Chase
Equity Growth II Fund
Annual Report
December 31, 1999
<PAGE>
Chase Equity Growth II Fund Chairman's Letter
- ---------------------------------------------
January 20, 2000
Dear Fellow Shareholders:
We are pleased to present this annual report for the Chase Equity Growth II Fund
for the year ended December 31, 1999. In providing you with this information, we
seek to assist you in fully understanding how your fund performed and the
strategies your fund managers pursued within the context of the overall economic
and market environment.
Continued Strong US Economic Growth Tests "New Paradigm"
Throughout the 1990s, the wonderful combination of strong economic growth,
falling unemployment and low inflation has led to a growing belief in a "new
paradigm." Under this theory, productivity and technological gains will allow
the economy to grow at faster levels without sparking an inflationary spiral
that causes the Federal Reserve to raise interest rates in an effort to cool the
economy. Prior to the arrival of the "new paradigm," it was thought that Gross
Domestic Product (GDP) growth much above a 2.5% annual rate would inevitably
become inflationary.
However, the sizzling US economy began testing the upper limits of the "new
paradigm" equation during the reporting year as GDP in 1999 grew by 4.2%.
Although inflation remained relatively subdued, it did move higher over the
reporting year and this, when combined with the very high growth in the US and
the resumption of growth overseas, led to rising interest rates and a generally
rough road to hoe for the bond market.
Fed Shifts Policy in Early 1999
Early in 1999, it became apparent that a global economic recovery was underway.
The global recovery, combined with 6% annual growth in the US in the 4th quarter
of 1998 and record-low unemployment, led to bond market fears that the Fed would
shift to a policy of raising short-term interest rates. This generally negative
sentiment continued for the rest of the year as the Fed did indeed begin
tightening, first on June 30, 1999 and then again on August 24 and November 16.
In the view of many market participants, the Fed would have acted again in
December were it not for Y2K concerns. Moving into 2000, the question among
market participants is not whether the Fed will continue to raise rates, but
rather by how much and for how long.
Your portfolio management team rose to the occasion of 1999's challenging
environment, working diligently to protect your investment. While it's
impossible to predict what markets will do, you can surely expect that all of us
at Chase Funds will continue to do our best to deliver solid investments and
help you reach your financial goals. We appreciate your continued trust and
support.
Sincerely yours,
/s/ Sarah E. Jones
Sarah E. Jones
Chairman
<PAGE>
Chase Equity Growth II Fund
as of December 31, 1999
(unaudited)
How the Fund Performed
Chase Equity Growth II Fund, which seeks to provide capital appreciation,
generated a total return of 14.76% for the period July 1, 1999 (commencement of
operations) through December 31, 1999. This compares to 14.36% and 20.39% for
the Lipper Growth Funds Index and Lipper Large Cap Growth Index, respectively.
How the Fund Was Managed
Skillful stock selection benefited the Fund in a year that was perfectly suited
to its style of investing in large-cap growth companies. Technology stocks made
the greatest contributions to performance, but biotechnology stocks were also
beginning to perform towards the year-end in anticipation of advances in medical
science.
Most of the gain came in the fourth quarter, when technology companies rallied
in expectation of a surge in demand for semiconductor devices, cell phones and
communications equipment as a result of the burgeoning Internet economy. Stocks
that rallied strongly then were also among the Fund's leading contributors to
performance for the year as a whole. EMC Corp., Microsoft and Applied Material
were all leading performers. Cisco Systems was also a major contributor.
But the fourth quarter rally was not confined to technology. Financials
performed strongly following the repeal of the Glass-Steagall Act that had
prevented commercial and investment banks from merging.
Another holding that performed well during the year was the biotechnology stock
Amgen. Fellow biotechnology company Biogen was also strong, if a little
volatile.
Otherwise performance was fairly selective. Although retailing, for example, was
poor as a sector, Wal-Mart and Home Depot made significant contributions to Fund
performance.
