<PAGE> 1
[VISTA LOGO]
- -----------------------------------------------------------------------
- - VISTA U.S. TREASURY INCOME FUND
(Class A and Class B Shares)
- - VISTA U.S. GOVERNMENT SECURITIES FUND
(Class A Shares and Class I Shares)
- - VISTA BOND FUND
(Class A Shares, Class B Shares and Class I Shares)
- - VISTA SHORT-TERM BOND FUND
(Class A Shares and Class I Shares)
- -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL REPORT
OCTOBER 31, 1996
<PAGE> 2
CONTENTS
Chairman's Letter 1
Fund Commentaries 2
Portfolio of Investments 10
Notes to Financial Statements 21
Per Share Data 29
<PAGE> 3
Vista is in the process of redesigning your Shareholder Reports to include even
more information about your fund, its current investment strategy and how it is
performing.
Watch for the completed redesign when you receive your next Semiannual Report.
December 19, 1996
Dear Shareholder:
We are pleased to present this Annual Report for the following Vista Fixed
Income Funds for the year ended October 31, 1996:
<TABLE>
<S> <C>
- U.S. Treasury Income Fund - Short-Term Bond Fund
- U.S. Government Securities Fund - Bond Fund
</TABLE>
UNEXPECTED ECONOMIC GROWTH CREATES MARKET VOLATILITY
After generally increasing in value as a result of Federal Reserve Board
interest rate cuts in late 1995 and early 1996, U.S. government and corporate
bond prices fell sharply in February in response to reports of
stronger-than-expected economic growth and resulting inflation fears. From
February through the summer of 1996, bond markets were extremely volatile as
investors reacted to mixed economic news and attempted to gauge the Federal
Reserve Board's next move on interest rates. A pattern emerged wherein reports
of economic growth triggered broad selling one day only to have conflicting
signals spark a brief rally the next.
By early fall, more consistent signs of moderating economic growth led many
market participants to believe that the inflation threat had subsided and that
the Fed would not raise short-term interest rates. The combination of the
resulting rally and continued strong performance from the non-Treasury sectors,
which had been doing well all year, helped the U.S. fixed income market end the
year on a positive note.
FIXED INCOME MARKET OUTLOOK
We believe that moderate-to-slowing economic growth should create a positive
environment for fixed income securities as we head into 1997. While the past
year proved that the direction of interest rates can be very difficult to
predict, Vista's management team continues to rely on a disciplined fixed income
management process which seeks to capitalize on all sectors of the U.S. fixed
income market to provide consistent returns over time.
We thank you for allowing us to serve your investment needs and encourage you to
contact us at 1-800-34-VISTA if you have any questions.
Sincerely,
/s/ FERGUS REID
Fergus Reid
Chairman
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, THE
CHASE MANHATTAN BANK, AND THE SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS
INVOLVE RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE> 4
VISTA U.S. TREASURY INCOME FUND
Vista U.S. Treasury Income Fund, which seeks to provide income through a
portfolio of high-quality U.S. Treasury Bonds, provided a one-year total return
of 3.56% for the period ended October 31, 1996 (Class A Shares, without sales
charge). Formerly the Vista U.S. Government Income Fund, the Fund changed its
name to the Vista U.S. Treasury Income Fund on May 6, 1996. This name change in
no way impacted the Fund's objective or investment parameters.
AS 1995 ENDED, FUND WAS POSITIONED FOR DECLINING INTEREST RATES
Along with most U.S. bond market participants, the Fund began 1996 on a bullish
note, confident that a slowing economy would translate into further interest
rate cuts by the Federal Reserve Board. As a result of unexpected economic
growth, however, the prices of bonds in the Fund's portfolio began to decline in
February. This prompted the Fund's manager to reduce the average duration of the
portfolio and take a slightly more neutral position.
Based on a belief that the economy would slow for the remainder of 1996 and
confident that the market had discounted a potential Federal Reserve Board rate
hike, the manager began looking for opportunities to expand duration in
mid-summer. The extended duration proved beneficial for the rest of the
reporting year as economic growth did indeed moderate and prices of U.S.
Treasury securities bounced back. As the year ended, the manager believed that
bond prices were at the higher end of their ranges and therefore reduced
duration to a slightly long position relative to the Fund's benchmark.
BOND INCOME OFFSETS EFFECT OF HIGHER RATES
Despite the generally upward movement in bond yields, interest payments from the
Fund's bonds were sufficient to more than offset any principal erosion and
provide shareholders with a positive total return. Moving forward, the Fund's
manager believes that a slowing economy will continue to create a positive
environment for U.S. Treasury security investments, and therefore expects to
maintain a slightly-long average maturity relative to the Fund's benchmark as
the new year begins.
2
<PAGE> 5
VISTA U.S. TREASURY INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS*
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year.................... 3.56% -1.10%
Five Years.................. 6.62% 5.64%
Since Inception (9/8/87).... 8.98% 8.44%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC#
------------ ------------
<S> <C> <C>
One Year.................... 2.82% -2.06%
Since Inception (11/4/93)... 3.54% 2.67%
</TABLE>
* Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
# Assumes a 5% CDSC for the one year period and a 3% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LIPPER
VISTA U.S. GENERAL US LEHMAN
MEASUREMENT PERIOD TREASURY GOV'T FUNDS TREASURY BOND
(FISCAL YEAR COVERED) INCOME FUND AVG. INDEX
<S> <C> <C> <C>
09/30/87 9550.00 10000.00 10000.00
10/31/87 10208.95 10328.00 10400.00
11/30/87 10228.05 10406.49 10445.76
12/31/87 10405.68 10533.45 10571.11
01/31/88 10892.84 10883.16 10924.18
02/29/88 11033.04 10999.61 11037.80
03/31/88 10810.41 10885.22 10914.17
04/30/88 10715.37 10838.41 10853.05
05/31/88 10571.24 10769.04 10771.66
06/30/88 10875.57 10998.42 11017.25
07/31/88 10772.76 10951.13 10936.82
08/31/88 10793.05 10954.42 10956.51
09/30/88 11095.58 11173.51 11200.84
10/31/88 11301.43 11356.75 11402.45
11/30/88 11121.03 11245.45 11263.34
12/31/88 11133.56 11237.58 11308.40
01/31/89 11288.10 11375.81 11454.28
02/28/89 11135.76 11298.45 11354.62
03/31/89 11223.06 11332.34 11429.56
04/30/89 11482.71 11531.79 11676.44
05/31/89 11810.02 11797.03 11954.34
06/30/89 12207.31 12122.62 12364.38
07/31/89 12487.84 12323.86 12630.21
08/31/89 12272.72 12163.65 12411.71
09/30/89 12318.26 12215.95 12463.84
10/31/89 12616.71 12484.70 12794.13
11/30/89 12741.64 12595.82 12916.95
12/31/89 12735.98 12641.16 12937.62
01/31/90 12558.11 12462.92 12744.85
02/28/90 12555.81 12501.56 12767.79
03/31/90 12546.57 12510.31 12763.96
04/30/90 12414.01 12372.69 12655.47
05/31/90 12759.50 12719.13 13003.49
06/30/90 12947.00 12915.00 13208.95
07/31/90 13146.37 13084.19 13376.70
08/31/90 12982.63 12897.09 13184.08
09/30/90 13098.14 13001.55 13310.64
10/31/90 13335.63 13165.37 13530.27
11/30/90 13607.71 13478.71 13829.29
12/31/90 13825.09 13691.67 14045.02
01/31/91 13979.66 13842.28 14195.31
02/28/91 14053.11 13914.26 14270.54
03/31/91 14086.93 13981.05 14341.89
04/30/91 14268.53 14104.08 14499.65
05/31/91 14328.20 14164.73 14553.30
06/30/91 14305.19 14137.82 14531.47
07/31/91 14464.71 14330.09 14701.49
08/31/91 14779.38 14643.92 15042.57
09/30/91 15079.14 14941.19 15359.96
10/31/91 15211.58 15075.66 15496.67
11/30/91 15327.67 15179.69 15651.63
12/31/91 15870.45 15686.69 16191.62
01/31/92 15598.07 15402.76 15932.55
02/29/92 15642.83 15492.09 15994.69
03/31/92 15532.36 15392.94 15898.72
04/30/92 15633.90 15472.99 15998.88
05/31/92 15904.36 15763.88 16293.26
06/30/92 16144.45 15968.81 16529.51
07/31/92 16539.34 16310.54 16951.01
08/31/92 16725.91 16457.34 17112.05
09/30/92 16996.69 16635.08 17361.89
10/31/92 16640.88 16400.52 17106.67
11/30/92 16558.24 16418.56 17067.32
12/31/92 16801.54 16686.19 17360.88
01/31/93 17175.89 16998.22 17734.14
02/28/93 17513.48 17299.09 18090.59
03/31/93 17577.46 17357.90 18150.29
04/30/93 17710.60 17458.58 18291.86
05/31/93 17664.00 17470.80 18269.91
06/30/93 18067.44 17820.22 18679.16
07/31/93 18153.98 17934.26 18789.37
08/31/93 18576.56 18269.64 19208.37
09/30/93 18651.66 18309.83 19283.28
10/31/93 18696.29 18372.08 19354.63
11/30/93 18495.42 18160.80 19141.73
12/31/93 18535.76 18244.34 19216.38
01/31/94 18808.49 18476.05 19481.57
02/28/94 18368.93 18100.98 19062.72
03/31/94 17983.65 17652.08 18635.71
04/30/94 17808.63 17463.20 18490.35
05/31/94 17766.69 17409.06 18468.16
06/30/94 17706.71 17330.72 18427.53
07/31/94 18037.39 17621.88 18762.91
08/31/94 18032.48 17614.83 18766.67
09/30/94 17701.47 17334.76 18503.93
10/31/94 17653.45 17284.48 18492.83
11/30/94 17601.82 17241.27 18455.85
12/31/94 17709.01 17370.58 18568.43
01/31/95 18049.37 17681.52 18911.94
02/28/95 18434.09 18070.51 19314.77
03/31/95 18538.01 18162.67 19436.45
04/30/95 18757.32 18382.44 19691.07
05/31/95 19477.29 19082.81 20486.59
06/30/95 19626.19 19201.12 20648.43
07/31/95 19551.37 19108.96 20572.03
08/31/95 19752.48 19342.09 20810.67
09/30/95 19935.24 19537.44 21010.45
10/31/95 20228.36 19816.83 21336.11
11/30/95 20517.59 20108.13 21666.82
12/31/95 20813.50 20399.70 21976.66
01/31/96 20931.71 20491.50 22115.11
02/29/96 20449.20 20034.54 21661.75
03/31/96 20243.28 19852.23 21475.46
04/30/96 20070.47 19701.35 21338.02
05/31/96 19992.58 19630.42 21303.87
06/30/96 20220.23 19860.10 21574.43
07/31/96 20286.28 19895.85 21626.21
08/31/96 20185.20 19832.18 21580.80
09/30/96 20507.27 20163.38 21934.72
10/31/96 20948.87 20604.96 22417.29
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista U.S. Treasury Income Fund, the Lipper General U.S.
Government Funds Average and the Lehman Treasury Bond Index from September 30,
1987 to October 31, 1996. The Fund's performance includes a 4.50% sales charge
and assumes the reinvestment of all dividends and capital gains and reflects
waivers and/or reimbursements. The average's performance does not include a
sales charge and reflects reinvestment of all dividends and capital gains on
mutual funds and the benchmark.
The General U.S. Government Funds Average represents the average performance of
a universe of 167 actively managed U.S. government income funds. Lipper is an
independent mutual fund performance monitor whose results do not reflect a sales
charge.
The Lehman Treasury Bond index is unmanaged, does not include a sales charge,
reflects reinvestment of dividends, and is a replica (or model) of the U.S.
government treasury securities market.
3
<PAGE> 6
VISTA BOND FUND
Vista Bond Fund, which seeks to provide a high level of current income through a
portfolio of investment grade government, asset-backed and corporate bonds,
provided a one-year total return of 4.90% for the period ended October 31, 1996
(Class I Shares). The Fund's Class A and Class B Shares posted total returns of
5.95% and 6.12% respectively (without sales charge or contingent deferred sales
charge) since inception on May 6, 1996 through the end of the reporting period.
Returns were 1.18% and 1.34%, respectively, after deduction of the maximum
front-end sales charge of 4.5% or the max. 5% CDSC.
SOUND MANAGEMENT DECISIONS SPARK STRONG PERFORMANCE
The volatility in U.S. bond markets--along with the shifting yield differentials
between corporate, government and asset-backed securities--tested the skills of
all bond fund portfolio managers during the year. Through sector/security
allocation and duration decisions made in response to changing market
conditions, Vista Bond Fund's management team was able to outperform the Fund's
benchmark index with low portfolio turnover despite market volatility.
During the late 1995 bond market rally, the Fund took advantage of declining
interest rates by taking positions in 20- to 30-year maturity U.S. Treasury
securities, asset-backed securities and the corporate bonds of issuers in the
financial services industry.
When stronger-than-expected economic growth upset bond market psychology
starting in February, 1996, the Fund began adjusting to a more neutral average
maturity. Recognizing an attractive relative value in mortgage-backed
securities, the Fund began to overweight these bonds as well as corporate bonds
while greatly reducing its exposure to U.S. Treasuries. Performance was
subsequently enhanced as the mortgages and corporates provided higher yields
while also outperforming Treasuries over the course of the reporting year.
MARKETS RALLY IN THE FALL OF 1996
Interest rates began to fall at the end of the reporting year and the yield
spread between mortgage-backed and Treasury securities narrowed. As a result,
the manager's more neutral outlook towards mortgage-backed securities was
evidenced by a gradual sector shift towards Treasuries. The Fund's ability to
allocate assets among U.S. Treasury, corporate, mortgage-backed and asset-backed
securities provides the manager with a great deal of flexibility. Using Vista's
fixed income management process, the Fund will continue to look for pockets of
relative value among sectors/securities and along the yield curve, seeking to
provide consistent returns in any market environment.
4
<PAGE> 7
VISTA BOND FUND
AVERAGE ANNUAL TOTAL RETURNS*
AS OF 10/31/96
<TABLE>
<CAPTION>
CLASS I SHARES
<S> <C>
One Year...................................... 4.90%
Five Years.................................... 7.66%
Since Inception (11/30/90).................... 8.43%
</TABLE>
* Assumes dividend reinvestment and reflects fee
waivers. Without such waivers, performance would have
been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LIPPER CORP. LEHMAN AG-
MEASUREMENT PERIOD VISTA BOND DEBT BBB GREGATE IN-
(FISCAL YEAR COVERED) FUND AVG. DEX
<S> <C> <C> <C>
11/30/90 10000.00 10000.00 10000.00
12/31/90 10000.00 10150.00 10156.00
01/31/91 10191.00 10260.64 10281.93
02/28/91 10286.59 10437.12 10369.33
03/31/91 10337.72 10559.23 10438.81
04/30/91 10465.74 10716.56 10553.63
05/31/91 10504.85 10781.94 10614.84
06/30/91 10482.47 10773.31 10609.54
07/31/91 10612.58 10920.90 10757.01
08/31/91 10849.77 11181.91 10989.36
09/30/91 11064.00 11410.03 11212.44
10/31/91 11161.61 11530.97 11336.90
11/30/91 11272.68 11622.07 11441.20
12/31/91 11649.76 12010.24 11781.01
01/31/92 11502.86 11912.96 11620.78
02/29/92 11540.05 11995.16 11696.32
03/31/92 11485.62 11962.77 11630.82
04/30/92 11544.79 12017.80 11714.56
05/31/92 11745.05 12262.96 11935.97
06/30/92 11915.63 12438.33 12100.68
07/31/92 12232.89 12787.84 12347.54
08/31/92 12326.81 12902.93 12472.25
09/30/92 12512.28 13059.06 12620.67
10/31/92 12316.18 12814.85 12452.81
11/30/92 12283.00 12852.02 12457.79
12/31/92 12480.59 13075.64 12653.38
01/31/93 12740.70 13371.15 12896.32
02/28/93 12995.28 13692.06 13122.01
03/31/93 13043.63 13793.38 13177.12
04/30/93 13133.75 13889.93 13269.36
05/31/93 13128.98 13935.77 13286.61
06/30/93 13399.71 14274.41 13527.10
07/31/93 13476.76 14417.15 13604.21
08/31/93 13763.48 14763.17 13842.28
09/30/93 13829.13 14808.93 13879.65
10/31/93 13871.89 14939.25 13931.01
11/30/93 13717.21 14774.92 13812.59
12/31/93 13776.42 14869.48 13887.18
01/31/94 13970.02 15122.26 14074.66
02/28/94 13671.29 14797.13 13829.76
03/31/94 13388.78 14363.57 13488.16
04/30/94 13281.01 14182.59 13380.26
05/31/94 13351.11 14140.05 13378.92
06/30/94 13242.20 14083.49 13349.49
07/31/94 13470.21 14332.76 13615.14
08/31/94 13492.22 14377.19 13631.48
09/30/94 13304.69 14155.79 13431.10
10/31/94 13274.57 14113.32 13419.01
11/30/94 13244.28 14083.68 13389.49
12/31/94 13339.64 14166.77 13481.88
01/31/95 13589.34 14396.28 13748.82
02/28/95 13876.70 14738.91 14076.04
03/31/95 13968.49 14845.03 14161.90
04/30/95 14154.47 15097.39 14360.17
05/31/95 14738.67 15785.83 14915.91
06/30/95 14859.43 15904.23 15024.79
07/31/95 14787.68 15829.48 14991.74
08/31/95 14965.25 16060.59 15173.14
09/30/95 15128.43 16243.68 15320.32
10/31/95 15376.60 16469.47 15519.48
11/30/95 15611.97 16744.51 15752.28
12/31/95 15858.47 17020.79 15972.81
01/31/96 15942.92 17124.62 16078.23
02/29/96 15578.65 16717.05 15798.47
03/31/96 15439.70 16576.63 15687.88
04/30/96 15327.90 16440.70 15600.03
05/31/96 15277.93 16416.04 15568.83
06/30/96 15460.08 16614.67 15777.45
07/31/96 15537.90 16646.24 15820.05
08/31/96 15518.67 16619.61 15793.15
09/30/96 15806.81 16947.01 16067.95
10/31/96 16139.86 17353.74 16424.66
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class I
shares of the Vista Bond Fund, the Lipper Corporate Debt BBB Average and the
Lehman Aggregate Bond Index from November 30, 1990 to October 31, 1996. The
Fund's performance assumes dividend reinvestment and reflects waivers as
described above. The Average's performance does not include a sales charge and
reflects reinvestment of all dividends and capital gains on mutual funds and the
benchmark. Class I shares have a $1,000,000 minimum initial deposit and carry no
sales charge. A shares (max. 4.5% front-end sales charge) and B shares (max. 5%
CDSC), which have different expense ratios, became available 5/6/96 at a minimum
initial investment of $2,500.
The Lipper Corporate Debt BBB Funds Average represents the average performance
of a universe of 91 actively managed BBB-rated corporate debt funds. Lipper is
an independent mutual fund performance monitor whose results do not reflect a
sales charge.
The Lehman Aggregate Bond index is composed of the Lehman Government/Corporate
Index and the Mortgage-Backed Securities Index and includes treasury issues,
agency issues, corporate bond issues and mortgage-backed securities.
5
<PAGE> 8
VISTA SHORT-TERM BOND FUND
Vista Short-Term Bond Fund, which seeks current income by investing in a
portfolio of short-term corporate and government securities, provided
shareholders with a total return of 6.10% (Class I shares) for the year ended
October 31, 1996.
This performance is ahead of both the unmanaged Lehman 1-3 Year Government Index
(5.98%) as well as the Lipper Short Investment Grade Debt Average (5.44% of 96
funds). The Fund's Class A Shares posted a total return of 3.41% or 1.86%
(including the maximum 1.5% sales charge) since inception on May 6, 1996 through
the end of the reporting period.
FUND EXTENDS DURATION -- AND CHANGES "BENCHMARK"
During the year, the Fund's manager conservatively extended the duration of the
portfolio in order to increase the Fund's yield without, in our view, assuming
significant additional risk. However, given the volatility in the fixed income
markets, the manager exercised caution in lengthening the portfolio's average
maturity. Consequently, it wasn't until late in the reporting year that the Fund
completed its adjustment to the new approach.
As a result of this shift, the benchmark index for your Fund has been changed
from the one-year Treasury bill to the Lehman 1-3 year Treasury index to more
accurately reflect the Fund's investment strategy.
After the sharp increases in interest rates in February and March, the Fund took
advantage of the widest sector yield spreads by replacing U.S. Treasury
securities with short-term corporate, asset-backed and mortgage-backed
securities. The Fund's performance subsequently benefited as yields tightened
later in the reporting year.
Additionally, the Fund's duration decisions proved sound. The manager was able
to capture incremental yield by purchasing somewhat longer-term securities,
exploiting a steep yield curve between one- and two-year maturity securities. In
addition, the Fund benefited from price appreciation given the longer duration
when interest rates later fell.
FUND DELIVERS HIGHER YIELDS WITHOUT COMPROMISING STABILITY
As the reporting year ended, it was clear that the decision to extend duration
had resulted in higher yields and price appreciation for shareholders without
compromising stability. Moving forward with this added flexibility, the manager
will seek to maintain portfolio quality while using the Vista fixed income
management process to identify sectors and maturities that offer risk-adjusted
value.
6
<PAGE> 9
VISTA SHORT-TERM BOND FUND
AVERAGE ANNUAL TOTAL RETURNS*
AS OF 10/31/96
<TABLE>
<CAPTION>
CLASS I SHARES
<S> <C>
One Year...................................... 6.10%
Five Years.................................... 5.38%
Since Inception (11/30/90).................... 5.87%
</TABLE>
* Assumes dividend reinvestment and reflects fee
waivers. Without such waivers, performance would have
been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
VISTA SHORT- LIPPER SHORT LEHMAN 1-3
MEASUREMENT PERIOD TERM BOND INV. GRADE YR GOVT
(FISCAL YEAR COVERED) FUND DEBT AVG. INDEX
<S> <C> <C> <C>
11/30/90 10000 10000.00 10000.00
12/31/90 10070 10097.00 10118.00
01/31/91 10131.00 10161.62 10213.11
02/28/91 10211.81 10253.08 10278.47
03/31/91 10262.66 10352.53 10347.34
04/30/91 10344.38 10458.13 10446.67
05/31/91 10403.88 10535.52 10509.35
06/30/91 10438.73 10567.12 10548.24
07/31/91 10517.49 10654.83 10638.95
08/31/91 10616.48 10793.34 10784.71
09/30/91 10693.91 10908.83 10899.02
10/31/91 10782.29 11019.01 11016.73
11/30/91 10860.60 11114.88 11130.21
12/31/91 10989.26 11267.15 11299.39
01/31/92 10981.05 11255.88 11284.70
02/29/92 11016.52 11297.53 11318.55
03/31/92 11026.27 11295.27 11315.15
04/30/92 11115.32 11374.34 11418.12
05/31/92 11191.74 11480.12 11523.17
06/30/92 11280.62 11581.14 11639.55
07/31/92 11371.01 11705.06 11773.41
08/31/92 11437.47 11784.66 11868.77
09/30/92 11516.58 11875.40 11980.34
10/31/92 11469.51 11804.15 11912.05
11/30/92 11476.26 11795.88 11898.95
12/31/92 11543.23 11885.53 12004.85
01/31/93 11643.02 12009.14 12130.90
02/28/93 11704.54 12117.22 12227.95
03/31/93 11746.87 12158.42 12265.85
04/30/93 11798.59 12225.29 12340.68
05/31/93 11792.82 12227.74 12311.06
06/30/93 11855.44 12315.78 12403.39
07/31/93 11883.39 12361.35 12430.68
08/31/93 11947.72 12465.18 12533.85
09/30/93 11986.48 12507.56 12573.96
10/31/93 12012.44 12545.09 12601.62
11/30/93 12034.95 12541.32 12604.14
12/31/93 12067.06 12594.00 12654.56
01/31/94 12121.96 12678.38 12734.28
02/28/94 12094.41 12607.38 12656.61
03/31/94 12078.78 12526.69 12592.06
04/30/94 12064.30 12480.34 12544.21
05/31/94 12098.22 12485.33 12560.51
06/30/94 12145.64 12497.82 12591.92
07/31/94 12207.89 12590.30 12705.24
08/31/94 12245.89 12630.59 12747.17
09/30/94 12259.43 12615.43 12717.85
10/31/94 12297.74 12636.88 12747.10
11/30/94 12298.98 12611.61 12693.56
12/31/94 12353.81 12612.87 12717.68
01/31/95 12457.69 12728.91 12890.64
02/28/95 12573.34 12876.56 13065.96
03/31/95 12644.04 12943.52 13139.12
04/30/95 12715.06 13056.13 13256.06
05/31/95 12864.12 13270.25 13482.74
06/30/95 12935.80 13340.58 13555.55
07/31/95 12996.24 13377.93 13609.77
08/31/95 13056.96 13462.22 13691.43
09/30/95 13116.66 13534.91 13758.52
10/31/95 13204.02 13637.78 13872.71
11/30/95 13290.47 13746.88 13990.63
12/31/95 13369.43 13848.61 14096.96
01/31/96 13461.99 13952.47 14216.78
02/29/96 13456.44 13899.45 14161.34
03/31/96 13488.50 13886.94 14150.01
04/30/96 13522.03 13892.50 14164.16
05/31/96 13558.13 13914.72 14195.32
06/30/96 13640.40 14010.74 14298.95
07/31/96 13701.47 14063.98 14354.71
08/31/96 13741.87 14106.17 14407.82
09/30/96 13862.55 14233.12 14538.94
10/31/96 14009.31 14379.73 14703.23
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class I
shares of the Vista Short-Term Bond Fund, the Lipper Short Investment Grade Debt
Funds Average and the Lehman Brothers 1-3 year Government Bond Index from
November 30, 1990 to October 31, 1996. The Fund's performance assumes dividend
reinvestment and reflects waivers as described above. The Average's performance
does not include a sales charge and reflects reinvestment of all dividends and
capital gains on mutual funds and the benchmark. Class I Shares have a
$1,000,000 minimum initial deposit and carry no sales charges. A Shares (max.
1.5% front-end sales charge), which have a different expense ratio, became
available on 5/6/96 at a minimum initial investment of $2,500.
The Lipper Short-Term Investment Grade Debt Funds Average represents the Average
performance of a universe of 96 actively managed short investment grade debt
funds. Lipper is an independent mutual fund performance monitor whose results do
not reflect a sales charge.
The unmanaged Lehman Brothers 1-3 Year Government Bond Index is composed of
bonds covered by the Government Bond Index with maturities of one to three
years.
7
<PAGE> 10
VISTA U.S. GOVERNMENT SECURITIES FUND
Vista U.S. Government Securities Fund, which seeks income and capital
appreciation by investing in a portfolio of high-quality, long-term U.S.
government and agency bonds, provided shareholders with a total return of 2.09%
(Class I shares) for the period December 1, 1995 through October 31, 1996. The
Fund's Class A Shares (without sales charge) posted a total return of 5.41%
since inception on May 6, 1996 through October 31, 1996 and 0.67% including the
maximum 4.5% sales charge.
In May, 1996, the Fund's benchmark was changed from the Lehman
Government/Corporate Bond Index to one evenly split between the Merrill Lynch
Government Index and the Merrill Lynch Mortgage Index.
BULLISH APPROACH SUPPORTS PERFORMANCE IN LATE 1995
Along with most U.S. bond market participants, who believed that a slowing
economy would translate into further interest rate cuts by the Federal Reserve
Board, the Fund began 1996 on a bullish note. As a result of unexpected economic
growth, however, the prices of bonds in the Fund's portfolio began to decline in
February. The effect of the downturn was heightened by the Fund's shift to a
shorter-duration benchmark.
MANAGER SELLS CORPORATE AND ASSET-BACKED SECURITIES
In the second quarter of 1996, the manager began selling the Fund's corporate
and asset-backed securities. This effectively shortened the Fund's duration and
brought the portfolio characteristics more in line with the benchmark
adjustment. The resulting higher-yielding portfolio was then able to outperform
its benchmark as spreads between mortgages and Treasuries tightened.
By the end of the reporting year, the Fund still contained some asset-backed
securities. Rather than sell these shorter-maturity credits, the manager
believes it may be beneficial to hold them until maturity and then reinvest the
proceeds in either Treasury or mortgage-backed securities.
Despite the upward year-to-year movement in bond yields, interest payments from
the Fund's bonds were sufficient to more than offset any principal erosion and
provide shareholders with a positive total return. As 1996 drew to a close, the
Fund's manager expected that a slowing economy and declining rates would
continue to create a positive environment for investments in U.S. Treasuries.
The manager therefore expected to move to overweight Treasuries relative to
mortgage-backed securities for the remainder of 1996.
8
<PAGE> 11
VISTA U.S. GOVERNMENT SECURITIES FUND
TOTAL RETURN*
AS OF 10/31/96
<TABLE>
<CAPTION>
CLASS I SHARES
<S> <C>
12/1/95 through 10/31/96...................... 2.09%
AVERAGE ANNUAL TOTAL RETURNS* AS OF 10/31/96
Three Years................................... 4.15%
Since Inception (2/19/93)..................... 5.31%
</TABLE>
* Assumes dividend reinvestment and reflects fee
waivers. Without such waivers, performance would have
been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
MERRILL MERRILL
MEASUREMENT PERIOD VISTA US LIPPER LYNCH LYNCH
(FISCAL YEAR GOV'T GENERAL US 50% GOVT/ GOV'T
COVERED) SECURITIES-I GOV'T AVG. 50% MTGE INDEX
<S> <C> <C> <C> <C>
2/28/93 10000.00 10000.00 10000.00 10000.00
3/31/93 10026.00 10034.00 10048.00 10035.30
4/30/93 10100.90 10092.20 10119.34 10113.47
5/31/93 10086.56 10099.26 10134.52 10104.88
6/30/93 10282.94 10297.21 10292.62 10323.04
7/31/93 10331.30 10362.08 10348.20 10384.46
8/31/93 10561.49 10554.81 10483.76 10615.31
9/30/93 10609.18 10578.03 10512.07 10663.08
10/31/93 10636.43 10612.94 10550.96 10698.48
11/30/93 10540.31 10493.02 10492.93 10583.79
12/31/93 10571.80 10537.09 10557.99 10624.44
2/31/94 10705.09 10667.75 10683.63 10771.16
2/28/94 10481.85 10455.46 10526.58 10537.75
3/31/94 10262.22 10199.30 10284.47 10318.56
4/30/94 10168.32 10097.31 10199.10 10225.90
5/31/94 10140.32 10071.05 10213.38 10218.85
6/30/94 10111.13 10026.74 10191.94 10201.88
7/31/94 10274.04 10195.19 10380.49 10375.83
8/31/94 10277.53 10193.15 10400.21 10385.68
9/30/94 10129.68 10035.16 10258.77 10243.71
10/31/94 10112.56 10008.06 10252.61 10235.52
11/30/94 10074.64 9986.04 10225.95 10209.41
12/31/94 10137.97 10060.94 10302.65 10281.29
1/31/95 10300.86 10241.03 10510.76 10470.57
2/28/95 10527.77 10472.48 10760.92 10694.43
3/31/95 10549.22 10525.89 10819.03 11369.25
4/30/95 10680.55 10654.30 10968.33 11516.36
5/31/95 11125.50 11067.69 11364.29 11979.44
6/30/95 11199.15 11136.31 11441.56 12075.63
7/31/95 11137.80 11083.97 11653.23 12036.87
8/31/95 11270.17 11221.41 11675.37 12171.44
9/30/95 11378.76 11338.11 11516.59 12286.58
10/31/95 11556.70 11500.25 11523.50 12479.36
11/30/95 11769.29 11670.45 11493.54 12669.17
12/31/95 11948.88 11839.67 11579.74 12849.83
1/31/96 11989.70 11894.14 11659.64 12930.66
2/29/96 11690.03 11627.71 11492.91 12673.47
3/31/96 11554.80 11524.22 11428.55 12571.95
4/30/96 11465.00 11437.79 11374.83 12490.86
5/31/96 11437.76 11397.76 11347.53 12472.13
6/30/96 11583.37 11531.11 11488.24 12626.28
7/31/96 11589.28 11551.87 11525.00 12655.45
8/31/96 11570.13 11514.90 11514.98 12628.24
9/30/96 11768.78 11709.50 11705.44 12835.72
10/31/96 12015.17 11965.94 11948.56 13115.77
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class I
shares of the Vista U.S. Government Securities Fund, the Lipper General U.S.
Government Funds Average and the Merrill Lynch Government Index and a composite
of the Merrill Lynch Government and Corporate Indexes from February 28, 1993 to
October 31, 1996. The Fund's performance assumes the reinvestment of all
dividends and capital gains, and reflects waivers as described above. The
Average's performance does not include a sales charge and reflects reinvestment
of all dividends and capital gains on mutual funds and the benchmark. Class I
shares have a $1,000,000 minimum initial deposit and carry no sales charge. A
Shares (max. 4.5% front-end sales charge) which have a different expense ratio,
became available on 5/6/96 at a minimum initial investment of $2,500.
The Lipper General U.S. Government Funds Average represents the performance of a
universe of 167 actively managed U.S. government income mutual funds. Lipper is
an independent mutual fund performance monitor whose results do not reflect a
sales charge.
The Merrill Lynch (ML) Government Index consists of bonds with a maturity
greater than or equal to one year. The ML Mortgage Master Index consists of
fixed-rate corporate interest-bearing bonds. The indexes are unmanaged, do not
include any sales charge and reflect reinvestment of dividends.
9
<PAGE> 12
VISTA U.S. TREASURY INCOME FUND**
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 97.0%
- ----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 97.0%
----------------------------------
U.S. Treasury Notes & Bonds,
$ 8,000,000 7.38%, 11/15/97 $ 8,142,480
3,750,000 6.13%, 03/31/98 3,774,038
8,500,000 6.00%, 05/31/98 8,538,505
1,500,000 6.00%, 09/30/98 1,506,795
9,000,000 6.38%, 01/15/99 9,108,270
6,200,000 5.00%, 02/15/99 6,091,500
9,632,000 9.13%, 05/15/99 10,363,454
8,500,000 5.63%, 02/28/01 8,361,875
4,500,000 7.50%, 05/15/02 4,787,595
2,400,000 7.50%, 02/15/05 2,580,000
10,000,000 6.50%, 05/15/05 10,109,400
3,900,000 10.75%, 08/15/05 5,037,708
9,050,000 6.88%, 05/15/06 9,369,555
18,200,000 8.50%, 02/15/20 21,899,696
1,200,000 7.13%, 02/15/23 1,254,936
2,000,000 6.75%, 08/15/26 2,023,740
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 112,949,547
(COST $113,060,239)
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 0.3%
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.3%
----------------------------
382,000 HSBC Securities, Inc., 5.60%, 11/01/96 (Dated 382,000
10/31/96, Proceeds $382,059, secured by U.S.
Treasury Bond, $340,000 at 8.75%, 11/15/08;
Market $397,702) (Cost $382,000)
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 97.3% $113,331,547
(COST $113,442,239)
- ----------------------------------------------------------------------------------------
</TABLE>
** Formerly the Vista U.S. Government Income Fund.
See notes to financial statements.
10
<PAGE> 13
VISTA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 98.6%
- ----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 57.8%
----------------------------------
U.S. Treasury Notes & Bonds,
$ 3,600,000 7.75% 11/30/99 $ 3,780,576
4,000,000 5.88%, 06/30/00 3,983,760
9,200,000 7.50%, 11/15/01 9,743,352
5,250,000 5.75%, 08/15/03 5,113,028
1,000,000 7.25%, 05/15/04 1,057,970
6,500,000 6.50%, 05/15/05 6,571,110
4,750,000 7.25%, 05/15/16 5,026,070
5,300,000 7.63%, 02/15/25 5,905,366
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $41,605,695) 41,181,232
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.7%
------------------------------------------
562,434 Federal Home Loan Bank, 4.44%, 11/4/96, 562,383
2,000,000 Federal National Mortgage Association, Global Bond,
8.50%, 02/01/05 2,100,800
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $2,562,434) 2,663,183
-----------
MORTGAGE BACKED SECURITIES - 23.8%
----------------------------------
Mortgage-Backed Pass Thru Securities - 16.0%
Federal National Mortgage Association,
7,000,000 7.50%, 11/15/11, TBA, 15 Year 7,109,410
4,250,000 8.00%, 11/15/26, TBA, 30 Year 4,335,000
-----------
11,444,410
-----------
Collateralized Mortgage Obligations -- 7.8%
1,460,778 Citicorp Mortgage Securities, Inc., REMIC, Ser.
1994-5, Class A2, 6.25%, 03/25/24 1,447,996
3,963,928 Mortgage Capital Funding, Inc., Ser. 1996-MC1,
Class A2A, 7.35%, 07/15/05 4,059,311
-----------
5,507,307
-----------
TOTAL MORTGAGE BACKED SECURITIES (COST $16,711,832) 16,951,717
-----------
ASSET BACKED SECURITIES -- 13.3%
---------------------------------
2,537,036 Chevy Chase Auto Receivables Trust, Ser. 1995-1,
Class A, 6.00%, 12/15/01 2,536,224
1,594,865 Ford Motor Credit Co., Grantor Trust, Ser. 1994-B,
Class A, 7.30%, 10/15/99 1,613,796
681,116 Premier Auto Trust Chrysler Credit Corp., Ser.
1993-3, Class A3, 4.90%, 12/16/98 677,281
2,000,000 Premier Auto Trust Chrysler Financial Corp., Ser.
1996-2, Class A3, 6.35%, 01/06/00 2,016,780
</TABLE>
See notes to financial statements.
11
<PAGE> 14
VISTA U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
<C> <S> <C>
$ 2,573,982 United Companies Financial Corp., Home Equity Loan,
Ser. 1995-A2, Class A7, 8.30%, 2/10/26 $ 2,663,273
-----------
TOTAL ASSET BACKED SECURITIES (COST $9,412,900) 9,507,354
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS
(COST $70,292,861) 70,303,486
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 17.0%
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 17.0%
-----------------------------
12,153,000 HSBC Securities, Inc., 5.60%, 11/01/96, (Dated
10/31/96; Proceeds $12,154,890, Secured by U.S.
Treasury Bond; $8,510,000 at 12.0%, 08/15/13;
Market Value $12,461,426) (Cost $12,153,000) 12,153,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 115.6%
(COST $82,445,861) $ 82,456,486
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
12
<PAGE> 15
VISTA BOND FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 96.1%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 24.3%
----------------------------------
U.S. Treasury Notes & Bonds,
$ 850,000 5.00%, 01/31/99 $ 835,788
1,000,000 7.75%, 01/31/00 1,052,030
800,000 6.38%, 08/15/02 809,128
500,000 5.75%, 08/15/03 486,955
750,000 7.50%, 11/15/16 813,398
750,000 6.88%, 08/15/25 766,755
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $4,696,549) 4,764,054
------------
CORPORATE NOTES & BONDS -- 28.0%
---------------------------------
Banking -- 5.3%
1,000,000 Australia & New Zealand Banking Group, Ltd., 7.55%,
9/15/06 (Australia)(Yankee Sector) 1,036,820
Chemicals -- 2.6%
500,000 de Dupont (EI) deNemours, 8.65%, 12/01/97 513,335
Consumer Products -- 2.1%
400,000 Philip Morris Companies Inc., 9.25%, 12/01/97 413,668
Financial Services -- 10.0%
250,000 Aetna Services, Inc., 6.97%, 08/15/36 254,885
300,000 General Motors Acceptance Corp., 6.30%, 09/10/97 301,341
1,000,000 Lehman Brothers Holdings, 7.25%, 10/15/03 1,007,610
400,000 Morgan Stanley Group, 7.50%, 09/01/99 410,584
Oil & Gas -- 4.0%
250,000 Petroliam Nasional Bhd., 7.625%, 10/15/26, (Malaysia) # 254,295
500,000 Tenneco Credit Corp., 10.13%, 12/01/97 520,610
Telecommunications -- 2.3%
500,000 Pacific Bell Corp. 6.63%, 10/15/34 442,240
Utilities -- 1.7%
350,000 Tenaga Nasional Bhd., 7.50%, 01/15/97 (Malaysia)(Yankee
Sector) # 331,849
------------
TOTAL CORPORATE NOTES & BONDS (COST $5,399,765) 5,487,237
------------
</TABLE>
See notes to financial statements.
13
<PAGE> 16
VISTA BOND FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
MORTGAGE BACKED SECURITIES -- 36.1%
-----------------------------------
Mortgage-Backed Pass Thru Securities -- 14.3%
Federal National Mortgage Association,
$ 1,000,000 7.50%, 11/15/11, TBA, 15 Year $ 1,015,630
750,000 8.00%, 11/15/26, TBA, 30 Year 765,000
1,000,000 Government National Mortgage Association, 8.00%,
11/15/26, TBA, 30 Year 1,022,500
------------
2,803,130
------------
Collateralized Mortgage Obligations -- 10.2%
1,000,000 Federal Home Loan Mortgage Corp., Series 1819, Class E,
6.00%, 02/15/11 933,960
Federal National Mortgage Association,
107,233 Ser. 1993-39, Class E, 5.50%, 11/25/97 106,630
1,000,000 Ser. G1993-34, Class PJ 6.60%, 12/25/22 958,430
------------
1,999,020
------------
Commercial Mortgage Backed Securities -- 11.6%
1,460,312 DLJ Mortgage Acceptance Corp., Ser. 1996-CF1, Class
A1A, 7.28%, 03/13/28 # 1,494,081
750,000 Morgan Stanley Capital 1, Ser. 1996-WF1, Class A3,
7.38%, 08/15/06 # 766,406
------------
2,260,487
------------
TOTAL MORTGAGE BACKED SECURITIES (COST $6,958,305) 7,062,637
------------
</TABLE>
See notes to financial statements.
14
<PAGE> 17
VISTA BOND FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
ASSET BACKED SECURITIES -- 7.7%
-------------------------------
$ 1,000,000 Capital Equipment Receivables Trust, Ser. 1996-1, Class
A3, 6.11%, 07/15/99 $ 1,001,940
501,510 The Money Store Home Equity Trust, Ser. 1994-B, Class A3,
7.10%, 11/15/16 507,869
------------
TOTAL ASSET BACKED SECURITIES (COST $1,506,180) 1,509,809
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS
(COST $18,560,799) 18,823,737
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 16.9%
- -----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 16.9%
-----------------------------
3,314,000 HSBC Securities, Inc., 5.60%, 11/01/96, (Dated 10/31/96;
Proceeds $3,314,516, Secured by U.S. Treasury Note,
$2,905,000 at 8.75%, 11/15/08; Market Value $3,398,021)
(Cost $3,314,000) 3,314,000
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 113.0%
(COST $21,874,799) $ 22,137,737
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
15
<PAGE> 18
VISTA SHORT-TERM BOND FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 96.4%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 40.1%
----------------------------------
U.S. Treasury Notes,
$ 2,000,000 5.63%, 10/31/97 $ 2,002,180
4,500,000 7.38%, 11/15/97 4,580,145
4,000,000 6.13%, 05/15/98 4,026,240
3,000,000 5.38%, 05/31/98 2,985,930
4,500,000 5.50%, 11/15/98 4,476,105
3,000,000 6.25%, 08/31/00 3,022,980
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $20,959,847) 21,093,580
------------
CORPORATE NOTES & BONDS -- 17.3%
--------------------------------
Banking -- 1.2%
250,000 Citicorp, 8.57%, 03/10/97 252,442
350,000 NationsBank Corp., 6.625%, 01/15/98 352,926
Financial Services -- 9.6%
800,000 Caterpillar Financial Services, 5.14%, 12/16/96 799,848
200,000 General Motors Acceptance Corp., 7.75%, 12/10/96 200,434
1,000,000 Golden West Financial Corp., 9.15%, 05/23/98 1,043,860
1,000,000 Hertz Corp., 8.125%, due 03/11/99 1,040,890
1,000,000 H.F. Ahmanson & Co., 6.35%, 09/01/98 998,530
1,000,000 Lehman Brothers Holdings, 6.00%, 01/12/99 994,780
Telecommunications -- 3.8%
1,000,000 Lucent Technologies Inc., 6.90%, 07/15/01 1,018,430
1,000,000 Pacific Northwest Bell Telephone Corp., 7.50%, 12/01/96 1,001,100
Utilities -- 2.7%
500,000 National Rural Utilities, 5.40%, 01/15/99 492,095
450,000 Pacific Gas & Electric Co., 7.33%, 11/12/96 450,158
500,000 Southern California Edison, 6.125%, 07/15/97 500,955
------------
TOTAL CORPORATE NOTES & BONDS (COST $9,148,439) 9,146,448
------------
MORTGAGE BACKED SECURITIES - 20.0%
-----------------------------------
Mortgage-Backed Pass Thru Securities - 10.4%
931,200 Federal Home Loan Mortgage Corp., Gold Pool G50251, 941,676
7.00%, 05/01/00,
2,000,000 Federal National Mortgage Association, 7.50%, 11/15/11, 2,031,260
TBA, 15 Year
Government National Mortgage Association,
1,500,000 6.50%, 11/15/11, TBA, 15 Year 1,480,320
1,000,000 8.00%, 11/15/26, TBA, 30 Year 1,022,500
------------
5,475,756
------------
</TABLE>
See notes to financial statements.
16
<PAGE> 19
VISTA SHORT-TERM BOND FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
Collateralized Mortgage Obligations -- 7.8%
$ 2,041,740 Federal National Mortgage Association, REMIC, Ser. $ 2,074,918
1991-131, Class G, 7.60%, 10/25/98,
2,000,000 Government National Mortgage Association, Ser. 1996-13, 2,022,500
Class G, 7.00%, 01/16/97
------------
4,097,418
------------
Commercial Mortgage Backed Secuirties -- 1.8%
969,669 Blackrock Capital Finance L.P., Ser. 1996-C2, Class A, 983,050
7.62%, 11/15/26 #
------------
TOTAL MORTGAGE BACKED SECURITIES (COST $10,432,917) 10,556,224
------------
ASSET BACKED SECURITIES -- 19.0%
----------------------------------
2,000,000 Boatmens Auto Trust, Ser. 1996-A, Class A3, 6.75%, 2,027,140
01/15/03
2,000,000 Capita Equipment Receivables Trust, Ser. 1996-1, Class 2,003,880
A3, 6.11%, 07/15/99
1,909,545 Daimler-Benz Auto Grantor Trust, Ser. 1995-A, Class A, 1,909,774
5.85%, 05/15/02
2,000,000 Premier Auto Trust Chrysler Financial Corp., Ser. 2,016,780
1996-2, Class A3, 6.35%, 01/06/00
1,997,395 The Money Store Home Equity Trust, Ser. 1994-B, Class 2,022,722
A3, 7.10%, 11/15/16
TOTAL ASSET BACKED SECURITIES (COST $9,923,365) 9,980,296
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 50,776,548
(COST $50,464,568)
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.2%
- -----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 9.2%
----------------------------
4,836,000 HSBC Securities, Inc., 5.60%, 11/01/96 (Proceeds 4,836,000
$4,836,753, Secured by U.S. Treasury Bonds, $725,000 at
7.875%, 11/15/97, $3,575,000 at 8.75%, 11/15/08; Market
$4,960,695) (Cost $4,836,000)
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 105.6% $55,612,548
(COST $55,300,568)
- -----------------------------------------------------------------------------------------
</TABLE>
MTN -- Medium Term Note
REMIC -- Real Estate Mortgage Investment Conduit
TBA -- To Be Announced
# -- Securities may only be sold to qualified institutional buyers.
See notes to financial statements.
17
<PAGE> 20
VISTA MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista Vista
U.S. Treasury U.S. Government Vista Short-Term
Income Securities Bond Bond
Fund** Fund Fund Fund
------------- --------------- --------------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value (Note 1)...... $113,331,547 $82,456,486 $22,137,737 $55,612,548
Cash.......................................... 641 933 113 65,401
Receivables:
Interest.................................... 2,532,497 1,205,379 238,141 723,665
Fund shares sold............................ 1,273,766 56,700 48,330 913,861
Other......................................... 6,682 38,146 1,164 35,426
------------ ----------- ----------- -----------
Total Assets............................. 117,145,133 83,757,644 22,425,485 57,350,901
------------ ----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased... -- 11,380,135 2,787,615 4,505,594
Payable for Fund shares redeemed.............. 267,494 675,423 287 71,600
Dividends payable............................. 184,441 282,734 14,172 24,204
Accrued liabilities: (Note 2)
Administration fees......................... 14,528 6,366 812 2,199
Distribution fees........................... 28,760 3,551 689 1,279
Investment advisory fees.................... 20,349 19,097 -- --
Shareholder servicing fees.................. 3,152 12,766 3,858 4,825
Custodian................................... 12,615 10,707 3,736 7,814
Other....................................... 128,146 53,396 28,376 74,894
------------ ----------- ----------- -----------
Total Liabilities........................ 659,485 12,444,175 2,839,545 4,692,409
------------ ----------- ----------- -----------
NET ASSETS:
Paid in capital............................... 122,844,817 72,110,335 18,910,435 53,468,514
Accumulated undistributed net investment
income...................................... (80,127) 101,645 9,653 62,777
Accumulated undistributed net realized gain
(loss) on investment transactions........... (6,168,350) (909,136) 402,914 (1,184,779)
Net unrealized appreciation/depreciation of
investments................................. (110,692) 10,625 262,938 311,980
------------ ----------- ----------- -----------
Net Assets:................................. $116,485,648 $71,313,469 $19,585,940 $52,658,492
============ =========== =========== ===========
Class A Shares............................. $105,719,837 $ 3,332,969 $ 987,857 $ 9,416,443
Class B Shares............................. $ 10,765,811 $ 821,223
Institutional Shares....................... $67,980,500 $17,776,860 $43,242,049
Shares of beneficial interest outstanding
($.001 par value; unlimited number of shares
authorized):
Class A Shares............................. 9,499,589 336,764 92,236 932,374
Class B Shares............................. 969,443 76,343
Institutional Shares....................... 6,877,075 1,659,584 4,273,578
Class A Shares:
Net asset value and redemption price per
share*...................................... $11.13 $9.90 $10.71 $10.10
Maximum offering price per share (net asset
value per share/95.5%, 95.5%, 95.5% and
98.5%)...................................... $11.65 $10.37 $11.21 $10.25
Class B Shares:
Net asset value and offering price per
share*...................................... $11.11 $10.76
Institutional Shares:
Net asset value and offering price per
share*...................................... $9.89 $10.71 $10.12
============ =========== =========== ===========
Cost of Investments............................ $113,442,239 $82,445,861 $21,874,799 $55,300,568
============ =========== =========== ===========
</TABLE>
- ---------------
* Net assets/shares outstanding.
