MUTUAL FUND SELECT GROUP, 485BPOS, 1997-12-30

MUTUAL FUND SELECT GROUP
485BPOS, 1997-12-30

Previous: MUTUAL FUND SELECT GROUP, NSAR-B, 1997-12-30

Next: ERGOBILT INC, 8-K/A, 1997-12-30

As filed via EDGAR with the Securities and Exchange Commission on December 30,
1997.

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. |_|

Post-Effective Amendment No. 1 |X|

and

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

Amendment No. 3 |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. Peter Eldridge 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)

It is proposed that this filing will become effective:

<TABLE>
<S> <C> <C> <C>
[ ] Immediately upon filing pursuant to [ ] on ( ) pursuant to
paragraph (b) paragraph (b)
[X] 60 days after filing pursuant to [ ] on ( ) pursuant to
paragraph (a)(1) paragraph (a)(1)
[ ] 75 days after filing pursuant to [ ] on ( ) pursuant to
paragraph (a)(2) paragraph (a)(2) rule 485.
</TABLE>

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

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

The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its series of shares under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940 on December 23,
1996 and the Rule 24f-2 Notice for the Registrant's fiscal year ended October
31, 1997 was filed on _________.

<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 NEW GROWTH OPPORTUNITIES 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>

[Vista Logo]

Vista
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN

PROSPECTUS
VISTA(SM) SELECT FIXED INCOME FUNDS

SHORT-TERM BOND FUND
INTERMEDIATE BOND FUND
BOND FUND

INVESTMENT STRATEGY: Income

February 27, 1998

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 February 27, 1998 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. In addition, the Commission maintains a Web site
(http://www.sec.gov) that contains the SAI, the Fund's Annual Report to
Shareholders and other information regarding the Fund which has been
electronically filed with the Commission.

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 Fund 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 the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary ................................. 3

Fund Objectives and Investment Approach ......... 4

Common Investment Policies ........................ 4

Management ....................................... 11

How to Purchase and Redeem Shares ............... 12

How the Funds Value Their Shares .................. 14

How Distributions Are Made; Tax Information ...... 14

Other Information Concerning the Funds ............ 15

Performance Information ........................... 18
</TABLE>

2
<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 expenses
incurred in the most recent fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.

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

<TABLE>
<CAPTION>
Vista Select Vista Select Vista Select
Short-Term Bond Intermediate Bond Bond
Fund Fund Fund
--------------- ----------------- ------------
<S> <C> <C> <C>
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
5 Years ....................................
10 Years ....................................
</TABLE>

* Reflects current expense reimbursement arrangements to maintain Total Fund
Operating Expenses at the levels indicated in the table above. 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 0.54%, 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.

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.

Under normal market conditions, the Fund invests at least 65% of its total
assets in debt obligations rated in the category of A or higher by Moody's or
S&P, and unrated securities determined by the Fund's advisors to be of
comparable quality.

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. Each Fund's advisers may
sell one security and purchase another

4
<PAGE>

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 may invest a substantial portion of its total assets in debt
obligations of foreign issuers, which may include issuers located in developing
countries so long as all such foreign debt obligations meet the quality
requirements of each Fund, described above.

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.

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.
See "Unique Characteristics of Master/Feeder Fund Structure."

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.

FOREIGN SECURITIES. Each Fund may invest a substantial portion of its assets in
foreign investment-grade fixed income securities. Since foreign securities are
normally denominated and traded in foreign currencies, the values of a Fund's
foreign investments may be influenced by currency exchange rates and exchange
control regulations. There may be less information publicly available about
foreign issuers than U.S. issuers, and they are not generally subject to
accounting, auditing and financial reporting standards and practices comparable
to those in the U.S. Foreign securities may be less liquid and more volatile
than comparable U.S. securities. Foreign settlement procedures and trade
regulations may involve certain expenses and risks. One risk would be the delay
in payment or delivery of securities or in the recovery of a Fund's assets held
abroad.

The securities markets of certain countries in which each Fund may invest are
smaller, less liquid and have more limited trading volume

5
<PAGE>

than those in the United States. Such factors could cause the prices of foreign
securities to be erratic for reasons apart from factors that affect the quality
of securities.

It is possible that nationalization or expropriation of assets, imposition of
currency exchange controls, taxation by withholding Fund assets, political or
financial instability and diplomatic developments could affect the value of the
Fund's investments in certain foreign countries.

Investments in securities of issuers based in developing countries entails
certain additional risks, including greater risks of expropriation, taxation by
withholding Fund assets, nationalization, and less social and economic
stability. The small size of market 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.

Additionally, special tax considerations will apply to foreign securities, such
as the imposition of withholding taxes, and there may be an absence of
developed legal structure governing private investment and private property.

MONEY MARKET INSTRUMENTS.
Each Fund may invest in cash or high-quality, short-term money market
instruments. These 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 AND STAND-BY
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. 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. 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. Each of these transactions involves 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 short-term purposes, but
will not borrow for leveraging purposes. Each Fund may also sell and
simultaneously commit to

6
<PAGE>

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.

