CHASE VISTA SELECT FIXED INCOME FUNDS
[CHASE VISTA SELECT FUNDS(SM) LOGO]
ANNUAL
REPORT
------------------------------
Chase Vista Select(SM). Make the Powerful Connection.
CHASE VISTA SELECT BOND FUND
CHASE VISTA SELECT
INTERMEDIATE BOND FUND
CHASE VISTA SELECT
SHORT-TERM BOND FUND
October 31, 1998 ANSFI-2-1298
<PAGE>
Highlights
o Although the U.S. economy continued its impressive growth, the Federal
Reserve Board's stance became more accommodative as the year progressed due
to concerns about the global economic slowdown.
o U.S. Treasury securities benefited as global investors sought a safe haven in
what are widely considered the world's safest securities.
o The yield on the 30-year U.S. Treasury bond fell from 6.15% on October 31,
1997 to 5.15% on October 31, 1998.
- --------------------------------------------------------------------------------
CONTENTS
- --------------------------------------------------------------------------------
Chairman's Letter 3
Chase Vista Select Bond Fund
Fund Commentary o Portfolio of Investments 4
Chase Vista Select Intermediate Bond Fund
Fund Commentary o Portfolio of Investments 15
Chase Vista Select Short-Term Bond Fund
Fund Commentary o Portfolio of Investments 25
Financial Statements 32
Notes to Financial Statements 35
Financial Highlights 40
- --------------------------------------------------------------------------------
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>
Chase Vista Select Fixed Income Funds
Chairman's Letter
December 1, 1998
Dear Shareholder:
We are pleased to present this annual report for the following Chase Vista
Select Fixed Income Funds for the year ended October 31, 1998:
o Bond Fund
o Intermediate Bond Fund
o Short-Term Bond Fund
Bonds Perform Well as Economic Growth Continues
As the long economic expansion continued in the United States during the
reporting year, bond markets posted positive results thanks to a continuing
absence of serious inflationary pressures, a positive supply and demand picture
and a moderation in U.S. economic activity due to the Asian economic crisis. In
the beginning of the reporting period, bond market activity was partially driven
by investor concern over whether the strong pace of economic activity and
"irrational exuberance" in the stock market would cause the Federal Reserve
Board to make a preemptive strike against potential inflation by raising
short-term interest rates. As the reporting year progressed, however, it became
clear that the Fed viewed global economic problems as a bigger threat than
inflation and growth in the U.S. economy, especially given the disinflationary
trend at the manufacturing level.
Budget Surplus, Flight to Quality Support Treasury Prices
On a technical level, the U.S. Treasury market in particular benefited from a
combination of the Federal budget surplus and investor preference for the
world's safest securities during a year which saw high levels of global market
volatility. For the year, the yield on the 30-year U.S. Treasury bond fell from
6.15% on October 31, 1997 to 5.15% on October 31, 1998. At its regular Federal
Open Market Committee (FOMC) meeting in late September, 1998, the Federal
Reserve Board lowered the Federal Funds rate by .25% and then made an additional
inter-meeting cut of .25% in mid-October. On November 11, after the reporting
period ended, the Fed made a third .25% reduction.
During a year that highlighted the important role bonds play in a diversified
portfolio, your Chase Vista Select portfolio management team did an exceptional
job, with each of the long-term funds providing double-digit returns. All of us
at Chase Vista will continue to work hard to continue to deliver solid
investments that help you reach your financial goals regardless of the market
environment. We appreciate the trust you have placed in us.
Sincerely,
/s/ Fergus Reid
Fergus Reid
Chairman
3
<PAGE>
Chase Vista Select Bond Fund
as of October 31, 1998
(unaudited)
Fund Facts
<TABLE>
<S> <C>
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 Corporate Debt A-Rated Funds Average
Inception date 1/1/97
Newspaper symbol Bond
Net assets $589.6 million
Average maturity 7.6 years
Average duration 4.7 years
Average quality AAA
</TABLE>
Average Maturity/Quality
- -------------------------
| | | |
| | X | | High
| | | |
- -------------------------
| | | |
| | | | Med.
| | | |
- -------------------------
| | | |
| | | | Low
| | | |
- -------------------------
Short Int. Long
4
<PAGE>
Chase Vista Select Bond Fund
as of October 31, 1998
(unaudited)
How the Fund Performed
Chase Vista Select Bond Fund, which seeks to provide a high level of current
income through a portfolio of investment-grade Treasuries, mortgage-backed and
asset-backed securities and corporate bonds, had a total return of 8.44% for
the year ended October 31, 1998.
How the Fund Was Managed
During the first half of the reporting year, the Fund maintained its
traditional focus on "spread" sectors--which included corporate, agency,
mortgage-backed and asset-backed securities--given the higher yields these
sectors offered relative to U.S. Treasury securities. Although this strategy
produced mixed performance in late 1997 as corporate bonds, particularly U.S.
dollar-denominated "Yankee" bonds issued overseas, underperformed in response
to the Asian crisis, it proved beneficial in the first part of 1998,
particularly in mortgage-backed securities.
By the middle of 1998, the management team recognized that Treasury securities
were likely to outperform given the balanced budget agreement, a flight to
quality due to "Asian contagion," the collapse of several highly-leveraged hedge
funds and the expectation of slower U.S. economic growth and lower interest
rates. The subsequent overweighting of Treasuries proved highly beneficial to
performance as the sector rallied sharply. After having benefited from a
relatively neutral yield curve stance in the first half of 1998, the Fund
benefited from a more bulleted approach during the last three months of the
reporting period.
As the period ended, two Federal Reserve Board short-term interest rate cuts
restored much of the lost confidence and liquidity to the markets, thus helping
the spread sectors stabilize. In response, the management team reallocated
assets to high-quality corporate and mortgage-backed securities while reducing
the portfolio's duration. However, as was the case for the great majority of
the reporting year, the Fund ended the year with a longer-than-benchmark
duration.
Where the Fund May Be Headed
Although the Fed again cut short-term rates after the period ended, the
management team believes that any further reductions will require new global
financial and liquidity concerns. With the markets adopting a more positive
tone, especially with respect to the spread sectors, the management team began
the new reporting year with a cautiously optimistic outlook as evidenced by a
slightly long duration, a neutral yield curve stance and a move back into the
most liquid corporate, mortgage-backed and commercial mortgage-backed
securities.
5
<PAGE>
Chase Vista Select Bond Fund
as of October 31, 1998
(unaudited)
How Much of the Fund Was Invested
[PIE CHART]
Cash 1.5%
Bonds 98.5%
What the Fund Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
Asset Backed Securities 12.3%
U.S. Treasury Securities 30.6%
U.S. Government Agency Obligations 15.0%
Corporate Notes & Bonds 10.4%
Residential Mortgage Backed Securities 25.2%
Commercial Mortgage Backed Securities 6.5%
Average Annual Total Returns+
This table shows the average annual total returns. This is where you can see the
Fund's short-term performance, which, as with the securities markets, tends to
be more volatile than the long-term trend.
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Select Bond 8.44% 6.42% 8.63%
</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.
+ The quoted performance of Chase Vista Select Bond Fund includes performance of
a predecessor account for the period dating back to 10/31/88 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>
Chase Vista Select Bond Fund
as of October 31, 1998
(unaudited)
10-Year Performance
This chart shows what the long-term growth would have been of a hypothetical
$10,000 investment in the Chase Vista Select Bond Fund compared to its key
benchmarks. This is where you see the Fund's long-term trend. This chart is for
illustrative purposes only.
[LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Lehman Aggregate Lipper Corp Debt
Select Bond Fund Bond Index A-Rated Funds Average
---------------- ---------------- ---------------------
<S> <C> <C> <C>
1988 10,000 10,000 10,000
1989 11,175 11,190 11,108
1990 11,687 11,894 11,534
1991 13,512 13,774 13,390
1992 14,784 15,129 14,769
1993 16,775 16,925 16,850
1994 16,073 16,303 15,863
1995 18,484 18,855 18,314
1996 19,517 19,955 19,193
1997 21,116 21,732 20,815
1998 22,898 23,758 22,417
</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 Chase Vista Select Bond Fund, the Lehman Aggregate Bond Index, and the
Lipper Corporate Debt A-Rated Funds Average for the 10 years ended 10/31/98.
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 A-Rated Funds Average represents the average
performance of a universe of 149 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 Chase Vista Select Bond Fund includes performance of
a predecessor account for the period dating back to 10/31/88 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>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- 123.2%
- ---------------------------------------------------------------------
<S> <C> <C>
U. S. Treasury Securities -- 42.4%
-----------------------------------
U. S. Treasury Notes and Bonds, @,
$20,000,000 4.500%, 09/30/00 $20,106,200
26,500,000 5.250%, 08/15/03 27,651,160
5,000,000 5.500%, 02/28/03 5,218,750
10,000,000 5.500%, 08/15/28 10,523,400
32,000,000 5.625%, 05/15/01 33,080,000
18,000,000 5.625%, 02/15/06 19,262,880
28,000,000 5.625%, 05/15/08 30,183,160
5,000,000 5.750%, 10/31/02 5,241,400
10,000,000 6.500%, 05/31/02 10,689,100
25,000,000 6.500%, 08/15/05 27,929,750
45,000,000 8.125%, 08/15/19 60,180,300
-----------
Total U. S. Treasury Securities 250,066,100
(Cost $242,708,404)
-----------
U. S. Government Agency Obligations--5.2%
-----------------------------------------
Federal Home Loan Bank,
5,000,000 5.125%, 09/15/03 5,052,350
10,000,000 5.500%, 07/15/00 10,123,400
10,000,000 5.500%, 08/13/01 10,198,400
5,000,000 Federal National Mortgage
Association, 5.750%, 04/15/03 5,192,950
-----------
Total U.S. Government Agency 30,567,100
Obligations (Cost $30,535,175)
-----------
Corporate Notes & Bonds -- 14.5%
-----------------------------------
Banking -- 0.9%
5,000,000 Key Bank of Washington, 7.125%,
08/15/06 5,401,350
-----------
Consumer Products -- 2.5%
2,180,000 Kellogg Co., 4.875%, 10/15/05 2,147,910
2,550,000 Kimberly-Clark Corporation,
6.250%, 07/15/18 2,559,562
</TABLE>
See notes to financial statements.
8
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
<S> <C> <C>
$ 4,810,000 Procter & Gamble Co., 5.250%,
09/15/03 $ 4,891,097
5,000,000 RACERS, Kellogg, Series 98-1 #,
5.750%, 02/02/01 5,056,250
------------
14,654,819
------------
Diversified -- 1.0%
6,000,000 Tyco International Group SA
(Luxemborg) 5.875%, 11/01/04 6,030,000
------------
Entertainment/Leisure -- 1.8%
5,000,000 Time Warner Inc., 7.750%,
06/15/05 5,469,950
5,000,000 Time Warner Pass Thru Asset Trust
Security #, 6.100%, 12/30/01 5,088,400
------------
10,558,350
------------
Financial Services -- 0.9%
5,250,000 Hartford Financial Services, 6.375%,
11/01/08 5,269,688
------------
Food/Beverage Products -- 1.2%
7,250,000 Campbell Soup Co., 4.750%,
10/01/03 7,192,000
------------
Health Care/Health Care Services -- 0.9%
2,450,000 Abbott Laboratories, 5.400%,
09/15/08 2,470,458
2,500,000 Abbott Laboratories, 6.000%,
03/15/08 2,632,650
------------
5,103,108
------------
Industrial Components -- 1.9%
5,000,000 Dayton Hudson Corp., 6.400%,
02/15/03 5,184,800
5,850,000 Kroger Co., 6.375%, 03/01/08 5,837,072
------------
11,021,872
------------
Real Estate Investment Trusts -- 0.3%
2,000,000 Chelsea GCA Realty Partnership,
7.250%, 10/21/07 1,833,840
------------
</TABLE>
See notes to financial statements.
9
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
<S> <C> <C>
Restaurants / Food Services -- 0.8%
$ 5,000,000 McDonald's Corp., MTN, 5.350%,
09/15/08 $ 4,959,400
------------
Telecommunications -- 1.7%
4,500,000 TCI Communications, Inc.,
8.000%, 08/01/05 5,043,420
5,000,000 Worldcom, Inc., 6.125%,
08/15/01 5,112,600
------------
10,156,020
------------
Utilities -- 0.6%
3,280,000 GTE Northwest Inc., 5.550%,
10/15/08 3,243,559
------------
Total Corporate Notes & Bonds 85,424,006
(Cost $84,396,942)
------------
Residential Mortgage Backed Securities -- 35.0%
------------------------------------------------
Mortgage-Backed Pass Through Securities -- 33.4%
Federal National Mortgage Association,
6,657,744 ARM Pool 313539, 7.210%,
11/01/18 6,738,885
1,197,693 Pool 100177, 12.500%,
10/15/15 1,366,076
10,000,000 TBA, 6.000%, 10/01/13 10,040,600
25,000,000 TBA, 6.500%, 11/01/13 25,371,000
35,000,000 TBA, 6.500%, 10/01/28 35,273,350
25,000,000 TBA, 7.000%, 11/12/28 25,543,000
60,000,000 TBA, 7.500%, 12/01/28 61,537,800
20,000,000 TBA, 8.000%, 11/12/28 20,684,400
10,000,000 Government National Mortgage
Association Corp., TBA, 7.000%,
12/01/28 10,235,900
------------
196,791,011
------------
</TABLE>
See notes to financial statements.
10
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
<S> <C> <C>
Collateralized Mortgage Obligation -- 1.6%
$ 2,000,000 Federal Farm Credit Association
Secured Lending Corporation,
Series 1997-1, Class 2, FRN #,
6.160%, 11/18/98 $ 2,000,940
7,500,000 Federal Home Loan Mortgage
Corp., Series 1343, Class H,
FRN #, 7.500%, 11/18/98 7,535,100
------------
9,536,040
------------
Total Residential Mortgage Backed 206,327,051
Securities (Cost $205,601,159)
------------
Commercial Mortgage Backed Securities -- 9.1%
---------------------------------------------
5,000,000 Asset Securitization Corp., Series
1997-D5, Class A1C, 6.750%,
02/14/41 5,164,844
3,250,000 DLJ Mortgage Acceptance Corp.,
Series 1997-CF2, Class A1B,
6.820%, 09/15/07 3,398,200
5,000,000 GS Mortgage Securities Corp. II,
Series 1997-GL, Class A2D,
6.940%, 07/13/30 5,235,750
7,500,000 Lehman Large Loan, Series 1997-
LLI, Class A3, 6.900%, 10/15/34 7,851,675
5,000,000 Morgan Stanley Capital Inc. Series
1998-WF1, Class A2, 6.550%,
11/1/98 5,039,200
7,000,000 Nomura Depositor Trust, Series
1998-ST1A, Class A3A, FRN #
6.140%, 11/15/98 6,703,620
4,354,000 Norwest Asset Securities Corp.,
Series 1997-14, Class A11,
7.250%, 10/25/27 4,376,450
Structured Asset Securities Corp., @,
4,000,000 Series 1998-2, Class M2, FRN,
5.969%, 11/25/98 3,948,760
</TABLE>
See notes to financial statements.
