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Chase Vista Funds
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The Growth Fund of Washington
(graphic)
Eastern US;DC, MD and VA high lighted
Annual Report
December 31, 1998
Growth of a $10,000 Investment
(Line Graph with Points Below Plotted)
Standard & Poor's
The Growth 500 Composite Consumer Price
Fund of Washington Index Index
(9/1/85,9425) (9/1/85,10000) (9/1/85,10000)
(12/31/85,10119) (12/31/85,11429) (12/31/85,10120)
(12/31/86,11551) (12/31/86,13557) (12/31/86,10231)
(12/31/87,12041) (12/31/87,14259) (12/31/87,10685)
(12/31/88,14115) (12/31/88,16611) (12/31/88,11157)
(12/31/89,16304) (12/31/89,21858) (12/31/89,11676)
(12/31/90.13290) (12/31/90,21178) (12/31/90.12389)
(12/31/91,16794) (12/31/91,27602) (12/31/91,12769)
(12/31/92,19770) (12/31/92,29702) (12/31/92,13139)
(12/31/93,22245) (12/31/93,32682) (12/31/93,13500)
(12/31/94,20173) (12/31/94,33126) (12/31/94,13861)
(12/31/95,29099) (12/31/95,45530) (12/31/95,14213)
(12/31/96,33363) (12/31/96,55956) (12/31/96,14685)
(12/31/97,45561) (12/31/97,74598) (12/31/97,14935)
(12/31/98,56139) (12/31/98,95874) (12/31/98,15185)
Average Annual Total Return to December 31, 1998
One Year 16.14%
Five Years 18.92%
Ten Years 14.12%
The Fund's results reflect payment of the maximum sales charge of 5.75%,
thus the net investment was $9,425. All dividends and capital gain
distributions are reinvested in additional shares without a sales charge.
The graph covers the period of the Fund's inception (August 7, 1985) to
December 31, 1998. The indexes are unmanaged and do not reflect sales
charges, commissions or expenses. Past results are not predictive of
future results.
Fund results in this letter were computed without a sales charge. Here are
the total and average annual compound returns with all distributions
reinvested for periods ended December 31, 1998, assuming payment of the
5.75% maximum sales charge at the beginning of the stated periods _ 10
years: +274.72%, or +14.12% a year; 5 years: +137.83%, or +18.92% a year;
and 12 months: +16.14%. Sales charges are lower for accounts of $100,000
or more.
The figures in this report reflect past results. All investments are
subject to certain risks. For example, those which include common stocks
are affected by fluctuating stock prices, so you may gain or lose money by
investing in the Fund. Accordingly, investors should maintain a long-term
investment perspective. Fund shares are not deposits or obligations of, or
insured, guaranteed or endorsed by, the U.S. government, any bank, the
Federal Deposit Insurance Corporation, or any other agency, entity or
person.
Fellow Shareholders
The Growth Fund of Washington continued its upward performance during 1998.
The Fund's net asset value increased to $30.86 on December 31, 1998, from
$26.09 on December 31, 1997. In addition, the Fund distributed an income
dividend of 7 cents per share, a short-term capital gain of 18.5 cents per
share, and a long-term capital gain of 1 dollar per share during the year.
For the twelve months ended December 31, 1998 the Fund's shares rose 23.2%
while the unmanaged Standard & Poor's 500 Composite Index rose 28.7%, both
including the reinvestment of distributions. At year end, the portfolio
weighted average price-earnings ratio for the Fund was approximately 19
times 1999 estimated earnings, or 30% less than the S&P 500's multiple of
about 27 times.
Although 1998 started and ended on a strong note, there was a considerable
period of volatility in the interim. Fears of a global credit crunch
dominated the market, especially in late August. The Federal Reserve cut
short-term interest rates three times during a seven-week period starting
on September 29th to calm investors' fears and return yield spreads to
normal ranges.
Domestic inflation continued to stay below expectations, and consumer
confidence remained strong. Home sales, buoyed by lower interest rates,
resulted in strong mortgage originations which benefited the Fund's Banking
and Financial Services sectors.
On December 31, 1998, The Growth Fund of Washington held 29 securities in
13 industry groups. The five largest holdings, representing 45.51% of net
assets were: Freddie Mac (14.50%), Fannie Mae (12.19%), The Washington Post
Co., Class B (7.42%), Crestar Financial Corp. (5.73%), and First Union
Corporation (5.67%).
