Chase
Equity Growth II Fund
Semi-Annual Report
June 30, 2000
(Unaudited)
<PAGE>
Chase Equity Growth II Fund Chairman's Letter
August 1, 2000
Dear Shareholder:
We are pleased to present this semi-annual report for the Chase Equity Growth II
Fund for the six months ended June 30, 2000. To help you analyze your
investment, this report gives you specific information on your Fund's holdings,
performance, management strategies and outlook.
Old Economy/New Economy: An End of the Extremes
The first half of 2000 was rocky for domestic equity and fixed-income markets.
At first, new economy outperformance continued, whereby technology-related
stocks appreciated at the expense of all others. This was evident in the Nasdaq,
which was up 15.42% in the first two months of the year, compared with a loss of
7% for the S&P 500. This trend carried into March, with the Nasdaq cresting to
its 2000 high of 5,048 on March 10.
Although there was no single catalyst that caused the new economy's stumble,
Nasdaq investors were on a bumpy ride for the remainder of the period as the
index fell to a low of 3,164 on May 23, before rising above 4,000 to 4,064 on
June 21, and ending at 3,966. The S&P 500 was flat (0.4%), proving less volatile
than the Nasdaq.
It became clear that the Federal Reserve Board's tight money policies were
taking effect. When the Fed raised rates in May, the market was in the doldrums.
Economic reports suggested, however, that rates were impacting the economy, and
the potential for slower growth and an end to tightenings allowed for a June
rally. The best performing S&P 500 sectors were healthcare, energy, technology
and utilities. By capitalization, mid-caps outperformed.
Treasury Buyback Program Has Big Impact on Bonds
While the economic state is a driver among bonds, one cannot overlook the factor
of the Treasury's buyback program for longer-dated Treasuries given the growing
federal budget surplus. With normal supply-and-demand considerations taking
hold, investors bid up the prices of long-term Treasuries, resulting in an
inverted yield curve, with higher yields for shorter-term issues. The program
caused "spread" sectors to underperform, which is unusual when the Fed is in a
tightening cycle.
Undoubtedly, the big issue is whether the economy can achieve a soft landing,
allowing the Fed to take its foot off the brakes. Regardless, our equity fund
managers continue to pick what they believe are the best stocks across sectors,
those with potential to increase earnings in a variety of economic scenarios.
Our bond fund managers are focused on adding value through individual security
selection as well as sector allocations. On behalf of the management team, and
everyone at Chase Funds, we thank you for your business.
Sincerely yours,
/s/ Sarah E. Jones
Sarah Jones
Chairman
<PAGE>
Chase Equity Growth II Fund
As of June 30, 2000
(unaudited)
How the Fund performed
Chase Equity Growth II Fund, which seeks to provide capital appreciation through
investment in growth stocks, generated a total return of 1.83%, compared to a
2.63% return from the S&P/BARRA Growth Index, for the six months ended June 30,
2000.
How the Fund was managed
For the first few months of 2000, the divergence between `old' and `new' economy
stocks continued to grow, as technology valuations became increasingly extended.
In March, however, the technology sector began a prolonged and violent
correction that lasted through May. By the end of the first half, investors were
taking a stock-by-stock approach that rewarded well-managed companies with good
prospects, and punished those that disappointed.
In spite of the volatility, technology names still made the greatest
contribution to performance. The stocks of companies with perceived competitive
advantage and strong growth prospects held up relatively well. Names like Intel,
the maker of Pentium semiconductor chips, EMC Corp and Applied Materials
performed well.
But there was a wide dispersion of performance in the sector. Microsoft
stock--dogged by fears of a corporate break-up--fell sharply. Some of Internet
stocks also ended the period in negative territory. America Online and Yahoo
both nursed substantial losses.
Many defensive `old economy' names had a strong first half. Healthcare stocks,
in particular, bounced back from depressed levels. These companies had been
overshadowed during 1999 by fears of legislation that would reduce the prices
Medicare patients pay for drugs. But the price falls appeared overdone, and as
technology stock prices started to weaken, investors sought refuge in drug
stocks like Pfizer, Warner-Lambert and Eli Lilly. Biotechnology companies, like
Amgen, received a boost as the mapping of the human genome sparked anticipation
of a new era in drug discovery.
Investors were unforgiving of stocks that disappointed. Procter & Gamble stock
plummeted in early March after the company announced extremely disappointing
first quarter earnings.
