<PAGE>
Chase Funds(SM). Invest With Power.
Semi-Annual Report for:
Chase Income Fund
Chase Intermediate Term Bond Fund
Chase Money Market Fund
Chase Short-Intermediate Term
U.S. Government Securities Fund
Chase U.S. Government Securities Fund
June 30, 1998
[CHASE FUNDS LOGO]
Chase Funds(SM)
<PAGE>
Table of Contents
Chairman's Letter 3
Chase Funds Risk/Rewards 4
Chase Funds Shareholder Services 5
Fund Commentary and Portfolio of Investments
Chase Income Fund 6-11
Chase Intermediate Term Bond Fund 12-18
Chase Money Market Fund 20-26
Chase Short-Intermediate Term
U.S. Government Securities Fund 28-33
Chase U.S. Government Securities Fund 34-38
Statement of Assets and Liabilities 39
Statement of Operations 40
Statement of Changes in Net Assets 41
Notes to Financial Statements 42-46
Financial Highlights 47-51
<PAGE>
Chase Fixed Income Funds
Chairman's Letter
August 10, 1998
Dear Fellow Shareholders
We are pleased to present this semi-annual report for the six month period
ended June 30, 1998.
Bonds Rallied on Fears of a Slowing Global Economy
The bond market recorded solid returns, fueled by low inflation and falling
interest rates.
Early in 1998, bonds benefited from several reports suggesting inflation was
under control. In February, several stronger-than-expected economic reports put
pressure on bond prices. Interest rates stayed in a relatively narrow range
midway through the period due partly to two opposing forces: concerns of a
slowing global economy brought on by the Asian financial crisis, and fears of
higher U.S. inflation ignited by the strengthening domestic economy.
Several factors caused volatility in the bond market in May, most notably a
fluctuating dollar and concerns over a worsening trade balance. In June,
interest rates dropped and bond prices rallied as investors once again grew
concerned over the prospects of slowing global economic growth due to the
economic turmoil in Asia. Throughout the period, the Federal Reserve Board
maintained its neutral monetary policy, as it has for more than one year. The
Federal Reserve Board has not raised short-term interest rates since March, 1997
and has not lowered them since December, 1996.
Everyone at Chase Funds wishes to remind you of the important role fixed
income investments play in a diversified portfolio. With that in mind, we
encourage you to maintain your investing discipline in the months and years
ahead.
Sincerely,
/s/ Sarah E. Jones
3
<PAGE>
Chase Funds
Risks/Rewards
HIGHEST RISK / RETURN
| Small Company Funds
| Diversified International Stock Funds
| Growth Funds
| Growth & Income Funds
| Equity Income Funds
| Balanced Funds
| Long-Term Bond Funds
| Intermediate-Term Bond Funds
| Short-Term Bond Funds
| Money Market Funds
LOWEST RISK / RETURN
CONSIDER YOUR INVESTMENT
RISK
& YOUR OVERALL RETURN
4
<PAGE>
Chase Funds
Shareholder Services
Telephone Exchange Privilege
Investors wishing to make a change within their Chase Funds accounts may do so
quickly and easily via telephone. This service allows you to respond to changes
in your goals and needs immediately without the burdensome paperwork and lengthy
delays often associated with selling one investment then purchasing another. The
sale of shares from one Chase Fund and purchase of shares in another is
simultaneous with Telephone Exchange.
Automatic Reinvestment
Dividends and capital gains earned in your Chase Funds account can either be
paid to you on a regular basis or automatically reinvested into your account
to purchase additional shares of the same fund. This service is particularly
valuable to growth-oriented investors who do not require current income from
their invested principal. The reinvested dividends compound over time,
enhancing returns and generating additional long-term growth potential.
Systematic Investing*
After opening a Chase Funds account with a minimum $1,000 initial investment,
you can automatically make regular investments of $100 or more through
automatic, periodic deductions from your bank checking or savings account.
Shareholders using this service benefit not only by accumulating investment
assets but also through the process of "dollar cost averaging".
Dollar cost averaging is an investment strategy that has shown that investing
the same amount of money on a regular basis in a fluctuating value investment
over time results in a lower actual price paid per share than the average
price per share over time. That is because when the share price is lower, more
shares are purchased and when it is higher, fewer are purchased. Dollar cost
averaging is highly recommended by investment experts as a prudent and highly
effective approach to wealth accumulation.
* Systematic investing does not assure a profit and does not protect against
loss in declining financial markets. An investor should be prepared to
continue the program of investing at regular intervals, even during economic
down turns.
Systematic Withdrawal
For investors who require an income stream from their Chase Fund(s) investment
account(s), regularly scheduled withdrawals of a specified value of $50 or
more can be sent to them by check on a monthly, quarterly or semi-annual
basis.
Check Writing Privilege
The Chase Money Market Fund offers investors the option of accessing account
assets quickly and easily simply by writing a check to redeem shares.
Chase Funds Website
Shareholders of the Chase Funds have unlimited access to their accounts and
first class Chase Funds customer service via the internet at:
http://www.chasefunds.com
Please note, these services are available to all shareholders investing
directly into any Chase Fund. If you purchase these funds through a financial
intermediary, please check with your service provider to determine
availability of these services.
5
<PAGE>
Chase Income Fund
as of June 30, 1998
How The Fund Performed
Chase Income Fund had a total return of 4.37% for the six-month period ended
June 30, 1998.
How The Fund Was Managed
Declining interest rates and generally benign inflation conditions helped the
Fund's investment results during the period.
The Fund's overweighting in long-term Treasuries helped performance as
interest rates declined and bond prices increased. Over the last six months,
the yield on the 30-year Treasury bond declined from 5.92% to 5.63%.
During the period, the Fund was also underweighted in lower-rated, less
creditworthy corporates. This strategy helped protect shareholder capital when
the Asian economic crisis became a serious concern among investors in May.
The Fund's decision to be underweighted in mortgages proved beneficial to
shareholders, as well. As interest rates fell, prepayment risk increased and
prices came under pressure.
Where The Fund May Be Headed
With inflation under control and interest rates low, the outlook for bonds
remains positive. Given this backdrop, we expect to maintain our overweighting
in long-term Treasuries and our underweighting in mortgages. Additionally, with
Asia still a threat to the global economy, we expect to maintain our
underweighting in lower-rated, less creditworthy corporates.
Looking ahead, we expect rates to stay in a narrow range during the second
half of the year. Given this backdrop, we remain optimistic that investors
will continue to find intermediate- and longer-term bonds attractive in the
months ahead.
6
<PAGE>
Chase Income Fund
as of June 30, 1998
Fund Facts
Objective Current income
Primary Investments Bonds, notes and debentures issued by
corporations, the U.S. government and its
agencies
Suggested investment time frame Long-term
Market benchmark Lehman Government/
Corporate Bond Index
Lipper Funds Universe Corporate Debt A Rated
Funds Index
Inception date 3/29/88
Newspaper symbol Income
Dividend Frequency Daily
Net Assets $54.4 million
Average Maturity 11.7 years
Average Duration 6.8 years
Average Quality AAA
Average Maturity/Quality
----------------
| |////| | High
| |////| |
----------------
| | | | Med
| | | |
---------------
| | | | Low
| | | |
----------------
Short Int. Long
7
<PAGE>
Chase Income Fund
as of June 30, 1998
10-Year Performance*
This chart shows what the long-term growth would have been for a hypothetical
investment in the Chase Income Fund compared to its key benchmarks. This is
where you can see the Fund's long-term trend. This chart is for illustrative
purposes only.
Lipper
Balanced
Debt A Lehman
Chase Rated Govt./Corp.
Income Funds Bond
Date Fund Index Index
---- ------- ------- -------
6/30/1988 $ 10000 $ 10000 $ 10000
10000 9941 9942
10000 9880.36 9875.39
10000 10139.2 10098.6
10000 10101.7 10041
10193.3 10134 10067.1
10335.3 10364.1 10287.6
10406.2 10529.9 10469.7
10344.1 10459.4 10351.4
10395.8 10504.3 10386.6
10489.6 10643 10524.7
10461.2 10571.7 10444.7
10496.4 10611.9 10500.1
10604.7 10803.9 10722.7
10927.5 11061.1 10986.5
11161.7 11392.9 11344.6
11321.4 11587.7 11580.6
11073.5 11442.9 11401.1
11131.9 11484.1 11451.2
11354.4 11720.6 11741
11470.1 11800.3 11846.6
11474 11819.2 11864.4
11331.6 11627.7 11701.9
11316.2 11638.2 11727.6
11302.1 11642.9 11728.8
11232.5 11488 11620.9
11489.3 11830.4 11957.9
11652 12032.6 12151.6
11764 12184.3 12302.3
11610.3 11939.4 12123.9
11686.3 11993.1 12224.5
11778.3 12131 12387.1
12021.6 12410 12657.1
12231.5 12604.9 12848.3
12309.5 12737.2 12992.2
12321.1 12897.7 13103.9
12395.1 13006 13194.3
12482.5 13168.6 13346
12508 13234.5 13408.8
12490.9 13208 13394
12597 13391.6 13562.8
12900.6 13713 13874.7
13201.1 14021.5 14164.7
13298.3 14150.5 14290.8
13361.2 14279.3 14433.7
13911.4 14807.6 14920.1
13604.3 14578.1 14699.3
13637.3 14653.9 14777.2
13550.7 14582.1 14695.9
13631.2 14647.7 14784.1
13865.9 14956.8 15070.9
14065.3 15184.1 15292.5
14445.8 15606.2 15683.9
14540.9 15735.8 15823.5
14696.7 15929.3 16038.7
14402.5 15650.6 15793.3
14414.6 15652.1 15779.1
14625.2 15921.4 16050.5
14950.1 16262.1 16400.4
15303.7 16644.2 16741.5
15352 16710.8 16798.5
15422.3 16826.1 16927.8
15409 16836.2 16919.4
15715.5 17240.3 17303.4
15821.7 17385.1 17414.2
16191.8 17814.5 17814.7
16207.4 17866.2 17877
16272.5 17966.2 17950.3
16074.1 17716.5 17747.5
16114.8 17812.2 17825.6
16312.3 18100.7 18093
15861.4 17673.5 17698.5
15569.7 17164.5 17264.9
15365 16962 17121.6
15347.2 16902.6 17090.8
15267.9 16845.2 17051.5
15549.8 17165.2 17392.5
15528.5 17170.4 17399.5
15336.2 16885.3 17136.8
15304.2 16827.9 17117.9
15290.6 16804.4 17087.1
15394.1 16937.1 17199.9
15666 17238.6 17530.1
15999.4 17655.8 17936.8
16093.3 17784.7 18057
16302.1 18039 18308
16810.4 18847.1 19075.1
16962 18981 19227.7
16849 18887.9 19152.7
17084.5 19150.5 19397.8
17293.1 19357.3 19595.7
17656.9 19649.6 19883.8
17944.8 19971.8 20211.8
18223.2 20293.4 20509
18291 20388.8 20636.1
17874.3 19928 20198.6
17724.5 19766.6 20029
17652.9 19614.4 19890.8
17618.2 19571.2 19857
17847.2 19815.9 20123
17876 19857.5 20169.3
17787.1 19801.9 20120.9
18076.4 20178.1 20479.1
18460.3 20672.5 20956.2
18790.7 21094.2 21341.8
18570.5 20855.8 21104.9
18563.5 20887.1 21130
18579 20960.2 21174.6
18363.2 20671 20922.9
18601 20962.4 21228.9
18750.1 21157.4 21427
19000.2 21443 21684.2
19560.5 22133.5 22347.6
19350.4 21852.4 22096.7
19650.6 22226 22444.1
19930.7 22512.8 22803.7
20010.8 22618.6 22923.7
20190.9 22858.3 23164.3
20475.6 23130.3 23490.8
20442.6 23091 23443.1
20497.5 23176.5 23515.4
20579.3 23283.1 23633.5
20826.9 23534.5 23887.6
6/30/1998 21072.5 23734.6 24131.2
Average Annual Total Returns
This table shows the average annual total returns. This is where you can see
the Fund's short-term performance, which, as with the stock markets, tends to
be more volatile than the long-term trend.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Premier Shares 10.91% 7.49% 6.04% 7.52%
* Source: Lipper Analytical Services. Past performance is no guarantee of future
results. Investment returns and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost.
