<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1998
FILE NOS. 33-9421
811-5526
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 \x\
PRE-EFFECTIVE AMENDMENT NO. \ \
POST-EFFECTIVE AMENDMENT NO. 23 \x\
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 \x\
AMENDMENT NO. 27 \x\
----------------
MUTUAL FUND INVESTMENT TRUST (formerly AVESTA Trust)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
One Chase Manhattan Plaza, Third Floor
New York, New York 10081
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
--------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 492-1600
--------------------
George Martinez, Esq.
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
GARY S. SCHPERO, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
It is proposed that this filing will become effective:
\x\ immediately upon filing pursuant
to paragraph (b) \ \ on pursuant to paragraph (b)
\ \ 60 days after filing pursuant to
paragraph (a)(1) \ \ on pursuant to paragraph (a)(1)
1
<PAGE>
\ \ 75 days after filing pursuant
to paragraph (a)(2) \ \ on pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
\ \ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has previously elected, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, to register an indefinite number of units of
beneficial interest for sale under the Securities Act of 1933. Registrant's
Rule 24f-2 Notice for the fiscal year 1997 was filed on or about March 26, 1998.
================================================================================
2
<PAGE>
MUTUAL FUND INVESTMENT TRUST
Registration Statement on Form N-1A
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) Under the Securities Act of 1933
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
---------- ------------------ -----------------------
Captions apply to all
Prospectuses except where
indicated in parenthesis.
Parenthesis indicate captions
for Institutional Shares
Prospectuses
1 Front Cover Page *
2(a) Expense Summary *
(b) Not Applicable *
3(a) Financial Highlights *
(b) Not Applicable *
(c) Performance Information *
4(a)(b) Other Information Concerning *
the Fund; Fund Objective;
Investment Policies
(c) Fund Objective; Investment *
Policies
(d) Not Applicable *
5(a) Management *
(b) Management *
(c)(d) Management; Other Information *
Concerning the Fund
(e) Other Information Concerning *
the Fund; Back Cover Page
(f) Other Information Concerning *
the Fund
(g) Not Applicable *
5A Not Applicable *
6(a) Other Information Concerning *
the Fund
(b) Not Applicable *
(c) Not Applicable *
3
<PAGE>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
---------- ------------------ -----------------------
(d) Not Applicable *
(e)(f) About Your Investment; How to *
Buy, Sell and Exchange Shares (How to Purchase, Redeem and
Exchange Shares); How Distributions Are Made; Tax
Information; Other Information Concerning the Fund.
(f) How Distributions are Made; *
Tax Information
(g) How Distributions are Made; Tax Matters
Tax Information
(h) About Your Investment; How to *
Buy, Sell and Exchange Shares
(How to Purchase, Redeem and
Exchange Shares); Other
Information Concerning the
Fund
7(a) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
(b) How the Fund Values its *
Shares; How to Buy, Sell and
Exchange Shares (How to
Purchase, Redeem and Exchange
Shares)
(c) Not Applicable *
(d) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
(e) Management; Other Information *
Concerning the Fund
(f) Other Information Concerning *
the Fund
8(a) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
(b) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
4
<PAGE>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
---------- ------------------ -----------------------
(c) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
(d) How to Buy, Sell and Exchange *
Shares (How to Purchase,
Redeem and Exchange Shares)
9 Not Applicable *
10 * Front Cover Page
11 * Front Cover Page
12 * Not Applicable
13(a)(b) Fund Objective; Investment Investment Policies and
Policies Restrictions
14(c) * Management of the Trust and
Funds or Portfolios
(b) * Not Applicable
(c) * Management of the Trust and
Funds or Portfolios
15(a) * Not Applicable
(b) * General Information
(c) * General Information
16(a) Management Management of the Trust and
Funds or Portfolios
(b) Management Management of the Trust and
Funds or Portfolios
(c) Other Information Concerning Management of the Trust and
the Fund Funds or Portfolios
(d) Management Management of the Trust and
Funds or Portfolios
(e) * Not Applicable
(f) How to Buy, Sell and Exchange Management of the Trust and
Shares (How to Purchase, Funds or Portfolios
Redeem and Exchange Shares);
Other Information Concerning
the Fund
(g) * Not Applicable
(h) * Management of the Trust and
Funds or Portfolios;
Independent Accountants
(i) * Not Applicable
5
<PAGE>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
---------- ------------------ -----------------------
17 Investment Policies Investment Policies and
Restrictions
18(a) Other Information Concerning General Information
the Fund; How to Buy, Sell
and Exchange Shares (How to
Purchase, Redeem and Exchange
Shares)
(b) * Not Applicable
19(a) How to Buy, Sell and Exchange Purchases, Redemptions and
Shares (How to Purchase, Exchanges
Redeem and Exchange Shares)
(b) How the Fund Values its Determination of Net Asset
Shares; How to Buy, Sell and Value
Exchange Shares (How to
Purchase, Redeem and Exchange
Shares)
(c) * Purchases, Redemptions and
Exchanges
20 How Distributions are Made; Tax Matters
Tax Information
21(a) * Management of the Trust and
Funds or Portfolios
(b) * Management of the Trust and
Funds or Portfolios
(c) * Not Applicable
22 * Performance Information
23 * Not Applicable
6
<PAGE>
EXPLANATORY NOTE
The Prospectus for the Premier Class Shares of the Chase Money Market Fund,
Chase Tax Free Money Market Fund, Chase Tax Free Income Fund, Chase New York Tax
Free Income Fund, Chase Short-Intermediate Term U.S. Government Securities Fund,
Chase U.S. Government Securities Fund, Chase Intermediate Term Bond Fund, Chase
Income Fund, Chase Balanced Fund, Chase Equity Income Fund, Chase Core Equity
Fund, Chase Equity Growth Fund, Chase Mid Cap Growth Fund, Chase Small
Capitalization Fund and Chase International Equity Fund, dated April 30, 1998,
is incorporated by reference to Amendment No. 22 to the Registration Statement
on Form N-1A of the Registrant filed on April 30, 1998.
The Prospectus for the Retail Class Shares of the Chase Money Market Fund, Chase
Tax Free Money Market Fund, Chase Tax Free Income Fund, Chase New York Tax Free
Income Fund, Chase Short-Intermediate Term U.S. Government Securities Fund,
Chase U.S. Government Securities Fund, Chase Intermediate Term Bond Fund, Chase
Income Fund, Chase Balanced Fund, Chase Equity Income Fund, Chase Core Equity
Fund, Chase Equity Growth Fund, Chase Mid Cap Growth Fund, Chase Small
Capitalization Fund and Chase International Equity Fund, dated April 30, 1998,
is incorporated by reference to Amendment No. 22 to the Registration Statement
on Form N-1A of the Registrant filed on April 30, 1998.
The Prospectus for the Premier Class Shares of the Chase Money Market Fund,
Chase Short-Intermediate Term U.S. Government Securities Fund, Chase U.S.
Government Securities Fund, Chase Intermediate Term Bond Fund, Chase Income
Fund, Chase Balanced Fund, Chase Equity Income Fund, Chase Core Equity Fund,
Chase Equity Growth Fund and Chase Small Capitalization Fund, dated April 30,
1998, is incorporated by reference to the Registrant's filing of a definitive
copy under Rule 497(c) of the Securities Act of 1933, as amended, on May 7,
1998.
The Statement of Additional Information for the Chase Money Market Fund, Chase
Tax Free Money Market Fund, Chase Tax Free Income Fund, Chase New York Tax Free
Income Fund, Chase Short-Intermediate Term U.S. Government Securities Fund,
Chase U.S. Government Securities Fund, Chase Intermediate Term Bond Fund, Chase
Income Fund, Chase Balanced Fund, Chase Equity Income Fund, Chase Core Equity
Fund, Chase Equity Growth Fund, Chase Mid Cap Growth Fund, Chase Small Cap
Growth Fund and Chase International Equity Fund, dated April 30, 1998, is
incorporated by reference to Amendment No. 22 to the Registration Statement on
Form N-1A of the Registrant filed on April 30, 1998.
<PAGE>
CHASE FUNDS
INVESTMENT STRATEGIES:
CHASE MONEY MARKET FUND: CURRENT INCOME
CHASE SHORT-INTERMEDIATE TERM U.S.
GOVERNMENT SECURITIES FUND: INCOME
CHASE U.S. GOVERNMENT SECURITIES FUND: INCOME
CHASE INTERMEDIATE TERM BOND FUND: INCOME
CHASE INCOME FUND: INCOME
CHASE BALANCED FUND: INCOME AND GROWTH
CHASE EQUITY INCOME FUND: GROWTH AND INCOME
CHASE CORE EQUITY FUND: TOTAL RETURN
CHASE EQUITY GROWTH FUND: CAPITAL GROWTH
CHASE SMALL CAPITALIZATION FUND: CAPITAL GROWTH
RETAIL SHARES
May 15, 1998
This Prospectus explains concisely what you should know before investing. Please
read it carefully and keep it for future reference. You can find more detailed
information about the Funds in their April 30, 1998 Statement of Additional
Information, as amended periodically (the 'SAI'). For a free copy of the SAI,
call the Chase Funds Service Center at 1-800-62-CHASE. The SAI has been filed
with the Securities and Exchange Commission (the 'Commission') and is
incorporated into this Prospectus by reference. In addition, the Commission
maintains a Web site (http://www.sec.gov) that contains the SAI, the Funds'
reports to shareholders and other information regarding the Funds which has been
electronically filed with the Commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INVESTMENTS IN THE MONEY MARKET FUND ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT SUCH FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, THE CHASE MANHATTAN BANK OR ANY OF ITS AFFILIATES AND ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENTS IN MUTUAL FUNDS INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
<PAGE>
The Chase Funds are portfolios of Mutual Fund Investment Trust ('MFIT'), an
open-end investment company organized as a Massachusetts business trust in
September 1997. The Chase Funds are managed by The Chase Manhattan Bank
('Chase'), a subsidiary of The Chase Manhattan Corporation ('CMC'). As indicated
below, certain of the Funds are successor investment portfolios to portfolios of
the AVESTA Trust, the predecessor entity of MFIT. The AVESTA Trust was a
collective trust established under the laws of the State of Texas by Chase Bank
of Texas, National Association (herein, 'Chase Texas'). The AVESTA Trust was
registered under the Investment Company Act of 1940 and was available solely for
certain individual retirement accounts and pension and profit-sharing plans. The
AVESTA Trust was converted and redomiciled into MFIT, effective as of January 1,
1998 (the 'Conversion'). Chase Texas acted as the trustee of the AVESTA Trust,
and as trustee was obligated to provide the investment portfolios of the AVESTA
Trust with the investment advisory, administrative, custodial and other services
necessary to manage the portfolios.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
CHASE MONEY MARKET FUND.................................................... 4
CHASE SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND.............. 6
CHASE U.S. GOVERNMENT SECURITIES FUND...................................... 8
CHASE INTERMEDIATE TERM BOND FUND.......................................... 10
CHASE INCOME FUND.......................................................... 12
CHASE BALANCED FUND........................................................ 14
CHASE EQUITY INCOME FUND................................................... 16
CHASE CORE EQUITY FUND..................................................... 18
CHASE EQUITY GROWTH FUND................................................... 20
CHASE SMALL CAPITALIZATION FUND............................................ 22
COMMON INVESTMENT POLICIES................................................. 24
MANAGEMENT................................................................. 36
HOW TO BUY, SELL AND EXCHANGE SHARES....................................... 38
HOW THE FUNDS VALUE THEIR SHARES........................................... 41
HOW DISTRIBUTIONS ARE MADE; TAX INFORMATION................................ 41
OTHER INFORMATION CONCERNING THE FUNDS..................................... 43
PERFORMANCE INFORMATION.................................................... 46
</TABLE>
3
<PAGE>
CHASE MONEY MARKET FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Money Market Fund's objective is to provide maximum current
income consistent with the preservation of capital and the maintenance of
liquidity.
