MUTUAL FUND SELECT GROUP, N-1A/A, 1996-11-15

MUTUAL FUND SELECT GROUP
N-1A/A, 1996-11-15

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As filed via EDGAR with the Securities and Exchange Commission on November 15,
1996.

File No. 811-7843
Registration No. 333-13317
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|

Pre-Effective Amendment No. 1 |X|

Post-Effective Amendment No. | |

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|

Amendment No. 1 |X|
-------------------------------
MUTUAL FUND SELECT GROUP
(Exact Name of Registrant as Specified in Charter)

101 Park Avenue
New York, New York 10178
--------------------------------------------------
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code: (212) 492-1600

Copies to:

George Martinez, Esq. Niall L. O'Toole, Esq. Gary S. Schpero, Esq.
BISYS Fund Services, Inc. Chase Manhattan Bank Simpson Thacher & Bartlett
3435 Stelzer Road 270 Park Avenue 425 Lexington Avenue
Columbus, Ohio 43219 New York, New York 10017 New York, New York 10017
- --------------------------------------------------------------------------------

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended, the
Registrant hereby elects to register an indefinite number of shares of common
stock, $.001 par value per share, of all series of the Registrant, now existing
or hereafter created. The amount of the registration fee required by Rule 24f-2
is $500.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.

<PAGE>

MUTUAL FUND SELECT GROUP
Registration Statement on Form N-1A

CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) Under the Securities Act of 1933

VISTA(SM) SELECT BALANCED FUND
VISTA(SM) SELECT EQUITY INCOME FUND
VISTA(SM) SELECT LARGE CAP EQUITY FUND
VISTA(SM) SELECT LARGE CAP GROWTH FUND
VISTA(SM) SELECT EMERGING GROWTH FUND
VISTA(SM) SELECT SMALL CAP VALUE FUND
VISTA(SM) SELECT INTERNATIONAL EQUITY FUND
VISTA(SM) SELECT SHORT-TERM BOND FUND
VISTA(SM) SELECT INTERMEDIATE BOND FUND
VISTA(SM) SELECT BOND FUND

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>
Captions apply to all Prospectuses.

1 Front Cover Page *

2(a) Expense Summary *

(b) Not Applicable *

3(a) Not Applicable *

(b) Not Applicable *

4(a)(b) Other Information *
Concerning the Fund;
Fund Objective; Investment
Policies

(d) Not Applicable *

5(a) Management *

(b) Management *

(c)(d) Management; Other Information Concerning the Fund *
</TABLE>

-i-
<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(e) Other Information Concerning *
the Fund; Back Cover Page

(f) Other Information Concerning *
the Fund

(g) Not Applicable *

5A Not Applicable *

6(a) Other Information Concerning *
the Fund

(b) Not Applicable *

(d) Not Applicable *

(e)(f) About Your Investment; How to Purchase and Redeem *
Shares; How Distributions Are Made; Tax Information;
Other Information Concerning the Fund

(f) How Distributions are Made; *
Tax Information

(g) How Distributions are Made; *
Tax Information

(h) About Your Investment; How to *
Purchase and Redeem Shares;
Other Information Concerning the Fund

7(a) How to Purchase and Redeem Shares *

(b) How the Fund Values its Shares; *
How to Purchase and Redeem Shares

(d) How to Purchase and Redeem Shares *

</TABLE>

-ii-

<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(e) Management; Other Information *
Concerning the Fund

(f) Other Information Concerning the *
Fund

8(a) How to Purchase and Redeem Shares *

(b) How to Purchase and Redeem Shares *

(d) How to Purchase and Redeem Shares *

9 Not Applicable *
</TABLE>

-iii-
<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

10 * Front Cover Page

11 * Front Cover Page

12 * Not Applicable

13(a)(b) Fund Objective; Investment Investment Policies
Policies and Restrictions

14(c) * Management of the Trust and
Funds

(b) * Not Applicable

15(a) * Not Applicable

(b) * General Information

16(a) Management Management of the Trust and
Funds

(b) Management Management of the Trust and
Funds

(d) Management Management of the Trust and
Funds

(e) * Not Applicable
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(f) How to Purchase and Redeem Shares; Management of the Trust and
Other Information Concerning the Fund Funds

(g) * Not Applicable

(h) * Management of the Trust and
Funds
Independent Accountants

(i) * Not Applicable

17 Investment Policies Investment Policies and Restrictions

18(a) Other Information Concerning the Fund; General Information
How to Purchase and Redeem Shares

(b) * Not Applicable

19(a) How to Purchase and Redeem Shares Purchases and Redemptions

(b) How the Fund Values its Shares; How to Determination of Net Asset Value
Purchase and Redeem Shares

20 How Distributions are Made; Tax Information Tax Matters

21(a) * Management of the Trust and Funds

(b) * Management of the Trust and Funds

22 * Performance Information

23 * Not Applicable
</TABLE>

Part C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

-v-

<PAGE>

Subject to Completion--Dated November 14, 1994

[VISTA LOGO]

PROSPECTUS
VISTA(SM) SELECT EQUITY FUNDS

INVESTMENT STRATEGIES:

BALANCED FUND: Total Return
EQUITY INCOME FUND: Income
LARGE CAP EQUITY FUND: Capital Growth
LARGE CAP GROWTH FUND: Capital Growth
EMERGING GROWTH FUND: Capital Growth
SMALL CAP VALUE FUND: Capital Growth
INTERNATIONAL EQUITY FUND: Total Return

_____, 1996

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Funds in their ____, 1996 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy
of the SAI, call the Vista Select Service Center at 1-800-622-4273. The SAI
has been filed with the Securities and Exchange Commission and is
incorporated into this Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

INVESTMENTS IN THE FUNDS ARE SUBJECT TO RISK--INCLUDING POSSIBLE LOSS OF
PRINCIPAL--AND WILL FLUCTUATE IN VALUE. SHARES OF THE FUNDS ARE NOT BANK
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, THE CHASE MANHATTAN
BANK OR ANY OF ITS AFFILIATES AND ARE NOT INSURED BY, OBLIGATIONS OF OR
OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.

<PAGE>

TABLE OF CONTENTS

EXPENSE SUMMARY ....................................... 4

FUND OBJECTIVES AND INVESTMENT APPROACH ............... 6

COMMON INVESTMENT POLICIES ............................ 9

MANAGEMENT ............................................ 18

HOW TO PURCHASE AND REDEEM SHARES ..................... 20

HOW THE FUNDS VALUE THEIR SHARES ...................... 21

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION ........... 21

OTHER INFORMATION CONCERNING THE FUNDS ................ 22

PERFORMANCE INFORMATION ............................... 26

2
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

EXPENSE SUMMARY

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Funds based on estimated
expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.

Vista Select
Vista Select Equity Income
Balanced Fund Fund
---- ----
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee .......................... 0.50% 0.40%
---- ----
12b-1 Fee ........................................ None None
Shareholder Servicing Fee ........................ None None
Other Expenses (after reimbursements)* ........... 0.24% 0.19%
---- ----
Total Fund Operating Expenses
(after reimbursements )* ......................... 0.74% 0.59%
---- ----

EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 Year ........................................... $ 8 $ 7
--- ---
3 Years .......................................... $24 $21
--- ---

4
<PAGE>

Vista Select Vista Select Vista Select Vista Select Vista Select
Large Cap Large Cap Emerging Small Cap International
Equity Fund Growth Fund Growth Fund Value Fund Equity Fund
- ----------- ----------- ----------- ---------- -------------

0.40% 0.40% 0.65% 0.65% 1.00%
---- ---- ---- ---- ----
None None None None None
None None None None None
0.26% 0.18% 0.21% 0.18% 0.40%
---- ---- ---- ---- ----

0.66% 0.58% 0.86% 0.83% 1.40%
---- ---- ---- ---- ----

$ 7 $ 6 $ 9 $ 8 $14
--- --- ---- --- ---
$21 $19 $ 27 $26 $44
--- --- ---- --- ---

* Reflects the agreement by Chase voluntarily to reimburse certain expenses
for a period of at least one year from the date of this Prospectus. Absent
such reimbursements, Total Fund Operating Expenses for Vista Select Balanced
Fund, Vista Select Equity Income Fund, Vista Select Large Cap Equity Fund,
Vista Select Large Cap Growth Fund, Vista Select Emerging Growth Fund, Vista
Select Small Cap Value Fund and Vista Select International Equity Fund would
be 0.77%, 0.63%, 0.70%, 0.65%, 0.97%, 0.90% and 1.43%, respectively.

The table is provided to help you understand the expenses of investing in the
Funds and your share of the operating expenses that the Funds incur. The
example should not be considered a representation of past or future expenses
or returns; actual expenses and returns may be greater or less than shown.

Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an
investment in the Funds.

5
<PAGE>

FUND OBJECTIVES AND
INVESTMENT APPROACH
- -------------------

VISTA SELECT BALANCED FUND

The Fund's objective is to maximize total return through long-term capital
growth and current income.

The Fund will invest in equity and debt securities. Under normal market
conditions, 35% to 70% of the Fund's total assets will be invested in equity
securities. The majority of the Fund's equity investments will be in
well-known, established companies with market capitalizations of at least
$200 million which are traded on established securities markets or
over-the-counter. The equity securities in which the Fund may invest include
common stocks, preferred stocks, securities convertible into common and
preferred stocks and warrants to purchase common stocks.

Under normal market conditions, at least 25% of the Fund's total assets will
be invested in investment grade fixed-income securities. The fixed income
securities in which the Fund may invest include non-convertible corporate
debt securities and U.S. Government obligations. Corporate debt securities in
which the Fund invests will be rated at the time of purchase in the category
Baa or higher by Moody's Investor Service, Inc. ("Moody's"), or BBB or higher
by Standard & Poor's Corporation ("S&P") or the equivalent by another
national rating organization, or, if unrated, determined by the Fund's
advisers to be of comparable quality.

The Fund's advisers may alter the relative portion of the Fund's assets
invested in equity and fixed income securities depending on their judgment as
to general market and economic conditions and trends, yields and interest
rates and changes in monetary policies. The average maturity of the Fund's
fixed income investments will vary based upon the advisers' assessment of the
relative yields available on securities of different maturities.

VISTA SELECT EQUITY INCOME FUND

The Fund's objective is to obtain an above-average rate of income consistent
with long-term capital appreciation. The Fund pursues this objective
primarily by investing in income-producing equity securities.

Under normal market conditions, the Fund will invest at least 65% of its
total assets in income-producing equity securities. The income- producing
equity securities in which the Fund invests include common stocks, preferred
stocks and convertible securities. The Fund attempts to achieve a yield which
exceeds the composite yield on the securities comprising the Standard and
Poor's 500 Stock Price Index.

It is anticipated that the major portion of the Fund's assets will be
invested in common stocks traded on a national securities exchange or on
NASDAQ. A significant portion of the Fund's assets may be invested in
convertible bonds or convertible preferred stock.

6
<PAGE>

VISTA SELECT LARGE CAP
EQUITY FUND

The Fund's objective is long-term capital growth.

Under normal market conditions, the Fund will invest at least 80% of its
total assets in equity securities and at least 65% of its total assets in
equity securities of established companies with market capitalizations in
excess of $1 billion. Such companies typically have a large number of
publicly held shares and high trading volume, resulting in a high degree of
liquidity.

The Fund's advisers intend to utilize both quantitative and fundamental
research to identify undervalued stocks with a catalyst for positive change.
The Fund's advisers will evaluate companies by assessing the strongest
sectors of the market over the economic cycle, identifying those companies
with favorable earnings prospects, and then selecting the most attractive
values. The Fund's advisers will consider industry diversification as an
important factor and will try to maintain representation in a variety of
market sectors, although sector emphasis will shift as a result of changes in
the outlook for earnings among market sectors.

VISTA SELECT LARGE CAP
GROWTH FUND

The Fund's objective is long-term capital growth.

To pursue the Fund's objective the advisers will utilize a disciplined
valuation process which seeks to identify high-quality, large and
medium-sized companies which have strong balance sheets, above- average
historical earnings growth, favorable earnings prospects and leadership
positions in their industries.

VISTA SELECT EMERGING
GROWTH FUND

The Fund's objective is long-term capital growth.

Under normal market conditions, the Fund will invest at least 80% of its
total assets in equity securities and at least 65% of its total assets in
equity securities of small to mid cap companies. The Fund's advisers classify
small to mid cap companies as those with market capitalizations of $300
million to $4 billion at the time of purchase by the Fund.

To pursue the Fund's objective the advisers will seek to invest in companies
with consistent, accelerating earnings and attractive stock valuations. The
Fund's advisers utilize a disciplined process involving quantitative
pre-screening techniques, fundamental company research, and a proprietary
company earnings model which identifies the potential for positive earnings.
Current income is an incidental consideration to the Fund's objective. You
should be aware that an investment in small to mid cap companies may be more
volatile

7
<PAGE>

than investments in companies with greater capitalization, as described under
"Risk Factors" below.

VISTA SELECT SMALL CAP
VALUE FUND

The Fund's objective is long-term capital growth.

Under normal market conditions, the Fund will invest at least 80% of its
total assets in equity securities and at least 65% of its total assets in
equity securities of smaller companies (i.e., those with market
capitalizations of $750 million or less at the time of purchase). The Fund's
advisers intend to utilize fundamental research to identify undervalued
stocks of financially sound companies with seasoned products and/or services,
competitive advantages and market leadership positions. The Fund's advisers
will consider industry diversification as an important factor and will try to
maintain representation in a variety of market sectors, although sector
emphasis will shift as a result of changes in the outlook for earnings among
market sectors. Current income is an incidental consideration to the Fund's
objective. You should be aware that an investment in smaller companies may be
more volatile than investments in companies with greater capitalization, as
described under "Risk Factors" below.

The Fund is classified as a "non-diversified" fund under federal securities law.

VISTA SELECT INTERNATIONAL
EQUITY FUND

The Fund's objective is total return from long-term capital growth and
income.

The Fund will invest principally in a broad portfolio of marketable equity
securities of established foreign companies organized in countries other than
the U.S. and foreign subsidiaries of U.S. companies participating in foreign
economies. Under normal market conditions, the Fund will invest at least 65%
of its total assets in equity securities, including common stocks, preferred
stocks, securities convertible into common stocks, and warrants to purchase
common stocks.

The Fund's advisers seek to identify those countries and industries where
economic and political factors, including currency movements, are likely to
produce above-average growth rates. The Fund's advisers attempt to identify
those companies in such countries and industries that are best positioned and
managed to take advantage of these economic and political factors. The Fund
will seek to diversify investments broadly among issuers in various countries
and normally to have represented in the Fund business activities of not less
than three different countries other than the U.S. The Fund may invest a
substantial portion of its assets in one or more of such countries.

The Fund intends to invest in companies based in (or governments located in)
the Far East (including Japan, Hong Kong, Singapore and Malaysia), Western
Europe (including United Kingdom, Germany, Netherlands, France, Switzerland,
Italy and Spain), Scandinavia, Australia, Canada and such other areas and
countries as the Fund's advisers may determine from time to time. Because the
Fund invests a large portion of its assets in countries

8
<PAGE>

comprising the Morgan Stanley Capital International Europe, Australia and the
Far East Index, which is heavily weighted towards companies based in Japan
and the United Kingdom, a substantial portion of the Funds' assets may be
invested in companies based in Japan, the United Kingdom and/or other
countries represented in the Index. However, investments may be made from
time to time in companies in, or governments of, developing countries as well
as developed countries.

The Fund's advisers will allocate the Fund's investments among securities
denominated in the U.S. dollar and currencies of foreign countries. The
advisers may adjust the Fund's exposure to each currency based on their
perception of the most favorable markets and issuers. The percentage of the
Fund's assets invested in securities of a particular country or denominated
in a particular currency will vary in accordance with the advisers'
assessment of the relative yield and appreciation potential of such
securities and the current and anticipated relationship of a country's
currency to the U.S. dollar. Fundamental economic strength, earnings growth,
quality of management, industry growth, credit quality and interest rate
trends are some of the principal factors which may be considered by the
Fund's advisers in determining whether to increase or decrease the emphasis
placed upon a particular type of security, industry sector, country or
currency within the Fund's investment portfolio. Securities purchased by the
Fund may be denominated in a currency other than that of the country in which
the issuer is domiciled.

Primary emphasis will be placed on equity securities and securities with
equity features. However, the Fund may invest in any type of investment grade
debt security including, but not limited to, other convertible securities,
bonds, notes and other debt securities of foreign governmental and private
issuers, and various derivative securities.

The Fund will neither invest more than 25% of its net assets in debt
securities denominated in a single currency other than the U.S. dollar, nor
invest more than 25% of its net assets in debt securities issued by a single
foreign government or supranational organization.

The Fund may invest in securities of companies of various sizes, including
smaller companies whose securities may be more volatile and less liquid than
securities of larger companies. With respect to certain countries in which
capital markets are either less developed or not easily accessed, investments
by the Fund may be made through investment in closed-end investment companies
that in turn are authorized to invest in the securities of such countries.
You should be aware that an investment in foreign securities involves a
higher degree of risk than investments in U.S. securities, as described under
"Risk Factors" below.

The Fund is classified as a "non-diversified" fund under federal securities law.

COMMON INVESTMENT
POLICIES
- --------

Each Fund may invest any portion of its assets not invested as described
above in high quality money market

9
<PAGE>

instruments and repurchase agreements. For temporary defensive purposes, a
Fund may invest without limitation in these instruments and, in the case of
Equity Income Fund, in investment grade debt securities. At times when a
Fund's advisers deem it advisable to limit the Fund's exposure to the equity
markets, each Fund may invest up to 20% of its total assets in U.S.
Government obligations (exclusive of any investments in money market
instruments). To the extent that a Fund departs from its investment policies
during temporary defensive periods, its investment objective may not be
achieved.

In lieu of investing directly, each Fund is authorized to seek to achieve its
objective by investing all of its investable assets in an investment company
having substantially the same investment objective and policies as such Fund.
It is anticipated that certain Funds will adopt this approach during 1997.
See "Unique Characteristics of Master/Feeder Fund Structure."

The Emerging Growth Fund and International Equity Fund are classified as
"non-diversified" funds under federal securities laws. These Funds' assets
may be more concentrated in the securities of any single issuer or group of
issuers than if the Funds were diversified. The other Funds are classified as
a "diversified" funds under federal securities law.

No Fund is intended to be a complete investment program, and there is no
assurance that any Fund will achieve its investment objective.

OTHER INVESTMENT PRACTICES

Each Fund may also engage in the following investment practices, when
consistent with its overall objective and policies. These practices, and
certain associated risks, are more fully described in the SAI.

FOREIGN SECURITIES. Each Fund other than the International Equity Fund may
invest up to 20% of its total assets in foreign securities, including
Depositary Receipts. The International Equity Fund may invest without
limitation in foreign securities. Since foreign securities are normally
denominated and traded in foreign currencies, the values of a Fund's foreign
investments may be affected favorably or unfavorably by currency exchange
rates and exchange control regulations. There may be less information
publicly available about foreign companies than U.S. companies, and they are
not generally subject to accounting, auditing and financial reporting
standards and practices comparable to those in the U.S. The securities of
foreign companies may be less liquid and more volatile than the securities of
comparable U.S. companies. Foreign settlement procedures and trade
regulations may involve certain risks (such as delay in payment or delivery
of securities or in the recovery of a Fund's assets held abroad) and
expenses. It is possible that nationalization or expropriation of assets,
imposition of currency exchange controls, confiscatory taxation, political or
financial instability and diplomatic developments could affect the value of a
Fund's investments in certain

10
<PAGE>

foreign countries. Foreign laws may restrict the ability to invest in certain
countries or issuers and special tax considerations will apply to foreign
securities. The risks can increase if a Fund invests in securities of issuers
in emerging markets.

Each Fund may invest its assets in securities of foreign issuers in the form
of American Depositary Receipts, European Depositary Receipts, Global
Depositary Receipts or other similar securities representing securities of
foreign issuers (collectively, "Depositary Receipts"). Each Fund treats
Depositary Receipts as interests in the underlying securities for purposes of
its investment policies. Each Fund will limit its investment in Depositary
Receipts not sponsored by the issuer of the underlying securities to no more
than 5% of the value of its net assets (at the time of investment).

SUPRANATIONAL AND ECU OBLIGATIONS. The Balanced Fund, Equity Income Fund and
International Equity Fund may invest in securities issued by supranational
organizations, which include organizations such as The World Bank, the
European Community, the European Coal and Steel Community and the Asian
Development Bank. Each such Fund may also invest in securities denominated in
the ECU, which is a "basket" consisting of specified amounts of the
currencies of certain member states of the European Community. These
securities are typically issued by European governments and supranational
organizations.

U.S. GOVERNMENT OBLIGATIONS. U.S. Government obligations include obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

MONEY MARKET INSTRUMENTS. Each Fund may invest in cash or high-quality,
short-term money market instruments. Such instruments may include U.S.
Government securities, commercial paper of domestic and foreign issuers and
obligations of domestic and foreign banks. Investments in foreign money market
instruments may involve certain risks associated with foreign investment.

REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD COMMITMENTS. Each Fund may
enter into agreements to purchase and resell securities at an agreed-upon price
and time. Each Fund also has the ability to lend portfolio securities in an
amount equal to not more than 30% of its total assets to generate additional
income. These transactions must be fully collateralized at all times. Each Fund
may purchase securities for delivery at a future date, which may increase its
overall investment exposure and involves a risk of loss if the value of the
securities declines prior to the settlement date. These transactions involve
some risk to a Fund if the other party should default on its obligation and the
Fund is delayed or prevented from recovering the collateral or completing the
transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow money from
banks for temporary or

11
<PAGE>

short-term purposes, but will not borrow for leveraging purposes. Each Fund
may also sell and simultaneously commit to repurchase a portfolio security at
an agreed-upon price and time, to avoid selling securities during unfavorable
market conditions in order to meet redemptions. Whenever a Fund enters into a
reverse repurchase agreement, it will establish a segregated account in which
it will maintain liquid assets on a daily basis in an amount at least equal
to the repurchase price (including accrued interest). Each Fund would be
required to pay interest on amounts obtained through reverse repurchase
agreements, which are considered borrowings under federal securities laws.

STAND-BY COMMITMENTS. The Funds may enter into put transactions, including
transactions sometimes referred to as stand-by commitments, with respect to
securities in their portfolios. In these transactions, a Fund would acquire the
right to sell a security at an agreed upon price within a specified period prior
to its maturity date. These transactions involve some risk to the Fund if the
other party should default on its obligation and the Fund is delayed or
prevented from recovering the collateral or completing the transaction.
Acquisition of puts will have the effect of increasing the cost of the
securities subject to the put and thereby reducing the yields otherwise
available from such securities.

CONVERTIBLE SECURITIES. Each Fund may invest in convertible securities, which
are securities generally offering fixed interest or dividend yields which may be
converted either at a stated price or stated rate for common or preferred stock.
Each of the Large Cap Equity Fund, Large Cap Growth Fund, Emerging Growth Fund
and Small Cap Value Fund limit its investments in convertible securities to 20%
of its net assets. Although to a lesser extent than with fixed-income securities
generally, the market value of convertible securities tends to decline as
interest rates increase, and increase as interest rates decline. Because of the
conversion feature, the market value of convertible securities also tends to
vary with fluctuations in the market value of the underlying common or preferred
stock.

OTHER INVESTMENT COMPANIES. Each Fund may invest up to 10% of its total
assets in shares of other investment companies when consistent with its
investment objectives and policies, subject to applicable regulatory
limitations. Additional fees may be charged by other investment companies.

STRIPPED OBLIGATIONS. The Balanced Fund may invest without limitation, and each
other Fund may invest up to 20% of its total assets in stripped obligations
where the underlying obligations are backed by the full faith and credit of the
U.S. Government, including instruments known as "STRIPS". The value of stripped
obligations tends to fluctuate more in response to changes in interest rates
than the value of ordinary

12
<PAGE>

interest-paying debt securities with similar maturities. The risk is greater
when the period to maturity is longer.

INVESTMENT GRADE DEBT SECURITIES. The Balanced Fund, Equity Income Fund and
International Equity Fund may invest in investment grade debt securities.
Investment grade debt securities are securities rated in the category BBB or
higher by Standard & Poor's Corporation ("S&P"), or Baa or higher by Moody's
Investors Services, Inc. ("Moody's") or the equivalent by another national
rating organization, or, if unrated, determined by the advisers to be of
comparable quality.

INDEXED INVESTMENTS. The International Equity Fund may invest in instruments
which are indexed to certain specific foreign currency exchange rates. The
terms of such instruments may provide that their principal amounts or just
their coupon interest rates are adjusted upwards or downwards (but not below
zero) at maturity or on established coupon payment dates to reflect changes
in the exchange rate between two or more currencies while the obligation is
outstanding. Such indexed investments entail the risk of loss of principal
and/or interest payments from currency movements in addition to principal
risk, but offer the potential for realizing gains as a result of changes in
foreign currency exchange rates.

REAL ESTATE INVESTMENT TRUSTS. Each Fund's equity securities may include
shares of real estate investment trusts ("REITs"). REITs are pooled
investment vehicles which invest primarily in income-producing real estate
("equity trusts") or real estate related loans or interests ("mortgage
trusts"). The value of equity trusts will depend upon the value of the
underlying properties, and the value of mortgage trusts will be sensitive to
the value of the underlying loans or interests. See "Mortgage-Backed
Securities."

DERIVATIVES AND RELATED INSTRUMENTS. Each Fund may invest its assets in
derivative and related instruments to hedge various market risks or to
increase the Fund's income or gain. Some of these instruments will be subject
to asset segregation requirements to cover the Fund's obligations. Each Fund
may (i) purchase, write and exercise call and put options on securities and
securities indexes (including using options in combination with securities,
other options or derivative instruments); (ii) enter into swaps, futures
contracts and options on futures contracts; (iii) employ forward currency
contracts; and (iv) purchase and sell structured products, which are
instruments designed to restructure or reflect the characteristics of certain
other investments. In addition, the Balanced Fund and International Equity
Fund may employ forward interest rate contracts.

13
<PAGE>

ability of a Fund to successfully utilize these instruments may depend in part
upon the ability of the Fund's advisers to forecast these factors correctly.
Inaccurate forecasts could expose a Fund to a risk of loss. There can be no
guarantee that there will be a correlation between price movements in a hedging
instrument and in the portfolio assets being hedged. The Funds are not required
to use any hedging strategies. Hedging strategies, while reducing risk of loss,
can also reduce the opportunity for gain. Derivatives transactions not involving
hedging may have speculative characteristics, involve leverage and result in
losses that may exceed the original investment of the Fund. There can be no
assurance that a liquid market will exist at a time when a Fund seeks to close
out a derivatives position. Activities of large traders in the futures and
securities markets involving arbitrage, "program trading," and other investment
strategies may cause price distortions in derivatives markets. In certain
instances, particularly those involving over-the-counter transactions or forward
contracts, there is a greater potential that a counterparty or broker may
default. In the event of a default, a Fund may experience a loss. For additional
information concerning derivatives, related instruments and the associated
risks, see the SAI.

PORTFOLIO TURNOVER. The frequency of a Fund's portfolio transactions will
vary from year to year. A Fund's investment policies may lead to frequent
changes in investments, particularly in periods of rapidly changing market
conditions. High portfolio turnover rates would generally result in higher
transaction costs, including brokerage commissions or dealer mark-ups, and
would make it more difficult for a Fund to qualify as a registered investment
company under federal tax law. See "How Distributions are Made; Tax
Information" and "Other Information Concerning the Funds--Certain Regulatory
Matters."

ADDITIONAL INVESTMENT POLICIES OF THE BALANCED FUND

ZERO COUPON SECURITIES AND PAYMENT-IN-KIND OBLIGATIONS. The Fund may invest in
zero coupon securities issued by governmental and private issuers. Zero coupon
securities are debt securities that do not pay regular interest payments, and
instead are sold at substantial discounts from their value at maturity.
Payment-in-kind obligations are obligations on which the interest is payable in
additional securities rather than cash. The value of these instruments tends to
fluctuate more in response to changes in interest rates than the value of
ordinary interest-paying debt securities with similar maturities. The risk is
greater when the period to maturity is longer.

INVERSE FLOATERS AND INTEREST RATE CAPS. The Fund may invest in inverse floaters
and in securities with interest rate caps. Inverse floaters are instruments
whose interest rates bear an inverse relationship to the interest rate on
another security or the value of an index. The market value of an inverse
floater will vary inversely with changes in market interest rates, and will be
more volatile in response to interest rate changes than that of a fixed-rate
obligation.

14
<PAGE>

Interest rate caps are financial instruments under which payments occur if an
interest rate index exceeds a certain predetermined interest rate level, known
as the cap rate, which is tied to a specific index. These financial products
will be more volatile in price than securities which do not include such a
structure.