Since our last report to you six months ago, the Fund has added shares of
three companies to its portfolio: MCI Worldcom, Inc., a global business
telecommunications company which will further diversify the Fund's
telecommunications holdings; PRIMUS Telecommunications Group, Inc., a
multinational telecommunications company with headquarters in Vienna,
Virginia, represents a quality name, selling at a reasonable valuation; and
USEC, Inc., a global energy company with attractive fundamentals
headquartered in Bethesda, Maryland. In addition, the merger of
NationsBank and BankAmerica Corp., as mentioned in our semi-annual report,
was finalized in September.
Consolidation activity in the banking industry continued in the second half
of the year, although at a slower pace. With 21% of your Fund invested in
bank issues, it continues to be well positioned to benefit, directly and
indirectly, from this trend: in July Crestar Financial Corp., a Fund
holding, agreed to combine with SunTrust Banks, Inc. for about four times
book value.
During the same period, the Fund eliminated shares of the following
holdings: EXCEL Communications, Inc.; Giant Food, Inc.; LCC International,
Inc.; NEXTEL Communications, Inc.; Roanoke Gas Co.; and Sunrise Assisted
Living, Inc.
Prospects for the regional economy remain positive. The pace of growth
mirrors national norms, with inflation in abeyance. With the general
market at historic high valuations, greater volatility and the possibility
of lower prices loom. The Fund's holdings of attractive businesses at
reasonable valuations should afford some protection. We continue to
maintain a long-term perspective, and suggest a similar approach in your
investment strategy.
We welcome your comments, as always, and look forward to reporting to you
again in six months.
Sincerely,
(signatures)
James H. Lemon, Jr. Harry J. Lister
Chairman President
February 17, 1999
Investment Portfolio as of December 31, 1998
<TABLE>
<CAPTION>
Investment Portfolio as of December 31, 1998
Number
Industry
of Market Percent of
Group Securities<F1>
Shares Value Net Assets
<S> <S>
<C> <C> <C>
Aerospace Lockheed Martin Corp.
48,563 $ 4,115,714 5.29%
Bethesda-based defense/aerospace company
that designs and services communication
and information systems.
Banking BankAmerica Corp.
44,400 2,669,550 3.43
Multi-bank holding company with
operations in many states and Washington,
DC with $595 billion in assets.
Capital One Financial Corp.
31,000 3,565,000 4.58
Northern Virginia-based general purpose
credit card issuer, with $17 billion in
managed loans.
Crestar Financial Corp.
62,000 4,464,000 5.73
Richmond-based bank holding company
with over $26 billion in assets.
First Union Corporation
72,600 4,414,987 5.67
Leading financial services company with
assets of $235 billion, serving 16 million
corporate and retail customers in invest-
ment and mortgage banking.
Provident Bankshares Corporation
52,147 1,297,157 1.67
Baltimore-based bank holding company for
Provident Bank.
TOTAL
16,410,694 21.08
Biotechnology Human Genome Sciences, Inc.<F2>
20,000 711,250 .91
Rockville, Maryland-based leader in gene
sequencing, with licensing agreements
with major pharmaceutical companies for
therapeutic and diagnostic product
development.
Computer American Management Systems, Inc.<F2>
44,000 1,760,000 2.26
Services & Northern Virginia-based leading supplier
Hardware of information technologies.
MICROS Systems, Inc.<F2>
31,000 1,019,125 1.31
Maryland-based manufacturer and marketer
of systems and software for the hospitality
industry.
TOTAL
2,779,125 3.57
Financial Fannie Mae
128,320 $ 9,495,680 12.19%
Services Washington, DC-based, the largest
residential mortgage funding operation
through the secondary market.
Freddie Mac
175,200 11,289,450 14.50
Northern Virginia-based company which
purchases, securitizes and guarantees
mortgages.
SLM Holding Corp.
17,500 840,000 1.08
Washington, DC-based, the largest source
of funding and servicing of education loans.
TOTAL
21,625,130 27.77
Health Services Trigon Healthcare, Inc.<F2>
31,700 1,182,806 1.52
Richmond-based managed health care
company serving approximately 2 million
members.
United Payors & United Providers, Inc.<F2>
30,000 855,000 1.10
Rockville-based company that is an
intermediary on behalf of indemnity
insurance companies, third-party admin-
istrators and self-insured unions for
discounted medical services.
