MUTUAL FUND GROUP, 485APOS, 1997-09-15

MUTUAL FUND GROUP
485APOS, 1997-09-15

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As filed via EDGAR with the Securities and Exchange Commission on
September 15, 1997
File No. 811-5151
Registration No. 33-14196
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | |

Pre-Effective Amendment No. |_|

Post-Effective Amendment No. 44 |X|

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | |

Post-Effective Amendment No. 83 |X|
-------------------------------
MUTUAL FUND GROUP
(Exact Name of Registrant as Specified in Charter)

101 Park Avenue
New York, New York 10178
--------------------------------------------------
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code: (212) 492-1600

George Martinez, Esq. Peter Eldridge, Esq. Gary S. Schpero, Esq.
BISYS Fund Services, Inc. Chase Manhattan Bank Simpson Thacher & Bartlett
3435 Stelzer Road 270 Park Avenue 425 Lexington Avenue
Columbus, Ohio 43219 New York, New York 10017 New York, New York 10017
- --------------------------------------------------------------------------------

(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

If appropriate, check the following box:

|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

------------------

The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its series under the Securities Act of 1933 pursuant to
Rule 24f-2 under the Investment Company Act of 1940 on July 18, 1994 and
Registrant's Rule 24f-2 Notice was filed on November 27, 1996.

<PAGE>

MUTUAL FUND GROUP
Registration Statement on Form N-1A

CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) Under the Securities Act of 1933

VISTA(SM) U.S. TREASURY INCOME FUND
VISTA(SM) BALANCED FUND
VISTA(SM) EQUITY INCOME FUND
VISTA(SM) GROWTH AND INCOME FUND
VISTA(SM) CAPITAL GROWTH FUND
VISTA(SM) LARGE CAP EQUITY FUND
VISTA(SM) BOND FUND
VISTA(SM) SHORT-TERM BOND FUND
VISTA(SM) INTERNATIONAL EQUITY FUND
VISTA(SM) SMALL CAP EQUITY FUND
VISTA(SM) U.S. GOVERNMENT SECURITIES FUND
VISTA(SM) AMERICAN VALUE FUND
VISTA(SM) SOUTHEAST ASIAN FUND
VISTA(SM) JAPAN FUND
VISTA(SM) EUROPEAN FUND
VISTA(SM) SMALL CAP OPPORTUNITIES FUND
VISTA(SM) SELECT GROWTH AND INCOME FUND
VISTA(SM) LATIN AMERICAN EQUITY FUND

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>
Captions apply to all Prospectuses except where
indicated in parenthesis. Parenthesis indicate
captions for Institutional Shares Prospectuses

1 Front Cover Page *

2(a) Expense Summary *

(b) Not Applicable *

3(a) Financial Highlights *

(b) Not Applicable *

4(a)(b) Other Information *
Concerning the Fund;
Fund Objective; Investment
Policies

(d) Not Applicable *

5(a) Management *

(b) Management *

(c)(d) Management; Other Information Concerning the Fund *
</TABLE>

-i-
<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(e) Other Information Concerning *
the Fund; Back Cover Page

(f) Other Information Concerning *
the Fund

(g) Not Applicable *

5A Not Applicable *

6(a) Other Information Concerning *
the Fund

(b) Not Applicable *

(d) Not Applicable *

(e)(f) About Your Investment; How to Buy, Sell *
and Exchange Shares (How to Purchase, Redeem
and Exchange Shares); How Distributions Are
Made; Tax Information; Other Information
Concerning the Fund; Make the Most of Your
Vista Privileges.

(f) How Distributions are Made; *
Tax Information

(g) How Distributions are Made; Tax Matters
Tax Information

(h) About Your Investment; How to Buy, *
Sell and Exchange Shares (How to
Purchase, Redeem and Exchange Shares);
Other Information Concerning the Fund

7(a) How to Buy, Sell and Exchange *
Shares (How to Purchase, Redeem
and Exchange Shares)

(b) How the Fund Values its Shares; *
How to Buy, Sell and Exchange
Shares (How to Purchase, Redeem
and Exchange Shares)

(d) How to Buy, Sell and Exchange *
Shares (How to Purchase, Redeem and
Exchange Shares)

</TABLE>

-ii-

<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part A Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(e) Management; Other Information *
Concerning the Fund

(f) Other Information Concerning the *
Fund

8(a) How to Buy, Sell and Exchange *
Shares (How to Purchase, Redeem
and Exchange Shares)

(b) How to Buy, Sell and Exchange *
Shares (How to Purchase, Redeem
and Exchange Shares)

(d) How to Buy, Sell and Exchange *
Shares (How to Purchase, Redeem
and Exchange Shares)

9 Not Applicable *
</TABLE>

-iii-

<PAGE>

<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

10 * Front Cover Page

11 * Front Cover Page

12 * Not Applicable

13(a)(b) Fund Objective; Investment Investment Policies
Policies and Restrictions

14(c) * Management of the Trust and
Funds or Portfolios

(b) * Not Applicable

15(a) * Not Applicable

(b) * General Information

16(a) Management Management of the Trust and
Funds or Portfolios

(b) Management Management of the Trust and
Funds or Portfolios

(d) Management Management of the Trust and
Funds or Portfolios

(e) * Not Applicable
</TABLE>
-iv-

<PAGE>
<TABLE>
<CAPTION>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
- ----------- ------------------ -----------------------
<S> <C> <C>

(f) How to Buy, Sell and Exchange Shares Management of the Trust and
(How to Purchase, Redeem and Exchange Shares); Funds or Portfolios
Other Information Concerning the Fund

(g) * Not Applicable

(h) * Management of the Trust and
Funds or Portfolios;
Independent Accountants

(i) * Not Applicable

17 Investment Policies Investment Policies and Restrictions

18(a) Other Information Concerning the Fund; General Information
How to Buy, Sell and Exchange Shares
(How to Purchase, Redeem and Exchange
Shares)

(b) * Not Applicable

19(a) How to Buy, Sell and Exchange Shares Purchases, Redemptions and Exchanges
(How to Purchase, Redeem and Exchange
Shares)

(b) How the Fund Values its Shares; How to Determination of Net Asset Value
Buy, Sell and Exchange Shares (How to
Purchase, Redeem and Exchange Shares)

20 How Distributions are Made; Tax Information Tax Matters

21(a) * Management of the Trust and Funds
or Portfolios

(b) * Management of the Trust and Funds
or Portfolios

22 * Performance Information

23 * Not Applicable
</TABLE>

-v-
<PAGE>

EXPLANATORY NOTE

Prospectuses for Class A and Class B Shares of Vista Balanced Fund, Vista
Bond Fund, Vista Capital Growth Fund, Vista Equity Income Fund, Vista European
Fund, Vista Growth and Income Fund, Vista International Equity Fund, Vista Japan
Fund, Vista Large Cap Equity Fund, Vista Small Cap Equity Fund, Vista Southeast
Asian Fund and Vista U.S. Treasury Income Fund, the Prospectuses for Class A
Shares of Vista Short-Term Bond Fund, Vista U.S. Government Securities Fund and
Vista U.S. Treasury Income Fund, the Prospectus for Shares of Vista American
Value Fund, and the Prospectuses for Institutional Shares of Vista Bond Fund,
Vista Capital Growth Fund, Vista Growth and Income Fund, Vista Large Cap Equity
Fund, Vista Small Cap Equity Fund, Vista Short-Term Bond Fund and Vista U.S.
Government Securities Fund are incorporated by reference to Amendment No. 41 to
the Registration Statement on Form N-1A of the Registrant filed on February 28,
1997.

The Prospectus for Shares of Vista Select Growth and Income Fund is
incorporated by reference to Amendment No. 38 to the Registration Statement on
Form N-1A of the Registrant filed on October 16, 1996.

The Prospectus for shares of Vista Small Cap Opportunities Fund is
incorporated by reference to Amendment No. 43 to the Registration Statement on
Form N-1A of the Registrant filed on May 13, 1997.

The Prospectus Supplement for Class A and Class B Shares of Vista Large Cap
Equity Fund and Institutional Shares of Vista Large Cap Equity Fund are
incorporated by reference to the Registrant's filing of a definitive copy under
Rule 497(e) of the Securities Act of 1933, as amended (the "Securities Act").

The Prospectus Supplement for Class A and Class B Shares of the Vista Bond
Fund and the Institutional Shares of the Vista Bond Fond are incorporated by
reference to the Registrant's filing of a definitive copy under Rule 497(e) of
the Securities Act.

The Statement of Additional Information for Vista U.S. Treasury Income
Fund, Vista Balanced Fund, Vista Equity Income Fund, Vista Growth and Income
Fund, Vista Capital Growth Fund, Vista Large Cap Equity Fund, Vista Bond Fund,
Vista Short-Term Bond Fund, Vista Small Cap Equity Fund, Vista Government
Securities Fund, Vista American Value Fund, Vista Small Cap Opportunities Fund
and Vista Select Growth and Income Fund is incorporated by reference to
Amendment No. 43 to the Registration Statement on Form N-1A of the Registrant
filed on May 13, 1997.

The Statement of Additional Information for Vista European Fund, Vista
International Equity Fund, Vista Japan Fund and Vista Southeast Asian Fund is
incorporated by reference to Amendment No. 41 to the Registration Statement on
Form N-1A of the Registrant filed on February 28, 1997.

The Statement of Additional Information for Vista Select Growth and Income
Fund is incorporated by reference to Amendment No. 38 to the Registration
Statementon Form N-1A of the Registrant filed on October 16, 1996.

<PAGE>

[VISTA LOGO]

PROSPECTUS
VISTA(SM) LATIN AMERICAN EQUITY FUND

CLASS A AND B SHARES

-----------------------------------
INVESTMENT STRATEGY: CAPITAL GROWTH
-----------------------------------

December __, 1997

This Prospectus explains concisely what you should know before investing.
Please read it carefully and keep it for future reference. You can find more
detailed information about the Fund in its December __, 1997 Statement of
Additional Information, as amended periodically (the "SAI"). For a free copy of
the SAI, call the Vista Service Center at 1-800-34-VISTA. The SAI has been
filed with the Securities and Exchange Commission (the "Commission") and is
incorporated into this Prospectus by reference. In addition, the Commission
maintains a Web site (http://www.sec.gov) that contains the SAI, the Fund's
Annual Report to Shareholders and other information regarding the Fund which
has been electronically filed with the Commission.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

Investments in the Fund are not bank deposits or obligations of, or guaranteed
or endorsed by, The Chase Manhattan Bank or any of its affiliates and are not
insured by the FDIC, the Federal Reserve Board or any other government agency.
Investments in mutual funds involve risk, including the possible loss of the
principal amount invested.
<PAGE>

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
Expense Summary ............................................................... 4
The expenses you might pay on your Fund investment, including examples

Financial Highlights .......................................................... 6
How the Fund has performed

Fund Objective ................................................................ 8

Investment Approach ........................................................... 8
The kinds of securities in which the Vista Latin America Fund invests

Other Investment Practices .................................................... 10
The investment techniques and risks of the Fund

Management .................................................................... 16
Chase Manhattan Bank, the Fund's adviser; Chase Asset Management, the Fund's
sub-adviser, and the individuals who manage the Fund

About Your Investment ......................................................... 17
Choosing a share class

How to Buy, Sell and Exchange Shares .......................................... 18

How the Fund Values Its Shares ................................................ 25

How Distributions Are Made; Tax Information ................................... 25
How the Fund distributes its earnings, and the taxes related to those earnings

Other Information Concerning the Fund ......................................... 26
Distribution plans, shareholder servicing agents, administration, custodian,
expenses and organization

Performance Information ....................................................... 29
How performance is determined, stated and/or advertised

Make the Most of Your Vista Privileges ........................................ 31
</TABLE>

3
<PAGE>

EXPENSE SUMMARY
---------------

Expenses are one of several factors to consider when investing. The following
table summarizes your costs from investing in the Fund based on estimated
expenses for the current fiscal year. The examples show the cumulative expenses
attributable to a hypothetical $1,000 investment over specified periods.

<TABLE>
<S> <C> <C>
Class A ClassB
Shares Shares
------- -------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of
offering price) ................................................... 4.75% None
Maximum Deferred Sales Charge (as a percentage of the lower of
original purchase price or redemption proceeds)* .................. None 5.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waivers)** ................. 0.00% 0.00%
12b-1 Fee*** ........................................................ 0.25% 0.75%
Shareholder Servicing Fee ........................................... 0.00%** 0.25%
Other Expenses (after estimated waivers and reimbursements)** ....... 1.50% 1.50%
------- -------
Total Fund Operating Expenses
(after waivers of fees and expense reimbursements)** .............. 1.75% 2.50%
======= =======
</TABLE>

EXAMPLES
Your investment of $1,000 would incur the
following expenses, assuming 5% annual return: 1 Year 3 Years
-------- ---------
Class A Shares+ .............................. $ 64 $ 100
Class B Shares:
Assuming complete redemption at the end of
the period++ .............................. $ 77 $ 110
Assuming no redemptions ..................... $ 25 $ 78

* The maximum deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge generally
declines by 1% annually thereafter (except in the fourth year),
reaching zero after six years. See "How to Buy, Sell and Exchange
Shares."
** Reflects current fee waiver and expense reimbursement arrangements to
maintain Total Fund Operating Expenses at the levels indicated in the
table above. Absent such arrangements, the Investment Advisory Fee and
Other Expenses would be 1.00%, and 1.65% respectively, for Class A and
Class B shares, the Shareholder Servicing Fee for Class A shares would
be 0.25% and Total Fund Operating Expenses would be 3.15% and 3.65% for
Class A and Class B shares, respectively.
*** Long-term shareholders in mutual funds with 12b-1 fees, such as Class A
and Class B shareholders of the Funds, may pay more than the economic
equivalent of the maximum front-end sales charge permitted by rules of
the National Association of Securities Dealers, Inc.

4
<PAGE>

+ Assumes deduction at the time of purchase of the maximum sales charge.
++ Assumes deduction at the time of redemption of the maximum applicable
deferred sales charge.

The table is provided to help you understand the expenses of investing in the
Fund and your share of the operating expenses that the Fund incurs. The
examples should not be considered representations of past or future expenses or
returns; actual expenses and returns may be greater or less than shown.

Charges or credits, not reflected in the expense table above, may be incurred
directly by customers of financial institutions in connection with investments
in the Fund. The Fund understands that Shareholder Servicing Agents may credit
to the accounts of their customers from whom they are already receiving other
fees amounts not exceeding such other fees or the fees received by the
Shareholder Servicing Agent from the Fund with respect to those accounts. See
"Other Information Concerning the Fund."

5
<PAGE>

6
<PAGE>

7
<PAGE>

FUND OBJECTIVE
- --------------

The Fund seeks total return from long-term capital growth. The Fund is not
intended to be a complete investment program, and there is no assurance that
the Fund will achieve its objective.

INVESTMENT APPROACH
- -------------------

The Fund will invest principally in a broad portfolio of equity securities of
foreign companies located in countries throughout Latin America. Under normal
market conditions, the Fund will invest at least 65% of its total assets in
equity securities of Latin American issuers.

The Fund's advisers seek to identify those countries and industries throughout
Latin America where economic and political factors are likely to produce
above-average growth rates. The Fund's advisers attempt to identify those
companies in such countries and industries that are best positioned and managed
to take advantage of these economic and political factors. Emphasis will be
placed on companies in Argentina, Brazil, Chile, Colombia, Mexico, Peru and
Venezuela, but the Fund may also invest in companies in other countries in
Latin America, which, for purposes of this prospectus, includes Mexico, Central
America, South America and the Spanish-speaking islands of the Caribbean. The
Fund may invest heavily in countries which comprise a substantial portion of
the total Latin American market capitalization.

The Fund is classified as a "non-diversified" fund under federal securities
law.

WHO MAY WANT TO INVEST

Vista Latin American Equity Fund may be most suitable for investors who . . .
[bullet] Are seeking long-term growth of capital
[bullet] Are investing for goals several years away
[bullet] Own or plan to own other types of investments for diversification
purposes
[bullet] Can assume market risk and the risk of investing internationally

The Fund may NOT be appropriate for investors who are unable to tolerate
frequent up and down price changes and the potential instability of foreign
markets; who are investing for short-term goals or who are in need of current
income.

INVESTMENT POLICIES
Instead of investing directly in underlying securities, the Fund is authorized
to seek to achieve its objective by investing all of its investable assets in
another investment company having substantially the same investment objective
and policies as the Fund.

The equity securities in which the Fund may invest include common stocks,
preferred stocks, securities convertible into common stocks and warrants to
purchase common stocks. Investments will be selected based on their potential
for capital growth.

For purposes of the investment policies described above, a security is deemed
to be issued by an issuer of Latin America if (i) the principal trading market
for the security is in Latin America, (ii) the issuer is organized under the
laws of a jurisdiction of Latin America or (iii)

8
<PAGE>

the issuer derives at least 50 percent of its revenues or profits from Latin
America or has at least 50 percent of its assets situated in Latin America.

The Fund's advisers will allocate the Fund's investments among securities
denominated in the U.S. dollar, other major reserve currencies and currencies
of Latin American countries in which the Fund is permitted to invest. The
advisers may adjust the Fund's exposure to each such currency based on their
perception of the most favorable markets and issuers. The percentage of the
Fund's assets invested in securities of a particular country or denominated in
a particular currency will vary in accordance with the advisers' assessment of
the relative yield and appreciation potential of such securities and the
current and anticipated relationship of a country's currency to the U.S.
dollar. Fundamental economic strength, earnings growth, quality of management,
industry growth, credit quality and interest rate trends are some of the
principal factors which may be considered by the Fund's advisers in determining
the degree of emphasis placed upon a particular type of security, industry
sector, country or currency within the Fund's portfolio. Securities purchased
by the Fund may be denominated in a currency other than that of the country in
which the issuer is domiciled. The Fund is not limited as to the amount of its
assets that may be invested in any one country; however, it will attempt to
allocate investments among a wide range of industries and companies. The Fund
will place primary emphasis on equity and equity-related securities but may
also invest in any type of debt security and various derivative securities if
the advisers believe that doing so may result in capital growth. The Fund will
not invest more than 25% of its net assets in debt securities denominated in a
single currency other than the U.S. dollar, or invest more than 25% of its
respective net assets in debt securities issued by a single foreign government
or supranational organization. Because certain companies represent a
significant portion of the total market capitalization of the country or
countries in which they operate, the Fund may invest a significant proportion
of its assets in these companies.

The Fund's advisers will review economic and political events in the countries
in which the Fund is invested on an ongoing basis.

The Fund may invest in securities of companies of various sizes, including
smaller companies whose securities may be more volatile and less liquid than
securities of larger companies. With respect to certain countries in which
capital markets are either less developed or not easily accessed, the Fund may
invest in closed-end investment companies that in turn are authorized to invest
in the securities of such countries.

The Fund may, for defensive purposes and in periods in which it is believed
that investment returns may be greater or volatility may be less, invest more
heavily in debt securities issued in various currencies by companies,
governments and supranational entities located in Latin America, and less than
65% of its net assets in the equity securities in which it

9
<PAGE>

normally invests. For temporary defensive purposes, the Fund's assets may be
invested in short-term debt instruments, including high quality money market
instruments and securities issued or guaranteed by the government of any member
country of the Organization for Economic Cooperation and Development or its
agencies or instrumentalities. At times when its advisers deem it advisable to
limit the Fund's exposure to the equity markets in which it ordinarily invests,
the Fund may invest up to 20% of its total assets in U.S. Government
obligations (exclusive of any investments in money market instruments).To the
extent that the Fund departs from its investment policies during such periods,
its investment objective may not be achieved.

For a discussion of certain risks associated with an investment in the Fund,
see "Risk Factors" and "Other Investment Practices" below.

OTHER INVESTMENT
PRACTICES
- ---------
`
The Fund may also engage in the following investment practices, when consistent
with the Fund's overall objective and policies. These practices, and certain
associated risks, are more fully described in the SAI.

U.S. GOVERNMENT OBLIGATIONS. U.S. Government obligations include obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.

MONEY MARKET INSTRUMENTS. The Fund may invest in cash or high-quality,
short-term money market instruments. These may include U.S. Government
securities, commercial paper of domestic and foreign issuers and obligations of
domestic and foreign banks. Investments in foreign money market instruments may
involve certain risks associated with foreign investment.

DEBT SECURITIES. The Fund may invest in investment grade debt securities, and
may invest up to 5% of the value of its net assets in non-investment grade debt
securities, commonly referred to as "junk bonds." Investment grade debt
securities are securities rated in the category BBB or higher by Standard &
Poor's Corporation ("S&P"), or Baa or higher by Moody's Investors Service, Inc.
("Moody's") or the equivalent by another national rating organization, or, if
unrated, determined by the advisers to be of comparable quality. Debt
securities which do not satisfy these standards are considered by the Fund to
be non-investment grade and involve greater risks than investment grade
securities. See "Risk Factors" below.

DEPOSITARY RECEIPTS. The Fund may invest its assets in securities of foreign
issuers in the form of American Depositary Receipts, European Depositary
Receipts, Global Depositary Receipts or other similar securities representing
securities of foreign issuers (collectively, "Depositary Receipts"). The Fund
treats Depositary Receipts as interests in the underlying securities for
purposes of its investment policies. Unsponsored Depositary Receipts may not
carry comparable

10
<PAGE>

voting rights to sponsored Depositary Receipts, and a purchaser of unsponsored
Depositary Receipts may not receive as much information about the issuer of the
underlying securities as with a sponsored Depositary Receipt.

SUPRANATIONAL OBLIGATIONS. The Fund may invest in debt securities issued by
supranational organizations, which include organizations such as The World Bank,
the European Community, the European Coal and Steel Community and the Asian
Development Bank.

BRADY BONDS AND EMERGING MARKET GOVERNMENT OBLIGATIONS. The Fund's debt
securities may include certain Latin American governmental debt obligations
commonly referred to as Brady Bonds. Brady Bonds are debt securities, generally
denominated in U.S. dollars, issued under the framework of the "Brady Plan," a
program for debtor nations to restructure their outstanding external commercial
bank indebtedness. Brady Bonds have only been issued relatively recently and
accordingly do not have a long payment history. In addition to Brady Bonds, the
Fund may invest in Latin American governmental obligations which may be issued
as a result of other debt restructuring agreements. A substantial portion of
the Brady Bonds and other similar obligations in which the Fund may invest are
likely to be acquired at a significant discount and, accordingly, may exhibit
volatility.

STRUCTURED PRODUCTS. The Fund may invest in structured products, which are
interests in entities organized solely for the purpose of restructuring the
investment characteristics of certain other investments. These investments are
deposited with or purchased by the entities, which then issue securities (the
structured products) backed by, or representing interests in, the underlying
investments. The cash flow on the underlying investments may be apportioned
among the newly issued structured products to create securities with different
investment characteristics such as varying maturities, payment priorities or
interest rate provisions, and the extent of the payments made with respect to
structured investments depends on the amount of the cash flow on the underlying
investments. Structured products are subject to the risks associated with the
underlying market or security, and may be subject to greater volatility than
direct investments in the underlying market or security.

INDEXED INVESTMENTS. The Fund may invest in instruments which are indexed to
certain specific foreign currency exchange rates. The terms of such instruments
may provide that their principal amounts or just their coupon interest rates
are adjusted upwards or downwards (but not below zero) at maturity or on
established coupon payment dates to reflect changes in the exchange rate
between two or more currencies while the obligation is outstanding. Such
indexed investments entail the risk of loss of principal and/or interest
payments from currency movements in addition to principal risk, but offer the
potential for realizing gains as a

11
<PAGE>

result of changes in foreign currency exchange rates.

REPURCHASE AGREEMENTS, SECURITIES LOANS AND FORWARD AND STAND-BY
COMMITMENTS. The Fund may enter into agreements to purchase and resell
securities at an agreed-upon price and time. The Fund also has the ability to
lend portfolio securities in an amount equal to not more than 30% of its total
assets to generate additional income. These transactions must be fully
collateralized at all times. The Fund may purchase securities for delivery at a
future date, which may increase its overall investment exposure and involves a
risk of loss if the value of the securities declines prior to the settlement
date. The Fund may enter into put transactions, including those sometimes
referred to as stand-by commitments, with respect to securities in its
portfolio. In these transactions, the Fund would acquire the right to sell a
security at an agreed upon price within a specified period prior to its
maturity date. A put transaction will increase the cost of the underlying
security and consequently reduce the available yield. Each of these
transactions involve some risk to the Fund if the other party should default on
its obligation and the Fund is delayed or prevented from recovering the
collateral or completing the transaction.