MORTGAGE-RELATED SECURITIES. The Fund may invest in mortgage-related securities.
Mortgage pass-through securities are securities representing interests in
"pools" of mortgages in which payments of both interest and principal on the
securities are made monthly, in effect "passing through" monthly payments made
by the individual borrowers on the residential mortgage loans which underlie the
securities. Early repayment of principal on mortgage pass-through securities
held by the Fund (due to prepayments of principal on the underlying mortgage
loans) may result in a lower rate of return when the Fund reinvests such
principal. In addition, as with callable fixed-income securities generally, if
the Fund purchased the securities at a premium, sustained early repayment would
limit the value of the premium. Like other fixed-income securities, when
interest rates rise the value of a mortgage-related security generally will
decline; however, when interest rates decline, the value of mortgage-related
securities with prepayment features may not increase as much as other
fixed-income, fixed-maturity securities which have no prepayment or call
features.

Payment of principal and interest on some mortgage pass-through securities
(but not the market value of the securities themselves) may be guaranteed by
the U.S. Government, or by agencies or instrumentalities of the U.S.
Government (which guarantees are supported only by the discretionary
authority of the U.S. Government to purchase the agency's obligations).
Certain mortgage pass-through securities created by nongovernmental issuers
may be supported by various forms of insurance or guarantees, while other
such securities may be backed only by the underlying mortgage collateral.

The Fund may also invest in investment grade Collateralized Mortgage
Obligations ("CMOs"), which are hybrid instruments with characteristics of
both mortgage-backed bonds and mortgage pass-through securities. Similar to
a bond, interest and prepaid principal on a CMO are paid, in most cases,
monthly. CMOs may be collateralized by whole residential or commercial
mortgage loans but are more typically collateralized by portfolios of
mortgage pass-through securities guaranteed by the U.S. Government or its
agencies or instrumentalities. CMOs are structured into multiple classes,
with each class having a different expected average life and/or stated
maturity. Monthly payments of principal, including prepayments, are allocated
to different classes in accordance with the terms of the instruments, and
changes in prepayment rates or assumptions may significantly affect the
expected average life and value of a particular class.

15
<PAGE>

The Fund expects that governmental, government-related or private entities
may create other mortgage-related securities in addition to those described
above. As new types of mortgage-related securities are developed and offered
to investors, the Fund will consider making investments in such securities.

DOLLAR ROLLS. The Fund may enter into mortgage "dollar rolls" in which the
Fund sells mortgage- backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. These
transactions involve some risk to the Fund if the other party should default
on its obligation and the Fund is delayed or prevented from completing the
transaction.

ASSET-BACKED SECURITIES. The Fund may invest in asset-backed securities,
which represent a participation in, or are secured by and payable from, a
stream of payments generated by particular assets, most often a pool of
assets similar to one another, such as motor vehicle receivables or credit
card receivables.

LIMITING INVESTMENT RISKS

Specific investment restrictions help the Funds limit investment risks for
their shareholders. These restrictions prohibit each Fund from: (a) investing
more than 15% of its net assets in illiquid securities (which include
securities restricted as to resale unless they are determined to be readily
marketable in accordance with procedures established by the Board of
Trustees) or (b) investing more than 25% of its total assets in any one
industry. These restrictions also prohibit each of the Balanced Fund, Equity
Income Fund, Large Cap Equity Fund and Large Cap Growth Fund from (c) with
respect to 75% of its total assets, holding more than 10% of the voting
securities of any issuer or investing more than 5% of its total assets in the
securities of any one issuer (other than U.S. Government obligations). A
complete description of these and other investment policies is included in
the SAI. Except for restrictions (b) and (c) above and investment policies
designated as fundamental in the SAI, the Funds' investment policies
(including their investment objectives) are not fundamental. The Trustees may
change any non-fundamental investment policy without shareholder approval.
However, in the event of a change in any such Fund's investment objective,
shareholders will be given at least 30 days' prior written notice.

RISK FACTORS

No Fund constitutes a complete investment program, and an investment in
certain Funds may not be appropriate for all investors. The net asset value
of the shares of each Fund can be expected to fluctuate based on the value of
the securities in the Fund's portfolio. Each Fund is subject to the general
risks and considerations associated with equity investing, as well as the
risks discussed herein. The Balanced Fund is also subject to the general
risks and considerations associated with fixed income investing.

16
<PAGE>

The performance of the Balanced Fund, Equity Income Fund, Emerging Growth
Fund and International Equity Fund, to the extent they invest in convertible
and/or fixed income securities, as applicable, will depend in part on
interest rate changes. As interest rates increase, the value of the fixed
income securities held by such Funds tends to decrease. To the extent a Fund
invests in fixed income securities with longer maturities, the volatility of
the Fund in response to changes in interest rates can be expected to be
greater than if such Funds had invested in comparable securities with shorter
maturities. The performance of these Funds will also depend on the quality of
these investments. While securities issued or guaranteed by the U.S.
Government generally are of high quality, the other fixed income securities
in which such Funds may invest, while of investment-grade quality, may be of
lesser credit quality. Securities rated in the category Baa by Moody's or BBB
by S&P lack certain investment characteristics and may have speculative
characteristics. In addition, with respect to each Fund's investments in
convertible securities, the market value of convertible securities tends to
vary with fluctuations in the market value of the underlying common or
preferred stock.

To the extent permitted by its investment objective and policies, a Fund may
invest in the securities of small or mid cap companies. The securities of
small to mid cap companies often trade less frequently and in more limited
volume, and may be subject to more abrupt or erratic price movements, than
securities of larger, more established companies. Such companies may have
limited product lines, markets or financial resources, or may depend on a
limited management group.

The Emerging Growth Fund and Small Cap Value Fund are aggressively managed
and, therefore, the value of the shares of these Funds is subject to greater
fluctuation and an investment in these Funds' shares involves a higher degree
of risk than an investment in a conservative equity fund or a growth fund
investing entirely in proven growth equities.

As the International Equity Fund invests primarily in equity securities of
companies outside the U.S., an investment in the Fund's shares involves a
higher degree of risk than an investment in a U.S. equity fund. See "Common
Investment Policies-Other Investment Practices-Foreign Securities" above.
Investments in securities of issuers based in developing countries entail
certain additional risks, including greater risks of expropriation,
confiscatory taxation, nationalization and less social, political and
economic stability. The small size of markets for securities of issuers based
in such countries and the low or non-existent volume of trading may result
in a lack of liquidity and in price volatility. Certain national policies may
restrict the investment opportunities, including restrictions on investing in
issuers or industries deemed sensitive to relevant national interests. There
may be an absence of developed legal structures governing private or foreign
investment and private property.

17
<PAGE>

Because the Emerging Growth Fund and International Equity Fund are
"non-diversified," the value of such Funds' shares is more susceptible to
developments affecting issuers in which such Funds invest.

For a discussion of certain other risks associated with each Fund's
additional investment activities, see "Common Investment Policies-Other
Investment Practices" above.

MANAGEMENT
- ----------

THE FUNDS' ADVISERS

The Chase Manhattan Bank ("Chase") acts as investment adviser to the Funds
pursuant to an Investment Advisory Agreement and has overall responsibility
for investment decisions of the Funds subject to the oversight of the Board
of Trustees. Chase is a wholly-owned subsidiary of The Chase Manhattan
Corporation, a bank holding company. Chase and its predecessors have over 100
years of money management experience. For its investment advisory services to
the Funds, Chase is entitled to receive an annual fee computed daily and paid
monthly based at an annual rate equal to 0.50%, 0.40%, 0.40%, 0.40%, 0.65%,
0.65% and 1.00% of the average daily net assets of the Balanced Fund, Equity
Income Fund, Large Cap Equity Fund, Large Cap Growth Fund, Emerging Growth
Fund, Small Cap Value Fund and International Equity Fund, respectively. Chase
is located at 270 Park Avenue, New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to each of the Funds other than International Equity
Fund pursuant to a Sub-Investment Advisory Agreement between CAM and Chase.
CAM is a wholly-owned operating subsidiary of Chase. CAM makes investment
decisions for the Funds on a day-to-day basis. For these services, CAM is
entitled to receive a fee, payable by Chase from its advisory fee, at an
annual rate equal to 0.25%, 0.20%, 0.20%, 0.20%, 0.30% and 0.30% of the
average daily net assets of the Balanced Fund, Equity Income Fund, Large Cap
Equity Fund, Large Cap Growth Fund, Emerging Growth Fund and Small Cap Value
Fund, respectively. CAM was recently formed for the purpose of providing
discretionary investment advisory services to institutional clients and to
consolidate Chase's investment management function. The same individuals who
serve as portfolio managers for Chase also serve as portfolio managers for
CAM. CAM is located at 1211 Avenue of the Americas, New York, New York 10036.

Chase Asset Management (London) Limited ("CAM London"), a registered
investment adviser, is the sub-investment adviser to the International Equity
Fund pursuant to a Sub-Investment Advisory Agreement between CAM London and
Chase. CAM London is a wholly-owned operating subsidiary of Chase. CAM London
makes investment decisions for the Fund on a day-to-day basis. For these
services, CAM London is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.50% of the average daily net
assets of the Fund. CAM

18
<PAGE>

London was recently formed for the purpose of providing discretionary
investment advisory services to institutional clients and to consolidate
Chase's investment management function. The same individuals who serve as
portfolio managers for Chase with respect to the International Equity Fund
also serve as portfolio managers for CAM London. CAM London is located at
Colvile House, 32 Curzon Street, London W1Y 8AL.

PORTFOLIO MANAGERS. Greg Adams and Stephen Humphrey, Vice Presidents of
Chase, and Susan Huang, Vice President and Director of Fixed Income
Management of Chase, are responsible for the management of the Balanced
Fund's portfolio. Mr. Adams joined Chase in 1987 and has been responsible for
overseeing the proprietary computer model program used in the U.S. equity
selection process. Mr. Adams manages a number of mutual funds at Chase. Mr.
Humphrey has been employed at Chase (including its predecessors) since 1976
and has managed pooled investment funds and private accounts at Chemical Bank
since 1985. Ms. Huang is responsible for developing the allocation and risk
management strategy for U.S. fixed income portfolios, and managing the
institutional U.S. fixed income assets under management. Prior to joining
Chase in June of 1995, Ms. Huang was Director of the Insurance Asset
Management Group at Hyperion Capital Management, Inc. Prior to joining
Hyperion, Ms. Huang was a senior portfolio manager with CS First Boston
Investment Management Inc.

Tony Gleason, Vice President of Chase, and Mr. Humphrey are responsible for
the management of the Equity Income Fund's portfolio. Mr. Gleason joined
Chase in 1995 with 10 years of investment experience. Prior to joining Chase,
Mr. Gleason spent nine years as a Vice President and Portfolio Manager with
Prudential Equity Management.

Mr. Adams is responsible for the day-to-day management of the Large Cap
Equity Fund's portfolio.

A committee composed of Chase investment professionals is responsible for the
management of the Large Cap Growth Fund's portfolio.

Mehda Vora, a Senior Portfolio Manager at Chase, is responsible for the
day-to-day management for the Emerging Growth Fund's portfolio. Ms. Vora
joined Chase in 1996. Prior to joining Chase, Ms. Vora was a Senior Vice
President and Associate Portfolio Manager at Trust Company of the West,
specializing in small to mid cap issues.

Richard Rolle and Judith Havard, Vice Presidents of Chase, are responsible
for the day-to-day management of the Small Cap Value Fund. Mr. Rolle has been
with Chase (including its predecessors) since 1982, serving as trust
portfolio manager, securities analyst and fund manager. Prior to joining
Chase in 1994, Ms. Havard was an associate director at the Massachusetts
Mutual Life Insurance Company, where she served as portfolio manager of the
company's convertible stock and bond portfolio.

Michael Browne and David Webb, Vice Presidents of Chase, are responsible for
the day-to-day management for the International

19
<PAGE>

Equity Fund. Mr. Browne is responsible for investment management and equity
research in for European equities. Mr. Browne joined Chase in 1994. Prior to
joining Chase, Mr. Browne was Assistant Director of European equity fund
management at BZW Investment Management in London. Mr. Webb is responsible
for investment management and equity research in the Asia region. Mr. Webb
joined Chase in 1992. Prior to joining Chase, Mr. Webb was with Hambros Bank
Limited where he was responsible for the management of the Hambros Equus
Pacific Japan and Hambros Japan Trust.

HOW TO PURCHASE AND REDEEM SHARES

HOW TO PURCHASE SHARES

Shares of the Funds may be purchased through Chase and other selected financial
institutions that have entered into an agreement with the Funds (such
institutions are referred to herein as "Financial Institutions") on each
business day during which Chase and the New York Stock Exchange are open ("Fund
Business Day"). The Funds reserve the right to reject any purchase order or
cease offering shares for purchase at any time.

Shares are sold at their public offering price, which is their next determined
net asset value. Orders received by the account administrator at your Financial
Institution in proper form prior to the New York Stock Exchange closing time (or
such earlier cut-off time as may be established by your Financial Institution)
are confirmed at that day's net asset value, provided the order is received by
the relevant Fund prior to its close of business accompanied by payment in
federal funds. Financial Institutions are responsible for forwarding orders for
the purchase of shares on a timely basis. Shares will be maintained in book
entry form and share certificates will not be issued. Management reserves the
right to refuse to sell shares of any Fund to any institution.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

ELIGIBLE INVESTORS

Qualified investors are defined as trusts, fiduciary accounts and investment
management clients of a Financial Institution or its affiliate. Financial
Institutions may establish additional eligibility requirements, including
minimum investment requirements, for qualified investors. Financial Institutions
are required to maintain at least $5,000,000 in an omnibus account with one or
more of the Vista Select Funds. Financial Institutions may offer investors that
cease to be qualified investors the ability to continue to hold their shares in
the Vista Select Funds through a separate account, for which a separate account
fee and transaction costs may be charged to the investor. Financial Institutions
that do not offer this feature may redeem an investor's shares if the investor
ceases to be qualified.

HOW TO REDEEM SHARES

0You may redeem all or any portion of the shares in your account at any time
at the net asset value next determined after a redemption request in proper
form is furnished by you to the account administrator at your Financial
Institution and transmitted to and received by the relevant Fund.

20
<PAGE>

of regular trading on the New York Stock Exchange. Your Financial Institution
will be responsible for furnishing all necessary documentation to the Funds,
and may charge you for its services.

A Fund generally sends your Financial Institution payment for your shares in
federal funds on the business day after your request is received in proper
form. Under unusual circumstances, the Funds may suspend redemptions, or
postpone payment for more than seven days, as permitted by federal securities
law.

If a Financial Institution is authorized to act upon redemption and transfer
instructions received by telephone from an investor and the Financial
Institution fails to employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, it may be liable for any
losses due to unauthorized or fraudulent instructions. An investor agrees,
however, that to the extent permitted by applicable law, neither the Funds
nor the investor's Financial Institution nor any of their agents will be
liable for any loss, liability, cost or expense arising out of any redemption
request, including any fraudulent or unauthorized request. For information,
consult your account administrator.

HOW THE FUNDS
VALUE THEIR SHARES
- ------------------

The net asset value of each Fund's shares is determined once daily based upon
prices determined as of the close of regular trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern time, however, options are priced at
4:15 p.m., Eastern time), on each Fund Business Day, by dividing the net
assets of a Fund by the total number of outstanding shares of that Fund.
Values of assets held by the Funds are determined on the basis of their
market or other fair value, as described in the SAI.

HOW DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------

The Balanced Fund, Equity Income Fund, Large Cap Equity Fund and Large Cap
Growth Fund distribute any net investment income other than short term capital
gains at least monthly. The Emerging Growth Fund, Small Cap Value Fund and
International Equity Fund distribute any net investment income other than short
term capital gains at least quarterly. Each Fund distributes any net realized
short term and long term capital gains at least annually. Distributions from
capital gains are made after applying any available capital loss carryovers.

You can choose from three distribution options if made available by your
Financial Institution: (1) reinvest all distributions in additional Fund
shares; (2) receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional shares; or (3) receive
all distributions in cash. You can change your distribution option by
notifying your account administrator in writing. If your Financial
Institution does not offer distribution reinvestment or if you do not select
an option when you open your account, all distributions will be made in cash.

21
<PAGE>

Each Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements that are necessary for
it to be relieved of federal taxes on income and gains it distributes to
shareholders. Each Fund intends to distribute substantially all of its
ordinary income and capital gain net income on a current basis. If a Fund
does not qualify as a regulated investment company for any taxable year or
does not make such distributions, such Fund will be subject to tax on all of
its income and gains.

All Fund distributions will be taxable to you as ordinary income, except that
any distributions of net long-term capital gains will be taxable as such,
regardless of how long you have held the shares. Distributions will be
taxable as described above whether received in cash or in shares through the
reinvestment of distributions.

A portion of the ordinary income dividends paid by each Fund other than the
International Equity Fund may qualify for the 70% dividends- received
deduction for corporate shareholders.

Investment income received by the International Equity Fund from sources
within foreign countries may be subject to foreign taxes withheld at the
source. Since more than 50% of the value of the total assets of the Fund at
the close of the Fund's taxable year is anticipated to be stock or securities
of foreign corporations, the Fund may elect to "pass through" to its
shareholders the amount of foreign taxes paid by the Fund.

Investors should be careful to consider the tax implications of purchasing
shares just prior to the next distribution date. Those investors purchasing
shares just prior to a distribution will be taxed on the entire amount of the
distribution received, even though the net asset value per share on the date
of such purchase reflected the amount of such distribution.

Early in each calendar year the Funds will notify your Financial Institution
of the amount and tax status of distributions paid for the preceding year.

The foregoing is a summary of certain federal income tax consequences of
investing in the Funds. You should consult your tax adviser to determine the
precise effect of an investment in the Funds on your particular tax situation
(including possible liability for state and local taxes and, for foreign
shareholders, U.S. withholding taxes).

OTHER INFORMATION
CONCERNING THE FUNDS
- --------------------

Your Financial Institution may offer additional services to its customers,
including specialized procedures for the purchase and redemption of Fund
shares, such as pre-authorized or systematic purchase and redemption plans.
Each Financial Institution may establish its own terms and conditions,
including limitations on the amounts of subsequent transactions, with respect
to such services. Certain Financial Institutions may (although they are not
required by the Trust to do so) credit to the accounts of their customers
from whom they are

22
<PAGE>

already receiving other fees an amount not exceeding such other fees.

ADMINISTRATOR

Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.10% of each
Fund's average daily net assets.

SUB-ADMINISTRATOR
AND DISTRIBUTOR

Vista Fund Distributors, Inc. ("VFD") acts as the Funds' sub-administrator
and distributor. VFD is a subsidiary of The BISYS Group, Inc. and is
unaffiliated with Chase. For the sub-administrative services it performs, VFD
is entitled to receive a fee from each Fund at an annual rate equal to 0.05%
of the Fund's average daily net assets. VFD has agreed to use a portion of
this fee to pay for certain expenses incurred in connection with organizing
new series of the Trust and certain other ongoing expenses of the Trust. VFD
is located at 101 Park Avenue, New York, New York 10178.

CUSTODIAN

Chase acts as custodian for the Funds and receives compensation under an
agreement with the Trust. Chase may sub-contract for the provision of certain
services to be provided under the custody agreement. Fund securities and cash
may be held by sub-custodian banks if such arrangements are reviewed and
approved by the Trustees.

EXPENSES

Each Fund pays the expenses incurred in its operations, including its pro
rata share of expenses of the Trust. These expenses include investment
advisory and administrative fees; the compensation of the Trustees;
registration fees; interest charges; taxes; expenses connected with the
execution, recording and settlement of security transactions; fees and
expenses of the Funds' custodian for all services to the Funds, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of preparing and mailing reports to investors and to
government offices and commissions; expenses of meetings of investors; fees
and expenses of independent accountants, of legal counsel and of any transfer
agent, registrar or dividend disbursing agent of the Trust; insurance
premiums; and expenses of calculating the net asset value of, and the net
income on, shares of the Funds. In addition, each Fund may allocate transfer
agency and certain other expenses by class if additional classes of such Fund
are established in the future. Service providers to a Fund may, from time to
time, voluntarily waive all or a portion of any fees to which they are
entitled.

ORGANIZATION AND
DESCRIPTION OF SHARES

<PAGE>

class represents an equal proportionate interest in that series or class with
each other share of that series or class. The shares of each series or class
participate equally in the earnings, dividends and assets of the particular
series or class. Shares have no pre-emptive or conversion rights. Shares when
issued are fully paid and non-assessable, except as set forth below.
Shareholders are entitled to one vote for each whole share held, and each
fractional share shall be entitled to a proportionate fractional vote, except
that Trust shares held in the treasury of the Trust shall not be voted.

Each Fund currently issues a single class of shares but may, in the future,
offer other classes of shares. The categories of investors that are eligible
to purchase shares may differ for each class of Fund shares. In addition,
other classes of Fund shares may be subject to differences in sales charge
arrangements, ongoing distribution and service fee levels, and levels of
certain other expenses, which will affect the relative performance of the
different classes. Investors may call 1-800-622-4273 to obtain additional
information about other classes of shares of the Funds that may be offered in
the future. Any person entitled to receive compensation for selling or
servicing shares of a Fund may receive different levels of compensation with
respect to one class of shares over another. Shares of each class of a Fund
would generally vote together except when required under federal securities
laws to vote separately on matters that only affect a particular class, such
as the approval of distribution plans for a particular class.

The business and affairs of the Trust are managed under the general direction
and supervision of the Trust's Board of Trustees. The Trust is not required
to hold annual meetings of shareholders but will hold special meetings of
shareholders of all series or classes when in the judgment of the Trustees it
is necessary or desirable to submit matters for a shareholder vote. The
Trustees will promptly call a meeting of shareholders to remove a trustee(s)
when requested to do so in writing by record holders of not less than 10% of
all outstanding shares of the Trust.

Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.

UNIQUE CHARACTERISTICS OF
MASTER/FEEDER FUND STRUCTURE

24
<PAGE>

conditions and would pay a proportionate share of such Portfolio's expenses.
However, other investors in a Portfolio would not be required to sell their
shares at the same public offering price as a Fund, and might bear different
levels of ongoing expenses than the Fund. Shareholders of the Funds should be
aware that these differences may result in differences in returns experienced
in the different funds that invest in a Portfolio. Such differences in return
are also present in other mutual fund structures.

Smaller funds investing in a Portfolio could be materially affected by the
actions of larger funds investing the Portfolio. For example, if a large fund
were to withdraw from a Portfolio, the remaining funds might experience
higher pro rata operating expenses, thereby producing lower returns.
Additionally, the Portfolio could become less diverse, resulting in increased
portfolio risk. However, this possibility also exists for traditionally
structured funds which have large or institutional investors. Funds with a
greater pro rata ownership in a Portfolio could have effective voting control
of such Portfolio. Under this master/feeder investment approach, whenever the
Trust was requested to vote on matters pertaining to a Portfolio, the Trust
would hold a meeting of shareholders of the relevant Fund and would cast all
of its votes in the same proportion as did such Fund's shareholders. Shares
of a Fund for which no voting instructions had been received would be voted
in the same proportion as those shares for which voting instructions had been
received. Certain changes in a Portfolio's objective, policies or
restrictions might require the Trust to withdraw the relevant Fund's interest
in such Portfolio. Any such withdrawal could result in a distribution in kind
of portfolio securities (as opposed to a cash distribution from such
Portfolio). A Fund could incur brokerage fees or other transaction costs in
converting such securities to cash. In addition, a distribution in kind could
result in a less diversified portfolio of investments or adversely affect the
liquidity of the relevant Fund.

State securities regulations generally would not permit the same individuals
who are disinterested Trustees of the Trust to be Trustees of a Portfolio
absent the adoption of procedures by a majority of the disinterested Trustees
of the Trust reasonably appropriate to deal with potential conflicts of
interest up to and including creating a separate Board of Trustees. A Fund
will not adopt a master/feeder structure under which the disinterested
Trustees of the Trust are Trustees of the Portfolio unless the Trustees of
the Trust, including a majority of the disinterested Trustees, adopt
procedures they believe to be reasonably appropriate to deal with any
conflict of interest up to and including creating a separate Board of
Trustees.

If a Fund invests all of its investable assets in a Portfolio, investors in such
Fund will be able to obtain information about whether investment in the
Portfolio might be available through other funds by contacting the Fund at
1-800-622-4273. In the event a Fund adopts a master/feeder structure and invests
all of its investable assets in a Portfolio, shareholders of that Fund will be
given at least 30 days' prior written notice.

<PAGE>

PERFORMANCE
INFORMATION
- -----------

Each Fund's investment performance may from time to time be included in
advertisements about the Fund. "Yield" is calculated by dividing the
annualized net investment income per share during a recent 30-day period by
the maximum public offering price per share on the last day of that period.

"Total return" for the one-, five- and ten-year periods (or for the life of a
class, if shorter) through the most recent calendar quarter represents the
average annual compounded rate of return on an investment of $1,000 in a Fund
invested at the public offering price. Total return may also be presented for
other periods.

All performance data is based on each Fund's past investment results and does
not predict future performance. The performance data for each Fund prior to
January 1, 1997 includes the historical performance of a predecessor common
trust fund, adjusted to reflect historical expenses at the levels indicated
(absent reimbursements) in the Expense Summary for that Fund. These predecessor
common trust funds were not registered under the Investment Company Act of 1940
(the "1940 Act") and thus were not subject to certain investment restrictions
that are imposed by the 1940 Act. If the common trust funds had been registered
under the 1940 Act, their performance might have been adversely affected.

Because each Fund is the successor to one or more common trust funds, the assets
of which it acquired on a tax-free basis at the time the Fund commenced
operations, a Fund's portfolio may include net unrealized appreciation
comparable to that of a mutual fund which has been in existence for the life of
the predecessor common trust fund or funds. Additional information on unrealized
appreciation is included under "Performance Information" in the SAI.

Investment performance, which will vary, is based on many factors, including
market conditions, the composition of a Fund's portfolio and a Fund's operating
expenses. Investment performance also often reflects the risks associated with a
Fund's investment objectives and policies.

These factors should be considered when comparing a Fund's investment results
to those of other mutual funds and other investment vehicles. Quotation of
investment performance for any period when a fee waiver or expense limitation
was in effect will be greater than if the waiver or limitation had not been
in effect. Each Fund's performance may be compared to other mutual funds,
relevant indices and rankings prepared by independent services. See the SAI.

26
<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

TRANSFER AGENT AND DIVIDEND PAYING AGENT

DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105

LEGAL COUNSEL

Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

[Vista Logo]
101 Park Avenue
New York, NY 10178

INLC-1-796CX

<PAGE>

Subject to Completion--Dated November 14, 1996

[VISTA LOGO]

PROSPECTUS
VISTA SELECT FIXED INCOME FUNDS

SHORT-TERM BOND FUND
INTERMEDIATE BOND FUND
BOND FUND
---------------------------
INVESTMENT STRATEGY: Income
_____, 1996

<PAGE>

TABLE OF CONTENTS

EXPENSE SUMMARY .......................................... 3

FUND OBJECTIVES AND INVESTMENT APPROACH .................. 4

COMMON INVESTMENT POLICIES ............................... 4

MANAGEMENT ............................................... 10

HOW TO PURCHASE AND REDEEM SHARES ........................ 11

HOW THE FUNDS VALUE THEIR SHARES ......................... 13

HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION .............. 13

OTHER INFORMATION CONCERNING THE FUNDS ................... 14

PERFORMANCE INFORMATION .................................. 18

2
<PAGE>

EXPENSE SUMMARY

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Vista Select Vista Select
Short-Term Bond Intermediate Bond Vista Select
Fund Fund Bond Fund
-------------- ---------------- -------------
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee 0.25% 0.30% 0.30%
---- ---- ----
12b-1 Fee None None None
Shareholder Servicing Fee None None None
Other Expenses (after reimbursements)* 0.30% 0.21% 0.19%
---- ---- ----
Total Fund Operating Expenses (after
reimbursements)* 0.55% 0.51% 0.49%
---- ---- ----

EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:

1 Year $6 $5 $5
-- -- --
3 Years 18 16 16
-- -- --

</TABLE>
* Reflects the agreement by Chase voluntarily to reimburse certain expenses
for a period of at least one year after the date of this Prospectus. Absent
such reimbursements, Total Fund Operating Expenses for Vista Select
Short-Term Bond Fund, Vista Select Intermediate Bond Fund and Vista Select
Bond Fund would be 0.91%, 0.59% and 0.49%, respectively.

Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an
investment in the Funds.

3
<PAGE>

FUND OBJECTIVES AND
INVESTMENT APPROACH
- -------------------

VISTA SELECT SHORT-TERM
BOND FUND

The Fund's objective is a high level of current income, consistent with
preservation of capital.

The Fund will invest at least 65% of its total assets in bonds which have a
maturity of three years or less, and the dollar weighted average maturity of
its portfolio will not exceed three years. The Fund normally will invest
substantially all of its assets in investment-grade fixed-income securities
of all types. Investment-grade fixed-income securities are securities rated
in the category BBB or higher by Standard & Poor's Corporation ("S&P"), or
Baa or higher by Moody's Investors Services, Inc. ("Moody's") or the
equivalent by another national rating organization, and unrated securities
determined by the Funds' advisers to be of comparable quality.

