July 8, 2003 — SAFECO Corp (SAFC) said it will reorganize its mutual fund family by eliminating three funds, and adding new managers to several offerings. The company said it has also lowered expense ratios on six bond funds.

As part of the reorganization, SAFECO US Value Fund/Advisor A (SVAAX) and SAFECO Small Company Growth Fund/Advisor A (SACGX) are being liquidated. Also, SAFECO Intmed Term US Treasury Fund/Advisor A (SFUAX) will be merged into SAFECO US Government Fund/Advisor A (SGNMX), subject to shareholder approval.

Safeco is adding managers to seven stock and bond funds to provide greater risk controls and “enhance the investment process,” a spokeswoman for the fund company said. The portfolio manager changes will become effective on July 1.

Darcy MacLaren, the fund complex’s director of equity research, will join Richard Meagley on SAFECO Equity Fund/Advisor A (SAEAX).

Rex Bentley and Lynette Sagvold, who run the US Value fund, will pilot SAFECO Dividend Income Fund/Advisor A (SFOAX), which is now overseen by a team of managers in Safeco’s equity department.

Brian Clancy, a co-manager of SAFECO Growth Opportunities Fund/Advisor A (SFGAX), will join William Whitlow Jr. on SAFECO Northwest Fund/Advisor A (SFNAX).

Mary Metastasio, who runs SAFECO Intermediate Term Muni Bond Fund/Adv A (SOBAX), will be joined on that fund by Stephen Bauer, and will join Bauer on SAFECO Municipal Bond Fund/Advisor A (SNBAX) and SAFECO California Tax Free Income/Advisor A (SCXAX).

Beverly Denny, who previously was an analyst with Safeco, will become a co-manager of SAFECO High Yield Bond Fund/Advisor A (SAHAX), joining Greg Card.

In addition to the changes in portfolio managers, Safeco said it formed a committee of portfolio managers and analysts to improve research and analysis of small companies. The panel is chaired by Whitlow.

The fund company said it waived reimbursements for certain expenses to lower expenses on the bond funds as well as a money market fund. The lower fees became effective on June 26.

Safeco also said it will change the names of seven stock and bond funds in October.