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 (i.e., separately traded principal and
interest components of securities) 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 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 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

7
<PAGE>

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.

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.

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

8
<PAGE>

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 currency and interest rate
contracts; (iv) purchase and sell mortgage-backed and asset-backed securities;
and (v) 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 its 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

9
<PAGE>

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 buy and sell 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."

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 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 each Fund's

10
<PAGE>

shares will 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 total 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") is each Fund's investment adviser under 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 each
Fund's sub-investment adviser under a Sub-Investment Advisory

11
<PAGE>

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 provides discretionary investment advisory services to
institutional clients. 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. Andrew Russell, Second Vice President of Chase, and Susan
Huang, Vice President and Director of Fixed Income Management of Chase, are
primarily responsible for the day-to-day management of the Short-Term Bond
Fund. Since joining Chase in 1990, Mr. Russell has held several positions
within the U.S. Fixed Income area, including taxable fixed income trader and
portfolio analyst. Mr. Russell is a member of the U.S. Fixed Income area's
quantitative research team, where he specializes in the analysis of
asset-backed securities. 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.

Patrick Quilty is responsible for the day-to-day management of the Intermediate
Bond Fund and the Bond Fund. Mr. Quilty joined Chase in December 1996. Prior to
joining Chase, from 1994 through 1996, Mr. Quilty was a Vice President and
Portfolio Manager at ARM Capital Advisors, Inc. where he managed mutual fund
and institutional portfolios. From 1991 to 1994, Mr. Quilty was a Portfolio
Strategist at Lehman Brothers, Inc. where he analyzed taxable fixed income
portfolios. Ms. Huang participates in the management of the Intermediate Bond
Fund and the Bond Fund.

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.

12
<PAGE>

Shares are purchased 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
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.

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

13
<PAGE>

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 Funds declare dividends daily and distribute any net investment income at
least monthly and any net realized capital gains at least annually. Capital
gains are distributed after deducting any available capital loss carryovers.

DISTRIBUTION PAYMENT OPTION. 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.

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.

TAXATION OF DISTRIBUTIONS. All Fund distributions of net investment income
(which term includes net short-term capital gain) will be taxable as ordinary
income. Any distributions of net capital gain which are designated as "capital
gain dividends" will be taxable as long-term capital gain at the currently
applicable 28% or 20% rate, regardless of how long you have held the shares.
The taxation of your

14
<PAGE>

distributions is the same whether received in cash or in shares through the
reinvestment of distributions.

Investors should carefully consider the tax implications of purchasing shares
just prior to a distribution. This is because you 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 distribution amount.

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

For shareholders that bank with Chase, Chase may aggregate investments in the
Vista Funds with balances held in Chase bank accounts for purposes of
determining eligibility for certain bank privileges that are based on specified
minimum balance requirements, such as reduced or no fees for certain banking
services or preferred rates on loans and deposits. Chase and certain other
Financial Institutions may, at their own expense, provide gifts, such as
computer software packages, guides and books related to investment or
additional Fund shares valued up to $250 to their customers that invest in the
Vista Funds.

Chase and its affiliates and the Vista Family of Funds, affiliates, agents, and
subagents may exchange among themselves and others certain information about
shareholders and their accounts, including information used to offer investment
products and insurance products to them, unless otherwise contractually
prohibited.

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

15
<PAGE>

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 One Chase Manhattan
Plaza, 3rd Floor, New York, New York 10081.

CUSTODIAN

Chase acts as custodian and fund accountant for the Funds and receives
compensation under an agreement with the Trust. 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 for custody services,
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
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.

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.

16
<PAGE>

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
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.

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

17
<PAGE>

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.

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.

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

18
<PAGE>

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.

19
<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]

Vista
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN

101 Park Avenue
New York, NY 10178
VSFI-1-1296

<PAGE>

[Vista Logo]

Vista
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN

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
NEW GROWTH OPPORTUNITIES FUND: Capital Growth
SMALL CAP VALUE FUND: Capital Growth
INTERNATIONAL EQUITY FUND: Total Return

February 27, 1998

<PAGE>

(This Page Intentionally Left Blank)

<PAGE>

TABLE OF CONTENTS

Expense Summary ................................. 4
Fund Objectives and Investment Approach ......... 6
Common Investment Policies ........................ 10
Management ....................................... 18
How to Purchase and Redeem Shares ............... 20
How the Funds Value Their Shares .................. 21
How Distributions Are Made; Tax Information ...... 22
Other Information Concerning the Funds ............ 23
Performance Information ........................... 26

3
<PAGE>

EXPENSE SUMMARY

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

<TABLE>
<CAPTION>
Vista Select Vista Select
Vista Select Equity Income Large Cap
Balanced Fund Fund Equity Fund
-------------- ------------- ------------
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ..................... 0.50% 0.40% 0.40%
12b-1 Fee .................................... None None None
Shareholder Servicing Fee .................. None None None
Other Expenses (after reimbursements)* ...... 0.24% 0.19% 0.26%
Total Fund Operating Expenses
(after reimbursements )* .................. 0.74% 0.59% 0.66%
EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 Year ....................................... $ 8 $ 7 $ 7
3 Years .................................... $24 $21 $21
5 Years ....................................
10 Years ....................................