This chart represents the comparative performance for $10,000 invested in
Premier Shares of Chase Income Fund, the Lehman Government/Corporate Bond
Index and the Lipper Corporate Debt A Rated Funds Index from June 30, 1988 to
June 30, 1998. The performance of the Fund assumes the reinvestment of all
dividends and capital gains and does not include a sales charge. The
performance of the indices does not include a sales charge and has been
adjusted to reflect the reinvestment of all dividends and capital gains on the
securities included in the benchmark. Premier Shares carry a $100,000 minimum
initial investment and carry no sales charge.
Chase Income Fund is the successor to the AVESTA Trust Income Fund. Effective
12/31/97, the AVESTA Trust was converted from a Texas Trust to Mutual Fund
Investment ("MFIT"), a Massachusetts business trust. As part of the
conversion, the Fund transferred all of its assets to Chase Income Fund, a new
investment portfolio of MFIT.
Chase Income Fund, unlike the AVESTA Income Fund, is subject to certain
diversification, distribution and other requirements imposed under the
Internal Revenue Code, which may impact performance.
The Lipper Corporate Debt A Rated Funds Index represents performance of the
largest 30 A rated corporate debt funds. Lipper is an independent mutual fund
performance monitor whose results are based on total return and do not reflect
a sales charge. An individual cannot invest directly in an index.
The Lehman Govt/Corp. Bond Index includes the Government and Corporate Bond
Indices, including U.S. Government Treasury and agency securities, corporate
and yankee bonds. The index is unmanaged and reflects the reinvestment of
dividends. An individual cannot invest directly in an index.
8
<PAGE>
Chase Income Fund
as of June 30, 1998
How Much Of The Fund Was Invested
[PIE CHART]
Investments 98.5%
Cash/Other 1.5%
What the Fund Was Invested In
Percentage to Total Portfolio Investments
[PIE CHART]
Corporate Notes & Bonds 35.7%
Asset Backed Securities 5.8%
Cash Equivalents & Short Term Paper 3.5%
Mortgage Backed Securities 8.7%
U.S. Treasury Securities 46.3%
9
<PAGE>
Chase Income Fund
Portfolio of Investments June 30, 1998 (unaudited)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments - 95.6%
- --------------------------------------------------------------------------------
U.S. Treasury Securities -- 45.8%
U.S. Treasury Notes & Bonds,
$3,800,000 5.500%, 01/31/03 $ 3,797,036
2,000,000 5.500%, 03/31/03 1,998,740
2,200,000 5.750%, 08/15/03 2,223,364
4,000,000 6.000%, 02/15/26 4,161,240
1,140,000 6.125%, 11/15/27 1,221,578
1,600,000 6.250%, 02/15/07 1,675,504
2,000,000 6.375%, 03/31/01 2,042,500
2,750,000 6.750%, 08/15/26 3,148,310
3,500,000 8.125%, 05/15/21 4,557,105
------------
Total U.S. Treasury Securities
(Cost $23,929,843) 24,825,377
------------
Corporate Notes & Bonds -- 35.4%
Automotive -- 4.5%
2,400,000 Caterpillar Financial Services, 6.950%, 11/01/00 2,456,784
------------
Banking -- 4.6%
2,400,000 Associates Corp. of North America, 7.520%,
03/29/00 2,469,456
------------
Consumer Products -- 3.3%
1,725,000 Procter & Gamble Co., 6.450%, 01/15/26 1,769,384
------------
Financial Services -- 5.5%
2,000,000 Bankamerica Corp., 6.200%, 02/15/06 1,988,200
1,000,000 Ford Motor Credit Co., 6.250%, 12/08/05 1,000,280
------------
2,988,480
------------
Food/Beverage -- 8.6%
2,500,000 Anheuser-Busch Companies, Inc., 6.750%, 08/01/03 2,585,850
2,000,000 McDonald's Corp., 7.050%, 11/15/25 2,068,400
------------
4,654,250
------------
Health Care / Health Care Services -- 4.4%
2,400,000 Abbott Laboratories, 5.600%, 10/01/03 2,369,040
------------
Retailing -- 4.5%
2,400,000 Wal-Mart Stores, 6.750%, 05/15/02 2,463,816
------------
Total Corporate Notes & Bonds
(Cost $18,315,429) 19,171,210
------------
See notes to financial statements.
10
<PAGE>
Chase Income Fund
Portfolio of Investments June 30, 1998 (unaudited) (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments - (continued)
- --------------------------------------------------------------------------------
Mortgage-Backed Pass Through Securities -- 8.7%
$2,257,516 Federal National Mortgage Association,
Pool 313166, 6.500%,09/01/26 $ 2,253,272
2,436,790 Government Mortgage Association Corp.,
Pool 416156, 6.500%, 02/15/26 2,434,499
------------
Total Mortgage-Backed Pass Through Securities
(Cost $4,556,385) 4,687,771
------------
Asset Backed Securities -- 5.7%
660,854 Ford Credit Grantor Trust, Ser. 1995-B,
Class A, 5.900%, 10/15/00 661,680
2,410,000 PNC Student Loan Trust I, Ser. 1997-2,
Class A2, 6.138%, 01/25/00 2,425,906
------------
Total Asset Backed Securities
(Cost $3,070,815) 3,087,586
------------
Total Long-Term Investments
(Cost $49,872,472) 51,771,944
- --------------------------------------------------------------------------------
Shares Issuer Value
- --------------------------------------------------------------------------------
Short-Term Investments - 3.5%
- --------------------------------------------------------------------------------
Money Market Fund -- 0.6%
331,200 Fidelity Colchester Street Trust Government Fund
(Cost $331,200) 331,200
------------
Principal
Amount
(USD)
Repurchase Agreement -- 2.9%
$1,557,000 Merrill Lynch & Co., Inc., 5.50% due 07/01/98,
(Dated 06/30/98, Proceeds $1,557,237,
Secured by U.S. Treasury Note $1,532,947,
7.75% due 11/30/99; Market $1,587,476)
(Cost $1,557,000) 1,557,000
------------
Total Short-Term Investments
(Cost $1,888,200) 1,888,200
- --------------------------------------------------------------------------------
Total Investments -- 99.1%
(Cost $51,760,672) $53,660,144
- --------------------------------------------------------------------------------
See notes to financial statements.
11
<PAGE>
Chase Intermediate Term
Bond Fund
as of June 30, 1998
How the Fund Performed
Chase Intermediate Term Bond Fund had a total return of 3.53% for the
six-month period ended June 30, 1998.
How the Fund Was Managed
Early in 1998, the Fund enjoyed good performance from high-quality corporate
securities, as concerns over the Asian financial crisis began to wane and
investors became less concerned about its potential impact on the credit
ratings of corporations.
In May, the Fund benefited from the sharp decline in long-term interest rates
and the modest dip in intermediate-term rates. This phenomenon created a
relatively narrow difference between the yields on long- and intermediate-term
securities, making the latter particularly attractive to investors.
During May, the Fund also benefited by maintaining a slightly
higher-than-average duration as yields fell modestly and by keeping an
underweighting in lower-rated, less creditworthy corporates as concerns over
Asia reignited.
Where the Fund May Be Headed
Looking ahead, we expect interest rates to stay in a relatively narrow range.
Of course, further problems in Asia could cause interest rates to trend
slightly lower. Given this backdrop, we remain optimistic that investors will
continue to find intermediate-term bonds attractive in the months ahead.
12
<PAGE>
Chase Intermediate Term
Bond Fund
as of June 30, 1998
Fund Facts
Objective Current income
Primary Investments Intermediate-term, investment-
grade bonds, notes and debentures
issued by corporations, the U.S.
government and its agencies
Suggested investment time frame Mid- to long-term
Market benchmark Lehman Aggregate Bond Index
Lipper Funds Universe Intermediate Investment Grade Debt Funds Index
Inception date 10/31/94
Newspaper symbol Not Listed
Dividend Frequency Daily
Net Assets $24.5 million
Average Maturity 7.9 years
Average Duration 1.3 years
Average Quality AAA
Average Maturity/Quality
----------------
| |////| | High
| |////| |
----------------
| | | | Med
| | | |
---------------
| | | | Low
| | | |
----------------
Short Int. Long
13
<PAGE>
Chase Intermediate Term
Bond Fund
as of June 30, 1998
Life of Fund Performance*
This chart shows what the long-term growth would have been of a hypothetical
investment in the Chase Intermediate Term Bond Fund compared to its key
benchmarks. This is where you can see the Fund's long-term trend. This chart
is for illustrative purposes only.
Lipper
Intermediate
Chase Investment
Intermediate Grade Lehman
Term Bond Debt Funds Aggregate
Date Bond Index Bond Index
- ---------- ----------- ---------- -----------
10/31/1994 $ 10000 $ 10000 $ 10000
9973.58 9988 9991
9943.09 9961.03 9969.02
9992.03 10009.8 10037.8
10152.6 10179 10236.5
10389.4 10394.8 10480.2
10440.8 10463.4 10544.1
10576.4 10600.5 10691.7
10960.5 10972.6 11105.5
11065.9 11041.7 11186.6
11016.4 11017.4 11162
11118.9 11146.3 11297
11214.6 11252.2 11406.6
11368.3 11399.6 11554.9
11529.4 11569.4 11728.2
11669.7 11724.5 11892.4
11729.6 11801.9 11970.9
11513.9 11596.5 11762.6
11418.2 11516.5 11680.3
11349.8 11449.7 11614.9
11314 11432.5 11591.6
11443.8 11565.1 11747
11467.6 11597.5 11778.7
11434.6 11585.9 11758.6
11598.8 11779.4 11963.2
11829 12028 12228.8
12023.1 12236 12437.9
11887 12127.1 12322.3
11894.4 12164.7 12360
11910.2 12195.1 12390.8
11805.2 12064.6 12253.4
11919 12229.9 12436.9
12000 12338.8 12554.4
12130 12484.4 12703.5
12400 12815.2 13046
12310 12698.6 12934.7
12460 12881.5 13125.5
12610 13036 13315.9
12640 13073.8 13377.2
12750 13192.8 13511.9
12910.5 13368.3 13685.4
12894.9 13349.6 13675.1
12934 13399 13722.1
12981.6 13461.9 13793.7
13091.4 13583.1 13924.5
6/30/1998 13200.1 13687.7 14042.9
Average Annual Total Returns
This table shows the average annual total returns. This is where you can see
the Fund's short-term performance, which, as with the stock markets, tends to
be more volatile than the long-term trend.
Since
Inception
1 Year 3 Years 5 Years (10/31/94)
------ ------- ------- ----------
Premier Shares 8.82% 6.05% N/A 7.70%
* Source: Lipper Analytical Services Past performance is no guarantee of
future results. Investment returns and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the
original cost.