11
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
<S> <C> <C>
Structured Asset Securities Corp., @
$12,000,000 Series 1998-4, Class M1, FRN,
5.649%, 11/25/98 $ 11,926,680
-------------
Total Commercial Mortgage Backed 53,645,179
Securities (Cost $53,462,131)
-------------
Asset Backed Securities -- 17.0%
--------------------------------
10,000,000 Advanta Credit Card Master Trust
II, Series 1998-A, Class B,
FRN, 5.649%, 11/16/98 9,948,400
9,147,004 Airplanes Pass Thru Trust, Series
1R, Class A6, FRN, 5.749%,
11/16/98 9,148,468
5,000,000 American Express Credit Account
Master Trust, Series 1997-1, Class
A, 6.400%, 04/15/05 5,178,100
9,600,000 Gramercy Place Insurance Limited,
Series 1998-AA, Class B (Cayman
Islands), FRN, 6.138%, 01/26/99 9,588,000
3,594,444 Green Tree Recreational, Equipment
& Consumer Trust, Series 1998-
A, 6.390%, 06/15/19 3,685,024
5,000,000 Lakeshore Commercial Loan Master
Trust, Series 1998-AA, Class A2,
FRN, #, 5.314%, 01/25/99 4,992,200
5,000,000 Lehman Home Equity Loan Trust,
Series 1998-2, Class A2, FRN,
5.429%, 11/24/98 4,931,600
9,500,000 MBNA Corp., Master Credit Card
Trust, Series 1995-C, Class A,
6.450%, 02/15/08 9,930,445
6,500,000 Nomura CBO, Ltd., Series 1997-1,
Class A2, #, 6.670%, 05/15/09 7,147,985
1,669,333 ROSE Funding Corp., Series II.,
FRN, #, 5.299%, 11/28/98 1,665,160
5,000,000 Sears Credit Account Master Trust,
Series 1998-1, Class B, 6.000%,
08/15/05 4,997,656
</TABLE>
See notes to financial statements.
12
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------------
<S> <C> <C>
Southern Pacific Secured Assets Corp.,
$ 5,101,378 Series 1997-4, Class A1, FRN,
5.454%, 11/25/98 $ 5,054,088
8,507,514 Series 1998-1, Class A, FRN,
5.419%, 11/25/98 8,411,720
5,000,000 Standard Credit Card Master Trust
Series 1993-2, Series A, 5.950%,
10/07/04 5,096,850
6,500,000 The Money Store Home Equity
Trust, 7.110%, 04/15/25 6,644,170
4,053,740 WMC Mortgage Loan Pass Thru
Certificates, Series 1998-A, Class
A, FRN, 5.397%, 11/20/98 4,012,554
------------
Total Asset Backed Securities 100,432,420
(Cost $99,532,764)
=====================================================================
Total Long-Term Investments 726,461,856
(Cost $716,236,575)
=====================================================================
Short-Term Investments -- 15.9%
- ---------------------------------------------------------------------
U.S. Government Agency Obligations -- 15.7%
-------------------------------------------
92,712,000 Federal Home Loan Bank, Discount
Note, 5.400%, 11/02/98 92,712,000
(Cost $92,712,000)
------------
U.S. Treasury Securities -- 0.2%
--------------------------------
1,000,000 U.S. Treasury Bill, @ 4.830%,
03/04/99 985,600
(Cost $983,869)
=====================================================================
Total Short-Term Investments 93,697,600
(Cost $93,695,869)
=====================================================================
Total Investments--139.1% $820,159,456
(Cost $809,932,444)
=====================================================================
</TABLE>
See notes to financial statements.
13
<PAGE>
Chase Vista Select Bond Fund
Portfolio of Investments October 31, 1998 (continued)
Long Futures Outstanding
<TABLE>
<CAPTION>
Number Original Notional
of Expiration Notional Value at Unrealized
Contracts Description Date Value 10/31/98 (Depreciation)
- ----------- --------------- --------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
50 U.S. 5 Year December 1998 $5,768,355 $5,732,031 ($ 36,324)
Treasury Note
1 U.S. 10 Year December 1998 437 437 --
Treasury Note
--------
($ 36,324)
========
</TABLE>
Index
# -- Security may only be sold to institutional buyers.
@ -- All or a portion of this security is segregated.
ARM -- Adjustable Rate Mortgage.
CBO -- Collateralized Bond Obligation.
FRN -- Floating Rate Note: The maturity date shown is the next interest reset
date; the rate shown is the rate in effect at October 31, 1998.
MTN -- Medium Term Note.
RACERS -- Restructured Asset Class Enhanced Return Securities.
REMIC -- Real Estate Mortgage Investment Conduit.
ROSE -- Repeat Offering Securitization Entity.
TBA -- To be announced.
See notes to financial statements.
14
<PAGE>
Chase Vista Select Intermediate Bond Fund
as of October 31, 1998
(unaudited)
Fund Facts
<TABLE>
<S> <C>
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 Debt
Funds Average
Inception date 1/1/97
Newspaper symbol IntmdBd
Net assets $353.3 million
Average maturity 4.9 years
Average duration 3.7 years
Average quality AAA
</TABLE>
Average Maturity/Quality
- -------------------------
| | | |
| | X | | High
| | | |
- -------------------------
| | | |
| | | | Med.
| | | |
- -------------------------
| | | |
| | | | Low
| | | |
- -------------------------
Short Int. Long
15
<PAGE>
Chase Vista Select Intermediate Bond Fund
as of October 31, 1998
(unaudited)
How the Fund Performed
Chase Vista Select Intermediate Bond Fund, which seeks to provide a high level
of current income through a portfolio of investment-grade Treasuries,
asset-backed and corporate bonds, had a total return of 7.98% for the year
ended October 31, 1998.
How the Fund Was Managed
During the first half of the reporting year, the Fund maintained its
traditional focus on "spread" sectors--which included corporate, agency,
mortgage-backed and asset-backed securities--given the higher yields these
sectors offered relative to U.S. Treasury securities. Although this strategy
produced mixed performance in late 1997 as corporate bonds, particularly U.S.
dollar-denominated "Yankee" bonds issued overseas, underperformed in response
to the Asian crisis, it proved beneficial in the first part of 1998,
particularly in mortgage-backed securities.
By the middle of 1998, the management team recognized that Treasury securities
were likely to outperform given the balanced budget agreement, a flight to
quality due to "Asian contagion," the collapse of several highly-leveraged hedge
funds and the expectation of slower U.S. economic growth and lower interest
rates. The subsequent overweighting of Treasuries proved highly beneficial to
performance as the sector rallied sharply. After having benefited from a
relatively neutral yield curve stance in the first half of 1998, the Fund
benefited from a more bulleted approach during the last three months of the
reporting period.
As the period ended, two Federal Reserve Board short-term interest rate cuts
restored much of the lost confidence and liquidity to the markets, thus helping
the spread sectors stabilize. In response, the management team reallocated
assets to high-quality corporate and mortgage-backed securities while reducing
the portfolio's duration. However, as was the case for the great majority of
the reporting year, the Fund ended the year with a longer-than-benchmark
duration.
Where the Fund May Be Headed
Although the Fed again cut short-term rates after the period ended, the
management team believes that any further reductions will require new global
financial and liquidity concerns. With the markets adopting a more positive
tone, especially with respect to the spread sectors, the management team began
the new reporting year with a cautiously optimistic outlook as evidenced by a
slightly long duration, a neutral yield curve stance and a move back into the
most liquid corporate, mortgage-backed and commercial mortgage-backed
securities.