** Formerly known as the Vista U.S. Government Income Fund.
See notes to financial statements.
18
<PAGE> 21
VISTA MUTUAL FUNDS
STATEMENT OF OPERATIONS For the year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista Vista
U.S. Treasury U.S. Government Vista Short-Term
Income Securities Bond Bond
Fund** Fund* Fund Fund
------------- --------------- --------------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME.......................... $ 7,510,473 $ 4,649,072 $ 3,127,209 $2,508,378
----------- ----------- ----------- ----------
EXPENSES: (Note 2)
Shareholder servicing fees.............. 276,596 199,489 45,121 59,125
Distribution fees....................... 330,502 3,551 76,341 58,581
Investment advisory fees................ 331,915 288,582 143,017 105,509
Administration fees..................... 166,017 82,798 71,508 63,256
Custodian fees.......................... 54,865 49,733 17,184 16,664
Amortization of organization costs (Note
1).................................... -- 5,124 305 553
Printing and postage.................... 17,656 10,926 1,329 1,588
Professional fees....................... 45,086 52,311 26,575 26,137
Registration costs...................... 40,874 19,647 10,177 17,390
Transfer agent fees..................... 201,286 31,794 24,714 48,930
Trustees fees........................... 7,930 7,836 3,230 2,936
Other................................... 12,473 10,514 5,530 1,219
----------- ----------- ----------- ----------
Total expenses.................... 1,485,200 762,305 425,031 401,888
----------- ----------- ----------- ----------
Less amounts waived (Note 2E)........... 408,771 86,091 242,603 234,123
Less expenses borne by the
Distributor........................... -- 51,863 9,499 --
----------- ----------- ----------- ----------
Net expenses.......................... 1,076,429 624,351 172,929 167,765
----------- ----------- ----------- ----------
Net investment income................. 6,434,044 4,024,721 2,954,280 2,340,613
----------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on:
Investments........................... 588,633 244,616 406,668 (12,737)
Futures and options transactions...... (232,723) -- -- --
Change in net unrealized appreciation/
depreciation on investments........... (3,055,305) (2,729,970) (2,461,517) 147,029
----------- ----------- ----------- ----------
Net realized and unrealized gain (loss)
on investments........................ (2,699,395) (2,485,354) (2,054,849) 134,292
----------- ----------- ----------- ----------
Net increase in net assets from
operations............................ $ 3,734,649 $ 1,539,367 $ 899,431 $2,474,905
=========== =========== =========== ==========
</TABLE>
- ---------------
* In 1996, the Fund changed its fiscal year end from November 30 to October 31.
The period shown is December 1,1995 through October 31, 1996.
** Formerly known as the Vista U.S. Government Income Fund.
See notes to financial statements.
19
<PAGE> 22
VISTA MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Vista
U.S. Treasury U.S. Government
Income Securities
Fund** Fund
------------------------------ -----------------------------
Year Year 12/01/95* Year
Ended Ended Through Ended
10/31/96 10/31/95 10/31/96 11/30/95
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 6,434,044 $ 6,717,656 $ 4,024,721 $ 4,720,978
Net realized gain (loss) on investments and futures
transactions...................................... 355,910 (3,753,121) 244,616 2,432,044
Change in net unrealized appreciation/depreciation
on investments and futures........................ (3,055,305) 11,426,144 (2,729,970) 5,455,517
------------ ------------ ------------ -----------
Increase in net assets from operations............ 3,734,649 14,390,679 1,539,367 12,608,539
------------ ------------ ------------ -----------
NET EQUALIZATION DEBITS (Note 1J):................... -- (20,821) -- --
------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1I)
Net investment income............................... (6,438,189) (6,695,330) (3,934,393) (4,720,978)
Net realized gain on investment transactions........ -- -- -- --
------------ ------------ ------------ -----------
Total dividends and distributions................. (6,438,189) (6,695,330) (3,934,393) (4,720,978)
------------ ------------ ------------ -----------
Net increase (decrease) from capital share
transactions (Note 5)............................... 9,427,327 (2,620,553) (11,088,402) (6,739,542)
------------ ------------ ------------ -----------
Total increase (decrease) in net assets........... 6,723,787 5,053,975 (13,483,428) 1,148,019
NET ASSETS:
Beginning of period................................. 109,761,861 104,707,886 84,796,897 83,648,878
------------ ------------ ------------ -----------
End of period....................................... $ 116,485,648 $ 109,761,861 $ 71,313,469 $ 84,796,897
============ ============ ============ ===========
<CAPTION>
Vista
Vista Short-Term
Bond Bond
Fund Fund
----------------------------- ----------------------------
Year Year Year Year
Ended Ended Ended Ended
10/31/96 10/31/95 10/31/96 10/31/95
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 2,954,280 $ 3,556,582 $ 2,340,613 $ 1,847,219
Net realized gain (loss) on investments and futures
transactions...................................... 406,668 330,075 (12,737) (1,467)
Change in net unrealized appreciation/depreciation
on investments and futures........................ (2,461,517) 4,034,751 147,029 556,820
------------ ----------- ----------- -----------
Increase in net assets from operations............ 899,431 7,921,408 2,474,905 2,402,572
------------ ----------- ----------- -----------
NET EQUALIZATION DEBITS (Note 1J):................... -- (10,848) -- (7,716)
------------ ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1I)
Net investment income............................... (2,951,527) (3,546,956) (2,319,533) (1,840,470)
Net realized gain on investment transactions........ (293,787) (122,330) -- --
------------ ----------- ----------- -----------
Total dividends and distributions................. (3,245,314) (3,669,286) (2,319,533) (1,840,470)
------------ ----------- ----------- -----------
Net increase (decrease) from capital share
transactions (Note 5)............................... (35,353,068) 604,544 16,257,372 (296,028)
------------ ----------- ----------- -----------
Total increase (decrease) in net assets........... (37,698,951) 4,845,818 16,412,744 258,358
NET ASSETS:
Beginning of period................................. 57,284,891 52,439,073 36,245,748 35,987,390
------------ ----------- ----------- -----------
End of period....................................... $ 19,585,940 $ 57,284,891 $ 52,658,492 $ 36,245,748
============ =========== =========== ===========
</TABLE>
- ---------------
* In 1996, the Fund changed its fiscal year end from November 30 to October 31.
The period shown is December 1,1995 through October 31, 1996.
** Formerly known as the Vista U.S. Government Income Fund.
See notes to financial statements.
20
<PAGE> 23
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- Mutual Fund Group (the
"Trust") was organized on May 11, 1987 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. Vista U.S. Treasury Income
Fund ("VUSTI") (formerly the Vista U.S. Government Income Fund), Vista U.S.
Government Securities Fund ("VUSGS"), Vista Bond Fund ("VBF"), and Vista
Short-Term Bond Fund ("VSTBF"), collectively, the "Funds", are four separate
portfolios of The Trust.
The Funds offer various classes of shares as follows:
<TABLE>
<CAPTION>
Fund Classes Offered
- ------ ---------------
<S> <C>
VUSTI Class A, Class B
VUSGS Class A, Institutional
VBF Class A, Class B, Institutional
VSTBF Class A, Institutional
</TABLE>
Class A shares generally provide for a front-end sales charge while Class B
shares provide for a contingent deferred sales charge. No sales charges are
assessed with respect to the Institutional Class. All classes of shares have
equal rights as to earnings, assets and voting privileges except that each class
may bear different distribution fees and each class has exclusive voting rights
with respect to its distribution plan.
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.
The following is a summary of significant accounting policies followed by
the Funds:
A. Valuation of investments -- Bonds and other fixed income securities
(other than short-term obligations), including listed issues, are valued on
the basis of valuations supplied by pricing services or by matrix pricing
systems of a major dealer in bonds. Short-term debt securities with 61 days
or more to maturity at time of purchase are valued, through the 61st day
prior to maturity, at market value based on quotations obtained from market
makers or other appropriate sources; thereafter, the value on the 61st day
is amortized on a straight-line basis over the remaining number of days to
maturity. Short-term investments with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market. Portfolio
securities for which there are no such quotations or valuations are valued
at fair value as determined in good faith by or at the direction of the
Trustees.
B. Repurchase agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the Trust
may be delayed or limited.
C. Futures contracts -- When a Fund enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash or
liquid securities. Thereafter, the futures contract is marked to market and
the Fund makes (or receives) additional cash payments daily to the broker.
Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The Funds may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to failure
of the exchange or board of trade.
As of October 31, 1996, the Funds had no outstanding futures contracts.
D. Written options -- When a Fund writes an option an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets
and Liabilities as an asset and corresponding liability. The amount of the
liability is adjusted daily to reflect the
21
<PAGE> 24
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
current market value of the written options and the change is recorded in a
corresponding unrealized gain or loss account. When a written option expires
on its stipulated expiration date, or when a closing transaction is entered
into, the related liability is extinguished and the Fund realizes a gain (or
loss if the cost of the closing transaction exceeds the premium received
when the option was written).
The VUSTI writes options on U.S. Treasury futures. These options are settled
for cash and subject the Fund to market risk in excess of the amounts that
are reflected in the Statement of Assets and Liabilities. The Fund, however,
is not subject to credit risk on written options as the counterparty has
already performed its obligation by paying a premium at the inception of the
contract.
As of October 31, 1996, VUSTI had no outstanding written options.
E. Security transactions and investment income -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified cost
basis. Interest income is determined on the basis of coupon interest accrued
adjusted for amortization of premiums, except VUSTI, and accretion of
discounts.
F. Expenses -- Expenses directly attributable to a Fund are charged to
that Fund; other expenses of the Trust are allocated proportionately among
each of the Funds within the Trust in relation to the net assets of each
Fund or on another reasonable basis. Expenses directly attributable to a
particular class are charged directly to such class. In calculating net
asset value per share of each class, investment income, realized and
unrealized gains and losses and expenses other than class specific expenses
are allocated daily to each class of shares based upon the proportion of net
assets of each class at the beginning of each day.
G. Organization costs -- Organization and initial registration costs
incurred in connection with establishing the Funds have been deferred and
are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of each Fund.
H. Federal income taxes -- Each Fund is treated as a separate taxable
entity for Federal income tax purposes. The Trust's policy is to comply with
the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to shareholders all of its
distributable net investment income, and net realized gain on investments.
In addition, the Trust intends to make distributions as required to avoid
excise taxes. Accordingly, no provision for Federal income or excise tax is
necessary.
I. 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 these
"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. The reclassifications made for the Funds are as
follows: VUSGS accumulated undistributed net investment income was increased
by $11,316, accumulated undistributed net realized gain (loss) on investment
transactions was decreased by $446 and paid in capital was decreased by
$10,870; VSTBF paid in capital was increased by $773,460 and an offsetting
decrease was made to accumulated undistributed net realized gain (loss) on
investments. 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.
J. Equalization -- In prior years, the Funds followed the practice of
equalization by which a portion of proceeds from sales and cost of
redemptions of Fund shares is credited or charged to undistributed net
investment income. In the current fiscal period ending October 31, 1996, the
Funds discontinued the practice of equalization, resulting in
reclassifications from undistributed net investment income of $917, $6,008
and $460 to accumulated paid-in capital for VUSTI, VBF, and VSTBF
respectively.
22
<PAGE> 25
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
K. Dollar rolls -- The funds (with the exception of VUSTI) enter into
dollar rolls in which the Funds sell mortgage-backed securities for delivery
in the current month and simultaneously contract to repurchase substantially
similar (same type, coupon and maturity) securities on a specified future
date. During the roll period, the Funds forgo principal and interest paid on
the securities. The Funds are compensated by the interest earned on the cash
proceeds of the initial sale and a fee earned for entering into the roll
transaction. The fee is amortized into income over the duration of the roll
transaction.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Adviser") acts as the
Investment Adviser to the Funds. Chase is a direct wholly-owned subsidiary
of The Chase Manhattan Corporation. As Investment Adviser, Chase supervises
the investments of the Funds and for such services is paid a fee. The fee is
computed daily and paid monthly at an annual rate equal to 0.30%, 0.30%,
0.30% and 0.25% of the average daily net assets for VUSTI, VUSGS, VBF and
VSTBF, respectively. The Adviser, voluntarily waived all or a portion of its
fees as outlined in Note 2.E. below.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to each Fund pursuant to a Sub-Investment
Advisory Agreement between CAM and Chase. CAM is a wholly owned subsidiary
of Chase and is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.15% for VUSTI, VUSGS and VBF, and
0.10% for VSTBF of average daily net assets.
B. Shareholder servicing fees -- The Trust has adopted an Administrative
Services Plan which, among other things, provides that the Trust on behalf
of the Funds may obtain the services of one or more Shareholder Servicing
Agents. For its services, the Shareholder Servicing Agent will receive a
fee. The fee is computed daily and paid monthly at an annual rate equal to
0.25% of the average daily net assets of the Funds. No shareholder Servicing
fees had been charged for VBF and VSTBF prior to May 1, 1996.
Since inception of the Funds, Chase, and certain affiliates have been the
only Shareholder Servicing Agents of the Funds. The Shareholder Servicing
Agents have voluntarily waived all or a portion of their fees as outlined in
Note 2.E. below.
C. Distribution and sub-administration fees -- Pursuant to a Distribution
and Sub-Administration Agreement, Vista Fund Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of The BISYS Group, Inc., acts as
the Trust's exclusive underwriter and promotes and arranges for the sale of
each Fund's shares. In addition, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space for an annual fee of 0.05% of the average
daily net assets of each Fund.
The Trustees have adopted Distribution Plans (the "Distribution Plans") for
Class A and B for the Funds in accordance with Rule 12b-1 under the 1940
Act. The Class A Distribution Plans provide that each Fund shall pay
distributions fees, including payments to the Distributor, at annual rates
not to exceed 0.25% of the average daily net assets of the Class A Shares of
each Fund for distribution services. The Class B Distribution Plan provides
that each Fund shall pay distribution fees, including payments to the
Distributor, at an annual rate not to exceed 0.75% of the average annual net
assets of the Class B Shares for its distribution services.
The Distributor voluntarily waived all or a portion of distribution fees as
outlined in Note 2.E. below.
D. Administration fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the Trust.
For these services and facilities, the Administrator receives from each Fund
a fee computed at the annual rate equal to 0.10% of the respective Fund's
average daily net assets. The Administrator voluntarily waived all or a
portion of the administration fees as outlined in Note 2.E. below.
23
<PAGE> 26
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
E. Waivers of fees -- For the year ended October 31, 1996, the Investment
Adviser, Shareholder Servicing Agent, Administrator and Distributor
voluntarily waived fees for each of the Funds as follows:
<TABLE>
<CAPTION>
Fee VUSTI VUSGS VBF VSTB
------------------------------------ --------- -------- --------- ---------
<S> <C> <C> <C> <C>
Administration...................... $ 23,372 $ 26,354 $ 47,715 $ 42,171
Distribution........................ 25,249 3,551 38,507 45,961
Investment Advisory................. 137,440 17,569 143,017 105,509
Shareholder Servicing............... 222,710 38,617 13,364 40,482
--------- -------- --------- ---------
Total............................... $ 408,771 $ 86,091 $ 242,603 $ 234,123
--------- -------- --------- ---------
Distributor Reimbursement........... -- $ 51,863 $ 9,499 --
========= ======== ========= =========
</TABLE>
F. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for the Funds.
Compensation for such services are presented in the Statement of Operations
as custodian fees.
3. INVESTMENT TRANSACTIONS -- For the year ended October 31, 1996, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
VUSTI VUSGS VBF VSTB
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Purchases (excluding U.S.
Government).............. -- $ 9,973,762 $ 13,860,322 $ 23,667,621
Sales (excluding U.S.
Government).............. -- 13,080,273 20,328,309 14,164,982
Purchases of U.S.
Government............... $ 118,881,246 62,773,145 41,222,407 47,395,197
Sales of U.S. Government... 108,472,700 86,412,222 75,742,416 46,973,390
</TABLE>
Written Option Transactions:
<TABLE>
<CAPTION>
VUSTI
---------------------
Number of Premiums
Contracts Received
--------- --------
<S> <C> <C>
Puts
- -----------------------------------------------------------
Options outstanding at 10/31/95............................ -- --
Options written............................................ 75 $69,005
Options terminated in closing purchase transactions........ (75) (69,005)
--- -------
Options outstanding at 10/31/96............................ -- --
==== =======
</TABLE>
4. FEDERAL INCOME TAX MATTERS -- For Federal income tax purposes, the cost and
unrealized appreciation (depreciation) in value of the investment securities at
October 31, 1996 are as follows:
<TABLE>
<CAPTION>
VUSTI VUSGS VBF VSTBF
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Aggregate cost...... $ 113,475,927 $82,445,861 $ 221,879,200 $55,318,682
============= =========== ============= ===========
Gross unrealized
appreciation...... $ 704,071 $ 764,234 $ 327,502 $ 317,151
Gross unrealized
depreciation...... (848,451) (753,609) (68,965) (23,285)
------------- ----------- ------------- -----------
Net unrealized
appreciation...... ($ 144,380) $ 10,625 $ 258,537 $ 293,866
============= =========== ============= ===========
</TABLE>
24
<PAGE> 27
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
At October 31, 1996 the VUSTI, VUSGS and VSTBF has net capital loss
carryovers of approximately $6,135,000, $909,000 and $1,167,000,
respectively, which will be available to offset capital gains arising
through October 31, 2003, October 31, 2004 and October 31, 2003,
respectively. To the extent that any net capital loss carryover is used to
offset future capital gains, it is probable that the gains so offset will
not be distributed to shareholders.
5. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST -- Transactions in Shares of
Beneficial Interest were as follows:
<TABLE>
<CAPTION>
Vista U.S. Treasury Income Fund#
------------------------------------------------------
Years Ended October 31,
------------------------------------------------------
1996 1995
------------------------- -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Class A
Shares sold....................... $ 33,787,054 3,035,946 $ 18,943,386 1,726,543
Shares issued in reinvestment of
distributions................... 3,763,710 337,488 3,953,641 360,648
Shares redeemed................... (28,490,015) (2,565,254) (30,405,442) (2,780,887)
------------ ---------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 9,060,749 808,180 ($ 7,508,415) (693,696)
============= ========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista U.S. Treasury Income Fund#
------------------------------------------------------
Years Ended October 31,
------------------------------------------------------
1996 1995
------------------------- -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Class B
Shares sold....................... $ 4,293,818 385,579 $ 6,947,722 636,178
Shares issued in reinvestment of
distributions................... 431,500 38,790 385,208 35,054
Shares redeemed................... (4,358,740) (391,659) (2,445,068) (223,952)
------------ ---------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 366,578 32,710 $ 4,887,862 447,280
============= ========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista U.S. Government
Securities Fund
-------------------------
5/6/96
Through
10/31/96**
-------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold....................... $ 3,347,216 348,260
Shares issued in reinvestment of
distributions................... 69,915 7,191
Shares redeemed................... (181,268) (18,687)
------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 3,235,863 336,764
============= ==========
</TABLE>
25
<PAGE> 28
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista U.S. Government Securities Fund*
------------------------------------------------------
12/1/95
Through Year Ended
10/31/96 November 30, 1995
------------------------- -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Institutional Shares
Shares sold....................... $ 16,871,922 1,703,494 $ 15,138,183 1,562,234
Shares issued in reinvestment of
distributions................... 249,093 25,455 135,296 13,872
Shares redeemed................... (31,445,280) (3,182,479) (22,040,933) (2,306,076)
------------ ---------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. ($14,324,265) (1,453,530) ($ 6,767,454) (729,970)
============= ========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Bond Fund
-------------------------
5/6/96
Through
10/31/96**
-------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold....................... $ 1,019,597 97,355
Shares issued in reinvestment of
distributions................... 6,269 593
Shares redeemed................... (59,799) (5,712)
------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 966,067 92,236
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Bond Fund
-------------------------
5/6/96
Through
10/31/96**
-------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class B
Shares sold....................... $ 1,149,672 109,737
Shares issued in reinvestment of
distributions................... 9,106 862
Shares redeemed................... (362,816) (34,256)
------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 795,962 76,343
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Bond Fund
------------------------------------------------------
Years Ended October 31,
------------------------------------------------------
1996 1995
------------------------- -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Institutional Shares
Shares sold....................... $ 7,747,917 718,508 $ 4,296,852 414,161
Shares issued in reinvestment of
distributions................... 3,072,283 286,096 3,498,583 334,782
Shares redeemed................... (47,935,297) (4,597,662) (7,190,891) (698,335)
------------ ---------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. ($37,115,097) (3,593,058) $ 604,544 50,608
============= ========== ============= ==========
</TABLE>
26
<PAGE> 29
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Short-Term Bond
Fund
-------------------------
5/6/96
Through
10/31/96**
-------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold....................... $ 9,842,672 980,691
Shares issued in reinvestment of
distributions................... 180,407 17,971
Shares issued in Acquisition from
Hanover Merger.................. 9,525,310 944,428
Shares redeemed................... (10,152,955) (1,010,716)
------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 9,395,434 932,374
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Short-Term Bond Fund
------------------------------------------------------
Years Ended October 31,
------------------------------------------------------
1996 1995
------------------------- -------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Institutional Shares
Shares sold....................... $ 23,871,765 2,370,072 $ 7,865,450 786,229
Shares issued in reinvestment of
distributions................... 1,898,858 188,565 1,730,468 173,094
Shares redeemed................... (18,908,685) (1,880,725) (9,891,946) (994,500)
------------ ---------- ------------ ----------
Net increase (decrease) in Trust
shares outstanding.............. $ 6,861,938 677,912 ($ 296,028) (35,177)
============= ========== ============= ==========
</TABLE>
- ---------------
* In 1996, the Fund changed its fiscal year end from November 30 to October 31.
The period shown is December 1, 1995 through October 31, 1996.
# Formerly known as the Vista U.S. Government Income Fund.
** Commencement of offering class of shares.
6. RETIREMENT PLAN -- The Funds have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Funds who
will have served as an independent trustee for at least five years at the time
of retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the year ended October 31, 1996, included in
Trustees Fees and Expenses in the Statement of Operations, prepaid pension costs
and accrued pension liability included in other assets, and other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were as
follows:
<TABLE>
<CAPTION>
Prepaid Accrued
Pension Pension Pension
Expenses Asset Liability
-------- ------- -------
<S> <C> <C> <C>
VUSTI.............................................. $2,156 $6,682 $8,838
VUSGS.............................................. 1,551 4,807 6,358
VBF................................................ 376 1,164 1,540
VSTBF.............................................. 881 2,731 3,612
</TABLE>
7. ACQUISITION -- On May 6, 1996, The Vista U.S. Government Securities Fund
acquired the net assets of the Hanover U.S. Government Fund in a tax-free
reorganization. At the time of the reorganization, the acquired Fund had
approximately $81 million in net assets. The Vista Fund had no assets and no
activity prior to the acquisition. The information included in
27
<PAGE> 30
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
the financial statements for VUSGS for the period prior to May 6, 1996 relates
to the predecessor Hanover Fund.
Also on May 6, 1996, the Vista Short-Term Bond Fund acquired all the net assets
(approximately $9.5 million) of the Hanover Short Term U.S. Government Fund
pursuant to a plan of reorganization approved by Hanover Fund shareholders in
April of 1996. The acquisition was accomplished by a tax-free exchange of
shares, whereby the Hanover Shareholders surrendered 976,558 shares (net assets
of $9.5 million) of the Hanover Short Term U.S. Government Fund in exchange for
944,428 shares of the Vista Short-Term Bond Fund. The post-merger net assets of
the combined Fund were approximately $46,118,000.
28
<PAGE> 31
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista U.S. Treasury Income Fund**
------------------------------------------------
Class A
------------------------------------------------
Year Ended
------------------------------------------------
10/31/96 10/31/95 10/31/94 10/31/93
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................... $ 11.40 $ 10.60 $ 12.10 $ 11.68
--------- -------- -------- --------
Income from Investment Operations:
Net Investment Income................................................ 0.655 0.699 0.646 0.666
Net Gains or (Losses) in Securities (both realized and unrealized)... (0.268) 0.798 (1.297) 0.699
--------- -------- -------- --------
Total from Investment Operations..................................... 0.387 1.497 (0.651) 1.365
--------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income................................. 0.656 0.697 0.646 0.667
Distributions from Capital Gains..................................... -- -- 0.203 0.287
--------- -------- -------- --------
Total Distributions.................................................. 0.656 0.697 0.849 0.954
--------- -------- -------- --------
Net Asset Value, End of Period.......................................... $ 11.13 $ 11.40 $ 10.60 $ 12.10
========= ======== ======== ========
Total Return (1)........................................................ 3.56% 14.59% (5.58%) 12.35%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)................................ $111,482 $99,109 $99,524 $93,039
Ratio of Expenses to Average Net Assets #.............................. 0.90% 0.87% 0.76% 0.75%
Ratio of Net Investment Income to Average Net Assets #................. 5.89% 6.37% 5.74% 5.61%
Ratio of Expenses Without Waivers and Assumption of Expenses to Average
Net Assets #......................................................... 1.29% 1.40% 1.28% 1.14%
Ratio of Net Investment Income Without Waivers and Assumptions of
Expenses to Average Net Assets #..................................... 5.50% 5.84% 5.22% 5.22%
Portfolio Turnover Rate................................................. 103% 164% 163% 296%
<CAPTION>
Vista U.S. Treasury Income Fund**
-----------------------------------------------
Class A Class B
----------- ----------------------------------
Year Ended Year Ended 11/4/93*
----------- --------------------- Through
10/31/92 10/31/96 10/31/95 10/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................... $ 11.53 $ 11.37 $ 10.59 $ 11.98
-------- -------- -------- --------
Income from Investment Operations:
Net Investment Income................................................ 0.786 0.571 0.621 0.592
Net Gains or (Losses) in Securities (both realized and unrealized)... 0.267 (0.265) 0.797 (1.187)
-------- -------- -------- --------
Total from Investment Operations..................................... 1.053 0.306 1.418 (0.595)
-------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income................................. 0.786 0.566 0.638 0.592
Distributions from Capital Gains..................................... 0.111 -- -- 0.203
-------- -------- -------- --------
Total Distributions.................................................. 0.897 0.566 0.638 0.795
-------- -------- -------- --------
Net Asset Value, End of Period.......................................... $ 11.68 $ 11.11 $ 11.37 $ 10.59
======== ======== ======== ========
Total Return (1)........................................................ 9.40% 2.82% 13.80% (5.18%)
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)................................ $59,391 $10,764 $10,652 $ 5,184
Ratio of Expenses to Average Net Assets #.............................. 0.38% 1.64% 1.62% 1.50%
Ratio of Net Investment Income to Average Net Assets #................. 6.52% 5.12% 5.53% 5.28%
Ratio of Expenses Without Waivers and Assumption of Expenses to Average
Net Assets #......................................................... 1.34% 1.79% 1.89% 1.78%
Ratio of Net Investment Income Without Waivers and Assumptions of
Expenses to Average Net Assets #..................................... 5.56% 4.97% 5.26% 5.00%
Portfolio Turnover Rate................................................. 514% 103% 164% 163%
</TABLE>
- ---------------
(1) Total return figures do not include the effect of any sales load.
* Commencement of operations.
# Short periods have been annualized.
** Formerly known as the Vista U.S. Government Income Fund.
See notes to financial statements.
29
<PAGE> 32
VISTA MUTUAL FUNDS
SELECTED DATA AND RATIOS
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
Throughout each period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VISTA U.S. GOVERNMENT
SECUIRITES FUND
---------------------------
CLASS A CLASS I
---------- -----------
05/06/96** 12/01/95(2)
THROUGH THROUGH
10/31/96 10/31/96
---------- -----------
<S> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................................... $ 9.62 $ 10.18
------- -------
Income From Investment Operations:
Net investment income.................................................................. 0.259 0.501
Net Gains or Losses in Securities (both realized....................................... 0.255 (0.302)
------- -------
Total From Investment Operations..................................................... 0.514 0.199
------- -------
Less Distributions:
Dividends from net investment income................................................... 0.234 0.489
Distributions from capital gains....................................................... -- --
------- -------
Total Distributions.................................................................. 0.234 0.489
------- -------
Net Asset Value, End of Period.......................................................... $ 9.90 $ 9.89
======= =======
Total Return (1)........................................................................ 5.41% 2.09%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted).............................................. $ 3,333 $ 67,980
Ratio of Expenses to Average Net Assets: #........................................... 1.05% 0.85%
Ratio of Net Investment Income to Average Net Assets: #.............................. 5.50% 5.55%
Ratio of expenses without waivers and assumption of expenses to Average Net Assets:
#................................................................................... 1.55% 1.04%
Ratio of net investment income without waivers and assumption of expenses to Average
Net Assets: #....................................................................... 5.00% 5.36%
Portfolio Turnover Rate................................................................. 101% 101%
<CAPTION>
VISTA U.S. GOVERNMENT
SECUIRITES FUND
-------------------------------------
CLASS I
-------------------------------------
YEAR ENDED 02/19/93*
---------------------- THROUGH
11/30/95 11/30/94 11/30/93
-------- -------- ---------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................................... $ 9.23 $ 10.27 $ 10.00
------- -------
Net investment income.................................................................. 0.560 0.500 0.340
Net Gains or Losses in Securities (both realized....................................... 0.950 (0.940) 0.270
------- -------
Total From Investment Operations..................................................... 1.510 (0.440) 0.610
------- -------
Dividends from net investment income................................................... 0.560 0.500 0.340
Distributions from capital gains....................................................... -- 0.100 --
------- -------
Total Distributions.................................................................. 0.560 0.600 0.340
------- -------
Net Asset Value, End of Period.......................................................... $ 10.18 $ 9.23 $ 10.27
======= =======
Total Return (1)........................................................................ 16.82% -4.41% 6.16%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted).............................................. $83,304 $83,649 $ 86,089
Ratio of Expenses to Average Net Assets: #........................................... 0.85% 0.85% 0.85%
Ratio of Net Investment Income to Average Net Assets: #.............................. 5.78% 5.15% 4.26%
Ratio of expenses without waivers and assumption of expenses to Average Net Assets:
#................................................................................... 1.11% 1.04% 1.04%
Ratio of net investment income without waivers and assumption of expenses to Average
Net Assets: #....................................................................... 5.52% 4.96% 4.07%
Portfolio Turnover Rate................................................................. 220% 134% 37%
</TABLE>
- ---------------
* Commencement of operations.
** Commencement of offering of class of shares.
# Short periods have been annualized
(1) Total return figures do not include the effect of any sales load.
(2) In 1996, the Fund changed its fiscal year end from November 30 to October
31.
See notes to financial statements.
30
<PAGE> 33
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Bond Fund
------------------------------------------------------------
Institutional Class
Class A Class B ----------------------------------
-------- --------
5/6/96* 5/6/96* Year Ended
Through Through ----------------------------------
10/31/96 10/31/96 10/31/96 10/31/95 10/31/94
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............................... $10.39 $10.39 $ 10.91 $ 10.08 $ 11.30
-------- -------- -------- -------- --------
Income from Investment Operations
Net Investment Income........................................... 0.288 0.233 0.665 0.687 0.667
Net Gains or (Losses) in Securities (both realized and
unrealized)................................................... 0.310 0.368 (0.148 ) 0.854 (1.140)
-------- -------- -------- -------- --------
Total from Investment Operations................................ 0.598 0.601 0.517 1.541 (0.473)
-------- -------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income............................ 0.278 0.231 0.662 0.687 0.667
Distributions from Capital Gains................................ -- -- 0.055 0.024 0.081
-------- -------- -------- -------- --------
Total Distributions............................................. 0.278 0.231 0.717 0.711 0.748
-------- -------- -------- -------- --------
Net Asset Value, End of Period..................................... $10.71 $10.76 $ 10.71 $ 10.91 $ 10.08
======== ======== ======== ======== ========
Total Return (1)................................................... 5.95% 6.12% 4.90% 15.83% (4.30%)
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)........................... $ 988 $ 821 $17,777 $57,285 $52,439
Ratio of Expenses to Average Net Assets #......................... 0.90% 1.65% 0.36% 0.31% 0.31%
Ratio of Net Investment Income to Average Net Assets #............ 5.75% 4.97% 6.23% 6.56% 6.27%
Ratio of Expenses Without Waivers and Assumption of Expenses to
Average Net Assets #............................................ 2.39% 2.93% 0.87% 0.87% 0.92%
Ratio of Net Investment Income Without Waivers and Assumptions of
Expenses #...................................................... 4.26% 3.69% 5.72% 6.00% 5.66%
Portfolio Turnover Rate............................................ 122% 122% 122% 30% 17%
<CAPTION>
Vista Bond Fund
---------------------
Institutional Class
---------------------
7/1/92**
Through
10/31/93 10/31/92
-------- ----------
<S> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............................... $ 10.76 $ 10.70
-------- ----------
Income from Investment Operations
Net Investment Income........................................... 0.622 0.240
Net Gains or (Losses) in Securities (both realized and
unrealized)................................................... 0.629 0.110
-------- ----------
Total from Investment Operations................................ 1.251 0.350
-------- ----------
Less Distributions
Dividends from Net Investment Income............................ 0.684 0.240
Distributions from Capital Gains................................ 0.026 0.050
-------- ----------
Total Distributions............................................. 0.710 0.290
-------- ----------
Net Asset Value, End of Period..................................... $ 11.30 $ 10.76
======== ==========
Total Return (1)................................................... 12.63% 3.36%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)........................... $61,155 $ 45,401
Ratio of Expenses to Average Net Assets #......................... 0.31% 0.30%
Ratio of Net Investment Income to Average Net Assets #............ 6.15% 6.74%
Ratio of Expenses Without Waivers and Assumption of Expenses to
Average Net Assets #............................................ 0.82% 0.73%
Ratio of Net Investment Income Without Waivers and Assumptions of
Expenses #...................................................... 5.64% 6.31%
Portfolio Turnover Rate............................................ 20% 3%
</TABLE>
- ---------------
(1) Total return figures do not include the effect of any sales load.
** In 1992, the Fund's fiscal year-end was changed from June 30 to October 31.
# Short periods have been annualized.
* Commencement of offering class of shares.
See notes to financial statements.
31
<PAGE> 34
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Short-Term Bond Fund
----------------------------------
Institutional Class
Class A ---------------------
--------
5/6/96* Year Ended
Through ---------------------
10/31/96 10/31/96 10/31/95
-------- -------- --------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................................................. $10.03 $ 10.08 $ 9.91
------ ------- -------
Income from Investment Operations
Net Investment Income............................................................. 0.262 0.561 0.542
Net Gains or (Losses) in Securities (both realized and unrealized)................ 0.072 0.035 0.168
------ ------- -------
Total from Investment Operations.................................................. 0.334 0.596 0.710
------ ------- -------
Less Distributions
Dividends from Net Investment Income.............................................. 0.264 0.556 0.542
Distributions from Capital Gains.................................................. -- -- --
------ ------- -------
Total Distributions............................................................... 0.264 0.556 0.542
------ ------- -------
Net Asset Value, End of Period....................................................... $10.10 $ 10.12 $ 10.08
====== ======= =======
Total Return (1)..................................................................... 3.41% 6.10% 7.37%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)............................................. $9,416 $43,242 $36,246
Ratio of Expenses to Average Net Assets #........................................... 0.75% 0.35% 0.32%
Ratio of Net Investment Income to Average Net Assets #.............................. 5.28% 5.59% 5.41%
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
#................................................................................. 1.45% 0.89% 0.90%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #........ 4.58% 5.05% 4.83%
Portfolio Turnover Rate.............................................................. 158% 158% 62%
<CAPTION>
Vista Short-Term Bond Fund
----------------------------------
Institutional Class
-----------------------------------
Year Ended
---------------------
7/1/92**
Through
10/31/94 10/31/93 10/31/92
-------- -------- ----------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................................................. $ 10.14 $ 10.26 $ 10.28
------- ------- -------
Income from Investment Operations
Net Investment Income............................................................. 0.465 0.489 0.190
Net Gains or (Losses) in Securities (both realized and unrealized)................ (0.230) (0.073) (0.010)
------- ------- -------
Total from Investment Operations.................................................. 0.235 0.416 0.180
------- ------- -------
Less Distributions
Dividends from Net Investment Income.............................................. 0.465 0.536 0.200
Distributions from Capital Gains.................................................. -- -- --
------- ------- -------
Total Distributions............................................................... 0.465 0.536 0.200
------- ------- -------
Net Asset Value, End of Period....................................................... $ 9.91 $ 10.14 $ 10.26
======= ======= =======
Total Return (1)..................................................................... 2.38% 4.73% 1.67%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)............................................. $35,987 $70,963 $ 81,327
Ratio of Expenses to Average Net Assets #........................................... 0.31% .31% 0.30%
Ratio of Net Investment Income to Average Net Assets #.............................. 4.59% 5.25% 5.66%
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
#................................................................................. 0.86% 0.76% 0.66%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #........ 4.05% 4.80% 5.30%
Portfolio Turnover Rate.............................................................. 44% 17% 0%
</TABLE>
- ---------------
(1) Total return figures do not include the effect of any sales load.
** In 1992, the Fund's fiscal year-end was changed from June 30 to October 31.
# Short periods have been annualized.
* Commencement of offering class of shares
See notes to financial statements.
32
<PAGE> 35
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Mutual Fund Group
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the selected per share data and ratios for a share of
beneficial interest outstanding present fairly, in all material respects, the
financial position of Vista U.S. Treasury Income Fund (formerly Vista U.S.
Government Income Fund), Vista U.S. Government Securities Fund, Vista Bond Fund
and Vista Short-Term Bond Fund, (separate portfolios of Mutual Fund Group,
hereafter referred to as the "Trust") at October 31, 1996, the results of each
of their operations for the year then ended (for the period December 1, 1995
through October 31, 1996 for Vista U.S. Government Securities Fund), the changes
in each of their net assets for each of the two years in the period then ended
(for the period December 1, 1995 through October 31, 1996 for Vista U.S.
Government Securities Fund), and the selected per share data and ratios for a
share of beneficial interest outstanding for each of the periods presented (for
the period December 1, 1995 through October 31, 1996 for Vista U.S. Government
Securities Fund, and for each of the 4 years in the period then ended and the
period July 1, 1992 through October 31, 1992 for Vista Bond Fund and Vista
Short-Term Bond Fund), in conformity with generally accepted accounting
principles. These financial statements and selected per share data and ratios
for a share of beneficial interest outstanding (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 audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards 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 audits, which included confirmation of securities at October
31, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. The
financial statements of Vista U.S. Government Securities Fund (formerly Hanover
U.S. Government Securities Fund) for each of the four years in the period ended
November 30, 1995 were audited by other independent accountants whose reports
dated January 19, 1996 expressed an unqualified opinion on those financial
statements.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 10, 1996
33
<PAGE> 36
(unaudited)
VISTA U.S. TREASURY INCOME FUND
VISTA U.S. GOVERNMENT SECURITIES FUND
VISTA BOND FUND
VISTA SHORT-TERM BOND FUND
- --------------------------------------------------------------------------------
Certain tax information regarding the Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 1996. The information and distributions reported
in this letter may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 1996. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1996 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996.
The following represents the source and percentage of income earned from
government obligations and the long-term capital gains distributed per share by
the Funds:
<TABLE>
<CAPTION>
FEDERAL STUDENT
U.S. HOME LOAN
TREASURY LOAN MARKETING
VISTA FUND OBLIGATIONS BANK ASSOCIATION
- --------------------------------------------------- ----------- ------- -----------
<S> <C> <C> <C>
U.S. Treasury Income............................... 98.60% -- --
U.S. Government Income............................. 57.69% 1.49% --
Bond............................................... 58.23% 0.11% --
Short-Term Bond.................................... 61.22% 1.44% 0.01%
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM
FEDERAL CAPITAL
HOME FEDERAL GOV'T GAINS
LOAN NAT'L NAT'L DISTRIBUTION
MORTGAGE MORTGAGE MORTGAGE PER
VISTA FUND CORPORATION ASSOCIATION ASSOCIATION SHARE
- ------------------------------------ -------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury Income................ -- -- -- --
U.S. Government Income.............. 1.12% 5.95% -- --
Bond................................ 3.89% 4.60% 0.01% $0.055
Short-Term Bond..................... 1.17% 11.92% -- --
</TABLE>
34
<PAGE> 37
VISTA SERVICE CENTER
P.O. BOX 419392
KANSAS CITY, MO 64179
Investment Adviser, Administrator,
Shareholder and Fund Servicing Agent and Custodian
The Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Transfer Agent
DST Systems, Inc.
Legal Counsel
Simpson Thacher & Bartlett
Independent Accountants
Price Waterhouse LLP
Vista Fund Distributors, Inc. is the funds' distributor and is unaffiliated with
Chase. The Chase Manhattan Bank is the funds' adviser.
This report is submitted for the general information of the shareholders of the
funds. It is not authorized for distribution to prospective investors in the
funds unless preceded or accompanies by a prospectus.
To obtain a prospectus for any of the Vista funds, call 1-800-34-VISTA. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
VBND-2-1296
<PAGE> 38
[VISTA LOGO]
FAMILY OF MUTUAL FUNDS
MANAGED BY CHASE MANHATTAN
- ------------------------------------------------------------------
- - VISTA SMALL CAP EQUITY FUND
(Class A Shares, Class B Shares and Class I Shares)
- - VISTA EQUITY INCOME FUND
(Class A and Class B Shares)
- - VISTA LARGE CAP EQUITY FUND
(Class A Shares, Class B Shares and Class I Shares)
- - VISTA AMERICAN VALUE FUND
(Class A Shares)
- - VISTA BALANCED FUND
(Class A Shares and Class B Shares)
- - VISTA GROWTH AND INCOME FUND
(Class A Shares, Class B Shares and Class I Shares)
- - VISTA CAPITAL GROWTH FUND
(Class A Shares, Class B Shares and Class I Shares)
- ------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL REPORT
OCTOBER 31, 1996
<PAGE> 39
CONTENTS
Chairman's Letter 1
Fund Commentaries 2
Portfolio of Investments 16
Notes to Financial Statements 51
Per Share Data 63
<PAGE> 40
Vista is in the process of redesigning your Shareholder Reports to include even
more information about your fund, its current investment strategy and how it is
performing.
Watch for the completed redesign when you receive your next Semiannual Report.
December 19, 1996
Dear Shareholder:
We are pleased to present the Annual Report for the following Vista U.S. Equity
Funds for the year ending October 31, 1996:
- - American Value Fund
- - Balanced Fund
- - Capital Growth Fund
- - Equity Fund
- - Equity Income Fund
- - Growth & Income Fund
- - Small Cap Equity Fund
U.S. STOCKS BENEFIT FROM POSITIVE ECONOMIC BACKDROP
Moderate but consistent economic growth, low inflation and better-than-expected
corporate earnings provided a positive environment for U.S. stock investors.
These factors, along with significant flows of cash into equity mutual funds,
helped the unmanaged S&P 500 Index post a 24.08% gain during the reporting
period.
BOND MARKETS VOLATILE FOR MOST OF 1996
Government reports of stronger-than-expected economic growth rattled U.S. bond
markets in February, 1996, leading to an extended period of market volatility as
investors worried about potential inflation. As the inflation threat subsided,
the market rallied at the end of the year, but the unmanaged Lehman Aggregate
Bond Index -- a broad measure of performance for corporate, government and
mortgage-related bond issues -- ended the reporting year with a return of just
5.85%.
The U.S. equity markets have delivered historically-high returns in 1995 and
1996. While it is unreasonable to expect such strong performance to continue
unabated, equity investing remains a vital component of any well-diversified
portfolio. As always, a long-term perspective and the ability to persevere
through down markets are necessary to reap the rewards of equity investing.
If you have any questions, please call us at 1-800-34-VISTA. We look forward to
serving your investment needs for many years to come.
Sincerely,
/s/ FERGUS REID
- --------------------
Fergus Reid
Chairman
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, THE
CHASE MANHATTAN BANK, AND THE SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS
INVOLVE RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE> 41
VISTA SMALL CAP EQUITY FUND
VISTA SMALL CAP EQUITY FUND, WHICH SEEKS CAPITAL GROWTH BY INVESTING IN SMALL
CAP COMMON STOCKS, TURNED IN A YEAR OF OUTSTANDING PERFORMANCE. With a total
return of 29.06% (Class A Shares, without sales charge) for the year ended
October 31, 1996, the Fund outpaced both the unmanaged Russell 2000 Index
(16.61%) and the Lipper Small Company Growth Average of 429 funds (20.4%). The
Fund's Class I Shares posted a 4.23% total return since inception on May 7,
1996, through October 31, 1996.
FUND MAINTAINS BROAD INDUSTRY DIVERSIFICATION
Unlike many small cap funds, whose investments are highly concentrated in the
technology sector, the Fund maintained relative broad industry diversification
throughout the reporting year. This positioning was most beneficial in late 1995
and in July, 1996, when technology stocks fell sharply. Although the Fund's
technology stock selection proved to be sound during the sector's strong rally
at the end of the reporting year, relative performance suffered from a
lighter-than-index weighting.
In early 1996, performance was led by overweight positions in consumer cyclicals
and capital goods, both of which outperformed the general market. The manager
trimmed these cyclical positions somewhat in May in favor of select financial
companies and other stable growth stocks. This shift helped performance as the
economy appeared to cool.
INDIVIDUAL STOCK SELECTION KEY MOVING FORWARD
Throughout the reporting year, the Fund increased weightings in positions where
the manager had a high degree of confidence in the company's management and
business opportunities. The focus moving forward will remain on adding value
through individual stock selection while maintaining relative broad industry
diversification.
2
<PAGE> 42
VISTA SMALL CAP EQUITY FUND
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year..................... 29.06% 22.93%
Since Inception (12/20/94)... 43.19% 39.37%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC*
------------ ------------
<S> <C> <C>
One Year..................... 28.04% 23.04%
Since Inception (3/28/95).... 39.00% 36.93%
</TABLE>
+ Assumes dividend reinvestment and, for I Shares only, reflects waivers.
Without such waivers, performance would have been reduced.
* Assumes a 5% CDSC for the one year period and a 4% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
VISTA SMALL LIPPER SMALL
MEASUREMENT PERIOD CAP EQUITY CO. FUNDS RUSSELL 2000
(FISCAL YEAR COVERED) FUND AVERAGE INDE X
<S> <C> <C> <C>
12/31/94 9525.00 10000.00 10000.00
01/31/95 9231.36 9881.00 9874.00
02/28/95 9772.76 10278.22 10284.76
03/31/95 10543.57 10558.81 10461.66
04/30/95 10919.80 10695.02 10693.91
05/31/95 11268.50 10858.65 10877.84
06/30/95 12110.88 11498.23 11442.40
07/31/95 13058.77 12351.40 12101.48
08/31/95 13528.11 12553.96 12351.98
09/30/95 13933.04 12856.51 12573.08
10/31/95 13868.62 12429.67 12011.07
11/30/95 14255.13 12908.22 12515.53
12/31/95 14672.02 13103.13 12845.94
01/31/96 14737.31 13021.89 12831.81
02/29/96 15287.63 13562.30 13232.16
03/31/96 15726.02 13924.41 13506.07
04/30/96 17218.40 14988.24 14228.64
05/31/96 17964.60 15643.22 14789.25
06/30/96 17787.38 15037.83 14181.41
07/31/96 16239.03 13744.58 12943.38
08/31/96 17423.61 14577.50 13695.39
09/30/96 18225.76 15318.04 14230.88
10/31/96 17899.30 15011.68 14011.72
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista Small Cap Equity Fund, The Lipper Small Company Funds
Average and the Russell 2000 Index from December 31, 1994 to October 31, 1996.
The Fund's performance includes a 4.75% sales charge and assumes the
reinvestment of all dividends and capital gains. The Average's performance does
not include a sales charge and reflects reinvestment of all dividends and
capital gains on mutual funds and the benchmark.
The Lipper Small Company Funds Average represents the average performance of a
universe of 429 actively managed stock mutual funds. Lipper is an independent
mutual fund performance monitor whose results do not reflect a sales charge.
The Russell 2000 Index is unmanaged and tracks the shares of 2,000 small
capitalization companies. Figures include the reinvestment of dividends.