STYLE AND PORTFOLIO COMPOSITION. The Fund invests in high quality, short-term,
U.S. dollar-denominated money market instruments. The Fund invests principally
in (i) high quality commercial paper and other short-term obligations, including
floating and variable rate master demand notes of U.S. and foreign issuers; (ii)
U.S. dollar-denominated obligations of foreign governments and supranational
agencies (e.g., the International Bank for Reconstruction and Development);
(iii) obligations issued or guaranteed by U.S. banks with total assets exceeding
$1 billion (including obligations of foreign branches of such banks) and by
foreign banks with total assets exceeding $10 billion (or the equivalent in
other currencies) which have branches or agencies in the U.S. (including U.S.
branches of such banks), or such other U.S. or foreign commercial banks which
are judged by the Fund's adviser to meet comparable credit standing criteria;
(iv) securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and (v) repurchase agreements.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income
o Are investing for short-term goals
o Own or plan to own other types of investments for
diversification purposes
o Can accept investing in non-bank guaranteed products
This Fund may NOT be appropriate for investors who are in need of capital
growth potential.
MATURITY. The dollar weighted average maturity of the Fund will be 90 days or
less. The Fund purchases only instruments which have or are deemed to have
remaining maturities of 397 days or less in accordance with federal regulations.
CREDIT QUALITY. The Fund invests only in U.S. dollar-denominated high quality
obligations which are determined to present minimal credit risks. This credit
determination must be made in accordance with procedures established by the
Board of Trustees. Each investment must be rated in the highest short-term
rating category by at least two nationally recognized statistical rating
organizations ('NRSROs') (or one NRSRO if the instrument was rated only by one
such organization) or, if unrated, must be determined to be of comparable
quality in accordance with the procedures of the Trust. If a security has an
unconditional guarantee or similar enhancement, the issuer of the guarantee or
enhancement may be relied upon in meeting these ratings requirements rather than
the issuer of the security.
MISCELLANEOUS. The Fund seeks to maintain a net asset value of $1.00 per share.
The Fund is classified as a 'diversified' fund under federal securities laws.
4
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Money Market Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.30%
12b-1 Fee............................................................. 0.10%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.20%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 0.60%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $6 $19 $33 $ 75
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.40% and 0.80%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
5
<PAGE>
CHASE SHORT-INTERMEDIATE TERM
U.S. GOVERNMENT SECURITIES FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Short-Intermediate Term Fund's objective is to provide as high a
level of current income as is consistent with the preservation of capital.
STYLE AND PORTFOLIO COMPOSITION. The Fund invests primarily (under normal market
conditions, at least 70% of the value of the Fund's total assets) in securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities,
and repurchase agreements with respect thereto. The Fund expects that
substantially all of its assets will be so invested. The Fund seeks to preserve
capital by investing in shorter-term securities; it expects the volatility in
the principal value of its shorter-term investments to be more limited than that
associated with investments in comparable securities having longer maturities.
The Fund may invest in mortgage-backed securities issued or guaranteed by
certain agencies of the U.S. Government as described below under 'Common
Investment Policies--Other Investment Practices--Mortgage-Related Securities.'
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income
o Are investing for relatively short-term goals
o Own or plan to own other types of investments for
diversification purposes
o Can assume a moderate degree of bond market (i.e., interest
rate) risk
This Fund may NOT be appropriate for investors who are unable to tolerate any
up and down price changes or who are in need of capital growth potential.
MATURITY. As a matter of operating policy, under normal market conditions the
dollar-weighted average maturity of the Fund's portfolio, measured at the time
an investment is made, will be between two and five years. There is no
restriction on the maturity of any individual asset which may be acquired by the
Fund. The average maturity of securities in the Fund will be based primarily
upon the adviser's expectations for the future course of interest rates and the
then prevailing price and yield levels in the U.S. Government securities market.
MISCELLANEOUS. Guarantees of principal and interest on obligations that may be
purchased by the Fund are not guarantees of the market value of such
obligations, nor do they extend to the value of the shares of the Fund. The Fund
is classified as a 'diversified' fund under federal securities laws.
6
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Short-Intermediate Term Fund
based on estimated expenses for the current fiscal year. The example shows the
cumulative expenses attributable to a hypothetical $1,000 investment over
specified periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.50%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.00%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual
return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares........................... $ 10 $32 $55 $122
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
1.03% and 1.78%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
7
<PAGE>
CHASE U.S. GOVERNMENT SECURITIES FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The U.S. Government Securities Fund's objective is to provide current
income with emphasis on the preservation of capital.
STYLE AND PORTFOLIO COMPOSITION. The Fund invests primarily (under normal market
conditions, at least 70% of the value of the Fund's total assets) in securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities,
and repurchase agreements with respect thereto. The Fund expects that
substantially all of its assets will be so invested. The Fund may invest in
mortgage-backed securities issued or guaranteed by certain agencies of the U.S.
Government as described below under 'Common Investment Policies--Other
Investment Practices--Mortgage-Related Securities.'
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income
o Are investing for mid-term goals
o Own or plan to own other types of investments for
diversification purposes
o Can assume bond market (i.e., interest rate) risk
This Fund may NOT be appropriate for investors who are unable to tolerate any
up and down price changes, are investing for very short-term goals or who are
in need of high growth potential.
MATURITY. As a matter of operating policy, under normal market conditions, the
dollar-weighted average maturity of the Fund's portfolio, measured at the time
an investment is made, will be between five and fifteen years. There is no
restriction on the maturity of any individual asset which may be acquired by the
Fund. The average maturity of securities in the Fund will be based primarily
upon the adviser's expectations for the future course of interest rates and the
then prevailing price and yield levels in the U.S. Government securities market.
Fixed income securities with longer maturities generally have less stable market
values.
MISCELLANEOUS. Guarantees of principal and interest on obligations that may be
purchased by the Fund are not guarantees of the market value of such
obligations, nor do they extend to the value of the shares of the Fund. The Fund
is classified as a 'diversified' fund under federal securities laws.
8
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the U.S. Government Securities
Fund based on estimated expenses for the current fiscal year. The example shows
the cumulative expenses attributable to a hypothetical $1,000 investment over
specified periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.50%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.00%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 10 $32 $55 $122
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
2.81% and 3.56%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
9
<PAGE>
CHASE INTERMEDIATE TERM BOND FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Intermediate Term Bond Fund's objective is to provide current
income, with consideration also given to stability of principal.
STYLE AND PORTFOLIO COMPOSITION. Primary investment emphasis is on intermediate
term debt securities. Under normal market conditions, at least 70% of the Fund's
total assets will be invested in bonds, notes and debentures issued by domestic
or foreign issuers, U.S. Government securities, debt obligations collateralized
by U.S. Government securities or by private mortgages and preferred stock of
domestic issuers. The Fund may also invest in debt securities issued by foreign
issuers. The Fund will not typically invest in common stocks, although the Fund
may acquire common stocks as a result of purchases of unit offerings of fixed
income securities, which include such securities, or in connection with the
conversion or exchange of fixed income securities.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income
o Are investing for mid-term goals
o Own or plan to own other types of investments for
diversification purposes
o Can assume bond market (i.e., interest rate) risk
This Fund may NOT be appropriate for investors who are unable to tolerate any
up and down price changes, are investing for very short-term goals or who are
in need of high growth potential.
MATURITY. The Fund will maintain a dollar weighted average portfolio maturity
ranging from three to ten years. Fixed income securities purchased by the Fund
will normally have a maturity in excess of one year. The average maturity of
securities in the Fund will be based primarily upon the adviser's expectations
for the future course of interest rates and the then prevailing price and yield
levels in the fixed income market. Fixed income securities with longer
maturities generally have less stable market values.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Investment grade debt securities
are securities rated in the category Baa or higher by Moody's or BBB or higher
by S&P or the equivalent by another NRSRO. Although the adviser is not required
to dispose of securities which are downgraded below investment grade subsequent
to acquisition, there is no present intention to retain securities which are
downgraded below investment grade. The Fund's investments in securities other
than debt of domestic and foreign issuers and debt obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities (e.g.,
preferred stock) will be based on the adviser's judgment of the quality of the
securities. The judgment may be based upon such considerations as the issuer's
financial strength, including its historic and current financial condition and
its historic and projected earnings; the issuer's market position; and other
factors relevant to an analysis of a particular issuer, as determined by the
adviser.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
10
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Intermediate Term Bond Fund
based on estimated expenses for the current fiscal year. The example shows the
cumulative expenses attributable to a hypothetical $1,000 investment over
specified periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.50%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.00%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 10 $32 $55 $122
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
1.14% and 1.89%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
11
<PAGE>
CHASE INCOME FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Income Fund's objective is to invest in securities that earn a
high level of current income with consideration also given to safety of
principal.
STYLE AND PORTFOLIO COMPOSITION. Investment emphasis is on fixed income
securities, primarily domestic debt securities, such as bonds, notes and
debentures issued by domestic issuers, U.S. Government securities, debt
obligations collateralized by U.S. Government securities or by private mortgages
and preferred stock of domestic issuers. Under normal market conditions, at
least 70% of the Income Fund's total assets will be invested in such securities.
The Fund may also invest in debt securities issued by foreign issuers. The Fund
will not typically invest in common stock, although the Fund may acquire common
stock as a result of purchases of unit offerings of fixed income securities,
which include such securities, or in connection with the conversion or exchange
of fixed income securities.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income
o Are investing for mid-term goals
o Own or plan to own other types of investments for
diversification purposes
o Can assume bond market (i.e., interest rate) risk
This Fund may NOT be appropriate for investors who are unable to tolerate any
up and down price changes, are investing for very short-term goals or who are
in need of high growth potential.
MATURITY. Under normal market conditions it is expected that the dollar weighted
average maturity of the Fund will range between five to fifteen years. Fixed
income securities purchased by the Fund will normally have a maturity in excess
of one year. The average maturity of securities in the Fund will be based
primarily upon the adviser's expectations for the future course of interest
rates and the then prevailing price and yield levels in the fixed income market.
Fixed income securities with longer maturities generally have less stable market
values.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade. The Fund's investments in
securities other than debt of domestic and foreign issuers and debt obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
(e.g., preferred stock) will be based on the adviser's judgment of the quality
of the securities. The judgment may be based upon such considerations as the
issuer's financial strength, including its historic and current financial
condition and its historic and projected earnings; the issuer's market position;
and other factors relevant to an analysis of a particular issuer, as determined
by the adviser.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
12
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Income Fund based on estimated
expenses for the current fiscal year. The example shows the cumulative expenses
attributable to a hypothetical $1,000 investment over specified periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.50%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.00%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 10 $32 $55 $122
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.88% and 1.63%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
13
<PAGE>
CHASE BALANCED FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Balanced Fund's objective is to provide a balance of current
income and growth of capital.