4
<PAGE>

<CAPTION>
Vista Select Vista Select Vista Select Vista Select
Large Cap New Growth Small Cap International
Growth Fund Opportunities Fund Value Fund Equity Fund
------------ ------------------ ------------ -------------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee ..................... 0.40% 0.65% 0.65% 1.00%
12b-1 Fee .................................... None None None None
Shareholder Servicing Fee .................. None None None None
Other Expenses (after reimbursements)* ...... 0.18% 0.21% 0.18% 0.40%
Total Fund Operating Expenses
(after reimbursements )* .................. 0.58% 0.86% 0.83% 1.40%
EXAMPLE
Your investment of $1,000 would
incur the following expenses,
assuming 5% annual return:
1 Year ....................................... $ 6 $ 9 $ 8 $14
3 Years .................................... $19 $27 $26 $44
5 Years ....................................
10 Years ....................................
</TABLE>

* Reflects current expense reimbursement arrangements to maintain Total Fund
Operating Expenses at the levels indicated in the table above. 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 New Growth Opportunities
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.

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, at the time of the Fund's purchase, 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 at the time of the Fund's purchase. 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 NEW GROWTH
OPPORTUNITIES 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 (under normal market conditions, at least 65%
of its total assets) 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,

8
<PAGE>

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
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.

9
<PAGE>

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 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.

The New Growth Opportunities 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, which are described below. 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 influenced by currency exchange rates and
exchange control regulations. There may be less information publicly available
about foreign issuers than U.S. issuers, and they are not generally subject to
accounting, auditing and financial reporting standards and practices comparable
to those in the U.S. Foreign securities may be less liquid and more volatile
than comparable U.S. securities. Foreign settlement procedures and trade
regulations may involve certain expenses and risks. One risk would be the delay
in payment or delivery of securities or in the recovery of a Fund's assets held
abroad). It is possible that

10
<PAGE>

nationalization or expropriation of assets, imposition of currency exchange
controls, taxation by withholding Fund assets, political or financial
instability and diplomatic developments could affect the value of a Fund's
investments in certain 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
emerging market securities.

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.
Unsponsored Depositary Receipts may not carry comparable voting rights to
sponsored Depositary Receipts, and a purchaser of unsponsored Depositary
Receipts may not receive as much information about the issuer of the underlying
securities as with a sponsored Depositary Receipt.

SUPRANATIONAL AND ECU OBLIGATIONS. The Balanced Fund, Equity Income Fund and
International Equity Fund may invest in debt 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. These 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.

11
<PAGE>

transactions, including those 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. A put transaction will increase
the cost of the underlying security and consequently reduce the available
yield. Each of these transactions involves 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 short-term purposes, but
will not borrow to buy additional securities, known as "leveraging". Each Fund
may also sell and simultaneously commit to repurchase a portfolio security at
an agreed-upon price and time. This practice may be used to generate cash for
shareholder redemptions without selling securities during unfavorable market
conditions. 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.

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, New Growth
Opportunities 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.

STRIPS. The Balanced Fund may invest without limitation, and each other Fund
may invest up to 20% of its total assets in stripped obligations (i.e.,
separately traded principal and interest components of securities) 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 these
instruments

12
<PAGE>

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.

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>

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 its 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 buy and sell 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."

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

14
<PAGE>

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 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.

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 each
Fund's shares will 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, New Growth
Opportunities 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 New Growth Opportunities 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, including
formerly communist 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

17
<PAGE>

foreign investment and private property.

Because the New Growth Opportunities 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") is each Fund's investment adviser under 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, New Growth Opportunities 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 each
Fund's, other than International Equity Fund, sub-investment adviser under 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, New Growth Opportunities Fund and Small Cap Value Fund, respectively. CAM
provides discretionary investment advisory services to institutional clients.
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

18
<PAGE>

its advisory fee, at an annual rate equal to 0.50% of the average daily net
assets of the Fund. CAM London provides discretionary investment advisory
services to institutional clients. 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. David Klassen, Director, U.S. Funds Management and Equity
Research at Chase, is responsible for asset allocation and investment strategy
for Chase's domestic equity portfolios. Mr. Klassen joined Chase in March 1992.
Prior to joining Chase, Mr. Klassen was a vice president and portfolio manager
at Dean Witter Reynolds, responsible for managing several mutual funds and
other accounts.