Small capitalization funds typically carry more risk than stock funds investing
in well-established "blue-chip" companies since smaller companies generally have
a higher risk of failure. Historically, smaller companies' stock has experienced
a greater degree of market volatility than the average stock.
3
<PAGE> 43
VISTA EQUITY INCOME FUND
Vista Equity Income Fund, which seeks to provide current income plus capital
growth by investing primarily in income-producing equity securities, completed a
significant restructuring during the year ended October 31, 1996. THE FUND'S
TOTAL RETURN FOR THE REPORTING PERIOD WAS 29.79% (CLASS A SHARES, WITHOUT SALES
CHARGE), WELL AHEAD OF THE UNMANAGED S&P 500'S 24.08% GAIN AND THE 20.7% RETURN
OF THE LIPPER EQUITY INCOME AVERAGE OF 181 FUNDS. CLASS B SHARES HAVE POSTED A
TOTAL RETURN OF 10.43% (NOT INCLUDING THE MAXIMUM 5% CDSC) SINCE INCEPTION ON
MAY 7, 1996.
FUND MANAGER INSTITUTES "BARBELL APPROACH"
While the Fund's overall investment objective and parameters have not changed,
throughout the reporting year the portfolio manager implemented a barbell
strategy. This strategy seeks to balance income-producing investments such as
REITs (real estate investment trusts), preferred stocks, convertible bonds and
other high yield securities with common stocks of companies the Vista stock
management system identifies as having significant capital appreciation
potential.
After utility stocks hindered performance in the first part of 1996, the manager
began reducing the Fund's position in this sector and increasing REIT exposure.
In addition to these securities' high current income, the Fund benefited as
improving real estate fundamentals drove REIT prices higher.
MANAGER'S FORECASTS OF SLOWING ECONOMY PROVE CORRECT
For the first seven months of the reporting year, the manager overweighted
cyclical stocks, which tend to do well in a fast-growing economy. However, in
May, the manager reduced exposure to cyclicals based on Vista's expectation that
growth would moderate. This shift proved beneficial as the economy slowed and
the Fed did not raise interest rates. The Fund also participated in the strong
rally in the energy sector in 1996, although the manager trimmed these positions
in the third quarter.
Having fully installed the barbell strategy, the Fund's manager will seek to
maintain the Fund's emphasis on current income while looking for value-oriented
capital appreciation opportunities.
4
<PAGE> 44
VISTA EQUITY INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year.................... 29.79% 23.95%
Since Inception (7/15/93)... 15.35% 13.75%
</TABLE>
+ Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LIPPER EQ-
UITY INCOME
MEASUREMENT PERIOD VISTA EQUITY FUNDS AVER-
(FISCAL YEAR COVERED) INCOME FUND AGE S&P 500
<S> <C> <C> <C>
07/31/93 9550.00 10000.00 10000.00
07/31/93 9600.88 10071.00 9960.00
08/31/93 10095.09 10435.57 10337.48
09/30/93 10239.00 10454.35 10257.89
10/31/93 10114.75 10587.12 10470.22
11/30/93 9880.89 10415.61 10370.76
12/31/93 10012.44 10591.64 10496.24
01/31/94 10295.50 10901.97 10853.11
02/28/94 10004.35 10633.78 10559.00
03/31/94 9669.52 10198.86 10099.68
04/30/94 9742.65 10309.01 10228.96
05/31/94 9791.41 10410.04 10395.69
06/30/94 9651.65 10239.31 10140.99
07/31/94 9913.39 10511.68 10473.62
08/31/94 10183.30 10850.15 10901.99
09/30/94 9969.82 10657.02 10635.98
10/31/94 9978.06 10719.90 10874.23
11/30/94 9599.35 10311.47 10478.40
12/31/94 9629.81 10388.81 10633.48
01/31/95 9707.33 10583.08 10908.89
02/28/95 10086.32 10921.74 11333.25
03/31/95 10313.72 11175.12 11667.58
04/30/95 10452.62 11420.97 12010.60
05/31/95 10825.93 11767.03 12489.83
06/30/95 11082.04 11918.82 12779.59
07/31/95 11580.21 12244.21 13202.60
08/31/95 11650.12 12365.42 13235.60
09/30/95 11982.24 12780.90 13794.15
10/31/95 11771.25 12641.59 13744.49
11/30/95 12527.28 13181.39 14346.50
12/31/95 12743.54 13510.92 14623.38
01/31/96 13355.31 13827.08 15120.58
02/29/96 13411.78 13940.46 15261.20
03/31/96 13841.90 14118.90 15407.71
04/30/96 14031.12 14279.85 16232.02
05/31/96 14144.66 14502.62 16649.18
06/30/96 14277.12 14512.77 16712.45
07/31/96 13858.60 13996.11 15973.76
08/31/96 14239.07 14350.22 16310.80
09/30/96 14742.24 14894.09 17227.47
10/31/96 15277.63 15227.72 17702.95
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista Equity Income Fund, the Lipper Equity Income Funds Average
and the Standard & Poor's 500 Stock Index from July 31, 1993 through October 31,
1996. The Fund's performance includes a 4.50% sales charge and assumes the
reinvestment of all dividends and capital gains and reflects waivers without
which performance would have been reduced. The Average's performance does not
include a sales charge and reflects reinvestment of all dividends and capital
gains on mutual funds and the benchmark.
The Lipper Equity Income Funds Average represents the average performance of a
universe of 181 actively managed mutual funds that invest in income-producing
equity securities. Lipper is an independent mutual fund performance monitor
whose results do not reflect a sales charge.
The Standard & Poor's 500 Stock Index is an unmanaged broad-based index that
replicates the U.S. stock market. It includes 500 widely held common stocks.
Total return figures include the reinvestment of dividends.
5
<PAGE> 45
VISTA LARGE CAP EQUITY FUND
VISTA LARGE CAP EQUITY FUND, WHICH SEEKS TO PROVIDE CAPITAL GROWTH THROUGH A
PORTFOLIO OF LARGE CAP COMMON STOCKS, PROVIDED SHAREHOLDERS WITH A TOTAL RETURN
OF 25.65% (CLASS I SHARES) FOR THE YEAR ENDED OCTOBER 31, 1996. THE FUND'S CLASS
A AND B SHARES HAD POSTED LIFE OF FUND RETURNS OF 5.57% AND 3.66%, INCLUDING THE
MAXIMUM 4.75% SALES CHARGE AND MAXIMUM 5% CDSC AND SINCE INCEPTION MAY 8, 1996
AND MAY 7, 1996 RESPECTIVELY.
Formerly the Vista Equity Fund, the Fund changed its name to the Vista Large Cap
Equity Fund on May 6, 1996. This name change in no way affected the Fund's
objective or investment parameters.
MANAGER'S VIEW OF ECONOMY BENEFITS FUND IN EARLY 1996
In the first four months of 1996, the Fund benefited strongly from the manager's
view that economic growth would be stronger. Overweight positions in basic
industries, capital goods and consumer cyclicals all added to performance, as
did underweight positions in consumer staples and health care, which tend to
outperform during slower economic growth. An above-index weighting in utilities,
however, hindered overall performance as the sector lagged.
By June, 1996, based on the management team's expectation that the economy would
slow in the second half of 1996, the Fund's manager took a more conservative
approach by cutting cyclical stocks, a move which proved highly-beneficial
during the brief mid-summer market correction. The Fund took advantage of July's
steep decline in technology stock prices to buy companies the manager believed
offered visible earnings growth at attractive prices.
Throughout the reporting year, the Fund's performance was supported by a general
market trend in favor of larger companies during a period of moderating economic
growth. While we believe the market will eventually shift its focus away from
large cap companies, we believe that Vista's five-step stock management system
provides a solid foundation for the selection of quality, value-oriented
companies that the Fund favors.
6
<PAGE> 46
VISTA LARGE CAP EQUITY FUND
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
CLASS I SHARES
<S> <C>
One Year................................. 25.65%
Five Years............................... 14.03%
Since Inception (11/30/93)............... 16.03%
</TABLE>
+ Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
VISTA LARGE LIPPER
MEASUREMENT PERIOD CAP EQUITY GROWTH FUNDS S&P 500 IN-
(FISCAL YEAR COVERED) FUND AVERAGE DEX
<S> <C> <C> <C>
11/30/90 10000.00 10000.00 10000.00
12/31/90 10000.00 10338.00 10278.00
01/31/91 10703.60 10991.36 10724.07
02/28/91 11405.15 11790.43 11489.76
03/31/91 11675.75 12173.62 11767.82
04/30/91 11656.10 12172.41 11796.06
05/31/91 12140.09 12700.69 12303.29
06/30/91 11525.02 12060.57 11739.80
07/31/91 12108.84 12693.75 12286.87
08/31/91 12498.12 13093.61 12576.84
09/30/91 12313.73 12966.60 12366.81
10/31/91 12497.87 13237.60 12532.53
11/30/91 12023.91 12725.31 12028.72
12/31/91 13517.89 14168.35 13402.40
01/31/92 13221.51 14225.03 13153.11
02/29/92 13283.68 14439.83 13322.79
03/31/92 12972.83 14012.41 13064.33
04/30/92 13177.92 13950.75 13447.11
05/31/92 13292.51 14048.41 13513.00
06/30/92 13021.66 13639.60 13311.66
07/31/92 13599.64 14129.26 13854.77
08/31/92 13351.20 13824.07 13572.14
09/30/92 13534.83 14050.78 13732.29
10/31/92 13643.89 14347.26 13778.98
11/30/92 14089.27 15071.79 14247.46
12/31/92 14221.30 15337.06 14422.71
01/31/93 14221.30 15527.23 14543.86
02/28/93 14265.20 15291.22 14741.65
03/31/93 14585.62 15722.43 15052.70
04/30/93 14210.49 15230.32 14688.43
05/31/93 14530.45 15801.46 15080.61
06/30/93 14587.82 15837.80 15124.34
07/31/93 14510.11 15779.20 15063.84
08/31/93 15020.79 16452.97 15634.76
09/30/93 14931.98 16610.92 15514.38
10/31/93 15244.69 16838.49 15835.52
11/30/93 15155.34 16528.66 15685.09
12/31/93 15447.95 16994.77 15874.88
01/31/94 16053.99 17516.51 16414.62
02/28/94 15614.32 17238.00 15969.78
03/31/94 14971.44 16431.26 15275.10
04/30/94 15114.83 16488.77 15470.62
05/31/94 15329.90 16556.37 15722.79
06/30/94 15034.77 15993.46 15337.58
07/31/94 15419.35 16404.49 15840.66
08/31/94 16056.32 17177.14 16488.54
09/30/94 15608.04 16867.95 16086.22
10/31/94 15910.29 17137.84 16446.55
11/30/94 15378.33 16502.02 15847.90
12/31/94 15482.30 16652.19 16082.44
01/31/95 15651.59 16758.77 16498.98
02/28/95 16359.53 17382.19 17140.79
03/31/95 16770.44 17863.68 17646.44
04/30/95 17080.15 18228.10 18165.25
05/31/95 17699.55 18762.18 18890.04
06/30/95 18120.75 19574.59 19328.29
07/31/95 18915.38 20520.04 19968.06
08/31/95 19055.61 20678.04 20017.98
09/30/95 19485.65 21267.37 20862.74
10/31/95 19156.98 20954.74 20787.63
11/30/95 20049.09 21698.63 21698.13
12/31/95 20286.99 21770.23 22116.90
01/31/96 20985.30 22238.29 22868.88
02/29/96 21343.42 22740.88 23081.56
03/31/96 21819.70 22943.27 23303.14
04/30/96 22089.53 23698.11 23645.70
05/31/96 22449.29 24326.11 24253.39
06/30/96 22398.92 23975.81 24345.55
07/31/96 21730.57 22551.65 23269.48
08/31/96 22435.05 23347.72 23760.47
09/30/96 23616.41 24671.54 25095.80
10/31/96 24069.88 24839.30 25788.45
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class I
shares of the Vista Large Cap Equity Fund, the Lipper Growth Funds Average and
the Standard & Poor's 500 Index from November 30, 1990 to October 31, 1996. The
Fund's performance assumes the reinvestment of all dividends and capital gains
and reflects waivers without which performance would have been reduced. The
Average's performance does not include a sales charge and reflects reinvestment
of all dividends and capital gains on mutual funds and the benchmark. Class I
Shares have a $1,000,000 minimum initial deposit and carry no sales charge. A
Shares (maximum 4.75% front-end sales charge) and B Shares (maximum 5% CDSC),
which have different expense ratios, became available on 5/6/96 at a minimum
initial investment of $2,500.
The Lipper Growth Funds Average represents the average performance of a universe
of 729 actively managed growth mutual funds. Lipper is an independent mutual
fund performance monitor whose results do not reflect a sales charge.
The Standard & Poor's 500 Index is an unmanaged broad-based index that
replicates the U.S. stock market. It includes 500 widely held common stocks.
Total return figures for the Index include the reinvestment of dividends.
7
<PAGE> 47
VISTA AMERICAN VALUE FUND
Vista American Value Fund, which seeks to maximize total return by investing in
a portfolio of well-established U.S. company equity securities, provided
shareholders of Class A Shares with a total return of 21.70% for the year ended
October 31, 1996.
While this was a rewarding period for shareholders, the Fund's return lagged
broad market indices. The S&P 500 Index, for instance, rose 24%, including
income, through the comparable period. The Fund's short term reserve position,
which ranged up to 22% of the portfolio, contributed most to this variance in
returns.
The Fund's short-term investments include U.S. Treasury Bills and high grade
commercial paper, and provide liquidity for the Fund to make additional
investments in stocks which the Advisor believes are attractively priced. In
view of the generally high level of the stock market, some sectors of the market
which would naturally fit the Fund's objectives do not appear sufficiently
undervalued to currently warrant investment. Unfortunately, this liquidity only
provides money market returns and this conservative strategy slows the
portfolio's progress during periods of rapidly rising stock prices.
At October 31, 1996, common stocks represented 92.8% of the portfolio and the
Fund held 47 issues which were diversified among nine broad economic sectors.
The portfolio was overweighted in areas which the Advisor believed contained the
best values, such as financial services, consumer cyclicals, and basic
materials. It was significantly underweighted other areas such as consumer
non-durables and utilities. The top five stock holdings included Allstate Corp.,
Banc One, Louisiana Pacific, Burlington Resources and Federal National Mortgage
Association.
The Fund is comprised of issues that are selected for their long-term potential.
The Fund's Advisor searches for stocks that are selling for prices that are
considered attractive in relation to their long-term earning capability or to
the true value of their assets.
Issues selected for the portfolio are often unpopular with other investors. In
some cases considerable time may elapse before their values are recognized by
other investors, which can lead these issues to become market leaders. The
Fund's Advisor continues to find attractive issues in the banking, consumer
products, capital goods and technology areas and among selected issues rich in
natural resources.
8
<PAGE> 48
VISTA AMERICAN VALUE FUND
TOTAL RETURN
AS OF 10/31/96*
<TABLE>
<S> <C>
12/1/95 through 10/31/96................. 15.76%
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
AS OF 10/31/96*
<TABLE>
<S> <C>
One Year................................. 21.70%
Since Inception (2/3/95)................. 21.86%
</TABLE>
* Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
GROWTH OF $10,000
<TABLE>
<CAPTION>
VISTA AMERI-
MEASUREMENT PERIOD CAN VALUE LIPPER S&P 500 IN-
(FISCAL YEAR COVERED) FUND GROWTH AVG. DEX
<S> <C> <C> <C>
2/28/95 10000.00 10000.00 10000.00
3/31/95 10258.19 10277.00 10295.00
4/30/95 10436.94 10486.65 10597.67
5/31/95 10645.48 10793.91 11020.52
6/30/95 10825.41 11261.29 11276.20
7/31/95 11195.25 11805.21 11649.44
8/31/95 11295.21 11896.11 11678.56
9/30/95 11555.10 12235.15 12171.40
10/31/95 11505.12 12055.29 12127.58
11/30/95 12094.87 12483.25 12658.77
12/31/95 12376.46 12524.45 12903.08
1/31/95 12467.99 12793.72 13341.79
2/29/96 12508.67 13082.86 13465.87
3/31/96 12762.91 13199.30 13595.14
4/30/96 13068.00 13633.55 13794.99
5/31/96 13451.39 13994.84 14149.52
6/30/96 13461.76 13793.32 14203.29
7/31/96 12849.87 12973.99 13575.50
8/31/96 13129.89 13431.98 13861.94
9/30/96 13575.85 14193.57 14640.99
10/31/96 13990.69 14290.09 15045.08
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in shares of
the Vista American Value Fund, the Lipper Growth Funds Average and the Standard
& Poor's 500 Index from February 28, 1995 to October 31, 1996. The Fund's
performance assumes the reinvestment of all dividends and capital gains and
reflects waivers without which performance would have been reduced. The Fund
does not impose a sales charge on purchases; therefore, performance is based on
the net asset value. The Average's performance reflects reinvestment of all
dividends and capital gains on mutual funds and the benchmark.
The Lipper Growth Funds Average represents the average performance of a universe
of 729 actively managed growth mutual funds. Lipper is an independent mutual
fund performance monitor whose results do not reflect a sales charge.
The Standard & Poor's 500 Index is an unmanaged broad-based index that
replicates the U.S. stock market. It includes 500 widely held common stocks.
Total return figures for the Index include the reinvestment of dividends.
9
<PAGE> 49
VISTA BALANCED FUND
Vista Balanced Fund seeks to provide capital growth plus current income by
investing in a portfolio of high-quality stocks, bonds and convertible
securities. BUOYED BY STRONG RETURNS FROM ITS ALLOCATION TO THE U.S. STOCK
MARKET, THE FUND POSTED A TOTAL RETURN OF 16.89% (CLASS A SHARES, WITHOUT SALES
CHARGE) FOR THE YEAR ENDED OCTOBER 31, 1996. By providing shareholders with a
significant gain despite a volatile year in the bond markets, the Fund provided
steady returns through diversification.
SLIGHT ALLOCATION SHIFTS SEEK TO MAXIMIZE RETURNS
The Fund's management team made tactical shifts throughout the reporting year to
capitalize on changing relative values of stocks, bonds and cash.
On the equity side, the Fund benefited early in the reporting year from the
manager's optimistic view of the U.S. economy. Overweight positions in basic
industries, capital goods and consumer cyclicals all added to performance, as
did underweight positions in consumer staples and health care. An above-index
(S&P 500) weighting in utilities, however, hindered overall performance as the
sector lagged.
By June, 1996, the management team believed that economic growth would slow in
the second half of 1996. As a result, the manager began to emphasize the more
conservative health care and consumer staples sectors while trimming cyclical
exposure, a decision which proved highly-beneficial during the brief mid-summer
market correction. The manager took advantage of July's steep decline in prices
to increase the Fund's allocation to equities, buying companies that appeared to
offer visible earnings growth at attractive prices. Once again, the manager's
view of the economy's strength proved correct, which helped performance.
The fixed income portion of the Fund suffered along with the rest of the U.S.
bond market as yields on the 30-year treasury bond increased over the reporting
year and prices fell. A focus on value and interest payments from its bonds,
however, supported the Fund's relative performance.
VALUE AND DIVERSIFICATION
As the reporting year ended, bond prices rallied and drove interest rates down
sharply. It appears that stock-picking will be the key going forward for
equities, and in this the manager is supported by a disciplined stock management
system that focuses on value and growth characteristics. Value will also be
crucial in bond selections as the manager seeks to find the most attractive
sectors and points on the yield curve.
10
<PAGE> 50
VISTA BALANCED FUND
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year.................... 16.89% 11.63%
Since Inception (11/4/92)... 13.30% 12.00%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC*
------------ ------------
<S> <C> <C>
One Year.................... 16.10% 11.10%
Since Inception (11/4/93)... 11.59% 10.78%
</TABLE>
+ Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
* Assumes a 5% CDSC for the one year period and a 3% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LEHMAN
MEASUREMENT PERIOD AGGREGATE
(FISCAL YEAR COV- VISTA BAL- LIPPER BOND IN-
ERED) ANCED BALANCED S&P 500 DEX
<S> <C> <C> <C> <C>
10/31/92 9550.00 10000.00 10000.00 10000.00
11/30/92 9826.95 10235.00 10765.00 10004.00
12/31/92 10013.175 10389.55 11139.62 10161.06
1/31/93 10186.1473128598848 10526.69 11516.14 10356.16
2/28/93 10311.0717610364683 10605.64 11250.12 10537.39
3/31/93 10481.1612020153551 10803.97 11614.62 10581.64
4/30/93 10481.1612020153551 10678.64 11296.38 10655.72
5/31/93 10733.2520357363535 10847.36 11795.68 10669.57
6/30/93 10887.4152763580409 10971.02 11868.81 10862.69
7/31/93 10858.0691435376688 10989.67 12032.60 10924.61
8/31/93 11131.9663831944749 11314.97 12552.41 11115.79
9/30/93 11155.4432894507726 11347.78 12906.39 11145.80
10/31/93 11244.37064959697 11461.26 13238.09 11187.04
11/30/93 11125.8008360687067 11303.09 12802.55 11091.95
12/31/93 11282.9058389936556 11498.64 13240.40 11151.84
1/31/94 11584.8569319194448 11784.95 13656.15 11302.39
2/28/94 11393.6212397331116 11557.50 13606.99 11105.73
3/31/94 11045.3709792253681 11132.19 12888.54 10831.42
4/30/94 11014.9708756128212 11151.11 12964.58 10744.77
5/31/94 11126.4379221921598 11202.41 12819.38 10743.70
6/30/94 11042.3309688641134 10998.52 12383.52 10720.06
7/31/94 11266.8515615766925 11242.69 12586.61 10933.39
8/31/94 11511.7831172631423 11526.01 13287.68 10946.51
9/30/94 11316.858420862676 11317.39 13243.83 10785.60
10/31/94 11419.8325648195702 11373.97 13192.18 10775.89
11/30/94 11224.1816913014711 11097.59 12659.22 10752.18
12/31/94 11306.5610064669865 11199.68 12999.75 10826.37
1/31/95 11411.8362486128616 11346.40 12835.95 11040.73
2/28/95 11738.1894992650745 11689.06 13369.93 11303.50
3/31/95 11946.6344787139072 11895.96 13599.89 11372.45
4/30/95 12095.4359757797388 12112.46 13901.81 11531.67
5/31/95 12488.697075168008 12513.39 14140.92 11977.94
6/30/95 12712.9621886029398 12758.65 14874.83 12065.38
7/31/95 13055.9763454623784 13055.92 15731.62 12038.84
8/31/95 13302.5177707050998 13169.51 16057.27 12184.51
9/30/95 13538.3400035459638 13459.24 16344.69 12302.70
10/31/95 13441.1748839032894 13432.32 15614.09 12462.63
11/30/95 13916.2043577119197 13844.69 16269.88 12649.57
12/31/95 14131.0472333662775 14035.75 16699.40 12826.67
1/31/96 14409.6562087875369 14289.80 16681.03 12911.32
2/29/96 14420.8005678043873 14339.81 17201.48 12686.67
3/31/96 14569.0205427284973 14395.74 17557.55 12597.86
4/30/96 14703.6073375804926 14545.45 18496.88 12527.31
5/31/96 14871.8408311454868 14724.36 19225.66 12502.26
6/30/96 14946.9851249378509 14739.09 18435.48 12669.79
7/31/96 14619.8435637127961 14336.71 16826.07 12704.00
8/31/96 14935.7043814473318 14597.64 17803.66 12682.40
9/30/96 15427.544797633966 15137.75 18499.78 12903.07
10/31/96 15711.5570361765648 15419.31 18214.89 13189.52
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista Balanced Fund and the Lipper Balanced Fund Average from
November 4, 1992 through October 31, 1996. The Fund's performance includes a
4.50% sales charge and assumes the reinvestment of all dividends and capital
gains and reflects waivers without which performance would have been reduced.
The Average's performance does not include a sales charge and reflects
reinvestment of all dividends and capital gains on mutual funds and the
benchmark.
The Lipper Balanced Funds Average represents the average performance of a
universe of 296 actively managed balanced mutual funds. Lipper is an independent
mutual fund performance monitor whose results do not reflect a sales charge.
11
<PAGE> 51
VISTA GROWTH AND INCOME FUND
Vista Growth and Income Fund, which seeks capital growth and current income by
investing primarily in common stocks, had a total return of 19.6% (Class A
shares, without sales charge) for the year ended October 31, 1996. This
performance lagged the unmanaged S&P 500's 24.08% gain and was slightly under
the Lipper Growth & Income Average return of 21.2% for 576 funds. The Fund's
Class I Shares posted a 13.39% total return since inception on January 24, 1996
through October 31, 1996.
Like all Vista equity portfolios, this Fund has a strong value orientation, an
investing style which has been generally out-of-favor for much of the past two
years, particularly among large cap stocks.
Despite two distinct market selloffs during the reporting year, the Fund
benefited from the management team's disciplined, value-oriented approach to
sector allocation and individual stock selection.
FUND WELL-POSITIONED THROUGHOUT YEAR
1996 began with many investors expecting that slower economic growth would lead
the Federal Reserve Board to cut short-term interest rates. Taking a contrary
position, the Fund's manager maintained an overweight position in cyclical
stocks such as those in the retail sector that tend to do well in a strong
economy. As a result, the Fund benefited when economic growth proved to be
stronger than others expected.
By June, the management team believed that economic growth would slow in the
second half of the year. As a result, the Fund's manager cut exposure to
cyclical stocks in favor of sectors that tend to outperform during periods of
slow growth, including health care and financials. This positioning proved
highly-beneficial during the brief mid-summer market correction. The Fund took
advantage of July's steep decline in technology stock prices to buy companies
the manager believed offered visible earnings growth at attractive prices. This
strategy helped the Fund end the reporting year on a very positive note as the
technology sector again assumed a market leadership role.
A FOCUS ON QUALITY COMPANIES & REASONABLE VALUATIONS
As the reporting year ended, the Fund had an overweight position in technology
and financial stocks and a market weighting in cyclical stocks. In this
environment, the Fund's manager has adhered closely to Vista's stock management
system, confident that the market will reward quality companies trading at
reasonable valuations.
12
<PAGE> 52
VISTA GROWTH AND INCOME FUND
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year.................... 19.60% 13.92%
Five Years.................. 13.83% 12.73%
Since Inception (9/23/87)... 22.67% 22.02%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC*
------------ ------------
<S> <C> <C>
One Year.................... 19.02% 14.02%
Since Inception (11/5/93)... 12.38% 11.58%
</TABLE>
+ Assumes dividend reinvestment.
* Assumes a 5% CDSC for the one year period and a 3% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LIPPER
VISTA GROWTH GROWTH AND
MEASUREMENT PERIOD AND INCOME INCOME FUNDS S&P 500 IN-
(FISCAL YEAR COVERED) FUND AVERAGE DEX
<S> <C> <C> <C>
09/30/87 9525.00 10000.00 10000.00
10/31/87 9525.00 8071.00 7847.00
11/30/87 9525.00 7613.37 7200.41
12/31/87 9525.00 8105.96 7748.36
01/31/88 9525.00 8427.77 8073.79
02/29/88 9525.00 8816.29 8448.41
03/31/88 10212.71 8678.75 8188.20
04/30/88 10785.38 8750.79 8279.09
05/31/88 11300.79 8759.54 8349.46
06/30/88 12757.29 9165.10 8732.70
07/31/88 13572.61 9103.70 8699.52
08/31/88 13428.73 8882.48 8404.61
09/30/88 13598.50 9192.48 8762.64
10/31/88 13608.17 9352.42 9006.24
11/30/88 12854.31 9219.62 8877.45
12/31/88 13342.39 9377.28 9031.92
01/31/89 14153.25 9919.28 9693.06
02/28/89 13953.17 9778.43 9451.70
03/31/89 14549.20 9979.86 9671.93
04/30/89 15810.20 10391.03 10173.90
05/31/89 17071.21 10743.29 10583.91
06/30/89 17131.61 10688.50 10524.64
07/31/89 18070.91 11418.52 11473.96
08/31/89 19159.65 11657.17 11697.70
09/30/89 19573.79 11607.05 11649.74
10/31/89 19649.70 11276.24 11379.47
11/30/89 20322.04 11448.77 11610.47
12/31/89 20927.15 11603.33 11889.12
01/31/90 20729.73 10940.78 11091.36
02/28/90 20961.99 11083.01 11234.44
03/31/90 21634.40 11319.08 11532.15
04/30/90 21470.42 11048.55 11245.00
05/31/90 23438.24 11908.13 12339.14
06/30/90 23567.09 11896.22 12256.47
07/31/90 22811.81 11805.81 12217.25
08/31/90 21254.05 10874.33 11114.03
09/30/90 20350.07 10345.84 10573.89
10/31/90 19658.62 10187.55 10529.48
11/30/90 20314.31 10784.54 11208.63
12/31/90 20961.64 11098.37 11520.23
01/31/91 23440.18 11636.64 12020.21
02/28/91 25931.16 12395.35 12878.45
03/31/91 28084.62 12682.92 13190.11
04/30/91 27922.21 12689.26 13221.76
05/31/91 30345.88 13196.83 13790.30
06/30/91 28596.84 12635.97 13158.70
07/31/91 30398.21 13161.62 13771.90
08/31/91 31624.15 13461.71 14096.92
09/30/91 31012.43 13336.51 13861.50
10/31/91 31965.50 13543.23 14047.24
11/30/91 30247.47 13005.56 13482.54
12/31/91 33343.69 14291.81 15022.25
01/31/92 34908.56 14290.38 14742.84
02/29/92 36379.80 14534.75 14933.02
03/31/92 35327.20 14284.75 14643.32
04/30/92 35246.76 14514.74 15072.37
05/31/92 35273.57 14604.73 15146.22
06/30/92 34222.47 14314.09 14920.54
07/31/92 35541.30 14792.18 15529.30
08/31/92 34720.40 14508.17 15212.50
09/30/92 35019.15 14685.17 15392.01
10/31/92 35910.16 14773.29 15444.34
11/30/92 37584.16 15316.94 15969.45
12/31/92 38380.67 15551.29 16165.88
01/31/93 39017.35 15730.13 16301.67
02/28/93 39529.46 15857.55 16523.37
03/31/93 40570.29 16268.26 16872.02
04/30/93 40375.97 15978.68 16463.71
05/31/93 41694.54 16355.78 16903.29
06/30/93 41911.07 16413.02 16952.31
07/31/93 41604.84 16401.53 16884.50
08/31/93 42857.58 17006.75 17524.43
09/30/93 42996.77 16994.85 17389.49
10/31/93 43262.01 17234.47 17749.45
11/30/93 42619.85 17005.25 17580.83
12/31/93 43368.11 17377.67 17793.56
01/31/94 44698.16 17921.59 18398.54
02/28/94 43891.64 17572.12 17899.94
03/31/94 42205.02 16842.88 17121.29
04/30/94 42119.87 17011.31 17340.45
05/31/94 42432.08 17179.72 17623.09
06/30/94 41620.34 16791.46 17191.33
07/31/94 42404.02 17258.26 17755.20
08/31/94 43800.38 17912.35 18481.39
09/30/94 42895.59 17514.69 18030.45
10/31/94 43325.12 17709.11 18434.33
11/30/94 41778.82 17057.41 17763.32
12/31/94 41887.63 17238.22 18026.22
01/31/95 42262.02 17493.34 18493.09
02/28/95 43946.74 18154.59 19212.48
03/31/95 45173.56 18626.61 19779.24
04/30/95 45882.79 19068.06 20360.75
05/31/95 47431.51 19691.59 21173.15
06/30/95 48640.10 20128.74 21664.37
07/31/95 50806.73 20815.13 22381.46
08/31/95 51112.09 20958.76 22437.41
09/30/95 52025.27 21572.85 23384.27
10/31/95 51032.65 21290.24 23300.08
11/30/95 53017.90 22209.98 24320.63
12/31/95 53429.55 22565.34 24790.02
01/31/96 55324.54 23165.58 25632.88
02/29/96 55832.95 23480.63 25871.26
03/31/96 56877.51 23807.01 26119.63
04/30/96 57681.43 24228.40 26503.59
05/31/96 58438.98 24686.31 27184.73
06/30/96 58242.63 24609.79 27288.03
07/31/96 55605.11 23551.57 26081.90
08/31/96 57544.47 24220.43 26632.23
09/30/96 60163.37 25332.15 28128.96
10/31/96 61035.07 25818.52 28905.32
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista Growth and Income Fund, the Lipper Growth and Income Funds
Average and the Standard & Poor's 500 Index from September 30, 1987 to October
31, 1996. The Fund's performance includes a 4.75% sales charge and assumes the
reinvestment of all dividends and capital gains. The Average's performance does
not include a sales charge and reflects reinvestment of all dividends and
capital gains on mutual funds and the benchmark.
The Lipper Growth and Income Funds Average represents the average performance of
a universe of 576 actively managed growth and income mutual funds. Lipper is an
independent mutual fund performance monitor whose results do not reflect a sales
charge.
The Standard & Poor's 500 Index is an unmanaged broad-based index of 500 common
stocks that replicates the U.S. stock market. It includes 500 widely held common
stocks. Figures include the reinvestment of dividends.
13
<PAGE> 53
VISTA CAPITAL GROWTH FUND
An opportunistic approach backed up by disciplined stock selection was a key
factor in the performance of Vista Capital Growth Fund for the year ended
October 31, 1996. THE FUND, WHICH SEEKS TO PROVIDE CAPITAL GROWTH THROUGH A
PORTFOLIO OF PRIMARILY MID-SIZE COMMON STOCKS, PROVIDED SHAREHOLDERS WITH A
TOTAL RETURN OF 21.48% (CLASS A SHARES, WITHOUT SALES CHARGE), OUTPACING BOTH
THE UNMANAGED RUSSELL 2000 INDEX (16.61%) AND THE LIPPER MID-CAP FUNDS AVERAGE
OF 172 FUNDS (18.47%). THE FUND'S CLASS I SHARES POSTED A 18.13% TOTAL RETURN
SINCE INCEPTION ON JANUARY 24, 1996 THROUGH OCTOBER 31, 1996.
The strong performance of the broad indexes masked a fair degree of volatility
and sector rotation throughout the reporting year. The Fund's ability to achieve
strong performance, while maintaining relative broad diversification, was
largely due to the manager's stock selection and sector allocation adjustments.
MARKET DIPS PROVIDE BUYING OPPORTUNITY
The manager was able to post strong performance by taking advantage of periodic
market drops. Since such declines tend to be indiscriminate in cutting the
prices of all stocks within a given sector, they can present excellent
opportunities to purchase what the manager believes to be high-quality stocks at
relatively-low prices. The Fund's manager attempted to find such values
following the major decline in technology stocks in November, 1995.
In early 1996, in line with Vista's view that the economy was stronger than many
market participants believed, the Fund began favoring cyclical companies that
benefit in a growing economy. This positioning proved beneficial for
shareholders as economic growth did indeed pick up. In May, forecasting more
moderate economic growth, the manager shifted assets to less-aggressive sectors,
including consumer staples, health care and financials. This shift proved
beneficial during July's sharp downturn, as did the Fund's relatively-high cash
position. Once again, the manager was able to go bargain-hunting, seeking
high-quality technology stocks at very attractive valuations.
A FOCUS ON VISIBLE EARNINGS GROWTH
Given the manager's view that the economy will slow during the remainder of 1996
and related concerns about corporate earnings, the Fund remained focused on
buying the stocks of companies that the manager believes can exhibit visible
earnings growth. Individual stock selection, not sector weightings, continued to
drive decisions throughout the remainder of the reporting year. Despite the fact
that stock market indexes are currently at all-time highs, Vista's stock
management system continues to identify small- and mid-cap issues which we
believe have excellent value characteristics.
14
<PAGE> 54
AVERAGE ANNUAL TOTAL RETURNS+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year.................... 21.48% 15.71%
Five Years.................. 15.93% 14.81%
Since Inception (9/23/87)... 20.50% 19.86%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC*
------------ ------------
<S> <C> <C>
One Year.................... 20.88% 15.88%
Since Inception (11/5/93)... 12.63% 11.87%
</TABLE>
+ Assumes dividend reinvestment.
* Assumes a 5% CDSC for the one year period and a 3% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
VISTA LIPPER MID-
MEASUREMENT PERIOD CAPITAL CAP FUNDS RUSSELL 2000
(FISCAL YEAR COVERED) GROWTH FUND AVERAGE INDEX
<S> <C> <C> <C>
09/30/87 9525.00 10000.00 10000.00
10/31/87 9525.00 7418.00 6937.00
11/30/87 9525.00 6942.51 6565.87
12/31/87 9525.00 7758.94 7094.42
01/31/88 9525.00 7843.52 7403.74
02/29/88 9525.00 8425.51 8070.82
03/31/88 9953.63 8589.80 8448.53
04/30/88 10658.48 8743.56 8640.31
05/31/88 10582.28 8588.80 8407.89
06/30/88 11110.91 9180.57 9007.37
07/31/88 11168.33 8963.91 8921.80
08/31/88 10986.50 8661.82 8694.29
09/30/88 11072.63 8932.07 8924.69
10/31/88 11063.06 8867.76 8825.63
11/30/88 10967.36 8630.99 8533.50
12/31/88 11737.76 8995.22 8868.87
01/31/89 12280.13 9507.05 9265.31
02/28/89 12894.13 9488.98 9332.94
03/31/89 13856.08 9742.34 9553.20
04/30/89 14951.06 10360.98 9969.72
05/31/89 15749.26 10908.04 10399.41
06/30/89 15616.23 10614.61 10161.27
07/31/89 16518.36 11276.96 10553.49
08/31/89 16964.24 11655.87 10811.00
09/30/89 17430.86 11749.12 10845.59
10/31/89 16829.44 11261.53 10203.53
11/30/89 16860.55 11400.05 10271.90
12/31/89 16950.76 11442.23 10310.93
01/31/90 16091.66 10627.54 9409.76
02/28/90 16212.82 10961.24 9701.46
03/31/90 16675.41 11388.73 10078.85
04/30/90 16389.04 11139.32 9749.27
05/31/90 17424.37 12213.15 10439.52
06/30/90 17592.89 12319.40 10460.39
07/31/90 16911.08 11970.77 10000.14
08/31/90 15189.79 10725.81 8668.12
09/30/90 14407.39 9979.29 7900.99
10/31/90 13781.47 9639.00 7419.03
11/30/90 14910.36 10546.03 7984.36
12/31/90 15937.55 11072.27 8301.34
01/31/91 17469.35 11984.63 9051.78
02/28/91 18730.84 12936.21 10061.05
03/31/91 20206.33 13633.47 10769.35
04/30/91 19361.59 13568.03 10742.43
05/31/91 20746.97 14247.79 11254.84
06/30/91 19575.59 13516.87 10598.68
07/31/91 21400.24 14330.59 10970.70
08/31/91 22864.47 14866.55 11376.61
09/30/91 23303.73 14830.87 11465.35
10/31/91 24801.75 15341.06 11768.04
11/30/91 23844.37 14796.45 11223.18
12/31/91 27212.09 16527.63 12122.15
01/31/92 28225.79 16977.19 13104.05
02/29/92 29476.01 17213.17 13486.69
03/31/92 28023.05 16514.31 13030.84
04/30/92 27155.78 16010.63 12574.76
05/31/92 27313.46 16105.09 12742.00
06/30/92 26251.34 15486.65 12139.30
07/31/92 27389.76 16132.45 12561.75
08/31/92 26566.94 15680.74 12207.51
09/30/92 27299.59 15983.38 12489.50
10/31/92 28314.02 16560.38 12886.67
11/30/92 29779.32 17610.31 13872.50
12/31/92 30736.27 18142.14 14355.26
01/31/93 31978.48 18446.92 14840.47
02/28/93 31579.61 17882.45 14497.66
03/31/93 32981.37 18472.57 14967.38
04/30/93 32058.26 17874.06 14557.27
05/31/93 33311.87 18817.81 15200.71
06/30/93 33552.34 18966.47 15294.95
07/31/93 34020.40 19029.06 15506.02
08/31/93 35904.08 19847.31 16175.88
09/30/93 36691.80 20341.51 16632.04
10/31/93 36543.39 20532.72 17059.48
11/30/93 35687.17 19974.23 16498.23
12/31/93 36937.25 20845.10 17062.47
01/31/94 37834.18 21399.58 17598.23
02/28/94 37799.24 21305.42 17534.87
03/31/94 36436.37 20225.24 16609.03
04/30/94 36715.93 20245.46 16707.03
05/31/94 36354.83 19994.42 16519.91
06/30/94 35344.91 19160.65 15958.23
07/31/94 36125.69 19610.93 16219.95
08/31/94 37803.78 20787.58 17123.40
09/30/94 37628.98 20702.36 17066.89
10/31/94 37500.79 21029.45 17000.33
11/30/94 35811.04 20192.48 16313.52
12/31/94 36453.15 20557.96 16752.35
01/31/95 36202.41 20496.29 16541.27
02/28/95 37790.44 21398.13 17229.39
03/31/95 39020.27 22057.19 17525.73
04/30/95 39366.54 22335.11 17914.80
05/31/95 40166.52 22714.81 18222.94
06/30/95 41138.45 24000.46 19168.71
07/31/95 43522.42 25606.10 20272.83
08/31/95 43714.09 25923.61 20692.47
09/30/95 44145.36 26597.63 21062.87
10/31/95 42707.80 25930.02 20121.36
11/30/95 43989.63 26876.47 20966.46
12/31/95 44558.67 27121.05 21519.97
01/31/96 45069.26 27289.20 21496.30
02/29/96 46264.80 28252.51 22166.98
03/31/96 47298.44 28741.27 22625.84
04/30/96 48880.03 30232.95 23836.32
05/31/96 49814.05 31082.49 24775.47
06/30/96 48278.53 29994.60 23757.20
07/31/96 45671.91 27616.03 21683.20
08/31/96 48428.19 29231.57 22942.99
09/30/96 51346.60 30982.54 23840.06
10/31/96 51882.89 30561.18 23472.92
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista Capital Growth Fund, the Lipper Mid-Cap Funds Average and
the Russell 2000 Index from September 30, 1987 through October 31, 1996. The
Fund's performance includes a 4.75% sales charge and assumes the reinvestment of
all dividends and capital gains. The Average's performance does not include a
sales charge and reflects reinvestment of all dividends and capital gains on
mutual funds and the benchmark.
The Lipper Mid-Cap Growth Funds Average represents the average performance of a
universe of 172 actively-managed stock mutual funds. Lipper is an independent
mutual fund performance monitor whose results do not reflect a sales charge.
The Russell 2000 Index is unmanaged and tracks the shares of 2,000 small-
capitalization companies. Figures include the reinvestment of dividends.
15
<PAGE> 55
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 83.9%
- ----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 82.6%
---------------------
ADVERTISING -- 0.6%
37,500 Outdoor Systems, Inc. * $ 1,678,125
-------------
AEROSPACE -- 0.8%
122,000 Rohr Industries, Inc. * 2,257,000
-------------
AGRICULTURAL PRODUCTION/SERVICES -- 0.6%
65,000 AGCO Corp. 1,649,375
-------------
AUTOMOTIVE -- 1.9%
90,500 Dura Automotive Systems, Inc. * 2,172,000
105,000 Tower Automotive, Inc. * 3,058,125
-------------
5,230,125
-------------
BROADCASTING -- 1.8%
50,000 Chancellor Corp. * 1,612,500
100,000 Granite Broadcasting Corp. * 1,150,000
25,000 Heftel Broadcasting Corp., Class A * 906,250
15,000 Metro Networks, Inc. * 303,750
25,000 Univision Communications Inc. * 843,750
-------------
4,816,250
-------------
BUSINESS SERVICES -- 6.9%
105,200 American Residential Services, Inc. * 1,998,800
65,000 Barrett Business Services, Inc. * 1,072,500
100,000 CDI Corp. * 2,750,000
125,000 CORT Business Services Corp. * 2,625,000
35,000 DeVRY, Inc. * 1,745,625
29,000 Fair Issac & Company, Inc. 1,091,125
20,000 Interim Services, Inc. * 800,000
50,000 ITT Educational Services, Inc. * 1,818,750
30,000 Metzler Group, Inc. * 699,375
75,000 Pittston Brink's Group 2,137,500
85,000 Rental Service Corp. * 1,955,000
-------------
18,693,675
-------------
BUILDING SUPPLIES -- 1.2%
51,000 Barnett, Inc. * 1,204,875
90,000 Wilmar Industries, Inc. * 1,935,000
-------------
3,139,875
-------------
</TABLE>
See notes to financial statements.
16
<PAGE> 56
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE -- 7.7%
75,000 American Management Systems, Inc. * $ 2,371,875
50,000 Applix, Inc. * 1,212,500
30,000 Business Objects S.A., ADR (France) * 446,250
145,000 Computervision Corp. * 1,305,000
125,000 Datastream Systems, Inc. * 2,281,250
56,000 Hummingbird Communications Ltd. * 1,596,000
100,000 Hyperion Software Corp.* 2,037,500
80,000 Integrated Systems, Inc. * 2,160,000
180,000 Vanstar Corp. * 4,275,000
71,250 Wind River Systems * 3,028,125
-------------
20,713,500
-------------
COMPUTERS/COMPUTER HARDWARE -- 1.0%
100,000 Applied Magnetics Corp. * 2,137,500
42,000 HMT Technology Corp. * 582,750
-------------
2,720,250
-------------
CONSTRUCTION MATERIALS -- 3.2%
100,000 Apogee Enterprises, Inc. 3,850,000
50,000 NCI Building Systems, Inc. * 1,637,500
114,000 Southdown, Inc. 3,120,750
-------------
8,608,250
-------------
CONSUMER PRODUCTS -- 1.2%
125,000 Furniture Brands International, Inc. * 1,671,875
60,000 Paragon Trade Brands, Inc. * 1,575,000
-------------
3,246,875
-------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 7.6%
50,000 Berg Electronics Corp. * 1,412,500
10,000 Cymer, Inc. * 235,000
35,000 Esterline Technologies Corp. * 818,125
40,000 Harman International Industries, Inc. 2,055,000
115,000 ITI Technologies, Inc. * 3,306,250
78,000 Microchip Technology, Inc.* 2,827,500
100,000 Perceptron Inc. * 2,475,000
50,000 QLogic Corp. * 793,750
50,000 SDL, Inc. * 850,000
80,000 Sipex Corp. * 2,110,000
55,000 Teleflex, Inc. 2,646,875
50,000 Tencor Instruments * 943,750
-------------
20,473,750
-------------
</TABLE>
See notes to financial statements.
17
<PAGE> 57
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT/LEISURE -- 4.0%
130,000 Cinar Films, Inc., Class B* $ 3,185,000
140,000 Coachmen Industries, Inc. 3,920,000
106,000 K2, Inc. 2,438,000
99,000 RockShox, Inc. * 1,262,250
-------------
10,805,250
-------------
ENVIRONMENTAL SERVICES -- 2.7%
64,800 Newpark Resources, Inc. * 2,430,000
100,000 United Waste Systems, Inc.* 3,437,500
45,900 U.S.A. Waste Services, Inc. * 1,468,800
-------------
7,336,300
-------------
FINANCIAL SERVICES -- 3.3%
52,500 Aames Financial Corp. 2,342,813
25,000 Matrix Capital Corp. * 275,000
100,000 Southern Pacific Funding Corp. * 3,150,000
61,930 WFS Financial, Inc. * 1,300,530
70,000 Winthrop Resources Corp. 1,960,000
-------------
9,028,343
-------------
FOOD/BEVERAGE PRODUCTS -- 0.9%
25,000 GoodMark Foods, Inc. 431,250
125,000 Morningstar Group, Inc. * 2,109,375
-------------
2,540,625
-------------
HEALTH CARE/HEALTH CARE SERVICES -- 8.8%
50,000 Advanced Technology Labs, Inc. * 1,525,000
40,000 Alternative Living Services, Inc. * 575,000
55,000 Assisted Living Concepts * 893,750
85,200 Conmed Corp.* 1,469,700
35,000 Emeritus Corp. * 398,125
72,500 ESC Medical Systems Ltd. * 2,002,813
70,800 Henry Schein, Inc. * 2,814,300
30,000 Lincare Holdings, Inc. * 1,125,000
120,000 Meridian Diagnostics, Inc. 1,260,000
100,000 OrNda Healthcorp * 2,725,000
25,000 Patterson Dental Co. * 700,000
50,000 Physician Sales & Service, Inc. * 1,062,500
77,500 Physio-Control International Corp. * 1,511,250
75,000 Sierra Health Services, Inc. * 2,146,875
</TABLE>
See notes to financial statements.
18
<PAGE> 58
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
HEALTH CARE/HEALTH CARE SERVICES -- (continued)
77,000 Sterling House Corp. * $ 972,125
91,000 Universal Health Services, Inc., Class B * 2,275,000
-------------
23,456,438
-------------
HOME BUILDERS -- 1.3%
115,000 Pacific Greystone Corp. * 1,308,125
147,500 Southern Energy Homes, Inc. * 2,194,062
-------------
3,502,187
-------------
HOTELS/LODGING -- 0.5%
150,000 Aztar Corp. * 1,218,750
-------------
INSURANCE -- 3.5%
56,000 American Bankers Insurance Group, Inc. 2,688,000
97,500 American Travellers Corp. * 3,351,563
48,000 CMAC Investment Corp. 3,318,000
-------------
9,357,563
-------------
MACHINERY & ENGINEERING EQUIPMENT -- 1.8%
92,000 Allied Products Corp. 2,277,000
47,000 Applied Power, Inc., Class A 1,692,000
18,500 Precision Castparts Corp. 864,875
-------------
4,833,875
-------------
MANUFACTURING -- 1.4%
75,000 Ametek, Inc. 1,490,625
69,000 Valmont Industries 2,380,500
-------------
3,871,125
-------------
OIL & GAS -- 3.1%
100,000 Coflexip SA, ADR (France) * 2,250,000
100,000 Mitchell Energy & Development, Class B 2,075,000
50,000 Smith International * 1,900,000
50,000 Production Operations Corp. 1,987,500
-------------
8,212,500
-------------
PHARMACEUTICAL -- 0.2%
40,000 Andrx Corp. * 570,000
-------------
PRINTING & PUBLISHING -- 0.4%
100,000 Golden Books Family Entertainment, Inc. * 1,112,500
-------------
</TABLE>
See notes to financial statements.