BORROWINGS AND REVERSE REPURCHASE AGREEMENTS. The Fund may borrow money from
banks for temporary or short-term purposes, but will not borrow money to buy
additional securities, known as "leveraging." The Fund may also sell and
simultaneously commit to repurchase a portfolio security at an agreed-upon price
and time. The Fund may use this practice to generate cash for shareholder
redemptions without selling securities during unfavorable market conditions.
Whenever the Fund enters into a reverse repurchase agreement, it will establish
a segregated account in which it will maintain liquid assets on a daily basis in
an amount at least equal to the repurchase price (including accrued interest).
The Fund would be required to pay interest on amounts obtained through reverse
repurchase agreements, which are considered borrowings under federal securities
laws.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities, which
are securities generally offering fixed interest or dividend yields which may
be converted either at a stated price or stated rate for common or preferred
stock. Although to a lesser extent than with fixed-income securities generally,
the market value of convertible securities tends to decline as interest rates
increase, and increase as interest rates decline. Because of the conversion
feature, the market value of convertible securities also tends to vary with
fluctuations in the market value of the underlying common or preferred stock.

LOAN PARTICIPATIONS. The Fund may invest in participations in fixed and
floating rate loans arranged through private negotiations between a borrower
and one or more financial institutions. When investing in a participation, the
Fund will typically have the right to receive

12
<PAGE>

payments only from the lender, and not from the borrower itself, to the extent
the lender receives payments from the borrower. Accordingly, the Fund may be
subject to the credit risk of both the borrower and the lender. Loan
participations may be illiquid.

OTHER INVESTMENT COMPANIES. Apart from being able to invest all of its
investable assets in another investment company having substantially the same
investment objectives and policies, the Fund may invest up to 10% of its total
assets in shares of other investment companies when consistent with its
investment objective and policies, subject to applicable regulatory
limitations. Additional fees may be charged by other investment companies.

STRIPS. The Fund may invest up to 20% of its total assets in stripped
obligations (i.e., separately traded principal and interest components of
securities) where the underlying obligation is backed by the full faith and
credit of the U.S. Government, including instruments known as "STRIPS." The
value of these instruments tends to fluctuate more in response to changes in
interest rates than the value of ordinary interest-paying debt securities with
similar maturities. The risk is greater when the period to maturity is longer.

DERIVATIVES AND RELATED INSTRUMENTS. The Fund may invest its assets in
derivative and related instruments to hedge various market risks or to
increase its income or gain. Some of these instruments will be subject to asset
segregation requirements to cover the Fund's obligations. The Fund may (i)
purchase, write and exercise call and put options on securities and securities
indexes (including using options in combination with securities, other options
or derivative instruments); (ii) enter into swaps, futures contracts and
options on futures contracts; (iii) employ forward currency and interest rate
contracts; and (iv) purchase and sell structured products, as described above.

There are a number of risks associated with the use of derivatives and related
instruments and no assurance can be given that any strategy will succeed. The
value of certain derivatives or related instruments in which the Fund invests
may be particularly sensitive to changes in prevailing economic conditions and
market value. The ability of the Fund to successfully utilize these instruments
may depend in part upon the ability of its advisers to forecast these factors
correctly. Inaccurate forecasts could expose the Fund to a risk of loss. There
can be no guarantee that there will be a correlation between price movements in
a hedging instrument and in the portfolio assets being hedged. The Fund is not
required to use any hedging strategies. Hedging strategies, while reducing risk
of loss, can also reduce the opportunity for gain. Derivatives transactions not
involving hedging may have speculative characteristics, involve leverage and
result in losses that may exceed the original investment of the Fund. There can
be no assurance that a liquid market will exist at a time when the Fund seeks
to close out a derivatives position. Activities of large traders in the futures
and securities markets

13
<PAGE>

involving arbitrage, "program trading," and other investment strategies may
cause price distortions in derivatives markets. In certain instances,
particularly those involving over-the-counter transactions or forward
contracts, there is a greater potential that a counterparty or broker may
default. In the event of a default, the Fund may experience a loss. For
additional information concerning derivatives, related instruments and the
associated risks, see the SAI.

PORTFOLIO TURNOVER. The frequency of the Fund's buy and sell transactions will
vary from year to year. The Fund's investment policies may lead to frequent
changes in investments, particularly in periods of rapidly changing market
conditions. High portfolio turnover rates would generally result in higher
transaction costs, including brokerage commissions or dealer mark-ups, and
would make it more difficult for the Fund to qualify as a registered investment
company under federal tax law. See "How Distributions are Made; Tax
Information."

LIMITING INVESTMENT RISKS
Specific investment restrictions help the Fund limit investment risks for its
shareholders. These restrictions prohibit the Fund from: (a) investing more
than 15% of its net assets in illiquid securities (which include securities
restricted as to resale unless they are determined to be readily marketable in
accordance with procedures established by the Board of Trustees) or (b)
investing more than 25% of its total assets in any one industry. A complete
description of these and other investment policies is included in the SAI.
Except for the Fund's investment objective, restriction (b) above and
investment policies designated as fundamental in the SAI, the Fund's investment
policies are not fundamental. The Trustees may change any non-fundamental
investment policy without shareholder approval.

RISK FACTORS
The net asset value of the shares of the Fund will fluctuate based on the value
of the securities in the Fund's portfolio. As the Fund invests primarily in
equity securities of companies outside the U.S., an investment in its shares
involves a higher degree of risk than an investment in a U.S. equity fund. An
investment in the Fund should not be considered a complete investment program
and may not be appropriate for all investors.

Latin American economies have experienced considerable difficulties in the past
decade. Although there have been significant improvements in recent years, the
Latin American economies continue to experience challenging problems, including
high inflation rates and high interest rates relative to the United States. The
emergence of the Latin American economies and securities markets will require
continued economic and fiscal discipline which has been lacking at times in the
past, as well as stable political and social conditions. Recovery may also be
influenced by international economic conditions, particularly those in the
United States, and by world prices for oil and other commodities. There is no
assurance

14
<PAGE>

that recent economic initiatives will be successful.

Since Latin American securities are normally denominated and traded in foreign
currencies, the values of the Fund's Latin American investments may be
influenced by currency exchange rates and exchange control regulations. Some of
the currencies of Latin American countries have experienced steady devaluations
relative to the United States dollar, and major adjustments have been made in
certain of these currencies periodically. Some Latin American countries may
also have managed currencies, which are not free floating against the United
States dollar. In addition, there is risk that certain Latin American countries
may restrict the free conversion of their currencies into other currencies.
Further, it generally will not be possible to reduce the Fund's Latin American
currency risk through hedging. Devaluations in the currencies in which the
Fund's portfolio securities are denominated will adversely affect the Fund's
net asset value.

There may be less information publicly available about Latin American issuers
than U.S. issuers, and they are not generally subject to accounting, auditing
and financial reporting standards and practices comparable to those in the U.S.
Latin American securities markets are smaller, less liquid and have more
limited trading volume than those in the United States. Such factors could
cause the prices of Latin American securities to be erratic for reasons apart
from factors that affect the quality of securities.

Most Latin American countries have experienced substantial, and in some
periods, extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain Latin American
countries.

Certain Latin American countries are among the largest debtors to commercial
banks and foreign governments. Some of these countries have in the past
defaulted on their sovereign debt. Holders of sovereign debt (which may include
the Fund) may be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. There is no bankruptcy
proceeding by which sovereign debt on which governmental entities have
defaulted may be collected in whole or in part.

Latin American settlement procedures and trade regulations may involve certain
expenses and risks. One risk would be the delay in payment or delivery of
securities or in the recovery of the Fund's assets held abroad. This factor
could impede the ability of the Fund to effect portfolio transactions on a
timely basis and could have an adverse impact on the net asset value of the
Fund's shares.

It is possible that nationalization or expropriation of assets, imposition of
currency exchange controls, taxation by withholding Fund assets, political or
financial instability and diplomatic developments could affect the value of the
Fund's investments in certain Latin American countries.

Certain national policies may impede the Fund's investment opportunities,
including restrictions on investing in issuers or industries

15
<PAGE>

deemed sensitive to relevant national interests. For example, the Fund
currently does not intend to invest directly in Chile due to certain
restrictions and deposit requirements imposed on foreign investors.
Additionally, special tax considerations will apply to foreign securities, such
as the imposition of withholding taxes, and there may be an absence of
developed legal structures governing private or foreign investment and private
property.

Although there is a trend toward less government involvement in commerce,
governments of many Latin American countries have exercised and continue to
exercise substantial influence over many aspects of the private sector. In
certain countries, the government still owns or controls many companies,
including some of the largest in the country. Accordingly, government actions
in the future could have a significant effect on economic conditions in Latin
American countries, which could affect private sector companies and the Fund,
as well as the value of securities in the Fund's portfolio.

Some of the Latin American equity securities in which the Fund may invest may
be issued by smaller companies. The securities of smaller companies, whether
Latin American or domestic, often trade less frequently and in lower volume
than securities of larger, more established companies. Consequently, price
changes may be more abrupt or erratic. Such companies may have limited product
lines, markets or financial resources, or may depend on a limited management
group.

Securities rated in the lowest investment grade category lack certain
investment characteristics and may have speculative characteristics.
Non-investment grade debt securities, commonly referred to as "junk bonds,"
involve greater risks than investment grade securities (including risks
relating to default or bankruptcy of the issuer) and are regarded as
speculative in nature.

Because the Fund is "non-diversified," the value of its shares may be more
susceptible to developments affecting the specific companies whose securities
are owned by the Fund.

For a discussion of certain other risks associated with the Fund's additional
investment activities, see "Other Investment Practices" above.

MANAGEMENT
- ----------

THE FUND'S ADVISERS
The Chase Manhattan Bank ("Chase") is the Fund's investment adviser under an
Investment Advisory Agreement and has overall responsibility for investment
decisions of the Fund, subject to the oversight of the Board of Trustees. Chase
is a wholly-owned subsidiary of The Chase Manhattan Corporation, a bank holding
company. Chase and its predecessors have over 100 years of money management
experience.

For its investment advisory services to the Fund, Chase is entitled to receive
an annual fee computed daily and paid monthly based at an annual rate equal to
1.00% of the Fund's average daily net assets. Chase is located at

16
<PAGE>

270 Park Avenue, New York, New York 10017.

Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is the
sub-investment adviser to the Fund under a Sub-Investment Advisory Agreement
between CAM and Chase. CAM is a wholly-owned operating subsidiary of Chase. CAM
makes investment decisions for the Fund on a day-to-day basis. For these
services, CAM is entitled to receive a fee, payable by Chase from its advisory
fee, at an annual rate equal to 0.50% of the Fund's average daily net assets.
CAM provides discretionary investment advisory services to institutional
clients. The same individuals who serve as portfolio managers for Chase also
serve as portfolio managers for CAM. CAM is located at 1211 Avenue of the
Americas, New York, New York 10036.

PORTFOLIO MANAGERS. Wayne Perkins, a Vice President of Chase, has been
responsible for the management of Vista Latin American Equity Fund since its
inception. Mr. Perkins is responsible for investment management and equity
research in the Latin American region. Mr. Perkins joined Chase in 1976.

ABOUT YOUR INVESTMENT
- ---------------------
CHOOSING A SHARE CLASS

CLASS A SHARES. An investor who purchases Class A shares pays a sales charge at
the time of purchase. As a result, Class A shares are not subject to any sales
charges when they are redeemed. Certain purchases of Class A shares qualify for
reduced sales charges. Class A shares have lower combined 12b-1 and service
fees than Class B shares. See "How to Buy, Sell and Exchange Shares" and "Other
Information Concerning the Fund."

CLASS B SHARES. Class B shares are sold without an initial sales charge, but
are subject to a contingent deferred sales charge ("CDSC") if redeemed within a
specified period after purchase. Class B shares also have higher combined 12b-1
and service fees than Class A shares.

Class B shares automatically convert into Class A shares, based on relative net
asset value, at the beginning of the ninth year after purchase. For more
information about the conversion of Class B shares, see the SAI. This
discussion will include information about how shares acquired through
reinvestment of distributions are treated for conversion purposes. Class B
shares provide an investor the benefit of putting all of the investor's dollars
to work from the time the investment is made. Until conversion, Class B shares
will have a higher expense ratio and pay lower dividends than Class A shares
because of the higher combined 12b-1 and service fees. See "How to Buy, Sell
and Exchange Shares" and "Other Information Concerning the Fund."

WHICH ARRANGEMENT IS BEST FOR YOU? The decision as to which class of shares
provides a more suitable investment for you depends on a number of factors,
including the amount and intended length of the investment. If you are making
an investment that qualifies for reduced sales charges, you might consider
Class A shares. If you

17
<PAGE>

prefer not to pay an initial sales charge and anticipate holding your shares
for a number of years, you might consider Class B shares. In almost all cases,
if you are planning to purchase $250,000 or more of the Fund's shares you will
pay lower aggregate charges and expenses by purchasing Class A shares.

HOW TO BUY, SELL
AND EXCHANGE SHARES
- -------------------

HOW TO BUY SHARES
You can open a Fund account with as little as $2,500 for regular accounts or
$1,000 for IRAs, SEP-IRAs and the Systematic Investment Plan. Additional
investments can be made at any time with as little as $100. Holders of omnibus
accounts with the Fund may set their own minimum amounts for investment through
such accounts. You can buy Fund shares three ways--through an investment
representative, through the Fund's distributor by calling the Vista Service
Center, or through the Systematic Investment Plan.

All purchases made by check should be in U.S. dollars and made payable to the
Vista Funds. Third party checks, credit cards and cash will not be accepted.
The Fund reserves the right to reject any purchase order or cease offering
shares for purchase at any time. When purchases are made by check, redemptions
will not be allowed until the check clears, which may take 15 calendar days or
longer. In addition, the redemption of shares purchased through Automated
Clearing House (ACH) will not be allowed until your payment clears, which may
take 7 business days or longer.

BUYING SHARES THROUGH THE FUND'S DISTRIBUTOR. Complete and return the enclosed
application and your check in the amount you wish to invest to the Vista
Service Center.

BUYING SHARES THROUGH SYSTEMATIC INVESTING. You can make regular investments of
$100 or more per transaction through automatic periodic deduction from your
bank checking or savings account. Shareholders electing to start this
Systematic Investment Plan when opening an account should complete Section 8 of
the account application. Current shareholders may begin such a plan at any time
by sending a signed letter and a deposit slip or voided check to the Vista
Service Center. Call the Vista Service Center at 1-800-34-VISTA for complete
instructions.

Shares are purchased at the public offering price, which is based on the net
asset value next determined after the Vista Service Center receives your order
in proper form. In most cases, in order to receive that day's public offering
price, the Vista Service Center must receive your order in proper form before
the close of regular trading on the New York Stock Exchange. If you buy shares
through your investment representative, the representative must receive your
order before the close of regular trading on the New York Stock Exchange to
receive that day's public offering price. Orders are in proper form only after
funds are converted to federal funds. Orders paid by check and received by 2:00
p.m., Eastern Time will generally be available for the

18
<PAGE>

purchase of shares the following business day.

If you are considering redeeming or exchanging shares or transferring shares to
another person shortly after purchase, you should pay for those shares with a
certified check to avoid any delay in redemption, exchange or transfer.
Otherwise the Fund may delay payment until the purchase price of those shares
has been collected or, if you redeem by telephone, until 15 calendar days after
the purchase date. To eliminate the need for safekeeping, the Fund will not
issue certificates for your Class A shares unless you request them. Due to the
conversion feature of Class B shares, certificates for Class B shares will not
be issued and all Class B shares will be held in book entry form.

Class A Shares
--------------

The public offering price of Class A shares is the net asset value plus a sales
charge that varies depending on the size of your purchase. The Fund receives
the net asset value. The sales charge is allocated between your broker-dealer
and the Fund's distributor as shown in the following table, except when the
Fund's distributor, in its discretion, allocates the entire amount to your
broker-dealer.

Amount of
Sales charge as a sales charge
percentage of: reallowed to
------------------------ dealers as a
Amount of transaction at Offering Net amount percentage of
offering price($) price invested offering price
- --------------------------------------------------------------------------------
Under 100,000 ...................... 4.75 4.99 4.00
100,000 but under 250,000 .......... 3.75 3.90 3.25
250,000 but under 500,000 .......... 2.50 2.56 2.25
500,000 but under 1,000,000 ........ 2.00 2.04 1.75

There is no initial sales charge on purchases of Class A shares of $1 million
or more.

The Fund's distributor pays broker-dealers commissions on net sales of Class A
shares of $1 million or more based on an investor's cumulative purchases of
shares of a Fund. Such commissions are paid at the rate of 1.00% of the amount
under $2.5 million, 0.75% of the next $7.5 million, 0.50% of the next $40
million and 0.20% thereafter. The Fund's distributor may withhold such payments
with respect to short-term investments.

Class B Shares

Class B shares are sold without an initial sales charge, although a CDSC will
be imposed if you redeem shares within a specified period after purchase, as
shown in the table below. The following types of shares may be redeemed without
charge at any time: (i) shares acquired by reinvestment of distributions and
(ii) shares otherwise exempt from the CDSC, as described below. For other
shares, the amount of the charge is determined as a percentage of the lesser of
the current market value or the purchase price of shares being redeemed.

19
<PAGE>

Year 1 2 3 4 5 6 7 8+
- ------------------------------------------------------------
CDSC 5% 4% 3% 3% 2% 1% 0% 0%

In determining whether a CDSC is payable on any redemption, the Fund will first
redeem shares not subject to any charge, and then shares held longest during
the CDSC period. When a share that has appreciated in value is redeemed during
the CDSC period, a CDSC is assessed only on its initial purchase price. For
information on how sales charges are calculated if you exchange your shares,
see "How to Exchange Your Shares." The Fund's distributor pays broker-dealers a
commission of 4.00% of the offering price on sales of Class B shares, and the
distributor receives the entire amount of any CDSC you pay.

GENERAL
You may be eligible to buy Class A shares at reduced sales charges. Consult
your investment representative or the Vista Service Center for details about
Vista's combined purchase privilege, cumulative quantity discount, statement of
intention, group sales plan, employee benefit plans, and other plans.
Descriptions are also included in the enclosed application and in the SAI. In
addition, sales charges are waived if you are using redemption proceeds
received within the prior ninety days from non-Vista mutual funds to buy your
shares, and on which you paid a front-end or contingent deferred sales charge.

Some participant-directed employee benefit plans participate in a "multi-fund"
program which offers both Vista and non-Vista mutual funds. With Board of
Trustee approval, the money that is invested in Vista Funds may be combined
with the other mutual funds in the same program when determining the Plan's
eligibility to buy Class A shares without a sales charge. These investments
will also be included for purposes of the discount privileges and programs
described above.

The Fund may sell Class A shares at net asset value without an initial sales
charge to the Fund's current and retired Trustees (and their immediate
families), current and retired employees (and their immediate families) of
Chase, the Fund's distributor and transfer agent or any affiliates or
subsidiaries thereof, registered representatives and other employees (and their
immediate families) of broker-dealers having selected dealer agreements with
the Fund's distributor, employees (and their immediate families) of financial
institutions having selected dealer agreements with the Fund's distributor (or
otherwise having an arrangement with a broker-dealer or financial institution
with respect to sales of Vista Fund shares), financial institution trust
departments investing an aggregate of $1 million or more in the Vista Family of
Funds and clients of certain administrators of tax-qualified plans when
proceeds from repayments of loans to participants are invested (or reinvested)
in the Vista Family of Funds.

No initial sales charge will apply to the purchase of the Fund's Class A shares
if you are investing the proceeds of a qualified retirement plan, where a
portion of the plan was invested in the Vista Family of Funds, any qualified
retirement plan with 50 or more participants,

20
<PAGE>

or an individual participant in a tax-qualified plan making a tax-free rollover
or transfer of assets from the plan in which Chase or an affiliate serves as
trustee or custodian of the plan or manages some portion of the plan's assets.

Purchases of the Fund's Class A shares may be made with no initial sales charge
through an investment adviser or financial planner that charges a fee for its
services. Purchases of the Fund's Class A shares may be made with no initial
sales charge (i) by an investment adviser, broker or financial planner,
provided arrangements are preapproved and purchases are placed through an
omnibus account with the Fund or (ii) by clients of such investment adviser or
financial planner who place trades for their own accounts, if such accounts are
linked to a master account of such investment adviser or financial planner on
the books and records of the broker or agent. Such purchases may also be made
for retirement and deferred compensation plans and trusts used to fund those
plans.

Investors may incur a fee if they effect transactions through a broker or
agent.

Purchases of the Fund's Class A shares may be made with no initial sales charge
in accounts opened by a bank, trust company or thrift institution which is
acting as a fiduciary exercising investment discretion, provided that
appropriate notification of such fiduciary relationship is reported at the time
of the investment to the particular Fund, the Fund's distributor or the Vista
Service Center.

Shareholders of record of any Vista Fund as of November 30, 1990 and certain
immediate family members may purchase the Fund's Class A shares with no initial
sales charge for as long as they continue to own Class A shares of any Vista
Fund, provided there is no change in account registration.

The Fund may sell Class A shares at net asset value without an initial sales
charge in connection with the acquisition by the Fund of assets of an
investment company or personal holding company. The CDSC will be waived on
redemption of Class B shares arising out of death or disability or in
connection with certain withdrawals from IRA or other retirement plans. Up to
12% of the value of Class B shares subject to a systematic withdrawal plan may
also be redeemed each year without a CDSC, provided that the Class B account
had a minimum balance of $20,000 with respect to the applicable Fund at the
time the systematic withdrawal plan was established. The SAI contains
additional information about purchasing the Fund's shares at reduced sales
charges.

The Fund reserves the right to change any of these policies on purchases
without an initial sales charge at any time and may reject any such purchase
request.

For shareholders that bank with Chase, Chase may aggregate investments in the
Vista Funds with balances held in Chase bank accounts for purposes of
determining eligibility for certain bank privileges that are based on specified
minimum balance requirements, such as reduced or no fees for certain banking
services or

21
<PAGE>

preferred rates on loans and deposits. Chase and certain broker-dealers and
other shareholder servicing agents may, at their own expense, provide gifts,
such as computer software packages, guides and books related to investment or
additional Fund shares valued up to $250 to their customers that invest in the
Vista Funds.

Shareholders of other Vista Funds may be entitled to exchange their shares for,
or reinvest distributions from their funds in, shares of the Fund at net asset
value.

HOW TO SELL SHARES
You can sell your Fund shares any day the New York Stock Exchange is open,
either directly to the Fund or through your investment representative. The Fund
will only forward redemption payments on shares for which it has collected
payment of the purchase price.

SELLING SHARES DIRECTLY TO A FUND. Send a signed letter of instruction to the
Vista Service Center, along with any certificates that represent shares you
want to sell. The price you will receive is the next net asset value calculated
after the Fund receives your request in proper form, less any applicable CDSC.
In order to receive that day's net asset value, the Vista Service Center must
receive your request before the close of regular trading on the New York Stock
Exchange.

SIGNATURE GUARANTEES. If you sell shares having a net asset value of $100,000
or more, the signatures of registered owners or their legal representatives
must be guaranteed by a bank, broker-dealer or certain other financial
institutions. See the SAI for more information about where to obtain a
signature guarantee.

If you want your redemption proceeds sent to an address other than your address
as it appears on Vista's records, a signature guarantee is required. The Fund
may require additional documentation for the sale of shares by a corporation,
partnership, agent or fiduciary, or a surviving joint owner. Contact the Vista
Service Center for details.

DELIVERY OF PROCEEDS. The Fund generally sends you payment for your shares the
business day after your request is received in proper form, assuming the Fund
has collected payment of the purchase price of your shares. Under unusual
circumstances, the Fund may suspend redemptions, or postpone payment for more
than seven days, as permitted by federal securities law.

