,590 ----------- 15,017 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 2.8% 113,700 Central Garden & Pet Company+ ............. 5,601 288,030 Clorox Company ............................ 18,486 89,000 Colgate-Palmolive Company ................. 5,262 223,000 Estee Lauder Companies Inc., Class A** .... 8,278 260,000 Procter & Gamble Company .................. $ 15,134 ----------- 52,761 ----------- Total Consumer Staples..................... 104,972 ----------- ENERGY - 7.5% 247,000 Apache Corporation** ...................... 17,547 131,000 Berry Petroleum Company, Class A .......... 9,654 78,000 CARBO Ceramics Inc. ....................... 4,518 669,826 Chevron Corporation ....................... 40,873 157,100 ExxonMobil Corporation .................... 9,910 907,200 Nabors Industries Ltd. (F)+ ............... 33,866 254,700 Occidental Petroleum Corporation** ........ 26,168 ----------- Total Energy .............................. 142,536 ----------- FINANCIALS - 16.8% BANKS - 10.8% 529,800 Bank of America Corporation ............... 26,448 329,900 Banner Corporation ........................ 12,332 179,700 City National Corporation ................. 13,111 197,000 Countrywide Financial Corporation** ....... 8,010 489,000 East West Bancorp, Inc. ................... 19,399 323,000 Greater Bay Bancorp** ..................... 8,921 92,833 Pacific Capital Bancorp ................... 3,114 915,600 U.S. Bancorp .............................. 28,786 208,400 UCBH Holdings, Inc.** ..................... 3,686 40,000 UnionBanCal Corporation ................... 2,804 78,240 United PanAm Financial Corporation+ ....... 2,346 938,755 Washington Federal, Inc.** ................ 22,455 811,416 Wells Fargo & Company** ................... 55,736 ----------- 207,148 ----------- DIVERSIFIED FINANCIALS - 4.4% 1,451,700 Charles Schwab Corporation ................ 25,985 467,300 Citigroup Inc. ............................ 23,342 332,500 Franklin Resources, Inc. .................. 30,962 46,432 Piper Jaffray Companies, Inc.+ ............ 3,246 ----------- 83,535 ----------- INSURANCE - 1.6% 74,004 Safeco Corporation ........................ 3,841 529,730 StanCorp Financial Group, Inc. ............ 26,137 ----------- 29,978 ----------- Total Financials .......................... 320,661 ----------- HEALTH CARE - 15.5% HEALTH CARE EQUIPMENT & SERVICES - 7.5% 71,000 Affymetrix, Inc.+** ....................... 2,034 235,700 AMN Healthcare Services, Inc.+ ............ 4,530 237,800 Applera Corporation-Applied Biosystems Group .................................. 6,858 27,000 C.R. Bard, Inc. ........................... 2,010 184,000 Caremark Rx, Inc.+ ........................ 8,381 12,300 Cooper Companies, Inc.** .................. 674 238,500 DaVita, Inc.+ ............................. 13,418
See Notes to Financial Statements. 29 Portfolio of Investments (continued) WEST COAST EQUITY FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) HEALTH CARE (CONTINUED) HEALTH CARE EQUIPMENT & SERVICES (CONTINUED) 84,460 Health Net, Inc.+ ......................... $ 3,438 152,700 McKesson Corporation ...................... 7,420 57,400 Mentor Corporation ........................ 2,487 935,400 OraSure Technologies, Inc.+** ............. 10,037 285,000 ResMed Inc.+ .............................. 12,298 675,363 SonoSite, Inc.+** ......................... 25,495 65,700 Stryker Corporation ....................... 2,874 92,300 Sybron Dental Specialties, Inc.+ .......... 4,342 404,000 Varian Medical Systems, Inc.+** ........... 21,162 318,000 VCA Antech, Inc.+** ....................... 9,887 93,600 Zimmer Holdings, Inc.+** .................. 5,887 ----------- 143,232 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 8.0% 267,750 Abbott Laboratories ....................... 11,444 259,825 Allergan, Inc.** .......................... 26,689 366,839 Amgen, Inc.+** ............................ 24,835 109,300 Amylin Pharmaceuticals, Inc.+** ........... 4,760 266,137 CV Therapeutics, Inc.+** .................. 5,283 429,400 Dendreon Corporation+** ................... 1,748 144,225 Eden Bioscience Corporation+ .............. 340 244,000 Genentech, Inc.+ .......................... 19,449 27,300 Gilead Sciences, Inc.+ .................... 1,570 267,120 ICOS Corporation+** ....................... 5,858 284,700 Johnson & Johnson ......................... 16,686 112,300 Martek Biosciences Corporation+** ......... 3,335 104,000 Neurocrine Biosciences, Inc.+** ........... 5,966 577,700 Pfizer Inc. ............................... 14,633 387,300 Watson Pharmaceuticals, Inc.+** ........... 11,015 ----------- 153,611 ----------- Total Health Care ......................... 296,843 ----------- INDUSTRIALS - 15.5% CAPITAL GOODS - 11.1% 514,533 Boeing Company ............................ 42,938 183,000 Cascade Corporation ....................... 7,594 12,600 Ceradyne, Inc.+ ........................... 668 297,730 Dionex Corporation+ ....................... 17,899 341,530 Electro Scientific Industries, Inc.+ ...... 6,841 71,060 Granite Construction Inc. ................. 3,294 424,400 Greenbrier Companies, Inc. ................ 17,040 327,000 Jacobs Engineering Group Inc.+ ............ 27,043 309,000 Northrop Grumman Corporation** ............ 20,672 509,787 PACCAR Inc.** ............................. 36,669 230,000 Precision Castparts Corporation ........... 14,485 440,700 Simpson Manufacturing Company, Inc. ....... 17,624 ----------- 212,767 ----------- COMMERCIAL SERVICES & SUPPLIES - 1.5% 48,000 Avery Dennison Corporation** .............. $ 3,000 249,000 Copart, Inc.+ ............................. 6,686 391,000 Robert Half International Inc.** .......... 16,528 47,700 Waste Connections, Inc.+ .................. 1,836 ----------- 28,050 ----------- TRANSPORTATION - 2.9% 445,010 Alaska Air Group, Inc.+ ................... 16,893 546,900 Cathay Pacific Airways Ltd., Sponsored ADR .................................... 4,884 389,720 Expeditors International of Washington, Inc.** ................................. 33,364 ----------- 55,141 ----------- Total Industrials ......................... 295,958 ----------- INFORMATION TECHNOLOGY - 16.7% COMMUNICATIONS EQUIPMENT - 1.6% 1,085,600 Cisco Systems, Inc.+ ...................... 22,743 133,000 Polycom, Inc.+** .......................... 2,926 81,300 QUALCOMM Inc. ............................. 4,174 ----------- 29,843 ----------- COMPUTERS & PERIPHERALS - 2.2% 1,123,700 Advanced Digital Information Corporation+ ........................... 9,540 57,450 Apple Computer, Inc.+ ..................... 4,044 598,000 Hewlett-Packard Company ................... 19,417 136,000 InFocus Corporation+ ...................... 662 104,900 Intermec Inc.+ ............................ 2,779 27,000 Network Appliance, Inc.+** ................ 1,001 209,200 QLogic Corporation+ ....................... 4,354 ----------- 41,797 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.2% 494,000 Tektronix, Inc.** ......................... 17,448 113,530 Trimble Navigation Ltd.+** ................ 5,379 ----------- 22,827 ----------- INTERNET SOFTWARE & SERVICES - 1.9% 2,510,261 Art Technology Group, Inc.+ ............... 7,129 26,650 Google Inc., Class A+ ..................... 11,138 564,700 WatchGuard Technologies, Inc.+ ............ 2,937 215,000 WebEx Communications, Inc.+ ............... 7,600 216,700 Yahoo! Inc.+** ............................ 7,104 ----------- 35,908 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.2% 323,700 Applied Materials, Inc. ................... 5,810 217,896 Credence Systems Corporation+ ............. 1,545 37,500 Exar Corporation+ ......................... 543 355,925 FEI Company+ .............................. 7,738 895,700 Intel Corporation** ....................... 17,896 66,000 International Rectifier Corporation+** .... 2,983 111,600 KLA-Tencor Corporation** .................. 5,375
30 See Notes to Financial Statements. Portfolio of Investments (continued) WEST COAST EQUITY FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONTINUED) 701,080 Lattice Semiconductor Corporation+ ........ $ 4,662 464,400 LSI Logic Corporation+ .................... 4,946 54,000 Maxim Integrated Products, Inc.** ......... 1,904 136,400 Novellus Systems, Inc.+** ................. 3,369 60,600 NVIDIA Corporation+ ....................... 1,771 932,100 Pixelworks, Inc.+ ......................... 3,682 ----------- 62,224 ----------- SOFTWARE - 6.6% 779,600 Actuate Corporation+ ...................... 3,282 652,000 Adobe Systems Inc.+ ....................... 25,558 141,000 Electronic Arts Inc.+** ................... 8,009 373,050 Fair Isaac Corporation .................... 13,844 94,000 Mentor Graphics Corporation+ .............. 1,234 1,869,378 Microsoft Corporation ..................... 45,146 575,100 Quest Software, Inc.+** ................... 9,898 408,508 RadiSys Corporation+ ...................... 8,644 243,200 SupportSoft, Inc.+ ........................ 1,111 248,600 Sybase, Inc.+ ............................. 5,412 195,178 Symantec Corporation+ ..................... 3,197 12,200 Websense, Inc.+ ........................... 303 ----------- 125,638 ----------- Total Information Technology .............. 318,237 ----------- MATERIALS - 3.9% 52,300 Cemex SA de CV, Sponsored ADR ............. 3,531 402,330 Oregon Steel Mills, Inc.+** ............... 19,927 529,540 Schnitzer Steel Industries, Inc., Class A ................................ 20,827 134,461 Symyx Technologies, Inc.+ ................. 3,920 379,000 Weyerhaeuser Company ...................... 26,708 ----------- Total Materials ........................... 74,913 ----------- UTILITIES - 0.3% 111,000 Sempra Energy ............................. 5,108 ----------- Total Common Stocks (Cost $1,202,629) ...................... 1,789,420 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 3.0% 358,700 AMB Property Corporation .................. 17,931 100,000 Essex Property Trust, Inc. ................ 10,910 322,485 Health Care Property Investors, Inc.** .... 8,843 46,400 Nationwide Health Properties, Inc.** ...... 999 530,000 Plum Creek Timber Company, Inc. ........... 19,239 ----------- Total REITs (Cost $45,115) ......................... 57,922
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- REPURCHASE AGREEMENT - 3.1% (Cost $59,149) $ 59,149 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006 to be repurchased at $59,172,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $60,407,000) ..................... $ 59,149 ----------- SHORT-TERM INVESTMENT - 10.3% (Cost $195,406) 195,406 Mellon GSL DBT II Collateral Fund++ ...................... 195,406 ----------- TOTAL INVESTMENTS (Cost $1,502,299*) ..................... 110.2% 2,101,897 OTHER ASSETS (LIABILITIES) (NET) ......................... (10.2) (194,732) ----- ----------- NET ASSETS ............................................... 100.0% $ 1,907,165 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $189,267,000, representing 9.9% of the total net assets of the Fund (collateral value $195,406,000). (See Note 7 to Financial Statements.) *** Affiliated issuer as defined by the Investment Company Act of 1940 (the Fund controls 5.0% or more of the outstanding voting shares of the com- pany). Total cost of such securities is $10,619,000 and the total value is $15,046,000 or 0.8% of the total net assets of the Fund (See Note 12 to Financial Statements). + Non-income producing security. ++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS ADR -- American Depositary Receipt (F) -- Foreign Shares See Notes to Financial Statements. 31 Portfolio of Investments MID CAP STOCK FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 91.4% CONSUMER DISCRETIONARY - 13.1% AUTOMOBILES & COMPONENTS - 2.3% 284,300 Magna International Inc., Class A(F)** .... $ 22,303 ----------- CONSUMER DURABLES & APPAREL - 2.5% 256,500 Jones Apparel Group, Inc. ................. 8,811 952,400 Mattel, Inc. .............................. 15,410 ----------- 24,221 ----------- CONSUMER SERVICES - 2.2% 179,500 Papa John's International, Inc.+ .......... 5,999 301,200 Yum! Brands, Inc. ......................... 15,566 ----------- 21,565 ----------- RETAILING - 6.1% 377,500 Aaron Rents, Inc. ......................... 10,140 477,600 Nordstrom, Inc.** ......................... 18,306 486,700 Tiffany & Company ......................... 16,981 264,800 Weight Watchers International, Inc. ....... 13,068 ----------- 58,495 ----------- Total Consumer Discretionary .............. 126,584 ----------- CONSUMER STAPLES - 1.4% FOOD, BEVERAGE & TOBACCO - 0.8% 91,550 Dean Foods Company+ ....................... 3,626 100,800 J.M. Smucker Company ...................... 3,958 ----------- 7,584 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 0.6% 153,800 Estee Lauder Companies Inc., Class A** .... 5,709 ----------- Total Consumer Staples .................... 13,293 ----------- ENERGY - 8.0% 274,100 Cimarex Energy Company .................... 11,773 509,800 Nabors Industries Ltd. (F)+ ............... 19,031 406,500 Noble Energy, Inc. ........................ 18,284 130,200 Tesoro Corporation ........................ 9,104 326,000 Tidewater Inc.** .......................... 18,986 ----------- Total Energy .............................. 77,178 ----------- FINANCIALS - 19.1% BANKS - 5.1% 304,511 North Fork Bancorporation, Inc. ........... 9,175 756,100 TCF Financial Corporation** ............... 20,309 809,050 Washington Federal, Inc. .................. 19,352 ----------- 48,836 ----------- DIVERSIFIED FINANCIALS - 3.6% 357,000 A.G. Edwards, Inc.** ...................... 18,864 195,400 Ambac Financial Group, Inc. ............... 16,093 ----------- 34,957 ----------- INSURANCE - 10.4% 918,800 Fidelity National Financial, Inc.** ....... $ 38,571 807,800 HCC Insurance Holdings, Inc.** ............ 27,053 369,700 Max Re Capital Ltd. (F) ................... 9,058 234,400 MGIC Investment Corporation** ............. 16,572 212,000 PMI Group, Inc.**. ........................ 9,784 ----------- 101,038 ----------- Total Financials .......................... 184,831 ----------- HEALTH CARE - 11.2% HEALTH CARE EQUIPMENT & SERVICES - 9.7% 159,100 AmerisourceBergen Corporation ............. 6,865 343,300 Covance Inc.+** ........................... 20,032 431,700 Edwards Lifesciences Corporation+** ....... 19,185 122,500 Express Scripts, Inc., Class A+ ........... 9,572 587,582 IMS Health Inc.** ......................... 15,970 427,800 Universal Health Services, Inc., Class B** .................................... 21,728 ----------- 93,352 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 1.5% 672,525 Mylan Laboratories Inc.** ................. 14,688 ----------- Total Health Care ......................... 108,040 ----------- INDUSTRIALS - 16.5% CAPITAL GOODS - 6.4% 538,300 Federal Signal Corporation ................ 10,083 407,500 Lincoln Electric Holdings, Inc. ........... 22,335 232,300 PACCAR Inc.** ............................. 16,709 202,500 Teleflex Inc. ............................. 13,211 ----------- 62,338 ----------- COMMERCIAL SERVICES & SUPPLIES - 5.0% 676,600 Allied Waste Industries, Inc.+** .......... 9,581 371,300 HNI Corporation ........................... 19,634 439,300 Republic Services, Inc. ................... 19,334 ----------- 48,549 ----------- TRANSPORTATION - 5.1% 307,200 Alaska Air Group, Inc.+ ................... 11,661 881,000 AMR Corporation+** ........................ 21,708 611,100 Continental Airlines, Inc., Class B+** .... 15,913 ----------- 49,282 ----------- Total Industrials ......................... 160,169 ----------- INFORMATION TECHNOLOGY - 12.2% COMPUTERS & PERIPHERALS - 3.6% 579,000 Electronics for Imaging, Inc.+ ............ 15,899 510,900 Network Appliance, Inc.+** ................ 18,939 ----------- 34,838 -----------
32 See Notes to Financial Statements. Portfolio of Investments (continued) MID CAP STOCK FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.5% 335,100 Arrow Electronics, Inc.+ .................. $ 12,131 284,900 Diebold, Inc. ............................. 12,122 ----------- 24,253 ----------- IT SERVICES - 1.5% 451,900 Acxiom Corporation** ...................... 11,713 129,300 Convergys Corporation+ .................... 2,518 ----------- 14,231 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.8% 729,400 Microchip Technology Inc.** ............... 27,178 ----------- SOFTWARE - 1.8% 643,400 BMC Software Inc.+** ...................... 13,859 168,500 Synopsys, Inc.+ ........................... 3,678 ----------- 17,537 ----------- Total Information Technology .............. 118,037 ----------- MATERIALS - 5.3% 255,500 Cabot Corporation**. ...................... 9,198 454,600 Lubrizol Corporation ...................... 19,825 775,400 Valspar Corporation. ...................... 21,944 ----------- Total Materials ........................... 50,967 ----------- TELECOMMUNICATION SERVICES - 0.6% 95,200 United States Cellular Corporation+ ....... 5,940 ----------- UTILITIES - 4.0% 897,400 NiSource Inc.** ........................... 18,944 494,300 Pinnacle West Capital Corporation** ....... 19,821 ----------- Total Utilities ........................... 38,765 ----------- Total Common Stocks (Cost $626,109) ........................ 883,804 ----------- REAL ESTATE INVESTMENT TRUST (REIT) - 2.0% (Cost $12,974) 413,300 General Growth Properties, Inc.** ......... 19,404 -----------
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- REPURCHASE AGREEMENT - 6.9% (Cost $66,738) $ 66,738 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $66,764,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $68,157,000) .............................. $ 66,738 ----------- SHORT-TERM INVESTMENT - 9.9% (Cost $95,978) 95,978 Mellon GSL DBT II Collateral Fund++ ....... 95,978 ----------- TOTAL INVESTMENTS (Cost $801,799*) ....................... 110.2% 1,065,924 OTHER ASSETS (LIABILITIES) (NET) ......................... (10.2) (98,321) ----- ----------- NET ASSETS ............................................... 100.0% $ 967,603 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $93,071,000 representing 9.6% of the total net assets of the Fund (collateral value $95,978,000). (See Note 7 to Financial Statements.) + Non-income producing security. ++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS (F) -- Foreign Shares See Notes to Financial Statements. 33 PORTFOLIO OF INVESTMENTS GROWTH FUND April 30, 2006 (Unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 97.8% CONSUMER DISCRETIONARY - 15.8% AUTOMOBILES & COMPONENTS - 0.1% 69,700 Toyota Motor Corporation (F) .............. $ 4,077 ----------- CONSUMER DURABLES & APPAREL - 1.1% 212,570 NIKE Inc., Class B ........................ 17,397 62,900 Polo Ralph Lauren Corporation ............. 3,819 144,300 Toll Brothers, Inc.+** .................... 4,639 ----------- 25,855 ----------- CONSUMER SERVICES - 1.8% 177,280 Apollo Group, Inc., Class A+ .............. 9,687 105,100 Carnival Corporation ...................... 4,921 59,300 Las Vegas Sands Corporation+ .............. 3,843 666,010 Starbucks Corporation+** .................. 24,822 ----------- 43,273 ----------- MEDIA - 2.8% 203,100 Comcast Corporation, Special Class A+** ... 6,261 1,310,500 Time Warner Inc. .......................... 22,803 646,200 Walt Disney Company 18,068 930,640 XM Satellite Radio Holdings Inc., Class A+** ...................................... 18,817 ----------- 65,949 ----------- RETAILING - 10.0% 1,048,400 Amazon.com Inc.+ .......................... 36,914 295,400 Bed Bath & Beyond Inc.+ ................... 11,329 125,150 Best Buy Company, Inc. .................... 7,091 1,079,960 eBay Inc.+ ................................ 37,161 48,100 Expedia, Inc.+** .......................... 897 1,203,645 Home Depot, Inc. .......................... 48,062 1,125,702 IAC/ InterActiveCorp+** ................... 32,499 104,900 J.C. Penney Company, Inc. (Holding Company) .................................. 6,867 103,200 Kohl's Corporation+ ....................... 5,763 156,200 Lowe's Companies, Inc.** .................. 9,848 156,000 Michaels Stores, Inc. ..................... 5,902 950,590 Staples, Inc. ............................. 25,105 88,100 Target Corporation ........................ 4,678 232,900 Urban Outfitters, Inc.+ ................... 5,403 ----------- 237,519 ----------- Total Consumer Discretionary ................. 376,673 ----------- CONSUMER STAPLES - 8.2% FOOD & STAPLES RETAILING - 1.0% 11,100 Costco Wholesale Corporation .............. 604 267,500 CVS Corporation ........................... 7,950 530,455 Sysco Corporation ......................... 15,856 ----------- 24,410 ----------- FOOD, BEVERAGE & TOBACCO - 4.3% 697,460 Cadbury Schweppes PLC (F) ................. $ 6,919 432,400 Coca-Cola Company ......................... 18,144 32,220 Nestle SA(F)** ............................ 9,827 845,285 PepsiCo, Inc. ............................. 49,229 325,200 Wm. Wrigley Jr. Company ................... 15,307 81,300 Wm. Wrigley Jr. Company, Class B .......... 3,829 ----------- 103,255 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 2.9% 1,042,707 Procter & Gamble Company .................. 60,696 216,640 Reckitt Benckiser PLC (F) ................. 7,897 ----------- 68,593 ----------- Total Consumer Staples .................... 196,258 ----------- ENERGY - 5.8% 50,400 Apache Corporation ........................ 3,581 154,465 EOG Resources, Inc. ....................... 10,848 276,210 ExxonMobil Corporation .................... 17,423 249,120 Halliburton Company ....................... 19,469 96,816 Kinder Morgan Management LLC+ ............. 4,143 415,470 Occidental Petroleum Corporation .......... 42,685 160,100 Schlumberger Ltd. ......................... 11,069 217,900 Smith International, Inc. ................. 9,202 117,500 Transocean Inc.+** ........................ 9,526 151,285 Valero Energy Corporation ................. 9,794 ----------- Total Energy .............................. 137,740 ----------- FINANCIALS - 11.1% BANKS - 0.1% 68,400 Bank of America Corporation ............... 3,415 ----------- DIVERSIFIED FINANCIALS - 8.1% 542,645 American Express Company .................. 29,200 18,100 Chicago Mercantile Exchange Holdings Inc.** .................................... 8,290 84,800 Citigroup Inc. ............................ 4,236 430,615 Fannie Mae ................................ 21,789 48,300 Franklin Resources, Inc. .................. 4,498 66,200 Goldman Sachs Group, Inc. ................. 10,611 51,600 Legg Mason, Inc ........................... 6,113 20,800 Lehman Brothers Holdings Inc. ............. 3,144 678,335 Merrill Lynch & Company, Inc. ............. 51,730 367,000 Morgan Stanley ............................ 23,598 177,400 Nomura Holdings, Inc. (F) ................. 4,012 86,100 Northern Trust Corporation ................ 5,070 303,280 optionsXpress Holdings, Inc. .............. 9,553 25,700 T. Rowe Price Group, Inc. ................. 2,164 66,100 UBS AG (F) ................................ 7,724 ----------- 191,732 -----------
34 See Notes to Financial Statements. PORTFOLIO OF INVESTMENTS (CONTINUED) GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) FINANCIALS (CONTINUED) INSURANCE - 2.9% 502,640 American International Group, Inc. ........ $ 32,797 259 Berkshire Hathaway, Inc., Class A+ ........ 23,051 62,700 Hartford Financial Services Group, Inc. ... 5,764 101,000 Prudential Financial, Inc. ................ 7,891 ----------- 69,503 ----------- Total Financials .......................... 264,650 ----------- HEALTH CARE - 18.9% HEALTH CARE EQUIPMENT & SERVICES - 6.6% 93,275 Alcon, Inc. (F) ........................... 9,487 376,825 Boston Scientific Corporation+** .......... 8,757 332,930 Caremark Rx, Inc.+ ........................ 15,165 359,060 Conventry Health Care, Inc.+ .............. 17,835 47,700 Covance Inc.+ ............................. 2,783 93,300 Fisher Scientific International Inc.+** ... 6,582 647,275 Medtronic, Inc. ........................... 32,442 141,400 Quest Diagnostics Inc.** .................. 7,880 59,185 Roche Holding AG-Genusschein (F) .......... 9,101 153,700 St. Jude Medical, Inc.+ ................... 6,068 705,665 UnitedHealth Group Inc. ................... 35,100 89,900 Varian Medical Systems, Inc.+** ........... 4,709 ----------- 155,909 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 12.3% 1,099,915 Amgen, Inc.+ .............................. 74,464 524,140 Biogen Idec Inc.+ ......................... 23,508 37,300 Celgene Corporation+ ...................... 1,573 20,200 Cephalon, Inc.+ ........................... 1,326 351,575 Eli Lilly & Company ....................... 18,605 726,200 Genentech, Inc.+ .......................... 57,885 111,700 Genzyme Corporation+ ...................... 6,832 52,200 Gilead Sciences, Inc.+ .................... 3,002 534,675 Johnson & Johnson ......................... 31,337 136,400 MedImmune, Inc.+ .......................... 4,293 216,613 Novartis AG (F) ........................... 12,427 122,800 PDL BioPharma Inc.+ ....................... 3,534 982,820 Pfizer Inc. ............................... 24,895 42,800 Sanofi-Aventis Group (F) .................. 4,036 344,685 Sanofi-Aventis, ADR** ..................... 16,214 237,862 Teva Pharmaceutical Industries Ltd., Sponsored ADR**......................... 9,633 ----------- 293,564 ----------- Total Health Care ......................... 449,473 ----------- INDUSTRIALS - 5.3% CAPITAL GOODS - 4.3% 105,600 Danaher Corporation** ..................... 6,770 190,600 Empresa Brasileira de Aeronautica SA, ADR** .................................. 7,401 55,400 Fastenal Company** ........................ 2,593 103,300 General Dynamics Corporation .............. $ 6,779 1,830,263 General Electric Company .................. 63,309 104,100 Lockheed Martin Corporation ............... 7,901 126,000 United Technologies Corporation ........... 7,914 ----------- 102,667 ----------- COMMERCIAL SERVICES & SUPPLIES - 0.4% 70,100 ChoicePoint Inc.+ ......................... 3,086 66,900 Corporate Executive Board Company ......... 7,167 ----------- 10,253 ----------- TRANSPORTATION - 0.6% 35,700 Expeditors International of Washington, Inc.** ................................. 3,056 94,690 FedEx Corporation ......................... 10,902 ----------- 13,958 ----------- Total Industrials ......................... 126,878 ----------- INFORMATION TECHNOLOGY - 30.3% COMMUNICATIONS EQUIPMENT - 9.4% 2,744,120 Cisco Systems, Inc.+ ...................... 57,489 246,400 Corning Inc.+ ............................. 6,808 44,600 F5 Networks, Inc.+ ........................ 2,612 938,600 Juniper Networks, Inc.+ ................... 17,345 2,220,450 Motorola, Inc. ............................ 47,407 227,000 Nokia Oyj, Sponsored ADR .................. 5,144 971,570 QUALCOMM Inc. ............................. 49,880 408,170 Research In Motion Ltd.+** ................ 31,278 154,600 Telefonaktiebolaget LM Ericsson, Sponsored ADR** .................................. 5,484 ----------- 223,447 ----------- COMPUTERS & PERIPHERALS - 1.8% 99,000 Apple Computer, Inc.+ ..................... 6,968 575,580 Dell Inc.+ ................................ 15,080 1,316,200 EMC Corporation+ .......................... 17,782 91,900 Network Appliance, Inc.+** ................ 3,407 ----------- 43,237 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.1% 123,300 PerkinElmer, Inc. ......................... 2,643 ----------- INTERNET SOFTWARE & SERVICES - 4.9% 585,400 Akamai Technologies, Inc.+ ................ 19,722 60,285 Google Inc., Class A+ ..................... 25,196 134,800 VeriSign Inc.+** .......................... 3,170 2,075,830 Yahoo! Inc.+** ............................ 68,046 ----------- 116,134 ----------- IT SERVICES - 1.1% 131,100 Affiliated Computer Services, Inc., Class A+ ............................... 7,310 279,800 Automatic Data Processing, Inc. ........... 12,333 107,400 Cognizant Technology Solutions Corporation, Class A+** ............................. 6,832 ----------- 26,475 -----------
See Notes to Financial Statements. 35 PORTFOLIO OF INVESTMENTS (CONTINUED) GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.6% 943,305 Advanced Micro Devices, Inc.+ ............. $ 30,516 245,850 Broadcom Corporation, Class A+ ............ 10,107 902,950 Intel Corporation ......................... 18,041 197,100 Linear Technology Corporation** ........... 6,997 70,200 Marvell Technology Group Ltd.+ ............ 4,008 152,200 Microchip Technology Inc.** ............... 5,671 61,310 Samsung Electronics Company Ltd., GDR ..... 20,931 1,706,900 Texas Instruments Inc.** .................. 59,246 ----------- 155,517 ----------- SOFTWARE - 6.4% 482,655 Adobe Systems Inc.+ ....................... 18,920 169,400 Amdocs Ltd. (F)+ .......................... 6,302 105,400 Autodesk, Inc.+ ........................... 4,431 491,600 Electronic Arts Inc.+ ..................... 27,923 136,300 McAfee Inc.+ .............................. 3,556 2,195,022 Microsoft Corporation ..................... 53,010 57,200 NAVTEQ Corporation+ ....................... 2,375 655,200 Red Hat, Inc.+ ............................ 19,256 312,355 SAPAG, Sponsored ADR ...................... 17,064 ----------- 152,837 ----------- Total Information Technology .............. 720,290 ----------- MATERIALS - 1.6% 169,900 Monsanto Company .......................... 14,170 202,000 Praxair, Inc. ............................. 11,338 54,795 Rio Tinto PLC, Sponsored ADR .............. 12,203 ----------- Total Materials ........................... 37,711 ----------- TELECOMMUNICATION SERVICES - 0.8% 205,500 American Tower Corporation, Class A+** .... 7,016 98,200 Crown Castle International Corporation+ ... 3,304 316,200 Sprint Nextel Corporation ................. 7,842 ----------- Total Telecommunication Services .......... 18,162 ----------- Total Common Stocks (Cost $2,068,377) ...................... 2,327,835 -----------
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- COMMERCIAL PAPER - 0.7% (Cost $17,500) $ 17,500 Prudential Funding LLC, 4.750% due 05/01/2006++ ................... $ 17,500 ----------- U.S. GOVERNMENT AGENCY DISCOUNT NOTES - 0.6% FEDERAL HOME LOAN BANK (FHLB) - 0.2% 5,000 4.600% due 06/12/2006++ ................... 4,973 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 0.4% 8,500 4.750% due 06/01/2006++ ................... 8,465 ----------- Total U.S. Government Agency Discount Notes (Cost $13,438) ......................... 13,438 ----------- REPURCHASE AGREEMENT - 0.8% (Cost $19,246) 19,246 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $19,253,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $19,655,000) .............................. 19,246 ----------- SHORT-TERM INVESTMENT - 5.5% (Cost $129,442) 129,442 Mellon GSL DBT II Collateral Fund+++ ...... 129,442 ----------- TOTAL INVESTMENTS (Cost $2,248,003*) ..................... 105.4% 2,507,461 OTHER ASSETS (LIABILITIES) (NET) ......................... (5.4) (128,220) ----- ----------- NET ASSETS 100.0% $ 2,379,241 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $124,430,000, representing 5.2% of the total net assets of the Fund (collateral value (See Note 7 $129,442,000). to Financial Statements.) + Non-income producing security. ++ Rate represents annualized yield at date of purchase. +++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS ADR -- American Depositary Receipt (F) -- Foreign Shares GDR -- Global Depositary Receipt 36 See Notes to Financial Statements. Portfolio of Investments SMALL CAP VALUE FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 81.8% CONSUMER DISCRETIONARY - 9.7% AUTOMOBILES & COMPONENTS - 1.5% 393,000 Accuride Corporation+** ................... $ 4,028 31,700 Tenneco, Inc.+ ............................ 763 ----------- 4,791 ----------- CONSUMER DURABLES & APPAREL - 3.3% 444,800 Lenox Group, Inc.+ ........................ 6,058 163,300 Rocky Shoes & Boots, Inc.+ ................ 4,030 ----------- 10,088 ----------- MEDIA - 1.2% 70,500 Carmike Cinemas, Inc.** ................... 1,742 145,700 Reader's Digest Association, Inc. ......... 2,008 ----------- 3,750 ----------- RETAILING - 3.7% 430,400 Blockbuster Inc., Class A** ............... 2,023 35,200 Children's Place Retail Stores, Inc.+ ..... 2,174 1,181,800 Movie Gallery, Inc. ....................... 3,073 108,000 RC2 Corporation+** ........................ 4,270 ----------- 11,540 ----------- Total Consumer Discretionary .............. 30,169 ----------- CONSUMER STAPLES - 4.7% FOOD & STAPLES RETAILING - 1.3% 216,100 Fresh Del Monte Produce, Inc.** ........... 4,065 ----------- FOOD, BEVERAGE & TOBACCO - 1.2% 241,000 B&G Foods Inc., EIS** ..................... 3,608 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 2.2% 60,100 Central Garden & Pet Company+ ............. 2,960 115,500 Jarden Corporation+** ..................... 3,927 ----------- 6,887 ----------- Total Consumer Staples .................... 14,560 ----------- ENERGY - 6.3% 141,100 Cimarex Energy Company .................... 6,060 137,400 Comstock Resources, Inc.+ ................. 4,271 103,400 Encore Acquisition Company+ ............... 3,168 33,500 Giant Industries, Inc.+ ................... 2,408 85,700 St. Mary Land & Exploration Company ....... 3,613 ----------- Total Energy .............................. 19,520 ----------- FINANCIALS - 14.2% BANKS - 7.5% 121,500 Capital Corporation of the West ........... 4,147 36,800 Center Financial Corporation .............. 821 237,800 Dime Community Bancshares ................. 3,369 366,230 Oriental Financial Group, Inc. ............ 4,787 288,050 TrustCo Bank Corporation NY** ............. 3,333 142,947 U.S.B. Holding Company, Inc. .............. 3,182 157,100 Washington Federal, Inc.** ................ $ 3,758 ----------- 23,397 ----------- INSURANCE - 6.7% 110,300 Navigators Group, Inc.+ ................... 5,218 96,700 Safety Insurance Group, Inc. .............. 4,476 107,700 State Auto Financial Corporation .......... 3,788 50,500 Stewart Information Services Corporation .. 2,182 170,900 United Fire & Casualty Company ............ 5,117 ----------- 20,781 ----------- Total Financials .......................... 44,178 ----------- HEALTH CARE - 6.5% HEALTH CARE EQUIPMENT & SERVICES - 3.7% 463,701 Gene Logic, Inc.+ ......................... 1,340 221,200 Kindred Healthcare, Inc.+** ............... 5,367 53,600 LifePoint Hospitals, Inc.+ ................ 1,699 90,100 Molina Healthcare Inc.+ ................... 2,946 ----------- 11,352 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 2.8% 479,400 Bradley Pharmaceuticals, Inc.+** .......... 7,114 224,400 Lannett Company, Inc.+** .................. 1,645 ----------- 8,759 ----------- Total Health Care ......................... 20,111 ----------- INDUSTRIALS - 14.2% CAPITAL GOODS - 5.3% 93,600 DRS Technologies, Inc. .................... 5,198 147,000 Griffon Corporation+** .................... 3,920 989,300 New Flyer Industries Inc. (F), IDS++ ...... 7,521 ----------- 16,639 ----------- COMMERCIAL SERVICES & SUPPLIES - 1.0% 116,900 McGrath RentCorp .......................... 3,143 ----------- TRANSPORTATION - 7.9% 112,700 Alaska Air Group, Inc.+ ................... 4,278 257,500 AMR Corporation+** ........................ 6,345 240,300 Continental Airlines, Inc., Class B+** .... 6,257 97,600 Dampskibsselskabet TORM A/S, ADR** ........ 4,476 160,900 OMI Corporation** ......................... 3,102 ----------- 24,458 ----------- Total Industrials ......................... 44,240 ----------- INFORMATION TECHNOLOGY - 10.1% COMMUNICATIONS EQUIPMENT - 1.2% 113,300 Bel Fuse Inc., Class B .................... 3,755 ----------- COMPUTERS & PERIPHERALS - 1.4% 184,100 Hutchinson Technology, Inc.+** ............ 4,376 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS - 1.4% 295,300 LeCroy Corporation+ ....................... 4,238 -----------
See Notes to Financial Statements. 37 Portfolio of Investments (continued) SMALL CAP VALUE FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) IT SERVICES - 1.3% 515,000 Lionbridge Technologies, Inc.+ ............ $ 4,233 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 3.3% 676,800 Axcelis Technologies, Inc.+ ............... 3,986 551,100 Credence Systems Corporation+ ............. 3,907 215,600 PortalPlayer Inc.+** ...................... 2,383 ----------- 10,276 ----------- SOFTWARE - 1.5% 456,800 RealNetworks, Inc.+** ..................... 4,577 ----------- Total Information Technology .............. 31,455 ----------- MATERIALS - 11.4% 103,100 Century Aluminum Company+ ................. 4,909 84,300 Headwaters, Inc.+** ....................... 2,839 1,656,100 Kingsgate Consolidated Ltd. (F) ........... 7,348 175,100 Metal Management, Inc. .................... 5,682 4,149,700 Minara Resources Ltd. (F) ................. 7,724 279,900 Randgold Resources Ltd., ADR+ ............. 6,813 ----------- Total Materials ........................... 35,315 ----------- TELECOMMUNICATION SERVICES - 3.9% 265,800 Asia Satellite Telecommunications Holdings Ltd., Sponsored ADR ........... 4,521 139,500 Iowa Telecommunications Services Inc.** ... 2,517 216,900 USA Mobility, Inc. ........................ 4,965 ----------- Total Telecommunication Services .......... 12,003 ----------- UTILITIES - 0.8% 81,700 Suburban Propane Partners LP** ............ 2,381 ----------- Total Common Stocks (Cost $227,009) ........................ 253,932 ----------- CANADIAN INCOME TRUSTS - 7.0% CONSUMER STAPLES - 2.9% FOOD, BEVERAGE & TOBACCO - 2.9% 390,300 Arctic Glacier Income Fund (F) ............ 3,788 566,400 Connors Brothers Income Fund (F) .......... 5,091 ----------- Total Consumer Staples .................... 8,879 ----------- ENERGY - 4.1% 150,400 Harvest Energy Trust (F)** ................ 4,626 206,300 Vermilion Energy Trust (F)** .............. 6,095 67,200 Zargon Energy Trust (F) ................... 2,019 ----------- Total Energy .............................. 12,740 ----------- Total Canadian Income Trusts (Cost $17,255) ......................... 21,619 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 5.3% 106,000 Entertainment Properties Trust ............ 4,332 208,100 Equity Inns, Inc.** ....................... 3,371 91,900 Redwood Trust, Inc. ....................... $ 3,903 40,900 Sovran Self Storage, Inc. ................. 2,010 269,800 Winston Hotels, Inc.** .................... 2,906 ----------- Total REITs (Cost $14,012) ......................... 16,522 -----------
CONTRACTS - --------- PURCHASED PUT OPTIONS - 0.7% 10,730 iShares Russell 2000 Index, Expires January 2007 @ $56 ............. 483 29,250 iShares Russell 2000 Index, Expires January 2007 @ $49 ............. 439 10,300 iShares Russell 2000 Index, Expires January 2008 @ $55 ............. 1,236 20,000 NASDAQ-100 Index, Expires January 2007 @ $30 ............. 200 ----------- Total Purchased Put Options (Cost $10,830) ......................... 2,358 -----------
PRINCIPAL AMOUNT (000S) - --------- REPURCHASE AGREEMENT - 4.0% (Cost $12,352) $ 12,352 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $12,357,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $12,615,000) ................. 12,352 ----------- SHORT-TERM INVESTMENT - 16.1% (Cost $49,923) 49,923 Mellon GSL DBT II Collateral Fund+++ ..................... 49,923 ----------- TOTAL INVESTMENTS (Cost $331,381*) ....................... 114.9% 356,706 OTHER ASSETS (LIABILITIES) (NET) ......................... (14.9) (46,372) ----- ----------- NET ASSETS ............................................... 100.0% $ 310,334 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $47,422,000, representing 15.3% of the total net assets of the Fund (collateral value $49,923,000). (See Note 7 to Financial Statements.) + Non-income producing security. ++ Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. +++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS ADR -- American Depositary Receipt EIS -- Enhanced Income Security (F) -- Foreign Shares IDS -- Income Deposit Security 38 See Notes to Financial Statements. Portfolio of Investments SMALL CAP GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 94.0% CONSUMER DISCRETIONARY - 14.9% CONSUMER DURABLES & APPAREL - 5.2% 63,080 Carter's, Inc.+ ........................... $ 4,249 127,360 Charles & Colvard Ltd.** .................. 1,504 166,648 Coach, Inc.+ .............................. 5,503 61,800 Crocs, Inc.+** ............................ 1,848 60,569 Desarrolladora Homex SAde CV, ADR+** ...... 2,321 63,000 Directed Electronics, Inc.+ ............... 1,030 83,700 Under Armour, Inc., Class A+** ............ 3,079 70,600 Volcom, Inc.+ ............................. 2,518 ----------- 22,052 ----------- CONSUMER SERVICES - 2.5% 74,300 BJ's Restaurants Inc.+ .................... 1,956 50,424 Ctrip.com International Ltd., ADR ......... 2,269 71,000 Ruby Tuesday, Inc.** ...................... 2,113 37,100 Shuffle Master, Inc.+** ................... 1,371 85,246 Sonic Corporation+ ........................ 2,891 ----------- 10,600 ----------- MEDIA - 2.0% 140,500 Focus Media Holding Ltd., ADR+ ............ 8,485 ----------- RETAILING - 5.2% 53,239 Guitar Center, Inc.+** .................... 2,862 103,700 Gymboree Corporation+ ..................... 3,119 176,959 Hibbett Sporting Goods, Inc.+ ............. 5,364 114,900 Hot Topic, Inc.+** ........................ 1,704 10,100 Iconix Brand Group, Inc.+ ................. 174 113,300 Priceline.com Inc.+ ....................... 2,769 61,881 Stamps.com, Inc.+ ......................... 1,745 500 Steven Madden, Ltd.+ ...................... 27 36,489 Tractor Supply Company+ ................... 2,364 91,864 Urban Outfitters, Inc.+** ................. 2,131 ----------- 22,259 ----------- Total Consumer Discretionary .............. 63,396 ----------- CONSUMER STAPLES - 1.2% FOOD & STAPLES RETAILING - 0.7% 77,900 Central European Distribution Corporation+ .............................. 3,198 ----------- HOUSEHOLD & PERSONAL PRODUCTS - 0.5% 59,247 Parlux Fragrances, Inc.+** ................ 1,616 11,762 USANA Health Sciences, Inc.+** ............ 430 ----------- 2,046 ----------- Total Consumer Staples .................... 5,244 ----------- ENERGY - 9.7% 71,024 ATP Oil & Gas Corporation+ ................ 3,234 106,700 Basic Energy Services, Inc.+** ............ 3,556 119,100 Bronco Drilling Company, Inc.+ ............ 3,217 37,300 CARBO Ceramics Inc. ....................... 2,161 184,661 Carrizo Oil & Gas, Inc.+ .................. 5,425 49,700 Dril-Quip, Inc.+ .......................... $ 3,577 66,100 Hercules Offshore, Inc.+ .................. 2,703 255,800 Input/Output, Inc.+** ..................... 2,579 39,600 Lufkin Industries, Inc. ................... 2,537 201,200 Petrohawk Energy Corporation+** ........... 2,531 120,400 Pioneer Drilling Company+ ................. 1,952 30,400 SEACOR Holdings Inc.+ ..................... 2,689 54,537 Veritas DGC, Inc.+ ........................ 2,613 54,000 W-H Energy Services, Inc.+ ................ 2,714 ----------- Total Energy .............................. 41,488 ----------- FINANCIALS - 4.7% BANKS - 1.6% 88,000 Brookline Bancorp, Inc. ................... 1,302 95,800 Midwest Banc Holdings, Inc. ............... 2,247 84,700 Signature Bank+ ........................... 2,996 11,100 Sterling Financial Corporation ............ 357 ----------- 6,902 ----------- DIVERSIFIED FINANCIALS - 1.3% 156,468 First Cash Financial Services, Inc.+ ...... 3,312 131,900 TradeStation Group, Inc.+ ................. 2,103 ----------- 5,415 ----------- INSURANCE - 1.8% 151,100 American Equity Investment Life Holding Company** ......................... 2,049 136,900 Amerisafe Inc.+ ........................... 1,602 77,006 Delphi Financial Group, Inc., Class A ..... 4,034 ----------- 7,685 ----------- Total Financials .......................... 20,002 ----------- HEALTH CARE - 23.6% HEALTH CARE EQUIPMENT & SERVICES - 12.2% 58,500 Abaxis, Inc.+** ........................... 1,528 127,191 Adeza Biomedical Corporation+ ............. 2,179 51,014 Advisory Board Company+ ................... 2,863 206,400 Align Technology, Inc.+ ................... 1,814 76,116 ArthroCare Corporation+** ................. 3,450 60,180 Aspect Medical Systems, Inc.+ ............. 1,713 72,129 Centene Corporation+ ...................... 1,853 137,732 Conceptus, Inc.+** ........................ 1,892 60,600 Conor Medsystems, Inc.+ ................... 1,636 33,000 Foxhollow Technologies Inc.+** ............ 1,028 91,900 HealthExtras, Inc.+ ....................... 2,671 93,800 Healthspring, Inc.+ ....................... 1,595 40,422 Healthways, Inc.+ ......................... 1,983 78,900 Immucor, Inc.+ ............................ 2,292 109,807 IntraLase Corporation+** .................. 2,359 47,900 IRIS International Inc.+** ................ 567 85,952 Kyphon, Inc.+ ............................. 3,571 74,384 LCA-Vision, Inc.** ........................ 4,177 75,052 Merge Technologies, Inc.+** ............... 949 130,900 Micrus Endovascular Corporation+ .......... 1,844
See Notes to Financial Statements. 39 Portfolio of Investments (continued) SMALL CAP GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) HEALTH CARE (CONTINUED) HEALTH CARE EQUIPMENT & SERVICES (CONTINUED) 53,900 Natus Medical Inc.+ ....................... $ 1,078 45,400 Palomar Medical Technologies, Inc.+** ..... 1,915 71,700 Quidel Corporation+ ....................... 821 98,100 Syneron Medical Ltd. (F)+** ............... 2,538 85,917 Ventiv Health, Inc.+ ...................... 2,581 1,900 Visicu, Inc.+** ........................... 45 34,300 Vital Images, Inc.+ ....................... 1,147 ----------- 52,089 ----------- PHARMACEUTICALS & BIOTECHNOLOGY - 11.4% 84,700 Adams Respiratory Therapeutics, Inc.+ ..... 3,633 160,800 Anadys Pharmaceuticals Inc.+ .............. 2,230 169,300 Aspreva Pharmaceuticals Corporation (F)+ .. 5,756 60,300 Combinatorx Inc.+** ....................... 539 142,900 CV Therapeutics, Inc.+** .................. 2,837 61,738 Digene Corporation+ ....................... 2,550 71,400 Encysive Pharmaceuticals, Inc.+** ......... 305 96,335 First Horizon Pharmaceutical Corporation+ . 2,145 135,200 Keryx Biopharmaceuticals, Inc.+ ........... 2,303 66,329 Kos Pharmaceuticals, Inc.+ ................ 3,210 165,844 MGI Pharma, Inc.+** ....................... 3,098 221,100 Nastech Pharmaceutical Company Inc.+** .... 3,354 142,734 Nektar Therapeutics+** .................... 3,070 99,257 PDL BioPharma Inc.+** ..................... 2,857 145,847 Rigel Pharmaceuticals, Inc.+ .............. 1,565 129,916 Salix Pharmaceuticals Ltd.+** ............. 1,780 123,400 Telik, Inc.+** ............................ 2,269 84,539 United Therapeutics Corporation+ .......... 5,034 ----------- 48,535 ----------- Total Health Care ......................... 100,624 ----------- INDUSTRIALS - 12.5% CAPITAL GOODS - 8.2% 153,120 A.S.V., Inc.+** ........................... 3,828 21,964 American Science & Engineering, Inc.+** ... 1,883 49,500 Bucyrus International, Inc.** ............. 2,570 149,380 Ceradyne, Inc.+** ......................... 7,917 55,700 ESCO Technologies Inc.+** ................. 2,824 113,300 Essex Corporation+ ........................ 2,417 115,600 Hexcel Corporation+** ..................... 2,554 28,400 iRobot Corporation+** ..................... 619 13,100 Ladish Co., Inc.+ ......................... 467 70,575 Lincoln Electric Holdings, Inc ............ 3,868 63,000 NCI Building Systems, Inc.+ ............... 4,094 157,421 TurboChef Technologies, Inc.+** ........... 2,015 ----------- 35,056 ----------- COMMERCIAL SERVICES & SUPPLIES - 3.4% 9,200 American Ecology Corporation .............. 246 41,358 CRA International Inc.+ ................... 2,017 70,700 Kenexa Corporation+ ....................... $ 2,349 112,516 LECG Corporation+ ......................... 2,081 58,900 Mine Safety Appliances Company ............ 2,462 58,900 Portfolio Recovery Associates, Inc.+** .... 3,030 82,000 Resources Connection, Inc.+** ............. 2,206 ----------- 14,391 ----------- TRANSPORTATION - 0.9% 102,574 Knight Transportation, Inc. ............... 2,003 58,000 Universal Truckload Services, Inc.+ ....... 1,759 ----------- 3,762 ----------- Total Industrials ......................... 53,209 ----------- INFORMATION TECHNOLOGY - 27.4% COMMUNICATIONS EQUIPMENT - 5.6% 163,699 AudioCodes Ltd.(F)+ ....................... 2,229 65,400 F5 Networks, Inc.+** ...................... 3,830 378,873 Glenayre Technologies, Inc.+ .............. 2,095 164,400 Ixia+ ..................................... 1,858 146,462 Openwave Systems Inc.+** .................. 2,726 1,400 OPLINK Communinications Inc.+ ............. 27 41,406 Orckit Communications Ltd.(F)+** .......... 667 148,900 Polycom, Inc.+ ............................ 3,276 61,700 Redback Networks Inc.+** .................. 1,382 58,500 Sierra Wireless+ .......................... 1,053 250,000 Symmetricom, Inc.+** ...................... 2,025 144,300 Tekelec+** ................................ 2,061 240,900 Zhone Technologies, Inc.+** ............... 583 ----------- 23,812 ----------- COMPUTERS & PERIPHERALS - 1.4% 23,300 Hutchinson Technology, Inc.+** ............ 554 78,300 Neoware Inc.+ ............................. 1,697 69,900 Rackable Systems Inc.+ .................... 3,592 ----------- 5,843 ----------- INTERNET SOFTWARE & SERVICES - 4.7% 95,200 Akamai Technologies, Inc.+** .............. 3,207 183,543 aQuantive, Inc.+** ........................ 4,600 123,800 iVillage, Inc.+** ......................... 1,047 135,923 Jupitermedia Corporation+ ................. 2,395 86,691 Marchex, Inc., Class B+** ................. 1,886 168,700 Secure Computing Corporation+ ............. 1,814 156,172 ValueClick, Inc.+** ....................... 2,631 133,800 WebSideStory, Inc.+** ..................... 2,299 ----------- 19,879 ----------- IT SERVICES - 2.6% 167,124 Euronet Worldwide, Inc.+** ................ 5,973 79,424 RightNow Technologies, Inc.+** ............ 1,470 117,000 VeriFone Holdings, Inc.+** ................ 3,623 ----------- 11,066 -----------