19
<PAGE> 59
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ------------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST -- 1.5%
82,000 Arden Realty Group, Inc. * $ 1,855,250
50,000 Evans Withycombe Residential, Inc. 1,056,250
100,000 Innkeepers USA Trust 1,175,000
-------------
4,086,500
-------------
RESTAURANTS/FOOD SERVICES -- 0.9%
55,000 Applebee's International, Inc. * 1,340,625
22,500 Papa John's International, Inc. * 1,119,375
-------------
2,460,000
-------------
RETAILING -- 4.8%
52,000 99 Cents Only Stores * 767,000
95,000 Cole National Corp., Class A * 2,244,375
50,000 Friedman's Inc., Class A, * 818,750
170,000 Hollywood Entertainment Corp. * 3,527,500
37,500 Marks Bros. Jewelers, Inc. * 871,875
50,000 Neiman-Marcus Group, Inc. * 1,631,250
75,000 Stage Stores, Inc. * 1,368,750
60,000 Williams-Sonoma, Inc. * 1,650,000
-------------
12,879,500
-------------
SHIPPING/TRANSPORTATION -- 1.6%
60,000 Hub Group, Inc., Class A * 1,335,000
44,000 Knight Transportation, Inc. * 990,000
52,000 Landstar System, Inc. * 1,228,500
25,000 Mark VII, Inc. * 653,125
-------------
4,206,625
-------------
TELECOMMUNICATIONS -- 3.5%
6,500 Advanced Fibre Communications * 371,312
57,500 Aspect Telecommunications Corp. * 3,421,250
25,000 LCC International, Inc., Class A * 365,625
85,000 Periphonics Corp. * 3,017,500
65,000 Teltrend, Inc. * 2,145,000
-------------
9,320,687
-------------
TELEMARKETING -- 0.6%
80,000 Sitel Corp. * 1,580,000
-------------
TEXTILE MILL PRODUCTS -- 0.8%
45,000 St. John Knits, Inc. 2,058,750
-------------
</TABLE>
See notes to financial statements.
20
<PAGE> 60
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES -- 2.5%
20,000 IES Industries, Inc. $ 615,000
17,500 Oklahoma Gas & Electric Co. 684,687
95,000 Sierra Pacific Resources 2,648,125
104,000 TNP Enterprises, Inc. 2,691,000
-------------
6,638,812
-------------
TOTAL COMMON STOCK (COST $183,439,480) 222,303,380
-------------
CONVERTIBLE PREFERRED STOCK -- 0.5%
-----------------------------------
BROADCASTING -- 0.5%
25,000 American Radio Systems, 7.00%, # 1,225,000
(COST $1,250,000) -------------
Principal
Amount
CONVERTIBLE CORPORATE BONDS & NOTES -- 0.8%
-------------------------------------------
COMPUTER SOFTWARE -- 0.1%
$ 250,000 Spectrum Holobyte, Inc., 6.50%, 09/15/02 # 157,562
-------------
COMPUTERS/COMPUTER HARDWARE -- 0.5%
1,000,000 Applied Magnetics Corp., 7.00%, 03/15/06 # 1,291,500
-------------
HEALTH CARE -- 0.2%
250,000 Assisted Living Concepts, 7.00%, 08/15/05 # 283,330
500,000 Sterling House, 6.75%, 6/30/06 # 410,000
-------------
693,330
-------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES 2,142,392
(COST $2,000,000)
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 225,670,772
(COST $186,689,480)
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 15.0%
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 0.1%
-----------------------------------
U.S. Treasury Bills,
60,000 4.96%, 01/16/97 t 59,372
40,000 4.98%, 01/09/97 t 39,618
70,000 4.98%, 01/23/97 t 69,196
55,000 5.00%, 01/31/97 t 54,313
20,000 5.00%, 11/07/96 t 19,983
65,000 5.18%, 12/05/96 t 64,682
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $307,164) 307,164
-------------
</TABLE>
See notes to financial statements.
21
<PAGE> 61
VISTA SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY SPONSORED OBLIGATIONS -- 3.3%
----------------------------------------------------
Federal Home Loan Bank, Discount Notes,
$ 3,000,000 5.15%, 11/27/96 $ 2,988,842
3,000,000 5.16%, 11/14/96 2,994,410
3,000,000 Federal Home Loan Mortgage Corp., Discount Note, 2,994,880
5.12%, 11/13/96 t
-------------
TOTAL U.S. GOVERNMENT AGENCY SPONSORED OBLIGATIONS 8,978,132
(COST $8,978,132)
COMMERCIAL PAPER -- 11.6%
-------------------------
3,000,000 Coca Cola Co., 5.20%, 11/14/96 t 2,994,367
19,152,000 Household Finance Corp., 5.40%, 11/01/96 19,152,000
3,000,000 Lucent Technologies Inc., 5.19%, 11/14/96 t 2,994,377
3,000,000 Pepsi Cola Inc., 5.21%, 11/04/96 t 2,998,698
3,000,000 Toyota Motor Credit Corp., 5.21%, 11/14/96 t 2,994,356
-------------
TOTAL COMMERCIAL PAPER (COST $31,133,798) 31,133,798
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 40,419,094
(COST $40,419,094)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 98.9% $ 266,089,866
(COST $227,108,574)
- ----------------------------------------------------------------------------------------
</TABLE>
PURCHASED INDEX FUTURES OUTSTANDING
<TABLE>
<CAPTION>
Number Original Nominal
Expiration of Nominal Value at Unrealized
Description Date Contracts Value 10/31/96 Appreciation
- -------------------- --------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Russell 2000........ 12/19/96 70 $11,782,065 $11,968,250 $186,185
</TABLE>
See notes to financial statements.
22
<PAGE> 62
VISTA EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 90.6%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 77.1%
---------------------
AEROSPACE -- 6.0%
3,800 Allied-Signal, Inc. $ 248,900
4,200 General Motors Class H 224,175
10,000 Rohr Industries, Inc. * 185,000
7,200 Sundstrand Corp. 289,800
1,000 United Technologies, Corp. 128,750
------------
1,076,625
------------
AUTOMOTIVE -- 0.6%
3,400 Chrysler Corp. 114,325
------------
BANKING -- 7.3%
5,000 Bank of Boston Corp. 320,000
5,400 Bank of New York Company, Inc. 178,875
10,000 Commonwealth Bank of Australia, ADR (Australia) 180,000
(preference shares) #
4,000 First Union Corp. 291,000
1,500 NationsBank Corp. 141,375
800 Wells Fargo & Co. 213,700
------------
1,324,950
------------
BUSINESS SERVICES -- 1.7%
3,900 ADT Ltd. * 77,025
9,450 ServiceMaster L.P. 239,794
------------
316,819
------------
CHEMICALS -- 1.1%
2,200 duPont (EI) deNemours & Co. 204,050
------------
COMPUTERS/COMPUTER HARDWARE -- 1.6%
1,100 International Business Machines Corp. 141,900
3,000 Texas Instruments 144,375
------------
286,275
------------
CONSUMER PRODUCTS -- 1.1%
5,200 Fruit of the Loom, Inc., Class A * 189,150
------------
DIVERSIFIED -- 1.3%
2,600 Textron, Inc. 230,750
------------
</TABLE>
See notes to financial statements.
23
<PAGE> 63
VISTA EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT/LEISURE -- 1.8%
6,500 Carnival Corp., Class A $ 195,813
4,000 Sabre Group Holdings, Inc., Class A * 122,000
------------
317,813
------------
FINANCIAL SERVICES -- 7.3%
8,200 American Express Co. 385,400
3,600 Federal Home Loan Mortgage Corp. 363,600
6,000 Federal National Mortgage Assoc. 234,750
4,500 Green Tree Financial Corp. 178,312
6,000 The Money Store, Inc. 156,000
------------
1,318,062
------------
FOOD/BEVERAGE PRODUCTS -- 0.8%
1,000 Unilever NV, ADR (Netherlands) 152,875
------------
HEALTH CARE -- 0.7%
6,000 Tenet Healthcare Corp. * 125,250
------------
INSURANCE -- 5.6%
5,000 AFLAC, Inc. 200,625
3,200 Allstate Corp. 179,600
2,200 American International Group 238,975
2,600 Loews Corp. 214,825
3,800 Mid Ocean, Ltd. (Bermuda) 178,600
------------
1,012,625
------------
MANUFACTURING -- 1.4%
3,500 Johnson Controls 255,500
------------
METALS/MINING -- 1.4%
4,200 Aluminum Co. of America (ALCOA) 246,225
------------
OIL & GAS -- 6.4%
1,900 British Petroleum PLC, ADR (United Kingdom) 244,388
6,500 Enterprise Oil PLC, ADR, (United Kingdom) 177,937
1,700 Mobil Corp. 198,475
5,000 Occidental Petroleum Corp. 122,500
4,400 PanEnergy Corp. 169,400
4,700 Williams Companies, Inc. 245,575
------------
1,158,275
------------
PAPER/FOREST PRODUCTS -- 0.4%
1,000 Willamette Industries 67,500
------------
</TABLE>
See notes to financial statements.
24
<PAGE> 64
VISTA EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
PHARMACEUTICALS -- 4.1%
3,800 American Home Products Corp. $ 232,750
3,000 Bristol-Myers Squibb Co. 317,250
3,000 Schering-Plough Corp. 192,000
------------
742,000
------------
REAL ESTATE INVESTMENT TRUST -- 11.3%
10,000 Arden Realty Group, Inc. * 226,250
7,200 Beacon Properties Corp. 211,500
6,000 Duke Realty Investments, Inc. 207,000
8,500 Equity Residential Properties Trust 312,375
7,500 Evans Withycombe Residential, Inc. 158,438
5,000 FelCor Suite Hotels, Inc. 163,750
6,000 Post Properties, Inc. 237,000
9,000 ROC Communities, Inc. 219,375
8,000 Security Capital Industrial Trust 145,000
7,000 Security Capital Pacific Trust 157,500
------------
2,038,188
------------
RETAILING -- 1.4%
7,500 Dayton-Hudson Corp. 259,687
------------
SHIPPING/TRANSPORTATION -- 2.6%
3,000 Burlington Northern, Inc. 247,125
8,000 Canadian National Railway Co. 220,000
------------
467,125
------------
STEEL -- 0.8%
9,000 Birmingham Steel Corp. 144,000
------------
TELECOMMUNICATIONS -- 7.2%
1 360 Communications Co. * 20
7,000 BellSouth Corp. 285,250
4,000 CPT Telefonica del Peru S.A., ADR (Peru) 82,500
5,400 Frontier Corp. 156,600
2,700 GTE Corp. 113,738
777 Lucent Technologies, Inc. 36,519
3,200 Sprint Corp. 125,600
3,100 Telecomunicacoes Brasileiros SA, ADR (Brazil) 230,950
4,400 Telefonica de Espana, ADR (Spain) 265,100
------------
1,296,277
------------
</TABLE>
See notes to financial statements.
25
<PAGE> 65
VISTA EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 3.2%
3,500 CINergy Corp. $ 115,937
6,000 DPL, Inc. 143,250
3,400 FPL Group Inc. 156,400
5,600 Sierra Pacific Resources 156,100
------------
571,687
------------
TOTAL COMMON STOCK (COST $11,341,419) 13,916,033
------------
CONVERTIBLE PREFERRED STOCK -- 7.9%
-----------------------------------
AIRLINES -- 0.7%
2,000 Continental Air Finance Trust, 8.50%, 12/01/20 # 123,000
BANKING -- 0.9%
3,500 First USA, Inc. 6.25%, 5/20/98 169,750
BROADCASTING -- 0.7%
5,000 Tele-Communications, Inc., Liberty Media Group, Class A* 128,750
FINANCIAL SERVICES -- 2.0%
3,500 Golden Books Financial Trust, 8.75%, 8/20/16 # 196,437
3,500 Merrill Lynch & Co., 6.25%, 07/01/01 137,375
HEALTH CARE -- 1.7%
7,500 U.S. Surgical Corp. $2.20, Series A # 300,000
INSURANCE -- 0.6%
2,000 American Bankers Insurance Group, 3.13%, Ser. B 114,750
OIL & GAS -- 1.3%
10,000 Enron Corp., 6.25% Exchange Notes, 12/13/98, ACES, 245,000
------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $1,329,366) 1,415,062
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS & NOTES -- 1.6%
-------------------------------------------
ELECTRONICS -- 1.0%
$ 200,000 Xilinx Inc., 5.25%, 11/01/02 # 188,580
HEALTH CARE -- 0.6%
100,000 Assisted Living Concepts, 7.00%, 08/15/05 # $ 113,332
------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES (COST $296,230) 301,912
------------
</TABLE>
See notes to financial statements.
26
<PAGE> 66
VISTA EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT OBLIGATION -- 4.0%
----------------------------------
$ 700,000 U.S. Treasury Note, 6.88%, 05/15/06 (Cost $699,572) $ 724,718
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 16,357,725
(COST $13,666,587)
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 8.9%
- -----------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 8.9%
-------------------------
1,605,000 Household Finance Corp., 5.40%, 11/01/96 1,605,000
(Cost $1,605,000) ------------
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.5% $ 17,962,725
(COST $15,271,587)
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
27
<PAGE> 67
VISTA LARGE CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 89.5%
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 89.5%
---------------------
AEROSPACE -- 2.1%
23,400 Allied-Signal, Inc. $ 1,532,700
5,500 United Technologies, Corp. 708,125
-------------
2,240,825
-------------
AGRICULTURAL PRODUCTION/SERVICES -- 1.1%
15,000 Case Corp. 697,500
12,700 Deere & Co. 530,225
-------------
1,227,725
-------------
AIRLINES -- 0.4%
5,700 AMR Corp. * 478,800
-------------
AUTOMOTIVE -- 1.3%
20,104 Chrysler Corp. 675,997
14,000 General Motors 754,250
-------------
1,430,247
-------------
BANKING -- 8.4%
36,000 Bank of Boston Corp. 2,304,000
17,000 Bank of New York Company, Inc. 563,125
14,600 Citicorp 1,445,400
12,300 First Union Corp. 894,825
30,900 National City Corp. 1,340,288
8,000 NationsBank Corp. 754,000
19,600 Norwest Corp. 859,950
3,233 Wells Fargo & Co. 863,615
-------------
9,025,203
-------------
BIOTECHNOLOGY -- 0.5%
9,400 Amgen, Inc. * 576,338
-------------
BROADCASTING -- 0.4%
5,800 Clear Channel Communications, Inc. * 423,400
-------------
CHEMICALS -- 1.9%
15,900 duPont (EI) deNemours 1,474,725
12,000 Union Carbide Corp. 511,500
-------------
1,986,225
-------------
</TABLE>
See notes to financial statements.
28
<PAGE> 68
VISTA LARGE CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE -- 3.5%
22,700 Cisco Systems, Inc. * $ 1,404,563
19,075 Computer Associates International 1,127,809
6,000 First Data Corp. 478,500
5,900 Microsoft Corp. * 809,775
-------------
3,820,647
-------------
COMPUTERS/COMPUTER HARDWARE -- 5.9%
17,600 Compaq Computer Corp. * 1,225,400
6,000 Hewlett-Packard Co. 264,750
15,100 Intel Corp. 1,659,113
9,000 International Business Machines Corp. 1,161,000
12,800 Seagate Technology, Inc. * 854,400
10,000 Sun Microsystems, Inc. * 610,000
11,000 Texas Instruments 529,375
-------------
6,304,038
-------------
CONSTRUCTION MACHINERY -- 0.7%
11,200 Caterpillar Inc. 768,600
-------------
CONSUMER PRODUCTS -- 6.6%
26,000 Avon Products, Inc. 1,410,500
30,800 Black & Decker Corp. 1,151,150
10,700 Colgate-Palmolive Co. 984,400
18,000 Nike, Inc., Class B, 1,059,750
11,000 Philip Morris Companies, Inc. 1,018,875
15,000 Procter & Gamble Co. 1,485,000
-------------
7,109,675
-------------
DIVERSIFIED -- 0.4%
9,000 Dover Corp. 462,375
-------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 1.4%
16,000 General Electric Co. 1,548,000
-------------
ENTERTAINMENT/LEISURE -- 2.5%
50,700 Carnival Corp., Class A 1,527,337
15,000 Circus Circus Enterprises Inc. * 517,500
18,500 Time Warner, Inc. 689,125
-------------
2,733,962
-------------
</TABLE>
See notes to financial statements.
29
<PAGE> 69
VISTA LARGE CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES -- 3.8%
20,000 Countrywide Credit Industries, Inc. $ 570,000
14,000 Federal Home Loan Mortgage Corp. 1,414,000
25,200 Federal National Mortgage Assoc. 985,950
29,000 Green Tree Financial Corp. 1,149,125
-------------
4,119,075
-------------
FOOD/BEVERAGE PRODUCTS -- 4.5%
29,500 Coca-Cola Enterprises, Inc. 1,257,438
15,500 ConAgra, Inc. 773,062
37,200 PepsiCo., Inc. 1,102,050
19,600 Sara Lee Corp. 695,800
6,300 Unilever NV, ADR (Netherlands) 963,113
-------------
4,791,463
-------------
HEALTH CARE -- 3.8%
13,600 Becton, Dickinson & Co. 591,600
36,000 Columbia/HCA Healthcare Corp. 1,287,000
28,800 HEALTHSOUTH Corp. * 1,080,000
9,000 Medtronic, Inc. 579,375
27,000 Tenet Healthcare Corp. * 563,625
-------------
4,101,600
-------------
INSURANCE -- 2.7%
7,400 Aetna Inc. 494,875
28,506 Allstate Corp. 1,599,899
7,400 American International Group 803,825
-------------
2,898,599
-------------
MANUFACTURING -- 3.3%
27,000 Ingersoll-Rand Co. 1,123,875
10,800 Johnson Controls 788,400
15,000 Parker Hannifin Corp. 568,125
22,000 Tyco International Ltd. 1,091,750
-------------
3,572,150
-------------
METALS/MINING -- 1.8%
21,000 Aluminum Co. of America (ALCOA) 1,231,125
22,700 Inco, Ltd. 720,725
-------------
1,951,850
-------------
OFFICE/BUSINESS EQUIPMENT -- 0.4%
10,000 Xerox Corp. 463,750
-------------
</TABLE>
See notes to financial statements.
30
<PAGE> 70
VISTA LARGE CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
OIL & GAS -- 9.1%
8,300 Amoco Corp. $ 628,725
7,400 British Petroleum PLC, ADR (United Kingdom) 951,825
11,500 Enron Corp. 534,750
15,500 Halliburton Company 877,688
12,100 Mobil Corp. 1,412,675
19,700 Occidental Petroleum Corp. 482,650
32,000 PanEnergy Corp. 1,232,000
13,500 Phillips Petroleum Co. 553,500
13,000 Texaco, Inc. 1,321,125
14,000 Unocal Corp. 512,750
24,000 Williams Companies, Inc. 1,254,000
-------------
9,761,688
-------------
PAPER/FOREST PRODUCTS -- 1.2%
11,000 Champion International Corp. 478,500
11,200 Willamette Industries 756,000
-------------
1,234,500
-------------
PHARMACEUTICALS -- 4.7%
20,300 American Home Products Corp. 1,243,375
8,000 Lilly Eli & Co. 564,000
24,000 Johnson & Johnson 1,182,000
12,000 Pfizer, Inc. 993,000
16,500 SmithKline Beecham PLC, ADR (United Kingdom) 1,033,313
-------------
5,015,688
-------------
PHOTOGRAPHIC EQUIPMENT -- 0.6%
8,000 Eastman Kodak Co. 638,000
-------------
PRINTING & PUBLISHING -- 0.5%
15,500 New York Times Company, Class A 559,937
-------------
RETAILING -- 4.7%
14,400 American Stores Co. 595,800
20,000 Dayton-Hudson Corp. 692,500
29,000 Federated Department Stores * 957,000
28,600 Gap, Inc. 829,400
29,000 Kroger Co. * 1,294,125
15,000 Sears Roebuck & Co. 725,625
-------------
5,094,450
-------------
</TABLE>
See notes to financial statements.
31
<PAGE> 71
VISTA LARGE CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
SHIPPING/TRANSPORTATION -- 1.0%
12,500 Burlington Northern, Inc. $ 1,029,687
-------------
TELECOMMUNICATIONS -- 7.0%
8,500 ADC Telecommunications, Inc. * 581,187
34,700 BellSouth Corp. 1,414,025
17,500 Frontier Corp. 507,500
15,400 GTE Corp. 648,725
24,639 Lucent Technologies, Inc. 1,158,033
17,400 Sprint Corp. 682,950
41,000 Telefonaktiebolaget LM Ericsson, Sp, ADR (Sweden) 1,132,625
15,300 U S West, Inc. 464,737
38,000 WorldCom, Inc. * 926,250
-------------
7,516,032
-------------
UTILITIES -- 3.3%
27,000 CMS Energy Corp. 853,875
19,000 Entergy Corp. 532,000
24,000 FPL Group Inc. 1,104,000
34,800 Pinnacle West Capital Corp. 1,074,450
-------------
3,564,325
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 96,448,854
(COST $79,488,342)
- -----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
<S> <C>
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.0%
- -----------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 9.0%
------------------------
$ 9,664,000 Household Finance Corp., 5.40%, 11/01/96 9,664,000
(Cost $9,664,000)
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 98.5% $ 106,112,854
(COST $89,152,342)
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
32
<PAGE> 72
VISTA AMERICAN VALUE FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 91.4%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 91.4%
---------------------
AEROSPACE -- 0.9%
1,800 Raytheon Co. $ 88,650
-----------
BANKING -- 7.0%
6,270 Banc One Corp. 265,691
1,400 BankAmerica Corp. 128,100
5,700 H. F. Ahmanson & Co. 178,838
1,200 J. P. Morgan & Company, Inc. 103,650
-----------
676,279
-----------
COMPUTERS/COMPUTER HARDWARE -- 2.3%
10,000 Stratus Computer, Inc., Class A * 223,750
-----------
CONSTRUCTION MATERIALS -- 1.6%
5,000 Masco Corp. 156,875
-----------
CONSUMER PRODUCTS -- 4.3%
9,000 Sunbeam Corp., Inc. 221,625
4,000 Whirlpool Corp. 189,000
-----------
410,625
-----------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 7.6%
10,000 EG&G, Inc. 176,250
4,000 Motorola, Inc. 184,000
4,000 Tecumseh Products Co., Class A 225,000
8,000 Watkins-Johnson 145,000
-----------
730,250
-----------
ENVIRONMENTAL SERVICES -- 3.8%
12,000 Calgon Carbon Corp. 120,000
7,000 WMX Technologies, Inc. 240,625
-----------
360,625
-----------
FINANCIAL SERVICES -- 2.6%
6,400 Federal National Mortgage Association 250,400
-----------
HEALTH CARE/HEALTH CARE SERVICES -- 3.1%
4,400 Bard (C.R.), Inc. 124,300
4,200 Baxter International Inc. 174,825
-----------
299,125
-----------
</TABLE>
See notes to financial statements.
33
<PAGE> 73
VISTA AMERICAN VALUE FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE -- 10.8%
7,000 Allstate Corp. $ 392,875
3,600 Aon Corp. 207,900
7,000 First Colony Corp. 250,250
4,800 Safeco Corp. 181,200
-----------
1,032,225
-----------
MANUFACTURING -- 1.6%
8,200 Zero Corp. 150,675
-----------
METALS/MINING -- 1.7%
7,400 Cyprus Amax Minerals Co. 167,425
-----------
OIL & GAS -- 11.1%
1,200 Atlantic Richfield Co. (ARCO) 159,000
5,000 Burlington Resources, Inc. 251,875
5,000 El Paso Natural Gas Co. 242,500
2,200 Schlumberger, Ltd. 218,075
7,000 Union Pacific Resources Group, Inc. 192,500
-----------
1,063,950
-----------
PAPER/FOREST PRODUCTS -- 9.1%
11,500 Longview Fibre Co. 199,812
12,500 Louisiana-Pacific Corp. 260,937
5,000 Potlatch Corp. 213,750
3,000 St. Joe Paper Co. 201,000
-----------
875,499
-----------
PHARMACEUTICALS -- 2.3%
3,000 Merck & Company, Inc. 222,375
-----------
PRINTING & PUBLISHING -- 6.3%
3,400 Dun & Bradstreet Corp. 196,775
6,000 Readers Digest Association, Inc. 213,750
2,400 Tribune Co. 196,200
-----------
606,725
-----------
REAL ESTATE INVESTMENT TRUST -- 2.3%
9,674 BRE Properties, Inc., Class A 222,502
-----------
</TABLE>
See notes to financial statements.
34
<PAGE> 74
VISTA AMERICAN VALUE FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
RETAILING -- 3.7%
6,000 Dayton-Hudson Corp. $ 207,750
4,600 Dillard Department Stores, Inc., Class A 146,050
-----------
353,800
-----------
SHIPPING/TRANSPORTATION -- 1.9%
2,000 Norfolk Southern Corp. 178,250
-----------
TEXTILES -- 3.7%
5,500 Liz Claiborne, Inc. 232,375
8,400 Oshkosh B'Gosh, Inc., Class A 126,000
-----------
358,375
-----------
TIRE & RUBBER -- 1.9%
4,000 Goodyear Tire & Rubber, Inc. 183,500
-----------
WHOLESALING -- 1.8%
4,800 Reliance Steel & Aluminum Co. 175,800
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 8,787,680
(COST $6,816,392)
- -----------------------------------------------------------------------------------------
Principal
Amount
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 7.8%
- -----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 4.7%
-----------------------------------
U.S. Treasury Bill,
$ 256,000 4.84%, 11/21/96 255,294
196,000 5.00%, 12/12/96 194,898
-----------
450,192
-----------
COMMERCIAL PAPER -- 3.1%
------------------------
298,800 General Electric, 5.20%, 11/04/96 298,671
- -----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 748,863
(COST $748,863)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.2% $ 9,536,543
(COST $7,565,255)
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
35
<PAGE> 75
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 90.3%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 45.6%
---------------------
AEROSPACE -- 1.6%
4,800 Allied-Signal, Inc. $ 314,400
1,800 Boeing Co. 171,675
1,500 Lockheed Martin Corp. 134,437
3,000 Precision Castparts Corp. 140,250
3,700 Sundstrand Corp. 148,925
1,400 United Technologies, Corp. 180,250
------------
1,089,937
------------
AGRICULTURAL PRODUCTION/SERVICES -- 0.5%
4,000 AGCO Corp. 101,500
4,500 Case Corp. 209,250
------------
310,750
------------
AIRLINES -- 0.2%
1,500 AMR Corp. * 126,000
------------
AUTOMOTIVE -- 0.7%
5,050 Chrysler Corp. 169,806
2,400 General Motors 129,300
3,700 Lear Corp. * 136,900
------------
436,006
------------
BANKING -- 2.8%
6,000 Bank of Boston Corp. 384,000
5,000 Bank of New York Company, Inc. 165,625
2,000 Citicorp 198,000
7,000 Commonwealth Bank of Australia, ADR (Australia) 126,000
3,700 First Financial Corp. of Wisconsin 100,363
6,500 National City Corp. 281,937
2,500 NationsBank Corp. 235,625
4,200 Norwest Corp. 184,275
2,100 Standard Federal Bancorp. 112,350
------------
1,788,175
------------
BROADCASTING -- 0.2%
5,500 Tele-Communications, Inc., Liberty Media Group, Class A * 141,625
------------
</TABLE>
See notes to financial statements.
36
<PAGE> 76
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
CHEMICALS -- 1.5%
7,000 Cabot Corp. $ 168,875
2,100 Dow Chemical Co. 163,275
3,900 duPont (EI) deNemours 361,725
2,700 Praxair, Inc. 119,475
3,600 Union Carbide Corp. 153,450
------------
966,800
------------
COMPUTER SOFTWARE -- 2.1%
2,000 Aurum Software, Inc. * 63,500
4,200 Cisco Systems, Inc. * 259,875
5,125 Computer Associates International 303,016
2,500 CyberMedia, Inc. * 55,625
2,000 Microsoft Corp. * 274,500
4,000 Reynolds & Reynolds, Inc., Class A 105,500
10,000 Sabre Group Holdings, Inc., Class A * 305,000
------------
1,367,016
------------
COMPUTERS/COMPUTER HARDWARE -- 2.2%
4,100 Compaq Computer Corp. * 285,462
3,000 Hewlett-Packard Co. 132,375
3,100 Intel Corp. 340,612
2,500 International Business Machines Corp. 322,500
3,400 Sun Microsystems, Inc.* 207,400
3,600 Texas Instruments 173,250
------------
1,461,599
------------
CONSTRUCTION MACHINERY -- 0.2%
2,300 Caterpillar Inc. 157,837
------------
CONSUMER PRODUCTS -- 3.3%
4,500 Adidas AG (Germany) 193,001
7,000 Avon Products, Inc. 379,750
8,500 Black & Decker Corp. 317,687
2,800 Colgate-Palmolive Co. 257,600
2,500 Gillette Co. 186,875
5,000 Nike, Inc., Class B 294,375
2,700 Philip Morris Companies, Inc. 250,088
3,000 Procter & Gamble Co. 297,000
------------
2,176,376
------------
</TABLE>
See notes to financial statements.
37
<PAGE> 77
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONICS/ELECTRICAL EQUIPMENT -- 0.7%
3,100 General Electric Co. $ 299,925
2,800 Teleflex, Inc. 134,750
------------
434,675
------------
ENTERTAINMENT/LEISURE -- 1.2%
14,000 Aztar Corp. * 113,750
12,000 Carnival Corp., Class A 361,500
5,000 Circus Circus Enterprises Inc. * 172,500
3,100 Time Warner, Inc. 115,475
------------
763,225
------------
FINANCIAL SERVICES -- 2.0%
11,000 Countrywide Credit Industries, Inc. 313,500
1,900 Federal Home Loan Mortgage Corp. 191,900
5,000 Federal National Mortgage Assoc. 195,625
7,300 Green Tree Financial Corp. 289,263
6,000 The Money Store, Inc. 156,000
2,800 The PMI Group, Inc. 159,950
------------
1,306,238
------------
FOOD/BEVERAGE PRODUCTS -- 2.5%
4,100 Coca-Cola Co. 207,050
9,000 Coca-Cola Enterprises, Inc. 383,625
5,300 ConAgra, Inc. 264,338
9,400 PepsiCo., Inc. 278,475
7,500 Sara Lee Corp. 266,250
1,700 Unilever NV, ADR (Netherlands) 259,887
------------
1,659,625
------------
HEALTH CARE -- 1.8%
10,000 Alternative Living Services, Inc. * 143,750
8,500 Columbia/HCA Healthcare Corp. 303,875
1,000 Foundation Health Corp. * 29,875
6,600 HEALTHSOUTH Corp. * 247,500
3,000 Medtronic, Inc. 193,125
3,500 OrNda Healthcorp * 95,375
7,400 Tenet Healthcare Corp. * 154,475
------------
1,167,975
------------
</TABLE>
See notes to financial statements.
38
<PAGE> 78
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE -- 1.9%
5,000 AFLAC, Inc. $ 200,625
5,000 Allstate Corp. 280,625
3,350 American Bankers Insurance Group, Inc. 160,800
2,650 American International Group 287,856
3,200 Mid Ocean, Ltd. (Bermuda) 150,400
2,000 Progressive Corp. 137,500
------------
1,217,806
------------
MANUFACTURING -- 1.7%
5,000 Ingersoll-Rand Co. 208,125
3,000 Johnson Controls 219,000
2,900 Kennametal Inc. 98,600
7,000 Parker Hannifin Corp. 265,125
3,400 Pentair, Inc. 85,850
5,000 Tyco International Ltd. 248,125
------------
1,124,825
------------
METALS/MINING -- 0.7%
5,500 Aluminum Co. of America (ALCOA) 322,438
4,000 Inco, Ltd. 127,000
------------
449,438
------------
OFFICE/BUSINESS EQUIPMENT -- 0.2%
3,000 Xerox Corp. 139,125
------------
OIL & GAS -- 4.1%
2,200 Amoco Corp. 166,650
4,000 Halliburton Company 226,500
3,100 Mobil Corp. 361,925
8,000 NGC Corp. 144,000
7,400 PanEnergy Corp. 284,900
3,500 Phillips Petroleum Co. 143,500
1,400 Royal Dutch Petroleum Co. (Netherlands) 231,525
4,800 Smith International * 182,400
3,500 Texaco, Inc. 355,687
3,700 Tidewater, Inc. 161,875
3,500 Unocal Corp. 128,188
4,900 Williams Companies, Inc. 256,025
------------
2,643,175
------------
</TABLE>
See notes to financial statements.
39
<PAGE> 79
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
PAPER/FOREST PRODUCTS -- 0.7%
3,400 Champion International Corp. $ 147,900
4,500 Willamette Industries 303,750
------------
451,650
------------
PHARMACEUTICALS -- 2.3%
6,000 American Home Products Corp. 367,500
1,400 Bristol-Myers Squibb Co. 148,050
2,500 Lilly Eli & Co. 176,250
6,400 Johnson & Johnson 315,200
3,300 Schering-Plough Corp. 211,200
4,500 SmithKline Beecham PLC, ADR (United Kingdom) 281,813
------------
1,500,013
------------
PHOTOGRAPHIC EQUIPMENT -- 0.3%
2,300 Eastman Kodak Co. 183,425
------------
PRINTING & PUBLISHING -- 0.6%
6,500 New York Times Company, Class A 234,812
1,700 Tribune Co. 138,975
------------
373,787
------------
REAL ESTATE INVESTMENT TRUST -- 1.1%
15,000 Arden Realty Group, Inc. * 339,375
4,000 Bay Apartment Communities, Inc. 120,000
3,700 Beacon Properties Corp. 108,687
4,000 Spieker Properties, Inc. 123,000
------------
691,062
------------
RESTAURANTS/FOOD SERVICE -- 0.2%
7,900 Wendy's International, Inc. 162,938
------------
RETAILING -- 2.0%
3,600 American Stores Co. 148,950
5,400 Dayton-Hudson Corp. 186,975
6,400 Eckerd Corp. * 177,600
7,100 Federated Department Stores * 234,300
8,300 Gap, Inc. 240,700
6,300 Kroger Co. * 281,138
------------
1,269,663
------------
</TABLE>
See notes to financial statements.
40
<PAGE> 80
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
SHIPPING/TRANSPORTATION -- 1.2%
3,300 Burlington Northern, Inc. $ 271,838
4,700 Ryder System 139,825
10,000 Trico Marine Services, Inc. * 352,500
------------
764,163
------------
TELECOMMUNICATIONS -- 2.7%
8,200 BellSouth Corp. 334,150
5,200 GTE Corp. 219,050
4,504 Lucent Technologies, Inc. 211,688
4,000 Omnipoint Corp. * 109,000
6,384 Sprint Corp. 250,572
10,500 Telefonaktiebolaget LM Ericsson, Sp, ADR (Sweden) 290,062
2,400 Telefonica de Espana, ADR (Spain) 144,600
5,800 U S West, Inc. 176,175
------------
1,735,297
------------
UTILITIES -- 2.4%
4,600 CMS Energy Corp. 145,475
5,000 Entergy Corp. 140,000
6,400 FPL Group Inc. 294,400
4,600 NIPSCO Industries Inc., 174,225
6,600 Pinnacle West Capital Corp. 203,775
3,200 Portland General Corp. 140,000
6,600 Sierra Pacific Resources 183,975
6,900 Texas Utilities Co. 279,450
------------
1,561,300
------------
TOTAL COMMON STOCK (COST $23,420,403) 29,621,526
------------
CONVERTIBLE PREFERRED STOCK -- 2.3%
-----------------------------------
CONSUMER PRODUCTS -- 0.4%
20,000 RJR Nabisco Holdings Corp. $0.6012, Ser. C 112,500
9,000 Westinghouse Electric, $1.30 # 143,019
------------
255,519
------------
FINANCIAL SERVICES -- 0.6%
2,000 American General Delaware, $3.00, Ser. A 104,500
5,000 St. Paul Capital Corp., LLC, 6.00%, 5/31/25 Ser. 262,500
------------
367,000
------------
HEALTH CARE -- 0.5%
7,500 U.S. Surgical Corp. $2.20, Series A # 300,000
------------
</TABLE>
See notes to financial statements.
41
<PAGE> 81
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE -- 0.6%
2,000 American Bankers Insurance Group, 6.25%, Ser. B $ 114,750
7,000 SunAmerica Inc., $3.188, 10/31/99 262,500
------------
377,250
------------
OIL & GAS -- 0.2%
6,500 Enron Corp., 6.25% Exchange Notes, 12/13/98, ACES, 159,250
------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $1,327,262) 1,459,019
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
<C> <S> <C>
CORPORATE BONDS & NOTES -- 11.5%
--------------------------------
AEROSPACE -- 0.8%
$ 500,000 Lockheed Martin Corp., 7.45%, 06/15/04 518,115
------------
BANKING -- 0.8%
500,000 Australia and New Zealand Banking Group, Ltd. (Yankee 518,410
Sector), 7.55%, 9/15/06 ------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 0.4%
250,000 Motorola, Inc., 7.60%, 01/01/07 265,095
------------
FINANCIAL SERVICES -- 6.8%
500,000 Aetna Services, Inc., 6.97%, 08/15/36 509,770
500,000 Donaldson Lufkin & Jenrette, 5.63%, 02/15/16 483,750
400,000 Ford Capital BV, 9.00%, 08/15/98 419,352
650,000 General Motors Acceptance Corp., 8.63%, 06/15/99 686,342
700,000 Goldman Sachs Group, 6.20%, 02/15/01 # 689,787
500,000 Household Finance Corp., 7.75%, 06/15/97 505,465
1,000,000 Lehman Brothers Holdings, 7.25%, 10/15/03 1,007,610
120,000 Norwest Financial, Inc., 6.88%, 12/15/99 122,130
------------
4,424,206
------------
FOOD/BEVERAGE -- 0.8%
500,000 Anheuser-Busch Companies, Inc., 6.75%, 08/01/03 505,625
------------
MULTI-MEDIA -- 0.8%
500,000 Walt Disney Co., Ser. A, 6.375%, 3/30/01 499,380
------------
OIL & GAS -- 1.1%
750,000 Petroliam Nasional Bhd., 7.625%, 10/15/26 (Malaysia) 762,885
------------
TOTAL CORPORATE BONDS & NOTES (COST $7,453,734) 7,493,716
------------
</TABLE>
See notes to financial statements.
42
<PAGE> 82
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS & NOTES -- 1.1%
-------------------------------------------
COMPUTER/COMPUTER HARDWARE -- 0.3%
$ 150,000 SCI Systems Inc., 5.00%, 05/01/06 # $ 183,375
------------
HEALTH CARE -- 0.5%
150,000 Assisted Living Concepts, 7.00%, 08/15/05 # 169,998
150,000 Sterling House, 6.75%, 06/30/06 # 123,000
------------
292,998
------------
MANUFACTURING -- 0.3%
100,000 3 Com Corp., 10.25%, 11/01/01 # 206,641
------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES (COST $550,000) 683,014
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 11.2%
-------------------------------------------
Federal National Mortgage Association,
1,250,000 8.00%, 11/15/26, TBA, 30 Year 1,275,000
1,500,000 7.50%, 11/15/11, TBA, 15 Year 1,523,445
Government National Mortgage Association,
2,000,000 6.50%, 11/15/11, TBA, 15 Year 1,973,760
1,500,000 8.00%, 11/15/26, TBA, 30 Year 1,533,750
1,000,000 Tennessee Valley Authority, 6.235% 7/15/45 1,002,040
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $7,170,335) 7,307,995
------------
ASSET BACKED SECURITIES -- 8.0%
-------------------------------
1,000,000 American Express Credit Account Master Trust, Ser. 1,016,870
1996-1, Class A, 6.80%, 12/15/03
484,834 Blackrock Capital Finance L.P., CMO, Ser. 1996-C2, Class 491,525
A, 7.62%, 11/15/26 #
1,000,000 Capital Equipment Receivables Trust, Ser. 1996-1, Class 1,001,940
A3, 6.11%, 07/15/99
750,000 Morgan Stanley Capital CMO, Ser. 1996-WF1, Class A3, 766,406
7.38%, 08/15/06 #
990,982 Mortgage Capital Funding, Inc., Ser. 1996-MC1, Class A2A, 1,014,828
7.35%, 07/15/05
873,127 Toyota Auto Receivables Grantor Trust, Ser. 1996-A, Class 878,130
A, 6.30%, 07/20/01
------------
TOTAL ASSET BACKED SECURITIES (COST $5,123,828) 5,169,699
------------
</TABLE>
See notes to financial statements.
43
<PAGE> 83
VISTA BALANCED FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 10.6%
------------------------------------
U.S. Treasury Notes,
$ 1,000,000 5.13%, 11/30/98 $ 987,500
1,500,000 5.75%, 08/15/03 1,460,865
500,000 6.00%, 09/30/98 502,265
500,000 6.88%, 05/15/06 517,655
U.S. Treasury Bonds,
1,500,000 7.50%, 11/15/24 1,645,305
1,500,000 8.50%, 02/15/20 1,804,920
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $6,779,162) 6,918,510
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 58,653,479
(COST $51,824,724)
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 18.0%
- -----------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 18.0%
-------------------------
2,000,000 Ford Motor Credit Corp., 5.25%, 11/14/96 1,996,208
9,681,000 Household Finance Corp., 5.40%, 11/01/96 9,681,000
- -----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 11,677,208
(COST $11,677,208)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 108.3% $ 70,330,687
(COST $63,501,932)
- -----------------------------------------------------------------------------------------
# = Security may only be sold to qualified institutional buyers.
* = Non income producing security.
t = All or a portion of this security is pledged to cover financial futures
contracts.
ACES = Automatic Common Exchange Securities.
ADR = American Depository Receipt.
</TABLE>
See notes to financial statements.
44
<PAGE> 84
(This page intentionally left blank)
45
<PAGE> 85
VISTA MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Small Vista Large
Vista Growth & Vista Capital Cap Vista Equity Cap
Income Growth Equity Income Equity
Fund Fund Fund Fund Fund#
-------------- -------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment, at value (Note 1).............. $1,990,210,435 $1,088,600,933 $ 266,089,866 $ 17,962,725 $ 106,112,854
Cash....................................... -- -- 916 677 7,944
Receivables:
Investment securities sold............... -- -- 1,228,750 94,076 4,420,343
Variation margin......................... -- -- 126,000 -- --
Interest and dividends................... -- -- 78,430 75,679 147,081
Fund shares sold......................... 3,733,224 47,326,340 3,339,615 392,371 104,186
Expense reimbursement from Distributor... -- -- -- -- --
Other assets............................... 71,332 30,632 61,993 894 36,110
-------------- -------------- ------------ ----------- -----------
Total assets......................... 1,994,014,991 1,135,957,905 270,925,570 18,526,422 110,828,518
-------------- -------------- ------------ ----------- -----------
LIABILITIES:
Payable for investment securities
purchased................................ -- -- 720,000 366,763 2,350,208
Payable for Fund shares redeemed........... 1,781,384 1,006,703 583,105 1,300 669,076
Dividends payable.......................... 36,525 -- -- -- --
Accrued liabilities: (Note 2)
Administration fees...................... 168,595 94,560 34,106 718 4,542
Distribution fees........................ 700,512 430,457 76,275 3,792 1,875
Investment advisory fees................. -- -- 147,794 -- --
Shareholder servicing fees............... 421,489 236,394 27,014 101 22,712
Custodian................................ -- -- 35,737 9,566 16,365
Other.................................... 1,543,235 933,829 275,106 91,783 84,422
-------------- -------------- ------------ ----------- -----------
Total Liabilities.................... 4,651,740 2,701,943 1,899,137 474,023 3,149,200
-------------- -------------- ------------ ----------- -----------
<CAPTION>
Vista
American Vista
Value Balanced
Fund## Fund
----------- ------------
<S> <C> <C>
ASSETS:
Investment, at value (Note 1).............. $ 9,536,543 $ 70,330,687
Cash....................................... 1,430 31,918
Receivables:
Investment securities sold............... 265,000 1,128,390
Variation margin......................... -- --
Interest and dividends................... 8,444 367,945
Fund shares sold......................... -- 69,970
Expense reimbursement from Distributor... -- 23,195
Other assets............................... 42,832 3,603
--------- ----------
Total assets......................... 9,854,249 71,955,708
--------- ----------
LIABILITIES:
Payable for investment securities
purchased................................ 195,685 6,718,153
Payable for Fund shares redeemed........... 4,229 57,923
Dividends payable.......................... -- --
Accrued liabilities: (Note 2)
Administration fees...................... 403 8,249
Distribution fees........................ -- 17,823
Investment advisory fees................. -- 21,996
Shareholder servicing fees............... -- 2,038
Custodian................................ 5,342 16,665
Other.................................... 39,190 143,215
--------- ----------
Total Liabilities.................... 244,849 6,986,062
--------- ----------
</TABLE>
- ---------------
# Formerly the Vista Equity Fund.
## In 1996, the fund changed its fiscal year end from November 30 to October 31.
See notes to financial statements.
46
<PAGE> 86
VISTA MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Small
Vista Growth & Vista Capital Cap Vista Equity
Income Growth Equity Income
Fund Fund Fund Fund
--------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
NET ASSETS:
Paid in capital...................................... $ 1,464,769,781 $ 824,161,752 $ 226,155,881 $ 13,483,557
Accumulated undistributed/(overdistributed) net
investment income.................................. 1,422,980 (9,884) (4,378) 50,342
Accumulated undistributed net realized gain on
investment transactions............................ 157,901,978 132,179,918 3,707,453 1,827,362
Net unrealized appreciation of investments
and futures........................................ 365,268,512 176,924,176 39,167,477 2,691,138
-------------- -------------- ------------ -----------
Net Assets:........................................ 1,989,363,251 1,133,255,962 269,026,433 18,052,399
============== ============== ============ ===========
Class A Shares.................................... $ 1,590,892,784 $ 767,997,900 $ 144,763,142 $ 17,492,702
Class B Shares.................................... $ 370,496,253 $ 333,702,516 $ 72,721,726 $ 559,697
Institutional Class............................... $ 27,974,214 $ 31,555,546 $ 51,541,565
Shares of beneficial interest outstanding ($.001 par
value; unlimited number of shares authorized):
Class A Shares.................................... 40,570,354 18,463,707 7,545,271 1,094,719
Class B Shares.................................... 9,495,481 8,098,216 3,826,516 35,164
Institutional Class............................... 712,557 757,712 2,681,199
Class A Shares:
Net asset value and redemption price per share*...... $39.21 $41.60 $19.19 $15.98
Maximum offering price per share (net asset value per
share: 95.5% for VEIF and VBAL, 95.25% for GIF,
CGF, VSCEF, VLCEF)................................. $41.17 $43.67 $20.15 $16.73
Class B Shares:
Net asset value and offering price per share*........ $39.02 $41.21 $19.00 $15.92
Institutional Shares:
Net asset value and offering price per share*........ $39.26 $41.65 $19.22
============== ============== ============ ===========
Cost of Investments................................... $ 227,108,574 $ 15,271,587
============ ===========
<CAPTION>
Vista Large Vista
Cap American Vista
Equity Value Balanced
Fund# Fund## Fund
------------- ----------- ------------
<S> <C> <C> <C>
NET ASSETS:
Paid in capital...................................... $ 75,418,393 $ 7,209,079 $ 54,120,642
Accumulated undistributed/(overdistributed) net
investment income.................................. 196,419 55,150 119,542
Accumulated undistributed net realized gain on
investment transactions............................ 15,103,994 373,883 3,900,707
Net unrealized appreciation of investments
and futures........................................ 16,960,512 1,971,288 6,828,755
----------- --------- ----------
Net Assets:........................................ 107,679,318 9,609,400 64,969,646
=========== ========= ==========
Class A Shares.................................... $ 8,349,022 $ 9,609,400 $ 55,232,744
Class B Shares.................................... $ 305,411 $ 9,736,902
Institutional Class............................... $ 99,024,885
Shares of beneficial interest outstanding ($.001 par
value; unlimited number of shares authorized):
Class A Shares.................................... 630,044 712,360 3,993,057
Class B Shares.................................... 23,108 710,887
Institutional Class............................... 7,460,747
Class A Shares:
Net asset value and redemption price per share*...... $13.25 $13.49 $13.83
Maximum offering price per share (net asset value per
share: 95.5% for VEIF and VBAL, 95.25% for GIF,
CGF, VSCEF, VLCEF)................................. $13.91 $14.48
Class B Shares:
Net asset value and offering price per share*........ $13.22 $13.70
Institutional Shares:
Net asset value and offering price per share*........ $13.27
=========== ========= ==========
Cost of Investments................................... $ 89,152,342 $ 7,565,255 $ 63,501,932
=========== ========= ==========
</TABLE>
- ---------------
# Formerly the Vista Equity Fund.
## In 1996, the fund changed its fiscal year end from November 30 to October 31.
* Net assets/shares outstanding.