Greg Adams, a Vice President and Senior Portfolio Manager at Chase, Susan
Huang, Vice President and Director of Fixed Income Management of Chase, and
Patrick Quilty Jr., a Vice President and Senior Fixed Income Manager at 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. 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. Mr. Quilty joined Chase in December 1996.
Prior to joining Chase, from 1994 through 1996, Mr. Quilty was a Vice President
and Portfolio Manager at ARM Capital Advisers, Inc. where he managed mutual
fund and institutional portfolios. From 1991 through 1994, Mr. Quilty was
Portfolio Strategist at Lehman Brothers Inc., where he analyzed taxable fixed
income portfolios.

Tony Gleason, Vice President of Chase, is 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.

Stephen Humphrey, a Vice President of Chase, is responsible for the management
of the Large Cap Growth Fund. Mr. Humphrey has been employed at Chase
(including its predecessors) since 1976 and has managed private accounts since
1981 and pooled investment funds since 1985.

A team composed of Chase investment professionals is responsible for the
day-to-day management for the New Growth

19
<PAGE>

Opportunities Fund's portfolio.

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 1978 and, since 1982, has served 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 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

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

20
<PAGE>

ELIGIBLE INVESTORS

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.

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.,

21
<PAGE>

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 at least monthly. The New
Growth Opportunities Fund, Small Cap Value Fund and International Equity Fund
distribute any net investment income at least quarterly. Each Fund distributes
any net realized capital gains at least annually. Capital gains are distributed
after deducting any available capital loss carryovers.

TAXATION OF DISTRIBUTIONS
All Fund distributions of net investment income (which term includes net
short-term capital gain) will be taxable as ordinary income. Any distributions
of net capital gain which are designated as "capital gain dividends" will be
taxable as long-term capital gain at the currently applicable 28% or 20% rate,
regardless of how long you have held the shares. The taxation of your
distributions is the same whether received in cash or in shares through the
reinvestment of distributions.

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.

22
<PAGE>

You should carefully consider the tax implications of purchasing shares just
prior to a distribution. This is because you 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 as it will include the distribution amount.

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 above is only 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).

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

23
<PAGE>

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 One Chase Manhattan Plaza, 3rd Floor, New York, New
York 10081.

CUSTODIAN

EXPENSES

24
<PAGE>

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.

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 a 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,

25
<PAGE>

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.

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 the
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 the Fund
will be given at least 30 days' prior written notice.

PERFORMANCE
INFORMATION

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

26
<PAGE>

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. 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.

27
<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]

FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN

101 Park Avenue
New York, NY 10178
VSE-1-1296

<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
February 27, 1998

VISTA(SM) SELECT BALANCED FUND
VISTA(SM) SELECT BOND FUND
VISTA(SM) SELECT NEW GROWTH OPPORTUNITIES 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

One Chase Manhattan Plaza, Third Floor, New York, New York 10081

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 New Growth Opportunities 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:

1-800-622-4273
Vista Select Service Center
P.O. Box 419392
Kansas City, MO 64141

MFSG-SAI

<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 .................. 30
Independent Accountants .............................................. 38
Certain Regulatory Matters .......................................... 38
General Information .................................................. 39
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

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.

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 industries; 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

4
<PAGE>

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 100% 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.

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

5
<PAGE>

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 possible 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 Cer-

6
<PAGE>

tificates, 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 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.

7
<PAGE>

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 100% 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 interest 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

8
<PAGE>

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.

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

9
<PAGE>

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 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

10
<PAGE>

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 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

11
<PAGE>

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. 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 move-

12
<PAGE>

ment 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 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

13
<PAGE>

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 Receivables(SM)" or "CARS(SM)" ("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.

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

14
<PAGE>

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.

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,

15
<PAGE>

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 purposes 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

16
<PAGE>

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 New Growth Opportunities 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 New Growth
Opportunities 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. No Fund has the current intention of making short sales against
the box.

(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.

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% 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 com-

17
<PAGE>

mitment by terminating sales of its shares in the state involved. In order
to comply with certain 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 Value 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, New Growth Opportunities 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 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

18
<PAGE>

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 requirements, 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

19
<PAGE>

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, the Lehman Brothers Intermediate
Government/Corporate Bond Index and the Lehman Aggregate Bond Index; the S&P
500 Index, the S&P Mid-Cap 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 New Growth Opportunities 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 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

20
<PAGE>

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, New Growth
Opportunities 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, 1997,
and, for the New Growth Opportunities Fund and the International Equity Fund,
for the period from commencement of business operations of each such Fund to
October 31, 1997, were as follows:

<TABLE>
<CAPTION>
One Five Ten Since Date of
Fund Year Years Years Inception Inception
- ---- ---- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Balanced Fund N/A
Bond Fund N/A
New Growth Opportunities Fund 4/1/89
Equity Income Fund N/A
Intermediate Bond Fund N/A
International Equity Fund 5/1/93
Large Cap Equity Fund N/A
Large Cap Growth Fund N/A
Short-Term Bond Fund N/A
Small Cap Value Fund N/A
</TABLE>

- ----------
Performance presented in the table above and in each table that follows is based
upon the performance of their

21
<PAGE>

respective predecessor funds 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 projected (absent reimbursements) for that Fund at the
time of the CTF Reorganization.

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.