This chart represents the comparative performance for $10,000 invested in
Premier Shares of Chase Intermediate Term Bond Fund, the Lehman Aggregate Bond
Index and the Lipper Intermediate Investment Grade Debt Funds Index from
October 31, 1994 to June 30, 1998. The performance of the Fund assumes the
reinvestment of all dividends and capital gains and does not include a sales
charge. The performance of the indices does not include a sales charge and has
been adjusted to reflect the reinvestment of all dividends and capital gains
on the securities included in the benchmark. Premier Shares carry a $100,000
minimum initial investment and carry no sales charge.
Chase Intermediate Term Bond Fund is the successor to the AVESTA Trust
Intermediate Term Bond Fund. Effective 12/31/97, the AVESTA Trust was
converted from a Texas Trust to Mutual Fund Investment ("MFIT"), a
Massachusetts business trust. As part of the conversion, the Fund transferred
all of its assets to Chase Intermediate Term Bond Fund, a new investment
portfolio of MFIT.
Chase Intermediate Term Bond Fund, unlike the AVESTA Trust Intermediate Term
Bond Fund, is subject to certain diversification, distribution and other
requirements imposed under the Internal Revenue Code, which may impact
performance.
The Lipper Intermediate Investment Grade Debt Funds Index represents
performance of the largest 30 intermedite investment grade debt funds. Each of
these funds invests the majority of its assets in investment grade debt issues
(rated in top four grades) with dollar-weighted average maturities of five to
10 years. Lipper is an independent mutual fund performance monitor whose
results are based on total return and do not reflect a sales charge. An
individual cannot invest directly in an index.
The Lehman Aggregate Bond Index is composed of the Lehman Government/Corporate
Bond Index and the Mortgage-Backed Securities Index and includes Treasury
issues, agency issues, corporate bond issues and mortgage-backed securities.
The index is unmanaged and reflects the reinvestment of dividends. An
individual cannot invest directly in an index.
14
<PAGE>
Chase Intermediate Term
Bond Fund
as of June 30, 1998
How Much of the Fund Was Invested
[PIE GRAPH]
Investments 98.5%
Cash/Other 1.5%
What the Fund Was Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
U.S. Treasury Securities 46.7%
Corporate Notes & Bonds 27.5%
Mortgage Backed Securities 16.3%
Cash Equivalents & Short Term Paper 4.4%
U.S. Government Obligations 2.6%
Other 2.5%
15
<PAGE>
Cash Intermediate Term Bond Fund
Portfolio of Investments June 30, 1998 (unaudited)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- 94.9%
- --------------------------------------------------------------------------------
U.S. Treasury Securities -- 46.3%
U.S. Treasury Notes & Bonds,
$2,700,000 5.500%, 04/15/00 $ 2,699,163
1,075,000 5.750%, 11/15/00 1,080,375
1,100,000 5.875%, 08/31/99 1,104,301
2,845,000 6.250%, 08/15/23 3,045,913
190,000 6.375%, 03/31/01 194,038
3,070,000 6.375%, 08/15/02 3,164,003
-----------
Total U.S. Treasury Securities
(Cost $11,155,448) 11,287,793
-----------
U.S. Government Agencies -- 2.6%
Federal Home Loan Mortgage Corp.,
100,000 6.050%, 06/28/00 100,781
500,000 6.995%, 04/02/07 538,670
-----------
Total U.S. Government Agencies
(Cost $596,832) 639,451
-----------
Corporate Notes & Bonds -- 25.5%
Automotive -- 2.0%
500,000 TRW Inc., 6.050%, 01/15/05 497,525
-----------
Banking -- 3.8%
150,000 Bankamerica Corp., 6.850%, 03/01/03 153,905
200,000 First Union Corp., 7.000%, 03/15/06 209,718
350,000 NBD Bancorp, 7.125%, 05/15/07 371,182
200,000 Norwest Corp., 6.200%, 12/01/05 201,230
-----------
936,035
-----------
Financial Services -- 14.3%
150,000 Associates Corp. of North America, 7.700%,
03/01/02 158,904
450,000 Chrysler Financial Corp., 6.950%, 03/25/02 463,469
200,000 Chubb Capital Corp., 6.875%, 02/01/03 206,576
Commercial Credit Corp.,
300,000 5.900%, 09/01/03 298,038
150,000 6.125%, 12/01/05 148,941
400,000 Ford Motor Credit Co., 6.250%, 12/08/05 400,112
350,000 General Motors Acceptance Corp., 6.625%,
10/15/05 358,064
250,000 Household Finance Co., 6.700%, 01/06/00 252,880
500,000 Morgan Stanley Group, Inc., 8.100%, 06/24/02 534,490
200,000 Pacific Bell, SBC Communications Inc.,
6.875%, 08/15/06 210,118
400,000 Salomon Smith Barney Holdings, Inc.,
7.000%, 03/15/04 415,500
-----------
3,447,092
-----------
See notes to financial statements.
16
<PAGE>
Chase Intermediate Term Bond Fund
Portfolio of Investments June 30, 1998 (unaudited) (continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- (continued)
- --------------------------------------------------------------------------------
Leasing -- 3.1%
$ 600,000 International Lease Finance Corp 5.950%,
06/01/01 $ 598,830
150,000 US Leasing Capital Corp., 5.950%, 10/15/03 148,799
-----------
747,629
-----------
Paper / Forest Products -- 2.3%
500,000 Weyerhaeuser Company, 7.950%, 03/15/25 568,605
-----------
Total Corporate Notes & Bonds
(Cost $5,998,828) 6,196,886
-----------
Corporate Notes & Bonds FRN -- 1.9%
Banking -- 1.9%
450,000 Nationsbank Corp., 7.000%, 05/15/03
(Cost $445,798) 466,403
-----------
Foreign Government Agency Securities -- 2.1%
500,000 Hydro-Quebec, Ser. B, 6.860%, 04/01/05
(Cost $515,465) 520,960
-----------
Mortgage Backed Pass Through Securities -- 16.2%
Federal National Mortgage Association,
170,115 Pool 124734, 6.500%, 03/01/00 170,457
491,618 Pool 398212, 6.500%, 02/01/13 494,381
638,158 Pool 250772, 7.000%, 12/01/03 646,046
Government Mortgage Association Corp.,
492,409 Pool 462580, 6.500%, 02/15/28 491,330
493,420 Pool 436259, 6.500%, 03/15/28 492,339
302,667 Pool 476305, 6.500%, 05/15/28 302,004
300,000 Pool 478172, 6.500%, 06/15/28 299,343
1,023,528 Pool 448704, 7.500%, 10/15/27 1,051,992
-----------
Total Mortgage Backed Securities
(Cost $3,920,497) 3,947,892
-----------
Asset Backed Securities -- 0.3%
54,070 Ford Credit Grantor Trust,
Ser. 1995-B, Class A, 5.900%, 10/15/00 54,137
18,686 General Motors Acceptance Corp.
Ser. 1995-A, 7.150%, 03/15/00 18,692
-----------
Total Asset Backed Securities
(Cost $72,667) 72,829
-----------
Total Long-Term Investments
(Cost $22,705,535) 23,132,214
-----------
See notes to financial statements.
17
<PAGE>
Chase Intermediate Term Bond Fund
Portfolio of Investments June 30, 1998 (unaudited) (continued)
Shares Issuer Value
- --------------------------------------------------------------------------------
Short-Term Investments -- 4.4%
- --------------------------------------------------------------------------------
Money Market Fund -- 2.1%
515,300 Fidelity Colchester Street Trust
Government Fund
(Cost $515,300) $ 515,300
-----------
Principal
Amount
(USD)
Repurchase Agreement -- 2.2%
$ 544,000 Merrill Lynch & Co., Inc., 5.50% due
07/01/98, (Dated 06/30/98, Proceeds
$544,083, Secured by U.S. Treasury Note
$535,596, 7.75% due 11/30/99; Market
$554,648)
(Cost $544,000) 544,000
-----------
Total Short-Term Investments
(Cost $1,059,300) 1,059,300
- -------------------------------------------------------------------------------
Total Investments -- 99.3%
(Cost $23,764,835) $24,191,514
- -------------------------------------------------------------------------------
See notes to financial statements.
18
<PAGE>
[This Page Intentionally Left Blank]
19
<PAGE>
Chase Money Market Fund
as of June 30, 1998
How the Fund Performed
Chase Money Market Fund had a total return of 2.59% for the six-month period
ended June 30, 1998.
How the Fund Was Managed
During the period, the Chase Money Market Fund maintained a slightly higher
weighted average maturity than that of its benchmark. This strategy helped
enhance the Fund's yield as interest rates stayed in a narrow trading range,
thanks partly to the Federal Reserve Board's decision to maintain a neutral
monetary policy throughout the period. As for sector allocation, the Fund held
approximately 25% of its assets in floating rate notes, with the remaining
assets diversified across various high-quality, short-term instruments.
Where the Fund May Be Headed
Looking ahead, we do not anticipate a dramatic change in rates along the short
end of the yield curve. In our opinion, any signs that the economy is
strengthening are likely to be countered by the threat of slowing global
economic growth due to the economic problems in Asia. Given this forecast, we
expect to maintain our current strategy.
20
<PAGE>
Chase Money Market Fund
as of June 30, 1998
Fund Facts
Objective Current income
Primary Investments Maximum current income
consistent with the preservation of
capital and maintenance of liquidity
Suggested investment time frame Short-term
Inception date 3/29/88
Newspaper symbol Not Listed
Dividend Frequency Daily
Net Assets $146.4 million
Average Maturity 66 days
21
<PAGE>
Chase Money Market Fund
as of June 30, 1998
Maturity Schedule
1-14 days 22%
15-30 days 17%
31-60 days 23%
61-90 days 11%
91+ days 27%
7-Day SEC Yield
Premier Shares 5.16%
Performance information represents past performance and is not intended to
indicate or predict future results. Yields will vary and you may experience
gains or losses when you sell your shares.
The Chase Money Market Fund is the successor to the AVESTA Trust Money Market
Fund. Effective December 31, 1997, the AVESTA Trust was converted from a Texas
Trust to Mutual Fund Investment ("MFIT"), a Massachusetts business trust. As
part of the conversion, the Fund transferred all of its assets to the Chase
Money Market Fund, a new investment portfolio of MFIT.
The Chase Money Market Fund unlike the AVESTA Money Market Fund, is subject to
certain diversification, distribution and other requirements imposed under the
Internal Revenue Code, which may impact performance.
Yield information is net of expenses and fees, and reflects reimbursement and
waiver of certain expenses and fees. An investment in a money market fund is
neither insured nor guaranteed by the U.S. government. Although the Fund
strives to maintain a stable net asset value of $1.00 per share, there can be
no assurance that this objective will be met.
22
<PAGE>
Chase Money Market Fund
as of June 30, 1998
How Much of the Fund Was Invested
[PIE CHART]
Investments 99.6%
Cash/Other 0.4%
What the Fund Was Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
Commerical Paper 61.3%
U.S. Government Obligations 2.7%
State & Municipal Obligations 1.0%
Corporate Notes & Bonds 24.8%
Cash Equivalents & Short Term Paper 10.2%
23
<PAGE>
Chase Money Market Fund
Portfolio of Investments June 30, 1998 (unaudited)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
State & Municipal Obligations -- 1.0%
$1,500,000 Wichita, Kansas, Series 195 Short Term Notes,
5.800%, 08/27/98 (Cost $1,500,160) $ 1,500,160
--------------
U.S. Government Obligations -- 2.7%
2,000,000 Federal Home Loan Mortgage Corp.,
5.835%, 12/17/98 1,999,481
2,000,000 Federal National Mortgage Association, MTN.,
5.940%, 08/14/98 2,000,258
--------------
Total U.S. Government Obligations
(Cost $3,999,739) 3,999,739
--------------
Corporate Notes & Bonds -- 14.5%
Banking -- 1.5%
1,740,000 Northwest Corp., 5.750%, 11/16/98 1,739,230
500,000 Swiss Bank Corp., 5.750%, 05/07/99 499,766
--------------
2,238,996
--------------
Financial Services -- 13.0%
Beta Finance Corp., Inc.,#
2,000,000 5.700%, 03/31/99 2,000,000
3,000,000 5.745%, 03/16/99 2,999,894
1,000,000 British Telecommunications Finance,
Yankee, (United Kingdom), 9.375%, 02/15/99 1,022,083
1,000,000 CC USA Inc.(Cenntauri Corp.)