The Fund's investment style was even suited to the difficult third quarter, when
inflation and valuation worries haunted the market. Much of the equity market
was trapped in a trading range, and those companies that missed earnings
forecasts were severely punished. Yet technology stocks and a small number of
well-managed blue chips continued to make new highs. Although technology and
other growth stocks came under pressure for a few weeks in May, they showed
great resilience.
Where the Fund May Be Headed
Financial markets are in a climate of rising interest rates and historically
high equity valuations. At the same time, investors were highly selective in
1999. While valuations in areas like technology rose significantly, many areas
of the market--such as consumer staples--actually experienced declining prices.
In this environment, there are some valuation discrepancies and, therefore, some
opportunities. The Fund will seek to take advantage of these opportunities
within the context of its focus on high-quality growth companies.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments - December 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------------------------
Long-Term Investments - 94.7%
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock - 94.7%
--------------------
Airlines - 0.6%
14 Southwest Airlines, Inc. $ 230
Biotechnology - 4.9%
23 Amgen, Inc. * 1,373
6 Biogen, Inc. * 515
3 Genzyme Corp.-General Division * 141
---
2,029
Broadcasting/Cable - 0.5%
2 Clear Channel Communications, Inc. * 187
Computer Networks - 3.1%
12 Cisco Systems, Inc. * 1,275
Computer Software - 6.8%
3 Citrix Systems, Inc. * 378
21 Microsoft Corp. * 2,414
-----
2,792
Computers/Computer Hardware - 8.3%
14 Dell Computer Corp. * 731
15 EMC Corp. * 1,665
10 International Business Machines Corp. 1,037
-----
3,433
Consumer Products - 2.6%
7 Gillette Co. 278
7 Procter & Gamble Co. 811
---
1,089
Diversified - 5.6%
13 General Electric Co. 1,984
8 Tyco International LTD (Bermuda) 325
---
2,309
Electronics/Electrical Equipment - 1.9%
8 Solectron Corp. * 771
Financial Services - 5.2%
2 American Express Co. 403
17 Charles Schwab Corp. 669
6 Merrill Lynch & Co., Inc. 468
4 Morgan Stanley Dean Witter & Co. 617
---
2,157
Food/Beverage Products - 2.4%
2 Anheuser-Busch Companies, Inc 133
9 Coca-Cola, Co. 550
9 Pepsico, Inc. 304
---
987
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments - December 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------------------------
Long-Term Investments - continued
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care/Health Care Services - 0.7%
3 Guidant Corp. * $ 140
4 Medtronic, Inc. 131
---
271
Insurance - 1.0%
4 American International Group, Inc. 393
Internet Services/Software - 3.1%
17 America Online, Inc. * 1,282
Machinery & Engineering Equipment - 3.6%
12 Applied Materials, Inc. * 1,489
Multi-Media - 1.6%
9 Time Warner, Inc. 656
Pharmaceuticals - 9.5%
6 Abbot Laboratories 218
7 American Home Products Corp. 282
8 Bristol-Myers Squibb Co. 527
6 Eli Lilly & Co. 379
6 Johnson & Johnson 512
11 Merck & Co., Inc. 707
16 Pfizer, Inc. 517
9 Schering-Plough Corp. 359
5 Warner-Lambert Co. 410
---
3,911
Restaurants/Food Services - 0.4%
4 McDonald's Corp. 147
Retailing - 9.6%
8 Bed Bath & Beyond, Inc. * 287
5 Best Buy Co., Inc. * 261
17 Gap, Inc. 769
9 Home Depot, Inc. 634
23 Kroger Co. * 439
22 Wal-Mart Stores, Inc. 1,550
-----
3,940
Semi-Conductors - 9.5%
19 Intel Corp. 1,600
7 KLA-Tencor Corp. * 802
10 Novellus Systems, Inc. * 1,277
3 Texas Instruments, Inc. 271
---
3,950
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments - December 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------------------------
Long-Term Investments - continued
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Telecommunications - 9.0%
19 AT&T Corp. 947
5 Bell Atlantic Corp. 306
6 BellSouth Corp. 284
3 GTE Corp. 229
8 MCI WorldCom, Inc. * 449
4 Nextel Communications, Inc., Class A * 402
13 SBC Communications, Inc. 619
4 Sprint Corp. (FON Group) 264