TELEPHONE REDEMPTIONS. You may use Vista's Telephone Redemption Privilege to
redeem shares from your account unless you have notified the Vista Service
Center of an address change within the preceding 30 days. Telephone redemption
requests in excess of $25,000 will only be made by wire to a bank account on
record with the Fund. Unless an investor indicates otherwise on the account
application, the Fund will be authorized to act upon redemption and transfer
instructions received by telephone from a shareholder, or any person claiming
to act as his or her representative, who can provide the Fund with his or her
account registration and address as it appears on the Fund's records.

22
<PAGE>

The Vista Service Center will employ these and other reasonable procedures to
confirm that instructions communicated by telephone are genuine; if it fails to
employ reasonable procedures, the Fund may be liable for any losses due to
unauthorized or fraudulent instructions. An investor agrees, however, that to
the extent permitted by applicable law, neither the Fund nor its agents will be
liable for any loss, liability, cost or expense arising out of any redemption
request, including any fraudulent or unauthorized request. For information,
consult the Vista Service Center.

During periods of unusual market changes and shareholder activity, you may
experience delays in contacting the Vista Service Center by telephone. In this
event, you may wish to submit a written redemption request, as described above,
or contact your investment representative. The Telephone Redemption Privilege
is not available if you were issued certificates for shares that remain
outstanding. The Telephone Redemption Privilege may be modified or terminated
without notice.

SYSTEMATIC WITHDRAWAL. You can make regular withdrawals of $50 or more ($100 or
more for Class B accounts) monthly, quarterly or semiannually. A minimum account
balance of $5,000 is required to establish a systematic withdrawal plan for
Class A accounts. Call the Vista Service Center at 1-800-34-VISTA for complete
instructions.

SELLING SHARES THROUGH YOUR INVESTMENT REPRESENTATIVE. Your investment
representative must receive your request before the close of regular trading on
the New York Stock Exchange to receive that day's net asset value. Your
investment representative will be responsible for furnishing all necessary
documentation to the Vista Service Center, and may charge you for its services.

INVOLUNTARY REDEMPTION OF ACCOUNTS. The Fund may involuntarily redeem your
shares if at such time the aggregate net asset value of the shares in your
account is less than $500 due to redemptions or if you purchase through the
Systematic Investment Plan and fail to meet the Fund's investment minimum
within a twelve month period. In the event of any such redemption, you will
receive at least 60 days notice prior to the redemption. In the event a Fund
redeems Class B shares pursuant to this provision, no CDSC will be imposed.

HOW TO EXCHANGE YOUR SHARES
You can exchange your shares for shares of the same class of certain other
Vista Funds at net asset value beginning 15 days after purchase. Not all Vista
Funds offer all classes of shares. The prospectus of the other Vista Fund into
which shares are being exchanged should be read carefully and retained for
future reference. If you exchange shares subject to a CDSC, the transaction
will not be subject to the CDSC. However, when you redeem the shares acquired
through the exchange, the redemption may be subject to the CDSC, depending

23
<PAGE>

upon when you originally purchased the shares. The CDSC will be computed using
the schedule of any fund into or from which you have exchanged your shares that
would result in your paying the highest CDSC applicable to your class of
shares. In computing the CDSC, the length of time you have owned your shares
will be measured from the date of original purchase and will not be affected by
any exchange.

EXCHANGING TO MONEY MARKET FUNDS. An exchange of Class B shares into any of the
Vista money market funds (other than the Class B shares of the Vista Prime
Money Market Fund in the case of Class B shares) will be treated as a
redemption--and therefore subject to the conditions of the CDSC--and a
subsequent purchase. Class B shares of any Vista non-money market fund may be
exchanged into the Class B shares of the Vista Prime Money Market Fund in order
to continue the aging of the initial purchase of such shares.

For federal income tax purposes, an exchange is treated as a sale of shares and
generally results in a capital gain or loss.

EXCHANGING BY PHONE. A Telephone Exchange Privilege is currently available.
Call the Vista Service Center for procedures for telephone transactions. The
Telephone Exchange Privilege is not available if you were issued certificates
for shares that remain outstanding. Ask your investment representative or the
Vista Service Center for prospectuses of other Vista Funds. Shares of certain
Vista Funds are not available to residents of all states.

EXCHANGE PARAMETERS. The exchange privilege is not intended as a vehicle for
short-term trading. Excessive exchange activity may interfere with portfolio
management and have an adverse effect on all shareholders. In order to limit
excessive exchange activity and in other circumstances where Vista management
or the Trustees believe doing so would be in the best interests of the Fund,
the Fund reserves the right to revise or terminate the exchange privilege,
limit the amount or number of exchanges or reject any exchange. In addition,
any shareholder who makes more than ten exchanges of shares involving the Fund
in a year or three in a calendar quarter will be charged a $5.00 administration
fee for each such exchange. Shareholders would be notified of any such action
to the extent required by law. Consult the Vista Service Center before
requesting an exchange. See the SAI to find out more about the exchange
privilege.

REINSTATEMENT PRIVILEGE. Upon written request, Class A shareholders have a one
time privilege of reinstating their investment in the Fund at net asset value
within 90 calendar days of the redemption. The reinstatement request must be
accompanied by payment for the shares (not in excess of the redemption), and
shares will be purchased at the next determined net asset value. Class B
shareholders who have redeemed their shares and paid a CDSC with such redemption
may purchase Class A shares with no initial sales charge (in an amount not in
excess of their redemption proceeds) if the purchase occurs within 90 days of

24
<PAGE>

the redemption of the Class B shares.

HOW THE FUNDS
VALUE THEIR SHARES
- ------------------

The net asset value of each class of the Fund's shares is determined once daily
based upon prices determined as of the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time, however, options are priced
at 4:15 p.m., Eastern time), on each business day of the Fund, by dividing the
net assets of the Fund attributable to that class by the total number of
outstanding shares of that class. Values of assets held by the Fund are
determined on the basis of their market or other fair value, as described in
the SAI.

HOW DISTRIBUTIONS ARE
MADE; TAX INFORMATION
- ---------------------

The Fund distributes any net investment income at least semi-annually and any
net realized capital gains at least annually. Capital gains are distributed
after deducting any available capital loss carryovers. Distributions paid by
the Fund with respect to Class A shares will generally be greater than those
paid with respect to Class B shares because expenses attributable to Class B
shares will generally be higher.

DISTRIBUTION PAYMENT OPTION. You can choose from three distribution options:
(1) reinvest all distributions in additional Fund shares without a sales
charge; (2) receive distributions from net investment income in cash or by ACH
to a pre-established bank account while reinvesting capital gains distributions
in additional shares without a sales charge; or (3) receive all distributions
in cash or by ACH. You can change your distribution option by notifying the
Vista Service Center in writing. If you do not select an option when you open
your account, all distributions will be reinvested. All distributions not paid
in cash or by ACH will be reinvested in shares of the same share class. You
will receive a statement confirming reinvestment of distributions in additional
Fund shares promptly following the quarter in which the reinvestment occurs.

If a check representing a Fund distribution is not cashed within a specified
period, the Vista Service Center will notify you that you have the option of
requesting another check or reinvesting the distribution in the Fund or in an
established account of another Vista Fund without a sales charge. If the Vista
Service Center does not receive your election, the distribution will be
reinvested in the Fund. Similarly, if the Fund or the Vista Service Center
sends you correspondence returned as "undeliverable," distributions will
automatically be reinvested in the Fund.

The Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements that are necessary for
it to be relieved of federal taxes on income and gains it distributes to
shareholders. The Fund intends to distribute substantially all of its ordinary
income and capital gain net income on a current basis. If the Fund does not
qualify as a regulated investment company for any

25
<PAGE>

taxable year or does not make such distributions, the Fund will be subject to
tax on all of its income and gains.

TAXATION OF DISTRIBUTIONS. Distributions by the Fund other than net long-term
capital gains will be taxable to you as ordinary income. Distributions of net
capital gain will be taxable as such, regardless of how long you have
held the shares. The taxation of your distributions is the same whether received
in cash or in shares through the reinvestment of distributions.

Investment income received by the Fund from sources within foreign countries
may be subject to foreign taxes withheld at the source. Since more than 50% of
the value of the total assets of the Fund at the close of its taxable year is
anticipated to be stock or securities of foreign corporations, the Fund may
elect to "pass through" to its shareholders the amount of foreign taxes paid by
the Fund.

You should carefully consider the tax implications of purchasing shares just
prior to a distribution. This is because you will be taxed on the entire amount
of the distribution received, even though the net asset value per share will be
higher on the date of such purchase as it will include the distribution amount.

Early in each calendar year the Fund will notify you of the amount and tax
status of distributions paid to you by the Fund for the preceding year.

The above is only a summary of certain federal income tax consequences of
investing in the Fund. You should consult your tax adviser to determine the
precise effect of an investment in the Fund on your particular tax situation
(including possible liability for state and local taxes and, for foreign
shareholders, U.S. withholding taxes).

OTHER INFORMATION
CONCERNING THE FUNDS
- --------------------
DISTRIBUTION PLANS
The Fund's distributor is Vista Fund Distributors, Inc. ("VFD"). VFD is a
subsidiary of The BISYS Group, Inc. and is unaffiliated with Chase. The Trust
has adopted Rule 12b-1 distribution plans for Class A and Class B shares, which
provide for the payment of distribution fees at annual rates of up to 0.25% and
0.75% of the average daily net assets attributable to Class A and Class B
shares of the Fund, respectively. Payments under the distribution plans shall
be used to compensate or reimburse the Fund's distributor and broker-dealers
for services provided and expenses incurred in connection with the sale of
Class A and Class B shares, and are not tied to the amount of actual expenses
incurred. Payments may be used to compensate broker-dealers with trail or
maintenance commissions at an annual rate of up to 0.25% of the average daily
net asset value of Class A and Class B shares invested in a Fund by customers
of these broker-dealers. Trail or maintenance commissions are paid to broker-
dealers beginning the 13th month following the purchase of shares by their
customers. Promotional activities for the sale of Class A and Class B shares
will be conducted generally by the Vista Family of

26
<PAGE>

Funds, and activities intended to promote the Fund's Class A and Class B shares
may also benefit the Fund's other shares and other Vista Funds.

VFD may provide promotional incentives to broker-dealers that meet specified
sales targets for one or more Vista Funds. These incentives may include gifts
of up to $100 per person annually; an occasional meal, ticket to a sporting
event or theater for entertainment for broker-dealers and their guests; and
payment or reimbursement for travel expenses, including lodging and meals, in
connection with attendance at training and educational meetings within and
outside the U.S.

VFD may from time to time, pursuant to objective criteria established by it,
pay additional compensation to qualifying authorized broker-dealers for certain
services or activities which are primarily intended to result in sales of
shares of the Fund. In some instances, such compensation may be offered only to
certain broker-dealers who employ registered representatives who have sold or
may sell significant amounts of shares of the Fund and/or other Vista Funds
during a specified period of time. Such compensation does not represent an
additional expense to the Fund or its shareholders, since it will be paid by
VFD out of compensation retained by it from the Fund or other sources available
to it.

SHAREHOLDER SERVICING AGENTS
The Trust has entered into shareholder servicing agreements with certain
shareholder servicing agents (including Chase) under which the shareholder
servicing agents have agreed to provide certain support services to their
customers who beneficially own Class A or Class B shares of the Fund. These
services include assisting with purchase and redemption transactions,
maintaining shareholder accounts and records, furnishing customer statements,
transmitting shareholder reports and communications to customers and other
similar shareholder liaison services. For performing these services, each
shareholder servicing agent receives an annual fee of up to 0.25% of the
average daily net assets of Class A or Class B shares of the Fund held by
investors for whom the shareholder servicing agent maintains a servicing
relationship. Shareholder servicing agents may subcontract with other parties
for the provision of shareholder support services.

Shareholder servicing agents may offer additional services to their customers,
such as pre-authorized or systematic purchase and redemption plans. Each
shareholder servicing agent may establish its own terms and conditions,
including limitations on the amounts of subsequent transactions, with respect
to such services. Certain shareholder servicing agents may (although they are
not required by the Trust to do so) credit to the accounts of their customers
from whom they are already receiving other fees an amount not exceeding such
other fees or the fees for their services as shareholder servicing agents.

Chase and/or VFD may from time to time, at their own expense out of
compensation retained by them

27
<PAGE>

from the Fund or other sources available to them, make additional payments to
certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers. These services include maintaining
account records, processing orders to purchase, redeem and exchange Fund shares
and responding to certain customer inquiries. The amount of such compensation
may be up to an additional 0.10% annually of the average net assets of the Fund
attributable to shares of the Fund held by customers of such shareholder
servicing agents. Such compensation does not represent an additional expense to
the Fund or its shareholders, since it will be paid by Chase and/or VFD.

Chase and its affiliates and the Vista Family of Funds, affiliates, agents, and
subagents may exchange among themselves and others certain information about
shareholders and their accounts, including information used to offer investment
products and insurance products to them, unless otherwise contractually
prohibited.

ADMINISTRATOR AND
SUB-ADMINISTRATOR
Chase acts as the Fund's administrator and is entitled to receive a fee
computed daily and paid monthly at an annual rate equal to 0.10% of the Fund's
average daily net assets.

VFD provides certain sub-administrative services to the Fund pursuant to a
distribution and sub-administration agreement and is entitled to receive a fee
for these services from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets. VFD has agreed to use a portion of this fee to pay
for certain expenses incurred in connection with organizing new series of the
Trust and certain other ongoing expenses of the Trust. VFD is located at 101
Park Avenue, New York, New York 10178.

CUSTODIAN
Chase acts as the Fund's custodian and fund accountant and receives
compensation under an agreement with the Trust. Fund securities and cash may be
held by sub-custodian banks if such arrangements are reviewed and approved by
the Trustees.

EXPENSES
The Fund pays the expenses incurred in its operations, including the Fund's pro
rata share of expenses of the Trust. These expenses include investment advisory
and administrative fees; the compensation of the Trustees; registration fees;
interest charges; taxes; expenses connected with the execution, recording and
settlement of security transactions; fees and expenses of the Fund's custodian
for all services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of preparing and mailing
reports to investors and to government offices and commissions; expenses of
meetings of investors; fees and expenses of independent accountants, of legal
counsel and of any transfer agent, registrar or dividend disbursing agent of
the Trust; insurance premiums; and expenses of calculating the net asset value
of, and the net income on, shares of the Fund. Shareholder servicing and
distribution fees are allocated to specific classes of the

28
<PAGE>

Fund. In addition, the Fund may allocate transfer agency and certain other
expenses by class. Service providers to the Fund may, from time to time,
voluntarily waive all or a portion of any fees to which they are entitled.

ORGANIZATION AND
DESCRIPTION OF SHARES
The Fund is a portfolio of Mutual Fund Group, an open-end management investment
company organized as a Massachusetts business trust in 1987 (the "Trust"). The
Trust has reserved the right to create and issue additional series and classes.
Each share of a series or class represents an equal proportionate interest in
that series or class with each other share of that series or class. The shares
of each series or class participate equally in the earnings, dividends and
assets of the particular series or class. Shares have no preemptive or
conversion rights. Shares when issued are fully paid and non-assessable, except
as set forth below. Shareholders are entitled to one vote for each whole share
held, and each fractional share shall be entitled to a proportionate fractional
vote, except that Trust shares held in the treasury of the Trust shall not be
voted. Shares of each class of the Fund generally vote together except when
required under federal securities laws to vote separately on matters that only
affect a particular class, such as the approval of distribution plans for a
particular class.

The Fund issues multiple classes of shares. This Prospectus relates to Class A
and Class B shares of the Fund. The Fund may offer other classes of shares in
addition to these classes and may determine not to offer certain classes of
shares. The categories of investors that are eligible to purchase shares and
minimum investment requirements may differ for each class of the Fund's shares.
In addition, other classes of Fund shares may be subject to differences in
sales charge arrangements, ongoing distribution and service fee levels, and
levels of certain other expenses, which would affect the relative performance
of the different classes. Investors may call 1-800-34-VISTA to obtain
additional information about other classes of shares of the Fund that are
offered. Any person entitled to receive compensation for selling or servicing
shares of the Fund may receive different levels of compensation with respect to
one class of shares over another.

The business and affairs of the Trust are managed under the general direction
and supervision of its Board of Trustees. The Trust is not required to hold
annual meetings of shareholders but will hold special meetings of shareholders
of all series or classes when in the judgment of the Trustees it is necessary
or desirable to submit matters for a shareholder vote. The Trustees will
promptly call a meeting of shareholders to remove a trustee(s) when requested
to do so in writing by record holders of not less than 10% of all outstanding
shares of the Trust.

Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances

29
<PAGE>

in which both inadequate insurance existed and the Trust itself was unable to
meet its obligations.

PERFORMANCE INFORMATION
- -----------------------

The Fund's investment performance may from time to time be included in
advertisements about the Fund. Performance is calculated separately for each
class of shares, in the manner described in the SAI. "Yield" for each class of
shares is calculated by dividing the annualized net investment income per share
during a recent 30-day period by the maximum public offering price per share of
such class on the last day of that period.

"Total return" for the one-, five- and ten-year periods (or since inception, if
shorter) through the most recent calendar quarter represents the average annual
compounded rate of return on an investment of $1,000 in the Fund invested at
the maximum public offering price (in the case of Class A shares) or reflecting
the deduction of any applicable contingent deferred sales charge (in the case
of Class B shares). Total return may also be presented for other periods or
without reflecting sales charges. Any quotation of investment performance not
reflecting the maximum initial sales charge or contingent deferred sales charge
would be reduced if such sales charges were used.

All performance data is based on the Fund's past investment results and does
not predict future performance. Investment performance, which will vary, is
based on many factors, including market conditions, the composition of the
Fund's portfolio, the Fund's operating expenses and which class of shares you
purchase. Investment performance also often reflects the risks associated with
the Fund's investment objectives and policies. These factors should be
considered when comparing the Fund's investment results to those of other
mutual funds and other investment vehicles. Quotation of investment performance
for any period when a fee waiver or expense limitation was in effect will be
greater than if the waiver or limitation had not been in effect. The Fund's
performance may be compared to other mutual funds, relevant indices and
rankings prepared by independent services. See the SAI.

30
<PAGE>

MAKE THE MOST OF YOUR VISTA PRIVILEGES
--------------------------------------

The following services are available to you as a Vista mutual fund shareholder.

[bullet] SYSTEMATIC INVESTMENT PLAN--Invest as much as you wish ($100 or more)
in the first or third week of any month. The amount will be
automatically transferred from your checking or savings account.
[bullet] SYSTEMATIC WITHDRAWAL PLAN--Make regular withdrawals of $50 or more
($100 or more for Class B accounts) monthly, quarterly or
semiannually. A minimum account balance of $5,000 is required to
establish a systematic withdrawal plan for Class A accounts.
[bullet] SYSTEMATIC EXCHANGE--Transfer assets automatically from one Vista
account to another on a regular, prearranged basis. There is no
additional charge for this service.
[bullet] FREE EXCHANGE PRIVILEGE--Exchange money between Vista Funds in the
same class of shares without charge. The exchange privilege allows you
to adjust your investments as your objectives change. Investors may
not maintain, within the same fund, simultaneous plans for systematic
investment or exchange and systematic withdrawal or exchange.
[bullet] REINSTATEMENT PRIVILEGE--Class A shareholders have a one time
privilege of reinstating their investment in the Fund at net asset
value next determined subject to written request within 90 calendar
days of the redemption, accompanied by payment for the shares (not in
excess of the redemption).

Class B shareholders of the Fund who have redeemed their shares and paid a
CDSC with such redemption may purchase Class A shares with no initial sales
charge (in an amount not in excess of their redemption proceeds) if the
purchase occurs within 90 days of the redemption of the Class B shares.

For more information about any of these services and privileges, call your
shareholder servicing agent, investment representative or the Vista Service
Center at 1-800-34-VISTA. These privileges are subject to change or
termination.

31
<PAGE>

Vista Family of Mutual Funds & Retirement Products

VISTA INTERNATIONAL EQUITY FUNDS
Southeast Asian Fund
Japan Fund
European Fund
International Equity Fund
Latin American Equity Fund

VISTA U.S. EQUITY FUNDS
Small Cap Opportunities Fund
Small Cap Equity Fund (closed to new investors)
The Growth Fund of Washington
Capital Growth Fund
Growth and Income Fund
Large Cap Equity Fund
Balanced Fund
Equity Income Fund

VISTA FIXED INCOME FUNDS
Bond Fund
U.S. Government Securities Fund
U.S. Treasury Income Fund
Short-Term Bond Fund

VISTA TAX-FREE FUNDS(1)
New York Tax Free Income Fund
California Intermediate Tax Free Fund
Tax Free Income Fund

VISTA TAX-FREE MONEY MARKET FUNDS(1,2)
New York Tax Free Money Market Fund
Connecticut Daily Tax Free Income Fund Select Shares(3)
New Jersey Daily Municipal Income Fund Select Shares(3)
Tax Free Money Market Fund
California Tax Free Money Market Fund

VISTA TAXABLE MONEY MARKET FUNDS(2)
Cash Management Money Market Fund
Federal Money Market Fund
100% U.S. Treasury Securities Money Market Fund
U.S. Government Money Market Fund
Treasury Plus Money Market Fund

VISTA RETIREMENT PRODUCTS
Vista Capital Advantage Variable Annuity(4)
Vista 401(k) Advantage

For complete information on the Vista Mutual Funds or Retirement Products,
including information about fees and expenses, call your investment
professional or 1-800-34-VISTA for a prospectus. Please read it carefully
before you invest or send money.

(1)Some income may be subject to certain state and local taxes. A portion of the
income may be subject to the federal alternative minimum tax for some
investors.
(2)An investment in a Money Market Fund is neither insured nor guaranteed by the
U.S. Government. Yields will fluctuate, and there can be no assurance that the
Fund will be able to maintain a stable net asset value of $1.00 per share.
(3)Vista Select Shares of these funds are not a part of, or affiliated with, the
Vista Family of Mutual Funds. Reich & Tang Distributors L.P. and New England
Investment Companies L.P., which are unaffiliated with Chase, are the funds'
distributor and investment adviser, respectively.
(4)The variable annuity contract is issued by First SunAmerica Life Insurance
Company in New York; in other states, but not necessarily all states, it is
issued by Anchor National Life Insurance Company.

32
<PAGE>

VISTA SERVICE CENTER
P.O. Box 419392
Kansas City, MO 64141-6392

TRANSFER AGENT AND DIVIDEND PAYING AGENT
DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105

LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036

[VISTA LOGO]
P.O. Box 419392
Kansas City, MO 64141-6392

VEJA-1-297X
<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
December __, 1997

VISTA(SM) LATIN AMERICAN EQUITY FUND

101 Park Avenue, New York, New York 10178

This Statement of Additional Information sets forth information which may
be of interest to investors but which is not necessarily included in the
Prospectuses offering shares of the Fund. This Statement of Additional
Information should be read in conjunction with the Prospectus offering shares
of Vista Latin American Equity Fund (the "Fund"). Any references to a
"Prospectus" in this Statement of Additional Information is a reference to the
foregoing Prospectus. Copies of the Prospectus may be obtained by an investor
without charge by contacting Vista Fund Distributors, Inc. ("VFD"), the Fund's
distributor (the "Distributor"), at the above-listed address.

This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by an
effective prospectus.

For more information about your account, simply call or write the Vista Service
Center at:

1-800-34-VISTA
Vista Service Center
P.O. Box 419392
Kansas City, MO 64141

INTL-SAI

<PAGE>

- --------------------------------------------------------------------------------
Table of Contents Page
- --------------------------------------------------------------------------------
The Fund .................................................................. 3
Investment Policies and Restrictions ...................................... 3
Performance Information ................................................... 21
Determination of Net Asset Value .......................................... 23
Purchases, Redemptions and Exchanges ...................................... 24
Tax Matters ............................................................... 26
Management ................................................................ 33
Independent Accountants ................................................... 42
Certain Regulatory Matters ................................................ 42
General Information ....................................................... 43
Appendix A--Description of Certain Obligations Issued or Guaranteed
by U.S. Government Agencies or Instrumentalities ......................... A-1
Appendix B--Description of Ratings ........................................ B-1

2
<PAGE>

THE FUND

Mutual Fund Group (the "Trust") is an open-end management investment
company which was organized as a business trust under the laws of the
Commonwealth of Massachusetts on May 11, 1987. The Trust presently consists of
18 separate series (the "Funds"). Certain of the Funds are diversified and
other Funds are non-diversified, as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). The shares of the Funds are
referred to in this Statement of Additional Information as the "Shares."