See notes to financial statements.
47
<PAGE> 87
VISTA MUTUAL FUNDS
STATEMENT OF OPERATIONS For the year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Growth & Vista Capital Vista Small Cap
Income Growth Equity
Fund Fund Fund
-------------- -------------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend.......................................................... $ 581,326
Interest.......................................................... 1,908,176
Investment income from Portfolio.................................. $ 54,069,309 $ 17,508,117 --
Foreign taxes withheld............................................ (130,562) (12,457) (205)
Expenses from Portfolio........................................... (9,121,769) (5,056,071) --
------------ ------------ -----------
Total investment income...................................... 44,816,978 12,439,589 2,489,297
------------ ------------ -----------
EXPENSES: (Note 2)
Administration fees............................................... 1,942,502 1,053,704 246,846
Distribution fees................................................. 6,450,305 4,076,849 588,741
Investment advisory fees.......................................... -- -- 1,069,668
Shareholder servicing fees........................................ 4,856,255 2,634,261 192,745
Custodian fees.................................................... -- -- 105,505
Printing and postage.............................................. 86,959 67,809 21,066
Professional fees................................................. 215,228 140,675 29,410
Registration costs................................................ 87,397 108,493 109,258
Transfer agent fees............................................... 4,108,132 2,459,072 394,202
Trustees fees and expenses........................................ 81,615 49,114 13,301
Other............................................................. 209,048 148,355 24,648
------------ ------------ -----------
Total expenses............................................... 18,037,441 10,738,332 2,795,390
------------ ------------ -----------
Less amounts waived (Note 2E)..................................... -- -- 75,917
------------ ------------ -----------
Net expenses.................................................... 18,037,441 10,738,332 2,719,473
------------ ------------ -----------
Net investment income (loss).................................... 26,779,537 1,701,257 (230,176)
------------ ------------ -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments..................................................... 151,976,351 132,727,253 3,966,439
Futures and written option transactions......................... 7,686,258 -- 22,024
Change in net unrealized appreciation on:
Investments..................................................... 154,859,839 71,516,843 32,105,210
Futures and written option transactions......................... -- -- 463,927
------------ ------------ -----------
Net realized and unrealized gain on investments................... 314,522,448 204,244,096 36,557,600
------------ ------------ -----------
Net increase in net assets from operations........................ $341,301,985 $ 205,945,353 $36,327,424
============ ============ ===========
<CAPTION>
Vista
Vista Equity Vista Large Cap American
Income Equity Value
Fund Fund# Fund##
--------------- --------------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend.......................................................... $ 447,641 $ 1,523,458 $ 156,894
Interest.......................................................... 90,692 386,961 56,297
Investment income from Portfolio.................................. -- -- --
Foreign taxes withheld............................................ (3,069) (6,916) (82)
Expenses from Portfolio........................................... -- -- --
---------- ----------- -------------
Total investment income...................................... 535,264 1,903,503 213,109
---------- ----------- -------------
EXPENSES: (Note 2)
Administration fees............................................... 20,538 126,664 9,506
Distribution fees................................................. 34,713 80,135 11,065
Investment advisory fees.......................................... 54,769 337,772 57,746
Shareholder servicing fees........................................ 34,231 139,400 22,535
Custodian fees.................................................... 35,657 40,276 26,673
Printing and postage.............................................. 2,498 5,032 7,648
Professional fees................................................. 35,455 29,761 17,729
Registration costs................................................ 44,854 23,913 15,202
Transfer agent fees............................................... 51,366 49,864 13,959
Trustees fees and expenses........................................ 1,046 6,684 650
Other............................................................. 3,278 2,331 12,529
---------- ----------- -------------
Total expenses............................................... 318,405 841,832 195,242
---------- ----------- -------------
Less amounts waived (Note 2E)..................................... 112,300 467,811 89,081
---------- ----------- -------------
Net expenses.................................................... 206,105 374,021 106,161
---------- ----------- -------------
Net investment income (loss).................................... 329,159 1,529,482 106,948
---------- ----------- -------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments..................................................... 1,828,111 15,140,787 500,892
Futures and written option transactions......................... -- -- --
Change in net unrealized appreciation on:
Investments..................................................... 1,356,617 6,075,061 716,130
Futures and written option transactions......................... -- -- --
---------- ----------- -------------
Net realized and unrealized gain on investments................... 3,184,728 21,215,848 1,217,022
---------- ----------- -------------
Net increase in net assets from operations........................ $ 3,513,887 $22,745,330 $ 1,323,970
========== =========== =============
<CAPTION>
Vista
Balanced
Fund
---------------
<S> <C>
INVESTMENT INCOME:
Dividend.......................................................... $ 522,083
Interest.......................................................... 1,623,795
Investment income from Portfolio.................................. --
Foreign taxes withheld............................................ (2,949)
Expenses from Portfolio........................................... --
-------------
Total investment income...................................... 2,142,929
-------------
EXPENSES: (Note 2)
Administration fees............................................... 76,196
Distribution fees................................................. 166,637
Investment advisory fees.......................................... 253,986
Shareholder servicing fees........................................ 126,993
Custodian fees.................................................... 67,279
Printing and postage.............................................. 9,690
Professional fees................................................. 29,799
Registration costs................................................ 59,039
Transfer agent fees............................................... 129,113
Trustees fees and expenses........................................ 3,934
Other............................................................. 21,109
-------------
Total expenses............................................... 943,775
-------------
Less amounts waived (Note 2E)..................................... 249,344
-------------
Net expenses.................................................... 694,431
-------------
Net investment income (loss).................................... 1,448,498
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments..................................................... 3,950,647
Futures and written option transactions......................... --
Change in net unrealized appreciation on:
Investments..................................................... 4,273,241
Futures and written option transactions......................... --
-------------
Net realized and unrealized gain on investments................... 8,223,888
-------------
Net increase in net assets from operations........................ $ 9,672,386
=============
</TABLE>
- ---------------
# Formerly the Vista Equity Fund.
## In 1996, the fund changed its fiscal year end from November 30 to October 31.
The period shown is December 1, 1995 through October 31, 1996.
See notes to financial statements.
48
<PAGE> 88
VISTA MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Growth & Vista Capital
Income Growth
Fund Fund
---------------------------------- ----------------------------------
Year Ended Year Ended
---------------------------------- ----------------------------------
10/31/96 10/31/95 10/31/96 10/31/95
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss)............ $ 26,779,537 $ 30,940,408 $ 1,701,257 $ 3,692,366
Net realized gain on investments and
futures transactions.................. 159,662,609 93,343,085 132,727,253 37,651,492
Change in net unrealized appreciation on
investments and futures............... 154,859,839 148,638,515 71,516,843 81,591,993
-------------- -------------- -------------- --------------
Increase in net assets from
operations............................ 341,301,985 272,922,008 205,945,353 122,935,851
-------------- -------------- -------------- --------------
NET EQUALIZATION CREDITS (DEBITS) (Note
1C):.................................... -- (295,049) -- 245,128
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note
1C):
Net investment income................... (27,278,466) (30,881,111) (2,370,914) (4,273,755)
Net realized gain on investment
transactions.......................... (90,504,699) -- (37,648,366) (15,178,282)
-------------- -------------- -------------- --------------
Total dividends and
distributions.................... (117,783,165) (30,881,111) (40,019,280) (19,452,037)
-------------- -------------- -------------- --------------
Increase (decrease) from capital share
transactions (Note 5)................... (29,330,249) (20,845,358) (40,621,092) 230,587,856
-------------- -------------- -------------- --------------
Total increase (decrease) in net
assets........................... 194,188,571 220,900,490 125,304,981 334,316,798
NET ASSETS:
Beginning of period..................... 1,795,174,680 1,574,274,190 1,007,950,981 673,634,183
-------------- -------------- -------------- --------------
End of period........................... $ 1,989,363,251 $ 1,795,174,680 $ 1,133,255,962 $ 1,007,950,981
============== ============== ============== ==============
<CAPTION>
Vista Small Cap Vista Equity
Equity Income
Fund Fund
----------------------------- ----------------------------
Year 12/20/94## Year Ended
Ended through ----------------------------
10/31/96 10/31/95 10/31/96 10/31/95
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income (loss)............ ($ 230,176) $ 58,219 $ 329,159 $ 311,627
Net realized gain on investments and
futures transactions.................. 3,988,463 1,003,383 1,828,111 737,043
Change in net unrealized appreciation on
investments and futures............... 32,569,137 6,598,340 1,356,617 778,380
------------ ----------- ----------- -----------
Increase in net assets from
operations............................ 36,327,424 7,659,942 3,513,887 1,827,050
------------ ----------- ----------- -----------
NET EQUALIZATION CREDITS (DEBITS) (Note
1C):.................................... -- 43,982 -- (4,769)
------------ ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note
1C):
Net investment income................... (112,777) (58,219) (305,452) (325,585)
Net realized gain on investment
transactions.......................... (926,492) (6,756) (736,935) (365,232)
------------ ----------- ----------- -----------
Total dividends and
distributions.................... (1,039,269) (64,975) (1,042,387) (690,817)
------------ ----------- ----------- -----------
Increase (decrease) from capital share
transactions (Note 5)................... 168,374,984 57,724,345 3,843,734 (803,127)
------------ ----------- ----------- -----------
Total increase (decrease) in net
assets........................... 203,663,139 65,363,294 6,315,234 328,337
NET ASSETS:
Beginning of period..................... 65,363,294 -- 11,737,165 11,408,828
------------ ----------- ----------- -----------
End of period........................... $ 269,026,433 $ 65,363,294 $ 18,052,399 $ 11,737,165
============ =========== =========== ===========
</TABLE>
- ---------------
## Fund commenced operations 12/20/94.
See notes to financial statements.
49
<PAGE> 89
VISTA MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Large Cap American
Equity Value
Fund* Fund
------------------------------- -----------
Year Ended 12/1/95
------------------------------- through
10/31/96 10/31/95 10/31/96**
------------- ------------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income.................................................... $ 1,529,482 $ 1,508,268 $ 106,948
Net realized gain on investments and futures
transactions........................................................... 15,140,787 6,905,243 500,892
Change in net unrealized appreciation on investments and futures......... 6,075,061 3,304,651 716,130
-------------- ----------- ----------
Increase in net assets from operations................................... 22,745,330 11,718,162 1,323,970
-------------- ----------- ----------
NET EQUALIZATION CREDITS (DEBITS) (Note 1C):.............................. -- (67,743) --
-------------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1C):
Net investment income.................................................... (1,487,894) (1,473,768) (137,004)
Net realized gain on investment transactions............................. (6,908,375) (12,783,335) (184,857)
-------------- ----------- ----------
Total dividends and distributions................................... (8,396,269) (14,257,103) (321,861)
-------------- ----------- ----------
Increase (decrease) from capital share transactions (Note 5).............. 37,913,034 (9,794,030) 208,701
-------------- ----------- ----------
Total increase (decrease) in net assets............................. 52,262,095 (12,400,714) 1,210,810
NET ASSETS:
Beginning of period...................................................... 55,417,223 67,817,937 8,398,590
-------------- ----------- ----------
End of period............................................................ $ 107,679,318 $ 55,417,223 $ 9,609,400
============== =========== ==========
<CAPTION>
Vista
Balanced
Fund
-----------------------------
02/03/95# Year Ended
through -----------------------------
11/30/95 10/31/96 10/31/95
----------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income.................................................... $ 115,010 $ 1,448,498 $ 974,732
Net realized gain on investments and futures
transactions........................................................... 55,748 3,950,647 1,024,866
Change in net unrealized appreciation on investments and futures......... 1,255,158 4,273,241 2,769,570
---------- ----------- -----------
Increase in net assets from operations................................... 1,425,916 9,672,386 4,769,168
---------- ----------- -----------
NET EQUALIZATION CREDITS (DEBITS) (Note 1C):.............................. -- -- 20,792
---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1C):
Net investment income.................................................... (44,600) (1,328,956) (986,430)
Net realized gain on investment transactions............................. -- (1,045,527) (302,310)
---------- ----------- -----------
Total dividends and distributions................................... (44,600) (2,374,483) (1,288,740)
---------- ----------- -----------
Increase (decrease) from capital share transactions (Note 5).............. 7,017,274 17,603,211 11,319,914
---------- ----------- -----------
Total increase (decrease) in net assets............................. 8,398,590 24,901,114 14,821,134
NET ASSETS:
Beginning of period...................................................... -- 40,068,532 25,247,398
---------- ----------- -----------
End of period............................................................ $ 8,398,590 $ 64,969,646 $ 40,068,532
========== =========== ===========
</TABLE>
- ---------------
* Previously the Vista Equity Fund
** In 1996, the fund changed its fiscal year end from November 30 to
October 31.
# Fund commenced operations on February 3, 1995.
See notes to financial statements.
50
<PAGE> 90
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- Mutual Fund Group ( the
"Trust") was organized on May 11, 1987 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. Vista Growth and Income Fund
("VGIF"), Vista Capital Growth Fund ("VCGF"), Vista Small Cap Equity Fund
("VSCEF"), Vista Equity Income Fund ("VEIF"), Vista Large Cap Equity Fund
("VLCEF") (formerly Vista Equity Fund), Vista American Value Fund ("VAVF") and
Vista Balanced Fund ("VBAL"), collectively, the "Funds", are seven separate
series of The Trust. The Funds offer various classes of shares as follows:
<TABLE>
<CAPTION>
Fund Classes Offered
- ------ -------------------------------------------------------------
<S> <C>
VGIF Class A, Class B, Institutional
VCGF Class A, Class B, Institutional
VSCEF Class A, Class B, Institutional
VEIF Class A, Class B
VLCEF Class A, Class B, Institutional
VAVF Class A
VBAL Class A, Class B
</TABLE>
Class A shares, with the exception of VAVF, generally provide for a front-end
sales charge while Class B shares provide for a contingent deferred sales
charge. All classes of shares have equal rights as to earnings, assets and
voting privileges except that each class may bear different distribution fees
and each class has exclusive voting rights with respect to its distribution
plan. No sales charges are assessed with respect to the Institutional Class.
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.
The following is a summary of significant accounting policies followed by the
Funds:
A. VGIF and VCGF
Effective November 29, 1993, VGIF and VCGF adopted the Master Feeder Fund
structure through the contribution of their investment assets to their
respective portfolios in exchange for beneficial interests in such
portfolios of an equal value. Prior thereto each Fund owned individual
investment securities. VGIF and VCGF seek to achieve their investment
objective by investing all of their investable assets in the Growth and
Income Portfolio and the Capital Growth Portfolio respectively (the
"Portfolios") which like the Funds, are open-end management investment
companies having the same investment objectives as the Funds. As of October
31, 1996 VGIF and VCGF owned 95.12% and 99.86% of the Growth and Income
Portfolio, and of the Capital Growth Portfolio, respectively. The financial
statements of each Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in conjunction with the
financial statements of the Funds.
1. Valuation of investments -- VGIF and VCGF record their investments
in their respective Portfolios at value. Securities of the Portfolios are
recorded at value as more fully discussed in the notes to those financial
statements.
2. Investment income and expenses -- VGIF and VCGF record daily their
pro-rata share of the respective Portfolio's income, expenses, and
realized and unrealized gains and losses. In addition, the Funds accrue
their own expenses daily as incurred. Realized gains/losses and changes
in unrealized appreciation/depreciation represent the Fund's share of
such elements allocated from the portfolio.
B. VSCEF, VEIF, VLCEF, VAVF and VBAL
1. Valuation of investments -- Equity securities, purchased options and
futures 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
51
<PAGE> 91
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
services or by matrix pricing systems of a major dealer in bonds.
Short-term debt securities with 61 days or more to maturity at time of
purchase are valued, through the 61st day prior to maturity, at market
value based on quotations obtained from market makers or other
appropriate sources; thereafter, the value on the 61st day is amortized
on a straight-line basis over the remaining number of days to maturity.
Short-term investments with 60 days or less to maturity at time of
purchase are valued at amortized cost, which approximates market.
Portfolio securities for which there are no such quotations or valuations
are valued at fair value as determined in good faith by or at the
direction of the Trustees.
2. Repurchase agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government
Agency securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book
Entry System. In connection with transactions in repurchase agreements,
if the seller defaults and the value of the collateral declines, or if
the seller enters an insolvency proceeding, realization of the collateral
by the Trust may be delayed or limited.
3. Futures contracts -- When a Fund enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to
market and the fund makes (or receives) additional cash payments daily to
the broker. Changes in the value of the contract are recorded as
unrealized appreciation/depreciation until the contract is closed or
settled.
The Funds invest in stock index futures contracts for the purpose of
hedging the Fund against share price volatility, which purpose may or may
not be achieved. When the Fund is not fully invested in the securities
market, it may enter into "long" positions in futures or options
contracts in order to gain rapid market exposure that may in part or
entirely offset increases in the cost of securities intended for
purchase. Use of futures contracts subject the Fund to risk of loss in
excess of amounts shown on the Statement of Assets and Liabilities, up to
the amount of the value of the futures contracts as shown in the
Portfolio of Investments at October 31, 1996.
The Fund may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
4. Written options -- When a Fund writes an option on a futures
contract, an amount equal to the premium received by the Fund is included
in the Fund's Statement of Assets and Liabilities as an asset and
corresponding liability. The amount of the liability is adjusted daily to
reflect the current market value of the written options and the change is
recorded in a corresponding unrealized gain or loss account. When a
written option expires on its stipulated expiration date, or when a
closing transaction is entered into, the related liability is
extinguished and the Fund realizes a gain (or loss if the cost of the
closing transaction exceeds the premium received when the option was
written).
The VSCEF writes options on stock index securities futures. These options
are settled for cash and subject the Fund to market risk in excess of the
amounts that are reflected in the Statement of Assets and Liabilities.
The Fund, however, is not subject to credit risk on written options as
the counterparty has already performed its obligation by paying a premium
at the inception of the contract.
As of October 31, 1996 the Funds had no outstanding written options.
5. 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.
6. Dollar Rolls -- VBAL enters into dollar rolls in which the 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. During the
roll period, the Fund forgoes principal and interest paid on the
securities. The Fund is compensated by the interest earned on the cash
52
<PAGE> 92
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
proceeds of the initial sale and a fee earned for entering into the roll
transaction. The fee is amortized into income over the duration of the
roll transaction.
C. General Policies
1. Organization costs -- Organization and initial registration costs
incurred in connection with establishing the Funds have been deferred and
are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of each Fund.
2. Federal income taxes -- Each Fund is treated as a separate taxable
entity for Federal income tax purposes. The Trust's policy is to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to shareholders all of its
distributable net investment income, and net realized gain on
investments. In addition, the Trust intends to make distributions as
required to avoid excise taxes. Accordingly, no provision for Federal
income or excise tax is necessary.
3. 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 these "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.
The reclassifications for the funds are as follows: VSCEF paid in capital
was increased by $12,570, accumulated undistributed net investment income
was increased and accumulated undistributed net realized gain/loss was
decreased by $338,573 and $351,143, respectively; VAVF paid in capital
was decreased by $16,895, accumulated undistributed net investment income
and accumulated undistributed net realized gain/loss were increased by
$14,796 and $2,099, respectively; VBAL paid in capital was decreased by
and accumulated undistributed net realized gain/loss was increased by
$34. VLCEF Paid in Capital was increased by and accumulated undistributed
realized gain/loss was decreased by $15,065. VGIF Paid in Capital was
increased and accumulated undistributed net realized gain/loss was
decreased by $22,417. VCGF Paid in Capital was increased by $10,580,
accumulated undistributed investment income was increased and accumulated
undistributed net realized gain/loss was decreased by $318,786 and
$329,366, respectively. The adjustments for the Funds relate primarily to
the character for tax purposes of certain short-term gains or losses.
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.
4. Equalization -- In prior years, certain of the Funds followed the
practice of equalization by which a portion of proceeds from sales and
cost of redemptions of Fund shares is credited or charged to
undistributed net investment income. In the current fiscal year ending
October 31, 1996, the Funds discontinued the practice of equalization,
resulting in reclassifications from undistributed net investment income
of $185,023, $152,267, $12,284, $515, $5,464 and $2,376 to accumulated
paid-in capital for VGIF, VCGF, VSCEF, VEIF, VLCEF, and VBAL,
respectively.
5. Expenses -- Expenses directly attributable to a Fund are charged to
that Fund; other expenses are allocated proportionately among each Fund
within the Trust in relation to the net assets of each Fund or on another
reasonable basis. In calculating the net asset value per share of each
class, investment income, realized and unrealized gains and losses and
expenses other than class specific expenses, are allocated daily to each
class of shares based upon the proportion of net assets of each class at
the beginning of each day.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank, ("Chase" or the "Adviser") acts as the
Investment Adviser to the VSCEF, VEIF, VLCEF, VAVF, and VBAL. Chase is a
direct wholly-owned subsidiary
53
<PAGE> 93
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
of The Chase Manhattan Corporation. As Investment Adviser, Chase supervises
the investments of the Funds and for such services is paid a fee. The fee is
computed daily and paid monthly at an annual rate equal to 0.50% for VBAL,
0.65% for VSCEF and 0.40% for VEIF and for VLCEF; and 0.70% for VAVF of the
average daily net assets. The Adviser, voluntarily waived all or a portion
of its fees as outlined in Note 2.E. below.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to each Fund, with the exception of VAVF,
pursuant to a Sub-Investment Advisory Agreement between CAM and Chase. CAM
is a wholly owned subsidiary of Chase and is entitled to receive a fee,
payable by Chase from its advisory fee, at an annual rate equal to 0.20% of
VEIF and VLCEF; 0.25% of VBAL; and 0.30% of VSCEF's of average daily net
assets.
VanDeventer and Hoch, a registered investment adviser is the sub-investment
advisor for VAVF pursuant to a Sub-Investment Advisory Agreement with Chase
and is paid a fee by Chase at an annual rate equal to 0.35% of the VAVF's
average daily net assets.
B. Shareholder servicing fees -- The Trust has adopted an Administrative
Services Plan which, among other things, provides that the Trust on behalf
of the Funds may obtain the services of one or more Shareholder Servicing
Agents. For its services, the Shareholder Servicing Agents receive a fee
that is computed daily and paid monthly at an annual rate equal to 0.25% of
the average daily net assets of each of the classes of the funds with the
exception of the Class A Shares of the VSCEF. The VSCEF is charged a fee
from non-affiliated shareholder serving agents not to exceed 0.25% of the
net assets of the Class. The VLCEF had not been charged Shareholder Serving
Fees prior to May 1, 1996. For the year ended October 31, 1996, Chase's
Shareholder Servicing charges amounted to: VGIF: $4,802,014, VCGF:
$2,539,324, VSCEF: $174,684, VEIF: $34,231, VLCEF: $139,400, VAVF: $22,535,
and VBAL: $126,993.
The Shareholder Servicing Agents have voluntarily waived all or a portion of
their fees as outlined in Note 2.E. below.
C. Distribution and sub-administration fees -- Pursuant to a Distribution
and Sub-Administration Agreement, Vista Fund Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of The BISYS Group, Inc., acts as
the Trust's exclusive underwriter and promotes and arranges for the sale of
each Fund's shares. In addition, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space for an annual fee of 0.05% of the average
daily net assets of each Fund.
The Trustees have adopted Distribution Plans (the "Distribution Plans") for
Class A and B (with the exception of VAVF) for the VGIF, VCGF, VSCEF, VEIF,
VLCEF, VAVF, and VBAL in accordance with Rule 12b-1 under the 1940 Act.
There is no Distribution Plan for the Institutional Classes. The Class A
Distribution Plans provide that each Fund shall pay distribution fees,
including payments to the Distributor, at annual rates not to exceed 0.25%
of the average daily net assets of the Class A Shares of each Fund with the
exception of VGIF and VCGF which pay 0.20% for distribution services. The
Class B Distribution Plan provides that each Fund shall pay distribution
fees, including payments to the Distributor, at an annual rate not to exceed
0.75% of the average annual net assets of the Class B Shares for
distribution services.
Under Class A Distribution Plans for VGIF and VCGF, the Class A shares are
also permitted to pay an additional fee at an annual rate not to exceed
0.05% of its average daily net assets in anticipation of, or as
reimbursement for, expenses incurred in connection with print or electronic
media advertising in connection with the sale of Fund shares. The maximum
compensation paid by the Class A shares under the Class A Distribution Plan
would be at an annual rate of 0.25% of its average daily net assets.
The Distributor voluntarily waived all or a portion of distribution fees and
sub-administration fees as outlined in Note 2.E. below.
D. 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 VSCEF,
VEIF, VAVF, VBAL and VLCEF a fee computed at the annual rate equal to 0.10%
of the respective Fund's average daily net assets and from VGIF and VCGF, a
fee computed at the annual rate equal to 0.05% of the
54
<PAGE> 94
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
respective Fund's average daily net assets. The Administrator voluntarily
waived all or a portion of the administration fees as outlined in Note 2.E.
below.
E. Waivers of fees -- For the year ended October 31, 1996, the
Administrator and Distributor, Investment Adviser, Shareholder Servicing
Agent, and Sub-Administrator voluntarily waived fees for each of the Funds
as follows:
<TABLE>
<CAPTION>
VSCEF VEIF VLCEF VAVF VBAL
-------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Administration................. $ 6,152 $ 13,293 $ 84,443 $ 7,293 $ 16,369
Distribution................... -- 11,667 21,319 11,065 9,081
Investment Advisory............ 31,530 53,342 337,772 57,746 125,808
Shareholder Servicing.......... 38,235 33,998 24,277 12,977 98,086
-------- --------- --------- -------- ---------
Total...................... $ 75,917 $ 112,300 $ 467,811 $ 89,081 $ 249,344
======== ========= ========= ======== =========
</TABLE>
F. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for VSCEF, VEIF,
VLCEF, VAVF and VBAL. Compensation for such services are presented in the
Statement of Operations as custodian fees.
3. INVESTMENT TRANSACTIONS -- For the year ended October 31, 1996, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
VSCEF VEIF VLCEF VAVF VBAL
-------------- ---------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding
U.S. Government)... $ 218,116,572 $ 16,650,723 $ 67,220,374 $ 2,444,291 $ 37,321,706
Sales (excluding
U.S. Government)... 103,873,136 15,102,327 85,416,184 1,957,189 26,132,324
Purchases of U.S.
Government......... -- 707,801 -- -- 26,433,423
Sales of U.S.
Government......... -- -- -- -- 36,079,167
<CAPTION>
VGIF VCGF
-------------- ----------------
<S> <C> <C>
Increase in
Portfolio
Investment......... $ 409,347,169 $ 1,111,940,498
Decrease in
Portfolio
Investment......... (576,741,433) (1,257,618,182)
</TABLE>
4. FEDERAL INCOME TAX MATTERS -- For Federal income tax purposes, the cost and
unrealized appreciation (depreciation) in value of the investment securities at
October 31, 1996 are as follows:
<TABLE>
<CAPTION>
VSCEF VEIF VLCEF VAVF VBAL
------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Aggregate cost........... $ 227,198,669 $ 15,281,774 $ 89,183,486 $ 7,565,255 $ 63,512,987
------------- ------------ ------------ ----------- ------------
Gross unrealized
appreciation............ 46,048,461 2,823,457 17,360,035 2,137,367 7,122,963
Gross unrealized
depreciation............ (7,157,264) (142,506) (430,667) (166,078) (305,264)
------------- ------------ ------------ ----------- ------------
Net unrealized
appreciation............ $ 38,891,197 $ 2,680,951 $ 16,929,368 $ 1,971,289 $ 6,817,699
============ =========== =========== ========== ===========
</TABLE>
55
<PAGE> 95
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
5. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST -- Transactions in Shares of
Beneficial Interest were as follows:
<TABLE>
<CAPTION>
Vista Growth and Income Fund
----------------------------------------------------------
Years Ended October 31,
----------------------------------------------------------
1996 1995
--------------------------- ---------------------------
Amount Shares Amount Shares
------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold.................. $ 306,503,072 8,420,913 $ 337,830,616 10,674,446
Shares issued in reinvestment
of distributions........... 92,236,921 2,484,259 24,946,995 781,341
Shares redeemed.............. (513,091,350) (13,861,216) (464,207,149) (14,660,747)
------------- ----------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding... ($114,351,357) (2,956,044) ($101,429,538) (3,204,960)
============== =========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Growth and Income Fund
----------------------------------------------------------
Years Ended October 31,
----------------------------------------------------------
1996 1995
--------------------------- ---------------------------
Amount Shares Amount Shares
------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Class B
Shares sold.................. $ 79,219,484 2,192,200 $ 98,186,608 3,087,386
Shares issued in reinvestment
of distributions........... 16,665,854 458,019 2,937,427 92,139
Shares redeemed.............. (37,163,821) (1,018,127) (20,539,855) (637,757)
------------- ----------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding... $ 58,721,517 1,632,092 $ 80,584,180 2,541,768
============== =========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Growth and Income
Fund
---------------------------
1/25/96*
Through
10/31/96
---------------------------
Amount Shares
------------- -----------
<S> <C> <C>
Institutional Class
Shares sold.................. $ 33,434,619 905,660
Shares issued in reinvestment
of distributions........... 332,694 8,842
Shares redeemed.............. (7,467,722) (201,945)
------------- -----------
Net increase (decrease) in
Trust shares outstanding... $ 26,299,591 712,557
============== ===========
</TABLE>
56
<PAGE> 96
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Capital Growth Fund
--------------------------------------------------------------
Years Ended October 31,
--------------------------------------------------------------
1996 1995
----------------------------- -----------------------------
Amount Shares Amount Shares
--------------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold............... $ 1,071,881,119 28,226,297 $ 1,239,572,225 37,056,900
Shares issued in
reinvestment of
distributions........... 28,044,019 781,770 14,790,541 476,453
Shares redeemed........... (1,195,855,101) (31,513,482) (1,136,103,052) (33,640,091)
--------------- ----------- --------------- -----------
Net increase (decrease)
in Trust shares
outstanding............. ($ 95,929,963) (2,505,415) $ 118,259,714 3,893,262
=============== =========== =============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Capital Growth Fund
--------------------------------------------------------------
Years Ended October 31,
--------------------------------------------------------------
1996 1995
----------------------------- -----------------------------
Amount Shares Amount Shares
--------------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
Class B
Shares sold............... $ 77,108,472 2,040,428 $ 135,751,317 4,172,672
Shares issued in
reinvestment of
distributions........... 9,795,148 275,885 3,597,211 117,362
Shares redeemed........... (59,845,813) (1,574,692) (27,020,386) (812,120)
--------------- ----------- --------------- -----------
Net increase (decrease)
in Trust shares
outstanding............. $ 27,057,807 741,621 $ 112,328,142 3,477,914
=============== =========== =============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Capital Growth Fund
-----------------------------
1/25/96*
Through
10/31/96
-----------------------------
Amount Shares
--------------- -----------
<S> <C> <C>
Institutional Class
Shares sold............... $ 32,122,751 857,195
Shares issued in
reinvestment of
distributions........... 85,889 2,222
Shares redeemed........... (3,957,576) (101,705)
--------------- -----------
Net increase (decrease)
in Trust shares
outstanding............. $ 28,251,064 757,712
=============== ===========
</TABLE>
57
<PAGE> 97
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Small Cap Equity Fund
---------------------------------------------------------
12/20/94**
Year Ended Through
October 31, 1996 10/31/95
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold................... $ 138,067,616 7,720,099 $ 40,671,733 3,072,528
Shares issued in reinvestment
of distributions............ 686,496 43,642 43,355 3,317
Shares redeemed............... (65,215,259) (3,588,493) (2,447,710) (173,634)
Hanover acquisition........... 7,769,538 467,812 -- --
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 81,308,391 4,643,060 $ 38,267,378 2,902,211
============== ========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Small Cap Equity Fund
---------------------------------------------------------
03/28/95*
Year Ended Through
October 31, 1996 10/31/95
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class B
Shares sold................... $ 48,475,336 2,773,564 $ 19,979,829 1,477,956
Shares issued in reinvestment
of distributions............ 306,606 19,554 17,854 1,358
Shares redeemed............... (7,189,827) (407,340) (540,716) (38,576)
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 41,592,115 2,385,778 $ 19,456,967 1,440,738
============== ========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Small Cap Equity
Fund
--------------------------
5/07/96*
Through
10/31/96
--------------------------
Amount Shares
------------- ----------
<S> <C> <C>
Institutional Class
Shares sold................... $ 7,753,068 409,919
Shares issued in reinvestment
of distributions............ -- --
Shares redeemed............... (3,601) (186)
Hanover Acquisition........... 37,725,011 2,271,466
------------- ----------
Net increase (decrease) in
Trust shares outstanding.... $ 45,474,478 2,681,199
============== ==========
</TABLE>
58
<PAGE> 98
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Equity Income Fund
---------------------------------------------------------
Years Ended October 31,
---------------------------------------------------------
1996 1995
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold................... $ 5,415,420 357,907 $ 1,418,840 117,176
Shares issued in reinvestment
of distributions............ 878,167 63,521 576,869 49,758
Shares redeemed............... (2,986,103) (202,972) (2,798,836) (231,862)
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 3,307,484 218,456 ($ 803,127) (64,928)
============== ========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Equity Income Fund
--------------------------
5/07/96*
Through
10/31/96
--------------------------
Amount Shares
------------- ----------
<S> <C> <C>
Class B
Shares sold................... $ 546,464 35,836
Shares issued in reinvestment
of distributions............ 1,831 120
Shares redeemed............... (12,045) (792)
------------- ----------
Net increase (decrease) in
Trust shares outstanding.... $ 536,250 35,164
============== ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Large Cap Equity
Fund#
--------------------------
5/08/96*
Through
10/31/96
--------------------------
Amount Shares
------------- ----------
<S> <C> <C>
Class A
Shares sold................... $ 8,241,907 674,653
Shares issued in reinvestment
of distributions............ 40,764 3,227
Shares redeemed............... (606,869) (47,836)
------------- ----------
Net increase (decrease) in
Trust shares outstanding.... $ 7,675,802 630,044
============== ==========
</TABLE>
59
<PAGE> 99
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Large Cap Equity
Fund#
--------------------------
5/07/96*
Through
10/31/96
--------------------------
Amount Shares
------------- ----------
<S> <C> <C>
Class B
Shares sold................... $ 294,905 23,070
Shares issued in reinvestment
of distributions............ 500 38
Shares redeemed............... -- --
------------- ----------
Net increase (decrease) in
Trust shares outstanding.... $ 295,405 23,108
============== ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Large Cap Equity Fund#
---------------------------------------------------------
Years Ended October 31,
---------------------------------------------------------
1996 1995
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Institutional Class
Shares sold................... $ 13,383,049 1,087,973 $ 8,812,141 760,959
Shares issued in reinvestment
of distributions............ 7,388,210 646,401 13,164,314 1,297,064
Shares redeemed............... (45,574,669) (3,792,063) (31,770,485) (2,684,018)
Hanover acquisition........... 54,745,237 4,989,990 -- --
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 29,941,827 2,932,301 (9,794,030) (625,995)
============== ========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista American Value Fund
---------------------------------------------------------
12/01/96## 02/03/95**
Through Through
10/31/96 11/30/95
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold................... $ 1,539,038 122,851 $ 7,267,905 717,505
Shares issued in reinvestment
of distributions............ 316,992 25,852 44,599 4,188
Shares redeemed............... (1,647,329) (130,112) (295,230) (27,919)
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 208,701 18,591 $ 7,017,274 693,774
============== ========== ============== ===========
</TABLE>
60
<PAGE> 100
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Balanced Fund
---------------------------------------------------------
Years Ended October 31,
---------------------------------------------------------
1996 1995
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class A
Shares sold................... $ 11,377,412 866,348 $ 13,619,762 1,147,533
Shares issued in reinvestment
of distributions............ 1,999,265 154,306 1,074,605 94,732
Shares redeemed............... (7,725,832) (587,614) (5,578,221) (489,732)
IEEE merger................... 9,380,999 849,658 -- --
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 15,031,844 1,282,698 $ 9,116,146 752,533
============== ========== ============== ===========
</TABLE>
<TABLE>
<CAPTION>
Vista Balanced Fund
---------------------------------------------------------
Years Ended October 31,
---------------------------------------------------------
1996 1995
-------------------------- ---------------------------
Amount Shares Amount Shares
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class B
Shares sold................... $ 3,442,067 264,808 $ 2,522,739 219,604
Shares issued in reinvestment
of distributions............ 330,884 25,817 180,001 15,917
Shares redeemed............... (1,201,584) (92,310) (498,972) (44,230)
------------- ---------- ------------- -----------
Net increase (decrease) in
Trust shares outstanding.... $ 2,571,367 198,315 $ 2,203,768 191,291
============== ========== ============== ===========
</TABLE>
- ---------------
* Commencement of offering class of shares
** Fund commenced operations.
# Previously the Vista Equity Fund.
## In 1996, the fund changed its fiscal year end from November 30 to
October 31.
The period shown is December 1, 1995 through October 31, 1996.
61
<PAGE> 101
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
6. RETIREMENT PLAN -- The funds have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Funds who
will have served as an independent trustee for at least five years at the time
of retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the year ended October 31, 1996, included in
Trustees Fees and Expenses in the Statement of Operations, prepaid pension costs
and accrued pension liability included in other assets, and other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were as
follows:
<TABLE>
<CAPTION>
Prepaid Accrued
Pension Pension Pension
Expenses Asset Liability
-------- ------- -------
<S> <C> <C> <C>
GIF.................................................... $18,735 $58,067 $76,802
CGF.................................................... 9,883 30,632 40,515
VSCEF.................................................. 4,380 13,575 17,955
VEIF................................................... 288 894 1,182
VLCEF.................................................. 1,974 6,120 8,094
VAVF................................................... 177 549 726
VBAL................................................... 1,163 3,603 4,766
</TABLE>
7. MERGERS -- On May 6, 1996, The Vista American Value Fund acquired the net
assets of the Hanover American Value Fund in a tax-free reorganization. At the
time of the reorganization, the acquired Fund had approximately $8.4 million in
net assets. The Vista Fund had no assets and no activity prior to the
acquisition. The information included in the financial statements for the VAVF
for the period prior to May 6, 1996 relates to the predecessor Hanover Fund.
Also on May 6, 1996, The Vista Large Cap Equity Fund and the Vista Small Cap
Equity Fund acquired all of the net assets of the Hanover Blue Chip Growth Fund
and the Hanover Small Capitalization Growth Fund, respectively, pursuant to a
plan of reorganization approved by Hanover Fund shareholders in April of 1996.
The acquisition was accomplished by a tax-free exchange of shares as shown in
the table below.
On June 10, 1996, the Vista Balanced Fund acquired all the net assets of the
IEEE Balanced Fund pursuant to a plan of reorganization approved by the IEEE
Balanced Fund shareholders in April of 1996. The acquisition was accomplished by
a tax-free exchange of shares as shown in the table below.
<TABLE>
<CAPTION>
The Blue The Small
Chip Growth Capitalization
Acquired Funds Fund Growth Fund IEEE
------------ ------------ -----------
<S> <C> <C> <C>
Shares Exchanged.......................... 5,277,621 4,587,887 955,190
Net Assets (in millions).................. $ 60.4 $ 50.4 $ 11.3
</TABLE>
<TABLE>
<CAPTION>
Vista Vista Vista
Large Cap Small Cap Balanced
Vista Funds Equity Fund Equity Fund Fund
------------ ------------ -----------
<S> <C> <C> <C>
Vista Shares Issued....................... 4,989,990 2,739,278 849,658
Aggregate Net Assets After Acquisition.... $118,556,169 $194,143,252 $58,491,280
</TABLE>
62
<PAGE> 102
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Growth & Income Fund
-------------------------------------------------------------------------------
Class A Class B
------------------------------------------------------------------ --------
Year
Year Ended Ended
------------------------------------------------------------------ --------
10/31/96 10/31/95 10/31/94 10/31/93 10/31/92 10/31/96
---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............. $ 34.96 $ 30.26 $ 30.99 $ 26.60 $ 25.49 $ 34.81
---------- ---------- ---------- -------- -------- --------
Income From Investment Operations
Net Investment Income......................... 0.599 0.614 0.466 0.341 0.313 0.366
Net Gains or (Losses) in Securities (both
realized and unrealized).................... 5.960 4.710 (0.429) 5.007 2.702 5.984
---------- ---------- ---------- -------- -------- --------
Total from Investment Operations.............. 6.559 5.324 0.037 5.348 3.015 6.350
---------- ---------- ---------- -------- -------- --------
Less Distributions
Dividends from Net Investment Income.......... 0.549 0.621 0.422 0.338 0.313 0.379
Distributions from Capital Gains.............. 1.762 -- 0.345 0.620 1.587 1.762
---------- ---------- ---------- -------- -------- --------
Total Distributions........................... 2.311 0.621 0.767 0.958 1.900 2.141
---------- ---------- ---------- -------- -------- --------
Net Asset Value, End of Period................... $ 39.21 $ 34.96 $ 30.26 $ 30.99 $ 26.60 $ 39.02
========== ========== ========== ======== ======== ========
Total Return (1)................................. 19.60% 17.79% 0.15% 20.47% 12.34% 19.02%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)......... $1,590,893 $1,521,489 $1,413,899 $949,465 $149,506 $370,496
Ratio of Expenses to Average Net Assets #....... 1.32% 1.43% 1.40% 1.39% 1.43% 1.81%
Ratio of Net Investment Income to Average Net
Assets #...................................... 1.46% 1.93% 1.60% 1.07% 1.19% 0.95%
Ratio of Expenses Without Waivers and Assumption
of Expenses to Average Net Assets #........... 1.32% 1.45% 1.40% 1.39% 1.46% 1.81%
Ratio of Net Investment Income Without Waivers
and Assumptions of Expenses #................. 1.46% 1.91% 1.60% 1.07% 1.16% 0.95%
Portfolio Turnover Rate.......................... 41% 56%
<CAPTION>
Vista Growth & Income Fund
------------------------------------
Class B Class I
---------------------- ---------
Year Ended 11/4/93** 1/25/96**
---------- Through Through
10/31/95 10/31/94 10/31/96
-------- --------- ---------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............. $ 30.12 $ 30.39 $ 34.80
-------- -------- -------
Income From Investment Operations
Net Investment Income......................... 0.463 0.336 0.467
Net Gains or (Losses) in Securities (both
realized and unrealized).................... 4.700 0.109 4.459
-------- -------- -------
Total from Investment Operations.............. 5.163 0.445 4.926
-------- -------- -------
Less Distributions
Dividends from Net Investment Income.......... 0.470 0.370 0.471
Distributions from Capital Gains.............. -- 0.345 --
-------- -------- -------
Total Distributions........................... 0.470 0.715 0.471
-------- -------- -------
Net Asset Value, End of Period................... $ 34.81 $ 30.12 $ 39.26
======== ======== =======
Total Return (1)................................. 17.21% 1.55% 13.39%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)......... $273,685 $160,375 $27,974
Ratio of Expenses to Average Net Assets #....... 1.93% 1.89% 1.24%
Ratio of Net Investment Income to Average Net
Assets #...................................... 1.38% 1.21% 1.73%
Ratio of Expenses Without Waivers and Assumption
of Expenses to Average Net Assets #........... 1.94% 1.89% 1.24%
Ratio of Net Investment Income Without Waivers
and Assumptions of Expenses #................. 1.37% 1.21% 1.73%
Portfolio Turnover Rate..........................
</TABLE>
- ---------------
** Commencement of offering of class of shares.
# Short periods have been annualized.
(1) Total return figures do not include the effect of any sales load.
See notes to financial statements.
63
<PAGE> 103
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Capital Growth Fund
-------------------------------------------------------------------------
Class A Class B
------------------------------------------------------------ --------
Year
Year Ended Ended
------------------------------------------------------------ --------
10/31/96 10/31/95 10/31/94 10/31/93 10/31/92 10/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................. $ 35.65 $ 32.17 $ 32.01 $ 25.12 $ 22.02 $ 35.39
-------- -------- -------- -------- ------- --------
Income From Investment Operations
Net Investment Income............................. 0.147 0.189 0.099@ 0.064 0.078 (0.076)
Net Gains or (Losses) in Securities (both realized
and unrealized)................................. 7.270 4.160 0.719 7.173 3.044 7.246
-------- -------- -------- -------- ------- --------
Total from Investment Operations.................. 7.417 4.349 0.818 7.237 3.122 7.170
-------- -------- -------- -------- ------- --------
Less Distributions
Dividends from Net Investment Income.............. 0.117 0.189 0.027 0.093 0.017 --
Distributions from Capital Gains.................. 1.355 0.676 0.631 0.257 -- 1.355
-------- -------- -------- -------- ------- --------
Total Distributions............................... 1.472 0.865 0.658 0.350 0.017 1.355
-------- -------- -------- -------- ------- --------
Net Asset Value, End of Period....................... $ 41.60 $ 35.65 $ 32.17 $ 32.01 $ 25.12 $ 41.21
======== ======== ======== ======== ======= ========
Total Return (1)..................................... 21.48% 13.89% 2.62% 29.06% 14.16% 20.88%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)............. $767,998 $747,575 $549,411 $225,235 $39,836 $333,703
Ratio of Expenses to Average Net Assets #........... 1.37% 1.51% 1.49% 1.49% 1.40% 1.87%
Ratio of Net Investment Income to Average Net Assets
#................................................. 0.39% 0.54% 0.33% 0.12% 0.32% (0.21%)
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #.................. 1.37% 1.53% 1.50% 1.49% 1.77% 1.87%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #......................... 0.39% 0.52% 0.32% 0.12% (0.05%) (0.21%)
Portfolio Turnover Rate.............................. 43% 67%
<CAPTION>
Vista Capital Growth Fund
-----------------------------------
Class B Class I
----------------------- ---------
Year Ended 11/4/93** 1/25/96**
---------- Through Through
10/31/95 10/31/94 10/31/96
-------- --------- ---------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................. $ 32.03 $ 31.38 $ 35.26
-------- -------- -------
Income From Investment Operations
Net Investment Income............................. 0.044 0.011@ 0.172
Net Gains or (Losses) in Securities (both realized
and unrealized)................................. 4.100 1.296 6.336
-------- -------- -------
Total from Investment Operations.................. 4.144 1.307 6.508
-------- -------- -------
Less Distributions
Dividends from Net Investment Income.............. 0.111 0.026 0.122
Distributions from Capital Gains.................. 0.676 0.631 --
-------- -------- -------
Total Distributions............................... 0.787 0.657 0.122
-------- -------- -------
Net Asset Value, End of Period....................... $ 35.39 $ 32.03 $ 41.65
======== ======== =======
Total Return (1)..................................... 13.34% 4.19% 18.13%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)............. $260,376 $124,223 $31,556
Ratio of Expenses to Average Net Assets #........... 2.01% 2.00% 1.25%
Ratio of Net Investment Income to Average Net Assets
#................................................. 0.02% (0.09%) 0.81%
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #.................. 2.02% 2.02% 1.25%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #......................... 0.01% (0.11%) 0.81%
Portfolio Turnover Rate..............................
</TABLE>
- ---------------
** Commencement of offering of class of shares.
# Short periods have been annualized
@ Calculated based upon average shares outstanding.
(1) Total return figures do not include the effect of any sales load.
See notes to financial statements.
64
<PAGE> 104
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Equity
Income
Vista Small Cap Equity Fund Fund
--------------------------------------------------------------- --------
Class A Class B Class I Class A
---------------------- ---------------------- --------- --------
Year
Year 12/20/94* Year 3/28/95** 5/7/96** Ended
Ended Through Ended Through Through --------
10/31/96 10/31/95 10/31/96 10/31/95 10/31/96 10/31/96
-------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................. $ 15.07 $ 10.00 $ 15.01 $ 11.39 $ 18.44 $ 13.39
-------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income............................. 0.005 0.060 (0.074) (0.018) 0.023 0.348
Net Gains or (Losses) in Securities (both realized
and unrealized)................................. 4.328 5.056 4.248 3.669 0.757 3.434
-------- ------- ------- ------- ------- -------
Total from Investment Operations.................. 4.333 5.116 4.174 3.651 0.780 3.782
-------- ------- ------- ------- ------- -------
Less Distributions:
dividends from Net Investment Income.............. 0.033 0.042 -- 0.027 -- 0.329
Distributions from Capital Gains.................. 0.180 0.004 0.180 0.004 -- 0.863
-------- ------- ------- ------- ------- -------
Total Distributions............................... 0.213 0.046 0.180 0.031 -- 1.192
-------- ------- ------- ------- ------- -------
Net Asset Value, End of Period....................... $ 19.19 $ 15.07 $ 19.00 $ 15.01 $ 19.22 $ 15.98
======== ======= ======= ======= ======= =======
Total Return (1)..................................... 29.06% 51.25% 28.04% 32.09% 4.23% 29.79%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)............. $144,763 $43,739 $72,722 $21,624 $51,542 $17,493
Ratio of Expenses to Average Net Assets #........... 1.50% 1.51% 2.22% 2.24% 1.10% 1.50%
Ratio of Net Investment Income to Average Net Assets
#................................................. 0.03% 0.52% (0.68%) (0.25%) 0.27% 2.41%
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #.................. 1.52% 2.67% 2.25% 3.23% 1.27% 2.32%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #......................... 0.01% (0.64%) (0.71%) (1.24%) 0.10% 1.59%
Portfolio Turnover Rate.............................. 78% 75% 78% 75% 78% 114%
Average Commission Rate Paid per share............... $ 0.0595 -- $0.0595 -- $0.0595 $0.0587
<CAPTION>
Vista Equity Income Fund
------------------------------------------------
Class A Class B
--------------------- ---------
Year Ended 7/15/92* 5/7/96**
--------------------- Through Through
10/31/95 10/31/94 10/31/93 10/31/96
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period................. $ 12.12 $ 13.84 $ 13.14 $ 14.56
------- ------- ------- -------
Income from Investment Operations:
Net Investment Income............................. 0.347 0.290 0.078 0.134
Net Gains or (Losses) in Securities (both realized
and unrealized)................................. 1.698 (0.477) 0.700 1.376
------- ------- ------- -------
Total from Investment Operations.................. 2.045 (0.187) 0.778 1.510
------- ------- ------- -------
Less Distributions:
dividends from Net Investment Income.............. 0.366 0.258 0.078 0.151
Distributions from Capital Gains.................. 0.410 1.275 -- --
------- ------- ------- -------
Total Distributions............................... 0.776 1.533 0.078 0.151
------- ------- ------- -------
Net Asset Value, End of Period....................... $ 13.39 $ 12.12 $ 13.84 $ 15.92
======= ======= ======= =======
Total Return (1)..................................... 17.97% (1.35%) 5.91% 10.43%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)............. $11,737 $11,409 $15,321 $ 560
Ratio of Expenses to Average Net Assets #........... 1.50% 1.50% 1.50% 2.25%
Ratio of Net Investment Income to Average Net Assets
#................................................. 2.81% 2.31% 1.72% 1.75%
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #.................. 2.19% 2.02% 2.40% 2.75%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #......................... 2.12% 1.79% 0.82% 1.25%
Portfolio Turnover Rate.............................. 91% 75% 54% 114%
Average Commission Rate Paid per share............... -- -- -- $0.0587
</TABLE>
- ---------------
* Commencement of operations.