TOTAL
2,037,806 2.62
Manufacturing The Black & Decker Corp.
10,000 560,625 .72
Maryland-based manufacturer and marketer
of a wide range of products sold to residential
and commercial markets in over 100 countries.
Danaher Corp.
50,000 2,715,625 3.49
Washington, DC-based manufacturer of
hand tools, automotive & transportation
equipment, and process & environmental
controls.
Harman International Industries, Inc.
15,750 600,469 .77
Washington, DC-based specialty manu-
facturer of electronic and audio components.
TOTAL
3,876,719 4.98
Publishing & The Washington Post Co., Class B
10,000 $ 5,779,375 7.42%
Communications Washington, DC-based company that
publishes "The Washington Post" and
"Newsweek"; owns several TV stations and
over 60 cable TV systems.
Retail Circuit City Stores, Inc.
35,000 1,747,813 2.24
Richmond-based retailer of audio, video and
brand name consumer electronic products,
with a presence in the new and used car
market through CarMax.
Telecommuni- American Tower Corp.<F2>
63,500 1,877,219 2.41
cations Owns and operates more than 3,000 wireless
communication towers in 44 states and
Washington, DC.
Bell Atlantic Corp.
56,000 3,181,500 4.09
Holding company for the mid-Atlantic
telephone companies, serving a multi-state
area and Washington, DC.
COMSAT Corp.
15,000 540,000 .69
Bethesda-based global provider of satellite
services, digital Networking services and
technology.
MCI Worldcom, Inc.
16,000 1,148,000 1.47
A global business telecommunications
company operating in more than 50 countries,
providing fully integrated local, long distance,
international, and Internet services.
PRIMUS Telecommunications Group, Inc.<F2>
25,000 412,500 .53
Vienna, Virginia-based provider of domestic
and international long-distance switched
voice, data, private network and value-
added services.
Qwest Communications International, Inc.<F2>
34,983 1,749,150 2.25
Nation's fourth largest long-distance
company and a multimedia communications
company serving over 2 million customers.
TOTAL
8,908,369 11.44
Transportation CSX Corp.
70,000 $ 2,905,000 3.73%
Richmond-based holding company for
transportation and natural resources with
railroad, trucking, pipeline, and ocean
shipping units.
Utilities Columbia Energy Group
15,000 866,250 1.11
Reston, Virginia-based utility holding
company with more than $6 billion in
assets, engaged in all phases of the natural
gas business; serves 7 million customers in
15 states and Washington, DC.
USEC, Inc.
60,000 832,500 1.07
Bethesda, Maryland-based energy company
and world leader in production and sales
of uranium fuel enrichment services for
commercial nuclear power plants
TOTAL
1,698,750 2.18
Wholesale Food Richfood Holdings, Inc.
140,000 2,905,000 3.73
Services Virginia-based wholesale supplier to grocery
retailers in the region.
TOTAL INVESTMENT SECURITIES
(cost: $20,493,002)
75,500,745 96.96
Repurchase Agreements:
Donaldson, Lufkin & Jenrette Securities Corporation
2,386,000 3.06
4.10%, issued 12/31/98, $2,387,087 including interest,
due 1/4/99 (collateralized by $8,904,000 United States
Treasury Strip Interest, due 8/15/22)
Payables over cash and receivables
(18,597) (.02)
NET ASSETS
$77,868,148 100.00%
<FN>
<F1> Securities listed are common stocks unless otherwise indicated.
<F2> Indicates security which has not paid dividends during the preceding
twelve months.