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 (including the predecessor common trust
funds) for the ten-year period ending October 31, 1997, or, in the case of the
New Growth Opportunities 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, 1997 Investment Distributions Dividends Total Value
---------------- ---------- ------------- --------- -----------
<S> <C> <C> <C> <C>
Balanced Fund N/A N/A
Bond Fund N/A N/A
New Growth Opportunities Fund N/A N/A
Equity Income Fund N/A N/A
Intermediate Bond Fund N/A N/A
International Equity Fund N/A N/A
Large Cap Equity Fund N/A N/A
Large Cap Growth Fund N/A N/A
Short-Term Bond Fund N/A N/A
Small Cap Value Fund N/A N/A
</TABLE>

22
<PAGE>

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. As of October 31, 1997 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 %
Bond Fund
New Growth Opportunities Fund
Equity Income Fund
Intermediate Bond Fund
International Equity Fund
Large Cap Equity Fund
Large Cap Growth Fund
Short-Term Bond Fund
Small Cap Value Fund

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 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 redemp-

23
<PAGE>

tion 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 regard to the
deduction for dividends paid) and net capital gain (i.e., the excess of net
long-term capital gain over net short-term capital loss) 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. Under the
current view of the Internal Revenue Service, 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").

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

24
<PAGE>

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.

Each Fund may engage in hedging or derivatives transactions involving
foreign currencies, forward contracts, options and futures contracts (including
options, futures and forward contracts on foreign currencies) and short sales.
See "Additional Policies Regarding Derivative and Related Transactions." Such
transactions will be subject to special provisions of the Code that, among
other things, may affect the character of gains and losses realized by the Fund
(that is, may affect whether gains or losses are ordinary or capital),
accelerate recognition of income of the Fund and defer recognition of certain
of the Fund's losses. These rules could therefore affect the character, amount
and timing of distributions to shareholders. In addition, these provisions (1)
will require a Fund to "mark-to-market" certain types of positions in its
portfolio (that is, treat them as if they were closed out) and (2) may cause a
Fund to recognize income without receiving cash with which to pay dividends or
make distributions in amounts necessary to satisfy the Distribution Requirement
and avoid the 4% excise tax (described below). Each Fund intends to monitor its
transactions, will make the appropriate tax elections and will make the
appropriate entries in its books and records when it acquires any option,
futures contract, forward contract or hedged investment in order to mitigate
the effect of these rules.

If the International Equity Fund purchases shares in a "passive foreign
investment company" (a "PFIC"), such Fund may be subject to U.S. federal income
tax on a portion of any "excess distribution" or gain from the disposition of
such shares even if such income is distributed as a taxable dividend by a Fund
to its shareholders. Additional charges in the nature of interest may be
imposed on a Fund in respect of deferred taxes arising from such distributions
or gains. If a Fund were to invest in a PFIC and elected to treat the PFIC as a
"qualified electing fund" under the Code (a "QEF"), in lieu of the foregoing
requirements, such Fund would be required to include in income each year a
portion of the ordinary earnings and net capital gain of the qualified electing
fund, even if not distributed to such Fund. Alternatively, under recently
enacted legislation, a Fund can elect to mark-to-market at the end of each
taxable year its shares in a PFIC; in this case, such Fund would recognize as
ordinary income any increase in the value of such shares, and as ordinary loss
any decrease in such value to the extent it did not exceed prior increases
included in income. Under either election, a Fund might be required to
recognize in a year income in excess of its distributions from PFICs and its
proceeds from dispositions of PFIC stock during that year, and such income
would nevertheless be subject to the Distribution Requirement and would be
taken into account for purposes of the 4% excise tax (described below).

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

25
<PAGE>

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.

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 net investment
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.

Under recently enacted legislation, the maximum rate of tax on long-term
capital gains of individuals will generally be reduced from 28% to 20% (10% for
gains otherwise taxed at 15%) for long-term capital gains realized after July
28, 1997 with respect to capital assets held for more than 18 months.
Additionally, beginning after December 31, 2000, the maximum tax rate for
capital assets with a holding period beginning after that date and held for
more than five years will be 18%. Under a literal reading of the legislation,
capital gain dividends paid by a regulated investment company would not appear
eligible for the reduced capital gain rates. However, the legislation
authorizes the Treasury Department to promulgate regulations that would apply
the new rates to capital gain dividends paid by a regulated investment company.

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), under the Rules of Code Section 246 (c)(3) and (4);
(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 if the corporate shareholder fails to
satisfy the foregoing requirements with respect to its shares of a Fund. 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

26
<PAGE>

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 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

27
<PAGE>

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.

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, dividends paid to a foreign
shareholder from net investment income 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 and
capital gain 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.

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.

