MUTUAL FUND SELECT GROUP, 485APOS, 1998-12-30

MUTUAL FUND SELECT GROUP
485APOS, 1998-12-30

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As filed via EDGAR with the Securities and Exchange Commission on December 30,
1998.

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|

Pre-Effective Amendment No. |_|

Post-Effective Amendment No. 3 |X|

and

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

Amendment No. 5 |X|
-------------------------------
MUTUAL FUND SELECT GROUP
(Exact Name of Registrant as Specified in Charter)

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

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

Copies to:

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

(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

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

If appropriate, check the following box:

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

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

The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its series of shares under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940 on December 23,
1996 and the Rule 24f-2 Notice for the Registrant's fiscal year ended October
31, 1997 was filed on January 22, 1998.
<PAGE>

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

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

SELECT BALANCED FUND
SELECT EQUITY INCOME FUND
SELECT LARGE CAP EQUITY FUND
SELECT LARGE CAP GROWTH FUND
SELECT NEW GROWTH OPPORTUNITIES FUND
SELECT SMALL CAP VALUE FUND
SELECT INTERNATIONAL EQUITY FUND
SELECT SHORT-TERM BOND FUND
SELECT INTERMEDIATE BOND FUND
SELECT BOND FUND

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

1 Front Cover Page *

2(a) Expense Summary *

(b) Not Applicable *

3(a) Not Applicable *

(b) Not Applicable *

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

(d) Not Applicable *

5(a) Management *

(b) Management *

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

-i-
<PAGE>

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

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

(f) Other Information Concerning *
the Fund

(g) Not Applicable *

5A Not Applicable *

6(a) Other Information Concerning *
the Fund

(b) Not Applicable *

(d) Not Applicable *

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

(f) How Distributions are Made; *
Tax Information

(g) How Distributions are Made; *
Tax Information

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

7(a) How to Purchase and Redeem Shares *

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

(d) How to Purchase and Redeem Shares *
</TABLE>

-ii-
<PAGE>

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

(e) Management; Other Information *
Concerning the Fund

(f) Other Information Concerning the *
Fund

8(a) How to Purchase and Redeem Shares *

(b) How to Purchase and Redeem Shares *

(d) How to Purchase and Redeem Shares *

9 Not Applicable *
</TABLE>

-iii-
<PAGE>

Chase Vista Funds
Select Funds Prospectus

[Front cover page]

Chase Vista Select Funds

Prospectus
February 26, 1999

Select Short-Term Bond Fund
Select Intermediate Bond Fund
Select Bond Fund
Select Balanced Fund
Select Equity Income Fund
Select Large Cap Equity Fund
Select Large Cap Growth Fund
Select Growth and Income Fund
Select New Growth Opportunities Fund
Select Small Cap Value Fund
Select International Equity Fund

Neither the Securities and Exchange Commission nor any state securities
commission has approved of securities of this Fund or determined if this
prospectus is accurate or complete. It is a crime to state otherwise.

<PAGE>

Contents

Information about the Funds x
Select Short-Term Bond Fund x
Select Intermediate Bond Fund x
Select Bond Fund x
Select Balanced Fund x
Select Equity Income Fund x
Select Large Cap Equity Fund x
Select Large Cap Growth Fund x
Select Growth and Income Fund x
Select New Growth Opportunities Fund x
Select Small Cap Value Fund x
Select International Equity Fund x

How your account works x
Buying Fund shares x
Selling Fund shares x
Other information concerning the Funds x

Distributions and taxes x

What the Terms Mean

Financial highlights of the Funds x

<PAGE>

Information about the Fund

Select Short-Term Bond Fund

The Fund's objective

The Fund seeks a high level of income consistent with preservation of capital.

The Fund's main investment strategy

Under normal market conditions, the Fund will invest at least 65% of its total
assets in bonds which have a maturity of three years or less. The Fund's
dollar-weighted average maturity will not exceed three years.

Substantially all of the Fund's investments will be investment grade, which
means a rating of Baa or higher by Moody's Investors Service, Inc. BBB or
higher, by Standard & Poor's Corporation, or the equivalent by another national
rating organization. They may also include unrated securities of comparable
quality.

The Fund may make substantial investments in foreign debt securities, including
securities of issuers in developing countries, as long as they meet the Fund's
credit quality standards.

The Fund develops an appropriate portfolio strategy by focusing on active sector
and security selection. This selection is based on a relative value investment
approach, and secondly, on active duration management. In seeking relative
value, the advisers analyze whether the values and risks of the different
sectors and securities are appropriately priced given the fundamental and
technical factors in the market at any time. The advisers also use yield curve
strategies in certain interest rate environments, which forms an important
dimension of their overall investment strategy.

The advisers consider several factors when choosing investments, including
current yield, preservation of original investment, maturity, credit quality,
ease of buying and selling and yield to maturity. The advisers will adjust the
portfolio as market conditions change.

The Fund may invest in floating rate securities, whose interest rates adjust
automatically whenever a specified interest rate changes, and in variable rate
securities, whose interest rates are changed periodically.

The Fund may invest in mortgage-related securities issued by governmental
entities and private issuers. These may include investments in collateralized
mortgage obligations and principal-only and interest-only stripped
mortgage-backed securities.

<PAGE>

The Fund may enter into "dollar rolls," in which the Fund sells mortgage-backed
securities and at the same time contracts to buy back very similar securities on
a future date. It may also buy asset-backed securities. These receive a stream
of income from a particular asset, such as credit card receivables.

The Fund may also invest in high-quality, short-term money market instruments,
repurchase agreements and derivatives, which are financial instruments whose
value is based on another security, index or exchange rate. The Fund may use
derivatives to hedge various market risks or to increase the Fund's income or
gain.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

The main investment risks

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some specific risks of investing in the Select
Short-Term Bond Fund.

The value of fixed income investments such as bonds tends to fall when
prevailing interest rates rise. Such a drop in value could be worse if the Fund
invests a larger portion of its assets in debt securities with longer
maturities. That's because long-term debt securities are more sensitive to
interest rate changes than other fixed-income securities.

When the Fund invests in mortgage-related securities, the value of the Fund
could change more often and to a greater degree than if it did not buy
mortgage-backed securities. That's because the prepayment features on some
mortgage-related securities make them more sensitive to interest rate changes.
Mortgage-related securities are subject to scheduled and unscheduled principal
payments as property owners pay down or prepay their mortgages. As these
payments are received, they must be reinvested when interest rates may be lower
than on the original mortgage security. When interest rates are rising, the
value of fixed-income securities with prepayment features are likely to decrease
as much or more than securities without prepayment features. In addition, while
the value of fixed-income securities will generally increase when interest rates
decline, the value of mortgage-related securities with prepayment features may
not increase as much as securities without prepayment features.

Collateral mortgage obligations are issued in multiple classes, and each class
may have its own interest rate and/or final payment date. A class with an
earlier final payment date

<PAGE>

may have certain preferences in receiving principal payments or earning
interest. As a result, the value of some classes in which the Fund invests may
be more volatile.

The value of interest-only and principal-only mortgage backed securities are
more volatile than other types of mortgage-related securities. That's because
they are very sensitive not only to changes in interest rates, but also to the
rate of prepayments. A rapid or unexpected increase in prepayments can
significantly depress the price of interest-only securities, while a rapid or
unexpected decrease could have the same effect on principal-only securities. In
addition, these instruments may be illiquid.

Certain securities which the Fund may hold, such as stripped obligations and
zero coupon securities, are more sensitive to changes in interest rates than
ordinary interest-paying securities.

Investments in foreign issuers may be riskier than investments in the United
States. They may be affected by political, social and economic instability. Some
securities may be harder to trade without incurring a loss and may be difficult
to convert into cash. There may be less public information available, differing
settlement procedures, or regulations and standards that don't match U.S.
standards. Some countries may nationalize or expropriate assets or impose
exchange controls. If the Fund were to invest in a security which is not
denominated in U.S. dollars, it also would be subject to currency exchange risk.
These risks increase when investing in issuers located in developing countries.

The Fund's performance will depend on the credit quality of its investments.
Securities which are rated Baa by Moody's or BBB by S&P may have fewer
protective provisions and are generally more risky than higher rated securities.
The issuer may have trouble making principal and interest payments when
difficult economic conditions exist.

Some asset-backed securities may have additional risk because they may receive
little or no collateral protection from the underlying assets.

Because the interest rate changes on floating and variable rate securities, the
Fund's yield may decline and it may lose the opportunity for capital
appreciation when interest rates decline.

Dollar rolls, forward commitments and repurchase agreements involve some risk to
the Fund if the other party does not live up to its obligations under the
agreement.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

[Sidenote:] An investment in the Fund isn't a bank deposit and it isn't insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

<PAGE>

The Fund's past performance
This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return over the past year, five years and ten years. It compares
that performance to [Index], a widely recognized benchmark for fixed income
funds.

On January 1, 1997, the Fund received the assets of a common trust fund which
had been maintained by Chase. The performance of the Fund before that date is
based on the historical performance of that common trust fund. The historical
performance of shares of the predecessor common trust fund has been adjusted to
reflect the Fund's expense levels (absent reimbursements) that were in place at
the time the Fund received the common trust fund assets. For more information,
see the Fund's Statement of Additional Information.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
Past 1 year Past 5 years
- ---------------------- ------------------- ---------------------------------------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ----------------------- -------------------------
Index --% --% --%
- ---------------------- ------------------- ----------------------- -------------------------
</TABLE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

Annual Fund operating expenses (expenses that deducted from Fund assets)

<PAGE>

<TABLE>
<CAPTION>
- --------------- ------------ -------- ----------
Total
annual
Fund
Distribution Other operating
Management fee (12b-1) fees expenses expenses
- --------------- ------------ -------- ----------
<S> <C> <C> <C>
- --% --% --% --%
- --------------- ------------ -------- ----------
</TABLE>

[Sidenote]
The actual management fee is currently expected to be --%, other expenses are
expected to be --% and the total annual fund operating expenses are expected not
to exceed --%. That's because The Chase Manhattan Bank (Chase) and some of the
Fund's other service providers have volunteered not to collect a portion of
their fees and to reimburse others. Chase and these other service providers may
end this arrangement at any time.

The table does not reflect charges or credits
which you might incur if you invest through a financial institution.

Example
This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. As with all other prospectuses, the example
assumes:
o you invest $10,000
o you sell all your shares at the end of the period
o your investment has a 5% return each year, and
o the Fund's operating expenses remain the same as shown above.

<TABLE>
<CAPTION>
- ------------ ---------- ---------- ------------
1 year 3 years 5 years 10 years
- ------------ ---------- ---------- ------------
<S> <C> <C> <C>
$230 $390 $560 $1,070
- ------------ ---------- ---------- ------------
</TABLE>

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Intermediate Bond Fund

The Fund's objective

The Fund seeks as high a high level of income as possible as is consistent with
reasonable risk.

The Fund's main investment strategy

Under normal market conditions, the Fund will invest at least 65% of its total
assets in a broad range of investment-grade debt securities. These include debt
securities issued by the U.S. Government and its agencies and authorities,
investment-grade corporate bonds and other fixed income securities.

The Fund's dollar weighted average maturity is between three and 10 years.

The Fund may make substantial investments in foreign debt securities, including
securities of issuers in developing countries, as long as they meet the Fund's
credit quality standards.

The Fund develops an appropriate portfolio strategy by focusing on active sector
and security selection. This selection is based on a relative value investment
approach, and secondly, active duration management. In seeking relative value,
the advisers analyze whether the values and risks of the different sectors and
securities are appropriately priced given the fundamental and technical factors
in the market at any point in time. The advisers also use yield curve strategies
in certain interest rate environments, which forms an important dimension of
their overall investment strategy.

The Fund may enter into "dollar rolls," in which the Fund sells mortgage-backed
securities and at the same time contracts to buy back very similar securities on
a future

<PAGE>

date. It may also buy asset-backed securities. These receive a stream of income
from a particular asset, such as credit card receivables.

To temporarily defend its assets, the Fund may put any amount of its assets in
high quality money market instruments and repurchase agreements.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

The main investment risks

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some specific risks of investing in the Select
Intermediate Bond Fund.

Collateral mortgage obligations are issued in multiple classes, and each class
may have its own interest rate and/or final payment date. A class with an
earlier final payment date

<PAGE>

may have certain preferences in receiving principal payments or earning
interest. As a result, the value of some classes in which the Fund invests may
be more volatile.

Certain securities which the Fund may hold, such as stripped obligations and
zero coupon securities, are more sensitive to changes in interest rates than
ordinary interest-paying securities.

Some asset-backed securities may have additional risk because they may receive
little or no collateral protection from the underlying assets.

Because the interest rate changes on floating and variable rate securities, the
Fund's yield may decline and it may lose the opportunity for capital
appreciation when interest rates decline.

Dollar rolls, forward commitments and repurchase agreements involve some risk to
the Fund if the other party does not live up to its obligations under the
agreement.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

If the Fund departs from its investment policies during temporary defensive
periods, it may not achieve its investment objective.

<PAGE>

[Sidenote:] An investment in the Fund isn't a bank deposit and it isn't insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return over the past year, five years and ten years. It compares
that performance to [Index], a widely recognized benchmark for fixed income
funds.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- ----------------------- -------------------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- ----------------------- -------------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ----------------------- -------------------------
Index --% --% --%
- ---------------------- ------------------- ----------------------- -------------------------
</TABLE>

Fees and expenses

<PAGE>

The following shows the fees and expenses charged when you own shares of the
Fund.

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

Annual Fund operating expenses (expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
- --------------- ------------ -------- ----------
Total
annual
Fund
Distribution Other operating
Management fee (12b-1) fees expenses expenses
- --------------- ------------ -------- ----------
<S> <C> <C> <C>
- --% --% --% --%
- --------------- ------------ -------- ----------
</TABLE>

[Sidenote]
The actual management fee is currently expected to be --%, other expenses are
expected to be --% and the total annual Fund operating expenses are expected not
to exceed --%. That's because The Chase Manhattan Bank (Chase) and some of the
Fund's other service providers have volunteered not to collect a portion of
their fees and to reimburse others. Chase and these other service providers may
end this arrangement at any time. The table does not reflect charges or credits
which you might incur if you invest through a financial institution.

<TABLE>
<CAPTION>
- ------------ ---------- ---------- ------------
1 year 3 years 5 years 10 years
- ------------ ---------- ---------- ------------
<S> <C> <C> <C>
$520 $680 $850 $1,340
- ------------ ---------- ---------- ------------
</TABLE>

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Bond Fund

The Fund's objective

The Fund seeks to provide as high a level of income as is consistent with
reasonable risk.

The Fund's main investment strategy

The Fund invests mainly in investment grade corporate bonds as well as other
debt securities. Under normal market conditions, the Fund will invest at least
65% of its total assets in debt securities with at least an "A" rating or the
equivalent from Moody's Investors Service, Inc., Standard & Poor's Corporation,
or Fitch Investor's Service Inc. or in securities that are unrated but of
comparable quality.

The Fund may make substantial investments in foreign debt securities, including
securities of issuers in developing countries, as long as they meet the Fund's
credit quality standards.

The Fund develops an appropriate portfolio strategy by focusing on active sector
and security selection. This selection is based on a relative value investment
approach, and secondly, active duration management. In seeking relative value,
the advisers analyze whether the values and risks of the different sectors and
securities are appropriately priced given the fundamental and technical factors
in the market at any point in time. The advisers also use yield curve strategies
in certain interest rate environments, which forms an important dimension of
their overall investment strategy.

There is no restriction on the maturity of the Fund's portfolio or on any
individual security in the portfolio. The advisers will change the actual
maturities according to changes in the market.