4 Vodafone AirTouch PLC, ADR (United Kingdom) 214
---
3,714
Telecommunications Equipment - 4.8%
15 Lucent Technologies, Inc. 1,112
6 Motorola, Inc. 884
---
1,996
- -----------------------------------------------------------------------------------------------------------
Total Long-Term Investments 39,008
(Cost $34,506)
- -----------------------------------------------------------------------------------------------------------
Short-Term Investments - 10.3%
- -----------------------------------------------------------------------------------------------------------
Principal
Amount
Repurchase Agreement - 10.3%
----------------------------
$ 4,251 Greenwich Capital Markets, Inc., in a joint trading account at 3.50%,0
due 01/03/00, (Dated 12/31/99, Proceeds $4,252, Secured by FHLMC
$4,446, 5.75%, due 09/15/22; Market Value $4,341)
(Cost $4,251) 4,251
- -----------------------------------------------------------------------------------------------------------
Total Investments - 105.0% $ 43,259
(Cost $38,757)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
INDEX:
* - Non-income producing security.
ADR - American Depositary Receipt.
FHLMC - Federal Home Loan Mortgage Corporation.
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Assets and Liabilities As of December 31, 1999
(Amounts in Thousands, Except Per Share Amounts)
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (Note 1) $ 43,259
Cash 19
Receivables:
Interest/Dividends 16
Expense reimbursement from Distributor 9
--------
Total Assets 43,303
--------
LIABILITIES:
Payables:
Investment securities purchased 1,842
Fund shares redeemed 219
Accrued liabilities: (Note 2)
Custody and accounting fees 6
Other 18
--------
Total Liabilities 2,085
--------
NET ASSETS:
Paid in capital 36,722
Accumulated undistributed net investment income 11
Accumulated net realized
loss on investment transactions (17)
Net unrealized appreciation on investments 4,502
--------
Net Assets $ 41,218
========
Shares of beneficial interest outstanding
($.001 par value; unlimited number of shares authorized) 3,593
Net Asset Value, maximum offering and redemption price per share $ 11.47
Cost of Investments $ 38,757
--------
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Operations For the period from July 1, 1999 * to December 31, 1999
(Amounts in Thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend $ 44
Interest 39
-------
Total investment income 83
-------
EXPENSES: (Note 2)
Investment advisory fees 35
Administration fees 13
Custody and accounting fees 48
Printing and postage 3
Professional fees 13
Registration expenses 5
Transfer agent fees 8
Trustees fees 1
Other 1
-------
Total expenses 127
-------
Less amounts waived (Note 2) 44
Less expense reimbursements 30
-------
Net expenses 53
-------
Net investment income 30
-------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investment transactions (17)
Change in net unrealized appreciation of investments 4,502
-------
Net realized and unrealized gain on investments 4,485
-------
Net increase in net assets from operations $ 4,515
=======
</TABLE>
* Commencement of operations.
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Changes in Net Assets For the period indicated
(Amounts in Thousands)
<TABLE>
<CAPTION>
07/01/99*
through
12/31/1999
----------
<S> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 30
Net realized loss on investment transactions (17)
Change in net unrealized appreciation of investments 4,502
Increase in net assets from operations 4,515
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1)
Net investment income (19)
CAPITAL SHARE TRANSACTIONS:
Shares sold 38,153
Shares issued in reinvestment of distributions 19
Shares redeemed (1,450)
Increase from capital share transactions 36,722
Total increase in net assets 41,218
NET ASSETS:
Beginning of period -
End of period 41,218
$ 41,218
SHARE TRANSACTIONS:
Shares sold 3,733
Shares issued from reinvestment of distributions 2
Shares redeemed (142)
Net increase in fund shares outstanding 3,593
</TABLE>
* Commencement of operations.