The Board of Trustees of the Trust provides broad supervision over the
affairs of the Trust including the Funds. The Chase Manhattan Bank ("Chase") is
the investment adviser for the Funds. Chase also serves as the administrator of
the Trust, including the Funds. A majority of the Trustees of the Trust are not
affiliated with the investment adviser or sub-advisers to the Funds.

INVESTMENT POLICIES AND RESTRICTIONS
Investment Policies

The Prospectus sets forth the various investment policies of the Fund. The
following information supplements and should be read in conjunction with the
related sections of the Prospectus. For descriptions of the securities ratings
of Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P") and Fitch Investors Service, Inc. ("Fitch"), see Appendix B.

U.S. Government Securities. U.S. Government Securities include (1) U.S.
Treasury obligations, which generally differ only in their interest rates,
maturities and times of issuance, including: U.S. Treasury bills (maturities of
one year or less), U.S. Treasury notes (maturities of one to ten years) and
U.S. Treasury bonds (generally maturities of greater than ten years); and (2)
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the U.S. Treasury, (b) the right of the issuer to borrow
any amount listed to a specific line of credit from the U.S. Treasury, (c)
discretionary authority of the U.S. Government to purchase certain obligations
of the U.S. Government agency or instrumentality or (d) the credit of the
agency or instrumentality. Agencies and instrumentalities of the U.S.
Government include but are not limited to: Federal Land Banks, Federal
Financing Banks, Banks for Cooperatives, Federal Intermediate Credit Banks,
Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Student Loan Marketing
Association, United States Postal Service, Chrysler Corporate Loan Guarantee
Board, Small Business Administration, Tennessee Valley Authority and any other
enterprise established or sponsored by the U.S. Government. Certain U.S.
Government Securities, including U.S. Treasury bills, notes and bonds,
Government National Mortgage Association certificates and Federal Housing
Administration debentures, are supported by the full faith and credit of the
United States. Other U.S. Government Securities are issued or guaranteed by
federal agencies or government sponsored enterprises and are not supported by
the full faith and credit of the United States. These securities include
obligations that are supported by the right of the issuer to borrow from the
U.S. Treasury, such as obligations of Federal Home Loan Banks, and obligations
that are supported by the creditworthiness of the particular instrumentality,
such as obligations of the Federal National Mortgage Association or Federal
Home Loan Mortgage Corporation. For a description of certain obligations issued
or guaranteed by U.S. Government agencies and instrumentalities, see Appendix
A.

In addition, certain U.S. Government agencies and instrumentalities issue
specialized types of securities, such as guaranteed notes of the Small Business
Administration, Federal Aviation Administration, Department of Defense, Bureau
of Indian Affairs and Private Export Funding Corporation, which often provide
higher yields that are available from the more common types of
government-backed instruments. However, such specialized instruments may only
be available from a few sources in limited amounts, or only in very large
denominations; they may also require specialized capability in portfolio
servicing and in legal matters

3
<PAGE>

related to government guarantees. While they may frequently offer attractive
yields, the limited-activity markets of many of these securities means that, if
the Fund were required to liquidate any of them, it might not be able to do so
advantageously; accordingly, if the Fund invests in such securities it would
normally hold such securities to maturity or pursuant to repurchase agreements,
and would treat such securities (including repurchase agreements maturing in
more than seven days) as illiquid for purposes of its limitation on investment
in illiquid securities.

Bank Obligations. Investments in bank obligations are limited to those of
U.S. banks (including their foreign branches) which have total assets at the
time of purchase in excess of $1 billion and the deposits of which are insured
by either the Bank Insurance Fund or the Savings Association Insurance Fund of
the Federal Deposit Insurance Corporation, and foreign banks (including their
U.S. branches) having total assets in excess of $10 billion (or the equivalent
in other currencies), and such other U.S. and foreign commercial banks which
are judged by the advisers to meet comparable credit standing criteria.

Bank obligations include negotiable certificates of deposit, bankers'
acceptances, fixed time deposits and deposit notes. A certificate of deposit is
a short-term negotiable certificate issued by a commercial bank against funds
deposited in the bank and is either interest-bearing or purchased on a discount
basis. A bankers' acceptance is a short-term draft drawn on a commercial bank
by a borrower, usually in connection with an international commercial
transaction. The borrower is liable for payment as is the bank, which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Fixed time deposits are obligations of branches of United States banks or
foreign banks which are payable at a stated maturity date and bear a fixed rate
of interest. Although fixed time deposits do not have a market, there are no
contractual restrictions on the right to transfer a beneficial interest in the
deposit to a third party. Fixed time deposits subject to withdrawal penalties
and with respect to which a Fund cannot realize the proceeds thereon within
seven days are deemed "illiquid" for the purposes of its restriction on
investments in illiquid securities. Deposit notes are notes issued by
commercial banks which generally bear fixed rates of interest and typically
have original maturities ranging from eighteen months to five years.

Banks are subject to extensive governmental regulations that may limit
both the amounts and types of loans and other financial commitments that may be
made and the interest rates and fees that may be charged. The profitability of
this industry is largely dependent upon the availability and cost of capital
funds for the purpose of financing lending operations under prevailing money
market conditions. Also, general economic conditions play an important part in
the operations of this industry and exposure to credit losses arising from
possible financial difficulties of borrowers might affect a bank's ability to
meet its obligations. Bank obligations may be general obligations of the parent
bank or may be limited to the issuing branch by the terms of the specific
obligations or by government regulation. Investors should also be aware that
securities of foreign banks and foreign branches of United States banks may
involve foreign investment risks in addition to those relating to domestic bank
obligations.

Commercial Paper. Commercial paper consists of short-term (usually from 1
to 270 days) unsecured promissory notes issued by corporations in order to
finance their current operations. A variable amount master demand note (which
is a type of commercial paper) represents a direct borrowing arrangement
involving periodically fluctuating rates of interest under a letter agreement
between a commercial paper issuer and an institutional lender pursuant to which
the lender may determine to invest varying amounts.

Supranational Obligations. Supranational organizations include
organizations such as The World Bank, which was chartered to finance
development projects in developing member countries; the European Community,
which is a twelve-nation organization engaged in cooperative economic
activities; the European Coal and Steel Community, which is an economic union
of various European nations steel and coal industries; and the Asian
Development Bank, which is an international development bank established to
lend funds, promote investment and provide technical assistance to member
nations of the Asian and Pacific regions.

4
<PAGE>

Loan Participations. The Fund may invest in loan participations. The Fund
may have difficulty disposing of participations because to do so it will have
to assign such securities to a third party. Because there is no established
secondary market for such securities, the Fund anticipates that such securities
could be sold only to a limited number of institutional investors. The lack of
an established secondary market may have an adverse impact on the value of such
securities and the Fund's ability to dispose of particular participations when
necessary to meet the Fund's liquidity needs or in response to a specific
economic event such as a deterioration in the creditworthiness of the borrower.
The lack of an established secondary market for participations also may make it
more difficult for the Fund to assign a value to these securities for purposes
of valuing the Fund's portfolio and calculating its net asset value. The Fund
will not invest more than 15% of the value of its net assets in participations
that are illiquid, and in other illiquid securities.

Brady Bonds. The Brady Plan framework, as it has developed, contemplates
the exchange of external commercial bank debt for newly issued bonds, called
Brady Bonds. Brady Bonds may also be issued in respect of new money being
advanced by existing lenders in connection with the debt restructuring. Brady
Bonds issued to date generally have maturities of between 15 and 30 years from
date of issuance. The following Latin American countries have issued Brady
Bonds: Argentina, Brazil, Costa Rica, the Dominican Republic, Ecuador, Mexico,
Uruguay and Venezuela. In addition, other countries may announce plans to issue
Brady Bonds. The Funds may invest in Brady Bonds of countries that have been
issued to date, as well as those which may be issued in the future.

Agreements implemented under the Brady Plan to date are designed to
achieve debt and debt-service reduction through specific options negotiated by
a debtor nation with its creditors. As a result, the financial packages offered
by each country differ. The types of options have included the exchange of
outstanding commercial bank debt for bonds issued at 100% of face value of such
debt which carry a below-market stated rate of interest (generally known as par
bonds), bonds issued at a discount from the face value of such debt (generally
known as discount bonds), bonds bearing an interest rate which increases over
time and bonds issued in exchange for the advancement of new money by existing
lenders. Regardless of the stated face amount and stated interest rate of the
various types of Brady Bonds, the Fund will purchase Brady Bonds in secondary
markets, as described below, in which the price and yield to the investor
reflect market conditions at the time of purchase. Brady Bonds issued to date
have traded at a deep discount from their face value. Brady Bonds are often
viewed as having three or four valuation components: (i) the collateralized
repayment of principal at final maturity; (ii) the collateralized interest
payments; (iii) the uncollateralized interest payments and (iv) any
uncollateralized repayment of principal at maturity. The Fund may purchase
Brady Bonds with no or limited collateralization and will be relying for
payment of interest and (except in the case of principal collateralized Brady
Bonds) principal primarily on the willingness and ability of the foreign
government to make payment in accordance with the terms of the Brady Bonds.
Brady Bonds issued to date are purchased and sold in secondary markets through
U.S. securities dealers and other financial institutions and are generally
maintained through European transnational securities depositories.

Repurchase Agreements. The Fund will enter into repurchase agreements only
with member banks of the Federal Reserve System and securities dealers believed
creditworthy, and only if fully collateralized by securities in which the Fund
is permitted to invest. Under the terms of a typical repurchase agreement, the
Fund would acquire an underlying instrument for a relatively short period
(usually not more than one week) subject to an obligation of the seller to
repurchase the instrument and the Fund to resell the instrument at a fixed
price and time, thereby determining the yield during the Fund's holding period.
This procedure results in a fixed rate of return insulated from market
fluctuations during such period. A repurchase agreement is subject to the risk
that the seller may fail to repurchase the security. Repurchase agreements are
considered under the 1940 Act to be loans collateralized by the underlying
securities. All repurchase agreements entered into by the Fund will be fully
collateralized at all times during the period of the agreement in that the
value of the underlying security will be at least equal to 102% of the amount
of the loan, including the accrued interest thereon, and the Fund or its
custodian or sub-custodian will have possession of the collateral, which

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<PAGE>

the Board of Trustees believes will give it a valid, perfected security
interest in the collateral. Whether a repurchase agreement is the purchase and
sale of a security or a collateralized loan has not been conclusively
established. This might become an issue in the event of the bankruptcy of the
other party to the transaction. In the event of default by the seller under a
repurchase agreement construed to be a collateralized loan, the underlying
securities would not be owned by the Fund, but would only constitute collateral
for the seller's obligation to pay the repurchase price. Therefore, the Fund
may suffer time delays and incur costs in connection with the disposition of
the collateral. The Board of Trustees believes that the collateral underlying
repurchase agreements may be more susceptible to claims of the seller's
creditors than would be the case with securities owned by the Fund. Repurchase
agreements maturing in more than seven days are treated as illiquid for
purposes of the Fund's restrictions on purchases of illiquid securities.
Repurchase agreements are also subject to the risks described below with
respect to stand-by commitments.

Reverse Repurchase Agreements. Reverse repurchase agreements involve the
sale of securities held by the Fund with an agreement to repurchase the
securities at an agreed upon price and date. The repurchase price is generally
equal to the original sales price plus interest. Reverse repurchase agreements
are usually for seven days or less and cannot be repaid prior to their
expiration dates. Reverse repurchase agreements involve the risk that the
market value of the portfolio securities transferred may decline below the
price at which the Fund is obliged to purchase the securities.

Forward Commitments. In order to invest the Fund's assets immediately,
while awaiting delivery of securities purchased on a forward commitment basis,
short-term obligations that offer same-day settlement and earnings will
normally be purchased. When a commitment to purchase a security on a forward
commitment basis is made, procedures are established consistent with the
General Statement of Policy of the Securities and Exchange Commission
concerning such purchases. Since that policy currently recommends that an
amount of the Fund's assets equal to the amount of the purchase be held aside
or segregated to be used to pay for the commitment, a separate account of the
Fund consisting of cash, cash equivalents or high quality debt securities equal
to the amount of such Fund's commitments securities will be established at the
Fund's custodian bank. For the purpose of determining the adequacy of the
securities in the account, the deposited securities will be valued at market
value. If the market value of such securities declines, additional cash, cash
equivalents or highly liquid securities will be placed in the account daily so
that the value of the account will equal the amount of such commitments by the
Fund.

Although it is not intended that such purchases would be made for
speculative purposes, purchases of securities on a forward commitment basis may
involve more risk than other types of purchases. Securities purchased on a
forward commitment basis and the securities held in the Fund's portfolio are
subject to changes in value based upon the public's perception of the issuer
and changes, real or anticipated, in the level of interest rates. Purchasing
securities on a forward commitment basis can involve the risk that the yields
available in the market when the delivery takes place may actually be higher or
lower than those obtained in the transaction itself. On the settlement date of
the forward commitment transaction, the Fund will meet its obligations from
then available cash flow, sale of securities held in the separate account, sale
of other securities or, although it would not normally expect to do so, from
sale of the forward commitment securities themselves (which may have a value
greater or lesser than such Fund's or Portfolio's payment obligations). The
sale of securities to meet such obligations may result in the realization of
capital gains or losses.

To the extent the Fund engages in forward commitment transactions, it will
do so for the purpose of acquiring securities consistent with its investment
objective and policies and not for the purpose of investment leverage, and
settlement of such transactions will be within 90 days from the trade date.

Stripped Obligations. The principal and interest components of United
States Treasury bonds with remaining maturities of longer than ten years are
eligible to be traded independently under the Separate Trading of Registered
Interest and Principal of Securities ("STRIPS") program. Under the STRIPS
program, the

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<PAGE>

principal and interest components are separately issued by the United States
Treasury at the request of depository financial institutions, which then trade
the component parts separately. The interest component of STRIPS may be more
volatile than that of United States Treasury bills with comparable maturities.

Warrants and Rights. Warrants basically are options to purchase equity
securities at a specified price for a specific period of time. Their prices do
not necessarily move parallel to the prices of the underlying securities.
Rights are similar to warrants but normally have a shorter duration and are
distributed directly by the issuer to shareholders. Rights and warrants have no
voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.

Illiquid Securities. For purposes of its limitation on investments in
illiquid securities, the Fund may elect to treat as liquid, in accordance with
procedures established by the Board of Trustees, certain investments in
restricted securities for which there may be a secondary market of qualified
institutional buyers as contemplated by Rule 144A under the Securities Act of
1933, as amended (the "Securities Act") and commercial obligations issued in
reliance on the so-called "private placement" exemption from registration
afforded by Section 4(2) of the Securities Act. ("Section 4(2) paper") Rule
144A provides an exemption from the registration requirements of the Securities
Act for the resale of certain restricted securities to qualified institutional
buyers. Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as the
Fund who agree that they are purchasing the paper for investment and not with a
view to public distribution. Any resale of Section 4(2) paper by the purchaser
must be in an exempt transaction.

One effect of Rule 144A and Section 4(2) is that certain restricted
securities may now be liquid, though there is no assurance that a liquid market
for Rule 144A securities or Section 4(2) paper will develop or be maintained.
The Trustees have adopted policies and procedures for the purpose of
determining whether securities that are eligible for resale under Rule 144A and
Section 4(2) paper are liquid or illiquid for purposes of the limitation on
investment in illiquid securities. Pursuant to those policies and procedures,
the Trustees have delegated to the advisers the determination as to whether a
particular instrument is liquid or illiquid, requiring that consideration be
given to, among other things, the frequency of trades and quotes for the
security, the number of dealers willing to sell and security and the number of
potential purchasers, dealer undertakings to make a market in the security, the
nature of the security and the time needed to dispose of the security. The
Trustees will periodically review the Fund's purchases and sales of Rule 144A
securities and Section 4(2) paper.

Stand-By Commitments. In a put transaction, the Fund acquires the right to
sell a security at an agreed upon price within a specified period prior to its
maturity date, and a stand-by commitment entitles the Fund to same-day
settlement and to receive an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of exercise.
Stand-by commitments are subject to certain risks, which include the inability
of the issuer of the commitment to pay for the securities at the time the
commitment is exercised, the fact that the commitment is not marketable by the
Fund, and that the maturity of the underlying security will generally be
different from that of the commitment.

Securities Loans. To the extent specified in its Prospectus, the Fund is
permitted to lend its securities to broker-dealers and other institutional
investors in order to generate additional income. Such loans of portfolio
securities may not exceed 30% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, cash equivalents, U.S. Government securities or irrevocable letters of
credit issued by financial institutions. Such collateral will be maintained at
all times in an amount equal to at least 102% of the current market value plus
accrued interest of the securities loaned. The Fund can increase its income
through the investment of such collateral. The Fund continues to be entitled to
the interest payable or any dividend-equivalent payments received on a loaned
security and, in addition, to receive interest on the amount of the loan.
However, the receipt of any dividend-equivalent payments by the Fund on a
loaned security from

7
<PAGE>

the borrower will not qualify for the dividends-received deduction. Such loans
will be terminable at any time upon specified notice. The Fund might experience
risk of loss if the institutions with which it has engaged in portfolio loan
transactions breach their agreements with the Fund. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower
experience financial difficulty. Loans will be made only to firms deemed by the
advisers to be of good standing and will not be made unless, in the judgment of
the advisers, the consideration to be earned from such loans justifies the
risk.

Additional Policies Regarding Derivative and Related Transactions

Introduction. As explained more fully below, the Fund may employ
derivative and related instruments as tools in the management of portfolio
assets. Put briefly, a "derivative" instrument may be considered a security or
other instrument which derives its value from the value or performance of other
instruments or assets, interest or currency exchange rates, or indexes. For
instance, derivatives include futures, options, forward contracts, structured
notes and various over-the-counter instruments.

Like other investment tools or techniques, the impact of using derivatives
strategies or similar instruments depends to a great extent on how they are
used. Derivatives are generally used by portfolio managers in three ways:
First, to reduce risk by hedging (offsetting) an investment position. Second,
to substitute for another security particularly where it is quicker, easier and
less expensive to invest in derivatives. Lastly, to speculate or enhance
portfolio performance. When used prudently, derivatives can offer several
benefits, including easier and more effective hedging, lower transaction costs,
quicker investment and more profitable use of portfolio assets. However,
derivatives also have the potential to significantly magnify risks, thereby
leading to potentially greater losses for the Fund.

The Fund may invest its assets in derivative and related instruments
subject only to the Fund's investment objective and policies and the
requirement that the Fund maintain segregated accounts consisting of liquid
assets, such as cash, U.S. Government securities, or other high-grade debt
obligations (or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under such instruments with
respect to positions where there is no underlying portfolio asset so as to
avoid leveraging the Fund.

The value of some derivative or similar instruments in which the Fund may
invest may be particularly sensitive to changes in prevailing interest rates or
other economic factors, and--like other investments of the Fund--the ability of
the Fund to successfully utilize these instruments may depend in part upon the
ability of the advisers to forecast interest rates and other economic factors
correctly. If the advisers inaccurately forecasts such factors and has taken
positions in derivative or similar instruments contrary to prevailing market
trends, the Fund could be exposed to the risk of a loss. The Fund may not
employ any or all of the strategies described herein, and no assurance can be
given that any strategy used will succeed.

Set forth below is an explanation of the various derivatives strategies
and related instruments the Fund may employ along with risks or special
attributes associated with them. This discussion is intended to supplement the
Fund's current Prospectus as well as provide useful information to prospective
investors.

Risk Factors. As explained more fully below and in the discussions of
particular strategies or instruments, there are a number of risks associated
with the use of derivatives and related instruments: There can be no guarantee
that there will be a correlation between price movements in a hedging vehicle
and in the portfolio assets being hedged. An incorrect correlation could result
in a loss on both the hedged assets in the Fund and the hedging vehicle so that
the portfolio return might have been greater had hedging not been attempted.
This risk is particularly acute in the case of "cross-hedges" between
currencies. The advisers may inaccurately forecast interest rates, market
values or other economic factors in utilizing a derivatives

8
<PAGE>

strategy. In such a case, the Fund may have been in a better position had it
not entered into such strategy. Hedging strategies, while reducing risk of
loss, can also reduce the opportunity for gain. In other words, hedging usually
limits both potential losses as well as potential gains. Strategies not
involving hedging may increase the risk to the Fund. Certain strategies, such
as yield enhancement, can have speculative characteristics and may result in
more risk to the Fund than hedging strategies using the same instruments.

There can be no assurance that a liquid market will exist at a time when
the Fund seeks to close out an option, futures contract or other derivative or
related position. Many exchanges and boards of trade limit the amount of
fluctuation permitted in option or futures contract prices during a single day;
once the daily limit has been reached on particular contract, no trades may be
made that day at a price beyond that limit. In addition, certain instruments
are relatively new and without a significant trading history. As a result,
there is no assurance that an active secondary market will develop or continue
to exist. Finally, over-the-counter instruments typically do not have a liquid
market. Lack of a liquid market for any reason may prevent the Fund from
liquidating an unfavorable position. Activities of large traders in the futures
and securities markets involving arbitrage, "program trading," and other
investment strategies may cause price distortions in these markets. In certain
instances, particularly those involving over-the-counter transactions, forward
contracts, foreign exchanges or foreign boards of trade, there is a greater
potential that a counterparty or broker may default or be unable to perform on
its commitments. In the event of such a default, the Fund may experience a
loss. In transactions involving currencies, the value of the currency
underlying an instrument may fluctuate due to many factors, including economic
conditions, interest rates, governmental policies and market forces.

Risks of Derivative and Related Transactions Outside the United
States. When conducted outside the United States, derivative and related
transactions may not be regulated as rigorously as in the United States, may
not involve a clearing mechanism and related guarantees, and are subject to the
risk of governmental actions affecting trading in, or the prices of, foreign
securities, currencies and other instruments. The value of such positions also
could be adversely affected by: (i) other complex foreign political, legal and
economic factors, (ii) lesser availability than in the United States of data on
which to make trading decisions, (iii) delays in a Fund's ability to act upon
economic events occurring in foreign markets during non-business hours in the
United States, (iv) the imposition of different exercise and settlement terms
and procedures and margin requirements than in the United States, and (v) lower
trading volume and liquidity.

Specific Uses and Strategies. Set forth below are explanations of various
strategies involving derivatives and related instruments which may be used by
the Fund.

Options on Securities, Securities Indexes, Currencies and Debt
Instruments. The Fund may PURCHASE, SELL or EXERCISE call and put options on:
securities; securities indexes; currencies; or debt instruments.

Although in most cases these options will be exchange-traded, the Fund may
also purchase, sell or exercise over-the-counter options. Over-the-counter
options differ from exchange-traded options in that they are two-party
contracts with price and other terms negotiated between buyer and seller. As
such, over-the-counter options generally have much less market liquidity and
carry the risk of default or nonperformance by the other party.

One purpose of purchasing put options is to protect holdings in an
underlying or related security against a substantial decline in market value.
One purpose of purchasing call options is to protect against substantial
increases in prices of securities the Fund intends to purchase pending its
ability to invest in such securities in an orderly manner. The Fund may also
use combinations of options to minimize costs, gain exposure to markets or take
advantage of price disparities or market movements. For example, the Fund may
sell put or call options it has previously purchased or purchase put or call
options it has previously sold. These transactions may result in a net gain or
loss depending on whether the amount realized on the sale is more

9
<PAGE>

or less than the premium and other transaction costs paid on the put or call
option which is sold. The Fund may write a call or put option in order to earn
the related premium from such transactions. Prior to exercise or expiration, an
option may be closed out by an offsetting purchase or sale of a similar option.
The Fund will not write uncovered options.