(Cayman Islands),# 5.880%, 05/04/99 1,000,000
IBM Credit Corp.,
2,000,000 5.470%, 02/10/99 1,998,552
1,500,000 5.690%, 03/09/99 1,499,475
1,900,000 5.800%, 11/06/98 1,899,840
1,000,000 International Lease Finance Corp.,
6.270%, 02/10/99 1,002,112
2,000,000 John Deere Capital Corp., 6.000%, 02/01/99 2,000,617
1,500,000 Merrill Lynch & Co. Ser. B, 5.565%, 02/16/99 1,499,906
Sigma Finance Corp. (United Kingdom),#
1,000,000 5.700%, 03/02/99 1,000,000
1,000,000 5.720%, 03/30/99 1,000,000
--------------
18,922,479
--------------
Total Corporate Notes & Bonds
(Cost $21,161,475) 21,161,475
--------------
Commercial Paper -- 61.4%
Automotive -- 4.1%
Daimler-Benz North America Corp. (Germany),
3,000,000 5.460%, 10/21/98 2,949,040
3,000,000 5.490%, 09/25/98 2,960,655
--------------
5,909,695
--------------
See notes to financial statements.
24
<PAGE>
Chase Money Market Fund
Portfolio of Investments June 30, 1998 (unaudited)(continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Banking -- 8.5%
$1,500,000 Bankers Trust Co. of New York,
5.450%, 10/02/98 $ 1,478,881
6,000,000 BIL North America Inc., 5.570%, 07/10/98 5,991,645
5,000,000 Svenska Handelsbanken Inc. (Sweden),
5.510%, 09/10/98 4,945,665
--------------
12,416,191
--------------
Electronics / Electrical Equipment -- 4.1%
6,000,000 Lucent Technologies, Inc., 5.500%, 07/01/98 6,000,000
--------------
Financial Services -- 36.5%
5,000,000 CC USA Inc. (Cenntauri Corp.)
(Cayman Islands),# 5.530%, 08/28/98 4,955,453
6,000,000 Den Norske Bank STATS OIL, 5.500%, 08/25/98 5,949,583
6,500,000 Eureka Securitization Inc.,# 5.520%, 07/30/98 6,471,097
1,500,000 Kitty Hawk Funding Corp.,# 5.500%, 09/21/98 1,481,208
2,500,000 Mont Blanc Capital Corp.,# 5.530%, 07/27/98 2,490,015
National Rural Utilities Cooperative
Finance Corp.,
2,500,000 5.470%, 07/22/98 2,492,024
4,000,000 5.490%, 08/07/98 3,977,430
1,500,000 Thames Asset Global Securities,
# 5.510%,07/20/98 1,495,638
6,000,000 Trident Capital Finance Corp.,
# 5.480%,07/10/98 5,991,780
5,685,000 Triple A One Funding Corp.,# 5.530%, 07/10/98 5,677,140
6,000,000 Twin Towers Inc.,# 5.520%, 09/08/98 5,936,520
4,000,000 Windmill Funding Corp.,# 5.520%, 07/24/98 3,985,893
2,290,000 Wood Street Funding Corp.,# 5.530%, 07/24/98 2,281,909
--------------
53,185,690
--------------
Insurance -- 3.4%
5,000,000 ING America Insurance Holdings, Inc.,
5.480%, 07/30/98 4,977,928
--------------
Metals / Mining -- 4.8%
7,000,000 Rio Tinto America Inc., 5.380%, 08/07/98 6,961,294
--------------
Total Commercial Paper
(Cost $89,450,798) 89,450,798
--------------
Corporate Notes & Bonds FRN -- 10.4%
Banking -- 1.4%
2,000,000 American Express Centurion, 5.596%, 07/13/98 2,000,000
--------------
Computers / Computer Hardware -- 0.7%
1,000,000 International Business Machines, Corp.,
5.561%, 08/17/98 999,903
--------------
Financial Services -- 8.3%
3,000,000 Caterpillar Financial Services, Inc.,
5.584%, 07/13/98 3,000,000
6,000,000 Goldman Sachs Group,# 5.656%, 07/15/98 6,000,000
1,100,000 John Deere Capital Corp., 5.711%, 07/02/98 1,100,221
2,000,000 Merrill Lynch & Co. Ser. B, 5.606%,07/03/98 2,000,000
--------------
12,100,221
--------------
Total Corporate Notes & Bonds FRN
(Cost $15,100,124) 15,100,124
--------------
See notes to financial statements.
25
<PAGE>
Chase Money Market Fund
Portfolio of Investments June 30, 1998 (unaudited)(continued)
Principal
Amount
(USD) Issuer Value
- --------------------------------------------------------------------------------
Certificates of Deposit -- 4.1%
$ 6,000,000 DuPont EI De Nemours Co.,#
5.530%, 08/06/98
(Cost $5,966,820) $ 5,966,820
------------
Foreign Certificate of Deposit -- 0.7%
1,000,000 Svenska Handelsbanken Inc. (Sweden),
5.790%,05/07/99
(Cost $999,594) 999,594
------------
Shares
Money Market Fund -- 1.1%
1,542,000 Fidelity Colchester Street Trust Government
Fund
(Cost $ 1,542,000) 1,542,000
------------
Principal
Amount
(USD)
Repurchase Agreements -- 4.3%
$ 5,000,000 Goldman Sachs & Co. 5.625%, due 07/01/98,
(Dated 06/30/98, Proceeds $5,000,781, Secured
by FHA ARM Pool 4210270, $5,211,780, 6.17%
due 09/01/24, Market $5,219,924) 5,000,000
1,330,000 Lehman Brothers Inc. 5.70%, due 07/01/98,
(Dated 06/30/98, Proceeds $1,330,211, Secured
by U.S. Treasury Note $1,374,198, 6.50%
due 04/30/99; Market $1,399,740) 1,330,000
------------
Total Repurchase Agreements
(Cost $6,330,000) 6,330,000
- --------------------------------------------------------------------------------
Total Investments -- 100.2%
(Cost $146,050,710) $146,050,710
- --------------------------------------------------------------------------------
See notes to financial statements.
26
<PAGE>
[This Page Intentionally Left Blank]
27
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
as of June 30, 1998
How the Fund Performed
Chase Short-Intermediate Term U.S. Government Securities Fund had a total
return of 2.87% for the six-month period ended June 30, 1998.
How the Fund Was Managed
During the period, short-term interest rates were relatively stable. Yields on
six-month and three-year securities declined only 18 basis points, while
yields on longer-term securities, as measured by the benchmark 30-year
Treasury bond, dropped 31 basis points.
In the first three months of the period, the Fund's overweighted exposure to
mortgage-backed securities helped performance, due to their relatively
attractive yields and the stable interest rate environment. In the last three
months, the Fund enjoyed good performance from Treasuries as interest rates
trended lower.
Where the Fund May Be Headed
Looking ahead, we do not anticipate a dramatic change in interest rates along
the short/intermediate end of the curve. In our opinion, any signs that the
economy is strengthening are likely to be countered by the threat of slowing
global economic growth due to the economic problems in Asia. Given this
backdrop, we remain optimistic that investors will continue to find short
intermediate U.S. Government securities attractive in the months ahead.
28
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
as of June 30, 1998
Fund Facts
Objective Current income
Primary Investments Short-term debt securities
issued by the U.S. government,
its agencies and instrumentalities
Suggested investment time frame Short- to mid-term
Market benchmark Lehman 1-3 year Government
Bond Index
Lehman Intermediate U.S.
Government Bond Index
Lipper Funds Universe Short Intermediate U.S.
Government Funds Index
Inception date 4/1/93
Newspaper symbol ST US GV
Dividend Frequency Daily
Net Assets $28.0 million
Average Maturity 3.2 years
Average Duration 2.8 years
Average Quality AAA
Average Maturity/Quality
---------------
|////| | |
|////| | | High
---------------
| | | |
| | | | Med
---------------
| | | |
| | | | Low
---------------
Short Int. Long
29
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
as of June 30, 1998
Life of Fund Performance*
This chart shows what the long-term growth would have been of a hypothetical
investment in the Chase Short-Intermediate Term U.S. Government Securities
Fund compared to its key benchmarks. This is where you can see the Fund's
long-term trend. This chart is for illustrative purposes only.
Chase Short-
Intermediate Lipper
Term U.S. Short-
Government Intermediate Lehman Lehman
Securities U.S. Govt. 1-3 Year Intermediate
Date Fund Fund Index Govt. Index Govt. Index
---- ----------- ---------- ----------- -----------
4/1/1993 $ 10000 $ 10000 $ 10000 $ 10000
10011.2 10066 10061 10078
9990.07 10030.8 10036.9 10050.8
10086 10166.2 10112.1 10196.5
10092.4 10170.2 10134.4 10216.9
10226.7 10313.6 10218.5 10369.1
10249.2 10338.4 10251.2 10411.7
10246.9 10332.2 10273.7 10436.6
10213.3 10304.3 10275.8 10385.5
10242.5 10349.6 10316.9 10428.1
10330.5 10441.8 10380.9 10531.3
10197.4 10338.4 10317.5 10387
10104.2 10195.7 10264.9 10235.4
10050.2 10105 10225.9 10168.9
10059.4 10130.2 10240.2 10176
10079.7 10135.3 10265.8 10178
10163.3 10214.4 10358.2 10311.4
10186.8 10272.6 10392.4 10341.3
10150.8 10218.1 10368.5 10255.4
10168.5 10225.3 10392.4 10257.5
10119.5 10187.5 10348.7 10212.4
10134.6 10189.5 10368.4 10246
10269.3 10345.4 10509.4 10413.1
10443.3 10509.9 10652.3 10614
10486.3 10564.5 10712 10672.4
10585.5 10652.2 10807.3 10796.2
10860.2 10905.7 10992.1 11100.7
10912.7 10969 11051.5 11171.7
10902.8 10978.9 11095.7 11177.3
10981.6 11063.4 11162.2 11268.9
11030.7 11115.4 11216.9 11344.4
11132.8 11237.7 11310 11469.2
11244.8 11354.5 11406.2 11609.2
11351.8 11439.7 11491.7 11724.1
11444.7 11538.1 11589.4 11822.6
11331 11448.1 11544.2 11697.2
11249.8 11370.2 11536.1 11643.4
11243.3 11349.8 11547.6 11609.7
11237 11347.5 11573 11603.9
11314.3 11437.1 11657.5 11722.2
11349.9 11474.9 11703 11758.6
11343.4 11486.4 11746.3 11771.5
11458.5 11617.3 11853.2 11923.4
11603.9 11778.8 11987.1 12118.9
11699 11897.8 12075.8 12265.5
11655.8 11856.1 12078.3 12199.3
11703.7 11908.3 12136.1 12245.7
11719.6 11934.5 12165.5 12265.6
11679.6 11887.9 12155.9 12195.7
11783 12002.1 12255.1 12333.4
11860 12082.5 12340.5 12429.4
11930 12179.1 12425.5 12535.7
12110 12359.4 12561.2 12766.9
12100 12332.2 12574.2 12718.1
12200 12449.3 12669.7 12856.3
12300 12562.6 12764 13006.1
12320 12584 12796.1 13034.7
12390 12678.4 12881.9 13140.9
12526.6 12814 13004.8 13312.3
12517.2 12808.9 13016.6 13298.2
12551.9 12848.6 13066.7 13339.6
12605.5 12900 13129.9 13403.3
12670.8 12980 13200.1 13495.4
6/30/1998 12745.2 13043.6 13267.4 13585.8
Average Annual Total Returns
This table shows the average annual total returns. This is where you can see
the Fund's short-term performance, which, as with the stock markets, tends to
be more volatile than the long-term trend.