40 See Notes to Financial Statements. Portfolio of Investments (continued) SMALL CAP GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) INFORMATION TECHNOLOGY (CONTINUED) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.8% 33,900 ATMI, Inc.+** ............................. $ 963 48,155 Cymer, Inc.+ .............................. 2,489 70,800 Ikanos Communications, Inc.+ .............. 1,311 100,500 Microsemi Corporation+** .................. 2,746 202,752 O2Micro International Limited (F)+ ........ 2,178 17,400 Saifun Semiconductors Ltd. (F)+ ........... 595 119,100 Semtech Corporation+** .................... 2,233 128,500 Silicon Motion Technology Corporation, ADR+ ................................... 1,912 68,300 SiRF Technology Holdings, Inc.+** 2,333 31,000 Supertex, Inc.+** 1,197 122,484 Tessera Technologies, Inc.+ 3,928 274,200 Trident Microsystems, Inc.+** 7,294 37,500 Varian Semiconductor Equipment Associates, Inc.+** ................................ 1,228 105,700 Zoran Corporation+** 2,900 ----------- 33,307 ----------- SOFTWARE - 5.3% 143,700 Concur Technologies, Inc.+ ................ 2,240 53,300 FactSet Research Systems Inc.** ........... 2,353 180,800 FalconStor Software, Inc.+** .............. 1,358 215,400 Informatica Corporation+** ................ 3,311 18,000 MRO Software, Inc.+ ....................... 342 162,136 Online Resources Corporation+ ............. 2,103 20,700 Open Solutions Inc.+ ...................... 563 117,293 PDF Solutions, Inc.+ ...................... 1,830 38,000 Retalix Ltd. (F)+** ....................... 934 67,780 TALX Corporation .......................... 1,763 263,000 TIBCO Software Inc.+ ...................... 2,267 212,100 VASCO Data Security International, Inc.+** ................................ 1,985 68,700 Witness Systems, Inc.+ .................... 1,604 ----------- 22,653 ----------- Total Information Technology .............. 116,560 ----------- Total Common Stocks (Cost $316,488) ........................ 400,523 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.0% 58,140 RAIT Investment Trust ..................... 1,505 124,700 Strategic Hotels & Resorts, Inc. .......... 2,828 ----------- Total REITs (Cost $3,861) .......................... 4,333 -----------
PRINCIPAL AMOUNT VALUE (000S) (000S) - --------- ----------- REPURCHASE AGREEMENT - 4.4% (Cost $18,839) $ 18,839 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $18,846,000 on 05/01/2006 (collateralized by U.S. Treasury obiligations, having various interest rates and maturiies, market value $19,240,000) ..................... $ 18,839 ----------- SHORT-TERM INVESTMENT - 19.2% (Cost $82,004) 82,004 Mellon GSL DBT II Collateral Fund++ ....... 82,004 ----------- TOTAL INVESTMENTS (Cost $421,192*) ....................... 118.6% 505,699 OTHER ASSETS (LIABILITIES) (NET) ......................... (18.6) (79,286) ----- ----------- NET ASSETS ............................................... 100.0% $ 426,413 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $77,921,000, representing 18.3% of the total net assets of the Fund (collateral value $82,004,000). (See Note 7 to Financial Statments.) + Non-income producing security. ++ Represents investment purchased with cash collateral for securities loaned. GLOSSARY OF TERMS ADR -- American Depositary Receipt (F) -- Foreign Shares See Notes to Financial Statements. 41 Portfolio of Investments INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS - 96.4% JAPAN - 24.3% *** 41,410 Advantest Corporation ..................... $ 4,771 246,000 AEON Company Ltd. ......................... 6,125 61,900 Astellas Pharma Inc. ...................... 2,582 30,100 Canon Inc. ................................ 2,302 95,300 Daiichi Sankyo Company Ltd.+ .............. 2,456 106,000 Daimaru, Inc. ............................. 1,543 87,000 Daiwa House Industry Company Ltd. ......... 1,483 79,400 FANUC Ltd. ................................ 7,510 17,900 Hirose Electric Company Ltd. .............. 2,627 70,800 Hoya Corporation .......................... 2,866 190,700 Kansai Electric Power Company Inc. ........ 4,463 119,000 Kao Corporation ........................... 3,198 289 Millea Holdings, Inc. ..................... 5,761 222,000 Mitsubishi Corporation .................... 5,371 454,000 Mitsubishi Estate Company Ltd. ............ 9,928 405,000 Mitsubishi Heavy Industries Ltd. .......... 2,006 1,221 Mitsubishi UFJ Financial Group, Inc. ...... 19,195 167,000 Mitsui & Company Ltd. ..................... 2,524 89,000 Mitsui Fudosan Company Ltd. ............... 1,993 156,000 Mitsui Sumitomo Insurance Company Ltd. .... 2,103 1,260 Mizuho Financial Group, Inc. .............. 10,745 23,000 Murata Manufacturing Company Ltd. ......... 1,675 118,000 NGK Spark Plug Company, Ltd.** ............ 2,591 32,000 Nidec Corporation ......................... 2,467 46,400 Nintendo Company Ltd. ..................... 6,928 205,000 Nippon Electric Glass Company, Ltd. ....... 4,627 525,000 Nippon Steel Corporation .................. 1,937 432 Nippon Telegraph & Telephone Corporation .. 1,935 634,900 Nissan Motor Company Ltd. ................. 8,347 119,300 Nitto Denko Corporation ................... 10,006 203,000 Obayashi Corporation ...................... 1,553 318,000 Odakyu Electric Railway Company, Ltd. ..... 2,000 45,630 ORIX Corporation .......................... 13,705 180,000 Ricoh Company, Ltd. ....................... 3,573 43,200 Rohm Company Ltd. ......................... 4,598 39,000 SECOM Company Ltd. ........................ 2,127 12,100 Shimamura Company Ltd. .................... 1,492 66,200 Shin-Etsu Chemical Company Ltd. ........... 3,826 49,500 SMC Corporation ........................... 7,521 561,000 SOFTBANK Corporation** .................... 14,436 241,000 Sompo Japan Insurance Inc. ................ 3,492 37,190 Sony Corporation .......................... 1,868 573,000 Sumitomo Corporation ...................... 8,585 2,389 Sumitomo Mitsui Financial Group, Inc. ..... 26,226 84,000 Sumitomo Realty & Development Company, Ltd. ................................... 2,228 377,000 Suzuki Motor Corporation .................. 9,204 24,950 T&D Holdings, Inc. ........................ 1,913 76,200 Takeda Pharmaceutical Company Ltd. ........ 4,658 19,100 TDK Corporation ........................... 1,599 69,600 Tokyo Electric Power Company Inc. ......... 1,788 138,100 Tokyo Electron Ltd. ....................... 9,945 407,000 Tokyo Gas Company Ltd.** .................. 1,970 565,000 Tokyu Corporation ......................... 3,985 250,000 Toshiba Corporation** ..................... 1,592 25,700 Toyota Motor Corporation (F) .............. $ 1,503 112,000 Trend Micro Inc. .......................... 4,338 83,700 USHIO Inc. ................................ 1,930 7,830 Yahoo! Japan Corporation .................. 4,566 42,300 Yamada Denki Company Ltd. ................. 4,610 297,500 Yamato Holdings Company, Ltd. ............. 5,931 ----------- 298,827 ----------- UNITED KINGDOM - 13.2% 9,600 Anglo American PLC ........................ 414 50,900 Anglo American PLC (F) .................... 2,167 437,000 ARM Holdings PLC .......................... 1,084 156,400 AstraZeneca PLC ........................... 8,642 97,000 AstraZeneca PLC (F) ....................... 5,365 460,800 Astro All Asia Networks PLC ............... 582 731,700 BAE Systems PLC ........................... 5,571 110,084 BHP Billiton PLC .......................... 2,266 137,300 Brambles Industries PLC ................... 1,135 101,100 British Land Company PLC .................. 2,316 174,563 Cadbury Schweppes PLC (F) ................. 1,732 59,500 Carnival PLC .............................. 2,949 633,900 HBOS PLC .................................. 11,126 197,900 HSBC Holdings PLC ......................... 3,419 105,600 Johnston Press PLC ........................ 936 10,800 Kazakhmys PLC ............................. 224 470,000 Kingfisher PLC ............................ 1,931 278,400 Lloyds TSB Group PLC ...................... 2,708 10,800 Lonmin PLC ................................ 538 92,000 Northern Rock PLC ......................... 1,778 112,900 Oxus Gold PLC+ ............................ 169 163,400 Pearson PLC ............................... 2,265 761,600 Reed Elsevier PLC ......................... 7,569 44,000 Rio Tinto PLC ............................. 2,420 643,500 Royal Bank of Scotland Group PLC++ ........ 21,017 466,948 Royal Dutch Shell PLC, A Shares ........... 16,012 121,402 Royal Dutch Shell PLC, B Shares ........... 4,341 180,400 Scottish & Southern Energy PLC ............ 3,701 224,800 Smith & Nephew PLC ........................ 1,859 224,000 Standard Chartered PLC .................... 5,947 233,900 Tesco PLC ................................. 1,363 194,000 TI Automotive Ltd., Class A+# ............. 0 464,700 Unilever PLC .............................. 4,936 11,575,019 Vodafone Group PLC (F) .................... 27,334 71,600 Wolseley PLC .............................. 1,793 63,800 Xstrata PLC ............................... 2,308 244,800 Yell Group PLC ............................ 2,294 ----------- 162,211 ----------- FRANCE - 7.9% 38,895 Accor SA** ................................ 2,448 61,500 AXA Group** ............................... 2,257 12,760 BNP Paribas+** ............................ 1,165 127,600 BNP Paribas SA** .......................... 12,057 211,865 Bouygues SA++** ........................... 11,560 24,800 Dassault Systemes SA** .................... 1,345 21,200 Essilor International SA** ................ 2,126 24,300 Groupe Danone** ........................... 3,032
42 See Notes to Financial Statements. Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) FRANCE (CONTINUED) 13,406 L'Air Liquide SA .......................... $ 2,901 57,600 L'Oreal SA** .............................. 5,341 52,000 Lafarge SA** .............................. 6,396 23,700 Renault SA** .............................. 2,751 56,700 Safran SA ................................. 1,456 189,500 Sanofi-Aventis Group (F)** ................ 17,871 82,587 Schneider Electric SA** ................... 9,351 17,900 Societe Generale Group** .................. 2,735 41,600 Thales SA ................................. 1,788 18,360 Total SA** ................................ 5,077 53,600 Veolia Environment SA** ................... 3,203 62,300 Vivendi SA** .............................. 2,275 ----------- 97,135 ----------- SWITZERLAND - 6.3% 31,000 Adecco SA** ............................... 1,922 236,782 Compagnie Financiere Richemont AG, A Units ................................ 12,267 85,139 Credit Suisse Group ....................... 5,348 115,263 Holcim Ltd.** ............................. 9,666 31,081 Nestle SA (F)** ........................... 9,479 296,387 Novartis AG (F) ........................... 17,004 33,331 Roche Holding AG-Genusschein (F) .......... 5,125 121,291 Swiss Reinsurance Company** ............... 8,851 11,589 Swisscom AG ............................... 3,866 10,500 Synthes, Inc. ............................. 1,304 15,785 UBS AG** .................................. 1,871 ----------- 76,703 ----------- CANADA - 4.9% 153,900 Abitibi-Consolidated Inc.** ............... 664 245,800 Alcan Inc.** .............................. 12,835 4,300 Banro Corporation+ ........................ 52 5,400 Banro Corportation+,++ .................... 65 3,700 Barrick Gold Corporation .................. 113 217,900 Barrick Gold Corporation (F) .............. 6,642 212,800 Cameco Corporation ........................ 8,658 27,500 Canadian Imperial Bank of Commerce ........ 2,035 135,700 Canadian Natural Resources Ltd. ........... 8,156 33,000 CIC Energy Corporation+ ................... 196 67,700 Inco Ltd. (F) ............................. 3,823 83,600 Ivanhoe Mines Ltd.+ ....................... 815 14,200 Magna International Inc., Class A** ....... 1,113 25,800 Manulife Financial Corporation** .......... 1,685 81,100 Methanex Corporation ...................... 1,795 54,300 Potash Corporation of Saskatchewan Inc. ... 5,140 44,800 Suncor Energy Inc. ........................ 3,836 51,000 TELUS Corporation** ....................... 2,108 ----------- 59,731 ----------- GERMANY - 4.8% 35,200 Allianz AG ................................ 5,893 37,000 Altana AG ................................. 2,375 82,300 Bayer AG .................................. 3,801 28,500 Bayerische Motoren Werke (BMW) AG ......... 1,550 67,000 Commerzbank AG ............................ $ 2,777 84,500 DaimlerChrysler AG** ...................... 4,633 32,200 Deutsche Bank AG .......................... 3,953 16,137 Deutsche Boerse AG ........................ 2,334 97,600 Deutsche Post AG .......................... 2,602 50,100 E.ON AG** ................................. 6,101 41,700 Infineon Technologies AG+ ................. 510 32,600 SAPAG** ................................... 7,123 85,900 Siemens AG ................................ 8,128 99,300 Volkswagen AG** ........................... 7,668 ----------- 59,448 ----------- NETHERLANDS - 4.5% 255,535 ABN AMRO Holding NV ....................... 7,637 261,444 AEGON NV .................................. 4,773 85,625 Heineken Holding NV** ..................... 3,054 130,406 Heineken NV** ............................. 5,283 285,614 ING Groep NV** ............................ 11,624 1,215,600 Koninklijke (Royal) KPN NV** .............. 14,278 50,700 Koninklijke (Royal) Numico NV+ ............ 2,298 12,700 Pyaterochka Holding NV, GDR+ .............. 243 79,400 Reed Elsevier NV** ........................ 1,177 75,500 TNT NV** .................................. 2,718 25,200 Unilever NV ............................... 1,820 ----------- 54,905 ----------- SOUTH KOREA - 3.9% *** 124,570 Asiana Airlines+ .......................... 1,024 590 Cheil Communications Inc. ................. 125 760 CJ Home Shopping .......................... 87 7,650 Daewoo Shipbuilding & Marine Engineering Company Ltd. ........................... 223 2,600 Doosan Heavy Industries and Construction Company Ltd. ........................... 94 54,940 Doosan Infracore Company Ltd. ............. 1,028 16,950 GS Engineering & Construction Corporation . 1,229 59,980 Hankook Tire Company Ltd. ................. 903 12,430 Hynix Semiconductor Inc.+ ................. 434 16,120 Hyundai Development Company ............... 935 2,010 Hyundai Heavy Industries Company Ltd. ..... 193 2,210 Hyundai Mipo Dockyard Company Ltd. ........ 207 2,140 Hyundai Mobis ............................. 189 19,330 Hyundai Motor Company ..................... 1,699 14,040 Hyundai Steel Company ..................... 543 42,330 Kookmin Bank .............................. 3,792 11,550 Kookmin Bank, Sponsored ADR ............... 1,029 14,200 KT Corporation, Sponsored ADR ............. 330 3,130 KT&G Corporation .......................... 175 1,800 LG.Philips LCD Company Ltd.+ .............. 76 75,500 LG.Philips LCD Company Ltd., ADR+ ......... 1,589 1,520 Lotte Shopping Company Ltd. ............... 635 23,090 LS Cable Ltd. ............................. 955 38,800 Macquarie Korea Infrastructure Fund+ ...... 286 33,300 Macquarie Korea Infrastructure Fund, GDR+ . 241 880 Nong Shim Company Ltd. .................... 246 580 POSCO ..................................... 162 2,300 POSCO, ADR ................................ 162
See Notes to Financial Statements. 43 Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) SOUTH KOREA (CONTINUED) 13,750 Pusan Bank ................................ $ 211 33,957 Samsung Electronics Company Ltd. .......... 23,185 25,300 Samsung Engineering Company Ltd. .......... 1,082 14,040 Samsung Fire & Marine Insurance Company Ltd. ................................... 2,017 3,630 Samsung Securities Company Ltd. ........... 228 25,530 Shinhan Financial Group Company Ltd. ...... 1,272 760 Shinsegae Company Ltd. .................... 372 1,130 SK Corporation ............................ 83 9,700 SK Telecom Company Ltd., ADR .............. 259 9,300 Sungshin Cement Company Ltd. .............. 170 20,090 Woori Finance Holdings Company Ltd. ....... 454 ----------- 47,924 ----------- SPAIN - 3.1% 62,400 Altadis, SA** ............................. 2,962 506,900 Banco Bilbao Vizcaya Argentaria SA ........ 11,198 573,000 Banco Santander Central Hispano SA** ...... 8,884 85,000 Iberdrola SA .............................. 2,769 61,300 Industria de Diseno Textil SA(Inditex)** .. 2,494 235,100 Repsol YPF SA** ........................... 7,023 165,274 Telefonica SA ............................. 2,648 ----------- 37,978 ----------- SOUTH AFRICA - 2.8% 68,100 ABSA Group Ltd. ........................... 1,344 8,200 Anglo Platinum Ltd. ....................... 792 6,800 AngloGold Ashanti Ltd. .................... 369 20,700 AngloGold Ashanti Ltd., Sponsored ADR ..... 1,132 39,000 Aspen Pharmacare Holdings Ltd. ............ 276 173,300 Aveng Ltd. ................................ 685 19,100 Barloworld Ltd. ........................... 419 74,200 Edgars Consolidated Stores Ltd. ........... 469 60,900 Gold Fields Ltd. .......................... 1,532 134,000 Harmony Gold Mining Company Ltd.+ ......... 2,206 7,400 Impala Platinum Holdings Ltd. ............. 1,403 73,400 Massmart Holdings Ltd. .................... 718 9,100 Mittal Steel South Africa Ltd. ............ 106 42,500 Mr. Price Group Ltd. ...................... 155 224,153 Murray & Roberts Holdings Ltd. ............ 1,014 120,258 Mvelaphanda Resources Ltd.+ ............... 700 1,800 Naspers Ltd., N Shares .................... 40 128,651 Network Healthcare Holdings Ltd. .......... 218 16,400 Sappi Ltd. ................................ 235 428,700 Sasol Ltd. ................................ 18,039 106,700 Standard Bank Group Ltd. .................. 1,523 20,800 Truworths International Ltd. .............. 100 26,088 Wilson Bayly Holmes-Ovcon Ltd. ............ 260 ----------- 33,735 ----------- MEXICO - 2.2% 484,400 America Movil SA de CV, Series L, ADR ..... 17,879 634,100 Carso Infraestructura y Construccion SA+ .. 464 34,700 Cemex SA de CV, CPO ....................... 235 294,500 Empresas ICA SA de CV+ 918 36,700 Grupo Aeroportuario del Pacifico SA de CV, ADR+ ............................... $ 1,221 11,932 Grupo Cementos de Chihuahua SA de CV, O Shares ................................. 39 141,529 Grupo Financiero Banorte SA de CV ......... 369 64,600 Grupo Financiero Inbursa SA de CV ......... 102 82,100 Grupo Televisa SA, Sponsored ADR .......... 1,741 101,900 Impulsora del Desarrollo y el Empleo en America Latina, SA de CV+ .............. 101 100,600 Kimberly-Clark de Mexico, SA de CV, Class A 355 1,233,400 Wal-Mart de Mexico SA de CV, Series V ..... 3,516 ----------- 26,940 ----------- TAIWAN - 2.1% *** 112,400 AU Optronics Corporation, ADR ............. 1,847 56,493 Cathy Financial Holding Company, Ltd., GDR .................................... 1,266 25,900 Chi Mei Optoelectronics Corporation, GDR .. 368 84,000 China Steel Corporation, GDR .............. 1,697 26,000 China Steel Corporation, Sponsored GDR .... 508 354,000 Fubon Financial Holding Company, Ltd., GDR .................................... 3,428 536,000 Hon Hai Precision Industry Company, Ltd., GDR .................................... 7,274 60,000 Quanta Computer Inc., GDR ................. 529 47,100 Siliconware Precision Industries Company, ADR .................................... 330 808,296 Taiwan Semiconductor Manufacturing Company Ltd., Sponsored ADR .................... 8,471 75,100 United Microelectronics Corporation, ADR .. 283 ----------- 26,001 ----------- AUSTRALIA - 1.9% *** 326,300 Amcor Ltd. ................................ 1,792 202,878 Brambles Industries Ltd.** ................ 1,720 374,145 Foster's Group Ltd. ....................... 1,671 677,209 Insurance Australia Group Ltd.** .......... 2,907 38,042 Macquarie Bank Limited .................... 2,064 169,100 Promina Group Ltd. ........................ 729 125,943 QBE Insurance Group Ltd. .................. 2,141 329,460 Rinker Group Ltd. ......................... 5,307 81,200 Westpac Banking Corporation ............... 1,549 269,055 Woolworths Ltd. ........................... 3,814 ----------- 23,694 ----------- HONG KONG - 1.8% *** 307,200 Bank of East Asia, Ltd. ................... 1,284 950,000 BOC Hong Kong (Holdings) Ltd. ............. 1,961 318,000 Clear Media Ltd.+ ......................... 394 762,000 Foxconn International Holdings Ltd.+ ...... 1,641 86,000 Guangdong Investment Ltd. ................. 36 836,000 Hang Lung Group Ltd. ...................... 1,989 850,000 Hang Lung Properties Ltd. ................. 1,710 911,500 Johnson Electric Holdings Ltd. ............ 770 17,500 Kingboard Chemical Holdings Ltd. .......... 46 1,394,000 Li & Fung Ltd. ............................ 3,308 2,408,000 PCCW Ltd. ................................. 1,600 622,000 Shangri-La Asia Ltd. ...................... 1,103 181,000 Sung Hung Kai Properties Ltd. ............. 2,068 421,500 Swire Pacific Ltd., Class A ............... 4,311 ----------- 22,221 -----------
44 See Notes to Financial Statements. Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) BRAZIL - 1.2% 12,000 All America Latina Logistica .............. $ 762 29,000 Banco Nossa Caixa SA ...................... 655 87,000 Companhia de Bebidas das Americas, ADR .... 3,563 23,000 Companhia de Concessoes Rodoviarias ....... 201 40,000 Companhia de Saneamento de Minas Gerais - Copasa MG+ ............................. 403 10,000 Companhia Siderurgica Nacional SA, Sponsored ADR .......................... 352 16,000 Companhia Vale do Rio Doce, Sponsored ADR .......................... 712 4,500 Gerdau SA, Sponsored ADR (F) .............. 78 11,769,000 Light SA+ ................................. 90 21,000 Lojas Renner SA ........................... 1,202 44,000 Natura Cosmeticos SA ...................... 560 20,000 Porto Seguro SA ........................... 406 12,000 Submarino SA .............................. 322 16,500 Telemig Celular Participacoes SA, ADR ..... 719 130,189,000 Tim Participacoes SA ...................... 580 49,200 Tim Participacoes SA, ADR ................. 1,892 27,000 Unibanco - Uniao de Bancos Brasileiros SA, GDR .................................... 2,142 5,000 Usinas Siderurgicas de Minas Gerais SA .... 216 28,386 Vivo Participacoes SA, ADR+ ............... 117 ----------- 14,972 ----------- FINLAND - 1.1% 286,800 Nokia Oyj ................................. 6,531 123,300 Nokia Oyj, Sponsored ADR .................. 2,794 176,200 UPM-Kymmene Oyj ........................... 4,135 ----------- 13,460 ----------- INDIA - 1.1% 130,500 ICICI Bank Ltd., Sponsored ADR ............ 3,580 64,100 Infosys Technologies Ltd., Sponsored ADR .. 5,041 43,600 McDowell & Company Ltd., GDR+ ............. 379 68,624 Ranbaxy Laboratories Ltd., Sponsored GDR .. 721 40,300 Reliance Energy Ltd., GDR ................. 1,640 30,430 Reliance Industries Ltd., Sponsored GDR ... 1,367 27,900 Wipro Ltd., ADR ........................... 399 ----------- 13,127 ----------- CHINA - 1.1% *** 122,000 Advanced Semiconductor Manufacturing Corporation, Class H+,++ ............... 30 220,000 Agile Property Holdings Ltd.+ ............. 170 96,000 Angang New Steel Company Ltd., Class H .... 84 624,000 Anhui Conch Cement Company Ltd., Class H .. 1,078 512,000 Beijing Capital International Airport Company Ltd., Class H .................. 297 84,000 Beijing Enterprises Holdings Ltd. ......... 184 555,000 Bio-Treat Technology Ltd. ................. 463 486,700 BOE Technology Group Company Ltd., Class B ................................ 80 2,069,000 China Construction Bank, Class H+ ......... 894 3,600 China Life Insurance Company Ltd., ADR+ ... 194 764,000 China Life Insurance Company Ltd., Class H+ ............................... 1,030 698,000 China Mengniu Dairy Company Ltd. .......... $ 797 49,000 China Merchants Holdings International Company Ltd. ........................... 167 122,500 China Netcom Group Corporation Ltd. ....... 224 310,000 China Oilfield Services Ltd., Class H ..... 171 248,000 China Overseas Land & Investment Ltd. ..... 158 616,000 China Paradise Electronics Retail Ltd.+ ... 218 106,000 China Resources Enterprise Ltd. ........... 227 272,140 Chongqing Changan Automobile Company Ltd., Class B ................................ 153 4,800 Ctrip.com International Ltd., ADR ......... 216 84,000 Dalian Port (PDA) Company Ltd., Class H+ .. 47 52,000 Dalian Port (PDA) Company Ltd., Class H+,++ ............................ 29 1,150,000 Dongfeng Motor Corporation Ltd., Class H+ ............................... 575 330,000 GOME Electrical Appliances Holdings Ltd. .. 285 606,000 Lenovo Group Ltd. ......................... 227 86,000 Li Ning Company Ltd. ...................... 97 187,000 Lianhua Supermarket Holdings Ltd., Class H ................................ 218 29,600 NetEase.com Inc., ADR+ .................... 642 384,000 Nine Dragons Paper Holdings Ltd.+ ......... 334 1,174,000 PetroChina Company Ltd., Class H .......... 1,295 2,525,000 Semiconductor Manufacturing International Corporation+ ........................... 384 11,600 Shanda Interactive Entertainment Ltd., ADR+ ................................... 143 490,000 Shanghai Forte Land Company Ltd., Class H ...................................... 239 100,000 Shanghai Prime Machinery Company Ltd., Class H+ ............................... 37 66,000 Shanghai Prime Machinery Company Ltd., Class H+,++ ............................ 25 416,000 Tsingtao Brewery Company Ltd., Class H .... 480 105,000 Weichai Power Company Ltd., Class H ....... 248 60,500 Weiqiao Textile Company Ltd., Class H ..... 80 158,000 Wumart Stores, Inc., Class H .............. 520 93,000 ZTE Corporation, Class H .................. 318 ----------- 13,058 ----------- SWEDEN - 1.1% 92,100 Assa Abloy AB, B Shares** ................. 1,783 128,100 Atlas Copco AB, Class A** ................. 3,786 35,400 Sandvik AB ................................ 2,304 3,700 Scania AB, B Shares** ..................... 172 1,402,000 Telefonaktiebolaget LM Ericsson, B Shares** ............................... 4,992 ----------- 13,037 ----------- RUSSIA - 0.9% 9,300 Evraz Group SA, GDR, S Shares ............. 232 25,900 Evraz Group SA, GDR, S Shares (F) ......... 648 61,000 Gazprom, Sponsored ADR (F) ................ 2,770 4,300 LUKOIL, Sponsored ADR ..................... 389 12,200 Mining and Metallurgical Company Norilsk Nickel, ADR ............................ 1,549 9,800 Mobile TeleSystems, Sponsored ADR ......... 320 3,700 NovaTek OAO, Sponsored GDR Regulation S ... 135 48,600 Novolipetsk Steel, GDR+ ................... 1,081 11,300 Pyaterochka Holding NV, GDR+ .............. 215 41,900 Unified Energy System of Russia, GDR ...... 3,214 12,100 Vimpel-Communications, Sponsored ADR+ ..... 563 ----------- 11,116 -----------
See Notes to Financial Statements. 45 Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) ISRAEL - 0.7% 56,300 Bank Hapoalim BM .......................... $ 284 22,671 Mizrahi Tefahot Bank Ltd.+ ................ 152 48,000 Partner Communications Company Ltd. ....... 407 149,200 Supersol Ltd. ............................. 447 182,900 Teva Pharmaceutical Industries Ltd., Sponsored ADR .......................... 7,407 ----------- 8,697 ----------- SINGAPORE - 0.7% *** 149,000 DBS Group Holdings Ltd.** ................. 1,678 3,252,675 Singapore Telecommunications Ltd.++ ....... 5,627 122,000 United Overseas Bank Ltd.** ............... 1,258 ----------- 8,563 ----------- INDONESIA - 0.7% *** 615,500 PT Bank Central Asia Tbk .................. 306 6,236,500 PT Bank Mandiri ........................... 1,363 1,430,000 PT Bank Rakyat Indonesia .................. 753 503,500 PT Ciputra Surya Tbk ...................... 45 41,000 PT Jaya Real Property Tbk ................. 16 660,500 PT Medco Energi Internasional Tbk ......... 361 786,500 PT Ramayana Lestari Sentosa Tbk ........... 81 74,000 PT Summarecon Agung Tbk ................... 10 6,343,500 PT Telekomunikasi Indonesia ............... 5,452 ----------- 8,387 ----------- IRELAND - 0.5% 93,268 CRH PLC ................................... 3,430 171,200 Depfa Bank PLC ............................ 3,214 ----------- 6,644 ----------- TURKEY - 0.5% 211,074 Akbank T.A.S .............................. 1,756 33,523 Anadolu Efes Biracilik ve Malt Sanayii AS ..................................... 1,122 91,214 Dogan Yayin Holding AS+ ................... 462 81,975 Hurriyet Gazetecilik ve Matbaacilik AS .... 301 62,857 Koc Holding AS ............................ 344 39,544 Selcuk Ecza Deposu Ticaret ve Sanayi AS+ .. 200 154,632 Turkiye Garanti Bankasi AS ................ 637 144,895 Turkiye Is Bankasi, Class C ............... 1,216 ----------- 6,038 ----------- MALAYSIA - 0.5% *** 726,900 Airasia BHD+ .............................. 351 548,100 Bumiputra-Commerce Holdings BHD ........... 953 145,000 EON Capital BHD ........................... 252 17,100 Genting BHD ............................... 120 481,700 IJM Corporation BHD ....................... 777 169,700 IOI Corporation BHD ....................... 665 61,900 Malakoff BHD .............................. 167 30,800 Malayan Banking BHD ....................... 94 54,500 Maxis Communications BHD .................. 131 98,800 MISC BHD (F) .............................. 240 301,100 MK Land Holdings BHD ...................... 68 105,000 Resorts World BHD ......................... $ 388 109,600 Road Builder (M) Holdings BHD ............. 68 469,200 SP Setia BHD ............................... 484 98,900 Tenaga Nasional BHD ....................... 233 142,700 Transmile Group BHD ....................... 520 195,100 UMW Holdings BHD .......................... 396 ----------- 5,907 ----------- BELGIUM - 0.4% 31,200 Fortis .................................... 1,171 63,600 SES GLOBAL, FDR ........................... 1,023 51,400 UCB Group SA .............................. 2,647 ----------- 4,841 ----------- THAILAND - 0.4% *** 476,300 Bank of Ayudhya PCL, NVDR ................. 237 55,500 Banpu Public Comany Ltd., NVDR ............ 225 254,200 Electricity Generating PCL, NVDR .......... 566 472,100 Kasikornbank PCL, (F) ..................... 855 95,300 Kiatnakin Bank PCL, NVDR .................. 89 2,281,500 Krung Thai Bank PCL, (F) .................. 748 125,800 Ratchaburi Electricity Generating Holding PCL, (F) ............................... 130 29,300 Siam Cement PCL, NVDR ..................... 186 56,600 Siam City Cement PCL, (F) ................. 407 148,700 Thai Airways International PCL, (F) ....... 196 232,000 Thanachart Capital PCL, NVDR .............. 99 144,900 TISCO Bank PCL, (F) ....................... 111 554,600 TISCO Bank PCL, NVDR ...................... 421 ----------- 4,270 ----------- EGYPT - 0.3% 62,800 Commercial International Bank, GDR ........ 770 12,000 Mobinil (Egyptian Mobile Phone Network) ... 329 36,900 Orascom Construction Industries, GDR ...... 3,077 ----------- 4,176 ----------- ITALY - 0.3% 322,200 Banca Intesa SpA** ........................ 1,910 70,550 Eni SpA ................................... 2,154 ----------- 4,064 ----------- AUSTRIA - 0.3% 23,600 Erste Bank der Oesterreichischen Sparkassen AG** ................................... 1,432 11,900 Raiffeisen International Bank Holding AG+** .................................. 1,037 58,808 Telekom Austria AG ........................ 1,443 ----------- 3,912 ----------- DENMARK - 0.3% 51,800 Novo Nordisk A/S, Class B ................. 3,364 ----------- NORWAY - 0.2% 127,700 DnB NOR ASA** .............................. 1,771 76,713 Norske Skogindustrier ASA** ................ 1,182 ----------- 2,953 -----------
46 See Notes to Financial Statements. Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited)
VALUE SHARES (000S) - ------ ----------- COMMON STOCKS (CONTINUED) GREECE - 0.2% 52,000 Opap SA ................................... $ 1,922 ----------- UNITED STATES - 0.1% 1,400 Freeport-McMoRan Copper & Gold, Inc., Class B ................................ 90 8,400 Net 1 UEPS Technologies, Inc.+ ............ 264 60,197 News Corporation (F), CDI ................. 1,036 11,400 Zoran Corporation+ ........................ 313 ----------- 1,703 ----------- LUXEMBOURG - 0.1% 20,000 Ternium SA, Sponsored ADR+ ................ 534 ----------- UNITED ARAB EMIRATES - 0.0% 37,400 Kingdom Hotels Investments, GDR+ .......... 328 ----------- OMAN - 0.0% 26,950 Bank Muscat SAOG, GDR ..................... 268 ----------- PHILIPPINES - 0.0% *** 8,800 Ayala Corporation ......................... 61 42,700 SM Investments Corporation ................ 190 ----------- 251 ----------- CHILE - 0.0% 19,000 Enersis SA, Sponsored ADR ................. 232 ----------- HUNGARY - 0.0% 15,500 Magyar Telekom Telecommunications ......... 71 ----------- Total Common Stocks (Cost $861,049) ........................ 1,183,348 ----------- PREFERRED STOCKS - 0.4% BRAZIL - 0.4% 4,300 Banco Itau Holding Financeira SA .......... 138 9,000 Bradespar SA++ ............................ 356 4,000 Companhia de Bebidas das Americas, ADR .... 185 4,674,000 Companhia Energetica de Minas Gerais ...... 223 4,410 Duratex S.A.++ ............................ 95 14,000 Duratex S.A ............................... 300 437,000 Itausa - Investimentos Itau SA ............ 2,006 1,286,000 Lojas Americanas SA ....................... 53 9,300 Suzano Petroquimica SA .................... 17 22,000 Usinas Siderurgicas de Minas Gerais SA, Class A ................................ 835 18,276 Vivo Participacoes SA+ .................... 74 ----------- 4,282 ----------- CHILE - 0.0% 35,200 Embotelladora Andina SA, Class A, ADR ..... 482 ----------- SOUTH KOREA - 0.0% *** 900 Samsung Electronics Company Ltd. .......... 488 Total Preferred Stocks (Cost $4,618) ...... 5,252 ----------- RIGHTS - 0.0% (Cost $0) SWITZERLAND - 0.0% 121,291 Swiss Reinsurance Company+ ................ $ 0 -----------
PRINCIPAL AMOUNT (000S) - ------------ FOREIGN BONDS AND NOTES - 0.1% $ 37 Dominican Republic, 9.500% due 09/27/2011++ ........................... 40 165 Federal Republic of Brazil, Note, 8.000% due 01/15/2018 .................. 179 400 Mexican Fixed Rate Bonds, 8.000% due 12/07/2023 .................. 34 1,236 Republic of Argentina, Note, 5.830% due 12/31/2033 .................. 525 30 Republic of Peru, 9.875% due 02/06/2015 .................. 36 40 Republic of Venezuela, Bond, 9.250% due 09/15/2027 .................. 50 50 Russian Federation, Bond, 5.000% due 03/31/2030 .................. 54 60 Turkey Government Bond, 20.000% due 10/17/2007 ................. 50 ----------- Total Foreign Bonds and Notes (Cost $959) ............................ 968 ----------- REPURCHASE AGREEMENT - 3.1% (Cost $37,868) 37,868 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $37,883,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $38,673,000) ..................... 37,868 ----------- SHORT-TERM INVESTMENT - 15.6% (Cost $191,138) 191,138 Mellon GSL DBT II Collateral Fund+++ ...... 191,138 ----------- TOTAL INVESTMENTS (Cost $1,095,632*) ..................... 115.6% 1,418,574 OTHER ASSETS (LIABILITIES) (NET) ......................... (15.6) (191,027) ----- ----------- NET ASSETS ............................................... 100.0% $ 1,227,547 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Some or all of these securities are on loan at April 30, 2006, and have an aggregate market value of $184,042,000, representing 15.0% of the total net assets of the Fund (collateral value $191,138,000). (See Note 7 to Financial Statements.) *** Investments in areas of the Pacific Rim at April 30, 2006 are 37.4% of the total net assets of the Fund. + Non-income producing security. ++ Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. +++ Represents investment purchased with cash collateral for securities loaned. # Security is restricted and illiquid. It was acquired on October 30, 2001, and has a value of $0.00 per Fund share at April 30, 2006. See Notes to Financial Statements. 47 Portfolio of Investments (continued) INTERNATIONAL GROWTH FUND April 30, 2006 (unaudited) SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
FORWARD FOREIGN CURRENCY CONTRACTS TO BUY CONTRACTS TO RECEIVE NET (000S) UNREALIZED ----------------------------------------- APPRECIATION/ EXPIRATION LOCAL VALUE IN IN EXCHANGE (DEPRECIATION) DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS - ---------- ------------ -------- ----------- -------------- 5/2/06 AUD 136 104 103 $ 1 5/2/06 CAD 20 18 18 -- 5/2/06 EUR 548 691 682 9 5/2/06 GBP 115 211 206 5 5/2/06 HKD 140 18 18 -- 5/2/06 JPY 16,974 149 149 -- 5/2/06 ZAR 409 68 68 -- 5/3/06 EUR 176 223 222 1 5/3/06 GBP 20 37 37 -- 5/3/06 HKD 1,163 150 150 -- 5/4/06 EUR 447 564 564 -- 5/4/06 GBP 130 237 237 -- 5/4/06 ZAR 527 88 87 1 5/8/06 ZAR 1,272 212 212 -- 6/14/06 GBP 2,109 3,848 3,660 188 6/26/06 GBP 2,112 3,855 3,602 253 7/21/06 AUD 4,852 3,681 3,584 97 ---- $555 ====
FORWARD FOREIGN CURRENCY CONTRACTS TO SELL CONTRACTS TO DELIVER NET (000S) UNREALIZED ------------------------------------------ APPRECIATION/ EXPIRATION LOCAL VALUE IN IN EXCHANGE (DEPRECIATION) DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACTS - ---------- ------------ -------- ----------- -------------- 5/1/06 JPY 9,788 86 85 $ (1) 5/2/06 CHF 84 67 66 (1) 5/2/06 EUR 27 34 34 -- 5/2/06 HKD 36 5 5 -- 5/3/06 EUR 155 195 194 (1) 5/3/06 ZAR 77 13 13 -- 5/5/06 ZAR 222 37 36 (1) 5/8/06 JPY 22,495 198 198 -- 6/14/06 CHF 4,723 3,828 3,660 (168) 6/26/06 CHF 4,757 3,859 3,602 (257) 7/7/06 ZAR 3,006 498 495 (3) 7/19/06 ZAR 2,759 457 446 (11) 7/21/06 EUR 2,910 3,691 3,584 (107) ----- $(550) ----- Net Unrealized Appreciation of Forward Foreign Currency Contracts $ 5 =====
AT APRIL 30, 2006, SECTOR DIVERSIFICATION WAS AS FOLLOWS:
% OF VALUE SECTOR DIVERSIFICATION NET ASSETS (000S) - ---------------------- ---------- ---------- COMMON STOCKS: Banks ....................................... 17.5% $ 214,622 Materials ................................... 10.4 127,654 Telecommunication Services .................. 8.2 100,072 Pharmaceuticals & Biotechnology ............. 6.9 84,294 Capital Goods ............................... 6.3 77,470 Energy ...................................... 5.7 69,918 Semiconductors & Semiconductor Equipment .... 4.4 54,025 Insurance ................................... 3.8 46,152 Food, Beverage & Tobacco .................... 3.6 43,694 Automobiles & Components .................... 3.5 43,523 Diversified Financials ...................... 2.8 33,908 Utilities ................................... 2.5 30,670 Electronic Equipment & Instruments .......... 2.3 28,285 Retailing ................................... 2.2 27,333 Internet Software & Services ................ 2.0 24,663 Consumer Durables & Apparel ................. 2.0 24,388 Real Estate Investment Trusts (REITs) ....... 1.9 23,422 Media ....................................... 1.8 22,220 Transportation .............................. 1.7 21,030 Commercial Services & Supplies .............. 1.6 20,165 Communications Equipment .................... 1.3 16,276 Other ....................................... 4.0 49,564 ----- ---------- TOTAL COMMON STOCKS ......................... 96.4 1,183,348 PREFERRED STOCK ............................. 0.4 5,252 RIGHTS ...................................... 0.0 0 FOREIGN BONDS AND NOTES ..................... 0.1 968 REPURCHASE AGREEMENT ........................ 3.1 37,868 SHORT-TERM INVESTMENT ....................... 15.6 191,138 ----- ---------- TOTAL INVESTMENTS ........................... 115.6 1,418,574 OTHER ASSETS (LIABILITIES) (NET) ............ (15.6) (191,027) ----- ---------- NET ASSETS .................................. 100.0% $1,227,547 ===== ==========
GLOSSARY OF TERMS ADR -- American Depositary Receipt AUD -- Australian Dollar BHD -- Bahraini Dollar CAD -- Canadian Dollar CDI -- CHESS Depositary Interest CHF -- Swiss Franc CPO -- Ordinary Participation Certificate EUR -- Euro (F) -- Foreign Shares FDR -- Fiduciary Depositary Receipt GBP -- Great Britain Pound Sterling GDR -- Global Depositary Receipt HKD -- Hong Kong Dollar JPY -- Japanese Yen NVDR -- Non-Voting Depositary Receipt ZAR -- South African Rand 48 See Notes to Financial Statements. Portfolio of Investments SHORT TERM INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES - 56.8% FINANCIAL SERVICES - 10.9% $ 6,000 Berkshire Hathaway Inc., Note, 3.375% due 10/15/2008 .................. $ 5,752 1,500 CIT Group Inc., Sr. Note, 7.375% due 04/02/2007 .................. 1,528 3,750 Countrywide Home Loans, Inc., Company ..... Guarantee, Series K, 5.500% due 02/01/2007 .................. 3,753 2,500 Goldman Sachs Group, Inc., Note, 4.125% due 01/15/2008 .................. 2,453 Household Finance Corporation, Note: ...... 3,500 5.750% due 01/30/2007 .................. 3,513 1,500 7.875% due 03/01/2007 .................. 1,530 2,000 Nuveen Investments, Inc., Sr. Note, 5.000% due 09/15/2010 .................. 1,927 3,500 Rollins Truck Leasing Corporation, Deb., 8.375% due 02/15/2007 .................. 3,578 4,000 SLM Corporation, MTN, 4.000% due 01/15/2009 .................. 3,848 ----------- 27,882 ----------- BANKS - 8.8% 5,750 Fifth Third Bank, Note, 2.700% due 01/30/2007 .................. 5,635 3,000 JPMorgan Chase & Company, Note, 5.350% due 03/01/2007 .................. 3,002 3,500 MBNA America Bank N.A., Note, 6.500% due 06/20/2006 .................. 3,506 5,000 SB Treasury Company LLC, Bond, 9.400% to 06/30/2008; 10.925% due 12/29/2049** ............... 5,364 5,000 U.S. Bank N.A., Note, 2.850% due 11/15/2006 .................. 4,938 ----------- 22,445 ----------- REAL ESTATE INVESTMENT TRUSTS/PROPERTY - 6.3% 4,000 CPG Partners LP, Note, 3.500% due 03/15/2009 .................. 3,799 4,250 Developers Diversified Realty Corporation, Sr. Note, 6.625% due 01/15/2008 .................. 4,321 4,000 Duke-Weeks Realty Corporation, Note, 7.375% due 08/01/2007 .................. 4,087 3,750 EOP Operating LP, Note, 7.750% due 11/15/2007 .................. 3,871 ----------- 16,078 ----------- CABLE TV - 4.3% 4,000 AOL Time Warner Inc., Note, 6.150% due 05/01/2007 .................. 4,029 4,000 Cox Enterprises, Inc., Note, 4.375% due 05/01/2008** ................ 3,888 3,000 Univision Communications Inc., Company Guarantee, 7.850% due 07/15/2011 .................. 3,134 ----------- 11,051 ----------- GAMING/LEISURE - 4.1% $ 5,750 Carnival Corporation, Company Guarantee, 3.750% due 11/15/2007 .................. $ 5,608 5,000 Harrah's Operating Company, Inc., Company Guarantee, 5.500% due 07/01/2010 .................. 4,946 ----------- 10,554 ----------- UTILITIES - 3.9% 4,000 Constellation Energy Group, Inc., Note, 6.350% due 04/01/2007 .................. 4,030 1,650 Pacific Gas & Electric Company, First Mortgage, 3.600% due 03/01/2009 ........ 1,572 1,650 Sempra Energy, Note, 4.750% due 05/15/2009 .................. 1,616 2,750 Texas-New Mexico Power Company, Sr. Note, 6.250% due 01/15/2009 .................. 2,774 ----------- 9,992 ----------- HEALTH CARE - 3.6% 5,500 Amgen Inc., Sr. Note, 4.000% due 11/18/2009 .................. 5,255 4,000 Cardinal Health, Inc., Note, 6.250% due 07/15/2008 .................. 4,063 ----------- 9,318 ----------- AUTO MANUFACTURING & PARTS - 3.5% 4,000 Ford Motor Credit Company, Note, 6.500% due 01/25/2007 .................. 3,976 5,000 Toyota Motor Credit Corporation, Note, 5.650% due 01/15/2007 .................. 5,013 ----------- 8,989 ----------- SERVICES - 2.5% 3,500 PHH Corporation, Note, 6.000% due 03/01/2008 .................. 3,522 3,000 Sealed Air Corporation, Conv. Sr. Note, 3.000% due 06/30/2033** ................ 2,857 ----------- 6,379 ----------- TELECOMMUNICATIONS - 1.9% 1,500 TELUS Corporation, Note, 7.500% due 06/01/2007 .................. 1,532 3,500 Verizon Global Funding Corporation, Note, 4.000% due 01/15/2008 .................. 3,422 ----------- 4,954 ----------- BUILDING PRODUCTS - 1.9% 4,750 Mohawk Industries, Inc., Note, Series D, 7.200% due 04/15/2012 .................. 4,944 ----------- INFORMATION TECHNOLOGY - 1.7% 4,250 Cisco Systems, Inc., Note, 5.250% due 02/22/2011 .................. 4,212 -----------
See Notes to Financial Statements. 49 Portfolio of Investments (continued) SHORT TERM INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES (CONTINUED) AIRLINES - 1.6% $ 4,000 Southwest Airlines Company, Pass-through Certificates, 5.496% due 11/01/2006 .................. $ 4,008 ----------- DIVERSIFIED MANUFACTURING - 0.8% 2,000 United Technologies Corporation, Note, 4.375% due 05/01/2010 .................. 1,926 ----------- FOOD - 0.6% 1,500 CVS Corporation, Note, 4.000% due 09/15/2009 .................. 1,431 ----------- AEROSPACE/DEFENSE - 0.4% 1,000 Boeing Capital Corporation, Sr. Note, 5.650% due 05/15/2006 .................. 1,000 ----------- Total Corporate Bonds and Notes (Cost $147,884) ........................ 145,163 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) - 14.9% 4,000 Banc of America Mortgage Securities, Inc., Pass-through Certificates, Series 2003-6, Class 1A30, 4.750% due 08/25/2033 .................. 3,870 4,223 Cendant Mortgage Corporation, Series 2003-3P, Class A1, 5.500% due 04/25/2020** ................ 4,170 4,604 Chase Mortgage Finance Corporation, Series 2005-S1, Class 1A8, 5.500% due 05/25/2035 .................. 4,553 2,375 Credit Suisse First Boston Mortgage Securities Corporation, Pass-through Certificates, Series 2003-29, Class 4A1, 6.000% due 12/25/2033 .................. 2,378 Federal Home Loan Mortgage Corporation: 2,994 Series 2442, Class PG, 6.000% due 06/15/2030 .................. 3,011 2,333 Series 2552, Class KB, 4.250% due 06/15/2027 .................. 2,308 1,732 Series 2575, Class LM, 4.500% due 05/15/2032 .................. 1,682 5,000 Series 2811, Class NU, 4.500% due 05/15/2030 .................. 4,760 Federal National Mortgage Association: 871 Series 2002-58, Class HB, 5.500% due 11/25/2015 .................. 870 4,898 Series 2005-100, Class QA, 5.000% due 11/25/2035 .................. 4,821 2,317 Government National Mortgage Association, Series 2002-70, Class PA, 4.500% due 08/20/2032 .................. 2,215 3,425 GSR Mortgage Loan Trust, Pass-through Certificates, Series 2005-1F, Class 2A1, 6.000% due 02/25/2035 .................. 3,404 ----------- Total CMOs (Cost $39,048) ......................... 38,042 ----------- U.S. GOVERNMENT AGENCY OBLIGATIONS - 9.7% Federal Home Loan Bank: $ 4,000 Bond, 1.875% due 06/15/2006 .................. $ 3,984 4,827 Series 00-0606, Class Y, 5.270% due 12/28/2012 .................. 4,758 Federal Home Loan Mortgage Corporation: 3,500 Bond, 3.250% due 02/25/2008 .................. 3,384 1,000 Note, 4.125% due 07/12/2010 .................. 959 Federal National Mortgage Association: Note: 4,000 4.250% due 07/15/2007 .................. 3,958 3,000 3.000% to 07/16/2006; 5.800% due 07/16/2013 .................. 2,960 5,000 Sub. Note, 4.000% due 09/02/2008 ..................... 4,866 ----------- Total U.S. Government Agency Obligations (Cost $25,343) ......................... 24,869 ----------- U.S. TREASURY NOTES - 6.4% 6,000 2.000% due 05/15/2006 ..................... 5,995 6,000 2.625% due 03/15/2009 ..................... 5,642 5,000 3.250% due 08/15/2008 ..................... 4,827 ----------- Total U.S. Treasury Notes (Cost $16,661) 16,464 ----------- ASSET-BACKED SECURITIES (ABSS) - 4.8% 2,522 Atlantic City Electric Transition Funding LLC, Series 2003-1, Class A1, 2.890% due 07/20/2011 .................. 2,428 5,000 Capital One Multi-Asset Execution Trust, Series 2003-A6, Class A6, 2.950% due 08/17/2009 .................. 4,955 120 Green Tree Financial Corporation, Series 1995-6, Class B1, 7.700% due 09/15/2026 .................. 106 4,750 WFS Financial Owner Trust, Series 2004-3, Class A4, 3.930% due 02/17/2012 .................. 4,656 ----------- Total ABSs (Cost $12,388) ......................... 12,145 ----------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 1.4% ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES (ARMS) - 0.5% 78 Federal Home Loan Mortgage Corporation (FHLMC), 3.756% due 11/01/2021+ ................. 79 Federal National Mortgage Association (FNMA): 1,174 4.646% due 11/01/2032+ ................. 1,178 30 4.807% due 01/01/2019+ ................. 30 48 5.000% due 11/01/2035+ ................. 47 6 5.540% due 11/01/2022+ ................. 7 9 5.610% due 04/01/2019+ ................. 9
50 See Notes to Financial Statements. Portfolio of Investments (continued) SHORT TERM INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (CONTINUED) ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES (ARMS) (CONTINUED) $ 19 5.875% due 11/01/2021+ .................... $ 19 ----------- Total ARMs (Cost $1,416) .......................... 1,369 ----------- FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 0.5% 1,121 6.000% due 04/01/2017-05/01/2017 .......... 1,135 21 9.500% due 08/01/2016 ..................... 22 ----------- Total FHLMC (Cost $1,161) .......................... 1,157 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 0.3% 567 6.500% due 01/01/2012-01/01/2014 .......... 579 34 8.500% due 11/01/2017 ..................... 36 21 10.000% due 05/01/2022 .................... 23 ----------- Total FNMA (Cost $623) 638 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 0.1% 5 8.000% due 03/15/2012 ..................... 6 6 9.000% due 04/20/2025 ..................... 7 135 10.000% due 01/15/2019-02/15/2019 ......... 149 127 11.000% due 02/15/2010-08/15/2020 ......... 140 ----------- Total GNMA (Cost $294) ............................ 302 ----------- Total U.S. Government Agency Mortgage-Backed Securities (Cost $3,494) .......................... 3,466 ----------- COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS) - 0.4% (Cost $888) 888 GMAC Commercial Mortgage Securities Inc., Series 1999-CTL1, Class A, 7.150% due 12/15/2016** ....... 900 ----------- REPURCHASE AGREEMENT - 4.8% (Cost $12,395) 12,395 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $12,400,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $12,659,000) .............. 12,395 ----------- TOTAL INVESTMENTS++ (Cost $258,101*) ..................... 99.2% 253,444 OTHER ASSETS (LIABILITIES) (NET) ......................... 0.8 2,130 ----- ----------- NET ASSETS ............................................... 100.0% $ 255,574 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. + Variable rate security. The interest rate shown reflects the rate in effect at April 30, 2006. ++ All securities segregated as collateral for futures contracts.