In addition to the general risk factors noted above, the purchase and
writing of options involve certain special risks. During the option period, the
Fund writing a covered call (i.e., where the underlying securities are held by
the Fund) has, in return for the premium on the option, given up the
opportunity to profit from a price increase in the underlying securities above
the exercise price, but has retained the risk of loss should the price of the
underlying securities decline. The writer of an option has no control over the
time when it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it cannot effect
a closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying securities at the exercise price.

If a put or call option purchased by the Fund is not sold when it has
remaining value, and if the market price of the underlying security, in the
case of a put, remains equal to or greater than the exercise price or, in the
case of a call, remains less than or equal to the exercise price, the Fund will
lose its entire investment in the option. Also, where a put or call option on a
particular security is purchased to hedge against price movements in a related
security, the price of the put or call option may move more or less than the
price of the related security. There can be no assurance that a liquid market
will exist when the Fund seeks to close out an option position. Furthermore, if
trading restrictions or suspensions are imposed on the options markets, the
Fund may be unable to close out a position.

Futures Contracts and Options on Futures Contracts. The Fund may purchase
or sell: interest-rate futures contracts; stock index futures contracts;
foreign currency futures contracts; futures contracts on specified instruments
or indices; and options on these futures contracts ("futures options").

The futures contracts and futures options may be based on various
instruments or indices in which the Fund may invest such as foreign currencies,
certificates of deposit, Eurodollar time deposits, securities indices, economic
indices (such as the Consumer Price Indices compiled by the U.S. Department of
Labor).

Futures contracts and futures options may be used to hedge portfolio
positions and transactions as well as to gain exposure to markets. For example,
the Fund may sell a futures contract--or buy a futures option--to protect
against a decline in value, or reduce the duration, of portfolio holdings.
Likewise, these instruments may be used where the Fund intends to acquire an
instrument or enter into a position. For example, the Fund may purchase a
futures contract--or buy a futures option--to gain immediate exposure in a
market or otherwise offset increases in the purchase price of securities or
currencies to be acquired in the future. Futures options may also be written to
earn the related premiums.

When writing or purchasing options, the Fund may simultaneously enter into
other transactions involving futures contracts or futures options in order to
minimize costs, gain exposure to markets, or take advantage of price
disparities or market movements. Such strategies may entail additional risks in
certain instances. The Fund may engage in cross-hedging by purchasing or
selling futures or options on a security or currency different from the
security or currency position being hedged to take advantage of relationships
between the two securities or currencies.

Investments in futures contracts and options thereon involve risks similar
to those associated with options transactions discussed above. The Fund will
only enter into futures contracts or options or futures contracts which are
traded on a U.S. or foreign exchange or board of trade, or similar entity, or
quoted on an automated quotation system.

Forward Contracts. The Fund may use foreign currency and interest-rate
forward contracts for various purposes as described below.

10
<PAGE>

Foreign currency exchange rates may fluctuate significantly over short
periods of time. They generally are determined by the forces of supply and
demand in the foreign exchange markets and the relative merits of investments
in different countries, actual or perceived changes in interest rates and other
complex factors, as seen from an international perspective. The Fund may invest
in securities denominated in foreign currencies and may, in addition to buying
and selling foreign currency futures contracts and options on foreign
currencies and foreign currency futures, enter into forward foreign currency
exchange contracts to reduce the risks or otherwise take a position in
anticipation of changes in foreign exchange rates. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific
currency at a future date, which may be a fixed number of days from the date of
the contract agreed upon by the parties, at a price set at the time of the
contract. By entering into a forward foreign currency contract, the Fund "locks
in" the exchange rate between the currency it will deliver and the currency it
will receive for the duration of the contract. As a result, the Fund reduces
its exposure to changes in the value of the currency it will deliver and
increases its exposure to changes in the value of the currency it will exchange
into. The effect on the value of the Fund is similar to selling securities
denominated in one currency and purchasing securities denominated in another.
Transactions that use two foreign currencies are sometimes referred to as
"cross-hedges."

The Fund may enter into these contracts for the purpose of hedging against
foreign exchange risk arising from investments or anticipated investments in
securities denominated in foreign currencies. The Fund may also enter into
these contracts for purposes of increasing exposure to a foreign currency or to
shift exposure to foreign currency fluctuations from one country to another.

The Fund may also use forward contracts to hedge against changes in
interest-rates, increase exposure to a market or otherwise take advantage of
such changes. An interest-rate forward contract involves the obligation to
purchase or sell a specific debt instrument at a fixed price at a future date.

Interest Rate and Currency Transactions. The Fund may employ currency and
interest rate management techniques, including transactions in options
(including yield curve options), futures, options on futures, forward foreign
currency exchange contracts, currency options and futures and currency and
interest rate swaps. The aggregate amount of the Fund's net currency exposure
will not exceed the total net asset value of its portfolio. However, to the
extent that the Fund is fully invested while also maintaining currency
positions, it may be exposed to greater combined risk.

The Fund will only enter into interest rate and currency swaps on a net
basis, i.e., the two payment streams are netted out, with the Fund receiving or
paying, as the case may be, only the net amount of the two payments. Interest
rate and currency swaps do not involve the delivery of securities, the
underlying currency, other underlying assets or principal. Accordingly, the
risk of loss with respect to interest rate and currency swaps is limited to the
net amount of interest or currency payments that the Fund is contractually
obligated to make. If the other party to an interest rate or currency swap
defaults, the Fund's risk of loss consists of the net amount of interest or
currency payments that the Fund is contractually entitled to receive. Since
interest rate and currency swaps are individually negotiated, the Fund expects
to achieve an acceptable degree of correlation between their portfolio
investments and their interest rate or currency swap positions.

The Fund may hold foreign currency received in connection with investments
in foreign securities when it would be beneficial to convert such currency into
U.S. dollars at a later date, based on anticipated changes in the relevant
exchange rate.

The Fund may purchase or sell without limitation as to a percentage of its
assets forward foreign currency exchange contracts when the advisers anticipate
that the foreign currency will appreciate or depreciate in value, but
securities denominated in that currency do not present attractive investment
opportunities and are not held by the Fund. In addition, the Fund may enter
into forward foreign currency exchange contracts in order to protect against
adverse changes in future foreign currency exchange rates. The Fund may engage

11
<PAGE>

in cross-hedging by using forward contracts in one currency to hedge against
fluctuations in the value of securities denominated in a different currency if
its advisers believe that there is a pattern of correlation between the two
currencies. Forward contracts may reduce the potential gain from a positive
change in the relationship between the U.S. Dollar and foreign currencies.
Unanticipated changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such contracts. The
use of foreign currency forward contracts will not eliminate fluctuations in
the underlying U.S. dollar equivalent value of the prices of or rates of return
on the Fund's foreign currency denominated portfolio securities and the use of
such techniques will subject the Fund to certain risks.

The matching of the increase in value of a forward contract and the
decline in the U.S. dollar equivalent value of the foreign currency denominated
asset that is the subject of the hedge generally will not be precise. In
addition, the Fund may not always be able to enter into foreign currency
forward contracts at attractive prices, and this will limit the Fund's ability
to use such contract to hedge or cross-hedge its assets. Also, with regard to
the Fund's use of cross-hedges, there can be no assurance that historical
correlations between the movement of certain foreign currencies relative to the
U.S. dollar will continue. Thus, at any time poor correlation may exist between
movements in the exchange rates of the foreign currencies underlying the Fund's
cross-hedges and the movements in the exchange rates of the foreign currencies
in which the Fund's assets that are the subject of such cross-hedges are
denominated.

The Fund may enter into interest rate and currency swaps to the maximum
allowed limits under applicable law. The Fund will typically use interest rate
swaps to shorten the effective duration of its portfolio. Interest rate swaps
involve the exchange by the Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of fixed rate
payments for floating rate payments. Currency swaps involve the exchange of
their respective rights to make or receive payments in specified currencies.

Structured Products. The Fund may invest in interests in entities
organized and operated solely for the purpose of restructuring the investment
characteristics of certain other investments. This type of restructuring
involves the deposit with or purchase by an entity, such as a corporation or
trust, or specified instruments (such as commercial bank loans) and the
issuance by that entity of one or more classes of securities ("structured
products") backed by, or representing interests in, the underlying instruments.
The cash flow on the underlying instruments may be apportioned among the newly
issued structured products to create securities with different investment
characteristics such as varying maturities, payment priorities and interest
rate provisions, and the extent of the payments made with respect to structured
products is dependent on the extent of the cash flow on the underlying
instruments. The Fund may invest in structured products which represent derived
investment positions based on relationships among different markets or asset
classes.

The Fund may also invest in other types of structured products, including,
among others, inverse floaters, spread trades and notes linked by a formula to
the price of an underlying instrument. Inverse floaters have coupon rates that
vary inversely at a multiple of a designated floating rate (which typically is
determined by reference to an index rate, but may also be determined through a
dutch auction or a remarketing agent or by reference to another security) (the
"reference rate"). As an example, inverse floaters may constitute a class of
CMOs with a coupon rate that moves inversely to a designated index, such as
LIBOR (London Interbank Offered Rate) or the Cost of Funds Index. Any rise in
the reference rate of an inverse floater (as a consequence of an increase in
interest rates) causes a drop in the coupon rate while any drop in the
reference rate of an inverse floater causes an increase in the coupon rate. A
spread trade is an investment position relating to a difference in the prices
or interest rates of two securities where the value of the investment position
is determined by movements in the difference between the prices or interest
rates, as the case may be, of the respective securities. When the Fund invests
in notes linked to the price of an underlying instrument, the price of the
underlying security is determined by a multiple (based on a formula) of the
price of such underlying security. A structured product may be considered to be
leveraged to the extent its interest rate varies by a magnitude that exceeds
the magnitude of the change in the index rate of interest. Because they are

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<PAGE>

linked to their underlying markets or securities, investments in structured
products generally are subject to greater volatility than an investment
directly in the underlying market or security. Total return on the structured
product is derived by linking return to one or more characteristics of the
underlying instrument. Because certain structured products of the type in which
the Fund may invest may involve no credit enhancement, the credit risk of those
structured products generally would be equivalent to that of the underlying
instruments. The Fund may invest in a class of structured products that is
either subordinated or unsubordinated to the right of payment of another class.
Subordinated structured products typically have higher yields and present
greater risks than unsubordinated structured products. Although the Fund's
purchase of subordinated structured products would have similar economic effect
to that of borrowing against the underlying securities, the purchase will not
be deemed to be leverage for purposes of the Fund's fundamental investment
limitation related to borrowing and leverage.

Certain issuers of structured products may be deemed to be "investment
companies" as defined in the 1940 Act. As a result, an investment in these
structured products may be limited by the restrictions contained in the 1940
Act. Structured products are typically sold in private placement transactions,
and there currently is no active trading market for structured products. As a
result, certain structured products in which the Fund invests may be deemed
illiquid and subject to its limitation on illiquid investments.

Investments in structured products generally are subject to greater
volatility than an investment directly in the underlying market or security. In
addition, because structured products are typically sold in private placement
transactions, there currently is no active trading market for structured
products.

Additional Restrictions on the Use of Futures and Option Contracts. The
Fund is not a "commodity pool" (i.e., a pooled investment vehicle which trades
in commodity futures contracts and options thereon and the operator of which is
registered with the CFTC and futures contracts and futures options will be
purchased, sold or entered into only for bona fide hedging purposes, provided
that the Fund may enter into such transactions for purposes other than bona
fide hedging if, immediately thereafter, the sum of the amount of its initial
margin and premiums on open contracts and options would not exceed 5% of the
liquidation value of the Fund's portfolio, provided, further, that, in the case
of an option that is in-the-money, the in-the-money amount may be excluded in
calculating the 5% limitation.

When the Fund purchases a futures contract, an amount of cash or cash
equivalents or high quality debt securities will be deposited in a segregated
account with the Fund's custodian or sub-custodian so that the amount so
segregated, plus the initial deposit and variation margin held in the account
of its broker, will at all times equal the value of the futures contract,
thereby insuring that the use of such futures is unleveraged.

The Fund's ability to engage in the transactions described herein may be
limited by the current federal income tax requirement that the Fund derive less
than 30% of its gross income from the sale or other disposition of stock or
securities held for less than three months.

Investment Restrictions

The Fund has adopted the following investment restrictions which may not
be changed without approval by a "majority of the outstanding shares" of the
Fund which, as used in this Statement of Additional Information, means the vote
of the lesser of (i) 67% or more of the shares of the Fund present at a
meeting, if the holders of more than 50% of the outstanding shares of the Fund
are present or represented by proxy, or (ii) more than 50% of the outstanding
shares of the Fund.

The Fund may not:

(1) borrow money, except that the Fund may borrow money for temporary
or emergency purposes, or by engaging in reverse repurchase transactions,
in an amount not exceeding 33-1/3% of

13
<PAGE>

the value of its total assets at the time when the loan is made and may
pledge, mortgage or hypothecate no more than 1/3 of its net assets to
secure such borrowings. Any borrowings representing more than 5% of total
assets must be repaid before the Fund may make additional investments;

(2) make loans, except that the Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or
other obligations and certificates of deposit, bankers' acceptances and
fixed time deposits) in accordance with its investment objectives and
policies; (ii) enter into repurchase agreements with respect to portfolio
securities; and (iii) lend portfolio securities with a value not in excess
of one-third of the value of its total assets;

(3) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured thereby) if, as a
result, more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry. Notwithstanding the foregoing, with respect to the Fund's
permissible futures and options transactions in U.S. Government
securities, positions in such options and futures shall not be subject to
this restriction;

(4) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments but this shall not prevent
the Fund from (i) purchasing or selling options and futures contracts or
from investing in securities or other instruments backed by physical
commodities or (ii) engaging in forward purchases or sales of foreign
currencies or securities;

(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business).
Investments by the Fund in securities backed by mortgages on real estate
or in marketable securities of companies engaged in such activities are
not hereby precluded;

(6) issue any senior security (as defined in the 1940 Act), except
that (a) the Fund may engage in transactions that may result in the
issuance of senior securities to the extent permitted under applicable
regulations and interpretations of the 1940 Act or an exemptive order; (b)
the Fund may acquire other securities, the acquisition of which may result
in the issuance of a senior security, to the extent permitted under
applicable regulations or interpretations of the 1940 Act; and (c) subject
to the restrictions set forth above, the Fund may borrow money as
authorized by the 1940 Act. For purposes of this restriction, collateral
arrangements with respect to permissible options and futures transactions,
including deposits of initial and variation margin, are not considered to
be the issuance of a senior security;

(7) underwrite securities issued by other persons except insofar as
the Fund may technically be deemed to be an underwriter under the
Securities Act of 1933 in selling a portfolio security.

(8) make or guarantee loans to any person or otherwise become liable
for or in connection with any obligation or indebtedness of any person
without the prior written consent of the Trustees, provided that for
purposes of this restriction the acquisition of bonds, debentures, or
other corporate debt securities and investments in government bonds,
short-term commercial paper, certificates of deposit and bankers'
acceptances shall not be deemed to be the making of a loan;

(9) invest in securities which are not traded or have not sought a
listing on a stock exchange, over-the-counter market or other organized
securities market that is open to the international public and on which
securities are regularly traded if, regarding all such securities, more
than 10% of its total net assets would be invested in such securities
immediately after and as a result of such transaction;

(10) deal in put options, write or purchase call options, including
warrants, unless such options or warrants are covered and are quoted on a
stock exchange or dealt in on a recognized market, and,

14
<PAGE>

at the date of the relevant transaction: (i) call options written do not
involve more than 25%, calculated at the exercise price, of the market
value of the securities within the Fund's portfolio excluding the value of
any outstanding call options purchased, and (ii) the cost of call options
or warrants purchased does not exceed, in terms of premium, 2% of the
value of the net assets of the Fund; or

(11) purchase securities of any issuer if such purchase at the time
thereof would cause more than 10% of the voting securities of such issuer
to be held by the Fund.

In addition, as a matter of fundamental policy, notwithstanding any other
investment policy or restriction, the Fund may seek to achieve its investment
objective by investing all of its investable assets in another investment
company having substantially the same investment objective and policies as the
Fund. For purposes of investment restriction (2) above, loan participations are
considered to be debt instruments. For purposes of investment restriction (5)
above, real estate includes Real Estate Limited Partnerships.

For purposes of investment restriction (3) above, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together as
an "industry." Investment restriction (3) above, however, is not applicable to
investments by the Fund in municipal obligations where the issuer is regarded
as a state, city, municipality or other public authority since such entities
are not members of an "industry." Supranational organizations are collectively
considered to be members of a single "industry" for purposes of restriction (3)
above.

In addition, the Fund is subject to the following nonfundamental
restrictions which may be changed without shareholder approval:

(1) The Fund may not make short sales of securities, other than short
sales "against the box," or purchase securities on margin except for
short-term credits necessary for clearance of portfolio transactions,
provided that this restriction will not be applied to limit the use of
options, futures contracts and related options, in the manner otherwise
permitted by the investment restrictions, policies and investment program
of the Fund.

(2) The Fund may not purchase or sell interests in oil, gas or
mineral leases.

(3) The Fund may not invest more than 15% of its net assets in
illiquid securities.

(4) The Fund may not write, purchase or sell any put or call option
or any combination thereof, provided that this shall not prevent (i) the
writing, purchasing or selling of puts, calls or combinations thereof with
respect to portfolio securities or (ii) with respect to the Fund's
permissible futures and options transactions, the writing, purchasing,
ownership, holding or selling of futures and options positions or of puts,
calls or combinations thereof with respect to futures.

(5) Except as specified above, the Fund may invest up to 5% of its
total assets in the securities of any one investment company, but may not
own more than 3% of the securities of any one investment company or invest
more than 10% of its total assets in the securities of other investment
companies.

(6) The value of the Fund's investments in holdings of options and
warrants (other than those held for hedging purposes) may not exceed 15%
of the total net asset value of the Fund.

(7) The Fund may not make any investment in assets that involve
assumption of any liability that is unlimited, or acquire any investments
that are for the time being nil paid or partly paid, unless according to
the terms of the issue thereof any call to be made thereon could be met in
full out of cash by the Fund's portfolio.

(8) The Fund may not sell, purchase or loan securities (excluding
shares in the Fund) or grant or receive a loan or loans to or from the
adviser, corporate and domicillary agent, or paying agent,

15
<PAGE>

the distributors and the authorized agents or any of their directors,
officers or employees or any of their major shareholders (meaning a
shareholder who holds, in his own or other name (as well as a nominee's
name), more than 10% of the total issued and outstanding shares of stock
of such company) acting as principal, or for their own account, unless the
transaction is made within the other restrictions set forth above and
either (i) at a price determined by current publicly available quotations,
or (ii) at competitive prices or interest rates prevailing from time to
time on internationally recognized securities markets or internationally
recognized money markets.

It is the Trust's position that proprietary strips, such as CATS and
TIGRS, are United States Government securities. However, the Trust has been
advised that the staff of the Securities and Exchange Commission's Division of
Investment Management does not consider these to be United States Government
securities, as defined under the Investment Company Act of 1940, as amended.

For purposes of the Fund's investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of and interest on the security.

With respect to the Fund, as a matter of nonfundamental policy, to the
extent permitted under applicable law, the above restrictions do not apply to
the following investments ("OECD investments"): (i) any security issued by or
the payment of principal and interest on which is guaranteed by the government
of any member state of the Organization for Economic Cooperation and
Development ("OECD country"); (ii) any fixed income security issued in any OECD
country by any public or local authority or nationalized industry or
undertaking of any OECD country or anywhere in the world by the International
Bank for Reconstruction and Development, European Investment Bank, Asian
Development Bank or any body which is, in the Trustees' opinion, of similar
standing. However, no investment may be made in any OECD investment of any one
issue if that would result in the value of the Fund's holding of that issue
exceeding 30% of the net asset value of the Fund and, if the Fund's portfolio
consists only of OECD investments, those OECD investments shall be of at least
six different issues.

If a percentage or rating restriction on investment or use of assets set
forth herein or in the Prospectus is adhered to at the time a transaction is
effected, later changes in percentage resulting from any cause other than
actions by the Fund will not be considered a violation. If the value of the
Fund's holdings of illiquid securities at any time exceeds the percentage
limitation applicable at the time of acquisition due to subsequent fluctuations
in value or other reasons, the Board of Trustees will consider what actions, if
any, are appropriate to maintain adequate liquidity.

Special Considerations

Investing in Latin America. Investing in securities of Latin American
issuers may entail risks relating to the potential political and economic
instability of certain Latin American countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment and on repatriation of capital invested. In the event of
expropriation, nationalization or other confiscation by any country, the Fund
could lose its entire investment in any such country.

The securities market of Latin American countries are substantially
smaller, less developed, less liquid and more volatile than the major
securities markets in the United States. Disclosure and regulatory standards
are in may respects less stringent than United States standards. Furthermore,
there is a lower level of monitoring and regulation of the markets and the
activities of investors in such markets.

The limited size of many Latin American securities markets and limited
trading volume in the securities of Latin American issuers compared to volume
of trading in the securities of United States issuers could cause prices to be
erratic for reasons apart from factors that affect the soundness and
competitiveness of the secu-

16
<PAGE>

rities issuers. For example, limited market size may cause prices to be unduly
influenced by traders who control large positions. Adverse publicity and
investors' perceptions, whether or not based on in-depth fundamental analysis,
may decrease the value and liquidity of portfolio securities.

The Fund invests in securities denominated in currencies of Latin American
countries. Accordingly, changes in the value of these currencies against the
United States dollar will result in corresponding changes in the United States
dollar value of the Fund's assets denominated in those currencies.

Some Latin American countries also may have managed currencies, which are
not free floating against the United States dollar. In addition, there is risk
that certain Latin American countries may restrict the free conversion of their
currencies into other currencies. Further, certain Latin American currencies
may not be internationally traded. Certain of these currencies have experienced
a steep devaluation relative to the United States dollar. Any devaluations in
the currencies in which the Fund's portfolio securities are denominated may
have a detrimental impact on the Fund's net asset value.

The economies of individual Latin American countries may differ favorably
or unfavorably from the United States economy in such respects as the rate of
growth of gross domestic product, the rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. Certain Latin
American countries have experienced high levels of inflation which can have a
debilitating effect on an economy. Furthermore, certain Latin American
countries may impose withholding taxes on dividends payable to the Fund at a
higher rate than those imposed by other foreign countries. This may reduce the
Fund's investment income available for distribution to shareholders.

Certain Latin American countries such as Argentina, Brazil and Mexico are
among the world's largest debtors to commercial banks and foreign governments.
At times, certain Latin American countries have declared moratoria on the
payment of principal and/or interest on outstanding debt. Investment in
sovereign debt can involve a high degree of risk. The governmental entity that
controls the repayment of sovereign debt may not be able or willing to repay
the principal and/or interest when due in accordance with the terms of such
debt. A governmental entity's willingness or ability to repay principal and
interest due in a timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the governmental entity's
policy towards the International Monetary Fund, and the political constraints
to which a governmental entity may be subject. Governmental entities may also
be dependent on expected disbursements from foreign governments, multilateral
agencies and others abroad to reduce principal and interest arrearages on their
debt. The commitment on the part of these governments, agencies and others to
make such disbursements may be conditioned on a governmental entity's
implementation of economic reforms and/or economic performance and the timely
service of such debtor's obligations. Failure to implement such reforms,
achieve such levels of economic performance or repay principal or interest when
due may result in the cancellation of such third parties' commitments to lend
funds to the governmental entity, which may further impair such debtor's
ability or willingness to service its debts in a timely manner. Consequently,
governmental entities may default on their sovereign debt.

Holders of sovereign debt, including the Fund, may be requested to
participate in the rescheduling of such debt and to extend further loans to
governmental entities. There is no bankruptcy proceeding by which defaulted
sovereign debt may be collected in whole or in part.