VISTA SELECT
INTERMEDIATE BOND FUND

The Fund's objective is as high a level of income as is consistent with
reasonable risk.

The Fund invests primarily in a broad range of investment-grade corporate
bonds as well as other fixed-income securities. Under normal market
conditions, the Fund invests at least 65% of its total assets in debt
obligations of the U.S. Government, its agencies and instrumentalities, and
investment- grade fixed income securities (as described above).

The dollar weighted average maturity of the Fund's portfolio will be greater
than three years but will not exceed ten years. For temporary defensive
purposes, the Fund may invest without limitation in high quality money market
instruments and repurchase agreements, which generally carry lower yields than
longer-term securities.

VISTA SELECT BOND FUND

The Fund's objective is as high a level of income as is consistent with
reasonable risk.

There is no restriction on the maturity of the Fund's portfolio or any
individual portfolio security. For temporary defensive purposes, the Fund may
invest without limitation in high quality money market instruments and
repurchase agreements, which generally carry lower yields than longer-term
securities.

COMMON INVESTMENT
POLICIES
- --------

In making investment decisions for the Funds, each Fund's advisers consider
many factors in addition to current yield, including preservation of capital,
maturity and yield to maturity. Each Fund's advisers will adjust such Fund's
investments in particular securities or types of securities based upon their
appraisal of changing economic conditions and trends.

4
<PAGE>

Each Fund's advisers may sell one security and purchase another security of
comparable quality and maturity in order to take advantage of what they
believe to be short- term differentials in market values or yield
disparities.

Fixed-income securities in each Fund's portfolio may include, in any
proportion, bonds, notes, mortgage-backed securities, asset- backed
securities, government and government agency and instrumentality obligations,
zero coupon securities, convertible securities and money market instruments,
as discussed below.

Each Fund's advisers may adjust the average maturity of the Fund's portfolio
based upon their assessment of the relative yields available on securities of
different maturities and their expectations of future changes in interest
rates. Each Fund is classified as a "diversified" fund under federal
securities laws.

The maturity of securities with put features will be measured based on the
next put date, and the maturity of mortgage-and asset-backed securities will
be measured based upon their weighted average lives.

No Fund is intended to be a complete investment program, and there is no
assurance that any Fund will achieve its investment objective.

OTHER INVESTMENT PRACTICES

Each Fund may also engage in the following investment practices, when
consistent with the Fund's overall objective and policies. These practices,
and certain associated risks, are more fully described in the SAI.

5
<PAGE>

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow money from
banks for temporary or short-term purposes, but will not borrow for leveraging
purposes. Each Fund may also sell and simultaneously commit to repurchase a
portfolio security at an agreed-upon price and time, to avoid selling securities
during unfavorable market conditions in order to meet redemptions. Whenever a
Fund enters into a reverse repurchase agreement, it will establish a segregated
account in which it will maintain liquid assets on a daily basis in an amount at
least equal to the repurchase price (including accrued interest). A Fund would
be required to pay interest on amounts obtained through reverse repurchase
agreements, which are considered borrowings under federal securities laws.

STAND-BY COMMITMENTS. Each Fund may enter into put transactions, including
transactions sometimes referred to as stand-by commitments, with respect to
securities in its portfolio. In these transactions, a Fund would acquire the
right to sell a security at an agreed upon price within a specified period prior
to its maturity date. These transactions involve some risk to a Fund if the
other party should default on its obligation and the Fund is delayed or
prevented from recovering the collateral or completing the transaction.
Acquisition of puts will have the effect of increasing the cost of the
securities subject to the put and thereby reducing the yields otherwise
available from such securities.

ZERO COUPON SECURITIES, PAYMENT-IN-KIND OBLIGATIONS AND STRIPPED OBLIGATIONS.
Each Fund may invest in zero coupon securities issued by governmental and
private issuers. Zero coupon securities are debt securities that do not pay
regular interest payments, and instead are sold at substantial discounts from
their value at maturity. Payment-in-kind obligations are obligations on which
the interest is payable in additional securities rather than cash. Each Fund may
also invest in stripped obligations where the underlying obligations are backed
by the full faith and credit of the U.S. government, including instruments know
as "STRIPS". The value of these instruments tends to fluctuate more in response
to changes in interest rates than the value of ordinary interest-paying debt
securities with similar maturities. The risk is greater when the period to
maturity is longer.

FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. Each Fund may
invest in floating rate securities, whose interest rates adjust automatically
whenever a specified interest rate changes, and variable rate securities, whose
interest rates are periodically adjusted. Certain of these instruments permit
the holder to demand payment of principal and accrued interest upon a specified
number of days' notice from either the issuer or a third party. The securities
in which a Fund may invest include participation certificates and certificates
of indebtedness or safekeeping. Participation certificates are pro rata
interests in securities held by others; certificates of indebtedness or
safekeeping are

6
<PAGE>

documentary receipts for such original securities held in custody by others.
As a result of the floating or variable rate nature of these investments, a
Fund's yield may decline and it may forego the opportunity for capital
appreciation during periods when interest rates decline; however, during
periods when interest rates increase, the Fund's yield may increase and it
may have reduced risk of capital depreciation. Demand features on certain
floating or variable rate securities may obligate a Fund to pay a "tender
fee" to a third party. Demand features provided by foreign banks involve
certain risks associated with foreign investments.

INVERSE FLOATERS AND INTEREST RATE CAPS. Each Fund may invest in inverse
floaters and in securities with interest rate caps. Inverse floaters are
instruments whose interest rates bear an inverse relationship to the interest
rate on another security or the value of an index. The market value of an
inverse floater will vary inversely with changes in market interest rates, and
will be more volatile in response to interest rate changes than that of a
fixed-rate obligation. Interest rate caps are financial instruments under which
payments occur if an interest rate index exceeds a certain predetermined
interest rate level, known as the cap rate, which is tied to a specific index.
These financial products will be more volatile in price than municipal
securities which do not include such a structure.

MORTGAGE-RELATED SECURITIES. Each Fund may invest in mortgage-related
securities. Mortgage pass-through securities are securities representing
interests in "pools" of mortgages in which payments of both interest and
principal on the securities are made monthly, in effect "passing through"
monthly payments made by the individual borrowers on the residential mortgage
loans which underlie the securities. Early repayment of principal on mortgage
pass-through securities held by a Fund (due to prepayments of principal on the
underlying mortgage loans) may result in a lower rate of return when the Fund
reinvests such principal. In addition, as with callable fixed- income securities
generally, if a Fund purchased the securities at a premium, sustained early
repayment would limit the value of the premium. Like other fixed- income
securities, when interest rates rise the value of a mortgage- related security
generally will decline; however, when interest rates decline, the value of
mortgage- related securities with prepayment features may not increase as much
as other fixed-maturity, fixed-income securities which have no prepayment or
call features.

7
<PAGE>

Each Fund may also invest in investment grade Collateralized Mortgage
Obligations ("CMOs"), which are hybrid instruments with characteristics of
both mortgage-backed bonds and mortgage pass- through securities. Similar to
a bond, interest and prepaid principal on a CMO are paid, in most cases,
monthly. CMOs may be collateralized by whole residential or commercial
mortgage loans but are more typically collateralized by portfolios of
mortgage pass-through securities guaranteed by the U.S. Government or its
agencies or instrumentalities. CMOs are structured into multiple classes,
with each class having a different expected average life and/or stated
maturity. Monthly payments of principal, including prepayments, are allocated
to different classes in accordance with the terms of the instruments, and
changes in prepayment rates or assumptions may significantly affect the
expected average life and value of a particular class.

The Funds expect that governmental, government-related or private entities
may create other mortgage-related securities in addition to those described
above. As new types of mortgage-related securities are developed and offered
to investors, the Funds will consider making investments in such securities.

DOLLAR ROLLS. The Funds may enter into mortgage "dollar rolls" in which a
Fund sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. These
transactions involve some risk to a Fund if the other party should default on
its obligation and the Fund is delayed or prevented from completing the
transaction.

ASSET-BACKED SECURITIES. Each Fund may invest in asset-backed securities, which
represent a participation in, or are secured by and payable from, a stream of
payments generated by particular assets, most often a pool of assets similar to
one another, such as motor vehicle receivables or credit card receivables.

OTHER INVESTMENT COMPANIES. Each Fund may invest up to 10% of its total assets
in shares of other investment companies when consistent with its investment
objective and policies, subject to applicable regulatory limitations. Additional
fees may be charged by other investment companies.

DERIVATIVES AND RELATED INSTRUMENTS. Each Fund may invest its assets in
derivative and related instruments to hedge various market risks or to increase
the Fund's income or gain. Some of these instruments will be subject to asset
segregation requirements to cover the Fund's obligations. Each Fund may (i)
purchase, write and exercise call and put options on securities and securities
indexes (including using options in combination with securities, other options
or derivative instruments); (ii) enter into swaps, futures contracts and options
on futures contracts; (iii) employ forward interest rate contracts; (iv)
purchase and sell mortgage-backed and asset-backed securities; and (v)

8
<PAGE>

purchase and sell structured products, which are instruments designed to
restructure or reflect the characteristics of certain other investments.

There are a number of risks associated with the use of derivatives and related
instruments and no assurance can be given that any strategy will succeed. The
value of certain derivatives or related instruments in which a Fund invests may
be particularly sensitive to changes in prevailing economic conditions and
market value. The ability of a Fund to successfully utilize these instruments
may depend in part upon the ability of the Fund's advisers to forecast these
factors correctly. Inaccurate forecasts could expose a Fund to a risk of loss.
There can be no guarantee that there will be a correlation between price
movements in a hedging instrument and in the portfolio assets being hedged. The
Funds are not required to use any hedging strategies. Hedging strategies, while
reducing risk of loss, can also reduce the opportunity for gain. Derivatives
transactions not involving hedging may have speculative characteristics, involve
leverage and result in losses that may exceed the original investments of the
Fund. There can be no assurance that a liquid market will exist at a time when a
Fund seeks to close out a derivatives position. Activities of large traders in
the futures and securities markets involving arbitrage, "program trading," and
other investment strategies may cause price distortions in derivatives markets.
In certain instances, particularly those involving over-the-counter transactions
or forward contracts, there is a greater potential that a counterparty or broker
may default. In the event of a default, the Fund may experience a loss. For
additional information concerning derivatives, related instruments and the
associated risks, see the SAI.

PORTFOLIO TURNOVER. The frequency of a Fund's portfolio transactions will
vary from year to year. Each Fund's investment policies may lead to frequent
changes in investments, particularly in periods of rapidly changing market
conditions. High portfolio turnover rates would generally result in higher
transaction costs, including dealer mark-ups, and would make it more
difficult for a Fund to qualify as a registered investment company under
federal tax law. See "How Distributions are Made; Tax Information" and "Other
Information Concerning the Funds-Certain Regulatory Matters."

LIMITING INVESTMENT RISKS

Specific investment restrictions help the Funds limit investment risks for
their shareholders. These restrictions prohibit each Fund from: (a) with
respect to 75% of its total assets, holding more than 10% of the voting
securities of any issuer or investing more than 5% of its total assets in the
securities of any one issuer (other than U.S. Government obligations); (b)
investing more than 15% of its net assets in illiquid securities (which
include securities restricted as to resale unless they are determined to be
readily marketable in accordance with procedures established by the Board of
Trustees); or (c) investing

9
<PAGE>

more than 25% of its total assets in any one industry (this would apply to
municipal obligations backed only by the assets and revenues of nongovernmental
users, but excludes obligations of states, cities, municipalities or other
public authorities). A complete description of these and other investment
policies is included in the SAI. Except for restriction (c) above and investment
policies designated as fundamental above or in the SAI, the Funds' investment
policies (including their investment objectives) are not fundamental. The
Trustees may change any non-fundamental investment policy without shareholder
approval. However, in the event of a change in a Fund's investment objective,
shareholders must be given at least 30 days' prior written notice.

RISK FACTORS

No Fund constitutes a balanced or complete investment program, and the net
asset value of the shares of each Fund can be expected to fluctuate based on
the value of the securities in such Fund's portfolio. Each Fund is subject to
the general risks and considerations associated with the types of investments
it may make, as described above, as well as the risks discussed herein.

The performance of each Fund depends in part on interest rate changes. As
interest rates increase, the value of the fixed income securities held by the
Fund tends to decrease. This effect will be more pronounced with respect to
investments by a Fund in mortgage-related securities, the value of which are
more sensitive to interest rate changes. Although the Short-Term Bond Fund
invests at least 65% of its assets in bonds which have a maturity of less
than three years and the Intermediate Bond Fund has a maximum weighted
average maturity of ten years, both Funds are permitted to invest in
securities with longer maturities. In addition, there is no restriction on
the maturity of Bond Fund's portfolio or any individual portfolio security.
To the extent that a Fund invests in securities with longer maturities, the
volatility of the Fund in response to changes in interest rates can be
expected to be greater than if the Fund had invested in comparable securities
with shorter maturities. The performance of each Fund will also depend on the
quality of its investments. While U.S. Government securities generally are of
high quality, government securities that are not backed by the full faith and
credit of the U.S. Treasury may be affected by changes in the
creditworthiness of the agency that issued them and the non-U.S. Government
securities held by a Fund, while of investment-grade quality, may be of
lesser credit quality. Securities rated in the category Baa by Moody's or BBB
by S&P lack certain investment characteristics and may have speculative
characteristics.

For a discussion of certain other risks associated with the Funds' additional
investment activities, see "Common Investment Policies-Other Investment
Practices" above.

MANAGEMENT
- ----------

THE FUNDS' ADVISERS

The Chase Manhattan Bank ("Chase") acts as investment adviser

10
<PAGE>

to the Funds pursuant to an Investment Advisory Agreement and has overall
responsibility for investment decisions of the Funds, subject to the
oversight of the Board of Trustees. Chase is a wholly-owned subsidiary of
The Chase Manhattan Corporation, a bank holding company. Chase and its
predecessors have over 100 years of money management experience. For its
investment advisory services to the Funds, Chase is entitled to receive an
annual fee computed daily and paid monthly at an annual rate equal to 0.25%,
0.30%, and 0.30% of the average daily net assets of the Short-Term Bond Fund,
Intermediate Bond Fund and Bond Fund, respectively. Chase is located at 270
Park Avenue, New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Funds pursuant to a Sub-Investment Advisory
Agreement between CAM and Chase. CAM is a wholly-owned operating subsidiary
of Chase. CAM makes investment decisions for the Funds on a day-to-day basis.
For these services, CAM is entitled to receive a fee, payable by Chase from
its advisory fee, at an annual rate equal to 0.10%, 0.15%, and 0.15% of the
average daily net assets of the Short-Term Bond Fund, Intermediate Bond Fund
and Bond Fund, respectively. CAM was recently formed for the purpose of
providing discretionary investment advisory services to institutional clients
and to consolidate Chase's investment management function. The same
individuals who serve as portfolio managers for Chase also serve as portfolio
managers for CAM. CAM is located at 1211 Avenue of the Americas, New York,
New York 10036.

PORTFOLIO MANAGER. Susan Huang, Vice President and Director of Fixed Income
Management of Chase, is responsible for the day-to-day management of the
Funds. Ms. Huang is responsible for developing the allocation and risk
management strategy for U.S fixed income portfolios, and managing the
institutional U.S. fixed income assets under management. Prior to joining
Chase in June of 1995, Ms. Huang was Director of the Insurance Asset
Management Group at Hyperion Capital Management Inc. Prior to joining
Hyperion, Ms. Huang was a senior portfolio manager with CS First Boston
Investment Management Inc. Prior to joining CS First Boston in 1992, Ms.
Huang spent 14 years at The Equitable, where she worked in the pension
consulting group and the U.S. Fixed Income Management Group.

HOW TO PURCHASE AND REDEEM SHARES
- -------------------

HOW TO PURCHASE SHARES

Shares of the Funds may be purchased through Chase and other selected
financial institutions that have entered into an agreement with the Funds
(such institutions are referred to herein as "Financial Institutions") on
each business day during which Chase and the New York Stock Exchange are open
("Fund Business Day"). The Funds

11
<PAGE>

reserve the right to reject any purchase order or cease offering shares for
purchase at any time.

Federal regulations require that each investor provide a certified Taxpayer
Identification Number upon opening an account.

ELIGIBLE INVESTORS

Qualified Investors are defined as trusts, fiduciary accounts and investment
management clients of a Financial Institution or its affiliate. Financial
Institutions may establish additional eligibility requirements, including
minimum investment requirements, for qualified investors. Financial Institutions
are required to maintain at least $5,000,000 in an omnibus account with one or
more of the Vista Select Funds. Financial Institutions may offer investors that
cease to be qualified investors the ability to continue to hold their shares in
the Vista Select Funds through a separate account, for which a separate account
fee and transaction costs may be charged to the investor. Financial Institutions
that do not offer this feature may redeem an investor's shares if the investor
ceases to be qualified.

HOW TO REDEEM SHARES

You may redeem all or any portion of the shares in your account at any time
at the net asset value next determined after a redemption request in proper
form is furnished by you to the account administrator at your Financial
Institution and transmitted to and received by the relevant Fund.

In making redemption requests, the names of the registered shareholders on
your account and your account number must be supplied. The price you will
receive is the next net asset value calculated after the relevant Fund
receives your request in proper form. In order to receive that day's net
asset value, the Fund must receive your request before the close of regular
trading on the New York Stock Exchange. Your Financial Institution will be
responsible for furnishing all necessary documentation to the Funds, and may
charge you for its services.

12
<PAGE>

HOW THE FUNDS
VALUE THEIR SHARES
- ------------------

HOW DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------

The Funds declare dividends daily and distribute any net investment income other
than short term capital gains at least monthly and any net realized short term
and long term capital gains at least annually. Distributions from capital gains
are made after applying any available capital loss carryovers.

Investors should be careful to consider the tax implications of purchasing
shares just prior to the next capital gains distribution date. Those
investors purchasing shares just prior to a distribution will be taxed on the
entire amount of the distribution received, even though the net asset value
per share on the date of such purchase reflected the amount of such
distribution.

Early in each calendar year the Funds will notify your Financial Institution
of the amount and tax status of distributions paid for the preceding year.

The foregoing is a summary of certain federal income tax

13
<PAGE>

consequences of investing in the Funds. You should consult your tax adviser
to determine the precise effect of an investment in the Funds on your
particular tax situation (including possible liability for state and local
taxes and, for foreign shareholders, U.S. withholding taxes).

OTHER INFORMATION
CONCERNING THE FUNDS
- --------------------

Your Financial Institution may offer additional services to its customers,
including specialized procedures for the purchase and redemption of Fund shares,
such as pre-authorized or systematic purchase and redemption plans. Each
Financial Institution may establish its own terms and conditions, including
limitations on the amounts of subsequent transactions, with respect to such
services. Certain Financial Institutions may (although they are not required by
the Trust to do so) credit to the accounts of their customers from whom they are
already receiving other fees an amount not exceeding such other fees.

ADMINISTRATOR

Chase acts as the Funds' administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.10% of each
Fund's average daily net assets.

SUB-ADMINISTRATOR
AND DISTRIBUTOR

CUSTODIAN

EXPENSES

14
<PAGE>

independent accountants, of legal counsel and of any transfer agent,
registrar or dividend disbursing agent of the Trust; insurance premiums; and
expenses of calculating the net asset value of, and the net income on, shares
of the Funds. In addition, each Fund may allocate transfer agency and certain
other expenses by class if additional classes of such Fund are established in
the future. Service providers to a Fund may, from time to time, voluntarily
waive all or a portion of any fees to which they are entitled.

ORGANIZATION AND
DESCRIPTION OF SHARES

The Funds are portfolios of Mutual Fund Select Group, an open-end management
investment company organized as a Massachusetts business trust in 1996 (the
"Trust"). The Trust has reserved the right to create and issue additional
series and classes. Each share of a series or class represents an equal
proportionate interest in that series or class with each other share of that
series or class. The shares of each series or class participate equally in
the earnings, dividends and assets of the particular series or class. Shares
have no pre-emptive or conversion rights. Shares when issued are fully paid
and non-assessable, except as set forth below. Shareholders are entitled to
one vote for each whole share held, and each fractional share shall be
entitled to a proportionate fractional vote, except that Trust shares held in
the treasury of the Trust shall not be voted.

Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances, be held personally liable as partners

15
<PAGE>

for its obligations. However, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
both inadequate insurance existed and the Trust itself was unable to meet its
obligations.

UNIQUE CHARACTERISTICS OF
MASTER/FEEDER FUND STRUCTURE

Unlike other mutual funds which directly acquire and manage their own
portfolio securities, each Fund is permitted to invest all of its investable
assets in a separate registered investment company (a "Portfolio"). In that
event, a shareholder's interest in a Fund's underlying investment securities
would be indirect. In addition to selling a beneficial interest to a Fund, a
Portfolio could also sell beneficial interests to other mutual funds or
institutional investors. Such investors would invest in such Portfolio on the
same terms and conditions and would pay a proportionate share of such
Portfolio's expenses. However, other investors in a Portfolio would not be
required to sell their shares at the same public offering price as a Fund,
and might bear different levels of ongoing expenses than the Fund.
Shareholders of the Funds should be aware that these differences may result
in differences in returns experienced in the different funds that invest in a
Portfolio. Such differences in return are also present in other mutual fund
structures.

State securities regulations generally would not permit the same individuals
who are disinterested Trustees of the Trust to be Trustees of a Portfolio
absent the adoption of

16
<PAGE>

procedures by a majority of the disinterested Trustees of the Trust
reasonably appropriate to deal with potential conflicts of interest up to and
including creating a separate Board of Trustees. A Fund will not adopt a
master/feeder structure under which the disinterested Trustees of the Trust
are Trustees of the Portfolio unless the Trustees of the Trust, including a
majority of the disinterested Trustees, adopt procedures they believe to be
reasonably appropriate to deal with any conflict of interest up to and
including creating a separate Board of Trustees.

17
<PAGE>

PERFORMANCE
INFORMATION
- -----------

18
<PAGE>

TRANSFER AGENT AND DIVIDEND PAYING AGENT

DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105

LEGAL COUNSEL

Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

[Vista Logo]
101 Park Avenue
New York, NY 10178

INLC-1-796CX

<PAGE>

Subject to Completion--Dated November 14, 1996

STATEMENT OF
ADDITIONAL INFORMATION
, 1996

VISTA(SM) SELECT BALANCED FUND
VISTA(SM) SELECT BOND FUND
VISTA(SM) SELECT EMERGING GROWTH FUND
VISTA(SM) SELECT EQUITY INCOME FUND
VISTA(SM) SELECT INTERMEDIATE BOND FUND
VISTA(SM) SELECT INTERNATIONAL EQUITY FUND
VISTA(SM) SELECT LARGE CAP GROWTH FUND
VISTA(SM) SELECT LARGE CAP EQUITY FUND
VISTA(SM) SELECT SHORT-TERM BOND FUND
VISTA(SM) SELECT SMALL CAP VALUE FUND

101 Park Avenue, New York, New York 10178

This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Prospectuses offering shares of the Funds. This Statement of Additional
Information should be read in conjunction with the Prospectuses offering
shares of Vista Select Bond Fund, Vista Select Intermediate Bond Fund and
Vista Select Short-Term Bond Fund (collectively the "Income Funds"), and
Vista Select Balanced Fund, Vista Select Emerging Growth Fund, Vista Select
Equity Income Fund, Vista Select International Equity Fund, Vista Select
Large Cap Growth Fund, Vista Select Large Cap Equity Fund and Vista Select
Small Cap Value Fund (collectively the "Equity Funds"). Any references to a
"Prospectus" in this Statement of Additional Information is a reference to
one or more of the foregoing Prospectuses, as the context requires. Copies of
each Prospectus may be obtained by an investor without charge by contacting
Vista Fund Distributors, Inc.("VFD"), the Funds' distributor (the
"Distributor"), at the above-listed address.

This Statement of Additional Information is NOT a prospectus and is
authorized for distribution to prospective investors only if preceded or
accompanied by an effective prospectus.

For more information about the Funds, simply call or write the Vista Select
Service Center at:

1-800-34-VISTA
Vista Select Service Center
P.O. Box 419392
Kansas City, MO 64141

MFG-SAI

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This statement of additional information shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.

<PAGE>

Table of Contents Page
- --------------------------------------------------------------------------------
The Funds ................................................................. 3
Investment Policies and Restrictions ...................................... 3
Performance Information ................................................... 20
Determination of Net Asset Value .......................................... 23
Purchases and Redemptions ................................................. 24
Tax Matters ............................................................... 24
Management of the Trust and the Funds or Portfolios ....................... 31
Independent Accountants ................................................... 37
Certain Regulatory Matters ................................................ 37
General Information ....................................................... 37
Appendix A--Description of Certain Obligations Issued or Guaranteed by
U.S. Government Agencies or Instrumentalities ........................... A-1
Appendix B--Description of Ratings ........................................ B-1
Part C--Other Information ................................................. C-1

2
<PAGE>

THE FUNDS

Mutual Fund Select Group (the "Trust") is an open-end management
investment company which was organized as a business trust under the laws of
the Commonwealth of Massachusetts on October 1, 1996. The Trust presently
consists of 10 separate series (the "Funds"). Certain of the Funds are
diversified and other Funds are non-diversified, as such term is defined in
the Investment Company Act of 1940, as amended (the "1940 Act"). The shares
of the Funds are collectively referred to in this Statement of Additional
Information as the "Shares."

The Board of Trustees of the Trust provides broad supervision over the
affairs of the Trust including the Funds. The Chase Manhattan Bank ("Chase")
is the investment adviser for the Funds. Chase also serves as the Trust's
administrator (the "Administrator") and supervises the overall administration
of the Trust, including the Funds. A majority of the Trustees of the Trust
are not affiliated with the investment adviser or sub- advisers.

INVESTMENT POLICIES AND RESTRICTIONS

Investment Policies

The Prospectuses set forth the various investment policies of each Fund.
The following information supplements and should be read in conjunction with
the related sections of each Prospectus. For descriptions of the securities
ratings of Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch"), see Appendix
B.

U.S. Government Securities. U.S. Government Securities include (1) U.S.
Treasury obligations, which generally differ only in their interest rates,
maturities and times of issuance, including: U.S. Treasury bills (maturities
of one year or less), U.S. Treasury notes (maturities of one to ten years)
and U.S. Treasury bonds (generally maturities of greater than ten years); and
(2) obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the U.S. Treasury, (b) the right of the issuer to borrow
any amount listed to a specific line of credit from the U.S. Treasury, (c)
discretionary authority of the U.S. Government to purchase certain
obligations of the U.S. Government agency or instrumentality or (d) the
credit of the agency or instrumentality. Agencies and instrumentalities of
the U.S. Government include but are not limited to: Federal Land Banks,
Federal Financing Banks, Banks for Cooperatives, Federal Intermediate Credit
Banks, Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Student Loan Marketing
Association, United States Postal Service, Chrysler Corporate Loan Guarantee
Board, Small Business Administration, Tennessee Valley Authority and any
other enterprise established or sponsored by the U.S. Government. Certain
U.S. Government Securities, including U.S. Treasury bills, notes and bonds,
Government National Mortgage Association certificates and Federal Housing
Administration debentures, are supported by the full faith and credit of the
United States. Other U.S. Government Securities are issued or guaranteed by
federal agencies or government sponsored enterprises and are not supported by
the full faith and credit of the United States. These securities include
obligations that are supported by the right of the issuer to borrow from the
U.S. Treasury, such as obligations of the Federal Home Loan Banks, and
obligations that are supported by the creditworthiness of the particular
instrumentality, such as obligations of the Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation. For a description of
certain obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, see Appendix A.

In addition, certain U.S. Government agencies and instrumentalities issue
specialized types of securities, such as guaranteed notes of the Small
Business Administration, Federal Aviation Administration, Department of
Defense, Bureau of Indian Affairs and Private Export Funding Corporation,
which often provide higher yields than are available from the more common
types of government-backed instruments. However, such specialized instruments
may only be available from a few sources, in limited amounts, or only in very

3
<PAGE>

large denominations; they may also require specialized capability in
portfolio servicing and in legal matters related to government guarantees.
While they may frequently offer attractive yields, the limited-activity
markets of many of these securities means that, if a Fund were required to
liquidate any of them, it might not be able to do so advantageously;
accordingly, each Fund investing in such securities normally to hold such
securities to maturity or pursuant to repurchase agreements, and would treat
such securities (including repurchase agreements maturing in more than seven
days) as illiquid for purposes of its limitation on investment in illiquid
securities.

Bank Obligations. Investments in bank obligations are limited to those of
U.S. banks (including their foreign branches) which have total assets at the
time of purchase in excess of $1 billion and the deposits of which are
insured by either the Bank Insurance Fund or the Savings Association
Insurance Fund of the Federal Deposit Insurance Corporation, and foreign
banks (including their U.S. branches) having total assets in excess of $10
billion (or the equivalent in other currencies), and such other U.S. and
foreign commercial banks which are judged by the advisers to meet comparable
credit standing criteria.