UNREALIZED NUMBER OF VALUE APPRECIATION CONTRACTS (000S) (000S) - --------- ------- ------------ FUTURES CONTRACTS-SHORT POSITION 100 U.S. 5 Year Treasury Note, June 2006 ..... $10,416 $37 ======= ===
GLOSSARY OF TERMS MTN -- Medium-Term Note See Notes to Financial Statements. 51 Portfolio of Investments U.S. GOVERNMENT SECURITIES FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 68.6% FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 33.6% $ 15,431 4.000% due 08/01/2018 ..................... $ 14,398 82,792 4.500% due 04/01/2018-06/01/2035 .......... 77,543 199,474 5.000% due 04/01/2018-10/01/2035 .......... 189,210 199,085 5.500% due 11/01/2018-10/01/2035 .......... 194,299 81,421 6.000% due 04/01/2017-02/01/2035 .......... 81,398 26,637 6.500% due 02/01/2011-01/01/2032 .......... 27,288 7,928 7.000% due 07/01/2024-04/01/2032 .......... 8,169 3,394 7.500% due 12/01/2006-02/01/2031 .......... 3,500 136 8.000% due 12/01/2030 ..................... 144 416 8.500% due 04/01/2019-07/01/2029 .......... 444 20 8.750% due 01/01/2013 ..................... 21 77 9.000% due 12/01/2008-08/01/2022 .......... 81 36 9.500% due 06/01/2016-04/01/2017 .......... 39 ----------- Total FHLMC (Cost $620,033) ........................ 596,534 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 30.0% 36,456 4.500% due 12/01/2018-11/01/2019 .......... 34,793 111,062 5.000% due 04/01/2018-06/01/2035 .......... 107,079 243,997 5.500% due 02/01/2009-10/01/2035 .......... 237,712 90,029 6.000% due 12/01/2016-10/01/2035 .......... 89,982 54,629 6.500% due 09/01/2024-02/01/2036 .......... 55,729 5,528 7.000% due 06/01/2010-07/01/2032 .......... 5,703 1,692 7.500% due 12/01/2024-02/01/2030 .......... 1,769 211 8.000% due 05/01/2022-01/01/2025 .......... 215 35 8.500% due 02/01/2023-09/01/2025 .......... 36 302 9.000% due 03/01/2017-09/01/2030 .......... 331 ----------- Total FNMA (Cost $552,494) ........................ 533,349 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 5.0% 40,894 5.500% due 07/20/2033-03/20/2034 .......... 40,012 31,350 6.000% due 04/20/2026-08/15/2034 .......... 31,478 11,098 6.500% due 03/15/2024-05/20/2034 .......... 11,338 113 6.800% due 04/20/2025 ..................... 116 2,287 7.000% due 07/15/2008-06/20/2031 .......... 2,373 2,079 7.500% due 03/15/2024-11/15/2029 .......... 2,181 89 7.750% due 12/15/2029 ..................... 94 134 8.000% due 04/15/2022 ..................... 142 439 9.000% due 11/15/2021 ..................... 473 897 9.500% due 04/15/2016-08/15/2021 .......... 986 10 13.500% due 09/15/2014-12/15/2014 ......... 12 ----------- Total GNMA (Cost $91,518) ......................... 89,205 ----------- ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES (ARMS) - 0.0% (Cost $85) $ 85 Federal National Mortgage Association, 6.528% due 03/01/2028+ ................. $ 86 ----------- Total U.S. Government Agency Mortgage-Backed Securities (Cost $1,264,130) ...................... 1,219,174 ----------- COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) - 20.0% Banc of America Mortgage Securities, Inc., Pass-through Certificates: 21,500 Series 2003-6, Class 1A30, 4.750% due 08/25/2033 .................. 20,801 14,125 Series 2004-4, Class 2A1, 5.500% due 05/25/2034 13,337 21,000 Chase Mortgage Finance Corporation, Series 2005-S1, Class 1A15, 6.000% due 05/25/2035 .................. 20,750 5,612 Countrywide Alternative Loan Trust, Series 2003-13T1, Class A1, 4.000% due 08/25/2033 .................. 5,478 Countrywide Home Loans: 18,715 Series 2003-50, Class A1, 5.000% due 11/25/2018 .................. 18,124 21,500 Series 2004-4, Class A5, 5.250% due 05/25/2034 .................. 20,129 Credit Suisse First Boston Mortgage Securities Corporation, Pass-through Certificates: 12,864 Series 2003-11, Class 1A3, 4.500% due 06/25/2033 .................. 12,630 8,039 Series 2003-29, Class 4A1, 6.000% due 12/25/2033 .................. 8,048 11,620 Series 2003-8, Class 1A1, 5.750% due 04/25/2033 .................. 11,345 Federal Home Loan Mortgage Corporation: 213 Series 1049, Class F, 5.650% due 02/15/2021++ ................ 213 724 Series 1981, Class C, 6.500% due 08/15/2027 .................. 732 7,447 Series 2435, Class GE, 6.500% due 06/15/2031 .................. 7,558 3,293 Series 2442, Class PG, 6.000% due 06/15/2030 .................. 3,312 19,445 Series 2449, Class ND, 6.500% due 05/15/2030 19,658 12,122 Series 2481, Class VC, 6.000% due 06/15/2017 .................. 12,255 9,000 Series 2551, Class QK, 5.500% due 01/15/2033 .................. 8,701 5,889 Series 2575, Class LM, 4.500% due 05/15/2032 .................. 5,719 26,023 Series 2634, Class IN, 5.000% due 09/15/2027 .................. 2,994 25,000 Series 2981, Class PC, 5.500% due 10/15/2031 .................. 24,389
52 See Notes to Financial Statements. Portfolio of Investments (continued) U.S. GOVERNMENT SECURITIES FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) (CONTINUED) Federal National Mortgage Association: $ 7,000 Grantor Trust, Series 2000-T5, Class B, 7.300% due 05/25/2010 .................. $ 7,497 10,610 Series 2002-16, Class TM, 7.000% due 04/25/2032 .................. 10,908 21,000 Series 2002-86, Class JC, 5.500% due 02/25/2032 .................. 20,484 17,847 Series 2003-58, Class PI, 5.000% due 02/25/2027 .................. 1,129 488 Trust 259 STRIP, 7.000% due 04/01/2024 .................. 119 Federal National Mortgage Association, REMIC, Pass-through Certificates: 112 Series 1990-49, Class G, 9.000% due 05/25/2020 .................. 118 40 Series 1993-162, Class E, 6.000% due 08/25/2023 .................. 40 100 Series 1997-32, Class FA, 5.444% due 04/25/2027++ ................ 102 GSR Mortgage Loan Trust, Pass-through Certificates: 9,313 Series 2003-4F, Class 2A3, 5.000% due 05/25/2033 .................. 9,252 15,072 Series 2005-1F, Class 2A1, 6.000% due 02/25/2035 .................. 14,979 74 L.F. Rothschild Mortgage Trust, Series 3, Class Z, 9.950% due 09/01/2017 .................. 79 Prime Mortgage Trust: 20,839 Series 2004-2, Class A2, 4.750% due 11/25/2019 .................. 19,894 20,355 Series 2005-4, Class 1A1, 4.750% due 10/25/2020 .................. 19,623 17,000 Residential Funding Mortgage Security, Series 2003-S20, Class 1A4, 5.500% due 12/25/2033 .................. 16,415 19,354 Structured Asset Securities Corporation, Series 2005-6, Class 4A1, 5.000% due 05/25/2035 .................. 18,235 ----------- Total CMOs (Cost $365,579) ........................ 355,047 ----------- U. S. GOVERNMENT AGENCY OBLIGATIONS - 4.3% 10,000 Federal Home Loan Bank, Bond, 2.875% due 09/15/2006 .................. 9,917 10,000 Federal Home Loan Mortgage Corporation, Sub. Note, 5.875% due 03/21/2011 .................. 10,184 Federal National Mortgage Association: 10,000 Bond, 3.250% due 01/15/2008 .................. 9,699 1,250 Deb., 6.210% due 08/06/2038 .................. 1,366 Note: $ 7,500 6.000% due 05/15/2008 .................. $ 7,628 20,000 6.000% due 02/03/2020 .................. 19,451 18,000 3.000% to 07/16/2006; 5.800% due 07/16/2013 .................. 17,758 ----------- Total U.S. Government Agency Obligations (Cost $76,204) ...................... 76,003 ----------- U.S. TREASURY NOTES - 3.9% 10,000 3.250% due 08/15/2007 .................. 9,798 10,000 3.500% due 12/15/2009 .................. 9,543 37,000 4.000% due 04/15/2010-02/15/2014 ....... 35,247 15,000 4.250% due 08/15/2014 .................. 14,210 ----------- Total U.S. Treasury Notes (Cost $72,284) ...................... 68,798 ----------- REPURCHASE AGREEMENT - 2.8% (Cost $49,518) 49,518 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $49,537,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $50,571,000) ..................... 49,518 ----------- TOTAL INVESTMENTS (Cost $1,827,715*) ..................... 99.6% 1,768,540 OTHER ASSETS (LIABILITIES) (NET) ......................... 0.4 7,359 ----- ----------- NET ASSETS ............................................... 100.0% $ 1,775,899 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. + Variable rate security. The interest rate shown reflects the rate in effect at April 30, 2006. ++ Floating rate security whose interest rate is reset periodically based on an index. GLOSSARY OF TERMS REMIC -- Real Estate Mortgage Investment Conduit STRIP -- Separate trading of registered interest and principal of securities See Notes to Financial Statements. 53 Portfolio of Investments INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES - 64.3% FINANCIAL SERVICES/BANKS - 11.8% $ 6,500 American General Finance, Inc., MTN, Series I, 4.625% due 05/15/2009 .................. $ 6,376 400 Banc One Corporation, Sub. Note, 10.000% due 08/15/2010 ................. 462 5,000 Bank of America Corporation, Sub. Note, 7.800% due 02/15/2010 .................. 5,386 1,000 BankAmerica Corporation, Sub. Note, 6.625% due 08/01/2007 1,015 690 BB&T Corporation, Sub. Note, 7.250% due 06/15/2007 .................. 704 CIT Group Inc.: 7,000 Bond, 5.400% due 01/30/2016 .................. 6,671 Sr. Note: 2,000 5.000% due 02/01/2015 .................. 1,867 3,000 7.750% due 04/02/2012 .................. 3,290 10,000 Citigroup Inc., Note, 6.000% due 02/21/2012 .................. 10,200 6,000 Farmers Insurance Exchange, Note, 6.000% due 08/01/2014** ................ 5,846 1,000 First Nationwide Bank, Sub. Deb., 10.000% due 10/01/2006 ................. 1,018 995 Fleet Financial Group, Inc., Sub. Deb., 6.875% due 01/15/2028 .................. 1,061 Goldman Sachs Group, Inc.: 10,000 Note, 6.600% due 01/15/2012 .................. 10,446 2,000 Sr. Note, 5.350% due 01/15/2016 .................. 1,915 7,500 Jefferies Group, Inc., Sr. Note, 7.750% due 03/15/2012 .................. 8,137 12,000 JPMorgan Chase & Company, Sub. Note, 5.125% due 09/15/2014 .................. 11,434 3,000 Legg Mason, Inc., Sr. Note, 6.750% due 07/02/2008 .................. 3,082 5,000 MBNA America Bank NA, Sub. Note, 7.125% due 11/15/2012 .................. 5,392 MBNA Corporation: 3,000 Note, 6.250% due 01/17/2007 .................. 3,020 2,000 Sr. Note, 7.500% due 03/15/2012 2,188 Merrill Lynch & Company Inc., Note: 3,000 5.000% due 01/15/2015 .................. 2,837 5,000 6.000% due 02/17/2009 .................. 5,084 2,000 6.500% due 07/15/2018 .................. 2,093 2,000 6.750% due 06/01/2028 .................. 2,078 7,500 Morgan Stanley Dean Witter & Company, Note, 6.750% due 04/15/2011 .................. 7,872 5,000 Morgan Stanley, Sub. Note, 4.750% due 04/01/2014 .................. 4,631 670 NationsBank Corporation, Sub. Note, 6.800% due 03/15/2028 .................. 709 $ 830 Paine Webber Group, Inc., Sr. Note, 8.060% due 01/17/2017 .................. $ 978 500 PNC Institute Capital B, Company Guarantee, 8.315% due 05/15/2027** ................ 531 10,000 SB Treasury Company LLC, Bond, 9.400% to 06/30/2008; 10.925% due 12/29/2049** ............... 10,729 U.S. Bank NA, Sub. Note: 6,000 4.950% due 10/30/2014 .................. 5,662 5,000 6.375% due 08/01/2011 .................. 5,191 11,000 Wells Fargo & Company, Sub. Note, 4.625% due 04/15/2014 .................. 10,199 ----------- 148,104 ----------- UTILITIES - 8.6% 5,000 Arizona Public Service Company, Note, 6.500% due 03/01/2012 .................. 5,095 10,000 Dominion Resources, Inc., Sr. Note, 5.000% due 03/15/2013 .................. 9,425 9,000 Illinois Power Company, First Mortgage, 7.500% due 06/15/2009 .................. 9,468 7,000 Metropolitan Edison Company, Sr. Note, 4.950% due 03/15/2013 .................. 6,634 NiSource Finance Corporation: 5,000 Bond, 5.400% due 07/15/2014 .................. 4,788 5,000 Sr. Note, 6.150% due 03/01/2013 .................. 5,052 4,000 Ohio Edison Company, Sr. Note, 5.450% due 05/01/2015 .................. 3,837 5,000 Ohio Power Company, Sr. Note, 5.500% due 02/15/2013 .................. 4,891 Oncor Electric Delivery Company, Deb.: 1,000 5.000% due 09/01/2007 .................. 994 9,000 7.000% due 09/01/2022 .................. 9,420 10,250 Pacific Gas & Electric Company, First Mortgage, 4.200% due 03/01/2011 .................. 9,667 PacifiCorp, First Mortgage: 7,500 4.950% due 08/15/2014 .................. 7,121 3,000 5.250% due 06/15/2035 .................. 2,603 5,000 PPL Energy Supply LLC, Sr. Note, 6.400% due 11/01/2011 ................. 5,147 2,000 Public Service Company of New Mexico, Sr. Note, 4.400% due 09/15/2008 .................. 1,943 9,000 Sempra Energy, Note, 6.000% due 02/01/2013 .................. 9,027 6,500 Southwestern Electric Power Company, Note, 5.375% due 04/15/2015 .................. 6,202 6,845 Texas-New Mexico Power Company, Sr. Note, 6.250% due 01/15/2009 .................. 6,905 ----------- 108,219 ----------- OIL & GAS - 6.6% 7,500 Consolidated Natural Gas Company, Sr. Note, 6.850% due 04/15/2011 .................. 7,865
54 See Notes to Financial Statements. Portfolio of Investments (continued) INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES (CONTINUED) OIL & GAS (CONTINUED) $ 10,000 El Paso Natural Gas Company, Deb., 7.500% due 11/15/2026 .................. $ 10,160 6,000 Enterprise Products Partners LP, Company Guarantee, 6.375% due 02/01/2013 6,097 5,005 Express Pipeline LP, Sub. Note, 7.390% due 12/31/2017** ................ 5,121 Hanover Compressor Company: 1,500 Conv. Sr. Note, 4.750% due 03/15/2008 .................. 1,464 9,000 Sr. Note, 8.625% due 12/15/2010 .................. 9,427 Petro-Canada: 8,500 Deb., 9.250% due 10/15/2021 .................. 10,757 3,000 Note, 4.000% due 07/15/2013 .................. 2,677 8,000 Petrobras International Finance Company, Sr. Note, 9.750% due 07/06/2011 .................. 9,340 Southern Natural Gas Company, Sr. Note: 4,000 8.000% due 03/01/2032 .................. 4,296 1,000 8.875% due 03/15/2010 .................. 1,067 2,000 Tennessee Gas Pipeline Company, Bond, 8.375% due 06/15/2032 .................. 2,220 12,000 Tesoro Corporation, Sr. Note, 6.250% due 11/01/2012** ................ 11,820 ----------- 82,311 ----------- REAL ESTATE INVESTMENT TRUSTS (REITS) - 5.9% 2,000 American Health Properties, Inc., Note, 7.500% due 01/15/2007 .................. 2,031 Arden Realty LP, Note: 3,000 5.200% due 09/01/2011 .................. 2,966 7,000 5.250% due 03/01/2015 .................. 6,742 10,000 Developers Diversified Realty Corporation, Note, 4.625% due 08/01/2010 .................. 9,573 3,000 Franchise Finance Corporation, MTN, 7.070% due 01/15/2008 .................. 3,084 Health Care Property Investors, Inc.: 1,750 Note, 6.000% due 03/01/2015 .................. 1,730 Sr. Note: 3,000 6.450% due 06/25/2012 .................. 3,097 2,250 7.072% due 06/08/2015 .................. 2,370 Health Care REIT, Inc.: 3,000 6.200% due 06/01/2016 .................. 2,940 Sr. Note: 8,000 6.000% due 11/15/2013 .................. 7,802 1,500 7.500% due 08/15/2007 .................. 1,525 Healthcare Realty Trust, Inc., Sr. Note: 1,000 5.125% due 04/01/2014 .................. 927 7,500 8.125% due 05/01/2011 .................. 8,157 $ 12,000 Nationwide Health Properties, Note, 6.000% due 05/20/2015 .................. $ 11,566 9,000 Shurgard Storage Centers, Inc., Note, 5.875% due 03/15/2013 .................. 9,008 ----------- 73,518 ----------- CONSUMER PRODUCTS/SERVICES - 5.3% Allied Waste North America, Inc., Sr. Note: 9,000 7.250% due 03/15/2015** ................ 9,202 1,000 7.875% due 04/15/2013 .................. 1,045 4,000 Cendant Corporation, Note, 6.875% due 08/15/2006 .................. 4,014 10,200 Corn Products International, Inc., Sr. Note, 8.450% due 08/15/2009 .................. 11,000 1,000 Mattel, Inc., Note, 7.300% due 06/13/2011 .................. 1,045 10,000 Reed Elsevier Capital Inc., Company Guarantee, 6.750% due 08/01/2011 .................. 10,436 Royal Caribbean Cruises Ltd.: 2,000 Deb., 7.250% due 03/15/2018 .................. 2,077 Sr. Note: 3,000 6.875% due 12/01/2013 .................. 3,074 1,250 8.000% due 05/15/2010 .................. 1,341 3,000 8.750% due 02/02/2011 .................. 3,318 Sealed Air Corporation: 7,250 Conv. Sr. Note, 3.000% due 06/30/2033** ................ 6,906 4,000 Note, 5.625% due 07/15/2013** ................ 3,892 USA Waste Services, Inc., Sr. Note: 1,000 7.000% due 07/15/2028 .................. 1,041 495 7.125% due 10/01/2007 .................. 506 Waste Management Inc.: 3,450 Company Guarantee, 6.875% due 05/15/2009 .................. 3,582 3,500 Sr. Note, 7.375% due 08/01/2010 .................. 3,720 ----------- 66,199 ----------- HEALTH CARE - 4.9% 11,000 Athena Neurosciences Finance LLC, Company Guarantee, 7.250% due 02/21/2008 .................. 10,986 10,000 Cardinal Health, Inc., Note, 6.750% due 02/15/2011 .................. 10,435 DVI, Inc., Sr. Note, (in default): 8,125 9.875% due 02/01/2007+ ................. 1,178 400 9.875% due 02/01/2007+ ................. 58 HCA Inc.: 3,000 Note, 5.250% due 11/06/2008 .................. 2,965 5,000 Sr. Note, 6.950% due 05/01/2012 .................. 5,042 12,000 Health Management PLC, Sr. Note, 6.125% due 04/15/2016 .................. 11,930
See Notes to Financial Statements. 55 Portfolio of Investments (continued) INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES (CONTINUED) HEALTH CARE (CONTINUED) $ 7,350 IVAX Corporation, Conv. Sr. Sub. Note, 4.500% due 05/15/2008 .................. $ 7,442 12,000 Tenet Healthcare Corporation, Sr. Note, 6.375% due 12/01/2011 .................. 11,190 ----------- 61,226 ----------- TRANSPORTATION/AUTO - 4.2% Burlington Northern Santa Fe Corporation: 10,000 Deb., 8.125% due 04/15/2020 .................. 11,910 1,500 Note, 8.750% due 02/25/2022 .................. 1,871 3,300 CSX Transportation, Inc., Deb., 9.750% due 06/15/2020 4,319 Norfolk Southern Corporation: 5,000 Deb., 9.750% due 06/15/2020 .................. 6,600 5,000 Sr. Note, 6.200% due 04/15/2009 .................. 5,102 12,000 Trailer Bridge, Inc., Sr. Sec. Note, 9.250% due 11/15/2011 .................. 12,375 5,000 Union Pacific Corporation, Note, 3.875% due 02/15/2009 .................. 4,817 United Air Lines Inc.: 5,000 Equipment Trust Certificates, (in default), 10.850% due 07/05/2014 ....... 2,325 Pass-through Certificates, (in default): 2,913 9.080% due 10/26/2015 .................. 909 4,806 9.560% due 10/19/2018 .................. 2,571 ----------- 52,799 ----------- GAMING - 4.0% 11,000 CCM Merger Inc., Note, 8.000% due 08/01/2013** ................ 10,725 5,000 Circus Circus Enterprise Inc., Deb., 7.000% due 11/15/2036 .................. 5,137 3,500 Harrah's Operating Company Inc., Company Guarantee, 8.000% due 02/01/2011 .................. 3,792 3,000 Mandalay Resort Group, Sr. Sub. Note, Series B, 10.250% due 08/01/2007 ................. 3,158 12,000 Old Evangeline Downs LLC / Diamond Jo LLC, Company Guarantee, 8.750% due 04/15/2012 .................. 12,060 Park Place Entertainment Corporation, Sr. Note: 1,500 7.500% due 09/01/2009 .................. 1,581 5,000 8.500% due 11/15/2006 .................. 5,078 7,900 Riviera Holdings Corporation, Company Guarantee, 11.000% due 06/15/2010 ................. 8,423 ----------- 49,954 ----------- TELECOMMUNICATIONS - 2.6% 5,000 Deutsche Telephone Finance, Bond, 8.500% due 06/15/2010 .................. 5,440 $ 8,000 Qwest Corporation, Note, 8.875% due 03/15/2012 .................. $ 8,800 9,000 TELUS Corporation, Note, 8.000% due 06/01/2011 .................. 9,890 8,000 Vodafone Group PLC, Note, 7.750% due 02/15/2010 .................. 8,556 ----------- 32,686 ----------- MEDIA - 2.4% Comcast Cable Communications Inc.: 550 Note, 6.200% due 11/15/2008 .................. 560 7,000 Sr. Note, 7.125% due 06/15/2013 .................. 7,390 8,000 Cox Communications, Inc., Note, 6.750% due 03/15/2011 .................. 8,258 2,500 FrontierVision Holdings LP, Sr. Disc. Note, (in default), 11.875% due 09/15/2007 ................. 2,900 2,000 FrontierVision Operating Partners LP, Sr. Sub. Note, (in default), 11.000% due 10/15/2006 ................. 2,750 2,000 Tele-Communications, Inc., Sr. Deb., 7.875% due 08/01/2013 .................. 2,191 5,260 Time Warner Inc., Deb., 9.150% due 02/01/2023 .................. 6,300 ----------- 30,349 ----------- INFORMATION TECHNOLOGY - 2.2% 11,250 Conexant Systems Inc., Conv. Sub. Note, 4.000% due 02/01/2007 .................. 11,138 12,000 Corning Inc., Note, 5.900% due 03/15/2014 .................. 11,715 5,000 Extreme Networks, Inc., Conv. Sub. Note, 3.500% due 12/01/2006 .................. 5,000 ----------- 27,853 ----------- INDUSTRIAL PRODUCTS - 1.6% 5,000 Champion International Corporation, Deb., 7.200% due 11/01/2026 .................. 5,190 12,000 Noranda Inc., Note, 6.000% due 10/15/2015 .................. 11,685 Weyerhaeuser Company: 1,500 Deb., 7.375% due 03/15/2032 .................. 1,571 1,500 Note, 6.750% due 03/15/2012 .................. 1,554 ----------- 20,000 ----------- RETAIL - 1.3% 5,000 Fred Meyer Inc., Company Guarantee, 7.450% due 03/01/2008 .................. 5,160 6,000 Neiman Marcus Group Inc., Company Guarantee, 10.375% due 10/15/2015 ................. 6,450 5,000 Safeway Inc., Note, 7.500% due 09/15/2009 .................. 5,286 ----------- 16,896 -----------
56 See Notes to Financial Statements. Portfolio of Investments (continued) INCOME FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES (CONTINUED) AEROSPACE/DEFENSE - 1.1% $ 3,000 Lockheed Martin Corporation, Company Guarantee, 7.750% due 05/01/2026 .................. $ 3,485 1,000 Loral Corporation, Deb., 7.625% due 06/15/2025 .................. 1,142 9,000 Orbital Sciences Corporation, Sr. Note, 9.000% due 07/15/2011 .................. 9,652 ----------- 14,279 ----------- INDEX PRODUCT - 1.0% 12,000 Dow Jones CDX High Yield Series 6 Trust 1, Pass-through Certificates, 8.625% due 06/29/2011 .................. 12,120 ----------- FOREIGN GOVERNMENT - 0.8% Federal Republic of Brazil: 2,750 Bond, 9.250% due 10/22/2010 .................. 3,120 1,500 Note, 8.750% due 02/04/2025 .................. 1,699 5,000 United Mexican States, Bond, 9.875% due 02/01/2010 .................. 5,690 ----------- 10,509 ----------- Total Corporate Bonds and Notes (Cost $809,504) ........................ 807,022 ----------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 23.7% FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - 14.7% 41,506 4.500% due 08/01/2033 ..................... 38,158 63,427 5.000% due 04/01/2018-11/01/2035 .......... 60,802 79,771 5.500% due 11/01/2017-04/01/2036 .......... 77,728 3,303 6.000% due 03/01/2031-05/01/2032 .......... 3,300 3,717 6.500% due 01/01/2029-08/01/2029 .......... 3,800 992 7.000% due 01/01/2032 ..................... 1,021 ----------- Total FHLMC (Cost $190,760) ........................ 184,809 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - 8.7% 38,179 4.000% due 09/01/2018-10/01/2018 .......... 35,649 10,301 5.000% due 01/01/2018-10/01/2032 .......... 9,949 49,004 5.500% due 03/01/2033-02/01/2035 .......... 47,705 1,550 6.000% due 04/01/2032 ..................... 1,547 4,915 6.500% due 09/01/2028-05/01/2032 .......... 5,014 77 7.000% due 01/01/2030 ..................... 79 187 7.451% due 06/01/2016 ..................... 203 8,000 7.630% due 02/01/2010 ..................... 8,460 ----------- Total FNMA (Cost $112,709) ........................ 108,606 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - 0.3% $ 3,927 6.000% due 05/20/2032 ..................... $ 3,932 507 7.000% due 06/20/2031 ..................... 521 ----------- Total GNMA (Cost $4,412) .......................... 4,453 ----------- Total U.S. Government Agency Mortgage-Backed Securities (Cost $307,881) ........................ 297,868 ----------- U.S. TREASURY OBLIGATIONS - 6.9% U.S. TREASURY NOTES - 5.3% 25,000 4.250% due 08/15/2014 ..................... 23,684 44,000 4.000% due 06/15/2009 ..................... 42,886 ----------- Total U.S. Treasury Notes ................. 66,570 ----------- U.S. TREASURY BOND - 1.6% 20,000 5.375% due 02/15/2031 ..................... 20,306 ----------- Total U.S. Treasury Obligations (Cost $92,519) ......................... 86,876 ----------- COLLATERALIZED MORTGAGE OBLIGATION (CMO) - 0.1% (Cost $476) 475 Reilly Mortgage FHA, Series 1982, (Partial default), 7.430% due 08/01/2022 .................. 475@ ----------- REPURCHASE AGREEMENT - 3.8% (Cost $47,224) 47,224 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/06, to be repurchased at $47,242,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $48,228,000) .............. 47,224 ----------- TOTAL INVESTMENTS (Cost $1,257,604*) 98.8% 1,239,465 OTHER ASSETS (LIABILITIES) (NET) 1.2 15,418 ----- ----------- NET ASSETS 100.0% $ 1,254,883 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. + Defaulted security is past maturity but continues to be valued in recog- nition of future potential worth. @ Represents fair value as determined in good faith under the direction of the Board of Trustees. GLOSSARY OF TERMS FHA -- Federal Housing Authority MTN -- Medium-Term Note See Notes to Financial Statements. 57 Portfolio of Investments HIGH YIELD FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES - 87.7% HEALTH CARE - 15.4% $ 10,500 Alliance Imagining, Inc., Sr. Sub. Note, 7.250% due 12/15/2012 .................. $ 9,188 21,500 Athena Neurosciences Finance LLC, Company Guarantee, 7.250% due 02/21/2008 .................. 21,473 16,500 CV Therapeutics, Inc., Conv. Sr. Sub. Deb., 2.000% due 05/16/2023 .................. 13,984 DVI, Inc., Sr. Note, (in default): 8,575 9.875% due 02/01/2007++ ................ 1,243 6,850 9.875% due 02/01/2007++ ................ 993 20,000 HCA, Inc., Note, 7.500% due 11/06/2033 .................. 19,391 20,500 ICOS Corporation, Conv. Sub. Note, 2.000% due 07/01/2023 .................. 16,631 5,000 Inhale Therapeutic Systems, Inc., Conv. Sub. Note, 5.000% due 02/08/2007 .................. 4,969 10,000 IVAX Corporation, Conv. Sr. Sub. Note, 4.500% due 05/15/2008 .................. 10,125 Omnicare, Inc., Sr. Sub. Note: 11,350 6.125% due 06/01/2013 .................. 10,939 7,000 6.875% due 12/15/2015 .................. 6,956 4,000 Sepracor Inc., Conv. Sub. Deb., 5.000% due 02/15/2007 .................. 3,990 16,000 Tenet Healthcare Corporation, Sr. Note, 9.250% due 02/01/2015** ................ 16,360 ----------- 136,242 ----------- INDEX PRODUCT - 11.5% 24,250 Dow Jones CDX High Yield Series 5 Trust 1, Pass-through Certificates, 8.750% due 12/29/2010 .................. 25,569 42,000 Dow Jones CDX High Yield Series 6 Trust 1, Pass-through Certificates, 8.625% due 06/29/2011 .................. 42,420 33,250 TRAINS (Targeted Return Index Securities Trust), Series HY-2005-1, Grantor Trust, 7.651% due 06/15/2015** ................ 33,636 ----------- 101,625 ----------- GAMING - 9.3% 14,500 155E Tropicana Hooters LLC, Sr. Note, 8.750% due 04/01/2012 .................. 14,391 16,500 CCM Merger Inc., Note, 8.000% due 08/01/2013** ................ 16,087 17,500 MGM Grand, Inc., Sr. Note, 6.000% due 10/01/2009 .................. 17,347 19,250 Old Evangeline Downs LLC / Diamond Jo LLC, Company Guarantee, 8.750% due 04/15/2012 .................. 19,346 14,000 Riviera Holdings Corporation, Company Guarantee, 11.000% due 06/15/2010 ............................. 14,928 ----------- 82,099 ----------- OIL/ENERGY - 6.5% El Paso Natural Gas Company: $ 12,500 Bond, 8.375% due 06/15/2032 .................. $ 13,829 2,750 Sr. Note, 7.625% due 08/01/2010 .................. 2,863 Hanover Compressor Company: 2,000 Company Guarantee, 7.500% due 04/15/2010 .................. 2,017 7,950 Conv. Sr. Note, 4.750% due 03/15/2008 .................. 7,761 10,250 Sr. Note, 8.625% due 12/15/2010 .................. 10,737 11,000 Petrobras International Finance Company, Sr. Note, 9.750% due 07/06/2011 .................. 12,843 7,500 Southern Natural Gas Company, Sr. Note, 8.000% due 03/01/2032 .................. 8,056 ----------- 58,106 ----------- LEISURE - 5.8% 23,000 Blockbuster Inc., Sr. Sub. Note, 10.000% due 09/01/2012 ................. 21,850 11,400 Carmike Cinemas, Inc., Sr. Sub. Note, 7.500% due 02/15/2014 .................. 10,944 Royal Caribbean Cruises Ltd.: 3,000 Deb., 7.250% due 03/15/2018 .................. 3,116 14,000 Sr. Note, 8.750% due 02/02/2011 .................. 15,482 ----------- 51,392 ----------- INFORMATION TECHNOLOGY - 5.6% 14,000 BEA Systems Inc., Conv. Sub. Note, 4.000% due 12/15/2006 .................. 13,930 20,500 Conexant Systems Inc., Conv. Sub. Note, 4.000% due 02/01/2007 .................. 20,295 14,500 SS&C Technologies, Inc., Sr. Sub Note, 11.750% due 12/01/2013 ................. 15,660 ----------- 49,885 ----------- TELECOMMUNICATIONS - 4.9% 14,250 Extreme Networks, Inc., Conv. Sub. Note, 3.500% due 12/01/2006 .................. 14,250 13,500 Qwest Corporation, Note, 8.875% due 03/15/2012 .................. 14,850 14,710 TriQuint Semiconductor, Inc., Conv. Sub. Note, 4.000% due 03/01/2007 .................. 14,489 ----------- 43,589 ----------- TRANSPORTATION - 4.6% AMR Corporation: 5,500 4.500% due 02/15/2024 .................. 7,205 Deb.: 5,000 9.000% due 08/01/2012 .................. 4,838 5,300 9.000% due 09/15/2016 .................. 5,088
58 See Notes to Financial Statements. Portfolio of Investments (continued) HIGH YIELD FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CORPORATE BONDS AND NOTES (CONTINUED) TRANSPORTATION (CONTINUED) $ 3,600 Continental Airlines, Inc., Conv. Sr. Note, 5.000% due 06/15/2023 .................. $ 5,517 10,000 New Flyer Industries (F), Sub. Note, 14.000% due 08/19/2020 ................. 9,391 8,629 Northwest Airlines, Inc., Pass-through Certificates, Series 1999-2, Class B, (in default), 7.950% due 03/01/2015 .................. 8,591 ----------- 40,630 ----------- FOREIGN GOVERNMENT - 3.9% Federal Republic of Brazil: 5,000 Bond, 9.250% due 10/22/2010 .................. 5,673 6,000 Note, 8.750% due 02/04/2025 .................. 6,795 20,000 Federal Republic of Brazil (F), Bond, 12.500% due 01/05/2016 ................. 9,590 142,634 United Mexican States, Bonds, 8.000% due 12/19/2013 .................. 12,511 ----------- 34,569 ----------- AEROSPACE/DEFENSE - 3.5% 18,000 Orbital Sciences Corporation, Sr. Note, 9.000% due 07/15/2011 .................. 19,305 11,000 Primus International Inc., Sr. Note, 11.500% due 04/15/2009** ............... 11,715 ----------- 31,020 ----------- CABLE TV - 3.2% 5,650 Adelphia Communications, Sr. Note, (in default), 10.250% due 06/15/2011 ................. 2,895 8,250 Echostar Communications, Conv. Sub. Note, 5.750% due 05/15/2008 .................. 8,178 9,250 FrontierVision Holdings LP, Sr. Disc. Note, (in default), 11.875% due 09/15/2007 ................. 10,730 5,000 FrontierVision Operating Partners LP, Sr. Sub. Note, (in default), 11.000% due 10/15/2006 ................. 6,875 ----------- 28,678 ----------- RETAILING - 3.2% 10,000 Neiman Marcus Group Inc., Company Guarantee, 10.375% due 10/15/2015** ............... 10,750 16,500 Southern States Cooperative, Inc., Sr. Note, 10.500% due 11/01/2010** ............... 17,573 ----------- 28,323 ----------- SERVICES - 2.7% 19,500 Allied Waste North America, Inc., Sr. Note, 7.875% due 04/15/2013 .................. 20,378 4,000 Great Lakes Dredge & Dock Company, Sr. Sub. Note, 7.750% due 12/15/2013 .................. 3,790 ----------- 24,168 ----------- UTILITIES - 4.5% $ 20,000 Mirant Americas Generation, LLC, Sr. Note, 8.500% due 10/01/2021 .................. $ 20,350 Reliant Energy Inc., Sr. Note: 4,000 6.750% due 12/15/2014 .................. 3,660 16,000 9.500% due 07/15/2013 .................. 16,320 ----------- 40,330 ----------- PAPER/CONTAINERS - 1.9% Jefferson Smurfit Corporation, Company Guarantee: 11,500 7.500% due 06/01/2013 .................. 10,781 6,425 8.250% due 10/01/2012 .................. 6,265 ----------- 17,046 ----------- MEDIA - 1.2% XM Satellite Radio Holdings Inc., Sr. Note: 5,111 12.000% due 06/15/2010 ................. 5,782 4,717 14.000% due 12/31/2009 ................. 5,077 ----------- 10,859 ----------- Total Corporate Bonds and Notes (Cost $760,317) ........................ 778,561 ----------- U.S. TREASURY NOTE - 1.6% (Cost $14,571) 15,000 4.500% due 02/15/2016 ..................... 14,351 ----------- SHARES COMMON STOCKS - 5.5% 280,000 B&G Foods Inc., EIS ....................... 4,191 245,600 Coinmach Service Corporation, IDS ......... 4,158 313,800 Health Care Property Investors, Inc. ...... 8,604 210,000 Health Care REIT, Inc. .................... 7,308 189,757 ICO Global Communications Holdings Ltd.+ .. 1,044 799,900 Nationwide Health Properties, Inc. ........ 17,214 801,400 New Flyer Industries Inc. (F), IDS ........ 6,093 ----------- Total Common Stocks (Cost $34,976) ......................... 48,612 ----------- CONVERTIBLE PREFERRED STOCK - 2.0% (Cost $17,055) 329,000 Crown Castle International Corporation*** ............................ 18,177 ----------- INVESTMENT COMPANY SECURITY - 0.4% (Cost $3,055) 348,500 Canada Cartage Diversified Income Fund .... 3,469 ----------- WARRANTS - 0.0% (Cost $12) 46,875 ICO Global Communications Holdings Ltd., Expires 05/16/2006+ .................... 0 -----------
See Notes to Financial Statements. 59 Portfolio of Investments (continued) HIGH YIELD FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- REPURCHASE AGREEMENT - 1.1% (Cost $9,751) $ 9,751 Agreement with Credit Suisse First Boston Corporation, 4.660% dated 04/28/2006, to be repurchased at $9,755,000 on 05/01/2006 (collateralized by U.S. Treasury obligations, having various interest rates and maturities, market value $9,958,000) ...................... $ 9,751 ----------- TOTAL INVESTMENTS (Cost $839,737*) ....................... 98.3% 872,921 OTHER ASSETS (LIABILITIES) (NET) ......................... 1.7 14,891 ----- ----------- NET ASSETS ............................................... 100.0% $ 887,812 ===== ===========
- ---------- * Aggregate cost for federal tax purpose. ** Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933, as amended. *** Affiliated issuer as defined by the Investment Company Act of 1940 (the Fund controls 5.0% or more of the outstanding voting shares of the company). Total cost of such securities is $17,055,000 and the total value is $18,177,000 or 2.0% of the total net assets of the Fund (See Note 12 to Financial Statements). + Non-income producing security. ++ Defaulted security is past maturity but continues to be valued in recog- nition of future potential worth. GLOSSARY OF TERMS (F) -- Foreign Shares EIS -- Enhanced Income Security IDS -- Income Deposit Security 60 See Notes to Financial Statements. Portfolio of Investments TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES - 98.8% ALABAMA - 0.5% $ 1,000 Birmingham Baptist Medical Center, Special Care Facilities Financing Authority, Health Care Revenue, (Baptist Health System, Inc.), Series A, 5.000% due 11/15/2030 .................. $ 976 ----------- ALASKA - 4.8% 1,000 Alaska State Housing Finance Corporation, Housing Revenue, Series A, (FGIC Insured), 5.250% due 12/01/2041 ........ 1,041 4,500 Alaska State International Airports, Airport & Marina Revenue, Series B, (AMBAC Insured), 5.250% due 10/01/2027 ............................. 4,849 1,235 Anchorage, Electric Utilities, Power & Light Revenue, Sr. Lien, (MBIA Insured), 6.500% due 12/01/2013 .................. 1,430 2,000 Anchorage, Ice Rink, Recreational Revenue, 6.375% due 01/01/2020 .................. 2,186 ----------- 9,506 ----------- ARIZONA - 2.3% 2,000 Arizona Tourism & Sports Authority, Recreational Revenue, (Multipurpose Stadium Facility Project), Series A, (MBIA Insured), 5.375% due 07/01/2019 .................. 2,143 1,000 Maricopa County, Hospital Revenue, (Sun Health Corporation), 5.000% due 04/01/2035 .................. 992 1,500 University Medical Center Corporation, Hospital Revenue, 5.000% due 07/01/2035 .................. 1,481 ----------- 4,616 ----------- CALIFORNIA - 9.2% 1,000 Alameda County, Fremont Unified School District, GO, Series A, (FGIC Insured), 5.000% due 08/01/2025 .................. 1,033 1,000 California County, Tobacco Securitization Agency, Tobacco Settlement Asset-Backed Revenue, (Merced County Tobacco Funding Corporation), Series A, 5.125% due 06/01/2038 .................. 975 1,000 California Educational Facilities Authority, College & University Revenue, (Pepperdine University), Series A, 5.000% due 09/01/2033 .................. 1,027 2,000 California Health Facilities Financing Authority, Health Care Revenue, (Cedars-Sinai Medical Center Project), 5.000% due 11/15/2034 .................. 2,014 3,000 California State Department of Water Resources, Power Supply Revenue, Series A, (Inverse Floater), (MBIA-IBC Insured), 6.466% due 05/01/2011+** ............... 3,532 $ 1,000 California Statewide Communities Development Authority, Health Care Revenue, (Adventist Health System), Series A, 5.000% due 03/01/2035 .................. $ 1,003 2,000 Foothill Eastern Transportation Corridor Agency, Capital Appreciation, Toll Road Revenue, (MBIA Insured), Zero coupon due 01/15/2018 ............. 1,100 2,700 Jurupa, Unified School District, GO, (FGIC Insured), 5.125% due 08/01/2022 .................. 2,842 1,000 Northern California, Tobacco Securitization Authority, Tobacco Settlement Asset- Backed Revenue, Series A-1, 5.375% due 06/01/2038 .................. 1,007 2,000 San Francisco City and County, International Airports Commission, Airport Revenue, Second Series, Issue 29B, (FGIC Insured), 5.125% due 05/01/2020 .................. 2,090 7,000 San Joaquin Hills, Transportation Corridor Agency, Toll Road Revenue, Series A, (MBIA Insured), Zero coupon due 01/15/2034 ............. 1,767 ----------- 18,390 ----------- COLORADO - 1.8% 1,250 Colorado Health Facilities Authority, Lease Revenue, (Covenant Retirement Communities, Inc.), 5.000% due 12/01/2035 .................. 1,221 1,650 Lakewood, COP, (AMBAC Insured), 5.350% due 12/01/2017 .................. 1,760 500 Park Creek Metropolitan Dististric,Property Tax Revenue, 5.500% due 12/01/2030 .................. 512 ----------- 3,493 ----------- CONNECTICUT - 0.8% 1,500 Connecticut State Special Obligation Parking, Airport & Marina Revenue, (Bradley International Airport), Series A, AMT, (ACA Insured), 6.600% due 07/01/2024 ............................. 1,637 ----------- DISTRICT OF COLUMBIA - 0.3% 500 District of Columbia, Water & Sewer Authority, Public Utilities Revenue, (FSA Insured), 5.500% due 10/01/2017 ... 557 ----------- FLORIDA - 6.4% 500 Bay Laurel Center Community Development District, Special Assessment Bonds, (Candler Series Bonds), 5.450% due 05/01/2037*** ............... 500 110 Escambia County, Health Facilities Authority, Health Facilities Revenue, (Florida Health Care Facilities Loan-VHAProgram), (AMBAC Insured), 5.950% due 07/01/2020 .................. 116