</FN>
See Notes to Financial Statements
</TABLE>
Statement of Assets and Liabilities
as of December 31, 1998
Assets Investment in securities,
at market (cost: $20,493,002) $75,500,745
Repurchase agreements,
(cost: $2,386,000) 2,386,000
Cash 16,088
Dividends and interest receivable 2,247
Receivable for Fund's shares sold 90,214
Other assets 11,143 $78,006,437
Liabilities Payable for adviser and mgt. services 45,464
Payable for distribution plan 39,176
Payable for Fund's shares repurchased 21,801
Accounts payable and accrued expenses 31,848 138,289
Net Assets Capital stock
($.01 par value, 2,523,667 shares
outstanding, 25,000,000 authorized) 25,236
Paid-in capital 22,802,162
Undistributed investment income 15,005
Undistributed realized capital gains 18,002
Unrealized gains 55,007,743 $77,868,148
Net asset value per share $30.86
See Notes to Financial Statements
Statement of Operations
for the year ended December 31, 1998
Investment Income
Income:
Dividends $ 928,278
Interest 108,638 $1,036,916
Expenses:
Investment advisory fee 259,032
Business management fee 237,145
Distribution fee 171,797
Transfer agency fee and expenses 68,250
Auditing and legal fees 23,027
Custodian fee and expenses 36,122
Directors' fees 8,000
Postage, stationery and supplies 4,125
Reports to shareholders 16,093
Registration and prospectus expense 14,321
Other 17,171 855,083
Net investment income 181,833
Realized and Unrealized Gain on Investments
Net realized gain on equities, identified
cost basis 2,941,788
Net change in unrealized gain 11,385,760
Net realized and change in unrealized
gain on investments 14,327,548
Net increase in net assets resulting from
operations $14,509,381
See Notes to Financial Statements
Statement of Changes in Net Assets
For the year ended December 31,
1998 1997
Increase in Net Assets
Operations:
Net investment income $ 181,833 $ 187,307
Net realized gain on equity investments 2,941,788 2,545,592
Net change in unrealized gain on
investments 11,385,760 14,214,092
Net increase in net assets resulting
from operations 14,509,381 16,946,991
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (169,899) (194,029)
Distributions from net realized gains (2,883,033) (2,495,778)
Total (3,052,932) (2,689,807)
Capital Stock Transactions:
Net increase (decrease) in net assets re-
sulting from capital stock transactions 4,762,643 (1,409,588)
Total increase in net assets 16,219,092 12,847,596
Net Assets:
Beginning of year 61,649,056 48,801,460
End of year $77,868,148 $61,649,056
See Notes to Financial Statements
<TABLE>
<CAPTION>
Financial Highlights
for a share outstanding throughout the fiscal year
For the
year ended December 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $26.09 $20.00 $18.19 $13.32 $15.37
Income from investment operations:
Net investment income .08 .09 .07 .14 .18
Net realized and unrealized gain (loss)
on investment 5.95 7.20 2.60 5.72 (1.61)
Total from investment operations 6.03 7.29 2.67 5.86 (1.43)
Less Distributions:
Dividends (from net investment
income) (.07) (.09) (.07) (.14) (.18)
Distributions (from capital gains) (1.19) (1.11) (.79) (.85) (.44)
Total distributions (1.26) (1.20) (.86) (.99) (.62)
Net asset value, end of year $30.86 $26.09 $20.00 $18.19 $13.32
Total return<F1> 23.22% 36.56% 14.65% 44.25% (9.32%)
Ratios/supplemental data:
Net assets, end of year (in thousands) $77,868 $61,649 $48,801 $45,397 $33,715
Ratio of expenses to average net assets 1.24% 1.25% 1.42% 1.46% 1.50%
Ratio of net income to average net assets .26% .35% .35% .87% 1.20%
Portfolio turnover rate 11.17% 13.03% 24.20% 25.65% 13.34%
<FN>
<F1> Excludes maximum sales charge of 5.75% of the Fund's offering price.
</FN>
</TABLE>
See Notes to Financial Statements
Notes to Financial Statements
Note 1 _ Summary of Significant
Accounting Policies
The Growth Fund of Washington, Inc. (the "Fund") was incorporated in
Maryland on May 24, 1985. The Fund is registered under the Investment
Company Act of 1940 (the "Act"), as amended, as an open end, diversified
investment company. The Fund's objective is to provide for long-term
growth of capital by investment primarily in securities of companies
headquartered or having a major place of business in Washington, D.C.,
Maryland or Virginia. Washington Investment Advisers, Inc. ("WIA") is the
Fund's investment adviser (the "Investment Adviser"). Washington
Management Corporation ("WMC") is the Fund's business manager (the
"Business Manager"). The Investment Adviser and the Business Manager are
wholly owned subsidiaries of The Johnston-Lemon Group, Incorporated. Vista
Fund Distributors, Inc. (the "Distributor"), a wholly owned subsidiary of
The BISYS Group, Inc., is the distributor of the Fund's shares.