16
<PAGE>
Chase Vista Select Intermediate Bond Fund
as of October 31, 1998
(unaudited)
How Much of the Fund Was Invested
[PIE CHART]
Cash 2.4%
Bonds 97.6%
What the Fund Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
Asset Backed Securities 13.8%
U.S. Treasury Securities 42.6%
U.S. Government Agency Obligations 12.6%
Corporate Notes & Bonds 19.4%
Residential Mortgage Backed Securities 3.6%
Commercial Mortgage Backed Securities 8.0%
Average Annual Total Returns+
This table shows the average annual total returns. This is where you can see the
Fund's short-term performance, which, as with the securities markets, tends to
be more volatile than the long-term trend.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 Year 5 Years 10 Years
------ ------- --------
Select Intermediate Bond 7.98% 5.46% 7.97%
</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.
+ The quoted performance of Chase Vista Select Intermediate Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/88 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.
17
<PAGE>
Chase Vista Select Intermediate Bond Fund
as of October 31, 1998
(unaudited)
10-Year Performance
This chart shows what the long-term growth would have been of a hypothetical
$10,000 investment in the Chase Vista Select Intermediate Bond Fund compared to
its key benchmarks. This is where you see the Fund's long-term trend. This
chart is for illustrative purposes only.
[LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Select Lehman Intermediate Lipper Intermediate
Intermediate Govt/Corp Investment Grade
Bond Fund Bond Index Debt Fund Average
------------------ ------------------- -------------------
<S> <C> <C> <C>
1988 10,000 10,000 10,000
1989 11,031 11,059 10,965
1990 11,642 11,875 11,515
1991 13,361 13,516 13,222
1992 14,684 14,868 14,506
1993 16,510 16,348 16,185
1994 15,540 16,032 15,509
1995 17,829 18,039 17,646
1996 18,647 19,088 18,555
1997 19,946 20,516 20,027
1998 21,538 22,461 21,597
</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 Chase 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 10/31/98. 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 215 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 Chase Vista Select Intermediate Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/88 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>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- 93.5%
- --------------------------------------------------------------------
<S> <C> <C>
U. S. Treasury Securities -- 43.5%
----------------------------------
U. S. Treasury Notes and Bonds, @,
$35,000,000 4.500%, 09/30/00 $ 35,185,850
33,658,000 5.250%, 08/15/03 35,120,103
5,000,000 5.500%, 01/31/03 5,216,400
33,500,000 5.625%, 05/15/08 36,111,994
2,100,000 5.750%, 10/31/02 2,201,388
9,000,000 6.250%, 08/31/02 9,572,310
21,000,000 6.500%, 05/31/02 22,447,110
7,000,000 6.500%, 08/15/05 7,820,330
------------
Total U. S. Treasury Securities 153,675,485
(Cost $151,631,728)
-----------
U. S. Government Agency Obligations -- 4.3%
-------------------------------------------
Federal Home Loan Bank,
3,500,000 5.125%, 10/15/08 3,479,630
4,000,000 5.500%, 08/13/01 4,079,360
7,500,000 Federal National Mortgage
Association,
5.750%, 04/15/03 7,789,425
-----------
Total U. S. Government Agency 15,348,415
Obligations (Cost $14,963,998)
-----------
Corporate Notes & Bonds -- 19.8%
--------------------------------
Banking -- 0.6%
2,150,000 First Union Corporation, 6.400%,
04/01/08 2,227,035
-----------
Consumer Products -- 3.5%
2,500,000 Kimberly-Clark Corporation,
6.250%, 07/15/18 2,509,375
4,690,000 Procter & Gamble Co., 5.250%,
09/15/03 4,769,073
4,750,000 RACERS, Kellogg, Series 98-1 #,
5.750%, 02/02/01 4,803,438
-----------
12,081,886
-----------
</TABLE>
See notes to financial statements.
19
<PAGE>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
<S> <C> <C>
Diversified -- 1.4%
$ 5,000,000 Tyco International Group SA
(Luxemborg), 5.875%,
11/01/04 $ 5,025,000
------------
Entertainment / Leisure -- 1.8%
3,600,000 Time Warner Inc., 7.750%,
06/15/05 3,938,364
2,500,000 Time Warner Pass Thru Asset Trust
Security #, 6.100%, 12/30/01 2,544,200
------------
6,482,564
------------
Financial Services -- 5.5%
6,000,000 Ford Motor Credit Co., 6.550%,
09/10/02 6,195,840
7,900,000 General Electric Capital Corp.,
8.200%, 10/30/03 8,912,701
4,370,000 Hartford Financial Services, 6.375%,
11/01/08 4,386,388
------------
19,494,929
------------
Food / Beverage Products -- 1.4%
5,000,000 Campbell Soup Co., 4.750%,
10/01/03 4,960,000
------------
Health Care / Health Care Services -- 0.6%
2,000,000 Abbott Laboratories, 5.400%,
09/15/08 2,016,700
------------
Industrial Components -- 2.5%
3,500,000 Dayton Hudson Corp., @, 6.400%,
02/15/03 3,629,360
5,000,000 Raytheon Corp., 5.950%,
03/15/01 5,062,400
------------
8,691,760
------------
Telecommunications -- 1.6%
2,000,000 Bellsouth Telecommunications Inc.,
6.500%, 06/15/05 2,132,140
3,625,000 Worldcom, Inc., 6.125%,
08/15/01 3,706,635
------------
5,838,775
------------
</TABLE>
See notes to financial statements.
20
<PAGE>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
<S> <C> <C>
Utilities -- 0.9%
$ 3,215,000 GTE Northwest, 5.550%,
10/15/08 $ 3,179,281
------------
Total Corporate Notes & Bonds 69,997,930
(Cost $68,759,653)
------------
Residential Mortgage Backed Securities -- 3.6%
----------------------------------------------
Mortgage Backed Pass Thru Securities -- 3.0%
Federal National Mortgage
Association,
3,648,344 ARM Pool 313539, 7.049%,
11/01/18 3,692,809
1,908,749 Pool 100156, 12.500%,
06/01/27 2,196,188
5,000,000 Government National Mortgage
Association Corp.,
TBA, 6.000%, 10/01/28 4,957,800
------------
10,846,797
------------
Collateralized Mortgage Obligation -- 0.6%
2,000,000 GE Capital Mortgage Services, Inc.,
Series 1998-13, Class A10,
6.050%, 08/25/28 1,996,260
------------
Total Residential Mortgage Backed 12,843,057
Securities (Cost $13,030,150)
------------
Commercial Mortgage Backed Securities -- 8.2%
---------------------------------------------
3,283,768 Credit Swiss First Boston Mortgage
Securities Corp. Series 1997,
6.653%, 06/20/03 3,283,768
2,700,000 GS Mortgage Securities Corp. II,
Series 1997-GL, Class A2D,
6.940%, 07/13/30 2,827,305
5,577,594 Mortgage Capital Funding, Inc.,
6.417%, 06/18/07 5,717,647
4,000,000 Nomura Depositor Trust, Series
1998-ST1A, Class A3A, FRN #,
@, 6.140%, 11/15/98 3,830,640
</TABLE>
See notes to financial statements.