State and Local Tax Matters

Depending on the residence of the shareholder for tax purposes,
distributions may also be subject to state and local taxes or withholding
taxes. Most states provide that a RIC may pass through (without restriction) to
its shareholders state and local income tax exemptions available to direct
owners of certain types of U.S. government securities (such as U.S. Treasury
obligations). Thus, for residents of these states, distributions derived from a
Fund's investment in certain types of U.S. government securities should be free
from state and local income taxes to the extent that the interest income from
such investments would have been exempt from state and local income taxes if
such securities had been held directly by the respective shareholders
themselves. Certain states, however, do not allow a RIC to pass through to its
shareholders the state and local income tax exemptions available to direct
owners of certain types of U.S. government securities unless the RIC holds at
least a required amount of U.S. government securities. Accordingly, for
residents of these states, distributions derived from a Fund's investment in
certain types of U.S. government securities may not be entitled to the
exemptions from state and local income taxes that would be available if the
shareholders had purchased U.S. government securities directly. Shareholders'
dividends attributable

28
<PAGE>

to a Fund's income from repurchase agreements generally are subject to state
and local income taxes, although states and regulations vary in their treatment
of such income. The exemption from state and local income taxes does not
preclude states from asserting other taxes on the ownership of U.S. government
securities. To the extent that a Fund invests to a substantial degree in U.S.
government securities which are subject to favorable state and local tax
treatment, shareholders of such Fund will be notified as to the extent to which
distributions from the Fund are attributable to interest on such securities.
Rules of state and local taxation of ordinary income dividends and capital gain
dividends from RICs may differ from the rules for U.S. federal income taxation
in other respects. 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.

Effect of Future Legislation

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.

29
<PAGE>

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: 65. Address: 202 June Road, Stamford, CT 06903.

*H. Richard Vartabedian--Trustee and President of the Trust; Chairman of
the Portfolios. Investment Management Consultant; formerly, Senior Investment
Officer, Division Executive of the Investment Management Division of The Chase
Manhattan Bank, N.A., 1980 through 1991. Age: 61. Address: P.O. Box 296, Beach
Road, Hendrick's Head, Southport, ME 04576.

William J. Armstrong--Trustee. Vice President and Treasurer,
Ingersoll-Rand Company. Age: 55. 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: 68. Address: 322 Main Street, Lakeville,
CT 06039.

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: 64. Address: 108 Valley
Road, Cos Cob, CT 06807.

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: 65. Address: 105 Coventry Place, Palm Beach Gardens, FL 33418.

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: 66. Address: 257
Plantation Circle South, Ponte Vedra Beach, FL 32082.

*Sarah E. Jones--Trustee. President and Chief Operating Officer of Chase
Mutual Funds Corp.; formerly Managing Director for the Global Asset Management
and Private Banking Division of the Chase Manhattan Bank. Age: 46. Address: One
Chase Manhattan Plaza, Third Floor, New York, NY 10081.

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: 70. Address: RR 1 Box 102, Weston, VT 05181.

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: 70. Address:
624 East 45th Street, Savannah, GA 31405

*Leonard M. Spalding, Jr.--Trustee. Chief Executive Officer of Chase
Mutual Funds Corp.; formerly President and Chief Executive Officer of Vista
Capital Management and formerly Chief Investment Executive of the Chase
Manhattan Private Bank. Age: 62. Address: One Chase Manhattan Plaza, Third
Floor, New York, NY 10081.

30
<PAGE>

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: 63. Address: 4 Barnfield Road, Pittsford, NY 14534.

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: 66. Address: 80 Perkins
Road, Greenwich, CT 06830.

Martin R. Dean--Treasurer and Assistant Secretary. Associate Director,
Accounting Services, BISYS Fund Services; formerly Senior Manager, KPMG Peat
Marwick (1987-1994). Age: 33. Address: 3435 Stelzer Road, Columbus, OH 43219.

Lee Schultheis--Assistant Treasurer and Assistant Secretary. President,
BISYS Fund Distributors; formerly Managing Director, Forum Financial Group.
Age: 41. Address: One Chase Manhattan Plaza, Third Floor, New York, NY 10081.

W. Anthony Turner--Secretary. Senior Vice President and Regional Client
Executive, BISYS Fund Services; formerly Senior Vice President, First Union
Brokerage Services, Inc. and Senior Vice President, NationsBank. Age: 36.
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), Armstrong,
Eppley, MacCallan and Thode. The function of the Audit Committee is to
recommend independent auditors and monitor accounting and financial matters.
The Audit Committee met two times during the fiscal period ended October 31,
1997.

The Board of Trustees of the Trust has established an Investment
Committee. The members of the Investment Committee are Messrs. Vartabedian
(Chairman), Reid and Spalding.The function of the Investment Committee is to
review the investment management process of the Trust.

The Trustees and officers of the Trust appearing in the table above also
serve in the same capacities with respect to Mutual Fund Trust, Mutual Fund
Variable Annuity Trust, Mutual Fund Group, Mutual Fund Select Trust, Capital
Growth Portfolio, Growth and Income Portfolio and International Equity
Portfolio (these entities, together with the Trust, are referred to below as
the "Vista Funds").

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.