The Fund may enter into "dollar rolls," in which the Fund sells mortgage-backed
securities and at the same time contracts to buy back very similar securities on
a future

<PAGE>

date. It may also buy asset-backed securities. These receive a stream of income
from a particular asset, such as credit card receivables.

To temporarily defend its assets, the Fund may put any amount of its assets in
high-quality money market instruments and repurchase agreements.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

The main investment risks

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some specific risks of investing in the Select
Bond Fund.

Collateral mortgage obligations are issued in multiple classes, and each class
may have its own interest rate and/or final payment date. A class with an
earlier final payment date may have certain preferences in receiving principal
payments or earning interest. As a result, the value of some classes in which
the Fund invests may be more volatile.

<PAGE>

Certain securities which the Fund may hold, such as stripped obligations and
zero coupon securities, are more sensitive to changes in interest rates than
ordinary interest-paying securities.

Investments in foreign issuers may be riskier than investments in the United
States. They may be affected by political, social and economic instability. Some
securities may be harder to trade without incurring a loss and may be difficult
to convert into cash. There may be less public information available, differing
settlement procedures, or regulations and standards that don't match U.S.
standards. Some countries may nationalize or expropriate assets or impose
exchange controls. These risks increase when investing in issuers located in
developing countries.

Some asset-backed securities may have additional risk because they may receive
little or no collateral protection from the underlying assets.

Because the interest rate changes on floating and variable rate securities, the
Fund's yield may decline and it may lose the opportunity for capital
appreciation when interest rates decline.

Dollar rolls, forward commitments and repurchase agreements involve some risk to
the Fund if the other party does not live up to its obligations under the
agreement.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

If the Fund departs from its investment policies during temporary defensive
periods, it may not achieve its investment objective.

[Sidenote:] An investment in the Fund isn't a bank deposit and it isn't insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

<PAGE>

The Fund's past performance

On January 1, 1997, the Fund received the assets of three common trust funds
which had been maintained by Chase. The performance of the Fund before that date
is based on the historical performance of one of the common trust funds whose
assets were transferred to the Fund. The historical performance of shares of the
predecessor common trust fund has been adjusted to reflect the Fund's expense
levels (absent reimbursements) that were in place at the time the Fund received
the common trust fund assets. For more information, see the Fund's Statement of
Additional Information.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

<PAGE>

The table below is based on expenses incurred in the most recent fiscal year.

The table does not reflect charges or credits
which you might incur if you invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Balanced Fund

The Fund's objective

The Fund seeks to maximize total return through long-term capital growth and
earning current income.

The Fund's main investment strategy

The Fund invests in both equity and debt securities. Under normal market
conditions, the Fund invests 35% to 70% of its total assets in equity
securities. Most of these are in well known, established companies with market
capitalizations of at least $200 million at the time of purchase and which are
traded on established securities markets or over-the-counter. Market
capitalization is the total market value of a company's shares. Equity
securities include common stocks, preferred stocks and securities that are
convertible into common stocks, and warrants to buy common stocks.

Under normal conditions, the Fund will invest at least 25% of its total assets
in investment grade debt securities. These include non-convertible corporate
debt and U.S. Government debt securities. The Fund invests in corporate debt
securities that are rated Baa or higher by Moody's Investors Service, Inc., BBB
or higher by Standard & Poor's Corporation, or the equivalent rating by another
national rating organization. It may also invest in unrated securities of
comparable quality. There is no restriction on the maturity of the Fund's fixed
income portfolio or of any individual security in the portfolio. The average
maturity, or time until debt investments come due, will vary as market
conditions change.

The Fund's advisers may change the balance between equity and fixed income
investments to suit market conditions.

The Fund may invest up to 20% of it total assets in foreign securities. These
investments may take the form of depositary receipts. The Fund may also invest
in convertible securities, which generally pay interest or dividends and which
can be converted into common or preferred stock.

The Fund's equity holdings may also include real estate investment trusts
(REITs), which are pools of investments primarily in income producing real
estate or loans related to real estate.

<PAGE>

The Fund may invest in floating rate securities, whose interest rate adjusts
automatically whenever a specified interest rate changes, and in variable rate
securities, whose interest rates are changed periodically.

The Fund may enter into "dollar rolls", in which the Fund sells mortgage-backed
securities and at the same time contracts to buy back very similar securities on
a future date. It may also buy asset-backed securities. These receive a stream
of income from a particular asset, such as credit card receivables.

The Fund may invest any portion of its assets that aren't in stocks or fixed
income securities in high quality money market instruments and repurchase
agreements. To temporarily defend its assets, the Fund may put any amount of its
assets in these types of investments.

The Fund may invest in derivatives, which are financial instruments whose value
is based on another security, index or exchange rate. The Fund may use
derivatives to hedge various market risks or to increase the Fund's income or
gain.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

Main risks of investing in the Fund

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select Balanced Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

The securities of smaller companies may trade less frequently and in smaller
volumes than securities of larger, more established companies. As a result,
share price changes may be more sudden or more erratic. Smaller companies may
have limited product lines, markets or financial resources, and they may depend
on a small management group.

Investments in foreign issuers may be riskier than investments in the United
States. Since foreign securities are normally denominated and traded in foreign
currencies, the value of

<PAGE>

the Fund's foreign holdings can be affected by currency exchange rates and
exchange control regulations. Foreign securities may be affected by political,
social and economic instability. Some securities may be harder to trade without
incurring a loss and may be difficult to convert into cash. There may be less
public information available, differing settlement procedures, or regulations
and standards that don't match U.S. standards. Some countries may nationalize or
expropriate assets or impose exchange controls. These risks increase when
investing in issuers located in developing countries.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

In early 1999, the European Monetary Union implemented a new currency called the
"euro". It is possible that the euro could increase volatility in financial
markets, which could have a negative effect on the strength and value of the
U.S. dollar and, as a result, the value of shares of the Fund.

The value of the Fund's fixed income securities tends to fall when prevailing
interest rates rise. Such a drop could be worse if the Fund invests a larger
portion of its assets in debt securities with longer maturities. That's because
long-term debt securities are more sensitive to interest rate changes than other
fixed-income securities.

When the Fund invests in mortgage-related securities, the value of the Fund
could change more often and to a greater degree than if it did not buy
mortgage-related securities. That's because the prepayment features on some
mortgage-related securities make them more sensitive to interest rate changes.
Mortgage-related securities are subject to scheduled and unscheduled principal
payments as property owners pay down or prepay their mortgages. As these
payments are received, they must be reinvested when interest rates may be lower
than on the original mortgage security. When interest rates are rising, the
value of fixed-income securities with prepayment features are likely to decrease
as much or more than securities without prepayment features. In addition, while
the value of fixed-income securities will generally increase when interest rates
decline, the value of mortgage-related securities with prepayment features may
not increase as much as securities without prepayment features.

<PAGE>

securities, while a rapid or unexpected decrease could have the same effect on
principal-only securities. In addition, these instruments may be illiquid.

Certain securities which the Fund may hold, such as stripped obligations and
zero coupon securities, are more sensitive to changes in interest rates than
ordinary interest-paying securities.

Some asset-backed securities may have additional risk because they may receive
little or no collateral protection from the underlying assets.

Because the interest rate changes on floating and variable rate securities, the
Fund's yield may decline and it may lose the opportunity for capital
appreciation when interest rates decline.

Dollar rolls, forward commitments and repurchase agreements involve some risk to
the Fund if the other party does not live up to its obligations under the
agreement.

The market value of convertible securities tends to decline as interest rates
increase and increase as interest rates decline. Their value also tends to
change whenever the market value of the underlying common or preferred stock
fluctuates.

The value of REITs will depend upon the value of the underlying properties or
the underlying loans or interest. The value of REITs may decline when interest
rates rise.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and U.S. government obligations, it could
reduce the Fund's potential return.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

<PAGE>

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- ------------------------- ----------------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- ------------------------- ----------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
Index --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
</TABLE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

<PAGE>

Annual Fund operating expenses (expenses that are deducted Fund assets)
<TABLE>
<CAPTION>
- --------------- ------------ -------- ----------
Total
annual
Fund
Distribution Other operating
Management fee (12b-1) fees expenses expenses
- --------------- ------------ -------- ----------
<S> <C> <C> <C>
- --% --% --% --%
- --------------- ------------ -------- ----------
</TABLE>

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

<TABLE>
<CAPTION>
- ------------ ---------- ---------- ------------
1 year 3 years 5 years 10 years
- ------------ ---------- ---------- ------------
<S> <C> <C> <C>
$000 $000 $000 $000
- ------------ ---------- ---------- ------------
</TABLE>

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Equity Income Fund

The Fund's objective

The Fund seeks to obtain income primarily by investing in income-producing
equity securities.

The Fund's main investment strategy

Under normal market conditions, the Fund invests at least 65% of its total
assets in income-producing equity securities. Equity securities include common
stocks, preferred stocks and securities that are convertible into common stocks.
The major portion of the Fund's assets will be invested in common stocks which
are traded on a national securities exchange or on NASDAQ. A significant portion
of the Fund's assets may be invested in convertible bonds or convertible
preferred stock, which generally pay interest or dividends and which can be
converted into common or preferred stock.

The Fund attempts to achieve a yield higher than the composite yield on the
securities in the Standard & Poor's 500 Stock Price Index.

The Fund's equity investments may also include real estate investment trusts
(REITs), which are pools of investments primarily in income-producing real
estate or loans related to real estate.

The Fund may invest up to 20% of it total assets in foreign securities.

The Fund may invest any portion of its assets that aren't in stocks or
investment grade debt securities, high quality money market instruments and
repurchase agreements. To temporarily defend its assets, the Fund may put any
amount of its assets in these types of investments.

The Fund may change any of these investment policies ( including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

<PAGE>

Main risks of investing in the Fund

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select Equity Income Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

The value of the Fund's convertible securities and other fixed income securities
tends to fall when prevailing interest rates rise. The price change tends to be
greater the longer the time until such securities come due, or mature.

Investments in foreign issuers may be riskier than investments in the United
States. Since foreign securities are normally denominated and traded in foreign
currencies, the value of the Fund's foreign holdings can be affected by currency
exchange rates and exchange control regulations. Foreign securities may be
affected by political, social and economic instability. Some securities may be
harder to trade without incurring a loss and may be difficult to convert into
cash. There may be less public information available, differing settlement
procedures, or regulations and standards that don't match U.S. standards. Some
countries may nationalize or expropriate assets or impose exchange controls.
These risks increase when investing in issuers located in developing countries.

In early 1999, the European Monetary Union implemented a new currency called the
OeuroO. It is possible that the euro could increase volatility in financial
markets, which could have a negative effect on the strength and value of the
U.S. dollar and, as a result, the value of shares of the Fund.

The market value of the Fund's convertible securities and fixed income
securities tends to fall when prevailing interest rates rise. Such a drop could
be worse if the Fund invests a larger portion of its assets in debt securities
with longer maturities. The value of convertible securities also tends to change
whenever the market value of the underlying common or preferred stock
fluctuates.

The value of REITs will depend upon the value of the underlying properties or
the underlying loans or interest. The value of REITs may decline when interest
rates rise.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and debt securities, it could reduce the
Fund's potential return.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

<PAGE>

Fund's past performance

On January 1, 1997, the Fund received the assets of two common trust funds which
had been maintained by Chase. The performance of the Fund before that date is
based on the historical performance of one of the common trust funds whose
assets were transferred to the Fund. The historical performance of shares of the
predecessor common trust fund has been adjusted to reflect the Fund's expense
levels (absent reimbursements) that were in place at the time the Fund received
the common trust fund assets. For more information, see the Fund's Statement of
Additional Information.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- ------------------------- ----------------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- ------------------------- ----------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
Index --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
</TABLE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

<PAGE>

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Large Cap Equity Fund

The Fund's objective

The Fund seeks capital growth over the long term.

The Fund's main investment strategy

Under normal conditions, the Fund invests at least 80% of its total assets in
equity securities and at least 65% of its total assets in equity securities of
companies with market capitalization over $4 billion at the time of purchase.
Market capitalization is the total market value of a company's shares. The
companies the Fund chooses typically have a large number of publicly held shares
and high trading volumes.

The Fund's advisers do quantitative analysis and fundamental research to
identify undervalued stocks which appear ready to increase in value. The
advisers first seek to identify the strongest sectors of the market, attempt to
find the companies in those sectors with the best earnings prospects, then
select the companies which appear to have the most attractive values.

The advisers try to diversify their investments across a number of sectors.
However, they may change sector weightings in response to market developments.

The Fund may invest up to 20% of it total assets in foreign securities. These
investments may take the form of depositary receipts. The Fund may also invest
up to 20% of its total assets in convertible securities, which generally pay
interest or dividends and which can be converted into common or preferred stock.

The Fund may invest any portion of its assets that aren't in stocks in high
quality money market instruments and repurchase agreements. To temporarily
defend its assets, the Fund may put any amount of its assets in these
investments. During unusual market conditions, the Fund may invest up to 20% of
its assets in U.S. Government debt securities.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs,
thus lowering performance, and increase your taxable dividends.

<PAGE>

Main risks of investing in the Fund

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select Large Cap Equity Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements or U.S. Government debt, it could reduce the
Fund's potential returns.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of Fund's shares has varied from year to year. This provides some

<PAGE>

indication of the risk of investing in the Fund. The table shows the average
annual return over the past year, five years and ten years. It compares that
performance to [Index], a widely recognized benchmark for large capitalization
equity funds.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- ------------------------- ---------------------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- ------------------------- ---------------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ------------------------- ---------------------------
Index --% --% --%
- ---------------------- ------------------- ------------------------- ---------------------------
</TABLE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

Annual Fund operating expenses (expenses that are deducted from Fund assets)

<PAGE>

[Sidenote]

The actual management fee is currently expected to be --%, other expenses are
expected to be --% and the total annual Fund operating expenses are expected not
to exceed --%. That's because The Chase Manhattan Bank (Chase) and some of the
Fund's other service providers have volunteered not to collect a portion of
their fees and to reimburse others. Chase and these other service providers may
end this arrangement at any time.

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Large Cap Growth Fund

The Fund's objective

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

The Fund's main investment strategy

Under normal market conditions, at least 80% of the Fund's total assets will be
invested in equity securities (shares) of companies and at least 65% will be
invested in established companies with a market capitalization over $1 billion
at the time of purchase. Market capitalization is the total market value of a
company's shares. The companies the Fund chooses typically have a large number
of publicly held shares and high trading volumes.

The Fund's advisers will try to identify high-quality large and medium-size
companies with strong balance sheets, above-average historical earnings growth,
favorable earnings prospects and leadership positions in their industries.

Up to 20% of the total assets may be invested in foreign securities. These
investments may take the form of depositary receipts. It may also invest up to
20% of its total assets in convertible securities, which generally pay interest
or dividends and which can be converted into common or preferred stock.

Any money not invested in stocks may be invested in high-quality money market
instruments and repurchase agreements. To temporarily defend its assets, the
Fund may invest any amount of its assets in these instruments. During unusual
market conditions, the Fund may invest up to 20% of its assets in U.S.
Government debt securities.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

The main investment risks

<PAGE>

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select Large Cap Growth Fund.

The value of the shares will be influenced by conditions in the stock markets as
well as the performance of the companies selected for the Fund's portfolio.