Since
Inception
1 Year 3 Years 5 Years (4/1/93)
------ ------- ------- --------
Premier Shares 6.83% 5.31% 4.79% 4.73%
* Source: Lipper Analytical Services. Past performance is no guarantee of
future results. Investment returns and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the
original cost.
This chart represents the comparative performance for $10,000 invested in
Premier Shares of Chase Short-Intermediate Term U.S. Government Securities
Fund, the Lehman 1-3 Year Government Bond Index, the Lehman Intermediate
Government Bond Index and Lipper Short-Intermediate Term U.S. Government Funds
Index from April 1, 1993 to June 30, 1998. The performance of the Fund assumes
the reinvestment of all dividends and capital gains and does not include a
sales charge. The performance of the indices does not include a sales charge
and has been adjusted to reflect the reinvestment of all dividends and capital
gains on the securities included in the benchmark. Premier Shares carry a
$100,000 minimum initial investment and carry no sales charge.
Chase Short-Intermediate Term U.S. Government Securities Fund is the successor
to the AVESTA Trust Short-Intermediate Term U.S. Government Securities Fund.
Effective 12/31/97, the AVESTA Trust was converted from a Texas Trust to
Mutual Fund Investment ("MFIT"), a Massachusetts business trust. As part of
the conversion, the Fund transferred all of its assets to Chase
Short-Intermediate Term U.S. Government Securities Fund, a new investment
portfolio of MFIT.
Chase Short-Intermediate Term U.S. Government Securities Fund, unlike the
AVESTA Trust Short-Intermediate Term U.S. Government Securities Fund, is
subject to certain diversification, distribution and other requirements
imposed under the Internal Revenue Code, which may impact performance.
The Lehman 1-3 Year Government Bond Index is composed of bonds covered by the
Government Bond Index with maturities of 1-3 years. The Lehman Intermediate
Government Bond Index is composed of bonds covered by the Government Bond
Index with maturities of 5-10 years. The indices are unmanaged and reflect the
reinvestment of dividends. An individual cannot invest directly in an index.
The Lipper Short-Intermediate Term U.S. Government Fund performance of Index
represents the 30 largest short-intermediate term debt funds. Lipper is an
independent mutual fund performance monitor whose results are based on total
return and do not reflect a sales charge. An individual cannot invest directly
in an index.
The Lehman Intermediate U.S. Government Bond Index consists of U.S. agency and
Treasury securities with maturities of one to 10 years. An individual cannot
invest directly in an index.
30
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
as of June 30, 1998
How Much of the Fund Was Invested
[PIE CHART]
Investments 99.0%
Cash/Other 1.0%
What the Fund Was Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
Mortgage Back Securities 12.0%
Cash Equivalents & Short Term Paper 3.6%
U.S. Government Agency Obligations 9.8%
U.S. Treasury Securitiers 74.6%
31
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
Portfolio of Investments June 30, 1998 (unaudited)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------------------
Long-Term Investments -- 86.2%
- -------------------------------------------------------------------------------
U.S. Treasury Securities -- 74.2%
U.S. Treasury Notes & Bonds,
$1,000,000 5.375%, 01/31/00 $ 997,660
1,000,000 5.500%, 04/15/00 999,690
1,000,000 5.500%, 12/31/00 999,530
1,200,000 5.500%, 03/31/03 1,199,244
1,000,000 5.500%, 02/15/08 999,370
500,000 5.625%, 11/30/00 501,095
1,500,000 5.625%, 12/31/02 1,506,555
1,000,000 5.625%, 02/15/06 1,004,060
1,000,000 5.750%, 11/30/02 1,008,280
1,265,000 5.750%, 08/15/03 1,278,434
875,000 5.875%, 10/31/98 876,365
1,000,000 5.875%, 01/31/99 1,002,190
1,000,000 5.875%, 02/15/00 1,005,470
900,000 5.875%, 11/30/01 909,144
500,000 5.875%, 09/30/02 506,250
2,000,000 6.375%, 04/30/99 2,014,060
1,150,000 6.500%, 05/31/01 1,179,463
1,100,000 6.875%, 05/15/06 1,191,091
1,408,000 7.750%, 11/30/99 1,450,015
------------
Total U.S. Treasury Securities
(Cost $20,391,103) 20,627,966
------------
Mortgage-Backed Securities -- 12.0%
Mortgage-Backed Pass Through Securities -- 6.7%
1,861,542 Federal National Mortgage Association,
Pool 190806, 6.000%, 05/01/01
(Cost $1,843,928) 1,855,231
------------
Collateralized Mortgage Obligations -- 5.3%
1,470,272 Federal Home Loan Mortgage Corp.,
Ser. 1566, Class C, 5.600%, 09/15/00
(Cost $1,465,634) 1,463,377
------------
Total Mortgage-Backed Securities
(Cost $3,309,562) 3,318,608
Total Long-Term Investments
(Cost $26,343,032) 26,667,920
- -------------------------------------------------------------------------------
See notes to financial statements.
32
<PAGE>
Chase Short-Intermediate Term
U.S. Government Securities Fund
Portfolio of Investments June 30, 1998 (unaudited) (continued)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------------------
Short-Term Investments -- 13.4%
- -------------------------------------------------------------------------------
U.S. Government Obligations -- 9.8%
Federal Home Loan Bank, Discount
Note Obligations,
$ 1,300,000 6.790%, 04/17/01 $ 1,336,309
1,330,000 6.900%, 05/01/02 1,385,036
------------
Total U.S. Government Obligations
(Cost $2,642,367) 2,721,345
------------
Shares
Money Market Fund -- 1.1%
296,000 Fidelity Colchester Street Trust
Government Fund
(Cost $296,000) 296,000
-----------
Principal
Amount
(USD)
Repurchase Agreement -- 2.5%
$698,000 Merrill Lynch & Co., Inc., 5.50% due 07/01/98,
(Dated 06/30/98,Proceeds $698,107, Secured by
U.S. Treasury Note $687,217, 7.75% due 11/30/99;
Market $711,662) (Cost $698,000) 698,000
-----------
Total Short-Term Investments
(Cost $3,636,367) 3,715,345
- -------------------------------------------------------------------------------
Total Investments -- 99.6%
(Cost $27,337,031) $27,661,919
- -------------------------------------------------------------------------------
See notes to financial statements.
33
<PAGE>
Chase U.S. Government
Securities Fund
as of June 30, 1998
How the Fund Performed
Chase U.S. Government Securities Fund had a total return of 4.25% for the
six-month period ended June 30, 1998.
How the Fund Was Managed
Declining interest rates and generally benign inflation conditions helped the
Fund's performance during the first half of 1998.
In the first three months of the period, the Fund's overweighted exposure to
mortgage-backed securities helped performance, due to their relatively
attractive yields and the stable interest rate environment.
In the April through June period, the Fund enjoyed good performance from
Treasury securities as interest rates declined. The decline in rates was
largely due to several weaker-than-expected economic reports and concerns over
global economic growth brought on by the economic problems in southeast Asia.
The Fund's decision to maintain a slightly longer-than-average duration also
contributed favorably to performance, as long-term rates fell.
Late in the period, the Fund benefited from maintaining an underweighted
exposure in mortgage-backed securities, as the decline in interest rates
increased mortgage prepayments.
Where the Fund May Be Headed
Our outlook for bonds is generally positive. The real rate of return on bonds
(the difference between the nominal yield and the inflation rate) remains
attractive. Moreover, we expect interest rates to stay in a relatively narrow
range. Given this forecast, we expect to maintain our above-average duration
going forward. Should yields move higher, we may extend the Fund's effective
duration to potentially enhance its income stream.
34
<PAGE>
Chase U.S. Government
Securities Fund
as of June 30, 1998
Fund Facts
Objective Current income
Primary Investments Debt securities issued or
guaranteed by the U.S.
government, its agencies and
instrumentalities
Suggested investment time frame Mid- to long-term
Market benchmark Lehman Government Bond Index
Lipper Funds Universe Lipper General U.S.
Government Funds Index
Inception date 4/1/93
Newspaper symbol Not Listed
Dividend Frequency Daily
Net Assets $2.9 million
Average Maturity 11.1 years
Average Duration 6.4 years
Average Quality AAA
Average Maturity/Quality
----------------
| |////| | High
| |////| |
----------------
| | | | Med
| | | |
---------------
| | | | Low
| | | |
----------------
Short Int. Long
35
<PAGE>
Chase U.S. Government
Securities Fund
as of June 30, 1998
Life of Fund Performance*
This chart shows what the long-term growth would have been of a hypothetical
investment in the Chase U.S. Government Securities Fund compared to its key
benchmarks. This is where you can see the Fund's long-term trend. This chart
is for illustrative purposes only.
Lipper
Chase U.S. General
Government U.S. Govt.
Securities Funds Lehman
Date Fund Index Govt. Index
---- ----------- ----------- ------------
4/1/1993 $ 10000 $ 10000 $ 10000
10070.9 10061 10077
10051.8 10067 10065.9
10534.9 10252.3 10289.4
10619.3 10308.7 10352.1
11020.6 10482.9 10583
11050.9 10494.4 10623.2
11136 10521.7 10663.6
10905.6 10408.1 10546.3
10912.2 10462.2 10587.4
11141.3 10597.1 10732.5
10668.8 10397.9 10504.9
10266.1 10134.9 10268.6
10123.4 10018.3 10187.5
10068 9980.23 10174.2
9996.63 9937.31 10150.8
10297.3 10102.3 10337.6
10179.9 10104.3 10339.6
9821.48 9950.71 10193.9
9749.2 9920.85 10186.7
9815 9894.07 10168.4
9997.08 9963.33 10230.4
10265.4 10138.7 10420.7
10569.1 10364.8 10644.7
10646.5 10412.5 10711.8
10798.8 10540.5 10852.1
11627.6 10923.1 11289.5
11749.3 10988.7 11376.4
11509 10950.2 11334.3
11767.5 11078.3 11466.9
11977 11182.5 11577
12358.9 11330.1 11753
12646.7 11489.8 11936.3
13007.6 11649.5 12105.8
12962 11709 12179.7
12341.6 11468.9 11931.2
12124.5 11372.6 11832.2
11962.6 11294.1 11756.4
11908 11252.3 11736.5
12102.5 11382.9 11887.9
12086.8 11404.5 11917.6
11935.4 11374.8 11891.4
12224.6 11565.9 12088.8
12657.1 11816.9 12354.7
13080.9 12024.9 12569.7
12761.6 11901 12441.5
12655.9 11926 12455.3
12633.3 11951.1 12472.4
12304.6 11810 12340.4
12586 11984.8 12518.5
12730 12084.3 12626.5
12960 12226.9 12768.2
13720 12564.4 13130.6
13350 12433.7 13000.8
13540 12623.9 13196.3
13780 12809.5 13424.6
13830 12855.6 13493.3
13980 12985.5 13634.4
14181 13150.4 13838.4
14148.1 13125.4 13800.8
14191.2 13158.2 13839.9
14243.3 13209.5 13902.2
14399.5 13332.4 14045
6/30/1998 14574.2 13444.4 14205.1
Average Annual Total Returns
This table shows the average annual total returns. This is where you can see
the Fund's short-term performance, which, as with the stock markets, tends to
be more volatile than the long-term trend.