** Commencement of offering of class of shares.
# Short periods have been annualized.
(1) Total return figures do not include the effect of any sales load.
See notes to financial statements.
65
<PAGE> 105
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Large Cap Equity Fund*
--------------------------------------------------------------
Class A Class B Institutional Class
--------- --------- ----------------------------------
5/8/96** 5/7/96** Year Ended
Through Through ----------------------------------
10/31/96 10/31/96 10/31/96 10/31/95 10/31/94
--------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period....................... $ 12.06 $ 12.06 $ 12.24 $ 13.16 $ 13.65
------- ------- ------- ------- --------
Income from Investment Operations:
Net Investment Income................................... 0.050 0.050 0.227 0.277 0.298
Net Gains or (Losses) in Securities (both realized and
unrealized)........................................... 1.209 1.187 2.597 1.744 0.263
------- ------- ------- ------- --------
Total from Investment Operations........................ 1.259 1.237 2.824 2.021 0.561
------- ------- ------- ------- --------
Less Distributions:
Dividends from Net Investment Income.................... 0.069 0.077 0.224 0.282 0.290
Distributions from Capital Gains........................ -- -- 1.570 2.659 0.761
------- ------- ------- ------- --------
Total Distributions..................................... 0.069 0.077 1.794 2.941 1.051
------- ------- ------- ------- --------
Net Asset Value, End of Period............................. $ 13.25 $ 13.22 $ 13.27 $ 12.24 $ 13.16
======= ======= ======= ======= ========
Total Return(1)............................................ 10.84% 6.66% 25.65% 20.41% 4.37%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)................... $ 8,349 $ 305 $99,025 $55,417 $67,818
Ratio of Expenses to Average Net Assets #................. 1.38% 1.88% 0.40% 0.31% 0.31%
Ratio of Net Investment Income to Average Net Assets #.... 0.84% 0.14% 1.86% 2.41% 2.30%
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #........................ 1.87% 2.38% 0.96% 0.90% 0.95%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #............................... 0.35% (0.36%) 1.30% 1.82% 1.66%
Portfolio Turnover Rate.................................... 89% 89% 89% 45% 53%
Average Commission Rate Paid per share..................... $0.0598 $0.0598 $0.0598 -- --
<CAPTION>
Vista Large Cap Equity Fund*
-----------------------------
Institutional Class
-----------------------------
Year Ended 7/1/92(2)
---------- Through
10/31/93 10/31/92
-------- ----------
<S> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period....................... $ 12.56 $ 12.50
-------- --------
Income from Investment Operations:
Net Investment Income................................... 0.302 0.080
Net Gains or (Losses) in Securities (both realized and
unrealized)........................................... 1.153 0.500
-------- --------
Total from Investment Operations........................ 1.455 0.580
-------- --------
Less Distributions:
Dividends from Net Investment Income.................... 0.304 0.140
Distributions from Capital Gains........................ 0.062 0.380
-------- --------
Total Distributions..................................... 0.366 0.520
-------- --------
Net Asset Value, End of Period............................. $ 13.65 $ 12.56
======== ========
Total Return(1)............................................ 11.73% 4.78%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)................... $120,635 $106,088
Ratio of Expenses to Average Net Assets #................. 0.31% 0.30%
Ratio of Net Investment Income to Average Net Assets #.... 2.30% 1.96%
Ratio of Expenses Without Waivers and Assumption of
Expenses to Average Net Assets #........................ 0.88% 0.80%
Ratio of Net Investment Income Without Waivers and
Assumptions of Expenses #............................... 1.73% 1.46%
Portfolio Turnover Rate.................................... 33% 5%
Average Commission Rate Paid per share..................... -- --
</TABLE>
- ---------------
* Formerly Vista Equity Fund.
** Commencement of offering of class of shares.
# Short periods have been annualized.
(1) Total returns figures do not include the effect of any sales load.
(2) In 1992, the Fund's fiscal year-end was changed from June 30 to October 31.
See notes to financial statements.
66
<PAGE> 106
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Balanced Fund
Vista American ----------------------------------
Value Fund Class A
------------------------ ----------------------------------
12/1/95## 2/3/95* Year Ended
Through Through ----------------------------------
10/31/96 11/30/95 10/31/96 10/31/95 10/31/94
---------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period........................... $ 12.11 $ 10.00 $ 12.45 $ 11.09 $ 11.38
------- ------ ------- ------- -------
Income from Investment Operations:
Net Investment Income....................................... 0.152 0.180 0.353 0.382 0.356
Net Gains or (Losses) in Securities (both realized and
unrealized)............................................... 1.694 2.000 1.692 1.517 (0.187)
------- ------ ------- ------- -------
Total from Investment Operations............................ 1.846 2.180 2.045 1.899 0.169
------- ------ ------- ------- -------
Less Distributions:
Dividends from Net Investment Income........................ 0.196 0.070 0.345 0.408 0.359
Distributions from Capital Gains............................ 0.270 -- 0.320 0.131 0.100
------- ------ ------- ------- -------
Total Distributions......................................... 0.466 0.070 0.665 0.539 0.459
------- ------ ------- ------- -------
Net Asset Value, End of Period................................. $ 13.49 $ 12.11 $ 13.83 $ 12.45 $ 11.09
======= ====== ======= ======= =======
Total Return (1)............................................... 15.76% 21.80% 16.89% 17.70% 1.56%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)....................... $ 9,609 $ 8,399 $55,233 $33,733 $21,705
Ratio of Expenses to Average Net Assets #..................... 1.37% 1.23% 1.25% 1.06% 0.58%
Ratio of Net Investment Income to Average Net Assets #........ 1.38% 1.97% 2.97% 3.48% 3.21%
Ratio of Expenses Without Waivers and Assumption of Expenses
to Average Net Assets #..................................... 2.52% 2.03% 1.78% 2.20% 2.20%
Ratio of Net Investment Income Without Waivers and Assumptions
of Expenses #............................................... 0.23% 1.17% 2.44% 2.34% 1.59%
Portfolio Turnover Rate........................................ 25% 11% 149% 68% 77%
Average Commission Rate Paid per share......................... $ 0.0793 -- $0.0598 -- --
<CAPTION>
Vista Balanced Fund
-------------------------------------------------
Class A Class B
-------- ------------------------------------
11/4/92* Year Ended 11/4/93**
Through --------------------- Through
10/31/93 10/31/96 10/31/95 10/31/94
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period........................... $ 10.00 $ 12.36 $11.03 $11.22
------- ------- ------- -------
Income from Investment Operations:
Net Investment Income....................................... 0.410 0.283 0.309 0.345
Net Gains or (Losses) in Securities (both realized and
unrealized)............................................... 1.344 1.656 1.502 (0.117)
------- ------- ------- -------
Total from Investment Operations............................ 1.754 1.939 1.811 0.228
------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income........................ 0.375 0.279 0.131 0.318
Distributions from Capital Gains............................ -- 0.320 0.350 0.100
------- ------- ------- -------
Total Distributions......................................... 0.375 0.599 0.481 0.418
------- ------- ------- -------
Net Asset Value, End of Period................................. $ 11.38 $ 13.70 $12.36 $11.03
======= ======= ======= =======
Total Return (1)............................................... 17.74% 16.10% 16.93% 2.17%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)....................... $13,920 $ 9,737 $6,336 $3,543
Ratio of Expenses to Average Net Assets #..................... -- 2.00% 1.82% 1.50%
Ratio of Net Investment Income to Average Net Assets #........ 3.87% 2.21% 2.68% 2.46%
Ratio of Expenses Without Waivers and Assumption of Expenses
to Average Net Assets #..................................... 3.07% 2.29% 2.72% 2.69%
Ratio of Net Investment Income Without Waivers and Assumptions
of Expenses #............................................... 0.80% 1.92% 1.78% 1.24%
Portfolio Turnover Rate........................................ 65% 149% 68% 77%
Average Commission Rate Paid per share......................... -- $0.0598 -- --
</TABLE>
- ---------------
* Commencement of operations.
** Commencement of offering of class of shares.
# Short periods have been annualized.
(1) Total return figures do not include the effect of any sales load.
## In 1996, the Fund changed its fiscal year end from November 30 to
October 31.
See notes to financial statements.
67
<PAGE> 107
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Mutual Fund Group
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the selected per share data and ratios for a share of
beneficial interest outstanding present fairly, in all material respects, the
financial position of Vista Growth & Income Fund, Vista Capital Growth Fund,
Vista Small Cap Equity Fund, Vista Equity Income Fund, Vista Large Cap Equity
Fund (formerly Vista Equity Fund), Vista American Value Fund and Vista Balanced
Fund (separate portfolios of Mutual Fund Group, hereafter referred to as the
"Trust") at October 31, 1996, the results of each of their operations for the
year then ended (for the period December 1, 1995 through October 31, 1996 for
Vista American Value Fund), the changes in each of their net assets for each of
the two years in the period then ended (for the period December 1, 1995 through
October 31, 1996 for Vista American Value Fund, for the year then ended and for
the period December 20, 1994 (commencement of operations) through October 31,
1995 for Vista Small Cap Equity Fund), and the selected per share data and
ratios for a share of beneficial interest outstanding for each of the periods
presented (for the period December 1, 1995 through October 31, 1996 for Vista
American Value Fund), in conformity with generally accepted accounting
principles. These financial statements and selected per share data and ratios
for a share of beneficial interest outstanding (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 audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards 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 audits, which included confirmation of securities at October
31, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. The
financial statements of Vista American Value Fund (formerly Hanover American
Value Fund) for the period February 3, 1995 (commencement of operations) through
November 30, 1995 were audited by other independent accountants whose report
dated January 19, 1996 expressed an unqualified opinion on those financial
statements.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 10, 1996
68
<PAGE> 108
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 94.0%
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 86.0%
---------------------
AEROSPACE -- 1.9%
300,000 Allied-Signal, Inc. $ 19,650,000
115,600 General Motors, Class H 6,170,150
110,000 United Technologies, Corp. 14,162,500
--------------
39,982,650
--------------
AGRICULTURAL PRODUCTION/SERVICES -- 2.0%
350,000 AGCO Corp. 8,881,250
355,000 Case Corp. 16,507,500
400,000 Deere & Co. 16,700,000
--------------
42,088,750
--------------
AIRLINES -- 0.5%
126,590 AMR Corp. * 10,633,560
--------------
AUTOMOTIVE -- 1.4%
300,000 Chrysler Corp. 10,087,500
200,000 General Motors 10,775,000
250,000 Lear Corp. * 9,250,000
--------------
30,112,500
--------------
BANKING -- 5.8%
400,000 Bank of Boston Corp. 25,600,000
145,000 BankAmerica Corp. 13,267,500
175,000 Citicorp 17,325,000
204,333 Commonwealth Bank of Australia, ADR (Australia) # 3,677,994
(Preference Stock)
220,000 First Union Corp. 16,005,000
425,000 National City Corp. 18,434,375
135,000 NationsBank Corp. 12,723,750
350,000 Norwest Corp. 15,356,250
--------------
122,389,869
--------------
BIOTECHNOLOGY -- 0.5%
160,000 Amgen, Inc. 9,810,000
--------------
CHEMICALS -- 3.0%
110,000 Dow Chemical Co. 8,552,500
245,000 duPont (EI) deNemours & Co. 22,723,750
340,000 IMC Global, Inc. 12,750,000
225,000 Praxair, Inc. 9,956,250
200,000 Union Carbide Corp. 8,525,000
--------------
62,507,500
--------------
</TABLE>
See notes to financial statements.
69
<PAGE> 109
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE -- 3.0%
350,000 Cisco Systems, Inc. * $ 21,656,250
300,000 Computer Associates International 17,737,500
90,000 Microsoft Corp. * 12,352,500
446,000 Reynolds & Reynolds, Inc., Class A 11,763,250
--------------
63,509,500
--------------
COMPUTERS/COMPUTER HARDWARE -- 6.4%
300,000 Analog Devices, Inc. * 7,800,000
350,000 Compaq Computer Corp. * 24,368,750
400,000 EMC Corp. * 10,500,000
230,000 Intel Corp. 25,271,250
145,000 International Business Machines Corp. 18,705,000
100,000 SCI Systems, Inc. * 4,975,000
100,000 Seagate Technology, Inc. * 6,675,000
250,000 Storage Technology Corp. * 10,656,250
220,000 Sun Microsystems, Inc. * 13,420,000
275,000 Texas Instruments 13,234,375
--------------
135,605,625
--------------
CONSTRUCTION MACHINERY -- 0.5%
160,000 Caterpillar Inc. 10,980,000
--------------
CONSUMER PRODUCTS -- 6.4%
450,000 Avon Products, Inc. 24,412,500
375,000 Black & Decker Corp. 14,015,625
185,000 Colgate-Palmolive Co. 17,020,000
350,000 Fruit of the Loom, Inc., Class A * 12,731,250
200,000 Liz Claiborne, Inc. 8,450,000
270,000 Nike, Inc., Class B 15,896,250
185,000 Philip Morris Companies, Inc. 17,135,625
250,000 Procter & Gamble Co. 24,750,000
--------------
134,411,250
--------------
DIVERSIFIED -- 0.5%
115,000 Textron, Inc. 10,206,250
--------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 0.5%
115,000 General Electric Co. 11,126,250
--------------
ENTERTAINMENT/LEISURE -- 1.8%
700,000 Carnival Corp., Class A 21,087,500
330,000 Circus Circus Enterprises Inc. * 11,385,000
325,000 Trump Hotels & Casino Resorts, Inc. * 5,159,375
--------------
37,631,875
--------------
</TABLE>
See notes to financial statements.
70
<PAGE> 110
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES -- 3.3%
574,500 Countrywide Credit Industries, Inc. $ 16,373,250
175,000 Federal Home Loan Mortgage Corp. 17,675,000
360,000 Federal National Mortgage Assoc. 14,085,000
505,000 Green Tree Financial Corp. 20,010,625
--------------
68,143,875
--------------
FOOD/BEVERAGE PRODUCTS -- 4.4%
540,000 Coca-Cola Enterprises, Inc. 23,017,500
460,000 ConAgra, Inc. 22,942,500
535,000 PepsiCo., Inc. 15,849,375
430,000 Sara Lee Corp. 15,265,000
100,000 Unilever NV, ADR (Netherlands) 15,287,500
--------------
92,361,875
--------------
HEALTH CARE -- 2.9%
571,000 Columbia/HCA Healthcare Corp. 20,413,250
495,000 HEALTHSOUTH Corp. * 18,562,500
180,000 Medtronic, Inc. 11,587,500
500,000 Tenet Healthcare Corp. * 10,437,500
--------------
61,000,750
--------------
INSURANCE -- 4.3%
150,000 Aetna Inc. 10,031,250
335,000 AFLAC, Inc. 13,441,875
455,110 Allstate Corp. 25,543,049
110,500 American International Group 12,003,063
125,000 Loews Corp. 10,328,125
220,000 Mid Ocean, Ltd. (Bermuda) 10,340,000
140,000 Reliastar Financial Corp. 7,420,000
750 Transport Holdings, Inc., Class A * 57,000
--------------
89,164,362
--------------
MANUFACTURING -- 3.4%
350,000 Ingersoll-Rand Co. 14,568,750
225,000 Johnson Controls 16,425,000
175,000 Kennametal Inc. 5,950,000
370,000 Parker Hannifin Corp. 14,013,750
400,000 Tyco International Ltd. 19,850,000
--------------
70,807,500
--------------
METALS/MINING -- 1.4%
310,000 Aluminum Co. of America (ALCOA) 18,173,750
335,000 Inco, Ltd. 10,636,250
--------------
28,810,000
--------------
</TABLE>
See notes to financial statements.
71
<PAGE> 111
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
OFFICE/BUSINESS EQUIPMENT -- 0.7%
310,000 Xerox Corp. $ 14,376,250
--------------
OIL & GAS -- 8.2%
150,000 Amoco Corp. 11,362,500
125,000 British Petroleum PLC, ADR (United Kingdom) 16,078,125
300,000 Halliburton Company 16,987,500
195,000 Mobil Corp. 22,766,250
601,500 PanEnergy Corp. 23,157,750
355,000 Phillips Petroleum Co. 14,555,000
224,200 Smith International * 8,519,600
190,000 Texaco, Inc. 19,308,750
140,000 Tidewater, Inc. 6,125,000
250,000 Unocal Corp. 9,156,250
445,000 Williams Companies, Inc. 23,251,250
--------------
171,267,975
--------------
PAPER/FOREST PRODUCTS -- 1.1%
325,000 Fort Howard Corp. * 8,328,125
220,000 Willamette Industries 14,850,000
--------------
23,178,125
--------------
PHARMACEUTICALS -- 4.2%
420,000 American Home Products Corp. 25,725,000
90,000 Bristol-Myers Squibb Co. 9,517,500
340,000 Johnson & Johnson 16,745,000
200,000 Schering-Plough Corp. 12,800,000
361,300 SmithKline Beecham PLC, ADR (United Kingdom) 22,626,413
--------------
87,413,913
--------------
PHOTOGRAPHIC EQUIPMENT -- 0.5%
135,000 Eastman Kodak Co. 10,766,250
--------------
PRINTING & PUBLISHING -- 1.5%
100,000 Harcourt General, Inc. 4,975,000
370,000 New York Times Company, Class A 13,366,250
150,000 Tribune Co. 12,262,500
--------------
30,603,750
--------------
REAL ESTATE INVESTMENT TRUST -- 1.3%
283,500 Beacon Properties Corp. 8,327,813
170,000 Equity Residential Properties Trust 6,247,500
280,000 Hospitality Properties Trust 7,280,000
210,000 Security Capital Industrial Trust 3,806,250
--------------
25,661,563
--------------
</TABLE>
See notes to financial statements.
72
<PAGE> 112
o
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
RESTAURANTS/FOOD SERVICE -- 0.4%
400,000 Wendy's International, Inc. $ 8,250,000
--------------
RETAILING -- 4.2%
320,000 American Stores Co. 13,240,000
420,000 Dayton-Hudson Corp. 14,542,500
350,000 Federated Department Stores * 11,550,000
470,000 Gap, Inc. 13,630,000
542,500 Kroger Co. * 24,209,063
225,000 Sears Roebuck & Co. 10,884,375
--------------
88,055,938
--------------
SHIPPING/TRANSPORTATION -- 1.3%
150,000 Burlington Northern, Inc. 12,356,250
130,000 Federal Express Corp. * 10,465,000
130,000 Ryder System 3,867,500
--------------
26,688,750
--------------
TELECOMMUNICATIONS -- 5.4%
500,000 BellSouth Corp. 20,375,000
183,000 CPT Telefonica del Peru S.A., ADR (Peru) 3,774,375
300,000 Frontier Corp. 8,700,000
300,000 GTE Corp. 12,637,500
72,918 Lucent Technologies, Inc. 3,427,146
400,000 Sprint Corp. 15,700,000
800,000 Telefonaktiebolaget LM Ericsson, Sp, ADR (Sweden) 22,100,000
150,000 Telefonica de Espana, ADR (Spain) 9,037,500
270,000 U S West, Inc. 8,201,250
350,000 WorldCom, Inc. 8,531,250
--------------
112,484,021
--------------
UTILITIES -- 3.3%
200,000 CINergy Corp. 6,625,000
370,000 FPL Group Inc. 17,020,000
350,000 GPU, Inc. 11,506,250
120,000 Northern States Power Co. 5,640,000
500,000 Pinnacle West Capital Corp. 15,437,500
280,000 Texas Utilities Co. 11,340,000
--------------
67,568,750
--------------
TOTAL COMMON STOCK (COST $1,437,565,995) 1,797,599,226
--------------
CONVERTIBLE PREFERRED STOCK -- 4.6%
-----------------------------------
AIRLINES -- 0.3%
90,000 Continental Air Finance Trust, 8.50%, 12/01/20 # 5,535,000
--------------
</TABLE>
See notes to financial statements.
73
<PAGE> 113
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE -- 0.2%
45,000 Ford Motor Co., Ser. A, 8.4% $ 4,601,250
--------------
BROADCASTING -- 0.2%
100,000 American Radio Systems, 7.00%, # 4,900,000
--------------
COMPUTERS/COMPUTER HARDWARE -- 0.3%
50,000 Ceridian Corp., 5.5% 5,450,000
--------------
CONSUMER PRODUCTS -- 0.9%
700,000 RJR Nabisco Holdings Corp., 9.25%, Ser. C 3,937,500
960,000 Westinghouse Electric, $1.30, Ser. C # 15,255,360
--------------
19,192,860
--------------
ENTERTAINMENT/LEISURE -- 0.4%
200,000 Time Warner Financing Trust, $1.24 7,750,000
--------------
FINANCIAL SERVICES -- 0.6%
100,000 American General Delaware, $3.00, Ser. A 5,225,000
91,000 SunAmerica Inc., $3.188, 10/31/99 Ser. 3,412,500
148,000 The Money Store, $1.720, 12/01/99 Ser. 3,848,000
--------------
12,485,500
--------------
HEALTH CARE -- 0.3%
225,000 FHP International Corp., Ser. A, 5.0% 6,468,750
--------------
INSURANCE -- 0.2%
67,000 American Bankers Insurance Group, 6.25%, Ser. B 3,844,125
--------------
OIL & GAS -- 0.7%
90,000 Diamond Shamrock, 5% # 5,190,120
140,000 Occidental Petroleum, $3.00 8,995,000
--------------
14,185,120
--------------
PAPER/FOREST PRODUCTS -- 0.4%
175,000 International Paper Capital Corp., 5.25% # 8,461,075
--------------
TELECOMMUNICATIONS -- 0.1%
40,000 Viacom International, 5.0%, 7/31/06 Ser. 3,320,000
--------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $88,416,322) 96,193,680
--------------
</TABLE>
See notes to financial statements.
74
<PAGE> 114
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS & NOTES -- 1.4%
-------------------------------
AUTOMOTIVE -- 0.2%
$ 4,500,000 Magna International Inc., 5.00%, 10/15/02 $ 4,910,355
--------------
COMPUTER HARDWARE -- 0.2%
4,000,000 Quantum Corp., 5.00%, 03/01/03 # 4,360,000
--------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 0.3%
7,000,000 Xilinx Inc., 5.25%, 11/01/02 # 6,600,300
--------------
FINANCIAL SERVICES -- 0.5%
1,500,000 Aames Financial Corp., 5.50%, 03/15/06 # 2,444,985
6,600,000 South African Pulp & Paper Industries, BVI Finance 6,121,500
Ltd., 7.50%, 06/30/06
2,000,000 UBS Finance of Delaware, 2.00%, 12/15/00 1,870,000
--------------
10,436,485
--------------
HEALTH CARE -- 0.2%
4,000,000 Tenet Healthcare Corp., 6.00%, 12/01/05 4,095,000
--------------
TOTAL CORPORATE BONDS & NOTES (COST $29,600,000) 30,402,140
--------------
CONVERTIBLE CORPORATE BONDS & NOTES -- 2.0%
-------------------------------------------
COMPUTERS/COMPUTER HARDWARE -- 0.2%
4,000,000 Applied Magnetics Corp., 7.00%, 3/15/06 # 5,166,000
--------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 0.2%
3,850,000 SCI Systems Inc., 5.00%, 05/01/06 # 4,706,625
--------------
FINANCIAL SERVICES -- 0.2%
2,300,000 First Financial Management, 5.00%, 12/15/99 4,315,306
--------------
HEALTH CARE -- 0.1%
1,200,000 Sterling House, 6.75%, 06/30/06 # 984,000
--------------
HOTELS/OTHER LODGING -- 0.4%
6,885,000 Hilton Hotels Corp., 5.00%, 05/15/06 7,625,138
--------------
</TABLE>
See notes to financial statements.
75
<PAGE> 115
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
<C> <S> <C>
MANUFACTURING -- 0.4%
$ 4,000,000 3 Com Corp., 10.25%, 11/01/01 # $ 8,265,640
1,000,000 Waban Inc., 6.50%, 07/01/02 1,093,750
--------------
9,359,390
--------------
PHARMACEUTICALS -- 0.3%
5,000,000 ICN Pharmaceuticals, 8.50%, 11/15/99 5,385,950
--------------
RETAILING -- 0.2%
4,000,000 Federated Department Stores *, 5.00%, 10/01/03 4,612,520
--------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES 42,154,929
(COST $32,207,500)
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 1,966,349,975
(COST $1,587,789,817)
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 6.4%
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 1.0%
------------------------------------------
20,000,000 Federal Home Loan Mortgage Corp., Discount Notes, 19,965,867
5.12%, 11/13/96 --------------
COMMERCIAL PAPER -- 5.4%
------------------------
20,000,000 Cargill Inc., 5.27%, 11/22/96 19,938,517
20,000,000 Commerzbank US Finance Inc., 5.24%, 11/20/96 19,944,689
33,716,000 Household Finance Corp., 5.40%, 11/01/96 33,716,000
20,000,000 Lucent Technologies, Inc., 5.21%, 11/22/96 19,939,217
20,000,000 Merrill Lynch & Co., Inc., 5.25%, 11/13/96 19,965,000
--------------
113,503,423
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 133,469,290
(COST $133,469,290)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.4% $2,099,819,265
(COST $1,721,259,107)
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
76
<PAGE> 116
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 93.2%
- ----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 92.1%
---------------------
AEROSPACE -- 2.0%
87,503 Precision Castparts Corp. $ 4,090,625
216,100 Rohr Industries, Inc. * 3,997,850
325,000 Sundstrand Corp. 13,081,250
--------------
21,169,725
--------------
AGRICULTURAL PRODUCTION/SERVICES -- 1.6%
410,000 AGCO Corp. 10,403,750
153,500 Case Corp. 7,137,750
--------------
17,541,500
--------------
AIRLINES -- 1.2%
500,000 Continental Airlines, Inc., Class B * 12,562,500
--------------
AUTOMOTIVE -- 1.2%
350,000 Lear Corp. * 12,950,000
--------------
BANKING -- 4.4%
220,000 Bank of Boston Corp. 14,080,000
300,000 Southtrust Corp. 9,937,500
200,000 Standard Federal Bancorp. 10,700,000
150,000 Zions Bancorporation 13,575,000
--------------
48,292,500
--------------
BROADCASTING -- 0.5%
200,000 Tele-Communications, Inc., Liberty Media Group, 5,150,000
Class A * --------------
BUSINESS SERVICES -- 2.6%
425,000 Equifax, Inc. 12,643,750
200,000 PHH Corp. 5,950,000
385,000 Primark Corp. * 9,576,875
--------------
28,170,625
--------------
CHEMICALS -- 2.8%
825,000 Agrium, Inc. 11,034,375
200,000 Cabot Corp. 4,825,000
135,000 Cytec Industries, Inc. * 4,826,250
250,000 IMC Global, Inc. 9,375,000
--------------
30,060,625
--------------
</TABLE>
See notes to financial statements.
77
<PAGE> 117
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE -- 5.0%
160,000 American Management Systems, Inc. * $ 5,060,000
241,000 Computervision Corp. * 2,169,000
214,500 DST Systems, Inc. * 6,595,875
600,000 Reynolds & Reynolds, Inc., Class A 15,825,000
238,890 Sterling Commerce, Inc. * 6,718,781
150,000 Sterling Software, Inc. 4,875,000
550,000 Vanstar Corp. * 13,062,500
--------------
54,306,156
--------------
COMPUTERS/COMPUTER HARDWARE -- 5.5%
500,000 EMC Corp. * 13,125,000
100,000 Gateway 2000 Inc. * 4,706,250
200,000 SCI Systems, Inc. * 9,950,000
120,000 Seagate Technology, Inc. * 8,010,000
200,000 Solectron Corp. * 10,700,000
300,000 Storage Technology Corp. * 12,787,500
17,500 U.S. Robotics Corp. * 1,100,313
--------------
60,379,063
--------------
CONSUMER PRODUCTS -- 4.8%
250,000 Black & Decker Corp. 9,343,750
550,000 First Brands Corp. 15,606,250
450,000 Fruit of the Loom, Inc., Class A * 16,368,750
200,000 Jones Apparel Group, Inc. * 6,250,000
125,000 Liz Claiborne, Inc. 5,281,250
--------------
52,850,000
--------------
DIVERSIFIED -- 0.6%
150,000 Harnischfeger Industries, Inc. 6,000,000
--------------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 5.8%
285,000 Adaptec, Inc. * 17,349,375
350,000 ADT Ltd. * 6,912,500
275,000 Atmel Corp. * 6,978,125
77,500 Harman International Industries, Inc. 3,981,563
120,000 Teleflex, Inc. 5,775,000
250,000 Teradyne Inc. * 3,968,750
349,500 UCAR International, Inc. * 13,674,188
150,000 Xilinx, Inc. * 4,912,500
--------------
63,552,001
--------------
</TABLE>
See notes to financial statements.
78
<PAGE> 118
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT/LEISURE -- 4.3%
500,000 Aztar Corp. * $ 4,062,500
600,000 Carnival Corp., Class A 18,075,000
175,000 Circus Circus Enterprises Inc. * 6,037,500
400,000 International Game Technology 8,450,000
400,000 Mirage Resorts, Inc. * 8,800,000
--------------
45,425,000
--------------
FINANCIAL SERVICES -- 5.6%
75,000 Aames Financial Corp. 3,346,875
100,000 Advanta Corp., Class A 4,831,250
400,000 Countrywide Credit Industries, Inc. 11,400,000
100,000 Finova Group, Inc. 6,175,000
200,000 First USA, Inc. 11,500,000
300,000 Green Tree Financial Corp. 11,887,500
260,000 The Money Store, Inc. 6,695,000
100,000 The PMI Group, Inc. 5,712,500
--------------
61,548,125
--------------
FOOD/BEVERAGE PRODUCTS -- 0.4%
100,000 Coca-Cola Enterprises, Inc. 4,262,500
--------------
HEALTH CARE -- 11.6%
300,000 Beckman Instruments, Inc. 11,025,000
1,000,000 Beverly Enterprises * 12,375,000
100,000 Foundation Health Corp. * 2,987,500
100,000 HBO & Co. 5,967,000
300,000 HEALTHSOUTH Corp. 11,250,000
135,000 Lincare Holdings, Inc. * 5,062,500
220,000 Omnicare, Inc. 5,995,000
550,000 OrNda Healthcorp * 14,987,500
300,000 PhyCor, Inc. 9,300,000
250,000 Steris Corp. * 9,437,500
175,000 Sybron International Corp. * 5,096,875
500,000 Tenet Healthcare Corp. * 10,437,500
419,000 Universal Health Services, Inc., Class B * 10,475,000
300,000 US Surgical Corp. 12,562,500
--------------
126,958,875
--------------
HOME BUILDING CONSTRUCTION -- 1.0%
400,000 Oakwood Homes Corp. 10,600,000
--------------
</TABLE>
See notes to financial statements.
79
<PAGE> 119
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE -- 8.2%
240,000 ACE, Ltd. # $ 13,140,000
200,000 AFLAC, Inc. 8,025,000
125,000 American Bankers Insurance Group, Inc. 6,000,000
100,000 Conseco Inc. 5,350,000
200,000 MGIC Investment Corp. 13,725,000
265,000 Mid Ocean, Ltd. (Bermuda) 12,455,000
200,000 Reliastar Financial Corp. 10,600,000
200,000 SunAmerica, Inc. 7,500,000
170,000 Transatlantic Holdings, Inc. 12,240,000
--------------
89,035,000
--------------
MANUFACTURING -- 2.8%
85,000 Johnson Controls 6,205,000
310,000 Kennametal Inc. 10,540,000
157,500 Mark IV Industries 3,405,938
150,000 Parker Hannifin Corp. 5,681,250
200,000 Pentair, Inc. 5,050,000
--------------
30,882,188
--------------
METAL/MINING -- 0.5%
150,000 Trinity Industries, Inc. 5,193,750
--------------
OFFICE SUPPLIES -- 0.9%
150,000 Avery Dennison Corp. 9,881,250
--------------
OIL & GAS -- 3.7%
300,000 Coflexip SA, ADR (France) 6,750,000
400,000 Noble Drilling Corp. * 7,450,006
200,000 PanEnergy Corp. 7,700,000
150,000 Smith International * 5,700,000
300,000 Tidewater, Inc. 13,125,000
--------------
40,725,006
--------------
PAPER/FOREST PRODUCTS -- 0.4%
150,000 Boise Cascade Corp. 4,650,000
--------------
PIPELINES -- 0.8%
150,000 Columbia Gas System, Inc. 9,112,500
--------------
</TABLE>
See notes to financial statements.
80
<PAGE> 120
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST -- 2.1%
200,000 Equity Residential Properties Trust $ 7,350,000
175,000 FelCor Suite Hotels, Inc. 5,731,250
222,400 Home Properties of New York, Inc. 4,448,000
200,000 Liberty Property Trust 4,325,000
100,000 ROC Communities, Inc. 2,437,500
--------------
24,291,750
--------------
RESTAURANTS/FOOD SERVICE -- 0.7%
375,000 Wendy's International, Inc. 7,734,375
--------------
RETAILING -- 3.8%
825,000 Eckerd Corp. * 22,893,750
150,000 Ethan Allen Interiors, Inc. * 5,362,500
150,000 Kroger Co. * 6,693,750
150,000 Proffitt's, Inc. * 6,056,250
--------------
41,006,250
--------------
STEEL -- 1.2%
50,000 AK Steel Holding Corp. 1,775,000
700,000 Birmingham Steel Corp. 11,200,000
--------------
12,975,000
--------------
TELECOMMUNICATIONS -- 2.7%
311,200 Aspect Telecommunications Corp. * 18,516,400
90,000 CPT Telefonica del Peru S.A., ADR (Peru) 1,856,250
300,000 Nextel Communications Inc., Class A * 4,800,000
250,000 Octel Communications Corp. * 3,968,750
--------------
29,141,400
--------------
TEXTILES -- 0.7%
256,600 Unifi, Inc. 7,986,675
--------------
</TABLE>
See notes to financial statements.
81
<PAGE> 121
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ----------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES -- 2.7%
400,000 American Power Conversion Corp. * $ 8,550,000
200,000 CINergy Corp. 6,625,000
220,000 DPL, Inc. 5,252,500
300,000 Pinnacle West Capital Corp. 9,262,500
--------------
29,690,000
--------------
TOTAL COMMON STOCK (COST $826,576,579) 1,004,084,339
--------------
CONVERTIBLE PREFERRED STOCK -- 0.3%
-----------------------------------
Broadcasting -- 0.3%
60,000 American Radio Systems, 7.00%, # 2,940,000
(COST $3,000,000) --------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
- ----------------------------------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS & NOTES -- 0.7%
-------------------------------------------
Electronics -- 0.4%
$5,000,000 Xilinx Inc., 5.25%, 11/01/02 # 4,714,500
Pharmaceuticals -- 0.3%
3,000,000 ICN Pharmaceuticals, 8.50%, 11/15/99 3,231,570
--------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES 7,946,070
(COST $8,000,000) --------------
U.S. GOVERNMENT OBLIGATION -- 0.1%
----------------------------------
565,000 U.S. Treasury Note, 6.87%, 05/15/06 (COST $570,385) 585,304
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 1,015,555,713
(COST $838,146,964)
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
82
<PAGE> 122
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 8.0%
- ----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT SPONSORED OBLIGATION -- 1.8%
--------------------------------------------
$ 20,000,000 Federal Home Loan Mortgage Corp., Discount Note, $ 19,827,333
5.18%, 12/31/96 --------------
COMMERCIAL PAPER -- 6.2%
------------------------
27,789,000 Household Finance Corp., 5.40%, 11/01/96 27,789,000
20,000,000 Nestle Capital Corp., 5.18%, 11/13/96 19,965,467
20,000,000 SmithKline Beecham PLC, 5.24%, 11/13/96 19,965,067
--------------
67,719,534
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 87,546,867
(COST $87,546,867)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 101.2% $1,103,102,580
(COST $925,693,831)
- ----------------------------------------------------------------------------------------
# = Security may only be sold to qualified institutional
buyers.
* = Non income producing security.
t = All or a portion of this security is pledged to cover
financial futures contracts.
ACES = Automatic Common Exchange Securities.
ADR = American Depositary Receipt.
</TABLE>
See notes to financial statements.
83
<PAGE> 123
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Capital
Income Growth
Portfolio Portfolio
-------------- --------------
<S> <C> <C>
ASSETS:
Investment securities, at value (Note 1)........................ $2,099,819,265 $1,103,102,580
Cash............................................................ 956 941
Receivables:
Investment securities sold.................................... 20,216,167 8,824,987
Interest and dividends........................................ 4,587,325 750,403
Other assets.................................................... 94,485 78,120
-------------- --------------
Total Assets.............................................. 2,124,718,198 1,112,757,031
-------------- --------------
LIABILITIES:
Payable for investment securities purchased..................... 31,402,747 22,079,842
Accrued liabilities: (Note 2)
Administration fees........................................... 88,975 47,321
Investment advisory fees...................................... 710,802 378,562
Custodian..................................................... 35,044 6,110
Other......................................................... 132,689 112,863
-------------- --------------
Total Liabilities......................................... 32,370,257 22,624,698
-------------- --------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS......... $2,092,347,941 $1,090,132,333
Cost of Investments.............................................. $1,721,063,078 $ 925,693,831
============== ==============
</TABLE>
See notes to financial statements.
84
<PAGE> 124
STATEMENT OF OPERATIONS For the year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Capital
Income Growth
Portfolio Portfolio
------------- -------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend............................................................ $ 40,163,037 $ 11,147,019
Interest............................................................ 15,979,731 6,376,287
------------ ------------
Total investment income....................................... 56,142,768 17,523,306
------------ ------------
EXPENSES: (Note 2)
Investment Advisory fees............................................ 8,101,188 4,226,466
Administration fees................................................. 1,012,648 528,308
Custodian fees...................................................... 141,771 81,603
Amortization of organization costs (Note 1)......................... 8,012 8,012
Professional fees................................................... 62,232 66,809
Trustees fees and expenses.......................................... 88,590 51,050
Other............................................................... 104,455 109,511
------------ ------------
Total expenses................................................ 9,518,896 5,071,759
------------ ------------
Net investment income............................................. 46,623,872 12,451,547
------------ ------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments....................................................... 155,750,263 132,963,967
Futures and written option transactions........................... 7,927,539 --
Change in net unrealized appreciation/depreciation on:
Investments....................................................... 164,599,862 71,608,504
Futures and written option transactions........................... (1,362,579) --
------------ ------------
Net realized and unrealized gain on investments..................... 326,915,085 204,572,471
------------ ------------
Net increase in net assets from operations.......................... $ 373,538,957 $ 217,024,018
============ ============
</TABLE>
See notes to financial statements.
85
<PAGE> 125
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Growth & Capital
Income Growth
Portfolio Portfolio
---------------------------------- ------------------------------------
Year Year Year Year
Ended Ended Ended Ended
10/31/96 10/31/95 10/31/96 10/31/95
--------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income.............................. $ 46,623,872 $ 49,161,074 $ 12,451,547 $ 14,034,371
Net realized gain on investments and futures
transactions..................................... 163,677,802 95,276,889 132,963,967 38,313,408
Change in net unrealized appreciation on
investments and futures.......................... 163,237,283 154,841,478 71,608,504 83,513,979
-------------- -------------- --------------- ---------------
Increase in net assets from operations............. 373,538,957 299,279,441 217,024,018 135,861,758
-------------- -------------- --------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions...................................... 470,616,913 511,820,403 1,114,082,444 1,403,653,138
Withdrawals........................................ (605,973,572) (542,453,501) (1,260,399,848) (1,217,251,104)
-------------- -------------- --------------- ---------------
Net increase (decrease) from transactions in
investors' beneficial interests.................. (135,356,659) (30,633,098) (146,317,404) 186,402,034
-------------- -------------- --------------- ---------------
Net increase in net assets................... 238,182,298 268,646,343 70,706,614 322,263,792
NET ASSETS:
Beginning of period................................ 1,854,165,643 1,585,519,300 1,019,425,719 697,161,927
-------------- -------------- --------------- ---------------
End of period...................................... $ 2,092,347,941 $ 1,854,165,643 $ 1,090,132,333 $ 1,019,425,719
============== ============== =============== ===============
</TABLE>
See notes to financial statements.
86
<PAGE> 126
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- Growth and Income
Portfolio ("GIP") and Capital Growth Portfolio ("CGP"), (the "Portfolios") are
separately registered under the Investment Company Act of 1940, as amended, as
non-diversified, open end management investment companies organized as trusts
under the laws of the State of New York. Each declaration of trust permits the
Trustees to issue beneficial interests in the respective Portfolios. The GIP and
the CGP commenced operations on November 29, 1993.
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.
The following is a summary of significant accounting policies followed by
the Portfolios:
A. Valuation of investments -- Equity securities, purchased options and
futures 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 by or at the direction of the
Trustees.
B. Repurchase agreements -- It is the Portfolios' policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Trusts' 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 Trusts
may be delayed or limited.
C. Futures contracts -- When a Portfolio enters into a futures contract,
it makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to market
and the portfolio makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The GIP invested a portion of its liquid assets in long stock index futures
contracts to more fully participate in the market. Use of futures contracts
subject the Portfolio to risk of loss up to the amount of the value of the
contract.
The Portfolio may enter into futures contracts only on exchanges or boards
of trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Portfolio's credit risk is limited to
failure of the exchange or board of trade.
As of October 31, 1996, the Portfolios had no outstanding futures contracts.
D. Written options -- When a Portfolio writes an option on a futures
contract, an amount equal to the premium received by the Portfolio is
included in the portfolio's Statement of Assets and Liabilities as an asset
and corresponding liability. The amount of the liability is adjusted daily
to reflect the current market value of the written options and the change is
recorded in a corresponding unrealized gain or loss account. When a written
option expires on its stipulated expiration date, or when a closing
transaction is entered into, the related liability is extinguished and the
Portfolio realizes a gain (or loss if the cost of the closing transaction
exceeds the premium received when the option was written).
87
<PAGE> 127
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
The GIP writes options on stock index securities futures. These options are
settled for cash and subject the Portfolio to market risk in excess of the
amounts that are reflected in the Statement of Assets and Liabilities. The
Portfolio, however, is not subject to credit risk on written options as the
counterparty has already performed its obligation by paying a premium at the
inception of the contract.
As of October 31, 1996 the Portfolios had no outstanding written options.
E. 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.
F. Organization costs -- Organization and initial registration costs
incurred in connection with establishing the Portfolios have been deferred
and are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of each Portfolio.
G. Federal income taxes -- The Portfolios intend to continue to qualify as
partnerships and therefore net income and net realized gains are taxed to
the partners. Accordingly, no tax provisions are recorded by the Portfolios.
The investors in the Portfolios must take into account their proportionate
share of the Portfolios' income, gains, losses, deductions, credits and tax
preference items in computing their federal income tax liability, without
regard to whether they have received any cash distributions from the
Portfolio. The Portfolios do not intend to distribute to investors their net
investment income or their net realized gains, if any. It is intended that
the Portfolios will be managed in such a way that investors in the portfolio
will be able to satisfy the requirements of subchapter M of the Internal
Revenue Code to be taxed as regulated investment companies.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Adviser") acts as the
Investment Adviser to the Portfolios. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Adviser, Chase
supervises the investments of the Portfolios 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 Portfolios' average daily net assets.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to each of the Portfolios pursuant to a
Sub-Investment Advisory Agreement between CAM and Chase. CAM is a wholly
owned subsidiary of Chase and is entitled to receive a fee, payable by Chase
from its advisory fee, at an annual rate equal to 0.20% of each Portfolio's
average daily net assets.
B. Custodial fees -- Chase, as Custodian provides safekeeping services for
the Portfolios' securities. Compensation for such services are presented in
the Statement of Operations as custodian fees.
C. Administration fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trusts. For these services and facilities, the Administrator receives from
each Portfolio a fee computed at the annual rate equal to 0.05% of the
respective Portfolio's average daily net assets.
88
<PAGE> 128
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS -- For the year ended October 31, 1996, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
GIP CGP
-------------- -------------
<S> <C> <C>
Purchases (excluding U.S. Government)............... $1,187,045,632 $ 865,730,088
Sales (excluding U.S. Government)................... 1,135,951,143 953,423,528
Purchases of U.S. Government........................ 20,197,299 570,385
Sales of U.S. Government............................ 25,429,221 --
</TABLE>
The portfolio turnover rates of GIP and CGP for the year end ended were 62% and
90%, respectively. The average commission rates paid per share were $0.05949 and
$0.05843 for GIP and CGP, respectively.
4. RETIREMENT PLAN -- The Portfolios have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Portfolios
who will have served as an independent trustee for at least five years at the
time of retirement. Benefits under this plan are based on compensation and years
of service. Pension expenses for the year ended October 31, 1996, included in
Trustees Fees and Expenses in the Statement of Operations, prepaid pension costs
and accrued pension liability included in other assets, and other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were as
follows:
<TABLE>
<CAPTION>
Prepaid Accrued
Pension Pension Pension
Expenses Assets Liability
-------- ------- -------
<S> <C> <C> <C>
GIP.................................................. $19,631 $60,845 $80,476
CGP.................................................. 9,910 30,717 40,627
</TABLE>
89
<PAGE> 129
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Beneficial
Interest Holders of Growth and Income
Portfolio and Capital Growth Portfolio
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets present fairly, in all material respects, the financial
position of Vista Growth and Income Portfolio and Vista Capital Growth Portfolio
(the "Portfolios") at October 31, 1996, the results of each of their operations
for the year then ended, and the changes in their net assets for each of the two
years in the period then ended in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Portfolios'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards 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 audits, which included
confirmation of securities at October 31, 1996 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 10, 1996
90
<PAGE> 130
(unaudited)
VISTA GROWTH AND INCOME FUND
VISTA CAPITAL GROWTH FUND
VISTA SMALL CAP EQUITY FUND
VISTA EQUITY INCOME FUND
VISTA LARGE CAP EQUITY FUND
VISTA AMERICAN VALUE FUND
VISTA BALANCED FUND
- --------------------------------------------------------------------------------
Certain tax information regarding the Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 1996. The information and distributions reported
in this letter may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 1996. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1996 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996.
The following represents the source and percentage of income earned from
government obligations, the percentage of distributions eligible for the
dividends received deduction and the long-term capital gains distributed per
share by the Funds:
<TABLE>
<CAPTION>
Long-Term
Federal Federal Federal Federal Capital
U.S. Farm Home Home Loan Nat'l Gov't Nat'l Dividends Galns
Treasury Credit Loan Mortgage Mortgage Mortgage Received Distribution
VISTA FUND Obligations Bank Bank Corporation Association Association Deduction Per Share
----------- ------- ------- ----------- ----------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth and
Income...... 4.54% 1.12% 3.52% 4.21% 0.34% -- 82.14% $1.611
Capital
Growth..... 0.28% 0.32% 4.30% 5.52% 4.13% -- 37.39% $0.480
Small Cap
Equity..... 0.67% 0.10% 3.23% 3.49% 1.04% -- 10.40% $0.360
Equity
Income..... 2.60% -- -- -- -- -- 43.05% $0.863
Large Cap
Equity..... -- -- 0.87% 0.81% -- -- 36.67% $1.570
American
Value...... 9.83% -- -- 0.36% -- -- 100.00% $0.270
Balanced..... 30.30% 0.12% 1.54% 4.44% 1.93% 1.57% 16.81% $0.640
</TABLE>
91
<PAGE> 131
VISTA SERVICE CENTER
P.O. BOX 419392
KANSAS CITY, MO 64179
Investment Adviser, Administrator,
Shareholder and Fund Servicing Agent and Custodian
The Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Transfer Agent
DST Systems, Inc.