STYLE AND PORTFOLIO
COMPOSITION. The Fund will employ a combination of (1) an active equity
management style focused primarily on strong earnings momentum and profitability
within a growth-oriented stock universe, and (2) an active fixed income
management style using primarily domestic debt securities. Under normal market
conditions, 30% to 70% of the Fund's total assets will be invested in
equity-based securities, which include common stocks and those debt securities
and preferred stocks that are convertible into common stock. Under normal market
conditions, at least 25% of the value of the total assets of the Fund will be
invested in U.S. Government securities and fixed income senior securities other
than convertible securities. The Fund's adviser may alter the relative portion
of the Fund's assets invested in equity-based and fixed income securities
depending on its judgment as to general market and economic conditions and
trends, yields and interest rates and changes in monetary policies.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking the total return potential of equity and fixed
income securities
o Are investing for goals at least 3-5 years away
o Own or plan to own other types of investments for
diversification purposes
o Can assume market risk of stocks and bonds
This Fund may NOT be appropriate for investors who are unable to tolerate
moderate up and down price changes, are investing for short-term goals or who
are in need of high growth potential.
EQUITY-BASED INVESTMENTS. The Fund's equity investments are typically made in
companies displaying one or more of the following characteristics: projected
earnings growth at a rate equal to or greater than the equity markets in
general, return on assets and equity equal to or greater than the equity
markets, above market average price/earnings ratios, below average dividend
yield, above average market volatility, and a market capitalization in excess of
$500 million. The Fund will focus on companies with strong earnings growth and
high levels of profitability as well as positive industry and company specific
characteristics, and attractive valuations given growth potential. The equity
portion of the Fund will emphasize the growth sectors of the economy.
MATURITY. The average maturity of fixed income securities in the Fund will be
based primarily upon the adviser's expectations for the future course of
interest rates and the then prevailing price and yield levels in the fixed
income market.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
14
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Balanced Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.75%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.25%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 13 $40 $69 $151
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.47% and 1.47%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
15
<PAGE>
CHASE EQUITY INCOME FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Equity Income Fund's objective is to invest in securities that
provide both capital appreciation as well as current income.
STYLE AND PORTFOLIO COMPOSITION. The Fund will employ an active equity
management style focused primarily on both earnings momentum and value within an
income-oriented stock universe. Investment emphasis is on equity-based
securities, which include common stocks and those debt securities and preferred
stocks convertible into common stocks. Under normal market conditions, it is
expected that at least 70% of the value of the total assets of the Fund will be
invested in equity-based securities. The Fund may invest any portion of its
assets not invested as described above in other types of securities, including
fixed income securities, money market instruments and non-income producing
equity securities.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking current income while maintaining an opportunity
to benefit from growth in the equity market
o Are investing for goals at least 3-5 years away
o Own or plan to own other types of investments for
diversification purposes
o Can assume stock market risk
This Fund may NOT be appropriate for investors who are unable to tolerate
moderate up and down price changes, are investing for short-term goals or who
are in need of high growth potential.
EQUITY-BASED INVESTMENTS. The Fund will emphasize companies displaying one or
more of the following characteristics: above average dividend yield, a
consistent dividend record, below average market volatility, attractive earnings
momentum, below market price/earnings ratios, and a market capitalization in
excess of $500 million.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
16
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Equity Income Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.75%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.25%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 13 $40 $69 $151
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.36% and 1.36%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
17
<PAGE>
CHASE CORE EQUITY FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Core Equity Fund's objective is to maximize total investment
return through emphasis on long-term capital appreciation and current income
consistent with reasonable risk.
STYLE AND PORTFOLIO COMPOSITION. The Fund will employ an active equity
management style focused primarily on strong earnings momentum and profitability
within the S&P 500 stock universe. Portfolio emphasis is on equity-based
securities, which include common stocks and those debt securities and preferred
stocks convertible into common stocks. Under normal conditions, it is expected
that at least 70% of the value of the total assets of the fund will be invested
in equity-based securities. The Fund may invest any portion of its assets not
invested as described above in other types of securities, including fixed income
securities and money market instruments.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking long-term growth of capital
o Are investing for goals several years away
o Own or plan to own other types of investments for
diversification purposes
o Can assume stock market risk
This Fund may NOT be appropriate for investors who are unable to tolerate
frequent up and down price changes and are investing for short-term goals.
EQUITY-BASED INVESTMENTS. The Fund will typically emphasize companies displaying
one or more of the following characteristics: superior and stable record of
earnings growth relative to the equity markets in general, return on assets and
equity equal to or greater than the equity markets averages, and projected
earnings growth at a rate equal to or greater than the equity markets, and a
market capitalization in excess of $500 million. The Fund will be well
diversified among both the growth and cyclical sectors of the economy.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
18
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Core Equity Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.75%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.25%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 13 $40 $69 $151
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.42% and 1.42%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
19
<PAGE>
CHASE EQUITY GROWTH FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Equity Growth Fund's objective is to provide capital
appreciation. Current income is a secondary objective.
STYLE AND PORTFOLIO COMPOSITION. The Fund will employ an active equity
management style focused primarily on strong earnings momentum and profitability
within a growth-oriented stock universe. Portfolio emphasis is on equity-based
securities, which include common stocks and those debt securities and preferred
stocks that are convertible into common stocks. Under normal market conditions,
it is expected that at least 70% of the value of the total assets of the Fund
will be invested in equity-based securities. The Fund may invest any portion of
its assets not invested as described above in other types of securities,
including fixed income securities and money market instruments.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking long-term growth of capital
o Are investing for goals several years away
o Own or plan to own other types of investments for
diversification purposes
o Can assume stock market risk
This Fund may NOT be appropriate for investors who are unable to tolerate
frequent up and down price changes, are investing for short-term goals or who
are in need of current income.
EQUITY-BASED INVESTMENTS. The Fund investments are typically made in companies
displaying one or more of the following characteristics: projected earnings
growth at a rate equal to or greater than the equity markets in general, return
on assets and equity equal to or greater than the equity markets, above market
average price-earnings ratios, below average dividend yield, above average
market volatility, and a market capitalization in excess of $500 million. The
Fund will focus on companies with strong earnings and high levels of
profitability as well as positive industry and company specific characteristics,
and attractive valuation given growth potential. The Fund will emphasize the
growth sectors of the economy.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade.
MISCELLANEOUS. The Fund is classified as a 'diversified' fund under federal
securities laws.
20
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Equity Growth Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.75%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.25%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5% annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 13 $40 $69 $151
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.36% and 1.36%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
21
<PAGE>
CHASE SMALL CAPITALIZATION FUND
FUND_ OBJECTIVE_ AND_ INVESTMENT_ APPROACH
OBJECTIVE. The Small Cap Fund's objective is to provide capital appreciation.
Although the Fund, in seeking its objective, may receive current income from
dividends and interest, income is only an incidental consideration of the Fund.
STYLE AND PORTFOLIO COMPOSITION. The Fund will employ an active equity
management style focused primarily on delivering risk and return characteristics
representative of a small capitalization asset class. Portfolio emphasis is on
equity-based securities, which include common stocks and those debt securities
and preferred stocks convertible into common stocks. Under normal conditions, it
is expected that at least 70% of the value of the total assets of the Fund will
be invested in equity-based securities of small cap issuers. The Fund may invest
any portion of its assets not invested as described above in other types of
securities, including equity securities of mid and large cap companies, fixed
income securities and money market instruments.
Who may want to invest?
This Fund may be most appropriate for investors who...
o Are seeking long-term growth of capital
o Are investing for goals several years away
o Own or plan to own other types of investments for
diversification purposes
o Can assume above-average stock market risk
This Fund may NOT be appropriate for investors who are unable to tolerate
frequent up and down price changes, are investing for short-term goals or who
are in need of current income.
EQUITY-BASED INVESTMENTS. The Fund investments are typically made in companies
displaying one or more of the following characteristics: above market average
price/earnings ratios and price/book ratios, below average dividend yield, and
above average market volatility. In addition, small capitalization companies
will be emphasized that possess one or more of the following: high quality
management, a leading or dominant position in a major product line, new or
innovative products, services, or processes, a sound financial position, and a
relatively high rate of return of invested capital so that future growth can be
financed from internal sources. The Fund primarily targets companies with market
capitalizations of $100 million to $1 billion at time of purchase. Purchases are
a direct result of a disciplined stock selection process focusing on identifying
attractively valued stock of companies with positive business fundamentals.
CREDIT QUALITY. The Fund will invest in debt securities of domestic and foreign
issuers only if they are rated investment grade or, if unrated, determined by
the Fund's adviser to be of comparable quality. Although the adviser is not
required to dispose of securities which are downgraded below investment grade
subsequent to acquisition, there is no present intention to retain securities
which are downgraded below investment grade.
MISCELLANEOUS. Investments in smaller companies may be more volatile than
investments in companies with greater capitalization, as described under 'Risk
Factors' below. The Fund is classified as a 'diversified' fund under federal
securities laws.
22
<PAGE>
EXPENSE_ SUMMARY
Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Small Cap Fund based on
estimated expenses for the current fiscal year. The example shows the cumulative
expenses attributable to a hypothetical $1,000 investment over specified
periods.
<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee........................................................ 0.75%
12b-1 Fee............................................................. 0.25%
Other Expenses (after estimated waivers and reimbursements)*.......... 0.25%
Total Fund Operating Expenses (after estimated waivers and
reimbursements)*.................................................... 1.25%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE
Your investment of $1,000 would incur the following expenses, assuming 5%
annual return:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Retail Shares.............................. $ 13 $40 $69 $151
</TABLE>
* Reflects current waivers and reimbursements to maintain Total Fund Operating
Expenses at the level indicated in the table above. Absent such waivers and
reimbursements, Other Expenses and Total Fund Operating Expenses would be
0.47% and 1.47%, respectively. Chase has agreed voluntarily to waive fees
payable to it and/or reimburse expenses for a period of at least one year
commencing January 1, 1998 to the extent necessary to prevent Total Fund
Operating Expenses for such period from exceeding the amount in the table.
The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. THE EXAMPLE
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURNS;
ACTUAL EXPENSES AND RETURNS MAY BE GREATER OR LESS THAN SHOWN.
Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with an investment
in the Fund.
23
<PAGE>
COMMON INVESTMENT
POLICIES
Although the Money Market Fund seeks to be fully invested, at times it may
hold uninvested cash reserves, which would adversely affect its yield.
Each Fund may invest any portion of its assets not invested as described above
in high quality money market instruments and repurchase agreements. For
temporary defensive purposes, a Fund may invest without limitation in these
instruments. At times when the advisers of the Balanced Fund, Equity Income
Fund, Core Equity Fund, Equity Growth Fund or Small Cap Fund (the 'Equity
Funds') deem it advisable to limit the Fund's exposure to the equity markets,
each Equity Fund may invest without limitation in investment grade fixed
income securities (exclusive of any investments in money market instruments).
To the extent a Fund departs from its investment policies during temporary
defensive periods, its investment objective may not be achieved.
Fixed income securities in each Fund's portfolio may include, to the extent
permitted by the Fund's investment policies, bonds, notes, mortgage-related
securities, asset-backed securities, government and government agency and
instrumentality obligations, zero coupon securities, convertible securities and
money market instruments, as discussed below.
In determining the credit quality of a fixed income security, each Fund's
adviser will consider the issuer's financial strength, including its historic
and current financial condition, its historic and projected earnings; the
issuer's market position; and other factors relevant to an analysis of a
particular issuer, as determined by the adviser.
In making investment decisions for the Short-Intermediate Term Fund, the U.S.