See Notes to Financial Statements. 61 Portfolio of Investments (continued) TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) FLORIDA (CONTINUED) $ 650 Escambia County, Utilities Authority, Utility Systems Revenue, (FGIC Insured), 5.250% due 01/01/2029 .................. $ 674 900 Florida Housing Finance Agency, Housing Revenue, (Spinnaker Cove Apartments Project), Series G, AMT, (AMBAC Insured), 6.500% due 07/01/2036 .................. 920 800 Florida State Board of Education, Lottery Revenue, Series A, (FGIC Insured), 5.250% due 07/01/2017 .................. 843 1,000 Hillsborough County, Port District Revenue, (Tampa Port Authority Project), Series A, AMT, (MBIA Insured), 5.375% due 06/01/2027 .................. 1,049 65 Manatee County, Housing Finance Authority, SFMR, Series 94-4, AMT, (GNMA/FNMA Collateral), 6.875% due 11/01/2026 .................. 68 500 Orange County, Housing Finance Authority, MFHR, (Hands Inc. Project), Series A, 7.000% due 10/01/2025** ................ 535 5,000 Orlando, Utilities Commission, Water & Electric Revenue, 6.000% due 10/01/2010 .................. 5,456 1,300 Osceola County, School Board, COP, Series A, (AMBAC Insured), 5.125% due 06/01/2022 .................. 1,360 1,275 UCF Athletics Association, Inc., COP, (Master Lease Program), Series A, (FGIC Insured), 5.000% due 10/01/2035 .................. 1,309 ----------- 12,830 ----------- GEORGIA - 5.9% 5,000 Georgia State, GO, Series B, 6.300% due 03/01/2009 .................. 5,349 Monroe County, Development Authority, PCR, (Oglethorpe Power Corporation Project), Series A, (MBIA-IBC Insured): 2,500 6.700% due 01/01/2009 .................. 2,684 3,410 6.750% due 01/01/2010 .................. 3,750 ----------- 11,783 ----------- HAWAII - 1.1% Honolulu City and County, GO, Series A: 1,270 (Unrefunded Balance), 6.000% due 01/01/2012 .................. 1,402 730 ETM, 6.000% due 01/01/2012 .................. 810 ----------- 2,212 ----------- IDAHO - 1.3% 2,000 Idaho Health Facilities Authority, Health Care Revenue, (IHC Hospitals Inc. Project), (Inverse Floater), ETM, 6.650% due 02/15/2021+** ............... 2,503 ----------- ILLINOIS - 8.3% $ 500 Bolingbrook, Capital Appreciation, Sales Tax Revenue, Zero coupon due 01/01/2024 ............. $ 455 Chicago, O'Hare International Airport, Airport Revenue, (Inverse Floater): 1,000 (FGIC Insured), 6.586% due 01/01/2023+** ............... 1,129 1,125 (MBIA Insured), 6.586% due 01/01/2024+** ............... 1,267 5,000 AMT, (FSA Insured), 7.550% due 01/01/2020+** ............... 5,888 965 Chicago, O'Hare International Airport, Special Facilities Revenue, Series B, (Second Lien Passenger Facility), (AMBAC Insured), 5.500% due 01/01/2017 .................. 1,027 500 Illinois Finance Authority, Health Care Revenue, (Friendship Village Schaumburg), Series A, 5.625% due 02/15/2037 .................. 505 500 Illinois Finance Authority, Revenue Bonds, (Landing At Plymouth Place Project), Series A, 6.000% due 05/15/2025 ........ 517 5,055 Metropolitan Pier & Exposition Authority, Capital Appreciation, Dedicated State Tax Revenue, Series A, (FGIC Insured), ETM, Zero coupon due 06/15/2009 ............. 4,482 500 United City of Yorkville, Special Service Area No. 2005-108, Special Tax, (Autumn Creek Project), 6.000% due 03/01/2036 .................. 498 800 Village of Pingree Grove, Special Service Area Number One, Special Tax, (Cambridge Lakes Project), Series 1, 5.250% due 03/01/2015 .................. 805 ----------- 16,573 ----------- INDIANA - 3.4% 6,000 Indiana Municipal Power Agency, Power Supply System Revenue, Series A, ETM, (MBIA Insured), 6.125% due 01/01/2013 .................. 6,520 230 St. Joseph County, Economic Development Revenue, (Holy Cross Village at Notre Dame Project), Series A, 6.000% due 05/15/2026 .................. 240 ----------- 6,760 ----------- IOWA - 0.5% 1,000 Tobacco Settlement Authority Iowa, Tobacco Settlement Asset-Backed Revenue, Series C, 5.500% due 06/01/2042 ............... 1,009 ----------- LOUISIANA - 2.9% 2,000 Ernest N. Morial, New Orleans Exhibit Hall Authority, Special Tax, Series A, (AMBAC Insured), 5.000% due 07/15/2033 .................. 2,021
62 See Notes to Financial Statements. Portfolio of Investments (continued) TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) LOUISIANA (CONTINUED) $ 2,680 Lafayette, Utility Revenue, (MBIA Insured), 5.250% due 11/01/2023 .................. $ 2,847 1,500 Louisiana Public Facilities Authority, Customer Receipts Revenue, Series B, ETM, Zero coupon due 12/01/2019 ........ 800 ----------- 5,668 ----------- MARYLAND - 1.9% 2,000 Baltimore, Port Facilities, Industrial Revenue, (Consolidated Coal Sales Project), Series B, 6.500% due 10/01/2011 .................. 2,091 1,150 Maryland State Economic Development Corporation, Student Housing Revenue, (University of Maryland College Park Project), 5.625% due 06/01/2035 .................. 1,257 500 Prince Georges County, Special Obligation Bonds, (National Harbor Project), 5.200% due 07/01/2034 .................. 502 ----------- 3,850 ----------- MASSACHUSETTS - 2.6% 2,000 Massachusetts Bay Transportation Authority, Sales Tax Revenue, Series A, 5.000% due 07/01/2035 .................. 2,048 1,000 Massachusetts State Development Finance Agency, Revenue Bonds, (Hillcrest Educational Centers Inc. Project), 6.375% due 07/01/2029 .................. 1,007 1,100 Massachusetts State Health & Educational Facilities Authority, College & University Revenue, (UMass Memorial Issue), Series D, 5.000% due 07/01/2033 .................. 1,091 1,000 Massachusetts State Health & Educational Facilities Authority, Health Care Revenue, (Health Care System-Covenant Health), 6.000% due 07/01/2031 .................. 1,056 ----------- 5,202 ----------- MICHIGAN - 1.0% 1,000 Kent Hospital Finance Authority, Revenue Bonds, (Metropolitan Hospital Project), Series A, 5.250% due 07/01/2030 .................. 995 1,000 Michigan State Strategic Fund, Limited Obligation Revenue, (Detroit Edison Company Exempt Facilities Project), Series C, AMT, (XLCA Insured), 5.450% due 12/15/2032 .................. 1,048 ----------- 2,043 ----------- MINNESOTA - 0.5% 1,000 St. Paul Housing and Redevelopment Authority, Hospital Facility Revenue, (HealthEast Project), 6.000% due 11/15/2030 .................. 1,072 ----------- MISSOURI - 1.7% $ 1,000 Cape Girardeau County, Industrial Development Authority, Health Care Facilities Revenue, (Southeast Hospital Association Project), 5.625% due 06/01/2027 .................. $ 1,024 750 Carthage, Hospital Revenue, 6.000% due 04/01/2038 .................. 749 575 Fenton, Tax Increment Revenue, (Gravois Bluffs Improvement Project), 7.000% due 10/01/2021 .................. 657 1,000 Missouri State Health and Education Facilities Authority, Education Facilities Revenue, (University of Missouri-Columbia Arena Project), 5.000% due 11/01/2018 .................. 1,042 ----------- 3,472 ----------- MONTANA - 0.5% 1,000 Forsyth, PCR, (NorthWestern Corporation Colstrip Project), 4.650% due 08/01/2023*** ............... 1,003 ----------- NEBRASKA - 1.1% 2,000 Omaha Public Power District, Electric Revenue, Series B, ETM, 6.150% due 02/01/2012 .................. 2,179 ----------- NEVADA - 1.1% 1,000 Clark County, Airport Systems Subordinate Lien Revenue, Series A-2, (FGIC Insured), 5.000% due 07/01/2036 ........ 1,020 1,000 Reno, Sales & Room Tax Revenue, Sr. Lien, (ReTrac-Reno Transportation Rail Access Corridor Project), (AMBAC Insured), 5.125% due 06/01/2037 .................. 1,067 ----------- 2,087 ----------- NEW JERSEY - 3.9% 2,000 Bergen County, Improvement Authority, School Improvement Revenue, (Wyckoff Township Board of Education Project), (County Guaranteed), 5.000% due 04/01/2032 .................. 2,076 1,000 New Jersey Economic Development Authority, Cigarette Tax Revenue, 5.500% due 06/15/2031 .................. 1,037 1,000 New Jersey Economic Development Authority, Economic Development Revenue, (Kapkowski Road Landfill Project), 5.750% due 04/01/2031 .................. 1,086 1,340 New Jersey Educational Facilities Authority, Government Fund Grant Revenue, (Higher Education Capital Improvement Project), Series A, (AMBAC Insured), 5.250% due 09/01/2020 .................. 1,425 2,000 New Jersey State Turnpike Authority, Transit Revenue, Series C-1, (AMBAC Insured), 5.000% due 01/01/2035 .................. 2,047 ----------- 7,671 -----------
See Notes to Financial Statements. 63 Portfolio of Investments (continued) TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) NEW YORK - 6.8% $ 1,265 Metropolitan Transportation Authority, Service Contract Revenue, (Transportation Facilities Project), Series 7, 4.750% due 07/01/2019 .................. $ 1,327 1,500 Metropolitan Transportation Authority, Transportation Revenue, Series A, (FGIC Insured), 5.250% due 11/15/2031 .................. 1,580 Nassau County, Tobacco Settlement Corporation, Tobacco Settlement Asset- Backed Revenue, Series A-3: 500 5.000% due 06/01/2035 .................. 485 500 5.125% due 06/01/2046 .................. 486 1,000 New York City Industrial Development Agency, Liberty Revenue Bonds, (7 World Trade Center, LLC Project), Series A, 6.250% due 03/01/2015 .................. 1,050 800 New York City Industrial Development Agency, Special Facilities Revenue, (American Airlines - JFK International Airport), 7.625% due 08/01/2025 .................. 877 2,500 New York City Municipal Water Finance Authority, Water & Sewer Revenue, (PA 1289 Project), (Inverse Floater), (MBIA Insured), 6.005% due 06/15/2027+** ............... 2,691 1,000 New York State Dormitory Authority, College & University Revenue, (State University Educational Facilities Project), (MBIA Insured), 6.000% due 05/15/2016 .................. 1,094 1,000 New York State Dormitory Authority, Mount Sinai NYU Health Revenue, 5.500% due 07/01/2026 .................. 1,011 415 New York State Housing Finance Agency, MFHR, (Secured Mortgage Program), Series F, AMT, 6.625% due 08/15/2012 .................. 416 525 New York State Mortgage Agency, Homeowner Mortgage Revenue, Series 82, AMT, 5.650% due 04/01/2030 .................. 529 1,000 New York State, GO, Series H, 5.750% due 03/15/2013 .................. 1,081 1,000 TSASC, Inc., Asset-Backed Bonds, Series 1, 5.125% due 06/01/2042 .................. 976 ----------- 13,603 ----------- NORTH CAROLINA - 1.6% 1,000 Charlotte, COP, (Convention Facility Project), Series A, 5.500% due 08/01/2019 .................. 1,076 2,000 North Carolina Municipal Power Agency No. 1, Catawba Electric Revenue, Series A, (MBIA Insured), 5.250% due 01/01/2018 .................. 2,118 ----------- 3,194 ----------- OHIO - 1.6% $ 1,000 Adams County, Hospital Facilities Improvement Revenue, (Adams County Hospital Project), 6.250% due 09/01/2020 .................. $ 1,006 1,000 Cuyahoga County, Hospital Facilities Revenue, (Canton Inc. Project), 7.500% due 01/01/2030 .................. 1,102 1,000 Ohio State University, General Receipts Revenue, Series A, 5.125% due 12/01/2031 .................. 1,032 ----------- 3,140 ----------- OKLAHOMA - 0.1% 230 Oklahoma Housing & Finance Authority, SFMR, Series B, AMT, (GNMA Collateral), 7.997% due 08/01/2018 .................. 243 ----------- OREGON - 2.1% 1,000 Oregon Health Sciences University, College & University Revenue, Series A, (MBIA Insured), 5.250% due 07/01/2022 .................. 1,059 2,000 Portland, Sewer System Revenue, Second Lien, Series A, (FSA Insured), 5.250% due 06/01/2020 .................. 2,122 1,000 Portland, Tax Allocation Revenue, (Downtown Waterfront Urban Renewal & Redevelopment Project), Series A, (AMBAC Insured), 5.750% due 06/15/2016 .................. 1,082 ----------- 4,263 ----------- PENNSYLVANIA - 3.6% Philadelphia, Gas Works Revenue, (FSA Insured): 2,500 (1998 General Ordinance), 5.250% due 07/01/2029 .................. 2,607 2,405 (Inverse Floater), Series 384, 6.620% due 07/01/2011+** ............... 2,695 820 Philadelphia, Parking Authority, Auto Parking Revenue, Series A, (AMBAC Insured), 5.250% due 02/15/2029 .................. 849 1,000 Philadelphia, Redevelopment Authority Revenue, (Neighborhood Transformation Project), Series A, (FGIC Insured), 5.500% due 04/15/2017 .................. 1,072 ----------- 7,223 ----------- PUERTO RICO - 0.5% 1,000 Puerto Rico Municipal Finance Agency, Revenue Bonds, Series A, (FSA Insured), 5.250% due 08/01/2021 .................. 1,064 ----------- SOUTH CAROLINA - 0.5% 1,000 South Carolina Jobs-Economic Development Authority, IDR, (Electric & Gas Company Project), Series A, (AMBAC Insured), 5.200% due 11/01/2027 .................. 1,053 -----------
64 See Notes to Financial Statements. Portfolio of Investments (continued) TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) SOUTH DAKOTA - 0.7% $ 1,250 South Dakota Health and Educational Facilities Authority, Health Care Revenue, (Sioux Valley Hospitals and Health System), Series A, 5.250% due 11/01/2034 ............................. $ 1,283 ----------- TENNESSEE - 1.7% 590 Chattanooga, Health, Educational & Housing Facility Board, College & University Revenue, (CDFI Phase I, LLC Project), Series B, 5.500% due 10/01/2020 .................. 591 Johnson City, Health & Educational Facilities Board, Hospital Revenue, (Mountain States Health Care Facilities First Mortgage Project), Series A: 500 5.500% due 07/01/2036 .................. 518 1,000 7.500% due 07/01/2033 .................. 1,157 500 Shelby County, Health, Educational & Housing Facilities Board, Health Facilities Revenue, (Trezevant Manor Project), Series A, 5.625% due 09/01/2026 .................. 496 625 Tennessee Housing Development Agency, Housing Revenue, (Homeownership Program), Series 2A, AMT, 5.700% due 07/01/2031 .................. 627 ----------- 3,389 ----------- TEXAS - 6.4% 500 Alliance Airport Authority, Special Facilities Revenue, (FedEx Corporation Project), AMT, 4.850% due 04/01/2021*** ............... 496 1,500 Dallas-Fort Worth International Airport Board, Airport & Marina Revenue, Series A, AMT, (FGIC Insured), 5.500% due 11/01/2031 .................. 1,569 2,000 Harris County, Houston Sports Authority, Special Revenue, Jr. Lien, Series B, (MBIA Insured), 5.250% due 11/15/2040 .. 2,070 85 Houston, GO, (Public Improvement Project), (FSA Insured), (Unrefunded Balance), 5.750% due 03/01/2015 .................. 91 1,000 Houston, Hotel Occupancy Tax & Special Revenue, (Convention & Entertainment Project), Series B, (AMBAC Insured), 5.750% due 09/01/2015 .................. 1,087 1,000 Lower Colorado River Authority, Transmission Contract Revenue, (LCRA Transmission Services Corporation Project), (FGIC Insured), 5.000% due 05/15/2033 .................. 1,014 1,100 Metro Health Facilities Development Corporation, Health Care Revenue, (Wilson N. Jones Memorial Hospital Project), 7.200% due 01/01/2021 .................. 1,136 North Central, Health Facilities Development Corporation Revenue: $ 1,000 (Baylor Health Care System Project), Series A, 5.125% due 05/15/2029 .................. $ 1,013 1,000 (Children's Medical Center of Dallas Project), (AMBAC Insured), 5.250% due 08/15/2032 .................. 1,038 1,000 Texas Tech University System, Financing System Revenue, Seventh Series, (MBIA Insured), 5.000% due 08/15/2025 .................. 1,059 2,000 University of Texas Financing System, College & University Revenue, Series A, 5.250% due 08/15/2019 .................. 2,113 ----------- 12,686 ----------- VIRGINIA - 0.8% 1,000 Tobacco Settlement Financing Corporation, Asset-Backed Revenue, 5.625% due 06/01/2037 .................. 1,023 500 Virginia Beach Development Authority, Residential Care Facility Mortgage Revenue, (Westminster & Canterbury of Hampton Roads Inc.), 5.375% due 11/01/2032 .................. 506 ----------- 1,529 ----------- WASHINGTON - 6.8% 5,000 Franklin County, Pasco School District No.1, GO, (FSA Insured), 5.250% due 12/01/2019 .................. 5,307 4,500 King County, Kent School District No. 415, GO, Series C, 6.300% due 12/01/2008 .................. 4,692 3,000 Washington State, GO, Series B & AT-7, 6.400% due 06/01/2017 .................. 3,494 ----------- 13,493 ----------- WEST VIRGINIA - 1.3% 2,500 Harrison County, County Community Solid Waste Disposal Authority, IDR, (Monongahela Power Company Project), Series A, AMT, (MBIA-IBC Insured), 6.875% due 04/15/2022 .................. 2,506 ----------- WISCONSIN - 0.5% Wisconsin State Health & Educational Facilities Authority, Health Care Revenue, Series A: 600 (Beaver Dam Community Hospitals, Inc. Project), 6.000% due 08/15/2019 .................. 626 380 (Waukesha Memorial Hospital Project), (AMBAC Insured), 7.125% due 08/15/2007 .................. 381 ----------- 1,007 ----------- Total Municipal Bonds and Notes (Cost $185,964) ........................ 196,768 -----------
See Notes to Financial Statements. 65 Portfolio of Investments (continued) TAX-EXEMPT BOND FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- CONVERTIBLE BOND - 0.2% (Cost $317) $ 317 UAL Corporation, Conv. Bond, 5.000% due 02/01/2021 $ 329 ----------- TOTAL INVESTMENTS++ (Cost $186,281*) 99.0% 197,097 OTHER ASSETS (LIABILITIES) (NET) 1.0 2,042 ----- ----------- NET ASSETS 100.0% $ 199,139 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Security deemed illiquid by the Portfolio Manager. *** Security purchased on a when-issued basis. + Variable rate security. The interest rate shown reflects the rate in effect at April 30, 2006. ++ All securities segregated as collateral for futures contracts or when- issued securities.
UNREALIZED NUMBER OF VALUE APPRECIATION CONTRACTS (000S) (000S) - --------- ------- ------------ FUTURES CONTRACTS-SHORT POSITION 89 U.S. 5 Year Treasury Note, June 2006 ...... $ 9,270 $77 41 U.S. 10 Year Treasury Note, June 2006 ..... 4,329 11 ------- --- Total Net Unrealized Appreciation of Futures Contracts ................... $13,599 $88 ======= ===
The Tax-Exempt Bond Fund had the following industry concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): Health Care - Hospital 11.1% Public Power - Retail Electric 10.9%
The Tax-Exempt Bond Fund had the following insurance concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): MBIA 20.4% AMBAC 11.1% FGIC 10.9% FSA 10.2%
GLOSSARY OF TERMS ACA -- ACA Financial Guaranty Corporation AMBAC -- American Municipal Bond Assurance Corporation AMT -- Alternative Minimum Tax COP -- Certificate of Participation ETM -- Escrowed to Maturity FGIC -- Federal Guaranty Insurance Corporation FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GNMA -- Government National Mortgage Association GO -- General Obligation IBC -- Insured Bond Certificate IDR -- Industrial Development Revenue BIA -- Municipal Bond Investors Assurance MFHR -- Multi-family Housing Revenue PCR -- Pollution Control Revenue SFMR -- Single Family Mortgage Revenue VHA -- Veterans Housing Authority XLCA -- XL Capital Assurance Inc. 66 See Notes to Financial Statements. Portfolio of Investments CALIFORNIA MUNICIPAL FUND April 30, 2006 (Unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES - 99.0% CALIFORNIA - 98.1% ABAG Financing Authority for Nonprofit Corporations, COP: $ 340 (Episcopal Homes Foundation), 5.000% due 07/01/2007 .................. $ 343 (O'Connor Woods Obligation Group), (ACA Insured): 700 5.400% due 11/01/2009 .................. 710 2,280 5.700% due 11/01/2013 .................. 2,384 1,240 ABAG Financing Authority for Nonprofit Corporations, Revenue Bonds, (California School of Mechanical Arts), 5.250% due 10/01/2026 .................. 1,279 5,360 Alhambra, Improvement Board Act of 1915, Special Tax Revenue, (Public Works Assessment District No. 1), (MBIA Insured), 6.125% due 09/02/2018 .................. 5,561 Amador Water Agency, COP, Series A, (MBIA Insured): 2,730 5.000% due 06/01/2032 .................. 2,811 3,625 5.000% due 06/01/2036 .................. 3,728 2,000 Anaheim, Public Financing Authority, Tax Allocation Revenue, (Inverse Floater), (MBIA Insured), 9.320% due 12/28/2018+ ................. 2,252 2,210 Azusa, Community Facilities District No. 1, Special Tax Revenue, (Mountain Cove), Series A, 6.000% due 09/01/2026 .................. 2,311 Baldwin Park, Public Financing Authority, Lease Revenue, (Community Center Project), (AMBAC Insured): 2,635 5.000% due 08/01/2027 .................. 2,713 3,000 5.000% due 08/01/2034 .................. 3,073 Barstow, Redevelopment Agency, Tax Allocation Revenue, (Central Redevelopment Project), Series A, (MBIA Insured): 635 (Unrefunded Balance), 7.000% due 09/01/2014 .................. 716 1,225 ETM, 7.000% due 09/01/2014 .................. 1,401 2,000 Bay Area Government Association, Tax Allocation Revenue, (California Redevelopment Agency Pool), Series A, (XLCA Insured), 5.250% due 09/01/2029 .................. 2,113 2,000 Burbank, Glendale & Pasadena Airport Authority, Airport Revenue, Series B, AMT, (AMBAC Insured), 5.000% due 07/01/2025 .................. 2,046 3,155 Burbank, Waste Disposal Revenue, Series B, (FSA Insured), 5.250% due 05/01/2024 .................. 3,338 California County, Tobacco Securitization Agency, Tobacco Settlement Asset-Backed Revenue: 2,000 (Los Angeles County Securitization Corporation), Zero coupon due 06/01/2028 ............. 1,553 (Sonoma County Securitization Corporation): $ 2,000 5.125% due 06/01/2038 .................. $ 1,951 5,000 5.250% due 06/01/2045 .................. 4,930 2,000 California County, Tobacco Securitization Agency, Tobacco Settlement Asset-Backed Revenue, (Merced County Tobacco Funding Corporation), Series A, 5.125% due 06/01/2038 .................. 1,951 2,000 California Department of Veteran Affairs, Home Purchase Revenue, Series A, (AMBAC Insured), 5.400% due 12/01/2018 .................. 2,023 California Educational Facilities Authority, College & University Revenue: 5,000 (Pomona College), Series A, 5.000% due 07/01/2045 .................. 5,133 1,000 (Pooled College & University), Series B, 6.625% due 06/01/2020 .................. 1,080 1,000 California Educational Facilities Authority, Student Loan Revenue, (California Loan Program), Series A, AMT, (MBIA Insured), 5.100% due 03/01/2014 .................. 1,029 3,000 California Health Facilities Financing Authority, Health Care Revenue, (Cedars-Sinai Medical Center Project), 5.000% due 11/15/2034 .................. 3,021 1,000 California Infrastructure & Economic Development Bank, Health Care Revenue, (The J. David Gladstone Institute Project), 5.500% due 10/01/2015 .................. 1,060 2,500 California Pollution Control Financing Authority, PCR, (San Diego Gas and Electric Company), Series A, AMT, (AMBAC Insured), 5.850% due 06/01/2021 .................. 2,523 California Pollution Control Financing Authority, Solid Waste Disposal Revenue, (Waste Management Inc. Project), AMT: 1,500 Series B, 5.000% due 07/01/2027 .................. 1,495 2,500 Series C, 5.125% due 11/01/2023 .................. 2,556 40 California Rural Home Mortgage Finance Authority, SFMR, (Mortgage-Backed Securities Program), Issue A, Series 2, AMT, (GNMA/FHLMC Collateral), 7.950% due 12/01/2024 .................. 40 6,320 California State Department of Transportation, COP, Series A, (MBIAInsured), 5.250% due 03/01/2016 .................. 6,517 California State Department of Water Resources, Power Supply Revenue, Series A: 5,000 5.750% due 05/01/2017 .................. 5,577 5,500 5.875% due 05/01/2016 .................. 6,170 1,670 California State Department of Water Resources, Water Revenue, Series W, (FSA Insured), (Unrefunded Balance), 5.000% due 12/01/2018 .................. 1,748
See Notes to Financial Statements. 67 Portfolio of Investments (continued) CALIFORNIA MUNICIPAL FUND April 30, 2006 (Unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) California State Public Works Board, Lease Revenue: $ 3,000 (California State University), Series C, 5.400% due 10/01/2022 .................. $ 3,096 1,980 (Department of Corrections - Kern County at Delano II State Prison), Series C, 5.500% due 06/01/2023 .................. 2,128 1,750 (Department of Corrections Program), Series A, (MBIA-IBC Insured), 5.000% due 09/01/2018 .................. 1,806 4,330 (Department of Corrections-Ten Administrative Segregation Housing Units), Series A, (AMBAC Insured), 5.250% due 03/01/2019 .................. 4,559 (Department of Mental Health - Coalinga State Hospital), Series A: 3,000 5.000% due 06/01/2024 .................. 3,079 1,750 5.000% due 06/01/2025 .................. 1,794 4,200 (UC M.I.N.D. Institute), Series A, 5.000% due 04/01/2023 .................. 4,280 California State, GO: 5,000 5.000% due 03/01/2026 .................. 5,159 2,000 (CIFG-TCRS Insured), 5.000% due 10/01/2022 .................. 2,061 4,430 (FGIC-TCRS Insured), 5.500% due 06/01/2025 .................. 4,690 1,280 (Veterans), Series BJ, AMT, 5.700% due 12/01/2032 .................. 1,309 1,500 California Statewide Communities Development Authority, College & University Revenue, (Thomas Jefferson School of Law), Series A, 4.875% due 10/01/2035 .................. 1,459 2,600 California Statewide Communities Development Authority, COP, (Cedars- Sinai Medical Center), (MBIA-IBC Insured), 6.500% due 08/01/2012 .................. 2,788 2,000 California Statewide Communities Development Authority, Health Care Revenue: (Adventist Health System), Series A, 5.000% due 03/01/2035 .................. 2,007 1,260 (Daughters of Charity Health System Project), Series A, 5.000% due 07/01/2039 .................. 1,233 5,085 (Sutter Health), Series A, 5.000% due 11/15/2043 .................. 5,107 California Statewide Communities Development Authority, MFHR, (Equity Residential Housing): 1,000 Series B, 5.200% due 12/01/2029 .................. 1,026 3,300 Series C, 5.200% due 06/15/2009 .................. 3,386 1,000 Carson, Redevelopment Agency, Tax Allocation Revenue, (Area No. 1 Project), (MBIAInsured), 5.500% due 10/01/2016 .................. 1,102 Cathedral City, Improvement Board Act of 1915, Special Tax Revenue, (Cove Improvement District No. 04-02): $ 990 5.000% due 09/02/2030 .................. $ 978 1,335 5.050% due 09/02/2035 .................. 1,311 1,000 Chula Vista, Community Facilities District No. 2001-1, Special Tax Revenue, (Improvement Area B-San Miguel Ranch Project), 5.450% due 09/01/2036 .................. 1,019 3,000 Chula Vista, COP, (MBIA Insured), 5.000% due 08/01/2027 .................. 3,091 100 Chula Vista, IDR, (San Diego Gas and Electric Company), Series A, AMT, 4.900% due 03/01/2023 .................. 101 1,725 Chula Vista, Public Financing Authority, Special Tax Revenue, (Assessment Districts Refinancing), Sr. Lien, Series A, (FSA Insured), 4.700% due 09/02/2014 .................. 1,800 2,610 Chula Vista, Redevelopment Agency, Tax Allocation Revenue, 8.625% due 09/01/2024 .................. 2,704 2,000 Coachella, Redevelopment Agency, Tax Allocation Revenue, (Area No. 3 Project), 5.875% due 12/01/2028 .................. 2,061 2,160 Contra Costa County, Public Financing Authority, Lease Revenue, (Capital Projects), Series B, (MBIA Insured), 5.250% due 06/01/2027 .................. 2,254 5,000 Contra Costa, Community College District, GO, (Election of 2002), (MBIA Insured), 5.000% due 08/01/2029 .................. 5,162 Contra Costa, Water District Revenue, Series K, (FSA Insured): 1,445 5.000% due 10/01/2017 .................. 1,514 1,520 5.000% due 10/01/2018 .................. 1,591 1,665 Davis, Public Facilities Finance Authority Local Agency, Special Tax Revenue, (Mace Ranch Area), Series A, 6.600% due 09/01/2025 .................. 1,744 1,215 Fairfield, Housing Authority, Mortgage Revenue, (Creekside Estates Mobile Homes), 5.625% due 09/01/2023 .................. 1,248 1,000 Fontana, Redevelopment Agency, Tax Allocation Revenue, (Southwest Industrial Park Project), (MBIA Insured), 5.200% due 09/01/2030 .................. 1,035 Foothill Eastern Transportation Corridor Agency, Toll Road Revenue: 9,000 Zero coupon due 01/15/2026 ............. 7,829 20,000 Zero coupon due 01/15/2030 ............. 5,035 10,000 Zero coupon due 01/15/2032 ............. 2,225 10,000 Zero coupon due 01/15/2033 ............. 2,096 10,000 Zero coupon due 01/15/2034 ............. 1,970 10,000 Zero coupon due 01/15/2036 ............. 1,738 10,000 Zero coupon due 01/15/2037 ............. 1,637 9,000 Zero coupon due 01/15/2038 ............. 1,386 2,000 Fresno, Joint Powers Financing Authority, Lease Revenue, Series A, (FSA Insured), 5.750% due 06/01/2026 .................. 2,166
68 See Notes to Financial Statements. Portfolio of Investments (continued) CALIFORNIA MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) Golden State Tobacco Securitization Corporation, Tobacco Settlement Asset- Backed Revenue, Series 2003-A-1: $ 2,890 6.250% due 06/01/2033 .................. $ 3,135 5,000 6.625% due 06/01/2040 .................. 5,525 1,000 6.750% due 06/01/2039 .................. 1,114 1,000 Hi Desert, Members Health Care District, Health Care Revenue, 5.500% due 10/01/2015 .................. 1,009 3,000 Highland, Redevelopment Agency, Tax Allocation Revenue, (Highland Redevelopment Project Area No. 1), Series A, (AMBAC Insured), 5.000% due 12/01/2028 .................. 3,090 Huntington Beach, Union High School District, GO, (Election of 2004), (FSA Insured): 2,000 5.000% due 08/01/2027 .................. 2,069 5,000 5.000% due 08/01/2029 .................. 5,162 2,000 Huntington Park, Public Financing Authority, Lease Revenue, (Wastewater System Project), 6.200% due 10/01/2025 .................. 2,067 5,000 Imperial Irrigation District, COP, (Water System Projects), (AMBAC Insured), 5.500% due 07/01/2029 .................. 5,362 1,250 Imperial, Water Facilities Revenue, COP, (FGIC Insured), 5.000% due 10/15/2020 .................. 1,294 Irvine, Improvement Board Act of 1915, Special Tax Revenue: 1,295 (Assessment District No. 00-18), Group 5, 5.000% due 09/02/2026 .................. 1,292 1,125 (Assessment District No. 03-19), Group 3, 5.000% due 09/02/2025 .................. 1,125 990 Irvine, Meadows Mobile Home Park, Mortgage Revenue, Series A, 5.700% due 03/01/2018 .................. 1,023 Irvine, Public Facilities & Infrastructure Authority, Assessment Revenue, (AMBAC Insured): Series B: 1,455 5.000% due 09/02/2020 .................. 1,504 3,630 5.000% due 09/02/2021 .................. 3,752 2,000 Series C, 5.000% due 09/02/2023 .................. 2,037 2,600 Irvine, Unified School District Financing Authority, Special Tax Revenue, (Group II), Series A, 5.000% due 09/01/2026 .................. 2,579 1,825 La Canada, Unified School District, GO, (Election of 2004), Series A, (MBIA Insured), 5.500% due 08/01/2028 .................. 1,982 La Quinta, Financing Authority, Local Agency Revenue, Series A, (AMBAC Insured): 2,000 5.000% due 09/01/2029 .................. 2,058 1,000 5.250% due 09/01/2024 .................. 1,063 $ 1,500 La Verne, Public Financing Authority, Revenue Bonds, (Capital Improvement Projects), 7.250% due 09/01/2026 .................. $ 1,540 1,000 Laguna Hills, COP, (Community Center Project), (MBIA Insured), 5.000% due 12/01/2017 .................. 1,045 1,840 Lake Elsinore, Public Financing Authority, Local Agency Revenue, Series G, 5.800% due 09/02/2015 .................. 1,908 1,000 Loma Linda, Hospital Revenue, (Loma Linda University Medical Center), Series A, 5.000% due 12/01/2022 .................. 1,011 1,315 Long Beach, Bond Finance Authority, Tax Allocation Revenue, (North Long Beach Redevelopment Projects), Series A, (AMBAC Insured), 5.000% due 08/01/2022 .................. 1,354 2,000 Long Beach, Community Facilities District No. 5, Special Tax Revenue, (Towne Center), 6.875% due 10/01/2025 .................. 2,061 210 Los Angeles, Community Redevelopment Agency, Housing Revenue, Series C, (AMBAC Insured), 6.750% due 07/01/2014 .................. 211 2,500 Los Angeles, Community Redevelopment Agency, Tax Allocation Revenue, (North Hollywood Project), Series E, (MBIA Insured), 5.400% due 07/01/2024 .................. 2,652 1,000 Los Angeles, MFHR, (Ridgecroft Apartments Project), Series E, AMT, (GNMA Collateral), 6.250% due 09/20/2039 .................. 1,026 1,445 Los Angeles, Special Assessment Revenue, (Landscaping & Lighting District No. 96-1 Project), (AMBAC Insured), 5.000% due 03/01/2022 .................. 1,486 1,000 Modesto City, Community Facilities District No. 2004-1, Special Tax Revenue, (Village One #2), 5.150% due 09/01/2036 .................. 997 Moreno Valley, Unified School District, COP, (FSA Insured): 1,600 5.000% due 03/01/2025 .................. 1,651 1,760 5.000% due 03/01/2027 .................. 1,810 1,490 Mountain View, Shoreline Regional Park Community, Tax Allocation Revenue, Series A, (MBIA Insured), 5.250% due 08/01/2015 .................. 1,590 2,785 Needles, Public Utilities Authority, Utilities Revenue, (Utilities System Acquisition Project), Series A, 6.500% due 02/01/2022 .................. 2,886 Northern California, Tobacco Securitization Authority, Tobacco Settlement Asset- Backed Revenue, Series A-1: 10,000 5.375% due 06/01/2038 .................. 10,071 9,080 5.500% due 06/01/2045 .................. 9,186 1,100 Oakland, Revenue Bonds, (YMCA East Bay Project), 7.100% due 06/01/2010 .................. 1,125
See Notes to Financial Statements. 69 Portfolio of Investments (continued) CALIFORNIA MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) $ 1,565 Oakland, Unified School District, GO, (Alameda County School Improvements), (FSA Insured), 5.000% due 08/01/2017 .................. $ 1,612 1,485 Oceanside, Community Facilities District No. 01-1, Special Tax Revenue, (Morro Hills Development Project), Series A, 5.500% due 09/01/2029 .................. 1,523 1,500 Oceanside, COP, Series A, (AMBAC Insured), 5.250% due 04/01/2018 .................. 1,588 Oxnard, Harbor District, Revenue Bonds: 1,200 Series A, AMT, 5.750% due 08/01/2020 .................. 1,231 1,000 Series B, 6.000% due 08/01/2024 .................. 1,075 1,090 Pacifica, Wastewater Revenue, (AMBAC Insured), 5.000% due 10/01/2024 .................. 1,130 1,280 Palm Desert, Financing Authority, Tax Allocation Revenue, (Project Area No. 2), Series A, (MBIA Insured), 5.000% due 08/01/2022 .................. 1,329 2,805 Perris, Public Financing Authority, 2006 Tax Allocation Revenue, 5.300% due 10/01/2026** ................ 2,811 1,995 Pomona, COP, (Mission Promenade Project), Series AE, (AMBAC Insured), 5.375% due 10/01/2032 .................. 2,094 5,000 Pomona, Public Financing Authority, Tax Allocation Revenue, (Merged Redevelopment Project), Series AD, (MBIA Insured), 5.000% due 02/01/2021 .................. 5,120 1,000 Pomona, Unified School District, GO, (MBIA Insured), 6.150% due 08/01/2030 .................. 1,189 5,000 Port of Oakland, Airport & Marina Revenue, Series K, AMT, (FGIC Insured), 5.750% due 11/01/2029 .................. 5,289 1,000 Poway, Redevelopment Agency, Tax Allocation Revenue, (Paguay Redevelopment Project), (AMBAC Insured), 5.375% due 06/15/2019 .................. 1,074 2,750 Redding, Electrical Systems, COP, (Inverse Floater), (MBIA Insured), 9.359% due 07/01/2022+ ................. 3,704 1,000 Redondo Beach, Public Financing Authority, Revenue Bonds, (South Bay Center Redevelopment Project), 7.125% due 07/01/2026 .................. 1,023 1,160 Riverside County, COP, (Capital Improvement & Family Law Court Refunding Projects), Series A, (FGIC Insured), 5.000% due 11/01/2025 .................. 1,200 2,100 Riverside County, Public Financing Authority, COP, 5.800% due 05/15/2029 .................. 2,154 Rocklin, Unified School District, Capital Appreciation, GO, (FGIC Insured): $ 1,030 Zero coupon due 08/01/2014 ............. $ 682 1,210 Zero coupon due 08/01/2016 ............. 716 1,255 Zero coupon due 08/01/2017 ............. 703 1,360 Zero coupon due 08/01/2019 ............. 682 1,415 Zero coupon due 08/01/2020 ............. 671 1,225 Zero coupon due 08/01/2023 ............. 494 Saddleback Valley, Unified School District, GO, (Election of 2004), Series A, (FSA Insured): 3,000 5.000% due 08/01/2027 .................. 3,103 4,000 5.000% due 08/01/2029 .................. 4,129 Salinas Valley, Solid Waste Authority, Resource Recovery Revenue, AMT, (AMBAC Insured): 2,475 5.250% due 08/01/2027 .................. 2,558 2,000 5.250% due 08/01/2031 .................. 2,062 San Diego, Redevelopment Agency, Auto Parking Revenue: 1,000 (Centre City Redevelopment Project), Series A, 6.400% due 09/01/2019 .................. 1,054 1,060 (Southcrest Redevelopment Project), 6.500% due 10/01/2025 .................. 1,150 San Francisco City and County, International Airports Commission, Airport Revenue, Second Series, AMT, (MBIA Insured): 4,000 Issue 27A, 5.250% due 05/01/2026 .................. 4,114 4,070 Issue 28A, 5.250% due 05/01/2020 .................. 4,232 1,185 San Francisco City and County, Redevelopment Agency, Lease Revenue, (George R. Moscone Convention Center Project), (XLCA Insured), Zero coupon due 07/01/2013 ............. 880 9,310 San Jose, Financing Authority, Lease Revenue, (Convention Center Project), Series F, (MBIA Insured), 5.000% due 09/01/2018 .................. 9,722 1,000 San Jose, MFHR, (Sixth & Martha Family Apartments), AMT, (FNMA Collateral), 5.875% due 03/01/2033 .................. 1,032 3,780 San Juan, Unified School District, GO, (Election of 2002), Series A, (MBIA Insured), 5.000% due 08/01/2027 .................. 3,910 4,380 Santa Rosa, Mortgage Revenue, (Channate Lodge), (FHA Insured), 6.700% due 12/01/2024 .................. 4,386 2,000 Semitropic Improvement District of Semitropic Water Storage District, Water Banking Revenue, Series A, (XLCA Insured), 5.125% due 12/01/2035 .................. 2,073
70 See Notes to Financial Statements. Portfolio of Investments (continued) CALIFORNIA MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - ------------ ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) South Gate, Public Financing Authority, Tax Allocation Revenue, (South Gate Redevelopment Project No. 1): $ 2,090 (AMBAC Insured), 5.250% due 09/01/2022 .................. $ 2,213 1,500 (XLCA Insured), 5.000% due 09/01/2016 .................. 1,578 1,780 Stockton-East, Water District, COP, (1975 & 1990 Projects), Series A, (FGIC Insured), 5.250% due 04/01/2022 .................. 1,883 3,270 Temecula, Redevelopment Agency, Tax Allocation Revenue, (Redevelopment Project No.1), (MBIA Insured), 5.250% due 08/01/2036 .................. 3,387 1,000 Torrance, Hospital Revenue, (Torrance Memorial Medical Center), Series A, 6.000% due 06/01/2022 .................. 1,082 1,900 Turlock, COP, (Emanuel Medical Center Inc. Project), Series A, 5.375% due 10/15/2034 .................. 1,938 1,000 Tustin, Community Facilities District No. 04-1, Special Tax Revenue, (Tustin Legacy/John Laing Homes Project), 5.375% due 09/01/2029 .................. 1,017 University of California, College & University Revenue, (Multipurpose Projects), Series M, (FGIC Insured): 2,260 5.125% due 09/01/2017 .................. 2,369 4,635 5.125% due 09/01/2018 .................. 4,851 2,035 Vallejo City, Unified School District, GO, Series A, (MBIA Insured), 5.900% due 02/01/2021 .................. 2,375 2,305 Walnut, Public Financing Authority, Tax Allocation Revenue, (Walnut Improvement Project), (AMBAC Insured), 5.375% due 09/01/2022 .................. 2,455 ----------- 393,399 ----------- PUERTO RICO - 0.6% 2,500 Puerto Rico Commonwealth, Children's Trust Fund, Tobacco Settlement Asset-Backed Revenue, Series 2002, 5.625% due 05/15/2043 .................. 2,568 ----------- VIRGIN ISLANDS - 0.3% 1,000 Virgin Islands, Public Finance Authority, Revenue Bonds, (Gross Receipts of Taxes on Loan Notes), Series A, 6.375% due 10/01/2019 .................. 1,096 ----------- Total Municipal Bonds and Notes (Cost $383,203) ........................ 397,063 ----------- SHORT-TERM MUNICIPAL BONDS - 0.1% (Cost $300) 300 California Statewide Communities Development Authority, COP, (John Muir/Mt. Diablo Health Center), (AMBAC Insured), 3.710% due 08/15/2027++ ................ 300 ----------- TOTAL INVESTMENTS+++ (Cost $383,503*) .................... 99.1% $ 397,363 OTHER ASSETS (LIABILITIES) (NET) ......................... 0.9 3,444 ----- ----------- NET ASSETS ............................................... 100.0% $ 400,807 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Security purchased on a when-issued basis. + Variable rate security. The interest rate shown reflects the rate in effect at April 30, 2006. ++ Securities with a maturity date of more than 13 months have variable rates and/or demand features which qualify them as short-term securities. Securities are secured by bank letters of credit or guarantees by certain corporations. The interest rates shown are those in effect at April 30, 2006. These rates change periodically based on specified market rates or indices. +++ All securities segregated as collateral for futures contracts or when- issued securities.