Bank obligations include negotiable certificates of deposit, bankers'
acceptances, fixed time deposits and deposit notes. A certificate of deposit
is a short-term negotiable certificate issued by a commercial bank against
funds deposited in the bank and is either interest-bearing or purchased on a
discount basis. A bankers' acceptance is a short-term draft drawn on a
commercial bank by a borrower, usually in connection with an international
commercial transaction. The borrower is liable for payment as is the bank,
which unconditionally guarantees to pay the draft at its face amount on the
maturity date. Fixed time deposits are obligations of branches of United
States banks or foreign banks which are payable at a stated maturity date and
bear a fixed rate of interest. Although fixed time deposits do not have a
market, there are no contractual restrictions on the right to transfer a
beneficial interest in the deposit to a third party. Fixed time deposits
subject to withdrawal penalties and with respect to which a Fund cannot
realize the proceeds thereon within seven days are deemed "illiquid" for the
purposes of its restriction on investments in illiquid securities. Deposit
notes are notes issued by commercial banks which generally bear fixed rates
of interest and typically have original maturities ranging from eighteen
months to five years.

Banks are subject to extensive governmental regulations that may limit
both the amounts and types of loans and other financial commitments that may
be made and the interest rates and fees that may be charged. The
profitability of this industry is largely dependent upon the availability and
cost of capital funds for the purpose of financing lending operations under
prevailing money market conditions. Also, general economic conditions play an
important part in the operations of this industry and exposure to credit
losses arising from possible financial difficulties of borrowers might affect
a bank's ability to meet its obligations. Bank obligations may be general
obligations of the parent bank or may be limited to the issuing branch by the
terms of the specific obligations or by government regulation. Investors
should also be aware that securities of foreign banks and foreign branches of
United States banks may involve foreign investment risks in addition to those
relating to domestic bank obligations.

Depositary Receipts. A Fund will limit its investment in Depository
Receipts not sponsored by the issuer of the underlying security to no more
than 5% of the value of its net assets (at the time of investment). A
purchaser of an unsponsored Depositary Receipt may not have unlimited voting
rights and may not receive as much information about the issuer of the
underlying securities as with a sponsored Depositary Receipt.

ECU Obligations. The specific amounts of currencies comprising the ECU may
be adjusted by the Council of Ministers of the European Community to reflect
changes in relative values of the underlying currencies. The Trustees do not
believe that such adjustments will adversely affect holders of
ECU-denominated securities or the marketability of such securities.

Supranational Obligations. Supranational organizations, include
organizations such as The World Bank, which was chartered to finance
development projects in developing member countries; the European Community,
which is a twelve-nation organization engaged in cooperative economic
activities; the European Coal and Steel Community, which is an economic union
of various European nations steel and coal indus-

4
<PAGE>

tries; and the Asian Development Bank, which is an international development
bank established to lend funds, promote investment and provide technical
assistance to member nations of the Asian and Pacific regions.

Corporate Reorganizations. In general, securities that are the subject of
a tender or exchange offer or proposal sell at a premium to their historic
market price immediately prior to the announcement of the offer or proposal.
The increased market price of these securities may also discount what the
stated or appraised value of the security would be if the contemplated action
were approved or consummated. These investments may be advantageous when the
discount significantly overstates the risk of the contingencies involved;
significantly undervalues the securities, assets or cash to be received by
shareholders of the prospective portfolio company as a result of the
contemplated transaction; or fails adequately to recognize the possibility
that the offer or proposal may be replaced or superseded by an offer or
proposal of greater value. The evaluation of these contingencies requires
unusually broad knowledge and experience on the part of the advisers that
must appraise not only the value of the issuer and its component businesses
as well as the assets or securities to be received as a result of the
contemplated transaction, but also the financial resources and business
motivation of the offeror as well as the dynamics of the business climate
when the offer or proposal is in progress. Investments in reorganization
securities may tend to increase the turnover ratio of a Fund and increase its
brokerage and other transaction expenses.

Warrants and Rights. Warrants basically are options to purchase equity
securities at a specified price for a specific period of time. Their prices
do not necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants but normally have a shorter duration and are
distributed directly by the issuer to shareholders. Rights and warrants have
no voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.

Commercial Paper. Commercial paper consists of short-term (usually from 1
to 270 days) unsecured promissory notes issued by corporations in order to
finance their current operations. A variable amount master demand note (which
is a type of commercial paper) represents a direct borrowing arrangement
involving periodically fluctuating rates of interest under a letter agreement
between a commercial paper issuer and an institutional lender pursuant to
which the lender may determine to invest varying amounts.

Repurchase Agreements. A Fund will enter into repurchase agreements only
with member banks of the Federal Reserve System and securities dealers
believed creditworthy, and only if fully collateralized by securities in
which such Fund is permitted to invest. Under the terms of a typical
repurchase agreement, a Fund would acquire an underlying instrument for a
relatively short period (usually not more than one week) subject to an
obligation of the seller to repurchase the instrument and the Fund to resell
the instrument at a fixed price and time, thereby determining the yield
during the Fund's holding period. This procedure results in a fixed rate of
return insulated from market fluctuations during such period. A repurchase
agreement is subject to the risk that the seller may fail to repurchase the
security. Repurchase agreements are considered under the 1940 Act to be loans
collateralized by the underlying securities. All repurchase agreements
entered into by a Fund will be fully collateralized at all times during the
period of the agreement in that the value of the underlying security will be
at least equal to 102% of the amount of the loan, including the accrued
interest thereon, and the Fund or its custodian or sub-custodian will have
possession of the collateral, which the Board of Trustees believes will give
it a valid, perfected security interest in the collateral. Whether a
repurchase agreement is the purchase and sale of a security or a
collateralized loan has not been conclusively established. This might become
an issue in the event of the bankruptcy of the other party to the
transaction. In the event of default by the seller under a repurchase
agreement construed to be a collateralized loan, the underlying securities
would not be owned by the Fund, but would only constitute collateral for the
seller's obligation to pay the repurchase price. Therefore, a Fund may suffer
time delays and incur costs in connection with the disposition of the
collateral. The Board of Trustees believes that the collateral underlying
repurchase agreements may be more susceptible to claims of the seller's
creditors than would be the case with securities owned by a Fund. Repurchase
agreements maturing in more than seven days are treated as illiquid for
purposes of the Funds' restrictions on purchases of illiquid securities.
Repurchase agreements are also subject to the risks described below with
respect to stand-by commitments.

5
<PAGE>

Forward Commitments. In order to invest a Fund's assets immediately, while
awaiting delivery of securities purchased on a forward commitment basis,
short-term obligations that offer same-day settlement and earnings will
normally be purchased. When a commitment to purchase a security on a forward
commitment basis is made, procedures are established consistent with the
General Statement of Policy of the Securities and Exchange Commission
concerning such purchases. Since that policy currently recommends that an
amount of the respective Fund's assets equal to the amount of the purchase be
held aside or segregated to be used to pay for the commitment, a separate
account of such Fund consisting of cash, cash equivalents or high quality
debt securities equal to the amount of such Fund's commitments securities
will be established at such Fund's custodian bank. For the purpose of
determining the adequacy of the securities in the account, the deposited
securities will be valued at market value. If the market value of such
securities declines, additional cash, cash equivalents or highly liquid
securities will be placed in the account daily so that the value of the
account will equal the amount of such commitments by the respective.

Although it is not intended that such purchases would be made for
speculative purposes, purchases of securities on a forward commitment basis
may involve more risk than other types of purchases. Securities purchased on
a forward commitment basis and the securities held in the respective Fund's
portfolio are subject to changes in value based upon the public's perception
of the issuer and changes, real or anticipated, in the level of interest
rates. Purchasing securities on a forward commitment basis can involve the
risk that the yields available in the market when the delivery takes place
may actually be higher or lower than those obtained in the transaction
itself. On the settlement date of the forward commitment transaction, the
respective Fund will meet its obligations from then available cash flow, sale
of securities held in the separate account, sale of other securities or,
although it would not normally expect to do so, from sale of the forward
commitment securities themselves (which may have a value greater or lesser
than such Fund's payment obligations). The sale of securities to meet such
obligations may result in the realization of capital gains or losses.

To the extent a Fund engages in forward commitment transactions, it will
do so for the purpose of acquiring securities consistent with its investment
objective and policies and not for the purpose of investment leverage, and
settlement of such transactions will be within 90 days from the trade date.

Floating and Variable Rate Securities; Participation Certificates. The
securities in which certain Funds may be invested include participation
certificates issued by a bank, insurance company or other financial
institution in securities owned by such institutions or affiliated
organizations ("Participation Certificates"). A Participation Certificate
gives a Fund an undivided interest in the security in the proportion that the
Fund's participation interest bears to the total principal amount of the
security and generally provides the demand feature described below. Each
Participation Certificate is backed by an irrevocable letter of credit or
guaranty of a bank (which may be the bank issuing the Participation
Certificate, a bank issuing a confirming letter of credit to that of the
issuing bank, or a bank serving as agent of the issuing bank with respect to
the possible repurchase of the Participation Certificate) or insurance policy
of an insurance company that the Board of Trustees of the Trust has
determined meets the prescribed quality standards for a particular Fund.

A Fund may have the right to sell the Participation Certificate back to
the institution and draw on the letter of credit or insurance on demand after
the prescribed notice period, for all or any part of the full principal
amount of the Fund's participation interest in the security, plus accrued
interest. The institutions issuing the Participation Certificates would
retain a service and letter of credit fee and a fee for providing the demand
feature, in an amount equal to the excess of the interest paid on the
instruments over the negotiated yield at which the Participation Certificates
were purchased by a Fund. The total fees would generally range from 5% to 15%
of the applicable prime rate or other short-term rate index. With respect to
insurance, a Fund will attempt to have the issuer of the participation
certificate bear the cost of any such insurance, although the Funds retain
the option to purchase insurance if deemed appropriate. Obligations that have
a demand feature permitting a Fund to tender the obligation to a foreign bank
may involve certain risks associated with foreign investment. A Fund's
ability to receive payment in such circumstances under the demand feature
from such foreign banks may involve certain risks such as future political
and economic developments, the pos-

6
<PAGE>

sible establishments of laws or restrictions that might adversely affect the
payment of the bank's obligations under the demand feature and the difficulty
of obtaining or enforcing a judgment against the bank.

The advisers have been instructed by the Board of Trustees to monitor on
an ongoing basis the pricing, quality and liquidity of the floating and
variable rate securities held by the Funds, including Participation
Certificates, on the basis of published financial information and reports of
the rating agencies and other bank analytical services to which the Funds may
subscribe. Although these instruments may be sold by a Fund, it is intended
that they be held until maturity.

Past periods of high inflation, together with the fiscal measures adopted
to attempt to deal with it, have seen wide fluctuations in interest rates,
particularly "prime rates" charged by banks. While the value of the
underlying floating or variable rate securities may change with changes in
interest rates generally, the floating or variable rate nature of the
underlying floating or variable rate securities should minimize changes in
value of the instruments. Accordingly, as interest rates decrease or
increase, the potential for capital appreciation and the risk of potential
capital depreciation is less than would be the case with a portfolio of fixed
rate securities. A Fund's portfolio may contain floating or variable rate
securities on which stated minimum or maximum rates, or maximum rates set by
state law, limit the degree to which interest on such floating or variable
rate securities may fluctuate; to the extent it does, increases or decreases
in value may be somewhat greater than would be the case without such limits.
Because the adjustment of interest rates on the floating or variable rate
securities is made in relation to movements of the applicable banks' "prime
rates" or other short-term rate adjustment indices, the floating or variable
rate securities are not comparable to long-term fixed rate securities.
Accordingly, interest rates on the floating or variable rate securities may
be higher or lower than current market rates for fixed rate obligations of
comparable quality with similar maturities.

The maturity of variable rate securities is deemed to be the longer of (i)
the notice period required before a Fund is entitled to receive payment of
the principal amount of the security upon demand or (ii) the period remaining
until the security's next interest rate adjustment.

Reverse Repurchase Agreements. Reverse repurchase agreements involve the
sale of securities held by a Fund with an agreement to repurchase the
securities at an agreed upon price and date. The repurchase price is
generally equal to the original sales price plus interest. Reverse repurchase
agreements are usually for seven days or less and cannot be repaid prior to
their expiration dates. Reverse repurchase agreements involve the risk that
the market value of the portfolio securities transferred may decline below
the price at which the Fund is obliged to purchase the securities.

Zero Coupon, Payment-in-Kind and Stripped Obligations. The principal and
interest components of United States Treasury bonds with remaining maturities
of longer than ten years are eligible to be traded independently under the
Separate Trading of Registered Interest and Principal of Securities
("STRIPS") program. Under the STRIPS program, the principal and interest
components are separately issued by the United States Treasury at the request
of depository financial institutions, which then trade the component parts
separately. The interest component of STRIPS may be more volatile than that
of United States Treasury bills with comparable maturities.

Zero coupon obligations are sold at a substantial discount from their
value at maturity and, when held to maturity, their entire return, which
consists of the amortization of discount, comes from the difference between
their purchase price and maturity value. Because interest on a zero coupon
obligation is not distributed on a current basis, the obligation tends to be
subject to greater price fluctuations in response to changes in interest
rates than are ordinary interest-paying securities with similar maturities.
The value of zero coupon obligations appreciates more than such ordinary
interest-paying securities during periods of declining interest rates and
depreciates more than such ordinary interest-paying securities during periods
of rising interest rates. Under the stripped bond rules of the Internal
Revenue Code of 1986, as amended, investments by a Fund in zero coupon
obligations will result in the accrual of interest income on such investments
in advance of the receipt of the cash corresponding to such income.

Zero coupon securities may be created when a dealer deposits a U.S.
Treasury or federal agency security with a custodian and then sells the
coupon payments and principal payment that will be generated

7
<PAGE>

by this security separately. Proprietary receipts, such as Certificates of
Accrual on Treasury Securities, Treasury Investment Growth Receipts and
generic Treasury Receipts, are examples of stripped U.S. Treasury securities
separated into their component parts through such custodial arrangements.

Payment-in-kind ("PIK") bonds are debt obligations which provide that the
issuer thereof may, at its option, pay interest on such bonds in cash or in
the form of additional debt obligations. Such investments benefit the issuer
by mitigating its need for cash to meet debt service, but also require a
higher rate of return to attract investors who are willing to defer receipt
of such cash. Such investments experience greater volatility in market value
due to changes in interest rates than debt obligations which provide for
regular payments of interest. A Fund will accrue income on such investments
for tax and accounting purposes, as required, which is distributable to
shareholders and which, because no cash is received at the time of accrual,
may require the liquidation of other portfolio securities to satisfy the
Fund's distribution obligations.

Illiquid Securities. For purposes of its limitation on investments in
illiquid securities, each Fund, may elect to treat as liquid, in accordance
with procedures established by the Board of Trustees, certain investments in
restricted securities for which there may be a secondary market of qualified
institutional buyers as contemplated by Rule 144A under the Securities Act of
1933, as amended (the "Securities Act") and commercial obligations issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act ("Section 4(2) paper"). Rule
144A provides an exemption from the registration requirements of the
Securities Act for the resale of certain restricted securities to qualified
institutional buyers. Section 4(2) paper is restricted as to disposition
under the federal securities laws, and generally is sold to institutional
investors such as a Fund who agree that they are purchasing the paper for
investment and not with a view to public distribution. Any resale of Section
4(2) paper by the purchaser must be in an exempt transaction.

One effect of Rule 144A and Section 4(2) is that certain restricted
securities may now be liquid, though there is no assurance that a liquid
market for Rule 144A securities or Section 4(2) paper will develop or be
maintained. The Trustees have adopted policies and procedures for the purpose
of determining whether securities that are eligible for resale under Rule
144A and Section 4(2) paper are liquid or illiquid for purposes of the
limitation on investment in illiquid securities. Pursuant to those policies
and procedures, the Trustees have delegated to the advisers the determination
as to whether a particular instrument is liquid or illiquid, requiring that
consideration be given to, among other things, the frequency of trades and
quotes for the security, the number of dealers willing to sell the security
and the number of potential purchasers, dealer undertakings to make a market
in the security, the nature of the security and the time needed to dispose of
the security. The Trustees will periodically review the Funds' and
Portfolios' purchases and sales of Rule 144A securities and Section 4(2)
paper.

Stand-By Commitments. In a put transaction, a Fund acquires the right to
sell a security at an agreed upon price within a specified period prior to
its maturity date, and a stand-by commitment entitles a Fund to same-day
settlement and to receive an exercise price equal to the amortized cost of
the underlying security plus accrued interest, if any, at the time of
exercise. Stand-by commitments are subject to certain risks, which include
the inability of the issuer of the commitment to pay for the securities at
the time the commitment is exercised, the fact that the commitment is not
marketable by a Fund, and that the maturity of the underlying security will
generally be different from that of the commitment.

Securities Loans. To the extent specified in its Prospectus, each Fund is
permitted to lend its securities to broker-dealers and other institutional
investors in order to generate additional income. Such loans of portfolio
securities may not exceed 30% of the value of a Fund's total assets. In
connection with such loans, a Fund will receive collateral consisting of
cash, cash equivalents, U.S. Government securities or irrevocable letters of
credit issued by financial institutions. Such collateral will be maintained
at all times in an amount equal to at least 102% of the current market value
plus accrued interest of the securities loaned. A Fund can increase its
income through the investment of such collateral. A Fund continues to be
entitled to the interest payable or any dividend-equivalent payments received
on a loaned security and, in addition, to receive inter-

8
<PAGE>

est on the amount of the loan. However, the receipt of any
dividend-equivalent payments by a Fund on a loaned security from the borrower
will not qualify for the dividends-received deduction. Such loans will be
terminable at any time upon specified notice. A Fund might experience risk of
loss if the institutions with which it has engaged in portfolio loan
transactions breach their agreements with such Fund. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower
experience financial difficulty. Loans will be made only to firms deemed by
the advisers to be of good standing and will not be made unless, in the
judgment of the advisers, the consideration to be earned from such loans
justifies the risk.

Real Estate Investment Trusts. Each Fund may invest in shares of real
estate investment trusts ("REITs"), which are pooled investment vehicles
which invest primarily in income-producing real estate or real estate related
loans or interests. REITs are generally classified as equity REITS or
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. The value of equity trusts will depend upon the value of the
underlying properties, and the value of mortgage trusts will be sensitive to the
value of the underlying loans or interests.

Additional Policies Regarding Derivative and Related Transactions

Introduction. As explained more fully below, the Funds may employ
derivative and related instruments as tools in the management of portfolio
assets. Put briefly, a "derivative" instrument may be considered a security
or other instrument which derives its value from the value or performance of
other instruments or assets, interest or currency exchange rates, or indexes.
For instance, derivatives include futures, options, forward contracts,
structured notes and various over-the-counter instruments.

Like other investment tools or techniques, the impact of using derivatives
strategies or similar instruments depends to a great extent on how they are
used. Derivatives are generally used by portfolio managers in three ways:
First, to reduce risk by hedging (offsetting) an investment position. Second,
to substitute for another security particularly where it is quicker, easier
and less expensive to invest in derivatives. Lastly, to speculate or enhance
portfolio performance. When used prudently, derivatives can offer several
benefits, including easier and more effective hedging, lower transaction
costs, quicker investment and more profitable use of portfolio assets.
However, derivatives also have the potential to significantly magnify risks,
thereby leading to potentially greater losses for a Fund.

Each Fund may invest its assets in derivative and related instruments
subject only to the Fund's investment objective and policies and the
requirement that the Fund maintain segregated accounts consisting of liquid
assets, such as cash, U.S. Government securities, or other high-grade debt
obligations (or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under such instruments with
respect to positions where there is no underlying portfolio asset so as to
avoid leveraging the Fund.

The value of some derivative or similar instruments in which the Funds may
invest may be particularly sensitive to changes in prevailing interest rates
or other economic factors, and--like other investments of the Funds--the
ability of a Fund to successfully utilize these instruments may depend in
part upon the ability of the advisers to forecast interest rates and other
economic factors correctly. If the advisers inaccurately forecast such
factors and have taken positions in derivative or similar instruments
contrary to prevailing market trends, a Fund could be exposed to the risk of
a loss. The Funds might not employ any or all of the strategies described
herein, and no assurance can be given that any strategy used will succeed.

Set forth below is an explanation of the various derivatives strategies
and related instruments the Funds may employ along with risks or special
attributes associated with them. This discussion is intended to supplement
the Funds' current prospectuses as well as provide useful information to
prospective investors.

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<PAGE>

Risk Factors. As explained more fully below and in the discussions of
particular strategies or instruments, there are a number of risks associated
with the use of derivatives and related instruments. There can be no
guarantee that there will be a correlation between price movements in a
hedging vehicle and in the portfolio assets being hedged. An incorrect
correlation could result in a loss on both the hedged assets in a Fund and
the hedging vehicle so that the portfolio return might have been greater had
hedging not been attempted. This risk is particularly acute in the case of
"cross-hedges" between currencies. The advisers may inaccurately forecast
interest rates, market values or other economic factors in utilizing a
derivatives strategy. In such a case, a Fund may have been in a better
position had it not entered into such strategy. Hedging strategies, while
reducing risk of loss, can also reduce the opportunity for gain. In other
words, hedging usually limits both potential losses as well as potential
gains. Strategies not involving hedging may increase the risk to a Fund.
Certain strategies, such as yield enhancement, can have speculative
characteristics and may result in more risk to a Fund than hedging strategies
using the same instruments. There can be no assurance that a liquid market
will exist at a time when a Fund seeks to close out an option, futures
contract or other derivative or related position. Many exchanges and boards
of trade limit the amount of fluctuation permitted in option or futures
contract prices during a single day; once the daily limit has been reached on
particular contract, no trades may be made that day at a price beyond that
limit. In addition, certain instruments are relatively new and without a
significant trading history. As a result, there is no assurance that an
active secondary market will develop or continue to exist. Finally,
over-the-counter instruments typically do not have a liquid market. Lack of a
liquid market for any reason may prevent a Fund from liquidating an
unfavorable position. Activities of large traders in the futures and
securities markets involving arbitrage, "program trading," and other
investment strategies may cause price distortions in these markets. In
certain instances, particularly those involving over-the-counter
transactions, forward contracts there is a greater potential that a
counterparty or broker may default or be unable to perform on its
commitments. In the event of such a default, a Fund may experience a loss. In
transactions involving currencies, the value of the currency underlying an
instrument may fluctuate due to many factors, including economic conditions,
interest rates, governmental policies and market forces.

Specific Uses and Strategies. Set forth below are explanations of various
strategies involving derivatives and related instruments which may be used by
a Fund.

Options on Securities, Securities Indexes and Debt Instruments. A Fund may
PURCHASE, SELL or EXERCISE call and put options on (i) securities, (ii)
securities indexes, and (iii) debt instruments.

Although in most cases these options will be exchange-traded, the Funds
may also purchase, sell or exercise over-the-counter options.
Over-the-counter options differ from exchange-traded options in that they are
two-party contracts with price and other terms negotiated between buyer and
seller. As such, over- the-counter options generally have much less market
liquidity and carry the risk of default or nonperformance by the other party.

One purpose of purchasing put options is to protect holdings in an
underlying or related security against a substantial decline in market value.
One purpose of purchasing call options is to protect against substantial
increases in prices of securities the Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. A Fund may also
use combinations of options to minimize costs, gain exposure to markets or
take advantage of price disparities or market movements. For example, a Fund
may sell put or call options it has previously purchased or purchase put or
call options it has previously sold. These transactions may result in a net
gain or loss depending on whether the amount realized on the sale is more or
less than the premium and other transaction costs paid on the put or call
option which is sold. A Fund may write a call or put option in order to earn
the related premium from such transactions. Prior to exercise or expiration,
an option may be closed out by an offsetting purchase or sale of a similar
option. The Funds will not write uncovered options.

In addition to the general risk factors noted above, the purchase and
writing of options involve certain special risks. During the option period, a
Fund writing a covered call (i.e., where the underlying securities

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<PAGE>

are held by the Fund) has, in return for the premium on the option, given up
the opportunity to profit from a price increase in the underlying securities
above the exercise price, but has retained the risk of loss should the price
of the underlying securities decline. The writer of an option has no control
over the time when it may be required to fulfill its obligation as a writer
of the option. Once an option writer has received an exercise notice, it
cannot effect a closing purchase transaction in order to terminate its
obligation under the option and must deliver the underlying securities at the
exercise price.

If a put or call option purchased by a Fund is not sold when it has
remaining value, and if the market price of the underlying security, in the
case of a put, remains equal to or greater than the exercise price or, in the
case of a call, remains less than or equal to the exercise price, such Fund
will lose its entire investment in the option. Also, where a put or call
option on a particular security is purchased to hedge against price movements
in a related security, the price of the put or call option may move more or
less than the price of the related security. There can be no assurance that a
liquid market will exist when a Fund seeks to close out an option position.
Furthermore, if trading restrictions or suspensions are imposed on the
options markets, a Fund may be unable to close out a position.

Futures Contracts and Options on Futures Contracts. A Fund may purchase or
sell (i) interest- rate futures contracts, (ii) futures contracts on
specified instruments or indices, and (iii) options on these futures
contracts ("futures options").

The futures contracts and futures options may be based on various
instruments or indices in which the Funds may invest such as foreign
currencies, certificates of deposit, Eurodollar time deposits, securities
indices, economic indices (such as the Consumer Price Indices compiled by the
U.S. Department of Labor).

Futures contracts and futures options may be used to hedge portfolio
positions and transactions as well as to gain exposure to markets. For
example, a Fund may sell a futures contract--or buy a futures option--to
protect against a decline in value, or reduce the duration, of portfolio
holdings. Likewise, these instruments may be used where a Fund intends to
acquire an instrument or enter into a position. For example, a Fund may
purchase a futures contract--or buy a futures option--to gain immediate
exposure in a market or otherwise offset increases in the purchase price of
securities or currencies to be acquired in the future. Futures options may
also be written to earn the related premiums.

When writing or purchasing options, the Funds may simultaneously enter
into other transactions involving futures contracts or futures options in
order to minimize costs, gain exposure to markets, or take advantage of price
disparities or market movements. Such strategies may entail additional risks
in certain instances. The Funds may engage in cross-hedging by purchasing or
selling futures or options on a security or currency different from the
security or currency position being hedged to take advantage of relationships
between the two securities or currencies.

Investments in futures contracts and options thereon involve risks similar
to those associated with options transactions discussed above. The Funds will
only enter into futures contracts or options on futures contracts which are
traded on a U.S. or foreign exchange or board of trade, or similar entity, or
quoted on an automated quotation system.

Forward Contracts. A Fund may use foreign currency and interest-rate
forward contracts for various purposes as described below.

Foreign currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of investments
in different countries, actual or perceived changes in interest rates and
other complex factors, as seen from an international perspective. A Fund that
may invest in securities denominated in foreign currencies may, in addition
to buying and selling foreign currency futures contracts and options on
foreign currencies and foreign currency futures, enter into forward foreign
currency exchange contracts to reduce the risks or otherwise take a position
in anticipation of changes in foreign exchange rates. A forward foreign
currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date, which

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<PAGE>

may be a fixed number of days from the date of the contract agreed upon by
the parties, at a price set at the time of the contract. By entering into a
forward foreign currency contract, a Fund "locks in" the exchange rate
between the currency it will deliver and the currency it will receive for the
duration of the contract. As a result, a Fund reduces its exposure to changes
in the value of the currency it will deliver and increases its exposure to
changes in the value of the currency it will exchange into. The effect on the
value of a Fund is similar to selling securities denominated in one currency
and purchasing securities denominated in another. Transactions that use two
foreign currencies are sometimes referred to as "cross-hedges."

A Fund may enter into these contracts for the purpose of hedging against
foreign exchange risk arising from the Fund's investments or anticipated
investments in securities denominated in foreign currencies. A Fund may also
enter into these contracts for purposes of increasing exposure to a foreign
currency or to shift exposure to foreign currency fluctuations from one
country to another.

A Fund may also use forward contracts to hedge against changes in interest
rates, increase exposure to a market or otherwise take advantage of such
changes. An interest-rate forward contract involves the obligation to
purchase or sell a specific debt instrument at a fixed price at a future
date.

Interest Rate and Currency Transactions. A Fund may employ currency and
interest rate management techniques, including transactions in options
(including yield curve options), futures, options on futures, forward foreign
currency exchange contracts, currency options and futures and currency and
interest rate swaps. The aggregate amount of a Fund's net currency exposure
will not exceed the total net asset value of its portfolio. However, to the
extent that a Fund is fully invested while also maintaining currency
positions, it may be exposed to greater combined risk.

The Funds will only enter into interest rate and currency swaps on a net
basis, i.e., the two payment streams are netted out, with the Fund receiving
or paying, as the case may be, only the net amount of the two payments.
Interest rate and currency swaps do not involve the delivery of securities,
the underlying currency, other underlying assets or principal. Accordingly,
the risk of loss with respect to interest rate and currency swaps is limited
to the net amount of interest or currency payments that a Fund is
contractually obligated to make. If the other party to an interest rate or
currency swap defaults, a Fund's risk of loss consists of the net amount of
interest or currency payments that the Fund is contractually entitled to
receive. Since interest rate and currency swaps are individually negotiated,
the Funds expect to achieve an acceptable degree of correlation between their
portfolio investments and their interest rate or currency swap positions.