Since
Inception
1 Year 3 Years 5 Years (4/1/93)
------ ------- ------- --------
Premier Shares 12.46% 7.44% 6.70% 7.44%
* Source: Lipper Analytical Services. Past performance is no guarantee of
future results. Investment returns and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the
original cost.
This chart represents the comparative performance for $10,000 invested in
Premier Shares of Chase U.S. Government Securities Fund, the Lehman Government
Index, and Lipper General U.S. Government Funds Index from April 1, 1993 to
June 30, 1998. The performance of the Fund assumes the reinvestment of all
dividends and capital gains and does not include a sales charge. The
performance of the indices does not include a sales charge and has been
adjusted to reflect the reinvestment of all dividends and capital gains on the
securities included in the benchmark. Premier Shares carry a $100,000 minimum
initial investment and carry no sales charge.
Chase U.S. Government Securities Fund is the successor to the AVESTA Trust
U.S. Government Securities Fund. Effective 12/31/97, the AVESTA Trust was
converted from a Texas Trust to Mutual Fund Investment ("MFIT"), a
Massachusetts business trust. As part of the conversion, the Fund transferred
all of its assets to Chase U.S. Government Securities Fund, a new investment
portfolio of MFIT.
Chase U.S. Government Securities Fund, unlike the AVESTA U.S. Government
Securities Fund, is subject to certain diversification, distribution and other
requirements imposed under the Internal Revenue Code, which may impact
performance.
Lehman Government Index is composed of the Lehman Treasury Bond Index and the
Agency Bond Index and includes Treasury bonds and debt issued by the U.S.
Government and its agencies. The index is unmanaged and includes the
reinvestment of dividends. An individual cannot invest directly in an index.
The Lipper General U.S. Government Funds Index represents performance of the
30 largest U.S. government securities funds. Lipper is an independent mutual
fund performance monitor whose results do not reflect a sales charge. An
individual cannot invest directly in an index.
36
<PAGE>
Chase U.S. Government
Securities Fund
as of June 30, 1998
How Much of the Fund Was Invested
[PIE CHART]
Investments 98.4%
Cash/Other 1.6%
What the Fund Was Invested In
Percentage of Total Portfolio Investments
[PIE CHART]
U.S. Treasury Securities 74.6%
Mortgage Backed Securities 17.1%
Cash Equivalent & Short Term Paper 8.3%
37
<PAGE>
Chase U.S. Government Securities Fund
Portfolio of Investments June 30, 1998 (unaudited)
Principal
Amount
(USD) Issuer Value
- -------------------------------------------------------------------------------
Long-Term Investments -- 90.8%
- -------------------------------------------------------------------------------
U.S. Treasury Securities -- 73.8%
U.S. Treasury Notes & Bonds,
$175,000 5.750%, 08/15/03 $ 176,859
525,000 5.875%, 08/31/99 527,053
175,000 6.000%, 02/15/26 182,054
535,000 6.250%, 10/31/01 546,117
590,000 6.750%, 08/15/26 675,456
-----------
Total U.S. Treasury Securities
(Cost $1,998,358) 2,107,539
-----------
Mortgage Backed Pass Through Securities -- 17.0%
484,518 Government Mortgage Association
Corp., Pool 407230, 6.500%, 01/15/28
(Cost $484,820) 483,457
-----------
Total Long-Term Investments
(Cost $2,483,178) 2,590,996
- -------------------------------------------------------------------------------
Shares Issuer Value
- -------------------------------------------------------------------------------
Short-Term Investments -- 8.2%
- -------------------------------------------------------------------------------
Money Market Fund -- 4.1%
118,000 Fidelity Colchester Street Trust
Government Fund, 5.584%, 01/01/20
(Cost $118,000) 118,000
-----------
Principal
Amount
(USD)
Repurchase Agreement -- 4.1%
$118,000 Merrill Lynch & Co., Inc., 5.50% due
07/01/98, (Dated 06/30/98, Proceeds
$118,018, Secured by U.S. Treasury Note
$116,177, 7.75% due 11/30/99;
Market $120,310), 5.500%, 07/01/98
(Cost $118,000) 118,000
-----------
Total Short-Term Investments
(Cost $236,000) 236,000
- -------------------------------------------------------------------------------
Total Investments -- 99.0%
(Cost $2,719,178) $ 2,826,996
- -------------------------------------------------------------------------------
Index
# Security may only be sold to qualified institutional buyers.
FRN Floating Rate Note.
MTN Medium Term Note
See notes to financial statements.
38
<PAGE>
Chase Funds
Statement of Assets and Liabilities As of June 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Chase
Chase Short-Interm. Chase
Chase Intermediate Chase Term U.S. U.S. Gov't.
Income Term Bond Money Market Gov't. Securities Securities
Fund Fund Fund Fund Fund
-------- ------------ ------------ ----------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment securities,
at value (Note 1).............. $ 53,660,144 $ 24,191,514 $146,050,710 $ 27,661,919 $ 2,826,996
Cash............................. 983 884 297 659 410
Receivables:
Interest....................... 807,509 333,882 558,220 291,386 41,507
Fund shares sold............... 2,249 30,113 - 1,147 84
Expense reimbursement
from Distributor............. - - - - 19,104
------------ ------------ ------------ ------------ ----------
Total Assets............. 54,470,885 24,556,393 146,609,227 27,955,111 2,888,101
------------ ------------ ------------ ------------ ----------
LIABILITIES:
Payable for Fund shares
redeemed....................... - - - 1,021 2,373
Dividends payable................ 2,604 - 119,740 500 -
Accrued liabilities: (Note 2)
Investment advisory fees....... 15,105 - 24,211 3,199 -
Administration fees............ 6,866 2,532 18,158 3,428 -
Custodian...................... 9,866 10,739 15,719 7,286 8,368
Other.......................... 29,652 26,135 56,297 29,100 12,786
------------ ------------ ------------ ------------ ----------
Total Liabilities........ 64,093 39,406 234,125 44,534 23,527
------------ ------------ ------------ ------------ ----------
NET ASSETS:
Paid in capital.................. 51,994,872 23,963,046 146,375,344 27,570,795 2,731,285
Accumulated undistributed net
investment income.............. (29) 6 - - 31
Accumulated undistributed net
realized gain (loss) on
investment transactions........ 512,477 127,256 (242) 14,894 25,440
Net unrealized appreciation
of investments................. 1,899,472 426,679 - 324,888 107,818
------------ ------------ ------------ ------------ ----------
Net Assets............... $ 54,406,792 $ 24,516,987 $146,375,102 $ 27,910,577 $2,864,574
------------ ------------ ----------- ------------ ----------
------------ ------------ ------------ ------------ ----------
Shares of beneficial interest
outstanding ($.001 par
value; unlimited number of
shares authorized)............. 2,653,965 1,908,233 146,375,344 2,246,378 201,687
Net asset value, maximum
offering price and redemption
price per share................ $20.50 $12.85 $1.00 $12.42 $14.20
Cost of Investments.............. $ 51,760,672 $ 23,764,835 $146,050,710 $ 27,337,031 $2,719,178
------------ ------------ ------------ ------------ ----------
</TABLE>
See notes to financial statements.
39
<PAGE>
Chase Funds
Statement of Operations For the six months ended June 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Chase
Short-Interm.
Chase Term U.S. Chase
Chase Intermediate Chase Gov't. U.S. Gov't.
Income Term Bond Money Market Securities Securities
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME ........................... $ 1,666,132 $ 657,757 $ 4,232,669 $ 812,408 $ 87,926
EXPENSES: (Note 2)
Investment Advisory fees .................. 134,035 53,033 224,282 67,920 7,326
Administration fees ....................... 40,210 15,910 112,141 20,376 2,198
Custodian fees ............................ 30,315 31,300 41,121 25,781 20,635
Printing and postage ...................... 2,480 2,480 5,795 2,480 2,041
Professional fees ......................... 11,776 8,500 16,572 8,797 5,187
Registration costs ........................ 7,827 7,827 8,237 7,827 1,082
Transfer agent fees ....................... 11,649 12,728 21,823 10,004 10,777
Trustees fees and expenses ................ 4,021 1,591 11,214 2,038 220
Other ..................................... 4,312 2,395 13,643 5,558 688
----------- ----------- ----------- ----------- -----------
Total expenses ....................... 246,625 135,764 454,828 150,781 50,154
----------- ----------- ----------- ----------- -----------
Less amounts waived (Note 2) ............ 45,572 56,215 81,026 48,902 9,524
Less expenses borne by the
Distributor .......................... -- -- -- -- 29,641
----------- ----------- ----------- ----------- -----------
Net expenses ......................... 201,053 79,549 373,802 101,879 10,989
----------- ----------- ----------- ----------- -----------
Net investment income ............. 1,465,079 578,208 3,858,867 710,529 76,937
----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ... 512,477 127,256 (170) 14,894 25,440
Change in net unrealized appreciation
on investments ........................ 348,303 52,174 -- 35,194 16,763
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments .................... 860,780 179,430 (170) 50,088 42,203
----------- ----------- ----------- ----------- -----------
Net increase in net assets from
operations ........................ $ 2,325,859 $ 757,638 $ 3,858,697 $ 760,617 $ 119,140
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
40
<PAGE>
Chase Funds
Statement of Changes in Net Assets For the periods indicated (unaudited)
<TABLE>
<CAPTION>
Chase
Chase Intermediate Chase
Income Term Bond Money Market
Fund Fund Fund
---------------------------------------------------------------------------------
01/01/98 Year 01/01/98 Year 01/01/98
Through Ended Through Ended Through
06/30/98 12/31/97 06/30/98 12/31/97 06/30/98
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ..................... $ 1,465,079 $ 2,989,444 $ 578,208 $ 843,372 $ 3,458,867
Net realized gain (loss) on investments ... 512,477 (39,579) 127,256 85,966 (170)
Change in net unrealized
appreciation on investments ............. 348,303 1,289,272 52,174 359,955 --
---------------------------------------------------------------------------------
Increase in net assets from operations .. 2,325,859 4,239,137 757,638 1,289,293 3,858,697
---------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM: (Note 1)
Net investment income ..................... (1,465,108) -- (578,202) -- (3,858,867)
Net realized gains ........................ -- -- -- -- (72)
---------------------------------------------------------------------------------
Total distributions to shareholders ..... (1,465,108) -- (578,202) -- (3,858,939)
---------------------------------------------------------------------------------
Increase (decrease) from capital share
transactions (Note 5) ................... 2,217,024 (6,524,419) 5,742,301 10,357,199 11,796,450
---------------------------------------------------------------------------------
Total increase (decrease) in net assets 3,077,775 (2,285,282) 5,921,737 11,646,492 11,796,208
NET ASSETS:
Beginning of period ..................... 51,329,017 53,614,299 18,595,250 6,948,758 134,578,894
---------------------------------------------------------------------------------
End of period ........................... $ 54,406,792 $ 51,329,017 $ 24,516,987 $ 18,595,250 $ 146,375,102
=================================================================================
<CAPTION>
Chase
Short-Interm. Chase
Chase Term U.S. U.S. Gov't.