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies -- Mutual Fund
Investment Trust (the "Trust") was organized on September 23, 1997 as a
Massachusetts Business Trust, and is registered under the Investment
Company Act of 1940, as amended, (the "1940 Act"), as an open-end
management investment company. Chase Equity Growth II Fund ("EGII") or,
the "Fund," is a separate series of the Trust. The Fund commenced
operations on July 1, 1999.
The Fund seeks to provide capital appreciation by emphasizing its
investments in the growth sectors of the economy. The Fund may be
purchased only by participating employee benefit plans that meet the
minimum investment requirement.
The following is a summary of significant accounting policies followed
by the Fund:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A. Valuation of investments -- Equity securities are valued at
the last sale price on the exchange on which they are
primarily traded, including the NASDAQ National Market.
Securities for which sale prices are not available and other
over-the-counter securities are valued at the last quoted bid
price. Bonds and other fixed income securities (other than
short-term obligations), including listed issues, are valued
on the basis of valuations supplied by pricing services or by
matrix pricing systems of a major dealer in bonds. Short-term
debt securities with 61 days or more to maturity at time of
purchase are valued, through the 61st day prior to maturity,
at market value based on quotations obtained from market
makers or other appropriate sources; thereafter, the value on
the 61st day is amortized on a straight-line basis over the
remaining number of days to maturity. Short-term investments
with 60 days or less to maturity at time of purchase are
valued at amortized cost, which approximates market. Portfolio
securities for which there are no such quotations or
valuations are valued at fair value as determined in good
faith or at the direction of the Trustees.
B. Repurchase agreements -- Pursuant to an Exemptive Order issued
by the Securities and Exchange Commission, the Fund may
transfer uninvested cash balances into one or more joint
trading accounts for the purpose of investing in repurchase
agreements. It is the Fund's policy that repurchase agreements
are fully collateralized by U.S. Treasury and Government
Agency securities. All collateral is held in one or more joint
trading account by the Trust's custodian bank, subcustodian,
or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal
Reserve Book Entry System.
In connection with transactions in repurchase agreements, if
the seller defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization
of the collateral by the Fund may be delayed or limited.
C. Security transactions and investment income -- Investment
transactions are accounted for on the trade date (the date the
order to buy or sell is executed). Securities gains and losses
are calculated on the identified cost basis. Interest income
is accrued as earned. Dividend income is recorded on the
ex-dividend date.
<PAGE>
Chase Equity Growth II Fund
Notes to Financial Statements
- --------------------------------------------------------------------------------
D. Federal income taxes -- The Fund is treated as a separate
entity for Federal income tax purposes. The Fund's policy is
to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and to distribute
to shareholders all of its distributable net investment
income, and net realized gain on investments. In addition, the
Fund intends to make distributions as required to avoid excise
taxes. Accordingly, no provision for Federal income or excise
tax is necessary.
E. Distributions to shareholders -- Dividends and distributions
paid to shareholders are recorded on the ex-dividend date. The
amount of dividends and distributions from net investment
income and net realized capital gains is determined in
accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles. To the
extent the "book/tax" differences are permanent in nature
(i.e., that they result from other than timing of recognition
-- "temporary differences"), such amounts are reclassified
within the capital accounts based on their Federal tax-basis
treatment. Dividends and distributions which exceed net
investment income or net realized capital gains for financial
reporting purposes but not for tax purposes are reported as
distributions in excess of net investment income or net
realized capital gains.
F. Expenses -- Expenses directly attributable to the Fund are
charged to the Fund; other expenses are allocated
proportionately among each Fund within the Trust in relation
to the net assets of each Fund or another reasonable basis.
2. Fees and Other Transactions with Affiliates
A. Investment advisory fee -- Pursuant to a separate Investment
Advisory Agreement, The Chase Manhattan Bank ("Chase" or the
"Advisor"), acts as the Investment Advisor to the Fund. Chase
is a direct wholly-owned subsidiary of The Chase Manhattan
Corporation. As Investment Advisor, Chase supervises the
investments of the Fund and for such services is paid a fee.