A Fund may hold foreign currency received in connection with investments
in foreign securities when it would be beneficial to convert such currency
into U.S. dollars at a later date, based on anticipated changes in the
relevant exchange rate.

A Fund may purchase or sell without limitation as to a percentage of its
assets forward foreign currency exchange contracts when the advisers
anticipate that the foreign currency will appreciate or depreciate in value,
but securities denominated in that currency do not present attractive
investment opportunities and are not held by such Fund. In addition, a Fund
may enter into forward foreign currency exchange contracts in order to
protect against adverse changes in future foreign currency exchange rates. A
Fund may engage in cross-hedging by using forward contracts in one currency
to hedge against fluctuations in the value of securities denominated in a
different currency if its advisers believe that there is a pattern of
correlation between the two currencies. Forward contracts may reduce the
potential gain from a positive change in the relationship between the U.S.
Dollar and foreign currencies. Unanticipated changes in currency prices may
result in poorer overall performance for a Fund than if it had not entered
into such contracts. The use of foreign currency forward contracts will not
eliminate fluctuations in the underlying U.S. dollar equivalent value of the
prices of or rates of return on a Fund's foreign currency denominated
portfolio securities and the use of such techniques will subject the Fund to
certain risks.

The matching of the increase in value of a forward contract and the
decline in the U.S. dollar equivalent value of the foreign currency
denominated asset that is the subject of the hedge generally will not be
precise.

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<PAGE>

In addition, a Fund may not always be able to enter into foreign currency
forward contracts at attractive prices, and this will limit a Fund's ability
to use such contract to hedge or cross-hedge its assets. Also, with regard to
a Fund's use of cross-hedges, there can be no assurance that historical
correlations between the movement of certain foreign currencies relative to
the U.S. dollar will continue. Thus, at any time poor correlation may exist
between movements in the exchange rates of the foreign currencies underlying
a Fund's cross- hedges and the movements in the exchange rates of the foreign
currencies in which the Fund's assets that are the subject of such
cross-hedges are denominated.

A Fund may enter into interest rate and currency swaps to the maximum
allowed limits under applicable law. A Fund will typically use interest rate
swaps to shorten the effective duration of its portfolio. Interest rate swaps
involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of fixed rate
payments for floating rate payments. Currency swaps involve the exchange of
their respective rights to make or receive payments in specified currencies.

Mortgage-Related Securities. A Fund may purchase mortgage-backed
securities--i.e., securities representing an ownership interest in a pool of
mortgage loans issued by lenders such as mortgage bankers, commercial banks
and savings and loan associations. Mortgage loans included in the pool--but
not the security itself--may be insured by the Government National Mortgage
Association or the Federal Housing Administration or guaranteed by the
Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation or the Veterans Administration. Mortgage-backed securities
provide investors with payments consisting of both interest and principal as
the mortgages in the underlying mortgage pools are paid off. Although
providing the potential for enhanced returns, mortgage-backed securities can
also be volatile and result in unanticipated losses.

The average life of a mortgage-backed security is likely to be
substantially less than the original maturity of the mortgage pools
underlying the securities. Prepayments of principal by mortgagors and
mortgage foreclosures will usually result in the return of the greater part
of the principal invested far in advance of the maturity of the mortgages in
the pool. The actual rate of return of a mortgage-backed security may be
adversely affected by the prepayment of mortgages included in the mortgage
pool underlying the security.

A Fund may also invest in securities representing interests in
collateralized mortgage obligations ("CMOs"), real estate mortgage investment
conduits ("REMICs") and in pools of certain other asset-backed bonds and
mortgage pass-through securities. Like a bond, interest and prepaid principal
are paid, in most cases, monthly. CMOs may be collateralized by whole
mortgage loans but are more typically collateralized by portfolios of
mortgage pass-through securities guaranteed by the U.S. Government, or U.S.
Government- related entities, and their income streams.

CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. Monthly payment of principal received from the
pool of underlying mortgages, including prepayments, are allocated to
different classes in accordance with the terms of the instruments, and
changes in prepayment rates or assumptions may significantly affect the
expected average life and value of a particular class.

REMICs include governmental and/or private entities that issue a fixed
pool of mortgages secured by an interest in real property. REMICs are similar
to CMOs in that they issue multiple classes of securities. REMICs issued by
private entities are not U.S. Government securities and are not directly
guaranteed by any government agency. They are secured by the underlying
collateral of the private issuer.

The advisers expect that governmental, government-related or private
entities may create mortgage loan pools and other mortgage-related securities
offering mortgage pass-through and mortgage- collateralized investments in
addition to those described above. The mortgages underlying these securities
may include alternative mortgage instruments, that is, mortgage instruments
whose principal or interest payments may vary or whose terms to maturity may
differ from customary long-term fixed-rate mortgages. A Fund may also invest
in debentures and other securities of real estate investment trusts. As new
types of

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<PAGE>

mortgage-related securities are developed and offered to investors, the Funds
may consider making investments in such new types of mortgage-related
securities.

Dollar Rolls. Under a mortgage "dollar roll," a Fund sells mortgage-backed
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities
on a specified future date. During the roll period, a Fund forgoes principal
and interest paid on the mortgage-backed securities. A Fund is compensated by
the difference between the current sales price and the lower forward price
for the future purchase (often referred to as the "drop") as well as by the
interest earned on the cash proceeds of the initial sale. A Fund may only
enter into covered rolls. A "covered roll" is a specific type of dollar roll
for which there is an offsetting cash position which matures on or before the
forward settlement date of the dollar roll transaction. At the time a Fund
enters into a mortgage "dollar roll", it will establish a segregated account
with its custodian bank in which it will maintain cash, U.S. government
securities or other liquid high grade debt obligations equal in value to its
obligations in respect of dollar rolls, and accordingly, such dollar rolls
will not be considered borrowings. Mortgage dollar rolls involve the risk
that the market value of the securities the Fund is obligated to repurchase
under the agreement may decline below the repurchase price. In the event the
buyer of securities under a mortgage dollar roll files for bankruptcy or
becomes insolvent, the Fund's use of proceeds of the dollar roll may be
restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the
securities.

Asset-Backed Securities. A Fund may invest in asset-backed securities,
including conditional sales contracts, equipment lease certificates and
equipment trust certificates. The advisers expect that other asset-backed
securities (unrelated to mortgage loans) will be offered to investors in the
future. Several types of asset-backed securities already exist, including,
for example, "Certificates for Automobile ReceivablesSM" or "CARSSM"
("CARS"). CARS represent undivided fractional interests in a trust whose
assets consist of a pool of motor vehicle retail installment sales contracts
and security interests in the vehicles securing the contracts. Payments of
principal and interest on CARS are passed-through monthly to certificate
holders, and are guaranteed up to certain amounts and for a certain time
period by a letter of credit issued by a financial institution unaffiliated
with the trustee or originator of the CARS trust. An investor's return on
CARS may be affected by early prepayment of principal on the underlying
vehicle sales contracts. If the letter of credit is exhausted, the CARS trust
may be prevented from realizing the full amount due on a sales contract
because of state law requirements and restrictions relating to foreclosure
sales of vehicles and the obtaining of deficiency judgments following such
sales or because of depreciation, damage or loss of a vehicle, the
application of federal and state bankruptcy and insolvency laws, the failure
of servicers to take appropriate steps to perfect the CARS trust's rights in
the underlying loans and the servicer's sale of such loans to bona fide
purchasers, giving rise to interests in such loans superior to those of the
CARS trust, or other factors. As a result, certificate holders may experience
delays in payments or losses if the letter of credit is exhausted. A Fund
also may invest in other types of asset-backed securities. In the selection
of other asset-backed securities, the advisers will attempt to assess the
liquidity of the security giving consideration to the nature of the security,
the frequency of trading in the security, the number of dealers making a
market in the security and the overall nature of the marketplace for the
security.

Structured Products. A Fund may invest in interests in entities organized
and operated solely for the purpose of restructuring the investment
characteristics of certain other investments. This type of restructuring
involves the deposit with or purchase by an entity, such as a corporation or
trust, or specified instruments (such as commercial bank loans) and the
issuance by that entity of one or more classes of securities ("structured
products") backed by, or representing interests in, the underlying
instruments. The cash flow on the underlying instruments may be apportioned
among the newly issued structured products to create securities with
different investment characteristics such as varying maturities, payment
priorities and interest rate provisions, and the extent of the payments made
with respect to structured products is dependent on the extent of the cash
flow on the underlying instruments. A Fund may invest in structured products
which represent derived investment positions based on relationships among
different markets or asset classes.

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<PAGE>

A Fund may also invest in other types of structured products, including,
among others, inverse floaters, spread trades and notes linked by a formula
to the price of an underlying instrument. Inverse floaters have coupon rates
that vary inversely at a multiple of a designated floating rate (which
typically is determined by reference to an index rate, but may also be
determined through a dutch auction or a remarketing agent or by reference to
another security) (the "reference rate"). As an example, inverse floaters may
constitute a class of CMOs with a coupon rate that moves inversely to a
designated index, such as LIBOR (London Interbank Offered Rate) or the Cost
of Funds Index. Any rise in the reference rate of an inverse floater (as a
consequence of an increase in interest rates) causes a drop in the coupon
rate while any drop in the reference rate of an inverse floater causes an
increase in the coupon rate. A spread trade is an investment position
relating to a difference in the prices or interest rates of two securities
where the value of the investment position is determined by movements in the
difference between the prices or interest rates, as the case may be, of the
respective securities. When a Fund invests in notes linked to the price of an
underlying instrument, the price of the underlying security is determined by
a multiple (based on a formula) of the price of such underlying security. A
structured product may be considered to be leveraged to the extent its
interest rate varies by a magnitude that exceeds the magnitude of the change
in the index rate of interest. Because they are linked to their underlying
markets or securities, investments in structured products generally are
subject to greater volatility than an investment directly in the underlying
market or security. Total return on the structured product is derived by
linking return to one or more characteristics of the underlying instrument.
Because certain structured products of the type in which a Fund may invest
may involve no credit enhancement, the credit risk of those structured
products generally would be equivalent to that of the underlying instruments.
A Fund may invest in a class of structured products that is either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured products typically have higher yields and present
greater risks than unsubordinated structured products. Although a Fund's
purchase of subordinated structured products would have similar economic
effect to that of borrowing against the underlying securities, the purchase
will not be deemed to be leverage for purposes of a Fund's fundamental
investment limitation related to borrowing and leverage.

Certain issuers of structured products may be deemed to be "investment
companies" as defined in the 1940 Act. As a result, a Fund's investments in
these structured products may be limited by the restrictions contained in the
1940 Act. Structured products are typically sold in private placement
transactions, and there currently is no active trading market for structured
products. As a result, certain structured products in which a Fund invests
may be deemed illiquid and subject to its limitation on illiquid investments.

Investments in structured products generally are subject to greater
volatility than an investment directly in the underlying market or security.
In addition, because structured products are typically sold in private
placement transactions, there currently is no active trading market for
structured products.

Additional Restrictions on the Use of Futures and Option Contracts. None
of the Funds is a "commodity pool" (i.e., a pooled investment vehicle which
trades in commodity futures contracts and options thereon and the operator of
which is registered with the CFTC and futures contracts and futures options
will be purchased, sold or entered into only for bona fide hedging purposes,
provided that a Fund may enter into such transactions for purposes other than
bona fide hedging if, immediately thereafter, the sum of the amount of its
initial margin and premiums on open contracts and options would not exceed 5%
of the liquidation value of the Fund's portfolio, provided, further, that, in
the case of an option that is in-the-money, the in-the-money amount may be
excluded in calculating the 5% limitation.

When a Fund purchases a futures contract, an amount of cash or cash
equivalents or high quality debt securities will be deposited in a segregated
account with such Fund's custodian or sub-custodian so that the amount so
segregated, plus the initial deposit and variation margin held in the account
of its broker, will at all times equal the value of the futures contract,
thereby insuring that the use of such futures is unleveraged.

A Fund's ability to engage in the transactions described herein may be
limited by the current federal income tax requirement that a Fund derive less
than 30% of its gross income from the sale or other disposition of stock or
securities held for less than three months.

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Investment Restrictions

The Funds have adopted the following investment restrictions which may not
be changed without approval by a "majority of the outstanding shares" of a
Fund which, as used in this Statement of Additional Information, means the
vote of the lesser of (i) 67% or more of the shares of a Fund present at a
meeting, if the holders of more than 50% of the outstanding shares of a Fund
are present or represented by proxy, or (ii) more than 50% of the outstanding
shares of a Fund.

Each Fund may not:

(1) borrow money, except that each Fund may borrow money for temporary or
emergency purposes, or by engaging in reverse repurchase transactions, in an
amount not exceeding 33-1/3% of the value of its total assets at the time
when the loan is made and may pledge, mortgage or hypothecate no more than
1/3 of its net assets to secure such borrowings. Any borrowings representing
more than 5% of a Fund's total assets must be repaid before the Fund may make
additional investments;

(2) make loans, except that each Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or other
obligations and certificates of deposit, bankers' acceptances and fixed time
deposits) in accordance with its investment objectives and policies; (ii)
enter into repurchase agreements with respect to portfolio securities; and
(iii) lend portfolio securities with a value not in excess of one-third of
the value of its total assets;

(3) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured thereby) if, as a result,
more than 25% of the Fund's total assets would be invested in the securities
of companies whose principal business activities are in the same industry.
Notwithstanding the foregoing, with respect to a Fund's permissible futures
and options transactions in U.S. Government securities, positions in such
options and futures shall not be subject to this restriction;

(4) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments but this shall not prevent a
Fund from (i) purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical commodities
or (ii) engaging in forward purchases or sales of foreign currencies or
securities;

(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent a Fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business). Investments by
a Fund in securities backed by mortgages on real estate or in marketable
securities of companies engaged in such activities are not hereby precluded;

(6) issue any senior security (as defined in the 1940 Act), except that
(a) a Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under applicable regulations and
interpretations of the 1940 Act or an exemptive order; (b) a Fund may acquire
other securities, the acquisition of which may result in the issuance of a
senior security, to the extent permitted under applicable regulations or
interpretations of the 1940 Act; and (c) subject to the restrictions set
forth above, a Fund may borrow money as authorized by the 1940 Act. For
purposes of this restriction, collateral arrangements with respect to
permissible options and futures transactions, including deposits of initial
and variation margin, are not considered to be the issuance of a senior
security; or

(7) underwrite securities issued by other persons except insofar as a Fund
may technically be deemed to be an underwriter under the Securities Act of
1933 in selling a portfolio security.

In addition, as a matter of fundamental policy, notwithstanding any other
investment policy or restriction, each Fund may seek to achieve its
investment objective by investing all of its investable assets in another
investment company having substantially the same investment objective and
policies as the Fund. For pur-

16
<PAGE>

poses of investment restriction (5) above, real estate includes Real Estate
Limited Partnerships. For purposes of investment restriction (3) above,
industrial development bonds, where the payment of principal and interest is
the ultimate responsibility of companies within the same industry, are
grouped together as an "industry." Investment restriction (3) above, however,
is not applicable to investments by a Fund in municipal obligations where the
issuer is regarded as a state, city, municipality or other public authority
since such entities are not members of an "industry." Supranational
organizations are collectively considered to be members of a single
"industry" for purposes of restriction (3) above.

In addition, each Fund is subject to the following nonfundamental
restrictions which may be changed without shareholder approval:

(1) Each Fund other than the Emerging Growth Fund, International Equity
Fund and Small Cap Value Fund may not, with respect to 75% of its assets,
hold more than 10% of the outstanding voting securities of any issuer or
invest more than 5% of its assets in the securities of any one issuer (other
than obligations of the U.S. Government, its agencies and instrumentalities);
Each of the Emerging Growth Fund, International Equity Fund and Small Cap
Value Fund may not, with respect to 50% of its assets, hold more than 10% of
the outstanding voting securities of any issuer.

(2) Each Fund may not make short sales of securities, other than short
sales "against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use of
options, futures contracts and related options, in the manner otherwise
permitted by the investment restrictions, policies and investment program of
a Fund.

(3) Each Fund may not purchase or sell interests in oil, gas or mineral
leases.

(4) Each Fund may not invest more than 15% of its net assets in illiquid
securities.

(5) Each Fund may not write, purchase or sell any put or call option or
any combination thereof, provided that this shall not prevent (i) the
writing, purchasing or selling of puts, calls or combinations thereof with
respect to portfolio securities or (ii) with respect to a Fund's permissible
futures and options transactions, the writing, purchasing, ownership, holding
or selling of futures and options positions or of puts, calls or combinations
thereof with respect to futures.

(6) Each Fund may invest up to 5% of its total assets in the securities of
any one investment company, but may not own more than 3% of the securities of
any one investment company or invest more than 10% of its total assets in the
securities of other investment companies.

It is the Trust's position that proprietary strips, such as CATS and
TIGRS, are United States Government securities. However, the Trust has been
advised that the staff of the Securities and Exchange Commission's Division
of Investment Management does not consider these to be United States
Government securities, as defined under the Investment Company Act of 1940,
as amended.

For purposes of the Funds' investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of and interest on the security.

With respect to the International Equity Fund, as a matter of
nonfundamental policy, to the extent permitted under applicable law, the
above restrictions do not apply to the following investments ("OECD
investments"): (i) any security issued by or the payment of principal and
interest on which is guaranteed by the government of any member state of the
Organization for Economic Cooperation and Development ("OECD country"); (ii)
any fixed income security issued in any OECD country by any public or local
authority or nationalized industry or undertaking of any OECD country or
anywhere in the world by the International Bank for Reconstruction and
Development, European Investment Bank, Asian Development Bank or any body
which is, in the Trustees' opinion, of similar standing. However, no
investment may be made in any OECD investment of any one issue if that would
result in the value of the Fund's holding of that issue exceeding 30%

17
<PAGE>

of the net asset value of the Fund and, if the Fund's portfolio consists only
of OECD investments, those OECD investments shall be of at least six
different issues.

In order to permit the sale of its shares in certain states, a Fund may
make commitments more restrictive than the investment policies and
limitations described above and in its Prospectus. Should a Fund determine
that any such commitment is no longer in its best interests, it will revoke
the commitment by terminating sales of its shares in the state involved. In
order to comply with certain federal and state statutes and regulatory
policies, as a matter of operating policy, each Fund will not: (i) invest
more than 5% of its assets in companies which, including predecessors, have a
record of less than three years' continuous operation, except for the Small
Cap Equity Fund which may invest up to 15% of its assets in such companies,
(ii) invest in warrants, valued at the lower of cost or market, in excess of
5% of the value of its net assets, and no more than 2% of such value may be
warrants which are not listed on the New York or American Stock Exchanges, or
(iii) purchase or retain in its portfolio any securities issued by an issuer
any of whose officers, directors, trustees or security holders is an officer
or Trustee of the Trust or is an officer or director of the adviser, if after
the purchase of the securities of such issuer by the Fund one or more of such
persons owns beneficially more than 1/2 of 1% of the shares or securities, or
both, all taken at market value, of such issuer, and such persons owning more
than 1/2 of 1% of such shares or securities together own beneficially more
than 5% of such shares or securities, or both, all taken at market value.

If a percentage or rating restriction on investment or use of assets set
forth herein or in a Prospectus is adhered to at the time a transaction is
effected, later changes in percentage resulting from any cause other than
actions by a Fund will not be considered a violation. If the value of a
Fund's holdings of illiquid securities at any time exceeds the percentage
limitation applicable at the time of acquisition due to subsequent
fluctuations in value or other reasons, the Board of Trustees will consider
what actions, if any, are appropriate to maintain adequate liquidity.

Portfolio Transactions and Brokerage Allocation

Specific decisions to purchase or sell securities for a Fund are made by a
portfolio manager who is an employee of the adviser or sub-adviser to such
Fund and who is appointed and supervised by senior officers of such adviser
or sub-adviser. Changes in a Fund's investments are reviewed by the Board of
Trustees of the Trust. The portfolio managers may serve other clients of the
advisers in a similar capacity.

The frequency of a Fund's portfolio transactions--the portfolio turnover
rate--will vary from year to year depending upon market conditions. Because a
high turnover rate may increase transaction costs and the possibility of
taxable short-term gains, the advisers will weigh the added costs of
short-term investment against anticipated gains. Each Fund will engage in
portfolio trading if its advisers believe a transaction, net of costs
(including custodian charges), will help it achieve its investment objective.
Funds investing in both equity and debt securities apply this policy with
respect to both the equity and debt portions of their portfolios.

For the fiscal year ending October 31, 1997, the annual rates of portfolio
turnover for the Balanced Fund, Bond Fund, Emerging Growth Fund, Equity
Income Fund, Intermediate Bond Fund, International Equity Fund, Large Cap
Equity Fund, Large Cap Growth Fund, Short-Term Bond Fund and Small Cap Value
Fund are expected not to exceed 75%, 150%, 100%, 50%, 150%, 100%, 75%, 50%,
200% and 50%, respectively.

Under the advisory agreement and the sub-advisory agreements, the adviser
and sub-advisers shall use their best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in total costs
or proceeds being the most favorable to the Funds and Portfolios. In
assessing the best overall terms available for any transaction, the adviser
and sub-advisers consider all factors they deem relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer,
research services provided to the adviser or sub-advisers, and the
reasonableness of the commissions, if any, both for the specific transaction
and on a continuing basis. The adviser and sub-advisers are not required to
obtain the lowest commission or the best net price for any Fund

18
<PAGE>

on any particular transaction, and are not required to execute any order in a
fashion either preferential to any Fund relative to other accounts they
manage or otherwise materially adverse to such other accounts.

Debt securities are traded principally in the over-the-counter market
through dealers acting on their own account and not as brokers. In the case
of securities traded in the over-the-counter market (where no stated
commissions are paid but the prices include a dealer's markup or markdown),
the adviser or sub- adviser to a Fund normally seeks to deal directly with
the primary market makers unless, in its opinion, best execution is available
elsewhere. In the case of securities purchased from underwriters, the cost of
such securities generally includes a fixed underwriting commission or
concession. From time to time, soliciting dealer fees are available to the
adviser or sub-adviser on the tender of a Fund's portfolio securities in
so-called tender or exchange offers. Such soliciting dealer fees are in
effect recaptured for a Fund by the adviser and sub-advisers. At present, no
other recapture arrangements are in effect.

Under the advisory and sub-advisory agreements and as permitted by Section
28(e) of the Securities Exchange Act of 1934, the adviser or sub-advisers may
cause the Funds to pay a broker-dealer which provides brokerage and research
services to the adviser or sub-advisers, the Funds and/or other accounts for
which they exercise investment discretion an amount of commission for
effecting a securities transaction for a Fund in excess of the amount other
broker-dealers would have charged for the transaction if they determine in
good faith that the greater commission is reasonable in relation to the value
of the brokerage and research services provided by the executing
broker-dealer viewed in terms of either a particular transaction or their
overall responsibilities to accounts over which they exercise investment
discretion. Not all of such services are useful or of value in advising the
Funds. The adviser and sub-advisers report to the Board of Trustees regarding
overall commissions paid by the Funds and their reasonableness in relation to
the benefits to the Funds. The term "brokerage and research services"
includes advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or
of purchasers or sellers of securities, furnishing analyses and reports
concerning issues, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts, and effecting securities
transactions and performing functions incidental thereto such as clearance
and settlement.

The management fees that the Funds pay to the adviser will not be reduced
as a consequence of the adviser's or sub-advisers' receipt of brokerage and
research services. To the extent the Funds' portfolio transactions are used
to obtain such services, the brokerage commissions paid by the Funds will
exceed those that might otherwise be paid by an amount which cannot be
presently determined. Such services generally would be useful and of value to
the adviser or sub-advisers in serving one or more of their other clients
and, conversely, such services obtained by the placement of brokerage
business of other clients generally would be useful to the adviser and
sub-advisers in carrying out their obligations to the Funds. While such
services are not expected to reduce the expenses of the adviser or
sub-advisers, they would, through use of the services, avoid the additional
expenses which would be incurred if they should attempt to develop comparable
information through their own staffs.

In certain instances, there may be securities that are suitable for one or
more of the Funds as well as one or more of the adviser's or sub-advisers'
other clients. Investment decisions for the Funds and for other clients are
made with a view to achieving their respective investment objectives. It may
develop that the same investment decision is made for more than one client or
that a particular security is bought or sold for only one client even though
it might be held by, or bought or sold for, other clients. Likewise, a
particular security may be bought for one or more clients when one or more
clients are selling that same security. Some simultaneous transactions are
inevitable when several clients receive investment advice from the same
investment adviser, particularly when the same security is suitable for the
investment objectives of more than one client. In executing portfolio
transactions for a Fund, the adviser or sub-advisers may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other Funds or
their other clients if, in the adviser's or sub-advisers' reasonable
judgment, such aggregation (i) will result in an overall economic benefit to
the Fund, taking into consideration the advantageous selling or purchase
price, brokerage commission and other expenses, and trading require-

19
<PAGE>

ments, and (ii) is not inconsistent with the policies set forth in the
Trust's registration statement and the Fund's Prospectus and Statement of
Additional Information. When two or more Funds or other clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable
to each. It is recognized that in some cases this system could have a
detrimental effect on the price or volume of the security as far as the Funds
are concerned. However, it is believed that the ability of the Funds to
participate in volume transactions will generally produce better executions
for the Funds.

PERFORMANCE INFORMATION

From time to time, a Fund may use hypothetical investment examples and
performance information in advertisements, shareholder reports or other
communications to shareholders. Because such performance information is based
on past investment results, it should not be considered as an indication or
representation of the performance of a Fund in the future. From time to time,
the performance and yield of a Fund may be quoted and compared to those of
other mutual funds with similar investment objectives, unmanaged investment
accounts, including savings accounts, or other similar products and to stock
or other relevant indices or to rankings prepared by independent services or
other financial or industry publications that monitor the performance of
mutual funds. For example, the performance of a Fund may be compared to data
prepared by Lipper Analytical Services, Inc. or Morningstar Mutual Funds on
Disc, widely recognized independent services which monitor the performance of
mutual funds. Performance and yield data as reported in national financial
publications including, but not limited to, Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in local or regional
publications, may also be used in comparing the performance and yield of a
Fund. A Fund's performance may be compared with indices such as the Lehman
Brothers Government/Corporate Bond Index, the Lehman Brothers Government Bond
Index, the Lehman Government Bond 1-3 Year Index and the Lehman Aggregate
Bond Index; the S&P 500 Index, the Dow Jones Industrial Average or any other
commonly quoted index of common stock prices; and the Russell 2000 Index and
the NASDAQ Composite Index. Additionally, a Fund may, with proper
authorization, reprint articles written about such Fund and provide them to
prospective shareholders.

A Fund may provide period and average annual "total rates of return." The
"total rate of return" refers to the change in the value of an investment in
a Fund over a period (which period shall be stated in any advertisement or
communication with a shareholder) based on any change in net asset value per
share including the value of any shares purchased through the reinvestment of
any dividends or capital gains distributions declared during such period.
One-, five-, and ten-year periods will be shown, unless the Fund has been in
existence for a shorter-period.

Unlike some bank deposits or other investments which pay a fixed yield for
a stated period of time, the yields and the net asset values of shares of a
Fund will vary based on market conditions, the current market value of the
securities held by the Fund and changes in the Fund's expenses. The advisers,
the Administrator, the Distributor and other service providers may
voluntarily waive a portion of their fees on a month-to-month basis. In
addition, the Distributor may assume a portion of a Fund's operating expenses
on a month-to-month basis. These actions would have the effect of increasing
the net income (and therefore the yield and total rate of return) of shares
of the Fund during the period such waivers are in effect. These factors and
possible differences in the methods used to calculate the yields and total
rates of return should be considered when comparing the yields or total rates
of return of shares of a Fund to yields and total rates of return published
for other investment companies and other investment vehicles .

In connection with the conversion of various common trust funds maintained
by Chase into the Vista Select funds (the "CTF Conversion"), the Balanced
Fund was established to receive the assets of The Balanced Fund of Chemical
Bank, the Bond Fund was established to receive the assets of The Taxable Bond
Fund of Chemical Bank and the Trinity Bond Fund and Fixed Income Fund of The
Chase Manhattan Bank, the Emerging Growth Fund was established to receive the
assets of the Emerging Growth Fund of The Chase Manhattan Bank, the Equity
Income Fund was established to receive the assets of The Equity Income Fund

20
<PAGE>

of Chemical Bank and the Equity Income Fund of The Chase Manhattan Bank, the
Intermediate Bond Fund was established to receive the assets of The
Intermediate-Term Taxable Bond Fund of Chemical Bank, the International Equity
Fund was established to receive the assets of The International Equity Fund of
Chemical Bank and the International Equity Fund of The Chase Manhattan Bank, the
Large Cap Equity Fund was established to receive the assets of the Trinity
Equity Fund and Intrinsic Value Equity Fund of The Chase Manhattan Bank, the
Large Cap Growth Fund was established to receive the assets of The Core Equity
Fund of Chemical Bank, the Short-Term Bond Fund was established to receive the
assets of the Short-Term Bond Fund of The Chase Manhattan Bank and the Small Cap
Value Fund was established to receive the assets of The Smaller Companies
Equities Fund of Chemical Bank.