Money Market Gov't Securities Securities
Fund Fund Fund
---------------------------------------------------------------------------------
Year 01/01/98 Year 01/01/98 Year
Ended Through Ended Through Ended
12/31/97 06/30/98 12/31/97 06/30/98 12/31/97
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ..................... $ 6,306,866 $ 710,529 $ 1,402,140 $ 76,937 $ 159,592
Net realized gain (loss) on investments ... -- 14,894 (36,214) 25,440 114,518
Change in net unrealized
appreciation on investments ............. -- 35,194 173,254 16,763 (15,753)
---------------------------------------------------------------------------------
Increase in net assets from operations .. 6,306,866 760,617 1,539,180 119,140 258,357
---------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
FROM: (Note 1)
Net investment income ..................... (6,306,866) (710,529) -- (76,906) --
Net realized gains ........................ -- -- -- -- --
---------------------------------------------------------------------------------
Total distributions to shareholders ..... (6,306,866) (710,529) -- (76,906) --
---------------------------------------------------------------------------------
Increase (decrease) from capital share
transactions (Note 5) ................... 15,472,904 3,912,026 (6,141,498) (105,419) (77,275)
---------------------------------------------------------------------------------
Total increase (decrease) in net assets 15,472,904 3,962,114 (4,602,318) (63,185) 181,082
NET ASSETS:
Beginning of period ..................... 119,105,990 23,948,463 28,550,781 2,927,759 2,746,677
---------------------------------------------------------------------------------
End of period ........................... $ 134,578,894 $ 27,910,577 $ 23,948,463 $ 2,864,574 $ 2,927,759
=================================================================================
</TABLE>
See notes to financial statements.
41
<PAGE>
Chase Funds
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies -- Mutual Fund Investment
Trust (the "Trust") was organized on September 23, 1997 as a Massachusetts
Business Trust, and is registered under the Investment Company Act of 1940, as
amended, (the "1940 Act") as an open-end management investment company. Chase
Income Fund ("CIF"), Chase Intermediate Term Bond Fund ("CIBF"), Chase Money
Market Fund ("CMMF"), Chase Short-Intermediate Term U.S. Government Securities
Fund ("CISF") and Chase U.S. Government Securities Fund ("CGSF"), are separate
funds of the Trust.
The Funds were established on January 1, 1998 for the conversion of the AVESTA
Trust to the Chase Funds of the Mutual Fund Investment Trust. The AVESTA Trust
contributed securities and other assets and liabilities, in exchange for
shares of the corresponding portfolio of the newly created Funds in a tax-free
exchange.
The following is a summary of significant accounting policies followed by the
Funds:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
A. Valuation of investments -- Bonds and other fixed income securities
(other than short-term obligations), including listed issues, are valued
on the basis of valuations supplied by pricing services or by matrix
pricing systems of a major dealer in bonds. Short-term debt securities
with 61 days or more to maturity at time of purchase are valued, through
the 61st day prior to maturity, at market value based on quotations
obtained from market makers or other appropriate sources; thereafter, the
value on the 61st day is amortized on a straight-line basis over the
remaining number of days to maturity. Short-term investments with 60 days
or less to maturity at time of purchase are valued at amortized cost,
which approximates market. Portfolio securities for which there are no
such quotations or valuations are valued at fair value as determined in
good faith by or at the direction of the Trustees.
B. Repurchase agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government
Agency securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book
Entry System. In connection with transactions in repurchase agreements,
if the seller defaults and the value of the collateral declines, or if
the seller enters an insolvency proceeding, realization of the collateral
by the Trust may be delayed or limited.
C. Security transactions and investment income -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified
cost basis. Interest income is determined on the basis of coupon interest
accrued adjusted for amortization of premiums and accretion of discounts.
D. Expenses -- Expenses directly attributable to a Fund are charged to
that Fund; other expenses of the Trust are allocated proportionately
among each of the Funds within the Trust in relation to the net assets of
each Fund or on another reasonable basis.
E. Federal income taxes -- Each Fund is treated as a separate taxable
entity for Federal income tax purposes. The Trust's policy is to comply
with the provisions of the Internal
42
<PAGE>
Chase Funds
Notes to Financial Statements (unaudited) (continued)
Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its distributable net investment
income, and net realized gain on investments. In addition, the Trust
intends to make distributions as required to avoid excise taxes.
Accordingly, no provision for Federal income or excise tax is necessary.
F. Distributions to shareholders -- Dividends and distributions paid to
shareholders are recorded on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized
capital gains is determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting
principles. Dividends and distributions which exceed net investment
income or net realized capital gains for financial reporting purposes but
not for tax purposes are reported as distributions in excess of net
investment income or net realized capital gains.
G. Dollar rolls -- The funds enter into dollar rolls in which the Funds
sell mortgage-backed securities for delivery in the current month and
simultaneously contract to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. During the
roll period, the Funds forgo principal and interest paid on the
securities. The Funds are compensated by the interest earned on the cash
proceeds of the initial sale and a fee earned for entering into the roll
transaction. The fee is amortized into income over the duration of the
roll transaction.
2. Fees and Other Transactions with Affiliates
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Adviser") acts as
the Investment Adviser to the Funds. Chase is a direct wholly owned
subsidiary of The Chase Manhattan Corporation. As Investment Adviser,
Chase supervises the investments of the Funds and for such services is
paid a fee. The fee is computed daily and paid monthly at an annual rate
equal to 0.30% for CMMF and 0.50% for CIF, CIBF, CSIF and CGSF of the
average daily net assets, respectively. The Adviser voluntarily waived
some or all of its fees in the amount of $45,572; $53,033; $81,026;
$48,902; and $7,326; for CIF, CIBF, CMMF, CSIF and CSGF, respectively,
for the six month period ended June 30, 1998.
Chase Texas, a wholly owned subsidiary of The Chase Manhattan
Corporation, is the Sub-Investment Advisor to each Fund. Pursuant to the
Sub-Investment Advisory Agreement between Chase Texas and Chase, Chase
Texas is entitled to receive a fee payable by Chase from its advisory
fee, at an annual rate equal to 0.15% for CMMF and 0.25% for CSIF, CGSF,
CIBF and CIF of average daily net assets, respectively.
B. Sub-administration fees -- Pursuant to a Sub-Administration Agreement,
Chase Fund Distributors, Inc. (the "Distributor"), a wholly owned
subsidiary of The BISYS Group, Inc., acts as the Trust's exclusive
underwriter and promotes and arranges for the sale of each Fund's shares.
In addition, the Distributor provides certain sub-administration services
to the Trust, including providing officers, clerical staff and office
space for an annual fee of 0.05% of the average daily net assets of each
Fund. The Distributor voluntarily waived some or all of its fees in the
amount of $731 for CGSF for the six month period ended June 30, 1998.
C. Administration fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trust. For these services and facilities, the Administrator receives from
each Fund a fee computed at the annual rate equal to 0.10% of the
respective Fund's average daily net assets. The Administrator voluntarily
waived some or all of its fees in the amount of $3,182 and $1,467 for
CIBF and CGSF, respectively, for the six month period ended June 30,
1998.
43
<PAGE>
Chase Funds
Notes to Financial Statements (unaudited) (continued)
D. Assumption of expenses -- The Distributor voluntarily assumed expenses
of the Funds as shown on the Statement of Operations.
E. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, The BISYS Group, Inc.
Chase provides portfolio accounting and custody services for the Funds.
Compensation for such services is presented in the Statement of
Operations as custodian fees.
3. Investment Transactions -- Purchases and sales of investments (excluding
short-term investments) were as follows:
<TABLE>
<CAPTION>
Chase
Short-
Chase Intermediate Chase
Chase Intermediate Term US Gov't US Gov't
Income Term Securities Securities
Fund Bond Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Purchases (excluding
U.S. Government) ......... $ -- $ 2,705,778 $ -- $ --
Sales (excluding
U.S.Government) .......... 1,422,230 427,916 -- --
Purchases of U.S. Government 13,057,635 8,609,502 10,225,758 670,720
Sales of U.S. Government ... 10,397,625 4,150,960 6,004,675 920,156
</TABLE>
4. Federal Income Tax Matters -- For Federal income tax purposes, the cost
and unrealized appreciation (depreciation) in value of the investment
securities at June 30, 1998 are as follows:
<TABLE>
<CAPTION>
Chase
Short-
Chase Intermediate Chase
Chase Intermediate Term US Gov't US Gov't
Income Term Securities Securities
Fund Bond Fund Fund Fund
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Aggregate cost .............. $ 51,760,672 $ 23,764,835 $ 27,337,031 $ 2,719,178
------------ ------------ ------------ -----------
Gross unrealized appreciation 1,906,326 436,727 344,046 109,180
Gross unrealized depreciation (6,854) (10,048) (19,158) (1,362)
------------ ------------ ------------ -----------
Net unrealized appreciation . $ 1,899,472 $ 426,679 $ 324,888 $ 107,818
------------ ------------ ------------ -----------
</TABLE>
5. Transactions in Shares of Beneficial Interest -- Transactions in Shares
of Beneficial Interest for the six months ended June 30, 1998 were as
follows:
<TABLE>
<CAPTION>
Chase Income Fund
-----------------
01/01/98 Through 06/30/98 Year Ended 12/31/97
----------------------------- -----------------------------
Amount Shares Amount Shares
------------ -------- ------------ --------
<S> <C> <C> <C> <C>
Shares sold .................... $ 10,851,616 534,582 $ 8,887,000 461,702
Shares issued in reinvestment
of distributions ............. 860,649 42,316 -- --
Shares redeemed ................ (9,495,241) (466,566) (15,411,419) (806,698)
------------ ------- ---------- -------
Net increase (decrease) in Trust
shares outstanding ........... $ 2,217,024 110,332 ($ 6,524,419) (344,996)
============ ======= =========== =======
</TABLE>
44
<PAGE>
Chase Funds
Notes to Financial Statements (unaudited) (continued)
<TABLE>
<CAPTION>
Chase Intermediate Term Bond Fund
---------------------------------
01/01/98 Through 06/30/98 Year Ended 12/31/97
------------------------------ ------------------------------
Amount Shares Amount Shares
------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Shares sold .......................... $ 8,271,740 646,863 $ 14,646,175 1,218,217
Shares issued in reinvestment
of distributions ................... 329,972 25,775 -- --
Shares redeemed ...................... (2,859,411) (222,651) (4,288,976) (344,539)
------------- ----------- ------------- ------------
Net increase (decrease) in Trust
shares outstanding ................. $ 5,742,301 449,987 $ 10,357,199 873,678
============= =========== ============= ============
<CAPTION>
Chase Money Market Fund
-----------------------
01/01/98 Through 06/30/98 Year Ended 12/31/97
------------------------------ ------------------------------
Amount Shares Amount Shares
------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Shares sold .......................... $ 101,663,444 101,663,444 $ 185,047,372 185,047,372
Shares issued in reinvestment
of distributions ................... 3,034,061 3,034,061 4,021,779 4,021,779
Shares redeemed ...................... (92,901,055) (92,901,055) (173,596,247) (173,596,247)
------------- ----------- ------------- ------------
Net increase (decrease) in Trust
shares outstanding ................. $ 11,796,450 11,796,450 $ 15,472,904 15,472,904
============= =========== ============= ============
</TABLE>
45
<PAGE>
Chase Funds
Notes to Financial Statements (unaudited) (continued)
<TABLE>
<CAPTION>
Chase Short-Intermediate Term
U.S. Government Securities Fund
-------------------------------
01/01/98 Through 06/30/98 Year Ended 12/31/97
------------------------------ ------------------------------
Amount Shares Amount Shares
------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Shares sold .................... $ 6,752,696 543,021 $ 7,667,388 641,679
Shares issued in reinvestment
of distributions ............. 464,040 37,399 -- --
Shares redeemed ................ (3,304,710) (266,234) (13,808,886) (1,158,939)
------------ -------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding ........... $ 3,912,026 314,186 ($ 6,141,498) (517,260)
============ ======== ============ ==========
<CAPTION>
Chase U.S. Government Securities Fund
-------------------------------------
01/01/98 Through 06/30/98 Year Ended 12/31/97
------------------------------ ------------------------------
Amount Shares Amount Shares
------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Shares sold .................... $ 608,025 43,140 $ 772,453 59,298
Shares issued in reinvestment
of distributions ............. 38,137 2,705 -- --
Shares redeemed ................ (751,581) (53,648) (849,728) (65,037)
--------- -------- --------- -------
Net increase (decrease) in Trust
shares outstanding ........... ($105,419) (7,803) ($ 77,275) (5,739)
========= ======== ========= =======
</TABLE>
6. Concentration of Credit Risk - As of June 30, 1998, CMMF invested 69.1%
of its net assets in financial institutions, of which 19.8% was
invested in Broker Dealers, 11.4% in Banking and 37.9% in other
Financial Service Providers. General economic conditions, as well as
exposure to credit losses arising from possible financial difficulties
of borrowers, play an important role in the operation of the financial
services industry.