Legal Counsel
Simpson Thacher & Bartlett
Independent Accountants
Price Waterhouse LLP
Vista Fund Distributors, Inc. is the funds' distributor and is unaffiliated with
Chase. The Chase Manhattan Bank is the funds' adviser.
This report is submitted for the general information of the shareholders of the
funds. It is not authorized for distribution to prospective investors in the
funds unless preceded or accompanies by a prospectus.
To obtain a prospectus for any of the Vista funds, call 1-800-34-VISTA. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
VEQTY-Z-1296
<PAGE> 132
[VISTA LOGO]
- ---------------------------------------------------------------
- - VISTA EUROPEAN FUND
(Class A and Class B Shares)
- - VISTA SOUTHEAST ASIAN FUND
(Class A and Class B Shares)
- - VISTA JAPAN FUND
(Class A and Class B Shares)
- - VISTA INTERNATIONAL EQUITY FUND
(Class A and Class B Shares)
- ---------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL REPORT
OCTOBER 31, 1996
<PAGE> 133
CONTENTS
Chairman's Letter 1
Fund Commentaries 2
Portfolio of Investments 8
Notes to Financial Statements 24
Per Share Data 32
<PAGE> 134
Vista is in the process of redesigning your Shareholder Reports to include even
more information about your fund, its current investment strategy and how it is
performing.
Watch for the completed redesign when you receive your next Semiannual Report.
December 19, 1996
Dear Shareholder:
We are pleased to enclose the annual reports for the following Vista
International Funds for the period ended October 31, 1996:
- Vista International Equity Fund
- Vista European Fund
- Vista Japan Fund
- Vista Southeast Asian Fund
The global equity markets turned in widely-divergent performance during the year
ended October 31, 1996. Among the highlights:
EUROPE
Low interest rates drove most European stock market prices higher over the
past year, despite only mixed signs of economic growth. The increasing
likelihood of currency convergence among European Union members could provide
a variety of investment opportunities within a slow-growth environment.
JAPAN
Despite low interest rates, Japanese markets ended the reporting year with
negative returns. Clearly, substantial market gains in Japan moving forward
will most likely require confirmed signs of economic recovery.
SOUTHEAST ASIA
The strong performance of markets in Hong Kong and Malaysia masked
disappointing returns in other regional markets, particularly in Thailand. The
region's high growth rates and a more docile U.S. interest rate environment
continue to present attractive opportunities for long-term investors.
LATIN AMERICA
The region has continued its recovery from the Mexican Peso crisis of 1994.
Further progress on economic and structural reforms will be key to the success
of the region.
The past year has clearly shown that all markets do not move in the same
direction at the same time. While the strong performance of the U.S. equity
markets has quieted investors' interest in overseas markets, we believe
long-term investors should continue to maintain an internationally-diversified
portfolio.
We appreciate the trust that you have placed in Vista, and we look forward to
serving your investment needs for many years to come. If you have any questions,
please feel free to call us at 1-800-34-VISTA.
Sincerely,
/s/ F. REID
Fergus Reid
Chairman
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY, THE
CHASE MANHATTAN BANK, AND THE SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS
INVOLVE RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE> 135
VISTA EUROPEAN FUND
Vista European Fund, which seeks long-term growth of capital by investing
primarily in the common stocks of established companies in Western Europe, has
provided shareholders with a total return of 20.78% since inception on November
2, 1995 (Class A shares, without sales charge).
LOW INTEREST RATES SPUR EUROPEAN STOCK MARKETS
What contributed to the Fund's strong performance? Early in 1996, the Fund took
above-index positions in France and Germany while underweighting the United
Kingdom. On a sector basis, the Fund benefited from an overweight position in
cyclical stocks and below-index allocations to the utility, banking and energy
sectors. By the second quarter, the Fund's manager changed course based on a
forecast of more restrictive corporate spending. That meant maintaining
defensive, relatively-neutral country and industry weightings while avoiding the
financial sector.
Throughout the reporting year, European stock market participants waited for
consistent signs of economic growth in the region's major economies,
particularly Germany. By mid-1996, it became apparent that flat consumer
incomes, rising taxes and increasing unemployment would keep much of Europe on
the slow growth track. Low interest rates, however, provided the underpinnings
for increases in stock prices.
MANAGER BULLISH ON PROSPECTS FOR CURRENCY CONVERGENCE
As the reporting year ended, the Fund's positioning reflected the manager's
belief that currency convergence among European Union members would indeed occur
and could prove to be deflationary. An additional theme running through the
portfolio was corporate restructuring, given the manager's view that such
companies are well-positioned to provide steady returns during a slow recovery.
While the road to convergence may be a difficult one for most European
economies, an exciting period should lie ahead for European companies. During
this time, careful stock selection such as that provided by Vista's disciplined
stock managment system may potentially add great value to shareholders. European
stocks have performed well over the past year, and we believe that continuing
reasonable valuations, a strong dollar and restructuring companies provide a
basis for continued optimism.
2
<PAGE> 136
VISTA SOUTHEAST ASIAN FUND
Vista Southeast Asian Fund, which seeks long-term growth of capital by investing
in the stocks of companies located in the Pacific Rim (excluding Japan), has
provided shareholders with a strong total return of 19.70% (Class A shares,
without sales charge) from inception on November 2, 1995 through October 31,
1996.
HONG KONG & MALAYSIA LEAD REGIONAL PERFORMANCE
Southeast Asian equity markets provided widely-divergent returns during the
reporting year, with markets in Hong Kong and Malaysia consistently
outperforming those in other countries, particularly Thailand.
A particular success story involved the manager's positive stance on Malaysia.
Throughout the year, the Fund's performance was supported by its above-index
allocation here. Contrary to popular sentiment that Malaysia's economy was
overheating, the manager remained invested and participated as overall equity
prices rose. While the Fund did trim positions later in the reporting year, it
maintained a focus on smaller Malaysian companies due to a lack of attractive
opportunities elsewhere.
Early in 1996, there were widely-held expectations of local interest rate cuts
and significant new liquidity throughout Southeast Asia. These hopes were
dashed, however, by stronger-than-expected economic growth as well as rising
U.S. interest rates. Despite subsequent volatility in the Southeast Asian
markets, the Fund performed well thanks to effective regional allocation
decisions.
Above-index allocations to Thailand detracted from performance in the first half
of the year, leading the manager to cut exposure there in favor of more
attractive valuations in Indonesia and the Philippines.
With investors in the region concerned about U.S. interest rates, Hong Kong
equities benefited from its position as the region's most liquid market.
ECONOMIC GROWTH CONTINUES
The emerging markets of the Pacific Rim continued to grow faster than those of
developed countries over the period. While they remain volatile and sensitive to
such factors as U.S. interest rates, we believe that these markets are among the
most exciting in the world for long-term investors.
3
<PAGE> 137
VISTA JAPAN FUND
Vista Japan Fund, which seeks long-term growth of capital by investing in the
stocks of companies located in Japan, has provided shareholders with a total
return of -5.80% (Class A shares, without sales charge) from inception on
November 2, 1995 through October 31, 1996.
ANTICIPATED GROWTH FAILS TO MATERIALIZE
Early in the reporting year, it appeared that the long-awaited economic recovery
had finally arrived in Japan. A weaker yen, increasing liquidity and muted signs
of recovery drove stock prices higher, especially after the announcement of
outstanding economic growth in the first quarter of 1996. In this environment,
the Fund benefited from its strong positions in the securities, machinery and
transportation industries.
With interest rates at record lows and growth in the consumption area already
discounted, most market participants counted on a continuation of economic
growth to drive stock prices higher. When this growth failed to materialize, the
market stalled and gave back its gains from early in the year. Vista Japan Fund
was not immune to these losses, but it responded to the disappointing growth by
underweighting cyclical stocks and overweighting real estate.
Despite a poor year for the Japanese stock market, the Fund's manager continues
to have a positive stance due to the weaker yen, a better interest rate
environment and the recovery in high-tech shares. At the end of the reporting
year, the Fund was underweighted in cyclical stocks and overweighted in real
estate, which the manager believed would benefit from gradual recovery and low
interest rates.
4
<PAGE> 138
VISTA EUROPEAN FUND
TOTAL RETURN*
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
Since Inception (11/2/95).... 20.78% 15.04%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC#
------------ ------------
<S> <C> <C>
Since Inception (11/3/95).... 20.35% 15.35%
</TABLE>
* Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
# Assumes a 5% CDSC for the period since inception.
VISTA SOUTHEAST ASIAN FUND
TOTAL RETURN
AS OF 10/31/96*
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
Since Inception (11/2/95).... 19.70% 14.01%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC#
------------ ------------
<S> <C> <C>
Since Inception (11/3/95).... 18.78% 13.78%
</TABLE>
* Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
# Assumes a 5% CDSC for the period since inception.
VISTA JAPAN FUND
TOTAL RETURN
AS OF 10/31/96*
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
Since Inception (11/2/95).... -5.80% -10.27%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC#
------------ ------------
<S> <C> <C>
Since Inception (11/3/95).... -6.50% -11.17%
</TABLE>
* Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
# Assumes a 5% CDSC for the period since inception.
5
<PAGE> 139
VISTA INTERNATIONAL EQUITY FUND
Vista International Equity Fund, which seeks long-term growth of capital by
investing primarily in the common stocks of established overseas companies,
provided shareholders with a total return of 3.53% (Class A shares, without
sales charge) for the year ended October 31, 1996.
EUROPE & JAPAN: WAITING FOR SUSTAINED GROWTH
Despite numerous interest rate cuts, sustainable signs of growth in EUROPE have
not emerged. In 1996, spirits were further dampened as European Union-member
governments issued austere budgets in their efforts to meet the Maastricht
criteria for currency convergence. Given the Fund manager's view that currency
convergence will happen -- and will be accompanied by slow growth -- the Fund
ended the reporting period with substantial allocations to restructured
companies, which can maintain performance in a slow-growth environment. The
manager also favored interest rate-sensitive stocks such as financials.
The JAPANESE MARKET disappointed investors throughout the reporting year and
hindered overall Fund performance. Japanese stock prices rallied at the end of
1995 and advanced after outstanding first quarter economic growth figures.
However, they fell sharply when growth proved unsustainable. At the end of the
reporting year, the Fund had taken an underweight position in Japan in response
to a stronger dollar and the manager's view that the Japanese recovery will be
slower than most people expect.
Because SOUTHEAST ASIAN MARKETS such as Thailand and Malaysia export a
significant amount to the U.S., their markets typically have a high correlation
to the U.S. dollar and interest rates. Consequently, Southeast Asian markets
were volatile during the year in response to the uncertain U.S. interest rate
environment. During the reporting year, Hong Kong and Malaysia outperformed
other regional markets, and the Fund's overweighting of these countries helped
performance. LATIN AMERICA continued to recover from the Mexican Peso shock of
1994 as markets there were generally positive.
VALUATION & DIVERSIFICATION: THE OVERSEAS ADVANTAGE
The international markets remain exciting and potentially lucrative for American
investors because of the likelihood of currency convergence in Europe,
expectations for the eventual Japanese economic recovery, strong growth
potential in the Pacific Rim, and significant structural reforms in Latin
America. We believe that, after generally underperforming their American
counterparts, many international markets carry a significant valuation
advantage. Perhaps most importantly, these markets might help investors spread
risk through diversification.
6
<PAGE> 140
VISTA INTERNATIONAL EQUITY FUND
AVERAGE ANNUAL TOTAL RETURN+
AS OF 10/31/96
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS A SHARES SALES CHARGE SALES CHARGE
------------ ------------
<S> <C> <C>
One Year..................... 3.53% -1.38%
Since Inception (12/31/92)... 6.34% 4.99%
</TABLE>
<TABLE>
<CAPTION>
WITHOUT WITH
CLASS B SHARES CDSC CDSC*
------------ ------------
<S> <C> <C>
One Year..................... 3.03% -1.97%
Since Inception (11/15/93)... 2.14% 1.17%
</TABLE>
+ Assumes dividend reinvestment and reflects fee waivers. Without such waivers,
performance would have been reduced.
* Assumes a 5% CDSC for the one year period and a 3% CDSC for the period since
inception.
GROWTH OF $10,000
<TABLE>
<CAPTION>
LIPPER
INTER-
VISTA INTER- NATIONAL
MEASUREMENT PERIOD NATIONAL EQ- FUNDS AVER- MSCI EAFE
(FISCAL YEAR COVERED) UITY FUND AGE INDEX
<S> <C> <C> <C>
12/31/92 9525.00 10000.00 10000.00
01/31/93 9458.33 10035.00 10002.00
02/28/93 9601.20 10262.79 10307.06
03/31/93 9906.00 10845.72 11208.93
04/30/93 10382.25 11396.68 12276.02
05/31/93 10753.73 11637.15 12538.73
06/30/93 10248.90 11389.28 12345.63
07/31/93 10572.75 11746.91 12780.20
08/31/93 11249.03 12477.56 13472.88
09/30/93 11153.78 12407.69 13172.44
10/31/93 11258.55 12947.42 13580.78
11/30/93 10658.48 12424.35 12396.54
12/31/93 11567.16 13583.54 13294.05
01/31/94 12284.73 14423.00 14421.38
02/28/94 11940.29 14110.02 14383.89
03/31/94 11461.92 13479.30 13766.82
04/30/94 11605.43 13820.33 14354.66
05/31/94 11461.92 13774.72 14275.71
06/30/94 11366.24 13631.47 14481.28
07/31/94 11634.13 14002.24 14623.20
08/31/94 11921.16 14416.71 14972.69
09/30/94 11576.73 14057.73 14504.05
10/31/94 11777.65 14330.45 14989.93
11/30/94 11146.19 13626.83 14273.41
12/31/94 11066.78 13490.56 14366.19
01/31/95 10330.93 12830.87 13817.40
02/28/95 10418.07 12848.83 13781.48
03/31/95 10844.09 13270.28 14645.58
04/30/95 11095.83 13692.27 15200.64
05/31/95 11221.69 13801.81 15022.80
06/30/95 11231.38 13800.43 14762.90
07/31/95 11821.99 14540.13 15685.58
08/31/95 11686.44 14268.23 15091.10
09/30/95 11821.99 14482.26 15389.90
10/31/95 11638.03 14182.47 14980.53
11/30/95 11608.98 14325.72 15401.48
12/31/95 11718.39 14759.78 16025.24
01/31/96 11893.58 15091.88 16094.15
02/29/96 11883.85 15147.72 16152.09
03/31/96 12166.10 15403.72 16499.36
04/30/96 12574.88 15844.31 16982.79
05/31/96 12438.62 15836.66 16673.71
06/30/96 12565.15 15941.18 16772.08
07/31/96 11893.58 15348.17 16285.69
08/31/96 11883.85 15518.53 16324.78
9/30/96 12205.04 15850.63 16762.28
10/31/96 12049.31 15738.09 16594.66
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value will fluctuate with market conditions. When shares are redeemed,
they may be worth more or less than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
shares of the Vista International Equity Fund, the Lipper International Funds
Average and the MSCI EAFE Index from December 31, 1992 to October 31, 1996. The
Fund's performance includes a 4.75% sales charge and assumes the reinvestment of
all dividends and capital gains. Also, certain fees were waived during the
period. Had they not been waived, total returns would have been lower. The
Average's performance does not include a sales charge and reflects reinvestment
of all dividends and capital gains on mutual funds and the benchmark.
The Lipper International Funds Average represents the average performance of a
universe of 375 actively managed international stock funds. Lipper is an
independent mutual fund performance monitor whose results do not reflect a sales
charge.
The MSCI EAFE Index is unmanaged and is a replica (or model) of the performance
of the world's equity markets, excluding the U.S. and Canada.
International investing involves special risks. Changes in currency exchange
rates and differences in accounting and taxation policies outside the U.S. can
raise or lower returns. Also, some overseas markets may not be as politically
and economically stable as the U.S. or other nations
7
<PAGE> 141
VISTA EUROPEAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 96.5%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 96.5%
---------------------
AUSTRIA -- 3.2%
Oil & Gas -- 1.7%
1,126 OMV AG $ 110,299
Steel -- 1.5%
1,295 Boehler -- Uddeholm AG 96,934
-----------
TOTAL AUSTRIA 207,233
-----------
DENMARK -- 4.5%
Banking -- 4.5%
7,000 BG Bank A/S 297,506
-----------
FRANCE -- 10.6%
Automotive -- 1.2%
573 Equipements et Composants pour l'Industrie Automobile 77,399
Broadcasting & Publishing -- 0.6%
400 TV Francaise (TF1) 42,598
Financial Services -- 3.2%
635 Cetelem Group 135,622
689 Group Axime* 71,622
Insurance -- 1.5%
3,230 AGF (Assurances Generales de France) 95,353
Oil & Gas -- 1.4%
1,192 Total SA -- B 93,317
Pharmaceuticals -- 1.4%
347 Roussel-Uclaf 91,909
Utilities -- 1.3%
726 Compagnie Generale des Eaux 86,838
-----------
TOTAL FRANCE 694,658
-----------
GERMANY -- 14.2%
Automotive -- 2.1%
2,300 Daimler-Benz AG 135,124
Capital Goods -- 1.6%
268 Mannesmann AG 104,139
Consumer Products -- 5.4%
1,920 Adidas AG 164,694
6,300 Puma AG 186,310
Insurance -- 2.5%
91 Allianz AG Holding 163,453
</TABLE>
See notes to financial statements.
8
<PAGE> 142
VISTA EUROPEAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
GERMANY (CONTINUED)
Pharmaceuticals -- 1.4%
1,200 Schwarz Pharma AG $ 92,466
Utilities -- 1.2%
1,514 Veba AG 80,813
-----------
TOTAL GERMANY 926,999
-----------
IRELAND -- 3.4%
Banking -- 2.4%
19,424 Bank of Ireland 159,732
Insurance -- 1.0%
15,000 Irish Life PLC 64,851
-----------
TOTAL IRELAND 224,583
-----------
ITALY -- 8.0%
Financial Services -- 2.0%
16,765 Istituto Mobiliare Italiano SpA 132,729
Oil & Gas -- 2.2%
29,500 Ente Nazionale Idrocarburi SpA (ENI) 141,338
Telecommunications -- 2.1%
65,500 Telecom Italia Mobile SpA 135,419
Utilities -- 1.7%
19,118 Edison SpA 113,786
-----------
TOTAL ITALY 523,272
-----------
NETHERLANDS -- 5.5%
Chemicals -- 1.9%
992 Akzo Noberl 125,060
Food/Beverage Products -- 2.1%
2,540 CSM NV, N.R. Certificate 134,047
Printing & Publishing -- 1.5%
5,420 Verenigde Nederlandse Uitgeversbedrijvan Verenigd Bezit 98,435
(VNU)
-----------
TOTAL NETHERLANDS 357,542
-----------
PORTUGAL -- 1.9%
Telecommunications -- 1.9%
4,798 Portugal Telecom SA 124,835
-----------
</TABLE>
See notes to financial statements.
9
<PAGE> 143
VISTA EUROPEAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
SPAIN -- 3.4%
Consumer Products -- 2.1%
3,700 Tabacalera SA, Class A $ 135,548
Retailing -- 1.3%
3,700 Centros Comerciales Pryca, SA 85,044
-----------
TOTAL SPAIN 220,592
-----------
SWEDEN -- 1.1%
Machinery & Engineering Equipment -- 1.1%
4,492 Svedala Industri AB-Free 70,481
-----------
SWITZERLAND -- 7.9%
Banking -- 3.3%
1,131 Schweizerische Bankverein, Registered Shares 218,793
Pharmaceuticals -- 4.6%
26 Ciba-Geigy AG, Registered Shares 32,161
232 Sandoz AG, Registered Shares 269,283
-----------
TOTAL SWITZERLAND 520,237
-----------
UNITED KINGDOM -- 32.8%
Aerospace -- 1.1%
16,897 Rolls-Royce PLC 70,026
Airport Services -- 1.4%
11,750 British Airport Authority PLC 94,712
Automotive (Services) -- 0.5%
5,306 Lex Service PLC 31,451
Banking -- 1.7%
9,935 National Westminster Bank 113,409
Chemicals -- 0.8%
9,367 BTP PLC 50,031
Construction -- 0.9%
6,179 Berkeley Group PLC 61,881
Construction Materials -- 1.0%
9,651 Meyer International PLC 65,220
Diversified -- 1.2%
21,315 Cookson Group PLC 78,443
Electronics/Electrical Equipment -- 0.4%
402 General Electric Company PLC 2,488
Engineering Services -- 1.3%
42,999 Senior Engineering Group PLC 87,524
</TABLE>
See notes to financial statements.
10
<PAGE> 144
VISTA EUROPEAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM (CONTINUED)
Financial Services -- 2.0%
8,504 Barclays PLC $ 133,563
Food/Beverage Products -- 1.8%
15,388 Allied Domecq PLC 119,526
Hotels/Other Lodging -- 1.8%
46,793 Jarvis Hotels PLC 121,154
Insurance -- 2.4%
4,421 Lloyds Abbey Life Group 45,175
14,964 Prudential Corp. PLC 113,308
Metals/Mining -- 1.9%
12,634 Powerscreen International PLC 125,085
Oil & Gas -- 2.7%
10,835 Shell Transport & Trading PLC 177,672
Printing & Publishing -- 0.7%
11,793 Mirror Group PLC 44,745
Real Estate -- 2.8%
9,211 Land Securities PLC 107,169
11,217 MEPC PLC 78,543
Retailing -- 2.9%
9,113 Boots Company, PLC 92,451
9,977 Great Universal Stores PLC 99,754
Security Services -- 0.8%
10,528 Chubb Security PLC 54,003
Shipping/Transportation -- 1.0%
6,992 Peninsular & Orient Steam Navigation Co. 68,542
Utilities -- 1.7%
17,233 National Power PLC 113,651
-----------
TOTAL UNITED KINGDOM 2,149,526
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 96.5% $ 6,317,464
(COST $5,889,418)
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
11
<PAGE> 145
VISTA SOUTHEAST ASIAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 85.2%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 84.6%
---------------------
AUSTRALIA -- 3.6%
Broadcasting -- 1.1%
18,400 News Corp. Ltd. $ 104,768
Metals/Mining -- 0.8%
60,000 Mount Edon Gold Mines 77,558
Oil -- 1.7%
220,000 Energy Equity Corp., Ltd. 165,742
-----------
TOTAL AUSTRALIA 348,068
-----------
HONG KONG -- 33.6%
Banking -- 5.3%
12,000 Hang Seng Bank Ltd. 142,389
18,000 HSBC Holdings PLC t 366,643
Consumer Products -- 0.8%
190,000 Guangdong Kelon Electric Holding, Class H 78,631
Diversified -- 9.4%
53,000 Citic Pacific Ltd. 257,724
116,000 First Pacific Company Ltd. t 159,771
44,000 Hutchison Whampoa 307,282
21,000 Swire Pacific, Ltd., Class A 185,359
Financial Services -- 2.1%
38,000 Guoco Group Ltd. 201,001
Real Estate -- 16.0%
166,000 Amoy Properties Ltd. 205,023
27,000 Cheung Kong Holdings, Ltd. t 216,494
132 Henderson China Holding Ltd. 299
51,000 Hysan Development Co., Ltd. t 163,573
41,000 New World Development Company, Ltd. 238,609
58,000 New World Infrastructure Ltd. 144,394
180,000 Sino Land Co. t 200,199
25,000 Sun Hung Kai Properties, Ltd. 284,520
23,000 Wharf (Holdings) Ltd. 94,888
-----------
TOTAL HONG KONG 3,246,799
-----------
</TABLE>
See notes to financial statements.
12
<PAGE> 146
VISTA SOUTHEAST ASIAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
INDIA -- 1.8%
Automotive -- 0.7%
5,550 Tata Engineering & Locomotive Co., Ltd. $ 68,709
Hotels/Other Lodging -- 0.9%
3,550 Indian Hotels Co. Ltd., GDR # 83,887
Metals/Mining -- 0.2%
1,350 Hindalco Industries Ltd., GDR 24,975
-----------
TOTAL INDIA 177,571
-----------
INDONESIA -- 1.7%
Construction Material -- 0.5%
62,500 PT Bank Negara Indonesia (Foreign) 22,815
17,500 PT United Tractors (Foreign) 32,505
Construction Materials -- 0.9%
30,000 PT Semen Gresik (Foreign) 86,322
Food/Beverage -- 0.3%
11,500 PT Indofood Sukses Makmur (Foreign) 24,200
-----------
TOTAL INDONESIA 165,842
-----------
MALAYSIA -- 23.6%
Agriculture -- 1.4%
87,000 Kumpulan Guthrie Bhd. 134,288
Automotive -- 1.7%
77,000 Tractors Malaysia Holdings Bhd. 166,133
Construction -- 3.3%
38,000 Intria Bhd. 101,518
70,000 Sunway Building Technology Bhd. 220,252
Construction Materials -- 5.1%
110,000 Kedah Cement Holdings, Bhd. 203,748
50,000 Sungei Way Holdings Bhd. 284,962
Diversified -- 0.8%
45,800 Westmont Industries Bhd. 77,220
Electronics/Electrical Equipment -- 0.8%
36,000 Leader Universal Holdings Bhd. 80,502
Engineering Services -- 2.0%
46,000 Ekran Bhd. 192,983
</TABLE>
See notes to financial statements.
13
<PAGE> 147
VISTA SOUTHEAST ASIAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
MALAYSIA (CONTINUED)
Engineering/Construction -- 2.1%
150,000 Pilecon Engineering Bhd. $ 201,848
Paper/Forest Products -- 2.2%
55,000 Malaysian Pacific Industries Bhd. 213,326
Telecommunications -- 4.2%
95,000 FCW Holdings Bhd. 225,595
38,000 Technology Resources Industries Bhd. 90,990
10,000 Telekom Malaysia Bhd. 88,259
-----------
TOTAL MALAYSIA 2,281,624
-----------
PHILIPPINES -- 4.5%
Banking -- 0.9%
4,250 Metropolitan Bank & Trust Co. 93,797
Diversified -- 1.6%
302,200 Metro Pacific Corp. 73,595
81,200 Ayala Corp., Class B 77,245
Electronics/Electrical Equipment -- 0.4%
58,200 Ionics Circuit Inc. 37,648
Real Estate -- 1.6%
76,950 Ayala Land, Inc., Class B 81,986
191,600 Filinvest Development Corp. 71,449
-----------
TOTAL PHILIPPINES 435,720
-----------
SINGAPORE -- 3.2%
Airlines -- 1.6%
18,000 Singapore Airlines Ltd. (Foreign) 158,411
Banking -- 1.6%
13,200 Overseas Chinese Banking Corp. (Foreign) 150,832
-----------
TOTAL SINGAPORE 309,243
-----------
SOUTH KOREA -- 5.3%
Airlines -- 0.7%
3,890 Korean Air 72,433
Banking -- 0.7%
2,500 Housing & Commercial Bank, Korea, 48,062
1,280 Shinhan Bank 20,584
</TABLE>
See notes to financial statements.
14
<PAGE> 148
VISTA SOUTHEAST ASIAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
SOUTH KOREA (CONTINUED)
Construction -- 1.4%
4,500 Hyundai Engineering & Construction Co. $ 130,585
Electronics/Electrical Equipment -- 0.9%
5,000 L.G. Electronics 82,220
Financial Services -- 0.7%
4,000 Hyundai Securities Co. 72,547
Utilities -- 0.9%
3,000 Korea Electric Power Corp. 88,145
-----------
TOTAL SOUTH KOREA 514,576
-----------
THAILAND -- 7.3%
Banking -- 3.7%
57,000 Krung Thai Bank Public Co. Ltd. (Foreign) 154,205
12,000 Siam Commercial Bank Public Co., Ltd. (Foreign) 109,155
17,000 Thai Farmers Bank Public Co. Ltd. 93,981
Financial Services -- 0.7%
30,000 Finance One (Foreign) 69,398
Food/Beverage Products -- 0.7%
19,000 Thai Theparos Food Product Public Co. Ltd. 71,515
Metals/Mining -- 0.2%
2,100 Loxley Company Ltd. (Foreign) 15,232
Printing & Publishing -- 0.2%
2,300 Siam Sport Syndicate Public Co. Ltd. 10,821
2,700 Siam Sport Syndicate Public Co., Ltd. (Foreign) 12,703
Utilities -- 1.8%
23,000 Cogeneration Public Company Ltd. (Foreign) 85,220
29,000 Electricity Generating Public Co. Ltd. 84,140
-----------
TOTAL THAILAND 706,370
-----------
TOTAL COMMON STOCK (COST $7,859,994) 8,185,813
-----------
WARRANTS -- 0.6%
----------------
MALAYSIA --
40,000 Sunway Building Technology, Bhd., Expires 7/30/01, 59,842
(COST $8,432)
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 8,245,655
(COST $7,868,426)
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
15
<PAGE> 149
VISTA SOUTHEAST ASIAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.10%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 1.10%
------------------------------------
U.S. Treasury Bills,
$ 20,000 5.08%, 11/07/96 $ 19,983
85,000 5.12%, 12/12/96 t 84,504
- -----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 104,487
(COST $104,487)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 86.30% $ 8,350,142
(COST $7,972,913)
- -----------------------------------------------------------------------------------------
</TABLE>
PURCHASED INDEX FUTURES OUTSTANDING
<TABLE>
<CAPTION>
Original Nominal
Expiration Number of Nominal Value at Unrealized
Description Date Contracts Value 10/31/96 Depreciation
- ------------------------- --------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C>
Hang Seng................ 11/28/96 12 $ 970,615 $968,791 ($1,824)
</TABLE>
See notes to financial statements.
16
<PAGE> 150
VISTA JAPAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 90.5%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 90.5%
---------------------
JAPAN --
AEROSPACE -- 1.5%
8,000 Sumitomo Precision Products $ 72,446
-----------
AUTOMOTIVE -- 7.5%
7,000 Honda Motor Co. Ltd. 167,399
25,000 Mazda Motor 110,999
4,000 Toyota Motor Corp. 94,602
-----------
373,000
-----------
BANKING -- 6.5%
4,000 Bank of Tokyo-Mitsubishi 81,590
12,000 Mitsui Trust & Banking 116,054
11,000 Sumitomo Bank 121,857
-----------
319,501
-----------
BUSINESS SERVICES -- 1.8%
9,000 Ricoh Corp. Ltd. 89,414
-----------
COMPUTER SOFTWARE -- 1.3%
3,000 Hitachi Software Engineering Co. 66,467
-----------
ELECTRONICS/ELECTRICAL EQUIPMENT -- 18.1%
6,000 Fujitsu Ltd. 52,752
11,000 Hitachi Ltd. 97,679
1,200 Keyence Corp. 139,265
8,000 Mitsubishi Electric Corp. 46,351
5,000 NEC Corp. 54,510
9,000 Nippon Signal Co. 89,414
2,000 Rohm Co. 118,692
6,000 Sharp Corp. 91,261
1,300 SMC Corp. 84,350
8,000 Toshiba Corp. 50,079
18,000 Yaskawa Electric Corp. 69,474
-----------
893,827
-----------
HEALTH CARE -- 1.7%
14,000 Shimadzu Corp. 82,469
-----------
</TABLE>
See notes to financial statements.
17
<PAGE> 151
VISTA JAPAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
MACHINERY & ENGINEERING EQUIPMENT -- 16.1%
9,000 CKD Corp. $ 71,136
5,000 Fuji Machine Manufacturing Co. 118,252
14,000 Ishikawajima-Harima Heavy Industries 64,621
12,000 Komatsu Ltd. 98,329
3,000 Komori Corp. 67,522
12,000 Mitsubishi Heavy Industries Ltd. 92,316
16,000 Nachi-Fujikoshi Corp. 64,850
12,000 NTN Corp. 72,903
2,000 Shima Seiki Manufacturing, Ltd. 102,163
1,000 TOWA Corp. 46,685
-----------
798,777
-----------
METALS/MINING -- 2.1%
20,000 Showa Aluminum Corp. 105,328
-----------
PRINTING & PUBLISHING -- 1.4%
4,000 Dai Nippon Printing Co., Ltd. 67,522
-----------
REAL ESTATE -- 6.8%
5,000 Daibiru Corp. 56,708
12,000 Hankyu Realty 108,669
8,000 Mitsubishi Estate Co. Ltd. 99,877
2,000 Tachihi Enterprise Co. Ltd. 68,753
-----------
334,007
-----------
RETAILING -- 8.7%
3,000 Aoyama Trading Co., Ltd. 76,754
9,000 Daimaru Inc. 54,282
6,000 Isetan 80,183
1,000 Ito-Yokado Co. Ltd. 49,938
6,000 Mitsukoshi Ltd. 52,277
2,700 Mr. Max 46,290
12,000 Tokyu Department Store 68,577
-----------
428,301
-----------
SHIPPING/TRANSPORTATION -- 4.3%
6,000 Hitachi Transport System 55,917
7,000 Nankai Electric Railway 40,065
17,000 Tokyu Corp. 114,340
-----------
210,322
-----------
STEEL -- 2.2%
11,000 Yamato Kogyo Co., Ltd. 109,284
-----------
</TABLE>
See notes to financial statements.
18
<PAGE> 152
VISTA JAPAN FUND
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS -- 4.5%
8 DDI Corp. $ 60,137
4,000 Matsushita Communication Industries 105,856
8 Nippon Telegraph & Telephone Corp. 55,917
-----------
221,910
-----------
WAREHOUSING -- 1.3%
10,000 Sumitomo Warehouse 63,039
-----------
WHOLESALING -- 4.7%
18,000 Itochu Corp. 108,722
16,000 Marubeni Corp. 74,134
2,000 Tokyo Electron Ltd. 51,521
-----------
234,377
- -----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 4,469,991
(COST $4,865,448)
- -----------------------------------------------------------------------------------------
Principal
Amount
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.2%
- -----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 1.2%
-----------------------------------
$ 60,000 U.S. Treasury Bill, 5.03%, 11/07/96 (Cost $59,950) 59,950
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 91.7% $ 4,529,941
(COST $4,925,398)
- -----------------------------------------------------------------------------------------
</TABLE>
# = Security may only be sold to qualified institutional buyers.
* = Non income producing security.
t = All or a portion of this security is pledged to cover financial futures
contracts.
GDR = Global Depositary Receipt
See notes to financial statements.
19
<PAGE> 153
VISTA MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Vista Vista International
European Southeast Asian Japan Equity
Fund Fund Fund Fund
----------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 1)............................ $ 6,317,464 $ 8,350,142 $ 4,529,941 $ 32,319,977
Cash...................................................... 312,278 523,698 178,989 --
Foreign Currency (Cost $36,866, $353,524, $82,019)........ 36,942 353,499 82,251 --
Receivables:
Open forward currency contracts......................... 10,656 -- 110,774 --
Investment securities sold.............................. -- 337,397 54,749 --
Interest and dividends.................................. 31,048 8,562 15,098 --
Trust shares sold....................................... 19,991 25,754 -- 538,506
Deposit at brokers...................................... -- 155,915 -- --
Other assets.............................................. 369 560 341 27,850
----------- ----------- ------------- ------------
Total assets........................................ 6,728,748 9,755,527 4,972,143 32,886,333
----------- ----------- ------------- ------------
LIABILITIES:
Payable for investment securities purchased............... 143,547 23,028 -- --
Payable for Trust shares redeemed......................... -- 4,323 -- 11,110
Payable for open forward currency contracts............... 123 -- -- --
Accrued liabilities: (Note 2)
Distribution fees....................................... 1,472 2,593 1,173 10,342
Shareholder servicing fees.............................. 34 252 37 6,954
Custodian............................................... 5,571 4,962 2,145 --
Other................................................... 29,851 47,705 26,487 134,609
----------- ----------- ------------- ------------
Total Liabilities................................... 180,598 82,863 29,842 163,015
----------- ----------- ------------- ------------
</TABLE>
See notes to financial statements.
20
<PAGE> 154
VISTA MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Vista Vista International
European Southeast Asian Japan Equity
Fund Fund Fund Fund
----------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS:
Paid in capital........................................... $ 5,574,772 $ 8,767,557 $ 5,369,175 $ 30,895,963
Accumulated undistributed net investment income (loss).... 52,307 (181) 895 (66,746)
Accumulated undistributed net realized gain (loss) on
investment transactions................................. 482,403 529,761 (143,085) 1,356,920
Net unrealized appreciation/depreciation of investments
and futures............................................. 438,668 375,527 (284,684) 537,181
----------- ----------- ------------- ------------
Net Assets:............................................. 6,548,150 9,672,664 4,942,301 32,723,318
=========== =========== ============= ============
Class A Shares........................................ $ 6,357,780 $ 8,451,113 $ 4,780,647 $ 24,903,942
=========== =========== ============= ============
Class B Shares........................................ $ 190,370 $ 1,221,551 $ 161,654 $ 7,819,376
=========== =========== ============= ============
Shares of beneficial interest outstanding ($.001 par value;
unlimited number of shares authorized):
Class A Shares........................................ 530,190 705,825 507,624 2,011,849
=========== =========== ============= ============
Class B Shares........................................ 15,962 102,716 17,285 639,098
=========== =========== ============= ============
Class A Shares:
Net asset value and redemption price per share *.......... $ 11.99 $ 11.97 $ 9.42 $ 12.38
=========== =========== ============= ============
Maximum offering price per share (net asset value per
share/95.25%)........................................... $ 12.59 $ 12.57 $ 9.89 $ 13.00
=========== =========== ============= ============
Class B Shares:
Net asset value and offering price per share*............. $ 11.93 $ 11.89 $ 9.35 $ 12.24
=========== =========== ============= ============
Cost of Investments......................................... $ 5,889,418 $ 7,972,913 $ 4,925,398
=========== =========== =============
</TABLE>
- ---------------
* Net assets/shares outstanding.
See notes to financial statements.
21
<PAGE> 155
VISTA MUTUAL FUNDS
STATEMENT OF OPERATIONS For the year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Vista Vista International
European Southeast Asian Japan Equity
Fund* Fund* Fund* Fund
---------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend................................................. $ 190,455 $ 107,868 $ 33,026
Interest................................................. 6,055 27,488 13,201
Investment income from Portfolio......................... -- -- -- $ 773,895
Foreign taxes withheld................................... (24,289) (8,814) (4,954) (100,106)
Expenses from Portfolio.................................. -- -- -- (264,803)
---------- --------- ------------ ------------
Total investment income............................ 172,221 126,542 41,273 408,986
---------- -------- ---------- -----------
EXPENSES: (Note 2)
Shareholder servicing fees............................... 136 1,564 273 82,500
Administration fees...................................... 8,102 11,696 7,123 33,000
Distribution fees........................................ 13,776 22,621 12,393 120,684
Investment Advisory fees................................. 54,013 77,971 47,488 --
Custodian fees........................................... 18,358 28,520 15,705 --
Printing and postage..................................... 3,481 5,472 3,939 3,337
Professional fees........................................ 15,498 16,599 17,321 16,395
Registration costs....................................... 20,945 28,804 20,957 26,711
Transfer agent fees...................................... 30,842 42,523 28,822 154,066
Trustees fees and expenses............................... 377 553 335 1,586
Other.................................................... 24,521 21,130 17,007 14,808
---------- --------- ------------ ------------
Total expenses..................................... 190,049 257,453 171,363 453,087
---------- --------- ------------ ------------
Less amounts waived (Note 2E)............................ 62,115 89,667 54,611 19,304
Less expenses borne by the Distributor................... 33,003 26,645 32,816 --
---------- --------- ------------ ------------
Net expenses........................................... 94,931 141,141 83,936 433,783
---------- --------- ------------ ------------
Net investment income (loss)........................... 77,290 (14,599) (42,663) (24,797)
---------- --------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments............................................ 482,403 405,738 (155,516) 3,537,037
Futures and written option transactions................ -- 146,146 12,431 --
Foreign currency transactions.......................... 19,733 (7,705) 43,558 79,753
Change in net unrealized appreciation/depreciation on:
Investments............................................ 428,046 377,229 (395,457) (2,436,093)
Futures and written option transactions................ -- (1,823) -- --
Foreign currency transactions.......................... 10,620 121 110,773 --
---------- --------- ------------ ------------
Net realized and unrealized gain (loss).................. 940,802 919,706 (384,211) 1,180,697
---------- --------- ------------ ------------
Net increase in net assets from operations............... $1,018,092 $ 905,107 ($426,874) $ 1,155,900
========== ========= ============ ============
</TABLE>
- ---------------
* Fund commenced operations on November 1, 1995
See notes to financial statements.
22
<PAGE> 156
STATEMENTS OF CHANGES IN NET ASSETS For the years indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Vista Vista International
European Southeast Asian Japan Equity
Fund* Fund* Fund* Fund
---------- --------------- ---------- --------------------------
Year Ended
-------------------------------------------------------------------------
10/31/96 10/31/96 10/31/96 10/31/96 10/31/95
---------- --------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss)....................... $ 77,290 ($ 14,599) ($ 42,663) ($ 24,797) ($ 69,183)
Net realized gain (loss) on investments, futures
and foreign currency transactions................ 502,136 544,179 (99,527) 3,616,790 (2,349,722)
Change in net unrealized appreciation/depreciation
on investments and foreign exchange.............. 438,666 375,527 (284,684) (2,436,093) 1,392,900
---------- ---------- ---------- ----------- -----------
Increase (decrease) in net assets from
operations....................................... 1,018,092 905,107 (426,874) 1,155,900 (1,026,005)
---------- ---------- ---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1C):
Net investment income.............................. (44,714) -- -- (143,398) --
Net realized gain on investment transactions....... -- -- -- (27) (471,229)
---------- ---------- ---------- ----------- -----------
Total distributions.......................... (44,714) -- -- (143,425) (471,229)
---------- ---------- ---------- ----------- -----------
Net increase (decrease) in net assets from shares
of beneficial interest transactions.............. 5,574,772 8,767,557 5,369,175 (1,335,627) (10,564,823)
---------- ---------- ---------- ----------- -----------
Total increase (decrease).................... 6,548,150 9,672,664 4,942,301 (323,152) (12,062,057)
NET ASSETS:
Beginning of period................................ -- -- -- 33,046,470 45,108,527
---------- ---------- ---------- ----------- -----------
End of period...................................... $6,548,150 $ 9,672,664 $4,942,301 $32,723,318 $33,046,470
========== =========== ========== =========== ===========
</TABLE>
- ---------------
* Fund commenced operations on November 1, 1995
See notes to financial statements.
23
<PAGE> 157
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- Mutual Fund Group (the
"Trust") was organized on May 11, 1987 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. Vista European Fund ("VEF"),
Vista Southeast Asian Fund ("VSEAF"), Vista Japan Fund ("VJF") and Vista
International Equity Fund ("VIEF") collectively, the "Funds", are four separate
series of the Trust. VEF, VSEAF and VJF commenced operations on November 2,
1995. The Funds each offer two classes of shares. Class A shares generally
provide for a front-end sales charge while Class B shares provide for a
contingent deferred sales charge. All classes of shares have equal rights as to
earnings, assets and voting privileges except that each class may bear different
distribution fees and each class has exclusive voting rights with respect to its
distribution plan.
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.
The following is a summary of significant accounting policies followed by the
Funds:
A. VIEF
Since inception, the VIEF has utilized the Master Feeder Fund Structure.
VIEF seeks to achieve its investment objective by investing all of its
investable assets of the Fund in the International Equity Portfolio, (the
"Portfolio"). The Portfolio, like the Fund, is an open-end management
investment company having the same investment objectives as the Fund.
Effective October 16, 1995, the offshore partner withdrew its partnership
interest from the Portfolio. As of October 31, 1996 VIEF owned 99.99% of the
Portfolio. The financial statement of the Portfolio, including the portfolio
of investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of the Fund.
1. Valuation of Investments -- VIEF records its investment in the
Portfolio at value. Securities of the Portfolio are recorded at value as
more fully discussed in the notes to those financial statements.
2. Foreign Currency Translations -- The books and records of the
Portfolio are maintained in U.S. dollars, the foreign currency
translation policy is more fully discussed in the notes to those
financial statements.
3. Investment Income -- VIEF records daily its pro-rata share of the
Portfolio's income, expenses, and realized and unrealized gains and
losses. In addition, the Fund accrues its own expenses daily as incurred.
Realized gain/losses and changes in unrealized appreciation/depreciation
represent the Fund's share of such elements allocated from the Portfolio.
B. VEF, VSEAF and VJF
1. Valuation of Investments -- Equity securities, purchased options and
futures 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 by or at the
direction of the Trustees.
2. Repurchase Agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government
Agency securities. All collateral is held by the Trust's custodian bank,
subcustodian, or a bank with which
24
<PAGE> 158
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
the custodian bank has entered into a subcustodian agreement, or is
segregated in the Federal Reserve Book Entry System. In connection with
transactions in repurchase agreements, if the seller defaults and the
value of the collateral declines, or if the seller enters an insolvency
proceeding, realization of the collateral by the Trust may be delayed or
limited.
3. Futures Contracts -- When a fund enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to
market and the fund makes (or receives) additional cash payments daily to
the broker. Changes in the value of the contract are recorded as
unrealized appreciation/depreciation until the contract is closed or
settled.
The Funds may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
As of October 31, 1996, the VSEAF had outstanding futures contracts as
indicated on the Portfolio of Investments.
4. Written Options -- When a fund writes an option on a futures
contract, an amount equal to the premium received by the fund is included
in the fund's Statement of Assets and Liabilities as an asset and
corresponding liability. The amount of the liability is adjusted daily to
reflect the current market value of the written option and the change is
recorded in a corresponding unrealized gain or loss account. When a
written option expires on its stipulated expiration date, or when a
closing transaction is entered into, the related liability is
extinguished and the fund realizes a gain (or loss if the cost of the
closing transaction exceeds the premium received when the option was
written).
The Funds write options on stock index securities futures. These options
are settled for cash and subject the Funds to market risk in excess of
the amounts that are reflected in the Statement of Assets and
Liabilities. The Funds, however, are not subject to credit risk on
written options as the counterparty has already performed its obligation
by paying a premium at the inception of the contract.
As of October 31, 1996 the Funds had no outstanding written options.
5. Foreign Currency Translation -- The books and records of the Funds
are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars at the official exchange rates, or at the mean of the
current bid and asked prices, of such currencies against the U.S. dollar
as quoted by a major bank, on the following basis:
a. Market value of investment securities and other assets and
liabilities: at the closing rate of exchange at the balance sheet
date.
b. Purchases and sales of investment securities, income and
expenses: at the rates of exchange prevailing on the respective
dates of such transactions.
Although the net assets of the Funds are presented at the foreign
exchange rates and market values at the close of the periods, the Funds
do not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of securities held during the
year. Similarly, the Funds do not isolate the effect of changes in
foreign exchange rates from the fluctuations arising from changes in the
market prices of long-term debt securities sold during the year.
Accordingly, such realized foreign currency gains (losses) are included
in the reported net realized gains (losses) on security transactions.
Reported realized foreign exchange gains or losses arise from disposition
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Funds' books on the transaction date and the U.S. dollar
equivalent of the amounts actually received or paid. Unrealized foreign
exchange gains and losses arise from changes (due to the changes in the
exchange rate) in the value of foreign currency and other assets and
liabilities denominated in foreign currencies which are held at period
end.
25
<PAGE> 159
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
6. Forward Foreign Currency Exchange Contracts -- The Funds may enter
into forward foreign currency contracts (obligations to purchase or sell
foreign currency in the future on a date and price fixed at the time the
contracts are entered into) to hedge the fund against fluctuations in the
value of its assets or liabilities due to change in the value of foreign
currencies. Each day the forward contract is open, changes in the value
of the contract are recognized as unrealized gains or losses by "marking
to market". When the forward contract is closed, or the delivery of the
currency is made or taken, the Fund records a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing
transaction and the fund's basis in the contract. The Funds are subject
to off-balance sheet risk to the extent of the value of the contracts for
purchases of currency and in an unlimited amount for sales of currency.
7. 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.
C. General Policies
1. Organization Costs -- Organization and initial registration costs
incurred in connection with establishing the VIEF have been deferred and
are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of each Fund.
2. Federal Income Taxes -- Each Fund is treated as a separate taxable
entity for Federal income tax purposes. The Trust's policy is to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute to shareholders all of its
distributable net investment income, and net realized gain on
investments. In addition, the Trust intends to make distributions as
required to avoid excise taxes. Accordingly, no provision for Federal
income or excise tax is necessary.
3. 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 these "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.
The reclassifications made for the funds are as follows: VEF net
investments income was increased by $19,733 and accumulated undistributed
net realized gain (loss) on investment transactions was decreased by
19,733; VJF net investment income was increased by $43,558 and
accumulated undistributed net realized gain (loss) on investment
transactions was decreased by $43,558; VSEAF net investment income was
increased by $14,418 and accumulated undistributed net realized gain
(loss) on investment transactions was decreased by $14,418 and VIEF Paid
in Capital was decreased by $321,674, accumulated undistributed net
investment income/loss was decreased by $25,243, and accumulated
undistributed net realized gain/loss was increased by $346,917. The
adjustments for the Funds relate primarily to the character for tax
purposes of certain short-term gains or losses. 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.
4. Expenses -- Expenses of the Trust directly attributable to a Fund
are charged to that Fund; other expenses are allocated proportionately
among each Fund within the Trust in relation to the net assets of each
Fund or on another reasonable basis. In calculating the net asset value
per share of each class, investment income, realized and unrealized gains
and losses and expenses other than class specific expenses, are allocated
daily to each class of shares based upon the proportion of net assets of
each class at the beginning of each day.