Government Securities Fund, the Intermediate Term Bond Fund and the Income
Fund (the 'Fixed Income Funds'), each such Fund's adviser considers many
factors in addition to current yield, including preservation of capital,
maturity and yield to maturity. Each Fixed Income Fund's adviser will adjust
such Fund's investments in particular securities or types of securities based
upon its appraisal of changing economic conditions and trends. Each Fixed
Income Fund's adviser may sell one security and purchase another security of
comparable quality and maturity in order to take advantage of what it believes
to be short-term differentials in market values or yield disparities.
The maturity of securities with put features will be measured based on the next
put date, and the maturity of mortgage-backed and asset-backed securities will
be based on their weighted average lives.
In lieu of investing directly, each Fund is authorized to seek to achieve its
objective by investing all of its investable assets in an investment company
having
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<PAGE>
substantially the same investment objective and policies as the applicable Fund.
See 'Unique Characteristics of Master/Feeder Structure.'
The Funds are classified as 'diversified' funds under federal securities laws.
No Fund is intended to be a complete investment program, and there is no
assurance that any Fund will achieve its investment objective.
OTHER INVESTMENT PRACTICES
The Funds may also engage in the following investment practices when consistent
with their overall objective and policies. These practices, and certain
associated risks, are more fully described in the SAI.
FOREIGN SECURITIES. The Money Market Fund may invest up to 30% of its total
assets in securities of foreign governments and supranational agencies. The
Money Market Fund will limit its investments in foreign government obligations
to commercial paper and other short-term notes issued or guaranteed by the
governments of Western Europe, Australia, New Zealand, Japan and Canada. Each
other Fund may invest up to 30% of its total assets in foreign securities,
including Depositary Receipts.
Since foreign securities are normally denominated and traded in foreign
currencies, the values of a Fund's foreign investments may be influenced by
currency exchange rates and exchange control regulations. There may be less
information publicly available about foreign issuers than U.S. issuers, and they
are not generally subject to accounting, auditing and financial reporting
standards and practices comparable to those in the U.S. Foreign securities may
be less liquid and more volatile than comparable U.S. securities. Foreign
settlement procedures and trade regulations may involve certain expenses and
risks. One risk would be the delay in payment or delivery of securities or in
the recovery of a Fund's assets held abroad. It is possible that nationalization
or expropriation of assets, imposition of currency exchange controls, taxation
by withholding Fund assets, political or financial instability and diplomatic
developments could affect the value of a Fund's investments in certain foreign
countries. Foreign laws may restrict the ability to invest in certain countries
or issuers and special tax considerations will apply to foreign securities. The
risks can increase if a Fund invests in emerging market securities.
DEPOSITARY RECEIPTS. Each of the Equity Funds, the Intermediate Term Bond Fund
and the Income
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Fund may invest its assets in securities of foreign issuers in the form of
American Depositary Receipts, European Depositary Receipts, Global Depositary
Receipts or other similar securities representing securities of foreign issuers
(collectively, 'Depositary Receipts'). Each Fund treats Depositary Receipts as
interests in the underlying securities for purposes of its investment policies.
Each Fund will limit its investment in Depositary Receipts not sponsored by the
issuer of the underlying securities to no more than 5% of the value of its net
assets (at the time of investment).
SUPRANATIONAL AND ECU OBLIGATIONS. Each Fund may invest in debt securities
issued by supranational organizations, which include organizations such as The
World Bank, the European Community, the European Coal and Steel Community and
the Asian Development Bank. Obligations of supranational agencies are supported
by subscribed, but unpaid, commitments of member countries. There is no
assurance that these commitments will be undertaken or complied with in the
future, and foreign and supranational securities are subject to certain risks
associated with foreign investing. Each such Fund may also invest in securities
denominated in the ECU, which is a 'basket' consisting of specified amounts of
the currencies of certain member states of the European Community. These
securities are typically issued by European governments and supranational
organizations.
U.S. GOVERNMENT SECURITIES. Each Fund may invest in U.S. Treasury obligations,
which are bills, notes and bonds backed by the full faith and credit of the U.S.
Government as to payment of principal and interest which generally differ only
in their interest rates and maturities. Each Fund also may invest in securities
issued or guaranteed by U.S. Government agencies and instrumentalities including
obligations that are supported by the full faith and credit of the U.S.
Treasury, the limited authority of the issuer or guarantor to borrow from the
U.S. Treasury, or only the credit of the issuer or guarantor. In the case of
obligations not backed by the full faith and credit of the U.S. Treasury, the
agency issuing or guaranteeing the obligation is principally responsible for
ultimate repayment.
MONEY MARKET INSTRUMENTS. Each Fund may invest in cash or high-quality,
short-term money market instruments. These may include U.S. Government
securities, commercial paper of domestic and foreign issuers and obligations of
domestic and foreign banks. Investments in foreign money market instruments may
involve certain risks associated with foreign investment.
REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. Each Fund may enter into agreements to purchase and resell
securities at an agreed-upon price and time. Each Fund also has the ability to
lend portfolio securities in an amount equal to not more than 30% of its total
assets to generate additional income. These transactions must be fully
collateralized at all times. Each Fund may purchase securities for delivery at a
future date, which
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may increase its overall investment exposure and involves a risk of loss if the
value of the securities declines prior to the settlement date. Each Fund may
enter into put transactions, including those sometimes referred to as stand-by
commitments, with respect to securities in its portfolio. In these transactions,
a Fund would acquire the right to sell a security at an agreed upon price within
a specified period prior to its maturity date. A put transaction will increase
the cost of the underlying security and consequently reduce the available yield.
Each of these transactions involves some risk to a Fund if the other party
should default on its obligation and the Fund is delayed or prevented from
recovering the collateral or completing the transaction.
BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow money from
banks for temporary or short-term purposes, but will not borrow money to buy
additional securities, known as 'leveraging.' Each Fund may also sell and
simultaneously commit to repurchase a portfolio security at an agreed-upon price
and time. Each Fund may use this practice to generate cash for shareholder
redemptions without selling securities during unfavorable market conditions.
Whenever a Fund enters into a reverse repurchase agreement, it will establish a
segregated account in which it will maintain liquid assets on a daily basis in
an amount at least equal to the repurchase price (including accrued interest).
The Funds would be required to pay interest on amounts obtained through reverse
repurchase agreements, which are considered borrowings under federal securities
laws.
CONVERTIBLE SECURITIES. Each Fund other than the Money Market Fund may invest in
convertible securities, which are securities generally offering fixed interest
or dividend yields which may be converted either at a stated price or stated
rate for common or preferred stock. Although to a lesser extent than with fixed
income securities generally, the market value of convertible securities tends to
decline as interest rates increase, and increase as interest rates decline.
Because of the conversion feature, the market value of convertible securities
also tends to vary with fluctuations in the market value of the underlying
common or preferred stock.
OTHER INVESTMENT COMPANIES. Apart from being able to invest all of its
investable assets in another investment company having substantially the same
investment objectives and policies, each Fund may invest up to 10% of its total
assets in shares of other registered investment companies when consistent with
its investment objective and policies, subject to applicable regulatory
limitations. Additional fees will be charged by such other investment companies.
ZERO COUPON SECURITIES, PAYMENT-IN-KIND OBLIGATIONS AND STRIPPED
OBLIGATIONS. The Short-Intermediate Term Fund and U.S. Government Securities
Fund may invest without limitation in zero coupon securities issued by
governmental issuers and each other Fund other than the Money Market Fund may
invest up to 25% of its total assets in zero coupon securities issued by
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governmental and private issuers. Zero coupon securities are debt securities
that do not pay regular interest payments, and instead are sold at substantial
discounts from their value at maturity. Each Fund other than the Money Market
Fund may invest in payment-in-kind obligations. Payment-in-kind obligations
are obligations on which the interest is payable in additional securities
rather than cash. The Short-Intermediate Term Fund and the U.S. Government
Securities Fund may invest without limitation and each other Fund other than
the Money Market Fund may invest up to 25% of its total assets in stripped
obligations (i.e., separately traded principal and interest components of
securities) where the underlying obligations are backed by the full faith
and credit of the U.S. Government, including instruments known as 'STRIPS.'
The value of these instruments tends to fluctuate more in response to
changes in interest rates than the value of ordinary interest-paying debt
securities with similar maturities. The risk is greater when the period to
maturity is longer.
FLOATING AND VARIABLE RATE SECURITIES; PARTICIPATION CERTIFICATES. Each Fund may
invest in floating rate securities, whose interest rates adjust automatically
whenever a specified interest rate changes, and variable rate securities, whose
interest rates are periodically adjusted. Certain of these instruments permit
the holder to demand payment of principal and accrued interest upon a specified
number of days' notice from either the issuer or a third party. The securities
in which a Fund may invest include participation certificates and certificates
of indebtedness or safekeeping. Participation certificates are pro rata
interests in securities held by others; certificates of indebtedness or
safekeeping are documentary receipts for such original securities held in
custody by others. As a result of the floating or variable rate nature of these
investments, a Fund's yield may decline and it may forego the opportunity for
capital appreciation during periods when interest rates decline; however, during
periods when interest rates increase, the Fund's yield may increase and it may
have reduced risk of capital depreciation. Demand features on certain floating
or variable rate securities may obligate the Fund to pay a 'tender fee' to a
third party. Demand features provided by foreign banks involve certain risks
associated with foreign investments.
REAL ESTATE INVESTMENT TRUSTS. Equity investments may include shares of real
estate investment
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<PAGE>
trusts ('REITs'). REITs are pooled investment vehicles which invest primarily in
income-producing real estate ('equity trust') or real estate related loans or
interests ('mortgage trusts'). The value of equity trusts will depend upon the
value of the underlying properties, and the value of the mortgage trusts will be
sensitive to the value of the underlying loans or interests. The value of REITs
may decline when interest rates rise.
INVERSE FLOATERS AND INTEREST RATE CAPS. Each of the Fixed Income Funds may
invest in inverse floaters and in securities with interest rate caps. Inverse
floaters are instruments whose interest rates bear an inverse relationship to
the interest rate on another security or the value of an index. The market value
of an inverse floater will vary inversely with changes in market interest rates,
and will be more volatile in response to interest rate changes than that of a
fixed rate obligation. Interest rate caps are financial instruments under which
payments occur if an interest rate index exceeds a certain predetermined
interest rate level, known as the cap rate, which is tied to a specific index.
These financial products will be more volatile in price than securities which do
not include such a structure. No Fund has any present intention to invest in
inverse floaters or securities with interest rate caps.
MORTGAGE-RELATED SECURITIES. Each Equity Fund may invest in investment grade
mortgage-related securities. The Intermediate Term Bond Fund and Income Fund
each may invest up to two-thirds of its total assets in investment grade
mortgage-related securities. The Short-Intermediate Term Fund and U.S.
Government Securities Fund may invest without limitation in mortgage-related
U.S. Government Securities. Mortgage pass-through securities are securities
representing interests in 'pools' of mortgages in which payments of both
interest and principal on the securities are made monthly, in effect 'passing
through' monthly payments made by the individual borrowers on the residential
mortgage loans which underlie the securities. Early repayment of principal on
mortgage pass-through securities held by a Fund (due to prepayments of principal
on the underlying mortgage loans) may result in a lower rate of return when the
Fund reinvests such principal. In addition, as with callable fixed income
securities generally, if a Fund purchased the securities at a premium, sustained
early repayment would limit the value of the premium. Like other fixed income
securities, when interest rates rise the value of a mortgage-related security
generally will decline; however, when interest rates decline, the value of
mortgage-related securities with prepayment features may not increase as much as
other fixed income, fixed maturity securities which have no prepayment or call
features.