46
<PAGE>
- -----------------
Chase Income Fund
- -----------------
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
01/01/98 For the Years Ended December 31,
Through --------------------------------------------------------
06/30/98 1997 1996 1995 1994 1993+
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ....................... $ 20.18 $ 18.56 $ 18.21 $ 15.39 $ 16.11 $ 14.62
-------------------------------------------------------------------
Income from Investment Operations:
Net Investment Income ................................... 0.55 1.140 1.000 0.970 0.840 0.820
Net Gains or Losses in Securities (both realized and
unrealized) ........................................... 0.320 0.480 (0.650) 1.850 (1.560) 0.670
-------------------------------------------------------------------
Total from Investment Operations ........................ 0.87 1.620 0.350 2.820 (0.720) 1.490
-------------------------------------------------------------------
Less Distributions:
Dividends from Net Investment Income .................... 0.55 -- -- -- -- --
-------------------------------------------------------------------
Net Asset Value, End of Period ............................. $ 20.50 $ 20.18 $ 18.56 $ 18.21 $ 15.39 $ 16.11
===================================================================
Total Return ............................................... 4.37% 8.73% 1.91% 18.38% (4.47)% 10.18%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) .................... $54,407 $51,329 $53,614 $57,452 $52,235 $76,085
Ratios to average net assets:#
Ratio of Expenses ....................................... 0.75% 0.75% 0.75% 0.75% 0.75% 1.00%
Ratio of Net Investment Income .......................... 5.46% 5.82% 5.58% 5.77% 5.43% 5.20%
Ratio of Expenses Without Waivers and Assumption of
Expenses .............................................. 0.92% 1.14% 1.07% 1.08% 1.07% 1.09%
Ratio of Net Investment Income Without Waivers and
Assumption of Expenses ................................ 5.29% 5.43% 5.26% 5.44% 5.11% 5.11%
Portfolio Turnover Rate .................................... 23% 97% 72% 93% 239% 156%
</TABLE>
# Short periods have been annualized.
+ Amounts have been adjusted to reflect 10:1 reverse split of the Fund's units
on May 7, 1993.
See notes to financial statements.
47
<PAGE>
- ---------------------------------
Chase Intermediate Term Bond Fund
- ---------------------------------
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
01/01/98 For the Years Ended December 31, 10/03/94+
Through ---------------------------------- Through
06/30/98 1997 1996 1995 12/31/94
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ................. $ 12.75 $ 11.89 $ 11.67 $ 9.99 $10.00
----------------------------------------------------------
Income from Investment Operations:
Net Investment Income .............................. 0.345 0.560 0.610 0.640 0.150
Net Gains or Losses in Securities (both realized and
unrealized) ....................................... 0.100 0.300 (0.390) 1.040 (0.160)
----------------------------------------------------------
Total from Investment Operations ................... 0.445 0.860 0.220 1.680 (0.010)
----------------------------------------------------------
Less Distributions:
Dividends from Net Investment Income ............... 0.345 -- -- -- --
----------------------------------------------------------
Net Asset Value, End of Period ....................... $ 12.85 $ 12.75 $ 11.89 $11.67 $ 9.99
==========================================================
Total Return ......................................... 3.53% 7.26% 1.86% 16.79% (0.32)%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ............ $24,517 $18,595 $6,949 $5,031 $5,124
Ratios to average net assets:#
Ratio of Expenses ................................ 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Net Investment Income ................... 5.43% 5.61% 5.32% 5.89% 6.12%
Ratio of Expenses Without Waivers and Assumption
of Expenses .................................... 1.28% 1.25% 1.42% 1.43% 1.38%
Ratio of Net Investment Income Without Waivers
and Assumption of Expenses ..................... 4.90% 5.11% 4.65% 5.21% 5.49%
Portfolio Turnover Rate .............................. 24% 14% 134% 198% 7%
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
48
<PAGE>
- ---------------------------------
Chase Money Market Fund
- ---------------------------------
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
01/01/98 For the Years Ended December 31,
Through -----------------------------------------------------------
06/30/98 1997 1996 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------
Income from Investment Operations:
Net Investment Income ......................... 0.026 0.051 0.049 0.054 0.039 0.026
Net Gains or Losses in Securities
(both realized and unrealized) .............. 0.000 -- -- -- -- --
------------------------------------------------------------------------
Total from Investment Operations .............. 0.026 0.051 0.049 0.054 0.039 0.026
------------------------------------------------------------------------
Less Distributions:
Dividends from Net Investment Income .......... 0.026 0.051 0.049 0.054 0.039 0.026
------------------------------------------------------------------------
Net Asset Value, End of Period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================
Total Return ..................................... 2.59% 5.10% 5.10% 5.70% 3.80% 2.60%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) ....... $146,375 $134,579 $119,106 $71,310 $55,505 $28,024
Ratios to average net assets:#
Ratio of Expenses ........................... 0.50% 0.50% 0.50% 0.50% 0.50% 0.65%
Ratio of Net Investment Income .............. 5.16% 5.09% 4.93% 5.43% 3.90% 2.57%
Ratio of Expenses Without Waivers and
Assumption of Expenses .................... 0.61% 0.74% 0.72% 0.72% 0.83% 0.82%
Ratio of Net Investment Income Without
Waivers and Assumption of Expenses ........ 5.05% 4.85% 4.71% 5.21% 3.57% 2.40%
</TABLE>
# Short periods have been annualized.
See notes to financial statements.
49
<PAGE>
- -------------------------------
Chase Short-Intermediate Term
U.S. Government Securities Fund
- -------------------------------
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
01/01/98 For The Years Ended December 31, 04/01/93+
Through --------------------------------------------- Through
06/30/98 1997 1996 1995 1994 12/31/93
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period .................... $ 12.39 $ 11.66 $ 11.35 $ 10.14 $ 10.24 $ 10.00
----------------------------------------------------------------------
Income from Investment Operations:
Net Investment Income ................................ 0.322 0.670 0.600 0.580 0.450 0.290
Net Gains or Losses in Securities (both realized and
unrealized) ........................................ 0.030 0.060 (0.290) 0.630 (0.550) (0.050)
----------------------------------------------------------------------
Total from Investment Operations ..................... 0.352 0.730 0.310 1.210 (0.100) 0.240
----------------------------------------------------------------------
Less Distributions:
Dividends from Net Investment Income ................. 0.322 -- -- -- -- --
----------------------------------------------------------------------
Net Asset Value, End of Period .......................... $ 12.42 $ 12.39 $ 11.66 $ 11.35 $ 10.14 $ 10.24
======================================================================
Total Return ............................................ 2.87% 6.30% 2.68% 12.01% (1.05)% 2.43%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) .............. $27,911 $23,948 $28,551 $28,783 $22,992 $17,391
Ratios to average net assets:#
Ratio of Expenses .................................. 0.75% 0.75% 0.75% 0.75% 0.75% 0.60%
Ratio of Net Investment Income ..................... 5.23% 5.40% 5.26% 5.38% 4.41% 3.76%
Ratio of Expenses Without Waivers and Assumption of
Expenses ......................................... 1.11% 1.01% 0.88% 0.91% 0.96% 1.66%
Ratio of Net Investment Income Without Waivers and
Assumption of Expenses ............................. 4.87% 5.14% 5.13% 5.22% 4.20% 2.70%
Portfolio Turnover Rate ................................. 23% 63% 177% 187% 268% 247%
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
50
<PAGE>
- -------------------------------------
Chase U.S. Government Securities Fund
- -------------------------------------
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
01/01/98 For the Years Ended December 31, 04/01/93*
Through -------------------------------------------------------- Through
06/30/98 1997 1996 1995 1994 12/31/93
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ..... $ 13.98 $ 12.76 $ 13.01 $ 10.00 $ 10.91 $ 10.00
-----------------------------------------------------------------------------------
Income from Investment Operations:
Net Investment Income ................. 0.367 0.750 0.740 0.730 0.620 0.400
Net Gains or Losses in Securities
(both realized and unrealized) ...... 0.220 0.470 (0.990) 2.280 (1.530) 0.510
-----------------------------------------------------------------------------------
Total from Investment Operations ...... 0.587 1.220 (0.250) 3.010 (0.910) 0.910
-----------------------------------------------------------------------------------
Less Distributions:
Dividends from Net Investment Income.. 0.367 -- -- -- -- --
-----------------------------------------------------------------------------------
Net Asset Value, End of Period ........... $ 14.20 $ 13.98 $ 12.76 $ 13.01 $ 10.00 $ 10.91
===================================================================================
Total Return ............................. 4.25% (9.55)% (1.89)% 30.11% (8.39)% 9.12%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted) $ 2,865 $ 2,928 $ 2,746 $ 2,877 $ 2,628 $ 2,916
Ratios to average net assets:#
Ratio of Expenses ................. 0.75% 0.75% 0.75% 0.75% 0.75% 0.64%
Ratio of Net Investment Income .... 5.26% 5.73% 6.01% 6.38% 6.23% 4.91%
Ratio of Expenses Without Waivers
and Assumption of Expenses ..... 3.42% 3.15% 2.09% 2.22% 2.38% 4.69%
Ratio of Net Investment Income
Without Waivers and
Assumption of Expenses ......... 2.59% 3.33% 4.67% 4.91% 4.60% 0.86%
Portfolio Turnover Rate .................. 25% 87% 48% 17% 174% 232%
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
51
<PAGE>
[This Page Intentionally Left Blank]
52
<PAGE>
[This Page Intentionally Left Blank]
53
<PAGE>
[This Page Intentionally Left Blank]
54
<PAGE>
Chase Funds are distributed by CFD Fund Distributors, Inc. which is unaffiliated
with The Chase Manhattan Bank. Chase and its respective affiliates receive
compensation from Chase Funds for providing investment advisory and other
services.
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by a prospectus.
The financial information in this report has been taken from the books and
records of the Funds without examination by independent accountants, who express
no opinion thereto.
To obtain a prospectus for any of the Chase Funds, call 1-888-5-CHASE-0. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
NOT May Lose Value
FDIC
INSURED No Bank Guarantee
<PAGE>
Chase Funds(SM). Invest With Power.
Chase Funds Service Center
210 West 10th Street
Kansas City, MO 64105
Legal Counsel
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Independent Accountants
Price Waterhouse Coopers
1177 Avenue of the Americas
New York, NY 10036
(c) The Chase Manhattan Corporation, 1998. All Rights Reserved.
C-465-01605
August 1998 CF802-3-898
[CHASE FUNDS LOGO]
Chase Funds Fulfillment Center
One Chase Manhattan Plaza, 3rd Floor
New York, NY 10081