21
<PAGE>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
<S> <C> <C>
$ 5,000,000 Norwest Asset Securities Corp.,
Series 1997-14, Class A11,
7.250%, 10/25/27 $ 5,025,781
Structured Asset Securities Corp., @,
3,200,000 Series 1998-2, Class M2, FRN,
5.969%, 11/25/98 3,159,008
5,000,000 Series 1998-3, Class M1, FRN,
5.719%, 11/25/98 4,948,450
-----------
Total Commercial Mortgage Backed 28,792,599
Securities (Cost $28,760,497)
-----------
Asset Backed Securities -- 14.1%
--------------------------------
4,750,000 American Express Credit Account
Master Trust, Series 1997-1,
Class A, 6.400%, 04/15/05 4,919,195
1,700,000 Citibank Credit Card Master
Trust I, Series 1997-2, Class A,
6.550%, 02/15/04 1,758,429
5,000,000 Contimortgage Home Equity Loan
Trust, Series 1998-1, 6.430%,
04/15/16 5,009,375
3,800,000 Gramercy Place Insurance Limited,
Series 1998-AA, Class B
(Cayman Islands), FRN, 6.138%,
01/26/99 3,795,250
4,000,000 Lakeshore Commercial Loan Master
Trust, Series 1998-AA, Class A2,
FRN, #, 5.314%, 01/25/99 3,993,760
4,000,000 Lehman Home Equity Loan Trust,
Series 1998-2, Class A2, FRN, @,
5.429%, 11/25/98 3,945,280
4,678,550 Mid-State Trust, Series 6, Class A4,
7.790%, 07/01/35 4,690,246
5,000,000 Nomura CBO, Ltd., Series 1997-1,
Class A2, #, 6.670%, 05/15/09 5,498,450
4,500,000 Sears Credit Account Master Trust,
Series 1998-1, Class B, 6.000%,
08/15/05 4,497,891
</TABLE>
See notes to financial statements.
22
<PAGE>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------
<S> <C> <C>
$ 3,291,212 Southern Pacific Secured Assets
Corp., Series 1997-4, Class A1,
FRN, @, 5.454%, 11/25/98 $ 3,260,702
4,000,000 Standard Credit Card Master Trust
Series 1993-2, Series A, 5.950%,
10/07/04 4,077,480
1,380,000 The Money Store Home Equity
Trust, 7.110%, 04/15/25 1,410,608
3,034,378 WMC Mortgage Loan Pass Thru
Certificates, Series 1998-A, Class
A, FRN, 5.397%, 11/20/98 3,003,549
------------
Total Asset Backed Securities 49,860,215
(Cost $49,277,119)
=====================================================================
Total Long-Term Investments 330,517,701
(Cost $326,423,145)
=====================================================================
Short-Term Investments -- 8.6%
- ---------------------------------------------------------------------
U. S. Government Agency Obligations -- 8.4%
-------------------------------------------
29,927,000 Federal Home Loan Bank, Discount
Note, 5.400%, 11/02/98 29,927,000
(Cost $29,927,000)
------------
U. S. Treasury Securities -- 0.1%
---------------------------------
200,000 U. S. Treasury Bill, 4.945%,
02/18/99 @ 197,480
(Cost $197,015)
=====================================================================
Total Short-Term Investments 30,124,480
(Cost $30,124,015)
=====================================================================
Total Investments -- 102.1% $360,642,181
(Cost $356,547,160)
=====================================================================
</TABLE>
See notes to financial statements.
23
<PAGE>
Chase Vista Select Intermediate Bond Fund
Portfolio of Investments October 31, 1998 (continued)
Long Futures Outstanding
<TABLE>
<CAPTION>
Number Original Notional
of Expiration Notional Value at Unrealized
Contracts Description Date Value 10/31/98 Appreciation
- ----------- -------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
100 U.S. 10 Year December 1998 $11,696,030 $12,037,500 $341,470
Treasury Note ========
</TABLE>
Index
# -- Security may only be sold to institutional buyers.
@ -- All or a portion of this security is segregated.
ARM -- Adjustable Rate Mortgage.
CBO -- Collateralized Bond Obligation.
FRN -- Floating Rate Note: The maturity date shown is the next interest reset
date; the rate shown is the rate in effect at October 31, 1998.
MTN -- Medium Term Note.
RACERS -- Restructured Asset Class Enhanced Return Securities.
REMIC -- Real Estate Mortgage Investment Conduit.
ROSE -- Repeat Offering Securitization Entity.
TBA -- To be announced.
See notes to financial statements.
24
<PAGE>
Chase Vista Select Short-Term Bond Fund
as of October 31, 1998
(unaudited)
Fund Facts
<TABLE>
<S> <C>
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
Net assets $25.3 million
Average maturity 2.0 years
Average duration 1.8 years
Average quality AAA
</TABLE>
Average Maturity/Quality
- -------------------------
| | | |
| X | | | High
| | | |
- -------------------------
| | | |
| | | | Med.
| | | |
- -------------------------
| | | |
| | | | Low
| | | |
- -------------------------
Short Int. Long
25
<PAGE>
Chase Vista Select Short-Term Bond Fund
as of October 31, 1998
(unaudited)
How the Fund Performed
Chase 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 6.25% for the year ended October 31, 1998.
How the Fund Was Managed
During the first half of the reporting year, the Fund maintained its
traditional focus on "spread" sectors--which included corporate, agency,
mortgage-backed and asset-backed securities--given the higher yields these
sectors offered relative to U.S. Treasury securities. Although this strategy
produced mixed performance in late 1997 as corporate bonds, particularly U.S.
dollar-denominated "Yankee" bonds issued overseas, underperformed in response
to the Asian crisis, it proved beneficial in the first part of 1998,
particularly in mortgage-backed securities.
By the middle of 1998, the management team recognized that Treasury securities
were likely to outperform given the balanced budget agreement, a flight to
quality due to "Asian contagion," the collapse of several highly-leveraged hedge
funds and the expectation of slower U.S. economic growth and lower interest
rates. The subsequent overweighting of Treasuries proved highly beneficial to
performance as the sector rallied sharply. For most of the reporting period, the
Fund had a barbelled yield curve structure, investing in floating rate notes at
the short end of the curve and three-to-five year fixed rate securities at the
long end.
As the period ended, two Federal Reserve Board short-term interest rate cuts
restored confidence and liquidity to the markets, helping the spread sectors
stabilize. In response, the management team continued to add high-quality
corporate and mortgage-backed securities. As was the case for the great
majority of the reporting year, the Fund ended the year with a
longer-than-benchmark duration.
Where the Fund May Be Headed
Although the Fed again cut short-term rates after the period ended, the
management team believes that any further reductions will require new global
financial and liquidity concerns. With the markets adopting a more positive
tone, especially with respect to the spread sectors, the management team began
the new reporting year with a cautiously optimistic outlook as evidenced by a
slightly long duration, a neutral yield curve stance and a move back into the
most liquid corporate, mortgage-backed and commercial mortgage-backed
securities.
26
<PAGE>
Chase Vista Select Short-Term Bond Fund
as of October 31, 1998
(unaudited)
How Much of the Fund Was Invested
[PIE CHART]
Cash 5.0%
Bonds 95.0%
What the Fund Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
U.S. Treasury Securities 54.4%
U.S. Government Agency Obligations 14.4%
Corporate Notes & Bonds 7.8%
Residential Mortgage Backed Securities 3.3%
Commercial Mortgage Backed Securities 5.6%
Asset Backed Securities 14.5%
Average Annual Total Returns+
This table shows the average annual total returns. This is where you can see the
Fund's short-term performance, which, as with the securities markets, tends to
be more volatile than the long-term trend.
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------ ------- --------
<S> <C> <C> <C>
Select Short-Term Bond 6.25% 4.85% 6.78%
</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.
+ The quoted performance of Chase Vista Select Short-Term Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/88 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.
27
<PAGE>
Chase Vista Select Short-Term Bond Fund
as of October 31, 1998
(unaudited)
10-Year Performance
This chart shows what the long-term growth would have been of a hypothetical
$10,000 investment in the Chase Vista Select Short-Term Bond Fund compared to
its key benchmarks. This is where you see the Fund's long-term trend. This
chart is for illustrative purposes only.
[LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Lehman Lipper Short-Term
Select Short-Term 1-3 Yr. Govt. Invest. Grade
Bond Fund Bond Index Debt Funds Average
---------------- ------------ ------------------
<S> <C> <C> <C>
1988 10,000 10,000 10,000
1989 10,868 10,945 10,933
1990 11,689 11,913 11,707
1991 13,106 13,252 13,029
1992 14,264 14,329 13,965
1993 15,207 15,158 14,847
1994 15,362 15,333 14,966
1995 16,378 16,687 16,173
1996 17,359 17,686 17,047
1997 18,140 18,832 18,079
1998 19,273 20,270 19,151
</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 Chase 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 10/31/98. 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 97 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 Chase Vista Select Short-Term Bond Fund includes
performance of a predecessor account for the period dating back to 10/31/88 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>
Chase Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1998
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------
Long-Term Investments -- 94.5%
- ---------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Securities -- 55.5%
---------------------------------
U. S. Treasury Notes, @,
$ 1,750,000 4.500%, 09/30/00 $1,759,293
1,000,000 5.125%, 08/31/00 1,014,530
1,500,000 5.375%, 02/15/01 1,533,750
1,500,000 5.500%, 02/29/00 1,520,865
2,000,000 5.625%, 04/30/00 2,036,240
2,000,000 5.625%, 05/15/01 2,067,500
2,500,000 6.000%, 06/30/99 2,524,600
1,500,000 6.250%, 10/31/01 1,578,510
----------
Total U.S. Treasury Securities 14,035,288
(Cost $13,999,457)
----------
U. S. Government Agency Obligations -- 7.0%
-------------------------------------------
Federal Home Loan Bank,
1,000,000 5.500%, 07/15/00 1,012,340
750,000 5.500%, 08/13/01 764,880
----------
Total U. S. Government Agency 1,777,220
Obligations (Cost $1,782,376)
----------
Corporate Notes & Bonds -- 8.0%
-------------------------------
Consumer Products -- 4.0%
1,000,000 RACERS, Kellogg, Series 98-1 #,
5.750%, 02/02/01 1,011,250
----------
Entertainment / Leisure -- 2.0%
500,000 Time Warner Pass Thru Asset Trust
Security #, 6.100%, 12/30/01 508,840
----------
Industrial Components -- 2.0%
500,000 Raytheon Corp., 5.950%,
03/15/01 506,240
----------
Total Corporate Notes & Bonds $2,026,330
(Cost $1,994,781)
----------
</TABLE>
See notes to financial statements.
29
<PAGE>
Chase Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- ---------------------------------------------------------------
Long-Term Investments -- (continued)
- ---------------------------------------------------------------
<S> <C> <C>
Residential Mortgage Backed Security -- 3.4%
--------------------------------------------
Collateralized Mortgage Obligation -- 3.4%
$ 854,224 GE Capital Mortgage Services, Inc.,
Series 1997-9, Class 1A8,
7.000%, 05/25/04 $ 859,296
(Cost $863,009)
-----------
Commercial Mortgage Backed Securities -- 5.7%
---------------------------------------------
336,590 Credit Swiss First Boston Mortgage
Securities Corp. Series 1997,
6.653%, 06/20/03 336,590
318,882 Kidder Peabody Acceptance Corp.,
Series 1993-M1, Class A1,
7.150%, 04/25/25 318,881
800,000 Structured Asset Securities Corp.,
Series 1998-2, Class M2, FRN,
5.969%, 11/25/98 789,752
-----------
Total Commercial Mortgage Backed 1,445,223
Securities (Cost $1,457,511)
-----------
Asset Backed Securities -- 14.9%
--------------------------------
500,000 Lehman Home Equity Loan Trust,
Series 1998-2, Class M2, FRN,
@, 5.819%, 11/25/98 485,705
1,000,000 Sears Credit Account Master Trust,
Series 1998-1, Class B, 6.000%,
08/15/05 999,531
1,000,000 Standard Credit Card Master Trust
Series 1993-2, Series A, 5.950%,
10/07/04 1,019,370
500,000 The Money Store Home Equity
Trust, 7.110%, 04/15/25 511,090
758,595 WMC Mortgage Loan Pass Thru
Certificates, Series 1998-A, Class
A, FRN, 5.397%, 11/20/98 750,888
</TABLE>
See notes to financial statements.
30
<PAGE>
Chase Vista Select Short-Term Bond Fund
Portfolio of Investments October 31, 1998 (continued)
<TABLE>
<CAPTION>
Principal
Amount
(USD) Issuer Value
- -----------------------------------------------------------------
Long-Term Investments -- (continued)
- -----------------------------------------------------------------
<S> <C> <C>
Total Asset Backed Securities $ 3,766,584
(Cost $3,765,043)
=================================================================
Total Long-Term Investments 23,909,941
(Cost $23,862,177)
=================================================================
Short-Term Investments -- 7.9%
- -----------------------------------------------------------------
U. S. Government Agency Obligation -- 7.7%
------------------------------------------------
$ 1,939,000 Federal Home Loan Bank, Discount
Note, 5.400%, 11/02/98 1,939,000
(Cost $1,939,000)
-----------
U. S. Treasury Security -- 0.2%
---------------------------------
50,000 U.S. Treasury Bill, 4.830%,
03/04/99 @ 49,280
(Cost $49,193)
=================================================================
Total Short-Term Investments 1,988,280
(Cost $1,988,193)
=================================================================
Total Investments -- 102.4% $25,898,221
(Cost $25,850,370)
=================================================================
</TABLE>
Long Futures Outstanding
<TABLE>
<CAPTION>
Number Original Notional
of Expiration Notional Value at Unrealized
Contracts Description Date Value 10/31/98 Appreciation
- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
10 U.S. 2 Year December 1998 $2,122,269 $2,126,563 $4,294
Treasury Note ======
</TABLE>
Index
# -- Security may only be sold to institutional buyers.
@ -- All or a portion of this security is segregated.
ARM -- Adjustable Rate Mortgage.
CBO -- Collateralized Bond Obligation.
FRN -- Floating Rate Note: The maturity date shown is the next interest reset
date; the rate shown is the rate in effect at October 31, 1998.
MTN -- Medium Term Note.
RACERS -- Restructured Asset Class Enhanced Return Securities.
REMIC -- Real Estate Mortgage Investment Conduit.
ROSE -- Repeat Offering Securitization Entity.
TBA -- To be announced.
See notes to financial statements.
31
<PAGE>
Chase Vista Select Funds
Statement of Assets and Liabilities October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investment securities, at value (Note 1) $820,159,456 $360,642,181 $25,898,221
Cash ..................................... 51,203 14,151 847
Receivables:
Investment securities sold .............. 5,280,863 4,429,552 1,010,642
Interest ................................ 6,280,086 3,816,914 336,676
Fund shares sold ........................ 299,000 502,100 --
Expense reimbursement (Note 2) .......... 10,000 -- 17,145
Other .................................... 262,059 194,587 3,503
------------ ------------ -----------
Total Assets .......................... 832,342,667 369,599,485 27,267,034
------------ ------------ -----------
LIABILITIES:
Payables:
Investment securities purchased .......... 239,501,829 14,349,054 1,808,037
Trust shares redeemed .................... 48,063 -- --
Dividends payable ........................ 2,995,301 1,683,603 113,622
Variation margin on futures contracts 33,849 78,125 4,687
Other accrued liabilities ................ 101,798 145,766 41,765
------------ ------------ -----------
Total Liabilities ..................... 242,680,840 16,256,548 1,968,111
------------ ------------ -----------
NET ASSETS:
Paid in capital .......................... 571,579,173 344,043,914 25,187,088
Accumulated undistributed net
investment income ....................... (37,481) (21,766) (28,590)
Accumulated undistributed net
realized gain on investments and
futures transactions .................... 7,929,447 4,884,298 88,280
Net unrealized appreciation of
investments and futures transactions 10,190,688 4,436,491 52,145
------------ ------------ -----------
Net Assets ................................. $589,661,827 $353,342,937 $25,298,923
============ ============ ===========
Shares of beneficial interest outstanding
($.001 par value; unlimited number
of shares authorized): .................... 14,280,384 34,107,317 2,366,160
Net Asset Value (Maximum offering
price and redemption per share) ......... $ 41.29 $ 10.36 $ 10.69
============ ============ ===========
Cost of Investments ...................... $809,932,444 $356,547,160 $25,850,370
============ ============ ===========
</TABLE>
See notes to financial statements.