Security Valuation: Securities (except for short-term obligations) are
valued at the last sales price on the exchange or national securities
market on which the securities primarily are traded. Securities not listed
on an exchange or national securities market, or securities in which there
were no reported transactions, are valued at the latest reliable quoted bid
price. Short-term obligations with maturities of 60 days or less are
valued at amortized cost, which approximates market value. Any securities
for which reliable recent market quotations are not readily available are
valued at fair value as determined in good faith under policies approved by
the Board of Directors.
Premiums received for covered call options written are deferred until the
contract expires or is closed. Such premiums are valued at the last sales
price of the option or, in the absence of a sale, the mean between the last
reliable bid and ask price.
Securities Transactions and Investment Income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income, including, where
applicable, amortization of discount on short-term investments, is recorded
on the accrual basis.
Pursuant to the custodian agreement, the Fund received credits against its
custodian fee for imputed interest on certain balances with the custodian
bank. The custodian fee of $36,122 includes $6,209 that was paid by these
credits rather than in cash.
Federal Income Taxes: It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income, including
any net realized gain on investments, to its shareholders. Therefore, no
Federal income tax provision is required. The Fund reclassified $90,000
from undistributed realized gains to paid-in capital during the year. Cost
of securities for tax purposes is the same as for financial reporting
purposes.
Note 2 _ Investment Adviser and Business Management Fees and Other
Transactions with Affiliates
WIA was paid a fee of $259,032 for investment management services. The
Investment Advisory Agreement provides for monthly fees, accrued daily,
based on an annual rate of 0.375% on the Fund's net assets up to
100,000,000, decreasing to 0.35% on the net assets in excess of
$100,000,000. WMC was paid a fee of $237,145 for business management
services. The Business Management Agreement provides for monthly fees,
accrued daily, based on an annual rate of 0.375% on the Fund's first
$40,000,000 of net assets, 0.30% on net assets in excess of $40,000,000 but
not exceeding $100,000,000 and 0.25% on net assets in excess of
$100,000,000. The Fund pays all expenses not assumed by the Investment
Adviser or Business Manager.
Pursuant to a Distribution Plan, the Fund pays a fee at a maximum annual
rate of 0.25% of the Fund's net assets. Payments under this plan are
primarily intended to result in the sale and retention of Fund shares
including, but not limited to, advertising, sales and other expenses of the
Distributor relating to selling or servicing efforts, expenses of
organizing and conducting sales seminars, printing of prospectuses and
reports for other than existing shareholders, preparation and distribution
of advertising material and sales literature and payments to dealers whose
customers purchase Fund shares.
Johnston, Lemon & Co. Incorporated, a wholly owned subsidiary of The
Johnston-Lemon Group, Incorporated, earned $134,619 on its retail sales of
shares of the Fund and Distribution Plan fee and received no brokerage
commissions resulting from purchases and sales of securities for the
investment account of the Fund. Sales charges are not an expense of the
Fund and, hence, are not reflected in the accompanying Statement of
Operations.
All Officers and two Directors of the Fund are "affiliated persons" (as
defined in the Act) of the Investment Adviser or Business Manager and
received no remuneration from the Fund in such capacities.
Note 3 _ Investment Transactions
The Fund made purchases of investment securities, other than short-term
securities, of $9,081,101 and sales of $7,482,802 during the year ended
December 31, 1998. Net unrealized gains at December 31, 1998 included
unrealized gains of $55,043,881 and unrealized losses of $36,138.
Note 4 _ Capital Stock Transactions
Transactions in capital stock were:
For the Year Ended
December 31,
1998 1997
In shares:
Shares sold 238,097 93,946
Shares issued in re-
investment of
dividends 92,251 95,256
Total shares issued 330,348 189,202
Shares redeemed (169,144) (266,908)
Net increase
(decrease) 161,204 (77,706)
In dollars:
Shares sold $6,750,474 $ 2,328,468
Shares issued in re-
investment of
dividends 2,777,562 2,432,163
Total shares issued 9,528,036 4,760,631
Shares redeemed (4,765,393) (6,170,219)
Net increase
(decrease) $4,762,643 $(1,409,588)
Report of Independent Accountant
The Board of Directors and Shareholders
The Growth Fund of Washington, Inc. / Washington, DC
We have audited the accompanying statement of assets and liabilities and
investment portfolio of The Growth Fund of Washington, Inc. as of December
31, 1998, the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits. We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities
owned as of December 31, 1998, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion. In our opinion, the financial statements
and financial highlights referred to above present fairly, in all material
respects, the financial position of The Growth Fund of Washington, Inc. as
of December 31, 1998, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended in conformity with generally accepted accounting
principles.