31
<PAGE>

<TABLE>
<CAPTION>
Select
New Growth Select
Select Select Opportunities Select Equity Intermediate
Balanced Fund Bond Fund Fund Income Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee
H. Richard Vartabedian, Trustee
William J. Armstrong, Trustee
John R.H. Blum, Trustee
Stuart W. Cragin, Jr., Trustee
Roland R. Eppley, Jr., Trustee
Joseph J. Harkins, Trustee
Sarah E. Jones, Trustee
W.D. MacCallan, Trustee
W. Perry Neff, Trustee
Leonard M. Spalding, Jr., Trustee
Richard E. Ten Haken, Trustee
Irving L. Thode, Trustee
</TABLE>

<TABLE>
<CAPTION>
Select Select Select Select Select
International Large Cap Large Cap Short Term Small Cap
Equity Fund Growth Fund Equity Fund Bond Fund Value Fund
<S> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee
H. Richard Vartabedian, Trustee
William J. Armstrong, Trustee
John R.H. Blum, Trustee
Stuart W. Cragin, Jr., Trustee
Roland R. Eppley, Jr., Trustee
Joseph J. Harkins, Trustee
Sarah E. Jones, Trustee
W.D. MacCallan, Trustee
W. Perry Neff, Trustee
Leonard M. Spalding, Jr., Trustee
Richard E. Ten Haken, Trustee
Irving L. Thode, Trustee
</TABLE>

<TABLE>
<CAPTION>
Pension or Retirement Total
Benefits Accrued Compensation
by the Fund Complex(1) from Fund Complex(2)
<S> <C> <C>
Fergus Reid, III, Trustee $56,368 $129,500
H. Richard Vartabedian, Trustee 47,622 102,750
William J. Armstrong, Trustee 38,372 67,000
John R.H. Blum, Trustee 41,363 73,000
Stuart W. Cragin, Jr., Trustee 34,965 68,500
Roland R. Eppley, Jr., Trustee 53,267 68,500
Joseph J. Harkins, Trustee 52,508 71,500
Sarah E. Jones, Trustee -- --
W.D. MacCallan, Trustee 66,323 68,500
W. Perry Neff, Trustee 66,323 71,500
Leonard M. Spalding, Jr., Trustee -- --
Richard E. Ten Haken, Trustee 52,508 68,500
Irving L. Thode, Trustee 41,876 68,500
</TABLE>

- ----------

(1) Data reflects total benefits accrued by the Trust, Mutual Fund Group,
Capital Growth Portfolio, Growth

32
<PAGE>

and Income Portfolio and International Equity Portfolio for the fiscal year
ended October 31, 1997, and by the Mutual Fund Trust, Mutual Fund Select
Trust and Mutual Fund Variable Annuity Trust for the fiscal year ended
August 31, 1997.

(2) Data reflects total compensation earned during the period January 1, 1997
to December 31, 1997 for service as a Trustee to the Trust, Mutual Fund
Group, Mutual Fund Trust, Mutual Fund Variable Annuity Trust, Mutual Fund
Select Trust, Capital Growth Portfolio, Growth and Income Portfolio and
International Equity Portfolio.

As of December 31, 1997, the Trustees and officers as a group owned less
than 1% of each Fund's outstanding shares, all of which were acquired for
investment purposes. For fiscal year ended October 31, 1997, the Trust paid its
disinterested Trustees fees and expenses for all of the meetings of the Board
of Directors and any committee meetings attended in the aggregate amount of
approximately $ , which amount is then apportioned among the Funds
comprising the Trust.

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 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 the sum of 8% 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 and (ii) 4% of the highest annual compensation
received from the Covered Funds for each year of service in excess of 10 years,
provided that no Trustees annual benefit will exceed the highest annual
compensation received by that Trustee from 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, 1997, the estimated credited years
of service for Messrs. Reid, Vartabedian, Armstrong, Blum, Cragin, Eppley,
Harkins, Neff, MacCallan, Spalding, Ten Haken, Thode and Ms. Jones are 12, 4,
9, 12, 4, 8, 6, 7, 7, 0, 12, 4 and 0, respectively.

Highest Annual Compensation Paid by All Vista Funds
-----------------------------------------------------------
$60,000 $80,000 $100,000 $120,000 $140,000
Years of
Service Estimated Annual Benefits upon Retirement
- ------- -------------------------------------------------------------
14 $57,600 $76,800 $ 96,000 $115,200 $134,400
12 52,800 70,400 88,000 105,600 123,200
10 48,000 64,000 80,000 96,000 112,000
8 38,400 51,200 64,000 76,800 89,600
6 28,800 38,400 48,000 57,600 67,200
4 19,200 25,600 32,000 38,400 44,800

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

33
<PAGE>

(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. Eppley, Ten Haken, Thode and Vartabedian have each executed a
deferred compensation agreement for the 1997 calendar year and as of October
31, 1997 they had contributed $55,354, $27,669, $49,803 and $83,000,
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.

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

34
<PAGE>

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 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 provides discretionary investment advisory services to institutional
clients, 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 provides discretionary investment advisory services to
institutional clients, 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-

35
<PAGE>

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.

For the fiscal year ended October 31, 1997, the Advisor was paid or
accrued advisory fees, and voluntarily waived the amounts in parentheses:

Fiscal Year-Ended
8/31/97
-------
Balanced Fund
Bond Fund
Small Cap Opportunities Fund
Equity Income Fund
Intermediate Bond Fund
International Equity Fund
Large Cap Growth Fund
Large Cap Equity Fund
Short Term Bond Fund
Small Cap Value Fund

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 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

36
<PAGE>

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.

For the fiscal year ended October 31, 1997, the Administrator was paid or
accrued advisory fees, and voluntarily waived the amounts in parentheses:

Fiscal Year-Ended
8/31/97
-------
Balanced Fund
Bond Fund
Small Cap Opportunities Fund
Equity Income Fund Intermediate Bond Fund
International Equity Fund
Large Cap Growth Fund
Large Cap Equity Fund
Short Term Bond Fund
Small Cap Value Fund

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 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

37
<PAGE>

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.

For the fiscal year ended October 31, 1997, the Distributor was paid or
accrued advisory fees, and voluntarily waived the amounts in parentheses:

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 or, 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 the Prospectuses and this Statement of Additional Information
without violating such laws. If future changes in these laws or inter-

38
<PAGE>

pretations 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 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 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 affiliate,
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 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.

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

39
<PAGE>

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 has been designated to address potential conflicts of
interest that can arise in connection with personal trading activities of such
persons. Persons subject to the code are generally permitted to engage in
personal securities transactions, subject to certain prohibitions,
pre-clearance requirements and blackout periods.

Principal Holders

As of January 31, 1997, no person owned of record 5% or more of the
outstanding shares of any Fund.

40
<PAGE>

<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: Financial Highlights

In Part B: Financial Statements and the Reports thereon
for the Funds filed herein are incorporated by
reference into Part B as part of the 1997
Annual Reports to Shareholders for such Funds
as filed with the Securities and Exchange
Commission by Mutual Fund Select Group on Form
N-30D on December __, 1997, accession number
____________________, which are incorporated
into Part B by reference.

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 Form of Proposed Custodian Agreement. (1)
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. (4)
11 Consent of Price Waterhouse LLP (4)
12 None.
13 Form of Share Purchase Agreement. (3)
14 None.
15 None.
16 Schedule for Computation for Each Performance Quotation. (4)
18 Not Applicable
24 Powers of Attorney (4)
27 Financial Data Schedules (4)

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

(1) Filed as an exhibit to 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) Filed as an exhibit to Pre-effective Amendment No. 1 as filed with the
Securities and Exchange Commission on November 15, 1996.

(4) Filed as an exhibit to Pre-effective Amendment No. 2 as filed with the
Securities and Exchange Commission on December 19, 1996.

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 November 28, 1997
--------------- -------------------------------

VISTA(SM) Select Balanced Fund 12
VISTA(SM) Select Equity Income Fund 23
VISTA(SM) Select Large Cap Equity Fund 12
VISTA(SM) Select Large Cap Growth Fund 28
VISTA(SM) Select New Growth Opportunities Fund 12
VISTA(SM) Select Small Cap Value Fund 26
VISTA(SM) Select International Equity Fund 16
VISTA(SM) Select Short-Term Bond Fund 10
VISTA(SM) Select Intermediate Bond Fund 20
VISTA(SM) Select Bond Fund 12

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

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.

</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.

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

Susan V. Berresford Director President, The Ford Foundation

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

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

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

</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 Post-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 29th day of December, 1997.

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.

* Chairman and Trustee December 29, 1997
- ------------------------------
Fergus Reid, III

/s/ H. Richard Vartabedian President December 29, 1997
- ------------------------------ and Trustee
H. Richard Vartabedian

/s/ Martin R. Dean Treasurer and December 29, 1997
- ------------------------------ Principal Financial
Martin R. Dean Officer

* Trustee December 29, 1997
- ------------------------------
Richard E. Ten Haken

* Trustee December 29, 1997
- ------------------------------
William J. Armstrong

* Trustee December 29, 1997
- ------------------------------
John R.H. Blum

* Trustee December 29, 1997
- ------------------------------
Joseph J. Harkins

* Trustee December 29, 1997
- ------------------------------
Stuart W. Cragin, Jr.

* Trustee December 29, 1997
- ------------------------------
Irving L. Thode

* Trustee December 29, 1997
- ------------------------------
W. Perry Neff

* Trustee December 29, 1997
- ------------------------------
Roland R. Eppley, Jr.

* Trustee December 29, 1997
- ------------------------------
W.D. MacCallan

* Trustee December 29, 1997
- ------------------------------
Sarah E. Jones

* Trustee December 29, 1997
- ------------------------------
Leonard M. Spalding

/s/ H. Richard Vartabedian Attorney In Fact December 29, 1997
- ------------------------------
H. Richard Vartabedian

C-8