Latin America is a region rich in natural resources such as oil, copper,
tin, silver, iron ore, forestry, fishing, livestock and agriculture. The region
has a large population (roughly 300 million) representing a large domestic
market. Economic growth was strong in the 1960's and 1970's, but slowed
dramatically (and in some instances was negative) in the 1980's as a result of
poor economic policies, higher international interest rates, and the denial of
access to new foreign capital. Although a number of Latin American countries
are

17
<PAGE>

currently experiencing lower rates of inflation and higher rates of real growth
in gross domestic product than they have in the past, other Latin American
countries continue to experience significant problems, including high inflation
rates and high interest rates. Capital flight has proven a persistent problem
and external debt has been forcibly rescheduled. Political turmoil, high
inflation, capital repatriation restrictions, and nationalization have further
exacerbated conditions.

Governments of many Latin American countries have exercised and continue
to exercise substantial influence over may aspects of the private sector
through the ownership or control of many companies, including some of the
largest in those countries. As a result, government actions in the future could
have a significant effect on economic conditions which may adversely affect
prices of certain portfolio securities. Expropriation, confiscatory taxation,
nationalization, political, economic or social instability or other similar
developments, such as military coups, have occurred in the past and could also
adversely affect the Fund's investments in this region.

Changes in political leadership, the implementation of market oriented
economic policies, such as the North American Free Trade Agreement ("NAFTA"),
privatization, trade reform and fiscal and monetary reform are among the recent
steps taken to renew economic growth. External debt is being restructured and
flight capital (domestic capital that has left home country) has begun to
return. Inflation control efforts have also been implemented. Latin American
equity markets can be extremely volatile and in the past have shown little
correlation with the United States market. Currencies are typically weak, but
most are now relatively free floating, and it is not unusual for the currencies
to undergo wide fluctuations in value over short periods of time due to changes
in the market.

Lower Rated Securities. The Fund is permitted to invest in non-investment
grade securities. Such securities, though higher yielding, are characterized by
risk. The Fund may invest in debt securities rated as low as B- by Moody's or
S&P or, if not rated, are determined to be of comparable quality. Lower rated
securities are securities such as those rated Ba by Moody's or BB by S&P or as
low as the lowest rating assigned by Moody's or S&P. They generally are not
meant for short-term investing and may be subject to certain risks with respect
to the issuing entity and to greater market fluctuation than certain lower
yielding, higher rated fixed income securities. Obligations rated Ba by Moody's
are judged to have speculative elements; their future cannot be considered well
assured and often the protection of interest and principal payments may be very
moderate. Obligations rated BB by S&P are regarded as having predominantly
speculative characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face major
ongoing uncertainties or exposure to adverse business, financial or economic
conditions which could lead to inadequate capacity to meet timely interest and
principal payments. Obligations rated C by Moody's are regarded as having
extremely poor prospects of ever attaining any real investment standing.
Obligations rated D by S&P are in default and the payment of interest and/or
repayments of principal is in arrears. Such obligations, though high yielding,
are characterized by great risk. See "Appendix B" herein for a general
description of Moody's and S&P ratings.

The ratings of Moody's and S&P represent their opinions as to the quality
of the securities which they undertake to rate. The ratings are relative and
subjective and, although ratings may be useful in evaluating the safety of
interest and principal payments, they do not evaluate the market risk of these
securities. Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, the Fund's advisers will also evaluate
these securities and the ability of the issuers of such securities to pay
interest and principal. The Fund will rely on the its advisers' judgment,
analysis and experience in evaluating the creditworthiness of an issuer. In
this evaluation, the Fund's advisers will take into consideration, among other
things, the issuer's financial resources, its sensitivity to economic
conditions and trends, its operating history, the quality of the issuer's
management and regulatory matters. The Fund's ability to achieve its investment
objective may be more dependent on the Investment Adviser's credit analysis
than might be the case for funds that invested in higher rated securities. Once
the rating of a security in the Fund's portfolio has been changed, the Fund's
advisers will consider all circumstances deemed relevant in determining whether
the Fund should continue to hold the security.

18
<PAGE>

The market price and yield of debt securities rated Ba or lower by Moody's
and BB or lower by S&P are more volatile than those of higher rated securities.
Factors adversely affecting the market price and yield of these securities will
adversely affect the Fund's net asset value. It is likely that any economic
recession could disrupt severely the market for such securities and may have an
adverse impact on the value of such securities. In addition, it is likely that
any such economic downturn could adversely affect the ability of the issuers of
such securities to repay principal and pay interest thereon and increase the
incidence for default for such securities.

The market values of certain lower rated debt securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates, and tend to be more sensitive to economic conditions than are
higher rated securities. Companies that issue such securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore the risk associated with acquiring the securities of such
issuers generally is greater than is the case with higher rated securities. For
example, during an economic downturn or a sustained period of rising interest
rates, highly leveraged issuers of these securities may experience financial
stress. During such periods, such issuers may not have sufficient revenues to
meet their interest payment obligations. The issuer's ability to service its
debt obligations also may be affected adversely by specific corporate
developments or the issuer's inability to meet specific projected business
forecasts, or the unavailability of additional financing. The risk of loss
because of default by the issuer is significantly greater for the holders of
these securities because such securities generally are unsecured and often are
subordinated to other creditors of the issuer.

Because there is no established retail secondary market for many of these
securities, the Fund's advisers anticipate that such securities could be sold
only to a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is not
as liquid as the secondary market for higher rated securities. The lack of a
liquid secondary market may have an adverse impact on market price and yield
and the Fund's ability to dispose of particular issues when necessary to meet
the Fund's liquidity needs or in response to a specific economic event such as
a deterioration in the creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for the
Fund to obtain accurate market quotations for purposes of valuing the Fund's
portfolio and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play a
greater role in valuation because less reliable, objective data may be
available.

The Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. The Fund has
no arrangement with any persons concerning the acquisition of such securities,
and the Fund's advisers will review carefully the credit and other
characteristics pertinent to such new issues.

The Fund may invest in lower rated zero coupon securities and pay-in-kind
bonds (bonds which pay interest through the issuance of additional bonds),
which involve special considerations. These securities may be subject to
greater fluctuations in value due to changes in interest rates that
interest-bearing securities. These securities carry an additional risk in that,
unlike bonds which may interest throughout the period to maturity, the Fund
will realize no cash until the cash payment date unless a portion of such
securities are sold and, if the issuer defaults, the Fund may obtain no return
at all on its investment. See "Tax Matters."

Portfolio Transactions and Brokerage Allocation

Specific decisions to purchase or sell securities for the Fund are made by
a portfolio manager who is an employee of the adviser or sub-adviser to the
Fund and who is appointed and supervised by senior officers of such adviser or
sub-adviser. Changes in the Fund's investments are reviewed by the Board of
Trustees of the Trust. The portfolio managers may serve other clients of the
advisers in a similar capacity.

19
<PAGE>

The frequency of the Fund's portfolio transactions--the portfolio turnover
rate--will vary from year to year depending upon market conditions. Because a
high turnover rate may increase the Fund's transaction costs and the
possibility of taxable short-term gains, the advisers will weigh the added
costs of short-term investment against anticipated gains. The Fund will engage
in portfolio trading if its advisers believe a transaction, net of costs
(including custodian charges), will help it achieve its investment objective.

For the fiscal year ending October 31, 1998, the annual rate of portfolio
turnover for the Fund is not expected to exceed 100%.

Under the advisory agreement and the sub-advisory agreement, the adviser
and sub-adviser shall use their best efforts to seek to execute portfolio
transactions at prices which, under the circumstances, result in total costs or
proceeds being the most favorable to the Fund. In assessing the best overall
terms available for any transaction, the adviser and sub-adviser consider all
factors they deem relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, research services provided to the adviser
or sub-adviser, and the reasonableness of the commissions, if any, both for the
specific transaction and on a continuing basis. The adviser and sub-adviser are
not required to obtain the lowest commission or the best net price for the Fund
on any particular transaction, and are not required to execute any order in a
fashion either preferential to the Fund relative to other accounts they manage
or otherwise materially adverse to such other accounts.

Debt securities are traded principally in the over-the-counter market
through dealers acting on their own account and not as brokers. In the case of
securities traded in the over-the-counter market (where no stated commissions
are paid but the prices include a dealer's markup or markdown), the adviser or
sub-adviser to the Fund normally seeks to deal directly with the primary market
makers unless, in its opinion, best execution is available elsewhere. In the
case of securities purchased from underwriters, the cost of such securities
generally includes a fixed underwriting commission or concession. From time to
time, soliciting dealer fees are available to the adviser or sub-adviser on the
tender of the Fund's portfolio securities in so-called tender or exchange
offers. Such soliciting dealer fees are in effect recaptured for the Fund by
the adviser and sub-adviser. At present, no other recapture arrangements are in
effect.

Under the advisory and sub-advisory agreemeet and as permitted by Section
28(e) of the Securities Exchange Act of 1934, the adviser or sub-adviser may
cause the Fund to pay a broker-dealer which provides brokerage and research
services to the adviser or sub-adviser, the Fund and/or other accounts for
which they exercise investment discretion an amount of commission for effecting
a securities transaction for the Fund in excess of the amount other
broker-dealers would have charged for the transaction if they determine in good
faith that the greater commission is reasonable in relation to the value of the
brokerage and research services provided by the executing broker-dealer viewed
in terms of either a particular transaction or their overall responsibilities
to accounts over which they exercise investment discretion. Not all of such
services are useful or of value in advising the Fund. The adviser and
sub-adviser report to the Board of Trustees regarding overall commissions paid
by the Fund and their reasonableness in relation to the benefits to the Fund.
The term "brokerage and research services" includes advice as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or of purchasers or sellers of securities,
furnishing analyses and reports concerning issues, industries, securities,
economic factors and trends, portfolio strategy and the performance of
accounts, and effecting securities transactions and performing functions
incidental thereto such as clearance and settlement.

The management fees that the Fund pays to the adviser will not be reduced
as a consequence of the adviser's or sub-adviser's receipt of brokerage and
research services. To the extent the Fund's portfolio transactions are used to
obtain such services, the brokerage commissions paid by the Fund will exceed
those that might otherwise be paid by an amount which cannot be presently
determined. Such services generally would be useful and of value to the adviser
or sub-adviser in serving one or more of their other clients and,

20
<PAGE>

conversely, such services obtained by the placement of brokerage business of
other clients generally would be useful to the adviser and sub-adviser in
carrying out their obligations to the Fund. While such services are not
expected to reduce the expenses of the adviser or sub-adviser, they would,
through use of the services, avoid the additional expenses which would be
incurred if they should attempt to develop comparable information through their
own staffs.

In certain instances, there may be securities that are suitable for the
Fund as well as one or more of the adviser's or sub-adviser's other clients.
Investment decisions for the Fund and for other clients are made with a view to
achieving their respective investment objectives. It may develop that the same
investment decision is made for more than one client or that a particular
security is bought or sold for only one client even though it might be held by,
or bought or sold for, other clients. Likewise, a particular security may be
bought for one or more clients when one or more clients are selling that same
security. Some simultaneous transactions are inevitable when several clients
receive investment advice from the same investment adviser, particularly when
the same security is suitable for the investment objectives of more than one
client. When the Fund and one or more other clients are simultaneously engaged
in the purchase or sale of the same security, the securities are allocated
among clients in a manner believed to be equitable to each. It is recognized
that in some cases this system could have a detrimental effect on the price or
volume of the security as far as the Fund is concerned. However, it is believed
that the ability of the Fund to participate in volume transactions will
generally produce better executions for the Fund.

No portfolio transactions are executed with the advisers or a Shareholder
Servicing Agent, or with any affiliate of the advisers or a Shareholder
Servicing Agent, acting either as principal or as broker.

PERFORMANCE INFORMATION

From time to time, the Fund may use hypothetical investment examples and
performance information in advertisements, shareholder reports or other
communications to shareholders. Because such performance information is based
on past investment results, it should not be considered as an indication or
representation of the performance of any classes of the Fund in the future.
From time to time, the performance and yield of classes of the Fund may be
quoted and compared to those of other mutual funds with similar investment
objectives, unmanaged investment accounts, including savings accounts, or other
similar products and to stock or other relevant indices or to rankings prepared
by independent services or other financial or industry publications that
monitor the performance of mutual funds. For example, the performance of the
Fund or its classes may be compared to data prepared by Lipper Analytical
Services, Inc. or Morningstar Mutual Funds on Disc, widely recognized
independent services which monitor the performance of mutual funds. Performance
and yield data as reported in national financial publications including, but
not limited to, Money Magazine, Forbes, Barron's, The Wall Street Journal and
The New York Times, or in local or regional publications, may also be used in
comparing the performance and yield of a Fund or its classes. The Fund's
performance may be compared with indices such as the Lehman Brothers
Government/Corporate Bond Index, the Lehman Brothers Government Bond Index, the
Lehman Government Bond 1-3 Year Index and the Lehman Aggregate Bond Index; the
S&P 500 Index, the Dow Jones Industrial Average or any other commonly quoted
index of common stock prices; and the Russell 2000 Index and the NASDAQ
Composite Index. Additionally, the Fund may, with proper authorization, reprint
articles written about the Fund and provide them to prospective shareholders.

The Fund may provide period and average annual "total rates of return."
The "total rate of return" refers to the change in the value of an investment
in the Fund over a period (which period shall be stated in any advertisement or
communication with a shareholder) based on any change in net asset value per
share including the value of any shares purchased through the reinvestment of
any dividends or capital gains distributions declared during such period. For
Class A shares, the average annual total rate of return figures will assume
payment of the maximum initial sales load at the time of purchase. For Class B
shares, the average annual total rate of return figures will assume deduction
of the applicable contingent deferred sales

21
<PAGE>

charge imposed on a total redemption of shares held for the period. One-,
five-, and ten-year periods will be shown, unless the class has been in
existence for a shorter-period.

Unlike some bank deposits or other investments which pay a fixed yield for
a stated period of time, the yields and the net asset values of the classes of
shares of the Fund will vary based on market conditions, the current market
value of the securities held by the Fund and changes in the Fund's expenses.
The advisers, Shareholder Servicing Agents, the Administrator, the Distributor
and other service providers may voluntarily waive a portion of their fees on a
month-to-month basis. In addition, the Distributor may assume a portion of the
Fund's operating expenses on a month-to-month basis. These actions would have
the effect of increasing the net income (and therefore the yield and total rate
of return) of the classes of shares of the Fund during the period such waivers
are in effect. These factors and possible differences in the methods used to
calculate the yields and total rates of return should be considered when
comparing the yields or total rates of return of the classes of shares of the
Fund to yields and total rates of return published for other investment
companies and other investment vehicles (including different classes of
shares). The Trust is advised that certain Shareholder Servicing Agents may
credit to the accounts of their customers from whom they are already receiving
other fees amounts not exceeding the Shareholder Servicing Agent fees received,
which will have the effect of increasing the net return on the investment of
customers of those Shareholder Servicing Agents. Such customers may be able to
obtain through their Shareholder Servicing Agents quotations reflecting such
increased return.

The Fund will present performance information for each class thereof since
the commencement of operations of the Fund rather than the date such class was
introduced. Performance information for each class introduced after the
commencement of operations of the Fund will therefore be based on the
performance history of a predecessor class. Performance information is restated
to reflect the current maximum front-end sales charge (in the case of Class A
Shares) or the maximum contingent deferred sales charge (in the case of Class B
Shares) when presented inclusive of sales charges. Additional performance
information may be presented which does not reflect the deduction of sales
charges. Historical expenses reflected in performance information will be based
upon the distribution, shareholder servicing fees and other expenses actually
incurred during the periods presented and will not be restated, for periods
during which the performance information for a particular class will be based
upon the performance history of a predecessor class, to reflect the ongoing
expenses currently borne by the particular class.

Advertising or communications to shareholders may contain the views of the
advisers as to current market, economic, trade and interest rate trends, as
well as legislative, regulatory and monetary developments, and may include
investment strategies and related matters believed to be of relevance to the
Fund.

Advertisements for the Vista Funds may include references to the asset
size of other financial products made available by Chase, such as the offshore
assets of other funds.

Total Rate of Return

The Fund's or class' total rate of return for any period will be
calculated by (a) dividing (i) the sum of the net asset value per share on the
last day of the period and the net asset value per share on the last day of the
period of shares purchasable with dividends and capital gains declared during
such period with respect to a share held at the beginning of such period and
with respect to shares purchased with such dividends and capital gains
distributions, by (ii) the public offering price per share on the first day of
such period, and (b) subtracting 1 from the result. Any annualized total rate
of return quotation will be calculated by (x) adding 1 to the period total rate
of return quotation as calculated above, (y) raising such sum to a power which
is equal to 365 divided by the number of days in such period, and (z)
subtracting 1 from the result.

The Fund may also from time to time include in advertisements or other
communications a total return figure that is not calculated according to the
formula set forth above in order to compare more accurately the performance of
the Fund with other measures of investment return.

22
<PAGE>

Yield Quotations

Any current "yield" quotation for a class of shares shall consist of an
annualized historical yield, carried at least to the nearest hundredth of one
percent, based on a thirty calendar day period and shall be calculated by (a)
raising to the sixth power the sum of 1 plus the quotient obtained by dividing
the Fund's net investment income earned during the period by the product of the
average daily number of shares outstanding during the period that were entitled
to receive dividends and the maximum offering price per share on the last day
of the period, (b) subtracting 1 from the result, and (c) multiplying the
result by 2.

Non-Standardized Performance Results*
(including sales charges)

The Fund may include in advertisements or other communications the net
change in the value of an assumed initial investment of $10,000 in the Fund
(excluding the effects of any applicable sales charges) for the period from the
commencement date of business for the Fund, with values reflecting an
assumption that capital gain distributions and income dividends, if any, have
been invested in additional shares of the same class. From time to time, the
Fund may provide these performance results in addition to the total rate of
return quotations required by the Securities and Exchange Commission. As
discussed more fully in the Prospectus, neither these performance results, nor
total rate of return quotations, should be considered as representative of the
performance of the Fund in the future. These factors and the possible
differences in the methods used to calculate performance results and total
rates of return should be considered when comparing such performance results
and total rate of return quotations of the Fund with those published for other
investment companies and other investment vehicles.

DETERMINATION OF NET ASSET VALUE

As of the date of this Statement of Additional Information, the New York
Stock Exchange is open for trading every weekday except for the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Since the Fund
invests in securities primarily listed on foreign exchanges which trade on
Saturdays or other customary United States national business holidays on which
the Fund does not price, the Fund's portfolio will trade and the net asset
value of the Fund's shares may be significantly affected on days on which the
investor has no access to the Fund.

Equity securities are valued at the last sale price on the exchange on
which they are primarily traded or on the NASDAQ National Market System, or at
the last quoted bid price for securities in which there were no sales during
the day or for other unlisted (over-the-counter) securities. Bonds and other
fixed income securities (other than short-term obligations, but including
listed issues) are valued on the basis of valuations furnished by a pricing
service, the use of which has been approved by the Board of Trustees. In making
such valuations, the pricing service utilizes both dealer-supplied valuations
and electronic data processing techniques that take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, since such valuations are believed to
reflect more accurately the fair value of such securities. Short-term
obligations which mature in 60 days or less are valued at amortized cost, which
constitutes fair value as determined by the Board of Trustees. Futures and
option contracts that are traded on commodities or securities exchanges are
normally valued at the settlement price on the exchange on which they are
traded. Portfolio securities (other than short-term obligations) 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 Board of Trustees.

Interest income on long-term obligations is determined on the basis of
interest accrued plus amortization of discount (generally, the difference
between coupon acquisition price and stated redemption price at maturity) and
premiums (generally, the excess of purchase price over stated redemption price
at maturity).

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<PAGE>

Interest income on short-term obligations is determined on the basis of
interest and discount accrued less amortization of premium.

PURCHASES, REDEMPTIONS AND EXCHANGES

The Fund has established certain procedures and restrictions, subject to
change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Fund's Transfer Agent may defer
acting on a shareholder's instructions until it has received them in proper
form. In addition, the privileges described in the Prospectuses are not
available until a completed and signed account application has been received by
the Transfer Agent. Telephone transaction privileges are made available to
shareholders automatically upon opening an account unless the privilege is
declined in Section 6 of the Account Application.

Upon receipt of any instructions or inquiries by telephone from a
shareholder or, if held in a joint account, from either party, or from any
person claiming to be the shareholder, the Fund or its agent is authorized,
without notifying the shareholder or joint account parties, to carry out the
instructions or to respond to the inquiries, consistent with the service
options chosen by the shareholder or joint shareholders in his or their latest
account application or other written request for services, including
purchasing, exchanging, or redeeming shares of the Fund and depositing and
withdrawing monies from the bank account specified in the Bank Account
Registration section of the shareholder's latest account application or as
otherwise properly specified to the Fund in writing.

Subject to compliance with applicable regulations, the Fund has reserved
the right to pay the redemption price of its Shares, either totally or
partially, by a distribution in kind of readily marketable portfolio securities
(instead of cash). The securities so distributed would be valued at the same
amount as that assigned to them in calculating the net asset value for the
shares being sold. If a shareholder received a distribution in kind, the
shareholder could incur brokerage or other charges in converting the securities
to cash. The Trust has filed an election under Rule 18f-1 committing to pay in
cash all redemptions by a shareholder of record up to amounts specified by the
rule (approximately $250,000).

Investors in Class A shares may qualify for reduced initial sales charges
by signing a statement of intention (the "Statement"). This enables the
investor to aggregate purchases of Class A shares in the Fund with purchases of
Class A shares of any other Fund in the Trust (or if a Fund has only one class,
shares of such Fund), excluding shares of any Vista money market fund, during a
13-month period. The sales charge is based on the total amount to be invested
in Class A shares during the 13-month period. All Class A or other qualifying
shares of these Funds currently owned by the investor will be credited as
purchases (at their current offering prices on the date the Statement is
signed) toward completion of the Statement. A 90-day back-dating period can be
used to include earlier purchases at the investor's cost. The 13-month period
would then begin on the date of the first purchase during the 90-day period. No
retroactive adjustment will be made if purchases exceed the amount indicated in
the Statement. A shareholder must notify the Transfer Agent or Distributor
whenever a purchase is being made pursuant to a Statement.

The Statement is not a binding obligation on the investor to purchase the
full amount indicated; however, on the initial purchase, if required (or
subsequent purchases if necessary), 5% of the dollar amount specified in the
Statement will be held in escrow by the Transfer Agent in Class A shares (or if
a Fund has only one class and is subject to an initial sales charge, shares of
such Fund) registered in the shareholder's name in order to assure payment of
the proper sales charge. If total purchases pursuant to the Statement (less any
dispositions and exclusive of any distributions on such shares automatically
reinvested) are less than the amount specified, the investor will be requested
to remit to the Transfer Agent an amount equal to the difference between the
sales charge paid and the sales charge applicable to the aggregate purchases
actually made. If not remitted within 20 days after written request, an
appropriate number of escrowed shares will be redeemed in order to realize the
difference. This privilege is subject to modification or discontinuance at any
time with respect to all shares purchased thereunder. Reinvested dividend and
capital gain distributions are not counted toward satisfying the Statement.

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<PAGE>

Class A shares of the Fund may also be purchased by any person at a
reduced initial sales charge which is determined by (a) aggregating the dollar
amount of the new purchase and the greater of the purchaser's total (i) net
asset value or (ii) cost of any shares acquired and still held in the Fund, or
any other Vista fund excluding any Vista money market fund, and (b) applying
the initial sales charge applicable to such aggregate dollar value (the
"Cumulative Quantity Discount"). The privilege of the Cumulative Quality
Discount is subject to modification or discontinuance at any time with respect
to all Class A shares purchased thereafter.

An individual who is a member of a qualified group (as hereinafter
defined) may also purchase Class A shares of Fund at the reduced sales charge
applicable to the group taken as a whole. The reduced initial sales charge is
based upon the aggregate dollar value of Class A shares previously purchased
and still owned by the group plus the securities currently being purchased and
is determined as stated in the preceding paragraph. In order to obtain such
discount, the purchaser or investment dealer must provide the Transfer Agent
with sufficient information, including the purchaser's total cost, at the time
of purchase to permit verification that the purchaser qualifies for a
cumulative quantity discount, and confirmation of the order is subject to such
verification. Information concerning the current initial sales charge
applicable to a group may be obtained by contacting the Transfer Agent.