Investments in foreign issuers may be riskier than investments in the United
States. Since foreign securities are usually denominated in foreign currencies,
the value of the Fund's foreign holdings can be affected by currency exchange
rates and exchange control regulations. Foreign securities may be affected by
political, social and economic instability. Some securities may be harder to
trade without incurring a loss and may be difficult to convert into cash. There
may be less public information available, differing settlement procedures, or
regulations and standards that don't match U.S. standards. Some countries may
nationalize or expropriate assets or impose exchange controls. These risks
increase when investing in issuers located in developing countries.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and U.S. Government debt, it could reduce the
Fund's potential return.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return in the past year, five years and ten years. It compares
that performance to [Index], a widely recognized benchmark for large cap growth
funds.

<PAGE>

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- --------------- -----------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- --------------- -----------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- --------------- -----------------
Index --% --% --%
- ---------------------- ------------------- --------------- -----------------
</TABLE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

Annual Fund operating expenses (expenses that are deducted from Fund assets)

<PAGE>

[Footnote]

The actual other expenses are currently expected to be --% and the total annual
Fund operating expenses are expected not to exceed --%. That's because The Chase
Manhattan Bank (Chase) and some of the Fund's other service providers have
volunteered not to collect a portion of their fees and to reimburse others.
Chase and these other service providers may end this arrangement at any time.

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

Example
This example helps you compare the cost of investing in the Fund with the cost
of investing in other mutual funds. As with all other prospectuses, the example
assumes:

o you invest $10,000
o you sell all your shares at the end of the period
o your investment has a 5% return each year, and
o the Fund's operating expenses remain the same as shown above.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Growth and Income Fund

The Fund's objective

The Fund seeks to provide capital growth over the long term and earn income from
dividends.

The Fund's main investment strategy

The Fund seeks to achieve its objective by investing all of its investible
assets in Growth and Income Portfolio, an open-end investment company which has
identical investment objectives and policies as the Fund. As a result, the
strategies and risks outlined below apply to Growth and Income Portfolio as well
as to the Fund.

Under normal market conditions, the Fund invests at least 80% of its total
assets in a broad range of market capitalizations. Market capitalization is the
total market value of a company's shares.

The Fund's advisers do quantitative analysis and fundamental research to
identify undervalued stocks which appear ready to increase in value. The
advisers believe that the market risk that the Fund incurs while seeking capital
growth can be at least partly offset by the expected dividend returns on the
stocks in the Fund's portfolio.

The Fund may invest up to 20% of it total assets in foreign securities. These
investments may take the form of depositary receipts. It may also invest up to
20% of its total assets in convertible securities, which generally pay interest
or dividends and which can be converted into common or preferred stock.

The Fund's equity holdings may also include real estate investment trusts
(REITs), which are pools of investments primarily in income-producing real
estate or loans related to real estate.

The Fund may invest any portion of its assets that aren't in stocks in high
quality money market instruments. To temporarily defend its assets, the Fund may
put any amount of its assets in these investments as well as in U.S. Government
debt securities and investment grade debt securities. During unusual market
conditions, the Fund may invest up to 20% of its assets in U.S. Government debt
securities.

<PAGE>

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

Main risks of investing in the Fund

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in
Select Growth and Income Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

The value of REITs will depend upon the value of the underlying properties or
the underlying loans or interest. The value of REITs may decline when interest
rates rise.

<PAGE>

If the Fund invests a substantial portion of its assets in money market
instruments and debt obligations, it could reduce the Fund's potential return.

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

The Fund is not diversified. It may invest a greater percentage of its assets in
a particular issuer or group of issuers than a diversified fund would. That
makes the value of its shares more sensitive to economic problems among those
issuing the securities.

Fund's past performance

The performance data for the Fund before January 2, 1998 is based on the
historical performance of Class A shares of the Growth and Income Fund, an
investment company which invests all its investible assets in Growth and Income
Portfolio, adjust to eliminate the effects of any sales charges charged on such
Class A shares.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- ------------------------- ----------------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- ------------------------- ----------------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
Index --% --% --%
- ---------------------- ------------------- ------------------------- ----------------------
</TABLE>

<PAGE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

Chase and these other service providers may end this arrangement at any time.

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select New Growth Opportunities Fund

The Fund's objective

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

The Fund's main investment strategy

Under normal market conditions, at least 80% of the Fund's total assets will be
invested in equity securities (shares) of companies and at least 65% will be
invested in shares of small and medium-size companies. This refers to companies
with a market capitalization of $300 million to $4 billion at the time of
purchase. Market capitalization is the total market value of a company's shares.

The Fund's advisers will seek to invest in companies that have consistent and
growing earnings and attractively priced stocks. The advisers will use a variety
of techniques, including quantitative analysis, fundamental research and their
own company earnings model, to identify which companies have good earnings
potential.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

The main investment risks

<PAGE>

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select New Growth Opportunities Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

The Fund is aggressively managed and prices could fluctuate more than those of
more conservative funds.

Because the assets in this Fund are invested mostly in small to mid-size
companies, the value of your investment is likely to fluctuate more dramatically
than an investment in a fund which invests mostly in larger companies. That's
because smaller companies trade less frequently and in smaller volumes, which
may lead to more volatility in the prices of their securities. They may have
limited product lines, markets or financial resources, and they may depend on a
small management group.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and U.S. Government debt, it could reduce the
Fund's potential returns.

<PAGE>

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return in the past year, five years and since the Fund's
inception. It compares that performance to [Index], a widely recognized
benchmark for new growth opportunities funds.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- --------------- -----------------
Past 1 year Past 5 years Since Inception
(4/30/89)
- ---------------------- ------------------- --------------- -----------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- --------------- -----------------
Index --% --% --%
- ---------------------- ------------------- --------------- -----------------
</TABLE>

<PAGE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

[Footnote]
The actual other expenses are currently expected to be --% and the total annual
Fund operating expenses are expected not to exceed --%. That's because The Chase
Manhattan Bank (Chase) and some of the Fund's other service providers have
volunteered not to collect a portion of their fees and to reimburse others.
Chase and these other service providers may end this arrangement at any time.

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select Small Cap Value Fund

The Fund's objective

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

The Fund's main investment strategy

Under normal market conditions, at least 80% of the Fund's total assets will be
invested in equity securities (shares) of companies and at least 65% will be
invested in shares of smaller companies. That refers to companies with a market
capitalization of $750 million or less at the time of purchase. Market
capitalization is the total market value of a company's shares.

The Fund's advisers will use fundamental research to seek undervalued stocks of
financially sound companies with seasoned products and/or services, competitive
advantages and market leadership positions. The Fund's advisers will try to
choose companies in a variety of market sectors. However, they may change sector
weightings in response to market developments.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

<PAGE>

The main investment risks

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select Small Cap Value Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

The Fund is aggressively managed and prices could fluctuate more than those of
more conservative funds.

Because the assets in this Fund are invested mostly in small companies, the
value of your investment is likely to fluctuate more dramatically than an
investment in a fund which invests mostly in larger companies. That's because
small companies trade less frequently and in smaller volumes, which may lead to
more volatility in the prices of their securities. They may have limited product
lines, markets or financial resources, and they may depend on a small management
group.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and U.S. Government debt, it could reduce the
Fund's potential returns.

<PAGE>

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return in the past year, five years and ten years. It compares
that performance to [Index], a widely recognized benchmark for small cap funds.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- --------------- -----------------
Past 1 year Past 5 years Past 10 years
- ---------------------- ------------------- --------------- -----------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- --------------- -----------------
Index --% --% --%
- ---------------------- ------------------- --------------- -----------------
</TABLE>

<PAGE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund

You don't pay any charges or commissions to invest in the Fund.

The table below is based on expenses incurred in the most recent fiscal year.

The table does not reflect charges or credits which you might incur if you
invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Select International Equity Fund

The Fund's objective

The Fund seeks total return from long-term capital growth and income.

The Fund's main investment strategy

Under normal conditions, the Fund will invest at least 65% of the its total
assets in a broad portfolio of equity securities of established foreign
companies of various sizes, including foreign subsidiaries of U.S. companies.
Equity securities include common stocks, preferred stocks, securities that are
convertible into common stocks and warrants to purchase common stocks. These
investments may take the form of depositary receipts.

The Fund's advisers seek to identify those countries and industries where
political and economic factors, including currency changes, are likely to
produce above-average growth rates. Then the advisers try to identify companies
within those countries and industries that are poised to take advantage of those
political and economic conditions.

The Fund's advisers will seek to select issuers in several countries -- at least
three other than the U.S. However, the Fund may invest a substantial part of its
assets in just one country.

The Fund intends to invest in companies (or governments) in the following
countries or regions: the Far East (including Japan, Hong Kong, Singapore and
Malaysia), Western Europe (including the United Kingdom, Germany, Netherlands,
France, Switzerland, Italy and Spain), Scandinavia, Australia, Canada and other
countries or areas that the advisers may select from time to time. A substantial
part of the Fund's assets may be invested in companies based in Japan, the
United Kingdom, and other countries who are heavily represented in an index
called the Morgan Stanley Capital International, Europe, Australia and Far East
Index. However, the Fund may also invest in companies or governments in
developing countries.

The Fund may invest in securities denominated in U.S. dollars, major reserve
currencies and currencies of other countries in which it can invest. The
advisers may adjust the Fund's exposure to each currency based on their view of
the markets and issuers. They will decide how much to invest in the securities
of a particular country or currency by evaluating the yield and potential growth
of an investment, as well as the relationship between the currency and the U.S.
dollar. They may increase or decrease the emphasis on a type of security,
industry, country or currency, based on their analysis of a variety of economic
factors, including fundamental economic strength, earnings growth, quality of

<PAGE>

management, industry growth, credit quality and interest rate trends. The Fund
may purchase securities where the issuer is located in one country but the
security is denominated in the currency of another.

While the Fund invests primarily in equities, it may also invest in
investment-grade debt securities. No more than 25% of the Fund's net assets will
be invested in debt securities denominated in a currency other than the U.S.
dollar. No more than 25% of the Fund's net assets will be invested in debt
securities issued by a single foreign government or international organization,
such as the World Bank. The Fund's debt investments may include convertible
securities, which generally pay interest or dividends and which can be converted
into common or preferred stock.

Any money not invested in stocks or investment-grade debt securities may be
invested in high-quality money-market instruments and repurchase agreements. To
temporarily defend its assets, the Fund may invest any amount of its assets in
these instruments. During unusual market conditions, the Fund may invest up to
20% of its assets in U.S. Government debt securities.

Where the capital markets in certain countries are either less developed or not
easy to access, the Fund may invest in these countries by investing in
closed-end investment companies which are authorized to invest in those
countries.

The Fund may change any of these investment policies (including its investment
objective) without shareholder approval.

[Sidenote] Frequency of trading
The Fund may trade securities actively, which could increase transaction costs
(and lower performance) and increase your taxable dividends.

Main risks of investing in the Fund

All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some of the specific risks of investing in the
Select International Equity Fund.

The value of shares of the Fund will be influenced by conditions in the stock
markets as well as the performance of the companies selected for the Fund's
portfolio.

Because the Fund invests mostly in securities of issuers outside the U.S., an
investment in the Fund is riskier than an investment in a U.S. equity fund.

<PAGE>

Investments in foreign issuers may be riskier than investments in the United
States. Since foreign securities are normally denominated and traded in foreign
currencies, the value of the Fund's portfolio can be affected by currency
exchange rates and exchange control regulations. Foreign securities may be
affected by political, social and economic instability. Some securities may be
harder to trade without incurring a loss and may be difficult to convert into
cash. There may be less public information available, differing settlement
procedures, or regulations and standards that don't match U.S. standards. Some
countries may nationalize or expropriate assets or impose exchange controls.
These risks increase when investing in issuers located in developing countries.

Unsponsored depositary receipts may not provide as much information about the
underlying issuer and may not carry the same voting privileges as sponsored
depositary receipts.

The Fund's investments in developing countries could lead to more volatility in
the value of the Fund's shares. As mentioned above, the normal risks of
investing in foreign countries increase when investing in developing countries.
In addition, the small size of securities markets and the low trading volume may
lead to a lack of liquidity, which leads to increased volatility. Also,
developing countries may not provide adequate legal protection for private or
foreign investment or private property.

Because the Fund may invest in small companies, the value of your investment may
fluctuate more dramatically than an investment in a fund which does not invest
in small companies. That's because small companies trade less frequently and in
smaller volumes, which may lead to more volatility in the prices of their
securities. They may have limited product lines, markets or financial resources,
and they may depend on a small management group.

If the Fund invests a substantial portion of its assets in money market
instruments, repurchase agreements and debt securities, it could reduce the
Fund's potential returns.

<PAGE>

Derivatives may be more risky than other types of investments and they could
cause losses that exceed the Fund's original investment.

Fund's past performance

This section shows the Fund's performance record. The bar chart shows how the
performance of the Fund's shares has varied from year to year. This provides
some indication of the risk of investing in the Fund. The table shows the
average annual return in the past one and five years and since inception. It
compares that performance to the Morgan Stanley Capital International Europe,
Australia and Far East Index, a widely recognized benchmark for international
funds.

The calculations assume that all dividends and distributions are reinvested in
the Fund.

Past performance does not predict how this Fund will perform in the future.

Year-by-year returns

[bar chart goes here]

Best quarter: --%, xth quarter, 1900
Worst quarter: --%, xth quarter, 1900

Average annual total returns
For the periods ending December 31, 1998:
<TABLE>
<CAPTION>
- ---------------------- ------------------- --------------- -----------------
Past 1 year Past 5 years Since inception
(5/31/93)
- ---------------------- ------------------- --------------- -----------------
<S> <C> <C> <C>
Shares --% --% --%
- ---------------------- ------------------- --------------- -----------------
Index --% --% --%
- ---------------------- ------------------- --------------- -----------------
</TABLE>

<PAGE>

Fees and expenses

The following shows the fees and expenses charged when you own shares of the
Fund.

You don't pay any charges or commissions to invest in the Fund..

The table below is based on expenses incurred in the most recent fiscal year.

Annual Fund operating expenses(expenses deducted from Fund assets)
<TABLE>
<CAPTION>
- --------------- ------------ -------- ----------
Total
annual
Fund
Distribution Other operating
Management fee (12b-1) fees expenses expenses
- --------------- ------------ -------- ----------
<S> <C> <C> <C>
--% --% --% --%
- --------------- ------------ -------- ----------
</TABLE>

[Sidenote]
The actual management fee is currently expected to be --% and the
total annual Fund operating expenses are expected not to exceed --%. That's
because The Chase Manhattan Bank (Chase) and some of the Fund's other service
providers have volunteered not to collect a portion of their fees and to
reimburse others. Chase and these other service providers may end this
arrangement at any time.

The table does not reflect charges or credits which you
might incur if you invest through a financial institution.

This example is for comparison only. Your actual costs may be higher or lower,
depending on the amount you invest and the Fund's actual rate of return.

<PAGE>

Financial highlights
[To be provided by Chase]

Fund Management

The investment adviser

The Chase Manhattan Bank (Chase) is the investment adviser to each Fund. Chase
is a wholly owned subsidiary of The Chase Manhattan Corporation (CMC), a bank
holding company. Chase provides the Funds with investment advice and
supervision. Chase and its predecessors have more than a century of money
management experience. Chase is located at 270 Park Avenue, New York, NY 10017

Chase is entitled to receive a management at the annual rate of 0.25% of the
average daily net assets of the Select Short-Term Bond Fund, 0.30% of the
average daily net assets of the Select Intermediate Bond Fund and Select Bond
Fund, 0.40% of the average daily net assets of the Select Equity Income Fund,
Select Large Cap Equity Fund and Select Large Cap Growth Fund, 0.50% of the
average daily net assets of the Select Balanced Fund, 0.65% of the average daily
net assets of the Select New Growth Opportunities Fund and Select Small Cap
Value Fund and 1.00% of the average daily net assets of the Select International
Equity Fund.