Payment of principal and interest on some mortgage pass-through securities (but
not the market value of the securities themselves) may be guaranteed by the U.S.
Government, or by agencies or instrumentalities of the U.S. Government (which
guarantees are supported only by the discretionary authority of the U.S.
Government to purchase the agency's obligations). Certain mortgage pass-through
securities created by
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<PAGE>
nongovernmental issuers may be supported by various forms of insurance or
guarantees, while other such securities may be backed only by the underlying
mortgage collateral.
Each Fund other than the Money Market Fund may also invest in investment
grade Collateralized Mortgage Obligations ('CMOs'), which are hybrid
instruments with characteristics of both mortgage-backed bonds and mortgage
pass-through securities. Similar to a bond, interest and prepaid principal
on a CMO are paid, in most cases, monthly. CMOs may be collateralized by
whole residential or commercial mortgage loans but are more typically
collateralized by portfolios of mortgage pass-through securities guaranteed by
the U.S. Government or its agencies or instrumentalities. CMOs are structured
into multiple classes, with each class having a different expected average life
and/or stated maturity. Monthly payments of principal, including prepayments,
are allocated to different classes in accordance with the terms of the
instruments, and changes in prepayment rates or assumptions may significantly
affect the expected average life and value of a particular class.
Each Fund other than the Money Market Fund may invest in principal-only or
interest-only stripped mortgage-backed securities. Stripped mortgage-backed
securities have greater volatility than other types of mortgage-related
securities. Stripped mortgage-backed securities which are purchased at a
substantial premium or discount generally are extremely sensitive not only to
changes in prevailing interest rates but also to the rate of principal payments
(including prepayments) on the related underlying mortgage assets, and a rapid
rate of principal payments may have a material adverse effect on such
securities' yield to maturity. In addition, stripped mortgage securities may be
illiquid.
The Funds expect that governmental, government-related or private entities may
create other mortgage-related securities in addition to those described above.
As new types of mortgage-related securities are developed and offered to
investors, a Fund may consider making investments in such securities.
DOLLAR ROLLS. Each Fund other than the Money Market Fund may enter into
mortgage 'dollar rolls' in which a Fund sells mortgage-backed securities for
delivery in the current month and simultaneously contracts to repurchase
substantially similar (same type, coupon and maturity) securities on a specified
future date. These transactions involve some risk to a Fund if the other party
should default on its obligation and the Fund is delayed or prevented from
completing the transaction.
ASSET-BACKED SECURITIES. Each Fund may invest in investment grade asset-backed
securities, which represent a participation in, or are secured by and payable
from, a stream of payments generated by particular assets, most often a pool of
assets similar to one another, such as motor vehicle receivables or credit card
receivables.
DERIVATIVES AND RELATED INSTRUMENTS. Each Fund other than the Money Market Fund
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<PAGE>
may invest its assets in derivative and related instruments to hedge various
market risks or to increase the Fund's income or gain. Some of these instruments
will be subject to asset segregation requirements to cover a Fund's obligations.
Each such Fund may (i) purchase, write and exercise call and put options on
securities and securities indexes (including using options in combination with
securities, other options or derivative instruments); (ii) enter into swaps,
futures contracts and options on futures contracts; (iii) employ forward
currency and interest rate contracts; and (iv) purchase and sell structured
products, which are instruments designed to restructure or reflect the
characteristics of certain other investments.
There are a number of risks associated with the use of derivatives and related
instruments and no assurance can be given that any strategy will succeed. The
value of certain derivatives or related instruments in which a Fund invests may
be particularly sensitive to changes in prevailing economic conditions and
market value. The ability of a Fund to successfully utilize these instruments
may depend in part upon the ability of its adviser to forecast these factors
correctly. Inaccurate forecasts could expose a Fund to a risk of loss. There can
be no guarantee that there will be a correlation between price movements in a
hedging instrument and in the portfolio assets being hedged. No Fund is required
to use any hedging strategies. Hedging strategies, while reducing risk of loss,
can also reduce the opportunity for gain. Derivatives transactions not involving
hedging may have speculative characteristics, involve leverage and result in
losses that may exceed the original investment of a Fund. There can be no
assurance that a liquid market will exist at a time when a Fund seeks to close
out a derivatives position. Activities of large traders in the futures and
securities markets involving arbitrage, 'program trading,' and other investment
strategies may cause price distortions in derivatives markets. In certain
instances, particularly those involving over-the-counter transactions or forward
contracts, there is a greater potential that a counterparty or broker may
default. In the event of a default, a Fund may experience a loss. For additional
information concerning derivatives, related instruments and the associated
risks, see the SAI.
PORTFOLIO TURNOVER. It is intended that the Money Market Fund will be fully
managed by buying and selling securities, as well as holding securities to
maturity. The frequency of each Fund's buy and sell transactions will vary from
year to year. A Fund's investment policies may lead to frequent changes in
investments, particularly in periods of rapidly changing market conditions. High
portfolio turnover rates would generally result in higher transaction costs,
including brokerage commissions or dealer mark-ups.
ADDITIONAL INVESTMENT POLICIES OF THE MONEY MARKET FUND
BANK OBLIGATIONS. Bank obligations include certificates of deposit, time
deposits and bankers' acceptances issued or guaranteed by U.S. banks (including
their foreign branches) and foreign banks (including their U.S. branches).
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These obligations may be general obligations of the parent bank or may be
limited to the issuing branch by the terms of the specific obligation or by
government regulation. Foreign bank obligations involve certain risks associated
with foreign investing.
MUNICIPAL OBLIGATIONS. The Fund may invest in high-quality, short-term municipal
obligations that carry yields that are competitive with those of other types of
money market instruments in which they may invest. Dividends paid by this Fund
that are derived from interest on municipal obligations will be taxable to
shareholders for federal income tax purposes.
CUSTODIAL RECEIPTS. The Fund may acquire securities in the form of custodial
receipts that evidence ownership of future interest payments, principal payments
or both on certain U.S. Treasury notes or bonds in connection with programs
sponsored by banks and brokerage firms. These are not deemed U.S. Government
securities. These notes and bonds are held in custody by a bank on behalf of the
owners of the receipts.
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<PAGE>
LIMITING INVESTMENT RISKS
Specific investment restrictions help the Funds limit investment risks for their
shareholders. These restrictions prohibit each Fund from (a) investing more than
15% of its net assets (10% in the case of the Money Market Fund) in illiquid
securities (which include securities restricted as to resale unless they are
determined to be readily marketable in accordance with procedures established by
the Board of Trustees) or (b) investing more than 25% of its total assets in any
one industry (excluding (i) U.S. Government obligations and (ii) with respect to
the Money Market Fund, bank obligations. Each 'diversified' Fund may not, with
respect to 75% of its total assets, invest more than 5% of its total assets in
the securities of any one issuer (other than U.S. Government obligations) or
hold more than 10% of the voting securities of any issuer. In addition, in order
to comply with federal securities regulations relating to money market funds,
the Money Market Fund will not, with respect to 100% of its total assets, invest
more than 5% of its total assets in the securities of any one issuer (other than
U.S. Government obligations). A complete description of these and other
investment policies is included in the SAI. Except for restriction (b) above and
investment policies designated as fundamental in the SAI, the Funds' investment
policies (including their investment objectives) are not fundamental. The
Trustees may change any non-fundamental investment policy without shareholder
approval. However, in the event of a change in any such Fund's investment
objective, shareholders will be given at least 30 days' prior written notice.
RISK FACTORS
There can be no assurance that the Money Market Fund will be able to maintain a
stable net asset value. Changes in interest rates may affect the value of the
obligations held by such Fund. The value of fixed income securities varies
inversely with changes in prevailing interest rates, although money market
instruments are generally less sensitive to changes in interest rates than are
longer-term securities.
The Money Market Fund is permitted to invest any portion of its assets in
obligations of domestic banks (including their foreign branches), and in
obligations of foreign issuers. The ability to concentrate in the banking
industry may involve certain credit risks, such as defaults or downgrades, if at
some future date adverse economic conditions prevail in such industry. U.S.
banks are subject to extensive governmental regulations which may limit both the
amount and types of loans which may be made and interest rates which may be
charged. In addition, the profitability of the banking industry is largely
dependent upon the availability and cost of funds for the purpose of financing
lending operations under prevailing money market conditions. General economic
conditions as well as exposure to credit losses arising
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<PAGE>
from possible financial difficulties of borrowers play an important part in the
operations of this industry.
Securities issued by foreign banks, foreign branches of U.S. banks and foreign
governmental and private issuers involve investment risks in addition to those
of obligations of domestic issuers, including risks relating to future political
and economic developments, more limited liquidity of foreign obligations than
comparable domestic obligations, the possible imposition of withholding taxes on
interest income, the possible seizure or nationalization of foreign assets, and
the possible establishment of exchange controls or other restrictions. There may
be less publicly available information concerning foreign issuers, there may be
difficulties in obtaining or enforcing a judgment against a foreign issuer
(including branches), and accounting, auditing and financial reporting standards
and practices may differ from those applicable to U.S. issuers. In addition,
foreign banks are not subject to regulations comparable to U.S. banking
regulations.
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<PAGE>
The net asset value of the shares of each Fund (other than the Money Market
Fund) will fluctuate based on the value of the securities in the Fund's
portfolio. The Fixed Income Funds are subject to the general risks and
considerations associated with fixed income investing, as well as the risks
discussed herein. The Equity Funds are subject to the general risks and
considerations associated with equity and, to the extent they invest in fixed
income securities, fixed income investing, as well as the risks discussed
herein.
The performance of each Fixed Income Fund and, to the extent it invests in fixed
income securities, each Equity Fund depends in part on interest rate changes. As
interest rates increase, the value of the fixed income securities held by a Fund
tends to decrease. This effect will be more pronounced with respect to
investments by a Fund in mortgage-related securities, the value of which are
more sensitive to interest rate changes. Except as indicated in its investment
policies, there is no restriction on the maturity of a Fund's portfolio or any
individual portfolio security, and to the extent a Fund invests in securities
with longer maturities, the volatility of the Fund in response to changes in
interest rates can be expected to be greater than if the Fund had invested in
comparable securities with shorter maturities. The performance of a Fund will
also depend on the quality of its investments. While U.S. Government securities
generally are of high quality, government securities that are not backed by the
full faith and credit of the U.S. Treasury may be affected by changes in the
creditworthiness of the agency that issued them. Guarantees of principal and
interest on obligations that may be purchased by a Fund are not guarantees of
the market value of such obligations, nor do they extend to the value of shares
of the Fund. Other fixed income securities in which a Fund may invest, while of
investment-grade quality, may be of lesser credit quality than U.S. Government
Securities. Securities rated in the category Baa by Moody's or BBB by S&P or the
equivalent by another NRSRO lack certain investment characteristics and may have
speculative characteristics.
To the extent permitted by its investment objective and policies, each Fund may
invest in the securities of small or mid cap companies. The securities of small
to mid cap companies often trade less frequently and in more limited volume, and
may be subject to more abrupt or erratic price movements, than securities of
larger, more established companies. Such companies may have limited product
lines, markets or financial resources, or may depend on a limited management
group.
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For a discussion of certain other risks associated with each Fund's additional
investment activities, see 'Other Investment Practices' above.