UNREALIZED NUMBER OF VALUE APPRECIATION CONTRACTS (000S) (000S) - --------- ------ ------------ FUTURES CONTRACTS-SHORT POSITION 312 U.S. 5 Year Treasury Note, June 2006 ...... $6,666 $2 ====== ===
The California Municipal Fund had the following industry concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): Special Tax Revenue-Tax Allocation/Increment 12.4% Tobacco-Master Settlement 10.7%
The California Municipal Fund had the following insurance concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): MBIA 21.9% AMBAC 13.6%
GLOSSARY OF TERMS ACA -- ACA Financial Guaranty Corporation AMBAC -- American Municipal Bond Assurance Corporation AMT -- Alternative Minimum Tax CIFG -- CDC IXIS Financial Guaranty North America, Inc. COP -- Certificate of Participation ETM -- Escrowed to Maturity FGIC -- Federal Guaranty Insurance Corporation FHA -- Federal Housing Authority FHLMC -- Federal Home Loan Mortgage Corporation FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GNMA -- Government National Mortgage Association GO -- General Obligation IBC -- Insured Bond Certificate IDR -- Industrial Development Revenue MBIA -- Municipal Bond Investors Assurance MFHR -- Multi-family Housing Revenue PCR -- Pollution Control Revenue SFMR -- Single Family Mortgage Revenue TCRS -- Transferable Custodial Receipts XLCA -- XL Capital Assurance Inc. See Notes to Financial Statements. 71 Portfolio of Investments CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - --------- ---------- MUNICIPAL BONDS AND NOTES - 96.4% CALIFORNIA - 94.7% $ 1,000 ABAG Financing Authority for Nonprofit Corporations, COP, (Episcopal Homes Foundation), 6.250% due 08/15/2030 .................. $ 1,037 805 Alameda County, COP, (Santa Rita Jail Project), (MBIA Insured), 5.375% due 06/01/2009 .................. 822 1,000 Alameda County, Public Financing Authority, Lease Revenue, 5.000% due 09/02/2008 .................. 1,023 2,000 Anaheim, Public Financing Authority, Lease Revenue, (Convention Center Project), Series A, (AMBAC Insured), 5.250% due 08/01/2013 .................. 2,153 Anaheim, Public Financing Authority, Power & Light Revenue, (Electric System Generation Project), Series B, (FSA Insured): 2,000 5.000% due 10/01/2015 .................. 2,098 2,000 5.250% due 10/01/2014 .................. 2,156 1,130 Baldwin Park Public Financing Authority, Sales Tax & Tax Allocation Revenue, (Puente Merced Redevelopment Project), 4.625% due 08/01/2016 .................. 1,135 1,000 California Educational Facilities Authority, Student Loan Revenue, (California Loan Program), Series A, AMT, (MBIA Insured), 5.100% due 03/01/2014 .................. 1,029 125 California Health Facilities Financing Authority, Health Care Revenue, (AMBAC Insured), 5.875% due 07/01/2009 .................. 128 California Housing Finance Agency, Mortgage Revenue, Series N, AMT, (AMBAC Insured): 1,000 5.000% due 08/01/2008 .................. 1,024 1,000 5.100% due 02/01/2009 .................. 1,027 1,155 California Infrastructure and Economic Development Bank, Lease Revenue, Series A, (FGIC Insured), 5.000% due 08/15/2018 .................. 1,216 California State Department of Water Resources, Power Supply Revenue, Series A: 1,675 (MBIA-IBC Insured), 5.250% due 05/01/2015 .................. 1,789 4,000 (XLCA Insured), 5.375% due 05/01/2017 .................. 4,381 3,000 California State Department of Water Resources, Water System Revenue, (Central Valley Project), Series Y, (FGIC Insured), 5.250% due 12/01/2014 .................. 3,235 1,000 California State Economic Recovery, GO, Series A, (FGIC-TCRS Insured), 5.000% due 07/01/2016 .................. 1,057 California State Public Works Board, Lease Revenue: 1,000 (California Community Colleges), Series A, (AMBAC Insured), 5.250% due 12/01/2012 .................. 1,042 $ 2,000 (Department of Corrections Program), Series A, (AMBAC Insured), 5.250% due 06/01/2012 .................. $ 2,157 1,000 (Department of Corrections-Ten Administrative Segregation Housing Units), Series A, (AMBAC Insured), 5.250% due 03/01/2016 .................. 1,069 2,750 (Department of General Services), (Capitol East End Complex-Blocks 171-174 & 225), Series A, (AMBAC Insured), 5.250% due 12/01/2014 .................. 2,946 California State, GO: 2,000 (FGIC-TCRS Insured), 7.000% due 10/01/2010 .................. 2,267 1,000 (FSA Insured), 5.500% due 03/01/2012 .................. 1,076 2,000 (MBIA-IBC Insured), 6.250% due 09/01/2012 .................. 2,269 1,000 California Statewide Communities Development Authority, Student Housing Revenue, (Irvine LLC, UCI East Campus Apartments, Phase II), 5.000% due 05/15/2020 .................. 1,041 1,845 California Statewide Communities Development Authority, Water Revenue, (Pooled Financing Program), Series C, (FSA Insured), 5.250% due 10/01/2015 .................. 1,979 1,240 Chino Valley, Unified School District, COP, Series A, (FSA Insured), 5.250% due 09/01/2013 .................. 1,333 645 Chula Vista, Public Financing Authority, Special Tax Revenue, (Assessment Districts Refinancing), Sr. Lien, Series A, (FSA Insured), 4.500% due 09/02/2013 .................. 670 1,325 Cotati-Rohnert Park, Unified School District, GO, Series B, (FGIC Insured), 5.000% due 08/01/2017 .................. 1,403 Emeryville, Public Financing Authority, Revenue Bonds, (Emeryville Redevelopment Project), Series A, (MBIA Insured): 1,265 5.250% due 09/01/2015 .................. 1,364 1,400 5.250% due 09/01/2017 .................. 1,497 2,000 Golden State Tobacco Securitization Corporation, Tobacco Settlement Asset- Backed Revenue, Series A, (AMBAC Insured), 5.000% due 06/01/2013 .................. 2,134 685 Golden West Schools Financing Authority, Revenue Bonds, Series A, (MBIA Insured), 5.650% due 02/01/2012 .................. 752 1,615 Inglewood, Unified School District, GO, (Election of 1998), Series C, (FSA Insured), 5.250% due 10/01/2017 .................. 1,728 1,195 Kings Canyon, Joint Unified School District, GO, (FGIC Insured), 5.375% due 08/01/2015 .................. 1,292 2,000 Loma Linda, Hospital Revenue, 5.000% due 12/01/2017 .................. 2,045
72 See Notes to Financial Statements. Portfolio of Investments (continued) CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - --------- ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) $ 1,080 Long Beach, Bond Financing Authority, Lease Revenue, (Public Safety Facilities Projects), (AMBAC Insured), 5.250% due 11/01/2013 .................. $ 1,165 1,435 Long Beach, Community College District, GO, Election 2002, Series B, (FGIC Insured), 5.000% due 05/01/2019 .................. 1,507 3,000 Long Beach, Harbor Department Revenue, Series B, (FGIC Insured), 5.000% due 05/15/2016 .................. 3,175 2,000 Los Angeles, Department of Water & Power, Power System Revenue, Series A-1, (FSA Insured), 5.000% due 07/01/2017 .................. 2,118 1,300 Los Angeles, Department of Water & Power, Power System Revenue, Series A-2, (MBIA Insured), 5.000% due 07/01/2017 .................. 1,362 1,045 Los Angeles, Municipal Improvement Corporation, Lease Revenue, (City of Los Angeles Central Library Project), Series AT, (MBIA Insured), 5.500% due 06/01/2017 .................. 1,130 1,500 Los Angeles, State Building Authority, Lease Revenue, (State of California Department of General Services Lease Project), Series A, (MBIA-IBC Insured), 5.625% due 05/01/2011 .................. 1,596 2,105 M-S-R Public Power Agency, San Juan Project Revenue, Series I, (MBIA Insured), 5.000% due 07/01/2015 .................. 2,222 1,500 Merced, Irrigation District, Revenue Bonds, Warrants, 4.000% due 07/01/2009 .................. 1,498 3,000 Monterey Peninsula, Community College District, GO, (FGIC Insured), 5.000% due 08/01/2020 .................. 3,148 1,575 Oceanside, COP, Series A, (AMBAC Insured), 5.250% due 04/01/2016 .................. 1,687 Ontario, Redevelopment Financing Authority, Lease Revenue: 1,055 (Capital Projects), (AMBAC Insured), 5.500% due 08/01/2016 .................. 1,147 1,060 (Project No.1, Center City & Cimarron Projects), (MBIA Insured), 5.250% due 08/01/2016 .................. 1,137 1,000 Orange County, Public Financing Authority, Lease Revenue, (Juvenile Justice Center Facility Project), (AMBAC Insured), 5.375% due 06/01/2016 .................. 1,086 1,000 Orange County, Water District Revenue, COP, Series B, (MBIA Insured), 5.000% due 08/15/2018 .................. 1,047 795 Palm Desert, Financing Authority, Tax Allocation Revenue, (Project Area No. 2), Series A, (MBIA Insured), 5.000% due 08/01/2012 .................. 847 $ 1,210 Redding, Joint Powers Financing Authority, Lease Revenue, (2004 Civic Center Refunding and Parks Project), Series B, (AMBAC Insured), 5.000% due 03/01/2015 .................. $ 1,281 1,590 Redlands, COP, (AMBAC Insured), 5.000% due 09/01/2017 .................. 1,659 200 Redondo Beach, Public Financing Authority, Revenue Bonds, (South Bay Center Redevelopment Project), 6.750% due 07/01/2006 .................. 201 2,090 Richmond, Joint Powers Financing Authority, Tax Allocation Revenue, Series A, (MBIA Insured), 5.500% due 09/01/2017 .................. 2,234 Riverside County, COP, (Historic Courthouse Refunding Project), Series B, (FGIC Insured): 1,015 5.000% due 11/01/2018 .................. 1,066 1,105 5.000% due 11/01/2019 .................. 1,156 1,100 Riverside, Special Tax Revenue, (Community Facilities District No. 90-1-A), (MBIA Insured), 5.500% due 09/01/2013 .................. 1,190 1,040 Sacramento, Limited Obligation Bonds, Reassessment District II No. 2006-1, (Willow Creek II & North Notomas), 5.000% due 09/02/2020** ................ 1,043 1,565 San Bernardino, Redevelopment Agency, Tax Allocation Revenue, (San Sevaine Redevelopment Project), Series A, (Radian Insured), 5.000% due 09/01/2018 .................. 1,627 San Diego County, COP, (Burnham Institute for Medical Research): 1,000 5.000% due 09/01/2016 .................. 1,025 1,000 5.000% due 09/01/2020 .................. 1,007 1,840 San Diego County, COP, (Motorola Refunding Project), (AMBAC Insured), 5.000% due 02/01/2011 .................. 1,942 3,000 San Francisco, Bay Area Rapid Transit District, Sales Tax Revenue, Series A, (MBIA Insured), 5.000% due 07/01/2018 .................. 3,166 1,200 San Jose, Financing Authority, Lease Revenue, (Convention Center Project), Series F, (MBIA Insured), 5.000% due 09/01/2016 .................. 1,265 Santa Maria, Redevelopment Agency, Lease Revenue, (Town Center & Westside Parking Facilities Project), (AMBAC Insured): 165 5.000% due 06/01/2013 .................. 176 1,085 5.250% due 06/01/2015 .................. 1,162 1,160 Shasta, Joint Powers Financing Authority, Lease Revenue, (County Administration Building Project), Series A, (MBIA Insured), 5.250% due 04/01/2017 .................. 1,228
See Notes to Financial Statements. 73 Portfolio of Investments (continued) CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND April 30, 2006 (unaudited)
PRINCIPAL AMOUNT VALUE (000S) (000S) - --------- ----------- MUNICIPAL BONDS AND NOTES (CONTINUED) CALIFORNIA (CONTINUED) $ 1,000 South Gate, Public Financing Authority, Tax Allocation Revenue, (South Gate Redevelopment Project No. 1), (XLCA Insured), 5.000% due 09/01/2016 .................. $ 1,052 995 Southern California Home Financing Authority, MFHR, (The Fountains Project), Series A, AMT, (FNMA Collateral), 5.400% due 01/01/2027 .................. 998 1,430 Southern California Public Power Authority, San Juan Power Revenue, (San Juan Unit 3 Project), Series A, (FSA Insured), 5.000% due 01/01/2020 .................. 1,496 910 Stanton, MFHR, (Continental Gardens LP Project), AMT, (FNMA Collateral), 5.625% due 08/01/2029 .................. 941 1,305 Stockton, Community Facilities District No. 1, Supplemental Tax Revenue, (Mello Roos- Weston Ranch), Series A, 5.500% due 09/01/2009 .................. 1,338 Sunnyvale, Solid Waste Revenue, (AMBAC Insured): 1,000 5.500% due 10/01/2014 .................. 1,076 1,000 5.500% due 10/01/2016 .................. 1,070 1,225 Sweetwater, Union High School District, COP, (MBIA Insured), 5.000% due 09/01/2020 .................. 1,277 1,000 Tracy, Area Public Facilities Financing Agency, Special Tax Revenue, (Community Facilities District No. 87-1-H), (MBIA Insured), 5.875% due 10/01/2013 .................. 1,043 1,000 Victor Valley, Union High School District, COP, (Victor Valley Junior High School Project), (AMBAC Insured), 5.000% due 11/15/2017 .................. 1,056 ----------- 115,021 ----------- GUAM - 0.9% 1,000 Guam Government, GO, Series A, (FSA Insured), 5.500% due 12/01/2011 .................. 1,088 ----------- PUERTO RICO - 0.8% 1,000 Puerto Rico Public Building Authority, Government Facilities Revenue, Series K, (MBIA Insured), 4.000% due 07/01/2026 .................. 1,003 ----------- Total Municipal Bonds and Notes (Cost $116,299) ........................ 117,112 ----------- SHORT-TERM MUNICIPAL BONDS - 2.8% 2,400 Adelanto, Public Utilities Authority, Water & Sewer Revenue, (Utilities System Project), Series A, (AMBAC Insured), 3.780% due 11/01/2034+ ................. 2,400 1,000 Madera, Irrigation Financing Authority, Water Revenue, Series A, (XLCA Insured), 3.780% due 01/01/2036+ ................. 1,000 ----------- Total Short-Term Municipal Bonds (Cost $3,400) .......................... 3,400 ----------- TOTAL INVESTMENTS++ (Cost $119,699*) ..................... 99.2% $ 120,512 OTHER ASSETS (LIABILITIES) (NET) ......................... 0.8 913 ----- ----------- NET ASSETS ............................................... 100.0% $ 121,425 ===== ===========
- ---------- * Aggregate cost for federal tax purposes. ** Security purchased on a when-issued basis. + Securities with a maturity date of more than 13 months have variable rates and/or demand features which qualify them as short-term securities. Securities are secured by bank letters of credit or guarantees by certain corporations. The interest rates shown are those in effect at April 30, 2006. These rates change periodically based on specified market rates or indices. ++ All securities segregated as collateral for futures contracts or when-issued securities. The California Insured Intermediate Municipal Fund had the following industry concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): Public Facilities-Public Buildings 16.2% Special Tax Revenue-Tax Allocation/Increment 11.0%
The California Insured Intermediate Municipal Fund had the following insurance concentrations greater than 10.0% at April 30, 2006 (as a percentage of the total net assets of the Fund): MBIA 25.8% AMBAC 25.2% FGIC 16.9% FSA 13.0%
UNREALIZED NUMBER OF VALUE APPRECIATION CONTRACTS (000S) (000S) - --------- ------- ------------ FUTURES CONTRACTS-SHORT POSITION 98 U.S. 5 Year Treasury Note, December 2006 .......................... $10,207 $44 ======= ===
GLOSSARY OF TERMS AMBAC -- American Municipal Bond Assurance Corporation AMT -- Alternative Minimum Tax COP -- Certificates of Participation FGIC -- Federal Guaranty Insurance Corporation FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance GO -- General Obligation IBC -- Insured Bond Certificate MBIA -- Municipal Bond Investors Assurance MFHR -- Multi-family Housing Revenue Radian -- Radian Asset Assurance Inc. TCRS -- Transferable Custodial Receipts XLCA -- XL Capital Assurance 74 See Notes to Financial Statements. This Page Left Blank Intentionally. 75 Statements of Assets and Liabilities WM GROUP OF FUNDS April 30, 2006 (unaudited) (In thousands)
SMALL EQUITY GROWTH & WEST COAST MID CAP CAP REIT INCOME INCOME EQUITY STOCK GROWTH VALUE FUND FUND FUND FUND FUND FUND FUND -------- ---------- ---------- ---------- ---------- ---------- -------- ASSETS: Investments, at cost ................... $356,052 $3,082,440 $1,896,746 $1,502,299 $ 801,799 $2,248,003 $331,381 ======== ========== ========== ========== ========== ========== ======== Investments, at value: Unaffiliated securities ............. $460,397 $3,456,615 $2,334,561 $1,891,445 $ 969,946 $2,378,019 $306,783 Affiliated securities ............... -- -- -- 15,046 -- -- -- Investments held as collateral for securities loaned ................ 43,913 200,715 150,151 195,406 95,978 129,442 49,923 -------- ---------- ---------- ---------- ---------- ---------- -------- Total Investments ................... 504,310 3,657,330 2,484,712 2,101,897 1,065,924 2,507,461 356,706 Cash ................................... -- 1 -- -- -- 49 36 Unrealized appreciation of forward foreign currency contracts .......... -- -- -- -- -- -- -- Dividends and/or interest receivable ... 761 6,141 2,626 675 835 1,280 957 Receivable for Fund shares sold ........ 402 17,577 1,847 5,488 2,518 1,489 119 Receivable for investment securities sold ..................... 1,059 52,082 17,744 419 -- 6,226 4,848 Prepaid expenses ....................... 7 48 39 28 14 33 5 -------- ---------- ---------- ---------- ---------- ---------- -------- Total Assets ........................ 506,539 3,733,179 2,506,968 2,108,507 1,069,291 2,516,538 362,671 -------- ---------- ---------- ---------- ---------- ---------- -------- LIABILITIES: Payable upon return of securities loaned .............................. 43,913 200,715 150,151 195,406 95,978 129,442 49,923 Unrealized depreciation of forward foreign currency contracts .......... -- -- -- -- -- -- -- Payable for Fund shares redeemed ....... 43 2,469 610 1,094 249 554 71 Payable for when-issued securities purchased ........................... -- -- -- -- -- -- -- Payable for investment securities purchased ........................... 4,907 58,477 3,303 3,278 4,717 5,340 2,092 Investment advisory fee payable ........ 299 1,415 978 740 574 1,377 217 Shareholder servicing and distribution fees payable ........... 18 647 184 350 63 106 8 Transfer agent fees payable ............ 6 99 48 70 9 54 3 Variation margin ....................... -- -- -- -- -- -- -- Dividends payable ...................... -- -- -- -- -- -- -- Due to custodian ....................... -- -- -- -- -- -- -- Accrued expenses and other payables ............................ 56 445 339 404 98 424 23 -------- ---------- ---------- ---------- ---------- ---------- -------- Total Liabilities ................... 49,242 264,267 155,613 201,342 101,688 137,297 52,337 -------- ---------- ---------- ---------- ---------- ---------- -------- NET ASSETS ............................. $457,297 $3,468,912 $2,351,355 $1,907,165 $ 967,603 $2,379,241 $310,334 ======== ========== ========== ========== ========== ========== ======== NET ASSETS CONSIST OF: Undistributed net investment income/ (accumulated net investment loss) ... $ (886) $ 3,276 $ 9,696 $ 1,366 $ 1,680 $ 1,990 $ 1,660 Accumulated net realized gain/(loss) on investment transactions .......... 28,124 87,408 (37,994) 12,725 29,402 (307,648) 31,068 Net unrealized appreciation/ (depreciation) of investments ....... 148,258 574,890 587,966 599,598 264,125 259,462 25,332 Paid-in capital ........................ 281,801 2,803,338 1,791,687 1,293,476 672,396 2,425,437 252,274 -------- ---------- ---------- ---------- ---------- ---------- -------- Total Net Assets .................... $457,297 $3,468,912 $2,351,355 $1,907,165 $ 967,603 $2,379,241 $310,334 ======== ========== ========== ========== ========== ========== ========
76 See Notes to Financial Statements.
CALIFORNIA SMALL SHORT U.S. TAX- INSURED CAP INTERNATIONAL TERM GOVERNMENT HIGH EXEMPT CALIFORNIA INTERMEDIATE GROWTH GROWTH INCOME SECURITIES INCOME YIELD BOND MUNICIPAL MUNICIPAL FUND FUND FUND FUND FUND FUND FUND FUND FUND - -------- ------------- -------- ---------- ---------- -------- -------- ---------- ------------ $421,192 $1,095,632 $258,101 $1,827,715 $1,257,604 $839,737 $186,281 $383,503 $119,699 ======== ========== ======== ========== ========== ======== ======== ======== ======== $423,695 $1,227,436 $253,444 $1,768,540 $1,239,465 $854,744 $197,097 $397,363 $120,512 -- -- -- -- -- 18,177 -- -- -- 82,004 191,138 -- -- -- -- -- -- -- - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- 505,699 1,418,574 253,444 1,768,540 1,239,465 872,921 197,097 397,363 120,512 1 -- 1 1 -- 13,573 945 70 71 -- 556 -- -- -- -- -- -- -- 109 5,509 2,835 8,897 16,412 16,989 3,144 5,359 1,583 651 1,169 34 491 535 3,775 772 2,258 1,002 7,593 2,254 -- -- 5,902 20 -- 97 -- 6 15 4 28 20 13 3 6 2 - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- 514,059 1,428,077 256,318 1,777,957 1,262,334 907,291 201,961 405,153 123,170 - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- 82,004 191,138 -- -- -- -- -- -- -- -- 551 -- -- -- -- -- -- -- 65 120 521 908 1,278 387 358 618 450 -- -- -- -- -- -- 2,000 2,805 1,040 5,114 6,243 -- -- 4,840 17,688 -- -- -- 297 1,792 103 729 515 383 82 164 50 34 31 30 113 132 135 60 177 63 20 11 10 19 20 16 6 10 3 -- -- 16 -- -- -- 21 10 15 -- -- 35 169 413 785 245 487 89 -- 467 -- -- 132 -- -- -- -- 112 177 29 120 121 85 50 75 35 - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- 87,646 200,530 744 2,058 7,451 19,479 2,822 4,346 1,745 - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- $426,413 $1,227,547 $255,574 $1,775,899 $1,254,883 $887,812 $199,139 $400,807 $121,425 ======== ========== ======== ========== ========== ======== ======== ======== ======== $ (1,099) $ (2,175) $ 164 $ (2,535) $ (557) $ 3,227 $ 217 $ 146 $ 60 (58,121) 12,058 (4,070) (23,924) (13,346) 14,356 272 1,150 20 84,507 323,104 (4,619) (59,175) (18,139) 33,189 10,904 13,862 857 401,126 894,560 264,099 1,861,533 1,286,925 837,040 187,746 385,649 120,488 - -------- ---------- -------- ---------- ---------- -------- -------- -------- -------- $426,413 $1,227,547 $255,574 $1,775,899 $1,254,883 $887,812 $199,139 $400,807 $121,425 ======== ========== ======== ========== ========== ======== ======== ======== ========
See Notes to Financial Statements. 77 Statements of Assets and Liabilities (continued) WM GROUP OF FUNDS April 30, 2006 (unaudited) (In thousands)
WEST SMALL EQUITY GROWTH & COAST MID CAP CAP REIT INCOME INCOME EQUITY STOCK GROWTH VALUE FUND FUND FUND FUND FUND FUND FUND -------- ---------- ---------- -------- -------- ---------- -------- NET ASSETS: Class A Shares ......................... $ 25,007 $1,270,674 $ 590,185 $865,459 $189,282 $ 143,023 $ 14,117 ======== ========== ========== ======== ======== ========== ======== Class B Shares ......................... $ 10,584 $ 293,220 $ 74,592 $190,358 $ 30,251 $ 88,870 $ 3,289 ======== ========== ========== ======== ======== ========== ======== Class C Shares ......................... $ 5,763 $ 203,788 $ 2,271 $ 20,164 $ 7,501 $ 2,767 $ 2,592 ======== ========== ========== ======== ======== ========== ======== Class I Shares ......................... $415,943 $1,700,951 $1,684,307 $831,184 $740,569 $2,144,581 $290,336 ======== ========== ========== ======== ======== ========== ======== Class R-1 Shares ....................... $ -- $ 279 $ -- $ -- $ -- $ -- $ -- ======== ========== ========== ======== ======== ========== ======== Class R-2 Shares ....................... $ -- $ -- $ -- $ -- $ -- $ -- $ -- ======== ========== ========== ======== ======== ========== ======== SHARES OUTSTANDING: Class A Shares ......................... 1,312 59,158 22,382 20,396 9,287 8,604 1,152 ======== ========== ========== ======== ======== ========== ======== Class B Shares ......................... 557 13,752 2,930 5,043 1,567 6,000 271 ======== ========== ========== ======== ======== ========== ======== Class C Shares ......................... 303 9,631 91 532 389 185 213 ======== ========== ========== ======== ======== ========== ======== Class I Shares ......................... 21,767 79,175 63,686 19,412 35,897 123,655 23,583 ======== ========== ========== ======== ======== ========== ======== Class R-1 Shares ....................... -- 13 -- -- -- -- -- ======== ========== ========== ======== ======== ========== ======== Class R-2 Shares ....................... -- -- -- -- -- -- -- ======== ========== ========== ======== ======== ========== ======== CLASS A SHARES:** Net asset value per share of beneficial interest outstanding* .... $ 19.06 $ 21.48 $ 26.37 $ 42.43 $ 20.38 $ 16.62 $ 12.25 ======== ========== ========== ======== ======== ========== ======== Maximum sales charge ................... 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% ======== ========== ========== ======== ======== ========== ======== Maximum offering price per share of beneficial interest outstanding ..... $ 20.17 $ 22.73 $ 27.90 $ 44.90 $ 21.57 $ 17.59 $ 12.96 ======== ========== ========== ======== ======== ========== ======== CLASS B SHARES:** Net asset value and offering price per share of beneficial interest outstanding* ........................ $ 19.00 $ 21.32 $ 25.46 $ 37.75 $ 19.31 $ 14.81 $ 12.12 ======== ========== ========== ======== ======== ========== ======== CLASS C SHARES:** Net asset value and offering price per share of beneficial interest outstanding* ........................ $ 19.00 $ 21.16 $ 25.07 $ 37.88 $ 19.30 $ 14.96 $ 12.14 ======== ========== ========== ======== ======== ========== ======== CLASS I SHARES:** Net asset value, offering and redemption price per share of beneficial interest outstanding ..... $ 19.11 $ 21.48 $ 26.45 $ 42.82 $ 20.63 $ 17.34 $ 12.31 ======== ========== ========== ======== ======== ========== ======== CLASS R-1 SHARES:** Net asset value, offering and redemption price per share of beneficial interest outstanding ..... $ 19.04 $ 21.48 $ 26.37 $ 42.43 $ 20.38 $ 16.62 $ 12.25 ======== ========== ========== ======== ======== ========== ======== CLASS R-2 SHARES:** Net asset value, offering and redemption price per share of beneficial interest outstanding ..... $ 19.04 $ 21.48 $ 26.37 $ 42.43 $ 20.38 $ 16.62 $ 12.25 ======== ========== ========== ======== ======== ========== ========
- ---------- * Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge and/or applicable redemption fees for the International Growth Fund. ** Net asset values and maximum offering prices are not shown in thousands. 78 See Notes to Financial Statements.
CALIFORNIA SMALL SHORT U.S. TAX- INSURED CAP INTERNATIONAL TERM GOVERNMENT HIGH EXEMPT CALIFORNIA INTERMEDIATE GROWTH GROWTH INCOME SECURITIES INCOME YIELD BOND MUNICIPAL MUNICIPAL FUND FUND FUND FUND FUND FUND FUND FUND FUND - -------- ------------- -------- ---------- -------- -------- -------- ---------- ------------ $120,439 $ 105,830 $ 32,653 $ 106,736 $147,116 $183,966 $169,423 $249,169 $61,597 ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 10,030 $ 10,328 $ 19,725 $ 101,354 $111,278 $ 75,410 $ 26,964 $147,670 $52,991 ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 1,485 $ 3,972 $ 7,876 $ 7,669 $ 10,730 $ 46,797 $ 2,752 $ 3,968 $ 6,837 ======== ========== ======== ========== ======== ======== ======== ======== ======= $294,459 $1,107,417 $195,320 $1,560,140 $985,759 $581,595 $ -- $ -- $ -- ======== ========== ======== ========== ======== ======== ======== ======== ======= $ -- $ -- $ -- $ -- $ -- $ 44 $ -- $ -- $ -- ======== ========== ======== ========== ======== ======== ======== ======== ======= $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- ======== ========== ======== ========== ======== ======== ======== ======== ======= 7,520 8,203 14,181 10,285 16,426 21,342 22,448 22,470 5,714 ======== ========== ======== ========== ======== ======== ======== ======== ======= 723 838 8,566 9,773 12,387 8,707 3,572 13,317 4,915 ======== ========== ======== ========== ======== ======== ======== ======== ======= 105 327 3,419 740 1,194 5,405 365 358 634 ======== ========== ======== ========== ======== ======== ======== ======== ======= 17,712 85,389 84,809 150,298 109,845 67,573 -- -- -- ======== ========== ======== ========== ======== ======== ======== ======== ======= -- -- -- -- -- 5 -- -- -- ======== ========== ======== ========== ======== ======== ======== ======== ======= -- -- -- -- -- -- -- -- -- ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 16.02 $ 12.90 $ 2.30 $ 10.38 $ 8.96 $ 8.62 $ 7.55 $ 11.09 $ 10.78 ======== ========== ======== ========== ======== ======== ======== ======== ======= 5.50% 5.50% 3.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 16.95 $ 13.65 $ 2.38 $ 10.87 $ 9.38 $ 9.03 $ 7.91 $ 11.61 $ 11.29 ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 13.88 $ 12.33 $ 2.30 $ 10.37 $ 8.98 $ 8.66 $ 7.55 $ 11.09 $ 10.78 ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 14.10 $ 12.16 $ 2.30 $ 10.36 $ 8.98 $ 8.66 $ 7.55 $ 11.09 $ 10.78 ======== ========== ======== ========== ======== ======== ======== ======== ======= $ 16.62 $ 12.97 $ 2.30 $ 10.38 $ 8.97 $ 8.61 ======== ========== ======== ========== ======== ======== $ 16.01 $ 12.90 $ 2.30 $ 10.38 $ 8.96 $ 8.62 ======== ========== ======== ========== ======== ======== $ 16.01 $ 12.90 $ 2.30 $ 10.38 $ 8.96 $ 8.62 ======== ========== ======== ========== ======== ========
See Notes to Financial Statements. 79 Statements of Operations WM GROUP OF FUNDS For the Six Months Ended April 30, 2006 (unaudited) (In thousands)
WEST SMALL EQUITY GROWTH & COAST MID CAP CAP REIT INCOME INCOME EQUITY STOCK GROWTH VALUE FUND FUND FUND FUND FUND FUND FUND ------- -------- -------- -------- -------- ------- ------- INVESTMENT INCOME: Dividends .............................. $ 4,884 $ 31,899 $ 25,714 $ 10,889 $ 6,412 $ 9,955 $ 4,043 Interest ............................... 526 5,472 1,151 1,225 1,089 1,644 263 Foreign withholding taxes .............. (38) (226) (34) -- (32) (139) (251) Securities lending income .............. 44 436 53 182 66 85 206 ------- -------- -------- -------- -------- ------- ------- Total investment income .......... 5,416 37,581 26,884 12,296 7,535 11,545 4,261 ------- -------- -------- -------- -------- ------- ------- EXPENSES: Investment advisory fee ................ 1,769 7,651 6,307 4,216 3,327 7,559 1,368 Custodian fees ......................... 6 32 40 35 12 80 14 Legal and audit fees ................... 19 41 39 30 24 33 19 Registration and filing fees ........... 26 82 22 49 31 82 27 Printing and postage expenses .......... 68 297 114 259 56 87 10 Other .................................. 18 188 125 135 36 110 12 Shareholder servicing and distribution fees: Class A Shares ...................... 27 1,319 728 1,005 145 167 18 Class B Shares ...................... 49 1,289 396 907 135 475 16 Class C Shares ...................... 27 830 10 85 29 12 13 Class R-1 Shares .................... -- -- -- -- -- -- -- Class R-2 Shares .................... -- -- -- -- -- -- -- Transfer agent fees: Class A Shares ...................... 21 390 223 307 40 184 14 Class B Shares ...................... 12 236 135 220 36 230 6 Class C Shares ...................... 4 78 3 13 4 3 2 Recordkeeping/administration fees: Class R-1 Shares .................... -- -- -- -- -- -- -- Class R-2 Shares .................... -- -- -- -- -- -- -- ------- -------- -------- -------- -------- ------- ------- Total expenses ................... 2,046 12,433 8,142 7,261 3,875 9,022 1,519 Fees reduced by custodian credits ...... (1) (5) (1) (1) (1) (15) (1) ------- -------- -------- -------- -------- ------- ------- Net expenses ..................... 2,045 12,428 8,141 7,260 3,874 9,007 1,518 ------- -------- -------- -------- -------- ------- ------- NET INVESTMENT INCOME/(LOSS) ........... 3,371 25,153 18,743 5,036 3,661 2,538 2,743 ------- -------- -------- -------- -------- ------- ------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) on: Unaffiliated security transactions .. 24,809 86,502 14,891 13,565 32,574 12,346 30,285 Affiliated secuity transactions ..... -- -- -- (149) -- -- -- Forward foreign currency contracts and foreign currency transactions ..................... -- -- -- -- -- (110) (63) Futures contracts ................... -- -- -- -- -- -- -- ------- -------- -------- -------- -------- ------- ------- Net realized gain/(loss) on investment transactions ....... 24,809 86,502 14,891 13,416 32,574 12,236 30,222 ------- -------- -------- -------- -------- ------- ------- Capital gain distributions received .... 3,324 1,019 -- 382 -- -- 30 ------- -------- -------- -------- -------- ------- ------- Net change in unrealized appreciation/ depreciation of: Securities .......................... 28,935 206,954 171,903 168,769 85,611 82,006 3,755 Forward foreign currency contracts .. -- -- -- -- -- 14 11 Foreign currency, futures contracts and other assets and liabilities ...................... -- -- -- -- -- (4) -- ------- -------- -------- -------- -------- ------- ------- Net change in unrealized appreciation/ depreciation of investment transactions ........................ 28,935 206,954 171,903 168,769 85,611 82,016 3,766 ------- -------- -------- -------- -------- ------- ------- Net realized and unrealized gain/(loss) on investments .......... 57,068 294,475 186,794 182,567 118,185 94,252 34,018 ------- -------- -------- -------- -------- ------- ------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... $60,439 $319,628 $205,537 $187,603 $121,846 $96,790 $36,761 ======= ======== ======== ======== ======== ======= =======
- ---------- * Amount represents less than $500. 80 See Notes to Financial Statements.
CALIFORNIA U.S. INSURED SMALL CAP INTERNATIONAL SHORT TERM GOVERNMENT HIGH TAX-EXEMPT CALIFORNIA INTERMEDIATE GROWTH GROWTH INCOME SECURITIES INCOME YIELD BOND MUNICIPAL MUNICIPAL FUND FUND FUND FUND FUND FUND FUND FUND FUND - --------- ------------- ---------- ---------- -------- ------- ---------- ---------- ------------ $ 227 $ 9,796 $ -- $ -- $ -- $ 932 $ -- $ -- $ -- 325 753 6,006 46,031 37,687 33,055 5,220 10,255 2,622 -- (774) -- -- -- (51) -- -- -- 431 301 -- -- -- -- -- -- -- ------- -------- ------- -------- -------- ------- ------- ------- ------ 983 10,076 6,006 46,031 37,687 33,936 5,220 10,255 2,622 ------- -------- ------- -------- -------- ------- ------- ------- ------ 1,617 4,127 632 4,512 3,058 2,245 504 999 315 23 327 4 34 11 73 5 5 4 20 25 18 32 26 24 17 19 17 28 49 24 25 35 33 21 13 12 45 40 12 45 44 43 10 47 14 34 31 16 71 60 40 15 24 9 121 91 41 142 183 186 214 301 78 50 35 108 556 595 369 142 773 283 6 11 50 36 53 208 12 21 36 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 110 49 26 74 83 61 35 40 8 30 15 17 65 64 34 7 27 11 1 2 6 3 7 16 1 1 1 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------- -------- ------- -------- -------- ------- ------- ------- ------ 2,085 4,802 954 5,595 4,219 3,332 983 2,270 788 (3) (2) --* --* (10) (65) (4) (2) (2) ------- -------- ------- -------- -------- ------- ------- ------- ------ 2,082 4,800 954 5,595 4,209 3,267 979 2,268 786 ------- -------- ------- -------- -------- ------- ------- ------- ------ (1,099) 5,276 5,052 40,436 33,478 30,669 4,241 7,987 1,836 ------- -------- ------- -------- -------- ------- ------- ------- ------ 7,972 31,669 (238) (738) 3,511 46,148 333 1,283 (77) -- -- -- -- -- -- -- -- -- -- (176) -- -- -- 24 -- -- -- -- -- 269 -- -- -- 304 (152) 115 ------- -------- ------- -------- -------- ------- ------- ------- ------ 7,972 31,493 31 (738) 3,511 46,172 637 1,131 38 ------- -------- ------- -------- -------- ------- ------- ------- ------ 4 -- -- -- -- 20 -- -- -- ------- -------- ------- -------- -------- ------- ------- ------- ------ 45,292 162,567 (1,222) (22,227) (16,260) (9,936) (596) (1,305) (545) -- (38) -- -- -- -- -- -- -- -- 203 (128) -- -- 26 (190) (61) 26 ------- -------- ------- -------- -------- ------- ------- ------- ------ 45,292 162,732 (1,350) (22,227) (16,260) (9,910) (786) (1,366) (519) ------- -------- ------- -------- -------- ------- ------- ------- ------ 53,268 194,225 (1,319) (22,965) (12,749) 36,282 (149) (235) (481) ------- -------- ------- -------- -------- ------- ------- ------- ------ $52,169 $199,501 $ 3,733 $ 17,471 $ 20,729 $66,951 $ 4,092 $ 7,752 $1,355 ======= ======== ======= ======== ======== ======= ======= ======= ======
See Notes to Financial Statements. 81 Statements of Changes in Net Assets WM GROUP OF FUNDS (In thousands)
REIT FUND EQUITY INCOME FUND GROWTH & INCOME FUND ----------------------- ----------------------- ----------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 ----------- ---------- ----------- ---------- ----------- ---------- Net investment income .................. $ 3,371 $ 11,284 $ 25,153 $ 44,832 $ 18,743 $ 37,167 Net realized gain on investment transactions ............. 24,809 7,623 86,502 86,726 14,891 45,639 Capital gain distributions received .... 3,324 2,695 1,019 1,209 -- -- Net change in unrealized appreciation/ depreciation of investments ......... 28,935 34,474 206,954 125,418 171,903 53,674 -------- -------- ---------- ---------- ---------- ---------- Net increase in net assets resulting from operations ........... 60,439 56,076 319,628 258,185 205,537 136,480 Distributions to shareholders from: Net investment income: Class A Shares ................... (243) (345) (9,112) (12,793) (6,969) (6,506) Class B Shares ................... (75) (127) (1,167) (2,100) (92) (25) Class C Shares ................... (44) (79) (894) (978) (9) (4) Class I Shares ................... (5,532) (10,165) (15,656) (25,533) (28,013) (21,264) Class R-1 Shares ................. -- -- -- -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- Net realized gains on investments: Class A Shares ................... (443) (240) (29,129) -- -- -- Class B Shares ................... (212) (144) (7,506) -- -- -- Class C Shares ................... (120) (86) (4,471) -- -- -- Class I Shares ................... (9,098) (7,193) (41,428) -- -- -- Class R-1 Shares ................. -- -- -- -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions: Class A Shares ................... 4,680 7,655 308,560 383,168 (21,711) (41,061) Class B Shares ................... 720 2,109 49,014 62,131 (12,305) (19,614) Class C Shares ................... 124 1,002 63,788 88,699 297 218 Class I Shares ................... (14,045) 36,671 299,467 261,151 (404,030) 495,612 Class R-1 Shares ................. -- -- 273 -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- -------- -------- ---------- ---------- ---------- ---------- Net increase/(decrease) in net assets .. 36,151 85,134 931,367 1,011,930 (267,295) 543,836 NET ASSETS: Beginning of period/year ............... 421,146 336,012 2,537,545 1,525,615 2,618,650 2,074,814 -------- -------- ---------- ---------- ---------- ---------- End of period/year ..................... $457,297 $421,146 $3,468,912 $2,537,545 $2,351,355 $2,618,650 ======== ======== ========== ========== ========== ========== Undistributed net investment income/ (accumulated net investment loss) at end of period/year ............... $ (886) $ 1,637 $ 3,276 $ 4,952 $ 9,696 $ 26,036 ======== ======== ========== ========== ========== ==========
82 See Notes to Financial Statements.
WEST COAST EQUITY FUND MID CAP STOCK FUND GROWTH FUND SMALL CAP VALUE FUND - ----------------------- ----------------------- ----------------------- ----------------------- SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 - ----------- ---------- ----------- ---------- ----------- ---------- ----------- ---------- $ 5,036 $ 10,166 $ 3,661 $ 12,829 $ 2,538 $ 8,416 $ 2,743 $ 2,892 13,416 37,872 32,574 56,510 12,236 66,759 30,222 18,587 382 1,036 -- 2 -- -- 30 1 168,769 124,947 85,611 55,365 82,016 82,424 3,766 2,884 - ---------- ---------- -------- -------- ---------- ---------- -------- -------- 187,603 174,021 121,846 124,706 96,790 157,599 36,761 24,364 (2,474) (3,556) (1,417) (100) -- (460) (89) (55) -- -- (150) -- -- (280) -- (6) -- (3) (52) -- -- (7) (6) (2) (4,379) (4,933) (11,820) (2,895) (2,024) (6,132) (2,800) (2,805) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (18,344) (7,696) (6,174) (2,119) -- -- (768) -- (4,676) (1,922) (1,651) (732) -- -- (171) -- (403) (126) (307) (69) -- -- (138) -- (15,468) (6,454) (48,230) (21,862) -- -- (17,591) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 64,027 41,184 88,426 25,110 8,571 (8,352) (894) 11,566 8,574 10,799 4,347 1,870 (11,927) (23,335) 177 2,358 5,280 3,521 2,823 2,289 501 (6) 54 2,082 149,251 45,817 (68,437) 64,931 554,950 93,923 (43,503) 29,467 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ---------- ---------- -------- -------- ---------- ---------- -------- -------- 368,991 250,652 79,204 191,129 646,861 212,950 (28,968) 66,969 1,538,174 1,287,522 888,399 697,270 1,732,380 1,519,430 339,302 272,333 - ---------- ---------- -------- -------- ---------- ---------- -------- -------- $1,907,165 $1,538,174 $967,603 $888,399 $2,379,241 $1,732,380 $310,334 $339,302 ========== ========== ======== ======== ========== ========== ======== ======== $ 1,366 $ 3,183 $ 1,680 $ 11,458 $ 1,990 $ 1,476 $ 1,660 $ 1,812 ========== ========== ======== ======== ========== ========== ======== ========
See Notes to Financial Statements. 83 Statements of Changes in Net Assets (continued) WM GROUP OF FUNDS (In thousands)
SMALL CAP INTERNATIONAL SHORT TERM GROWTH FUND GROWTH FUND INCOME FUND ----------------------- ----------------------- ----------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 ----------- ---------- ----------- ---------- ----------- ---------- Net investment income/(loss) ........... $ (1,099) $ (2,251) $ 5,276 $ 10,174 $ 5,052 $ 9,220 Net realized gain/(loss) on investment transactions ........................ 7,972 (47,989) 31,493 18,824 31 643 Capital gain distributions received .... 4 1 -- -- -- -- Net increase from payment by the Advisor ............................. -- 1,321 -- -- -- -- Net change in unrealized appreciation/ depreciation of investments ......... 45,292 73,015 162,732 87,039 (1,350) (7,518) -------- -------- ---------- -------- -------- -------- Net increase in net assets resulting from operations ..................... 52,169 24,097 199,501 116,037 3,733 2,345 Distributions to shareholders from: Net investment income: Class A Shares ................... -- -- (881) (364) (594) (1,541) Class B Shares ................... -- -- (33) -- (309) (742) Class C Shares ................... -- -- (19) (4) (147) (453) Class I Shares ................... -- -- (14,503) (7,523) (3,893) (6,799) Class R-1 Shares ................. -- -- -- -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- Net realized gains on investments: Class A Shares ................... -- -- -- -- -- -- Class B Shares ................... -- -- -- -- -- -- Class C Shares ................... -- -- -- -- -- -- Class I Shares ................... -- -- -- -- -- -- Class R-1 Shares ................. -- -- -- -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions: Class A Shares ................... 20,498 (12,015) 36,786 9,765 (3,485) (16,583) Class B Shares ................... (1,185) (2,939) 4,247 579 (3,791) (7,458) Class C Shares ................... 376 42 2,410 634 (5,563) (5,044) Class I Shares ................... 17,182 (15,365) 157,891 140,594 635 31,452 Class R-1 Shares ................. -- -- -- -- -- -- Class R-2 Shares ................. -- -- -- -- -- -- Redemption fees .................. -- -- 10 10 -- -- -------- -------- ---------- -------- -------- -------- Net increase/(decrease) in net assets .. 89,040 (6,180) 385,409 259,728 (13,414) (4,823) NET ASSETS: Beginning of period/year ............... 337,373 343,553 842,138 582,410 268,988 273,811 -------- -------- ---------- -------- -------- -------- End of period/year ..................... $426,413 $337,373 $1,227,547 $842,138 $255,574 $268,988 ======== ======== ========== ======== ======== ======== Undistributed net investment income/ (accumulated net investment loss) at end of period/year .................. $ (1,099) $ -- $ (2,175) $ 7,985 $ 164 $ 55 ======== ======== ========== ======== ======== ========