Chase Asset Management, Inc.(CAM) is the sub-adviser to each Fund except the
Select International Equity Fund. Chase Asset Management (London) Limited (CAM
London) is the sub-adviser to the Select International Equity Fund. Both
sub-advisers are wholly-owned subsidiaries of Chase and each makes the
day-to-day investment decisions for its respective Funds. CAM and CAM London
both provide discretionary investment services to institutional clients. CAM is
located at 1211 Avenue of the Americas, New York, NY 10036. CAM London is
located at Colvile House, 32 Curzon Street, London W1Y8AL.

Portfolio Managers

Select Short-Term Bond Fund
The portfolio managers are Andrew Russell, a Vice President and Portfolio
Manager at Chase, and Susan Huang, a Managing Director and Head of U.S. Fixed
Income Management at Chase. TheyOve been responsible for the Fund since 1997.
Mr. Russell joined Chase in 1990 and has held several positions within the U.S.
fixed income area, including portfolio analyst, taxable fixed-income trader and
assistant trader. Mr. Russell is a member of the U.S. fixed income area's
quantitative research team.

<PAGE>

Before joining Chase in 1995, Ms. Huang was Director of the Insurance Asset
Management Group at Hyperion Capital Management Inc. Previously, she was a
Senior Portfolio Manager with CS First Boston. Before joining CS First Boston in
1992, she spent 14 years at the Equitable, where she was head of the U.S. fixed
income management group at Equitable Capital Management.

Select Intermediate Bond Fund
Leonard Lovito, Vice President and Senior Portfolio Manager at Chase, has been
resposible for the management of the Select Intermediate Bond Fund since July
1998. From 1984 to June 1998, Mr. Lovito was a Vice President and Portfolio
Manager at J.W. Seligman & Co., Inc, where he was responsible for managing a
number of institutional portfolios and mutual funds. Before that, Mr. Lovito was
in the Investment Department at Dime Savings Bank of New York.

Select Bond Fund
A team of investment managers with Chase, led by Ms. Huang, is responsible for
the management of the Select Bond Fund.

David Klassen, Director, U.S. Funds Management and Equity Research at Chase, is
responsible for asset allocation and investment strategy for Chase's domestic
equity portfolios. Before joining Chase in 1992, Mr. Klassen was a Vice
President and Portfolio Manager at Dean Witter Reynolds, responsible for
managing several mutual funds and other accounts.

Select Balanced Fund
Greg Adams, Vice President and Senior Portfolio Manager at Chase, and Mr. Lovito
are responsible for the management of the Fund's portfolio. Mr. Adams has
managed the equity portion of the Fund since 1997. He joined Chase in 1987 and
has been responsible for overseeing the proprietary computer model program used
in the U.S. equity selection process. Mr. Lovito has been responsible for the
debt portion of the Fund since July 1998.

Select Equity Income Fund
Tony Gleason, a Vice President of Chase, has been responsible for the day-to-day
management of the Fund's portfolio since September 1997. Mr. Gleason joined
Chase in 1995. Prior to joining Chase, Mr. Gleason spent nine years as a Vice
President and Portfolio Manager with Prudential Equity Management.

Bill Ellsworth, Senior Research Analyst and Associate Portfolio Manager at
Chase, participates in the management of the Fund. Mr. Ellsworth has been
employed by Chase since 1992.

Select Large Cap Equity Fund

<PAGE>

Mr. Adams has been primarily responsible for the management of the Fund since
January, 1997.

Select Large Cap Growth Fund
Stephen Humphrey, a vice-president of Chase, manages the Fund's portfolio. Mr.
Humphrey has worked at Chase since 1976. He has managed private accounts since
1981 and pooled investment funds since 1985.

Select Growth and Income Fund
Mr. Adams and Diane Sobin, a Senior Portfolio Manager at Chase, are responsible
for the day-to-day management of the Growth and Income portfolio. Mr. Adams has
been a manager of the Portfolio since March 1995.

Ms. Sobin joined Chase in 1997 and has been a manager of the Portfolio since
July 1997. Prior to joining Chase, Ms. Sobin was a Senior Portfolio Manager at
Oppenheimer Funds Inc., where she managed mutual funds. Prior to 1995, Ms. Sobin
was a Senior Portfolio Manager at Dean Witter Discover, where she managed
several mutual funds and other accounts.

Select New Growth Opportunities Fund
Ronald Zibelli, a vice-president and Senior Portfolio Manager at Chase, manages
the portfolio. Mr. Zibelli joined Chase in 1996. Before that, he was a Portfolio
Manager at The Portfolio Group and at Princeton Bank & Trust Company. Mr.
Zibelli began his career with JP Morgan Investment Management.

Select Small Cap Value Fund
Richard Rolle and Judith Havard, both Vice-Presidents at Chase, are managing the
Fund. Mr. Rolle has worked for Chase since 1978. Since 1982, he has served as
trust Portfolio Manager, securities analyst and fund manager. Before joining
Chase in 1994, Ms. Havard was an associate director at Massachusetts Mutual Life
Insurance Company, where she managed the company's convertible stock and bond
portfolio.

Select International Equity Fund
Michael Browne and David Webb, both Vice Presidents of Chase, have been
responsible for the Fund's portfolio since August 1996. Mr. Browne is
responsible for investment management and equity research for European equities.
He joined Chase in 1994. Before that, he was assistant director of European
equity fund management at BZW Investment Management in London. Mr. Webb is
responsible for investment management and equity research in the Asia region. He
joined Chase in 1992. Before that he was with Hambros Bank Ltd. where he was
responsible for the Hambros Equus Pacific Trust and Hambros Japan Trust.

[Sidenote]

<PAGE>

The Year 2000
The Fund, like any business, could be affected if the computer systems on which
it relies fail to properly process information beginning on January 1, 2000. The
Fund's advisers are updating their own systems and encouraging service providers
to do the same, but there's no guarantee these systems will work properly. Year
2000 problems could also hurt issuers whose securities the Fund holds or
securities markets generally.

<PAGE>

How your account works

Who may buy these shares

Only qualified investors may buy shares. Qualified Fund investors are trusts,
fiduciary accounts and investment management clients of Chase, other financial
institution or their affiliates. The financial institution must have an
agreement with the Funds to buy and sell shares.

Financial institutions may set other eligibility requirements, including minimum
investments. They must maintain at least $5 million in an account with one or
more Chase Vista Select Funds on behalf of their clients. If you are no longer a
qualified investor, your financial institution may redeem your shares or allow
you to keep holding your shares through a separate account. If you hold Fund
shares through a separate account, you may incur additional fees. The Funds may
refuse to sell Fund shares to any institution.

Buying Fund shares
<TABLE>
<S> <C>
- --------------------------------- --------------------------------------------------------
Through your financial Tell Chase or your financial institution which Funds
institution you want to buy. Your financial institution is
responsible for forwarding orders in a timely manner.
Your financial institution may impose different
minimum investments and earlier deadlines to buy
shares.
- --------------------------------- --------------------------------------------------------
</TABLE>

The price of the shares is based on the net asset value per share (NAV). NAV is
the value of everything a Fund owns, minus everything it owes, divided by the
number of shares held by investors. If the account administrator at your
financial institution receives your order in proper form before the New York
Stock Exchange closes regular trading (or the institution's earlier deadline, if
any) and the order, along with payment in federal funds, is received by the
Funds before they close for business, your order will be confirmed at that day's
net asset value. Each Fund calculates its NAV once each day at the close of
regular trading on the New York Stock Exchange (normally 4 p.m. Eastern time.)
Each fund generally values its assets at their market value but may use fair
value if market prices are unavailable.

The Select International Equity Fund invests in securities which are primarily
listed on foreign exchanges and these exchanges may trade on Saturdays or other
United States holidays on which the Fund does not price. As a result, the Fund's
portfolio will trade and its NAV may fluctuate significantly on days when the
investor has no access to the Fund.

<PAGE>

You can buy shares on any business day that the Federal Reserve Bank of New York
and the New York Stock Exchange are open.

You must provide a Social Security Number or Taxpayer Identification Number when
you open an account. The Fund has the right to refuse any purchase order or to
stop offering shares for sale at any time.

The Funds will not issue certificates for shares.

Selling Fund shares
<TABLE>
<S> <C>
- --------------------------------- --------------------------------------------------------
Through your financial Tell your financial institution which Funds you want
institution to sell. You must supply the names of the registered
shareholders on your account and your account
number. Your financial institution is
responsible for sending the Funds all
necessary documents and may charge you for
this service.

- --------------------------------- --------------------------------------------------------
</TABLE>

You can sell some or all of your shares on any day the Chase Vista Select Funds
Service Center is accepting purchase orders. You'll receive the next NAV
calculated after the Chase Vista Funds Service Center receives your order in
proper form from your financial institution. If the Fund receives your order
before the New York Stock Exchange closes regular trading, you will receive that
day's net asset value.

The Funds generally send proceeds of the sale in federal funds to your financial
institution on the business day after the Fund receives your request in proper
form.

Under unusual circumstances, the Funds may stop accepting orders to sell shares
or postpone payment for more than seven days, as federal securities laws permit.

Other information concerning the Funds

You may authorize your financial institution to act on redemption and transfer
instructions received by phone. If someone trades on your account by phone, your
financial institution has a responsibility to take all reasonable precautions to
confirm that the instructions are genuine. If your financial institution fails
to use such reasonable precautions, it may be liable for any losses due to
unauthorized or fraudulent instructions. Investors agree, however, that they
will not hold the Funds or their financial institution or any of their agents
liable for any losses or expenses arising from any sales request, if reasonable
precautions are taken.

Your financial institution may offer other services. These could include special
procedures for buying and selling Fund shares, such as pre-authorized or
systematic

<PAGE>

buying and selling plans. Each financial institution may establish its own terms
and conditions for these services.

Chase and its affiliates and the Funds and their affiliates, agents and
subagents may share information about shareholders and their accounts with each
other and with others unless this sharing is prohibited by contract. This
information can be used for a variety of purposes, including offering investment
and insurance products to shareholders.

Vista Fund Distributors, Inc. (VFD), a subsidiary of The BISYS Group, Inc., is
the Funds' distributor. VFD is unaffiliated with Chase.

<PAGE>

Distributions and taxes

Each Fund can earn income and it can realize capital gain. The Funds deduct any
expenses then pay out these earnings to shareholders as distributions.

The Select Short-Term Bond Fund, Select Intermediate Bond Fund and Select Bond
Fund declare dividends daily and distribute any net investment income at least
monthly. The Select Balanced Fund, Select Equity Income Fund, Select Large Cap
Equity Fund and Select Large Cap Growth Fund distribute any net investment
income at least monthly. The Select New Growth Opportunities Fund, Select Small
Cap Value Fund and Select International Equity Fund distribute any net
investment income at least quarterly. Each Fund distributes net capital gain at
least annually. You have three options for your distributions. You may
o reinvest all of them in additional Fund shares without a sales charge;
o take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain in
additional shares; or
o take all distributions in cash or as a deposit in a pre-assigned bank account.

If your financial institution does not offer distribution reinvestment or if you
don't select an option when you open your account, weOll pay all distributions
in cash. The taxation of dividends won't be affected by the form in which you
receive them.

Dividends of net investment income are usually taxable as ordinary income at the
federal, state and local levels. The state or municipality where you live may
not charge you state and local taxes on tax exempt interest earned on certain
bonds. Dividends earned on bonds issued by the U.S. government and its agencies
may also be exempt from some types of state and local taxes.

If you receive distributions of net capital gain, the tax rate will be based on
how long the Fund held a particular asset, not on how long you have owned your
shares. If you buy shares just before a distribution, you will pay tax on the
entire amount of the taxable distribution you receive, even though the NAV will
be higher on that date because it includes the distribution amount.

Investment income received by the Select International Equity Fund from sources
in foreign countries may be subject to foreign taxes withheld at the source.
Since it is anticipated that more than 50% of this Fund's assets at the close of
its taxable year will be in securities of foreign corporations, the Fund may
elect to "pass through" to its shareholder the foreign taxes that it paid.

The Select Short-Term Bond Fund, Select Intermediate Bond Fund, Select Bond
Fund, Select Balanced Fund and Select Equity Income Fund expect that their
distributions will consist primarily of ordinary income. The Select Growth and
Income Fund, Select New

<PAGE>

Growth Opportunities Fund, Select Small Cap Value Fund and Select International
Equity Fund expect that their distributions will consist primarily of capital
gains.

Early in each calendar year, each Fund will send you a notice showing the amount
of distributions you received in the preceding year and the tax status of those
distributions.

The above is a general summary of tax implications of investing in the Funds.
Please consult your tax adviser to see how investing in the Funds will affect
your own tax situation.

<PAGE>

What the terms mean

Collateralized mortgage obligations: debt securities that are collateralized by
a portfolio of mortgages or mortgage-backed securities.

Debt securities: securities used by issuers, such as governmental entities and
corporations, to borrow money. The issuer usually pays a fixed, variable or
floating rate of interest and repays the amount borrowed at the maturity date of
the security. However, if a borrower issues a zero coupon debt security, it does
not make regular interest payments.

Depositary receipts: instruments which are typically issued by financial
institutions and which represent ownership of securities of foreign
corporations. Depositary receipts are usually designed for use on U.S. and
European securities exchanges.

Distribution fee: a fee that covers the cost of the distribution system used to
sell shares to the public.

Dollar-weighted average maturity: The average maturity of the Fund is the
average amount of time until the issuers of the debt securities in the Fund's
portfolio must pay off the principal amount of the debt. "Dollar weighted" means
the larger the dollar value of the debt security in the Fund's portfolio, the
more weight it gets in calculating this average.

Duration: A mathematical calculation of the average life of a bond that serves
as a useful measure of its price risk. Each year of duration represents an
expected 1% change in interest rates. For example, if a bond has an average
duration of 4 years, its price will move 4% when interest rates move 1%.

Fundamental research: method which concentrates on " fundamental" information
about an issuer such as it's financial statements, history, management, etc.

Growth approach: approach which focuses on identifying securities of companies
whose earnings growth potential appears to the manager to be greater than the
market in general and whose growth in revenue is expected to continue for an
extended period.

Management fee: a fee paid to the investment adviser to manage the Fund and make
decisions about buying and selling the Fund's investments.

Mortgage-related securities: securities that directly or indirectly represent an
interest in, or are secured by and paid from, mortgage loans secured by real
property.

Other expenses: miscellaneous items, including transfer agency, administration
shareholder servicing, custody and registration fees.

<PAGE>

Repurchase agreements: a type of short-term investment in which a dealer sells
securities to the Fund and agrees to buy them back later at a set price. In
effect, the dealer is borrowing the Fund's money for a short time, using the
securities as collateral.

Shareholder service fee: a fee to cover the cost of paying shareholder servicing
agents to provide certain support services for your account.

Stripped obligations: debt securities which are separately traded interest-only
or principal-only components of an underlying obligation.

Technical analysis: method which focuses on historical price trends in an
attempt to predict future price movements

Value approach: approach which focuses on identifying securities that the
advisers believe are undervalued by the market as measured by certain financial
formulas.

Yield curve: measure showing relationship among yields of similar bonds with
different maturities.

More information

You'll find more information about the Funds in the following documents:

Annual and semi-annual reports
Our annual and semi-annual reports contain more information about each Fund's
investments and performance. The annual report also includes details about the
market conditions and investment strategies that had a significant effect on
each Fund's performance during the last fiscal year.

Statement of Additional Information (SAI)
The SAI contains more detailed information about the Funds and their policies.
It's incorporated by reference into this prospectus. That means, by law, it's
considered to be part of this prospectus.