MANAGEMENT
THE FUNDS' ADVISERS
Chase acts as investment adviser to the Funds pursuant to an Investment Advisory
Agreement and has overall responsibility for investment decisions of each of the
Funds, subject to the oversight of the Board of Trustees. Chase is a
wholly-owned subsidiary of The Chase Manhattan Corporation, a bank holding
company. Chase and its predecessors have over 100 years of money management
experience.
For its investment advisory services to the Funds, Chase is entitled to receive
an annual fee equal to the percentage of the average daily net assets of each
Fund set forth below:
<TABLE>
<CAPTION>
Fee
Fund Rate
- ----------------------------- -----
<S> <C>
Money Market Fund............ 0.30%
Short-Intermediate Term U.S.
Government Securities
Fund ....................... 0.50%
U.S. Government Securities
Fund........................ 0.50%
Intermediate Term Bond
Fund........................ 0.50%
Income Fund.................. 0.50%
Balanced Fund................ 0.75%
Equity Income Fund........... 0.75%
Core Equity Fund............. 0.75%
Equity Growth Fund........... 0.75%
Small Cap Fund............... 0.75%
</TABLE>
Chase Texas serves as sub-investment adviser to the Funds under a Sub-Investment
Advisory Agreement between Chase and Chase Texas. Chase Texas is a wholly-owned
subsidiary of The Chase Manhattan Corporation. Chase Texas makes investment
decisions for the Funds on a day-to-day basis. For these services, Chase Texas
is entitled to receive a fee, payable by Chase, at an annual rate equal to the
percentage of the average daily net assets of each Fund set forth below:
<TABLE>
<CAPTION>
Fee
Fund Rate
- ----------------------------- ------
<S> <C>
Money Market Fund............ 0.15%
Short-Intermediate Term U.S.
Government Securities
Fund ....................... 0.25%
U.S. Government Securities
Fund ....................... 0.25%
Intermediate Term Bond
Fund........................ 0.25%
Income Fund.................. 0.25%
Balanced Fund................ 0.375%
Equity Income Fund........... 0.375%
Core Equity Fund............. 0.375%
Equity Growth Fund........... 0.375%
Small Cap Fund............... 0.375%
</TABLE>
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<PAGE>
Chase Texas is located at 712 Main Street, Houston, Texas 77002. Prior to
January 1, 1998, Chase Texas acted as trustee of the AVESTA Trust and, as
trustee, was obligated to provide the investment portfolios of the AVESTA Trust
with the investment advisory, administrative, custodial and other services
necessary to manage the portfolios.
PORTFOLIO MANAGERS. Guy Barba, a Senior Investment Officer at Chase Texas, has
served as the portfolio manager of the Money Market Fund since April 1993 and
the Short-Intermediate Term Fund since its inception. Mr. Barba has been
employed by Chase Texas since 1988.
H. Mitchell Harper, a Senior Investment Officer at Chase Texas, has served as
the portfolio manager of the Intermediate Term Bond Fund since its inception.
Mr. Harper has been employed by Chase Texas since 1987.
John Miller, a Senior Investment Officer at Chase Texas, has served as the
portfolio manager for each of the Income Fund and the fixed income portion of
the Balanced Fund since July 1994 and for the U.S. Government Securities Fund
since June 1995. Mr. Miller has been employed with Chase Texas since 1986.
Henry Lartigue, the Chief Investment Officer at Chase Texas, has served as the
portfolio manager for the Equity Growth Fund since July 1994, the equity portion
of the Balanced Fund since July 1994 and the Core Equity Fund since January
1996. Between July 1992 and July 1994, Mr. Lartigue was self-employed as a
registered investment adviser.
Robert Heintz, a Senior Investment Officer at Chase Texas, has served as the
portfolio manager of the Equity Income Fund since its inception. Mr. Heintz has
been employed by Chase Texas since 1983.
Juliet Ellis, a Senior Investment Officer at Chase Texas, has served as the
portfolio manager of the Small Cap Fund since September 1993. Ms. Ellis has been
employed by Chase Texas since 1987. Prior to becoming portfolio manager for the
Small Cap Fund, Ms. Ellis was the director of research and an equity analyst at
Chase Texas.
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HOW TO BUY, SELL AND
EXCHANGE_ SHARES
HOW TO BUY SHARES
You can open a Fund account with as little as $2,500 for regular accounts,
$1,000 for traditional and Roth IRAs, SEP-IRAs and the Systematic Investment
Plan, or $500 for Educaton IRAs. The Funds and CFD reserve the right to modify
the minimum initial investment with respect to certain accounts. Additional
investments can be made at any time with as little as $100. You can buy Fund
shares three ways-- through an investment representative, directly through the
Fund's distributor by calling the Chase Funds Service Center, or through the
Systematic Investment Plan.
All purchases made by check should be in U.S. dollars and made payable to the
Chase Funds. Third Party checks, credit cards and cash will not be accepted. The
Funds reserve the right to reject any purchase order or cease offering shares
for purchase at any time. When purchases are made by check, redemptions will not
be allowed for 15 calendar days or longer. In addition, the redemption of shares
purchased through Automated Clearing House (ACH) will not be allowed until your
payment clears, which may take 7 business days or longer.
BUYING SHARES THROUGH THE FUNDS' DISTRIBUTOR. Complete and return the enclosed
application and your check in the amount you wish to invest to the Chase Funds
Service Center.
BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular investments of
$100 or more per transaction through automatic periodic deduction from your bank
checking or savings account. Shareholders electing to start this Systematic
Investment Plan when opening an account should complete the relevant section of
the account application. Current shareholders may begin such a plan at any time
by sending a signed letter and a deposit slip or voided check to the Chase Funds
Service Center. Call the Chase Funds Service Center at 1-888-5-CHASE-0 for
complete instructions.
Shares are purchased at the public offering price, which is based on the net
asset value next determined after the Chase Funds Service Center receives your
order in proper form. In most cases, in order to receive that day's public
offering price, the Chase Funds Service Center must receive your order in proper
form before the close of regular trading on the New York Stock Exchange. If you
buy shares through your investment representative, the representative must
receive your order generally before the close of regular trading on the New York
Stock Exchange to receive that day's public offering price; however your
investment representative may impose an earlier deadline. Orders are in proper
form only after funds are converted to federal funds.
If you are considering redeeming or exchanging shares or transferring shares to
another person shortly after purchase, you should pay for those shares with a
certified check to avoid any delay in redemption,
38
<PAGE>
exchange or transfer. Otherwise the Funds may delay payment until the purchase
price of those shares has been collected or, if you redeem by telephone, until
15 calendar days after the purchase date. To eliminate the need for safekeeping,
the Funds will not issue certificates for your shares and all shares will be
held in book entry form.
HOW TO SELL SHARES
You can sell your Fund shares any day the New York Stock Exchange is open,
either directly to the Funds or through your investment representative. Each
Fund will only forward redemption payments on shares for which it has collected
payment of the purchase price.
SELLING SHARES DIRECTLY TO THE FUNDS. Send a signed letter of instruction to the
Chase Funds Service Center. The price you will receive is the next net asset
value calculated after the Fund receives your request in proper form. In order
to receive that day's net asset value, the Chase Funds Service Center must
receive your request before the close of regular trading on the New York Stock
Exchange.
If you sell shares having a net asset value of $100,000 or more, the signatures
of registered owners or their legal representatives must be guaranteed with
either (i) a medallion stamp of the Stock Transfer Agents Medallion Program, or
(ii) a medallion stamp of the NYSE Medallion Signature Program. See the SAI for
more information about where to obtain a signature guarantee.
If you want your redemption proceeds sent to an address other than your address
as it appears on the Funds' records, a signature guarantee is required. The
Funds may require additional documentation for the sale of shares by a
corporation, partnership, agent or fiduciary, or a surviving joint owner.
Contact the Chase Funds Service Center for details.
DELIVERY OF PROCEEDS. Each Fund generally sends you payment for your shares the
business day after your request is received in proper form, assuming the Fund
has collected payment of the purchase price of your shares. Under unusual
circumstances, the Funds may suspend redemptions, or postpone payment for more
than seven days, as permitted by federal securities law.
TELEPHONE REDEMPTIONS. You may use the Funds' Telephone Redemption Privilege to
redeem shares from your account unless you have notified the Chase Funds Service
Center of an address change within the preceding 30 days. Telephone redemption
requests in excess of $25,000 will only be made by wire or ACH to a bank account
on record with the Funds. Unless an investor indicates otherwise on the account
application, each Fund will be authorized to act upon redemption and transfer
instructions received by telephone from a shareholder, or any person claiming to
act as his or her representative, who can provide the Fund with his or her
account registration and address as it appears on the Fund's records.
The Chase Funds Service Center will employ these and other reasonable procedures
to confirm that instructions communicated by telephone are genuine; if it fails
to employ reasonable procedures, the Funds may be liable for any losses due to
unauthorized or fraudulent instructions. An investor agrees, however, that to
the extent
39
<PAGE>
permitted by applicable law, neither the Funds nor their agents will be liable
for any loss, liability, cost or expense arising out of any redemption request,
including any fraudulent or unauthorized request. For information, consult the
Chase Funds Service Center.
During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Chase Funds Service Center by telephone. In
this event, you may wish to submit a written redemption request, as described
above, or contact your investment representative. The Telephone Redemption
Privilege may be modified or terminated without notice.
SYSTEMATIC WITHDRAWAL. You can make regular withdrawals of $50 or more monthly,
quarterly or semiannually. A minimum account balance of $5,000 is required
to establish a systematic withdrawal plan. Call the Chase Funds Service Center
at 1-888-5-CHASE-0 for complete instructions.
SELLING SHARES THROUGH YOUR INVESTMENT REPRESENTATIVE. Your investment
representative must receive your request before the close of regular trading on
the New York Stock Exchange to receive that day's net asset value. Your
investment representative will be responsible for furnishing all necessary
documentation to the Chase Funds Service Center, and may charge you for its
services.
INVOLUNTARY REDEMPTION OF ACCOUNTS. Each Fund may involuntarily redeem your
shares if at such time the aggregate net asset value of the shares in your
account is less than $500 due to redemptions or if you purchase through the
Systematic Investment Plan and fail to meet the Fund's investment minimum within
a twelve month period. In the event of any such redemption, you will receive at
least 60 days notice prior to the redemption.
HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other Chase
Funds at net asset value beginning 15 days after purchase. Not all Chase Funds
offer all classes of shares. The description of the other Chase Fund into which
shares are being exchanged which appears in this prospectus should be read
carefully and retained for future reference.
For federal income tax purposes, an exchange is treated as a sale of shares and
generally results in a capital gain or loss.
EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available. Call
the Chase Funds Service Center at 1-888-5-CHASE-0 for procedures for telephone
transactions.
EXCHANGE PARAMETERS. The exchange privilege is not intended as a vehicle for
short-term trading. Excessive exchange activity may interfere with portfolio
management and have an adverse effect on all shareholders. In order to limit
excessive exchange activity and in other circumstances where Fund management or
the Trustees believe doing so would be in the best interests of the Funds, each
40
<PAGE>
Fund reserves the right to revise or terminate the exchange privilege, limit the
amount or number of exchanges or reject any exchange. In addition, any
shareholder who makes more than ten exchanges of shares involving a Fund in a
year or three in a calendar quarter will be charged a $5.00 administration fee
for each such exchange. Shareholders would be notified of any such action to the
extent required by law. Consult the Chase Funds Service Center before requesting
an exchange. See the SAI to find out more about the exchange privilege.