26
<PAGE> 160
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment Advisory Fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank, ("Chase" or the "Adviser") acts as the
Investment Adviser to the VEF, VSEAF and VJF. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Adviser, Chase
supervises the investments of the Funds and for such services is paid a fee.
The fee is computed daily and paid monthly at an annual rate equal to 1.00%
of the average daily net assets of each Fund. The Adviser, voluntarily
waived all or a portion of its fees as outlined in Note 2.E. below.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to each Fund pursuant to a Sub-Investment
Advisory Agreement between CAM and Chase. CAM is a wholly owned subsidiary
of Chase and is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.50% of each Fund's average daily
net assets.
B. Shareholder Servicing Fees -- The Trust has adopted an Administrative
Services Plan for the Class B Shares of all of the Funds, which, among other
things, provides that the Trust on behalf of the Funds may obtain the
services of one or more Shareholder Servicing Agents. For its services, the
Shareholder Servicing Agent will receive a fee that is computed daily and
paid monthly at an annual rate equal to 0.25% of the average daily net
assets of the Class B Shares of each Fund and for the Class A Shares of
VIEF. No Shareholder Servicing Fees have been charged to the Class A Shares
of the VEF, VSEAF and VJF.
Since inception, Chase, and certain affiliates have been the only
Shareholder Servicing Agents of the funds.
C. Distribution and Sub-Administration Fees -- Pursuant to a Distribution
and Sub-Administration Agreement, Vista Fund Distributors, Inc. (the
"Distributor"), a wholly owned subsidiary of The BISYS Group, Inc., acts as
the Trust's exclusive underwriter and promotes and arranges for the sale of
each Fund's shares. In addition, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space for an annual fee of 0.05% of the average
daily net assets of each Fund. The Trustees have adopted Distribution Plans
(the "Distribution Plans") for Class A and B shares of the funds in
accordance with Rule 12b-1 under the 1940 Act. The Class A Distribution
Plans provide that each Fund shall pay distributions fees, including
payments to the Distributor, at annual rates not to exceed 0.25% of the
average daily net assets of the Class A Shares of each Fund for distribution
services. The Class B Distribution Plan provides that each Fund shall pay
distribution fees, including payments to the Distributor, at an annual rate
not to exceed 0.75% of the average annual net assets of the Class B Shares
for distribution services.
The Distributor voluntarily waived all or a portion of sub-administration
fees as outlined in Note 2.E. below.
D. 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 VEF,
VSEAF, and VJF a fee computed at the annual rate equal to 0.10% of the
respective Fund's average daily net assets and from VIEF at the annual rate
equal to 0.05% of the respective Fund's average daily net assets . The
Administrator voluntarily waived all or a portion of the administration fees
as outlined in Note 2.E. below.
E. Waivers of fees -- For the period ended October 31, 1996, the,
Administrator, Investment Adviser, Shareholder Servicing Agent and
Sub-Administrator voluntarily waived fees for each of the Funds as follows:
<TABLE>
<CAPTION>
Fee Waivers VEF VSEAF VJF VIEF
--------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Administration......................... $ 8,102 $ 11,696 $ 7,123 $ 19,304
Investment Advisory.................... 54,013 77,971 47,488 --
-------- -------- -------- --------
Total.............................. $ 62,115 $ 89,667 $ 54,611 $ 19,304
======== ======== ======== ========
Distributor Reimbursement.............. $ 33,003 $ 26,645 $ 32,816 --
======== ======== ======== ========
</TABLE>
27
<PAGE> 161
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
F. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for VEF, VSEAF and
VJF. Compensation for such services are presented in the Statement of
Operations as custodian fees.
3. INVESTMENT TRANSACTIONS -- For the year ended October 31, 1996, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
VEF VSEAF VJF
------------ ------------ ------------
<S> <C> <C> <C>
Purchases (excluding U.S. Government)..... $ 14,592,762 $ 17,248,442 $ 10,236,540
Sales (excluding U.S. Government)......... 9,185,671 9,785,871 5,215,696
<CAPTION>
VIEF
------------
<S> <C>
Increase in Portfolio Investment.......... $ 20,400,056
Decrease in Portfolio Investment.......... 24,033,082
</TABLE>
4. FEDERAL INCOME TAX MATTERS -- For Federal income tax purposes, the cost and
unrealized appreciation (depreciation) in value of the investment securities at
October 31, 1996 are as follows:
<TABLE>
<CAPTION>
VEF VSEAF VJF
----------- ----------- -----------
<S> <C> <C> <C>
Aggregate cost.............................. $ 5,890,961 $ 7,978,784 $ 4,925,398
----------- ----------- -----------
Gross unrealized appreciation............... $ 593,575 $ 885,293 $ 32,827
Gross unrealized depreciation............... (167,072) (513,935) (428,284)
----------- ----------- -----------
Net unrealized appreciation................. $ 426,503 $ 371,358 ($ 395,457)
========== ========== ==========
</TABLE>
The VIEF utilized all of its net capital loss carry-over of approximately
$2,274,000, as a result there is $0 capital loss carry-overs to offset future
gains.
5. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST -- Transactions in Shares of
Beneficial Interest were as follows:
<TABLE>
<CAPTION>
Vista European Fund
--------------------------
11/2/95*
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold................. $ 6,578,504 642,276
Shares issued in
reinvestment of
distributions............. 8,362 716
Shares redeemed............. (1,193,977) (112,802)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 5,392,889 530,190
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista European Fund
--------------------------
11/3/95**
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class B
Shares sold................. $ 186,865 16,436
Shares issued in
reinvestment of
distributions............. 449 38
Shares redeemed............. (5,431) (512)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 181,883 15,962
============= ==========
</TABLE>
28
<PAGE> 162
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista Southeast Asian Fund
--------------------------
11/2/95*
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold................. $ 9,712,207 895,578
Shares issued in
reinvestment of
distributions............. -- --
Shares redeemed............. (2,159,565) (189,753)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 7,552,642 705,825
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Southeast Asian Fund
--------------------------
11/3/95**
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class B
Shares sold................. $ 1,414,580 119,531
Shares issued in
reinvestment of
distributions............. -- --
Shares redeemed............. (199,665) (16,815)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 1,214,915 102,716
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Japan Fund
--------------------------
11/2/95*
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class A
Shares sold................. $ 5,956,715 581,717
Shares issued in
reinvestment of
distributions............. -- --
Shares redeemed............. (768,571) (74,093)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 5,188,144 507,624
============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista Japan Fund
--------------------------
11/3/95**
Through
10/31/96
--------------------------
Amount Shares
------------ ----------
<S> <C> <C>
Class B
Shares sold................. $ 221,292 21,331
Shares issued in
reinvestment of
distributions............. -- --
Shares redeemed............. (40,261) (4,046)
------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... $ 181,031 17,285
============= ==========
</TABLE>
29
<PAGE> 163
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista International Equity Fund
--------------------------------------------------------
Years Ended October 31,
--------------------------------------------------------
1996 1995
-------------------------- --------------------------
Amount Shares Amount Shares
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Class A
Shares sold................. $ 17,914,479 1,456,995 $ 21,109,068 1,812,964
Shares issued in
reinvestment of
distributions............. 116,872 9,707 319,993 28,001
Shares redeemed............. (20,230,065) (1,640,951) (31,703,235) (2,735,407)
------------ ---------- ------------ ----------
Net increase (decrease) in
Trust shares
outstanding............... ($ 2,198,714) (174,249) ($10,274,174) (894,442)
============= ========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
Vista International Equity Fund
------------------------------------------------------
Years Ended October 31,
------------------------------------------------------
1996 1995
-------------------------- ------------------------
Amount Shares Amount Shares
------------ ---------- ------------ --------
<S> <C> <C> <C> <C>
Class B
Shares sold.................. $ 3,728,205 305,390 $ 4,133,925 361,483
Shares issued in reinvestment
of distributions........... 5,775 483 83,935 7,428
Shares redeemed.............. (2,870,893) (235,173) (4,508,509) (387,778)
------------ ---------- ------------ --------
Net increase (decrease) in
Trust shares outstanding... $ 863,087 70,700 ($ 290,649) (18,867)
============= ========== ============= =========
</TABLE>
- ---------------
* Fund commenced operations.
** Commenced offering class of shares.
6. OPEN FORWARD FOREIGN CURRENCY CONTRACTS -- The following forward foreign
currency contracts were open at October 31, 1996:
VISTA EUROPEAN FUND
<TABLE>
<CAPTION>
Net
Delivery Market Unrealized
Value (Local Cost Settlement Value Gain (Loss)
Purchases Currency) (USD) Date (USD) (USD)
- -------------------------- ------------ ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Italian Lira.............. 210,000,000 $ 138,613 05-Nov-96 $ 138,490 ($ 123)
Sales
- --------------------------
German Deutsche Mark...... 890,000 $ 599,760 26-Nov-96 $ 589,104 $ 10,656
VISTA JAPAN FUND
Sales
- --------------------------
Japanese Yen.............. 86,777,994 $ 813,000 19-Nov-96 $ 764,916 $ 48,084
Japanese Yen.............. 57,580,200 540,000 19-Nov-96 507,548 32,452
Japanese Yen.............. 58,547,580 546,000 19-Nov-96 516,075 29,925
Japanese Yen.............. 27,337,760 244,000 05-Feb-97 243,687 313
------------ ---------- -----------
$ 2,143,000 $2,032,226 $ 110,774
========== ========== ===========
</TABLE>
30
<PAGE> 164
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
7. FOREIGN CASH POSITIONS
VISTA EUROPEAN FUND
<TABLE>
<CAPTION>
Net
Delivery Market Unrealized
Value (Local Cost Value Gain (Loss)
Currency) (USD) (USD) (USD)
------------ --------- --------- -----------
<S> <C> <C> <C> <C>
Danish Krone........................... 14,308 $ 2,442 $ 2,462 $ 20
Spanish Peseta......................... 1,232,755 9,767 9,671 (96)
French Franc........................... 63,361 12,304 12,404 100
Italian Lira........................... 11,584,532 7,611 7,640 29
Dutch Guilder.......................... 23 14 14 0
Portuguese Escudo...................... 17,130 112 112 0
Swedish Krona.......................... 30,451 4,616 4,639 23
--------- --------- -----
$ 36,866 $ 36,942 $ 76
========= ========= =====
VISTA SOUTHEAST ASIAN FUND
Hong Kong Dollar....................... 3,234,585 $ 418,341 $ 418,320 ($ 21)
Korean Won............................. (55,906,348) (67,306) (67,306) 0
Singapore Dollar....................... 10 7 7 0
Thai Baht.............................. 63,207 2,482 2,478 (4)
--------- --------- -----
$ 353,524 $ 353,499 ($ 25)
========= ========= =====
VISTA JAPAN FUND
Japanese Yen........................... 9,355,244 $ 82,019 $ 82,251 $ 232
========= ========= =====
</TABLE>
8. CONCENTRATIONS -- At October 31, 1996, substantially all of the Fund's net
assets consist of securities of issuers which are denominated in foreign
currencies. Changes in currency exchange rates will affect the value of and
investment income from such securities. Substantially all of VSEAF's net assets
consists of securities which are subject to greater price volatility, limited
capitalization and liquidity, and higher rates of inflation than securities of
companies based in the United States. In addition, certain Asian securities may
be subject to substantial governmental involvement in the economy and greater
social economic and political uncertainty.
9. RETIREMENT PLAN -- The Funds have adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Funds who
will have served as independent trustees for at least five years at the time of
retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the year ended October 31, 1996, included in
Trustees Fees and Expenses in the Statement of Operations, prepaid pension
assets and accrued pension liability included in other assets, and other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were as
follows:
<TABLE>
<CAPTION>
Prepaid Accrued
Pension Pension Pension
Fund: Expenses Asset Liability
-------- ------- ---------
<S> <C> <C> <C>
VEF................................................... $119 $ 369 $ 488
VSEAF................................................. 181 560 741
VJF................................................... 110 341 451
VIEF.................................................. 310 960 1,269
</TABLE>
31
<PAGE> 165
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista
Vista Southeast
European Asian
Fund Fund
------------------------- ----------
Class A Class B Class A
---------- ---------- ----------
11/2/95* 11/3/95** 11/2/95*
Through Through Through
10/31/96 10/31/96 10/31/96
---------- ---------- ----------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................................. $ 10.00 $ 9.97 $ 10.00
-------- -------- --------
Income From Investment Operations:
Net Investment Income.............................................................. 0.146 0.066 (0.013)
Net Gains or (Losses) in Securities (both realized and unrealized)................. 1.929 1.961 1.983
-------- -------- --------
Total from Investment Operations................................................... 2.075 2.027 1.970
-------- -------- --------
Less Distributions:
Dividends from Net Investment Income............................................... 0.085 0.067 --
-------- -------- --------
Total Distributions................................................................ 0.085 0.067 --
-------- -------- --------
Net Asset Value, End of Period........................................................ $ 11.99 $ 11.93 $ 11.97
======== ======== ========
Total Return (1)...................................................................... 20.78% 20.35% 19.70%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted).............................................. $ 6,358 $ 190 $ 8,451
Ratio of Expenses to Average Net Assets #............................................ 1.75% 2.47% 1.74%
Ratio of Net Investment Income to Average Net Assets #............................... 1.44% 0.80% (0.12%)
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
#.................................................................................. 3.49% 3.83% 3.26%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #......... (0.30%) (0.56%) (1.64%)
Portfolio Turnover Rate............................................................... 186% 186% 149%
Average commission rate paid per share................................................ $ 0.0242 $ 0.0242 $ 0.0129
<CAPTION>
Vista
Japan
Fund
-------------------------
Class B Class A Class B
---------- ---------- ----------
11/3/95** 11/2/95* 11/3/95**
Through Through Through
10/31/96 10/31/96 10/31/96
---------- ---------- ----------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period.................................................. $ 10.01 $ 10.00 $ 10.00
-------- -------- --------
Income From Investment Operations:
Net Investment Income.............................................................. (0.055) (0.083) (0.022)
Net Gains or (Losses) in Securities (both realized and unrealized)................. 1.935 (0.497) (0.628)
-------- -------- --------
Total from Investment Operations................................................... 1.880 (0.580) (0.650)
-------- -------- --------
Less Distributions:
Dividends from Net Investment Income............................................... -- -- --
-------- -------- --------
Total Distributions................................................................ -- -- --
-------- -------- --------
Net Asset Value, End of Period........................................................ $ 11.89 $ 9.42 $ 9.35
======== ======== ========
Total Return (1)...................................................................... 18.78% (5.80%) (6.50%)
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted).............................................. $ 1,222 $ 4,781 $ 162
Ratio of Expenses to Average Net Assets #............................................ 2.52% 1.75% 2.52%
Ratio of Net Investment Income to Average Net Assets #............................... (0.90%) (0.91%) (0.40%)
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
#.................................................................................. 3.70% 3.60% 4.00%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #......... (2.08%) (2.76%) (1.88%)
Portfolio Turnover Rate............................................................... 149% 121% 121%
Average commission rate paid per share................................................ $ 0.0129 $ 0.0499 $ 0.0499
</TABLE>
- ---------------
(1) Total return figures do not include the effect of any sales load.
* Commencement of operations.
** Commencement of offering of class of shares.
# Short periods have been annualized.
See notes to financial statements.
32
<PAGE> 166
VISTA MUTUAL FUNDS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING
Throughout each period indicated (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vista International Equity Fund
---------------------------------------------
Class A
---------------------------------------------
Year Ended 12/31/92*
-------------------------------- Through
10/31/96 10/31/95 10/31/94 10/31/93
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............................................... $ 12.02 $ 12.31 $ 11.82 $ 10.00
------- ------- ------- --------
Income From Investment Operations:
Net Investment Income........................................................... 0.056 0.039 (0.022) (0.010)
Net Gains or (Losses) in Securities (both realized and unrealized).............. 0.367 (0.190) 0.566 1.830
------- ------- ------- --------
Total from Investment Operations................................................ 0.423 (0.151) 0.544 1.820
------- ------- ------- --------
Less Distributions:
Dividends from Net Investment Income............................................ 0.063 -- -- --
Distributions from Capital Gains................................................ -- 0.137 0.054 --
------- ------- ------- --------
Total Distributions............................................................. 0.063 0.137 0.054 --
------- ------- ------- --------
Net Asset Value, End of Period..................................................... $ 12.38 $ 12.02 $ 12.31 $ 11.82
======= ======= ======= ========
Total Return (1)................................................................... 3.53% (1.19%) 4.61% 22.23%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)........................................... $24,904 $26,287 $37,926 $ 14,290
Ratio of Expenses to Average Net Assets #......................................... 2.00% 2.01% 2.00% 2.13%
Ratio of Net Investment Income to Average Net Assets #............................ 0.03% (0.10%) (0.27%) (0.14%)
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
# (2)........................................................................... 2.86% 2.86% 2.86% 2.86%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #...... (0.89%) (0.96%) (1.13%) (0.87%)
<CAPTION>
Vista International Equity Fund
----------------------------------
Class B
----------------------------------
Year Ended 11/04/93**
-------------------- Through
10/31/96 10/31/95 10/31/94
-------- -------- ----------
<S> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period............................................... $ 11.89 $ 12.23 $ 11.69
------- ------- --------
Income From Investment Operations:
Net Investment Income........................................................... 0.013 (0.026) (0.053)
Net Gains or (Losses) in Securities (both realized and unrealized).............. 0.350 (0.180) 0.647
------- ------- --------
Total from Investment Operations................................................ 0.363 (0.206) 0.594
------- ------- --------
Less Distributions:
Dividends from Net Investment Income............................................ -- -- --
Distributions from Capital Gains................................................ 0.010 0.137 0.054
------- ------- --------
Total Distributions............................................................. 0.010 0.137 0.054
------- ------- --------
Net Asset Value, End of Period..................................................... $ 12.24 $ 11.89 $ 12.23
======= ======= ========
Total Return (1)................................................................... 3.03% (1.61%) 5.09%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)........................................... $ 7,819 $ 6,759 $ 7,182
Ratio of Expenses to Average Net Assets #......................................... 2.50% 2.50% 2.50%
Ratio of Net Investment Income to Average Net Assets #............................ (0.43%) (0.53%) (0.94%)
Ratio of Expenses Without Waivers and Assumption of Expenses to Average Net Assets
# (2)........................................................................... 3.36% 3.36% 3.36%
Ratio of Net Investment Income Without Waivers and Assumptions of Expenses #...... (1.29%) (1.40%) (1.80%)
</TABLE>
- ---------------
(1) Total return figures do not include the effect of any sales load.
(2) Not to exceed the maximum statutory ratio.
* Commencement of operations.
** Commencement of offering of class of shares.
# Short periods have been annualized.
See notes to financial statements.
33
<PAGE> 167
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Mutual Fund Group
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the selected per share data and ratios for a share of
beneficial interest outstanding present fairly, in all material respects, the
financial position of Vista European Fund, Vista Southeast Asian Fund, Vista
Japan Fund and Vista International Equity Fund (separate portfolios of Mutual
Fund Group, hereafter referred to as the "Trust") at October 31, 1996, the
results of each of their operations for the year then ended, the changes in each
of their net assets for each of the two years in the period then ended (for the
year ended October 31, 1996 for Vista Japan Fund, Vista Southeast Asian Fund and
Vista European Fund), and the selected per share data and ratios for a share of
beneficial interest outstanding for each of the periods presented, in conformity
with generally accepted accounting principles. These financial statements and
selected per share data and ratios for a share of beneficial interest
outstanding (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 audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards 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
audits, which included confirmation of securities at October 31, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 10, 1996
34
<PAGE> 168
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 91.4%
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK -- 91.2%
---------------------
ARGENTINA -- 0.9%
Banking -- 0.9%
11,000 Banco Frances del Rio de la Plata SA, ADS $ 288,750
------------
AUSTRALIA -- 0.5%
Broadcasting -- 0.1%
8,000 News Corp. Ltd. 45,518
Metals/Mining -- 0.2%
50,000 Mount Edon Gold Mines 64,585
Oil -- 0.2%
68,000 Energy Equity Corp. Ltd. * 51,192
------------
TOTAL AUSTRALIA 161,295
------------
AUSTRIA -- 1.6%
Oil & Gas -- 0.8%
2,714 OMV AG 265,756
Steel -- 0.8%
3,376 Boehler -- Uddeholm AG 252,610
------------
TOTAL AUSTRIA 518,366
------------
BRAZIL -- 0.7%
Telecommunications -- 0.7%
3,100 Telecomunicacoes Brasileiras SA, ADR 230,950
------------
DENMARK -- 0.9%
Banking -- 0.9%
7,000 BG Bank A/S 297,462
------------
FRANCE -- 5.3%
Automotive -- 0.7%
1,678 Equipments et Composants pour l'Industrie Automobile 226,502
Computer Software -- 0.3%
1,032 Group Axime * 107,202
Financial Services -- 1.1%
1,631 Cetelem Group 348,104
Insurance -- 0.8%
9,020 AGF (Assurances Generales de France) 266,096
Oil & Gas -- 0.8%
3,310 Total SA -- B 258,946
</TABLE>
See notes to financial statements.
35
<PAGE> 169
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- ------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- ------------------------------------------------------------------------------------
<C> <S> <C>
FRANCE (CONTINUED)
Pharmaceuticals -- 0.9%
1,046 Roussel-Uclaf $ 276,860
Utilities -- 0.7%
1,892 Compagnie Generale des Eaux 226,148
------------
TOTAL FRANCE 1,709,858
------------
GERMANY -- 6.8%
Automotive -- 1.1%
6,000 Daimler-Benz AG 352,405
Capital Goods -- 0.8%
637 Mannesmann AG 247,460
Consumer Products -- 2.1%
5,007 Adidas AG 429,379
7,955 Puma AG 235,192
Insurance -- 1.3%
237 Allianz AG Holding 425,585
Pharmaceuticals -- 0.9%
3,800 Schwarz Pharma AG 292,733
Utilities -- 0.6%
3,948 Veba AG 210,677
------------
TOTAL GERMANY 2,193,431
------------
HONG KONG -- 6.1%
Banking -- 1.3%
14,000 Hang Seng Bank Ltd. 166,123
11,911 HSBC Holdings PLC 242,620
Diversified -- 1.6%
32,000 Citic Pacific Ltd. 155,609
62,000 First Pacific Company Ltd. 85,396
22,000 Hutchison Whampoa 153,643
15,000 Swire Pacific, Ltd, Class A 132,401
Financial Services -- 0.3%
21,000 Guoco Group Ltd. 111,081
</TABLE>
See notes to financial statements.
36
<PAGE> 170
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
HONG KONG (CONTINUED)
Real Estate -- 2.9%
66,000 Amoy Properties Ltd. $ 81,516
18,000 Cheung Kong (Holdings) Ltd. 144,332
212 Henderson China Holding Ltd. 480
30,000 Hysan Development Co. Ltd. 96,221
32,000 New World Development Company, Ltd. 186,234
57,000 New World Infrastructure Ltd. * 141,907
96,000 Sino Land Co. 106,774
13,000 Sun Hung Kai Properties Ltd. 147,953
6,000 Wharf (Holdings) Ltd. 24,754
------------
TOTAL HONG KONG 1,977,044
------------
INDIA -- 0.2%
Automotive -- 0.1%
1,650 Tata Engineering & Locomotive Co., Ltd., GDR 20,419
Hotels/Other Lodging -- 0.1%
1,000 Indian Hotels Co. Ltd., GDR # 23,750
Metals/Mining -- 0.0%
300 Hindalco Industries Ltd, GDR 5,514
------------
TOTAL INDIA 49,683
------------
INDONESIA -- 0.3%
Banking -- 0.0%
26,500 PT Bank Negara Indonesia, (Foreign) * 9,670
Construction Materials -- 0.2%
16,000 PT Semen Gresik, (Foreign) 46,022
1,500 PT United Tractors (Foreign) 2,785
Diversified -- 0.1%
24,500 PT Bimantara Citra, (Foreign) 27,610
------------
TOTAL INDONESIA 86,087
------------
IRELAND -- 1.9%
Banking -- 1.2%
46,000 Bank of Ireland 378,115
Insurance -- 0.7%
53,800 Irish Life PLC 232,499
------------
TOTAL IRELAND 610,614
------------
</TABLE>
See notes to financial statements.
37
<PAGE> 171
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
ITALY -- 4.2%
Financial Services -- 1.4%
55,400 Istituto Mobiliare Italiano SPA $ 439,064
Oil & Gas -- 1.1%
74,000 Ente Nazionale Idrocarburi SpA (ENI) 354,150
Telecommunications -- 0.6%
95,000 Telecom Italia Mobile SpA 195,996
Utilities -- 1.1%
61,500 Edison SpA 366,611
------------
TOTAL ITALY 1,355,821
------------
JAPAN -- 27.3%
Automotive -- 1.0%
4,000 Honda Motor Co. Ltd. 95,627
9,000 Toyota Motor Corp. 212,788
Banking -- 1.8%
9,000 Bank of Tokyo-Mitsubishi 183,520
24,000 Mitsui Trust & Banking 232,037
15,000 Sumitomo Trust & Banking 166,117
Business Services -- 0.6%
19,000 Ricoh Corp. Ltd. 188,706
Chemicals -- 0.5%
41,000 Dainippon Ink & Chemical Inc. 175,496
Computer Software -- 0.3%
5,000 Hitachi Software Engineering Co. 110,745
Electronics/Electrical Equipment -- 6.0%
16,000 Hitachi Ltd. 142,035
2,400 Keyence Corp. 278,444
4,400 Mabuchi Motor 224,302
47,000 Mitsubishi Electric Corp. 272,230
17,000 Nippon Signal Co. 168,842
3,000 Rohm Company 177,983
15,000 Sharp Corp. 228,082
2,800 SMC Corp. 181,622
3,000 Tokyo Electron Ltd. 77,258
46,000 Yaskawa Electric Corp. * 177,491
Engineering/Construction -- 0.2%
9,000 Nichiei Construction 77,205
Health Care -- 0.6%
32,000 Shimadzu Corp. 188,442
</TABLE>
See notes to financial statements.
38
<PAGE> 172
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
JAPAN (CONTINUED)
Machinery & Engineering Equipment -- 6.0%
19,000 CKD Corp. $ 150,130
7,000 Fuji Machine Manufacturing Co. 165,502
50,000 Ishikawajima-Harima Heavy Industries 230,719
23,000 Komatsu Ltd. 188,407
11,000 Komori Corp. 247,506
25,000 Mitsubishi Heavy Industries Ltd. 192,265
19,000 Mori Seiki 280,554
65,000 Nachi-Fujikoshi Corp. * 263,371
35,000 NTN Corp. 212,569
Metals/Mining -- 0.9%
53,000 Showa Aluminum Corp. 279,033
Printing & Publishing -- 0.6%
12,000 Dai Nippon Printing Co. Ltd. 202,505
Real Estate -- 1.6%
20,000 Daibiru Corp. 226,763
16,000 Hankyu Realty 144,847
11,000 Mitsubishi Estate Co., Ltd. 137,289
Retailing -- 2.1%
6,000 Aoyama Trading Co., Ltd. 153,461
7,000 Isetan 93,518
2,000 Ito-Yokado Co. Ltd. 99,846
10,600 Mr. Max 181,674
26,000 Tokyu Department Store 148,539
Shipping/Transportation -- 1.9%
20,000 Hitachi Transport System 186,333
45,000 Nagoya Railroad Co., Ltd. 182,334
16,000 Nankai Electric Railway 91,549
25,000 Tokyu Corp. 168,095
Steel -- 0.9%
36,000 NKK Corp. * 90,494
19,000 Yamato Kogyo Co., Ltd. 188,706
Telecommunications -- 1.0%
20 DDI Corp. 150,297
19,000 Tamura Electric Works, 170,336
Warehousing -- 0.6%
30,000 Sumitomo Warehouse 189,057
</TABLE>
See notes to financial statements.
39
<PAGE> 173
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
JAPAN (CONTINUED)
Wholesaling -- 0.7%
39,000 Itochu Corp. $ 235,491
------------
TOTAL JAPAN 8,810,162
------------
MALAYSIA -- 3.2%
Agriculture -- 0.2%
33,000 Kumpulan Guthrie Bhd. 50,940
Automotive -- 0.3%
50,000 Tractors Malaysia Holdings Bhd. 108,846
Construction -- 0.7%
13,000 Intria Bhd. * 34,732
60,000 Sunway Building Technology Bhd. 188,799
Construction Materials -- 0.8%
65,000 Kedah Cement Holdings Bhd. 120,404
25,000 Sungei Way Holdings Bhd. 142,490
Diversified -- 0.1%
22,000 Westmont Bhd. 37,095
Electronics/Electrical Equipment -- 0.3%
42,000 Leader Universal Holdings Bhd. 93,924
Engineering Services -- 0.3%
19,000 Ekran Bhd. 79,715
Engineering/Construction -- 0.1%
31,000 Pilecon Engineering Bhd. 41,718
Telecommunications -- 0.4%
30,000 FCW Holdings Bhd. 71,245
15,000 Technology Resources Industries Bhd. * 35,919
3,000 Telekom Malaysia Bhd. 26,479
------------
TOTAL MALAYSIA 1,032,306
------------
MEXICO -- 0.4%
Diversified -- 0.2%
13,829 ALFA, S.A. de C.V., Class A 57,434
Real Estate -- 0.2%
3,900 Corporacion GEO, S.A. de C.V., Ser. B, ADR * 69,743
------------
TOTAL MEXICO 127,177
------------
</TABLE>
See notes to financial statements.
40
<PAGE> 174
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
NETHERLANDS -- 3.3%
Banking -- 0.0%
1 ING Groep N.V. $ 31
Chemicals -- 1.0%
2,671 Akzo Dutch 336,660
Food/Beverage Products -- 1.2%
7,580 CSM NV, N.R. Certificate 399,947
Printing & Publishing -- 1.1%
19,020 Verenigde Nederlandse Uitgeversbedrijvan Verenigd 345,359
Bezit (VNU)
------------
TOTAL NETHERLANDS 1,081,997
------------
PHILIPPINES -- 0.4%
Banking -- 0.1%
1,000 Metropolitan Bank & Trust Co. 22,070
1,500 Philippine National Bank * 17,266
Diversified -- 0.1%
21,200 Ayala Corp. 20,167
79,000 Metro Pacific Corp. 19,239
Electronics/Electrical Equipment -- 0.1%
15,100 Ionics Circuit Inc 9,768
Real Estate -- 0.1%
20,000 Ayala Land, Inc., Class B, 21,309
50,000 Filinvest Development Corp. 18,645
------------
TOTAL PHILIPPINES 128,464
------------
PORTUGAL -- 1.0%
Telecommunications -- 1.0%
12,509 Portugal Telecom SA 325,291
------------
SINGAPORE -- 0.7%
Airlines -- 0.2%
8,000 Singapore Airlines Ltd. (Foreign) 70,430
Banking -- 0.3%
6,600 Overseas Chinese Banking Corp. (Foreign) 75,442
Shipping/Transportation -- 0.2%
84,000 Comfort Group Ltd. 74,547
------------
TOTAL SINGAPORE 220,419
------------
</TABLE>
See notes to financial statements.
41
<PAGE> 175
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
SPAIN -- 1.8%
Consumer Products -- 0.9%
8,200 Tabacalera SA, Class A $ 300,121
Retailing -- 0.9%
12,100 Centros Comerciales Pryca SA 277,856
------------
TOTAL SPAIN 577,977
------------
SWEDEN -- 0.6%
Machinery & Engineering Equipment -- 0.6%
13,084 Svedala Industri AB-Free 205,124
------------
SWITZERLAND -- 4.1%
Banking -- 1.7%
2,949 Schweizerische Bankverein, Registered Shares 568,687
Pharmaceuticals -- 2.4%
681 Sandoz AG 787,947
------------
TOTAL SWITZERLAND 1,356,634
------------
THAILAND -- 0.9%
Banking -- 0.6%
31,300 Krung Thai Bank Ltd. (Foreign) 84,711
18,000 Thai Farmers Bank Public Co. Ltd 99,549
Metals/Mining -- 0.0%
1,900 Loxley Company Ltd (Foreign) 13,787
Utilities -- 0.3%
12,000 Cogeneration Public Co. (Foreign) 44,479
19,000 Electricity Generating Public Company Ltd. (Foreign) 55,148
------------
TOTAL THAILAND 297,674
------------
UNITED KINGDOM -- 18.1%
Aerospace -- 0.6%
49,168 Rolls-Royce PLC 202,958
Airport Services -- 0.9%
34,190 British Airport Authority PLC 277,142
Automotive Services -- 0.3%
18,899 Lex Service PLC 111,973
Banking -- 1.1%
31,185 National Westminster Bank 356,080
Chemicals -- 0.5%
27,258 BTP PLC 145,527
</TABLE>
See notes to financial statements.
42
<PAGE> 176
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM (CONTINUED)
Construction -- 0.6%
19,075 Berkeley Group PLC $ 190,482
Construction Materials -- 0.6%
28,956 Meyer International PLC 195,596
Diversified -- 0.7%
61,114 Cookson Group PLC 224,317
Engineering Services -- 0.9%
141,801 Senior Engineering Group PLC 288,512
Food/Beverage Products -- 1.1%
44,777 Allied Domecq PLC 346,197
Hotels/Other Lodging -- 0.7%
92,440 Jarvis Hotels PLC * 240,743
Insurance -- 1.1%
45,909 Prudential Corp. PLC 346,729
Metals/Mining -- 1.2%
40,128 Powerscreen International PLC 397,123
Oil & Gas -- 1.7%
33,323 Shell Transport & Trading PLC 546,466
Printing & Publishing -- 0.4%
37,993 Mirror Group PLC 144,090
Real Estate -- 1.7%
28,828 Land Securities PLC 335,971
32,640 MEPC PLC 227,123
Retailing -- 1.7%
26,518 Boots Company PLC 270,634
29,031 Great Universal Stores PLC 286,830
Security Services -- 0.5%
32,419 Chubb Security PLC 167,804
Shipping/Transportation -- 0.7%
21,289 Peninsular & Orient Steam Navigation Co. 209,125
Utilities -- 1.1%
1 London Electricity PLC 10
52,929 National Power PLC 351,502
------------
TOTAL UNITED KINGDOM 5,862,934
------------
TOTAL COMMON STOCK (COST $29,001,226) 29,505,520
------------
</TABLE>
See notes to financial statements.
43
<PAGE> 177
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Shares Issuer Value
- -----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<S> <C>
WARRANTS -- 0.2%
----------------
MALAYSIA -- 0.2%
Construction --
60,000 Sunway Building Technology, Bhd., 3.0% Rules, $ 18,880
Redeemable Unsecured Loan Stock
24,000 Sunway Building Technology, Bhd., attached to Rules 35,907
------------
TOTAL WARRANTS (COST $24,077) 54,787
------------
Principal
Amount
- ----------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES -- 0.0%
-------------------------------
FRANCE -- 0.0%
Banking --
$ 15,840 Societe Generale, 3.50%, 01/01/00 3,711
(COST $2,844)
- ----------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 29,564,018
(COST $29,028,147)
- ----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 3.50%
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATION -- 0.4%
----------------------------------
U.S. Treasury Bills,
100,000 5.03%, 11/14/96 99,818
35,000 5.26%, 12/12/96 34,799
------------
134,617
------------
MONEY MARKET DEPOSIT ACCOUNT -- 0.6%
------------------------------------
193,422 Chase Manhattan Bank, 3.15%, 11/01/96 193,422
------------
</TABLE>
See notes to financial statements.
44
<PAGE> 178
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS October 31, 1996 (continued)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- (CONTINUED)
- -----------------------------------------------------------------------------------------
<C> <S> <C>
COMMERCIAL PAPER -- 2.5%
------------------------
$ 788,000 Household Finance Corp., 5.38%, 11/01/96 $ 788,000
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS 1,116,039
(COST $1,116,039)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 94.9% $ 30,680,057
(COST $30,144,186)
- ----------------------------------------------------------------------------------------
</TABLE>
# = Security may only be sold to qualified institutional buyers.
* = Non income producing security.
ACES = Automatic Common Exchange Securities.
ADR = American Depository Receipt.
ADS = American Depository Shares.
GDR = Global Depositary Receipt
PURCHASED INDEX FUTURES OUTSTANDING
<TABLE>
<CAPTION>
Number Original Nominal
Expiration of Nominal Value at Unrealized
Description Date Contracts Value 10/31/96 Appreciation
- ----------------------- ---------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Nikkei 225 Index....... Dec 96 20 $1,861,106 $1,805,318 ($55,788)
</TABLE>
See notes to financial statements.
45
<PAGE> 179
STATEMENT OF ASSETS AND LIABILITIES October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Equity
Portfolio
------------
<S> <C>
ASSETS:
Investment securities, at value (Note 1)............................. $ 30,680,057
Foreign Cash (Cost $1,487,232)....................................... 1,488,322
Receivables:
Investment securities sold......................................... 435,069
Interest and dividends............................................. 97,001
Open forward currency contracts.................................... 35,876
Other assets......................................................... 14,811
------------
Total assets................................................... 32,751,136
------------
LIABILITIES:
Payable for investment securities purchased.......................... 359,280
Payable for open forward currency contracts.......................... 20,327
Variation margin payable on futures contracts........................ 11,866
Accrued liabilities: (Note 2)
Custodian.......................................................... 3,539
Other.............................................................. 36,147
------------
Total Liabilities.............................................. 431,159
------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL
INTERESTS............................................................ $ 32,319,977
============
Cost of Investments.................................................... $ 30,144,186
============
</TABLE>
See notes to financial statements.
46
<PAGE> 180
STATEMENT OF OPERATIONS For the year ended October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Equity
Portfolio
------------
<S> <C>
INVESTMENT INCOME:
Dividend.......................................................................... $ 729,818
Interest.......................................................................... 40,468
Foreign taxes withheld............................................................ (100,106)
------------
Total investment income..................................................... 670,180
------------
EXPENSES: (Note 2)
Investment Advisory fees.......................................................... 330,983
Administration fees............................................................... 16,550
Custodian fees.................................................................... 45,746
Amortization of organization costs (Note 1)....................................... 11,547
Professional fees................................................................. 64,929
Trustees fees..................................................................... 1,737
Other............................................................................. 140,845
------------
Total expenses.............................................................. 612,337
------------
Less amounts waived............................................................... 347,533
------------
Net expenses.................................................................... 264,804
------------
Net investment income........................................................... 405,376
------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments..................................................................... 3,643,482
Financial Futures............................................................... (3,585)
Foreign currency transactions................................................... (21,633)
Change in net unrealized appreciation/depreciation on:
Investments..................................................................... (2,456,743)
Foreign currency contracts and translations..................................... 16,780
------------
Net realized and unrealized gain (loss)........................................... 1,178,301
------------
Net increase in net assets from operations........................................ $ 1,583,677
============
</TABLE>
See notes to financial statements.
47
<PAGE> 181
STATEMENT OF CHANGES IN NET ASSETS For the periods indicated
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Equity
Portfolio
----------------------------
Year Ended
----------------------------
10/31/96 10/31/95
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income............................... $ 405,376 $ 331,777
Net realized gain (loss) on investments............. 3,618,264 (2,783,479)
Change in net unrealized appreciation/depreciation
on investments and foreign currency
translations...................................... (2,439,963) 1,386,352
------------ ------------
Increase (decrease) in net assets from operations... 1,583,677 (1,065,350)
------------ ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions....................................... 20,400,056 27,092,056
Withdrawals......................................... (24,033,082) (47,239,948)
------------ ------------
Net increase (decrease) from transactions in
investors' beneficial interests................... (3,633,026) (20,147,892)
------------ ------------
Net increase (decrease) in net assets......... (2,049,349) (21,213,242)
NET ASSETS:
Beginning of period................................. 34,369,326 55,582,568
------------ ------------
End of period....................................... $ 32,319,977 $ 34,369,326
============ ============
</TABLE>
See notes to financial statements.
48
<PAGE> 182
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- International Equity
Portfolio ("the Portfolio") is separately registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open end management
investment company organized as a trust under the laws of the State of New York.
The declaration of trust permits the Trustees to issue beneficial interests in
the Portfolio. The Portfolio commenced operations on December 29, 1992.
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.
The following is a summary of significant accounting policies followed by
the Portfolio:
A. Valuation of Investments -- Equity securities, purchased options and
futures 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 by or at the direction of the
Trustees.
B. Repurchase Agreements -- It is the Trust's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Trusts' 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 Trusts
may be delayed or limited.
C. Forward Foreign Currency Exchange Contracts -- The Portfolio may enter
into forward foreign currency contracts (obligations to purchase or sell
foreign currency in the future on a date and price fixed at the time the
contracts are entered into) to hedge the Portfolio against fluctuations in
the value of its assets or liabilities due to change in the value of foreign
currencies. Each day the forward contract is open, changes in the value of
the contract are recognized as unrealized gains or losses by "marking to
market". When the forward contract is closed, or the delivery of the
currency is made or taken, the Portfolio records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Portfolio's basis in the contract. The Portfolio is
subject to off-balance sheet risk to the extent of the value of the
contracts for purchases of currency and in an unlimited amount for sales of
currency.
D. Foreign Currency Translation -- The books and records of the Portfolio
are maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at the official exchange rates, or at the mean of the current
bid and asked prices, of such currencies against the U.S. dollar as quoted
by a major bank, on the following basis:
1. Market value of investment securities and other assets and
liabilities: at the closing rate of exchange at the balance sheet date.
2. Purchases and sales of investment securities, income and expenses:
at the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Portfolio are presented at the foreign
exchange rates and market values at the close of the periods, the Portfolio
does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of securities sold during the
year. Accordingly, realized foreign currency gains (losses) are included in
the reported net realized losses on security transactions.
49
<PAGE> 183
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
Reported realized foreign exchange gains or losses arise from disposition of
foreign currency, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Portfolio's books on the transaction date and the U.S. dollar equivalent
of the amounts actually received or paid. Unrealized foreign exchange gains
and losses arise from changes (due to the changes in the exchange rate) in
the value of foreign currency and other assets and liabilities denominated
in foreign currencies which are held at period end.
E. Futures Contracts -- When the Portfolio enters into a futures contract,
it makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to market
and the Portfolio makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The Portfolio invested a portion of its liquid assets in long stock index
futures contracts to more fully participate in the market. Use of futures
contracts subject the Portfolio to risk of loss in excess of amounts shown
on the Statement of Assets and Liabilities, up to the amount of the value of
the contract.
The Portfolio may enter into futures contracts only on exchanges or boards
of trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Portfolio's credit risk is limited to
failure of the exchange or board of trade.
As of October 31, 1996, the Portfolio had no futures contracts.
F. Written Options -- When the Portfolio writes an option on a futures
contract, an amount equal to the premium received by the Portfolio is
included in the Portfolio's Statement of Assets and Liabilities as an asset
and corresponding liability. The amount of the liability is adjusted daily
to reflect the current market value of the written options and the change is
recorded in a corresponding unrealized gain or loss account. When a written
option expires on its stipulated expiration date, or when a closing
transaction is entered into, the related liability is extinguished and the
Portfolio realizes a gain (or loss if the cost of the closing transaction
exceeds the premium received when the option was written).
The Portfolio writes options on stock index securities futures. These
options are settled for cash and subject the Portfolio to market risk in
excess of the amounts that are reflected in the Statement of Assets and
Liabilities. The Portfolio, however, is not subject to credit risk on
written options as the counterparty has already performed its obligation by
paying a premium at the inception of the contract.
As of October 31, 1996 the Portfolio had no outstanding written options.
G. 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.
H. Organization Costs -- Organization and initial registration costs
incurred in connection with establishing the Portfolio have been deferred
and are being amortized on a straight-line basis over a sixty month period
beginning at the commencement of operations of the Portfolio.
I. Federal Income Taxes -- The Portfolio intends to continue qualify as a
partnership and therefore net income and net realized gains are taxed to the
partners. Accordingly, no tax provision is recorded by the Portfolio. The
investors in the Portfolio must take into account their proportionate share
of the Portfolio's income, gains, losses, deductions, credits and tax
preference items in computing their federal income tax liability, without
regard to whether they have received any cash distributions from the
Portfolio. The Portfolio does not intend to distribute to investors its net
investment income or its net realized gains, if any. It is intended that the
Portfolio will be managed in such a way that investors in the Portfolio will
be able to satisfy the requirements of subchapter M of the Internal Revenue
Code to be taxed as regulated investment companies.
50
<PAGE> 184
VISTA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1996 (continued)
- --------------------------------------------------------------------------------
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment Advisory Fee -- Pursuant to an Investment Advisory
Agreement, The Chase Manhattan Bank, ("Chase" or the "Adviser") acts as the
Investment Adviser to the Portfolio. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Adviser, Chase
supervises the investments of the Portfolio and for such services is paid a
fee. The fee is computed daily and paid monthly at an annual rate equal to
1.00% of the Portfolio's average daily net assets. For the period ended
October 31, 1996, the Advisor waived fees of $330,983 for the Portfolio.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to the Portfolio pursuant to a Sub-Investment
Advisory Agreement between CAM and Chase. CAM is a wholly owned subsidiary
of Chase and is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.50% of the Portfolio's average
daily net assets.
B. Custodial Fees -- Chase, as Custodian, provides safekeeping services
for the Portfolio's securities. Compensation for such services are presented
in the Statement of Operations as custodian fees.
C. Administration Fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Portfolio. For these services and facilities, the Administrator receives
from the Portfolio a fee computed at the annual rate equal to 0.05% of the
Portfolio's average daily net assets. For the year ended October 31, 1996,
the Administrator waived fees of $16,550 for the Portfolio.
3. INVESTMENT TRANSACTIONS -- For the year ended October 31, 1996, purchases
and sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
<S> <C>
Purchases (excluding U.S. Government).............................. $ 56,089,682
Sales (excluding U.S. Government).................................. 59,457,025
</TABLE>
The portfolio turnover rate of IEP for the year ended October 31, 1996 was 179%.
The average commission rate per share was $.02724.
4. OPEN FORWARD FOREIGN CURRENCY CONTRACTS -- The following forward foreign
currency contracts were held by the Portfolio.
<TABLE>
<CAPTION>
Delivery Net
Value Market Unrealized
(Local Cost Settlement Value Gain (Loss)
Currency) (USD) Date (USD) (USD)
------------ ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Sales
German Deutsche Mark........ 1,500,000 $ 986,323 01/10/97 $ 995,645 ($ 9,322)
German Deutsche Mark........ 1,500,000 984,640 01/10/97 995,645 (11,005)
Japanese Yen................ 170,000,000 1,545,314 01/10/97 1,509,438 35,876
----------- ---------- -----------
$ 3,516,277 $3,500,728 15,549
=========== ========== ===========
</TABLE>
5. RETIREMENT PLAN -- The Portfolio has adopted an unfunded noncontributory
defined benefit pension plan covering all independent trustees of the Portfolio
who will have served as independent trustees for at least five years at the time
of retirement. Benefits under this plan are based on compensation and years of
service. Pension expenses for the year ended October 31, 1996, included in
Trustees Fees and Expenses in the Statement of Operations, prepaid pension costs
and accrued pension liability included in other assets, and other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were $311,
$963 and $1,273.
51
<PAGE> 185
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Beneficial Interest Holders of
International Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities including
the portfolio of investments and the related statement of operations and of
changes in net assets present fairly, in all material respects, the financial
position of Vista International Equity Portfolio (the "Portfolio") at October
31, 1996, the results of its operations for the year then ended, and the changes
in its net assets for each of the two years in the period then ended in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards 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 audits, which included confirmation of securities at October
31, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 10, 1996
52
<PAGE> 186
(unaudited)
VISTA EUROPEAN FUND
VISTA SOUTHEAST ASIAN FUND
VISTA JAPAN FUND
VISTA INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Certain tax information regarding the Vista Mutual Funds is required to be
provided to shareholders based upon the Funds income and distributions for the
taxable year ended October 31, 1996. The information and distributions reported
in this letter may differ from the information and distributions taxable to the
shareholders for the calendar year ending December 31, 1996. The information
necessary to complete your income tax returns for the calendar year ending
December 31, 1996 will be received under separate cover.
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1996.
The following represents the source and percentage of income earned from
government obligations by the Funds:
<TABLE>
<CAPTION>
U.S.
TREASURY
OBLIGATION
------------
<S> <C>
European................................................ 0.00%
Southeast Asian......................................... 1.50%
Japan................................................... 1.67%
International Equity.................................... 10.40%
</TABLE>
53
<PAGE> 187
VISTA SERVICE CENTER
P.O. BOX 419392
KANSAS CITY, MO 64179
Investment Adviser, Administrator,
Shareholder and Fund Servicing Agent and Custodian
The Chase Manhattan Bank
Distributor
Vista Fund Distributors, Inc.
Transfer Agent
DST Systems, Inc.
Legal Counsel
Simpson Thacher & Bartlett
Independent Accountants
Price Waterhouse LLP
Vista Fund Distributors, Inc. is the funds' distributor and is unaffiliated with
Chase. The Chase Manhattan Bank is the funds' adviser.
This report is submitted for the general information of the shareholders of the
funds. It is not authorized for distribution to prospective investors in the
funds unless preceded or accompanies by a prospectus.
To obtain a prospectus for any of the Vista funds, call 1-800-34-VISTA. The
prospectus contains more complete information, including charges and expenses.
Please read it carefully before you invest or send money.
VINTL-2-1296