You can get a free copy of these documents and other information, or ask us any
questions, by calling us at 1-800-34-VISTA or writing to:

Chase Vista Fund Service Center
P.O. Box 419392
Kansas City, MO 64141-6392

If you buy your shares through The Chase Manhattan Bank or another institution,
you should contact that institution directly for more information. You can also
find information on-line at www.chasevista.com on the Internet.

<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
February 26, 1999

SELECT BALANCED FUND
SELECT BOND FUND
SELECT NEW GROWTH OPPORTUNITIES FUND
SELECT EQUITY INCOME FUND
SELECT INTERMEDIATE BOND FUND
SELECT INTERNATIONAL EQUITY FUND
SELECT LARGE CAP GROWTH FUND
SELECT LARGE CAP EQUITY FUND
SELECT SHORT-TERM BOND FUND
SELECT SMALL CAP VALUE FUND

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

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

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

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

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

MFSG-SAI
<PAGE>

<TABLE>
<S> <C>
Table of Contents Page
- --------------------------------------------------------------------------------
The Funds ............................................................ 3
Investment Policies and Restrictions ................................. 3
Performance Information .............................................. 23
Determination of Net Asset Value ..................................... 26
Purchases and Redemptions ............................................ 26
Distributions; Tax Matters ........................................... 27
Management of the Trust and the Funds or Portfolios .................. 33
Independent Accountants .............................................. 41
Certain Regulatory Matters ........................................... 41
General Information .................................................. 42
Appendix A--Description of Certain Obligations Issued or Guaranteed by
U.S. Government Agencies or Instrumentalities ..................... A-1
Appendix B--Description of Ratings ................................... B-1
</TABLE>

2
<PAGE>

THE FUNDS

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

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

INVESTMENT POLICIES AND RESTRICTIONS

Investment Policies

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

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

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

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

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

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

The dependence on the banking industry may involve certain credit risks,
such as defaults or downgrades, if at some future date adverse economic
conditions prevail in such industry. Banks are subject to extensive governmental
regulations that may limit both the amounts and types of loans and other
financial commitments that may be made and the interest rates and fees that may
be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operations of this industry and
exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations. Bank
obligations may be general obligations of the parent bank or may be limited to
the issuing branch by the terms of the specific obligations or by government
regulation. Investors should also be aware that securities of foreign banks and
foreign branches of United States banks may involve foreign investment risks in
addition to those relating to domestic bank obligations. These investment risks
may involve, among other considerations, risks relating to future political and
economic developments, more limited liquidity of foreign obligations than
comparable domestic obligations, the possible imposition of withholding taxes on
interest income, the possible seizure or nationalization of foreign assets and
the possible establishment of exchange controls or other restrictions. There may
be less publicly available information concerning foreign issuers, there may be
difficulties in obtaining or enforcing a judgment against a foreign issuer
(including branches) and accounting, auditing and financial reporting standards
and practices may differ from those applicable to U.S. issuers. In addition,
foreign banks are not subject to regulations comparable to U.S. banking
regulations.

Foreign Securities. For purposes of a Fund's investment policies, the
issuer of a security may be deemed to be located in a particular country if (i)
the principal trading market for the security is in such country, (ii) the
issuer is organized under the laws of such country or (iii) the issuer derives
at least 50% of its assets situated in such country.

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Depositary Receipts. The Equity Funds may invest their assets in securities
of multinational companies in the form of American Depositary Receipts or other
similar securities representing securities of foreign issuers, such as European
Depositary Receipts, Global Depositary Receipts and other similar securities
representing securities of foreign issuers (collectively, "Depositary
Receipts"). The Funds treat Depositary Receipts as interests in the underlying
securities for purposes of their investment policies.

Supranational Obligations. The Balanced Fund, the Equity Income Fund and
the International Equity Fund, as well as all of the Fixed Income Funds, may
invest in debt securities issued by supranational organizations. Supranational
organizations, include organizations such as The World Bank, which was chartered
to finance development projects in developing member countries; the European
Community, which is a twelve-nation organization engaged in cooperative economic
activities; the European Coal and Steel Community, which is an economic union of
various European nations steel and coal industries; and the Asian Development
Bank, which is an international development bank established to lend funds,
promote investment and provide technical assistance to member nations of the
Asian and Pacific regions. Obligations of supranational agencies are supported
by subscribed, but unpaid, commitments of member countries. There is no
assurance that these commitments will be undertaken or complied with in the
future, and foreign and supranational securities are subject to certain risks
associated with foreign investing.

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

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

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

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

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

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Repurchase Agreements. Each Fund may enter into repurchase agreements. A
Fund will enter into repurchase agreements only with member banks of the Federal
Reserve System and securities dealers believed creditworthy, and only if fully
collateralized by securities in which such Fund is permitted to invest. Under
the terms of a typical repurchase agreement, a Fund would acquire an underlying
instrument for a relatively short period (usually not more than one week)
subject to an obligation of the seller to repurchase the instrument and the Fund
to resell the instrument at a fixed price and time, thereby determining the
yield during the Fund's holding period. This procedure results in a fixed rate
of return insulated from market fluctuations during such period. A repurchase
agreement is subject to the risk that the seller may fail to repurchase the
security. Repurchase agreements are considered under the 1940 Act to be loans
collateralized by the underlying securities. All repurchase agreements entered
into by a Fund will be fully collateralized at all times during the period of
the agreement in that the value of the underlying security will be at least
equal to 100% of the amount of the loan, including the accrued interest thereon,
and the Fund or its custodian or sub-custodian will have possession of the
collateral, which the Board of Trustees believes will give it a valid, perfected
security interest in the collateral. Whether a repurchase agreement is the
purchase and sale of a security or a collateralized loan has not been
conclusively established. This might become an issue in the event of the
bankruptcy of the other party to the transaction. In the event of default by the
seller under a repurchase agreement construed to be a collateralized loan, the
underlying securities would not be owned by the Fund, but would only constitute
collateral for the seller's obligation to pay the repurchase price. Therefore, a
Fund may suffer time delays and incur costs in connection with the disposition
of the collateral. The Board of Trustees believes that the collateral underlying
repurchase agreements may be more susceptible to claims of the seller's
creditors than would be the case with securities owned by a Fund. Repurchase
agreements maturing in more than seven days are treated as illiquid for purposes
of the Funds' restrictions on purchases of illiquid securities. Repurchase
agreements are also subject to the risks described below with respect to
stand-by commitments.

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

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

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

Floating and Variable Rate Securities; Participation Certificates. The
Fixed Income Funds may invest in floating rate securities, whose interest rates
adjust automatically whenever a specified interest rate changes, and variable
rate securities, whose interest rates are periodically adjusted. Certain of
these instruments permit the holder to demand payment of principal and accrued
interest upon a specified number of days' notice from either the issuer or a
third party. The securities in which the Funds may invest include participation
certificates and certificates of indebtedness or safekeeping. Participation
certificates are pro rata interests in securities held by others; certificates
of indebtedness or safekeeping are documentary receipts for such original
securities held in custody by others. As a result of the floating or variable
rate nature of these investments, the Funds' yields may decline, and they may
forego the opportunity for capital appreciation during periods when interest
rates decline; however, during periods when interest rates increase, the Funds'
yields may increase, and they may have reduced risk of capital depreciation.
Demand features on certain floating or variable rate securities may obligate the
Funds to pay a "tender fee" to a third party. Demand features provided by
foreign banks involve certain risks associated with foreign investments.

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

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

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

Past periods of high inflation, together with the fiscal measures adopted
to attempt to deal with it, have seen wide fluctuations in interest rates,
particularly "prime rates" charged by banks. While the value of the underlying
floating or variable rate securities may change with changes in interest rates
generally, the floating

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

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

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

Borrowings. Each Fund may borrow money from banks for temporary or
short-term purposes. But, none of the Funds will borrow money to buy additional
securities, which is known as "leveraging."

Reverse Repurchase Agreements. Each Fund may enter into reverse repurchase
agreement. Reverse repurchase agreements involve the sale of securities held by
a Fund with an agreement to repurchase the securities at an agreed upon price
and date. Each Fund may use this practice to generate cash for shareholder
redemptions without selling securities during unfavorable market conditions.
Whenever a Fund enters into a reverse repurchase agreement, it will establish a
segregated account in which it will maintain liquid assets on a daily basis in
an amount at least equal to the repurchase price (including accrued interest).
The Fund would be required to pay interest on amounts obtained through reverse
repurchase agreements, which are considered borrowings under federal securities
laws. The repurchase price is generally equal to the original sales price plus
interest. Reverse repurchase agreements are usually for seven days or less and
cannot be repaid prior to their expiration dates. Reverse repurchase agreements
involve the risk that the market value of the portfolio securities transferred
may decline below the price at which the Fund is obliged to purchase the
securities.

Other Investment Companies. Apart from being able to invest all of their
investable assets in another investment company having substantially the same
investment objectives and policies, each Fund may invest up to 10% of its total
assets in shares of other investment companies when consistent with its
investment objective and policies, subject to applicable regulatory limitations.
Additional fees may be charged by other investment companies.

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

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Each Fund may invest in stripped obligations where the underlying obligations
are backed by the full faith and credit of the U.S. Government.

The Balanced Fund and the Fixed Income Funds may invest in zero coupon
securities issued by governmental and private issuers. Zero coupon securities
are debt securities that do not pay regular interest payments, and instead are
sold at substantial discounts from their value at maturity. When Zero coupon
obligations are held to maturity, their entire return, which consists of the
amortization of discount, comes from the difference between their purchase price
and maturity value. Because interest on a zero coupon obligation is not
distributed on a current basis, the obligation tends to be subject to greater
price fluctuations in response to changes in interest rates than are ordinary
interest-paying securities with similar maturities. As with STRIPS, the risk is
greater when the period to maturity is longer. (*) The value of zero coupon
obligations appreciates more than such ordinary interest-paying securities
during periods of declining interest rates and depreciates more than such
ordinary interest-paying securities during periods of rising interest rates.
Under the stripped bond rules of the Internal Revenue Code of 1986, as amended,
investments by a Fund in zero coupon obligations will result in the accrual of
interest income on such investments in advance of the receipt of the cash
corresponding to such income.

Zero coupon securities may be created when a dealer deposits a U.S.
Treasury or federal agency security with a custodian and then sells the coupon
payments and principal payment that will be generated by this security
separately. Proprietary receipts, such as Certificates of Accrual on Treasury
Securities, Treasury Investment Growth Receipts and generic Treasury Receipts,
are examples of stripped U.S. Treasury securities separated into their component
parts through such custodial arrangements.

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

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

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

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takings to make a market in the security, the nature of the security and the
time needed to dispose of the security. The Trustees will periodically review
the Funds' and Portfolios' purchases and sales of Rule 144A securities and
Section 4(2) paper.

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

Securities Loans. To the extent specified in its Prospectus, each Fund is
permitted to lend its securities to broker-dealers and other institutional
investors in order to generate additional income. Such loans of portfolio
securities may not exceed 30% of the value of a Fund's total assets. In
connection with such loans, a Fund will receive collateral consisting of cash,
cash equivalents, U.S. Government securities or irrevocable letters of credit
issued by financial institutions. Such collateral will be maintained at all
times in an amount equal to at least 100% of the current market value plus
accrued interest of the securities loaned. A Fund can increase its income
through the investment of such collateral. A Fund continues to be entitled to
the interest payable or any dividend-equivalent payments received on a loaned
security and, in addition, to receive interest on the amount of the loan.
However, the receipt of any dividend-equivalent payments by a Fund on a loaned
security from the borrower will not qualify for the dividends-received
deduction. Such loans will be terminable at any time upon specified notice. A
Fund might experience risk of loss if the institutions with which it has engaged
in portfolio loan transactions breach their agreements with such Fund. The risks
in lending portfolio securities, as with other extensions of secured credit,
consist of possible delays in receiving additional collateral or in the recovery
of the securities or possible loss of rights in the collateral should the
borrower experience financial difficulty. Loans will be made only to firms
deemed by the advisers to be of good standing and will not be made unless, in
the judgment of the advisers, the consideration to be earned from such loans
justifies the risk.

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

Diversification of Funds. The Small Cap Value Fund, the New Growth
Opportunities Fund and the International Equity Fund are classified as
"non-diversified" funds under federal securities laws. These Funds' assets may
be more concentrated inthe securities of any single issuer or group of issuers
than if the Funds were diversified. The other Funds are classified as
"diversified" funds under federal securities law.

Unique Characteristics of Master/Feeder Fund Structure. Unlike other mutual
funds which directly acquire and manage their own portfolio securities, each
Fund is permitted to invest all of its investable assets in a separate
registered investment company (a "Master Portfolio"). In that event, a
shareholder's interest in a Fund's underlying investment securities would be
indirect. In addition to selling a beneficial interest to a Fund, a Master
Portfolio could also sell beneficial interests to other mutual funds or
institutional investors. Such investors would invest in such Master Portfolio on
the same terms and conditions and would pay a proportionate share of such Master
Portfolio's expenses. However, other investors in a Master Portfolio

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<PAGE>

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

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

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

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

Additional Policies Regarding Derivative and Related Transactions

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

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

Each Fund may invest its assets in derivative and related instruments
subject only to the Fund's investment objective and policies and the requirement
that the Fund maintain segregated accounts consisting of liquid assets, such as
cash, U.S. Government securities, or other high-grade debt obligations (or, as
permitted by applicable

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<PAGE>

regulation, enter into certain offsetting positions) to cover its obligations
under such instruments with respect to positions where there is no underlying
portfolio asset so as to avoid leveraging the Fund.

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

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

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

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

Options on Securities, Securities Indexes and Debt Instruments. A Fund may
PURCHASE, SELL or EXERCISE call and put options on (i) securities, (ii)
securities indexes, and (iii) debt instruments. Specifically, each Fund may (i)
purchase, write and exercise call and put options on securities and securities
indexes (including using options in combination with securities, other options
or derivative instruments), (ii)

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<PAGE>

enter into swaps, futures contracts and options on futures contracts, (iii)
employ forward currency contracts and (iv) purchase and sell structured
products, which are instruments designed to restructure or reflect the
characteristics of certain other investments. In addition, the Fixed Income
Funds may (i) employ interest rate contracts and (ii) purchase and sell
mortgage-backed and asset-backed securities.

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

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

In addition to the general risk factors noted above, the purchase and
writing of options involve certain special risks. During the option period, a
Fund writing a covered call (i.e., where the underlying securities are held by
the Fund) has, in return for the premium on the option, given up the opportunity
to profit from a price increase in the underlying securities above the exercise
price, but has retained the risk of loss should the price of the underlying
securities decline. The writer of an option has no control over the time when it
may be required to fulfill its obligation as a writer of the option. Once an
option writer has received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its obligation under the option and
must deliver the underlying securities at the exercise price.

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

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

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

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

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<PAGE>

or otherwise offset increases in the purchase price of securities or currencies
to be acquired in the future. Futures options may also be written to earn the
related premiums.

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

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

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

Foreign currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of investments in
different countries, actual or perceived changes in interest rates and other
complex factors, as seen from an international perspective. A Fund that may
invest in securities denominated in foreign currencies may, in addition to
buying and selling foreign currency futures contracts and options on foreign
currencies and foreign currency futures, enter into forward foreign currency
exchange contracts to reduce the risks or otherwise take a position in
anticipation of changes in foreign exchange rates. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be a fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
By entering into a forward foreign currency contract, a Fund "locks in" the
exchange rate between the currency it will deliver and the currency it will
receive for the duration of the contract. As a result, a Fund reduces its
exposure to changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will exchange into. The
effect on the value of a Fund is similar to selling securities denominated in
one currency and purchasing securities denominated in another. Transactions that
use two foreign currencies are sometimes referred to as "cross-hedges."