HOW THE FUNDS
VALUE_ THEIR_ SHARES
MONEY MARKET FUND. The net asset value of each class of shares of the Money
Market Fund is currently determined as of 4:00 p.m., Eastern time on each
Fund Business Day by dividing the net assets of a Fund attributable to such
class by the number of shares of such class outstanding at the time the
determination is made.
The portfolio securities of the Money Market Fund are valued at their amortized
cost in accordance with federal securities laws, certain requirements of which
are summarized under 'Common Investment Policies.' This method increases
stability in valuation, but may result in periods during which the stated value
of a portfolio security is higher or lower than the price a Fund would receive
if the instrument were sold. It is anticipated that the net asset value of each
share of each Fund will remain constant at $1.00 and the Funds will employ
specific investment policies and procedures to accomplish this result, although
no assurance can be given that they will be able to do so on a continuing basis.
The Board of Trustees will review the holdings of each Fund at intervals it
deems appropriate to determine whether that Fund's net asset value calculated by
using available market quotations (or an appropriate substitute which reflects
current market conditions) deviates from $1.00 per share based upon amortized
costs. In the event the Trustees determine that a deviation exists that may
result in material dilution or other unfair results to investors or existing
shareholders, the Trustees will take such corrective action as they regard as
necessary and appropriate.
NON-MONEY MARKET FUNDS. The net asset value of each class of each other Fund's
shares is determined once daily based upon prices determined as of the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time, however, options are priced at 4:15 p.m., Eastern time), on each Fund
Business Day, by dividing the net assets of the Fund attributable to that class
by the total number of outstanding shares of that class. Values of assets held
by the Funds are determined on the basis of their market or other fair value, as
described in the SAI.
HOW DISTRIBUTIONS ARE
MADE;_ TAX_ INFORMATION
MONEY MARKET FUND. The net investment income (i.e., a Fund's investment company
taxable income as that term is defined in the Internal Revenue Code of 1986, as
amended (the 'Code') without
41
<PAGE>
regard to the deduction for dividends paid) of each class of shares of the
Money Market Fund is declared as a dividend to the shareholders each Fund
Business Day. Dividends are declared as of the time of day which corresponds
to the latest time on that day that a Fund's net asset value is determined.
Shares begin accruing dividends on the day that the order is received in
proper form by the Fund. Dividends are distributed monthly. Unless a
shareholder arranges to receive dividends in cash or by Automated Clearing
House (ACH) to a pre-established bank account, dividends are distributed in
the form of additional shares. The Money Market Fund does not expect to
realize net capital gain (i.e., the excess of a Fund's net long-term capital
gains over short-term capital losses).
NON-MONEY MARKET FUNDS. Each Fixed Income Fund declares dividends daily and
distributes any net investment income at least monthly. Each Equity Fund
distributes any net investment income at least quarterly. Each Fund other than
the Money Market Fund (which do not expect to earn net capital gain) distributes
any net capital gain at least annually.
GENERAL. You can choose from three distribution options: (1) reinvest all
distributions in additional Fund shares; (2) receive distributions from net
investment income in cash while reinvesting net capital gain distributions in
additional shares; or (3) receive all distributions in cash. You can change your
distribution option by notifying your account administrator in writing. If you
do not select an option when you open your account, all distributions will be
reinvested.
Each Fund intends to qualify as a 'regulated investment company' for federal
income tax purposes under Subchapter M of the Code and to meet all other
requirements that are necessary for it to be relieved of federal taxes on income
and gain it distributes to shareholders. If a Fund does not qualify as a
regulated investment company for any taxable year or does not meet certain other
requirements, such Fund will be subject to tax on all of its taxable income and
gains.
All Fund distributions of net investment income (which term shall include net
short-term capital gain) will be taxable as ordinary income. Any distributions
of net capital gain which are designated as 'capital gain dividends' will be
taxable as long-term capital gain at the currently applicable 28% or 20% rate,
regardless of how long you have held the shares. To the extent distributions
are attributable to interest from obligations of the U.S. Government and
certain of its agencies and
42
<PAGE>
instrumentalities, such distributions may be exempt from certain types of state
and local taxes. Distributions will be taxable as described above whether
received in cash or in shares through the reinvestment of distributions.
A portion of the ordinary income dividends paid by certain Funds may qualify for
the 70% dividends-received deduction for corporate shareholders.
Investors should be careful to consider the tax implications of purchasing
shares just prior to the next distribution date. Those investors purchasing
shares just prior to a distribution will be taxed on the entire amount of the
distribution received, even though the net asset value per share on the date of
such purchase reflected the amount of such distribution.
Early in each calendar year the Funds will notify you of the amount and tax
status of distributions paid for the preceding year.
The foregoing is a summary of certain federal income tax consequences of
investing in the Funds. You should consult your tax adviser to determine the
precise effect of an investment in the Funds on your particular tax situation
(including possible liability for state and local taxes and, for foreign
shareholders, U.S. withholding taxes).
OTHER INFORMATION
CONCERNING_ THE_ FUNDS
For shareholders that bank with Chase or Chase Texas, Chase or Chase Texas may
aggregate investments in the Chase Funds with balances held in Chase or Chase
Texas bank accounts for purposes of determining eligibility for certain bank
privileges that are based on specified minimum balance requirements, such as
reduced or no fees for certain banking services or preferred rates on loans and
deposits. Chase, Chase Texas and certain other financial institutions may, at
their own expense, provide gifts, such as computer software packages, guides and
books related to investment or additional Fund shares valued up to $250 to their
customers that invest in the Chase Funds.
Chase and its affiliates and the Chase Funds, affiliates, agents and subagents
may exchange among themselves and others certain information about
shareholders and their accounts, including information used to offer
investment products and insurance products to them, unless otherwise
contractually prohibited.
DISTRIBUTION PLANS
The Funds' distributor is CFD Fund Distributors, Inc. ('CFD'). CFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Trust
has adopted a Rule 12b-1 distribution plan for Retail Class shares, which
provides for the payment of distribution fees at an annual rate of up to 0.10%
of the average daily net assets attributable to Retail Class shares of the Money
Market Fund and at an annual rate of up to 0.25% of the average daily net
assets attributable to Retail Class shares of each other Fund. Payments under
the distribution plan shall be used to compensate the Funds' distributor and
broker-dealers for services provided and expenses incurred in connection with
the sale of Retail Class shares, and are not tied to the actual expenses
incurred. Payments may be used to compensate broker-
43
<PAGE>
dealers with trail or maintenance commissions at an annual rate of up to 0.25%
of the average daily net assets value of Retail Class shares invested in each
Fund by customers of those broker-dealers. Trail or maintenance commissions are
paid to broker-dealers beginning the 13th month following the purchase of shares
by their customers. Promotional activities for the sale of Retail Class shares
will be conducted generally by the Chase Funds, and activities intended to
promote one Fund's Retail Class shares may also benefit such Fund's other shares
and other Chase Funds.
CFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Chase Funds. These incentives may include gifts of
up to $100 per person annually; an occasional meal, ticket to a sporting event
or theater for entertainment for broker-dealers and their guests; and payment or
reimbursement for travel expenses, including lodging and meals, in connection
with attendance at training and educational meetings within and outside the U.S.
ADMINISTRATOR
Chase acts as the Funds' administrator and is entitled to receive a fee computed
daily and paid monthly at an annual rate equal to 0.10% of each Fund's average
daily net assets.
SUB-ADMINISTRATOR AND DISTRIBUTOR
CFD acts as the Funds' sub-administrator and distributor. CFD is a subsidiary of
The BISYS Group, Inc. and is unaffiliated with Chase. For the sub-administrative
services it performs, CFD is entitled to receive a fee from each Fund at an
annual rate equal to 0.05% of the Fund's average daily net assets. CFD has
agreed to use a portion of this fee to pay for certain expenses incurred in
connection with organizing new series of the Trust and certain other ongoing
expenses of the Trust. CFD is located at One Chase Manhattan Plaza, Third Floor,
New York, NY 10081.
CUSTODIAN
Chase acts as custodian for the Funds and receives compensation under an
agreement with the Trust. Chase may sub-contract for the provision of certain
services to be provided under the custody agreement. Fund securities and cash
may be held by sub-custodian banks if such arrangements are reviewed and
approved by the Trustees.
EXPENSES
Each Fund pays the expenses incurred in its operations, including its pro rata
share of expenses of the Trust. These expenses include investment advisory and
administrative fees; the compensation of the Trustees; registration fees;
interest charges; taxes; expenses connected with the execution, recording and
settlement of security transactions; fees and expenses of the Funds' custodian
for all services to the Funds, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of preparing and mailing
reports to investors and to government offices and commissions; expenses of
meetings of investors; fees and
44
<PAGE>
expenses of independent accountants, of legal counsel and of any transfer agent,
registrar or dividend disbursing agent of the Trust; insurance premiums; and
expenses of calculating the net asset value of, and the net income on, shares of
the Funds. Shareholder servicing and distribution fees are allocated to specific
classes of a Fund. In addition, each Fund may allocate transfer agency and
certain other expenses by class. Service providers to a Fund may, from time to
time, voluntarily waive all or a portion of any fees to which they are entitled.
ORGANIZATION AND DESCRIPTION OF SHARES
The Funds are portfolios of Mutual Fund Investment Trust, an open-end management
investment company organized as a Massachusetts business trust on September 23,
1997 (the 'Trust'). The Trust has reserved the right to create and issue
additional series and classes. Each share of a series or class represents an
equal proportionate interest in that series or class with each other share of
that series or class. The shares of each series or class participate equally in
the earnings, dividends and assets of the particular series or class. Shares
have no preemptive or conversion rights. Shares when issued are fully paid and
non-assessable, except as set forth below. Shareholders are entitled to one vote
for each whole share held, and each fractional share shall be entitled to a
proportionate fractional vote, except that Trust shares held in the treasury of
the Trust shall not be voted. Shares of each class of a Fund generally vote
together except when required under federal securities laws to vote separately
on matters that only affect a particular class, such as the approval of
distribution plans for a particular class.
Each Fund issues multiple classes of shares. This Prospectus relates only to
Retail Shares of the Funds. The Funds offer other classes of shares in addition
to this class. The categories of investors that are eligible to purchase shares
may differ for each class of Fund shares. In addition, other classes of Fund
shares may be subject to differences in sales charge arrangements, ongoing
distribution and service fee levels, and levels of certain other expenses, which
will affect the relative performance of the different classes. Investors may
call 1-800-5-CHASE-0 to obtain additional information about other classes of
shares of the Funds that are offered. Any person entitled to receive
compensation for selling or servicing shares of a Fund may receive different
levels of compensation with respect to one class of shares over another.
The business and affairs of the Trust are managed under the general direction
and supervision of the Trust's Board of Trustees. The Trust is not required to
hold annual meetings of shareholders but will hold special meetings of
shareholders of all series or classes when in the judgment of the Trustees it is
necessary or desirable to submit matters for a shareholder vote. The Trustees
will promptly call a meeting of shareholders to remove a trustee(s) when
requested to do so in writing by record holders of not less than 10% of all
outstanding shares of the Trust.
Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances
45
<PAGE>
be held personally liable as partners for its obligations. However, the risk of
a shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which both inadequate insurance existed and the
Trust itself was unable to meet its obligations.