A "qualified group" is one which (i) has been in existence for more than
six months, (ii) has a purpose other than acquiring Class A shares at a
discount and (iii) satisfies uniform criteria which enables the Distributor to
realize economies of scale in its costs of distributing Class A shares. A
qualified group must have more than 10 members, must be available to arrange
for group meetings between representatives of the Fund and the members, must
agree to include sales and other materials related to the Fund in its
publications and mailings to members at reduced or no cost to the Distributor,
and must seek to arrange for payroll deduction or other bulk transmission of
investments in the Fund. This privilege is subject to modification or
discontinuance at any time with respect to all Class A shares purchased
thereafter.

Under the Exchange Privilege, shares may be exchanged for shares of
another fund only if shares of the fund exchanged into are registered in the
state where the exchange is to be made. Shares of the Fund may only be
exchanged into another fund if the account registrations are identical. With
respect to exchanges from any Vista money market fund, shareholders must have
acquired their shares in such money market fund by exchange from one of the
Vista non-money market funds or the exchange will be done at relative net asset
value plus the appropriate sales charge. Any such exchange may create a gain or
loss to be recognized for federal income tax purposes. Normally, shares of the
fund to be acquired are purchased on the redemption date, but such purchase may
be delayed by either fund for up to five business days if a fund determines
that it would be disadvantaged by an immediate transfer of the proceeds.

The contingent deferred sales charge for Class B shares will be waived for
certain exchanges and for redemptions in connection with a Fund's systematic
withdrawal plan, subject to the conditions described in the Prospectuses. In
addition, subject to confirmation of a shareholder's status, the contingent
deferred sales charge will be waived for: (i) a total or partial redemption
made within one year of the shareholder's death or initial qualification for
Social Security disability payments; (ii) a redemption in connection with a
Minimum Required Distribution form an IRA, Keogh or custodial account under
section 403(b) of the Internal Revenue Code or a mandatory distribution from a
qualified plan; (iii) redemptions made from an IRA, Keogh or custodial account
under section 403(b) of the Internal Revenue Code through an established
Systematic Redemption Plan; (iv) a redemption resulting from an
over-contribution to an IRA; (v) distributions from a qualified plan upon
retirement; and (vi) an involuntary redemption of an account balance under
$500.

Class B shares automatically convert to Class A shares (and thus are then
subject to the lower expenses borne by Class A shares) after a period of time
specified below has elapsed since the date of purchase (the "CDSC Period"),
together with the pro rata portion of all Class B shares representing dividends
and other distributions paid in additional Class B shares attributable to the
Class B shares then converting. The conversion of Class B shares purchased on
or after May 1, 1996, will be effected at the relative net asset values per
share of the two classes on the first business day of the month following the
eighth anniversary

25
<PAGE>

of the original purchase. The conversion of Class B shares purchased prior to
May 1, 1996, will be effected at the relative net asset values per share of the
two classes on the first business day of the month following the seventh
anniversary of the original purchase. If any exchanges of Class B shares during
the CDSC Period occurred, the holding period for the shares exchanged will be
counted toward the CDSC Period. At the time of the conversion the net asset
value per share of the Class A shares may be higher or lower than the net asset
value per share of the Class B shares; as a result, depending on the relative
net asset values per share, a shareholder may receive fewer or more Class A
shares than the number of Class B shares converted.

The Fund may require signature guarantees for changes that shareholders
request be made in Fund records with respect to their accounts, including but
not limited to, changes in bank accounts, for any written requests for
additional account services made after a shareholder has submitted an initial
account application to the Fund, and in certain of the circumstances described
in the Prospectuses. The Fund may also refuse to accept or carry out any
transaction that does not satisfy any restrictions then in effect. A signature
guarantee may be obtained from a bank, trust company, broker-dealer or other
member of a national securities exchange. Please note that a notary public
cannot provide a signature guarantee.

TAX MATTERS

The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Fund or its shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful tax planning.

Qualification as a Regulated Investment Company

The Fund will elect to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). As
a regulated investment company, the Fund is not subject to federal income tax
on the portion of its net investment income (i.e., its investment company
taxable income, as that term is defined in the Code, without a deduction for
dividends paid) and net capital gain (i.e., the excess of net long-term capital
gains over net short-term capital losses) that it distributes to shareholders,
provided that it distributes at least 90% of its net investment income for the
taxable year (the "Distribution Requirement"), and satisfies certain other
requirements of the Code that are described below. Distributions by the Fund
made during the taxable year or, under specified circumstances, within twelve
months after the close of the taxable year, will be considered distributions of
income and gains of the taxable year and can therefore satisfy the Distribution
Requirement.

In addition to satisfying the Distribution Requirement, a regulated
investment company must (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement") and, for taxable
years beginning on or before August 5, 1997, (2) derive less than 30% of its
gross income (exclusive of certain gains on designated hedging transactions that
are offset by realized or unrealized losses on offsetting positions) from the
sale or other disposition of stock, securities or foreign currencies (or
options, futures or forward contracts thereon) held for less than three months
(the "Short-Short Gain Test"). The Short Short-Short Gain Test has been repealed
for taxable years beginning after August 5, 1997.

In general, gain or loss recognized by the Fund on the disposition of an
asset will be a capital gain or loss. However, gain recognized on the
disposition of a debt obligation purchased by the Fund at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent of the portion of the market discount which
accrued during the period of time the Fund held the debt obligation. In
addition, under the rules of Code Section 988, gain or loss recognized on the
disposition of a debt obligation denominated in a foreign currency or an option
with respect thereto (but only to the extent attributable to changes in foreign
currency exchange rates), and gain or loss recognized on the disposition of a
foreign currency forward contract, futures contract, option or similar
financial instrument, or of foreign currency itself, except for regulated
futures contracts or non-equity options subject to Code Section 1256, will
generally be treated as ordinary income or loss.

26
<PAGE>

Further, the Code also treats as ordinary income, a portion of the capital
gain attributable to a transaction where substantially all of the return
realized is attributable to the time value of the Fund's net investment in the
transaction and: (1) the transaction consists of the acquisition of property by
the Fund and a contemporaneous contract to sell substantially identical
property in the future; (2) the transaction is a straddle within the meaning of
Section 1092 of the Code; (3) the transaction is one that was marketed or sold
to the Fund on the basis that it would have the economic characteristics of a
loan but the interest-like return would be taxed as capital gain; or (4) the
transaction is described as a conversion transaction in the Treasury
Regulations. The amount of the gain recharacterized generally will not exceed
the amount of the interest that would have accrued on the net investment for
the relevant period at a yield equal to 120% of the federal long-term,
mid-term, or short-term rate, depending upon the type of instrument at issue,
reduced by an amount equal to: (1) prior inclusions of ordinary income items
from the conversion transaction; and (2) the capitalized interest on
acquisition indebtedness under Code Section 263 (g). Built-in losses will be
preserved where the Fund has a built-in loss with respect to property that
becomes a part of a conversion transaction. No authority exists that indicates
that the converted character of the income will not be passed to the Fund's
shareholders.

In general, for purposes of determining whether capital gain or loss
recognized by the Fund on the disposition of an asset is long-term or
short-term, the holding period of the asset may be affected if (1) the asset is
used to close a "short sale" (which includes for certain purposes the
acquisition of a put option) or is substantially identical to another asset so
used, (2) the asset is otherwise held by the Fund as part of a "straddle"
(which term generally excludes a situation where the asset is stock and the
Fund grants a qualified covered call option (which, among other things, must
not be deep-in-the-money) with respect thereto) or (3) the asset is stock and
the Fund grants an in-the-money qualified covered call option with respect
thereto. However, for purposes of the Short-Short Gain Test, the holding period
of the asset disposed of may be reduced only in the case of clause (1) above.
In addition, the Fund may be required to defer the recognition of a loss on the
disposition of an asset held as part of a straddle to the extent of any
unrecognized gain on the offsetting position.

Any gain recognized by the Fund on the lapse of, or any gain or loss
recognized by the Fund from a closing transaction with respect to, an option
written by the Fund will be treated as a short-term capital gain or loss.

Transactions that may be engaged in by the Fund (such as regulated futures
contracts, certain foreign currency contracts, and options on stock indexes and
futures contracts) will be subject to special tax treatment as "Section 1256
contracts." Section 1256 contracts are treated as if they are sold for their
fair market value on the last business day of the taxable year, even though a
taxpayer's obligations (or rights) under such contracts have not terminated (by
delivery, exercise, entering into a closing transaction or otherwise) as of to
such date. Any gain or loss recognized as a consequence of the year-end deemed
disposition of Section 1256 contracts is taken into account for the taxable
year together with any other gain or loss that was previously recognized upon
the termination of Section 1256 contracts during that taxable year. Any capital
gain or loss for the entire taxable year with respect to Section 1256 contracts
(including any capital gain or loss arising as a consequence of the year-end
deemed sale of such contracts) is generally treated as 60% long-term capital
gain or loss and 40% short-term capital gain or loss. The Fund, however, may
elect not to have this special tax treatment apply to Section 1256 contracts
that are part of a "mixed straddle" with other investments of the Fund that are
not Section 1256 contracts.

The Fund may enter into notional principal contracts, including interest
rate swaps, caps, floors and collars. Under Treasury Regulations, in general,
the net income or deduction from a notional principal contract for a taxable
year is included in or deducted from gross income for that taxable year. The
net income or deduction from a notional principal contract for a taxable year
equals the total of all of the periodic payments (gen-

27
<PAGE>

erally, payments that are payable or receivable at fixed periodic intervals of
one year or less during the entire term of the contract) that are recognized
from that contract for the taxable year and all of the non-periodic payments
(including premiums for caps, floors and collars) that are recognized from that
contract for the taxable year. No portion of a payment by a party to a notional
principal contract is recognized prior to the first year to which any portion
of a payment by the counterparty relates. A periodic payment is recognized
ratably over the period to which it relates. In general, a non-periodic payment
must be recognized over the term of the notional principal contract in a manner
that reflects the economic substance of the contract. A non-periodic payment
that relates to an interest rate swap, cap, floor or collar shall be recognized
over the term of the contract by allocating it in accordance with the values of
a series of cash-settled forward or option contracts that reflect the specified
index and notional principal amount upon which the notional principal contract
is based under an alternative method contained in the proposed regulations.

Under recently enacted legislation, the Fund must generally recognize gain
(but not loss) upon entering into a "constructive sale" of an appreciated
financial position. A constructive sale of an appreciated financial position is
generally: (1) a short sale of, (2) an offsetting notional principal contract
with respect to, or (3) a forward or futures contract to deliver, the same or
substantially identical property. In the case of such a transaction, the Fund
will be treated as having entered into the constructive sale when it acquires
the related long position. To the extent provided in regulations, a constructive
sale will occur if the Fund enters into one or more transactions that have
substantially the same effect as the above-described transactions. The
legislation contains certain exceptions from constructive sale treatment,
including an exception for any position which is marked-to-market under any
other provision of the Code. When a constructive sale occurs, the Fund will
recognize gain as if the position were sold at its fair market value on the date
of the constructive sale and immediately repurchased. The basis of the property
is adjusted and a new holding period begins on the date of the constructive
sale. Constructive sale treatment does not apply to a transaction that is closed
within 30 days after the end of the taxable year during which the transaction is
entered into. However, if the transaction is closed during the last 90 days of
this period, then the exception will only apply if the Fund holds the
appreciated financial position (without reducing the risk of loss with respect
thereto) throughout the 60-day period following the closing of the transaction.

If the Fund purchases shares in a "passive foreign investment company" (a
"PFIC"), such Fund may be subject to U.S. federal income tax on a portion of any
"excess distribution" or gain from the disposition of such shares even if such
income is distributed as a taxable dividend by the Fund to its shareholders.
Additional charges in the nature of interest may be imposed on the Fund in
respect of deferred taxes arising from such distributions or gains. If the Fund
were to invest in a PFIC and elected to treat the PFIC as a "qualified electing
fund" under the Code (a "QEF"), in lieu of the foregoing requirements, the Fund
would be required to include in income each year a portion of the ordinary
earnings and net capital gain of the qualified electing fund, even if not
distributed to the Fund. Alternatively, under recently enacted legislation, the
Fund can elect to mark-to-market at the end of each taxable year its shares in a
PFIC; in this case, the Fund would recognize as ordinary income any increase in
the value of such shares, and as ordinary loss any decrease in such value to the
extent it did not exceed prior increases included in income. Under either
election, the Fund might be required to recognize in a year income in excess of
its distributions from PFICs and its proceeds from dispositions of PFIC stock
during that year, and such income would nevertheless be subject to the
Distribution Requirement and would be taken into account for purposes of the 4%
excise tax (described below).

Treasury Regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain for any taxable
year, to elect (unless it has made a taxable year election for excise tax
purposes as discussed below) to treat all or any part of any net capital loss,
any net long-term capital loss or any net foreign currency loss incurred after
October 31 as if it had been incurred in the succeeding year.

In addition to satisfying the requirements described above, the Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash

28
<PAGE>

items, U.S. Government securities, securities of other regulated investment
companies, and securities of other issuers (as to which the Fund has not
invested more than 5% of the value of the Fund's total assets in securities of
such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the
value of its total assets may be invested in the securities of any one issuer
(other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which the Fund controls and
which are engaged in the same or similar trades or businesses. Generally, an
option (call or put) with respect to a security is treated as issued by the
issuer of the security, not the issuer of the option. However, with regard to
forward currency contracts, there does not appear to be any formal or informal
authority which identifies the issuer of such instrument. For purposes of asset
diversification testing, obligations issued by or guaranteed by agencies and
instrumentalities of the U.S. Government such as the Federal Agricultural
Mortgage Corporation, the Farm Credit System Financial Assistance Corporation,
a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, the Government National Mortgage
Corporation, and the Student Loan Marketing Association are treated as U.S.
Government Securities.

If for any taxable year the Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.

Excise Tax on Regulated Investment Companies

A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98%
of ordinary taxable income for the calendar year and 98% of capital gain net
income for the one-year period ended on October 31 of such calendar year (or,
at the election of a regulated investment company having a taxable year ending
November 30 or December 31, for its taxable year (a "taxable year election")).
The balance of such income must be distributed during the next calendar year.
For the foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable
year ending in such calendar year.

For purposes of the excise tax, a regulated investment company shall (1)
reduce its capital gain net income (but not below its net capital gain) by the
amount of any net ordinary loss for the calendar year and (2) exclude foreign
currency gains and losses incurred after October 31 of any year (or after the
end of its taxable year if it has made a taxable year election) in determining
the amount of ordinary taxable income for the current calendar year (and,
instead, include such gains and losses in determining ordinary taxable income
for the succeeding calendar year).

The Fund intends to make sufficient distributions or deemed distributions
of its ordinary taxable income and capital gain net income prior to the end of
each calendar year to avoid liability for the excise tax. However, investors
should note that the Fund may in certain circumstances be required to liquidate
portfolio investments to make sufficient distributions to avoid excise tax
liability.

Fund Distributions

The Fund anticipates distributing substantially all of its net investment
income for each taxable year. Such distributions will be taxable to shareholders
as ordinary income and treated as dividends for federal income tax purposes, but
they will not qualify for the 70% dividends-received deduction for corporate
shareholders of the Fund.

Dividends paid on Class A and Class B shares are calculated at the same
time. In general, dividends on Class B shares are expected to be lower than
those on Class A shares due to the higher distribution expenses borne by the
Class B shares. Dividends may also differ between classes as a result of
differences in other class specific expenses.

29
<PAGE>

The Fund may either retain or distribute to shareholders its net capital
gain for each taxable year. The Fund currently intends to distribute any such
amounts. If net capital gain is distributed and designated as a capital gain
dividend, it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares. Under recently enacted legislation, the maximum rate of tax
on long-term capital gains of individuals will generally be reduced from 28% to
20% (10% for gains otherwise taxed at 15%) for long-term capital gains realized
after July 28, 1997 with respect to capital assets held for more than 18 months.
Additionally, beginning after December 31, 2000, the maximum tax rate for
capital assets with a holding period beginning after that date and held for more
than five years will be 18%. Under a literal reading of the legislation, capital
gain dividends paid by a regulated investment company would not appear eligible
for the reduced capital gain rates. However, the legislation authorizes the
Treasury Department to promulgate regulations that would apply the new rates to
capital gain dividends paid by a regulated investment company.

Conversely, if the Fund elects to retain its net capital gain,
the Fund will be taxed thereon (except to the extent of any available capital
loss carryovers) at the 35% corporate tax rate. If the Fund elects to retain
its net realized capital gain, it is expected that the Fund also will elect to
have shareholders of record on the last day of its taxable year treated as if
each received a distribution of his pro rata share of such gain, with the
result that each shareholder will be required to report his pro rata share of
such gain on his tax return as long-term capital gain, will receive a
refundable tax credit for his pro rata share of tax paid by the Fund on the
gain, and will increase the tax basis for his shares by an amount equal to the
deemed distribution less the tax credit.

Net investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of, or exemption from, taxes on such income.
It is impossible to determine the effective rate of foreign tax in advance since
the amount of the Fund's assets to be invested in various countries is not
known. If more than 50% of the value of the Fund's total assets at the close of
its taxable year consists of the stock or securities of foreign corporations,
the Fund may elect to "pass through" to the Fund's shareholders the amount of
foreign taxes paid by the Fund. If the Fund so elects, each shareholder would be
required to include in gross income, even though not actually received, his pro
rata share of the foreign taxes paid by the Fund, but would be treated as having
paid his pro rata share of such foreign taxes and would therefore be allowed to
either deduct such amount in computing taxable income or use such amount
(subject to various Code limitations) as a foreign tax credit against federal
income tax (but not both). For purposes of the foreign tax credit limitation
rules of the Code, each shareholder would treat as foreign source income his pro
rata share of such foreign taxes plus the portion of dividends received from the
Fund representing income derived from foreign sources. In certain circumstances,
a shareholder that (i) has held shares of the Fund for less than a specified
minimun period during which it is not protected from risk of loss or (ii) is
obligated to make payments related to the dividends, will not be allowed a
foreign tax credit for foreign taxes deemed imposed on dividends paid on such
shares. The Fund must also meet this holding period requirement with respect to
its foreign stock and securities in order to flow through "creditable" taxes. No
deduction for foreign taxes could be claimed by an individual shareholder who
does not itemize deductions. Each shareholder should consult his own tax advisor
regarding the potential application of foreign tax credits.

The Fund may make investments that produce income that is not matched by a
corresponding cash distribution to the Fund, such as investments in obligations
such as certain Brady Bonds or zero coupon securities having original issue
discount or market discount if the Fund elects to accrue market discount on a
current basis. In addition, income may continue to accrue for federal income
tax purposes with respect to a non-performing investment. Any of the foregoing
income would be treated as income earned by the Fund and therefore would be
subject to the distribution requirements of the Code. Because such income may
not be matched by a corresponding cash distribution to the Fund, the Fund may
be required to dispose of other securities to be able to make distributions to
its investors.

Distributions by the Fund that do not constitute ordinary income dividends
or capital gain dividends will be treated as a return of capital to the extent
of (and in reduction of) the shareholder's tax basis in his shares; any excess
will be treated as gain from the sale of his shares, as discussed below.

Distributions by a Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date. In addition, if the net asset
value at the time a shareholder purchases shares of the Fund reflects
undistributed net investment income or recognized capital gain net income, or
unrealized appreciation in the value of the assets of the Fund, distributions
of such amounts will be taxable to the shareholder in the manner described
above, although such distributions economically constitute a return of capital
to the shareholder.

30
<PAGE>

Ordinarily, shareholders are required to take distributions by the Fund
into account in the year in which the distributions are made. However,
dividends declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.

The Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and
the proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the IRS for failure to report the
receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that it is not subject to backup withholding or that it is
a corporation or other "exempt recipient."

Sale or Redemption of Shares

A shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of such Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of the Fund will be considered capital
gain or loss and will be long-term capital gain or loss if the shares were held
for longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be treated as a long-term
capital loss to the extent of the amount of capital gain dividends received on
such shares. For this purpose, the special holding period rules of Code Section
246(c)(3) and (4) generally will apply in determining the holding period of
shares. Capital losses in any year are deductible only to the extent of capital
gains plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.

If a shareholder (1) incurs a sales load in acquiring shares of the Fund,
(2) disposes of such shares less than 91 days after they are acquired and (3)
subsequently acquires shares of the Fund or another fund at a reduced sales
load pursuant to a right to reinvest at such reduced sales load acquired in
connection with the acquisition of the shares disposed of, then the sales load
on the shares disposed of (to the extent of the reduction in the sales load on
the shares subsequently acquired) shall not be taken into account in
determining gain or loss on the shares disposed of but shall be treated as
incurred on the acquisition of the shares subsequently acquired.

Foreign Shareholders

Taxation of a shareholder who, as to the United States, is a nonresident
alien individual, foreign trust or estate, foreign corporation, or foreign
partnership ("foreign shareholder"), depends on whether the income from the
Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.

If the income from the Fund is not effectively connected with a U.S. trade
or business carried on by a foreign shareholder, dividends paid to a foreign
shareholder from net investment income will be subject to U.S. withholding tax
at the rate of 30% (or lower treaty rate) upon the gross amount of the dividend.
Furthermore, such a foreign shareholder may be subject to U.S. withholding tax
at the rate of 30% (or lower treaty rate) on the gross income resulting from a
Fund's election to treat any foreign taxes paid by it as paid by its
shareholders, but may not be allowed a deduction against this gross income or a
credit against this U.S. withholding tax for the foreign shareholder's pro rata
share of such foreign taxes which it is treated as having paid. Such a foreign
shareholder would generally be exempt from U.S. federal income tax on gains
realized on the sale of shares of the Fund, capital gain dividends and amounts
retained by the Fund that are designated as undistributed capital gains.

31
<PAGE>

If the income from the Fund is effectively connected with a U.S. trade or
business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends and any gains realized upon the sale of shares of the
Fund will be subject to U.S. federal income tax at the rates applicable to U.S.
citizens or domestic corporations.

In the case of foreign noncorporate shareholders, the Fund may be required
to withhold U.S. federal income tax at a rate of 31% on distributions that are
otherwise exempt from withholding tax (or taxable at a reduced treaty rate)
unless such shareholders furnish the Fund with proper notification of their
foreign status.

The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Fund, including the applicability of foreign taxes.

Effect of Future Legislation; Local Tax Considerations

The foregoing general discussion of U.S. federal income tax consequences
is based on the Code and the Treasury Regulations issued thereunder as in
effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect with respect to the transactions contemplated herein.

Rules of state and local taxation of ordinary income dividends and capital
gain dividends from regulated investment companies often differ from the rules
for U.S. federal income taxation described above. Shareholders are urged to
consult their tax advisers as to the consequences of these and other state and
local tax rules affecting investment in the Fund.

32
<PAGE>

MANAGEMENT OF THE TRUST AND THE FUND

Trustees and Officers

The Trustees and officers of the Trust and their principal occupations for
at least the past five years are set forth below. Their titles may have varied
during that period.

Fergus Reid, III--Chairman of the Trust. Chairman and Chief Executive
Officer, Lumelite Corporation, since September 1985; Trustee, Morgan Stanley
Funds. Age: 65. Address: 202 June Road, Stamford, CT 06903.

Richard E. Ten Haken--Trustee. Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2 and Orleans Counties, New
York; Chairman of the Board and President, New York State Teachers' Retirement
System. Age: 63. Address: 4 Barnfield Road, Pittsford, NY 14534.

William J. Armstrong--Trustee. Vice President and Treasurer,
Ingersoll-Rand Company. Age: 55. Address: 49 Aspen Way, Upper Saddle River, NJ
07458.

John R.H. Blum--Trustee. Attorney in private practice; formerly, partner
in the law firm of Richards, O'Neil & Allegaert; Commissioner of
Agriculture--State of Connecticut, 1992-1995. Age: 68. Address: 322 Main
Street, Lakeville, CT 06039.