Where the Fund may be headed
For the market as a whole, the big question remains whether the economy is
slowing to the extent that no further interest-rate rises are necessary. The
FOMC refrained from tightening in late June as weaker economic and monetary data
suggested that the 175 basis points of tightening over the past year might be
beginning to lower the trend rate of economic growth, and to reduce rising price
pressures. But the extent of any slowdown is still an open question.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments
As of June 30, 2000 (unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
---------------------------------------------------------------------------------------------------------------------
Long-Term Investments - 96.4%
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock -- 96.4%
---------------------
Biotechnology -- 5.7%
44 Amgen, Inc. * $ 3,113
17 Biogen, Inc. * 1,093
14 MedImmune, Inc. * 1,006
-------------
5,212
Computer Networks -- 5.5%
78 Cisco Systems, Inc. * 4,977
Computer Software -- 6.9%
40 Microsoft Corp. * 3,208
36 Oracle Corp. * 3,066
-------------
6,274
Computers/Computer Hardware -- 10.9%
32 Dell Computer Corp. * 1,579
59 EMC Corp. * 4,528
19 International Business Machines Corp. 2,041
20 Sun Microsystems, Inc. * 1,839
-------------
9,987
Consumer Products -- 1.6%
22 Gillette Co. 780
12 Procter & Gamble Co. 658
-------------
1,438
Diversified -- 6.0%
93 General Electric Co. 4,948
12 Tyco International LTD (Bermuda) 563
-------------
5,511
Electronics/Electrical Equipment -- 1.8%
18 Molex, Inc. 864
15 Symbol Technologies, Inc. 821
-------------
1,685
Financial Services -- 5.9%
66 Charles Schwab Corp. 2,215
15 Merrill Lynch & Co., Inc. 1,771
17 Morgan Stanley Dean Witter & Co. 1,409
-------------
5,395
Food/Beverage Products -- 2.5%
18 Coca-Cola Co. 1,054
28 PepsiCo, Inc. 1,226
-------------
2,280
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments
As of June 30, 2000 (unaudited) (continued)
(Amounts in thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
---------------------------------------------------------------------------------------------------------------------
Long-Term Investments - (continued)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care/Health Care Services -- 1.4%
7 Medtronic, Inc. $ 342
11 UnitedHealth Group Inc. 918
-------------
1,260
Multi-Media -- 3.7%
52 The Walt Disney Co. 2,009
18 Time Warner, Inc. 1,336
-------------
3,345
Pharmaceuticals -- 10.7%
12 Bristol-Myers Squibb Co. 682
15 Eli Lilly & Co. 1,453
11 Johnson & Johnson 1,077
20 Merck & Co., Inc. 1,569
86 Pfizer, Inc. 4,108
17 Pharmacia Corp. 863
-------------
9,752
Restaurants/Food Services -- 1.2%
39 Tricon Global Restaurants, Inc. * 1,092
Retailing -- 7.2%
26 Best Buy Co., Inc. * 1,673
35 Home Depot, Inc. 1,738
55 Wal-Mart Stores, Inc. 3,191
-------------
6,602
Semi-Conductors -- 17.7%
45 Applied Materials, Inc. * 4,114
41 Intel Corp. 5,525
28 KLA-Tencor Corp. * 1,638
61 Novellus Systems, Inc. * 3,435
20 Texas Instruments, Inc. 1,405
-------------
16,117
Telecommunications -- 1.4%
15 Nextel Communications, Inc., Class A * 924
8 Sprint Corp. (FON Group) 393
-------------
1,317
Telecommunications Equipment -- 6.3%
7 ADC Telecommunications, Inc. * 627
10 JDS Uniphase Corp. * 1,151
29 Lucent Technologies, Inc. 1,711
33 Nortel Networks Corp., (Canada) 2,276
-------------
5,765
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Portfolio of Investments
As of June 30, 2000 (unaudited) (continued)
(Amounts in thousands)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
---------------------------------------------------------------------------------------------------------------------
Long-Term Investments - (continued)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total Common Stock $ 88,009
(Cost $78,681)
-------------------------------------------------------------------------------------------------------------------
Short-Term Investment - 3.7%
-------------------------------------------------------------------------------------------------------------------
Repurchase Agreement -- 3.7%
----------------------------
$ 3,387 Greenwich Capital Markets, Inc., in a joint trading account at 6.80%,
due 07/03/00 (Dated 06/30/00, Proceeds $3,389, Secured by
FHLMC, $3,520, 7.00%, due 11/15/21; Market Value $3,458)
(Cost $3,387) $ 3,387
---------------------------------------------------------------------------------------------------------------------
Total Investments-- 100.1% $ 91,396
(Cost $82,068)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
INDEX:
* - Non-income producing security.
FHLMC - Federal Home Loan Mortgage Corporation.