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

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

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

The Funds will only enter into interest rate and currency swaps on a net
basis, i.e., the two payment streams are netted out, with the Fund receiving or
paying, as the case may be, only the net amount of the two payments. Interest
rate and currency swaps do not involve the delivery of securities, the
underlying currency, other underlying assets or principal. Accordingly, the risk
of loss with respect to interest rate and currency swaps is limited to the net
amount of interest or currency payments that a Fund is contractually obli-

14
<PAGE>

gated to make. If the other party to an interest rate or currency swap defaults,
a Fund's risk of loss consists of the net amount of interest or currency
payments that the Fund is contractually entitled to receive. Since interest rate
and currency swaps are individually negotiated, the Funds expect to achieve an
acceptable degree of correlation between their portfolio investments and their
interest rate or currency swap positions.

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

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

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

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

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

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

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<PAGE>

adversely affected by the prepayment of mortgages included in the mortgage pool
underlying the security. In addition, as with callable fixed-income securities
generally, if the Fund purchased the securities at a premium, sustained early
repayment would limit the value of the premium.

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

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

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

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

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

Asset-Backed Securities. A Fund may invest in asset-backed securities,
including conditional sales contracts, equipment lease certificates and
equipment trust certificates. The advisers expect that other asset-backed
securities (unrelated to mortgage loans) will be offered to investors in the
future. Several types of asset-backed securities already exist, including, for
example, "Certificates for Automobile Receivables(SM)" or "CARS(SM)" ("CARS").
CARS represent undivided fractional interests in a trust whose assets consist
of a pool of motor vehicle

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<PAGE>

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

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

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

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<PAGE>

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

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

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

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

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

Investment Restrictions

The Funds have adopted the following investment restrictions which may not
be changed without approval by a "majority of the outstanding shares" of a Fund
which, as used in this Statement of Additional Information, means the vote of
the lesser of (i) 67% or more of the shares of a Fund present at a meeting, if
the holders of more than 50% of the outstanding shares of a Fund are present or
represented by proxy, or (ii) more than 50% of the outstanding shares of a Fund.
Except as otherwise indicated herein, the Funds are not subject to any
percentage limits with respect to the practices described below.

Except for the investment policies designated as fundamental herein, the
Funds' investment policies (including their investment objectives) are not
fundamental. However, in the event of a change in any such Fund's investment
objective, shareholders will be given at least 30 days' prior written notice.

Each Fund may not:

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

(2) make loans, except that each Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or
other obligations and certificates of deposit, bankers'

18
<PAGE>

acceptances and fixed time deposits) in accordance with its investment
objectives and policies; (ii) enter into repurchase agreements with respect
to portfolio securities; and (iii) lend portfolio securities with a value
not in excess of one-third of the value of its total assets;

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

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

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

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

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

In addition, as a matter of fundamental policy, notwithstanding any other
investment policy or restriction, each Fund may seek to achieve its investment
objective by investing all of its investable assets in another investment
company having substantially the same investment objective and policies as the
Fund. For purposes of investment restriction (5) above, real estate includes
Real Estate Limited Partnerships. For purposes of investment restriction (3)
above, industrial development bonds, where the payment of principal and interest
is the ultimate responsibility of companies within the same industry, are
grouped together as an "industry." Investment restriction (3) above, however, is
not applicable to investments by a Fund in municipal obligations where the
issuer is regarded as a state, city, municipality or other public authority
since such entities are not members of an "industry." Supranational
organizations are collectively considered to be members of a single "industry"
for purposes of restriction (3) above.

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

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

19
<PAGE>

(2) Each Fund may not make short sales of securities, other than short
sales "against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use of
options, futures contracts and related options, in the manner otherwise
permitted by the investment restrictions, policies and investment program
of a Fund. No Fund has the current intention of making short sales against
the box.

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

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

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

(6) Each Fund may invest in the securities of other investment
companies to the extent permitted by applicable Federal securities law;
provided, however, that a Mauritius holding company (a "Mauritius Portfolio
Company") will not be considered an investment company for this purpose.

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

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

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

If a percentage or rating restriction on investment or use of assets
set forth herein or in a Prospectus is adhered to at the time a transaction
is effected, later changes in percentage resulting from

20
<PAGE>

any cause other than actions by a Fund will not be considered a violation.
If the value of a Fund's holdings of illiquid securities at any time
exceeds the percentage limitation applicable at the time of acquisition due
to subsequent fluctuations in value or other reasons, the Board of Trustees
will consider what actions, if any, are appropriate to maintain adequate
liquidity.

Portfolio Transactions and Brokerage Allocation

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

The frequency of a Fund's portfolio transactions--the portfolio turnover
rate--will vary from year to year depending upon market conditions. A high
turnover rate may increase transaction costs, including brokerage commissions
and dealer mark-ups, and the possibility of taxable short-term gains. A high
turn-over rate could thus make it more difficult for a Fund to qualify as a
registered investment company under federal tax law. Therefore, the advisers
will weigh the added costs of short-term investment against anticipated gains
and each Fund will engage in portfolio trading if its advisers believe a
transaction, net of costs (including custodian charges), will help it achieve
its investment objective. Funds investing in both equity and debt securities
apply this policy with respect to both the equity and debt portions of their
portfolios.

For the period January 1, 1997 through October 31, 1997, the rates of
portfolio turnover for the Balanced Fund, Bond Fund, New Growth Opportunities
Fund, Equity Income Fund, Intermediate Bond Fund, International Equity Fund,
Large Cap Equity Fund, Large Cap Growth Fund, Short-Term Bond Fund and Small Cap
Value Fund were 131%, 261%, 50%, 73%, 193%, 141%, 54%, 36%, 406% and 8%,
respectively.

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

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

Under the advisory and sub-advisory agreements and as permitted by Section
28(e) of the Securities Exchange Act of 1934, the adviser or sub-advisers may
cause the Funds to pay a broker-dealer which provides brokerage and research
services to the adviser or sub-advisers, the Funds and/or other accounts for
which they exercise investment discretion an amount of commission for effecting
a securities transaction for a Fund in excess of the amount other broker-dealers
would have charged for the transaction if they determine in good faith that the
greater commission is reasonable in relation to the value of the brokerage and
research services provided by the executing broker-dealer viewed in terms of
either a particular transaction or their

21
<PAGE>

overall responsibilities to accounts over which they exercise investment
discretion. Not all of such services are useful or of value in advising the
Funds. The adviser and sub-advisers report to the Board of Trustees regarding
overall commissions paid by the Funds and their reasonableness in relation to
the benefits to the Funds. The term "brokerage and research services" includes
advice as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or of
purchasers or sellers of securities, furnishing analyses and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy
and the performance of accounts, and effecting securities transactions and
performing functions incidental thereto such as clearance and settlement.

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

In certain instances, there may be securities that are suitable for one or
more of the Funds as well as one or more of the adviser's or sub-advisers' other
clients. Investment decisions for the Funds and for other clients are made with
a view to achieving their respective investment objectives. It may develop that
the same investment decision is made for more than one client or that a
particular security is bought or sold for only one client even though it might
be held by, or bought or sold for, other clients. Likewise, a particular
security may be bought for one or more clients when one or more clients are
selling that same security. Some simultaneous transactions are inevitable when
several clients receive investment advice from the same investment adviser,
particularly when the same security is suitable for the investment objectives of
more than one client. In executing portfolio transactions for a Fund, the
adviser or sub-advisers may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be sold
or purchased with those of other Funds or their other clients if, in the
adviser's or sub-advisers' reasonable judgment, such aggregation (i) will result
in an overall economic benefit to the Fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other expenses,
and trading requirements, and (ii) is not inconsistent with the policies set
forth in the Trust's registration statement and the Fund's Prospectus and
Statement of Additional Information. When two or more Funds or other clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could have a detrimental
effect on the price or volume of the security as far as the Funds are concerned.
However, it is believed that the ability of the Funds to participate in volume
transactions will generally produce better executions for the Funds.

For the period January 1, 1997 though October 31, 1997, the Funds paid
brokerage commissions as detailed below:

<TABLE>
<S> <C>
Balanced Fund $ 136,964
Equity Income Fund 1,252,606
International Equity Fund 2,045,434
Large Cap Equity Fund 263,676
Large Cap Growth Fund 355,303
New Growth Opportunities Fund 97,666
Small Cap Equity Fund 72,383
</TABLE>

22
<PAGE>

PERFORMANCE INFORMATION

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

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

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

In connection with the conversion of various common trust funds maintained
by Chase into the Chase Vista Select Funds (the "CTF Conversion"), the Balanced
Fund was established to receive the assets of The Balanced Fund of Chemical
Bank, the Bond Fund was established to receive the assets of The Taxable Bond
Fund of Chemical Bank and the Trinity Bond Fund and Fixed Income Fund of The
Chase Manhattan Bank, the New Growth Opportunities Fund was established to
receive the assets of the Emerging Growth Fund of The Chase Manhattan Bank, the
Equity Income Fund was established to receive the assets of The Equity Income
Fund of Chemical Bank and the Equity Income Fund of The Chase Manhattan Bank,
the Intermediate Bond Fund was established to receive the assets of The
Intermediate-Term Taxable Bond Fund of Chemical Bank, the International Equity
Fund was established to receive the assets of The International Equity Fund of
Chemical Bank and the International Equity Fund of The Chase Manhattan Bank, the
Large Cap Equity Fund was established to receive the assets of the Trinity
Equity Fund and Intrinsic Value Equity Fund of The Chase Manhattan Bank, the
Large Cap Growth Fund was established to receive the assets of The Core Equity
Fund of Chemical Bank, the Short-Term Bond Fund was established to receive the
assets of the Short-

23
<PAGE>

Term Bond Fund of The Chase Manhattan Bank and the Small Cap Value Fund was
established to receive the assets of The Smaller Companies Equities Fund of
Chemical Bank.

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

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

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

Total Rate of Return

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

The average annual total rate of return figures for the following Funds,
reflecting the initial investment assuming the reinvestment of all distributions
(but excluding the effects of any applicable sales charges) for, where
applicable, the one, five and ten year periods ended October 31, 1997, and, for
the New Growth Opportunities Fund and the International Equity Fund, for the
period from commencement of business operations of each such Fund to October 31,
1997, were as follows:

<TABLE>
<CAPTION>
One Five Ten Since Date of
Fund Year Years Years Inception Inception
- ---- ---- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Balanced Fund 18.97% 11.28% 11.23% N/A
Bond Fund 8.19% 7.39% 8.82% N/A
New Growth Opportunities Fund 14.13% 14.54% N/A 12.94% 4/30/89
Equity Income Fund 30.74% 18.69% 16.63% N/A
Intermediate Bond Fund 6.96% 6.31% 8.24% N/A
International Equity Fund 8.91% N/A N/A 5.92% 5/31/93
Large Cap Equity Fund 31.83% 16.83% 14.98% N/A
Large Cap Growth Fund 31.83% 16.54% 14.80% N/A
Short-Term Bond Fund 4.50% 4.92% 6.93% N/A
Small Cap Value Fund 22.37% 17.53% 16.31% N/A
</TABLE>

- ----------
Performance presented in the table above and in each table that follows is based
upon the performance of their respective predecessor funds for periods prior to
the consummation of the CTF Reorganization. Performance presented for each of
these Funds for periods prior to the consummation of the CTF Reorganization is
based on the historical performance of shares of its predecessor fund, adjusted
to

24
<PAGE>

reflect historical expenses at the levels projected (absent reimbursements) for
that Fund at the time of the CTF Reorganization.

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

Yield Quotations

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

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

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

The yields of the Funds for the thirty day period ended October 31, 1997
were as follows:

<TABLE>
<S> <C>
Balanced Fund 4.41%
Bond Fund 6.68%
Equity Income Fund 3.04%
Intermediate Bond Fund 6.52%
International Equity Fund 1.16%
Large Cap Equity Fund 1.72%
Large Cap Growth Fund 1.11%
New Growth Opportunities Fund 0.32%
Short-Term Bond Fund 6.29%
Small Cap Value Fund 1.42%
</TABLE>

Non-Standardized Performance Results

The table below reflects the net change in the value of an assumed initial
investment of $10,000 in the Funds (including the predecessor common trust
funds) for the ten-year period ending October 31, 1997, or, in the case of the
New Growth Opportunities Fund and the International Equity Fund, from the
commencement of operations of their predecessor common trust funds on April 1,
1989 and May 1, 1993, respectively. The values reflect an assumption that
capital gain distributions and income dividends, if any, have been invested in
additional shares of the same class. From time to time, the Funds may provide
these performance results in addition to the total rate of return quotations
required by the Securities and Exchange Commission. As discussed more fully in
the Prospectuses, neither these performance results, nor total rate of return
quotations, should be considered as representative of the performance of the
Funds in the future. These factors and the possible differences in the methods
used to calculate performance results and total rates of return should be
considered when comparing such performance results and total rate of return
quotations of the Funds with those published for other investment companies and
other investment vehicles.

25
<PAGE>

<TABLE>
<CAPTION>
Value of Value of
Initial Capital Value of
Period Ended $10,000 Gains Reinvested
October 31, 1997 Investment Distributions Dividends Total Value
---------------- ---------- ------------- --------- -----------
<S> <C> <C> <C> <C>
Balanced Fund $28,855 N/A N/A $28,855
Bond Fund 22,702 N/A N/A 22,702
New Growth Opportunities Fund 28,165 N/A N/A 28,165
Equity Income Fund 46,642 N/A N/A 46,642
Intermediate Bond Fund 22,082 N/A N/A 22,082
International Equity Fund 12,897 N/A N/A 12,897
Large Cap Equity Fund 40,419 N/A N/A 40,419
Large Cap Growth Fund 39,791 N/A N/A 39,791
Short-Term Bond Fund 19,557 N/A N/A 19,557
Small Cap Value Fund 45,378 N/A N/A 45,378
</TABLE>

DETERMINATION OF NET ASSET VALUE

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

Equity securities in a Fund's portfolio are valued at the last sale price
on the exchange on which they are primarily traded or on the NASDAQ National
Market System, or at the last quoted bid price for securities in which there
were no sales during the day or for other unlisted (over-the-counter) securities
not reported on the NASDAQ National Market System. Bonds and other fixed income
securities (other than short-term obligations, but including listed issues) in a
Fund's portfolio are valued on the basis of valuations furnished by a pricing
service, the use of which has been approved by the Board of Trustees. In making
such valuations, the pricing service utilizes both dealer-supplied valuations
and electronic data processing techniques that take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or exchange
or over-the-counter prices, since such valuations are believed to reflect more
accurately the fair value of such securities. Short-term obligations which
mature in 60 days or less are valued at amortized cost, which constitutes fair
value as determined by the Board of Trustees. Futures and option contracts that
are traded on commodities or securities exchanges are normally valued at the
settlement price on the exchange on which they are traded. Portfolio securities
(other than short-term obligations) for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or at the
direction of the Board of Trustees.

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

PURCHASES AND REDEMPTIONS

The Fund has established certain procedures and restrictions, subject to
change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Funds' Transfer Agent may defer
acting on a

26
<PAGE>

financial institution's instructions until it has received them in proper form.
In addition, the privileges described in the Prospectuses are not available
until a completed and signed account application has been received by the
Transfer Agent.