84 See Notes to Financial Statements.
U.S. GOVERNMENT SECURITIES FUND INCOME FUND HIGH YIELD FUND TAX-EXEMPT BOND FUND - ----------------------- ----------------------- ----------------------- ----------------------- SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 - ----------- ---------- ----------- ---------- ----------- ---------- ----------- ---------- $ 40,436 $ 70,544 $ 33,478 $ 59,461 $ 30,669 $ 53,962 $ 4,241 $ 8,898 (738) 2,784 3,511 1,785 46,172 9,623 637 3,616 -- -- -- -- 20 -- -- -- -- -- -- -- -- -- -- -- (22,227) (52,278) (16,260) (50,548) (9,910) (13,197) (786) (8,065) - ---------- ---------- ---------- ---------- -------- -------- -------- -------- 17,471 21,050 20,729 10,698 66,951 50,388 4,092 4,449 (2,581) (5,482) (3,931) (7,648) (4,913) (7,174) (3,686) (7,693) (2,120) (4,948) (2,760) (6,248) (2,180) (4,795) (505) (1,151) (138) (222) (244) (504) (1,229) (2,317) (43) (95) (38,715) (67,624) (27,177) (49,194) (19,988) (41,288) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (3,337) (2,041) -- -- -- -- -- -- (566) (392) -- -- -- -- -- -- (50) (40) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (12,250) (10,238) 1,126 6,391 66,044 26,776 (2,259) (3,754) (19,249) (31,325) (15,635) (17,900) (1,679) (5,927) (2,532) (4,309) 1,006 700 83 (310) 6,416 5,421 446 (1,180) (59,679) 431,064 92,428 108,913 (33,369) 65,992 -- -- -- -- -- -- 44 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ---------- ---------- ---------- ---------- -------- -------- -------- -------- (116,255) 332,975 64,619 44,198 76,097 87,076 (8,440) (16,206) 1,892,154 1,559,179 1,190,264 1,146,066 811,715 724,639 207,579 223,785 - ---------- ---------- ---------- ---------- -------- -------- -------- -------- $1,775,899 $1,892,154 $1,254,883 $1,190,264 $887,812 $811,715 $199,139 $207,579 ========== ========== ========== ========== ======== ======== ======== ======== $ (2,535) $ 583 $ (557) $ 77 $ 3,227 $ 868 $ 217 $ 210 ========== ========== ========== ========== ======== ======== ======== ========
See Notes to Financial Statements. 85 Statements of Changes in Net Assets (continued) WM GROUP OF FUNDS (In thousands)
CALIFORNIA INSURED CALIFORNIA INTERMEDIATE MUNICIPAL FUND MUNICIPAL FUND ----------------------- ----------------------- SIX MONTHS SIX MONTHS ENDED ENDED 4/30/06 YEAR ENDED 4/30/06 YEAR ENDED (UNAUDITED) 10/31/05 (UNAUDITED) 10/31/05 ----------- ---------- ----------- ---------- Net investment income .................. $ 7,987 $ 16,236 $ 1,836 $ 3,813 Net realized gain on investment transactions ............. 1,131 5,076 38 282 Net change in unrealized depreciation of investments ......................... (1,366) (10,599) (519) (3,874) -------- -------- -------- -------- Net increase in net assets resulting from operations ..................... 7,752 10,713 1,355 221 Distributions to shareholders from: Net investment income: Class A Shares ................... (5,161) (9,845) (1,028) (2,071) Class B Shares ................... (2,739) (6,202) (716) (1,549) Class C Shares ................... (75) (168) (92) (194) Net realized gains on investments: Class A Shares ................... (3,051) (601) (152) (29) Class B Shares ................... (2,036) (503) (133) (30) Class C Shares ................... (57) (14) (17) (3) Net increase/(decrease) in net assets from Fund share transactions: Class A Shares ................... 10,554 13,478 (3,681) 1,650 Class B Shares ................... (12,816) (30,692) (6,222) (10,250) Class C Shares ................... (618) (556) (594) (1,077) -------- -------- -------- -------- Net decrease in net assets ............. (8,247) (24,390) (11,280) (13,332) NET ASSETS: Beginning of period/year ............... 409,054 433,444 132,705 146,037 -------- -------- -------- -------- End of period/year ..................... $400,807 $409,054 $121,425 $132,705 ======== ======== ======== ======== Undistributed net investment income at end of period/year ............... $ 146 $ 134 $ 60 $ 60 ======== ======== ======== ========
86 See Notes to Financial Statements. Statements of Changes in Net Assets -- Capital Stock Activity WM GROUP OF FUNDS (In thousands) REIT FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- ---------------- ------------------ ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------- ------ --------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 7,220 390 $ 597 34 $ (3,137) (170) $ 4,680 254 Class B ......... 1,816 98 239 14 (1,335) (73) 720 39 Class C ......... 653 36 150 8 (679) (38) 124 6 Class I ......... 2,393 128 14,630 823 (31,068) (1,705) (14,045) (754) Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $12,754 768 $ 508 31 $ (5,607) (341) $ 7,655 458 Class B ......... 4,183 255 224 14 (2,298) (140) 2,109 129 Class C ......... 2,480 150 150 9 (1,628) (98) 1,002 61 Class I ......... 21,378 1,337 17,358 1,056 (2,065) (125) 36,671 2,268
EQUITY INCOME FUND
ISSUED AS REINVESTMENT SOLD OF DIVIDENDS REDEEMED NET INCREASE ----------------- ---------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------- ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $366,737 17,689 $32,878 1,617 $(91,055) (4,393) $308,560 14,913 Class B ......... 64,816 3,153 7,162 356 (22,964) (1,117) 49,014 2,392 Class C ......... 69,583 3,416 4,240 212 (10,035) (492) 63,788 3,136 Class I ......... 246,002 12,021 57,084 2,805 (3,619) (170) 299,467 14,656 Class R-1 ....... 329 16 -- -- (56) (3) 273 13 Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $467,759 23,884 $11,158 573 $(95,749) (4,876) $383,168 19,581 Class B ......... 94,639 4,886 1,809 94 (34,317) (1,776) 62,131 3,204 Class C ......... 96,461 4,973 766 40 (8,528) (440) 88,699 4,573 Class I ......... 237,093 12,184 25,533 1,313 (1,475) (81) 261,151 13,416
GROWTH & INCOME FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ----------------- ---------------- ------------------- ------------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------- ------ --------- ------- --------- ------- SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 22,086 856 $ 6,713 264 $ (50,510) (1,964) $ (21,711) (844) Class B ......... 2,197 88 88 4 (14,590) (585) (12,305) (493) Class C ......... 579 24 9 -- (291) (12) 297 12 Class I ......... 22,912 883 28,013 1,101 (454,955) (17,648) (404,030) (15,664) Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $ 39,189 1,595 $ 6,275 253 $ (86,525) (3,517) $ (41,061) (1,669) Class B ......... 5,243 220 24 1 (24,881) (1,049) (19,614) (828) Class C ......... 729 32 4 -- (515) (22) 218 10 Class I ......... 474,848 19,204 21,264 856 (500) (20) 495,612 20,040
See Notes to Financial Statements. 87 Statements of Changes in Net Assets -- Capital Stock Activity (continued) WM GROUP OF FUNDS (In thousands) WEST COAST EQUITY FUND
ISSUED AS REINVESTMENT SOLD OF DIVIDENDS REDEEMED NET INCREASE ----------------- ---------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------- ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 87,208 2,099 $19,815 487 $(42,996) (1,040) $ 64,027 1,546 Class B ......... 21,539 582 4,311 119 (17,276) (467) 8,574 234 Class C ......... 6,503 176 382 10 (1,605) (44) 5,280 142 Class I ......... 130,557 3,165 19,847 483 (1,153) (27) 149,251 3,621 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $111,137 2,980 $10,883 291 $(80,836) (2,167) $ 41,184 1,104 Class B ......... 29,204 875 1,832 55 (20,237) (605) 10,799 325 Class C ......... 5,584 166 118 4 (2,181) (65) 3,521 105 Class I ......... 36,035 970 11,387 301 (1,605) (43) 45,817 1,228
MID CAP STOCK FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- ---------------- ------------------ ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------- ------ --------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $90,008 4,510 $ 7,090 376 $ (8,672) (444) $ 88,426 4,442 Class B ......... 5,090 274 1,619 91 (2,362) (127) 4,347 238 Class C ......... 2,858 155 314 18 (349) (19) 2,823 154 Class I ......... 6,082 304 60,050 3,143 (134,569) (6,936) (68,437) (3,489) Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $31,725 1,718 $ 2,131 122 $ (8,746) (482) $ 25,110 1,358 Class B ......... 4,988 285 701 42 (3,819) (220) 1,870 107 Class C ......... 2,699 150 61 4 (471) (27) 2,289 127 Class I ......... 46,690 2,637 24,756 1,394 (6,515) (347) 64,931 3,684
GROWTH FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ----------------- --------------- ----------------- ------------------ AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------ ------ -------- ------ --------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 22,129 1,323 $ -- -- $(13,558) (814) $ 8,571 509 Class B ......... 1,879 126 -- -- (13,806) (927) (11,927) (801) Class C ......... 1,085 73 -- -- (584) (39) 501 34 Class I ......... 556,508 32,059 2,024 117 (3,582) (207) 554,950 31,969 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $ 17,252 1,129 $ 448 29 $(26,052) (1,705) $ (8,352) (547) Class B ......... 3,252 237 270 19 (26,857) (1,955) (23,335) (1,699) Class C ......... 1,024 74 6 -- (1,036) (74) (6) -- Class I ......... 100,416 6,423 6,132 383 (12,625) (785) 93,923 6,021
88 See Notes to Financial Statements. Statements of Changes in Net Assets -- Capital Stock Activity (continued) WM GROUP OF FUNDS (In thousands) SMALL CAP VALUE FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- ---------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------- ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 2,728 227 $ 642 55 $ (4,264) (354) $ (894) (72) Class B ......... 745 63 119 10 (687) (58) 177 15 Class C ......... 562 47 135 12 (643) (54) 54 5 Class I ......... 5,333 438 20,391 1,729 (69,227) (5,803) (43,503) (3,636) Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $16,188 1,333 $ 43 3 $ (4,665) (388) $ 11,566 948 Class B ......... 2,833 237 4 -- (479) (40) 2,358 197 Class C ......... 2,506 207 2 -- (426) (37) 2,082 170 Class I ......... 27,162 2,255 2,805 236 (500) (44) 29,467 2,447
SMALL CAP GROWTH FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- --------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------ ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $29,234 1,829 $-- -- $ (8,736) (572) $ 20,498 1,257 Class B ......... 715 53 -- -- (1,900) (142) (1,185) (89) Class C ......... 520 38 -- -- (144) (11) 376 27 Class I ......... 18,837 1,223 -- -- (1,655) (101) 17,182 1,122 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $11,769 873 $-- -- $(23,784) (1,757) $(12,015) (884) Class B ......... 811 68 -- -- (3,750) (319) (2,939) (251) Class C ......... 555 46 -- -- (513) (43) 42 3 Class I ......... 35,485 2,536 -- -- (50,850) (3,688) (15,365) (1,152)
INTERNATIONAL GROWTH FUND
ISSUED AS REINVESTMENT SOLD OF DIVIDENDS REDEEMED NET INCREASE ----------------- ---------------- ---------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------- ------ ------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 40,960 3,370 $ 848 73 $(5,022) (420) $ 36,786 3,023 Class B ......... 5,734 496 28 3 (1,515) (132) 4,247 367 Class C ......... 2,771 243 18 2 (379) (33) 2,410 212 Class I ......... 144,141 11,985 14,503 1,246 (753) (59) 157,891 13,172 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $ 16,974 1,684 $ 356 36 $(7,565) (760) $ 9,765 960 Class B ......... 1,979 205 -- -- (1,400) (146) 579 59 Class C ......... 929 95 3 -- (298) (31) 634 64 Class I ......... 133,171 13,246 7,523 749 (100) (9) 140,594 13,986
See Notes to Financial Statements. 89 Statements of Changes in Net Assets -- Capital Stock Activity (continued) WM GROUP OF FUNDS (In thousands) SHORT TERM INCOME FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- --------------- ------------------ ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------ ------ -------- ------- -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 6,543 2,834 $ 450 195 $(10,478) (4,532) $ (3,485) (1,503) Class B ......... 1,689 731 243 105 (5,723) (2,477) (3,791) (1,641) Class C ......... 377 163 118 51 (6,058) (2,618) (5,563) (2,404) Class I ......... 5,131 2,219 3,893 1,686 (8,389) (3,634) 635 271 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $14,092 6,020 $1,042 445 $(31,717) (13,549) $(16,583) (7,084) Class B ......... 2,089 891 592 253 (10,139) (4,327) (7,458) (3,183) Class C ......... 3,121 1,330 389 166 (8,554) (3,655) (5,044) (2,159) Class I ......... 24,653 10,528 6,799 2,909 -- -- 31,452 13,437
U.S. GOVERNMENT SECURITIES FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ----------------- ---------------- ------------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES -------- ------ ------- ------ --------- ------- -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 4,371 416 $ 1,929 184 $ (18,550) (1,768) $(12,250) (1,168) Class B ......... 1,684 160 1,691 161 (22,624) (2,154) (19,249) (1,833) Class C ......... 1,785 170 110 10 (889) (85) 1,006 95 Class I ......... 15,110 1,447 38,715 3,687 (113,504) (10,772) (59,679) (5,638) Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $ 20,979 1,956 $ 4,035 376 $ (35,252) (3,278) $(10,238) (946) Class B ......... 4,266 397 3,945 367 (39,536) (3,681) (31,325) (2,917) Class C ......... 3,171 296 175 17 (2,646) (246) 700 67 Class I ......... 363,440 33,841 67,624 6,304 -- -- 431,064 40,145
INCOME FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- ---------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------- ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $19,459 2,149 $ 2,472 273 $(20,805) (2,298) $ 1,126 124 Class B ......... 3,930 432 1,687 186 (21,252) (2,340) (15,635) (1,722) Class C ......... 2,144 236 170 18 (2,231) (246) 83 8 Class I ......... 73,149 8,035 27,177 2,996 (7,898) (875) 92,428 10,156 Class R-1 ....... -- -- -- -- -- -- -- -- Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $37,224 4,000 $ 4,859 523 $(35,692) (3,835) $ 6,391 688 Class B ......... 11,034 1,180 3,740 401 (32,674) (3,499) (17,900) (1,918) Class C ......... 3,712 397 349 37 (4,371) (469) (310) (35) Class I ......... 69,059 7,342 49,194 5,280 (9,340) (1,005) 108,913 11,617
90 See Notes to Financial Statements. Statements of Changes in Net Assets -- Capital Stock Activity (continued) WM GROUP OF FUNDS (In thousands) HIGH YIELD FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- ---------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------- ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $89,732 10,639 $ 2,794 329 $(26,482) (3,131) $ 66,044 7,837 Class B ......... 5,451 640 981 115 (8,111) (955) (1,679) (200) Class C ......... 9,359 1,098 595 70 (3,538) (416) 6,416 752 Class I ......... 12,686 1,500 19,988 2,362 (66,043) (7,876) (33,369) (4,014) Class R-1 ....... 76 9 -- -- (32) (4) 44 5 Class R-2 ....... -- -- -- -- -- -- -- -- YEAR ENDED 10/31/05: Class A ......... $65,936 7,984 $ 3,681 445 $(42,841) (5,212) $ 26,776 3,217 Class B ......... 9,556 1,153 2,103 253 (17,586) (2,120) (5,927) (714) Class C ......... 14,492 1,743 1,133 136 (10,204) (1,232) 5,421 647 Class I ......... 35,769 4,296 41,288 5,005 (11,065) (1,345) 65,992 7,956
TAX-EXEMPT BOND FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- --------------- ----------------- ---------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------ ------ -------- ------ ------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 8,673 1,140 $4,921 650 $(15,853) (2,083) $(2,259) (293) Class B ......... 425 55 755 100 (3,712) (487) (2,532) (332) Class C ......... 1,202 158 82 11 (838) (110) 446 59 YEAR ENDED 10/31/05: Class A ......... $15,149 1,928 $6,593 844 $(25,496) (3,258) $(3,754) (486) Class B ......... 829 105 1,001 128 (6,139) (784) (4,309) (551) Class C ......... 1,798 231 103 13 (3,081) (396) (1,180) (152)
CALIFORNIA MUNICIPAL FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- --------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------ ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $22,573 2,019 $5,587 502 $(17,606) (1,574) $ 10,554 947 Class B ......... 1,752 157 3,512 315 (18,080) (1,617) (12,816) (1,145) Class C ......... 44 4 100 9 (762) (68) (618) (55) YEAR ENDED 10/31/05: Class A ......... $35,403 3,108 $6,596 580 $(28,521) (2,508) $ 13,478 1,180 Class B ......... 3,770 330 4,531 399 (38,993) (3,428) (30,692) (2,699) Class C ......... 801 70 129 11 (1,486) (130) (556) (49)
CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND
ISSUED AS REINVESTMENT NET INCREASE/ SOLD OF DIVIDENDS REDEEMED (DECREASE) ---------------- --------------- ----------------- ----------------- AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES ------- ------ ------ ------ -------- ------ -------- ------ SIX MONTHS ENDED 4/30/06 (UNAUDITED): Class A ......... $ 6,246 575 $ 827 76 $(10,754) (987) $ (3,681) (336) Class B ......... 544 50 657 60 (7,423) (683) (6,222) (573) Class C ......... 165 15 82 7 (841) (77) (594) (55) YEAR ENDED 10/31/05: Class A ......... $13,962 1,264 $1,383 126 $(13,695) (1,244) $ 1,650 146 Class B ......... 1,211 109 1,190 108 (12,651) (1,148) (10,250) (931) Class C ......... 785 71 140 13 (2,002) (181) (1,077) (97)
See Notes to Financial Statements. 91 Financial Highlights REIT FUND For a Fund share outstanding throughout each period.
INCOME FROM INVESTMENT OPERATIONS ----------------------------------- LESS DISTRIBUTIONS NET ---------------------------------------- NET REALIZED DISTRIBUTIONS NET ASSET AND TOTAL DIVIDENDS FROM NET ASSET VALUE NET UNREALIZED FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT GAIN ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD --------- ---------- ---------- ---------- ---------- ------------- ------------- ------ CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $17.23 $0.10(6) $2.34 $2.44 $(0.21) $(0.40) $(0.61) $19.06 Year Ended: 10/31/05 $15.62 $0.42(6) $1.95 $2.37 $(0.42) $(0.34) $(0.76) $17.23 10/31/04 12.46 0.39(6) 3.13 3.52 (0.31) (0.05) (0.36) 15.62 10/31/03(3) 10.00 0.28(6) 2.35 2.63 (0.17) -- (0.17) 12.46 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $17.18 $0.03(6) $2.33 $2.36 $(0.14) $(0.40) $(0.54) $19.00 Year Ended: 10/31/05 $15.58 $0.29(6) $1.94 $2.23 $(0.29) $(0.34) $(0.63) $17.18 10/31/04 12.43 0.29(6) 3.12 3.41 (0.21) (0.05) (0.26) 15.58 10/31/03(3) 10.00 0.22(6) 2.35 2.57 (0.14) -- (0.14) 12.43 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $17.18 $0.04(6) $2.33 $2.37 $(0.15) $(0.40) $(0.55) $19.00 Year Ended: 10/31/05 $15.58 $0.30(6) $1.94 $2.24 $(0.30) $(0.34) $(0.64) $17.18 10/31/04 12.43 0.31(6) 3.12 3.43 (0.23) (0.05) (0.28) 15.58 10/31/03(3) 10.00 0.23(6) 2.35 2.58 (0.15) -- (0.15) 12.43 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $17.27 $0.15(6) $2.34 $2.49 $(0.25) $(0.40) $(0.65) $19.11 Year Ended: 10/31/05 $15.65 $0.49(6) $1.96 $2.45 $(0.49) $(0.34) $(0.83) $17.27 10/31/04 12.47 0.46(6) 3.14 3.60 (0.37) (0.05) (0.42) 15.65 10/31/03(3) 10.00 0.34(6) 2.32 2.66 (0.19) -- (0.19) 12.47 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $18.80 $0.05(6) $0.25 $0.30 $(0.06) $ -- $(0.06) $19.04 CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $18.80 $0.05(6) $0.25 $0.30 $(0.06) $ -- $(0.06) $19.04 RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------------ RATIO OF RATIO OF EXPENSES TO EXPENSES TO RATIO OF NET AVERAGE AVERAGE NET ASSETS NET ASSETS NET ASSETS INVESTMENT END OF BEFORE AFTER INCOME TO PORTFOLIO TOTAL PERIOD REIMBURSEMENTS/ REIMBURSEMENTS/ AVERAGE TURNOVER RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE --------- --------- --------------- --------------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 14.49% $ 25,007 1.31%(7) 1.31%(7) 1.14%(7) 16% Year Ended: 10/31/05 15.46% $ 18,234 1.31% 1.31% 2.50% 11% 10/31/04 28.71 9,376 1.33 1.33 2.82 5 10/31/03(3) 26.43 3,159 1.41(7) 1.41(7) 3.60(7) 7 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 14.04% $ 10,584 2.11%(7) 2.11%(7) 0.34%(7) 16% Year Ended: 10/31/05 14.57% $ 8,898 2.09% 2.09% 1.72% 11% 10/31/04 27.76 6,060 2.08 2.08 2.07 5 10/31/03(3) 25.86 2,808 2.13(7) 2.13(7) 2.88(7) 7 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 14.09% $ 5,763 2.00%(7) 2.00%(7) 0.45%(7) 16% Year Ended: 10/31/05 14.66% $ 5,100 2.00% 2.00% 1.81% 11% 10/31/04 27.95 3,672 1.98 1.98 2.17 5 10/31/03(3) 25.88 1,322 2.06(7) 2.06(7) 2.95(7) 7 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 14.75% $415,943 0.86%(7) 0.86%(7) 1.59%(7) 16% Year Ended: 10/31/05 15.99% $388,914 0.84% 0.84% 2.97% 11% 10/31/04 29.40 316,904 0.86 0.86 3.29 5 10/31/03(3) 26.76 182,138 0.92(7) 0.92(7) 4.09(7) 7 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) 1.58% $ -- 1.91%(7)(8) 1.91%(7)(8) 0.54%(7)(8) 16% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) 1.58% $ -- 1.66%(7)(8) 1.66%(7)(8) 0.79%(7)(8) 16%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The REIT Fund commenced operations on March 1, 2003. (4) The Funds commenced selling Class R-1 and R-2 shares on March 1, 2006. 92 See Notes to Financial Statements. Financial Highlights EQUITY INCOME FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS -------------------------------------- NET LESS DISTRIBUTIONS NET REALIZED ---------------------------------------- NET ASSET AND DIVIDENDS DISTRIBUTIONS ASSET VALUE NET UNREALIZED TOTAL FROM FROM NET FROM NET VALUE BEGINNING INVESTMENT GAIN/(LOSS) INVESTMENT INVESTMENT REALIZED TOTAL END OF OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD --------- ---------- -------------- ---------- ---------- ------------- ------------- ------ CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $20.07 $0.17(6) $ 2.05 $ 2.22 $(0.18) $(0.63) $(0.81) $21.48 Year Ended: 10/31/05 $17.79 $0.41(6) $ 2.25 $ 2.66 $(0.38) $ -- $(0.38) $20.07 10/31/04 15.46 0.29(6) 2.33 2.62 (0.29) -- (0.29) 17.79 10/31/03 12.73 0.33(6) 2.73 3.06 (0.33) -- (0.33) 15.46 10/31/02 14.85 0.40(6) (1.85) (1.45) (0.35) (0.32) (0.67) 12.73 10/31/01 15.59 0.48(6) 0.37 0.85 (0.46) (1.13) (1.59) 14.85 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $19.93 $0.08(6) $ 2.03 $ 2.11 $(0.09) $(0.63) $(0.72) $21.32 Year Ended: 10/31/05 $17.67 $0.24(6) $ 2.24 $ 2.48 $(0.22) $ -- $(0.22) $19.93 10/31/04 15.36 0.14(6) 2.30 2.44 (0.13) -- (0.13) 17.67 10/31/03 12.65 0.20(6) 2.71 2.91 (0.20) -- (0.20) 15.36 10/31/02 14.78 0.27(6) (1.85) (1.58) (0.23) (0.32) (0.55) 12.65 10/31/01 15.52 0.35(6) 0.38 0.73 (0.34) (1.13) (1.47) 14.78 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $19.79 $0.09(6) $ 2.02 $ 2.11 $(0.11) $(0.63) $(0.74) $21.16 Year Ended: 10/31/05 $17.57 $0.26(6) $ 2.22 $ 2.48 $(0.26) $ -- $(0.26) $19.79 10/31/04 15.29 0.16(6) 2.30 2.46 (0.18) -- (0.18) 17.57 10/31/03 12.62 0.22(6) 2.68 2.90 (0.23) -- (0.23) 15.29 10/31/02(5) 15.09 0.18(6) (2.43) (2.25) (0.22) -- (0.22) 12.62 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $20.07 $0.20(6) $ 2.05 $ 2.25 $(0.21) $(0.63) $(0.84) $21.48 Year Ended: 10/31/05 $17.79 $0.48(6) $ 2.24 $ 2.72 $(0.44) $ -- $(0.44) $20.07 10/31/04 15.45 0.35(6) 2.33 2.68 (0.34) -- (0.34) 17.79 10/31/03 12.73 0.38(6) 2.72 3.10 (0.38) -- (0.38) 15.45 10/31/02 14.85 0.45(6) (1.85) (1.40) (0.40) (0.32) (0.72) 12.73 10/31/01 15.59 0.54(6) 0.35 0.89 (0.50) (1.13) (1.63) 14.85 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $20.72 $0.03(4) $ 0.82 $ 0.85 $(0.09) $ -- $(0.09) $21.48 CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $20.72 $0.07(4) $ 0.78 $ 0.85 $(0.09) $ -- $(0.09) $21.48 RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES RATIO OF NET TO AVERAGE TO AVERAGE NET ASSETS NET ASSETS NET ASSETS INVESTMENT END OF BEFORE AFTER INCOME TO PORTFOLIO TOTAL PERIOD REIMBURSEMENTS/ REIMBURSEMENTS/ AVERAGE TURNOVER RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE --------- ---------- --------------- --------------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 11.32% $1,270,674 0.88%(7) 0.88%(7) 1.63%(7) 36% Year Ended: 10/31/05 15.06% $ 887,828 0.90% 0.90% 2.13% 32% 10/31/04 17.06 438,776 0.91 0.91 1.74 20 10/31/03 24.43 268,489 0.95 0.95 2.43 18 10/31/02 (10.35) 198,756 0.97 0.97 2.77 16 10/31/01 5.92 211,445 0.97 0.96 3.17 17 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 10.85% $ 293,220 1.74%(7) 1.74%(7) 0.77%(7) 36% Year Ended: 10/31/05 14.07% $ 226,390 1.78% 1.78% 1.25% 32% 10/31/04 16.04 144,144 1.81 1.81 0.84 20 10/31/03 23.19 103,888 1.89 1.89 1.49 18 10/31/02 (11.20) 82,330 1.88 1.88 1.86 16 10/31/01 5.09 68,549 1.82 1.81 2.32 17 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 10.91% $ 203,788 1.65%(7) 1.65%(7) 0.86%(7) 36% Year Ended: 10/31/05 14.16% $ 128,523 1.68% 1.68% 1.35% 32% 10/31/04 16.16 33,770 1.70 1.70 0.95 20 10/31/03 23.29 5,973 1.78 1.78 1.60 18 10/31/02(5) (15.07) 1,780 1.80(7) 1.80(7) 1.94(7) 16 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 11.49% $1,700,951 0.55%(7) 0.55%(7) 1.96%(7) 36% Year Ended: 10/31/05 15.39% $1,294,804 0.58% 0.58% 2.45% 32% 10/31/04 17.51 908,925 0.59 0.59 2.06 20 10/31/03 24.77 529,665 0.61 0.61 2.77 18 10/31/02 (10.04) 350,185 0.63 0.63 3.11 16 10/31/01 6.26 252,453 0.65 0.64 3.49 17 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) 4.03% $ 279 1.60%(7) 1.60%(7) 0.91%(7) 36% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) 4.03% $ -- 1.35%(7)(8) 1.35%(7)(8) 1.16%(7)(8) 36%
(5) The Equity Income Fund commenced selling Class C shares on March 1, 2002. (6) Per share numbers have been calculated using the average shares method. (7) Annualized. (8) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class A share ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 93 Financial Highlights GROWTH & INCOME FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------------- LESS DISTRIBUTIONS NET NET ---------------------------------------- ASSET NET REALIZED AND DIVIDENDS DISTRIBUTIONS VALUE INVESTMENT UNREALIZED TOTAL FROM FROM NET FROM NET BEGINNING INCOME/ GAIN/(LOSS) INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- -------------- ---------- ---------- ------------- ------------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $24.63 $ 0.17(5) $ 1.88 $ 2.05 $(0.31) $ -- $(0.31) Year Ended: 10/31/05 $23.41 $ 0.33(5) $ 1.16 $ 1.49 $(0.27) $ -- $(0.27) 10/31/04 21.59 0.22(5) 1.81 2.03 (0.21) -- (0.21) 10/31/03 18.44 0.22(5) 3.11 3.33 (0.18) -- (0.18) 10/31/02 22.34 0.17(5) (3.68) (3.51) (0.03) (0.36) (0.39) 10/31/01 27.11 0.10 (3.63) (3.53) (0.07) (1.17) (1.24) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $23.65 $ 0.04(5) $ 1.80 $ 1.84 $(0.03) $ -- $(0.03) Year Ended: 10/31/05 $22.47 $ 0.08(5) $ 1.11 $ 1.19 $(0.01) $ -- $(0.01) 10/31/04 20.74 (0.01)(5) 1.74 1.73 -- -- -- 10/31/03 17.72 0.02(5) 3.00 3.02 -- -- -- 10/31/02 21.67 (0.04)(5) (3.55) (3.59) (0.00)(6) (0.36) (0.36) 10/31/01 26.49 (0.13) (3.52) (3.65) -- (1.17) (1.17) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $23.33 $ 0.05(5) $ 1.80 $ 1.85 $(0.11) $ -- $(0.11) Year Ended: 10/31/05 $22.22 $ 0.08(5) $ 1.10 $ 1.18 $(0.07) $ -- $(0.07) 10/31/04 20.62 (0.00)(5)(6) 1.73 1.73 (0.13) -- (0.13) 10/31/03 17.73 0.03(5) 2.98 3.01 (0.12) -- (0.12) 10/31/02(3) 21.36 (0.01)(5) (3.62) (3.63) -- -- -- CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $24.75 $ 0.21(5) $ 1.88 $ 2.09 $(0.39) $ -- $(0.39) Year Ended: 10/31/05 $23.52 $ 0.41(5) $ 1.17 $ 1.58 $(0.35) $ -- $(0.35) 10/31/04 21.68 0.30(5) 1.82 2.12 (0.28) -- (0.28) 10/31/03 18.52 0.29(5) 3.12 3.41 (0.25) -- (0.25) 10/31/02 22.39 0.24(5) (3.70) (3.46) (0.05) (0.36) (0.41) 10/31/01 27.16 0.18 (3.64) (3.46) (0.14) (1.17) (1.31) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $25.62 $ 0.06(5) $ 0.69 $ 0.75 $ -- $ -- $ -- CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $25.62 $ 0.06(5) $ 0.69 $ 0.75 $ -- $ -- $ -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES RATIO OF TO AVERAGE TO AVERAGE NET NET NET NET ASSETS NET ASSETS INVESTMENT ASSET ASSETS BEFORE AFTER INCOME/ VALUE END OF REIMBURSE- REIMBURSE- (LOSS) TO PORTFOLIO END OF TOTAL PERIOD MENTS/ MENTS/ AVERAGE TURNOVER PERIOD RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE ------ --------- ---------- ----------- ----------- ------------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $26.37 8.35% $ 590,185 0.87%(7) 0.87%(7) 1.32%(7) 15% Year Ended: 10/31/05 $24.63 6.34% $ 572,128 0.89% 0.89% 1.34% 15% 10/31/04 23.41 9.45 582,866 0.90 0.90 0.94 6 10/31/03 21.59 18.18 541,707 0.93 0.93 1.12 17 10/31/02 18.44 (16.10) 475,010 0.94 0.94 0.79 22 10/31/01 22.34 (13.40) 560,226 0.92 0.92 0.40 35 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $25.46 7.78% $ 74,592 1.88%(7) 1.88%(7) 0.31%(7) 15% Year Ended: 10/31/05 $23.65 5.28% $ 80,957 1.92% 1.92% 0.31% 15% 10/31/04 22.47 8.39 95,528 1.89 1.89 (0.05) 6 10/31/03 20.74 16.99 115,457 1.96 1.96 0.09 17 10/31/02 17.72 (16.94) 123,423 1.91 1.91 (0.18) 22 10/31/01 21.67 (14.20) 186,247 1.82 1.82 (0.50) 35 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $25.07 7.96% $ 2,271 1.81%(7) 1.81%(7) 0.38%(7) 15% Year Ended: 10/31/05 $23.33 5.30% $ 1,835 1.88% 1.88% 0.35% 15% 10/31/04 22.22 8.45 1,537 1.84 1.84 (0.00) 6 10/31/03 20.62 17.08 823 1.89 1.89 0.16 17 10/31/02(3) 17.73 (17.00) 264 1.83(7) 1.83(7) (0.10)(7) 22 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $26.45 8.51% $1,684,307 0.54%(7) 0.54%(7) 1.65%(7) 15% Year Ended: 10/31/05 $24.75 6.70% $1,963,730 0.56% 0.56% 1.67% 15% 10/31/04 23.52 9.85 1,394,883 0.57 0.57 1.27 6 10/31/03 21.68 18.61 895,547 0.59 0.59 1.46 17 10/31/02 18.52 (15.84) 671,191 0.60 0.60 1.13 22 10/31/01 22.39 (13.12) 768,550 0.58 0.58 0.74 35 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $26.37 2.93% $ -- 1.59%(7)(8) 1.59%(7)(8) 0.60%(7)(8) 15% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $26.37 2.93% $ -- 1.34%(7)(8) 1.34%(7)(8) 0.85%(7)(8) 15%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. (4) The Funds commenced selling Class R-1 and R-2 shares on March 1, 2006. 94 See Notes to Financial Statements. Financial Highlights WEST COAST EQUITY FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------------- LESS DISTRIBUTIONS NET NET ---------------------------------------- ASSET NET REALIZED AND DIVIDENDS DISTRIBUTIONS VALUE INVESTMENT UNREALIZED TOTAL FROM FROM NET FROM NET BEGINNING INCOME/ GAIN/(LOSS) INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- -------------- ---------- ---------- ------------- ------------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $38.99 $ 0.11(5) $ 4.43 $ 4.54 $(0.13) $(0.97) $(1.10) Year Ended: 10/31/05 $35.04 $ 0.25 $ 4.33 $ 4.58 $(0.20) $(0.43) $(0.63) 10/31/04 32.14 0.06(5) 2.84 2.90 -- -- -- 10/31/03 23.73 0.04(5) 8.37 8.41 -- -- -- 10/31/02 28.89 0.02(5) (4.09) (4.07) (0.07) (1.02) (1.09) 10/31/01 36.23 0.11 (2.35) (2.24) (0.03) (5.07) (5.10) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $34.84 $(0.07)(5) $ 3.95 $ 3.88 $ -- $(0.97) $(0.97) Year Ended: 10/31/05 $31.48 $(0.09) $ 3.88 $ 3.79 $ -- $(0.43) $(0.43) 10/31/04 29.14 (0.24)(5) 2.58 2.34 -- -- -- 10/31/03 21.73 (0.20)(5) 7.61 7.41 -- -- -- 10/31/02 26.71 (0.23)(5) (3.73) (3.96) (0.00)(6) (1.02) (1.02) 10/31/01 34.12 (0.15) (2.19) (2.34) -- (5.07) (5.07) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $34.94 $(0.05)(5) $ 3.96 $ 3.91 $ -- $(0.97) $(0.97) Year Ended: 10/31/05 $31.56 $(0.06) $ 3.88 $ 3.82 $(0.01) $(0.43) $(0.44) 10/31/04 29.20 (0.21)(5) 2.57 2.36 -- -- -- 10/31/03 21.74 (0.18)(5) 7.64 7.46 -- -- -- 10/31/02(3) 27.59 (0.14)(5) (5.71) (5.85) -- -- -- CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $39.39 $ 0.18(5) $ 4.47 $ 4.65 $(0.25) $(0.97) $(1.22) Year Ended: 10/31/05 $35.39 $ 0.39 $ 4.37 $ 4.76 $(0.33) $(0.43) $(0.76) 10/31/04 32.39 0.17(5) 2.87 3.04 (0.04) -- (0.04) 10/31/03 23.83 0.13(5) 8.43 8.56 -- -- -- 10/31/02 29.00 0.12(5) (4.10) (3.98) (0.17) (1.02) (1.19) 10/31/01 36.34 0.20 (2.34) (2.14) (0.13) (5.07) (5.20) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $41.49 $ 0.06(5) $ 0.88 $ 0.94 $ -- $ -- $ -- CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $41.49 $ 0.06(5) $ 0.88 $ 0.94 $ -- $ -- $ -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES RATIO OF TO AVERAGE TO AVERAGE NET NET NET NET ASSETS NET ASSETS INVESTMENT ASSET ASSETS BEFORE AFTER INCOME/ VALUE END OF REIMBURSE- REIMBURSE- (LOSS) TO PORTFOLIO END OF TOTAL PERIOD MENTS/ MENTS/ AVERAGE TURNOVER PERIOD RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE ------ --------- --------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $42.43 11.76% $865,459 0.87%(7) 0.87%(7) 0.54%(7) 5% Year Ended: 10/31/05 $38.99 13.13% $735,037 0.91% 0.91% 0.68% 13% 10/31/04 35.04 9.06 621,924 0.94 0.94 0.17 12 10/31/03 32.14 35.44 523,308 1.02 1.02 0.14 14 10/31/02 23.73 (14.94) 375,821 1.05 1.05 0.07 16 10/31/01 28.89 (6.55) 427,215 1.01 1.01 0.38 27 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $37.75 11.24% $190,358 1.78%(7) 1.78%(7) (0.37)%(7) 5% Year Ended: 10/31/05 $34.84 12.09% $167,531 1.85% 1.85% (0.26)% 13% 10/31/04 31.48 8.03 141,134 1.89 1.89 (0.78) 12 10/31/03 29.14 34.10 122,221 2.01 2.01 (0.85) 14 10/31/02 21.73 (15.73) 102,208 2.00 2.00 (0.88) 16 10/31/01 26.71 (7.40) 109,655 1.89 1.89 (0.50) 27 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $37.88 11.29% $ 20,164 1.70%(7) 1.70%(7) (0.29)%(7) 5% Year Ended: 10/31/05 $34.94 12.18% $ 13,613 1.78% 1.78% (0.19)% 13% 10/31/04 31.56 8.12 9,000 1.80 1.80 (0.69) 12 10/31/03 29.20 34.27 3,593 1.90 1.90 (0.74) 14 10/31/02(3) 21.74 (21.20) 1,341 1.96(7) 1.96(7) (0.84)(7) 16 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $42.82 11.94% $831,184 0.54%(7) 0.54%(7) 0.87%(7) 5% Year Ended: 10/31/05 $39.39 13.55% $621,993 0.58% 0.58% 1.01% 13% 10/31/04 35.39 9.39 515,464 0.61 0.61 0.50 12 10/31/03 32.39 35.92 349,363 0.67 0.67 0.49 14 10/31/02 23.83 (14.65) 195,029 0.70 0.70 0.42 16 10/31/01 29.00 (6.22) 176,303 0.68 0.68 0.71 27 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $42.43 2.27% $ -- 1.59%(7)(8) 1.59%(7)(8) (0.18)%(7)(8) 5% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $42.43 2.27% $ -- 1.34%(7)(8) 1.34%(7)(8) 0.07%(7)(8) 5%