JOHNSON LAMBERT & CO.
(signature)
Bethesda, MD
January 21, 1999
Tax Information (unaudited)
We are required to advise you within 60 days of the Fund's fiscal year-end
regarding the federal tax status of distributions received by shareholders
during such fiscal year. The distributions made during the fiscal year by
the Fund were earned from the following sources:
<TABLE>
Dividends and Distributions Per Share
From Net From Net Realized From Net Realized
To Shareholders of Record Payment Date Investment Income Short-Term Gains Long-Term Gains
<S> <C> <C> <C> <C>
June 19, 1998 June 22, 1998 $.03 _ _
December 18, 1998 December 21, 1998 $.04 $.185 $1.00
</TABLE>
The Fund also designates as a capital gain distribution a portion of
earnings and profits paid to shareholders in redemption of their shares.
Corporate shareholders may exclude up to 70% of qualifying dividends
received during the year. For purposes of computing this exclusion, 100%
of the dividends paid by the Fund from net investment income represent
qualifying dividends.
Dividends and distributions received by retirement plans such as IRAs,
Keogh-type plans, and 403(b) plans need not be reported as taxable income.
However, many retirement plan trusts may need this information for their
annual information reporting.
Shareholders should consult their tax adviser.
(logo)
THE GROWTH FUND OF WASHINGTON
Board of Directors
James H. Lemon, Jr.
Chairman
Chairman of the Board and
Chief Executive Officer,
The Johnston-Lemon Group, Incorporated
Harry J. Lister
President
President, Washington
Management Corporation
Cyrus A. Ansary
President, Investment
Services International
Company
T. Eugene Smith
President,
T. Eugene Smith Inc.
Leonard P. Steuart, II
Vice President,
Steuart Investment Co.
Margita E. White
President, Association
for Maximum Service
Television Inc.
Officers
Stephen Hartwell
Executive Vice President
Howard L. Kitzmiller
Senior Vice President,
Secretary and Treasurer
Prabha S. Carpenter
Senior Vice President
Lois A. Erhard
Vice President
Ralph S. Richard
Vice President
Michael W. Stockton
Assistant Vice President,
Assistant Secretary and Assistant Treasurer
J. Lanier Frank
Assistant Vice President
Preparing for the Year 2000 _ The Fund's key service providers _
Washington Investment Advisers, Washington Management Corporation, Chase
Manhattan Bank, the custodian, and DST Systems, the transfer agent are
updating their computer systems to process date-related information
properly following the turn of the century. Modifications of significant
internal systems have been completed and testing with business partners,
vendors and other service providers is well under way. We will continue to
keep you up-to-date in our regular publications.
(logo)
Chase Vista Funds
Chase Vista Service Center
P.O. Box 419392
Kansas City, MO 64141-6392
1-800-34-VISTA
Office of the Fund and
Business Manager
Washington Management Corporation
1101 Vermont Avenue, NW
Washington, DC 20005
(202) 842-5665
Investment Adviser
Washington Investment Advisers, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
Custodian
The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, NY 10081
Transfer Agent
DST Systems, Inc.
127 West 10th Street
Kansas City, MO 64105
800-34-VISTA
Distributor
Vista Fund Distributors, Inc.
125 West 55th Street
New York, NY 10019
Counsel
Dechert Price & Rhoads
1775 Eye Street, NW
Washington, DC 20006
Independent Accountants
Johnson Lambert & Co.
7500 Old Georgetown Road
Bethesda, MD 20814
This report is for the information of the shareholders of The Growth Fund
of Washington, Inc., but it may be used as sales literature when preceded
or accompanied by the current prospectus, which gives details about
charges, expenses, investment objectives and operating policies of the
Fund. If used as sales material after March 31, 1999, this report must also
be accompanied by the Fund's most recent calendar quarter statistical
update.
Vista Fund Distributors, Inc., is unaffiliated with The Chase Manhattan
Bank.
GFW-2-1298
The Growth Fund of Washington, Inc.
1101 Vermont Avenue, NW
Washington, DC 20005
Bulk Rate
U.S. Postage
PAID
Rockville, MD
Permit No. 3539