32
<PAGE>
Chase Vista Select Funds
Statement of Operations For the year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Select Select
Select Intermediate Short-Term
Bond Bond Bond
Fund Fund Fund
-------------- -------------- -------------
<S> <C> <C> <C>
INTEREST INCOME ............................ $34,721,015 $20,813,430 $1,601,051
----------- ----------- ----------
EXPENSES: (Note 2)
Investment Advisory fees ................. 1,657,582 1,008,927 65,557
Administration fees ...................... 828,791 504,464 39,334
Custodian fees ........................... 128,263 92,469 67,898
Amortization of organization costs
(Note 1) ................................ 9,108 4,890 3,159
Printing and postage ..................... 15,043 10,850 2,006
Professional fees ........................ 44,788 42,260 25,346
Registration costs ....................... 7,110 22,809 5,014
Transfer agent fees ...................... 33,152 23,442 11,427
Trustees fees ............................ 27,626 16,815 1,311
Other .................................... 27,276 25,828 8,768
----------- ----------- ----------
Total expenses ......................... 2,778,739 1,752,754 229,820
----------- ----------- ----------
Less amounts waived (Note 2) ............... 2,614,636 1,605,860 172,789
Less expenses borne by the Distributor ..... 20,445 2,500 27,133
----------- ----------- ----------
Net expenses ............................ 143,658 144,394 29,898
----------- ----------- ----------
Net investment income .................. 34,577,357 20,669,036 1,571,153
----------- ----------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Investments .............................. 6,821,995 4,640,470 46,796
Futures .................................. 974,557 235,880 11,433
Change in net unrealized appreciation/
depreciation in:
Investments .............................. 2,808,219 185,464 (32,825)
Futures .................................. (36,324) 341,470 4,294
----------- ----------- ----------
Net realized and unrealized gain on
investments and futures transactions 10,568,447 5,403,284 29,698
----------- ----------- ----------
Net increase in net assets from
operations .............................. $45,145,804 $26,072,320 $1,600,851
=========== =========== ==========
</TABLE>
See notes to financial statements.
33
<PAGE>
- --------------------------------------------------------------------------------
Chase Vista Select Funds
Statement of Changes in Net Assets For the periods indicated
<TABLE>
<CAPTION>
Select
Bond
Fund
---------------------------------
Year 01/01/97*
Ended Through
10/31/98 10/31/97
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................................................ $ 34,577,357 $ 28,389,111
Net realized gain (loss) on investments and futures transactions ..... 7,796,552 6,166,990
Change in net unrealized appreciation/depreciation on investments
and futures transactions ............................................ 2,771,895 1,953,197
------------- -------------
Increase in net assets from operations ............................... 45,145,804 36,509,298
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1H)
Net investment income ................................................ (34,401,314) (28,354,703)
Net realized gain on investments and futures transactions ............ (6,298,388) --
------------- -------------
Total dividends and distributions ................................... (40,699,702) (28,354,703)
------------- -------------
Increase (decrease) from capital share transactions (Note 5) ......... 65,427,688 511,633,442
------------- -------------
Total increase (decrease) in net assets ............................. 69,873,790 519,788,037
NET ASSETS:
Beginning of period .................................................. 519,788,037 --
------------- -------------
End of period ........................................................ $ 589,661,827 $ 519,788,037
============= =============
<CAPTION>
Chase Vista Select Funds
Statement of Changes in Net Assets For the periods indicated
Select
Intermediate Select
Bond Short-Term Bond
Fund Fund
--------------------------------- -----------------------------
Year 01/01/97* Year 01/01/97*
Ended Through Ended Through
10/31/98 10/31/97 10/31/98 10/31/97
--------------- ---------------- --------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ............................................. $ 20,669,036 $ 16,540,964 $ 1,571,153 $ 1,463,281
Net realized gain (loss) on investments and futures transactions .. 4,876,350 (432,270) 58,229 (75,606)
Change in net unrealized appreciation/depreciation on
investments and futures transactions ............................. 526,934 3,737,088 (28,531) 152,052
------------- ------------- ------------ ------------
Increase in net assets from operations ............................ 26,072,320 19,845,782 1,600,851 1,539,727
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1H)
Net investment income ............................................. (20,278,862) (16,520,272) (1,495,164) (1,463,293)
Net realized gain on investments and futures transactions ......... -- -- -- --
------------- ------------- ------------ ------------
Total dividends and distributions ................................ (20,278,862) (16,520,272) (1,495,164) (1,463,293)
------------- ------------- ------------ ------------
Increase (decrease) from capital share transactions (Note 5) ...... 28,383,763 315,840,206 (1,482,315) 26,599,117
------------- ------------- ------------ ------------
Total increase (decrease) in net assets .......................... 34,177,221 319,165,716 (1,376,628) 26,675,551
NET ASSETS:
Beginning of period ............................................... 319,165,716 -- 26,675,551 --
------------- ------------- ------------ ------------
End of period ..................................................... $ 353,342,937 $ 319,165,716 $ 25,298,923 $ 26,675,551
============= ============= ============ ============
</TABLE>
- -------
* Commencement of operations.
See notes to financial statements.
34
<PAGE>
Chase Vista Select 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. Effective March 16, 1998,
the Vista Family of Mutual Funds changed its name to the Chase Vista Funds.
Select Bond Fund ("CVBF"), Select Intermediate Bond Fund ("CVIBF") and Select
Short-Term Bond Fund ("CVSTBF"), 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 -- 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. 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 exchange-traded interest rate futures and options for
hedging purposes, to either modify the duration of the portfolio, modify
the yield curve exposure of the portfolio, or in anticipation of buying or
selling a specific security.
Use of long futures contracts subjects the Funds to risk of loss in excess
of the amounts shown on the Statement of Assets and Liabilities, up to the
amount of the nominal value of the futures contracts.
The Funds 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.
35
<PAGE>
Chase Vista Select Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
At October 31, the Funds held open futures contracts as listed in the
Portfolio of Investments.
E. 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.
F. 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.
G. 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.
H. 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. 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.
I. 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 CVBF, CVIBF and CVSTBF,
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 CVBF and CVIBF, and
0.10% for CVSTBF 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.
36
<PAGE>
Chase Vista Select Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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.
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. Chase waived all custodian fees for the year ended
October 31, 1998.
3. Investment Transactions -- Purchases and sales of investments (excluding
short-term investments) were as follows:
<TABLE>
<CAPTION>
CVBF CVIBF CVSTBF
------------ ------------ -----------
<S> <C> <C> <C>
Purchases (excluding U.S.
Government) .................. $663,289,400 $140,949,612 $14,814,763
Sales (excluding U.S.