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

DISTRIBUTIONS; TAX MATTERS

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

Qualification as a Regulated Investment Company

Each Fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
to meet all other requirements that are necessary for it to be relieved of
federal taxes on income and gains it distributes to shareholders. Net investment
income for each Fund consists of all interest accrued and discounts earned, less
amortization of any market premium on the portfolio assets of the Fund and the
accrued expenses of the Fund. As a regulated investment company, each Fund is
not subject to federal income tax on the portion of its net investment income
(i.e., its investment company taxable income, as that term is defined in the
Code, without regard to the deduction for dividends paid) and net capital gain
(i.e., the excess of net long-term capital gain over net short-term capital
loss) that it distributes to shareholders, provided that it distributes at least
90% of its net investment income for the taxable year (the "Distribution
Requirement"), and satisfies certain other requirements of the Code that are
described below. Under the current view of the Internal Revenue Service, if a
Fund invests all of its assets in another open-end, management investment
company which is classified as a partnership for federal income tax purposes,
such Fund will be deemed to own a proportionate share of the income of the
portfolio into which it contributes all of its assets for purposes of
determining whether such Fund satisfies the Distribution Requirement and the
other requirements necessary to qualify as a regulated investment company (e.g.,
Income Requirement (hereinafter defined), etc.).

In addition to satisfying the Distribution Requirement, a regulated
investment company must: (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement").

In addition to satisfying the requirements described above, each Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the value
of its total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment

27
<PAGE>

companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses.

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

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

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

Excise Tax on Regulated Investment Companies

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

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

28
<PAGE>

Fund Distributions

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

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

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

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

With respect to each Fund other than International Equity Fund, ordinary
income dividends paid by a Fund with respect to a taxable year will qualify for
the 70% dividends- received deduction generally available to corporations to the
extent of the amount of qualifying dividends received by a Fund from domestic
corporations for the taxable year. A dividend received by a Fund will not be
treated as a qualifying dividend (1) if it has been received with respect to any
share of stock that the Fund has held for less than 46 days (91 days in the case
of certain preferred stock), under the Rules of Code Section 246 (c)(3) and (4);
(2) to the extent that a Fund is under an obligation (pursuant to a short sale
or otherwise) to make related payments with respect to positions in
substantially similar or related property; or (3) to the extent the stock on
which the dividend is paid is treated as debt-financed under the rules of Code
Section 246A. Moreover, the dividends-received deduction for a corporate
shareholder may be disallowed or reduced if the corporate shareholder fails to
satisfy the foregoing requirements with respect to its shares of a Fund. In the
case where a Fund invests all of its assets in a Portfolio and the Fund
satisfies the holding period rules pursuant to Code Section 246(c) as to its
interest in the Portfolio, a corporate shareholder which satisfies the foregoing
requirements with respect to its shares of the Fund should receive the
dividends-received deduction.

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

Investment income that may be received by certain of the Funds from sources
within foreign countries may be subject to foreign taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle any such Fund to a reduced rate of, or exemption from, taxes on
such income.

29
<PAGE>

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

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

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

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

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

Sale or Redemption of Shares

A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of a Fund will be considered capital gain
or loss and will be long- term capital gain or loss if the shares were held for
longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be disallowed to the
extent of the amount of exempt- interest dividends received on such shares and
(to the extent not disallowed) will be treated as a long-term capital loss to
the extent of the amount of capital gain dividends received on such shares.

30
<PAGE>

Foreign Shareholders

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

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

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

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

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

State and Local Tax Matters

Depending on the residence of the shareholder for tax purposes,
distributions may also be subject to state and local taxes or withholding taxes.
Most states provide that a RIC may pass through (without restriction) to its
shareholders state and local income tax exemptions available to direct owners of
certain types of U.S. government securities (such as U.S. Treasury obligations).
Thus, for residents of these states, distributions derived from a Fund's
investment in certain types of U.S. government securities should be free from
state and local income taxes to the extent that the interest income from such
investments would have been exempt from state and local income taxes if such
securities had been held directly by the respective shareholders themselves.
Certain states, however, do not allow a RIC to pass through to its shareholders
the state and local income tax exemptions available to direct owners of certain
types of U.S. government securities unless the RIC holds at least a required
amount of U.S. government securities. Accordingly, for residents of these
states, distributions derived from a Fund's investment in certain types of U.S.
government securities may not be entitled to the exemptions from state and local
income taxes that would be available if the shareholders had purchased U.S.
government securities directly. Shareholders' dividends attributable to a Fund's
income from repurchase agreements generally are subject to state and local
income taxes, although states and regulations vary in their treatment of such
income. The exemption from state and local income taxes does not preclude states
from asserting other taxes on the ownership of U.S. government securities. To
the extent that a Fund invests to a substantial degree in U.S. government
securities which are subject to favorable state and local tax treatment,
shareholders of such Fund will be notified as to the extent to which
distributions from the Fund are attributable to interest on such securities.
Rules of state and local taxation of ordinary income dividends and capital gain
dividends from RICs may differ from the rules for U.S. federal income taxation
in other respects. Shareholders are urged to consult their tax advisers as to
the consequences of these and other state and local tax rules affecting
investment in a Fund.

31
<PAGE>

Effect of Future Legislation

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

32
<PAGE>

MANAGEMENT OF THE TRUST AND THE FUNDS OR PORTFOLIOS

Trustees and Officers

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

Fergus Reid, III--Chairman of the Trust. Chairman and Chief Executive
Officer, Lumelite Corporation, since September 1985; Trustee, Morgan Stanley
Funds. Age: 65. Address: 202 June Road, Stamford, CT 06903.

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

William J. Armstrong--Trustee. Vice President and Treasurer, Ingersoll-Rand
Company. Age: 55. Address: 49 Aspen Way, Upper Saddle River, NJ 07458.

John R.H. Blum--Trustee. Attorney in private practice; formerly, partner in
the law firm of Richards, O'Neil & Allegaert; Commissioner of Agriculture -
State of Connecticut, 1992-1995. Age: 68. Address: 322 Main Street, Lakeville,
CT 06039.

Stuart W. Cragin, Jr.--Trustee. Retired; formerly President, Fairfield
Testing Laboratory, Inc. He has previously served in a variety of marketing,
manufacturing and general management positions with Union Camp Corp., Trinity
Paper & Plastics Corp., and Conover Industries. Age: 64. Address: 108 Valley
Road, Cos Cob, CT 06807.

Roland R. Eppley, Jr.--Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard Association Inc. (1971-1988);
Director, Janel Hydraulics, Inc.; formerly Director of The Hanover Funds, Inc.
Age: 65. Address: 105 Coventry Place, Palm Beach Gardens, FL 33418.

Joseph J. Harkins--Trustee. Retired; Commercial Sector Executive and
Executive Vice President of The Chase Manhattan Bank, N.A. from 1985 through
1989. He has been employed by Chase in numerous capacities and offices since
1954. Director of Blessings Corporation, Jefferson Insurance Company of New
York, Monticello Insurance Company and National. Age: 66. Address: 257
Plantation Circle South, Ponte Vedra Beach, FL 32082.

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

W. Perry Neff--Trustee. Independent Financial Consultant; Director of North
America Life Assurance Co., Petroleum & Resources Corp. and The Adams Express
Co.; formerly Director and Chairman of The Hanover Funds, Inc.; formerly
Director, Chairman and President of The Hanover Investment Funds, Inc. Age: 70.
Address: RR 1 Box 102, Weston, VT 05181.

W.D. MacCallan--Trustee. Director of The Adams Express Co. and Petroleum &
Resources Corp.; formerly Chairman of the Board and Chief Executive Officer of
The Adams Express Co. and Petroleum & Resources Corp.; formerly Director of The
Hanover Funds, Inc. and The Hanover Investment Funds, Inc. Age: 70. Address: 624
East 45th Street, Savannah, GA 31405

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

33
<PAGE>

Richard E. Ten Haken--Trustee; Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2 and Orleans Counties, New York;
Chairman of the Board and President, New York State Teachers' Retirement System.
Age: 63. Address: 4 Barnfield Road, Pittsford, NY 14534.

Irving L. Thode--Trustee. Retired; formerly Vice President of Quotron
Systems. He has previously served in a number of executive positions with
Control Data Corp., including President of its Latin American Operations, and
General Manager of its Data Services business. Age: 66. Address: 80 Perkins
Road, Greenwich, CT 06830.

Martin R. Dean--Treasurer and Assistant Secretary. Associate Director,
Accounting Services, BISYS Fund Services; formerly Senior Manager, KPMG Peat
Marwick (1987-1994). Age: 34. Address: 3435 Stelzer Road, Columbus, OH 43219.

Richard Baxt--Secretary. Senior Vice President, Client Services, BISYS Fund
Services; formerly General Manager of Investment and Insurance, First Fidelity
Bank, President of First Fidelity Brokers, and President of Citicorp Investment
Services. Age: 44. Address: 125 W. 55th Street, New York, NY 10019.

Vicky M. Hayes--Assistant Secretary. Vice President and Global Marketing
Manager, Vista Fund Distributors, Inc.; formerly Assistant Vice President,
Alliance Capital Management and held various positions with J. & W. Seligman &
Co. Age: 36. Address: One Chase Manhattan Plaza, 3rd Fl., New York, NY 10081.

Alaina Metz--Assistant Secretary. Chief Administrative Officer, BISYS Fund
Services; formerly Supervisor, Blue Sky Department, Alliance Capital Management
L.P. Age: 30. Address: 3435 Stelzer Road, Columbus, OH 43219.

Lee Schultheis--Assistant Treasurer and Assistant Secretary. President,
BISYS Fund Distributors; formerly Managing Director, Forum Financial Group. Age:
41. Address: One Chase Manhattan Plaza, 3rd Fl., New York, NY 10081.

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

The Board of Trustees of the Trust presently has an Audit Committee. The
members of the Audit Committee are Messrs. Ten Haken (Chairman), Armstrong,
Eppley, MacCallan and Thode. The function of the Audit Committee is to recommend
independent auditors and monitor accounting and financial matters. The Audit
Committee met two times during the fiscal period ended October 31, 1997.

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

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

Remuneration of Trustees and Certain Executive Officers:

Each Trustee is reimbursed for expenses incurred in attending each meeting
of the Board of Trustees or any committee thereof. Each Trustee who is not an
affiliate of the advisers is compensated for his or her services according to a
fee schedule which recognizes the fact that each Trustee also serves as a
Trustee of other investment companies advised by the advisers. Each Trustee
receives a fee, allocated among all investment companies for which the Trustee
serves, which consists of an annual retainer component and a meeting fee
component.

34
<PAGE>

<TABLE>
<CAPTION>
New Growth
Opportunities Equity Intermediate
Balanced Fund Bond Fund Fund Income Fund Bond Fund
<S> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee $532.50 $1,416.76 $315.73 $2,629.77 $886.68
H. Richard Vartabedian, Trustee 347.57 998.55 222.26 1,854.54 623.69
William J. Armstrong, Trustee 239.43 638.42 142.33 1,186.67 399.09
John R.H. Blum, Trustee 281.41 750.39 168.68 1,386.33 463.98
Stuart W. Cragin, Jr., Trustee 249.71 665.70 148.17 1,236.36 415.79
Roland R. Eppley, Jr., Trustee 249.71 665.70 148.17 1,236.36 415.79
Joseph J. Harkins, Trustee 270.96 723.45 162.56 1,336.75 446.59
Sarah E. Jones, Trustee -- -- -- -- --
W.D. MacCallan, Trustee 249.71 665.70 148.17 1,236.35 415.79
W. Perry Neff, Trustee 270.96 922.04 162.56 1,336.75 446.59
Leonard M. Spalding, Jr., Trustee -- -- -- -- --
Richard E. Ten Haken, Trustee 249.71 665.70 148.17 1,236.36 415.79
Irving L. Thode, Trustee 249.71 665.70 148.17 1,236.36 415.79

<CAPTION>
International Large Cap Large Cap Short Term Small Cap
Equity Fund Growth Fund Equity Fund Bond Fund Value Fund
<S> <C> <C> <C> <C> <C>
Fergus Reid, III, Trustee $750.27 $1,491.65 $527.33 $80.54 $1,240.37
H. Richard Vartabedian, Trustee 531.26 1,055.81 371.37 56.66 876.60
William J. Armstrong, Trustee 339.65 675.77 237.69 36.20 561.47
John R.H. Blum, Trustee 400.72 782.36 281.85 42.50 650.87
Stuart W. Cragin, Jr., Trustee 354.17 703.87 247.58 37.77 584.40
Roland R. Eppley, Jr., Trustee 354.17 703.87 247.58 37.77 584.40
Joseph J. Harkins, Trustee 387.48 755.86 271.69 40.93 626.29
Sarah E. Jones, Trustee -- -- -- -- --
W.D. MacCallan, Trustee 354.17 703.87 247.58 37.77 584.40
W. Perry Neff, Trustee 387.48 755.86 271.69 40.93 628.29
Leonard M. Spalding, Jr., Trustee -- -- -- -- --
Richard E. Ten Haken, Trustee 354.17 703.87 247.58 37.77 584.40
Irving L. Thode, Trustee 354.17 703.87 247.58 37.77 584.40
</TABLE>

<TABLE>
<CAPTION>
Pension or Retirement Total
Benefits Accrued Compensation
by the Fund Complex(1) from Fund Complex(2)
<S> <C> <C>
Fergus Reid, III, Trustee $56,368 $129,500
H. Richard Vartabedian, Trustee 47,622 102,750
William J. Armstrong, Trustee 38,372 67,000
John R.H. Blum, Trustee 41,363 73,000
Stuart W. Cragin, Jr., Trustee 34,965 68,500
Roland R. Eppley, Jr., Trustee 53,267 68,500
Joseph J. Harkins, Trustee 52,508 71,500
Sarah E. Jones, Trustee -- --
W.D. MacCallan, Trustee 66,323 68,500
W. Perry Neff, Trustee 66,323 71,500
Leonard M. Spalding, Jr., Trustee -- --
Richard E. Ten Haken, Trustee 31,463 68,500
Irving L. Thode, Trustee 41,876 68,500
</TABLE>

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

35
<PAGE>

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

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

As of December 31, 1997, the Trustees and officers as a group owned less
than 1% of each Fund's outstanding shares, all of which were acquired for
investment purposes. For fiscal year ended October 31, 1997, the Trust paid its
disinterested Trustees fees and expenses for all of the meetings of the Board of
Directors and any committee meetings attended in the aggregate amount of
approximately $2,780, which amount is then apportioned among the Funds
comprising the Trust.

Chase Vista Funds Retirement Plan for Eligible Trustees

The Trustees have instituted a Retirement Plan for Eligible Trustees (the
"Plan") pursuant to which each Trustee (who is not an employee of any of the
Funds advised by the advisers, the advisers, administrator or distributor or any
of their affiliates) may be entitled to certain benefits upon retirement from
the Board of Trustees. Pursuant to the Plan, the normal retirement date is the
date on which the eligible Trustee has attained age 65 and has completed at
least five years of continuous service with one or more of the investment
companies advised by the adviser (collectively, the "Covered Funds"). Each
Eligible Trustee is entitled to receive from the Covered Funds an annual benefit
commencing on the first day of the calendar quarter coincident with or following
his date of retirement equal to the sum of 8% of the highest annual compensation
received from the Covered Funds multiplied by the number of such Trustee's years
of service (not in excess of 10 years) completed with respect to any of the
Covered Funds and (ii) 4% of the highest annual compensation received from the
Covered Funds for each year of service in excess of 10 years, provided that no
Trustees annual benefit will exceed the highest annual compensation received by
that Trustee from the Covered Funds. Such benefit is payable to each eligible
Trustee in monthly installments for the life of the Trustee.