(5) Per share numbers have been calculated using the average shares method. (6) Amount represents less than $0.01 per share. (7) Annualized. (8) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class Ashare ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 95 Financial Highlights MID CAP STOCK FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS)FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS ------------------------------------ ---------------------------------------- NET REALIZED NET AND ASSET NET UNREALIZED DIVIDENDS DISTRIBUTIONS VALUE INVESTMENT GAIN/(LOSS) TOTAL FROM FROM NET FROM NET BEGINNING INCOME/ ON INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ---------- ------------ ---------- ---------- ------------- ------------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $19.23 $ 0.06(5) $ 2.58 $ 2.64 $(0.26) $(1.23) $(1.49) Year Ended: 10/31/05 $17.06 $ 0.24(5) $ 2.56 $ 2.80 $(0.03) $(0.60) $(0.63) 10/31/04 15.34 0.02(5) 1.75 1.77 (0.01) (0.04) (0.05) 10/31/03 12.39 0.01(5) 2.94 2.95 -- -- -- 10/31/02 13.50 (0.01)(5) (0.60) (0.61) -- (0.50) (0.50) 10/31/01 12.58 (0.03)(5) 1.00 0.97 -- (0.05) (0.05) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $18.23 $(0.03)(5) $ 2.44 $ 2.41 $(0.10) $(1.23) $(1.33) Year Ended: 10/31/05 $16.33 $ 0.06(5) $ 2.44 $ 2.50 $ -- $(0.60) $(0.60) 10/31/04 14.82 (0.14)(5) 1.69 1.55 -- (0.04) (0.04) 10/31/03 12.09 (0.13)(5) 2.86 2.73 -- -- -- 10/31/02 13.31 (0.15)(5) (0.57) (0.72) -- (0.50) (0.50) 10/31/01 12.51 (0.15)(5) 1.00 0.85 -- (0.05) (0.05) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $18.28 $(0.02)(5) $ 2.45 $ 2.43 $(0.18) $(1.23) $(1.41) Year Ended: 10/31/05 $16.36 $ 0.08(5) $ 2.44 $ 2.52 $ -- $(0.60) $(0.60) 10/31/04 14.83 (0.13)(5) 1.70 1.57 -- (0.04) (0.04) 10/31/03 12.10 (0.12)(5) 2.85 2.73 -- -- -- 10/31/02(3) 13.60 (0.10)(5) (1.40) (1.50) -- -- -- CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $19.47 $ 0.09(5) $ 2.61 $ 2.70 $(0.31) $(1.23) $(1.54) Year Ended: 10/31/05 $17.26 $ 0.30(5) $ 2.59 $ 2.89 $(0.08) $(0.60) $(0.68) 10/31/04 15.50 0.08(5) 1.78 1.86 (0.06) (0.04) (0.10) 10/31/03 12.51 0.06(5) 2.97 3.03 (0.04) -- (0.04) 10/31/02 13.59 0.04(5) (0.60) (0.56) (0.02) (0.50) (0.52) 10/31/01 12.62 0.04(5) 1.00 1.04 (0.02) (0.05) (0.07) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $19.39 $ 0.03(5) $ 0.96 $ 0.99 $ -- $ -- $ -- CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $19.39 $ 0.03(5) $ 0.96 $ 0.99 $ -- $ -- $ -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES RATIO OF TO AVERAGE TO AVERAGE NET NET NET NET ASSETS NET ASSETS INVESTMENT ASSET ASSETS BEFORE AFTER INCOME/ VALUE END OF REIMBURSE- REIMBURSE- (LOSS)TO PORTFOLIO END OF TOTAL PERIOD MENTS/ MENTS/ AVERAGE TURNOVER PERIOD RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE ------ --------- --------- ----------- ----------- ------------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $20.38 14.43% $189,282 1.10%(7) 1.10%(7) 0.60%(7) 14% Year Ended: 10/31/05 $19.23 16.75% $ 93,180 1.12% 1.12% 1.32% 28% 10/31/04 17.06 11.57 59,491 1.14 1.14 0.12 23 10/31/03 15.34 23.81 38,676 1.16 1.16 0.07 28 10/31/02 12.39 (4.86) 28,248 1.25 1.25 (0.10) 27 10/31/01 13.50 7.71 6,165 1.36 1.36 (0.25) 33 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $19.31 13.88% $ 30,251 2.05%(7) 2.05%(7) (0.35)%(7) 14% Year Ended: 10/31/05 $18.23 15.63% $ 24,218 2.11% 2.11% 0.33% 28% 10/31/04 16.33 10.54 19,958 2.12 2.12 (0.86) 23 10/31/03 14.82 22.50 17,405 2.24 2.24 (1.01) 28 10/31/02 12.09 (5.79) 13,229 2.26 2.26 (1.11) 27 10/31/01 13.31 6.79 10,271 2.17 2.17 (1.06) 33 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $19.30 13.97% $ 7,501 1.94%(7) 1.94%(7) (0.24)%(7) 14% Year Ended: 10/31/05 $18.28 15.73% $ 4,303 1.99% 1.99% 0.45% 28% 10/31/04 16.36 10.60 1,769 2.04 2.04 (0.79) 23 10/31/03 14.83 22.56 550 2.15 2.15 (0.92) 28 10/31/02(3) 12.10 (11.03) 55 2.24(7) 2.24(7) (1.09)(7) 27 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $20.63 14.58% $740,569 0.79%(7) 0.79%(7) 0.91%(7) 14% Year Ended: 10/31/05 $19.47 17.11% $766,698 0.80% 0.80% 1.64% 28% 10/31/04 17.26 12.02 616,052 0.80 0.80 0.45 23 10/31/03 15.50 24.27 369,772 0.81 0.81 0.42 28 10/31/02 12.51 (4.44) 231,409 0.83 0.83 0.32 27 10/31/01 13.59 8.29 220,052 0.81 0.81 0.30 33 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $20.38 5.11% $ -- 1.84%(7)(8) 1.84%(7)(8) (0.14)%(7)(8) 14% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $20.38 5.11% $ -- 1.59%(7)(8) 1.59%(7)(8) 0.11%(7)(8) 14%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. (4) The Funds commenced selling Class R-1 and R-2 shares on March 1, 2006. 96 See Notes to Financial Statements. Financial Highlights GROWTH FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS)FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS -------------------------------------- ---------------------------------------- NET REALIZED NET AND ASSET NET UNREALIZED DIVIDENDS DISTRIBUTIONS VALUE INVESTMENT GAIN/(LOSS) TOTAL FROM FROM NET FROM NET BEGINNING INCOME/ ON INVESTMENT INVESTMENT REALIZED TOTAL OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------ ------------ ---------- ---------- ------------- ------------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $15.77 $(0.02) $ 0.87 $ 0.85 $ -- $ -- $ -- Year Ended: 10/31/05 $14.44 $ 0.01 $ 1.37 $ 1.38 $(0.05) $ -- $(0.05) 10/31/04 13.71 (0.06)(5) 0.79 0.73 -- -- -- 10/31/03 11.47 (0.08)(5) 2.32 2.24 -- -- -- 10/31/02 15.23 (0.10)(5) (3.66) (3.76) -- -- -- 10/31/01 32.78 (0.09)(5) (13.13) (13.22) (0.20) (4.13) (4.33) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $14.12 $(0.08) $ 0.77 $ 0.69 $ -- $ -- $ -- Year Ended: 10/31/05 $13.03 $(0.14) $ 1.26 $ 1.12 $(0.03) $ -- $(0.03) 10/31/04 12.49 (0.17)(5) 0.71 0.54 -- -- -- 10/31/03 10.55 (0.18)(5) 2.12 1.94 -- -- -- 10/31/02 14.13 (0.21)(5) (3.37) (3.58) -- -- -- 10/31/01 30.78 (0.24)(5) (12.24) (12.48) (0.04) (4.13) (4.17) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $14.25 $(0.07) $ 0.78 $ 0.71 $ -- $ -- $ -- Year Ended: 10/31/05 $13.13 $(0.11) $ 1.27 $ 1.16 $(0.04) $ -- $(0.04) 10/31/04 12.55 (0.15)(5) 0.73 0.58 -- -- -- 10/31/03 10.56 (0.14)(5) 2.13 1.99 -- -- -- 10/31/02(3) 13.48 (0.11)(5) (2.81) (2.92) -- -- -- CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $16.43 $ 0.03 $ 0.90 $ 0.93 $(0.02) $ -- $(0.02) Year Ended: 10/31/05 $14.96 $ 0.10 $ 1.44 $ 1.54 $(0.07) $ -- $(0.07) 10/31/04 14.13 0.02(5) 0.81 0.83 -- -- -- 10/31/03 11.74 0.00(5)(6) 2.39 2.39 -- -- -- 10/31/02 15.48 (0.01)(5) (3.73) (3.74) -- -- -- 10/31/01 33.23 0.02(5) (13.31) (13.29) (0.33) (4.13) (4.46) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $16.58 $ 0.01 $ 0.03 $ 0.04 $ -- $ -- $ -- CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $16.58 $ 0.01 $ 0.03 $ 0.04 $ -- $ -- $ -- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA -------------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES RATIO OF TO AVERAGE TO AVERAGE NET NET NET NET ASSETS NET ASSETS INVESTMENT ASSET ASSETS BEFORE AFTER INCOME/ VALUE END OF REIMBURSE- REIMBURSE- (LOSS)TO PORTFOLIO END OF TOTAL PERIOD MENTS/ MENTS/ AVERAGE TURNOVER PERIOD RETURN(1) (IN 000S) WAIVERS WAIVERS(2) NET ASSETS RATE ------ --------- ---------- ----------- ----------- ------------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $16.62 5.39% $ 143,023 1.27%(7) 1.27%(7) (0.19)%(7) 18% Year Ended: 10/31/05 $15.77 9.59% $ 127,677 1.41% 1.41% 0.06% 78% 10/31/04 14.44 5.32 124,755 1.44 1.44 (0.43) 56 10/31/03 13.71 19.53 114,757 1.62 1.62 (0.66) 71 10/31/02 11.47 (24.69) 94,848 1.69 1.69 (0.74) 170 10/31/01 15.23 (45.77) 151,893 1.52 1.52 (0.43) 99 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $14.81 4.89% $ 88,870 2.23%(7) 2.23%(7) (1.15)%(7) 18% Year Ended: 10/31/05 $14.12 8.55% $ 96,044 2.36% 2.36% (0.89)% 78% 10/31/04 13.03 4.40 110,794 2.35 2.35 (1.34) 56 10/31/03 12.49 18.39 129,239 2.54 2.54 (1.58) 71 10/31/02 10.55 (25.34) 128,007 2.54 2.54 (1.59) 170 10/31/01 14.13 (46.19) 220,108 2.31 2.31 (1.22) 99 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $14.96 4.98% $ 2,767 2.03%(7) 2.03%(7) (0.95)%(7) 18% Year Ended: 10/31/05 $14.25 8.85% $ 2,158 2.13% 2.13% (0.66)% 78% 10/31/04 13.13 4.62 1,981 2.14 2.14 (1.13) 56 10/31/03 12.55 18.85 565 2.19 2.19 (1.23) 71 10/31/02(3) 10.56 (21.66) 199 2.38(7) 2.38(7) (1.43)(7) 170 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $17.34 5.65% $2,144,581 0.74%(7) 0.74%(7) 0.34%(7) 18% Year Ended: 10/31/05 $16.43 10.30% $1,506,501 0.83% 0.83% 0.64% 78% 10/31/04 14.96 5.95 1,281,900 0.86 0.86 0.15 56 10/31/03 14.13 20.27 664,334 0.92 0.92 0.04 71 10/31/02 11.74 (24.16) 357,296 1.03 1.03 (0.08) 170 10/31/01 15.48 (45.50) 203,646 1.00 1.00 0.09 99 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $16.62 0.24% $ -- 1.79%(7)(8) 1.79%(7)(8) (0.71)%(7)(8) 18% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $16.62 0.24% $ -- 1.54%(7)(8) 1.54%(7)(8) (0.46)%(7)(8) 18%
(5) Per share numbers have been calculated using the average shares method. (6) Amount represents less than $0.01 per share. (7) Annualized. (8) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class A share ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 97 Financial Highlights SMALL CAP VALUE FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS -------------------------------------- LESS DISTRIBUTIONS NET ---------------------------------------- NET REALIZED DISTRIBUTIONS NET ASSET AND DIVIDENDS FROM NET ASSET VALUE NET UNREALIZED TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT GAIN ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ------------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $11.68 $ 0.08(6) $1.21 $1.29 $(0.07) $(0.65) $(0.72) $12.25 11.24% Year Ended: 10/31/05 $10.81 $ 0.06(6) $0.91 $0.97 $(0.10) $ -- $(0.10) $11.68 9.04% 10/31/04(3) 10.00 0.05(6) 0.76 0.81 -- -- -- 10.81 8.10 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $11.55 $ 0.02(6) $1.20 $1.22 $ -- $(0.65) $(0.65) $12.12 10.79% Year Ended: 10/31/05 $10.74 $(0.05)(6) $0.92 $0.87 $(0.06) $ -- $(0.06) $11.55 8.08% 10/31/04(3) 10.00 (0.01)(6) 0.75 0.74 -- -- -- 10.74 7.40 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $11.58 $ 0.03(6) $1.21 $1.24 $(0.03) $(0.65) $(0.68) $12.14 10.92% Year Ended: 10/31/05 $10.76 $(0.03)(6) $0.90 $0.87 $(0.05) $ -- $(0.05) $11.58 8.08% 10/31/04(3) 10.00 (0.00)(6)(8) 0.76 0.76 -- -- -- 10.76 7.60 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $11.74 $ 0.11(6) $1.22 $1.33 $(0.11) $(0.65) $(0.76) $12.31 11.61% Year Ended: 10/31/05 $10.83 $ 0.11(6) $0.91 $1.02 $(0.11) $ -- $(0.11) $11.74 9.42% 10/31/04(3) 10.00 0.08(6) 0.75 0.83 -- -- -- 10.83 8.30 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $12.02 $ 0.04(6) $0.19 $0.23 $ -- $ -- $ -- $12.25 1.91% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $12.02 $ 0.04(6) $0.19 $0.23 $ -- $ -- $ -- $12.25 1.91% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO RATIO OF AVERAGE AVERAGE NET NET NET INVESTMENT NET ASSETS ASSETS INCOME ASSETS BEFORE AFTER /(LOSS) TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE ---------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $ 14,117 1.34%(7) 1.34%(7) 1.31%(7) 15% Year Ended: 10/31/05 $ 14,302 1.29% 1.29% 0.52% 54% 10/31/04(3) 2,978 1.33(7) 1.33(7) 0.77(7) 36 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 3,289 2.26%(7) 2.26%(7) 0.39%(7) 15% Year Ended: 10/31/05 $ 2,955 2.20% 2.20% (0.39)% 54% 10/31/04(3) 631 2.23(7) 2.23(7) (0.13)(7) 36 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 2,592 2.08%(7) 2.08%(7) 0.57%(7) 15% Year Ended: 10/31/05 $ 2,414 2.10% 2.10% (0.29)% 54% 10/31/04(3) 414 2.13(7) 2.13(7) (0.03)(7) 36 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $290,336 0.90%(7) 0.90%(7) 1.75%(7) 15% Year Ended: 10/31/05 $319,631 0.90% 0.90% 0.91% 54% 10/31/04(3) 268,310 0.95(7) 0.95(7) 1.15(7) 36 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.95%(7)(9) 1.95%(7)(9) 0.70%(7)(9) 15% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.70%(7)(9) 1.70%(7)(9) 0.95%(7)(9) 15%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Small Cap Value Fund commenced operations on March 1, 2004. (4) The Funds commenced selling Class R-1 and Class R-2 shares on March 1, 2006. 98 See Notes to Financial Statements. Financial Highlights SMALL CAP GROWTH FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS -------------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD LOSS INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ------------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $13.93 $(0.07)(6) $ 2.16 $ 2.09 $ -- $ -- $ -- $16.02 14.93% Year Ended: 10/31/05 $13.00 $(0.13)(6) $ 1.06 $ 0.93 $ -- $ -- $ -- $13.93 7.15% 10/31/04 13.42 (0.14)(6) (0.28) (0.42) -- -- -- 13.00 (3.13) 10/31/03 8.21 (0.09)(6) 5.30 5.21 -- -- -- 13.42 63.46 10/31/02 13.60 (0.14)(6) (4.28) (4.42) -- (0.97) (0.97) 8.21 (35.71) 10/31/01 26.67 (0.20) (9.56) (9.76) -- (3.31) (3.31) 13.60 (40.84) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $12.14 $(0.13)(6) $ 1.87 $ 1.74 $ -- $ -- $ -- $13.88 14.33% Year Ended: 10/31/05 $11.46 $(0.25)(6) $ 0.93 $ 0.68 $ -- $ -- $ -- $12.14 5.93% 10/31/04 11.96 (0.26)(6) (0.24) (0.50) -- -- -- 11.46 (4.18) 10/31/03 7.40 (0.18)(6) 4.74 4.56 -- -- -- 11.96 61.62 10/31/02 12.46 (0.23)(6) (3.86) (4.09) -- (0.97) (0.97) 7.40 (36.36) 10/31/01 24.93 (0.32) (8.84) (9.16) -- (3.31) (3.31) 12.46 (41.35) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $12.31 $(0.11)(6) $ 1.90 $ 1.79 $ -- $ -- $ -- $14.10 14.54% Year Ended: 10/31/05 $11.59 $(0.22)(6) $ 0.94 $ 0.72 $ -- $ -- $ -- $12.31 6.21% 10/31/04 12.06 (0.23)(6) (0.24) (0.47) -- -- -- 11.59 (3.90) 10/31/03 7.42 (0.14)(6) 4.78 4.64 -- -- -- 12.06 62.53 10/31/02(5) 11.51 (0.10)(6) (3.99) (4.09) -- -- -- 7.42 (35.53) CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $14.43 $(0.03)(6) $ 2.22 $ 2.19 $ -- $ -- $ -- $16.62 15.18% Year Ended: 10/31/05 $13.39 $(0.07)(6) $ 1.11 $ 1.04 $ -- $ -- $ -- $14.43 7.77% 10/31/04 13.76 (0.07)(6) (0.30) (0.37) -- -- -- 13.39 (2.62) 10/31/03 8.35 (0.02)(6) 5.43 5.41 -- -- -- 13.76 64.67 10/31/02 13.74 (0.06)(6) (4.36) (4.42) -- (0.97) (0.97) 8.35 (35.32) 10/31/01 26.77 (0.06) (9.66) (9.72) -- (3.31) (3.31) 13.74 (40.49) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $15.61 $(0.01)(6) $ 0.41 $ 0.40 $ -- $ -- $ -- $16.01 2.56% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $15.61 $(0.01)(6) $ 0.41 $ 0.40 $ -- $ -- $ -- $16.01 2.56% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ----------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO RATIO OF AVERAGE AVERAGE NET NET NET INVESTMENT NET ASSETS ASSETS INCOME ASSETS BEFORE AFTER /LOSS TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE ---------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $120,439 1.40%(7) 1.40%(7) (0.88)%(7) 37% Year Ended: 10/31/05 $ 87,252 1.51% 1.51% (1.00)% 251%(10) 10/31/04 92,919 1.46 1.46 (1.01) 53 10/31/03 81,234 1.64 1.64 (0.86) 40 10/31/02 42,984 1.68 1.68 (1.20) 21 10/31/01 66,262 1.52 1.52 (1.03) 46 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 10,030 2.53%(7) 2.53%(7) (2.01)%(7) 37% Year Ended: 10/31/05 $ 9,859 2.65% 2.65% (2.14)% 251%(10) 10/31/04 12,181 2.54 2.54 (2.09) 53 10/31/03 18,037 2.81 2.81 (2.03) 40 10/31/02 14,238 2.64 2.64 (2.16) 21 10/31/01 29,346 2.42 2.42 (1.93) 46 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 1,485 2.16%(7) 2.16%(7) (1.64)%(7) 37% Year Ended: 10/31/05 $ 954 2.33% 2.33% (1.82)% 251%(10) 10/31/04 871 2.28 2.28 (1.83) 53 10/31/03 404 2.28 2.28 (1.50) 40 10/31/02(5) 69 2.25(7) 2.25(7) (1.77)(7) 21 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $294,459 0.93%(7) 0.93%(7) (0.41)%(7) 37% Year Ended: 10/31/05 $239,308 0.98% 0.98% (0.47)% 251%(10) 10/31/04 237,582 0.95 0.95 (0.50) 53 10/31/03 337,271 0.96 0.96 (0.18) 40 10/31/02 123,620 1.00 1.00 (0.52) 21 10/31/01 134,462 0.97 0.97 (0.48) 46 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.98%(7)(9) 1.98%(7)(9) (1.46)%(7)(9) 37% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.73%(7)(9) 1.73%(7)(9) (1.21)%(7)(9) 37%
(5) The Small Cap Growth Fund commenced selling Class C shares on March 1, 2002. (6) Per share numbers have been calculated using the average shares method. (7) Annualized. (8) Amount represents less than $0.01 per share. (9) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class A share ratios adjusted for the respective expenses of the share class. (10) The Small Cap Growth Fund had unusually high portfolio turnover due to a change in sub-advisors. See Notes to Financial Statements. 99 Financial Highlights INTERNATIONAL GROWTH FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS -------------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME/(LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ------------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $10.74 $ 0.04(5) $ 2.28 $ 2.32 $(0.16) $ -- $(0.16) $12.90 21.77% Year Ended: 10/31/05 $ 9.21 $ 0.10(5) $ 1.52 $ 1.62 $(0.09) $ -- $(0.09) $10.74 17.60% 10/31/04 8.38 0.06(5) 0.85 0.91 (0.08) -- (0.08) 9.21 10.89 10/31/03 6.76 0.03(5) 1.63 1.66 (0.04) -- (0.04) 8.38 24.75 10/31/02 7.61 (0.02)(5) (0.75) (0.77) (0.08) -- (0.08) 6.76 (10.36) 10/31/01 10.97 (0.02) (2.67) (2.69) (0.01) (0.66) (0.67) 7.61 (25.99) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $10.24 $(0.02)(5) $ 2.18 $ 2.16 $(0.07) $ -- $(0.07) $12.33 21.11% Year Ended: 10/31/05 $ 8.80 $(0.01)(5) $ 1.45 $ 1.44 $ -- $ -- $ -- $10.24 16.36% 10/31/04 8.03 (0.04)(5) 0.81 0.77 -- -- -- 8.80 9.59 10/31/03 6.51 (0.05)(5) 1.57 1.52 -- -- -- 8.03 23.35 10/31/02 7.35 (0.09)(5) (0.73) (0.82) (0.02) -- (0.02) 6.51 (11.23) 10/31/01 10.70 (0.10) (2.58) (2.68) (0.01) (0.66) (0.67) 7.35 (26.68) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $10.14 $(0.00)(5)(6) $ 2.15 $ 2.15 $(0.13) $ -- $(0.13) $12.16 21.32% Year Ended: 10/31/05 $ 8.75 $ 0.01(5) $ 1.44 $ 1.45 $(0.06) $ -- $(0.06) $10.14 16.60% 10/31/04 8.02 (0.02)(5) 0.81 0.79 (0.06) -- (0.06) 8.75 9.87 10/31/03 6.53 (0.03)(5) 1.56 1.53 (0.04) -- (0.04) 8.02 23.57 10/31/02(3) 7.55 (0.05)(5) (0.96) (1.01) (0.01) -- (0.01) 6.53 (13.34) CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $10.81 $0.07(5) $ 2.29 $ 2.36 $(0.20) $ -- $(0.20) $12.97 22.02% Year Ended: 10/31/05 $ 9.26 $0.15(5) $ 1.53 $ 1.68 $(0.13) $ -- $(0.13) $10.81 18.19% 10/31/04 8.43 0.11(5) 0.84 0.95 (0.12) -- (0.12) 9.26 11.38 10/31/03 6.80 0.08(5) 1.64 1.72 (0.09) -- (0.09) 8.43 25.56 10/31/02 7.69 0.04(5) (0.75) (0.71) (0.18) -- (0.18) 6.80 (9.61) 10/31/01 11.00 0.04 (2.68) (2.64) (0.01) (0.66) (0.67) 7.69 (25.53) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $12.05 $0.02(5) $ 0.83 $ 0.85 $ -- $ -- $ -- $12.90 7.06% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $12.05 $0.02(5) $ 0.83 $ 0.85 $ -- $ -- $ -- $12.90 7.06% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ---------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO RATIO OF AVERAGE AVERAGE NET NET NET INVESTMENT NET ASSETS ASSETS INCOME/ ASSETS BEFORE AFTER (LOSS) TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE ---------- ---------- ----------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $ 105,830 1.30%(7) 1.30%(7) 0.71%(7) 18% Year Ended: 10/31/05 $ 55,628 1.39% 1.39% 1.02% 24% 10/31/04 38,864 1.49 1.49 0.68 20 10/31/03 26,429 1.70 1.70 0.47 19 10/31/02 21,317 1.93 1.93 (0.20) 25 10/31/01 16,636 1.93 1.93 (0.25) 27 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 10,328 2.35%(7) 2.35%(7) (0.34)%(7) 18% Year Ended: 10/31/05 $ 4,822 2.51% 2.51% (0.10)% 24% 10/31/04 3,630 2.62 2.62 (0.45) 20 10/31/03 4,020 2.91 2.91 (0.74) 19 10/31/02 4,732 2.91 2.91 (1.18) 25 10/31/01 7,172 2.74 2.74 (1.06) 27 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 3,972 2.09%(7) 2.09%(7) (0.08)%(7) 18% Year Ended: 10/31/05 $ 1,169 2.29% 2.29% 0.12% 24% 10/31/04 445 2.36 2.36 (0.19) 20 10/31/03 91 2.64 2.64 (0.47) 19 10/31/02(3) 53 2.67(7) 2.67(7) (0.94)(7) 25 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $1,107,417 0.92%(7) 0.92%(7) 1.09%(7) 18% Year Ended: 10/31/05 $ 780,519 0.95% 0.95% 1.46% 24% 10/31/04 539,471 0.99 0.99 1.18 20 10/31/03 317,493 1.07 1.07 1.10 19 10/31/02 185,137 1.19 1.19 0.54 25 10/31/01 124,886 1.18 1.18 0.50 27 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.97%(7)(8) 1.97%(7)(8) 0.04%(7)(8) 18% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.72%(7)(8) 1.72%(7)(8) 0.29%(7)(8) 18%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. (4) The Funds commenced selling Class R-1 and Class R-2 shares on March 1, 2006. 100 See Notes to Financial Statements. Financial Highlights SHORT TERM INCOME FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $2.31 $0.04 $(0.01) $ 0.03 $(0.04) $-- $(0.04) $2.30 1.36% Year Ended: 10/31/05 $2.38 $0.08 $(0.07) $ 0.01 $(0.08) $-- $(0.08) $2.31 0.49% 10/31/04 2.39 0.08 (0.01) 0.07 (0.08) -- (0.08) 2.38 2.87 10/31/03 2.34 0.09 0.06 0.15 (0.10) -- (0.10) 2.39 6.28 10/31/02 2.41 0.12 (0.07) 0.05 (0.12) -- (0.12) 2.34 2.18 10/31/01 2.29 0.13 0.12 0.25 (0.13) -- (0.13) 2.41 11.31 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $2.31 $0.03 $(0.01) $ 0.02 $(0.03) $-- $(0.03) $2.30 0.99% Year Ended: 10/31/05 $2.38 $0.06 $(0.07) $(0.01) $(0.06) $-- $(0.06) $2.31 (0.26)% 10/31/04 2.39 0.06 (0.01) 0.05 (0.06) -- (0.06) 2.38 2.11 10/31/03 2.34 0.07 0.06 0.13 (0.08) -- (0.08) 2.39 5.49 10/31/02 2.41 0.10 (0.07) 0.03 (0.10) -- (0.10) 2.34 1.41 10/31/01 2.29 0.12 0.12 0.24 (0.12) -- (0.12) 2.41 10.52 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $2.31 $0.03 $(0.01) $ 0.02 $(0.03) $-- $(0.03) $2.30 1.00% Year Ended: 10/31/05 $2.38 $0.06 $(0.07) $(0.01) $(0.06) $-- $(0.06) $2.31 (0.26)% 10/31/04 2.39 0.06 (0.01) 0.05 (0.06) -- (0.06) 2.38 2.10 10/31/03 2.34 0.07 0.06 0.13 (0.08) -- (0.08) 2.39 5.48 10/31/02(3) 2.37 0.07 (0.03) 0.04 (0.07) -- (0.07) 2.34 1.61 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $2.31 $0.05 $(0.01) $ 0.04 $(0.05) $-- $(0.05) $2.30 1.57% Year Ended: 10/31/05 $2.38 $0.09 $(0.07) $ 0.02 $(0.09) $-- $(0.09) $2.31 0.74% 10/31/04 2.39 0.08 (0.01) 0.07 (0.08) -- (0.08) 2.38 3.13 10/31/03 2.34 0.09 0.06 0.15 (0.10) -- (0.10) 2.39 6.55 10/31/02 2.41 0.13 (0.07) 0.06 (0.13) -- (0.13) 2.34 2.53 10/31/01 2.29 0.15 0.12 0.27 (0.15) -- (0.15) 2.41 11.93 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $2.31 $0.02 $(0.03) $(0.01) $ -- $-- $ -- $2.30 (0.43)% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $2.31 $0.02 $(0.03) $(0.01) $ -- $-- $ -- $2.30 (0.43)% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA -------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE --------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $ 32,653 0.95%(7) 0.95%(7) 3.69%(7) 3% Year Ended: 10/31/05 $ 36,287 0.93% 0.81% 3.36% 13% 10/31/04 54,082 0.92 0.83 3.23 14 10/31/03 71,920 0.97 0.84 3.58 33 10/31/02 28,106 1.09 0.96 5.03 28 10/31/01 18,929 1.15 0.83 5.63 27 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 19,725 1.69%(7) 1.69%(7) 2.95%(7) 3% Year Ended: 10/31/05 $ 23,617 1.70% 1.56% 2.61% 13% 10/31/04 31,812 1.70 1.58 2.48 14 10/31/03 44,310 1.70 1.59 2.83 33 10/31/02 24,621 1.77 1.71 4.28 28 10/31/01 6,595 1.86 1.54 4.92 27 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 7,876 1.67%(7) 1.67%(7) 2.97%(7) 3% Year Ended: 10/31/05 $ 13,477 1.65% 1.56% 2.61% 13% 10/31/04 18,970 1.66 1.58 2.48 14 10/31/03 17,843 1.65 1.59 2.83 33 10/31/02(3) 5,743 1.68(7) 1.68(7) 4.31(7) 28 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $195,320 0.55%(7) 0.55%(7) 4.09%(7) 3% Year Ended: 10/31/05 $195,607 0.56% 0.56% 3.61% 13% 10/31/04 168,947 0.58 0.58 3.48 14 10/31/03 129,443 0.59 0.59 3.83 33 10/31/02 89,210 0.61 0.61 5.38 28 10/31/01 110,710 0.59 0.27 6.19 27 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.60%(7)(8) 1.60%(7)(8) 3.04%(7)(8) 3% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.35%(7)(8) 1.35%(7)(8) 3.29%(7)(8) 3%
(5) Per share numbers have been calculated using the average shares method. (6) Amount represents less than $0.01 per share. (7) Annualized. (8) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class Ashare ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 101 Financial Highlights U.S. GOVERNMENT SECURITIES FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $10.53 $0.22 $(0.13) $ 0.09 $(0.24) $-- $(0.24) $10.38 0.82% Year Ended: 10/31/05 $10.88 $0.41(5) $(0.30) $ 0.11 $(0.46) $-- $(0.46) $10.53 1.02% 10/31/04 10.89 0.40(5) 0.05 0.45 (0.46) -- (0.46) 10.88 4.26 10/31/03 11.19 0.40(5) (0.19) 0.21 (0.51) -- (0.51) 10.89 1.94 10/31/02 11.20 0.54 0.04 0.58 (0.59) -- (0.59) 11.19 5.37 10/31/01 10.55 0.62 0.65 1.27 (0.62) -- (0.62) 11.20 12.39 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $10.52 $0.18 $(0.13) $ 0.05 $(0.20) $-- $(0.20) $10.37 0.45% Year Ended: 10/31/05 $10.87 $0.33(5) $(0.30) $ 0.03 $(0.38) $-- $(0.38) $10.52 0.28% 10/31/04 10.88 0.32(5) 0.05 0.37 (0.38) -- (0.38) 10.87 3.50 10/31/03 11.18 0.32(5) (0.19) 0.13 (0.43) -- (0.43) 10.88 1.20 10/31/02 11.19 0.46 0.04 0.50 (0.51) -- (0.51) 11.18 4.62 10/31/01 10.54 0.54 0.65 1.19 (0.54) -- (0.54) 11.19 11.59 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $10.51 $0.18 $(0.13) $ 0.05 $(0.20) $-- $(0.20) $10.36 0.46% Year Ended: 10/31/05 $10.86 $0.33(5) $(0.30) $ 0.03 $(0.38) $-- $(0.38) $10.51 0.29% 10/31/04 10.87 0.32(5) 0.05 0.37 (0.38) -- (0.38) 10.86 3.53 10/31/03 11.18 0.32(5) (0.20) 0.12 (0.43) -- (0.43) 10.87 1.12 10/31/02(3) 11.00 0.33 0.18 0.51 (0.33) -- (0.33) 11.18 4.74 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $10.53 $0.24 $(0.13) $ 0.11 $(0.26) $-- $(0.26) $10.38 1.01% Year Ended: 10/31/05 $10.88 $0.45(5) $(0.30) $ 0.15 $(0.50) $-- $(0.50) $10.53 1.41% 10/31/04 10.89 0.44(5) 0.05 0.49 (0.50) -- (0.50) 10.88 4.65 10/31/03 11.19 0.44(5) (0.19) 0.25 (0.55) -- (0.55) 10.89 2.32 10/31/02 11.20 0.58 0.04 0.62 (0.63) -- (0.63) 11.19 5.77 10/31/01 10.55 0.66 0.65 1.31 (0.66) -- (0.66) 11.20 12.81 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $10.55 $0.08 $(0.25) $(0.17) $ -- $-- $ -- $10.38 (1.61)% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $10.55 $0.08 $(0.25) $(0.17) $ -- $-- $ -- $10.38 (1.61)% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 00S) WAIVERS WAIVERS(2) ASSETS RATE ---------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $ 106,736 0.90%(6) 0.90%(6) 4.20%(6) 6% Year Ended: 10/31/05 $ 120,615 0.92% 0.92% 3.84% 34% 10/31/04 134,896 0.93 0.93 3.64 30 10/31/03 176,859 0.93 0.93 3.59 62 10/31/02 196,222 0.96 0.96 4.91 48 10/31/01 174,047 0.95 0.95 5.71 30 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 101,354 1.64%(6) 1.64%(6) 3.46%(6) 6% Year Ended: 10/31/05 $ 122,147 1.65% 1.65% 3.11% 34% 10/31/04 157,900 1.65 1.65 2.92 30 10/31/03 251,153 1.66 1.66 2.86 62 10/31/02 271,440 1.68 1.68 4.19 48 10/31/01 128,155 1.67 1.67 4.99 30 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 7,669 1.62%(6) 1.62%(6) 3.48%(6) 6% Year Ended: 10/31/05 $ 6,775 1.64% 1.64% 3.12% 34% 10/31/04 6,279 1.64 1.64 2.93 30 10/31/03 13,354 1.64 1.64 2.88 62 10/31/02(3) 11,634 1.63(6) 1.63(6) 4.24(6) 48 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $1,560,140 0.52%(6) 0.52%(6) 4.58%(6) 6% Year Ended: 10/31/05 $1,642,617 0.54% 0.54% 4.22% 34% 10/31/04 1,260,104 0.55 0.55 4.02 30 10/31/03 658,676 0.57 0.57 3.95 62 10/31/02 365,912 0.58 0.58 5.29 48 10/31/01 301,656 0.57 0.57 6.09 30 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.57%(6)(7) 1.57%(6)(7) 3.53%(6)(7) 6% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.32%(6)(7) 1.32%(6)(7) 3.78%(6)(7) 6%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. (4) The Funds commenced selling Class R-1 and R-2 shares on March 1, 2006. 102 See Notes to Financial Statements. Financial Highlights INCOME FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $9.05 $0.24 $(0.08) $ 0.16 $(0.25) $-- $(0.25) $8.96 1.68% Year Ended: 10/31/05 $9.46 $0.45 $(0.38) $ 0.07 $(0.48) $-- $(0.48) $9.05 0.75% 10/31/04 9.35 0.46 0.15 0.61 (0.50) -- (0.50) 9.46 6.68 10/31/03 9.02 0.51 0.38 0.89 (0.56) -- (0.56) 9.35 10.10 10/31/02 9.32 0.60 (0.28) 0.32 (0.62) -- (0.62) 9.02 3.63 10/31/01 8.90 0.62 0.43 1.05 (0.63) -- (0.63) 9.32 12.21 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $9.08 $0.20 $(0.09) $ 0.11 $(0.21) $-- $(0.21) $8.98 1.19% Year Ended: 10/31/05 $9.49 $0.38 $(0.38) $ 0.00 $(0.41) $-- $(0.41) $9.08 0.02% 10/31/04 9.37 0.39 0.16 0.55 (0.43) -- (0.43) 9.49 6.03 10/31/03 9.04 0.44 0.38 0.82 (0.49) -- (0.49) 9.37 9.31 10/31/02 9.35 0.54 (0.29) 0.25 (0.56) -- (0.56) 9.04 2.79 10/31/01 8.92 0.56 0.44 1.00 (0.57) -- (0.57) 9.35 11.52 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $9.08 $0.20 $(0.09) $ 0.11 $(0.21) $-- $(0.21) $8.98 1.18% Year Ended: 10/31/05 $9.49 $0.38 $(0.38) $ 0.00 $(0.41) $-- $(0.41) $9.08 0.01% 10/31/04 9.37 0.39 0.16 0.55 (0.43) -- (0.43) 9.49 6.02 10/31/03 9.04 0.45 0.38 0.83 (0.50) -- (0.50) 9.37 9.33 10/31/02(3) 9.21 0.37 (0.17) 0.20 (0.37) -- (0.37) 9.04 2.25 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $9.07 $0.25 $(0.09) $ 0.16 $(0.26) $-- $(0.26) $8.97 1.75% Year Ended: 10/31/05 $9.48 $0.49 $(0.38) $ 0.11 $(0.52) $-- $(0.52) $9.07 1.13% 10/31/04 9.36 0.50 0.16 0.66 (0.54) -- (0.54) 9.48 7.18 10/31/03 9.03 0.55 0.38 0.93 (0.60) -- (0.60) 9.36 10.51 10/31/02 9.34 0.64 (0.29) 0.35 (0.66) -- (0.66) 9.03 3.94 10/31/01 8.91 0.66 0.44 1.10 (0.67) -- (0.67) 9.34 12.78 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $9.11 $0.09 $(0.24) $(0.15) $ -- $-- $ -- $8.96 (1.65)% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $9.11 $0.09 $(0.24) $(0.15) $ -- $-- $ -- $8.96 (1.65)% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 00S) WAIVERS WAIVERS ASSETS RATE -------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $147,116 0.89%(6) 0.89%(6) 5.28%(6) 12% Year Ended: 10/31/05 $147,521 0.91% 0.91% 4.83% 20% 10/31/04 147,695 0.92 0.92 4.90 24 10/31/03 153,654 0.94 0.94 5.42 33 10/31/02 130,512 0.97 0.97 6.61 20 10/31/01 120,508 0.97 0.97 6.86 35 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $111,278 1.64%(6) 1.64%(6) 4.53%(6) 12% Year Ended: 10/31/05 $128,067 1.65% 1.65% 4.09% 20% 10/31/04 152,065 1.65 1.65 4.17 24 10/31/03 194,396 1.65 1.65 4.71 33 10/31/02 142,186 1.68 1.68 5.90 20 10/31/01 72,472 1.69 1.69 6.14 35 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 10,730 1.65%(6) 1.65%(6) 4.52%(6) 12% Year Ended: 10/31/05 $ 10,761 1.66% 1.66% 4.08% 20% 10/31/04 11,580 1.65 1.65 4.17 24 10/31/03 15,274 1.63 1.63 4.73 33 10/31/02(3) 7,710 1.62(6) 1.62(6) 5.96(6) 20 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $985,759 0.53%(6) 0.53%(6) 5.64%(6) 12% Year Ended: 10/31/05 $903,915 0.54% 0.54% 5.20% 20% 10/31/04 834,726 0.55 0.55 5.27 24 10/31/03 679,139 0.56 0.56 5.80 33 10/31/02 487,376 0.56 0.56 7.02 20 10/31/01 387,998 0.56 0.56 7.27 35 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.58%(6)(7) 1.58%(6)(7) 4.59%(6)(7) 12% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.33%(6)(7) 1.33%(6)(7) 4.84%(6)(7) 12%
(5) Per share numbers have been calculated using the average shares method. (6) Annualized. (7) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class A share ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 103 Financial Highlights HIGH YIELD FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $8.23 $0.30(5) $ 0.37 $ 0.67 $(0.28) $-- $(0.28) $8.62 8.23% Year Ended: 10/31/05 $8.28 $0.56 $(0.03) $ 0.53 $(0.58) $-- $(0.58) $8.23 6.56% 10/31/04 7.88 0.58 0.43 1.01 (0.61) -- (0.61) 8.28 13.23 10/31/03 6.63 0.61(5) 1.31 1.92 (0.67) -- (0.67) 7.88 30.13 10/31/02 7.44 0.71 (0.72) (0.01) (0.80) -- (0.80) 6.63 (0.48) 10/31/01 8.50 0.84 (1.00) (0.16) (0.90) -- (0.90) 7.44 (1.97) CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $8.27 $0.27(5) $ 0.37 $ 0.64 $(0.25) $-- $(0.25) $8.66 7.80% Year Ended: 10/31/05 $8.32 $0.50 $(0.03) $ 0.47 $(0.52) $-- $(0.52) $8.27 5.75% 10/31/04 7.91 0.52 0.44 0.96 (0.55) -- (0.55) 8.32 12.50 10/31/03 6.66 0.56(5) 1.31 1.87 (0.62) -- (0.62) 7.91 29.08 10/31/02 7.47 0.66 (0.72) (0.06) (0.75) -- (0.75) 6.66 (1.17) 10/31/01 8.54 0.78 (1.01) (0.23) (0.84) -- (0.84) 7.47 (2.72) CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $8.27 $0.27(5) $ 0.37 $ 0.64 $(0.25) $-- $(0.25) $8.66 7.81% Year Ended: 10/31/05 $8.32 $0.50 $(0.03) $ 0.47 $(0.52) $-- $(0.52) $8.27 5.77% 10/31/04 7.91 0.52 0.44 0.96 (0.55) -- (0.55) 8.32 12.51 10/31/03 6.67 0.56(5) 1.30 1.86 (0.62) -- (0.62) 7.91 29.08 10/31/02(3) 7.55 0.46 (0.86) (0.40) (0.48) -- (0.48) 6.67 (5.66) CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $8.22 $0.31(5) $ 0.37 $ 0.68 $(0.29) $-- $(0.29) $8.61 8.42% Year Ended: 10/31/05 $8.27 $0.58 $(0.03) $ 0.55 $(0.60) $-- $(0.60) $8.22 6.91% 10/31/04 7.86 0.60 0.44 1.04 (0.63) -- (0.63) 8.27 13.75 10/31/03 6.62 0.63(5) 1.30 1.93 (0.69) -- (0.69) 7.86 30.44 10/31/02 7.43 0.73 (0.72) 0.01 (0.82) -- (0.82) 6.62 (0.15) 10/31/01 8.48 0.87 (0.99) (0.12) (0.93) -- (0.93) 7.43 (1.49) CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $8.57 $0.10(5) $(0.01)(6) $ 0.09 $(0.04) $-- $(0.04) $8.62 1.08% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $8.57 $0.13(5) $(0.08)(6) $ 0.05 $ -- $-- $ -- $8.62 0.58% RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE --------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $183,966 0.92%(7) 0.90%(7) 7.21%(7) 53% Year Ended: 10/31/05 $111,164 0.92% 0.92% 6.76% 94% 10/31/04 85,190 0.93 0.93 7.11 82 10/31/03 48,618 0.97 0.97 8.24 61 10/31/02 13,563 1.03 1.03 9.72 60 10/31/01 9,035 1.09 1.08 10.47 27 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 75,410 1.69%(7) 1.67%(7) 6.44%(7) 53% Year Ended: 10/31/05 $ 73,667 1.68% 1.68% 6.00% 94% 10/31/04 80,036 1.69 1.69 6.35 82 10/31/03 83,665 1.73 1.73 7.48 61 10/31/02 44,004 1.78 1.78 8.97 60 10/31/01 35,391 1.78 1.77 9.78 27 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 46,797 1.67%(7) 1.65%(7) 6.46%(7) 53% Year Ended: 10/31/05 $ 38,475 1.66% 1.66% 6.02% 94% 10/31/04 33,318 1.68 1.68 6.36 82 10/31/03 24,540 1.71 1.71 7.50 61 10/31/02(3) 2,556 1.78(7) 1.78(7) 8.97(7) 60 CLASS I SHARES Six Months Ended (unaudited): 4/30/06 $581,595 0.59%(7) 0.57%(7) 7.54%(7) 53% Year Ended: 10/31/05 $588,409 0.59% 0.59% 7.09% 94% 10/31/04 526,095 0.61 0.61 7.43 82 10/31/03 424,781 0.64 0.64 8.57 61 10/31/02 244,937 0.68 0.68 10.07 60 10/31/01 201,385 0.69 0.68 10.87 27 CLASS R-1 SHARES Period Ended (unaudited): 4/30/06(4) $ 44 1.64%(7) 1.62%(7) 6.49%(7) 53% CLASS R-2 SHARES Period Ended (unaudited): 4/30/06(4) $ -- 1.39%(7)(9) 1.37%(7)(9) 6.74%(7)(9) 53%
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. (4) The High Yield Fund commenced selling Class R-1 and R-2 shares on March 1, 2006. 104 See Notes to Financial Statements. Financial Highlights TAX-EXEMPT BOND FUND For a Fund share outstanding throughout each period.
INCOME FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $7.70 $0.16 $(0.00)(8) $0.16 $(0.16) $(0.15) $(0.31) $7.55 2.13% Year Ended: 10/31/05 $7.95 $0.33 $(0.16) $0.17 $(0.33) $(0.09) $(0.42) $7.70 2.19% 10/31/04 7.96 0.33 0.08 0.41 (0.33) (0.09) (0.42) 7.95 5.35 10/31/03 7.95 0.34 0.08 0.42 (0.34) (0.07) (0.41) 7.96 5.31 10/31/02 7.93 0.35 0.03 0.38 (0.35) (0.01) (0.36) 7.95 5.02 10/31/01 7.55 0.37 0.38 0.75 (0.37) -- (0.37) 7.93 10.16 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $7.70 $0.13 $(0.00)(8) $0.13 $(0.13) $(0.15) $(0.28) $7.55 1.75% Year Ended: 10/31/05 $7.95 $0.27 $(0.16) $0.11 $(0.27) $(0.09) $(0.36) $7.70 1.43% 10/31/04 7.96 0.27 0.08 0.35 (0.27) (0.09) (0.36) 7.95 4.57 10/31/03 7.95 0.28 0.08 0.36 (0.28) (0.07) (0.35) 7.96 4.53 10/31/02 7.93 0.29 0.03 0.32 (0.29) (0.01) (0.30) 7.95 4.25 10/31/01 7.55 0.31 0.38 0.69 (0.31) -- (0.31) 7.93 9.35 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $7.70 $0.13 $(0.00)(8) $0.13 $(0.13) $(0.15) $(0.28) $7.55 1.72% Year Ended: 10/31/05 $7.95 $0.27 $(0.16) $0.11 $(0.27) $(0.09) $(0.36) $7.70 1.41% 10/31/04 7.96 0.27 0.08 0.35 (0.27) (0.09) (0.36) 7.95 4.58 10/31/03 7.95 0.28 0.08 0.36 (0.28) (0.07) (0.35) 7.96 4.54 10/31/02(3) 7.83 0.20 0.12 0.32 (0.20) -- (0.20) 7.95 4.06 RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS(2) ASSETS RATE --------- ---------- ---------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $169,423 0.86%(7) 0.86%(7) 4.32%(7) 11% Year Ended: 10/31/05 $175,146 0.87% 0.87% 4.22% 28% 10/31/04 184,711 0.90 0.90 4.22 25 10/31/03 207,433 0.88 0.88 4.20 47 10/31/02 213,673 0.90 0.90 4.49 46 10/31/01 219,883 0.89 0.89 4.75 44 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $ 26,964 1.61%(7) 1.61%(7) 3.57%(7) 11% Year Ended: 10/31/05 $ 30,073 1.62% 1.62% 3.47% 28% 10/31/04 35,433 1.65 1.65 3.47 25 10/31/03 45,061 1.62 1.62 3.46 47 10/31/02 47,308 1.64 1.64 3.75 46 10/31/01 43,978 1.63 1.63 4.01 44 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 2,752 1.65%(7) 1.65%(7) 3.53%(7) 11% Year Ended: 10/31/05 $ 2,360 1.63% 1.63% 3.46% 28% 10/31/04 3,641 1.65 1.65 3.47 25 10/31/03 4,332 1.61 1.61 3.47 47 10/31/02(3) 2,395 1.61(7) 1.61(7) 3.78(7) 46
(5) Per share numbers have been calculated using the average share method. (6) The amount shown may not accord with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of Fund shares. (7) Annualized. (8) Amount represents less than $0.01 per share. (9) Ratios of expenses and net investment income to average net assets are hypothetical, based on Class A share ratios adjusted for the respective expenses of the share class. See Notes to Financial Statements. 105 Financial Highlights CALIFORNIA MUNICIPAL FUND For a Fund share outstanding throughout each period.
INCOME FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $11.24 $0.24 $(0.01) $0.23 $(0.24) $(0.14) $(0.38) $11.09 2.09% Year Ended: 10/31/05 $11.42 $0.48 $(0.15) $0.33 $(0.48) $(0.03) $(0.51) $11.24 2.90% 10/31/04 11.22 0.49 0.20 0.69 (0.49) -- (0.49) 11.42 6.25 10/31/03 11.35 0.47 (0.06) 0.41 (0.47) (0.07) (0.54) 11.22 3.69 10/31/02 11.34 0.50 0.00(4) 0.50 (0.49) -- (0.49) 11.35 4.57 10/31/01 10.81 0.53 0.53 1.06 (0.53) -- (0.53) 11.34 9.99 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $11.24 $0.20 $(0.01) $0.19 $(0.20) $(0.14) $(0.34) $11.09 1.71% Year Ended: 10/31/05 $11.42 $0.39 $(0.15) $0.24 $(0.39) $(0.03) $(0.42) $11.24 2.13% 10/31/04 11.22 0.40 0.20 0.60 (0.40) -- (0.40) 11.42 5.47 10/31/03 11.35 0.38 (0.06) 0.32 (0.38) (0.07) (0.45) 11.22 2.92 10/31/02 11.34 0.42 0.00(4) 0.42 (0.41) -- (0.41) 11.35 3.79 10/31/01 10.81 0.44 0.53 0.97 (0.44) -- (0.44) 11.34 9.19 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $11.24 $0.20 $(0.01) $0.19 $(0.20) $(0.14) $(0.34) $11.09 1.70% Year Ended: 10/31/05 $11.42 $0.39 $(0.15) $0.24 $(0.39) $(0.03) $(0.42) $11.24 2.13% 10/31/04 11.22 0.40 0.20 0.60 (0.40) -- (0.40) 11.42 5.46 10/31/03 11.35 0.38 (0.06) 0.32 (0.38) (0.07) (0.45) 11.22 2.92 10/31/02(3) 11.20 0.28 0.14 0.42 (0.27) -- (0.27) 11.35 3.77 RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA -------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS (2) ASSETS RATE --------- ---------- ----------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $249,169 0.84%(5) 0.84%(5) 4.29%(5) 15% Year Ended: 10/31/05 $241,879 0.84% 0.84% 4.19% 26% 10/31/04 232,239 0.85 0.85 4.32 27 10/31/03 252,511 0.85 0.85 4.14 34 10/31/02 286,095 0.86 0.86 4.39 48 10/31/01 291,132 0.86 0.85 4.74 52 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $147,670 1.59%(5) 1.59%(5) 3.54%(5) 15% Year Ended: 10/31/05 $162,534 1.59% 1.59% 3.44% 26% 10/31/04 195,930 1.59 1.59 3.58 27 10/31/03 255,445 1.59 1.59 3.40 34 10/31/02 295,662 1.60 1.60 3.65 48 10/31/01 237,594 1.59 1.58 4.01 52 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $3,968 1.60%(5) 1.60%(5) 3.53%(5) 15% Year Ended: 10/31/05 $4,641 1.59% 1.59% 3.44% 26% 10/31/04 5,275 1.60 1.60 3.57 27 10/31/03 8,193 1.59 1.59 3.40 34 10/31/02(3) 6,665 1.58(5) 1.58(5) 3.67(5) 48
(1) Total return is not annualized for periods of less than one year and does not reflect any applicable sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses reimbursed by the investment advisor or if fees had not been reduced by credits allowed by the custodian. (2) Ratio of operating expenses to average net assets includes expenses paid indirectly through custodian credits. (3) The Funds commenced selling Class C shares on March 1, 2002. 106 See Notes to Financial Statements. Financial Highlights CALIFORNIA INSURED INTERMEDIATE MUNICIPAL FUND For a Fund share outstanding throughout each period.