Government) .................. 650,295,156 133,505,615 20,445,397
Purchases of U.S. Government ... 745,329,115 345,208,895 64,152,153
Sales of U.S. Government ....... 677,944,643 353,401,596 59,789,616
</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, 1998 are as follows:
<TABLE>
<CAPTION>
CVBF CVIBF CVSTBF
------------ ------------ -----------
<S> <C> <C> <C>
Aggregate cost .................. $809,932,444 $356,547,160 $25,850,370
------------ ------------ -----------
Gross unrealized appreciation ... $ 12,826,714 $ 5,019,516 $ 109,751
Gross unrealized depreciation ... (2,599,702) (924,495) (61,900)
------------ ------------ -----------
Net unrealized appreciation ..... $ 10,227,012 $ 4,095,021 $ 47,851
============ ============ ===========
</TABLE>
5. Transactions in Shares of Beneficial Interest -- Transactions in Shares of
Beneficial Interest for the year ended October 31, 1998 were as follows:
<TABLE>
<CAPTION>
Select Bond Fund
-----------------------------------------------------------------
Year 1/01/97*
Ended Through
10/31/98 10/31/97
----------------------------- ------------------------------
Amount Shares Amount Shares
----------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Shares sold ............. $96,373,405 2,364,561 $ 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 ......... 5,177,856 127,625 2,124,455 52,834
Shares redeemed ......... (36,123,573) (887,057) (106,658,646) (2,666,590)
----------- --------- ------------ ----------
Net increase (decrease)
in Trust shares
outstanding ........... $65,427,688 1,605,129 $511,633,442 12,675,255
=========== ========= ============ ==========
</TABLE>
37
<PAGE>
Chase Vista Select Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Select Intermediate Bond Fund
-----------------------------------------------------------------
Year 1/01/97*
Ended Through
10/31/98 10/31/97
----------------------------- ------------------------------
Amount Shares Amount Shares
----------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Shares sold ............. $61,732,539 6,050,177 $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 ......... 22,831 2,233 1,576,083 156,821
Shares redeemed ......... (33,371,607) (3,265,704) (60,797,487) (6,084,443)
----------- ---------- ------------ ----------
Net increase (decrease)
in Trust shares
outstanding ........... $28,383,763 2,786,706 $315,840,206 31,320,611
=========== ========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
Select Short-Term Bond Fund
--------------------------------------------------------------
Year 1/01/97*
Ended Through
10/31/98 10/31/97
------------------------------- ----------------------------
Amount Shares Amount Shares
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Shares sold ............. $ 2,680,029 251,855 $ 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 ......... 576 54 155,062 14,601
Shares redeemed ......... (4,162,920) (391,292) (2,581,533) (243,458)
----------- -------- ----------- ---------
Net increase (decrease)
in Trust shares
outstanding ........... $(1,482,315) (139,383) $26,599,117 2,505,543
=========== ======== =========== =========
</TABLE>
- --------------
* Fund commenced operations.
38
<PAGE>
Chase Vista Select Funds
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 year ended October 31, 1998, 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:
<TABLE>
<CAPTION>
Accrued
Pension Pension
Expenses Liability
-------- ---------
<S> <C> <C>
CVBF ............................................ $8,555 $23,693
CVIBF ........................................... 5,224 13,374
CVSTBF .......................................... 441 1,167
</TABLE>
7. Bank Borrowings -- The Funds may borrow money for temporary or emergency
purposes. Any borrowings representing more than 5% of a Fund's total assets must
be repaid before the Fund may make additional investments. The Funds have
entered into an agreement, enabling them to participate with other Chase Vista
Funds in an unsecured line of credit with a syndicate of banks, which permits
borrowings up to $350 million, collectively. Interest is charged to each Fund
based on its borrowings at an annual rate equal to the sum of the Federal Funds
Rate plus 0.35%. The Funds also pay a commitment fee of 0.055% per annum on the
average daily amount of the available commitment, which is allocated on a
pro-rata basis to the funds. The commitment fee is included in Other expenses on
the Statement of Operations. Borrowings are payable on demand.
The Funds had no borrowings outstanding at October 31, 1998, nor at anytime
during the year.
39
<PAGE>
Chase Vista Select Funds
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Chase Vista Select
----------------------------------------------------------------------------
Intermediate Short-Term
Bond Fund Bond Fund Bond Fund
----------------------- ----------------------- ------------------------
Year 1/1/97* Year 1/1/97* Year 1/1/97*
Ended Through Ended Through Ended Through
10/31/98 10/31/97 10/31/98 10/31/97 10/31/98 10/31/97
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance
Net Asset Value,
Beginning of Period ......... $ 41.01 $ 40.34 $ 10.19 $ 10.09 $ 10.65 $ 10.62
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income 2.561 2.308 0.620 0.554 0.611 0.568
Net gains or losses on
securities (both
realized and
unrealized) .............. 0.760 0.667 0.167 0.100 0.035 0.030
-------- -------- -------- -------- -------- --------
Total from Investment
Operations ............... 3.321 2.975 0.787 0.654 0.646 0.598
-------- -------- -------- -------- -------- --------
Distributions to
Shareholders From:
Dividends from net
investment income ........ 2.549 2.305 0.617 0.554 0.608 0.568
Net realized gains on
investment
transactions ............. 0.492 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and
distributions ............ 3.041 2.305 0.617 0.554 0.608 0.568
-------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period ...................... $ 41.29 $ 41.01 $ 10.36 $ 10.19 $ 10.69 $ 10.65
======== ======== ======== ======== ======== ========
Total Return ................ 8.44% 7.64% 7.98% 6.71% 6.25% 5.82%
Ratios/Supplemental
Data:
Net assets, end of
period (in millions) ..... $ 590 $ 520 $ 353 $ 319 $ 25 $ 27
Ratios to average net
assets:#
Ratio of expenses ......... 0.03% 0.02% 0.04% 0.06% 0.11% 0.11%
Ratio of net
investment income ........ 6.27% 6.89% 6.16% 6.67% 6.01% 6.45%
Ratio of expenses
without waivers and
assumption of
expenses ................. 0.51% 0.49% 0.52% 0.54% 0.88% 0.63%
Ratio of net
investment income
without waivers and
assumption of
expenses ................. 5.79% 6.42% 5.68% 6.19% 5.24% 5.93%
Portfolio turnover rate ..... 306% 261% 168% 193% 382% 406%
</TABLE>
- --------------
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
40
<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 Chase Vista Select Bond Fund, Chase
Vista Select Intermediate Bond Fund and Chase Vista Select Short-Term Bond Fund
(separate portfolios of Mutual Fund Select Group, hereafter referred to as the
"Portfolios") at October 31, 1998, the results of each of their operations for
the year then ended, and the changes in each of their net assets and the
financial highlights for the year then ended, and 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 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, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 15, 1998
41
<PAGE>
Unaudited
Chase Select Bond Fund
Chase Vista Select Intermediate Term Bond Fund
Chase Vista Select Short-Term Bond Fund
- --------------------------------------------------------------------------------
Certain tax information regarding the Chase Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 1998. 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, 1998. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1998 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1998.
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>
Federal
Federal Federal Home Loan
U.S. Treasury Farm Home Loan Mortgage
Chase Vista Fund Obligations Credit Bank Bank Corporation
- -------------------------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Select Bond 28.74% 0.01% -- 3.09%
Select Intermediate Bond 37.60% 0.01% 1.61% 2.66%
Select Short-Term Bond 19.26% -- 1.22% 4.77%
<CAPTION>
Federal Government Long-Term
National Federal National Student Loan Capital Gains
Mortgage Mortgage Mortgage Marketing Distributions
Chase Vista Fund Association Corporation Association Association Per Share
- -------------------------- ------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Select Bond 8.17% -- 3.19% -- $0.25
Select Intermediate Bond 10.96% 0.53% 0.56% 0.09% --
Select Short-Term Bond 8.49% 0.41% -- -- --
</TABLE>
42
<PAGE>
Chase Vista Funds 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
PricewaterhouseCoopers LLP
Chase Vista Select Funds are distributed by Vista Fund Distributors, Inc., which
is unaffiliated with The Chase Manhattan Bank. Chase and its respective
affiliates receive compensation from Chase Vista Select 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 Chase Vista Select 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.
43
<PAGE>
(C) The Chase Manhattan Bank, 1998, 1999. December 1998
Chase Vista Funds
Fulfillment Center
393 Manley Street
West Bridgewater, MA 02379-1039