Performance results presented for the Balanced Fund, Bond Fund, Emerging
Growth Fund, Equity Income Fund, Intermediate Bond Fund, International Equity
Fund, Large Cap Equity Fund, Large Cap Growth Fund, Short-Term Bond Fund and
Small Cap Value Fund will be based upon the performance of The Balanced Fund
of Chemical Bank, the Fixed Income Fund of The Chase Manhattan Bank, the
Emerging Growth Fund of The Chase Manhattan Bank, the Equity Income Fund of
The Chase Manhattan Bank, The Intermediate-Term Taxable Bond Fund of Chemical
Bank, The International Equity Fund of Chemical Bank, the Intrinsic Value
Equity Fund of The Chase Manhattan Bank, The Core Equity Fund of Chemical
Bank, the Short-Term Bond Fund of The Chase Manhattan Bank and The Smaller
Companies Equities Fund of Chemical Bank, respectively, for periods prior to
the consummation of the CTF Conversion.

Advertising or communications to shareholders may contain the views of the
advisers as to current market, economic, trade and interest rate trends, as
well as legislative, regulatory and monetary developments, and may include
investment strategies and related matters believed to be of relevance to a
Fund.

Advertisements for the Vista funds may include references to the asset
size of other financial products made available by Chase, such as the
offshore assets of other funds.

Total Rate of Return

A Fund's or class' total rate of return for any period will be calculated
by (a) dividing (i) the sum of the net asset value per share on the last day
of the period and the net asset value per share on the last day of the period
of shares purchasable with dividends and capital gains declared during such
period with respect to a share held at the beginning of such period and with
respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day
of such period, and (b) subtracting 1 from the result. The average annual
rate of return quotation will be calculated by (x) adding 1 to the period
total rate of return quotation as calculated above, (y) raising such sum to a
power which is equal to 365 divided by the number of days in such period, and
(z) subtracting 1 from the result.

The average annual total rate of return figures for the following Funds,
reflecting the initial investment assuming the reinvestment of all distributions
(but excluding the effects of any applicable sales charges) for, where
applicable, the one, five and ten year periods ended October 31, 1996, and, for
the Emerging Growth Fund and the International Equity Fund, for the period from
commencement of business operations of each such Fund to October 31, 1996, were
as follows:

21
<PAGE>

<TABLE>
<CAPTION>
One Five Ten Since Date of
Fund Year Years Years Inception Inception
- ------------------------- ---- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Balanced Fund 11.76 9.63 9.64 N/A
Bond Fund 5.51 7.62 8.12 N/A
Emerging Growth Fund 11.52 13.06 -- 12.78 4/1/89
Equity Income Fund 22.67 14.76 13.48 N/A
Intermediate Bond Fund 4.59 6.89 7.70 N/A
International Equity Fund 11.32 -- -- 5.05 5/1/89
Large Cap Equity Fund 21.54 12.36 12.67 N/A
Large Cap Growth Fund 15.09 13.25 12.13 N/A
Short-Term Bond Fund 5.99 5.95 7.29 N/A
Small Cap Value Fund 13.97 18.43 13.22 N/A
</TABLE>

- ----------

Performance presented in the table above and in each table that follows the
Funds is based upon the performance of their respective predecessor funds (which
had fiscal years ending on October 31) for periods prior to the consummation of
the CTF Reorganization. Performance presented for each of these Funds for
periods prior to the consummation of the CTF Reorganization is based on the
historical performance of shares of its predecessor fund, adjusted to reflect
historical expenses at the levels indicated (absent reimbursements) in the
Expense Summary for that Fund as disclosed in its prosepctus.

The Funds may also from time to time include in advertisements or other
communications a total return figure that is not calculated according to the
formula set forth above in order to compare more accurately the performance
of a Fund with other measures of investment return.

Yield Quotations

Any current "yield" quotation for a Fund shall consist of an annualized
hypothetical yield, carried at least to the nearest hundredth of one percent,
based on a thirty calendar day period and shall be calculated by (a) raising
to the sixth power the sum of 1 plus the quotient obtained by dividing the
Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were
entitled to receive dividends and the maximum offering price per share on the
last day of the period, (b) subtracting 1 from the result, and (c)
multiplying the result by 2.

The Funds will not quote yields for periods prior to the consummation of the
CTF Reorganization.

22
<PAGE>

Advertisements for the Funds may include references to the asset size of
other financial products made available by Chase, such as the offshore assets
of other funds advised by Chase.

Non-Standardized Performance Results

The table below reflects the net change in the value of an assumed initial
investment of $10,000 in the Funds for the ten-year period of business of the
predecessor common trust fund ending October 31, 1996, or, in the case of the
Emerging Growth Fund and the International Equity Fund, from the commencement of
operations of their predecessor common trust funds on April 1, 1989 and May 1,
1993, respectively. The values reflect an assumption that capital gain
distributions and income dividends, if any, have been invested in additional
shares of the same class. From time to time, the Funds may provide these
performance results in addition to the total rate of return quotations required
by the Securities and Exchange Commission. As discussed more fully in the
Prospectuses, neither these performance results, nor total rate of return
quotations, should be considered as representative of the performance of the
Funds in the future. These factors and the possible differences in the methods
used to calculate performance results and total rates of return should be
considered when comparing such performance results and total rate of return
quotations of the Funds with those published for other investment companies and
other investment vehicles.

<TABLE>
<CAPTION>
Value of Value of
Initial Capital Value of
Period Ended $10,000 Gains Reinvested
October 31, 1996 Investment Distributions Dividends Total Value
---------------- ---------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
Balanced Fund $25,104 N/A N/A $25,104
Bond Fund 21,836 N/A N/A 21,836
Emerging Growth Fund 24,678 N/A N/A 24,678
Equity Income Fund 35,427 N/A N/A 35,427
Intermediate Bond Fund 20,997 N/A N/A 20,997
International Equity Fund 11,836 N/A N/A 11,836
Large Cap Equity Fund 32,970 N/A N/A 32,970
Large Cap Growth Fund 31,421 N/A N/A 31,421
Short-Term Bond Fund 20,219 N/A N/A 20,219
Small Cap Value Fund 34,618 N/A N/A 34,618
</TABLE>

Certain Information Regarding Unrealized Appreciation

Because each Fund is the successor to one or more common trust funds, the
assets of which it acquired on a tax-free basis at the time the Fund commenced
operations, a Fund's portfolio may include net unrealized appreciation
comparable to that of a mutual fund which has been in existence for the life of
the predecessor common trust fund or funds. Assuming the assets had been
acquired at October 31, 1996 each Fund's pro forma net unrealized appreciation,
and the percentage of each Fund's pro forma net assets that this appreciation
represents, in each case unaudited, would be as follows:

Percentage
Unrealized of Net
Gain Assets
---------- ----------
Balanced Fund 38,533,281 20.36%
Bond Fund 7,023,102 1.31%
Emerging Growth Fund 22,823,305 18.00%
Equity Income Fund 184,030,180 22.98%
Intermediate Bond Fund 1,658,362 0.69%
International Equity Fund 6,422,912 2.87%
Large Cap Equity Fund 4,955,474 2.48%
Large Cap Growth Fund 165,198,646 38.52%
Short-Term Bond Fund 289,371 1.01%
Small Cap Value Fund 145,622,733 37.09%

DETERMINATION OF NET ASSET VALUE

As of the date of this Statement of Additional Information, the New York
Stock Exchange is open for trading every weekday except for the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. In addition
to the days listed above (other then Good Friday), Chase is closed for
business on the following holidays: Martin Luther King Day, Columbus Day and
Veteran's Day. Since the International Equity Fund invests in securities
primarily listed on foreign exchanges which trade on Saturdays or other
customary United States national business holidays on which the Fund does not
price, the Fund's portfolio will trade and the net asset value of the Fund's
shares may be significantly affected on days when the investor has no access
to the Fund.

Equity securities in a Fund's portfolio are valued at the last sale price
on the exchange on which they are primarily traded or on the NASDAQ National
Market System, or at the last quoted bid price for securities in which there
were no sales during the day or for other unlisted (over-the-counter)
securities not reported on the NASDAQ National Market System. Bonds and other
fixed income securities (other than short-term obligations, but including
listed issues) in a Fund's portfolio are valued on the basis of valuations
furnished

23
<PAGE>

by a pricing service, the use of which has been approved by the Board of
Trustees. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques that
take into account appropriate factors such as institutional-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices, since
such valuations are believed to reflect more accurately the fair value of
such securities. Short-term obligations which mature in 60 days or less are
valued at amortized cost, which constitutes fair value as determined by the
Board of Trustees. Futures and option contracts that are traded on
commodities or securities exchanges are normally valued at the settlement
price on the exchange on which they are traded. Portfolio securities (other
than short-term obligations) for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Board of Trustees.

Interest income on long-term obligations in a Fund's portfolio is
determined on the basis of coupon interest accrued plus amortization of
discount (the difference between acquisition price and stated redemption
price at maturity) and premiums (the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest and discount accrued less amortization of
premium.

PURCHASES AND REDEMPTIONS

The Fund has established certain procedures and restrictions, subject to
change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Funds' Transfer Agent may defer
acting on a financial institution's instructions until it has received them
in proper form. In addition, the privileges described in the Prospectuses are
not available until a completed and signed account application has been
received by the Transfer Agent.

Subject to compliance with applicable regulations, each Fund has reserved
the right to pay the redemption price of its Shares, either totally or
partially, by a distribution in kind of readily marketable portfolio
securities (instead of cash). The securities so distributed would be valued
at the same amount as that assigned to them in calculating the net asset
value for the shares being sold. If a shareholder received a distribution in
kind, the shareholder could incur brokerage or other charges in converting
the securities to cash. The Trust has filed an election under Rule 18f-1
committing to pay in cash all redemptions by a shareholder of record up to
amounts specified by the rule (approximately $250,000).

TAX MATTERS

The following is only a summary of certain additional tax considerations
generally affecting the Funds and their shareholders that are not described
in the respective Fund's Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Fund or its shareholders, and the
discussions here and in each Fund's Prospectus are not intended as
substitutes for careful tax planning.

Qualification as a Regulated Investment Company

Each Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
As a regulated investment company, each Fund is not subject to federal income
tax on the portion of its net investment income (i.e., its investment company
taxable income, as that term is defined in the Code, without a deduction for
dividends paid) and net capital gain (i.e., the excess of net long-term
capital gains over net short-term capital losses) that it distributes to
shareholders, provided that it distributes at least 90% of its net investment
income for the taxable year (the "Distribution Requirement"), and satisfies
certain other requirements of the Code that are described below.
Distributions by a Fund made during the taxable year or, under specified
circumstances, within twelve months after the close of the taxable year, will
be considered distributions of income and gains of the taxable year and can
therefore satisfy the Distribution Requirement. Under the current view of the
Internal Revenue Ser-

24
<PAGE>

vice, if a Fund invests all of its assets in another open-end, management
investment company which is classified as a partnership for federal income
tax purposes, such Fund will be deemed to own a proportionate share of the
income of the portfolio into which it contributes all of its assets for
purposes of determining whether such Fund satisfies the Distribution
Requirement and the other requirements necessary to qualify as a regulated
investment company (e.g., Income Requirement (hereinafter defined), etc.).

In addition to satisfying the Distribution Requirement, a regulated
investment company must: (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign
currencies (to the extent such currency gains are directly related to the
regulated investment company's principal business of investing in stock or
securities) and other income (including but not limited to gains from
options, futures or forward contracts) derived with respect to its business
of investing in such stock, securities or currencies (the "Income
Requirement"); and (2) derive less than 30% of its gross income (exclusive of
certain gains on designated hedging transactions that are offset by realized
or unrealized losses on offsetting positions) from the sale or other
disposition of stock, securities or foreign currencies (or options, futures
or forward contracts thereon) held for less than three months (the
"Short-Short Gain Test"). However, foreign currency gains, including those
derived from options, futures and forwards, will not in any event be
characterized as Short-Short Gain if they are directly related to the
regulated investment company's investments in stock or securities (or options
or futures thereon). Because of the Short-Short Gain Test, a Fund may have to
limit the sale of appreciated securities that it has held for less than three
months. However, the Short-Short Gain Test will not prevent a Fund from
disposing of investments at a loss, since the recognition of a loss before
the expiration of the three-month holding period is disregarded for this
purpose. Interest (including original issue discount) received by a Fund at
maturity or upon the disposition of a security held for less than three
months will not be treated as gross income derived from the sale or other
disposition of such security within the meaning of the Short-Short Gain Test.
However, income that is attributable to realized market appreciation will be
treated as gross income from the sale or other disposition of securities for
this purpose.

In general, gain or loss recognized by a Fund on the disposition of an
asset will be a capital gain or loss. However, gain recognized on the
disposition of a debt obligation purchased by a Fund at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent of the portion of the market discount which
accrued during the period of time the Fund held the debt obligation. In
addition, under the rules of Code Section 988, gain or loss recognized on the
disposition of a debt obligation denominated in a foreign currency or an
option with respect thereto (but only to the extent attributable to changes
in foreign currency exchange rates), and gain or loss recognized on the
disposition of a foreign currency forward contract, futures contract, option
or similar financial instrument, or of foreign currency itself, except for
regulated futures contracts or non-equity options subject to Code Section
1256, will generally be treated as ordinary income or loss.

Further, the Code also treats as ordinary income, a portion of the capital
gain attributable to a transaction where substantially all of the return
realized is attributable to the time value of a Fund's net investment in the
transaction and: (1) the transaction consists of the acquisition of property
by such Fund and a contemporaneous contract to sell substantially identical
property in the future; (2) the transaction is a straddle within the meaning
of Section 1092 of the Code; (3) the transaction is one that was marketed or
sold to such Fund on the basis that it would have the economic
characteristics of a loan but the interest-like return would be taxed as
capital gain; or (4) the transaction is described as a conversion transaction
in the Treasury Regulations. The amount of the gain recharacterized generally
will not exceed the amount of the interest that would have accrued on the net
investment for the relevant period at a yield equal to 120% of the federal
long-term, mid-term, or short-term rate, depending upon the type of
instrument at issue, reduced by an amount equal to: (1) prior inclusions of
ordinary income items from the conversion transaction; and (2) the
capitalized interest on acquisition indebtedness under Code Section 263(g).
Built-in losses will be preserved where a Fund has a built-in loss with
respect to property that becomes a part of a conversion transaction. No
authority exists that indicates that the converted character of the income
will not be passed to a Fund's shareholders.

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<PAGE>

In general, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if: (1) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, (2) the
asset is otherwise held by the Fund as part of a "straddle" (which term
generally excludes a situation where the asset is stock and the Fund grants a
qualified covered call option (which, among other things, must not be
deep-in-the-money) with respect thereto); or (3) the asset is stock and the Fund
grants an in-the- money qualified covered call option with respect thereto.
However, for purposes of the Short-Short Gain Test, the holding period of the
asset disposed of may be reduced only in the case of clause (1) above. In
addition, a Fund may be required to defer the recognition of a loss on the
disposition of an asset held as part of a straddle to the extent of any
unrecognized gain on the offsetting position.

Any gain recognized by a Fund on the lapse of, or any gain or loss recognized
by a Fund from a closing transaction with respect to, an option written by the
Fund will be treated as a short-term capital gain or loss. For purposes of the
Short-Short Gain Test, the holding period of an option written by a Fund will
commence on the date it is written and end on the date it lapses or the date a
closing transaction is entered into. Accordingly, a Fund may be limited in its
ability to write options which expire within three months and to enter into
closing transactions at a gain within three months of the writing of options.

Transactions that may be engaged in by certain of the Funds (such as
regulated futures contracts, certain foreign currency contracts, and options
on stock indexes and futures contracts) will be subject to special tax
treatment as "Section 1256 contracts." Section 1256 contracts are treated as
if they are sold for their fair market value on the last business day of the
taxable year, even though a taxpayer's obligations (or rights) under such
contracts have not terminated (by delivery, exercise, entering into a closing
transaction or otherwise) as of such date. Any gain or loss recognized as a
consequence of the year-end deemed disposition of Section 1256 contracts is
taken into account for the taxable year together with any other gain or loss
that was previously recognized upon the termination of Section 1256 contracts
during that taxable year. Any capital gain or loss for the taxable year with
respect to Section 1256 contracts (including any capital gain or loss arising
as a consequence of the year-end deemed sale of such contracts) is generally
treated as 60% long- term capital gain or loss and 40% short-term capital
gain or loss. A Fund, however, may elect not to have this special tax
treatment apply to Section 1256 contracts that are part of a "mixed straddle"
with other investments of the Fund that are not Section 1256 contracts. The
Internal Revenue Service (the "IRS") has held in several private rulings that
gains arising from Section 1256 contracts will be treated for purposes of the
Short-Short Gain Test as being derived from securities held for not less than
three months if the gains arise as a result of a constructive sale under Code
Section 1256.

The International Equity Fund may enter into notional principal contracts,
including interest rate swaps, caps, floors and collars. Under Treasury
Regulations, in general, the net income or deduction from a notional
principal contract for a taxable year is included in or deducted from gross
income for that taxable year. The net income or deduction from a notional
principal contract for a taxable year equals the total of all of the periodic
payments (generally, payments that are payable or receivable at fixed
periodic intervals of one year or less during the entire term of the
contract) that are recognized from that contract for the taxable year and all
of the non-periodic payments (including premiums for caps, floors and
collars) that are recognized from that contract for the taxable year. No
portion of a payment by a party to a notional principal contract is
recognized prior to the first year to which any portion of a payment by the
counterparty relates. A periodic payment is recognized ratably over the
period to which it relates. In general, a non-periodic payment must be
recognized over the term of the notional principal contract in a manner that
reflects the economic substance of the contract. A non-periodic payment that
relates to an interest rate swap, cap, floor or collar shall be recognized
over the term of the contract by allocating it in accordance with the values
of a series of cash- settled forward or option contracts that reflect the
specified index and notional principal amount upon which the notional
principal contract is based under an alternative method contained in the
proposed regulations.

The International Equity Fund may purchase securities of certain foreign
investment funds or trusts which constitute passive foreign investment
companies ("PFICs") for federal income tax purposes. If the Fund

26
<PAGE>

invests in a PFIC, it may elect to treat the PFIC as a qualifying electing
fund (a "QEF") in which event the Fund will each year have ordinary income
equal to its pro rata share of the PFIC's ordinary earnings for the year and
long-term capital gain equal to its pro rata share of the PFIC's net capital
gain for the year, regardless of whether the Fund receives distributions of
any such ordinary earnings or net capital gain from the PFIC. If the Fund
does not (because it is unable to, chooses not to or otherwise) elect to
treat the PFIC as a QEF, then in general (1) any gain recognized by the Fund
upon sale or other disposition of its interest in the PFIC or any excess
distribution received by the Fund from the PFIC will be allocated ratably
over the Fund's holding period of its interest in the PFIC, (2) the portion
of such gain or excess distribution so allocated to the year in which the
gain is recognized or the excess distribution is received shall be included
in the Fund's gross income for such year as ordinary income (and the
distribution of such portion by the Fund to shareholders will be taxable as
an ordinary income dividend, but such portion will not be subject to tax at
the Fund level), (3) the Fund shall be liable for tax on the portions of such
gain or excess distribution so allocated to prior years in an amount equal
to, for each such prior year, (i) the amount of gain or excess distribution
allocated to such prior year multiplied by the highest tax rate (individual
or corporate) in effect for such prior year plus (ii) interest on the amount
determined under clause (i) for the period from the due date for filing a
return for such prior year until the date for filing a return for the year in
which the gain is recognized or the excess distribution is received at the
rates and methods applicable to underpayments of tax for such period, and (4)
the distribution by the Fund to shareholders of the portions of such gain or
excess distribution so allocated to prior years (net of the tax payable by
the Fund thereon) will again be taxable to the shareholders as an ordinary
income dividend.

Under proposed Treasury Regulations issued in 1992 (but not yet
effective), the International Equity Fund could elect to recognize as gain
the excess as of the last day of its taxable year, of the fair market value
of each share of PFIC stock over the Fund's adjusted tax basis in that share
("mark-to-market gain"). Such mark-to-market gain will be included by the
Fund as ordinary income, such gain will not be subject to the Short-Short
Gain Test, and the Fund's holding period with respect to such PFIC stock
commences on the first day of the next taxable year. If the Fund makes such
election in the first taxable year it holds PFIC stock, the Fund will include
ordinary income from any mark-to-market gain, if any, and will not incur the
tax described in the previous paragraph.

Treasury Regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain (i.e., the excess
of net long-term capital gain over net short-term capital loss) for any
taxable year, to elect (unless it has made a taxable year election for excise
tax purposes as discussed below) to treat all or any part of any net capital
loss, any net long-term capital loss or any net foreign currency loss
incurred after October 31 as if it had been incurred in the succeeding year.

In addition to satisfying the requirements described above, each Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which
the Fund has not invested more than 5% of the value of the Fund's total
assets in securities of such issuer and as to which the Fund does not hold
more than 10% of the outstanding voting securities of such issuer), and no
more than 25% of the value of its total assets may be invested in the
securities of any one issuer (other than U.S. Government securities and
securities of other regulated investment companies), or in two or more
issuers which the Fund controls and which are engaged in the same or similar
trades or businesses. Generally, an option (call or put) with respect to a
security is treated as issued by the issuer of the security not the issuer of
the option. However, with regard to forward currency contracts, there does
not appear to be any formal or informal authority which identifies the issuer
of such instrument. For purposes of asset diversification testing,
obligations issued or guaranteed by agencies or instrumentalities of the U.S.
Government such as the Federal Agricultural Mortgage Corporation, the Farm
Credit System Financial Assistance Corporation, a Federal Home Loan Bank, the
Federal Home Loan Mortgage Association, the Government National Mortgage
Corporation, and the Student Loan Marketing Association are treated as U.S.
Government Securities.

27
<PAGE>

If for any taxable year a Fund does not qualify as a regulated investment
company, all of its taxable income (including its net capital gain) will be
subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.

Excise Tax on Regulated Investment Companies

A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98%
of ordinary taxable income for the calendar year and 98% of capital gain net
income for the one-year period ended on October 31 of such calendar year (or,
at the election of a regulated investment company having a taxable year
ending November 30 or December 31, for its taxable year (a "taxable year
election"). The balance of such income must be distributed during the next
calendar year. For the foregoing purposes, a regulated investment company is
treated as having distributed any amount on which it is subject to income tax
for any taxable year ending in such calendar year.

For purposes of the excise tax, a regulated investment company shall: (1)
reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year; and (2) exclude
foreign currency gains and losses incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) in
determining the amount of ordinary taxable income for the current calendar
year (and, instead, include such gains and losses in determining ordinary
taxable income for the succeeding calendar year).

Each Fund intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end
of each calendar year to avoid liability for the excise tax. However,
investors should note that a Fund may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid
excise tax liability.

Fund Distributions

Each Fund anticipates distributing substantially all of its investment
company taxable income for each taxable year. Such distributions will be
taxable to shareholders as ordinary income and treated as dividends for
federal income tax purposes, but they will qualify for the 70%
dividends-received deduction for corporations only to the extent discussed
below.

A Fund may either retain or distribute to shareholders its net realized
capital gain for each taxable year. Each Fund currently intends to distribute
any such amounts. If net capital gain is distributed and designated as a
capital gain dividend, it will be taxable to shareholders as long-term
capital gain, regardless of the length of time the shareholder has held his
shares or whether such gain was recognized by the Fund prior to the date on
which the shareholder acquired his shares.

Conversely, if a Fund elects to retain its net realized capital gain, the
Fund will be taxed thereon (except to the extent of any available capital
loss carryovers) at the 35% corporate tax rate. If a Fund elects to retain
its net capital gain, it is expected that the Fund also will elect to have
shareholders of record on the last day of its taxable year treated as if each
received a distribution of his pro rata share of such gain, with the result
that each shareholder will be required to report his pro rata share of such
gain on his tax return as long-term capital gain, will receive a refundable
tax credit for his pro rata share of tax paid by the Fund on the gain, and
will increase the tax basis for his shares by an amount equal to the deemed
distribution less the tax credit.

With respect to each Fund other than International Equity Fund, ordinary
income dividends paid by a Fund with respect to a taxable year will qualify
for the 70% dividends- received deduction generally available to corporations
to the extent of the amount of qualifying dividends received by a Fund from
domestic corporations for the taxable year. A dividend received by a Fund
will not be treated as a qualifying dividend (1) if it has been received with
respect to any share of stock that the Fund has held for less than 46 days
(91 days in the case of certain preferred stock), excluding for this purpose
under the rules of Code Section 246(c)

28
<PAGE>

(3) and (4): (i) any day more than 45 days (or 90 days in the case of certain
preferred stock) after the date on which the stock becomes ex-dividend and
(ii) any period during which a Fund has an option to sell, is under a
contractual obligation to sell, has made and not closed a short sale of, is
the grantor of a deep-in- the-money or otherwise nonqualified option to buy,
or has otherwise diminished its risk of loss by holding other positions with
respect to, such (or substantially identical) stock; (2) to the extent that a
Fund is under an obligation (pursuant to a short sale or otherwise) to make
related payments with respect to positions in substantially similar or
related property; or (3) to the extent the stock on which the dividend is
paid is treated as debt-financed under the rules of Code Section 246A.
Moreover, the dividends-received deduction for a corporate shareholder may be
disallowed or reduced (1) if the corporate shareholder fails to satisfy the
foregoing requirements with respect to its shares of a Fund or (2) by
application of Code Section 246(b) which in general limits the
dividends-received deduction to 70% of the shareholder's taxable income
(determined without regard to the dividends-received deduction and certain
other items). In the case where a Fund invests all of its assets in a
Portfolio and the Fund satisfies the holding period rules pursuant to Code
Section 246(c) as to its interest in the Portfolio, a corporate shareholder
which satisfies the foregoing requirements with respect to its shares of the
Fund should receive the dividends-received deduction.

For purposes of the Corporate AMT and the environmental Superfund tax, the
corporate dividends- received deduction is not itself an item of tax
preference that must be added back to taxable income or is otherwise
disallowed in determining a corporation's AMT. However, corporate
shareholders will generally be required to take the full amount of any
dividend received from a Fund into account (without a dividends- received
deduction) in determining its adjusted current earnings.

Investment income that may be received by certain of the Funds from
sources within foreign countries may be subject to foreign taxes withheld at
the source. The United States has entered into tax treaties with many foreign
countries which entitle any such Fund to a reduced rate of, or exemption
from, taxes on such income. It is impossible to determine the effective rate
of foreign tax in advance since the amount of any such Fund's assets to be
invested in various countries is not known. If more than 50% of the value of
the International Equity Fund's total assets at the close of its taxable year
consists of the stock or securities of foreign corporations, the Fund may
elect to "pass through" to the Fund's shareholders the amount of foreign
taxes paid by such Fund. If the Fund so elects, each shareholder would be
required to include in gross income, even though not actually received, his
pro rata share of the foreign taxes paid by the Fund, but would be treated as
having paid his pro rata share of such foreign taxes and would therefore be
allowed to either deduct such amount in computing taxable income or use such
amount (subject to various Code limitations) as a foreign tax credit against
federal income tax (but not both). For purposes of the foreign tax credit
limitation rules of the Code, each shareholder would treat as foreign source
income his pro rata share of such foreign taxes plus the portion of dividends
received from the Fund representing income derived from foreign sources. No
deduction for foreign taxes could be claimed by an individual shareholder who
does not itemize deductions. Each shareholder should consult his own tax
advisor regarding the potential application of foreign tax credits.

Distributions by a Fund that do not constitute ordinary income dividends,
or capital gain dividends will be treated as a return of capital to the
extent of (and in reduction of) the shareholder's tax basis in his shares;
any excess will be treated as gain from the sale of his shares, as discussed
below.

Distributions by a Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date. In addition, if the net
asset value at the time a shareholder purchases shares of a Fund reflects
undistributed net investment income or recognized capital gain net income, or
unrealized appreciation in the value of the assets of the Fund, distributions
of such amounts will be taxable to the shareholder in the manner described
above, although such distributions economically constitute a return of
capital to the shareholder.

Ordinarily, shareholders are required to take distributions by a Fund into
account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year

29
<PAGE>

and payable to shareholders of record on a specified date in such a month
will be deemed to have been received by the shareholders (and made by the
Fund) on December 31 of such calendar year if such dividends are actually
paid in January of the following year. Shareholders will be advised annually
as to the U.S. federal income tax consequences of distributions made (or
deemed made) during the year.

A Fund will be required in certain cases to withhold and remit to the U.S.
Treasury 31% of ordinary income dividends and capital gain dividends, and the
proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all,
(2) who is subject to backup withholding by the IRS for failure to report the
receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that it is not subject to backup withholding or that it
is a corporation or other "exempt recipient."