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Assets and Liabilities As of June 30, 2000 (unaudited)
(Amounts in Thousands, Except Per Share Amounts)
<TABLE>
ASSETS:
<S> <C>
Investment securities, at value (Note 1) $ 91,396
Cash 1
Receivables:
Interest/Dividends 23
--------
Total Assets 91,420
--------
LIABILITIES:
Accrued liabilities: (Note 2)
Investment advisory fees 14
Administration fees 11
Custody and accounting fees 34
Other 58
--------
Total Liabilities 117
--------
NET ASSETS:
Paid in capital 85,744
Accumulated undistributed net
investment income 55
Accumulated net realized
loss on investment transactions (3,824)
Net unrealized appreciation on investments 9,328
--------
Net Assets $ 91,303
========
Shares of beneficial interest outstanding
($.001 par value; unlimited number of shares authorized) 7,819
Net Asset Value, maximum offering and redemption price per share $ 11.68
Cost of Investments $ 82,068
--------
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Operations For the six months ended June 30, 2000
(Amounts in Thousands) (unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend $ 132
Interest 142
-------
Total investment income 274
-------
EXPENSES: (Note 2)
Investment advisory fees 154
Administration fees 58
Custody and accounting fees 61
Printing and postage 16
Professional fees 18
Registration expenses 22
Transfer agent fees 12
Trustees fees and expenses 2
Other 5
-------
Total expenses 348
-------
Less amounts waived (Note 2) 117
Less expense reimbursements 1
-------
Net expenses 230
-------
Net investment income 44
-------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investment transactions (3,807)
Change in net unrealized appreciation of investments 4,826
-------
Net realized and unrealized gain on investments 1,019
-------
Net increase in net assets from operations $ 1,063
=======
</TABLE>
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Statement of Changes in Net Assets For the periods indicated (unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
1/1/00 7/1/99*
Through Through
6/30/00 12/31/99
-------- --------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 44 $ 30
Net realized loss on investment transactions (3,807) (17)
Change in net unrealized appreciation of investments 4,826 4,502
-------- --------
Increase in net assets from operations 1,063 4,515
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1)
Net investment income - (19)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold 59,053 38,153
Shares issued in reinvestment of distributions - 19
Shares redeemed (10,031) (1,450)
-------- --------
Increase from capital share transactions 49,022 36,722
-------- --------
Total increase in net assets 50,085 41,218
NET ASSETS:
Beginning of period 41,218 -
-------- --------
End of period $ 91,303 $ 41,218
-------- --------
SHARE TRANSACTIONS:
Shares sold 5,100 3,733
Shares issued from reinvestment of distributions - 2
Shares redeemed (874) (142)
-------- --------
Net increase in fund shares outstanding 4,226 3,593
======== ========
</TABLE>
* Commencement of operations.
See notes to financial statements.
<PAGE>
Chase Equity Growth II Fund
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies -- Mutual Fund Investment
Trust (the "Trust") was organized on September 23, 1997 as a Massachusetts
Business Trust, and is registered under the Investment Company Act of 1940,
as amended, (the "1940 Act"), as an open-end management investment company.
Chase 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 (unaudited)
--------------------------------------------------------------------------------
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 six months
ended June 30, 2000 in the amount of $103,068.
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 six months ended June 30, 2000 in the
amount of $4,753.
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 six months ended June 30, 2000 in the
amount of $9,507.
<PAGE>
Chase Equity Growth II Fund
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
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 six months ended June 30, 2000, purchases and sales of investments
(excluding short-term investments) were as follows (in thousands):
Purchases (excluding U.S. Government) $ 71,041
Sales (excluding U.S. Government) 23,059
4. Federal Income Tax Matters
For Federal income tax purposes, the cost and unrealized appreciation
(depreciation) in value of the investment securities at June 30, 2000 are
as follows (in thousands):
Aggregate cost $ 82,068
-------------------
Gross unrealized appreciation $ 12,363
Gross unrealized depreciation (3,035)
-------------------
Net unrealized appreciation $ 9,328
===================
5. Concentration of Shareholders
At June 30, 2000, all shares outstanding for the Fund are owned by the
participants in The Chase Manhattan Bank 401(K) Savings Plan.
6. Concentrations
At June 30, 2000, EGII invested 49.0% of its portfolio in securities issued
by technology sector companies, such as computer hardware and software
companies, internet connectivity providers, and telecommunications
equipment manufacturers. Valuations of companies in the technology sector
are typically subject to greater volatility than other sectors.
<PAGE>
Chase Equity Growth II Fund
Financial Highlights For the periods indicated (unaudited)
<TABLE>
<CAPTION>
1/1/00 7/1/99*
Through Through
Per share operating performance: 6/30/00 12/31/99
------- --------
<S> <C> <C>
Net asset value, beginning of period $ 11.47 $ 10.00
------- -------
Income from investment operations:
Net investment income 0.01 0.01
Net gains on investments (both realized and unrealized) 0.20 1.47
------- -------
Total from investment operations 0.21 1.48
------- -------
Less distributions:
Dividends from net investment income - 0.01
------- -------
Net asset value, end of period $ 11.68 $ 11.47
======= =======
Total return 1.83% 14.76%
Ratios/supplemental data:
Net assets, end of period (millions) $91 $41
Ratios to average net assets: #
Expenses 0.60% 0.59%
Net investment income 0.11% 0.33%
Expenses without waivers and reimbursements 0.91% 1.42%
Net investment income without waivers and reimbursements (0.20%) (0.50%)
Portfolio turnover rate 32% 5%
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