INCOME/(LOSS) FROM INVESTMENT OPERATIONS ----------------------------------- NET LESS DISTRIBUTIONS REALIZED ---------------------------------------- NET AND DISTRIBUTIONS NET ASSET UNREALIZED DIVIDENDS FROM NET ASSET VALUE NET GAIN/(LOSS) TOTAL FROM FROM NET REALIZED VALUE BEGINNING INVESTMENT ON INVESTMENT INVESTMENT CAPITAL TOTAL END OF TOTAL OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS PERIOD RETURN(1) --------- ---------- ----------- ---------- ---------- ------------- ------------- ------ --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $10.85 $0.18 $(0.05) $ 0.13 $(0.18) $(0.02) $(0.20) $10.78 1.22% Year Ended: 10/31/05 $11.14 $0.34 $(0.29) $ 0.05 $(0.34) $(0.00)(4) $(0.34) $10.85 0.52% 10/31/04 11.14 0.33 0.10 0.43 (0.33) (0.10) (0.43) 11.14 4.02 10/31/03 11.08 0.35 0.12 0.47 (0.35) (0.06) (0.41) 11.14 4.29 10/31/02 10.98 0.39 0.15 0.54 (0.39) (0.05) (0.44) 11.08 5.12 10/31/01 10.58 0.44 0.49 0.93 (0.44) (0.09) (0.53) 10.98 9.00 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $10.85 $0.14 $(0.05) $ 0.09 $(0.14) $(0.02) $(0.16) $10.78 0.84% Year Ended: 10/31/05 $11.14 $0.26 $(0.29) $(0.03) $(0.26) $(0.00)(4) $(0.26) $10.85 (0.24)% 10/31/04 11.14 0.25 0.10 0.35 (0.25) (0.10) (0.35) 11.14 3.24 10/31/03 11.08 0.27 0.12 0.39 (0.27) (0.06) (0.33) 11.14 3.51 10/31/02 10.98 0.31 0.15 0.46 (0.31) (0.05) (0.36) 11.08 4.32 10/31/01 10.58 0.36 0.49 0.85 (0.36) (0.09) (0.45) 10.98 8.19 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $10.85 $0.14 $(0.05) $ 0.09 $(0.14) $(0.02) $(0.16) $10.78 0.85% Year Ended: 10/31/05 $11.14 $0.26 $(0.29) $(0.03) $(0.26) $(0.00)(4) $(0.26) $10.85 (0.24)% 10/31/04 11.14 0.25 0.10 0.35 (0.25) (0.10) (0.35) 11.14 3.24 10/31/03 11.08 0.27 0.12 0.39 (0.27) (0.06) (0.33) 11.14 3.50 10/31/02(3) 10.90 0.21 0.18 0.39 (0.21) -- (0.21) 11.08 3.58 RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------------- RATIO OF RATIO OF EXPENSES EXPENSES TO TO AVERAGE AVERAGE RATIO OF NET NET NET NET ASSETS ASSETS INVESTMENT ASSETS BEFORE AFTER INCOME TO END OF REIMBURSE- REIMBURSE- AVERAGE PORTFOLIO PERIOD MENTS/ MENTS/ NET TURNOVER (IN 000S) WAIVERS WAIVERS (2) ASSETS RATE --------- ---------- ----------- ---------- --------- CLASS A SHARES Six Months Ended (unaudited): 4/30/06 $61,597 0.87%(5) 0.86%(5) 3.29%(5) 16% Year Ended: 10/31/05 $65,667 0.87% 0.87% 3.11% 27% 10/31/04 65,772 0.86 0.85 3.02 37 10/31/03 75,231 0.86 0.77 3.15 65 10/31/02 57,102 0.89 0.70 3.59 28 10/31/01 39,996 0.92 0.73 4.09 23 CLASS B SHARES Six Months Ended (unaudited): 4/30/06 $52,991 1.63%(5) 1.62%(5) 2.53%(5) 16% Year Ended: 10/31/05 $59,562 1.63% 1.63% 2.35% 27% 10/31/04 71,502 1.62 1.61 2.26 37 10/31/03 93,448 1.62 1.53 2.39 65 10/31/02 89,240 1.65 1.46 2.83 28 10/31/01 51,525 1.67 1.48 3.34 23 CLASS C SHARES Six Months Ended (unaudited): 4/30/06 $ 6,837 1.62%(5) 1.61%(5) 2.54%(5) 16% Year Ended: 10/31/05 $ 7,476 1.63% 1.63% 2.35% 27% 10/31/04 8,763 1.62 1.61 2.26 37 10/31/03 10,317 1.62 1.53 2.39 65 10/31/02(3) 7,953 1.64(5) 1.45(5) 2.84(5) 28
(4) Amount represents less than $0.01 per share. (5) Annualized. See Notes to Financial Statements. 107 Notes to Financial Statements (unaudited) WM GROUP OF FUNDS 1. ORGANIZATION AND BUSINESS WM Trust I ("Trust I") and WM Trust II ("Trust II") (collectively, the "Trusts") were organized as Massachusetts business trusts on September 19, 1997 and February 22, 1989, respectively. The Trusts are each registered under the Investment Company Act of 1940, as amended ("1940 Act"), as open-end management investment companies. The Trusts consist of 17 funds, 16 of which (each a "Fund" and collectively, the "Funds") are presented in this report and are as follows: TRUST I TRUST II EQUITY FUNDS EQUITY FUNDS REIT Fund Growth Fund Equity Income Fund Small Cap Growth Fund Growth & Income Fund International Growth Fund West Coast Equity Fund Mid Cap Stock Fund Small Cap Value Fund FIXED-INCOME FUNDS FIXED-INCOME FUND U.S. Government Securities Fund Short Term Income Fund Income Fund High Yield Fund MUNICIPAL FUND MUNICIPAL FUNDS Tax-Exempt Bond Fund California Municipal Fund California Insured Intermediate Municipal Fund
WM Advisors, Inc. (the "Advisor") serves as investment advisor to the Trusts. The Advisor is a wholly owned subsidiary of Washington Mutual, Inc. ("Washington Mutual"), a publicly owned financial services company. The Trusts are authorized to issue an unlimited number of shares of beneficial interest, each without par value. Each of the Fixed-Income Funds and the Equity Funds offer six classes of shares: Class A, Class B, Class C, Class I, Class R-1, and Class R-2 shares. Each of the Municipal Funds currently offer Class A shares, Class B shares and Class C shares. Class A shares of the Funds are generally subject to an initial sales charge at the time of purchase. Certain Class A shares purchased without an initial sales charge may be subject to a contingent deferred sales charge ("CDSC") if redeemed within eighteen months from the date of purchase. Class B shares are not subject to an initial sales charge although they are generally subject to a CDSC if redeemed within five years from the date of purchase. Class C shares are not subject to an initial sales charge although they are subject to a CDSC if redeemed within one year from the date of purchase. In addition, redemptions from the International Growth Fund, including exchange redemptions, within 90 days of purchase are subject to a redemption fee equal to 2.00% of the redemption proceeds, which are retained by the Fund. Class I shares are sold exclusively to the various investment portfolios of the WM Strategic Asset Management Portfolios, LLC (the "Portfolios"), an affiliated open-end management investment company, and affiliates of Washington Mutual and are not available for direct purchase by investors. Class R-1 and Class R-2 shares are only offered through retirement plans and are not available for direct purchase by investors. Class I, Class R-1, and Class R-2 shares are not subject to an initial sales charge, CDSC or redemption fee. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies, in conformity with accounting principles generally accepted in the United States of America ("generally accepted accounting principles"), which are consistently followed by the Funds in the preparation of their financial statements. 108 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS PORTFOLIO VALUATION: Securities that are primarily traded on a U.S. exchange (excluding securities traded through the NASDAQ National Market System, which are valued at the NASDAQ official closing price) are valued at the last reported sales price from that exchange or, if there were no sales during the day (and no official closing price on such day), at the mean of the current day's bid and asked prices. Securities traded only on over-the-counter markets (other than the NASDAQ National Market System and the U.S. Government Securities System) are valued at the mean of the current day's bid and asked prices. The value of a foreign security is determined in its functional currency as of the close of trading on the foreign exchange on which it is traded or at the close of the New York Stock Exchange, if that is earlier, or if there has been movement in the U.S. market and/or other economic indicators that exceed a specified threshold, the foreign security is fair valued. The value is then converted into its U.S. dollar equivalent using prevailing exchange rates on the day the value of the foreign security is determined. Options are generally valued at the last sale price or, in the absence of a last sale price, at the mean of the current day's bid and asked prices. The value of a futures contract equals the unrealized gain or loss on the contract, which is determined by marking the contract to the current settlement price for a like contract acquired on the day on which the futures contract is being valued. Debt securities of U.S. issuers (other than short-term investments), including municipal securities, are valued by one or more independent pricing services retained by the Trusts. When, in the judgment of a pricing service, market quotations for these securities are readily available, they are valued at the mean between the quoted bid and asked prices. Short-term debt securities that mature in 60 days or less are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available are valued at fair value as determined by, or under the direction of, the Funds' Board of Trustees, which may rely on the assistance of one or more pricing services. REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreement transactions. A repurchase agreement is a purchase of an underlying debt obligation subject to an agreement by the seller to repurchase the obligation at an agreed upon price and time. It is each Fund's policy that its custodian take possession of the underlying collateral securities. The fair value of the collateral is at all times at least equal to the total amount of the repurchase obligation. In the event of counterparty default, the Fund would seek to use the collateral to offset losses incurred. There is potential loss to the Fund in the event the Fund is delayed or prevented from exercising its right to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights. The Advisor, acting under the supervision of the Board of Trustees of the Trusts, reviews the value of the collateral and the creditworthiness of those banks and broker/dealers with whom each Fund enters into repurchase agreements. FUTURES CONTRACTS: Certain Funds may enter into futures transactions. The underlying value of a futures contract is incorporated within the unrealized appreciation/(depreciation) shown in the Portfolio of Investments under the caption "Futures Contracts." Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a certain percentage of the contract amount (known as an initial margin deposit). Subsequent payments (known as variation margins) are made or received by the Fund each day, depending on the daily fluctuation of the value of the contract. The daily changes in contract value are recorded as unrealized gains or losses, and the Fund recognizes a realized gain or loss when the contract is closed. Should market conditions change unexpectedly, the Funds may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. 109 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS PURCHASED OPTION CONTRACTS: Certain Funds may enter into put and call option contracts. These Funds may use option contracts to manage their exposure to the stock and bond markets and to fluctuations in interest rates and currency values. Upon entering into a put or call option, the premium paid is recorded as an investment. The daily changes in contract value are recorded as unrealized gains or losses. When a purchased option expires, the Fund will realize a loss in the amount of the cost of the option. When the Fund enters into a closing sale transaction, the Fund will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option plus related transaction costs. When the Fund exercises a put option, the Fund will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid. The risk associated with purchasing options is limited to the premium originally paid. FOREIGN CURRENCY: The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars on a daily basis using prevailing exchange rates. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. Unrealized gains and losses, not relating to securities, which result from changes in foreign currency exchange rates, have been included in unrealized appreciation/(depreciation) of investments. Unrealized gains and losses of securities, which result from changes in foreign currency exchange rates as well as changes in market prices of securities, have been included in unrealized appreciation/(depreciation) of investments. Net realized foreign currency gains and losses, which result from changes in exchange rates between trade date and settlement date on investment transactions as well as the difference between the amounts of interest and dividends recorded on the books of the Funds and the amount actually received, have been included in realized gains/(losses) on investment transactions. Foreign currency gains and losses, which result from fluctuations in exchange rates between the initial purchase trade date and subsequent sale trade date, have been included in realized gains/(losses) on investment transactions. FORWARD FOREIGN CURRENCY CONTRACTS: Certain Funds may enter into forward foreign currency contracts. Forward foreign currency contracts are agreements to exchange one currency for another at a future date and at a specified price. These Funds may use forward foreign currency contracts to facilitate transactions in foreign securities and to manage the Funds'foreign currency exposure. These contracts are valued daily, and a Fund's net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the "Statements of Assets and Liabilities". Realized and unrealized gains and losses are included in the "Statements of Operations". Due to the risks, the Funds could incur losses up to the entire contract amount, which may exceed the net unrealized value shown in the "Statements of Assets and Liabilities". ILLIQUID INVESTMENTS: Each Fund may invest a portion of its net assets in securities that are not readily marketable, including: (1) repurchase agreements with maturities greater than seven calendar days; (2) time deposits maturing in more than seven calendar days; (3) certain futures contracts and options; (4) certain variable rate demand notes having a demand period of more than seven calendar days; (5) securities, the disposition of which are restricted under federal securities laws, excluding certain Rule 144A securities, as defined in the following paragraph; and (6) certain over-the-counter options. Illiquid securities generally cannot be sold or disposed of in the ordinary course of business (within seven calendar days) at approximately the value at which each Fund has valued the investments. This may have an adverse effect on each Fund's ability to dispose of particular illiquid securities at fair market value and may limit the Fund's ability to obtain accurate market quotations for purposes of valuing the securities and calculating the net asset value per share of the Fund. The Funds may also purchase securities that are not registered under the Securities Act of 1933, as amended (the "Act"), but that can be sold to qualified institutional buyers in accordance with Rule 144A under the Act ("Rule 144 A Securities"). Rule 144 A Securities generally must be sold only to other qualified institutional buyers. If a particular investment in Rule 144 A Securities is not determined to be liquid under the guidelines established by the Board of Trustees, the investment will be subject to a Fund's limitation on investment in illiquid securities as indicated above. 110 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities sold are recorded on the identified cost basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date; interest income is not accrued until settlement date. Each Fund instructs the custodian to segregate assets of the Fund with a current value at least equal to the amount of its when-issued purchase commitments. Interest income on debt securities is accrued daily. Premiums and discounts are amortized using the interest method. Paydown gains and losses on mortgage-backed and asset-backed securities are presented as an adjustment to interest income. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities are recorded as soon as the information is available to the Funds if informed after the ex-dividend date. The Funds estimate components of distributions from real estate investment trusts ("REITs"). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Each Fund's investment income and realized and unrealized gains and losses are allocated among the classes of that Fund based upon the relative average net assets of each class. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income of the Fixed-Income Funds and the Municipal Funds will normally be declared daily and paid monthly. Dividends from net investment income of the REIT and Equity Income Funds are declared and paid quarterly. Dividends from any net investment income of Growth & Income, West Coast Equity, Mid Cap Stock, Growth, Small Cap Value, Small Cap Growth, and International Growth Funds are declared and paid annually. Distributions of any net capital gains earned by a Fund are distributed no less frequently than annually at the discretion of the Board of Trustees. Additional distributions of net investment income and capital gains for each Fund may be made at the discretion of the Board of Trustees of the Trusts in accordance with federal income tax regulations. Distributions from income and capital gains are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Funds, dividends payable, redesignated distributions and differing characterization of distributions made by each Fund. FEDERAL INCOME TAXES: It is each Fund's policy to qualify as a regulated investment company by complying with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), applicable to regulated investment companies and by distributing substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is required. EXPENSES: General expenses of the Trusts are allocated to all the Funds of the Trusts based upon the relative average net assets of each Fund except printing and postage expenses, which are allocated to all the Funds based upon the relative number of shareholder accounts of each Fund. Operating expenses directly attributable to a class of shares are charged to the operations of that class of shares. Expenses of each Fund not directly attributable to the operations of any class of shares are prorated among the classes to which the expenses relate based on the relative average net assets of each class of shares. USE OF ESTIMATES: The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. 111 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS 3. INVESTMENT ADVISORY AND OTHER TRANSACTIONS The Advisor is entitled to a monthly fee at an annual rate based upon a percentage of the average daily net assets of each Fund at the following rates:
FROM $125 FROM $200 FROM $250 FROM $1 FROM $2 FROM $0 MILLION MILLION MILLION FROM $500 BILLION BILLION TO $125 TO $200 TO $250 TO $500 MILLION TO TO $2 TO $3 OVER NAME OF FUND MILLION MILLION MILLION MILLION $1 BILLION BILLION BILLION $3 BILLION - ------------ ------- --------- --------- --------- ---------- ------- ------- ---------- REIT Fund ......................... 0.800% 0.800% 0.800% 0.800% 0.750% 0.750% 0.700% 0.650% Equity Income Fund ................ 0.625% 0.625% 0.625% 0.500% 0.500% 0.500% 0.500% 0.500% Growth & Income Fund .............. 0.625% 0.625% 0.625% 0.500% 0.500% 0.500% 0.500% 0.500% West Coast Equity Fund ............ 0.625% 0.625% 0.625% 0.625% 0.500% 0.375% 0.375% 0.375% Mid Cap Stock Fund ................ 0.750% 0.750% 0.750% 0.750% 0.750% 0.700% 0.650% 0.600% Growth Fund ....................... 0.750% 0.750% 0.750% 0.750% 0.700% 0.700% 0.650% 0.600% Small Cap Value Fund .............. 0.850% 0.850% 0.850% 0.850% 0.750% 0.750% 0.750% 0.700% Small Cap Growth Fund ............. 0.850% 0.850% 0.850% 0.850% 0.750% 0.750% 0.750% 0.700% International Growth Fund ......... 1.000% 0.800% 0.800% 0.800% 0.800% 0.750% 0.750% 0.700% Short Term Income Fund ............ 0.500% 0.500% 0.450% 0.450% 0.400% 0.400% 0.400% 0.400% U.S. Government Securities Fund ... 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.450% 0.450% Income Fund ....................... 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.450% 0.450% High Yield Fund ................... 0.625% 0.625% 0.625% 0.500% 0.500% 0.500% 0.500% 0.500% Tax-Exempt Bond Fund .............. 0.500% 0.500% 0.500% 0.400% 0.400% 0.400% 0.400% 0.400% California Municipal Fund ......... 0.500% 0.500% 0.500% 0.500% 0.500% 0.450% 0.450% 0.450% California Insured Intermediate Municipal Fund ................. 0.500% 0.500% 0.500% 0.500% 0.500% 0.450% 0.450% 0.450%
WM Shareholder Services, Inc. (the "Transfer Agent"), a wholly owned subsidiary of Washington Mutual, serves as the transfer agent of the Funds. Fees are paid to the Transfer Agent for services related to the issuance and transfer of shares, maintaining shareholder lists, and issuing and mailing distributions and reports. For such services, the Transfer Agent receives a fee per open and closed account, in addition to reimbursement for certain out-of-pocket expenses. The Transfer Agent is entitled to a monthly fee based upon an annual rate of $20.00 per open account for all Class A, Class B and Class C shareholder accounts. Class I, Class R-1 and Class R-2 shares are not subject to shareholder servicing fees. The Transfer Agent also provides services to retirement plans investing in Class R-1 and R-2 shares and their participants. For such services, the Transfer Agent is entitled to a monthly fee at an annual rate of 0.25% of the average daily net assets of each Class R-1 and Class R-2 shares. Custodian fees for certain Funds have been reduced by credits allowed by the Funds' custodian for uninvested cash balances. The Funds could have invested this cash in income producing securities. Fees reduced by credits allowed by the custodian for the six months ended April 30, 2006, are shown separately in the "Statements of Operations". 4. TRUSTEES' FEES No officer or employee of Washington Mutual or its subsidiaries receives any compensation from the Trusts for serving as an officer or Trustee of the Trusts. The Trusts, together with other mutual funds advised by the Advisor, pay each Trustee who is not an officer or employee of Washington Mutual or its subsidiaries a per annum retainer plus attendance fees for each meeting at which they are present. The Chairman, Committee Chairs and Committee Members receive additional remuneration for these services to the Trusts. Trustees are also reimbursed for travel and out-of-pocket expenses. Each Trustee serves in the same capacity for all 40 funds within the WM Group of Funds. 112 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS 5. DISTRIBUTION PLANS WM Funds Distributor, Inc. (the "Distributor"), a registered broker/dealer and a wholly owned subsidiary of Washington Mutual, serves as distributor for the Funds. For the six months ended April 30, 2006, the Distributor received $9,309,605 representing commissions (front-end sales charges) on Class A shares and $1,269,043 representing CDSCs from Class A, Class B, and Class C shares. Each of the Funds has adopted distribution plans, pursuant to Rule 12b-1 under the 1940 Act, applicable to Class A, Class B, Class C, Class R-1, and Class R-2 shares of each Fund (each, a "Rule 12b-1 Plan"), respectively. There are no 12b-1 Plans applicable to Class I shares of the Funds. Under the applicable Rule 12b-1 Plans, the Distributor may receive a service fee at an annual rate of 0.25% of the average daily net assets of each class. In addition, the Distributor is paid a fee as compensation in connection with the offering and sale of Class B, Class C, Class R-1, and Class R-2 shares. The distribution fees for Class B and Class C shares are paid to the Distributor at annual rates of 0.75% of the average daily net assets of such shares. The distribution fees for Class R-1 and Class R-2 are paid to the Distributor at annual rates of 0.55% and 0.30%, respectively, of the average daily net assets of such shares. These fees may be used to cover the expenses of the Distributor primarily intended to result in the sale of such shares, including payments to the Distributor's representatives or others for selling shares. The service fee is paid by the Fund to the Distributor, which in turn, pays service fees to broker/dealers that provide services, such as accepting telephone inquiries, transaction requests, processing correspondence, new account applications and subsequent purchases for the shareholders. Under their terms, each Rule 12b-1 plan shall remain in effect from year to year, provided such continuance is approved annually by vote of the Board of Trustees, including a majority of those Trustees who are not "interested persons" of the Trusts, as defined in the 1940 Act, and who have no direct or indirect financial interest in the operation of such distribution plans, or any agreements related to such plans, respectively. 6. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding U.S. government and short-term investments, for the six months ended April 30, 2006, are as follows:
PURCHASES SALES NAME OF FUND (000S) (000S) - ------------ ---------- ---------- REIT Fund ............................................ $ 69,015 $ 93,392 Equity Income Fund ................................... 1,691,485 1,032,535 Growth & Income Fund ................................. 367,717 745,496 West Coast Equity Fund ............................... 267,836 86,111 Mid Cap Stock Fund ................................... 115,689 157,025 Growth Fund .......................................... 911,224 381,803 Small Cap Value Fund ................................. 46,297 107,735 Small Cap Growth Fund ................................ 161,655 137,793 International Growth Fund ............................ 352,465 174,807 Short Term Income Fund ............................... 14,222 2,088 U.S. Government Securities Fund ...................... 43,936 16,376 Income Fund .......................................... 169,366 123,290 High Yield Fund ...................................... 425,184 409,876 Tax-Exempt Bond Fund ................................. 22,339 28,969 California Municipal Fund ............................ 59,244 71,827 California Insured Intermediate Municipal Fund ....... 19,342 21,531
The aggregate cost of purchases and proceeds from sales of U.S. government securities, excluding short-term investments, for the six months ended April 30, 2006, are as follows:
PURCHASES SALES NAME OF FUND (000S) (000S) - ------------ --------- -------- Equity Income Fund ...................................... $ -- $ 41 Short Term Income Fund .................................. -- 4,279 U.S. Government Securities Fund ......................... 61,396 147,631 Income Fund ............................................. 53,212 17,415 High Yield Fund ......................................... 38,848 24,140
113 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS 7. LENDING OF SECURITIES Certain Funds may lend securities to brokers, dealers and other financial organizations to earn additional income. The Funds also continue to receive interest or dividends on the securities loaned. Each security loan is collateralized with collateral assets in an amount equal to or greater than the current market value of the loaned securities. There is a risk of delay in receiving collateral, that the collateral could lose value or become valueless, or in recovering the securities loaned or even a loss of rights in collateral should the borrower fail financially. At April 30, 2006, each of the Funds with outstanding loans of securities to certain brokers, dealers or other financial institutions has segregated cash and/or securities at least equal to the market value of securities loaned with the Funds' custodian. The Funds currently invest the segregated cash in Mellon GSL DBT II, which is a common collective trust that invests in high-grade short-term investments. 8. PORTFOLIO OWNERSHIP AND OTHER FACTORS At April 30, 2006, the WM Strategic Asset Management Portfolios hold investments in a number of the Funds. The figures presented below represent the percentage of shares outstanding of each Fund owned by the Portfolios:
PORTFOLIOS ----------------------------------------------------------------------- FLEXIBLE CONSERVATIVE CONSERVATIVE STRATEGIC INCOME BALANCED BALANCED GROWTH GROWTH NAME OF FUND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL - ------------ --------- ------------ --------- ------------ --------- ----- REIT Fund ......................... 2.1% 2.9% 31.5% 34.1% 20.4% 91.0% Equity Income Fund ................ 1.2% 1.7% 16.7% 17.9% 11.4% 48.9% Growth & Income Fund .............. 2.4% 2.3% 24.1% 26.0% 16.7% 71.5% West Coast Equity Fund ............ 0.6% 1.4% 14.6% 15.5% 10.6% 42.7% Mid Cap Stock Fund ................ 2.8% 2.3% 25.3% 26.4% 19.4% 76.2% Growth Fund ....................... 2.8% 2.7% 30.7% 31.0% 22.1% 89.3% Small Cap Value Fund .............. 3.3% 2.6% 30.7% 34.6% 22.3% 93.5% Small Cap Growth Fund ............. 2.4% 1.8% 22.1% 25.1% 16.5% 67.9% International Growth Fund ......... -- 3.0% 32.3% 32.5% 22.3% 90.1% Short Term Income Fund ............ 44.3% 14.6% 17.5% -- -- 76.4% U.S. Government Securities Fund ... 16.7% 9.7% 45.6% 15.8% -- 87.8% Income Fund ....................... 18.7% 9.3% 38.6% 11.9% -- 78.5% High Yield Fund ................... 7.0% 4.3% 24.7% 11.1% 10.6% 57.7%
From time to time, one or more of the Funds used for investment by a Portfolio may experience relatively large investments or redemptions due to reallocations or rebalancings of the Portfolios by the Advisor. These transactions will affect the Funds, since the Funds that experience redemptions as a result of the reallocations or rebalancings may have to sell portfolio securities and since the Funds that receive additional cash will have to invest such cash. While it is impossible to predict the overall impact of these transactions over time, there could be adverse effects on portfolio management to the extent that the Funds may be required to sell securities or invest cash at times when they would not otherwise do so. These transactions could also have tax consequences if sales of securities resulted in gains and could also increase transaction costs. The Advisor is committed to minimizing such impact on the Funds to the extent it is consistent with pursuing the investment objectives of the Portfolios. The Advisor may nevertheless face conflicts in fulfilling its dual responsibilities of the Portfolios and the Funds. The Advisor will, at all times, monitor the impact on the Funds of transactions by the Portfolios. 114 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS 9. UNREALIZED APPRECIATION/(DEPRECIATION) At April 30, 2006, the aggregate gross unrealized appreciation and depreciation on a tax basis are as follows:
(IN THOUSANDS) ------------------------------------------------------------------------------------ WEST SMALL SMALL EQUITY GROWTH & COAST MID CAP CAP CAP REIT INCOME INCOME EQUITY STOCK GROWTH VALUE GROWTH FUND FUND FUND FUND FUND FUND FUND FUND -------- -------- -------- -------- -------- -------- -------- ------ Gross tax unrealized appreciation ... $151,964 $592,119 $621,267 $648,272 $265,092 $303,390 $ 62,318 $92,828 Gross tax unrealized depreciation ... (3,706) (17,229) (33,301) (48,674) (967) (43,932) (36,993) (8,321) -------- -------- -------- -------- -------- -------- -------- ------- Net tax unrealized appreciation ..... $148,258 $574,890 $587,966 $599,598 $264,125 $259,458 $ 25,325 $84,507 ======== ======== ======== ======== ======== ======== ======== =======
CALIFORNIA U.S. TAX- INSURED INTERNATIONAL SHORT TERM GOVERNMENT HIGH EXEMPT CALIFORNIA INTERMEDIATE GROWTH INCOME SECURITIES INCOME YIELD BOND MUNICIPAL MUNICIPAL FUND FUND FUND FUND FUND FUND FUND FUND ------------- ---------- ---------- -------- -------- ------- ---------- -------------- Gross tax unrealized appreciation .. $328,253 $ 372 $ 2,844 $ 25,665 $ 52,050 $11,105 $14,413 $1,408 Gross tax unrealized depreciation .. (5,311) (5,028) (62,019) (43,804) (18,866) (289) (553) (595) -------- ------- -------- -------- -------- ------- ------- ------ Net tax unrealized appreciation/ (depreciation) .................. $322,942 $(4,656) $(59,175) $(18,139) $ 33,184 $10,816 $13,860 $ 813 ======== ======= ======== ======== ======== ======= ======= ======
10. INDUSTRY AND GEOGRAPHIC CONCENTRATION AND OTHER RISK FACTORS While no individual fund is intended as a complete investment program, this is especially true for funds that concentrate their investments such as those investing in particular industries or regions. The REIT Fund concentrates its investments in real estate investment trust ("REIT") securities or debt securities of issuers that are principally engaged in the U.S. real estate or related industries. The REIT Fund could be adversely impacted by economic trends within this industry. The West Coast Equity Fund, which invests the majority of its assets in Alaska, California, Oregon, and Washington, generally has more exposure to regional economic risks than a fund making investments more broadly. The West Coast Equity Fund could be adversely impacted by economic trends within this region. The International Growth Fund concentrates its investments in foreign securities in both developed and emerging market countries. Additional risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments, and the possible prevention of currency exchange or other foreign governmental laws or restrictions. Investments in emerging markets are subject to additional risk as less developed countries are more likely to experience high levels of inflation, deflation, or currency devaluation, which could harm their economies and securities markets. The High Yield Fund concentrates its investments in lower rated debt securities, which may be more susceptible to adverse economic conditions than investment grade holdings. These securities are often subordinated to the prior claims of other senior lenders, and uncertainties may exist as to an issuer's ability to meet principal and interest payments. The California Municipal and California Insured Intermediate Municipal Funds are more susceptible to factors adversely affecting issuers of California municipal securities than is a municipal bond fund that is not concentrated in these issuers. Uncertain economic conditions or governmental developments may affect the ability of California municipal securities issuers to meet their financial obligations. Certain Funds may invest a portion of their assets in foreign securities of developing or emerging market countries; enter into forward foreign currency transactions; lend their portfolio securities; enter into a stock index, interest rate and currency futures contracts, and options on such contracts; enter into interest rate swaps or purchase or sell interest rate caps or floors; enter into other types of options transactions; make short sales; purchase zero coupon and payment-in-kind bonds; enter into repurchase or reverse repurchase agreements; purchase and sell "when-issued" securities and engage in "delayed-delivery" transactions; and enter into various other investment practices, each with inherent risks. The risks involved in investing in a high concentration of a single sector include those resulting from future adverse political and economic developments or regulatory occurrences and the potential for adverse effects to the financial conditions of the industries within the sector due to market fluctuations. 115 Notes to Financial Statements (unaudited) (continued) WM GROUP OF FUNDS 11. INVESTMENTS IN AFFILIATED SECURITIES The companies listed below are an affiliate of the Fund because the Fund owned at least 5.0% of the company's voting securities during the six-month period ended April 30, 2006.
MARKET VALUE SHARES SHARES OF INVESTMENTS AT BEGINNING AT END IN AFFILIATES AT (IN THOUSANDS) OF PERIOD ADDITIONS REDUCTIONS OF PERIOD DIVIDENDS LOSS APRIL 30, 2006 ------------ --------- ---------- --------- --------- ----- ---------------- West Coast Equity Fund Red Lion Hotels Corporation ... 1,267 18 (31) 1,254 $ -- $(149) $15,046 High Yield Fund Crown Castle International Corporation ................... 150 179 -- 329 514 $ -- $18,177 ---- ----- ------- $514 $(149) $33,223 ==== ===== =======
116 Supplemental Information (unaudited) WM GROUP OF FUNDS BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT Each year, the Board of Trustees of the Trust (the "Board"), including a majority of the Trustees who are not interested persons of the Trust (the "Independent Trustees"), is required to determine whether to continue the Trust's advisory agreement. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the investment manager furnish, such information as may reasonably be necessary to evaluate the terms of the Trust's advisory agreement. In May 2005, the Board and the Independent Trustees approved a new Investment Sub-Advisory Agreement (the "Agreement") with Capital Guardian Trust Company ("Capital Guardian"), and in November 2005, the Board and the Independent Trustees approved an amendment of the Trust's Investment Sub-Advisory Agreement with Capital Guardian, in each case following the recommendation of the Investment Committee (the "Committee"), a majority of the members of which are Independent Trustees, and the recommendations of the Independent Trustees as a whole. The material factors and conclusions that formed the basis for the Committee's recommendation and the subsequent approval by the Board and the Independent Trustees are required to be in this report and are discussed below. In connection with the November 2005 approval of the amendment, the Board, the Independent Trustees and the Committee relied on the information provided in connection with the May 2005 approval (as supplemented by performance information for periods ended September 30, 2005). The material factors and conclusions that formed the basis for the Committee's recommendation and the subsequent approval by the Board and the Independent Trustees in November 2005 were the same as those in May 2005, which are discussed below, except that the Board, the Independent Trustees and the Committee also considered the addition of emerging market securities to Capital Guardian's mandate for the International Growth Fund, and that the effect of the amendment was to reduce the fees payable to the Advisor in the same amount that the fees to Capital Guardian were increased, so that the total advisory fees payable by the International Growth Fund would not change. REVIEW PROCESS: The Independent Trustees received assistance and advice, including a written memorandum, regarding the legal standards applicable to the consideration of advisory arrangements from independent counsel to the Trusts and the Independent Trustees. The Independent Trustees discussed the continuation of the Agreement with representatives of the Advisor and in private session with independent legal counsel at which no representatives of the Advisor were present. The Committee, in deciding to recommend approval of the Agreement, and the Board and the Independent Trustees, in approving Such agreement, did not identify any particular information that was all-important or controlling, and each Trustee attributed different weights to the various factors. The Trustees evaluated all information available to them on a Fund-by-Fund basis, and their deliberations were made separately in respect of each Fund. This summary describes the most important, but not all, of the factors considered by the Board, the Independent Trustees and the Committee. MATERIALS REVIEWED: During the course of each year, the Board receives a wide variety of materials relating to the services provided by the Advisor and its affiliates, including reports on: each Fund's investment results; portfolio construction; portfolio composition; portfolio trading practices; performance attribution; shareholder services; the Advisor's views on the economy and capital markets; and other information relating to the nature, extent and quality of services provided by the Advisor and its affiliates to the Funds. In addition, in connection with its annual consideration of the Agreement, the Board requests and reviews supplementary information regarding the terms of the Agreement, the Funds' investment results, advisory fee and total expense comparisons, financial and profitability information regarding the Advisor and its affiliates, descriptions of various functions undertaken by the Advisor, such as compliance monitoring, and information about the personnel providing investment management and administrative services to the Funds. The Board requested and evaluated performance and expense information for other investment companies compiled by Lipper Inc., a third-party data provider ("Lipper"). The Board, the Independent Trustees and the Committee also considered information regarding "revenue sharing" arrangements that the Advisor and its affiliates have entered into with various intermediaries that sell shares of the Funds. The Board also requested and reviewed information relating to other services provided to the Funds by the Advisor and its affiliates under other agreements, including information regarding so-called "fall-out" benefits to the Advisor and its affiliates due to their other relationships with the Funds. The Board, the Independent Trustees and the Committee also received and reviewed comparative performance information regarding the Funds at each of the quarterly Board and Committee meetings. NATURE, EXTENT AND QUALITY OF SERVICES: Nature and Extent of Services -- In considering the approval of the Agreement, the Board, the Independent Trustees and the Committee evaluated the nature and extent of the services provided by the Advisor, its affiliates and the sub-advisors. For each Fund, the Advisor or the relevant sub-advisor, as applicable, formulates the Fund's investment policies (subject to the terms of the prospectus); analyzes economic trends and capital market developments; evaluates the risk/return characteristics of the Fund; 117 Supplemental Information (unaudited) (continued) WM GROUP OF FUNDS constructs the Fund's portfolio; monitors the Fund's investment performance; and reports to the Board, the Independent Trustees and the Committee. The Board, the Independent Trustees and the Committee considered information concerning the investment philosophy and investment process used by the Advisor and the sub-advisors in managing the Funds. In this context, the Board, the Independent Trustees and the Committee considered the in-house research capabilities of the Advisor and the sub-advisors as well as other sources available to the Advisor and the sub-advisors, including research services available to the Advisor and the sub-advisors as a result of securities transactions effected for the Funds and other investment advisory clients of the Advisor and the sub-advisors. The Board, the Independent Trustees and the Committee considered the managerial and financial resources available to the Advisor and the sub-advisors and concluded that they would be sufficient to meet any reasonably foreseeable obligations under the Agreement. The Board, the Independent Trustees and the Committee noted that the standard of care under the Agreement was comparable to that found in many investment advisory agreements, and considered the record of the Advisor in resolving potential disputes arising under its investment advisory agreement with the WM Group of Funds to be in the best interests of shareholders. Quality of Services -- The Board, the Independent Trustees and the Committee considered the quality of the services provided by the Advisor and the sub-advisors and the quality of their resources that are available to the Funds. The Board, the Independent Trustees and the Committee considered the investment experience and professional qualifications of the personnel of the Advisor, its affiliates and the sub-advisors, and the size and functions of their staffs as well as the reputation of the Advisor and the sub-advisors. The Board, the Independent Trustees and the Committee considered the complexity of managing the Funds relative to other types of funds. The Board, the Independent Trustees and the Committee also received and reviewed information regarding the quality of non-investment advisory services provided to the Funds by the Advisor and its affiliates under other agreements. The Board, the Independent Trustees and the Committee concluded that the services provided by the Advisor and the sub-advisors have benefited and should continue to benefit the Funds and its shareholders. The Board, the Independent Trustees and the Committee concluded that the investment philosophies, processes, and research capabilities of the Advisor and the sub-advisors were well-suited to the Funds, given their investment objectives and policies. The Board, the Independent Trustees and the Committee concluded that the scope of the services provided to the Funds by the Advisor, its affiliates and the sub-advisors were consistent with the Funds' operational requirements, including, in addition to its investment objectives, compliance with the Funds' investment restrictions, tax and reporting requirements and related shareholder services. The Board, the Independent Trustees and the Committee concluded that the nature, scope and quality of the services provided by the Advisor, its affiliates and the sub-advisors were sufficient, in light of the resources dedicated by the Advisor and the sub-advisors and their integrity, personnel, systems and financial resources, to merit approval of the Agreement. PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE: In their evaluation of the quality of the portfolio management services provided by the Advisor and the sub-advisors, the Board, the Independent Trustees and the Committee considered the professional credentials and investment experience of the Funds' portfolio managers. The Board and the Independent Trustees considered whether the Funds operated within their investment objectives and their record of compliance with investment restrictions. The Board, the Independent Trustees and the Committee reviewed information comparing the Funds' historical performance to relevant market indices for the 1-, 3- and 5-year periods ended September 30, 2005, and to performance information for other investment companies with similar investment objectives over the 1-, 3-, 5-, 10-year and since inception periods, derived from data compiled by Lipper. The Board, the Independent Trustees and the Committee concluded that the Advisor's and the sub-advisors' performance record and investment processes used in managing the Funds were sufficient to merit approval of the Agreement. MANAGEMENT FEES AND EXPENSES: The Board, the Independent Trustees and the Committee reviewed information, including comparative information provided by Lipper, regarding the advisory, transfer agent, and service and distribution fees paid to the Advisor, its affiliates and the sub-advisors, and the total expenses borne by the Funds. The Board, the Independent Trustees and the Committee reviewed the transfer agency fees paid by the Funds to WM Shareholder Services, Inc. (the "Transfer Agent"), an affiliate of the Advisor, as well as the distribution (12b-1) fees paid to the Distributor. They considered the Funds' management fees relative to their respective peer group as determined by Lipper. The Board, the Independent Trustees and the Investment Committee considered the fees paid to the Advisor by other clients, and the services provided to such clients relative to the fees paid by, and services provided to, the Funds. The Board, the Independent Trustees and the Committee concluded that the fees to be charged under the Agreement bore a reasonable relationship to the scope and quality of the services provided. 118 Supplemental Information (unaudited) (continued) WM GROUP OF FUNDS PROFITABILITY AND ECONOMIES OF SCALE: Profitability -- The Board, the Independent Trustees and the Committee reviewed information regarding the cost of services provided by the Advisor and its affiliates and the profitability (before and after distribution expenses and prior to taxes) of the Advisor's relationship with the Funds. The Board, the Independent Trustees and the Committee considered trends in the profitability of the Advisor and its affiliates, and information provided by Lipper regarding the pre- and post-marketing profitability of other investment advisers with publicly-traded parent companies. The Board, the Independent Trustees and the Committee considered that the Advisor must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Funds (and in connection therewith reviewed and considered changes in the structure of compensation of the investment professionals of the Advisor including a change in the performance-based component of the compensation and the introduction of options and restricted stock rather than vesting periods for cash bonuses) and that maintaining the financial viability of the Advisor is important in order for it to continue to provide significant services to the Funds and its shareholders. The Board, the Independent Trustees and the Committee considered the impact of previously-negotiated fee reductions on the profitability of the Advisor and the year-to-year trends in pre-distribution margins for the Advisor over a four-year period in which complex-wide assets more than doubled. The Board, the Independent Trustees and the Committee considered various breakpoint schedules and reviewed a graph showing the effective fees for the Advisor at different asset levels. In addition, the Board, the Independent Trustees and the Committee considered information regarding the direct and indirect benefits the Advisor receives as a result of its relationships with the Funds, including compensation paid to the Advisor and their affiliates, including transfer agency fees to the Transfer Agent and 12b-1 fees to the Distributor as well as research provided to the Advisor in connection with portfolio transactions effected on behalf of the Funds (soft dollar arrangements), and reputational benefits. The Trustees considered the fact that the structure of breakpoints for the Advisor's fees and the fees of the sub-advisors for Funds with multiple sub-advisors was such that, assuming relatively equal allocation of Fund assets among all sub-advisors, the Advisor's fee would be reduced by breakpoints at lower asset levels than those at which the Advisor might benefit from breakpoints in the fees of the sub-advisors. The Trustees did not evaluate the profitability to the sub-advisors of their relationships with the Funds because they concluded that negotiations between the Advisor and the sub-advisors had been entirely at arm's-length. Economies of Scale -- The Board, the Independent Trustees and the Committee reviewed the extent to which the Advisor may realize economies of scale in managing and supporting the Funds and the current level of Fund assets in relation to the breakpoints in the Funds' advisory fees. The Board, the Independent Trustees and the Committee considered the extent to which any economies of scale might be realized (if at all) by the Advisor across a variety of products and services, and not only in respect of a single Fund. The Board, the Independent Trustees and the Committee considered the savings for the Funds that had been achieved due to breakpoints previously implemented as a result of negotiations between the Advisor and the Board. The Board, the Independent Trustees and the Committee concluded that the Funds' cost structure was reasonable given the scope and quality of the services provided to the Funds and that the Advisor was sharing any economies of scale with the Funds and its shareholders. ADDITIONAL CONSIDERATIONS: The Board, the Independent Trustees and the Committee considered the procedures of the Advisor designed to fulfill its fiduciary duties to advisory clients with respect to possible conflicts of interest, including the codes of ethics, the integrity of the systems in place to ensure compliance with the foregoing, and the record of the Advisor in these matters. The Board, the Independent Trustees and the Committee also received and considered information concerning procedures of the Advisor with respect to the execution of portfolio transactions. CONCLUSIONS: Based on their review, including their consideration of each of the factors referred to above, the Board, the Independent Trustees and the Committee concluded that the Agreement, including the fees payable to the Advisor and the sub-advisors, are fair and reasonable to the Funds and their shareholders given the scope and quality of the services provided to the Funds and such other considerations as the Trustees considered relevant in the exercise of their reasonable business judgment and that approval of the Agreement was in the best interests of the Funds and their shareholders. The Board and Independent Trustees unanimously approved the Agreement. 119 Supplemental Information (unaudited) (continued) WM GROUP OF FUNDS OTHER FUND INFORMATION SCHEDULES OF INVESTMENTS: The Trusts file their complete schedules of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Trusts' Forms N-Q are available at http://www.sec.gov and also may be reviewed and copied at the SEC's Public Reference Room ("PRR") in Washington, DC. Information regarding the operation of the PRR may be obtained by calling 800-SEC-0330. PROXY VOTING INFORMATION: The policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities held by the Funds are included in the Trusts' Statement of Additional Information which is available, without charge and upon request, by calling 800-222-5852. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available at http://www.wmgroupoffunds.com. This information is also available at http://www.sec.gov. 120 (GRAPHIC) (WM GROUP OF FUNDS LOGO) A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost. This semiannual report is published as general information for the shareholders of the WM Group of Funds. This material is not authorized for distribution unless preceded or accompanied by a current prospectus that includes more information regarding the risk factors, expenses, policies, and objectives of the funds. Investors should read the prospectus carefully before investing. To obtain an additional prospectus, please contact your Investment Representative or call 800-222-5852. The WM Group of mutual funds is advised by WM Advisors, Inc., distributed by WM Funds Distributor, Inc., and sold through WM Financial Services, Inc. (all affiliates of Washington Mutual, Inc.) and independent broker/dealers. Distributed by: WM Funds Distributor, Inc. Member NASD (E-DELIVERY LOGO) SAVE TIME AND PAPER. ENROLL TODAY. Choose e-delivery and we'll e-mail you when statements, prospectuses, and shareholder reports are updated. You can select which items to receive electronically when you sign up at wmgroupoffunds.com. (WM GROUPOFFUNDS LOGO) P.O.Box 8024 Boston, MA 02266-8024 WMGSAR (6/29/06) ITEM 2. CODE OF ETHICS Not applicable for this filing. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not applicable for this filing. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not applicable for this filing. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable for this filing. ITEM 6. SCHEDULE OF INVESTMENTS Not Applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS Not Applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 11. CONTROLS AND PROCEDURES: (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report on Form N-CSR, that the design and operation of such procedures are effective to provide reasonable assurance that information required to be disclosed by the registrant in the reports that it files or submits on Form N-CSR is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. (b) There have been no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS (a) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 of the Investment Company Act of 1940 attached hereto as Exhibit 99.CERT. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto as Exhibit 99.906 CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WM Trust II By: /s/ William G. Papesh William G. Papesh President and Chief Executive Officer Date: June 29, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Jeffrey L. Lunzer Jeffrey L. Lunzer Treasurer and Chief Financial Officer Date: June 29, 2006 By: /s/ William G. Papesh William G. Papesh President and Chief Executive Officer Date: June 29, 2006 EX-99.CERT 2 v21649exv99wcert.txt EX-99.CERT Exhibit 99.cert CERTIFICATIONS I, William G. Papesh, certify that: 1. I have reviewed this report on Form N-CSR of WM Trust II; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 29, 2006 /s/ William G. Papesh President and Chief Executive Officer Exhibit 99.cert CERTIFICATIONS I, Jeffrey L. Lunzer, certify that: 1. I have reviewed this report on Form N-CSR of WM Trust II; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 29, 2006 /s/ Jeffrey L. Lunzer Treasurer and Chief Financial Officer EX-99.906CERT 3 v21649exv99w906cert.txt EX-99.906CERT Exhibit 99.906 I, William G. Papesh, principal executive officer of the WM Trust II (the "Funds"), certify that: 1. The Form N-CSR of the Funds for the period ended April 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR of the Funds for the period ended April 30, 2006 fairly presents, in all material respects, the financial condition and results of operations of the Funds. Date: June 29, 2006 /s/ William G. Papesh President and Chief Executive Officer Principal Executive Officer Exhibit 99.906 I, Jeffrey L. Lunzer, principal financial officer of the Trust II (the "Funds"), certify that: 1. The Form N-CSR of the Funds for the period ended April 30, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Form N-CSR of the Funds for the period ended April 30, 2006 fairly presents, in all material respects, the financial condition and results of operations of the Funds. Date: June 29, 2006 /s/ Jeffrey L. Lunzer Treasurer and Chief Financial Officer Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----