The Trust was formed to receive the assets of the AVESTA Trust, a Texas business
trust ('AVESTA'). Pursuant to a conversion and re-domicilling which was
effective as of January 1, 1998, the Money Market Fund, Short-Term Intermediate
Term Fund, U.S. Government Securities Fund, Intermediate Term Bond Fund, Income
Fund, Balanced Fund, Equity Income Fund, Core Equity Fund, Equity Growth Fund
and Small Cap Fund each acquired the assets of a corresponding series of AVESTA
in exchange for Premier Shares of such Fund.
UNIQUE CHARACTERISTICS OF MASTER/FEEDER FUND STRUCTURE
Unlike other mutual funds which directly acquire and manage their own portfolio
securities, each Fund is permitted to invest all of its investable assets in a
separate registered investment company (a 'Portfolio'). In that event, a
shareholder's interest in a Fund's underlying investment securities would be
indirect. In addition to selling a beneficial interest to a Fund, a Portfolio
could also sell beneficial interests to other mutual funds or institutional
investors. In the event that a Fund adopts a master/feeder structure and invests
all its investable assets in a Portfolio, shareholders of the Fund will be given
at least 30 days' prior written notice. For additional information regarding the
master/feeder structure, see the SAI.
PERFORMANCE_ INFORMATION
MONEY MARKET FUND. The Money Market Fund may advertise its annualized 'yield'
and its 'effective yield.' 'Annualized 'yield' is determined by assuming that
income generated by an investment in a Fund over a stated seven-day period (the
'yield') will continue to be generated each week over a 52-week period. It is
shown as a percentage of such investment. 'Effective yield' is the annualized
'yield' calculated assuming the reinvestment of the income earned during each
week of the 52-week period. The 'effective yield' will be slightly higher than
the 'yield' due to the compounding effect of this assumed reinvestment.
NON-MONEY MARKET FUNDS. The investment performance of each Fund other than the
Money Market Fund may from time to time be included in advertisements about the
Fund. 'Yield' is calculated by dividing the annualized net investment income
per share during a recent 30-day period by the
46
<PAGE>
maximum public offering price per share on the last day of that period.
'Total return' for the one-, five-and ten-year periods (or for the life of a
class, if shorter) through the most recent calendar quarter represents the
average annual compounded rate of return on an investment of $1,000 in a Fund
invested at the public offering price. Total return may also be presented for
other periods.
GENERAL. All performance data is based on each Fund's past investment results
and does not predict future performance. Investment performance, which will
vary, is based on many factors, including market conditions, the composition of
a Fund's portfolio and a Fund's operating expenses. Investment performance also
often reflects the risks associated with a Fund's investment objectives and
policies. These factors should be considered when comparing a Fund's investment
results to those of other mutual funds and other investment vehicles. Quotation
of investment performance for any period when a fee waiver or expense limitation
was in effect will be greater than if the waiver or limitation had not been in
effect. Each Fund's performance may be compared to other mutual funds, relevant
indices and rankings prepared by independent services. See the SAI.
47
<PAGE>
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Prospectus:
Financial Highlights
Included in the Statement of Additional Information: #
Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statement of Changes in Net Assets for each of the two years in the period
ended December 31, 1997 and December 31, 1997
# Incorporated by reference to the Registrant's Annual Report filed
with the Securities and Exchange Commission on March 13, 1998
(Accession No. 0000944209-98-00534).
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
(b) Exhibits
1. Declaration of Trust dated as of September 19, 1997.*
2. By-Laws.*
3. None.
4. None.
5.1 Form of Investment Advisory Agreement between Trust and The Chase
Manhattan Bank.*
5.2 Form of Sub-Advisory Agreement between The Chase Manhattan Bank and
Texas Commerce Bank National Association.*
5.3 Form of Administration Agreement.*
5.4 Form of Investment Advisory Agreement.*
6. Form of Distribution and Sub-Administration Agreement.*
7. None.
8.1 Form of Custodian Agreement.*
8.2 Form of Transfer Agency Agreement.*
9. None.
II-1
<PAGE>
10. Opinion and consent of counsel as to the legality of the securities
being registered.*
11. Consent of Independent Auditors.*
12. None.
13. None.
14. None.
15. Distribution Plan.*
16. Schedules for computation of each performance quotation provided in
the Registration Statement.*
17. Financial Data Schedules.*
18. None.
* Previously filed with Registration Statement and Post-effective
Amendments and are herein incorporated by reference.
II-2
<PAGE>
Item 25. Persons Controlled by or under Common Control with
Registrant
Inapplicable.
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class April 15, 1998
-------------- -----------------
Money Market Fund 11
Income Fund 10
Intermediate Term Bond Fund 10
Equity Growth Fund 12
Equity Income Fund 11
Balanced Fund 10
Short-Intermediate U.S. 10
Government Securities Fund 10
U.S. Government Securities Fund 11
Small Capitalization Fund 12
Core Equity Fund
Item 27. Indemnification
Sections 10.2 and 10.4 of the Amended and Restated Declaration of Trust, filed
as Exhibit 1, are incorporated herein by reference. Section 10.2 contains
provisions limiting the liabilities of members of the Supervisory Committee and
Section 10.4 contains provisions for indemnification of the Trustee, members of
the Supervisory Committee and officers of the Trust.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Trust and the Trustee pursuant to the foregoing provisions or otherwise,
the Trust has been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Trust of expenses incurred or paid by
a director, officer, or controlling person of the Trust and the Trustee in
connection with the successful defense of any action, suit or proceeding) is
asserted against the Trust by such director, officer or controlling person or
the Trustee in connection with the Units being registered, the Trust will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
(a) The Chase Manhattan Bank ("Chase") is the investment adviser of the Trust.
Chase is a commercial bank providing a wide range of banking and investment
services.
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<PAGE>
To the knowledge of the Registrant, none of the Directors or executive officers
of Chase, except those described below, are or have been, at any time during the
past two years, engaged in any other business, profession, vocation or
employment of a substantial nature, except that certain Directors and executive
officers of Chase also hold or have held various positions with bank and
non-bank affiliates of Chase, including its parent, The Chase Manhattan
Corporation. Each Director listed below is also a Director of The Chase
Manhattan Corporation.
<TABLE>
<CAPTION>
Name Position with Chase Principal Occupation
---- ------------------- --------------------
<S> <C> <C>
Hans W. Becherer Director Chairman and CEO, Deere & Co.
Frank A. Bennack, Jr. Director Chairman and CEO, The Hearst
Corp.
Susan V. Berresford Director President, The Ford Foundation
Donald L. Boudreau Vice Chairman None
Of the Board
M. Anthony Burns Director Chairman of the Board,
President and Chief Executive
Officer of Ryder System, Inc.
H. Laurance Fuller Director Chairman, President, Chief
Executive Officer and Director
of Amoco Corporation and
Director of Abbott Laboratories
Melvin R. Goodes Director Chairman and CEO, Warner-Lambert
Co.
William H. Gray III Director President and CEO, The College
Fund/UNCF
George V. Grune Director Chairman and CEO, The Reader's
Digest Assoc., Inc.
William Harrison Vice Chairman None
Of the Board
Harold S. Hook Director Retired Chairman, American
General Corp.
Helene Kaplan Director Of Counsel, Skaden, Arps, Slate,
Meager & Flom LLP
Thomas G. Labreque President and Chief Chairman, Chief Executive
Operating Officer Officer and a Director of The
and Director Chase Manhattan Corporation and
a Director of AMAX, Inc.
Donald H. Layton Vice Chairman None
Of the Board
James B. Lee Vice Chairman None
Of the Board
Denis O'Leary Executive None
Vice President
Marc J. Shapiro Vice Chairman None
Of the Board
Joseph G. Sponholz Vice Chairman None
Of the Board
Henry B. Schacht Director Chairman and Chief Executive
Officer of Cummins Engine
Company, Inc. and a Director of
each of American Telephone and
Telegraph Company and CBS Inc.
II-4
<PAGE>
Walter V. Shipley Chairman of the None
Board and Chief
Executive Officer
Andrew C. Sigler Director Chairman of the Board and Chief
Executive Officer, Champion
International Corporation
John R. Stafford Director Chairman, President and Chief
Executive Officer, American
Home Products Corporation
Marina V. N. Whitman Director Professor of Business
Administration and Public
Policy, University of Michigan
</TABLE>
(b) Chase Bank of Texas, N.A. ("CBT") is investment sub-adviser with respect to
certain of the Funds. Its business has been solely that of a national bank.
The directors and executive officers (i.e., members of management committee) of
the investment adviser have held during the past two fiscal years the following
positions of a substantial nature:
II-5
<PAGE>
<TABLE>
<CAPTION>
Position(s) Position(s)
and Offices and Offices Other Substantial
with with Business, Profession,
Name CBT Registrant Vocation or Employment
----- -------------- ----------- ----------------------
<S> <C> <C> <C>
John L. Adams Chairman, None None
President and
CEO
Elaine B. Agather CEO, CBT -- None None
Fort Worth,
Vice Chairman,
CBT -- Metroplex
Alan R. Buckwalter, III Director, None None
Vice Chairman
II-6
<PAGE>
Position(s) Position(s)
and Offices and Offices Other Substantial
with with Business, Profession,
Name CBT Registrant Vocation or Employment
----- -------------- ------------- ----------------------
Robert C. Hunter Director, None None
Vice Chairman
S. Todd Maclin Director, None None
Vice Chairman
Beverly H. McCaskill Director, None None
Executive
Vice President
Scott J. McLean Executive None None
Vice President
Cathy S. Nunnally Executive None None
Vice President
Jeffrey B. Reitman Director, None None
General Counsel
Harriet S. Wasserstrum Director, None None
Vice Chairman
</TABLE>
Item 29. Principal Underwriters
Inapplicable.
Item 30. Location of Accounts and Records
Accounts and other documents are maintained at the offices of the Registrant.
II-7
<PAGE>
Item 31. Management Services.
Inapplicable.
Item 32. Undertakings
(a) Registrant hereby undertakes to call a meeting of
shareholders for the purpose of voting upon the question of
removal of one or more of Registrant's directors when
requested in writing to do so by the holders of at least 10%
of Registrant's outstanding shares of common stock and, in
connection with such meeting, to assist in communications
with other shareholders in this regard, as provided under
Section 16(c) of the 1940 Act.
(b) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without change.
(c) Registrant undertakes to file a post-effective amendment, using
reasonably current financial statements which need not be
certified, within four to six months from the date of
commencement of investment operations for Tax Free Money Market
Fund, Tax Free Income Fund, New York Tax Free Income Fund, Mid
Cap Growth Fund and International Equity Fund.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has certified that it meets all of the
requirements for effectiveness of the Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the city of New York and the
State of New York on the 14th day of May, 1998.
MUTUAL FUND INVESTMENT TRUST
By /s/ Sarah E. Jones
--------------------------
Sarah E. Jones
Chair
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
/s/ Sarah E. Jones Chair May 14, 1998
- ------------------------- and
Sarah E. Jones Trustee
/s/ Frank A. Liddell, Jr.
- ------------------------- Trustee May 14, 1998
Frank A. Liddell, Jr.
/s/ George E. McDavid
- ------------------------- Trustee May 14, 1998
George E. McDavid
/s/ Kenneth L. Otto
- ------------------------- Trustee May 14, 1998
Kenneth L. Otto
/s/ Fergus Reid, III
- ------------------------- Trustee May 14, 1998
Fergus Reid, III
/s/ H. Michael Tyson
- ------------------------- Trustee May 14, 1998
H. Michael Tyson
<PAGE>
47
/s/ Martin Dean
- ------------------------- Treasurer May 14, 1998
Martin Dean and
Principal
Financial
Officer
II-9