Sale or Redemption of Shares

A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the
shares. All or a portion of any loss so recognized may be disallowed if the
shareholder purchases other shares of the Fund within 30 days before or after
the sale or redemption. In general, any gain or loss arising from (or treated
as arising from) the sale or redemption of shares of a Fund will be
considered capital gain or loss and will be long- term capital gain or loss
if the shares were held for longer than one year. However, any capital loss
arising from the sale or redemption of shares held for six months or less
will be disallowed to the extent of the amount of exempt- interest dividends
received on such shares and (to the extent not disallowed) will be treated as
a long-term capital loss to the extent of the amount of capital gain
dividends received on such shares. For this purpose, the special holding
period rules of Code Section 246(c)(3) and (4) (discussed above in connection
with the dividends-received deduction for corporations) generally will apply
in determining the holding period of shares. Long-term capital gains of
noncorporate taxpayers are currently taxed at a maximum rate 11.6% lower than
the maximum rate applicable to ordinary income. Capital losses in any year
are deductible only to the extent of capital gains plus, in the case of a
noncorporate taxpayer, $3,000 of ordinary income.

Foreign Shareholders

Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder"), depends on whether the income from a
Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.

If the income from a Fund is not effectively connected with a U.S. trade
or business carried on by a foreign shareholder, ordinary income dividends
paid to a foreign shareholder will be subject to U.S. withholding tax at the
rate of 30% (or lower treaty rate) upon the gross amount of the dividend.
Such a foreign shareholder would generally be exempt from U.S. federal income
tax on gains realized on the sale of shares of the Fund, capital gain
dividends and exempt-interest dividends and amounts retained by the Fund that
are designated as undistributed capital gains. Furthermore, with respect to
the International Equity Fund, such a foreign shareholder may be subject to
U.S. withholding tax at the rate of 30% (or lower treaty rate) on the gross
income resulting from the Fund's election to treat any foreign taxes paid by
it as paid by its shareholders, but may not be allowed a deduction against
this gross income or a credit against this U.S. withholding tax for the
foreign shareholder's pro rata share of such foreign taxes which it is
treated as having paid.

If the income from a Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of shares of the
Fund will be subject to U.S. federal income tax at the rates applicable to
U.S. citizens or domestic corporations.

In the case of foreign noncorporate shareholders, a Fund may be required
to withhold U.S. federal income tax at a rate of 31% on distributions that
are otherwise exempt from withholding tax (or taxable at a reduced treaty
rate) unless such shareholders furnish the Fund with proper notification of
its foreign status.

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<PAGE>

The tax consequences to a foreign shareholder entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in a Fund, including
the applicability of foreign taxes.

Effect of Future Legislation; Local Tax Considerations

The foregoing general discussion of U.S. federal income tax consequences
is based on the Code and the Treasury Regulations issued thereunder as in
effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions
may have a retroactive effect with respect to the transactions contemplated
herein.

Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the
rules for U.S. federal income taxation described above. Shareholders are
urged to consult their tax advisers as to the consequences of these and other
state and local tax rules affecting investment in a Fund.

MANAGEMENT OF THE TRUST AND THE FUNDS OR PORTFOLIOS

Trustees and Officers

The Trustees and officers of the Trust and their principal occupations for
at least the past five years are set forth below. Their titles may have
varied during that period.

Fergus Reid, III--Chairman of the Trust. Chairman and Chief Executive
Officer, Lumelite Corporation, since September 1985; Trustee, Morgan Stanley
Funds. Age: 63. Address: 202 June Road, Stamford, CT 06903.

Richard E. Ten Haken--Trustee; Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2 and Orleans Counties, New
York; Chairman of the Board and President, New York State Teachers'
Retirement System. Age: 61. Address: 4 Barnfield Road, Pittsford, NY 14534.

William J. Armstrong--Trustee. Vice President and Treasurer,
Ingersoll-Rand Company. Age: 54. Address: 49 Aspen Way, Upper Saddle River,
NJ 07458.

John R.H. Blum--Trustee. Attorney in private practice; formerly, partner
in the law firm of Richards, O'Neil & Allegaert; Commissioner of Agriculture
- - State of Connecticut, 1992-1995. Age: 66. Address: 322 Main Street,
Lakeville, CT 06039.

Joseph J. Harkins--Trustee. Retired; Commercial Sector Executive and
Executive Vice President of The Chase Manhattan Bank, N.A. from 1985 through
1989. He has been employed by Chase in numerous capacities and offices since
1954. Director of Blessings Corporation, Jefferson Insurance Company of New
York, Monticello Insurance Company and National. Age: 64. Address: 257
Plantation Circle South, Ponte Vedra Beach, FL 32082.

*H. Richard Vartabedian--Trustee and President of the Trust; Chairman of
the Portfolios. Consultant, Republic Bank of New York; formerly, Senior
Investment Officer, Division Executive of the Investment Management Division
of The Chase Manhattan Bank, N.A., 1980 through 1991. Age: 60. Address: P.O.
Box 296, Beach Road, Hendrick's Head, Southport, ME 04576.

Stuart W. Cragin, Jr.--Trustee. Retired; formerly President, Fairfield
Testing Laboratory, Inc. He has previously served in a variety of marketing,
manufacturing and general management positions with Union Camp Corp., Trinity
Paper & Plastics Corp., and Conover Industries. Age: 63. Address: 108 Valley
Road, Cos Cob, CT 06807.

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<PAGE>

Irving L. Thode--Trustee. Retired; formerly Vice President of Quotron
Systems. He has previously served in a number of executive positions with
Control Data Corp., including President of its Latin American Operations, and
General Manager of its Data Services business. Age: 64. Address: 80 Perkins
Road, Greenwich, CT 06830.

*W. Perry Neff--Trustee. Independent Financial Consultant; Director of
North America Life Assurance Co., Petroleum & Resources Corp. and The Adams
Express Co.; Formerly Director and Chairman of The Hanover Funds, Inc.;
Formerly Director, Chairman and President of The Hanover Investment Funds,
Inc. Age: 68. Address: RR 1 Box 102, Weston, VT 05181.

Roland R. Eppley, Jr.--Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard Association Inc. (1971-1988);
Director, Janel Hydraulics, Inc.; Formerly Director of The Hanover Funds,
Inc. Age: 63. Address: 105 Coventry Place, Palm Beach Gardens, FL 33418.

W.D. MacCallan--Trustee. Director of The Adams Express Co. and Petroleum &
Resources Corp.; formerly Chairman of the Board and Chief Executive Officer
of The Adams Express Co. and Petroleum & Resources Corp.; Formerly Director
of The Hanover Funds, Inc. and The Hanover Investment Funds, Inc. Age: 68.
Address: 624 East 45th Street, Savannah, GA 31405

Martin R. Dean--Treasurer and Assistant Secretary. Associate Director,
Accounting Services, BISYS Fund Services; formerly Senior Manager, KPMG Peat
Marwick (1987-1994). Age: 32. Address: 3435 Stelzer Road, Columbus, OH 43219.

Ann E. Bergin--Secretary. First Vice President, BISYS Fund Services, Inc.;
formerly, Senior Vice President, Administration, Concord Financial Group
(1991-1995); Assistant Vice President, Dreyfus Service Corporation
(1982-1991). Age: 35. Address: 125 West 55th Street, New York, NY 10019.

- ----------
* Asterisks indicate those Trustees that are "interested persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of the Trust's
investment advisers or principal underwriter, but may be deemed an
interested person of the Trust solely by reason of being an officer of the
Trust.

The Board of Trustees of the Trust presently has an Audit Committee. The
members of the Audit Committee are Messrs. Ten Haken (Chairman), Blum,
Cragin, Thode, Armstrong, Harkins, Reid and Vartabedian. The function of the
Audit Committee is to recommend independent auditors and monitor accounting
and financial matters.

The Board of Trustees of the Trust has established an Investment
Committee. The members of the Investment Committee are Messrs. Vartabedian
(Chairman) and Reid, as well as Leonard M. Spalding, President of Vista
Capital Management. The function of the Investment Committee is to review the
investment management process of the Trust.

Remuneration of Trustees and Certain Executive Officers:

Each Trustee is reimbursed for expenses incurred in attending each meeting
of the Board of Trustees or any committee thereof. Each Trustee who is not an
affiliate of the advisers is compensated for his or her services according to
a fee schedule which recognizes the fact that each Trustee also serves as a
Trustee of other investment companies advised by the advisers. Each Trustee
receives a fee, allocated among all investment companies for which the
Trustee serves, which consists of an annual retainer component and a meeting
fee component. Each Trustee of the Vista Funds receives a quarterly retainer
of $12,000 and an additional per meeting fee of $1,500. Members of committees
receive a meeting fee only if the committee meeting is held on a day other
than a day on which a regularly scheduled meeting is held. The Chairman of
the Trustees and the Chairman of the Investment Committee each receive a 50%
increment over regular Trustee total compensation for serving in such
capacities for all the investment companies advised by the adviser.

Vista Funds Retirement Plan for Eligible Trustees

The Trustees have instituted a Retirement Plan for Eligible Trustees (the
"Plan") pursuant to which each Trustee (who is not an employee of any of the
Funds advised by the advisers, the advisers, administrator

<PAGE>

or distributor or any of their affiliates) may be entitled to certain
benefits upon retirement from the Board of Trustees. Pursuant to the Plan,
the normal retirement date is the date on which the eligible Trustee has
attained age 65 and has completed at least five years of continuous service
with one or more of the investment companies advised by the adviser
(collectively, the "Covered Funds"). Each Eligible Trustee is entitled to
receive from the Covered Funds an annual benefit commencing on the first day
of the calendar quarter coincident with or following his date of retirement
equal to 10% of the highest annual compensation received from the Covered
Funds multiplied by the number of such Trustee's years of service (not in
excess of 10 years) completed with respect to any of the Covered Funds. Such
benefit is payable to each eligible Trustee in monthly installments for the
life of the Trustee.

Set forth below in the table are the estimated annual benefits payable to
an eligible Trustee upon retirement assuming various compensation and years
of service classifications. As of September 30, 1996, the estimated credited
years of service for Messrs. Reid, Ten Haken, Armstrong, Blum, Harkins,
Vartabedian, Cragin, Thode, Neff, Eppley and MacCallan were 11, 11, 8, 11, 5,
3, 3, 3, 6, 7 and 6, respectively.

<TABLE>
<CAPTION>
Highest Annual Compensation Paid by All Vista Funds
---------------------------------------------------
<S> <C> <C> <C> <C>
$40,000 $45,000 $50,000 $55,000

Years of
Service Estimated Annual Benefits upon Retirement
- ---------- -------------------------------------------------
10 $40,000 $45,000 $50,000 $55,000
9 36,000 40,500 45,000 49,500
8 32,000 36,000 40,000 44,000
7 28,000 31,500 35,000 38,500
6 24,000 27,000 30,000 33,000
5 20,000 22,500 25,000 27,500
</TABLE>

The Trustees have also instituted a Deferred Compensation Plan for
Eligible Trustees (the "Deferred Compensation Plan") pursuant to which each
Trustee (who is not an employee of any of the Covered Funds, the advisers,
administrator or distributor or any of their affiliates) may enter into
agreements with the Covered Funds whereby payment of the Trustee's fees are
deferred until the payment date elected by the Trustee (or the Trustee's
termination of service). The deferred amounts are invested in shares of Vista
funds selected by the Trustee. The deferred amounts are paid out in a lump
sum or over a period of several years as elected by the Trustee at the time
of deferral. If a deferring Trustee dies prior to the distribution of amounts
held in the deferral account, the balance of the deferral account will be
distributed to the Trustee's designated beneficiary in a single lump sum
payment as soon as practicable after such deferring Trustee's death.

Messrs. Ten Haken, Thode and Vartabedian have each executed a deferred
compensation agreement for the 1996 calendar year and as of September 30,
1996 they had contributed $15,200, $39,500 and $59,250, respectively.

The Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with
the Trust, unless, as to liability to the Trust or its shareholders, it is
finally adjudicated that they engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in their
offices or with respect to any matter unless it is finally adjudicated that
they did not act in good faith in the reasonable belief that their actions
were in the best interest of the Trust. In the case of settlement, such
indemnification will not be provided unless it has been determined by a court
or other body approving the settlement or other disposition, or by a
reasonable determination based upon a review of readily available facts, by
vote of a majority of disinterested Trustees or in a written opinion of
independent counsel, that such officers or Trustees have not engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.

As of October 1, 1996, the Trustees and officers as a group owned no
outstanding shares of any Fund.

33
<PAGE>

Adviser and Sub-Adviser

Chase acts as investment adviser to the Funds pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Subject to such policies as
the Board of Trustees may determine, Chase is responsible for investment
decisions for the Funds. Pursuant to the terms of the Advisory Agreement,
Chase provides the Funds with such investment advice and supervision as it
deems necessary for the proper supervision of the Funds' investments. The
advisers continuously provide investment programs and determine from time to
time what securities shall be purchased, sold or exchanged and what portion
of the Funds' assets shall be held uninvested. The advisers to the Funds
furnish, at their own expense, all services, facilities and personnel
necessary in connection with managing the investments and effecting portfolio
transactions for the Funds. The Advisory Agreement for the Funds will
continue in effect from year to year only if such continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority
of a Fund's outstanding voting securities and by a majority of the Trustees
who are not parties to the Advisory Agreement or interested persons of any
such party, at a meeting called for the purpose of voting on such Advisory
Agreement.

Under the Advisory Agreement, the adviser may utilize the specialized
portfolio skills of all its various affiliates, thereby providing the Funds
with greater opportunities and flexibility in accessing investment expertise.

Pursuant to the terms of the Advisory Agreement and the sub-advisers'
agreements with the adviser, the adviser and sub-advisers are permitted to
render services to others. Each advisory agreement is terminable without
penalty by the Trust on behalf of the Funds on not more than 60 days', nor
less than 30 days', written notice when authorized either by a majority vote
of a Fund's shareholders or by a vote of a majority of the Board of Trustees
of the Trust, or by the adviser or sub-adviser on not more than 60 days', nor
less than 30 days', written notice, and will automatically terminate in the
event of its "assignment" (as defined in the 1940 Act). The advisory
agreements provide that the adviser or sub-adviser under such agreement shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of
portfolio transactions for the respective Fund, except for wilful
misfeasance, bad faith or gross negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties thereunder.

With respect to the Equity Funds, the equity research team of the adviser
looks for two key variables when analyzing stocks for potential investment by
equity portfolios: value and momentum. To uncover these qualities, the team
uses a combination of quantitative analysis, fundamental research and
computer technology to help identify undervalued stocks.

In the event the operating expenses of the Funds, including all investment
advisory, administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, for any fiscal year exceed the most restrictive expense
limitation applicable to the Funds imposed by the securities laws or
regulations thereunder of any state in which the shares of the Funds are
qualified for sale, as such limitations may be raised or lowered from time to
time, the adviser shall reduce its advisory fee (which fee is described
below) to the extent of its share of such excess expenses. The amount of any
such reduction to be borne by the adviser shall be deducted from the monthly
advisory fee otherwise payable with respect to the Funds during such fiscal
year; and if such amounts should exceed the monthly fee, the adviser shall
pay to a Fund its share of such excess expenses no later than the last day of
the first month of the next succeeding fiscal year.

Under the Advisory Agreement, Chase may delegate a portion of its
responsibilities to a sub-adviser. In addition, the Advisory Agreement
provides that Chase may render services through its own employees or the
employees of one or more affiliated companies that are qualified to act as an
investment adviser of the Fund and are under the common control of Chase as
long as all such persons are functioning as part of an organized group of
persons, managed by authorized officers of Chase.

Chase, on behalf of the Funds (except the International Equity Fund), has
entered into an investment sub-advisory agreement with Chase Asset
Management, Inc. ("CAM"). With respect to the International

34
<PAGE>

Equity Fund, Chase has entered into an investment sub-advisory agreement with
Chase Asset Management (London) Limited ("CAM London"). With respect to the
day-to-day management of the Funds, under the sub- advisory agreements, the
sub-advisers make decisions concerning, and place all orders for, purchases
and sales of securities and helps maintain the records relating to such
purchases and sales. The sub-advisers may, in their discretion, provide such
services through their own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser to
the Company under applicable laws and are under the common control of Chase;
provided that (i) all persons, when providing services under the sub-advisory
agreement, are functioning as part of an organized group of persons, and (ii)
such organized group of persons is managed at all times by authorized
officers of the sub-advisers. This arrangement will not result in the payment
of additional fees by the Funds.

Chase, a wholly-owned subsidiary of The Chase Manhattan Corporation, a
registered bank holding company, is a commercial bank offering a wide range
of banking and investment services to customers throughout the United States
and around the world. Also included among Chase's accounts are commingled
trust funds and a broad spectrum of individual trust and investment
management portfolios. These accounts have varying investment objectives.

CAM is a wholly-owned operating subsidiary of the Adviser. CAM is
registered with the Securities and Exchange Commission as an investment
adviser and was formed for the purpose of providing discretionary investment
advisory services to institutional clients and to consolidate Chase's
investment management function, and the same individuals who serve as
portfolio managers for CAM also serve as portfolio managers for Chase.

CAM London is an indirect wholly-owned subsidiary of the Adviser. CAM
London is registered with the Securities and Exchange Commission and is
regulated by the Investment Management Regulatory Organization (IMRO) as an
investment adviser and was formed for the purpose of providing discretionary
investment advisory services to institutional clients and to consolidate
Chase's investment management function, and the same individuals who serve as
portfolio managers for CAM London also serve as portfolio managers for Chase.

In consideration of the services provided by the adviser pursuant to the
Advisory Agreement, the adviser is entitled to receive from each Fund an
investment advisory fee computed daily and paid monthly based on a rate equal
to a percentage of such Fund's average daily net assets specified in the
relevant Prospectuses. However, the adviser may voluntarily agree to waive a
portion of the fees payable to it on a month- to-month basis. For its
services under its sub-advisory agreement, CAM (or CAM London in the case of
the International Equity Fund) will be entitled to receive, with respect to
each such Fund, such compensation, payable by the adviser out of its advisory
fee, as is described in the relevant Prospectuses.

Administrator

Pursuant to separate Administration Agreements (the "Administration
Agreements"), Chase is the administrator of the Funds. Chase provides certain
administrative services to the Funds, including, among other
responsibilities, coordinating the negotiation of contracts and fees with,
and the monitoring of performance and billing of, the Funds' independent
contractors and agents; preparation for signature by an officer of the Trust
of all documents required to be filed for compliance by the Trust with
applicable laws and regulations excluding those of the securities laws of
various states; arranging for the computation of performance data, including
net asset value and yield; responding to shareholder inquiries; and arranging
for the maintenance of books and records of the Funds and providing, at its
own expense, office facilities, equipment and personnel necessary to carry
its duties. Chase in its capacity as administrator does not have any
responsibility or authority for the management of the Funds, the
determination of investment policy, or for any matter pertaining to the
distribution of Fund shares.

Under the Administration Agreements Chase is permitted to render
administrative services to others. The Administration Agreements will
continue in effect from year to year with respect to each Fund only if such
continuance is specifically approved at least annually by the Board of
Trustees of the Trust or by vote of a majority

35
<PAGE>

of such Fund's outstanding voting securities and, in either case, by a
majority of the Trustees who are not parties to the Administration Agreements
or "interested persons" (as defined in the 1940 Act) of any such party. The
Administration Agreements are terminable without penalty by the Trust on
behalf of each Fund on 60 days' written notice when authorized either by a
majority vote of such Fund's shareholders or by vote of a majority of the
Board of Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust, or by Chase
on 60 days' written notice, and will automatically terminate in the event of
their "assignment" (as defined in the 1940 Act). The Administration
Agreements also provide that neither Chase or its personnel shall be liable
for any error of judgment or mistake of law or for any act or omission in the
administration of the Funds, except for willful misfeasance, bad faith or
gross negligence in the performance of its or their duties or by reason of
reckless disregard of its or their obligations and duties under the
Administration Agreements.

In addition, the Administration Agreements provide that, in the event the
operating expenses of any Fund, including all investment advisory,
administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, for any fiscal year exceed the most restrictive expense
limitation applicable to that Fund imposed by the securities laws or
regulations thereunder of any state in which the shares of such Fund are
qualified for sale, as such limitations may be raised or lowered from time to
time, Chase shall reduce its administration fee (which fee is described
below) to the extent of its share of such excess expenses. The amount of any
such reduction to be borne by Chase shall be deducted from the monthly
administration fee otherwise payable to Chase during such fiscal year, and if
such amounts should exceed the monthly fee, Chase shall pay to such Fund its
share of such excess expenses no later than the last day of the first month
of the next succeeding fiscal year.

In consideration of the services provided by Chase pursuant to the
Administration Agreements, Chase receives from each Fund a fee computed daily
and paid monthly at an annual rate equal to 0.10% of each of the Fund's
average daily net assets, on an annualized basis for the Fund's then-current
fiscal year. Chase may voluntarily waive a portion of the fees payable to it
with respect to each Fund on a month-to-month basis.

Distribution and Sub-Administration Agreement

The Trust has entered into a Distribution and Sub-Administration
Agreement, (the "Distribution Agreement") with the Distributor, pursuant to
which the Distributor acts as the Funds' exclusive underwriter, provides
certain administration services and promotes and arranges for the sale of
Shares. The Distributor is a wholly-owned subsidiary of BISYS Fund Services,
Inc. The Distribution Agreement provides that the Distributor will bear the
expenses of printing, distributing and filing prospectuses and statements of
additional information and reports used for sales purposes, and of preparing
and printing sales literature and advertisements not paid for by the
Distribution Plan. The Trust pays for all of the expenses for qualification
of the shares of each Fund for sale in connection with the public offering of
such shares, and all legal expenses in connection therewith. In addition,
pursuant to the Distribution Agreement, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space.

The Distribution Agreement is currently in effect and will continue in
effect with respect to each Fund only if such continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority
of such Fund's outstanding voting securities and, in either case, by a
majority of the Trustees who are not parties to the Distribution Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Distribution Agreement is terminable without penalty by the Trust on behalf
of each Fund on 60 days' written notice when authorized either by a majority
vote of such Fund's shareholders or by vote of a majority of the Board of
Trustees of the Trust, including a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust, or by the
Distributor on 60 days' written notice, and will automatically terminate in
the event of its "assignment" (as defined in the 1940 Act). The Distribution
Agreement also provides that neither the Distributor nor its personnel shall
be liable for any act or omission in the course of, or connected with,
rendering services under the Distribution Agreement, except for willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties.

In the event the operating expenses of any Fund, including all investment
advisory, administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary

36
<PAGE>

expenses such as litigation, for any fiscal year exceed the most restrictive
expense limitation applicable to that Fund imposed by the securities laws or
regulations thereunder of any state in which the shares of such Fund are
qualified for sale, as such limitations may be raised or lowered from time to
time, the Distributor shall reduce its sub-administration fee with respect to
such Fund (which fee is described below) to the extent of its share of such
excess expenses. The amount of any such reduction to be borne by the
Distributor shall be deducted from the monthly sub-administration fee
otherwise payable with respect to such Fund during such fiscal year; and if
such amounts should exceed the monthly fee, the Distributor shall pay to such
Fund its share of such excess expenses no later than the last day of the
first month of the next succeeding fiscal year.

In consideration of the sub-administration services provided by the
Distributor pursuant to the Distribution Agreement, the Distributor receives
an annual fee, payable monthly, of 0.05% of the net assets of each Fund.
However, the Distributor has voluntarily agreed to waive a portion of the
fees payable to it under the Distribution Agreement with respect to each Fund
on a month-to-month basis.

Transfer Agent and Custodian

The Trust has also entered into a Transfer Agency Agreement with DST
Systems, Inc. ("DST") pursuant to which DST acts as transfer agent for the
Trust. DST's address is 210 West 10th Street, Kansas City, MO 64105.

Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of each Fund and receives such compensation as is from time to time
agreed upon by the Trust and Chase. As custodian, Chase provides oversight
and record keeping for the assets held in the portfolios of each Fund. Chase
is located at 3 Metrotech Center, Brooklyn, NY 11245.

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036, independent accountants of the Funds, provides the Funds with audit
services, tax return preparation and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.

CERTAIN REGULATORY MATTERS

Banking laws, including the Glass-Steagall Act as currently interpreted,
prohibit bank holding companies and their affiliates from sponsoring,
organizing, controlling, or distributing shares of, mutual funds, and generally
prohibit banks from issuing, underwriting, selling or distributing securities.
These laws do not prohibit banks or their affiliates from acting as investment
adviser, administrator or custodian to mutual funds or from purchasing mutual
fund shares as agent for a customer. Chase and the Trust believe that Chase
(including its affiliates) may perform the services to be performed by it as
described in this Prospectus without violating such laws. If future changes in
these laws or interpretations required Chase to alter or discontinue any of
these services, it is expected that the Board of Trustees would recommend
alternative arrangements and that investors would not suffer adverse financial
consequences. State securities laws may differ from the interpretations of
banking law described above and banks may be required to register as dealers
pursuant to state law.

Chase and its affiliates may have deposit, loan and other commercial banking
relationships with the issuers of securities purchased on behalf of any of the
Funds, including outstanding loans to such issuers which may be repaid in whole
or in part with the proceeds of securities so purchased. Chase and its
affiliates deal, trade and invest for their own accounts in the U.S. Government
obligations, municipal obligations and commercial paper and are among the
leading dealers of various types of U.S. Government obligations and municipal
obligations. Chase and its affiliates may sell U.S. Government obligations and
municipal obligations to, and purchase them from, other investment companies
sponsored by the Funds' distributor or affiliates of the distributor. Chase will
not invest any Fund assets in any U.S. Government obligations, municipal
obligations or commercial paper purchased from itself or any affilliate,
although under certain circumstances such securities may be purchased from other
members of an underwriting syndicate in which Chase or an affiliate is a
non-principal member. This restriction may limit the amount or type of U.S.
Government obligations, municipal obligations or commercial paper available to
be purchased by any Fund. Chase has informed the Funds that in making its
investment decisions, it does not obtain or use material inside information in
the possession of any other division or department of Chase, including the
division that performs services for the Trust as custodian, or in the possession
of any affiliate of Chase. Shareholders of the Funds should be aware that,
subject to applicable legal or regulatory restrictions, Chase and its affiliates
may exchange among themselves certain information about the shareholder and his
account. Transactions with affiliated broker-dealers will only be executed on an
agency a basis in accordance with applicable federal regulations.

GENERAL INFORMATION

Description of Shares, Voting Rights and Liabilities

Mutual Fund Select Group is an open-end, non-diversified management
investment company organized as Massachusetts business trust under the laws
of the Commonwealth of Massachusetts in 1996. The Trust currently consists of
10 series of shares of beneficial interest, par value $.001 per share. The
Trust has reserved the right to create and issue additional series or
classes. Each share of a series or class represents an equal proportionate
interest in that series or class with each other share of that series or
class. The shares of each series or class participate equally in the
earnings, dividends and assets of the particular series or class. Expenses of
the Trust which are not attributable to a specific series or class are
allocated among all the series in a manner believed by management of the
Trust to be fair and equitable. Shares have no pre-emptive or conversion
rights. Shares when issued are fully paid and non-assessable, except as set
forth below. Shareholders are entitled to one vote for each share held.
Shares of each series or class generally vote together, except when required
under federal securities laws to vote separately on matters that only affect
a particular class, such as the approval of distribution plans for a
particular class.

Each Fund currently issues a single class of shares but may, in the
future, offer other classes of shares. The categories of investors that are
eligible to purchase shares may be different for each class of Fund shares.
Other classes of shares may be subject to differences in sales charge
arrangements, ongoing distribution and service fee levels, and levels of
certain other expenses, which will affect the relative performance of the
different classes.

37
<PAGE>

Any person entitled to receive compensation for selling or servicing
shares of a Fund may receive different levels of compensation for selling one
particular class of shares rather than another.

The Trust is not required to hold annual meetings of shareholders but will
hold special meetings of shareholders of a series or class when, in the
judgment of the Trustees, it is necessary or desirable to submit matters for
a shareholder vote. Shareholders have, under certain circumstances, the right
to communicate with other shareholders in connection with requesting a
meeting of shareholders for the purpose of removing one or more Trustees.
Shareholders also have, in certain circumstances, the right to remove one or
more Trustees without a meeting. No material amendment may be made to the
Trust's Declaration of Trust without the affirmative vote of the holders of a
majority of the outstanding shares of each portfolio affected by the
amendment. Shares have no preemptive or conversion rights. Shares, when
issued, are fully paid and non- assessable, except as set forth below. Any
series or class may be terminated (i) upon the merger or consolidation with,
or the sale or disposition of all or substantially all of its assets to,
another entity, if approved by the vote of the holders of two-thirds of its
outstanding shares, except that if the Board of Trustees recommends such
merger, consolidation or sale or disposition of assets, the approval by vote
of the holders of a majority of the series' or class' outstanding shares will
be sufficient, or (ii) by the vote of the holders of a majority of its
outstanding shares, or (iii) by the Board of Trustees by written notice to
the series' or class' shareholders. Unless each series and class is so
terminated, the Trust will continue indefinitely.

Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Trust and
provides for indemnification and reimbursement of expenses out of the Trust
property for any shareholder held personally liable for the obligations of
the Trust. The Trust's Declaration of Trust also provides that the Trust
shall maintain appropriate insurance (for example, fidelity bonding and
errors and omissions insurance) for the protection of the Trust, its
shareholders, Trustees, officers, employees and agents covering possible tort
and other liabilities. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
both inadequate insurance existed and the Trust itself was unable to meet its
obligations.

The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the
property of the Trust and that the Trustees will not be liable for any action
or failure to act, errors of judgment or mistakes of fact or law, but nothing
in the Declaration of Trust protects a Trustee against any liability to which
he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct
of his office.

The Board of Trustees has adopted a Code of Ethics addressing personal
securities transactions by investment personnel and access persons and other
related matters. The Code of Ethics substantially conforms to the
recommendations made by the Investment Company Institute ("ICI") (except
where noted) and includes such provisions as:

o Prohibitions on investment personnel acquiring securities in initial
offerings;

o A requirement that access persons obtain prior to acquiring securities in a
private placement and that the officer granting such approval have no
interest in the issuer making the private placement;

o A restriction on access persons executing transactions for securities on a
recommended list until 14 days after distribution of that list;

o A prohibition on access persons acquiring securities that are pending
execution by one of the Funds until 7 days after the transactions of the
Funds are completed;

o A prohibition of any buy or sell transaction in a particular security in a
30-day period, except as may be permitted in certain hardship cases or
exigent circumstances where prior approval is obtained. This provision
differs slightly from the ICI recommendation;

38
<PAGE>

o A requirement for pre-clearance of any buy or sell transaction in a
particular security after 30 days, but within 60 days;

o A requirement that any gift exceeding $75.00 from a customer must be
reported to the appropriate compliance officer;

o A requirement that access persons submit in writing any request to serve as
a director or trustee of a publicly traded company;

o A requirement that all securities transactions in excess of $1,000 be
pre-cleared, except that if a person has engaged in more than $10,000 of
securities transactions in a calendar quarter all securities of such person
require pre-clearance (this de minimus exception differs slightly from the
ICI recommendations);

o A requirement that all access persons direct their broker-dealer to submit
duplicate confirmation and customer statements to the appropriate
compliance unit; and

o A requirement that all access persons sign a Code of Ethics acknowledgment,
affirming that they have read and understood the Code and submit a personal
security holdings report upon commencement of employment or status and a
personal security transaction report within 10 days of each calendar
quarter thereafter.

Principal Holders

As of October 1, 1996, no person owned of record 5% or more of the
outstanding shares of any Fund.

39
<PAGE>

APPENDIX A

DESCRIPTION OF CERTAIN OBLIGATIONS
ISSUED OR GUARANTEED BY U.S. GOVERNMENT
AGENCIES OR INSTRUMENTALITIES

Federal Farm Credit System Notes and Bonds--are bonds issued by a
cooperatively owned nationwide system of banks and associations supervised by
the Farm Credit Administration, an independent agency of the U.S. Government.
These bonds are not guaranteed by the U.S. Government.

Maritime Administration Bonds--are bonds issued and provided by the
Department of Transportation of the U.S. Government are guaranteed by the
U.S. Government.

FNMA Bonds--are bonds guaranteed by the Federal National Mortgage
Association. These bonds are not guaranteed by the U.S. Government.

FHA Debentures--are debentures issued by the Federal Housing
Administration of the U.S. Government and are guaranteed by the U.S.
Government.

FHA Insured Notes--are bonds issued by the Farmers Home Administration of
the U.S. Government and are guaranteed by the U.S. Government.

GNMA Certificates--are mortgage-backed securities which represent a
partial ownership interest in a pool of mortgage loans issued by lenders such
as mortgage bankers, commercial banks and savings and loan associations. Each
mortgage loan included in the pool is either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration and therefore
guaranteed by the U.S. Government. As a consequence of the fees paid to GNMA
and the issuer of GNMA Certificates, the coupon rate of interest of GNMA
Certificates is lower than the interest paid on the VA-guaranteed or
FHA-insured mortgages underlying the Certificates. The average life of a GNMA
Certificate is likely to be substantially less than the original maturity of
the mortgage pools underlying the securities. Prepayments of principal by
mortgagors and mortgage foreclosures may result in the return of the greater
part of principal invested far in advance of the maturity of the mortgages in
the pool. Foreclosures impose no risk to principal investment because of the
GNMA guarantee. As the prepayment rate of individual mortgage pools will vary
widely, it is not possible to accurately predict the average life of a
particular issue of GNMA Certificates. The yield which will be earned on GNMA
Certificates may vary from their coupon rates for the following reasons: (i)
Certificates may be issued at a premium or discount, rather than at par; (ii)
Certificates may trade in the secondary market at a premium or discount after
issuance; (iii) interest is earned and compounded monthly which has the
effect of raising the effective yield earned on the Certificates; and (iv)
the actual yield of each Certificate is affected by the prepayment of
mortgages included in the mortgage pool underlying the Certificates.
Principal which is so prepaid will be reinvested although possibly at a lower
rate. In addition, prepayment of mortgages included in the mortgage pool
underlying a GNMA Certificate purchased at a premium could result in a loss
to a Fund. Due to the large amount of GNMA Certificates outstanding and
active participation in the secondary market by securities dealers and
investors, GNMA Certificates are highly liquid instruments. Prices of GNMA
Certificates are readily available from securities dealers and depend on,
among other things, the level of market rates, the Certificate's coupon rate
and the prepayment experience of the pool of mortgages backing each
Certificate. If agency securities are purchased at a premium above principal,
the premium is not guaranteed by the issuing agency and a decline in the
market value to par may result in a loss of the premium, which may be
particularly likely in the event of a prepayment. When and if available, U.S.
Government obligations may be purchased at a discount from face value.

FHLMC Certificates and FNMA Certificates--are mortgage-backed bonds issued
by the Federal Home Loan Mortgage Corporation and the Federal National
Mortgage Association, respectively, and are guaranteed by the U.S.
Government.

A-1
<PAGE>

GSA Participation Certificates--are participation certificates issued by the
General Services Administration of the U.S. Government and are guaranteed by the
U.S. Government.

New Communities Debentures--are debentures issued in accordance with the
provisions of Title IV of the Housing and Urban Development Act of 1968, as
supplemented and extended by Title VII of the Housing and Urban Development Act
of 1970, the payment of which is guaranteed by the U.S. Government.

Public Housing Bonds--are bonds issued by public housing and urban renewal
agencies in connection with programs administered by the Department of
Housing and Urban Development of the U.S. Government, the payment of which is
secured by the U.S. Government.

Penn Central Transportation Certificates--are certificates issued by Penn
Central Transportation and guaranteed by the U.S. Government.

SBA Debentures--are debentures fully guaranteed as to principal and
interest by the Small Business Administration of the U.S. Government.

Washington Metropolitan Area Transit Authority Bonds--are bonds issued by
the Washington Metropolitan Area Transit Authority. Some of the bonds issued
prior to 1993 are guaranteed by the U.S. Government.

FHLMC Bonds--are bonds issued and guaranteed by the Federal Home Loan
Mortgage Corporation. These bonds are not guaranteed by the U.S. Government.

Federal Home Loan Bank Notes and Bonds--are notes and bonds issued by the
Federal Home Loan Bank System and are not guaranteed by the U.S. Government.

Student Loan Marketing Association ("Sallie Mae") Notes and bonds--are
notes and bonds issued by the Student Loan Marketing Association and are not
guaranteed by the U.S. Government.

D.C. Armory Board Bonds--are bonds issued by the District of Columbia
Armory Board and are guaranteed by the U.S. Government.

Export-Import Bank Certificates--are certificates of beneficial interest
and participation certificates issued and guaranteed by the Export-Import
Bank of the U.S. and are guaranteed by the U.S. Government.

In the case of securities not backed by the "full faith and credit" of the
U.S. Government, the investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment, and may not be able to
assert a claim against the U.S. Government itself in the event the agency or
instrumentality does not meet its commitments.

Investments may also be made in obligations of U.S. Government agencies or
instrumentalities other than those listed above.

A-2
<PAGE>

APPENDIX B

DESCRIPTION OF RATINGS

A description of the rating policies of Moody's, S&P and Fitch with respect
to bonds and commercial paper appears below.

Moody's Investors Service's Corporate Bond Ratings

Aaa--Bonds which are rated "Aaa" are judged to be of the best quality and
carry the smallest degree of investment risk. Interest payments are protected
by a large or by an exceptionally stable margin, and principal is secure.
While the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa--Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.

A--Bonds which are rated "A" possess many favorable investment qualities and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.

Baa--Bonds which are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.

Ba--Bonds which are rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguared
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated "B" generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance
and other terms of the contract over any long period of time may be small.

Caa--Bonds which are rated "Caa" are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.

Ca--Bonds which are rated "Ca" represent obligations which are speculative in
high degree.

Such issues are often in default or have other marked shortcomings.

C--Bonds which are rated "C" are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Moody's applies numerical modifiers "1", "2", and "3" to certain of its
rating classifications. The modifier "1" indicates that the security ranks in
the higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.

Standard & Poor's Ratings Group Corporate Bond Ratings

AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to repay principal and
pay interest.

B-1
<PAGE>

AA--Bonds rated "AA" also qualify as high quality debt obligations. Capacity
to pay principal and interest is very strong, and differs from "AAA" issues
only in small degree.

A--Bonds rated "A" have a strong capacity to repay principal and pay
interest, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than debt in higher rated
categories.

BBB--Bonds rated "BBB" are regarded as having an adequate capacity to repay
principal and pay interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to repay principal and pay interest for
bonds in this category than for higher rated categories.

BB-B-CCC-CC-C--Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity
to pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and C the highest
degree of speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

CI--Bonds rated "CI" are income bonds on which no interest is being paid.

D--Bonds rated "D" are in default. The "D" category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has not expired unless S&P believes that such
payments will be made during such grace period. The "D" rating is also used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

The ratings set forth above may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.

Moody's Investors Service's Commercial Paper Ratings

Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have a
superior ability for repayment of senior short-term debt obligations.
"Prime-1" repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries,
high rates of return on funds employed, conservative capitalization
structures with moderate reliance on debt and ample asset protection, broad
margins in earnings coverage of fixed financial charges and high internal
cash generation, and well- established access to a range of financial markets
and assured sources of alternate liquidity.

Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternative
liquidity is maintained.

Prime-3--Issuers (or related supporting institutions) rated "Prime-3" have an
acceptable ability for repayment of senior short-term obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level
of debt protection measurements and the requirement for relatively high
financial leverage. Adequate alternate liquidity is maintained.

Not Prime--Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.

Standard & Poor's Ratings Group Commercial Paper Ratings

A S&P commercial paper rating is current assessment of the likelihood of
timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded in several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. The four categories are as
follows:

B-2
<PAGE>

A-1--This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.

A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher
designations.

B--Issues rated "B" are regarded as having only speculative capacity for
timely payment.

C--This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D--Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.

Fitch Bond Ratings

AAA--Bonds rated AAA by Fitch are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA--Bonds rated AA by Fitch are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.
Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issues is generally rated F-1+ by Fitch.

A--Bonds rated A by Fitch are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB--Bonds rated BBB by Fitch are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have adverse
consequences on these bonds, and therefore impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.

Plus and minus signs are used by Fitch to indicate the relative position of a
credit within a rating category. Plus and minus signs, however, are not used
in the AAA category.

Fitch Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

Fitch's short-term ratings are as follows:

F-1+--Issues assigned this rating are regarded as having the strongest degree
of assurance for timely payment.

B-3
<PAGE>

F-1--Issues assigned this rating reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+.

F-2--Issues assigned this rating have a satisfactory degree of assurance for
timely payment but the margin of safety is not as great as for issues
assigned F-1+ and F-1 ratings.

F-3--Issues assigned this rating have characteristics suggesting that the
degree of assurance for timely payment is adequate, although near-term
adverse changes could cause these securities to be rated below investment
grade.

LOC--The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.

Like higher rated bonds, bonds rated in the Baa or BBB categories are
considered to have adequate capacity to pay principal and interest. However,
such bonds may have speculative characteristics, and changes in economic
conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case with higher
grade bonds.

After purchase by a Fund, a security may cease to be rated or its rating may
be reduced below the minimum required for purchase by such Fund. Neither
event will require a sale of such security by a Fund. However, a Fund's
investment manager will consider such event in its determination of whether
such Fund should continue to hold the security. To the extent the ratings
given by Moody's, S&P or Fitch may change as a result of changes in such
organizations or their rating systems, a Fund will attempt to use comparable
ratings as standards for investments in accordance with the investment
policies contained in this Prospectus and in the Statement of Additional
Information.

B-4
<PAGE>

PART C

MUTUAL FUND SELECT GROUP
PART C. OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits

(a) Financial statements
In Part A: None

In Part B: To be filed by amendment

In Part C: None.

(b) Exhibits:

Exhibit
Number
- -------
1 Declaration of Trust (1)
2 By-laws. (1)
3 None.
4 None.

5(a) Form of Proposed Investment Advisory Agreement. (1)

5(b) Form of Proposed Sub-Advisory Agreement between The Chase Manhattan
Bank and Chase Asset Management, Inc.(1)
5(c) Form of Proposed Investment Subadvisory Agreement between The Chase
Manhattan Bank and Chase Asset Management (London) Limited (1)
6 Form of Proposed Distribution and Sub-Administration Agreement. (1)
7(a) Form of Retirement Plan for Eligible Trustees.(2)
7(b) Form of Deferred Compensation Plan for Eligible Trustees. (2)
8(a) Form of Proposed Custodian Agreement. (1)
8(b) Form of Proposed Sub-Custodian Agreement. (3)
9(a) Form of Proposed Transfer Agency Agreement. (1)
9(b) Form of Proposed Administration Agreement. (1)

C-1

<PAGE>

10 Opinion re: Legality of Securities being Registered. (3)
11 Consent of Price Waterhouse LLP (3)
12 None.

13 Form of Share Purchase Agreement. (4)

14 None.
15 None.
16 Schedule for Computation for Each Performance Quotation.(3)
17 Financial Data Schedules (3)
18 Not Applicable

- --------------------

(1) Filed as an exhibit ot the Registration Statement on Form N-1A of the
Registrant (File No. 333-13317) as filed with the Securities and Exchange
Commission on October 2, 1996.
(2) Incorporated by reference to Amendment No. 6 to the Registration Statement
on Form N-1A of Mutual Fund Group (File No. 33-14196) as filed with the
Securities and Exchange Commission on March 23, 1990.
(3) To be filed by amendment
(4) Filed herewith

ITEM 25. Persons Controlled by or Under Common
Control with Registrant

Not applicable

C-2

<PAGE>

ITEM 26. Number of Holders of Securities

Number of Record
Title of Series Holders as of September 30, 1996
--------------- --------------------------------

VISTA(SM) Select Balanced Fund None
VISTA(SM) Select Equity Income Fund None
VISTA(SM) Select Large Cap Equity Fund None
VISTA(SM) Select Large Cap Growth Fund None
VISTA(SM) Select Emerging Growth Fund None
VISTA(SM) Select Small Cap Value Fund None
VISTA(SM) Select International Equity Fund None
VISTA(SM) Select Short-Term Bond Fund None
VISTA(SM) Select Intermediate Bond Fund None
VISTA(SM) Select Bond Fund None

ITEM 27. Indemnification

Reference is hereby made to Article V of the Registrant's Declaration
of Trust.

The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.

Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such Trustees so directs, by
independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.

Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable

C-3

<PAGE>

insurance or an equivalent form of security which assures that any repayments
may be obtained by the Registrant without delay or litigation, which bond,
insurance or other form of security must be provided by the recipient of the
advance, or (b) a majority of a quorum of the Registrant's disinterested,
non-party Trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of it counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

ITEM 28(a). Business and Other Connections of Investment Adviser

The Chase Manhattan Bank (the "Adviser") is a commercial bank
providing a wide range of banking and investment services.

To the knowledge of the Registrant, none of the Directors or
executive officers of the Adviser, except those described below, are or have
been, at any time during the past two years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
Directors and executive officers of the Adviser also hold or have held various
positions with bank and non-bank affiliates of the Adviser, including its
parent, The Chase Manhattan Corporation. Each Director listed below is also a
Director of The Chase Manhattan Corporation.

<TABLE>
<CAPTION>
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ------------- -----------------------------
<S> <C> <C>

Thomas G. Labreque President and Chief Operating Officer Chairman, Chief Executive Officer
and Director and a Director of The Chase
Manhattan Corporation and a
Director of AMAX, Inc.

M. Anthony Burns Director Chairman of the Board, President
and Chief Executive Officer of
Ryder System, Inc.

</TABLE>

C-4

<PAGE>

H. Laurance Fuller Director Chairman, President, Chief
Executive Officer and Director of
Amoco Corporation and Director of
Abbott Laboratories

Paul W. MacAvoy Director Dean of Yale School of
Organization and Management

David T. McLaughlin Director President and Chief Executive
Officer of The Aspen Institute,
Chairman of Standard Fuse
Corporation and a Director of each
of ARCO Chemical Company and
Westinghouse Electric Corporation

Edmund T. Pratt, Jr. Director Chairman Emeritus, formerly
Chairman and Chief Executive
Officer, of Pfizer Inc. and a
Director of each of Pfizer, Inc.,
Celgene Corp., General Motors
Corporation and International Paper
Company

Henry B. Schacht Director Chairman and Chief Executive
Officer of Cummins Engine
Company, Inc. and a Director of
each of American Telephone and
Telegraph Company and CBS Inc.

Donald H. Trautlein Director Retired Chairman and
Chief Executive Officer
of Bethlehem Steel
Corporation

</TABLE>

C-5

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C>
James L. Ferguson Director Retired Chairman and Chief
Executive Officer of General Foods
Corporation

William H. Gray III Director President and Chief Executive
Officer of the United Negro College
Fund, Inc.

David T. Kearns Director Retired Chairman and Chief
Executive Officer of the Xerox
Corporation

Delano E. Lewis Director President and Chief Executive
Officer of National Public Radio

John H. McArthur Director Dean of the Harvard Graduate
School of Business Administration

Frank A. Bennack, Jr. Director President and Chief Executive Officer
The Hearst Corporation

Michael C. Bergerac Director Chairman of the Board and
Chief Executive Officer Bergerac & Co., Inc.

Susan V. Berresford Director President, The Ford Foundation

Randolph W. Bromery Director President, Springfield College; President,
Geoscience Engineering Corporation

Charles W. Duncan, Jr. Director Private Investor

Melvin R. Goodes Director Chairman of the Board and Chief Executive
Officer, The Warner-Lambert Company

George V. Grune Director Retired Chairman and Chief Executive
Officer, The Reader's Digest Association,
Inc.; Chairman, The DeWitt Wallace-
Reader's Digest Fund; The Lila-Wallace
Reader's Digest Fund

William B. Harrison, Jr. Vice Chairman of the Board

Harold S. Hook Director Chairman and Chief Executive Officer,
General Corporation

Helen L. Kaplan Director Of Counsel, Skadden, Arps, Slate, Meagher
& Flom

E. Michael Kruse Vice Chairman of the Board

J. Bruce Llewellyn Director Chairman of the Board, The Philadelphia
Coca-Cola Bottling Company, The Coca-
Cola Bottling Company of Wilmington,
Inc., Queen City Broadcasting, Inc.

John P. Mascotte Director Chairman, The Missouri Corporation of
Johnson & Higgins

John F. McGillicuddy Director Retired Chairman of the Board and
Chief Executive Officer

Edward D. Miller Senior Vice Chairman
of the Board

Walter V. Shipley Chairman of the Board and
Chief Executive Officer

Andrew C. Sigler Director Chairman of the Board and Chief
Executive Officer, Champion International
Corporation
.
Michael I. Sovern Director President, Emeritus and Chancellor Kent,
Professor of Law, Columbia University

John R. Stafford Director Chairman, President and Chief Executive
Officer, American Home Products
Corporation

W. Bruce Thomas Director Private Investor

Marina v. N. Whitman Director Professor of Business Administration and
Public Policy, University of Michigan

Richard D. Wood Director Retired Chairman of the Board, Eli Lilly
and Company
</TABLE>
<PAGE>

Item 28(b)

Chase Asset Management ("CAM") is an Investment Advisor providing investment
services to institutional clients.

To the knowledge of the Registrant, none of the Directors or executive
officers of the CAM, except those described below, are or have been, at any time
during the past two years, engaged in any other business, profession, vocation
or employment of a substantial nature, except that certain Directors and
executive officers of the CAM also hold or have held various positions with bank
and non-bank affiliates of the Advisor, including its parent, The Chase
Manhattan Corporation.

Principal Occupation or Other
Position with Employment of a Substantial
Name the Sub-Advisor Nature During Past Two Years
- ---- --------------- ----------------------------

James Zeigon Chairman and Director Director of Chase
Asset Management
(London) Limited

Steven Prostano Executive Vice President Chief Operating Officer
and Chief Operating Officer and Director of Chase
Asset Management
(London) Limited

Mark Richardson President and Chief Chief Investment Officer
Investment Officer and Director of Chase
Asset Management
(London) Limited

Item 28(c)

Chase Asset Management (London) Limited ("CAM London") is an Investment
Advisor providing investment services to institutional clients.

To the knowledge of the Registrant, none of the Directors or executive
officers of CAM London, except those described below, are or have been, at any
time during the past two years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain Directors
and executive officers of CAM London also hold or have held various positions
with bank and non-bank affiliates of the Advisor, including its parent, The
Chase Manhattan Corporation.

Principal Occupation or Other
Position with Employment of a Substantial
Name the Sub-Advisor Nature During Past Two Years
- ---- --------------- ----------------------------

Michael Browne Director Fund Manager, The Chase Manhattan
Bank, N.A.; Fund Manager, BZW
Investment Management

David Gordon Ross Director Head of Global Fixed Income
Management, Chase Asset
Management, Inc.; Vice President,
The Chase Manhattan Bank, N.A.

Brian Harte Director Investment Manager, The Chase
Manhattan Bank, N.A.

Cornelia L. Kiley Director

James Zeigon Director Chairman and Director of Chase
Asset Management, Inc.

Mark Richardson Chief Investment Director, President and Chief
Officer and Director Operating Officer of Chase Asset
Management, Inc.

Steve Prostano Chief Operating Director, Executive Vice President
Officer and and Chief Operating Officer of Chase
Director Asset Management, Inc.

<PAGE>

ITEM 29. Principal Underwriters

(a) Vista Fund Distributors, Inc., a wholly-owned subsidiary of
The BISYS Group, Inc. is the underwriter for Mutual Fund Group, Mutual Fund
Trust and Mutual Fund Select Trust.

(b) The following are the Directors and officers of Vista Fund
Distributors, Inc. The principal business address of each of these persons, is
listed below.

<TABLE>
<CAPTION>
Position and Offices Position and Offices
Name and Address with Distributor with the Registrant
- ---------------- -------------------- --------------------
<S> <C> <C>

Lynn J. Mangum Chairman None
150 Clove Street
Little Falls, NJ 07424

Robert J. McMullan Director and Exec. Vice President None
150 Clove Street
Little Falls, NJ 07424

Lee W. Schultheis President None
101 Park Avenue, 16th Floor
New York, NY 10178

George O. Martinez Senior Vice President None
3435 Stelzer Road
Columbus, OH 43219

Irimga McKay Vice President None
1230 Columbia Street
5th Floor, Suite 500
San Diego, CA 92101

Michael Burns Vice President/Compliance None
3435 Stelzer Road
Columbus, OH 43219

William Blundin Vice President None
125 West 55th Avenue
11th Floor
New York, NY 10019

Dennis Sheehan Vice President None
150 Clove Street
Little Falls, NJ 07424

Annamaria Porcaro Assistant Secretary None
150 Clove Street
Little Falls, NJ 97424

Robert Tuch Assistant Secretary None
3435 Stelzer Road
Columbus, OH 43219

Stephen Mintos Executive Vice President/COO None
3435 Stelzer Road
Columbus, OH 43219

Dale Smith Vice President/CFO None
3435 Stelzer Road
Columbus, OH 43219

William J. Tomko Vice President None
3435 Stelzer Road
Columbus, OH 43219
</TABLE>

C-6

<PAGE>
ITEM 30. Location of Accounts and Records

The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:

Name Address
---- -------
Vista Fund Distributors, Inc. 101 Park Avenue,
New York, NY 10178

DST Systems, Inc. 210 W. 10th Street,
Kansas City, MO 64105

The Chase Manhattan Bank 270 Park Avenue,
New York, NY 10017

Chase Asset Mangement, Inc. 1211 Avenue of the
Americas,
New York, NY 10036

Chase Asset Management, Ltd. (London) Colvile House
32 Curzon Street
London, England W1Y8AL

The Chase Manhattan Bank One Chase Square,
Rochester, NY 14363

ITEM 31. Management Services

Not applicable

ITEM 32. Undertakings

(1) Registrant undertakes that its trustees shall promptly
call a meeting of shareholders of the Trust for the purpose of voting upon the
question of removal of any such trustee or trustees when requested in writing so
to do by the record holders of not less than 10 per centum of the outstanding
shares of the Trust. In addition, the Registrant shall, in certain
circumstances, give such shareholders assistance in communicating with other
shareholders of a fund as required by Section 16(c) of the Investment Company
Act of 1940.

(2) The Registrant, on behalf of the Funds, undertakes,
provided the information required by Item 5A is contained in the latest annual
report to shareholders, to furnish to each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the Registrant's
latest annual report to shareholders.

(3) Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not be certified,
within four to six months from the date of commencement of investment operations
for each of Vista Select Balanced Fund, Vista Select Equity Income Fund, Vista
Select Large Cap Equity Fund, Vista Select Large Cap Growth Fund, Vista Select
Emerging Growth Fund, Vista Select Small Cap Value Fund, Vista Select
International Equity Fund, Vista Select Short-Term Bond Fund, Vista Select
Intermediate Bond Fund and Vista Select Bond Fund.

C-7

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Pre-Effective Amendment
to its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York and the State of
New York on the 14th day of November, 1996.

MUTUAL FUND SELECT GROUP

By /s/ H. Richard Vartabedian
--------------------------
H. Richard Vartabedian
President

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

/s/ Fergus Reid, III Chairman and Trustee November 14, 1996
- ------------------------------
Fergus Reid, III

/s/ H. Richard Vartabedian President November 14, 1996
- ------------------------------ and Trustee
H. Richard Vartabedian

/s/ Martin R. Dean Treasurer and November 14, 1996
- ------------------------------ Principal Financial
Martin R. Dean Officer

C-8

<PAGE>

Exhibit
Number
- -------

13 Share Purchase Agreement

SHARE PURCHASE AGREEMENT

Mutual Fund Select Group, a Massachusetts business trust (the "Trust"), and
Vista Fund Distributors, Inc., a Delaware corporation ("VFD"), hereby agree as
follows:

1. The Trust hereby offers VFD and VFD hereby purchases ______ shares of
the Vista Select Balanced Fund (par value $.001 per share), ______ shares of the
Vista Select Bond Fund (par value $.001 per share), ______ shares of the Vista
Select Emerging Growth Fund (par value $.001 per share), ______ shares of the
Vista Select Equity Income Fund (par value $.001 per share), ______ shares of
the Vista Select Intermediate Bond Fund (par value $.001 per share), ______
shares of the Vista Select International Equity Fund (par value $.001 per
share), ______ shares of the Vista Select Large Cap Growth Fund (par value $.001
per share), ______ shares of the Vista Select Large Cap Equity Fund (par value
$.001 per share), ______ shares of the Vista Select Short-Term Bond Fund (par
value $.001 per share), and ______ shares of the Vista Select Small Cap Value
Fund (par value $.001 per share), at $_____ per share (the "Shares"). VFD hereby
acknowledges receipt of a purchase confirmation reflecting the purchase of the
Shares, and the Trust hereby acknowledges receipt from VFD of funds in the
amount of $_______ in full payment for the Shares.

2. VFD represents and warrants to the Trust that the Shares are being
acquired for investment purposes and not with a view to the distribution
thereof.

3. VFD agrees that if it or any direct or indirect transferee of the Shares
redeems the Shares prior to the fifth anniversary of the date the Funds begin
their investment activities, VFD will pay to the Trust an amount equal to the
number resulting from multiplying each Fund's total unamortized organizational
expenses by a fraction, the numerator of which is equal to the number of Shares
redeemed by VFD or such transferee and the denominator of which is equal to the
number of shares of each Fund outstanding as of the date of such redemption, as
long as the administrative position of the staff of the Securities and Exchange
Commission requires such reimbursement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the ____ day of _______, 1996.

MUTUAL FUND SELECT GROUP
Attest:

_________________________ By:___________________________
Name: Name:
Title:

Vista Fund Distributors, Inc.

Attest:

_________________________ By:___________________________
Name: Name:
Title: