[Inside bar on cover]
VISTA SELECT EQUITY FUNDS
ANNUAL
REPORT
-----------------------------------
Vista. Setting the Global Standard.
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
VISTA SELECT INTERNATIONAL
EQUITY FUND
[Vista Logo]
VISTA
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN
October 31, 1997
<PAGE>
HIGHLIGHTS
Economic expansion in the U.S. set the stage for solid stock market gains during
the reporting period.
[bullet] The stock market benefited from corporate profit growth, low inflation
and continuing inflows from U.S. and overseas investors.
[bullet] Bond markets, while sensitive to whether the high levels of economic
growth would lead to a resurgence of inflation, rallied as global
investors turned to U.S. Treasury securities in light of global stock
market instability.
- -------------------------------------------------------------------------------
CONTENTS
- -------------------------------------------------------------------------------
Chairman's Letter 3
Vista Select Balanced Fund
Fund Commentary [bullet] Portfolio of Investments 4
Vista Select Equity Income Fund
Fund Commentary [bullet] Portfolio of Investments 16
Vista Select Large Cap Equity Fund
Fund Commentary [bullet] Portfolio of Investments 26
Vista Select Large Cap Growth Fund
Fund Commentary [bullet] Portfolio of Investments 35
Vista Select New Growth Opportunities Fund
Fund Commentary [bullet] Portfolio of Investments 43
Vista Select Small Cap Value Fund
Fund Commentary [bullet] Portfolio of Investments 52
Vista Select International Equity Fund
Fund Commentary [bullet] Portfolio of Investments 61
Financial Statements 75
Notes to Financial Statements 80
Financial Highlights 88
Report of Independent Accountants 89
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, THE
CHASE MANHATTAN BANK, AND THE SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL
FUNDS INVOLVE RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
Vista Family of Mutual Funds
CHAIRMAN'S LETTER
December 10, 1997
Dear Shareholder:
We are pleased to present this Annual Report for the following Vista Select
Equity Funds for the period ended October 31, 1997:
[bullet] Balanced Fund [bullet] New Growth Opportunities Fund
[bullet] Equity Income Fund [bullet] Small Cap Value Fund
[bullet] Large Cap Equity Fund [bullet] International Equity Fund
[bullet] Large Cap Growth Fund
Growing Economy, Low Inflation Drive Equities Higher The U.S. economy, in one of
its longest expansions in history, set the stage for solid stock market gains
during the reporting period. The market benefited from corporate profit growth,
low inflation and continuing inflows from both U.S. and overseas investors.
Although the largest U.S. stocks showed slightly higher gains than small- and
mid-capitalization issues, smaller issues closed the gap later in the year as
investors focused on compelling valuations and earnings. While U.S. stocks were
not immune to October's global correction caused by economic and currency
instability in Asia, prices recovered as investors recognized the enduring
strength of U.S. economic fundamentals.
U.S. Bond Markets Become Safe Haven
U.S. bond markets were driven by an acute sensitivity to whether the high
levels of economic growth would lead to a resurgence of inflation. While this
caused bond investors to react to each economic report, inflation remained
muted. As the year ended, U.S. bond markets rallied as global investors turned
to U.S. Treasury securities in light of global stock market instability.
After a three-year period in which U.S. stock prices doubled, the October
volatility served as a reminder that equity markets are inherently volatile
over the short term. It's important that you, working with your Chase Trust
Account Officer, invest based upon an understanding of the potential risks and
returns in an investment program. If you have any questions, please call your
Chase Trust Account Officer whose name appears on the account statement sent to
you.
Sincerely yours,
/s/ Fergus Reid
- ---------------
Fergus Reid
Chairman
3
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BALANCED FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital growth plus current income
Primary investments: Common stocks, preferred stocks, convertibles
warrants and investmen grade fixed-income
securities
Suggested investment
time frame: Mid- to long-term
Market benchmark: S&P 500 Index and Lehman Aggregate Bond Index
Lipper funds category: Balanced Funds Average
Inception date: 1/1/97
Newspaper symbol: Balanced
As of October 31, 1997
Net assets: $179.2 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select Balanced Fund, which seeks to provide capital growth plus current
income by investing in a portfolio of high-quality stocks, bonds and
convertible securities, had a total return of 18.97% for the year ended October
31, 1997.
STRATEGY
Throughout the reporting period, Fund management shifted to capitalize on the
relative values of stocks, bonds and cash. At the end of the reporting year,
77.0% of the Fund's assets was in common stocks, 32.1% was in bonds and 0.9%
was in cash.
On the equity side, the Fund began with overweight positions in technology and
financials but later reduced financial exposure in favor of more economically
sensitive sectors. By early summer, the management team adopted a sector-neutral
approach favoring stronger valuations at the lower end of the large cap range
and in mid-caps. On the fixed income side, the Fund utilized a relative value
analysis to shift among corporate, government and mortgage-backed securities.
At the end of the reporting period, the fixed income portion of the Fund had a
slightly-long duration relative to its benchmark and was emphasizing Treasury
securities.
4
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BALANCED FUND
OUTLOOK
On the equity side, the management team is looking for companies it believes
will maintain earnings in a slower economy, as well as those that may benefit
from expected lower interest rates. On the fixed income side, the management
team expects to maintain a longer-than-benchmark duration. And it expects to
overweight U.S. Treasury securities, underweight mortgage-backed securities and
keep a neutral weighting in corporate securities.
VISTA SELECT BALANCED FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 0.72%
Investment 99.28%
VISTA SELECT BALANCED FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
U.S. Treasury Securities 6.41%
U.S. Government Agency Obligation 2.82%
Mortgage Backed Securities 7.07%
Asset Backed Securities 3.30%
Airlines 2.48%
Banking 9.13%
Computers/Computer Hardware 2.94%
Consumer Products 2.98%
Diversified 3.92%
Entertainment/Leisure 4.48%
Financial Services 8.00%
Health Care/Health Care Services 2.13%
Oil & Gas 7.03%
Pharmaceuticals 6.26%
Retailing 3.85%
Telecommunications 4.71%
Utilities 3.48%
Other 19.01%
5
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BALANCED FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
U.S. Treasury Notes & Bonds 6.41%
Deutsche Bank AG (US) 5.24%
Time Warner Inc. 3.61%
Termoemcali Funding Corp. 3.56%
Federal Home Loan Mortgage Corp. 3.18%
Government National Mortgage Association 3.17%
Federal National Mortgage Association 2.94%
CentraGas (Colombia) 2.07%
Pfizer, Inc. 1.98%
Federal Home Loan Bank 1.98%
- -------------------------------------------------------------------------------
Top 10 holdings comprised 34.14% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 18.97%
Five Years 11.28%
Ten Years 11.23%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Balanced Fund includes performance of
a predecessor account for the period dating back to 10/31/87 and prior to the
Fund's commencement of operations on 1/1/97. Returns are adjusted to reflect
historical expenses at the levels indicated (absent reimbursements) in the
Expense Summary for the Fund as disclosed in the Prospectus. The account was
not registered with the Securities and Exchange Commission and, therefore, was
not subject to the investment restrictions imposed by law on registered mutual
funds. If the account had been registered, the account's performance may have
been adversely affected. Also, the Fund is currently waiving certain fees. This
voluntary waiver may be modified or terminated at any time, which would reduce
returns.
6
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BALANCED FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT BALANCED FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select S&P 500 Index Lehman Aggregate Bond Index
Balanced Fund Lipper Balanced Funds Avg.
10/87 10000 10000 10000
11117 11477 11146
10/89 12669 14502 12472
12646 13418 13256
10/91 15393 17901 15352
16988 19682 16863
10/93 18819 22619 18865
18070 23492 18171
10/95 21813 29693 21016
24377 36836 22241
10/31/97 29002 48652 24222
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with market
conditions. When shares are redeemed, they may be worth more or less than their
original cost.
This chart illustrates comparative performance for $10,000 invested in shares of
Vista Select Balanced Fund, the S&P 500 Index, the Lehman Aggregate Bond Index
and Lipper Balanced Funds Average for the ten years ended 10/31/97. The
performance of the Fund assumes reinvestment of all dividends and capital gains.
The performance of the average and the index does not include a sales charge and
has been adjusted to reflect the reinvestment of all dividends and capital gains
on the securities included in the benchmark.
The Standard and Poor's 500 Index is a broad-based index that is generally
considered representative of the U.S. stock market. The index is unmanaged and
reflects the reinvestment of dividends. An individual cannot invest in an
index.
The Lehman Aggregate Bond Index is composed of the Lehman Government/Corporate
Index and the Mortgage-Backed Securities Index and includes U.S. Treasury and
agency securities and corporate bond and mortgage-backed securities. The
indexes are unmanaged and reflect the reinvestment of dividends. An individual
cannot invest in an index.
The Lipper Balanced Funds Average represents the average performance of a
universe of 382 actively managed balanced funds. Lipper is an independent
mutual fund performance monitor whose results are based on total return and do
not reflect a sales charge.
+ The quoted performance of Vista Select Balanced Fund includes performance of
a predecessor account for the period dating back to 10/31/87 and prior to the
Fund's commencement of operations on 1/1/97. Returns are adjusted to reflect
historical expenses at the levels indicated (absent reimbursements) in the
Expense Summary for the Fund as disclosed in the Prospectus. The account was
not registered with the Securities and Exchange Commission and, therefore, was
not subject to the investment restrictions imposed by law on registered mutual
funds. If the account had been registered, the account's performance may have
been adversely affected. Also, the Fund is currently waiving certain fees. This
voluntary waiver may be modified or terminated at any time, which would reduce
returns.
7
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- ------------------------------------------------------------
Long-Term Investments -- 94.5%
- ------------------------------------------------------------
Common Stock -- 49.5%
---------------------
Airlines -- 0.6%
9,000 AMR Corp.* $ 1,047,938
------------
Automotive -- 0.6%
18,000 General Motors Corp. 1,155,375
------------
Banking -- 2.6%
25,000 Barnett Banks, Inc. 1,725,000
36,000 First Union Corp. 1,766,250
10,000 J. P. Morgan & Company, Inc. 1,097,500
------------
4,588,750
------------
Chemicals -- 1.5%
15,000 Dow Chemical Co. 1,361,250
24,000 duPont (EI) deNemours 1,365,000
------------
2,726,250
------------
Computer Software -- 1.4%
15,000 Cisco Systems, Inc.* 1,230,469
18,000 Computer Associates International 1,342,125
------------
2,572,594
------------
Computers/Computer Hardware -- 1.7%
35,000 EMC Corp.* 1,960,000
10,800 International Business Machines
Corp. 1,059,075
------------
3,019,075
------------
Construction Machinery -- 0.8%
30,000 Caterpillar, Inc. 1,537,500
------------
Consumer Products -- 3.0%
20,000 Avon Products, Inc. 1,310,000
60,000 Philip Morris Companies, Inc. 2,377,500
24,000 Procter & Gamble Co. 1,632,000
------------
5,319,500
------------
Diversified -- 3.2%
30,000 Corning Inc. 1,353,750
40,000 General Electric Co. 2,582,500
20,000 Minnesota Mining and
Manufacturing Co. 1,830,000
------------
5,766,250
------------
See notes to financial statements.
8
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- -------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------
Entertainment/Leisure -- 0.9%
32,000 Carnival Corp., Class A $ 1,552,000
------------
Financial Services -- 1.6%
30,000 Federal Home Loan Mortgage Corp. 1,136,250
40,000 Green Tree Financial Corp. 1,685,000
------------
2,821,250
------------
Food/Beverage Products -- 1.5%
50,000 ConAgra, Inc. 1,506,250
35,000 PepsiCo., Inc. 1,288,438
------------
2,794,688
------------
Health Care/Health Care Services -- 1.5%
35,000 Columbia/HCA Healthcare Corp. 988,750
70,000 HEALTHSOUTH Corp.* 1,789,375
------------
2,778,125
------------
Insurance -- 1.8%
20,000 Allstate Corp. 1,658,750
15,000 American International Group 1,530,938
------------
3,189,688
------------
Metals/Mining -- 0.8%
19,000 Aluminum Co. of America (ALCOA) 1,387,000
------------
Office/Business Equipment -- 0.6%
15,000 Xerox Corp. 1,189,688
------------
Oil & Gas -- 7.0%
10,000 Chevron Corp. 829,375
20,000 Coastal Corp. 1,202,500
40,000 Exxon Corp. 2,457,500
32,000 Halliburton Company 1,908,000
34,000 Mobil Corp. 2,475,625
24,000 Royal Dutch Petroleum Co.,
New York Registered Shares,
ADR (Netherlands) 1,263,000
20,000 Texaco, Inc. 1,138,750
25,000 Williams Companies, Inc. 1,273,438
------------
12,548,188
------------
Paper/Forest Products -- 0.7%
36,000 Willamette Industries, Inc. 1,190,250
------------
See notes to financial statements.
9
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
Pharmaceuticals -- 5.7%
34,000 Bristol-Myers Squibb Co. $ 2,983,500
727 Crescenco Pharmaceuticals Corp.* 8,224
25,000 Johnson & Johnson 1,434,375
25,000 Merck & Company, Inc. 2,231,250
50,000 Pfizer, Inc. 3,537,500
-----------
10,194,849
-----------
Photographic Equipment -- 0.5%
15,000 Eastman Kodak Co. 898,125
-----------
Printing & Publishing -- 0.9%
28,000 New York Times Company, Class A 1,533,000
-----------
Real Estate Investment Trust -- 1.0%
35,000 Beacon Properties Corp. 1,474,375
8,500 Equity Office Properties Trust 259,781
-----------
1,734,156
-----------
Restaurants/Food Services -- 0.6%
20,000 McDonald's Corp. 896,250
3,500 Tricon Global Restaurants, Inc.* 106,094
-----------
1,002,344
-----------
Retailing -- 3.4%
30,000 CVS Corp. 1,839,375
30,000 Dayton-Hudson Corp. 1,884,375
50,000 Kroger Co.* 1,631,250
20,000 Sears Roebuck & Co. 837,500
-----------
6,192,500
-----------
Shipping/Transportation -- 0.3%
6,000 Burlington Northern Santa Fe 570,000
-----------
Telecommunications -- 4.0%
18,000 Ameritech Corp. 1,170,000
50,000 BellSouth Corp. 2,365,625
25,000 GTE Corp. 1,060,937
20,114 SBC Communications, Inc. 1,279,753
40,000 WorldCom, Inc. 1,345,000
-----------
7,221,315
-----------
See notes to financial statements.
10
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
Utilities -- 1.3%
37,500 OGE Energy Corp. $ 1,816,406
17,500 Sierra Pacific Resources 532,656
------------
2,349,062
------------
Total Common Stock 88,879,460
------------
(Cost $53,457,974)
Convertible Preferred Stock -- 1.4%
-----------------------------------
Banking -- 0.7%
12,000 Banc One Corp., Ser. C, $3.50 1,205,250
------------
Diversified -- 0.7%
17,000 Corning Delaware LP, 6.00% 1,232,500
------------
Total Convertible Preferred Stock 2,437,750
------------
(Cost $1,554,640)
Preferred Stock -- 1.0%
-----------------------------------
Telecommunications -- 0.6%
20,000 AirTouch Communications, 4.25%,
08/16/16 1,200,000
------------
Utilities -- 0.4%
12,000 Houston Industries, Inc., 7.00%,
07/01/00 657,000
------------
Total Preferred Stock 1,857,000
------------
(Cost $1,506,063)
Principal
Amount
(USD)
Convertible Corporate Notes & Bonds -- 2.5%
--------------------------------------------------
Computer Software -- 0.3%
$ 500,000 Tecnomatix Technologies, Ltd.,
(Israel), 5.25%, 08/15/04# 481,250
------------
Computers/Computer Hardware -- 1.2%
300,000 EMC Corp., 3.25%, 03/15/02# 411,750
500,000 Quantum Corp., 7.00%, 08/01/04 515,000
1,000,000 Solectron Corp., 6.00%, 03/01/06# 1,299,100
------------
2,225,850
------------
See notes to financial statements.
11
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ------------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------------
Health Care / Health Care Services -- 0.4%
$ 500,000 Alternative Living Services, 7.00%,
06/01/04# $ 660,000
------------
Manufacturing -- 0.2%
350,000 Tower Automotive, Inc., 5.00%,
08/01/04# 362,250
------------
Retailing -- 0.4%
500,000 Federated Department Stores, 5.00%,
10/01/03 681,250
------------
Total Convertible Corporate
Notes & Bonds 4,410,600
------------
(Cost $3,818,571)
Corporate Notes & Bonds -- 19.1%
-------------------------------------
Aerospace -- 1.1%
1,735,000 Northrop-Grumman Corp., 9.38%,
10/15/24 2,013,190
------------
Airlines -- 1.9%
772,060 American Airlines, Ser. 91-B, 9.71%,
01/30/07# 883,870
2,000,000 Delta Air Lines, 10.06%, 01/02/16 2,492,680
------------
3,376,550
------------
Banking -- 0.7%
1,000,000 BankAmerica Corp., 10.00%,
02/01/03 1,158,130
------------
Broadcasting -- 0.7%
1,000,000 Time Warner, Inc., 9.15%, 02/01/23 1,201,930
------------
Construction/Transportation -- 1.2%
2,000,000 Zhuhai Highway Co., Ltd., Yankee,
Ser. A, 9.13%, 07/01/06# 2,107,740
------------
Entertainment/Leisure -- 2.9%
5,000,000 Time Warner Inc., 7.75%, 06/15/05 5,242,900
------------
Financial Services -- 6.4%
3,000,000 Bankers Trust Capital Trust, Ser. B1,
7.90%, 01/15/27 3,056,250
See notes to financial statements.
12
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ------------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------------
$ 2,000,000 Corp. Andina de Fomento, Yankee
(Venezuela), 7.25%, 03/01/07 $ 2,067,500
6,000,000 Termoemcali Funding Corp., 10.13%,
12/15/14# 6,349,080
------------
11,472,830
------------
Paper/Forest Product -- 0.9%
1,500,000 Georgia-Pacific Corp., 8.63%,
04/30/25 1,625,730
------------
Pharmaceuticals -- 0.5%
1,000,000 ALZA Corp., 5.00%, 05/01/06 985,000
------------
Project Finance -- 0.6%
1,000,000 Ras Laffan Liquefied Natural Gas,
(Qatar)# 8.29%, 03/15/14 1,047,905
------------
Real Estate Investment Trust -- 0.4%
750,000 Simon Debartolo Group, 7.13%,
09/20/07 760,072
------------
Utilities -- 1.8%
3,000,000 Texas Utilities Electric, Capital V,
8.18%, 01/30/37 3,198,990
------------
Total Corporate Notes & Bonds 34,190,967
------------
(Cost $33,242,554)
U.S. Government Agency Obligations -- 2.8%
----------------------------------------------------
3,500,000 Federal Home Loan Bank, 8.75%,
02/03/05 3,527,335
1,500,000 Federal Home Loan Mortgage Corp.,
8.00%, 04/09/07 1,513,365
------------
Total U.S. Government Agency
Obligations 5,040,700
------------
(Cost $5,000,000)
Mortgage Backed Pass Thru Securities -- 7.1%
----------------------------------------------------
1,468,207 Federal Home Loan Mortgage Corp.,
Gold, Pool #A01717, 12.00%,
06/01/17 1,723,078
See notes to financial statements.
13
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- -----------------------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------------------
Federal National Mortgage Association,
$ 2,774,507 Pool #100156, 12.50%, 06/01/27 $ 3,335,911
1,933,167 Pool #250375, 6.50%, 09/01/25 1,907,804
Government National Mortgage
Association,
2,789,827 Pool #351335, 6.50%, 11/15/23 2,767,146
2,662,870 Pool #780319, 9.00%, 11/15/17 2,890,838
------------
Total Mortgage Backed
Pass Thru Securities 12,624,777
------------
(Cost $12,387,750)
Collateralized Mortgage Obligations -- 1.4%
---------------------------------------------------
Federal Home Loan Mortgage Corp.,
1,000,000 Ser. 1985, Class PB, 6.25%,
08/17/12 1,001,531
1,375,187 Mortgage Cash Flow Obligations,
Ser. A, Class 4, 8.70%, 12/30/08 1,439,219
------------
Total Collateralized Mortgage
Obligations 2,440,750
------------
(Cost $2,326,530)
Asset Backed Securities -- 3.3%
-----------------------------------
3,378,439 CentraGas (Colombia), 10.65%,
12/01/10# 3,697,566
972,107 Continental Airlines, Inc., 10.22%,
07/02/14 1,187,525
966,654 Mid-State Trust, Ser. 6, Class A4,
7.79%, 07/01/35 1,007,284
------------
Total Asset Backed Securities 5,892,375
------------
(Cost $6,011,464)
U.S. Treasury Securities -- 6.4%
-----------------------------------
U.S. Treasury Bonds & Notes,
1,500,000 6.13%, 08/15/07 1,532,580
2,000,000 6.38%, 08/15/27 2,061,240
2,000,000 6.63%, 02/15/27 2,120,620
See notes to financial statements
14
<PAGE>
Vista Select Balanced Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------
$ 450,000 7.00%, 07/15/06 $ 482,837
1,000,000 7.13%, 02/15/23 1,112,970
1,500,000 8.25%, 07/15/98 1,527,660
900,000 8.50%, 11/15/00 968,481
1,250,000 8.75%, 08/15/20 1,631,050
------------
Total U.S. Treasury Securities 11,437,438
(Cost $11,104,118)
- -------------------------------------------------------------
Total Long-Term Investments 169,211,817
(Cost $130,409,664)
- -------------------------------------------------------------
Short-Term Investments -- 5.2%
- -------------------------------------------------------------
Time Deposit -- 5.2%
- -------------------------------------------------------------
9,350,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 9,350,000
(Cost $9,350,000)
- -------------------------------------------------------------
Total Investments -- 99.7% $178,561,817
(Cost $139,759,664)
- -------------------------------------------------------------
See notes to financial statements.
15
<PAGE>
Unaudited
About Your Fund
VISTA SELECT EQUITY INCOME FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Income
Primary investments: Income producing common stocks, preferred stocks
and convertible securities
Suggested investment
time frame: Long-term
Market benchmark: S&P 500 Index
Lipper funds category: Equity Income Funds Average
Inception date: 1/1/97
Newspaper symbol: Eq Inc
As of October 31, 1997
Net assets: $955.1 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select Equity Income Fund, which seeks to provide current income plus
capital growth by investing primarily in income-producing equity securities,
had a total return of 30.74% for the year ended October 31, 1997.
STRATEGY
The Fund began the reporting year with an overweight position in real estate
investment trusts (REITs). Anticipating accelerating economic growth, however,
the investment team subsequently cut exposure to REITs and other interest-rate
sensitive companies in favor of sectors which have historically performed
better in a stronger economy. After building a large cash position after the
March 25th interest rate hike, the Fund began aggressively buying, adding REITs
and mid-cap insurance companies, as the market rallied in April and May.
The REIT and insurance positions proved beneficial in the second half of the
year, and the Fund was further aided by the decision to sell technology
holdings, which had reached their price targets prior to the October
correction. By the end of the year, the Fund had built substantial holdings in
cable/media companies, where it believes company managements are increasingly
focused on shareholder return.
16
<PAGE>
Unaudited
About Your Fund
VISTA SELECT EQUITY INCOME FUND
OUTLOOK
The Fund expects to continue to pursue a barbell strategy, investing in
securities with high dividend yields as well as those believed to offer the
potential for capital appreciation. Anticipating slowing economic growth, the
management team expects to emphasize companies it believes are capable of
maintaining earnings as well as those that may benefit from the expected lower
interest rates.
VISTA SELECT EQUITY INCOME FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 0.91%
Investments 99.09%
VISTA SELECT EQUITY INCOME FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Aerospace 2.76%
Automotive 2.12%
Banking 7.63%
Chemicals 2.90%
Computers/Computer Hardware 2.49%
Entertainment/Leisure 2.07%
Financial Services 4.99%
Insurance 6.08%
Oil & Gas 10.72%
Pharmaceuticals 5.88%
Real Estate Investment Trusts 15.58%
Retailing 3.93%
Telecommunications 6.42%
U.S. Treasury Securities 10.48%
Utilities 3.80%
Other 12.15%
17
<PAGE>
Unaudited
About Your Fund
VISTA SELECT EQUITY INCOME FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
U.S. Treasury Notes & Bonds 10.35%
Deutsche Bank AG (US) 3.72%
Viacom International (TCI Pacific) 2.56%
Equity Residential Properties 2.55%
Dow Chemical Co. 2.38%
Federal Home Loan Mortgage Corp. 2.19%
Federated Dept. Stores 2.15%
Carnival Corp. Class A 2.07%
Aluminum Co. of America 1.96%
Beacon Properties Corp. 1.93%
- -------------------------------------------------------------------------------
Top 10 holdings comprised 31.86% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 30.74%
Five Years 18.69%
Ten Years 16.63%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Equity Income Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
18
<PAGE>
Unaudited
About Your Fund
VISTA SELECT EQUITY INCOME FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT EQUITY INCOME FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select Equity S&P 500 Index Lipper Equity
Income Fund Funds Avg.
10/87 10000 10000 10000
12624 11477 11622
10/89 14849 14502 13969
13488 13418 12344
10/91 17923 17901 16206
19790 19682 17792
10/93 24371 22619 21280
24069 23492 21495
10/95 29081 29693 25397
35675 36836 30705
10/31/97 46642 48652 39022
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in shares of
Vista Select Equity Income Fund, Standard & Poor's 500 Index and the Lipper
Equity Income Funds Average for the ten years ended 10/31/97. The performance of
the Fund assumes reinvestment of all dividends and capital gains. The
performance of the average and the index does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains on
the securities included in the benchmark.
The Standard & Poor's 500 Stock Index is a broad-based index that is generally
considered representative of the U.S. stock market. The index is unmanaged and
reflects reinvestment of dividends. An individual cannot invest in the index.
The Lipper Equity Income Funds Average represents the average performance of a
universe of 203 actively managed equity income mutual funds. Lipper is an
independent mutual fund performance monitor whose results are based on total
return and do not reflect a sales charge.
+ The quoted performance of Vista Select Equity Income Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
19
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- ----------------------------------------------------------------
Long-Term Investments -- 95.9%
- ----------------------------------------------------------------
Common Stock -- 76.8%
------------------------------------
Aerospace -- 2.5%
220,000 Precision Castparts Corp. $ 12,938,750
192,000 Sundstrand Corp. 10,440,000
------------
23,378,750
------------
Agricultural Production/Services -- 0.6%
100,000 Case Corp. 5,981,250
------------
Automotive -- 2.1%
240,000 Chrysler Corp. 8,460,000
244,000 Lear Corp.* 11,727,250
------------
20,187,250
------------
Banking -- 3.9%
125,000 BankAmerica Corp. 8,937,500
75,000 NationsBank Corp. 4,490,625
175,000 Signet Banking Corp. 9,417,187
110,000 U.S. Bancorp 11,185,625
82,500 Zions Bancorporation 3,207,187
------------
37,238,124
------------
Business Services -- 1.5%
284,200 GTECH Holdings Corp.* 9,165,450
220,000 ServiceMaster L.P. 5,266,250
------------
14,431,700
------------
Chemicals -- 2.9%
150,000 BOC Group PLC, ADR
(United Kingdom) 4,950,000
250,000 Dow Chemical Co. 22,687,500
------------
27,637,500
------------
Computer Software -- 1.0%
132,500 Computer Associates International* 9,879,531
------------
Computers/Computer Hardware -- 1.1%
110,000 International Business Machines
Corp. 10,786,875
------------
Consumer Products -- 1.8%
205,000 Philip Morris Companies, Inc. 8,123,125
300,000 RJR Nabisco Holdings Corp. 9,506,250
------------
17,629,375
------------
See notes to financial statements.
20
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
Diversified -- 1.0%
350,000 BTR PLC, ADR (United Kingdom) $ 4,771,585
170,000 Canadian Pacific, Ltd. 5,068,125
------------
9,839,710
------------
Entertainment/Leisure -- 2.1%
406,438 Carnival Corp., Class A 19,712,243
------------
Financial Services -- 5.0%
200,000 American Express Co. 15,600,000
550,000 Federal Home Loan Mortgage Corp. 20,831,250
230,000 Lehman Brothers Holding, Inc. 10,824,375
------------
47,255,625
------------
Food/Beverage Products -- 1.3%
224,000 Unilever NV, ADR (Netherlands) 11,956,000
------------
Health Care/Health Care Services -- 1.1%
50,500 Columbia/HCA Healthcare Corp. 1,426,625
300,000 Tenet Healthcare Corp.* 9,168,750
------------
10,595,375
------------
Hotels/Other Lodging -- 0.1%
63,005 Homestead Village, Inc.* 1,008,080
------------
Insurance -- 4.8%
166,351 Allstate Corp. 13,796,736
18,700 American International Group 1,908,569
200,000 Equitable Companies, Inc. 8,237,500
100,000 Loews Corp. 11,168,750
850,000 Reliance Group Holdings, Inc. 10,731,250
------------
45,842,805
------------
Metals/Mining -- 2.0%
255,000 Aluminum Co. of America (ALCOA) 18,615,000
------------
Oil & Gas -- 10.7%
203,437 British Petroleum PLC, ADR
(United Kingdom) 17,851,597
160,000 ENI SPA, ADR (Italy) 9,020,000
410,000 Enterprise Oil PLC, ADR
(United Kingdom) 13,632,500
170,000 Exxon Corp. 10,444,375
122,000 Mobil Corp. 8,883,125
180,000 Occidental Petroleum Corp. 5,017,500
See notes to financial statements.
21
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- -------------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------------
200,000 Royal Dutch Petroleum Co., New
York Registered Shares, ADR
(Netherlands) $ 10,525,000
185,000 Societe National Elf Aquitaine SA,
ADR (France) 11,423,750
300,000 Williams Companies, Inc. 15,281,250
------------
102,079,097
------------
Paper/Forest Products -- 1.0%
200,000 Weyerhaeuser Co. 9,550,000
------------
Pharmaceuticals -- 5.9%
125,000 American Home Products Corp. 9,265,625
114,000 Bristol-Myers Squibb Co. 10,003,500
250,000 Pharmacia & Upjohn, Inc. 7,937,500
300,000 Schering-Plough Corp. 16,818,750
250,000 SmithKline Beecham PLC, ADR
(United Kingdom) 11,906,250
------------
55,931,625
------------
Real Estate Investment Trusts -- 15.5%
436,500 Beacon Properties Corp. 18,387,563
200,000 Boston Properties, Inc. 6,400,000
300,000 Cali Realty Corp. 12,150,000
243,724 Chateau Properties, Inc. 7,250,783
776,000 Duke Realty Investments, Inc. 17,460,000
150,000 Equity Office Properties Trust 4,584,375
480,000 Equity Residential Properties Trust 24,240,000
330,000 FelCor Suite Hotels, Inc. 12,086,250
413,500 Security Capital Industrial Trust 10,156,594
790,000 Security Capital Pacific Trust 17,676,250
250,000 Spieker Properties, Inc. 9,781,250
215,000 Storage USA, Inc. 8,156,562
------------
148,329,627
------------
Retailing -- 1.8%
519,132 Kroger Co.* 16,936,682
------------
Telecommunications -- 3.8%
150,000 Bell Atlantic Corp. 11,981,250
315,000 BellSouth Corp. 14,903,438
75,000 SBC Communications, Inc. 4,771,875
See notes to financial statements.
22
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
50,000 Telecomunicacoes Brasileiras SA,
ADR (Brazil) $ 5,075,000
------------
36,731,563
------------
Utilities -- 3.3%
94,000 Centrais Electricas Brasileiras S/A-
Electrobras, ADR (Brazil) 2,046,342
265,000 Companhia Paranaense de Energia-
Copel, ADR (Brazil) 3,269,066
400,000 Edison International 10,250,000
300,000 FPL Group Inc. 15,506,250
------------
31,071,658
------------
Total Common Stock 732,605,445
------------
(Cost $566,649,674)
Warrants -- 0.1%
------------------------------------
Financial Services --
60,838 Security Capital Group, Ser. B,
$28.00, Expires 09/18/98 292,783
------------
(Cost $0)
Convertible Preferred Stock -- 4.9%
------------------------------------
Aerospace -- 0.3%
47,200 Loral Space & Communications, Inc.,
6.00%, 11/01/06# 2,883,495
------------
Alternate Energy -- 0.8%
100,000 Calenergy Capital Trust II, 6.25%,
02/25/12# 5,129,700
50,000 Calenergy Capital Trust III, 6.50%,
05/01/27# 2,475,000
------------
7,604,700
------------
Insurance -- 1.3%
151,900 American Bankers Insurance Group,
6.25%, Ser. B 12,000,100
------------
Telecommunications -- 2.5%
175,000 Viacom International (TCI Pacific),
5.00%, 7/31/06 24,390,625
------------
Total Convertible Preferred Stock 46,878,920
------------
(Cost $37,709,280)
See notes to financial statements.
23
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ----------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------
Convertible Corporate Notes & Bonds -- 3.8%
--------------------------------------------------
Computers/Computer Hardware -- 1.4%
$10,000,000 Solectron Corp., 6.00%, 03/01/06# $ 12,991,000
------------
Environmental Services -- 0.1%
1,200,000 USA Waste Services Inc., 4.00%,
02/01/02 1,279,500
------------
Health Care/Health Care Services -- 0.2%
2,000,000 Assisted Living Concepts, 6.00%,
11/01/02 2,160,000
------------
Retailing -- 2.1%
15,000,000 Federated Department Stores, 5.00%,
10/01/03 20,437,500
------------
Total Convertible Corporate
Notes & Bonds 36,868,000
------------
(Cost $32,502,596)
U.S. Treasury Securities -- 10.3%
---------------------------------
U.S. Treasury Notes and Bonds,
13,000,000 6.88%, 05/15/06 13,830,830
72,185,000 7.25%, 08/15/22 81,377,038
2,500,000 9.25%, 02/15/16 3,333,600
------------
Total U.S. Treasury Securities 98,541,468
(Cost $91,517,274)
- ----------------------------------------------------------------
Total Long-Term Investments 915,186,616
(Cost $728,378,824)
- ----------------------------------------------------------------
See notes to financial statements.
24
<PAGE>
Vista Select Equity Income Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------
Short-Term Investments -- 3.8%
- --------------------------------------------------------------
U. S. Treasury Security -- 0.1%
---------------------------------
$ 1,200,000 U. S. Treasury Bill, 5.24%,
11/20/97 $ 1,196,767
------------
(Cost $1,196,767)
Time Deposit -- 3.7%
---------------------------------
35,449,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 35,449,000
(Cost $35,449,000)
- --------------------------------------------------------------
Total Short-Term Investments 36,645,767
(Cost $36,645,767)
- --------------------------------------------------------------
Total Investments -- 99.7% $951,832,383
(Cost $765,024,591)
- --------------------------------------------------------------
See notes to financial statements.
25
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP EQUITY FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital Growth
Primary investments: Large cap common stocks
Suggested investment
time frame: Long-term
Market benchmark: S&P 500 Index
Lipper funds category: Growth Funds Average
Inception date: 1/1/97
Newspaper symbol: LgCapEq
As of October 31, 1997
Net assets: $186.4 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select Large Cap Equity Fund, which seeks to provide capital growth
through a portfolio of large cap common stocks, provided shareholders with a
total return of 31.83% for the year ended October 31, 1997.
STRATEGY
In the first half of the reporting year, as large caps outpaced small- and
mid-caps, the investment team avoided what it believed were over-valued stocks.
This provided shareholders with the returns inherent in large caps without the
added valuation risks. When earnings difficulties at several of the largest
blue chip companies were announced during the summer and early fall, therefore,
the Fund was well positioned.
The Fund benefited from overweight positions in financial and technology stocks
in late 1996, but financial positions were subsequently reduced based on the
assumption that economic growth would accelerate in early 1997. After the
spring market volatility surrounding the March 25th interest rate hike, the
Fund aggressively added to select technology holdings, which proved beneficial.
By the end of the period, the Fund was focused on companies at the low end of
the large cap range, which helped it maintain value during the October
correction.
26
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP EQUITY FUND
OUTLOOK
Believing that economic growth will slow, the investment team expects to
emphasize companies which, in its opinion, can maintain earnings in a
slower-growth environment, as well as those which may benefit from the expected
lower interest rates. After reducing exposure to economically sensitive
cyclicals, the management team has taken an overweight position in the
historically more-conservative utilities sector and expects to avoid aggressive
investments in technology until the sector's earnings picture clears.
VISTA SELECT LARGE CAP EQUITY FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 0.69%
Investments 99.31%
VISTA SELECT LARGE CAP EQUITY FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
Banking 13.11%
Chemicals 2.65%
Computer Software 2.78%
Computers/Computer Hardware 5.19%
Consumer Products 3.76%
Diversified 2.79%
Entertainment/Leisure 3.26%
Financial Services 3.08%
Food/Beverage Products 5.40%
Health Care/Health Care Services 2.95%
Insurance 2.83%
Manufacturing 2.60%
Oil & Gas 10.99%
Pharmaceuticals 6.02%
Retailing 8.46%
Telecommunications 5.88%
Other 18.25%
27
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP EQUITY FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
Deutsche Bank AG (US) 6.12%
Halliburton Holdings Co. 1.92%
Computer Associates International Inc. 1.88%
EMC Corp. Mass 1.75%
Carnival Corp. Class A 1.69%
Allstate Corp. 1.69%
Kroger Co. 1.58%
Dow Chemical Co. 1.56%
Federated Department Stores Inc. 1.51%
Texaco Inc. 1.47%
- --------------------------------------------------------------------------------
Top 10 holdings comprised 21.17% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 31.83%
Five Years 16.83%
Ten Years 14.98%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Large Cap Equity Income Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
28
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP EQUITY FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT LARGE CAP EQUITY FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select Large Cap S&P 500 Index Lipper Growth
Equity Fund Funds Avg.
10/87 10000 10000 10000
10953 11477 11622
10/89 13642 14502 14480
12999 13418 12821
10/91 17101 17901 18154
18562 19682 19691
10/93 20598 22619 23196
21212 23492 23650
10/95 25226 29693 28946
30659 36836 34380
10/31/97 40419 48652 43682
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with market
conditions. When shares are redeemed, they may be worth more or less than their
original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select Large Cap Equity Fund, the Standard & Poor's 500 Index and the
Lipper Growth Funds Average for the ten years ended 10/31/97. The performance of
the Fund assumes reinvestment of all dividends and capital gains. The
performance of the average and the index does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains on
the securities included in the benchmark.
The Standard & Poor's 500 Index is a broad-based index that is generally
considered representative of the U.S. stock market. The index is unmanaged and
reflects reinvestment of dividends. An individual cannot invest in the index.
The Lipper Growth Funds Average represents the average performance of a
universe of 933 actively managed growth mutual funds. Lipper is an independent
mutual fund performance monitor whose results are based on total return and do
not reflect a sales charge.
+ The quoted performance of Vista Select Large Cap Equity Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
29
<PAGE>
Vista Select Large Cap Equity Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- -----------------------------------------------------------
Long-Term Investments -- 93.9%
- -----------------------------------------------------------
Common Stock -- 93.9%
---------------------
Aerospace -- 1.3%
24,000 Allied-Signal, Inc. $ 864,000
24,000 United Technologies, Corp. 1,680,000
------------
2,544,000
------------
Agricultural Production/Services -- 1.6%
32,000 Case Corp. 1,914,000
20,000 Deere & Co. 1,052,500
------------
2,966,500
------------
Airlines -- 1.0%
15,500 AMR Corp.* 1,804,781
------------
Automotive -- 1.3%
26,788 Chrysler Corp. 944,277
25,000 General Motors Corp. 1,604,688
------------
2,548,965
------------
Banking -- 7.0%
31,000 BankAmerica Corp. 2,216,500
23,000 Comerica, Inc. 1,818,438
32,000 First Union Corp. 1,570,000
34,000 NationsBank Corp. 2,035,750
37,000 Norwest Corp. 1,186,313
18,000 U.S. Bancorp 1,830,375
34,500 Washington Mutual Savings Bank 2,361,094
------------
13,018,470
------------
Broadcasting -- 1.9%
70,000 Comcast Corp., Special Class A 1,925,000
70,000 Tele-Communications, TCI Group,
Class A* 1,605,625
------------
3,530,625
------------
Chemicals -- 2.6%
32,000 Dow Chemical Co. 2,904,000
19,000 duPont (EI) deNemours 1,080,625
21,000 Union Carbide Corp. 959,438
------------
4,944,063
------------
See notes to financial statements.
30
<PAGE>
Vista Select Large Cap Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
Computer Software -- 2.8%
20,500 Cisco Systems, Inc.* $ 1,681,641
47,000 Computer Associates International 3,504,438
------------
5,186,079
------------
Computers/Computer Hardware -- 5.2%
25,500 Compaq Computer Corp.* 1,625,625
21,400 Digital Equipment Corp.* 1,071,338
58,300 EMC Corp.* 3,264,800
23,000 International Business Machines
Corp. 2,255,437
42,600 Sun Microsystems, Inc.* 1,459,050
------------
9,676,250
------------
Construction Machinery -- 0.7%
25,000 Caterpillar, Inc. 1,281,250
------------
Consumer Products -- 3.7%
25,000 Avon Products, Inc. 1,637,500
30,000 Colgate-Palmolive Co. 1,942,500
22,000 Liz Claiborne, Inc. 1,115,125
58,200 Philip Morris Companies, Inc. 2,306,175
------------
7,001,300
------------
Diversified -- 2.8%
85,000 Canadian Pacific, Ltd. 2,534,062
15,000 Dover Corp. 1,012,500
44,000 Tyco International Ltd. 1,661,000
------------
5,207,562
------------
Electronics/Electrical Equipment -- 2.1%
29,000 Adaptec, Inc.* 1,404,687
18,000 Intel Corp. 1,386,000
11,000 Texas Instruments 1,173,562
------------
3,964,249
------------
Entertainment/Leisure -- 3.3%
65,000 Carnival Corp., Class A 3,152,500
35,000 Time Warner, Inc. 2,019,062
30,000 Viacom, Inc. Class B* 907,500
------------
6,079,062
------------
See notes to financial statements.
31
<PAGE>
Vista Select Large Cap Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- -------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------
Financial Services -- 3.1%
15,000 American Express Co. $ 1,170,000
15,000 Associates First Capital Corp. 954,375
49,000 Federal Home Loan Mortgage Corp. 1,855,875
36,000 Morgan Stanley, Dean Witter,
Discover and Co. 1,764,000
------------
5,744,250
------------
Food/Beverage Products -- 5.4%
20,000 Campbell Soup Co. 1,031,250
14,600 Coca-Cola Co. 824,900
44,000 Coca-Cola Enterprises, Inc. 1,237,500
66,000 PepsiCo., Inc. 2,429,625
22,000 Ralston Purina Group 1,974,500
48,000 Unilever NV, ADR (Netherlands) 2,562,000
------------
10,059,775
------------
Health Care/Health Care Services -- 3.0%
56,100 Columbia/HCA Healthcare Corp. 1,584,825
100,000 HEALTHSOUTH Corp.* 2,556,250
44,400 Tenet Healthcare Corp.* 1,356,975
------------
5,498,050
------------
Insurance -- 2.8%
38,000 Allstate Corp. 3,151,625
7,500 American International Group 765,469
33,000 Equitable Companies, Inc. 1,359,188
------------
5,276,282
------------
Manufacturing -- 2.6%
14,000 Honeywell, Inc. 952,875
37,500 Ingersoll-Rand Co. 1,460,156
28,000 Johnson Controls 1,256,500
28,000 Parker Hannifin Corp. 1,170,750
------------
4,840,281
------------
Media/Advertising -- 0.7%
18,000 Omnicom Group, Inc. 1,271,250
------------
Metals/Mining -- 1.0%
25,500 Aluminum Co. of America (ALCOA) 1,861,500
------------
Office/Business Equipment -- 1.1%
27,000 Xerox Corp. 2,141,437
------------
See notes to financial statements.
32
<PAGE>
Vista Select Large Cap Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ------------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------------
Oil & Gas -- 11.0%
35,000 Apache Corp. $ 1,470,000
28,000 British Petroleum PLC, ADR
(United Kingdom) 2,457,000
36,000 Coastal Corp. 2,164,500
42,000 Dresser Industries, Inc. 1,769,250
60,000 Halliburton Company 3,577,500
36,000 Mobil Corp. 2,621,250
24,000 Sonat, Inc. 1,102,500
48,000 Texaco, Inc. 2,733,000
36,000 USX-Marathon Group 1,287,000
25,500 Williams Companies, Inc. 1,298,906
------------
20,480,906
------------
Paper/Forest Products -- 0.9%
48,000 Willamette Industries, Inc. 1,587,000
------------
Pharmaceuticals -- 6.0%
30,000 Bristol-Myers Squibb Co. 2,632,500
29,000 Johnson & Johnson 1,663,875
15,000 Merck & Company, Inc. 1,338,750
15,000 Pfizer, Inc. 1,061,250
57,000 Pharmacia & Upjohn, Inc. 1,809,750
57,000 SmithKline Beecham PLC, ADR
(United Kingdom) 2,714,625
------------
11,220,750
------------
Printing & Publishing -- 1.1%
38,000 New York Times Company, Class A 2,080,500
------------
Real Estate Investment Trust -- 0.8%
47,000 Security Capital Group Inc., Class B* 1,504,000
------------
Restaurants -- 0.5%
30,500 Tricon Global Restaurants, Inc.* 924,531
------------
Retailing -- 8.5%
40,000 American Stores Co. 1,027,500
59,000 Costco Companies, Inc.* 2,271,500
31,000 CVS Corp. 1,900,687
25,400 Dayton-Hudson Corp. 1,595,437
64,000 Federated Department Stores* 2,816,000
90,000 Kroger Co.* 2,936,250
See notes to financial statements.
33
<PAGE>
Vista Select Large Cap Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
20,000 Safeway, Inc.* $ 1,162,500
30,000 Tandy Corp. 1,031,250
30,000 Toys "R" Us, Inc.* 1,021,875
------------
15,762,999
------------
Telecommunications -- 5.9%
30,000 Airtouch Communications, Inc.* 1,158,750
28,500 Bell Atlantic Corp. 2,276,438
52,000 BellSouth Corp. 2,460,250
21,800 GTE Corp. 925,138
11,000 Lucent Technologies, Inc. 906,813
22,000 Sprint Corp. 1,144,000
62,000 WorldCom, Inc.* 2,084,750
------------
10,956,139
------------
Utilities -- 2.2%
46,000 CMS Energy Corp. 1,679,000
45,000 FPL Group Inc. 2,325,937
------------
4,004,937
------------
Total Common Stock 174,967,743
------------
(Cost $126,477,257)
Principal
Amount
(USD)
- --------------------------------------------------------------------
Short-Term Investments -- 6.1%
- --------------------------------------------------------------------
Time Deposit -- 6.1%
--------------------
$11,403,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 11,403,000
(Cost $11,403,000)
- --------------------------------------------------------------------
Total Investments -- 100.0% $186,370,743
(Cost $137,880,257)
- --------------------------------------------------------------------
See notes to financial statements.
34
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP GROWTH FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital Growth
Primary investments: Large cap common stocks
Suggested investment
time frame: Long-term
Market benchmark: S&P 500 Index
Lipper funds category: Growth Funds Average
Inception date: 1/1/97
Newspaper symbol: LgCapGr
As of October 31, 1997
Net assets: $548.2 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select Large Cap Growth Fund, which seeks to provide capital growth
through a portfolio of large cap common stocks, provided shareholders with a
total return of 31.83% for the year ended October 31, 1997.
STRATEGY
The management team's growth oriented strategy targets stocks of companies it
believes will benefit from major shifts in American society. Specifically, it
targets those companies that are participating in productivity gains as well as
companies the management team believes will benefit from the aging American
population.
During the first half of the reporting year, the Fund was able to participate
in a market environment which favored the largest stocks. It began by
overweighting technology and financial services stocks, but the financial
exposure was cut significantly in early 1997 as the management team began
investing in companies it believed would benefit from the expected stronger
economic environment. In the second half of the reporting year, the Fund was
focused on companies in the technology, capital spending, pharmaceutical and
financial sectors, all of which are in line with the management team's
growth-oriented strategy.
35
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP GROWTH FUND
OUTLOOK
Believing that economic growth will slow, the investment team expects to
emphasize companies which, in its opinion, can maintain earnings in a
slower-growth environment as well as those which may benefit from the expected
lower interest rates.
VISTA SELECT LARGE CAP GROWTH FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 0.52%
Investments 99.48%
VISTA SELECT LARGE CAP GROWTH FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
Appliances & Household Durables 2.24%
Banking 5.64%
Business Services 2.06%
Computer Software 5.32%
Computers/Computer Hardware 11.28%
Consumer Products 4.99%
Diversified 7.65%
Electronics/Electrical Equipment 8.71%
Financial Services 2.67%
Food/Beverage Products 3.72%
Insurance 6.38%
Manufacturing 2.85%
Multi-Media 3.42%
Oil & Gas 5.69%
Pharmaceuticals 11.66%
Retailing 5.00%
Other 10.72%
36
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP GROWTH FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
Warner Lambert Co. 3.40%
Pfizer Inc. 3.23%
Tyco International Ltd. 3.10%
Illinois Tool Works, Inc. 2.85%
Procter & Gamble Co. 2.48%
General Electric Co. 2.36%
Dell Computer Corp. 2.34%
American International Group Inc. 2.33%
Honeywell Inc. 2.24%
International Business Machines Corp. 2.15%
- -------------------------------------------------------------------------------
Top 10 holdings comprised 26.48% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 31.83%
Five Years 16.54%
Ten Years 14.80%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Large Cap Growth Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
37
<PAGE>
Unaudited
About Your Fund
VISTA SELECT LARGE CAP GROWTH FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT LARGE CAP GROWTH FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select Large Cap S&P 500 Index Lipper Growth
Growth Fund Funds Avg.
10/87 10000 10000 10000
11214 11477 11622
10/89 13413 14502 14480
12601 13418 12821
10/91 16201 17901 18154
18499 19682 19691
10/93 19959 22619 23196
20788 23492 23650
10/95 26226 29693 28946
30183 36836 34380
10/31/97 39791 48652 43682
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select Large Cap Growth Fund, the Standard & Poor's 500 Index and the
Lipper Growth Funds Average for the ten years ended 10/31/97. The performance of
the Fund assumes reinvestment of all dividends and capital gains. The
performance of the average and the index does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains on
the securities included in the benchmark.
The Standard & Poor's 500 Index is a broad-based index that is generally
considered representative of the U.S. stock market. The index is unmanaged and
reflects reinvestment of dividends. An individual cannot invest in the index.
The Lipper Growth Funds Average represents the average performance of a
universe of 933 actively managed growth mutual funds. Lipper is an independent
mutual fund performance monitor whose results are based on total return and do
not reflect a sales charge.
+ The quoted performance of Vista Select Large Cap Growth Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
38
<PAGE>
Vista Select Large Cap Growth Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- 99.4%
- --------------------------------------------------------------
Common Stock -- 99.4%
-----------------------------------
Airlines -- 0.6%
30,000 AMR Corp.* $ 3,493,125
------------
Appliances & Household Durables -- 2.2%
180,000 Honeywell, Inc. 12,251,250
------------
Banking -- 5.1%
150,000 Banc One Corp. 7,818,750
50,000 Citicorp 6,253,125
110,000 First Virginia Banks, Inc. 5,108,125
200,000 Norwest Corp. 6,412,500
35,000 Washington Mutual Savings Bank 2,395,312
------------
27,987,812
------------
Business Services -- 2.1%
100,000 Automatic Data Processing, Inc. 5,112,500
80,800 Avery Dennison Corp. 3,216,850
100,000 CUC International, Inc.* 2,950,000
------------
11,279,350
------------
Chemicals -- 1.8%
90,000 Air Products and Chemicals, Inc. 6,840,000
100,000 Morton International, Inc. 3,300,000
------------
10,140,000
------------
Computer Software -- 5.3%
100,000 Cisco Systems, Inc.* 8,203,125
125,000 Computer Associates International 9,320,313
175,000 First Data Corp. 5,085,938
50,000 Microsoft Corp.* 6,500,000
------------
29,109,376
------------
Computers/Computer Hardware -- 11.3%
200,000 3Com Corp.* 8,287,500
180,000 Compaq Computer Corp.* 11,475,000
160,000 Dell Computer Corp.* 12,820,000
200,000 EMC Corp.* 11,200,000
100,000 Hewlett-Packard Co. 6,168,750
120,000 International Business Machines
Corp. 11,767,500
------------
61,718,750
------------
See notes to financial statements.
39
<PAGE>
Vista Select Large Cap Growth Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
Consumer Products -- 5.0%
25,000 Gillette Co. $ 2,226,563
200,000 Philip Morris Companies, Inc. 7,925,000
200,000 Procter & Gamble Co. 13,600,000
117,500 Service Corp. International 3,576,406
------------
27,327,969
------------
Diversified -- 8.4%
200,000 Corning Inc. 9,025,000
97,500 Crane Co. 4,052,344
85,000 Dover Corp. 5,737,500
250,000 Federal Signal Corp. 6,046,875
100,000 National Service Industries, Inc. 4,425,000
450,000 Tyco International Ltd. 16,987,500
------------
46,274,219
------------
Electronics/Electrical Equipment -- 8.7%
60,000 Applied Materials, Inc.* 2,002,500
35,000 Atmel Corp.* 905,625
200,000 General Electric Co. 12,912,500
68,000 Grainger (W.W.), Inc. 5,945,750
117,500 Intel Corp. 9,047,500
120,000 Molex Inc., Class A 4,207,500
115,000 Molex, Inc. 4,312,500
135,000 Motorola, Inc. 8,336,250
------------
47,670,125
------------
Entertainment/Leisure -- 1.8%
200,000 Carnival Corp., Class A 9,700,000
------------
Financial Services -- 2.7%
47,500 American Express Co. 3,705,000
150,000 The Charles Schwab Corp. 5,118,750
80,000 Federal Home Loan Mortgage Corp. 3,030,000
40,000 Lehman Brothers Holding, Inc. 1,882,500
17,500 Morgan Stanley, Dean Witter,
Discover and Co. 857,500
------------
14,593,750
------------
See notes to financial statements.
40
<PAGE>
Vista Select Large Cap Growth Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ----------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------
Food/Beverage Products -- 3.7%
10,000 Coca-Cola Co. $ 565,000
25,000 CPC International, Inc. 2,475,000
250,000 PepsiCo., Inc. 9,203,125
25,000 Ralston Purina Group 2,243,750
32,500 Safeway, Inc.* 1,889,062
100,000 Sysco Corp. 4,000,000
------------
20,375,937
------------
Health Care/Health Care Services -- 0.3%
75,000 HEALTHSOUTH Corp.* 1,917,187
------------
Insurance -- 6.4%
7,500 Allstate Corp. 622,031
125,000 American International Group 12,757,813
50,000 General Re Corp. 9,859,375
120,000 MGIC Investment Corp. 7,237,500
75,000 SunAmerica, Inc. 2,695,312
25,000 Travelers, Inc. 1,750,000
------------
34,922,031
------------
Machinery & Engineering Equipment -- 1.2%
150,000 Dresser Industries, Inc. 6,318,750
------------
Manufacturing -- 2.9%
317,500 Illinois Tool Works, Inc. 15,617,031
------------
Multi-media -- 3.4%
200,000 Gannett Co., Inc. 10,512,500
100,000 The Walt Disney Co. 8,225,000
------------
18,737,500
------------
Oil & Gas -- 5.7%
40,000 Amoco Corp. 3,667,500
25,000 British Petroleum PLC, ADR
(United Kingdom) 2,193,750
45,000 Enron Corp. 1,710,000
80,000 Exxon Corp. 4,915,000
50,000 Halliburton Company 2,981,250
120,000 Mobil Corp. 8,737,500
47,500 Tidewater, Inc. 3,120,156
75,000 Williams Companies, Inc. 3,820,313
------------
31,145,469
------------
See notes to financial statements.
41
<PAGE>
Vista Select Large Cap Growth Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- -----------------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------------
Pharmaceuticals -- 11.6%
175,000 Abbot Laboratories $ 10,729,688
42,500 Bristol-Myers Squibb Co. 3,729,375
150,000 Johnson & Johnson 8,606,250
50,000 Merck & Company, Inc. 4,462,500
250,000 Pfizer, Inc. 17,687,500
130,000 Warner-Lambert Co. 18,614,375
------------
63,829,688
------------
Printing & Publishing -- 1.5%
150,000 Tribune Co. 8,268,750
------------
Retailing -- 5.0%
60,000 Dayton-Hudson Corp. 3,768,750
150,000 Home Depot, Inc. 8,343,750
100,000 May Department Stores 5,387,500
350,000 Walgreen Co. 9,843,750
------------
27,343,750
------------
Shipping/Transportation -- 0.9%
50,000 Burlington Northern Santa Fe 4,750,000
------------
Telecommunications -- 1.8%
250,000 Airtouch Communications, Inc. 9,656,250
------------
Total Common Stock 544,428,069
------------
(Cost $322,600,002)
Principal
Amount
(USD)
- ------------------------------------------------------------
Short-Term Investments -- 0.5%
- ------------------------------------------------------------
Time Deposit -- 0.5%
--------------------
$2,892,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 2,892,000
(Cost $2,892,000)
- ------------------------------------------------------------
Total Investments -- 99.9% $547,320,069
(Cost $325,492,002)
- ------------------------------------------------------------
See notes to financial statements.
42
<PAGE>
Unaudited
About Your Fund
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital Growth
Primary investments: Small- to mid-cap common stocks
Suggested investment
time frame: Long-term
Market benchmark: Russell 2000 Index
Lipper funds category: Mid Cap Growth Funds Average
Inception date: 1/1/97
Newspaper symbol: NewGrOp
As of October 31, 1997
Net assets: $116.4 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select New Growth Opportunities Fund, which seeks to provide capital
growth through a portfolio that consists primarily of the common stocks of
small- and mid-sized companies, had a total return of 14.13% for the year ended
October 31, 1997.
STRATEGY
The Fund had a difficult time in the first half of the year as the
faster-growing, small- and mid-cap stocks in which it invests were hit
particularly hard in February and March. However, coming to the conclusion that
the market had overreacted in punishing smaller growth companies uniformly,
without regard to individual prospects, the management team took the
opportunity to buy what it believed were high-quality companies at
newly-attractive prices, particularly in the technology and health-care
sectors.
Management's "buy on weakness" strategy proved correct, as many of its
technology holdings rallied beginning in May and throughout the summer. While
the health care sector as a whole lagged during the rally, the Fund's stock
selections in the sector outperformed. During the year, the management team
succeeded in revamping the portfolio by mixing mid- cap stocks with more
dynamic, faster-growing smaller company stocks. This strategy proved beneficial
in the second half of the year as these stocks increasingly showed positive
results.
43
<PAGE>
Unaudited
About Your Fund
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
OUTLOOK
The management team expects to emphasize those small- and mid-cap companies
which it believes will maintain earnings in a slower-growth environment as well
as those that may benefit from the expected lower interest rates. They expect
to limit investments in technology until the earnings picture of companies in
the sector clears.
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 0.53%
Investments 99.47%
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
Advertising 2.62%
Banking 7.02%
Business Services 7.07%
Computer Software 12.77%
Consumer Products 5.66%
Electronics/Electrical Equipment 11.89%
Environmental Services 4.60%
Health Care/Health Care Services 13.52%
Insurance 3.89%
Multi-Media 2.01%
Oil & Gas 4.19%
Pharmaceuticals 2.63%
Retailing 4.10%
Telecommunications 3.70%
Other 14.33%
44
<PAGE>
Unaudited
About Your Fund
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
Deutsche Bank AG (US) 6.45%
Noble Drilling Corp. 2.47%
Newpark Resources Inc. 2.13%
ESC Medical Systems Ltd., ADR 1.93%
Omnicare Inc. 1.90%
Linear Technology Corp. 1.88%
Waters Corp. 1.88%
Dura Pharmaceuticals Inc. 1.86%
Jones Apparel Group Inc. 1.74%
Concentra Managed Care Inc. 1.54%
- -------------------------------------------------------------------------------
Top 10 holdings comprised 23.78% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 14.13%
Five Years 14.54%
Since Inception (4/30/89) 12.94%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select New Growth Opportunities Fund includes
performance of a predecessor account for the period dating back to 4/30/89 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
45
<PAGE>
Unaudited
About Your Fund
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT NEW GROWTH OPPORTUNITIES FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select New Growth Russell Lipper Mid Cap
Opportunities Fund 2000 Index Growth Funds Avg.
4/89 10000 10000 10000
10/89 10145 10235 10926
8533 7442 9460
10/91 13359 11804 14796
14283 12926 16024
10/93 18780 17111 19936
18975 17052 20458
10/95 22129 20182 25179
24678 23537 29869
10/31/97 28165 30443 36874
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select New Growth Opportunities Fund, the Russell 2000 Index and the
Lipper Mid Cap Growth Funds Average from 5/31/89 to 10/31/97. The performance of
the Fund assumes reinvestment of all dividends and capital gains. The
performance of the average and the index does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains on
the securities included in the benchmark.
The Russell 2000 index tracks the shares of 2,000 small-capitalization
companies. The index is unmanaged and reflects the reinvestment of dividends.
An individual cannot invest in the index.
The Lipper Mid-Cap Growth Funds Average represents the average performance of a
universe of 275 actively managed mid-cap growth mutual funds. Lipper is an
independent mutual fund performance monitor whose results are based on total
return and do not reflect a sales charge.
+ The quoted performance of Vista Select New Growth Opportunities Fund includes
performance of a predecessor account for the period dating back to 4/30/89 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
46
<PAGE>
Vista Select New Growth Opportunities Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- ----------------------------------------------------------------
Long-Term Investments -- 94.2%
- ----------------------------------------------------------------
Common Stock -- 94.2%
---------------------
Advertising -- 2.6%
51,750 Outdoor Systems, Inc.* $ 1,591,313
35,000 Universal Outdoor Holdings, Inc.* 1,478,750
------------
3,070,063
------------
Agricultural Production/Services -- 1.1%
45,000 AGCO Corp. 1,305,000
------------
Apparel -- 0.9%
25,000 Tommy Hilfiger Corp.* 989,063
------------
Banking -- 0.6%
17,000 Peoples Heritage Financial Group,
Inc. 669,375
------------
Biotechnology -- 0.6%
40,000 Pharmaceutical Product
Development, Inc.* 710,000
------------
Broadcasting -- 1.1%
20,000 Heftel Broadcasting Corp.Class A* 1,330,000
------------
Business Services -- 7.1%
20,000 Abacus Direct Corp.* 735,000
15,000 Administaff, Inc.* 324,375
50,000 Corrections Corporation of America* 1,525,000
32,500 Maximus, Inc.* 910,000
30,000 Paychex, Inc. 1,143,750
15,000 Pierce Leahy Corp.* 420,000
60,000 PMT Services, Inc.* 967,500
30,000 Robert Half International, Inc.* 1,228,125
35,000 Snyder Communications, Inc.* 1,032,500
------------
8,286,250
------------
Computer Software -- 12.9%
50,000 American Management Systems, Inc.* 1,081,250
10,200 Aspen Technologies, Inc.* 383,775
35,000 AXENT Technologies, Inc.* 818,125
10,000 CBT Group PLC, ADR
(United Kingdom)* 767,500
35,000 J. D. Edwards & Co.* 1,190,000
35,000 E*TRADE Group, Inc.* 1,080,625
45,000 Gartner Group, Inc., Class A* 1,271,250
20,000 Hyperion Software Corp.* 762,500
See notes to financial statements.
47
<PAGE>
Vista Select New Growth Opportunities Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ------------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------------
13,000 McAfee Associates, Inc.* $ 646,750
55,000 Memco Software Ltd., ADR (Israel)* 1,388,750
50,000 New Era of Networks, Inc.* 625,000
20,000 Remedy Corp.* 940,000
44,815 Sterling Commerce, Inc.* 1,487,298
25,000 Sterling Software, Inc.* 853,125
100,000 TSI International Software Ltd.* 1,087,500
15,000 Wind River Systems* 575,625
------------
14,959,073
------------
Computers/Computer Hardware -- 1.0%
20,000 Saville Systems Ireland PLC, ADR
(Ireland)* 1,195,000
------------
Consumer Products -- 5.7%
30,000 Danaher Corp.* 1,644,375
50,000 Equity Corp.* 1,018,750
60,000 Furniture Brands International, Inc.* 1,005,000
40,000 Jones Apparel Group, Inc.* 2,035,000
33,750 Pacific Sunwear of California* 932,344
------------
6,635,469
------------
Educational Services -- 1.1%
30,000 Apollo Group, Inc., Class A* 1,267,500
------------
Electronics/Electrical Equipment -- 12.0%
15,000 Adaptec, Inc.* 726,562
20,000 Atmel Corp.* 517,500
20,000 Credence Systems Corp.* 590,000
10,300 Lernout & Hauspie Speech Products
N.V. (Belgium)* 499,550
35,000 Linear Technology Corp. 2,200,625
15,000 Microchip Technology, Inc.* 598,125
50,000 MRV Communications Inc.* 1,462,500
130,000 Pericom Semiconductor Corp.* 1,186,250
10,000 Rambus Inc.* 497,500
20,000 Teradyne Inc.* 748,750
25,000 Uniphase Corp.* 1,678,125
50,000 Waters Corp.* 2,200,000
30,000 Xilinx, Inc.* 1,023,750
------------
13,929,237
------------
See notes to financial statements.
48
<PAGE>
Vista Select New Growth Opportunities Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- -----------------------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------------------
Entertainment/Leisure -- 1.4%
15,000 Anchor Gaming* $ 1,177,500
17,500 Family Golf Centers, Inc.* 468,125
------------
1,645,625
------------
Environmental Services -- 4.6%
64,000 Allied Waste Industries, Inc.* 1,304,000
60,000 Newpark Resources, Inc. 2,490,000
43,000 U.S.A. Waste Services, Inc.* 1,591,000
------------
5,385,000
------------
Financial Services -- 1.4%
20,000 Green Tree Financial Corp. 842,500
21,500 Healthcare Financial Partners, Inc.* 741,750
------------
1,584,250
------------
Food/Beverage Products -- 1.5%
29,875 Safeway, Inc.* 1,736,484
------------
Health Care/Health Care Services -- 13.6%
45,000 Alternative Living Services, Inc.* 1,102,500
55,366 Concentra Managed Care, Inc.* 1,806,316
30,000 Cytyc Corp.* 712,500
57,500 ESC Medical Systems Ltd., ADR
(Israel)* 2,256,875
30,000 Henry Schein, Inc.* 986,250
70,000 Nitinol Medical Technologies* 980,000
80,000 Omnicare, Inc. 2,225,000
16,000 Pediatrix Medical Group, Inc.* 676,000
25,000 Perclose, Inc.* 612,500
37,500 PhyCor, Inc.* 864,844
30,000 Physician Sales & Service, Inc.* 735,000
25,000 Sunrise Assisted Living, Inc.* 928,125
25,000 Universal Health Services, Inc.,
Class B* 1,101,562
55,000 Ventana Medical Systems, Inc.* 852,500
------------
15,839,972
------------
See notes to financial statements.
49
<PAGE>
Vista Select New Growth Opportunities Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ----------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------
Insurance -- 3.9%
20,000 American Bankers Insurance
Group, Inc.* $ 747,500
50,000 Nationwide Financial Services, Inc.,
Class A* 1,521,875
68,000 Penn-America Group, Inc.* 1,253,750
35,000 Triad Guaranty, Inc.* 1,032,500
------------
4,555,625
------------
Machinery & Engineering Equipment -- 0.5%
20,000 Rental Service Corp.* 535,000
------------
Multi-Media -- 2.0%
30,000 Chancelor Media Corp.* 1,646,250
50,500 Macrovision Corp.* 707,000
------------
2,353,250
------------
Oil & Gas -- 4.2%
81,291 Noble Drilling Corp.* 2,890,911
26,400 Swift Energy Co.* 684,750
30,000 UTI Energy Corp.* 1,338,750
------------
4,914,411
------------
Pharmaceuticals -- 2.7%
45,000 Dura Pharmaceuticals, Inc.* 2,176,875
25,000 Parexel International Corp.* 903,125
------------
3,080,000
------------
Printing & Publishing -- 0.7%
17,500 Electronics for Imaging, Inc.* 818,125
------------
Restaurants/Food Services -- 1.1%
45,000 Papa John's International, Inc.* 1,330,313
------------
Retailing -- 4.1%
66,000 Borders Group, Inc.* 1,711,875
100,000 Hollywood Entertainment Corp.* 1,225,000
15,000 Quality Food Centers, Inc.* 714,375
20,000 Starbucks Corp.* 660,000
20,000 U.S. Rentals, Inc.* 487,500
------------
4,798,750
------------
Shipping/Transportation -- 0.8%
30,000 Hub Group, Inc., Class A* 915,000
------------
See notes to financial statements.
50
<PAGE>
Vista Select New Growth Opportunities Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------
Telecommunications -- 3.7%
35,000 Aspect Telecommunications Corp.* $ 840,000
6,600 CIENA Corp.* 363,000
45,000 NEXTLINK Communications, Inc.,
Class A* 1,018,125
20,000 PairGain Technologies, Inc.* 565,000
25,000 Qwest Communications
International Inc.* 1,543,750
------------
4,329,875
------------
Wholesaling -- 1.3%
46,500 US Office Products Co.* 1,453,125
- ------------------------------------------------------------
Total Common Stock 109,620,835
(Cost $77,181,348)
- ------------------------------------------------------------
Principal
Amount
(USD)
- ------------------------------------------------------------
Short-Term Investments -- 6.5%
- ------------------------------------------------------------
Time Deposit -- 6.5%
--------------------
$7,554,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 7,554,000
(Cost $7,554,000)
- ------------------------------------------------------------
Total Investments -- 100.7% $117,174,835
(Cost $84,735,348)
- ------------------------------------------------------------
See notes to financial statements
51
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital Growth
Primary investments: Small cap common stocks
Suggested investment
time frame: Long-term
Market benchmark: Russell 2000 Index
Lipper funds category: Small Company Growth Funds Average
Inception date: 1/1/97
Newspaper symbol: SmCpVal
As of October 31, 1997
Net assets: $487.6 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select Small Cap Value Fund, which seeks capital growth by investing in
small cap common stocks, had a total return of 22.37% for the year ended
October 31, 1997.
STRATEGY
For small cap stocks, the year can be broken into two distinct periods. The
first, lasting through April of 1997, was one of underperformance and slim
returns as investors favored larger-company stocks. The management team took
advantage of falling stock prices to purchase what it believed were
high-quality stocks at attractive prices, particularly within the technology
and health care sectors.
The second period starting in May, was one of small cap leadership, proving the
earlier buying to be beneficial as the Fund's technology holdings performed
well. As many technology holdings reached their price targets, the investment
team sold them and split the assets among several sectors. This stance left the
Fund well positioned for the October correction, since technology stocks were
the hardest hit among all major industry sectors.
52
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SMALL CAP VALUE FUND
OUTLOOK
A key aspect of the small cap turnaround has been the improving earnings of
small caps relative to their larger peers. This, combined with attractive
valuations, leads the investment team to expect that small caps will remain the
most attractive segment of the U.S. stock market over the next 12 to 18 months.
VISTA SELECT SMALL CAP VALUE FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 1.11%
Investments 98.89%
VISTA SELECT SMALL CAP VALUE FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
Banking 13.38%
Business Services 8.55%
Chemicals 6.05%
Construction Materials 4.08%
Consumer Products 5.39%
Electronics/Electrical Equipment 7.28%
Environmental Services 2.64%
Food/Beverage Products 5.14%
Insurance 6.82%
Manufacturing 5.41%
Metals/Mining 1.99%
Packaging 1.99%
Printing & Publishing 4.81%
Retailing 3.48%
Other 22.99%
53
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
Deutsche Bank AG (US) 10.88%
Concord EFS Inc. 3.55%
Carlisle Companies Inc. 3.07%
Teleflex Inc. 2.91%
HCC Insurance Holdings Inc. 2.84%
Computer Products Inc. 2.82%
Hanna M.A. Co. 2.53%
NFO Research Inc. 2.52%
Devon Group Inc. 2.37%
Richfood Holdings Inc. 2.32%
- -------------------------------------------------------------------------------
Top 10 holdings comprised 35.81% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 22.37%
Five Years 17.53%
Ten Years 16.31%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Small Cap Value Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
54
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT SMALL CAP VALUE FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select Small Cap Russell Lipper Small Co.
Value Fund 2000 Index Growth Funds Avg.
10/87 10000 10000 10000
12388 12722 12261
10/89 14128 14708 15203
11237 10694 12210
10/91 15918 16964 19664
20224 18576 21302
10/93 27321 24592 27704
28586 24506 28137
10/95 32537 29005 34568
37082 33827 41993
10/31/97 45378 43752 53175
- --------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with market
conditions. When shares are redeemed, they may be worth more or less than their
original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select Small Cap Value Fund, the Russell 2000 Index and the Lipper Small
Company Growth Funds Average for the ten years ended 10/31/97. The performance
of the Fund assumes reinvestment of all dividends and capital gains. The
performance of the average and the index does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains on
the securities included in the benchmark.
The Russell 2000 Index tracks the shares of 2,000 small capitalization
companies. The index is unmanaged and reflects reinvestment of dividends. An
individual cannot invest in the index.
The Lipper Small Company Growth Funds Average represents the average
performance of a universe of 543 actively managed small company stock mutual
funds. Lipper is an independent mutual fund performance monitor whose results
are based on total return and do not reflect a sales charge.
+ The quoted performance of Vista Select Small Cap Value Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
Small capitalization funds typically carry more risk than stock funds investing
in well-established "blue-chip" companies since smaller companies generally
have a higher risk of failure. Historically, smaller companies' stock has
experienced a greater degree of market volatility than the average stock.
55
<PAGE>
Vista Select Small Cap Value Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value
- ----------------------------------------------------------
Long-Term Investments -- 88.8%
- ----------------------------------------------------------
Common Stock -- 88.8%
---------------------
Agricultural Production/Services -- 0.8%
268,400 Sylvan, Inc.* $ 4,026,000
------------
Apparel -- 1.9%
258,100 Unitog Co. 6,387,975
357,000 Worldtex, Inc.* 2,989,875
------------
9,377,850
------------
Appliances & Household Durables -- 0.9%
181,750 Watsco, Inc. 4,271,125
------------
Automotive -- 1.7%
142,187 Donnelly Corp. Class A 2,559,366
129,200 Edelbrock Corp.* 2,519,400
290,000 TBC Corp.* 2,972,500
------------
8,051,266
------------
Banking -- 2.5%
100,125 First Virginia Banks, Inc. 4,649,555
136,935 Summit Bancorp. 5,845,413
54,000 Trustmark Corp. 1,667,250
------------
12,162,218
------------
Biotechnology -- 0.3%
93,242 Pharmaceutical Product
Development, Inc.* 1,655,045
------------
Broadcasting -- 0.3%
171,939 Century Communications Corp.,
Class A* 1,321,781
------------
Business Services -- 8.5%
581,187 Concord EFS, Inc.* 17,253,989
143,437 CUC International, Inc.* 4,231,392
250,000 Information Resources, Inc.* 4,125,000
150,000 McGrath Rentcorp 3,656,250
680,400 NFO Research Inc.* 12,247,200
------------
41,513,831
------------
See notes to financial statements.
56
<PAGE>
Vista Select Small Cap Value Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ----------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------
Chemicals -- 6.0%
680,000 Airgas, Inc.* $ 10,582,500
477,650 Hanna (M.A.) Co. 12,299,488
135,600 Minerals Technologies, Inc. 5,610,450
33,800 The Scotts Co., Class A* 904,150
------------
29,396,588
------------
Computers/Computer Hardware -- 2.8%
502,200 Computer Products, Inc.* 13,684,950
------------
Construction Materials -- 4.1%
344,400 Carlisle Companies, Inc. 14,895,300
267,400 LSI Industries, Inc. 4,913,475
------------
19,808,775
------------
Consumer Products -- 5.4%
5,000 Chromcraft Revington, Inc.* 156,875
203,195 Department 56 Inc.* 6,133,949
227,825 Heilig-Meyers Co. 3,047,159
340,900 Interface, Inc. Class A 9,843,487
150,000 Oil-Dri Corp. of America 2,568,750
43,600 Oneida Ltd. 1,487,850
105,000 Stanhome, Inc. 2,933,437
------------
26,171,507
------------
Distribution -- 1.4%
237,300 Applied Industrial Technology, Inc. 6,896,531
------------
Diversified -- 1.6%
40,812 Corning Inc. 1,841,642
60,000 Lawson Products, Inc. 1,661,250
120,000 Tyco International Ltd. 4,530,000
------------
8,032,892
------------
Electronics/Electrical Equipment -- 7.2%
125,000 Adaptec, Inc.* 6,054,688
74,800 Comptek Research, Inc.* 532,950
11,000 Harmon Industries, Inc. 298,375
275,000 Medar, Inc. 1,615,625
378,900 Teleflex, Inc. 14,114,025
281,416 Vishay Intertechnology, Inc.* 6,736,395
309,100 X-Rite, Inc. 5,988,812
------------
35,340,870
------------
See notes to financial statements.
57
<PAGE>
Vista Select Small Cap Value Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
Entertainment/Leisure -- 0.2%
53,500 Johnson Worldwide Associates, Inc.,
Class A* $ 829,250
------------
Environmental Services -- 2.6%
481,300 Lydall, Inc.* 9,866,650
176,625 Met-Pro Corp. 2,958,469
------------
12,825,119
------------
Food/Beverage Products -- 5.1%
60,000 Dreyer's Grand Ice Cream, Inc. 2,482,500
195,000 J & J Snack Foods Corp.* 3,315,000
467,100 Richfood Holdings, Inc. 11,268,788
298,000 Sbarro, Inc. 7,878,375
------------
24,944,663
------------
Health Care/Health Care Services -- 1.6%
65,000 Beckman Instruments, Inc. 2,559,375
20,203 Covance, Inc.* 357,341
97,318 Morrison Health Care, Inc. 1,611,829
10,101 Quest Diagnostics Inc.* 168,560
102,000 ResMed, Inc.* 2,856,000
------------
7,553,105
------------
Insurance -- 6.8%
67,800 Arthur J. Gallagher & Co. 2,373,000
590,050 HCC Insurance Holdings, Inc. 13,792,419
166,100 Poe & Brown, Inc. 6,851,625
290,100 Trenwick Group, Inc. 10,117,237
------------
33,134,281
------------
Manufacturing -- 5.4%
194,500 Albany International Corp., Class A 4,740,938
446,380 Essef Corp.* 7,644,258
194,600 Flowserve Corp. 5,789,350
250,000 Stimsonite Corp.* 1,468,750
50,000 United Industrial Corp. 521,875
227,900 Zero Corp. 6,124,812
------------
26,289,983
------------
See notes to financial statements.
58
<PAGE>
Vista Select Small Cap Value Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
Metals/Mining -- 2.0%
195,600 Amcast Industrial Corp. $ 4,963,350
105,000 Trinity Industries, Inc. 4,698,750
------------
9,662,100
------------
Office/Business Equipment -- 1.2%
165,600 CSS Industries, Inc.* 5,858,100
------------
Packaging -- 2.0%
391,000 Shorewood Packaging Corp.* 9,677,250
------------
Paper/Forest Products -- 1.2%
286,368 Wausau Paper Mills Co. 5,781,054
------------
Printing & Publishing -- 4.8%
304,600 Banta Corp. 7,957,675
84,000 Bowne & Co., Inc. 2,929,500
292,800 Devon Group, Inc.* 11,492,400
100,000 Golden Books Family
Entertainment, Inc.* 1,000,000
------------
23,379,575
------------
Restaurants/Food Services -- 0.9%
72,989 Morrison Restaurants Inc. 228,091
145,978 Ruby Tuesday, Inc.* 3,968,777
------------
4,196,868
------------
Retailing -- 3.5%
564,600 Cash America International, Inc. 6,669,338
300,000 Cato Corp., Class A 2,568,750
97,800 Tractor Supply Co.* 1,931,550
240,000 Viking Office Products, Inc.* 5,745,000
------------
16,914,638
------------
Rubber & Plastics -- 1.1%
310,296 Myers Industries, Inc. 5,449,573
------------
Shipbuilding -- 0.4%
36,540 Halter Marine Group, Inc.* 1,911,499
------------
Shipping/Transportation -- 1.4%
210,200 M.S. Carriers, Inc.* 5,327,256
55,000 Swift Transportation Co., Inc.* 1,760,000
------------
7,087,256
------------
See notes to financial statements.
59
<PAGE>
Vista Select Small Cap Value Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
Telecommunications -- 2.0%
286,696 WorldCom, Inc.* $ 9,640,153
------------
Textile Mill Products -- 1.2%
240,000 Unifirst Corp. 6,030,000
- --------------------------------------------------------------------
Total Common Stock 432,875,696
(Cost $226,937,402)
- --------------------------------------------------------------------
Principal
Amount
(USD)
- --------------------------------------------------------------------
Short-Term Investments -- 10.8%
- --------------------------------------------------------------------
Time Deposit -- 10.8%
---------------------
$52,823,000 Deutsche Bank AG (United States),
5.66%, 11/03/97 52,823,000
(Cost $52,823,000)
- --------------------------------------------------------------------
Total Investments -- 99.6% $485,698,696
(Cost $279,760,402)
- --------------------------------------------------------------------
See notes to financial statements.
60
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------
FUND FACTS
- -------------------------------------------------------------------------------
Objective: Capital growth and income
Primary investments: Common stocks, preferred stocks, convertibles and
warrants of established companies outside the U.S.
Suggested investment
time frame: Long-term
Market benchmark: MSCI EAFE Index
Lipper funds category: International Equity Funds Average
Inception date: 1/1/97
Newspaper symbol: Intl Eq
As of October 31, 1997
Net assets: $254.4 million
- -------------------------------------------------------------------------------
PERFORMANCE
Vista Select International Equity Fund, which seeks long-term growth of capital
by investing in the common stocks of established overseas companies, provided
shareholders with a total return of 8.91% for the year ended October 31, 1997.
STRATEGY
Throughout the reporting year, the Fund benefited from a sharply underweight
position in the poorly-performing Japanese market and an overweight position in
European equities, particularly those of restructuring companies. Within the
emerging markets, the Fund's holdings in Latin American companies generally
proved helpful to performance as Brazil and Mexico, in particular, advanced.
Despite these good asset allocation decisions, overall performance was
significantly held back by the Fund's Southeast Asian positions.
The Fund was not immune to the sharp downturn in world equity markets at the
end of October, which reduced the annual return substantially. For American
investors, these losses were further compounded by the fact that most global
currencies fell relative to the dollar, although the management team's currency
stance did provide a small measure of relief.
61
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERNATIONAL EQUITY FUND
OUTLOOK
Moving forward, the management team believes that European markets continue to
provide the best relative values in the world and, therefore, expects to
continue overweighting European equities. Although markets elsewhere remain
highly volatile, the management team will continue to use Vista's international
stock management system to analyze the relative values of markets and seek to
protect shareholders from the negative effects of currency fluctuations.
VISTA SELECT INTERNATIONAL EQUITY FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[PIE CHART]
Cash 17.80%
Investments 82.20%
VISTA SELECT INTERNATIONAL EQUITY FUND
COMPOSITION OF MARKET VALUE INVESTMENTS AS OF 10/31/97
[PIE CHART]
Austria 3.09%
Brazil 5.00%
Finland 2.20%
France 7.30%
Germany 7.39%
Hong Kong 3.44%
Italy 5.09%
Japan 17.46%
Mexico 2.43%
Netherlands 4.90%
Switzerland 5.74%
United Kingdom 25.84%
Other 10.12%
62
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 10/31/97
- -------------------------------------------------------------------------------
Roche Holdings AG 3.93%
Telecomunicacoes Brasileiras SA, ADR 3.75%
Baan Company NV 2.57%
Legal & General Group PLC 2.52%
Nokia AB 2.20%
General Accident PLC 1.92%
Shell Transport & Trading PLC 1.80%
Dresdner Bank AG 1.76%
Mannesmann AG 1.76%
Royal & Sun Alliance Insurance Group PLC 1.73%
- --------------------------------------------------------------------------------
Top 10 holdings comprised 23.94% of Fund's market value of investments. Fund
holdings are subject to change at any time.
- -------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- -------------------------------------------------------------------------------
One Year 8.91%
Since Inception (5/31/93) 5.92%
- -------------------------------------------------------------------------------
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select International Equity Fund includes
performance of a predecessor account for the period dating back to 5/31/93 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
63
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT INTERNATIONAL EQUITY FUND+
AND ITS KEY BENCHMARKS
- -------------------------------------------------------------------------------
[PLOT POINTS]
Select MSCI EAFE Lipper International
International Index Equity Funds Avg.
Equity Fund
5/93 10000 10000 10000
10/93 10648 10831 11123
10475 11955 12313
10/95 10633 11947 12177
11835 13235 13552
10/31/97 12889 13885 14919
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select International Equity Fund, the MSCI EAFE Index and the Lipper
International Funds Average from 5/31/93 to 10/31/97. The performance of the
Fund assumes reinvestment of all dividends and capital gains. The performance of
the average and the index does not include a sales charge and has been adjusted
to reflect the reinvestment of all dividends and capital gains on the securities
included in the benchmark.
The MSCI EAFE (Europe, Australia, Far East) Index is representative of the
performance of the world's equity markets, excluding the U.S. and Canada. The
index is unmanaged and reflects reinvestment of dividends. An individual cannot
invest in the index.
The Lipper International Equity Funds Average represents the average
performance of a universe of 476 actively managed international stock mutual
funds. Lipper is an independent mutual fund performance monitor whose results
are based on total return and do not reflect a sales charge.
+ The quoted performance of Vista Select International Equity Fund includes
performance of a predecessor account for the period dating back to 5/31/93 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
International investing involves a greater degree of risk and increased
volatility. Changes in currency exchange rates and differences in accounting
and taxation policies outside the U.S. can raise or lower returns. Also, some
overseas markets may not be as politically and economically stable as the U.S.
or other nations.
64
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997
Shares Issuer Value (USD)
- ---------------------------------------------------------------
Long-Term Investments -- 83.0%
- ---------------------------------------------------------------
Common Stock -- 82.1%
---------------------
Australia -- 1.2%
Banking -- 0.4%
79,000 Commonwealth Bank of Australia $ 910,452
Diversified -- 0.3%
595,000 Futuris Corp. Ltd. 696,205
Entertainment/Leisure -- 0.2%
93,000 TABCORP Holdings Ltd. 427,408
Food/Beverage Products -- 0.1%
146,000 Foster's Brewing Group, Ltd. 277,862
Multi-Media -- 0.1%
55,000 Publishing & Broadcasting Ltd. 319,837
Oil & Gas -- 0.1%
420,000 Energy Equity Corp. Ltd.* 304,929
------------
Total Australia 2,936,693
------------
Austria -- 2.6%
Oil & Gas -- 1.8%
20,629 OMV AG 2,937,522
12,840 Schoeller-Bleckmann Oilfield
Equipment AG* 1,521,006
Steel -- 0.8%
28,690 Boehler -- Uddeholm AG, 2,060,458
------------
Total Austria 6,518,986
------------
Brazil -- 4.1%
Telecommunications -- 3.1%
78,000 Telecomunicacoes Brasileiras SA,
ADR 7,917,000
Utilities -- 1.0%
121,000 Centrais Electricas Brasileiras SA-
Electrobras, ADR 2,634,122
------------
Total Brazil 10,551,122
------------
Finland -- 1.8%
Electronics/Electrical Equipment -- 1.8%
53,800 Nokia AB, A Shares 4,655,191
------------
See notes to financial statements.
65
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
France -- 6.0%
Automotive -- 0.5%
7,000 Equipments et Composants pour
l'Industries Automobile $ 1,161,389
Banking -- 1.5%
35,600 Banque Nationale de Paris 1,577,127
38,000 Credit Commercial de France 2,157,457
Computer Software -- 1.2%
40,000 Cap Gemini Sogeti SA 3,182,745
Consumer Products -- 0.7%
85,023 Moulinex* 1,920,243
Entertainment/Leisure -- 0.2%
26,700 Parc Asterix, SA* 528,801
Financial Services -- 0.4%
9,000 Cetelem Group 1,000,689
Oil & Gas -- 0.6%
11,500 Societe National Elf Aquitaine SA 1,426,502
Telecommunications -- 0.9%
19,445 Alcatel Alsthom (Cie General El) 2,351,222
------------
Total France 15,306,175
------------
Germany -- 6.1%
Banking -- 1.5%
89,600 Dresdner Bank AG 3,711,747
Capital Goods -- 1.4%
8,764 Mannesmann AG 3,706,931
Consumer Products -- 0.7%
11,500 Adidas AG 1,667,052
Health Care/Health Care Services -- 1.3%
20,000 Fresenius Medical Care AG Preference
Shares* 1,138,772
31,813 Fresenius Medical Care AG* 2,245,751
Machinery & Engineering Equipment -- 1.2%
2,360 GEA AG, Ordinary Shares 767,858
7,195 GEA AG, Preference Shares 2,307,548
------------
Total Germany 15,545,659
------------
Greece -- 0.6%
Construction -- 0.6%
30,700 Titan Cement Company, SA 1,502,185
------------
See notes to financial statements.
66
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
Hong Kong -- 2.9%
Banking -- 0.3%
155,000 Guoco Group Ltd. $ 338,896
23,835 HSBC Holdings PLC 539,637
Business Services -- 0.2%
556,000 Cosco Pacific Ltd. 647,390
Diversified -- 0.8%
139,000 Citic Pacific Ltd. 665,373
410,000 Guangdong Investments, Ltd. 261,239
138,000 Hutchison Whampoa 955,172
Food/Beverage Products -- 0.0%
92,500 Guangdong Brewery Holdings, Ltd.* 16,993
Real Estate -- 1.5%
95,000 Cheung Kong Holdings, Ltd. 660,618
351,000 China Resources Beijing Land 143,043
116,000 China Resources Enterprises, Ltd. 318,158
774,400 HKR International, Ltd. 510,957
235,000 Hysan Development Co., Ltd. 491,008
161,000 New World Development
Company, Ltd. 566,557
51,000 Sun Hung Kai Properties, Ltd. 376,092
119,000 Wharf (Holdings) Ltd. 243,250
348,000 Wheelock & Co., Ltd. 396,196
Shipping/Transportation -- 0.1%
52,000 Kowloon Motor Bus Company Ltd. 107,640
------------
Total Hong Kong 7,238,219
------------
India -- 0.0%
Metals/Mining -- 0.0%
450 Hindalco Industries Ltd, GDR 13,005
Utilities -- 0.0%
6,000 BSES Ltd., GDR 96,900
------------
Total India 109,905
------------
Indonesia -- 0.1%
Diversified -- 0.1%
106,000 PT Bimantara Citra (Foreign)* 97,032
Telecommunications -- 0.0%
100,000 PT Telekomunikasi Indonesia
(Foreign)* 92,926
------------
Total Indonesia 189,958
------------
See notes to financial statements.
67
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- ------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------
Ireland -- 1.6%
Construction Materials -- 0.5%
96,500 CRH PLC $ 1,163,492
Food/Beverage Products -- 0.5%
295,979 Greencore Group PLC 1,404,606
Real Estate -- 0.6%
256,414 Green Property PLC 1,504,932
------------
Total Ireland 4,073,030
------------
Italy -- 4.2%
Banking -- 0.7%
660,000 Banco Ambrosiano Veneto SPA, RNC 1,866,580
Consumer Products -- 0.8%
175,500 CSP International Industria
Calze SPA* 1,936,559
Insurance -- 1.0%
117,000 Assicurazioni Generali, SPA 2,620,152
Oil & Gas -- 1.7%
368,738 Ente Nazionale Idrocarburi
SPA (ENI) 2,076,967
400,000 Saipem SPA 2,249,504
------------
Total Italy 10,749,762
------------
Japan -- 14.5%
Apparel -- 0.6%
39,000 World Co., Ltd. 1,443,003
Automotive -- 0.1%
25,000 Keihin Corp. 340,900
Banking -- 0.3%
50,000 Bank of Tokyo-Mitsubishi 652,698
Computers/Computer Hardware -- 0.5%
116,000 Fujitsu Ltd. 1,273,135
Consumer Products -- 1.4%
135,000 Citizen Watch Co. 862,060
115,000 KAO Corp. 1,606,385
16,500 Sony Corp. 1,370,541
Electronics/Electrical Equipment -- 3.9%
17,000 Futaba Corp. 826,889
14,600 Keyence Corp. 2,185,083
See notes to financial statements.
68
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
73,000 Matsushita Electric Industrial
Co., Ltd. $ 1,226,074
39,000 Murata Manufacturing Co., Ltd. 1,582,439
14,000 Rohm Company 1,385,216
17,600 SMC Corp. 1,521,909
149,000 Tokin Corp. 1,313,212
Entertainment/Leisure -- 0.4%
51,000 Shimano Inc. 1,038,912
260 Toho Co., Ltd. 34,156
Financial Services -- 1.5%
38,600 Acom Co., Ltd. 2,118,234
28,160 Promise Co., Ltd. 1,648,344
Insurance -- 0.4%
97,000 Tokio Marine & Fire Insurance Co. 967,822
Machinery & Engineering Equipment -- 0.3%
160,000 Tokyo Kikai Seisakusho 744,990
Manufacturing -- 1.0%
38,000 Fuji Machine Manufacturing Co. 1,102,685
46,000 Komori Corp. 841,440
16,700 Shima Seiki Manufacturing, Ltd. 680,386
Pharmaceuticals -- 0.8%
58,000 Sankyo Co. Ltd. 1,914,525
Photographic Equipment -- 0.7%
52,000 Fuji Photo Film 1,885,092
Real Estate -- 0.8%
70,000 Hankyu Realty 454,560
85,000 Mitsubishi Estate Co., Ltd. 1,074,249
25,000 Mitsui Fudosan 282,697
5,000 Tachihi Enterprise Co. Ltd. 121,394
Retailing -- 1.4%
23,980 Fast Retailing Co., Ltd. 448,616
44,000 Ito-Yokado Co. Ltd. 2,187,744
19,500 Matsumotokiyoshi 713,395
Shipping/Transportation -- 0.4%
80,000 Yamato Transport Co., Ltd. 1,017,710
------------
Total Japan 36,866,495
------------
See notes to financial statements.
69
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
Malaysia -- 0.4%
Agricultural Production/Services -- 0.2%
288,000 Kumpulan Guthrie Bhd. $ 238,998
79,000 Malakoff Bhd. 188,657
Construction -- 0.1%
230,000 Sunway Building Technology Bhd. 158,597
Construction Materials -- 0.1%
407,750 Sungei Way Holdings Bhd. 267,777
------------
Total Malaysia 854,029
------------
Mexico -- 2.0%
Construction -- 0.4%
56,200 Corporacion GEO, SA de CV,
Ser. B, ADR*# 1,201,275
Diversified -- 1.2%
404,041 ALFA, SA. de C.V., Class A 2,966,374
Financial Services -- 0.4%
450,000 Grupo Financiero Banamex Accival,
SA de CV (Banacci), Ser. B* 962,446
------------
Total Mexico 5,130,095
------------
Netherlands -- 4.1%
Business Services -- 1.8%
107,570 Brunel International NV* 2,272,540
66,120 Koninklijke Ahrend Groep NV 2,204,315
Computer Software -- 2.1%
76,519 Baan Company, NV* 5,421,362
Consumer Products -- 0.2%
10,000 Hagemeyer NV 440,557
------------
Total Netherlands 10,338,774
------------
Philippines -- 0.1%
Diversified -- 0.0%
1,137,150 Metro Pacific Corp. 75,864
Telecommunications -- 0.1%
5,670 Philippine Long Distance Telephone 140,247
Utilities -- 0.0%
13,500 Manila Electric Co., Class B 41,216
------------
Total Philippines 257,327
------------
See notes to financial statements.
70
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- -----------------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------------
Poland -- 0.4%
Banking -- 0.4%
76,000 Bank Inicjatyw Gospodarczych BIG
SA, GDR* $ 1,144,902
------------
Portugal -- 0.7%
Telecommunications -- 0.7%
40,231 Portugal Telecom SA 1,651,682
------------
Singapore -- 0.0%
Business Services -- 0.0%
9,000 Venture Manufacturing Ltd. 30,896
------------
Spain -- 1.6%
Business Services -- 0.5%
120,000 Prosegur, CIA de Seguridad SA,
Registered 1,345,625
Construction -- 1.1%
73,200 Fomento de Construcciones y
Contratas SA 2,694,139
------------
Total Spain 4,039,764
------------
Sweden -- 0.1%
Electronics/Electrical Equipment -- 0.1%
9,900 Pricer AB, B Shares* 230,164
------------
Switzerland -- 4.8%
Electronics/Electrical Equipment -- 0.5%
750 SEZ Holding AG 1,272,929
Pharmaceuticals -- 4.3%
1,341 Ares-Serono Group, Class B 2,544,891
943 Roche Holding AG 8,309,747
------------
Total Switzerland 12,127,567
------------
United Kingdom -- 21.3%
Aerospace -- 0.6%
60,862 British Aerospace PLC 1,614,581
Business Services -- 0.6%
132,670 Delphi Group PLC 1,548,421
Construction -- 1.6%
185,692 Berkeley Group PLC 2,013,116
393,000 Jarvis PLC 2,141,821
See notes to financial statements.
71
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- ----------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------
Diversified -- 1.9%
760,940 Cookson Group PLC $ 3,049,688
124,926 Granada Group PLC 1,717,805
Financial Services -- 2.1%
654,303 Legal & General Group PLC 5,321,423
Food/Beverage Products -- 1.2%
190,280 Allied Domecq PLC 1,539,564
256,750 Devro PLC 1,590,860
Hotels/Other Lodging -- 0.4%
447,062 Jarvis Hotels PLC* 1,094,530
Insurance -- 3.0%
238,770 General Accident PLC 4,061,991
379,922 Royal & Sun Alliance Insurance
Group PLC 3,660,089
Multi-Media -- 0.7%
207,211 Carlton Communications PLC 1,726,936
Oil & Gas -- 2.3%
255,507 British-Borneo Petro Syndica PLC 2,039,468
537,156 Shell Transport & Trading PLC 3,807,950
Pharmaceuticals -- 1.3%
157,300 Glaxo Wellcome PLC 3,371,062
Real Estate Investment Trust -- 1.4%
273,073 MEPC PLC 2,378,874
725,187 TBI PLC 1,045,817
Retailing -- 2.0%
128,285 Boots Company, PLC 1,876,932
114,264 Great Universal Stores PLC 1,359,468
287,019 Safeway PLC 1,868,656
Shipping/Transportation -- 1.4%
151,118 British Airport Authority PLC 1,392,487
136,812 Railtrack Group PLC 2,186,373
Telecommunications -- 0.8%
383,184 Vodafone Group PLC 2,105,995
------------
Total United Kingdom 54,513,907
------------
See notes to financial statements.
72
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Shares Issuer Value (USD)
- -----------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------
Venezuela -- 0.9%
Telecommunications -- 0.9%
50,000 Compania Anonima Nacional
Telefonos de Venezuela
(CANTV), ADR $ 2,187,500
------------
Total Common Stock 208,749,987
------------
(Cost $207,157,106)
Rights -- 0.0%
--------------
United Kingdom -- 0.0%
Construction -- 0.0%
41,264 The Berkeley Group PLC 56,740
------------
(Cost $0)
Warrants -- 0.0%
----------------
Hong Kong -- 0.0%
Financial Services -- 0.0%
74,000 Guangdong Investments, Ltd., 8.00,
Expires 07/30/99 11,488
------------
Malaysia -- 0.0%
Construction -- 0.0%
40,000 Sunway Building Technology, Bhd.,
Expires 07/30/01 11,342
------------
Total Warrants 22,830
------------
(Cost $0)
Principal
Amount
(Local
Currency)
- --------------------------------------------------------------
Convertible Corporate Notes & Bonds -- 0.9%
-------------------------------------------
France -- 0.0%
Banking -- 0.0%
80,000 Societe Generale, 3.50%, 1/01/00 109,846
------------
Germany -- 0.0%
Automotive -- 0.0%
73,400 Daimler-Benz AG, 5.75%, 6/14/02 55,013
------------
See notes to financial statements.
73
<PAGE>
Vista Select International Equity Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(Local
Currency) Issuer Value (USD)
- ------------------------------------------------------------
Long-Term Investments -- (continued)
- ------------------------------------------------------------
Malaysia -- 0.0%
Construction -- 0.0%
100,000 Sunway Building Technology, Bhd.,
Loan Stock, 3.00%, 7/30/01 $ 20,896
------------
Poland -- 0.9%
Electronics/Electrical Equipment -- 0.9%
3,800,000 Elektrim SA, 2.00%, 5/30/04 2,170,953
------------
Total Convertible Corporate
Notes & Bonds 2,356,708
(Cost $2,502,794)
- ------------------------------------------------------------
Total Investments -- 83.0% $211,186,265
(Cost $209,659,900)
- ------------------------------------------------------------
Index
* -- Non income producing security.
# -- Security may only be sold to qualified institutional buyers.
ADR -- American Depository Receipt.
GDR -- Global Depository Receipt.
See notes to financial statements.
74
<PAGE>
Vista Mutual Funds
Statement of Assets and Liabilities October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select Vista Select
Vista Select Vista Select Large Cap Large Cap
Balanced Equity Equity Growth
Fund Income Fund Fund Fund
---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value
(Note 1) ..................... $178,561,817 $951,832,383 $186,370,743 $547,320,069
Cash ........................... 335 -- 661 157
Foreign currency ............... -- -- -- --
Receivables:
Investment securities sold ... -- 5,249,550 900,318 2,198,375
Open forward currency
contracts .................. -- -- -- --
Interest and dividends ...... 1,269,126 3,111,830 165,175 306,016
Fund shares sold ............ -- 360,817 203,079 335,070
Expense reimbursement from
Distributor .................. 10,000 -- 10,000 10,000
Other assets .................. 15,337 61,646 16,872 36,240
------------ ------------ ------------ ------------
Total Assets ............... 179,856,615 960,616,226 187,666,848 550,205,927
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investment
securities purchased ......... -- 2,908,475 933,189 1,441,125
Payable for open forward
currency contracts ............ -- -- -- --
Payable for Fund shares
redeemed ..................... 1,300 124,700 85,000 232,052
Payable to custodian ......... -- 14,126 -- --
Dividends payable ............ 636,174 2,334,370 193,690 310,189
Accrued liabilities: (Note 2)
Other ........................ 36,479 98,044 42,361 60,788
------------ ------------ ------------ ------------
Total Liabilities ......... 673,953 5,479,715 1,254,240 2,044,154
------------ ------------ ------------ ------------
NET ASSETS:
Paid in capital ............... 121,650,558 578,067,151 81,071,257 272,901,256
Accumulated undistributed net
investment income ............ (59,210) 14,178 3,396 10,142
Accumulated undistributed net
realized gain on investments
and futures .................. 18,789,161 190,247,390 56,847,469 53,422,308
Net unrealized appreciation of
investments .................. 38,802,153 186,807,792 48,490,486 221,828,067
------------ ------------ ------------ ------------
Net Assets: ..................... $179,182,662 $955,136,511 $186,412,608 $548,161,773
============ ============ ============ ============
Shares of beneficial interest
outstanding ($.001 par value;
unlimited number of shares
authorized): .................. 5,257,939 9,304,342 363,822 5,657,845
Net asset value, maximum
offering and redemption
price per share* ............ $ 34.08 $ 102.65 $ 512.37 $ 96.89
============ ============ ============ ============
Cost of Investments ............ $139,759,664 $765,024,591 $137,880,257 $325,492,002
============ ============ ============ ============
</TABLE>
- --------------
* Net assets/shares outstanding
See notes to financial statements.
75
<PAGE>
Vista Mutual Funds
Statement of Assets and Liabilities October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select Vista Select Vista Select
New Growth Small Cap International
Opportunities Value Equity
Fund Fund Fund
--------------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
Investment securities, at value
(Note 1) .............................. $117,174,835 $485,698,696 $211,186,265
Cash .................................... -- 245 36,663,061
Foreign currency (Cost $2,080,571) ...... -- -- 2,082,617
Receivables:
Investment securities sold ............ 348,269 1,904,707 5,835,588
Open forward currency contracts ...... -- -- 4,355
Interest and dividends ............... 9,557 121,907 675,887
Fund shares sold ..................... 250,000 3,379,959 447,332
Expense reimbursement from
Distributor ........................... -- 10,000 --
Other assets ........................... 11,377 32,886 19,490
------------ ------------ ------------
Total Assets ........................ 117,794,038 491,148,400 256,914,595
------------ ------------ ------------
LIABILITIES:
Payable for investment securities
purchased .............................. 1,368,000 283,269 2,060,175
Payable for open forward currency
contracts .............................. -- -- 3,538
Payable for Fund shares redeemed ...... -- 3,164,926 185,487
Payable to custodian .................. 859 -- --
Dividends payable ..................... -- -- --
Accrued liabilities: (Note 2)
Other ................................. 50,097 56,911 263,776
------------ ------------ ------------
Total Liabilities .................. 1,418,956 3,505,106 2,512,976
------------ ------------ ------------
NET ASSETS:
Paid in capital ........................ 75,507,057 264,420,536 232,290,101
Accumulated undistributed net
investment income ..................... 31,153 410,123 5,981,509
Accumulated undistributed net
realized gain on investments and
futures .............................. 8,397,386 16,874,341 14,581,781
Net unrealized appreciation of
investments ........................... 32,439,486 205,938,294 1,548,228
------------ ------------ ------------
Net Assets: .............................. $116,375,082 $487,643,294 $254,401,619
============ ============ ============
Shares of beneficial interest outstanding
($.001 par value; unlimited number
of shares authorized): .................. 179,639 8,055,097 1,439,628
Net asset value and offering price per
share* ................................. $ 647.83 $ 60.54 $ 176.71
============ ============ ============
Cost of Investments ..................... $ 84,735,348 $279,760,402 $209,659,900
============ ============ ============
</TABLE>
- --------------
* Net assets/shares outstanding
See notes to financial statements.
76
<PAGE>
Vista Mutual Funds
Statement of Operations For the period Jan. 1, 1997* - Oct. 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select Vista Select Vista Select
Vista Select Equity Large Cap Large Cap
Balanced Income Equity Growth
Fund Fund Fund Fund
-------------- --------------- -------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend ........................ $ 1,507,179 $ 16,931,124 $ 2,286,124 $ 4,631,248
Interest ........................ 5,069,412 5,940,060 366,164 222,688
Foreign taxes withheld ......... (5,763) (294,842) (17,656) (3,029)
----------- ------------ ------------- ------------
Total investment income ...... 6,570,828 22,576,342 2,634,632 4,850,907
----------- ------------ ------------- ------------
EXPENSES: (Note 2)
Administration fees ............ 227,867 1,130,672 233,975 636,398
Investment Advisory fees ...... 760,251 3,015,125 623,935 1,697,055
Custodian fees .................. 63,752 108,080 68,683 107,944
Printing and postage ............ 1,233 12,466 3,343 3,343
Professional fees ............... 15,444 46,363 16,939 24,988
Registration costs ............ 2,041 12,506 3,685 4,165
Transfer agent fees ............ 13,754 37,689 14,228 22,144
Trustees fees and expenses ...... 7,602 37,689 7,798 21,213
Other ........................... 12,505 41,719 15,482 23,242
----------- ------------ ------------- ------------
Total expenses ............... 1,104,449 4,442,309 988,068 2,540,492
----------- ------------ ------------- ------------
Less amounts waived (Note 2) ...... 1,051,870 4,253,877 926,593 2,441,397
Less expenses borne by the
Distributor ..................... 10,000 -- 10,000 10,000
----------- ------------ ------------- ------------
Net expenses .................. 42,579 188,432 51,475 89,095
----------- ------------ ------------- ------------
Net investment income ......... 6,528,249 22,387,910 2,583,157 4,761,812
----------- ------------ ------------- ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments ..................... 18,722,208 191,549,566 56,847,469 53,422,308
Futures transactions ............ -- (1,302,176) -- --
Foreign currency transactions ... -- -- -- --
Change in net unrealized
appreciation/depreciation on:
Investments .................. 643,155 (22,248,307) (14,519,014) 55,496,670
Foreign currency
transactions ............... -- -- -- --
----------- ------------ ------------- ------------
Net realized and unrealized gain
on investments ............... 19,365,363 167,999,083 42,328,455 108,918,978
----------- ------------ ------------- ------------
Net increase in net assets from
operations ..................... $25,893,612 $190,386,993 $ 44,911,612 $113,680,790
=========== ============ ============= ============
</TABLE>
- --------------
* Funds commenced operations on January 1, 1997.
See notes to financial statements.
77
<PAGE>
Vista Mutual Funds
Statement of Operations For the period Jan. 1, 1997* - Oct. 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select Vista Select Vista Select
New Growth Small Cap International
Opportunities Value Equity
Fund Fund Fund
--------------- -------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend ................................. $ 95,718 $ 2,801,325 $ 3,736,316
Interest ................................. 514,047 1,821,726 614,760
Foreign taxes withheld ..................... -- -- (458,207)
----------- ----------- -------------
Total investment income .................. 609,765 4,623,051 3,892,869
----------- ----------- -------------
EXPENSES: (Note 2)
Administration fees ........................ 141,711 539,391 314,430
Investment Advisory fees .................. 614,080 2,337,360 2,096,199
Custodian fees ........................... 44,068 97,755 279,578
Printing and postage ..................... 4,165 3,343 7,494
Professional fees ........................ 23,258 23,048 30,439
Registration costs ........................ 7,891 5,768 15,298
Transfer agent fees ........................ 14,565 19,955 20,962
Trustees fees and expenses ............... 4,724 17,979 10,481
Other .................................... 18,318 19,021 77,151
----------- ----------- -------------
Total expenses ........................... 872,780 3,063,620 2,852,032
----------- ----------- -------------
Less amounts waived (Note 2) ............... 799,859 2,974,506 2,690,207
Less expenses borne by the Distributor ...... -- 10,000 --
----------- ----------- -------------
Net expenses .............................. 72,921 79,114 161,825
----------- ----------- -------------
Net investment income ..................... 536,844 4,543,937 3,731,044
----------- ----------- -------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments .............................. 8,397,386 16,874,341 15,226,907
Futures transactions ..................... -- -- 396
Foreign currency transactions ............ -- -- 4,978,620
Change in net unrealized
appreciation/depreciation on:
Investments .............................. 5,059,237 49,902,918 (13,073,113)
Foreign currency transactions ............ -- -- (1,733,788)
----------- ----------- -------------
Net realized and unrealized gain on
investments .............................. 13,456,623 66,777,259 5,399,022
----------- ----------- -------------
Net increase in net assets from
operations .............................. $13,993,467 $71,321,196 $ 9,130,066
=========== =========== =============
</TABLE>
- --------------
* Funds commenced operations on January 1, 1997.
See notes to financial statements.
78
<PAGE>
Vista Mutual Funds
Statement of Changes in Net Assets For the period January 1, 1997* through
October 31, 1997
<TABLE>
<CAPTION>
Vista Select Vista Select
Vista Select Equity Large Cap
Balanced Income Equity
Fund Fund Fund
---------------- ---------------- --------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income .................................... $ 6,528,249 $ 22,387,910 $ 2,583,157
Net realized gain on investments and futures transactions 18,722,208 190,247,390 56,847,469
Change in net unrealized appreciation/depreciation on
investments and futures ................................. 643,155 (22,248,307) (14,519,014)
------------ ------------- -------------
Increase in net assets from operations .................. 25,893,612 190,386,993 44,911,612
------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (Note 1K):
Net investment income .................................... (6,523,896) (22,384,817) (2,582,870)
------------ ------------- -------------
Increase from capital share transactions (Note 5) ...... 159,812,946 787,134,335 144,083,866
------------ ------------- -------------
Total increase in net assets ........................... 179,182,662 955,136,511 186,412,608
NET ASSETS:
Beginning of period .................................... -- -- --
------------ ------------- -------------
End of period .......................................... $179,182,662 $ 955,136,511 $ 186,412,608
============ ============= =============
Undistributed net investment income ..................... $ (59,210) $ 14,178 $ 3,396
------------ ------------- -------------
<CAPTION>
Vista Select Vista Select Vista Select Vista Select
Large Cap New Growth Small Cap International
Growth Opportunities Value Equity
Fund Fund Fund Fund
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income .................................... $ 4,761,812 $ 536,844 $ 4,543,937 $ 3,731,044
Net realized gain on investments and futures transactions 53,422,308 8,397,386 16,874,341 20,205,923
Change in net unrealized appreciation/depreciation on
investments and futures ................................. 55,496,670 5,059,237 49,902,918 (14,806,901)
------------ ------------ ------------ ------------
Increase in net assets from operations .................. 113,680,790 13,993,467 71,321,196 9,130,066
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (Note 1K):
Net investment income .................................... (4,756,957) (507,925) (4,138,699) (3,376,605)
------------ ------------ ------------ ------------
Increase from capital share transactions (Note 5) ...... 439,237,940 102,889,540 420,460,797 248,648,158
------------ ------------ ------------ ------------
Total increase in net assets ........................... 548,161,773 116,375,082 487,643,294 254,401,619
NET ASSETS:
Beginning of period .................................... -- -- -- --
------------ ------------ ------------ ------------
End of period .......................................... $548,161,773 $116,375,082 $487,643,294 $254,401,619
============ ============ ============ ============
Undistributed net investment income ..................... $ 10,142 $ 31,153 $ 410,123 $ 5,981,509
------------ ------------ ------------ ------------
</TABLE>
- --------
* Funds commenced operations on January 1, 1997.
See notes to financial statements.
79
<PAGE>
Vista Mutual Funds
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies -- Mutual Fund Select Group
(the "Trust") was organized as a Massachusetts Business Trust, and is
registered under the Investment Company Act of 1940, as amended, (the "1940
Act") as an open-end management investment company, Vista Select Balanced Fund
("VSBF"), Vista Select Equity Income Fund ("VSEIF"), Vista Select Large Cap
Equity Fund ("VSLCEF"), Vista Select Large Cap Growth Fund ("VSLCGF"), Vista
Select New Growth Opportunities Fund ("VSNGOF"), Vista Select Small Cap Value
Fund ("VSSCVF"), and Vista Select International Equity Fund ("VSIEF"),
collectively, the "Funds", are separate series of The Trust.
The Funds were established in December 1996 for the conversion of the Chase
Manhattan Bank Common Trust Funds. Effective January 1, 1997, the Chase Common
Trust Funds contributed securities and other assets in exchange for shares of
the newly created Funds in a tax-free exchange.
The following is a summary of significant accounting policies followed by the
Funds:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
A. Valuation of investments -- Equity securities, purchased options and
futures are valued at the last sale price on the exchange on which they are
primarily traded, including the NASDAQ National Market. Securities for which
sale prices are not available and other over-the-counter securities are
valued at the last quoted bid price. Bonds and other fixed income securities
(other than short-term obligations), including listed issues, are valued on
the basis of valuations supplied by pricing services or by matrix pricing
systems of a major dealer in bonds. Short-term debt securities with 61 days
or more to maturity at time of purchase are valued, through the 61st day
prior to maturity at market value based on quotations obtained from market
makers or other appropriate sources; thereafter, the value on the 61st day is
amortized on a straight-line basis over the remaining number of days to
maturity. Short-term investments with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market. Portfolio
securities 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
Trustees.
B. Repurchase agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the Trust
may be delayed or limited.
C. Futures contracts -- When a Fund enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash or
liquid securities. Thereafter, the futures contract is marked to market and
the Fund makes (or receives) additional cash payments daily to the broker.
Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The Funds invest in stock index futures contracts for the purpose of
hedging the Fund against share price volatility, which purpose may or may
not be achieved. When the Fund is not fully invested in the securities
market, it may enter into "long" positions in futures or options contracts
in order to gain rapid market exposure that may in part or entirely offset
increases in the cost of securities intended for purchase. Use of long
futures contracts subject the Fund to risk of loss in excess of amounts
shown
80
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
on the Statement of Assets and Liabilities, up to the amount of the value
of the futures contracts.
The Fund may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
As of October 31, 1997, the Funds had no open futures contracts.
D. Written options -- When a Fund writes an option on a futures contract,
an amount equal to the premium received by the Fund is included in the
Fund's Statement of Assets and Liabilities as an asset and corresponding
liability. The amount of the liability is adjusted daily to reflect the
current market value of the written options and the change is recorded in a
corresponding unrealized gain or loss account. When a written option
expires on its stipulated expiration date, or when a closing transaction is
entered into, the related liability is extinguished and the Fund realizes a
gain (or loss if the cost of the closing transaction exceeds the premium
received when the option was written).
The Funds may write options on stock index securities futures. These
options are settled for cash and subject the Fund to market risk in excess
of the amounts that are reflected in the Statement of Assets and
Liabilities. The Fund, however, is not subject to credit risk on written
options as the counterparty has already performed its obligation by paying
a premium at the inception of the contract.
As of October 31, 1997, the Funds had no outstanding written options.
E. Forward Foreign Currency Exchange Contracts -- The VSIEF may enter into
forward foreign currency contracts (obligations to purchase or sell foreign
currency in the future on a date and price fixed at the time the contracts
are entered into) to hedge the Fund against fluctuations in the value of its
assets or liabilities due to change in the value of foreign currencies. Each
day the forward contract is open, changes in the value of the contract are
recognized as unrealized gains or losses by "marking to market". When the
forward contract is closed, or the delivery of the currency is made or taken,
the VSIEF records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transaction and the Fund's basis in
the contract. The VSIEF is subject to off-balance sheet risk to the extent of
the value of the contracts for purchases of currency and in an unlimited
amount for sales of currency.
F. Security transactions and investment income -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified
cost basis. Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
G. Dollar Rolls -- VSBF enters into 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. During the roll
period, the Fund forgoes principal and interest paid on the securities. The
Fund is compensated by the interest earned on the cash proceeds of the
initial sale and a fee earned for entering into the roll transaction. The
fee is amortized into income over the duration of the roll transaction.
H. Foreign Currency Translation -- The books and records of the Funds are
maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at the official exchange rates, or at the mean of the current
bid and asked prices, of such currencies against the U.S. dollar as quoted
by a major bank, on the following basis.
1. Market value of investment securities and other assets and liabilities:
at the closing rate of exchange at the balance sheet date.
81
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
2. Purchases and sales of investment securities, income and expenses: at
the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Funds are presented at the foreign exchange
rates and market values at the close of the periods, the Funds do not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of securities held during the year. Similarly,
the Funds do not isolate the effect of changes in foreign exchange rates
from the fluctuations arising from changes in the market prices of
long-term debt securities sold during the year. Accordingly, such realized
foreign currency gains (losses) are included in the reported net realized
gains (losses) on securitytransactions.
Reported realized foreign exchange gains or losses arise from disposition
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded
on the Funds' books on the transaction date and the U.S. dollar equivalent
of the amounts actually received or paid. Unrealized foreign exchange gains
and losses arise from changes (due to changes in the exchange rate) in the
value of foreign currency and other assets and liabilities denominated in
foreign currencies which are held at period end.
I. Organization costs -- Organization and initial registration costs
incurred in connection with establishing the Funds have been deferred and
are being amortized on a straight-line basis over a sixty-month period
beginning at the commencement of operations of each Fund.
J. Federal income taxes -- Each Fund is treated as a separate taxable entity
for Federal income tax purposes. The Trust's policy is to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute to shareholders all of its distributable net
investment income, and net realized gain on investments. In addition, the
Trust intends to make distributions as required to avoid excise taxes.
Accordingly, no provision for Federal income or excise tax is necessary.
K. Distributions to shareholders -- Dividends and distributions paid to
shareholders are recorded on the ex-dividend date. The amount of dividends
and distributions from net investment income and net realized capital gains
is determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles. To the extent these
"book/tax" differences are permanent in nature (i.e., that they result from
other than timing of recognition -- "temporary differences"), such amounts
are reclassified within the capital accounts based on their Federal
tax-basis treatment. The reclassifications of the VSIEF relate primarily to
gains on foreign currency translations and resulted in a decrease in
accumulated realized gains of approximately $650,000 with an offsetting
increase in undistributed net investment income.
L. Expenses -- Expenses directly attributable to a Fund are charged to that
Fund; other expenses are allocated proportionately among each Fund within
the Trust in relation to the net assets of each Fund or on another
reasonable basis.
2. Fees and Other Transactions with Affiliates
A. Investment advisory fee -- Pursuant to separate investment advisory
agreements, The Chase Manhattan Bank ("Chase" or the "Advisor"), acts as
the Investment Advisor to the Funds. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Advisor, Chase
supervises the investments of the Funds and for such services is paid a
fee. The fee is computed daily and paid monthly at an annual rate equal to
0.50% for VSBF, 0.40% for VSEIF, VSLCEF, and VSLCGF, 0.65% for VSNGOF and
VSSCVF, and 1.00% for VSIEF of the average daily net assets. The Advisor
voluntarily waived all of its fees.
82
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Chase Asset Management, Inc. ("CAM"), a registered investment advisor, is the
sub-investment advisor to each Fund, with the exception of VSIEF, pursuant to
a Sub-Investment Advisory Agreement between CAM and Chase. CAM is a wholly
owned subsidiary of Chase and is entitled to receive a fee, payable by Chase
from its advisory fee, at an annual rate equal to 0.25% for VSBF, 0.20% for
VSEIF, VSLCEF and VSLCGF, and 0.30% for VSNGOF and VSSCVF of average daily
net assets.
CAM London, a registered investment advisor is the sub-investment advisor
for VSIEF pursuant to a Sub-Investment Advisory Agreement with Chase and is
paid a fee by Chase from its advisory fee at an annual rate equal to 0.50%
of the VSIEF's average daily net assets.
B. Sub-administration fees -- Pursuant to a Distribution and
Sub-Administration Agreement, Vista Fund Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of The BISYS Group, Inc., acts as
the Trust's exclusive underwriter and promotes and arranges for the sale of
each Fund's shares. In addition, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space for an annual fee of 0.05% of the average
daily net assets of each Fund.
The Distributor voluntarily waived all of the sub-administration fees.
C. Administration fee -- Pursuant to an Administration Agreement, Chase (the
"Administrator") provides certain administration services to the Trust. For
these services and facilities, the Administrator receives from the Funds a
fee computed at the annual rate equal to 0.10% of the respective Fund's
average daily net assets. The Administrator voluntarily waived all of the
administration fees.
D. Waivers of fees -- For the period ended October 31, 1997, the
Administrator, Investment Advisor, and Sub-Administrator voluntarily waived
all fees for each of the Funds. In addition, the Distributor voluntarily
reimbursed expenses of the Funds in the amounts as shown on the Statement of
Operations.
E. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for the Funds.
Compensation for such services are presented in the Statement of Operations
as custodian fees.
3. Investment Transactions -- For the period ended October 31, 1997, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
VSBF VSEIF VSLCEF VSLCGF
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Purchases (excluding
U.S. Government) ...... $110,806,682 $540,885,599 $ 96,121,240 $177,941,041
Sales (excluding
U.S. Government) ...... 158,582,372 644,661,920 160,709,606 188,780,918
Purchases of
U.S. Government ...... 115,673,152 76,360,380 -- --
Sales of
U.S. Government ...... 100,667,122 -- -- --
</TABLE>
83
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VSNGOF VSSCVF VSIEF
------------- ------------- -------------
<S> <C> <C> <C>
Purchases (excluding
U.S. Government) ...... $50,605,674 $31,121,871 $320,435,368
Sales (excluding
U.S. Government) ...... 55,619,169 30,047,926 339,020,691
Purchases of
U.S. Government ...... -- -- --
Sales of
U.S. Government ...... -- -- --
</TABLE>
4. Federal Income Tax Matters -- For Federal income tax purposes, the cost and
unrealized appreciation (depreciation) in value of the investment securities at
October 31, 1997 are as follows:
<TABLE>
<CAPTION>
VSBF VSEIF VSLCEF VSLCGF
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Aggregate cost ...... $139,759,664 $ 765,024,591 $137,880,257 $325,492,002
------------ ------------- ------------ ------------
Gross unrealized
appreciation ...... $ 39,815,802 $ 198,485,272 $ 49,966,711 $224,238,897
Gross unrealized
depreciation ...... (1,013,649) (11,677,480) (1,476,225) (2,410,830)
------------ ------------- ------------ ------------
Net unrealized
appreciation ...... $ 38,802,153 $ 186,807,792 $ 48,490,486 $221,828,067
============ ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
VSNGOF VSSCVF VSIEF
--------------- ---------------- ---------------
<S> <C> <C> <C>
Aggregate cost ...... $ 84,735,348 $ 279,760,402 $ 210,927,988
------------ ------------- -------------
Gross unrealized
appreciation ...... $ 35,162,571 $ 216,201,308 $ 20,407,624
Gross unrealized
depreciation ...... (2,723,085) (10,263,014) (20,149,246)
------------ ------------- -------------
Net unrealized
appreciation ...... $ 32,439,486 $ 205,938,294 $ 258,378
============ ============= =============
</TABLE>
5. Transactions in Shares of Beneficial Interest -- Transactions in Shares of
Beneficial Interest were as follows for the period January 1, 1997
(commencement of operations) through October 31, 1997.
<TABLE>
<CAPTION>
Vista Select
Balanced Fund
-----------------------------
January 1, 1997
Through
October 31, 1997
-----------------------------
Amount Shares
---------------- ----------
<S> <C> <C>
Shares sold .......................................... $ 188,703 6,016
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 185,334,938 6,052,671
Shares issued in reinvestment of distributions ...... 655,231 20,400
Shares redeemed .................................... (26,365,926) (821,148)
------------- ---------
Net increase in Trust shares outstanding ............ $ 159,812,946 5,257,939
============= =========
</TABLE>
84
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select
Equity Income Fund
-----------------------------
January 1, 1997
Through
October 31, 1997
-----------------------------
Amount Shares
---------------- ----------
<S> <C> <C>
Shares sold .......................................... $ 29,196,797 313,613
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 828,838,615 9,754,471
Shares issued in reinvestment of distributions ...... 1,367,260 15,284
Shares redeemed .................................... (72,268,337) (779,026)
------------- ---------
Net increase in Trust shares outstanding ............ $ 787,134,335 9,304,342
============= =========
</TABLE>
<TABLE>
<CAPTION>
Vista Select
Large Cap Equity Fund
---------------------------
January 1, 1997
Through
October 31, 1997
---------------------------
Amount Shares
---------------- --------
<S> <C> <C>
Shares sold .......................................... $ 7,670,676 16,722
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 200,538,629 489,840
Shares issued in reinvestment of distributions ...... 22,438 51
Shares redeemed .................................... (64,147,877) (142,792)
------------- --------
Net increase in Trust shares outstanding ............ $ 144,083,866 363,822
============= ========
</TABLE>
<TABLE>
<CAPTION>
Vista Select
Large Cap Growth Fund
--------------------------------
January 1, 1997
Through
October 31, 1997
--------------------------------
Amount Shares
---------------- -------------
<S> <C> <C>
Shares sold .......................................... $ 33,523,782 413,187
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 446,275,715 5,718,447
Shares issued in reinvestment of distributions ...... 133,131 1,660
Shares redeemed .................................... (40,694,688) (475,449)
------------- ---------
Net increase in Trust shares outstanding ............ $ 439,237,940 5,657,845
============= =========
</TABLE>
85
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select New Growth
Opportunities Fund
---------------------------
January 1, 1997
Through
October 31, 1997
---------------------------
Amount Shares
---------------- --------
<S> <C> <C>
Shares sold .......................................... $ 12,449,526 21,149
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 126,731,600 221,746
Shares issued in reinvestment of distributions ...... 49 1
Shares redeemed .................................... (36,291,635) (63,258)
------------- -------
Net increase in Trust shares outstanding ............ $ 102,889,540 179,639
============= =======
</TABLE>
<TABLE>
<CAPTION>
Vista Select
Small Cap Value Fund
----------------------------
January 1, 1997
Through
October 31, 1997
----------------------------
Amount Shares
---------------- ---------
<S> <C> <C>
Shares sold .......................................... $ 65,913,927 1,206,998
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 391,143,652 7,540,473
Shares issued in reinvestment of distributions ...... 1,491 25
Shares redeemed .................................... (36,598,273) (692,399)
------------- ---------
Net increase in Trust shares outstanding ............ $ 420,460,797 8,055,097
============= =========
</TABLE>
<TABLE>
<CAPTION>
Vista Select
International Equity Fund
-----------------------------
January 1, 1997
Through
October 31, 1997
-----------------------------
Amount Shares
---------------- ----------
<S> <C> <C>
Shares sold .......................................... $ 68,517,763 382,789
Shares issued in exchange for Common Trust Fund
Assets (see Note 1) .............................. 235,112,660 1,368,148
Shares issued in reinvestment of distributions ...... 177 2
Shares redeemed .................................... (54,982,442) (311,311)
------------- ---------
Net increase in Trust shares outstanding ............ $ 248,648,158 1,439,628
============= =========
</TABLE>
6. Retirement Plan -- The Funds have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Funds who
will have served as an independent trustee for at least five years at the time
of retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the period ended October 31, 1997, included in
Trustees Fees and Expenses in the Statement of Operations, and accrued pension
liability included in other accrued liabilities, in the Statement of Assets and
Liabilities were as follows:
86
<PAGE>
Vista Mutual Funds
Notes to Financial Statements (continued)
- -------------------------------------------------------------------------------
Pension Accrued Pension
Expenses Liability
---------- -----------------
VSBF ......... $ 2,867 $ 9,320
VSEIF ...... 12,565 48,118
VSLCEF ...... 3,093 9,717
VSLCGF ...... 6,962 28,746
VSNGOF ...... 1,949 5,801
VSSCVF ...... 6,287 23,535
VSIEF ...... 3,530 13,813
7. Open Forward Foreign Currency Contracts -- The following forward foreign
currency contracts were held by the Funds at October 31, 1997.
<TABLE>
<CAPTION>
Vista Select International Equity Fund
-------------------------------------------------------------------
Delivery Net
Value Market Unrealized
(Local Cost Settlement Value Gain (Loss)
Currency) (USD) Date (USD) (USD)
----------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Purchases
Hong Kong Dollar ...... 4,585,000 $592,952 11/03/97 $593,182 $ 230
Sales
German Deutsche
Mark .................. 440,000 $255,542 11/03/97 $255,643 $ (101)
Malaysian Ringgit ...... 460,000 133,877 11/04/97 137,314 (3,437)
Thai Baht ............... 6,669,600 166,698 11/04/97 162,573 4,125
</TABLE>
8. Foreign Cash Positions
<TABLE>
<CAPTION>
Vista Select International Equity Fund
----------------------------------------------------------
Delivery Net
Value Market Unrealized
(Local Cost Value Gain (Loss)
Currency Currency) (USD) (USD) (USD)
- ------------------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Australian Dollar ...... (13,870) $ (9,952) $ (9,777) $ 175
Belgian Franc ......... 543 14 15 1
Swiss Franc ............ 378,938 255,779 271,371 15,592
German Deutsche Mark .... 2,669,796 1,566,357 1,551,168 (15,189)
Spanish Peseta ......... 4,207,394 28,264 28,945 681
Finnish Markka ......... 36,919 7,068 7,068 0
French Franc ............ 51,790 8,967 8,997 30
UK Sterling ............ 1,363 2,270 2,285 15
Greek Drachma ......... 787,430 2,857 2,895 38
Hong Kong Dollar ...... 9,718 1,257 1,257 0
Indonesian Rupiah ...... 8,473,455 3,055 2,350 (705)
Italian Lira ............ 66,924,330 39,200 39,597 397
Japanese Yen ............ 14,223,777 118,258 118,265 7
Malaysian Ringgit ...... 11,238 3,308 3,355 47
Dutch Guilder ......... 90,427 45,608 46,595 987
Portuguese Escudo ...... 14,270 79 81 2
Swedish Krona ......... 16,117 2,150 2,153 3
Singapore Dollar ...... 3,362 1,896 2,137 241
Thai Baht ............... 158,349 4,136 3,860 (276)
---------- ----------
$2,080,571 $2,082,617
========== ==========
</TABLE>
87
<PAGE>
Vista Mutual Funds
Financial Highlights For the period January 1, 1997* through October 31, 1997
<TABLE>
<CAPTION>
Vista Select Vista Select
Vista Select Equity Large Cap
Balanced Income Equity
Fund Fund Fund
-------------- ------------- --------------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period .............................. $ 30.62 $ 84.97 $ 409.39
------- -------- --------
Income from Investment Operations:
Net investment income ............................................. 1.171 2.371 6.506
Net Gains or Losses in Securities (both realized and unrealized) . 3.460 17.680 102.979
------- -------- ---------
Total From Investment Operations ................................. 4.631 20.051 109.485
------- -------- ---------
Less Distributions:
Dividends from net investment income .............................. 1.171 2.371 6.505
------- -------- ---------
Net Asset Value, End of Period .................................... $ 34.08 $102.65 $ 512.37
======= ======== =========
Total Return ...................................................... 15.36% 23.78% 26.89%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) ........................... $179,183 $955,137 $186,413
Ratios to average net assets:#
Ratio of expenses ................................................ 0.03% 0.03% 0.03%
Ratio of net investment income .................................... 4.29% 2.97% 1.66%
Ratio of expenses without waivers and assumption of expenses ...... 0.72% 0.59% 0.58%
Ratio of net investment income without waivers and assumption
of expenses ...................................................... 3.60% 2.41% 1.11%
Portfolio turnover rate ............................................. 131% 73% 54%
Commission rate per share .......................................... $ 0.0593 $ 0.0597 $ 0.0595
<CAPTION>
Vista Select Vista Select Vista Select Vista Select
Large Cap New Growth Small Cap International
Growth Opportunities Value Equity
Fund Fund Fund Fund
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period .............................. $ 78.04 $ 571.52 $ 51.87 $ 171.85
------ -------- -------- ---------
Income from Investment Operations:
Net investment income ............................................. 0.827 2.914 0.574 2.662
Net Gains or Losses in Securities (both realized and unrealized) . 18.849 76.149 8.620 4.614
------- --------- --------- ---------
Total From Investment Operations ................................. 19.676 79.063 9.194 7.276
------- --------- --------- ---------
Less Distributions:
Dividends from net investment income .............................. 0.826 2.753 0.524 2.416
------- --------- --------- ---------
Net Asset Value, End of Period .................................... $ 96.89 $ 647.83 $ 60.54 $ 176.71
======= ========= ========= =========
Total Return ...................................................... 25.32% 13.90% 17.80% 4.15%
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) ........................... $548,162 $116,375 $487,643 $254,402
Ratios to average net assets:#
Ratio of expenses ................................................ 0.02% 0.08% 0.02% 0.07%
Ratio of net investment income .................................... 1.12% 0.57% 1.26% 1.66%
Ratio of expenses without waivers and assumption of expenses ...... 0.60% 0.92% 0.85% 1.27%
Ratio of net investment income without waivers and assumption
of expenses ...................................................... 0.54% (0.27%) 0.43% 0.46%
Portfolio turnover rate ............................................. 36% 50% 8% 141%
Commission rate per share .......................................... $ 0.0564 $ 0.0590 $ 0.0497 $0.0295
</TABLE>
- --------
* Commencement of operations.
# Short periods have been annualized
See notes to financial statements.
88
<PAGE>
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Mutual Fund Select Group
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of 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 (separate
portfolios of Mutual Fund Select Group, hereafter referred to as the "Trust")
at October 31, 1997, and the results of each of their operations, the changes
in each of their net assets and the financial highlights for the period January
1, 1997 (commencement of operations) through October 31, 1997, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 1997 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 17, 1997
89
<PAGE>
Unaudited
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
Vista Select International Equity Fund
- -------------------------------------------------------------------------------
Certain tax information regarding the Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 1997. The information and distributions reported
in this letter may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 1997. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1997 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997.
The following represents the source and percentage of income earned from
government obligations, the percentage of distributions eligible for the
dividends received deduction and the long-term capital gains distributed per
share by the Funds:
<TABLE>
<CAPTION>
Government
U.S. Treasury National Mortgage
Vista Fund Obligations Association
- -------------------------------------------------------------------
<S> <C> <C>
Select Balanced 18.01% 7.24%
Select Equity Income 12.38% --
Select Large Cap Equity -- --
Select Large Cap Growth -- --
Select New Growth Opportunities -- --
Select Small Cap Value -- --
Select International Equity 0.01% --
<CAPTION>
Federal Home Federal National Dividends
Federal Home Loan Mortgage Mortgage Received
Vista Fund Loan Bank Corporation Association Deduction
- --------------------------------- -------------- --------------- ------------------ ----------
<S> <C> <C> <C> <C>
Select Balanced 3.88% 6.80% 4.07% 22.56%
Select Equity Income -- 0.97% -- 73.43%
Select Large Cap Equity -- -- -- 85.45%
Select Large Cap Growth -- -- -- 96.83%
Select New Growth Opportunities -- -- -- 17.83%
Select Small Cap Value -- -- -- 61.65%
Select International Equity -- -- -- --
</TABLE>
90
<PAGE>
Vista Service Center
P.O. Box 419392
Kansas City, MO 64179
Investment Adviser, Administrator,
Shareholder and Fund Servicing Agent
and Custodian
The Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Transfer Agent
DST Systems, Inc.
Legal Counsel
Simpson Thacher & Bartlett
Independent Accountants
Price Waterhouse LLP
Vista Mutual Funds are distributed by Vista Fund Distributors, Inc. which is
unaffiliated with The Chase Manhattan Bank. Chase and its respective affiliates
receive compensation from the Vista Funds for providing investment advisory and
other services.
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
funds unless preceded or accompanied by a prospectus.
To obtain a prospectus for any of the Vista Funds, call 1-800-34-VISTA. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
VSE-2-1297
<PAGE>
[IN SIDE BAR ON COVER]
VISTA SELECT FIXED INCOME FUNDS
[BACKGROUND GRAPHIC OF HILLS AND TREES]
ANNUAL
REPORT
-----------------------------------
Vista. Setting the Global Standard.
VISTA SELECT BOND FUND
VISTA SELECT INTERMEDIATE
BOND FUND
VISTA SELECT SHORT-TERM
BOND FUND
[VISTA LOGO]
Vista
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN
October 31, 1997
<PAGE>
HIGHLIGHTS
Over the reporting year, the fixed income markets exhibited significant
volatility as investors reacted to changing perception of U.S. economic
strength.
[bullet] During the reporting period, the yeild on the 30-year U.S. Treasury
bond fell from 6.65% to 6.15%.
[bullet] The yield on the 3-year bond peaked at 7.17% on April 11, 1997, shortly
after the Federal Reserve Boards did indeed act on March 25th, but
then began moving down with occasional interruptions for the remainder
of the reporting year as inflation remained muted.
CONTENTS
Chairman's Letter 3
Vista Select Bond Fund
Fund Commentary [bullet] Portfolio of Investments 4
Vista Select Intermediate Bond Fund
Fund Commentary [bullet] Portfolio of Investments 13
Vista Select Short-Term Bond Fund
Fund Commentary [bullet] Portfolio of Investments 21
Financial Statements 29
Notes to Financial Statements 32
Financial Highlights 36
Report of Independent Accountants 37
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, THE
CHASE MANHATTAN BANK, AND THE SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS
INVOLVE RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
Vista Select Fixed Income Funds/Annual Report
CHAIRMAN'S LETTER
December 10, 1997
Dear Shareholder:
We are pleased to present this Annual Report for the following Vista Select
Fixed Income Funds for the period ended October 31, 1997:
[bullet] Bond Fund
[bullet] Intermediate Bond Fund
[bullet] Short-Term Bond Fund
Economic Growth Reports Drive Fixed Income Markets
Over the reporting year, the yield on the 30-year U.S. Treasury bond fell from
6.65% to 6.15%, while the yield on the 2-year Treasury note declined from 5.74%
to 5.61%, contributing to a dramatic flattening of the yield curve. Behind this
generally positive backdrop, however, the fixed income markets exhibited
significant volatility as investors reacted to the changing perception of U.S.
economic strength.
Specifically, fixed income investors were concerned that the high levels of
economic growth would lead to a resurgence of inflation, a sensitivity that
caused investors to react -- and at times overreact -- to each new economic
report. Volatility levels peaked in late February when reports of unexpectedly
strong economic growth created the expectation that the Federal Reserve Board
would raise short term interest rates. The yield on the 30-year bond peaked at
7.17% on April 11, 1997, shortly after the Fed did indeed act on March 25th,
but then began moving down with occasional interruptions for the remainder of
the reporting year as inflation remained muted.
U.S. Treasuries: Safe Haven Amid Asian Crisis
As the reporting year ended, U.S. fixed income markets were in the midst of a
strong rally as global investors sought a safe haven in U.S. Treasury
securities in light of worldwide stock market volatility. The rally was
reinforced by the general belief that the Asian economic difficulties would
cause a slowing of U.S. exports to that region while also adding to Asian
imports to the U.S., both of which were expected to dampen inflation.
The recent equity market volatility serves as a timely reminder of the
important role fixed income securities play in any diversified portfolio. We
appreciate the confidence you have placed in Vista and ask that you please call
your Chase Trust Account Officer, whose name appears on the statement sent to
you, if you have any questions.
Sincerely yours,
/s/ Fergus Reid
- ---------------
Fergus Reid
Chairman
3
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BOND FUND
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
Objective: Income
Primary investments: Debt obligations of the U.S. government, its
agencies and instrumentalities and investment-
grade fixed income securities.
Suggested investment
time frame: Long-term
Market benchmark: Lehman Aggregate Bond Index
Lipper Funds category: Corporat Debt BBB-Rated Funds Average Corporate
Debt A-Rated Funds Average
Inception date: 1/1/97
Newspaper symbol: Bond
As of October 31, 1997
Net assets: $519.8 million
Average maturity: 13.4 years
Average duration: 4.6 years
Average quality: AAA
4
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BOND FUND
PERFORMANCE
Vista Select Bond Fund, which seeks to provide a high level of current income
through a portfolio of investment-grade government, asset-backed and corporate
bonds, had a total return of 8.19% for the year ended October 31, 1997.
STRATEGY
Using a relative value analysis, the Fund's management team began the reporting
year by emphasizing mortgage-backed and selected corporate securities. This
helped the Fund outperform as reports of accelerating economic growth drove
rates higher, and spreads tighter, in the first quarter of 1997. The Fund had a
relatively-neutral sector allocation during the volatility associated with the
Federal Reserve Board's raising of short-term interest rates on March 25th.
However, when the market subsequently exhibited signs of settling into an
interest rate trading range, the management team, once again, took an overweight
stance in mortgage-backed and corporate securities, given their higher yields.
By the summer, the management team became concerned about the very small yield
differential between securities of different quality. Believing there was not
much yield incentive for the extra risk associated with lower-quality bonds,
they sharply reduced their BBB-rated foreign-issued Yankee securities. This
move proved beneficial as these bonds fell sharply during the Asian volatility.
At the end of the reporting period, the Fund had a more neutral duration
strategy, was overweight in U.S. Treasuries and maintained neutral allocations
to mortgage-backed and corporate securities.
OUTLOOK
The management team believes that, by the first quarter of 1998, U.S. economic
growth will moderate and that inflation will be further dampened by the events
in Asia. With the expectation that rates will decline after the first quarter,
the management team expects to shift to a longer-than-benchmark duration, to
underweight U.S. Treasury securities and overweight mortgage-backed and
corporate securities. Within the corporate sector, the Fund expects to
emphasize high-quality bonds of companies with little foreign exposure.
5
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BOND FUND
VISTA SELECT BOND FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
Cash 7.56%
Bonds 92.44%
VISTA SELECT BOND FUND
COMPOSITION OF MARKET VALUE OF INVESTMENTS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
Asset Backed Securities 1.56%
U.S. Treasury Notes & Bonds 27.52%
U.S. Government Agency Obligations 18.21%
Corporate Notes & Bonds 20.03%
Mortgage Backed Securities 27.86%
Commercial Mortgage Backed Securities 4.82%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- --------------------------------------------------------------------------------
One Year 8.19%
Five Years 7.39%
Ten Years 8.82%
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Bond Fund includes performance of a
predecessor account for the period dating back to 10/31/87 and prior to the
Fund's commencement of operations on 1/1/97. Returns are adjusted to reflect
historical expenses at the levels indicated (absent reimbursements) in the
Expense Summary for the Fund as disclosed in the Prospectus. The account was
not registered with the Securities and Exchange Commission and, therefore, was
not subject to the investment restrictions imposed by law on registered mutual
funds. If the account had been registered, the account's performance may have
been adversely affected. Also, the Fund is currently waiving certain fees. This
voluntary waiver may be modified or terminated at any time, which would reduce
returns.
6
<PAGE>
Unaudited
About Your Fund
VISTA SELECT BOND FUND
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT BOND FUND+
AND ITS KEY BENCHMARKS
[TABULAR REPRESENTATION OF LINE CHART]
<TABLE>
<CAPTION>
Vista Select Lehman Aggregate Lipper Corp Debt Lipper Corp Debt
Bond Fund Bond Index A-Rated Funds Average BBB-Rated Funds Average
<S> <C> <C> <C> <C>
10/87 10000 10000 10000 10000
10/88 11031 11146 11141 11256
10/89 12328 12472 12376 12294.8
10/90 12893 13256 12850 12455.7
10/91 14095 15352 14918 14674.4
10/92 16308 16863 16455 16311.9
10/93 18505 18865 18773 19044.3
10/94 17730 18171 17673 17971.1
10/95 20390 21016 20405 21010.2
10/96 21530 22241 21384 22171.5
10/31/97 23294 24222 23191 24231
</TABLE>
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with market
conditions. When shares are redeemed, they may be worth more or less than their
original cost.
This chart illustrates comparative performance for $10,000 invested in shares of
Vista Select Bond Fund, the Lehman Aggregate Bond Index, the Lipper Corporate
Debt BBB-Rated Funds Average and the Lipper Corporate Debt A-Rated Funds Average
for the 10 years ended 10/31/97. The performance of the Fund assumes
reinvestment of all dividends and capital gains. The performance of the average
and the index does not include a sales charge and has been adjusted to reflect
the reinvestment of all dividends and capital gains on the securities included
in the benchmark.
The Lehman Aggregate Bond Index is composed of the Lehman Government/Corporate
Index and the Mortgage-Backed Securities Index and includes U.S. Treasury,
agency and corporate bond issues and mortgage-backed securities. The index is
unmanaged and reflects the reinvestment of dividends. An individual cannot
invest in an index.
The Lipper Corporate Debt BBB Rated Funds Average represents the average
performance of a universe of 119 actively managed BBB-rated corporate debt
funds. The Lipper Corporate Debt A-Rated Funds Average represents the average
performance of a universe of 140 actively managed corporate debt A-Rated or
better funds. Lipper is an independent mutual fund performance monitor whose
results are based on total return and do not reflect a sales charge.
+ The quoted performance of Vista Select Bond Fund includes performance of a
predecessor account for the period dating back to 10/31/87 and prior to the
Fund's commencement of operations on 1/1/97. Returns are adjusted to reflect
historical expenses at the levels indicated (absent reimbursements) in the
Expense Summary for the Fund as disclosed in the Prospectus. The account was
not registered with the Securities and Exchange Commission and, therefore, was
not subject to the investment restrictions imposed by law on registered mutual
funds. If the account had been registered, the account's performance may have
been adversely affected. Also, the Fund is currently waiving certain fees. This
voluntary waiver may be modified or terminated at any time, which would reduce
returns.
7
<PAGE>
Vista Select Bond Fund
Portfolio of Investments October 31, 1997
Principal
Amount
(USD) Issuer Value
- -----------------------------------------------------------------
Long-Term Investments -- 97.6%
- -----------------------------------------------------------------
U.S. Treasury Securities -- 29.0%
---------------------------------
U.S. Treasury Notes & Bonds,
$10,000,000 8.75%, 08/15/00+ $ 10,770,300
17,675,000 8.50%, 11/15/00+ 19,019,891
10,000,000 6.25%, 04/30/01+ 10,154,688
4,030,000 8.00%, 05/15/01 4,317,782
11,500,000 6.50%, 05/31/02 11,828,785
14,500,000 6.25%, 08/31/02 14,783,185
4,750,000 5.75%, 10/31/02 4,757,422
10,000,000 10.75%, 02/15/03 12,221,900
12,000,000 11.13%, 08/15/03 15,080,640
45,400,000 6.38%, 08/15/27 46,790,148
1,000,000 Treasury Lincs 6.00%, 08/15/09 969,390
------------
U.S. Treasury Securities 150,694,131
(Cost $149,053,107) ------------
U.S. Government Agency Obligations -- 11.5%
-------------------------------------------
5,005,000 Federal Home Loan Mortgage
Corp., 7.59%, 09/19/06 5,240,385
Federal National Mortgage
Association,
8,000,000 7.17%, 06/26/07 8,144,960
25,000,000 7.00%, 11/13/27 25,121,000
4,000,000 7.55%, 03/27/07 4,103,120
2,500,000 6.95%, 11/13/06 2,551,550
5,000,000 7.44%, 11/08/06 5,093,750
9,000,000 Global Notes, 8.50%, 02/01/05 9,482,310
------------
Total U.S. Government Agency 59,737,075
Obligations (Cost $58,862,083) ------------
Corporate Notes & Bonds -- 21.0%
--------------------------------
Aerospace -- 0.9%
4,500,000 Lockheed Martin Corp., 7.45%,
06/15/04 4,749,840
------------
Airlines -- 2.3%
5,147,062 Continental Airlines, 9.50%,
10/15/13 5,985,055
See notes to financial statements.
8
<PAGE>
Vista Select Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
$ 5,000,000 Delta Air Lines, 10.06%, 01/02/16 $ 6,231,700
------------
12,216,755
------------
Banking -- 6.1%
6,400,000 Banco Latinoamerican (Panama),
7.20%, 05/28/02 6,550,080
7,050,000 BankAmerica Corp., 10.00%,
02/01/03 8,164,817
4,000,000 Bankers Trust Capital Trust, Ser. B1,
7.90%, 01/15/27 4,075,000
3,575,000 Commerica Bank, 7.25%, 06/15/07 3,723,997
3,000,000 Corp Andina de Fomento, Yankee
(Venezuela), 7.38%, 07/21/00 3,058,470
5,650,000 Key Bank of Washington, 7.13%,
08/15/06 5,909,844
------------
31,482,208
------------
Broadcasting -- 1.9%
Time Warner Inc.,
5,000,000 7.75%, 06/15/05 5,242,900
4,000,000 9.15%, 02/01/23 4,807,720
------------
10,050,620
------------
Financial Services -- 4.0%
8,850,000 Donaldson Lufkin & Jenrette, Inc.,
6.90%, 10/01/07 8,872,125
1,000,000 General Electric Capital Corp.,
8.30%, 09/20/09 1,153,620
7,000,000 Goldman Sachs Group, LP, 7.13%,
03/01/03# 7,206,360
1,500,000 Lehman Brothers Inc., 7.38%,
01/15/07 1,552,725
1,850,000 Morgan Stanley Group, Inc., 9.38%,
06/15/01 2,041,179
------------
20,286,009
------------
Project Finance -- 4.7%
8,000,000 Ras Laffan Liquefied Natural Gas,
(Qatar), 8.29%, 03/15/14# 8,383,240
See notes to financial statements.
9
<PAGE>
Vista Select Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ----------------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------------
$12,250,000 Termoemcali Funding Corp.,
10.13%, 12/15/14# $ 12,962,705
3,000,000 Zhuhai Highway Co., Ltd., Ser. A,
Yankee (China), 9.13%,
07/01/06# 3,161,610
------------
24,507,555
------------
Real Estate Investment Trust -- 1.1%
2,000,000 Chelsea GCA Realty Partnership
7.25%, 10/21/07 2,030,880
3,750,000 Simon Debartolo Group, 7.13%,
09/20/07 3,800,363
------------
5,831,243
------------
Total Corporate Notes & Bonds 109,664,230
(Cost $108,006,967) ------------
Mortgage Backed Securities -- 29.4%
-----------------------------------
Mortgage-Backed Pass Through Securities -- 20.1%
Federal Home Loan Mortgage Corp.,
4,398,760 GOLD, Pool # D68794, 7.00%,
03/01/26 4,428,979
2,029,832 Pool #170169, 9.00%, 06/01/16 2,172,549
Federal National Mortgage Association,
5,321,992 ARM, Pool #313539, 7.44%,
11/01/18 5,499,946
4,587,721 ARM, Pool #377930, 5.50%,
04/01/27 4,709,571
6,000,000 Pool #100176, 12.00%, 02/15/16 7,172,813
4,675,520 Pool #250738, 7.00%, 11/01/11 4,744,671
5,444,843 Pool #250739, 7.50%, 11/01/11 5,591,146
8,822,855 Pool #313549, 9.00%, 09/01/22 9,503,869
9,775,395 Pool #313563, 10.50%, 03/01/18 11,012,594
4,669,903 Pool #337259, 6.50%, 02/01/26 4,598,407
3,606,436 Pool #58013, 8.50%, 08/01/12 3,763,749
Government National Mortgage
Association,
4,775,937 Pool #369459, 8.00%, 10/15/24 4,962,485
8,588,620 Pool #370957, 6.50%, 12/15/23 8,518,795
See notes to financial statements.
10
<PAGE>
Vista Select Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ----------------------------------------------------------------------
Long-Term Investments -- (continued)
- ----------------------------------------------------------------------
$ 5,689,367 Pool #393178, 8.00%, 08/15/24 $ 5,911,594
3,808,504 Pool #411546, 6.50%, 12/15/25 3,769,238
3,037,629 Pool #780325, 8.50%, 11/15/09 3,178,119
9,866,874 Pool #780412, 7.50%, 08/15/26 10,094,997
4,531,120 Pool #780508, 8.00%, 11/15/24 4,729,311
------------
104,362,833
------------
Collateralized Mortgage Obligations -- 9.3%
Federal Home Loan Mortgage Corp.,
7,223,511 Ser. 77, Class G, 8.50%, 01/15/20 7,555,287
7,500,000 Ser. 1343, Class H, 7.50%,
05/15/19 7,706,250
5,000,000 Ser. 1761, Class G, 8.00%,
06/15/21 5,295,300
800 Ser. 1819, Class E, 6.00%,
02/15/11 779
7,200,000 Ser. 1985, Class PB, 6.25%,
08/17/12 7,211,023
Federal National Mortgage Association,
954,250 REMIC, Ser. 1992-118, Class J,
7.50%, 07/25/02 970,644
2,000,000 REMIC, Ser. 1992-136, Class
PG, 6.00%, 08/25/19 1,957,500
10,000,000 Ser. 1992-163, Class FE, 6.47%,
09/25/22 10,087,500
1,000,000 Ser. G93-34, Class PJ, 6.60%,
12/25/22 999,680
5,500,000 Government National Mortgage
Association, Ser. 1996, Class 26E
9.00%, 12/16/26 6,369,660
------------
48,153,623
------------
Total Mortgage Backed Securities 152,516,456
(Cost $150,117,768) ------------
Commercial Mortgage Backed Securities -- 5.1%
---------------------------------------------
5,000,000 Asset Securitization Corp., Ser.
1997-D5, Class A1C, 6.75%,
02/14/41 5,079,687
See notes to financial statements.
11
<PAGE>
Vista Select Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------------
$ 3,000,000 DLJ Mortgage Acceptance Corp.,
Ser. 1997-CF2, Class A1B,
6.82%, 09/15/07# $3,061,875
5,000,000 GS Mortgage Securities Corp. II,
Ser. 1997-GL, Class A2D, 6.94%,
07/13/30 5,242,187
5,000,000 Lehman Large Loan, Ser. 1997-LLI,
Class A3, 6.00%, 10/12/34 5,129,687
4,354,000 Norwest Asset Securities Corp., Ser.
1997-14, Class A11, 7.25%,
10/25/27 4,407,064
3,453,968 Wells Fargo Capital Markets
Apartments Financing, Ser. APT,
Class A, 6.56%, 12/29/05# 3,477,175
------------
Total Commercial Mortgage Backed 26,397,675
Securities (Cost $26,020,494) ------------
Asset Backed Securities -- 1.6%
-------------------------------
6,500,000 Nomura CBO, Ltd., Ser. 1997-1,
Class A2, 6.67%, 05/15/07# 7,028,125
1,491,885 The Money Store Home Equity
Trust, Ser. 1994-B, Class A3,
7.10%, 11/15/16 1,510,042
------------
Total Asset Backed Securities 8,538,167
(Cost $8,068,521) ------------
- -------------------------------------------------------------------
Total Long-Term Investments 507,547,734
(Cost $500,128,940)
- -------------------------------------------------------------------
Short-Term Investments -- 7.7%
- -------------------------------------------------------------------
U.S. Government Agency
Obligations -- 7.7%
40,000,000 Federal Home Loan Mortgage
Corp., Discount Note 5.65%,
11/03/97 39,987,444
(Cost $39,987,444)
- -------------------------------------------------------------------
Total Investments -- 105.3% $547,535,178
(Cost $540,116,385)
- -------------------------------------------------------------------
See notes to financial statements.
12
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERMEDIATE BOND FUND
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
Objective: Income
Primary investments: Debt obligations of the U.S. Government, its
agencies and instrumentalities and investment-
grade fixed income securities.
Suggested investment
time frame: Mid- to long-term
Market Benchmark: Lehman Intermediate Govt/Corp Bond Index
Lipper Funds Category: Intermediate Investment Grade Funds Average
Inception date: 1/1/97
Newspaper symbol: IntmdBd
As of October 31, 1997
Net assets: $319.2 million
Average maturity: 9 years
Average duration: 4.6 years
Average quality: AAA
13
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERMEDIATE BOND FUND
PERFORMANCE
Vista Select Intermediate Bond Fund, which seeks to provide a high level of
current income through a portfolio of investment-grade government, asset-backed
and corporate bonds, had a total return of 6.96% for the year ended October 31,
1997.
STRATEGY
Using a relative value analysis, the Fund's management team began the reporting
year by emphasizing mortgage-backed and selected corporate securities. This
helped the Fund outperform as reports of accelerating economic growth drove
rates higher, and spreads tighter, in the first quarter of 1997. The Fund had a
relatively-neutral sector allocation during the volatility associated with the
Federal Reserve Board's raising of short-term interest rates on March 25th.
However, when the market subsequently exhibited signs of settling into an
interest rate trading range, the management team once again took an overweight
stance in mortgage-backed and corporate securities, given their higher yields.
By the summer, the management team became concerned about the very small yield
differential between securities of different quality. Believing there was not
much yield incentive for the extra risk associated with lower-quality bonds,
they sharply reduced their BBB-rated foreign-issued Yankee securities. This
move proved beneficial as these bonds fell sharply during the Asian volatility.
At the end of the reporting period, the Fund had a more neutral duration
strategy, was overweight in U.S. Treasuries and maintained neutral allocations
to mortgage-backed and corporate securities.
OUTLOOK
The management team believes that, by the first quarter of 1998, U.S. economic
growth will moderate and that inflation will be further dampened by the events
in Asia. With the expectation that rates will decline after the first quarter,
the management team expects to shift to a longer-than-benchmark duration, to
underweight U.S. Treasury securities and overweight mortgage-backed and
corporate securities. Within the corporate sector, the Fund expects to
emphasize high-quality bonds of companies with little foreign exposure.
14
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERMEDIATE BOND FUND
VISTA SELECT INTERMEDIATE BOND FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
Cash 7.84%
Bonds 92.16%
VISTA SELECT INTERMEDIATE BOND FUND
COMPOSITION OF MARKET VALUE OF INVESTMENTS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
Asset Backed Securities 5.10%
U.S. Treasury Securities 34.65%
U.S. Government Aency Obligations 9.35%
Corporate Notes & Bonds 27.68%
Mortgage Backed Securities 18.71%
Commercial Mortgage Backed Securities 4.51%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- --------------------------------------------------------------------------------
One Year 6.96%
Five Years 6.31%
Ten Years 8.24%
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Intermediate Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
15
<PAGE>
Unaudited
About Your Fund
VISTA SELECT INTERMEDIATE BOND FUND
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT INTERMEDIATE BOND FUND+
AND ITS KEY BENCHMARKS
[TABULAR REPRESENTATION OF LINE CHART]
Lehman Intermediate Lipper Intermediate
Select Intermediate Govt/Corp Investment Grade
Bond Fund Bond Index Funds Average
10/87 10000 10000 10000
10/88 11071 10926 11006
10/89 12213 12083 12068
10/90 12889 12975 12673
10/91 14792 14768 14552
10/92 16256 16245 15965
10/93 18278 17862 17813
10/94 17204 17516 17069
10/95 19738 19709 19421
10/96 20644 20855 20421
10/31/97 22082 22416 22041
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in shares of
Vista Select Intermediate Bond Fund, Lehman Intermediate Government/Corporate
Bond Index and the Lipper Intermediate Investment Grade Debt Funds Average for
the 10 years ended 10/31/97. The performance of the Fund assumes reinvestment of
all dividends and capital gains. The performance of the average and the index
does not include a sales charge and has been adjusted to reflect the
reinvestment of all dividends and capital gains on the securities included in
the benchmark.
The Lehman Intermediate Government/Corporate Bond Index is composed of the
government and corporate indexes, which includes bonds with 5-10 year
maturities, including U.S. Government Treasury and agency securities, and
corporate and Yankee bonds. The index is unmanaged and reflects reinvestment of
dividends. An individual cannot invest in the index.
The Lipper Intermediate Investment Grade Debt Funds Average represents the
average performance of a universe of 200 actively managed intermediate
investment grade debt mutual funds. Lipper is an independent mutual fund
performance monitor whose results are based on total return and do not reflect
a sales charge.
+ The quoted performance of Vista Select Intermediate Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
16
<PAGE>
Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1997
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------
Long-Term Investments -- 92.2%
- --------------------------------------------------------------------------
U.S. Treasury Securities -- 33.3%
----------------------------------
U.S. Treasury Notes & Bonds,
$ 8,000,000 8.25%, 07/15/98 $ 8,147,520
20,000,000 9.25%, 08/15/98+ 20,556,200
10,000,000 8.50%, 02/15/00 10,595,300
14,500,000 8.75%, 08/15/00 15,616,935
16,000,000 8.50%, 11/15/00 17,217,440
10,250,000 6.50%, 05/31/02 10,543,048
18,000,000 6.25%, 08/31/02 18,351,540
5,000,000 6.38%, 08/15/27 5,153,100
------------
Total U.S. Treasury Securities 106,181,083
(Cost $105,212,674) ------------
U.S. Government Agency Obligations -- 5.2%
------------------------------------------
Federal National Mortgage
Association,
5,000,000 7.44%, 11/08/06 5,093,750
11,000,000 Global Bond, 8.50%, 02/01/05 11,589,490
------------
Total U.S. Government Agency 16,683,240
Obligations (Cost $16,365,193) ------------
Corporate Notes & Bonds -- 26.6%
--------------------------------
Airlines -- 2.9%
2,588,672 American Airlines, 9.71%,
01/30/07# 2,963,563
5,165,774 Continental Airlines, Inc., 10.22%,
07/02/14 6,310,510
------------
9,274,073
------------
Banking -- 7.8%
3,500,000 Banco Latinoamerican (Panama),
7.20%, 05/28/02 3,582,075
7,700,000 BankAmerica Corp., 10.00%,
02/01/03 8,917,601
5,550,000 Comerica Bank, 7.25%, 06/15/07 5,777,772
4,000,000 Corp. Andina de Fomento, Yankee
(Venezuela), 7.25%, 03/01/07 4,135,000
See notes to financial statements.
17
<PAGE>
Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------------
$ 2,450,000 Societe Generale (New York),
7.40%, 06/01/06 $ 2,547,486
------------
24,959,934
------------
Broadcasting -- 1.6%
5,000,000 Time Warner Inc., 7.75%, 06/15/05 5,242,900
------------
Financial Services -- 9.1%
3,500,000 Donaldson Lufkin & Jenrette, Inc.,
6.90%, 10/01/07 3,508,750
8,000,000 Ford Motor Credit Corp., 8.20%,
02/15/02 8,551,840
7,900,000 General Electric Capital Corp.,
8.20%, 10/30/03 8,586,036
8,000,000 Lehman Brothers Inc., 7.38%,
01/15/07 8,281,200
------------
28,927,826
------------
Oil & Gas -- 2.0%
2,775,000 Petroleum Geo-Services ASA, Yankee
(Norway) 7.50%, 03/31/07 2,921,603
3,482,849 YPF Sociedad Anonima, Yankee
(Argentina) 7.50%, 10/26/02 3,526,385
------------
6,447,988
------------
Project Finance -- 1.9%
1,626,224 Hero Asia BVI Co., Ltd., Yankee
(China), 9.11%, 10/15/01# 1,704,445
4,000,000 Zhuhai Highway Co., Ltd., Ser. A,
Yankee (China), 9.13%,
07/01/06# 4,215,480
------------
5,919,925
------------
Real Estate Investment Trust -- 1.3%
4,000,000 Simon Debartolo Group, 7.13%,
09/20/07 4,052,248
------------
Total Corporate Notes & Bonds 84,824,894
(Cost $83,630,318) ------------
See notes to financial statements.
18
<PAGE>
Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------------
Mortgage Backed Securities -- 17.9%
-----------------------------------
Mortgage Pass-Through Securities -- 11.3%
$ 5,365,545 Federal Home Loan Mortgage
Corp., Gold, Pool #A01717,
12.00%, 06/01/17 $ 6,296,970
Federal National Mortgage
Association,
7,319,503 TBA 10.50%, 06/01/27 8,245,878
4,434,993 ARM Pool #313539, 7.44%,
11/01/18 4,583,288
2,624,185 Pool #100156, 12.50%, 06/01/27 3,155,173
2,650,000 Pool #100176 12.00%, 10/01/07 3,167,992
4,411,427 Pool #313549, 9.00%, 09/01/22 4,751,934
341,591 Pool #313748, 13.00%, 10/01/15 412,276
4,669,903 Pool #337259, 6.50%, 02/01/26 4,598,407
886,674 Pool #372176, 10.00%, 09/01/25 983,925
------------
36,195,843
------------
Collateralized Mortgage Obligations -- 6.6%
Federal Home Loan Mortgage Corp.
5,000,000 REMIC, Ser. 1763, Class J,
8.50%, 03/15/24 5,491,585
5,275,000 Ser. 1343, Class D, 7.50%,
04/15/21 5,512,375
4,000,000 Ser. 1985, Class PB, 6.25%,
08/17/12 4,006,124
6,100,000 Federal National Mortgage
Association, Ser. 1992-163,
Class FE, 6.47%, 09/25/22 6,153,375
------------
21,163,459
------------
Total Mortgage Backed Securities 57,359,302
(Cost $56,826,729) ------------
Commercial Mortgage Backed Securities -- 4.3%
---------------------------------------------
2,700,000 GS Mortgage Securities Corp. II,
Ser. 1997-GL, Class A2D, 6.94%,
07/13/30 2,830,781
See notes to financial statements.
19
<PAGE>
Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------
Long-Term Investments -- (continued)
- -------------------------------------------------------------------
$ 3,650,000 JP Morgan Commercial Mortgage
Finance Corp., Ser. 1997-C5,
Class A3, 7.09%, 09/15/29 $ 3,786,305
5,000,000 Norwest Asset Securities Corp., Ser.
1997-14, Class A11, 7.25%,
10/25/27 5,060,937
2,129,947 Wells Fargo Capital Markets
Apartments Financing, Ser. APT,
Class A, 6.56%, 12/29/05# 2,144,258
------------
Total Commercial Mortgage Backed 13,822,281
Securities (Cost $13,520,571) ------------
Asset Backed Securities -- 4.9%
-------------------------------
4,750,000 American Express Credit Account
Master Trust, Ser. 1997-1, Class
A, 6.40%, 04/15/05 4,797,500
5,219,932 Mid-State Trust, Ser. 6, Class A4,
7.79%, 07/01/35 5,439,332
5,000,000 Nomura CBO, Ltd., Ser. 1997-1,
Class A2, 6.67%, 05/15/07# 5,406,250
------------
Total Asset Backed Securities 15,643,082
(Cost $15,048,839)
- -------------------------------------------------------------------
Total Long-Term Investments 294,513,882
(Cost $290,604,324)
- -------------------------------------------------------------------
Short-Term Investments -- 3.8%
- -------------------------------------------------------------------
U.S. Government Agency Obligations -- 3.8%
------------------------------------------
12,000,000 Federal Home Loan Mortgage
Corp., Discount Note, 5.65%,
11/03/97 11,996,233
(Cost $11,996,233)
- -------------------------------------------------------------------
Total Investments -- 96.0% $306,510,115
(Cost $302,600,558)
- -------------------------------------------------------------------
See notes to financial statements.
20
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SHORT-TERM BOND FUND
- --------------------------------------------------------------------------------
FUND FACTS
- --------------------------------------------------------------------------------
Objective: Current Income
Primary investments: Investment-grade fixed-income securities with
maturities of three years or less.
Suggested investment
time frame: Short-term
Market benchmark: Lehman 1-3 Year Government Bond Index
Lipper Funds category: Short-term Investment Grade Debt Funds Average
Inception date: 1/1/97
Newspaper symbol: ST Bond
As of October 31, 1997
Net assets: $26.7 million
Average maturity: 2.4 years
Average duration: 1.7 years
Average quality: AAA
21
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SHORT-TERM BOND FUND
PERFORMANCE
Vista Select Short-Term Bond Fund, which seeks current income by investing in a
portfolio of short-term investment grade fixed income securities, had a total
return of 4.50% for the year ended October 31, 1997.
STRATEGY
Using a relative value analysis, the Fund's management team began the reporting
year by emphasizing mortgage-backed and selected corporate securities. This
helped the Fund outperform as reports of accelerating economic growth drove
rates higher, and spreads tighter, in the first quarter of 1997. The Fund had a
relatively-neutral sector allocation during the volatility associated with the
Federal Reserve Board's raising of short-term interest rates on March 25th.
However, when the market subsequently exhibited signs of settling into an
interest rate trading range, the management team once again took an overweight
stance in mortgage-backed and corporate securities given their higher yields.
By the summer, the management team became concerned about the very small yield
differential between securities of different quality. Believing there was not
much yield incentive for the extra risk associated with lower-quality bonds,
they sharply reduced their BBB-rated foreign-issued Yankee securities. This
move proved beneficial as these bonds fell sharply during the Asian volatility.
At the end of the reporting period, the Fund had a more neutral duration
strategy, was overweight in U.S. Treasuries and maintained neutral allocations
to mortgage-backed and corporate securities.
OUTLOOK
The management team believes that, by the first quarter of 1998, U.S. economic
growth will moderate and that inflation will be further dampened by the events
in Asia. With the expectation that rates will decline after the first quarter,
the management team expects to shift to a longer-than-benchmark duration, to
underweight U.S. Treasury securities and overweight mortgage-backed and
corporate securities. Within the corporate sector, the Fund expects to
emphasize high-quality bonds of companies with little foreign exposure.
22
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SHORT-TERM BOND FUND
VISTA SELECT SHORT-TERM BOND FUND
COMPOSITION OF TOTAL ASSETS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
Cash 2.86%
Bonds 97.14%
VISTA SELECT SHORT-TERM BOND FUND
COMPOSITION OF MARKET VALUE OF INVESTMENTS AS OF 10/31/97
[TABULAR REPRESENTATION OF PIE CHART]
U.S. Treasury Securities 20.20%
U.S. Government Agency Securities 15.33%
State & Municipal Obligations 4.28%
Corporate Notes & Bonds 14.83%
Mortgage Backed Securities 29.08%
Commercial Mortgage Backed Securities 4.27%
Asset Backed Securities 12.01%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/97+
- --------------------------------------------------------------------------------
One Year 4.50%
Five Years 4.92%
Ten Years 6.93%
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
+ The quoted performance of Vista Select Short-Term Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
23
<PAGE>
Unaudited
About Your Fund
VISTA SELECT SHORT-TERM BOND FUND
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT IN
VISTA SELECT SHORT-TERM BOND FUND+
AND ITS KEY BENCHMARKS
[TABULAR REPRESENTATION OF LINE CHART]
Select Short-Term Lehman 1-3 Yr. Lipper Short-Term Invest.
Bond Fund Govt. Bond Index Grade Debt Funds Average
10/87 10000 10000 10000
10/88 10781 10765 10812
10/89 11717 11782 11820
10/90 12602 12825 12658
10/91 14129 14266 14087
10/92 15378 15425 15098
10/93 16394 16318 16052
10/94 16462 16507 16181
10/95 17657 17964 17485
10/96 18715 19040 18431
10/31/97 19557 20273 19546
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Shares of
Vista Select Short-Term Bond Fund, the Lehman 1-3 Year Government Bond Index and
the Lipper Short-Term Investment Grade Debt Funds Average for the ten years
ended 10/31/97. The performance of the Fund assumes reinvestment of all
dividends and capital gains. The performance of the average and the index does
not include a sales charge and has been adjusted to reflect the reinvestment of
all dividends and capital gains on the securities included in the benchmark.
The Lehman Brothers 1-3 Year Government Bond Index is composed of all bonds
covered by the Government Bond Index with maturities of one to three years. The
index is unmanaged and reflects reinvestment of dividends. An individual cannot
invest in the index.
The Lipper Short-Term Investment Grade Debt Funds Average represents the
average performance of a universe of 107 actively managed short-term investment
grade debt mutual funds. Lipper is an independent mutual fund performance
monitor whose results are based on total return and do not reflect a sales
charge.
+ The quoted performance of Vista Select Short-Term Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/87 and
prior to the Fund's commencement of operations on 1/1/97. Returns are adjusted
to reflect historical expenses at the levels indicated (absent reimbursements)
in the Expense Summary for the Fund as disclosed in the Prospectus. The account
was not registered with the Securities and Exchange Commission and, therefore,
was not subject to the investment restrictions imposed by law on registered
mutual funds. If the account had been registered, the account's performance may
have been adversely affected. Also, the Fund is currently waiving certain fees.
This voluntary waiver may be modified or terminated at any time, which would
reduce returns.
24
<PAGE>
Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1997
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- 95.9%
- --------------------------------------------------------------------
U.S. Treasury Securities -- 20.5%
---------------------------------
U.S. Treasury Notes,
$ 3,400,000 5.88%, 07/31/99 $ 3,412,206
2,050,000 6.00%, 08/15/00 2,066,338
-----------
Total U.S. Treasury Securities 5,478,544
(Cost $5,472,393) -----------
U.S. Government Agency Obligations -- 5.8%
------------------------------------------
Federal National Mortgage
Association,
500,000 7.00%, 11/13/27 502,420
1,050,000 MTN, 6.03%, 10/23/00 1,055,082
-----------
Total U.S. Government Agency 1,557,502
Obligations (Cost $1,555,218) -----------
State & Municipal Obligation -- 4.4%
------------------------------------
1,150,000 New York City, New York, GO,
Taxable, Ser. I, 6.85%, 04/15/99+ 1,161,500
(Cost $1,150,000) -----------
Corporate Notes & Bonds -- 19.0%
---------------------------------
Banking -- 1.9%
500,000 Corp Andina de Fomento, Yankee
(Venezuela), 7.38%, 07/21/00 509,745
-----------
Broadcasting -- 2.8%
750,000 Cox Enterprises Inc., Class A, 6.25%,
08/26/99 751,230
-----------
Financial Services -- 12.0%
1,000,000 Associated Corp., Pass-thru Asset
Trust Securities (PATS), 6.45%,
09/15/00# 1,006,800
1,000,000 General Motors Acceptance Corp.,
8.40%, 10/15/99 1,042,140
1,150,000 Lehman Brothers Holdings, 6.33%,
08/01/00 1,147,470
-----------
3,196,410
-----------
See notes to financial statements.
25
<PAGE>
Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------------
Oil & Gas -- 1.5%
$ 382,731 YPF Sociedad Anonima, Yankee
(Argentina) 7.50%, 10/26/02 $ 387,515
-----------
Project Finance -- 0.8%
208,490 Hero Asia BVI Co., Ltd., Yankee
(China) 9.11%, 10/15/01# 218,519
-----------
Total Corporate Notes & Bonds 5,063,419
(Cost $5,042,492) -----------
Mortgage Backed Securities -- 29.6%
-----------------------------------
Mortgage Pass Through Securities -- 13.4%
822,192 Federal Home Loan Mortgage Corp.,
ARM, Pool #846416, 7.91%,
06/01/28 867,412
Federal National Mortgage
Association,
917,544 ARM, Pool #377930, 5.50%,
04/01/27 941,914
754,175 Pool #100160, 13.00%, 11/15/15 923,510
350,000 Pool #100176, 12.00%, 02/15/16 418,414
350,000 Pool #100177, 12.50%, 10/15/15 421,585
-----------
3,572,835
-----------
Collateralized Mortgage Obligations -- 16.2%
Federal National Mortgage
Association,
574,467 REMIC, Ser. 1997-54, Class VA,
6.50%, 08/18/02 576,265
900,000 Ser. 1311, Class G, 7.50%,
05/15/19 915,462
GE Capital Mortgage Services, Inc.,
1,000,000 REMIC, Ser. 1994-8, Class A3,
6.00%, 02/25/24 996,560
975,000 Ser. 1997-9, Class A8 7.00%,
05/25/04 985,359
See notes to financial statements.
26
<PAGE>
Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------
$ 843,701 Resolution Trust Corp., Ser.
1992-16, Class B2, 7.75%,
08/25/25 $ 841,460
-----------
4,315,106
-----------
Total Mortgage Backed Securities 7,887,941
(Cost $7,857,633) -----------
Commercial Mortgage Backed Securities -- 4.3%
----------------------------------------------
469,587 Blackrock Capital Finance L.P.,
Ser. 1996-C2, Class A, 7.64%,
11/15/26# 473,843
679,154 Kidder Peabody Acceptance Corp.,
Ser. 1993-M1, Class A1, 7.15%,
04/25/25 684,036
-----------
Total Commercial Mortgage Backed 1,157,879
Securities (Cost $1,156,547) -----------
Asset Backed Securities -- 12.3%
--------------------------------
1,150,000 Contimortgage Home Equity Loan
Trust, Ser. 1997-4, Class A3,
6.26%, 07/15/12 1,151,797
1,150,000 EQCC Home Equity Loan Trust,
Ser. 1997-1, Class A2, 6.61%,
06/15/06 1,161,822
931,220 The Money Store Home Equity
Trust, Ser. 1994-B, Class A3,
7.10%, 11/15/16 942,553
-----------
Total Asset Backed Securities 3,256,172
(Cost $3,247,998)
- --------------------------------------------------------------
Total Long-Term Investments 25,562,957
(Cost $25,482,281)
- --------------------------------------------------------------
See notes to financial statements.
27
<PAGE>
Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1997 (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------
Short-Term Investments -- 5.8%
- --------------------------------------------------------------
U.S. Government Agency Obligations -- 5.8%
------------------------------------------
$1,560,000 Federal Mortgage Corp., Discount
Note 5.65%, 11/03/97 $ 1,559,510
(Cost $1,559,510)
- --------------------------------------------------------------
Total Investments -- 101.7% $27,122,467
(Cost $27,041,791)
- --------------------------------------------------------------
Index
# -- Security may only be sold to qualified institutional buyers.
TBA -- To Be Announced
ARM -- Adjustable Rate Mortgage
MTN -- Medium Term Note
GO -- General Obligation
REMIC -- Real Estate Mortgage Investment Conduit
+ -- All or a portion of this security is pledged to cover TBA's.
See notes to financial statements.
28
<PAGE>
Vista Mutual Funds
Statement of Assets and Liabilities October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista
Vista Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
---------------- ---------------- ---------------
<S> <C> <C> <C>
ASSETS:
Investment securities, at value (Note 1) $547,535,178 $306,510,115 $27,122,467
Cash ................................. 566,417 973,064 9,929
Receivables:
Investment securities sold ............ 36,090,867 19,831,769 512,500
Interest .............................. 6,760,005 4,805,355 211,130
Fund shares sold ..................... 1,330,852 422,610 25,000
Expense reimbursement from
Distributor ........................ -- -- 10,000
Other ................................. 39,575 26,040 29,143
------------ ------------ -----------
Total assets ........................ 592,322,894 332,568,953 27,920,169
------------ ------------ -----------
LIABILITIES:
Payable for investment securities
purchased ........................... 69,547,065 11,340,644 1,013,510
Payable for Fund shares redeemed ...... 700 102,817 45,000
Dividends payable ..................... 2,927,346 1,799,723 143,805
Accrued liabilities: (Note 2)
Other ................................. 54,549 93,763 27,658
Other liabilities ..................... 5,197 66,290 14,645
------------ ------------ -----------
Total Liabilities .................. 72,534,857 13,403,237 1,244,618
------------ ------------ -----------
NET ASSETS:
Paid in capital ........................ 506,161,332 315,665,041 26,669,462
Accumulated undistributed net
investment income ..................... (79,846) (279,879) (64,158)
Accumulated undistributed net
realized gain (loss) on investment
transactions ........................ 6,287,758 (129,003) (10,429)
Net unrealized appreciation of
investments ........................... 7,418,793 3,909,557 80,676
------------ ------------ -----------
Net Assets: .............................. $519,788,037 $319,165,716 $26,675,551
============ ============ ===========
Shares of beneficial interest outstanding
($.001 par value; unlimited number
of shares authorized): .................. 12,675,255 31,320,611 2,505,543
Net asset value, maximum offering
price and redemption price per
share* .............................. $ 41.01 $ 10.19 $ 10.65
============ ============ ===========
Cost of Investments .................. $540,116,385 $302,600,558 $27,041,791
============ ============ ===========
</TABLE>
- --------------
* Net assets/shares outstanding.
See notes to financial statements.
29
<PAGE>
Vista Mutual Funds
Statement of Operations For the period January 1, 1997* through
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista
Vista Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
------------- -------------- --------------
<S> <C> <C> <C>
INTEREST INCOME ........................... $28,496,281 $16,677,412 $1,489,135
----------- ----------- ----------
EXPENSES: (Note 2)
Administration fees ..................... 618,295 372,118 34,009
Investment Advisory fees ............... 1,236,590 744,236 56,681
Custodian fees ........................ 116,301 82,839 16,908
Amortization of organization costs
(Note 1) .............................. 7,253 2,696 1,031
Printing and postage .................. 5,809 7,493 1,403
Professional fees ..................... 31,680 31,587 12,940
Registration costs ..................... 794 26,150 1,685
Transfer agent fees ..................... 26,969 24,808 8,179
Trustees fees ........................... 20,610 12,404 1,134
Other ................................. 22,574 31,310 9,482
----------- ----------- ----------
Total expenses ........................ 2,086,875 1,335,641 143,452
----------- ----------- ----------
Less amounts waived (Note 2) ............ 1,971,186 1,199,193 107,598
Less expenses borne by the Distributor . 8,519 -- 10,000
----------- ----------- ----------
Net expenses ........................... 107,170 136,448 25,854
----------- ----------- ----------
Net investment income ............... 28,389,111 16,540,964 1,463,281
----------- ----------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments . 6,166,990 (432,270) (75,606)
Change in net unrealized appreciation
on investments ........................ 1,953,197 3,737,088 152,052
----------- ----------- ----------
Net realized and unrealized gain on
investments ........................... 8,120,187 3,304,818 76,446
----------- ----------- ----------
Net increase in net assets from
operations ........................... $36,517,817 $19,845,782 $1,539,727
=========== =========== ==========
</TABLE>
- --------------
* Commencement of operations.
See notes to financial statements.
30
<PAGE>
Vista Mutual Funds
Statement of Changes in Net Assets For the period Jan. 1, 1997* - Oct. 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista
Vista Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
---------------- ---------------- --------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ............... $ 28,389,111 $ 16,540,964 $ 1,463,281
Net realized gain (loss) on investments 6,166,990 (432,270) (75,606)
Change in net unrealized appreciation
on investments ..................... 1,953,197 3,737,088 152,052
------------- ------------- -----------
Increase in net assets from operations 36,509,298 19,845,782 1,539,727
------------- ------------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS FROM: (Note 1G)
Net investment income ............... (28,354,703) (16,520,272) (1,463,293)
------------- ------------- -----------
Increase from capital share transactions
(Note 5) .............................. 511,633,442 315,840,206 26,599,117
------------- ------------- -----------
Total increase in net assets ......... 519,788,037 319,165,716 26,675,551
NET ASSETS:
Beginning of period .................. -- -- --
------------- ------------- -----------
End of period ........................ $ 519,788,037 $ 319,165,716 $26,675,551
============= ============= ===========
</TABLE>
- --------------
* Commencement of operations.
See notes to financial statements.
31
<PAGE>
Vista Mutual Funds
Notes to Financial Statements October 31, 1997
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies -- Mutual Fund Select Group
(the "Trust") was organized as a Massachusetts Business Trust, and is
registered under the Investment Company Act of 1940, as amended, (the "1940
Act") as an open-end management investment company. Vista Select Bond Fund
("VBF"), Vista Select Intermediate Bond Fund ("VIBF") and Vista Select
Short-Term Bond Fund ("VSTBF"), collectively, the "Funds", are separate
portfolios of The Trust.
The Funds were established in December 1996 for the conversion of the Chase
Manhattan Bank Common Trust Funds. Effective January 1, 1997, the Chase Common
Trust Funds contributed securities and other assets in exchange for shares of
the newly created Funds in a tax-free exchange.
The following is a summary of significant accounting policies followed by the
Funds:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
A. Valuation of investments -- Bonds and other fixed income securities (other
than short-term obligations), including listed issues, are valued on the
basis of valuations supplied by pricing services or by matrix pricing systems
of a major dealer in bonds. Short-term debt securities with 61 days or more
to maturity at time of purchase are valued, through the 61st day prior to
maturity, at market value based on quotations obtained from market makers or
other appropriate sources; thereafter, the value on the 61st day is amortized
on a straight-line basis over the remaining number of days to maturity.
Short-term investments with 60 days or less to maturity at time of purchase
are valued at amortized cost, which approximates market. Portfolio securities
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 Trustees.
B. Repurchase agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the Trust
may be delayed or limited.
C. Security transactions and investment income -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified
cost basis. Interest income is determined on the basis of coupon interest
accrued adjusted for amortization of premiums and accretion of discounts.
D. Expenses -- Expenses directly attributable to a Fund are charged to that
Fund; other expenses of the Trust are allocated proportionately among each
of the Funds within the Trust in relation to the net assets of each Fund or
on another reasonable basis.
E. Organization costs -- Organization and initial registration costs
incurred in connection with establishing the Funds have been deferred and
are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of each Fund.
F. Federal income taxes -- Each Fund is treated as a separate taxable
entity for Federal income tax purposes. The Trust's policy is to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to shareholders all of its
distributable net investment income, and net realized gain on
32
<PAGE>
Vista Mutual Funds
Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
investments. In addition, the Trust intends to make distributions as
required to avoid excise taxes. Accordingly, no provision for Federal
income or excise tax is necessary.
G. Distributions to shareholders -- Dividends and distributions paid to
shareholders are recorded on the ex-dividend date. The amount of dividends
and distributions from net investment income and net realized capital gains
is determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles. The reclassifications
for the funds are as follows: VBF paid in capital was decreased by $6,514,
accumulated undistributed net investment income was decreased by $114,254
and undistributed net realized gain/loss was increased by $120,768; VIBF
paid in capital was decreased by $2,696, accumulated undistributed net
investment income was decreased by $300,571 and undistributed net realized
gain/loss was increased by $303,267; VSTBF paid in capital was decreased by
$1,031, accumulated undistributed net investment income was decreased by
$64,146 and undistributed net realized gain/loss was increased by $65,177.
To the extent these "book/tax" differences are permanent in nature, (i.e.,
that they result from other than timing of recognition -- "temporary
differences") such amounts are reclassified within the capital accounts
based on their Federal tax-basis treatment. Dividends and distributions
which exceed net investment income or net realized capital gains for
financial reporting purposes but not for tax purposes are reported as
distributions in excess of net investment income or net realized capital
gains.
H. Dollar rolls -- The funds enter into dollar rolls in which the Funds sell
mortgage-backed securities for delivery in the current month and
simultaneously contract to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. During the roll
period, the Funds forgo principal and interest paid on the securities. The
Funds are compensated by the interest earned on the cash proceeds of the
initial sale and a fee earned for entering into the roll transaction. The fee
is amortized into income over the duration of the roll transaction.
2. Fees and Other Transactions with Affiliates
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Adviser") acts as the
Investment Adviser to the Funds. Chase is a direct wholly-owned subsidiary
of The Chase Manhattan Corporation. As Investment Adviser, Chase supervises
the investments of the Funds and for such services is paid a fee. The fee
is computed daily and paid monthly at an annual rate equal to 0.30%, 0.30%
and 0.25% of the average daily net assets for VBF, VIBF and VSTBF,
respectively. The Adviser voluntarily waived all of its fees.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the subinvestment adviser to each Fund pursuant to a Sub-Investment
Advisory Agreement between CAM and Chase. CAM is a wholly owned subsidiary
of Chase and is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.15% for VBF and VIBF, and 0.10%
for VSTBF of average daily net assets.
B. Sub-administration fees -- Pursuant to a Sub-Administration Agreement,
Vista Fund Distributors, Inc. (the "Distributor"), a wholly owned
subsidiary of The BISYS Group, Inc., acts as the Trust's exclusive
underwriter and promotes and arranges for the sale of each Fund's shares.
In addition, the Distributor provides certain sub-administration services
to the Trust, including providing officers, clerical staff and office space
for an annual fee of 0.05% of the average daily net assets of each Fund.
The Distributor voluntarily waived all sub-administration fees.
C. Administration fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trust. For these services and facilities, the Administrator receives from
each Fund a fee computed at the annual rate equal to 0.10% of the
respective Fund's average daily net assets. The Administrator voluntarily
waived all of the administration fees.
33
<PAGE>
Vista Mutual Funds
Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
D. Assumption of expenses -- The Distributor voluntarily assumed expenses
of the Funds as shown on the Statement of Operations.
E. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for the Funds.
Compensation for such services is presented in the Statement of Operations
as custodian fees.
3. Investment Transactions -- Purchases and sales of investments (excluding
short-term investments) were as follows:
<TABLE>
<CAPTION>
VBF VIBF VSTBF
---------------- -------------- ------------
<S> <C> <C> <C>
Purchases (excluding U.S.
Government) ..................... $ 260,089,068 $193,977,257 $17,629,552
Sales (excluding U.S.
Government) ..................... 284,857,096 154,700,895 20,353,717
Purchases of U.S. Government ...... 1,071,601,280 394,279,883 91,778,836
Sales of U.S. Government ......... 1,057,992,245 353,396,048 87,002,917
</TABLE>
4. Federal Income Tax Matters -- For Federal income tax purposes, the cost and
unrealized appreciation (depreciation) in value of the investment securities at
October 31, 1997 are as follows:
<TABLE>
<CAPTION>
VBF VIBF VSTBF
---------------- ---------------- ---------------
<S> <C> <C> <C>
Aggregate cost ..................... $540,116,385 $302,600,558 $27,041,791
------------ ------------ -----------
Gross unrealized appreciation ...... 8,303,483 3,980,853 103,616
Gross unrealized depreciation ...... (884,690) (71,296) (22,940)
------------ ------------ -----------
Net unrealized appreciation ......... $ 7,418,793 $ 3,909,557 $ 80,676
============ ============ ===========
</TABLE>
At October 31, 1997, VIBF and VSTBF had net capital loss carryovers of
approximately $129,000 and $10,000, respectively. Such losses will be available
to offset future capital gains and will expire by year 2005.
5. Transactions in Shares of Beneficial Interest -- Transactions in Shares of
Beneficial Interest for the period January 1, 1997 (commencement of operations)
through October 31, 1997 were as follows:
<TABLE>
<CAPTION>
Vista Select Bond Fund
-----------------------------------
January 1, 1997
Through October 31, 1997
-----------------------------------
Amount Shares
----------------- ---------------
<S> <C> <C>
Shares sold .......................................... $ 89,146,534 2,223,771
Shares issued in exchange for Common Trust
Fund Assets (see Note 1) ........................... 527,021,099 13,065,240
Shares issued in reinvestment of distributions ...... 2,124,455 52,834
Shares redeemed .................................... (106,658,646) (2,666,590)
-------------- ----------
Net increase (decrease) in Trust shares outstanding $ 511,633,442 12,675,255
============== ==========
</TABLE>
34
<PAGE>
Vista Mutual Funds
Notes to Financial Statements October 31, 1997 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Select
Intermediate Bond Fund
----------------------------------
January 1, 1997
Through October 31, 1997
----------------------------------
Amount Shares
---------------- ---------------
<S> <C> <C>
Shares sold .......................................... $ 129,170,064 12,872,348
Shares issued in exchange for Common Trust
Fund Assets (see Note 1) ........................... 245,891,546 24,375,885
Shares issued in reinvestment of distributions ...... 1,576,083 156,821
Shares redeemed .................................... (60,797,487) (6,084,443)
------------- ----------
Net increase (decrease) in Trust shares outstanding $ 315,840,206 31,320,611
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Select Short-Term Bond
Fund
-----------------------------
January 1, 1997
Through October 31, 1997
-----------------------------
Amount Shares
--------------- -------------
<S> <C> <C>
Shares sold .......................................... $ 1,822,225 171,757
Shares issued in exchange for Common Trust
Fund Assets (see Note 1) ........................... 27,203,363 2,562,643
Shares issued in reinvestment of distributions ...... 155,062 14,601
Shares redeemed .................................... (2,581,533) (243,458)
------------ ---------
Net increase (decrease) in Trust shares outstanding $ 26,599,117 2,505,543
============ =========
</TABLE>
- --------------
* Fund commenced operations.
6. Retirement Plan -- The Funds have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Funds who
will have served as an independent trustee for at least five years at the time
of retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the period ended October 31, 1997, included in
Trustees Fees and Expenses in the Statement of Operations, and accrued pension
liability included in other accrued liabilities in the Statement of Assets and
Liabilities were as follows:
Accrued
Pension Pension
Expenses Liability
---------- ----------
VBF ......... $8,201 $25,118
VIBF ...... 3,908 15,655
VSTBF ...... 415 1,349
35
<PAGE>
Vista Mutual Funds
Financial Highlights
For the period January 1, 1997* through October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista
Vista Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
------------- -------------- -------------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ...... $ 40.34 $ 10.09 $ 10.62
--------- --------- ---------
Income from Investment Operations:
Net investment income .................. 2.308 0.554 0.568
Net gains or losses on securities (both
realized and unrealized) ............... 0.667 0.100 0.030
--------- --------- ---------
Total from Investment Operations ......... 2.975 0.654 0.598
--------- --------- ---------
Less Distributions:
Dividends from net investment
income ................................. 2.305 0.554 0.568
--------- --------- ---------
Net Asset Value, End of Period ............ $ 41.01 $ 10.19 $ 10.65
========= ========= =========
Total Return .............................. 7.64% 6.71% 5.82%
Ratios/Supplemental Data:
Net assets, end of period (000
omitted) .............................. $ 519,788 $ 319,166 $ 26,676
Ratios to average net assets:#
Ratio of expenses ........................ 0.02% 0.06% 0.11%
Ratio of net investment income ......... 6.89% 6.67% 6.45%
Ratio of expenses without waivers and
assumption of expenses .................. 0.49% 0.54% 0.63%
Ratio of net investment income
without waivers and assumption of
expenses .............................. 6.42% 6.19% 5.94%
Portfolio turnover rate .................. 261% 193% 406%
</TABLE>
- --------------
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
36
<PAGE>
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Mutual Fund Select Group
In our opinion, the accompanying statement of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Vista Select Bond Fund, Vista
Select Intermediate Bond Fund and Vista Select Short-Term Bond Fund (separate
portfolios of Mutual Fund Select Group, hereafter referred to as the
"Portfolios") at October 31, 1997, and the results of each of their operations,
the changes in each of their net assets and the financial highlights for the
period January 1, 1997 (commencement of operations) through October 31, 1997,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Portfolios' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at October 31, 1997 by correspondence with the custodian and brokers
and the application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 17, 1997
37
<PAGE>
Unaudited
Vista Select Bond Fund
Vista Select Intermediate Term Bond Fund
Vista Select Short-Term Bond Fund
- --------------------------------------------------------------------------------
Certain tax information regarding the Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 1997. The information and distributions reported
in this letter may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 1997. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1997 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997.
The following represents the source and percentage of income earned from
government obligations and the long-term capital gains distributed per share by
the Funds:
<TABLE>
<CAPTION>
Government Federal Federal
U.S. Treasury National Mortgage Farm Credit Home Loan
Vista Fund Obligations Association Bank Bank
- ------------------------------- --------------- ------------------- ------------- -----------
<S> <C> <C> <C> <C>
Select Bond 21.68% 10.10% -- 2.06%
Select Intermediate Term Bond 27.40% 4.14% 0.16% 3.58%
Select Short-Term Bond 18.45% 4.41% -- 0.26%
</TABLE>
<TABLE>
<CAPTION>
Federal Home Federal National Student Loan Federal
Loan Mortgage Mortgage Marketing Mortgage
Vista Fund Corporation Association Association Corporation
- ------------------------------- --------------- ------------------ -------------- ------------
<S> <C> <C> <C> <C>
Select Bond 7.69% 18.54% 0.40% 1.63%
Select Intermediate Term Bond 10.28% 17.41% 0.23% 1.21%
Select Short-Term Bond 12.71% 11.04% 0.03% 0.96%
</TABLE>
38
<PAGE>
Vista Service Center
25 Drydock Avenue, 4th Floor
Boston, MA 02210
Investment Adviser, Administrator,
Shareholder Servicing Agent
and Custodian
The Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Transfer Agent
DST Systems, Inc.
Legal Counsel
Simpson Thacher & Bartlett
Independent Accountants
Price Waterhouse LLP
Vista Mutual Funds are distributed by Vista Fund Distributors, Inc. which is
unaffiliated with The Chase Manhattan Bank. Chase and its respective affiliates
receive compensation from the Vista Funds for providing investment advisory
and other services.
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
funds unless preceded or accompanied by a prospectus.
To obtain a prospectus for any of the Vista Funds, call 1-800-34-VISTA. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
VSFI-2-1297