Set forth below in the table are the estimated annual benefits payable to
an eligible Trustee upon retirement assuming various compensation and years of
service classifications. As of October 31, 1997, the estimated credited years of
service for Messrs. Reid, Vartabedian, Armstrong, Blum, Cragin, Eppley, Harkins,
Neff, MacCallan, Spalding, Ten Haken, Thode and Ms. Jones are 12, 4, 9, 12, 4,
8, 6, 7, 7, 0, 12, 4 and 0, respectively.

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

The Trustees have also instituted a Deferred Compensation Plan for Eligible
Trustees (the "Deferred Compensation Plan") pursuant to which each Trustee (who
is not an employee of any of the Covered Funds, the advisers, administrator or
distributor or any of their affiliates) may enter into agreements with the
Covered Funds whereby payment of the Trustee's fees are deferred until the
payment date elected by the Trustee

36
<PAGE>

(or the Trustee's termination of service). The deferred amounts are invested in
shares of Vista funds selected by the Trustee. The deferred amounts are paid out
in a lump sum or over a period of several years as elected by the Trustee at the
time of deferral. If a deferring Trustee dies prior to the distribution of
amounts held in the deferral account, the balance of the deferral account will
be distributed to the Trustee's designated beneficiary in a single lump sum
payment as soon as practicable after such deferring Trustee's death.

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

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

Adviser and Sub-Adviser

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

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

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

With respect to the Equity Funds, the equity research team of the adviser
looks for two key variables when analyzing stocks for potential investment by
equity portfolios: value and momentum. To uncover these

37
<PAGE>

qualities, the team uses a combination of quantitative analysis, fundamental
research and computer technology to help identify undervalued stocks.

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

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

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

Chase, a wholly-owned subsidiary of The Chase Manhattan Corporation, a
registered bank holding company, is a commercial bank offering a wide range of
banking and investment services to customers throughout the United States and
around the world. Also included among Chase's accounts are commingled trust
funds and a broad spectrum of individual trust and investment management
portfolios. These accounts have varying investment objectives. Chase is located
at 270 Park Avenue, New York, New York 10017.

CAM is a wholly-owned operating subsidiary of the Adviser. CAM is
registered with the Securities and Exchange Commission as an investment adviser
and provides discretionary investment advisory services to institutional
clients, and the same individuals who serve as portfolio managers for CAM also
serve as portfolio managers for Chase. CAM is located at 1211 Avenue of the
Americas, New York, New York 10036.

CAM London is an indirect wholly-owned subsidiary of the Adviser. CAM
London is registered with the Securities and Exchange Commission and is
regulated by the Investment Management Regulatory Organization (IMRO) as an
investment adviser and provides discretionary investment advisory services to
institutional clients, and the same individuals who serve as portfolio managers
for CAM London also serve as portfolio managers for Chase. CAM London is located
at Colvile House, 32 Curzon Street, London W1Y8AL.

In consideration of the services provided by the adviser pursuant to the
Advisory Agreement, the adviser is entitled to receive from each Fund an
investment advisory fee computed daily and paid monthly based on a rate equal to
a percentage of such Fund's average daily net assets specified in the relevant
Prospectuses. However, the adviser may voluntarily agree to waive a portion of
the fees payable to it on a month-

38
<PAGE>

to-month basis. For its services under its sub-advisory agreement, CAM (or CAM
London in the case of the International Equity Fund) will be entitled to
receive, with respect to each such Fund, such compensation, payable by the
adviser out of its advisory fee, as is described in the relevant Prospectuses.

For the period January 1, 1997 through October 31, 1997, the Advisor was
paid or accrued advisory fees, and voluntarily waived the amounts in
parentheses:

<TABLE>
<CAPTION>
Period-Ended
10/31/97
--------
<S> <C> <C>
Balanced Fund 790,251 (790,251)
Bond Fund 1,236,590 (1,236,590)
New Growth Opportunities Fund 614,080 (614,080)
Equity Income Fund 3,012,125 (3,012,125)
Intermediate Bond Fund 744,236 (744,236)
International Equity Fund 2,096,199 (2,096,199)
Large Cap Growth Fund 1,697,055 (1,697,055)
Large Cap Equity Fund 623,935 (623,935)
Short Term Bond Fund 56,681 (56,681)
Small Cap Value Fund 2,337,360 (2,337,360)
</TABLE>

Administrator

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

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

In addition, the Administration Agreements provide that, in the event the
operating expenses of any Fund, including all investment advisory,
administration and sub-administration fees, but excluding brokerage commissions
and fees, taxes, interest and extraordinary expenses such as litigation, for any
fiscal year exceed the most restrictive expense limitation applicable to that
Fund imposed by the securities laws or regulations thereunder of any state in
which the shares of such Fund are qualified for sale, as such limitations may be
raised or lowered from time to time, Chase shall reduce its administration fee
(which fee is described below) to the extent of its share of such excess
expenses. The amount of any such reduction to be borne by Chase shall be
deducted from the

39
<PAGE>

monthly administration fee otherwise payable to Chase during such fiscal year,
and if such amounts should exceed the monthly fee, Chase shall pay to such Fund
its share of such excess expenses no later than the last day of the first month
of the next succeeding fiscal year.

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

For the period January 1, 1997 through October 31, 1997, the Administrator
was paid or accrued administration fees, and voluntarily waived the amounts in
parentheses:

<TABLE>
<CAPTION>
Period-Ended
10/31/97
--------
<S> <C> <C>
Balanced Fund 152,050 (152,050)
Bond Fund 412,197 (412,197)
New Growth Opportunities Fund 94,474 (94,474)
Equity Income Fund 753,781 (753,781)
Intermediate Bond Fund 248,079 (248,079)
International Equity Fund 209,620 (209,620)
Large Cap Growth Fund 424,474 (424,474)
Large Cap Equity Fund 155,983 (155,983)
Short Term Bond Fund 22,673 (22,673)
Small Cap Value Fund 359,594 (359,594)
</TABLE>

Distribution and Sub-Administration Agreement

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

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

In the event the operating expenses of any Fund, including all investment
advisory, administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, for any fiscal year exceed the most restrictive expense limitation
applicable to

40
<PAGE>

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

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

For the period January 1, 1997 through October 31, 1997, the Distributor
was paid or accrued sub-administration fees, and voluntarily waived the amounts
in parentheses:

<TABLE>
<CAPTION>
Period-Ended
10/31/97
--------
<S> <C> <C>
Balanced Fund 75,817 (75,817)
Bond Fund 206,098 (206,098)
New Growth Opportunities Fund 47,237 (47,237)
Equity Income Fund 376,891 (376,891)
Intermediate Bond Fund 124,039 (124,039)
International Equity Fund 104,810 (104,810)
Large Cap Growth Fund 212,133 (212,133)
Large Cap Equity Fund 77,992 (77,992)
Short Term Bond Fund 11,336 (11,336)
Small Cap Value Fund 179,797 (179,797)
</TABLE>

Transfer Agent and Custodian

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

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

INDEPENDENT ACCOUNTANTS

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

CERTAIN REGULATORY MATTERS

Banking laws, including the Glass-Steagall Act as currently interpreted,
prohibit bank holding companies and their affiliates from sponsoring,
organizing, controlling, or distributing shares or, mutual funds, and generally
prohibit banks from issuing, underwriting, selling or distributing securities.
These laws do not prohibit banks or their affiliates from acting as investment
adviser, administrator or custodian to mutual funds or from purchasing mutual
fund shares as agent for a customer. Chase and the Trust believe that Chase
(including its affiliates) may perform the services to be performed by it as
described in the Prospectuses and

41
<PAGE>

this Statement of Additional Information without violating such laws. If future
changes in these laws or interpretations required Chase to alter or discontinue
any of these services, it is expected that the Board of Trustees would recommend
alternative arrangements and that investors would not suffer adverse financial
consequences. State securities laws may differ from the interpretations of
banking law described above and banks may be required to register as dealers
pursuant to state law.

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

Expenses

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

GENERAL INFORMATION

Description of Shares, Voting Rights and Liabilities

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

42
<PAGE>

forth below. Shareholders are entitled to one vote for each share held. Shares
of each series or class generally vote together, except when required under
federal securities laws to vote separately on matters that only affect a
particular class, such as the approval of distribution plans for a particular
class.

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

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

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

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

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

The Board of Trustees has adopted a code of ethics addressing personal
securities transactions by investment personnel and access persons and other
related matters. The code has been designated to address potential conflicts of
interest that can arise in connection with personal trading activities of such
persons. Persons subject to the code are generally permitted to engage in
personal securities transactions, subject to certain prohibitions, pre-clearance
requirements and blackout periods.

43
<PAGE>

Principal Holders

As of January 31, 1998, no person owned of record 5% or more of the
outstanding shares of any Fund.

<TABLE>
<S> <C>
Balanced Fund

Balsa & CO 99.87%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Bond Fund

Balsa & CO 81.73%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 17.81%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Equity Income Fund

Balsa & CO 90.94%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 6.43%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Intermediate Bond Fund

Balsa & CO 76.10%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 23.70%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412
</TABLE>

<TABLE>
<S> <C>
International Equity Fund

Balsa & CO 82.79%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 11.94%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Andrews & Company 5.17%
c/o Chase Manhattan Bank
PO Box 17665
Grand Central Station
New York, NY 10163-1768

Large Cap Growth Fund

Balsa & CO 76.10%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 23.70%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Large Cap Equity Fund

Liva & Company 87.78%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Balsa & CO 11.55%
PO Box 1768
Grand Central Station
New York, NY 10163-1768
</TABLE>

44
<PAGE>

<TABLE>
<S> <C>
New Growth Opportunities Fund

Balsa & CO 82.35%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 9.70%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412

Andrews & Company 7.28%
c/o Chase Manhattan Bank
PO Box 1768
Grand Central Station
New York, NY 10163-1768
</TABLE>

<TABLE>
<S> <C>
Short-Term Bond Fund

Balsa & CO 93.14%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Small Cap Value Fund

Balsa & CO 94.28%
PO Box 1768
Grand Central Station
New York, NY 10163-1768

Liva & Company 5.12%
c/o Chase Manhattan Bank
Attn: Mutual Fund Operations
PO Box 1412
Rochester, NY 14603-1412
</TABLE>

45
<PAGE>

APPENDIX A

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

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

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

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

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

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

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

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

A-1
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

A-2
<PAGE>

APPENDIX B

DESCRIPTION OF RATINGS

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

Moody's Investors Service's Corporate Bond Ratings

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

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

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

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

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

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

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

Ca--Bonds which are rated "Ca" represent obligations which are speculative in
high degree. Such issues are often in default or have other marked shortcomings.

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

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

Standard & Poor's Ratings Group Corporate Bond Ratings

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

B-1
<PAGE>

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

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

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

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

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

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

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

Moody's Investors Service's Commercial Paper Ratings

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

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

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

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

Standard & Poor's Ratings Group Commercial Paper Ratings

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

B-2
<PAGE>

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

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

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

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

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

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

Fitch Bond Ratings

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

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

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

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

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

Fitch Short-Term Ratings

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

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

Fitch's short-term ratings are as follows:

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

B-3
<PAGE>

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

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

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

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

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

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

B-4
<PAGE>

PART C

MUTUAL FUND SELECT GROUP
PART C. OTHER INFORMATION

ITEM 23. Exhibits

Exhibit
Number
- -------
1 Declaration of Trust (1)
2 By-laws. (1)
3 None.
4(a) Form of Investment Advisory Agreement. (1)

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

C-1
<PAGE>

9 Opinion re: Legality of Securities being Registered. (4)
10 Consent of Price Waterhouse LLP (5)
11 Financial statements

In Part B: Financial Statements and the Reports thereon
for the Funds filed herein are incorporated by
reference into Part B as part of the 1997
Annual Reports to Shareholders for such Funds
as filed with the Securities and Exchange
Commission by Mutual Fund Select Group on Form
N-30D on January 7, 1998, accession number
0000950146-98-000024, which are incorporated
into Part B by reference.

12 None.
13 Form of Share Purchase Agreement. (3)
14 Financial Data Schedules (5)
15 None.
24 Powers of Attorney (4)

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

(1) Filed as an exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 333-13317) as filed with the Securities and Exchange
Commission on October 2, 1996.
(2) Incorporated by reference to Amendment No. 6 to the Registration Statement
on Form N-1A of Mutual Fund Group (File No. 33-14196) as filed with the
Securities and Exchange Commission on March 23, 1990.
(3) Filed as an exhibit to Pre-effective Amendment No. 1 as filed with the
Securities and Exchange Commission on November 15, 1996.
(4) Filed as an exhibit to Pre-effective Amendment No. 2 as filed with the
Securities and Exchange Commission on December 19, 1996.
(5) To be filed by amendment.

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

Not applicable

C-2
<PAGE>

ITEM 26. Number of Holders of Securities

Number of Record
Title of Series Holders as of January 31, 1998
- --------------- -------------------------------

Select Balanced Fund 12
Select Equity Income Fund 36
Select Large Cap Equity Fund 14
Select Large Cap Growth Fund 45
Select New Growth Opportunities Fund 15
Select Small Cap Value Fund 41
Select International Equity Fund 19
Select Short-Term Bond Fund 10
Select Intermediate Bond Fund 22
Select Bond Fund 13

ITEM 27. Indemnification

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

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

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

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

C-3
<PAGE>

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

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

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

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

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

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

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

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

</TABLE>

C-4
<PAGE>

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

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

C-5
<PAGE>

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

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

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

Susan V. Berresford Director President, The Ford Foundation

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

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

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

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

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

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

Andrew C. Sigler Director Chairman of the Board and Chief
Executive Officer, Champion International
Corporation
.
John R. Stafford Director Chairman, President and Chief Executive
Officer, American Home Products
Corporation

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

<PAGE>

Item 28(b)

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

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

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

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

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

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

Item 28(c)

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

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

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

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

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

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

Cornelia L. Kiley Director

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

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

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

ITEM 29. Principal Underwriters

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

C-6
<PAGE>

ITEM 30. Location of Accounts and Records

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

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

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

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

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

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

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

ITEM 31. Management Services

Not applicable

ITEM 32. Undertakings

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

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

C-7
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of New York and the
State of New York on the 30th day of December, 1998.

MUTUAL FUND SELECT GROUP

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

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

<TABLE>
<S> <C> <C>
* Chairman and Trustee December 30, 1998
- -------------------------------
Fergus Reid, III

/s/ H. Richard Vartabedian President December 30, 1998
- ------------------------------- and Trustee
H. Richard Vartabedian

* Trustee December 30, 1998
- -------------------------------
William J. Armstrong

* Trustee December 30, 1998
- -------------------------------
John R.H. Blum

* Trustee December 30, 1998
- -------------------------------
Stuart W. Cragin, Jr.

*
- ------------------------------- Trustee December 30, 1998
Roland R. Eppley, Jr.

* Trustee December 30, 1998
- -------------------------------
Joseph J. Harkins

* Trustee December 30, 1998
- -------------------------------
Sarah E. Jones

*
- ------------------------------- Trustee December 30, 1998
W.D. MacCallan

*
- ------------------------------- Trustee December 30, 1998
W. Perry Neff

* Trustee December 30, 1998
- -------------------------------
Leonard M. Spalding, Jr.

* Trustee December 30, 1998
- -------------------------------
Irv Thode

* Trustee December 30, 1998
- -------------------------------
Richard E. Ten Haken

/s/ Martin R. Dean Treasurer and December 30, 1998
- ------------------------------- Principal Financial
Martin R. Dean Officer

/s/ H. Richard Vartabedian Attorney in December 30, 1998
- ------------------------------- Fact
H. Richard Vartabedian
</TABLE>