The fee is computed daily and paid monthly at an annual rate
equal to 0.40% of the Fund's average daily net assets. The
Advisor voluntarily waived a portion of its fees for the
period ended December 31, 1999 in the amount of $32,928.
Chase Bank of Texas N.A. ("Chase Texas"), a wholly-owned
subsidiary of The Chase Manhattan Corporation, is the
Sub-Investment Advisor to the Fund. Pursuant to the
Sub-Investment Advisory Agreement between Chase Texas and
Chase, Chase Texas is entitled to receive a fee payable by
Chase from its advisory fee, at an annual rate equal to 0.20%
of average daily net assets.
B. Sub-administration fees -- Pursuant to a Distribution and
Sub-Administration Agreement, Chase Fund Distributors, Inc.
("CFD" or the "Distributor"), a wholly-owned subsidiary of The
BISYS Group, Inc., acts as the Fund's distributor and
sub-administrator.
For the sub-administrative services it performs, CFD is
entitled to receive a fee from the Fund at an annual rate
equal to 0.05% of the Fund's average daily net assets. The
Distributor voluntarily waived a portion of its fees for the
period ended December 31, 1999 in the amount of $3,808.
C. Administration fee -- Pursuant to an Administration Agreement,
Chase (the "Administrator") provides certain administration
services to the Trust. For these services and facilities, the
Administrator receives from the Fund a fee computed at an
annual rate equal to 0.10% of the Fund's average daily net
assets. The Administrator voluntarily waived a portion of its
fees for the period ended December 31, 1999 in the amount of
$7,615.
<PAGE>
D. Other -- Certain officers of the Trust are officers of Chase
Fund Distributors, Inc. or of its parent corporation, The
BISYS Group, Inc.
The Distributor voluntarily reimbursed expenses of the Fund in
the amount as shown on the Statement of Operations.
3. Investment Transactions
For the period ended December 31, 1999, purchases and sales of
investments (excluding short-term investments) were as follows (in
thousands):
<TABLE>
<S> <C>
Purchases (excluding U.S. Government) $ 34,968
Sales (excluding U.S. Government) 445
</TABLE>
4. Federal Income Tax Matters
For Federal income tax purposes, the cost and unrealized appreciation
(depreciation) in value of the investment securities at December 31,
1999 are as follows (in thousands):
<TABLE>
<S> <C>
Aggregate cost $ 38,765
-------------------
Gross unrealized appreciation $ 5,394
Gross unrealized depreciation (900)
-------------------
Net unrealized appreciation $ 4,494
===================
</TABLE>
5. Concentration of Shareholders
At December 31, 1999, all shares outstanding for the Fund are owned by
the participants in The Chase Manhattan Bank 401(K) Savings Plan.
<PAGE>
Chase Equity Growth II Fund
Financial Highlights For the period from July 1, 1999 * to December 31, 1999
<TABLE>
<S> <C>
Per share operating performance:
Net asset value, beginning of period $ 10.00
-------
Income from investment operations:
Net investment income 0.01
Net gains on investments (both realized and unrealized) 1.47
-------
Total from investment operations 1.48
-------
Less distributions:
Dividends from net investment income 0.01
-------
Net asset value, end of period $ 11.47
=======
Total return 14.76%
Ratios/supplemental data:
Net assets, end of period (millions) $41
Ratios to average net assets: #
Expenses 0.59%
Net investment income 0.33%
Expenses without waivers and assumption of expenses 1.42%
Net investment income without waivers and assumption of expenses (0.50%)
Portfolio turnover rate 5%
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
<PAGE>
To the Trustees and Shareholders of
Mutual Fund Investment Trust
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Chase Equity Growth II Fund (a
separate portfolio of Mutual Fund Investment Trust, hereafter referred to as
the "Trust") at December 31, 1999, and the results of its operations, the
changes in its net assets and the financial highlights for the period July
1, 1999 (commencement of operations) through December 31, 1999, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at December 31, 1999 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
February 10, 2000