Joseph J. Harkins--Trustee. Retired; Commercial Sector Executive and
Executive Vice President of The Chase Manhattan Bank, N.A. from 1985 through
1989. He has been employed by Chase in numerous capacities and offices since
1954. Director of Blessings Corporation, Jefferson Insurance Company of New
York, Monticello Insurance Company and National. Age: 65. Address: 257
Plantation Circle South, Ponte Vedra Beach, FL 32082.

*H. Richard Vartabedian--Trustee and President of the Trust. Consultant,
Republic Bank of New York; formerly, Senior Investment Officer, Division
Executive of the Investment Management Division of The Chase Manhattan Bank,
N.A., 1980 through 1991. Age: 61. Address: P.O. Box 296, Beach Road, Hendrick's
Head, Southport, ME 04576.

Stuart W. Cragin, Jr.--Trustee. Retired; formerly President, Fairfield
Testing Laboratory, Inc. He has previously served in a variety of marketing,
manufacturing and general management positions with Union Camp Corp., Trinity
Paper & Plastics Corp., and Conover Industries. Age: 64. Address: 108 Valley
Road, Cos Cob, CT 06807.

Irving L. Thode--Trustee. Retired; formerly Vice President of Quotron
Systems. He has previously served in a number of executive positions with
Control Data Corp., including President of its Latin American Operations, and
General Manager of its Data Services business. Age: 66. Address: 80 Perkins
Road, Greenwich, CT 06830.

W. Perry Neff--Trustee. Independent Financial Consultant; Director of
North America Life Assurance Co., Petroleum & Resources Corp. and The Adams
Express Co.; formerly Director and Chairman of The Hanover Funds, Inc.;
Director, Chairman and President of The Hanover Investment Funds, Inc. Age: 70.
Address: 96 Holden Hill Road, Weston, VT 05161.

Roland R. Eppley, Jr.--Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard Association Inc., (1971-1988);
Director, Janel Hydraulics, Inc.; formerly Director of The Hanover Funds, Inc.
Age: 65. Address: 105 Coventry Place, Palm Beach Gardens, FL 33418.

33
<PAGE>

W.D. MacCallan--Trustee. Director of The Adams Express Co. and Petroleum &
Resources Corp.; formerly Chairman of the Board and Chief Executive Officer of
The Adams Express Co. and Petroleum & Resources Corp.; formerly Director of The
Hanover Funds, Inc. and The Hanover Investment Funds, Inc. Age: 70. Address:
624 East 45th Street, Savannah, GA 31405

*Leonard M. Spalding, Jr.--Trustee. Chief Executive Officer of Chase
Mutual Funds Corp.; formerly President and Chief Executive Officer of Vista
Capital Management; Chief Investment Executive of The Chase Manhattan Private
Bank. Age: 62. Address: 2025 Lincoln Park Road, Springfield, KY 40069.

*Sarah E. Jones--Trustee. President and Chief Operating Officer of Chase
Mutual Funds Corp.; formerly Managing Director for the Global Asset Management
and Private Banking Division of The Chase Manhattan Bank. Age: 46. Address:
Chase Mutual Funds Corp., 101 Park Avenue, Suite 15, New York, New York 10178.

Martin R. Dean--Treasurer and Assistant Secretary. Associate Director,
Accounting Services, BISYS Fund Services; formerly Senior Manager, KPMG Peat
Marwick (1987-1994). Age: 33. Address: 3435 Stelzer Road, Columbus, OH 43219.

W. Anthony Turner--Secretary. Senior Vice President and Regional Client
Executive, BISYS Fund Services; formerly, Senior Vice President, First Union
Brokerage Services, Inc. and Senior Vice President, NationsBank. Age: 36.
Address: 125 West 55th Street, New York, NY 10019.
- ----------
* Asterisks indicate those Trustees that are "Interested Persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of the Trust's
investment advisers or principal underwriter, but may be deemed an
interested person of the Trust solely by reason of being an officer of the
Trust.

The Board of Trustees of the Trust presently has an Audit Committee. The
members of the Audit Committee are Messrs. Ten Haken (Chairman), Blum, Cragin,
Thode, Armstrong, Harkins, Reid and Vartabedian. The function of the Audit
Committee is to recommend independent auditors and monitor accounting and
financial matters. The Audit Committee met two times during the fiscal year
ended October 31, 1996.

The Board of Trustees of the Trust has established an Investment Committee.
The members of the Investment Committee are Messrs. Vartabedian, Reid and
Spalding. The function of the Investment Committee is to review the investment
management process of the Trust.

The Trustees and officers of the Trust appearing in the table above also
serve in the same capacities with respect to Mutual Fund Trust, Mutual Fund
Variable Annuity Trust, Mutual Fund Select Group, Mutual Fund Select
Trust,Capital Growth Portfolio, Growth and Income Portfolio, International
Equity Portfolio and New Growth Opportunities Portfolio (these entities,
together with the Trust, are referred to below as the "Vista Funds").

Remuneration of Trustees and Certain Executive Officers:

Each Trustee is reimbursed for expenses incurred in attending each meeting
of the Board of Trustees or any committee thereof. Each Trustee who is not an
affiliate of the advisers is compensated for his or her services according to a
fee schedule which recognizes the fact that each Trustee also serves as a
Trustee of other investment companies advised by the advisers. Each Trustee
receives a fee, allocated among all investment companies for which the Trustee
serves, which consists of an annual retainer component and a meeting fee
component.

34
<PAGE>

Set forth below is information regarding compensation paid or accrued
during the fiscal year ended October 31, 1996 for each Trustee of the Trust:

Pension or Total
Retirement Compensation
Benefits Accrued from
as Fund Expenses(1) "Fund Complex"(2)
------------------- -----------------
Fergus Reid, III, Trustee $7,511 $90,000
Richard E. Ten Haken, Trustee 4,222 58,500
William J. Armstrong, Trustee 4,735 58,500
John R.H. Blum, Trustee 5,445 60,000
Joseph J. Harkins, Trustee 6,139 60,000
H. Richard Vartabedian, Trustee 5,525 90,000
Stuart W. Cragin, Jr., Trustee 3,977 60,000
Irving L. Thode, Trustee 4,728 60,000
W. Perry Neff, Trustee -- 43,500
Ronald R. Eppley, Jr., Trustee -- 43,500
W.D. MacCallan, Trustee -- 42,000
Leonard M. Spalding, Jr., Trustee -- --
Sarah E. Jones, Trustee -- --

- ----------
(1) Data reflects accruals for all portfolios of the Trust.

(2) Data reflects total compensation earned during the period January 1, 1996
to December 31, 1996 for service as a Trustee to all Funds advised by the
adviser.

Vista Funds Retirement Plan for Eligible Trustees

Effective August 21, 1995, the Trustees also instituted a Retirement Plan
for Eligible Trustees (the "Plan") pursuant to which each Trustee (who is not
an employee of any of the Vista Funds, the advisers, administrator or
distributor or any of their affiliates) may be entitled to certain benefits
upon retirement from the Board of Trustees. Pursuant to the Plan, the normal
retirement date is the date on which the eligible Trustee has attained age 65
and has completed at least five years of continuous service with one or more of
the investment companies advised by the adviser (collectively, the "Covered
Funds"). Each Eligible Trustee is entitled to receive from the Covered Funds an
annual benefit commencing on the first day of the calendar quarter coincident
with or following his date of retirement equal to (i) the sum of 8% of the
highest annual compensation received from the Covered Funds multiplied by the
number of such Trustee's years of service (not in excess of 10 years) completed
with respect to any of the Covered Funds and (ii) 4% of the highest annual
compensation received from the Covered Funds for each year of service in excess
of 10 years, provided that no Trustee's annual benefit will exceed the highest
annual compensation received by that Trustee from the Covered Funds. Such
benefit is payable to each eligible Trustee in monthly installments for the
life of the Trustee.

Set forth below in the table are the estimated annual benefits payable to
an eligible Trustee upon retirement assuming various compensation and years of
service classifications. As of October 31, 1996, the estimated credited years
of service for Messrs. Reid, Ten Haken, Armstrong, Blum, Harkins, Vartabedian,
Cragin, Thode, Neff, Eppley, MacCallan and Spalding and for Ms. Jones are 12,
12, 9, 12, 6, 5, 4, 4, 12, 8, 7, 0 and 0, respectively.

35
<PAGE>

Highest Annual Compensation Paid by Allta Funds
-----------------------------------------------------------
$60,000 $70,000 $80,000 $90,000 $100,000
Years of
Service Estimated Annual Benefits Upon Retirement
-------- -----------------------------------------------------------
14 $57,600 $67,200 $76,800 $86,400 $ 96,000
12 52,800 61,600 70,400 79,200 88,000
10 48,000 56,000 64,000 72,000 80,000
8 38,400 44,800 51,200 57,600 64,000
6 28,800 33,600 38,400 43,200 48,000
4 19,200 22,400 25,600 28,800 32,000

Effective August 21, 1995, the Trustees instituted a Deferred Compensation
Plan for Eligible Trustees (the "Deferred Compensation Plan") pursuant to which
each Trustee (who is not an employee of any of the Funds, the advisers,
administrator or distributor or any of their affiliates) may enter into
agreements with the Funds whereby payment of the Trustee's fees are deferred
until the payment date elected by the Trustee (or the Trustee's termination of
service). The deferred amounts are invested in shares of Vista Funds selected
by the Trustee. The deferred amounts are paid out in a lump sum or over a
period of several years as elected by the Trustee at the time of deferral. If a
deferring Trustee dies prior to the distribution of amounts held in the
deferral account, the balance of the deferral account will be distributed to
the Trustee's designated beneficiary in a single lump sum payment as soon as
practicable after such deferring Trustee's death.

Messrs. Ten Haken, Thode and Vartabedian have each executed a deferred
compensation agreement for the 1996 calendar year and as of October 31, 1996
they had contributed $17,400, $45,000 and $67,500, respectively.

The Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, unless, as to liability to the Trust or its shareholders, it is finally
adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices or
with respect to any matter unless it is finally adjudicated that they did not
act in good faith in the reasonable belief that their actions were in the best
interest of the Trust. In the case of settlement, such indemnification will not
be provided unless it has been determined by a court or other body approving
the settlement or other disposition, or by a reasonable determination based
upon a review of readily available facts, by vote of a majority of
disinterested Trustees or in a written opinion of independent counsel, that
such officers or Trustees have not engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of their duties.

As of December 1, 1996, the Trustees and officers as a group owned no
outstanding shares of any Funds.

Adviser and Sub-Adviser

Chase acts as investment adviser to the Fund pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Subject to such policies as the
Board of Trustees may determine, Chase is responsible for investment decisions
for the Fund. Pursuant to the terms of the Advisory Agreement, Chase provides
the Fund with such investment advice and supervision as it deems necessary for
the proper supervision of the Fund's investments. The advisers continuously
provide investment programs and determine from time to time what securities
shall be purchased, sold or exchanged and what portion of the Fund's assets
shall be held uninvested. The advisers to the Fund furnish, at their own
expense, all services, facilities and personnel necessary in connection with
managing the investments and effecting portfolio transactions for the Fund. The
Advisory Agreement for the Fund will continue in effect from year to year only
if such continuance is specifically approved at least annually by the Board of
Trustees or by vote of a majority of the Fund's outstanding voting securities
and by a majority of the Trustees who are not parties to the Advisory Agreement
or interested persons of any such party, at a meeting called for the purpose of
voting on such Advisory Agreement.

36
<PAGE>

Under the Advisory Agreement, the adviser may utilize the specialized
portfolio skills of all its various affiliates, thereby providing the Fund with
greater opportunities and flexibility in accessing investment expertise.

Pursuant to the terms of the Advisory Agreement and the sub-advisers'
agreements with the adviser, the adviser and sub-advisers are permitted to
render services to others. Each advisory agreement is terminable without
penalty by the Trust on behalf of the Fund on not more than 60 days', nor less
than 30 days', written notice when authorized either by a majority vote of the
Fund's shareholders or by a vote of a majority of the Board of Trustees of the
Trust, or by the adviser or sub-adviser on not more than 60 days', nor less
than 30 days', written notice, and will automatically terminate in the event of
its "assignment" (as defined in the 1940 Act). The advisory agreements provide
that the adviser or sub-adviser under such agreement shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of portfolio
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties thereunder.

With respect to the Fund investing in equity securities, the equity
research team of the adviser looks for two key variables when analyzing stocks
for potential investment by equity portfolios: value and momentum. To uncover
these qualities, the team uses a combination of quantitative analysis,
fundamental research and computer technology to help identify undervalued
stocks.

In the event the operating expenses of the Fund, including all investment
advisory, administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, for any fiscal year exceed the most restrictive expense limitation
applicable to the Fund imposed by the securities laws or regulations thereunder
of any state in which the shares of the Fund are qualified for sales, as such
limitations may be raised or lowered from time to time, the adviser shall
reduce its advisory fee (which fee is described below) to the extent of its
share of such excess expenses. The amount of any such reduction to be borne by
the adviser shall be deducted from the monthly advisory fee otherwise payable
with respect to the Fund during such fiscal year; and if such amounts should
exceed the monthly fee, the adviser shall pay to the Fund its share of such
excess expenses no later than the last day of the first month of the next
succeeding fiscal year.

Under the Advisory Agreement, Chase may delegate a portion of its
responsibilities to a sub-adviser. In addition, the Advisory Agreement provides
that Chase may render services through its own employees or the employees of
one or more affiliated companies that are qualified to act as an investment
adviser of the Fund and are under the common control of Chase as long as all
such persons are functioning as a part of an organized group of persons,
managed by authorized officers of Chase.

Chase, on behalf of the Fund, has entered into an investment sub-advisory
agreement with Chase Asset Management, Inc. ("CAM"). With respect to the
day-to-day management of the Fund, under the sub-advisory agreement CAM makes
decisions concerning, and places all orders for, purchases and sales of
securities and helps maintain the records relating to such purchases and sales.
CAM may, in its discretion, provide such services through its own employees or
the employees of one or more affiliated companies that are qualified to act as
an investment adviser to the Company under applicable laws and are under the
common control of Chase; provided that (i) all persons, when providing services
under the sub-advisory agreement, are functioning as part of an organized group
of persons, and (ii) such organized group of persons is managed at all times by
authorized officers of the sub-advisers. This arrangement will not result in
the payment of additional fees by the Funds.

Chase, a wholly-owned subsidiary of The Chase Manhattan Corporation, a
registered bank holding company, is a commercial bank offering a wide range of
banking and investment services to customers throughout the United States and
around the world. The Chase Manhattan Corporation is the entity resulting

37
<PAGE>

from the merger of The Chase Manhattan Corporation into Chemical Banking
Corporation on March 31, 1996. Chemical Banking Corporation was thereupon
renamed The Chase Manhattan Corporation. Also included among Chase's accounts
are commingled trust funds and a broad spectrum of individual trust and
investment management portfolios. These accounts have varying investment
objectives.

CAM is a wholly-owned operating subsidiary of the Adviser. CAM is
registered with the Securities and Exchange Commission as an investment adviser
and provides discretionary investment advisory services to institutional
clients. The same individuals who serve as portfolio managers for CAM also
serve as portfolio managers for Chase.

In consideration of the services provided by the adviser pursuant to the
Advisory Agreement, the adviser is entitled to receive from the Fund an
investment advisory fee computed daily and paid monthly based on a rate equal
to a percentage of the Fund's average daily net assets specified in the
Prospectus. However, the adviser may voluntarily agree to waive a portion of
the fees payable to it on a month-to-month basis. For its services under its
sub-advisory agreement, CAM will be entitled to receive, with respect to the
Fund, such compensation, payable by the adviser out of its advisory fee, as is
described in the Prospectus.

Administrator

Pursuant to an Administration Agreement (the "Administration Agreement"),
Chase is the administrator of the Fund. Chase provides certain administrative
services to the Fund, including, among other responsibilities, coordinating the
negotiation of contracts and fees with, and the monitoring of performance and
billing of, the Fund's independent contractors and agents; preparation for
signature by an officer of the Trust all documents required to be filed for
compliance by the Trust with applicable laws and regulations excluding those of
the securities laws of various states; arranging for the computation of
performance data, including net asset value and yield; responding to
shareholder inquiries, and arranging for the maintenance of books and records
of the Fund and providing, at its own expense, office facilities, equipment and
personnel necessary to carry out its duties. Chase in its capacity as
administrator does not have any responsibility or authority for the management
of the Fund, the determination of investment policy, or for any matter
pertaining to the distribution of Fund shares.

Under the Administration Agreement Chase is permitted to render
administrative services to others. The Administration Agreement will continue
in effect from year to year with respect to the Fund only if such continuance
is specifically approved at least annually by the Board of Trustees of the
Trust or by vote of a majority of the Fund's outstanding voting securities and,
in either case, by a majority of the Trustees who are not parties to the
Administration Agreement or "interested persons" (as defined in the 1940 Act)
of any such party. The Administration Agreement is terminable without penalty
by the Trust on behalf of the Fund on 60 days' written notice when authorized
either by a majority vote of the Fund's shareholders or by vote of a majority
of the Board of Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust or by Chase on
60 days' written notice, and will automatically terminate in the event of their
"assignment" (as defined in the 1940 Act). The Administration Agreement also
provides that neither Chase or its personnel shall be liable for any error of
judgment or mistake of law or for any act or omission in the administration of
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its or their duties or by reason of reckless disregard of its or
their obligations and duties under the Administration Agreement.

In addition, the Administration Agreement provides that, in the event the
operating expenses of the Fund, including all investment advisory,
administration and sub-administration fees, but excluding brokerage commissions
and fees, taxes, interest and extraordinary expenses such as litigation, for
any fiscal year exceed the most restrictive expense limitation applicable to
the Fund imposed by the securities laws or regulations thereunder of any state
in which the shares of such Fund are qualified for sale, as such limitations
may be raised or lowered from time to time, Chase shall reduce its
administration fee (which fee is described

38
<PAGE>

below) to the extent of its share of such excess expenses. The amount of any
such reduction to be borne by Chase shall be deducted from the monthly
administration fee otherwise payable to Chase during such fiscal year, and if
such amounts should exceed the monthly fee, Chase shall pay to the Fund its
share of such excess expenses no later than the last day of the first month of
the next succeeding fiscal year.

In consideration of the services provided by Chase pursuant to the
Administration Agreements, Chase receives from the Fund a fee computed daily
and paid monthly at an annual rate equal to 0.10% of each of the Fund's average
daily net assets, on an annualized basis for the Fund's then-current fiscal
year . Chase may voluntarily waive a portion of the fees payable to it with
respect to the Fund on a month-to-month basis.

Distribution Plans

The Trust has adopted separate plans of distribution pursuant to Rule
12b-1 under the 1940 Act (a "Distribution Plan") on behalf of certain classes
or shares of the Fund as described in the Prospectus, which provide that such
classes of the Fund shall pay for distribution services a distribution fee (the
"Distribution Fee"), including payments to the Distributor, at annual rates not
to exceed the amounts set forth in the Prospectus. The Distributor may use all
or any portion of the Class A Distribution Fee to pay for Fund expenses of
printing prospectuses and reports used for sales purposes, expenses of the
preparation and printing of sales literature and other such
distribution-related expenses.

Class B shares pay a Distribution Fee of up to 0.75% of average daily net
assets. The Distributor currently expects to pay sales commissions to a dealer
at the time of sale of Class B shares of up to 4.00% of the purchase price of
the shares sold by such dealer. The Distributor will use its own funds (which
may be borrowed or otherwise financed) to pay such amounts. Because the
Distributor will receive a maximum Distribution Fee of 0.75% of average daily
net assets with respect to Class B shares, it will take the Distributor several
years to recoup the sales commissions paid to dealers and other sales expenses.

Some payments under the Distribution Plans may be used to compensate
broker-dealers with trail or maintenance commissions in an amount not to exceed
0.25% annualized of the average net asset value of Class A shares, or 0.25%
annualized of the average net asset value of the Class B shares maintained in
the Fund by such broker-dealers' customers. Trail or maintenance commissions on
Class B shares will be paid to broker-dealers beginning the 13th month
following the purchase of such Class B shares. Since the distribution fees are
not directly tied to expenses, the amount of distribution fees paid by the Fund
during any year may be more or less than actual expenses incurred pursuant to
the Distribution Plans. For this reason, this type of distribution fee
arrangement is characterized by the staff of the Securities and Exchange
Commission as being of the "compensation variety" (in contrast to
"reimbursement" arrangements by which a distributor's payments are directly
linked to its expenses). With respect to Class B shares, because of the 0.75%
annual limitation on the compensation paid to the Distributor during a fiscal
year, compensation relating to a large portion of the commissions attributable
to sales of Class B shares in any one year will be accrued and paid by a Fund
to the Distributor in fiscal years subsequent thereto. In determining whether
to purchase Class B shares, investors should consider that compensation
payments could continue until the Distributor has been fully reimbursed for the
commissions paid on sales of Class B shares. However, the shares are not liable
for any distribution expenses incurred in excess of the Distribution Fee paid.

Each class of shares is entitled to exclusive voting rights with respect
to matters concerning its Distribution Plan.

Each Distribution Plan provides that it will continue in effect
indefinitely if such continuance is specifically approved at least annually by
a vote of both a majority of the Trustees and a majority of the Trustees who
are not "interested persons" (as defined in the 1940 Act) of the Trust and who
have no direct or indirect financial interest in the operation of the
Distribution Plans or in any agreement related to such Plan ("Qualified

39
<PAGE>

Trustees"). The continuance of each Distribution Plan was most recently
approved on October 13, 1995. The Distribution Plans require that the Trust
shall provide to the Board of Trustees, and the Board of Trustees shall review,
at least quarterly, a written report of the amounts expended (and the purposes
therefor) under the Distribution Plans. The Distribution Plans further provides
that the selection and nomination of Qualified Trustees shall be committed to
the discretion of the disinterested Trustees (as defined in the 1940 Act) then
in office. The Distribution Plans may be terminated at any time by a vote of a
majority of the Qualified Trustees or, with respect to the Fund, by vote of a
majority of the outstanding voting Shares of the class of the Fund to which it
applies (as defined in the 1940 Act). The Distribution Plans may not be amended
to increase materially the amount of permitted expenses thereunder without the
approval of shareholders and may not be materially amended in any case without
a vote of the majority of both the Trustees and the Qualified Trustees. The
Fund will preserve copies of any plan, agreement or report made pursuant to a
Distribution Plan for a period of not less than six years from the date of the
Distribution Plan, and for the first two years such copies will be preserved in
an easily accessible place.

Distribution and Sub-Administration Agreement

The Trust has entered into a Distribution and Sub-Administration Agreement
(the "Distribution Agreement") with the Distributor, pursuant to which the
Distributor acts as the Fund's exclusive underwriter, provides certain
administration services and promotes and arranges for the sale of each class of
Shares of the Fund. The Distributor is a wholly-owned subsidiary of BISYS Fund
Services, Inc. The Distribution Agreement provides that the Distributor will
bear the expenses of printing, distributing and filing prospectuses and
statements of additional information and reports used for sales purposes, and
of preparing and printing sales literature and advertisements not paid for by
the Distribution Plan. The Trust pays for all of the expenses for qualification
of the shares of the Fund for sale in connection with the public offering of
such shares, and all legal expenses in connection therewith. In addition,
pursuant to the Distribution Agreement, the Distributor provides certain
sub-administration services to the Trust, including providing officers,
clerical staff and office space.

The Distribution Agreement is currently in effect and will continue in
effect thereafter with respect to the Fund only if such continuance is
specifically approved at least annually by the Board of Trustees or by vote of
a majority of the Fund's outstanding voting securities and, in either case, by
a majority of the Trustees who are not parties to the Distribution Agreement or
"interested persons" (as defined in the 1940 Act) of any such party. The
Distribution Agreement is terminable without penalty by the Trust on behalf of
each Fund on 60 days' written notice when authorized either by a majority vote
of the Fund's shareholders or by vote of a majority of the Board of Trustees of
the Trust, including a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust, or by the Distributor on 60
days' written notice, and will automatically terminate in the event of its
"assignment" (as defined in the 1940 Act). The Distribution Agreement also
provides that neither the Distributor nor its personnel shall be liable for any
act or omission in the course of, or connected with, rendering services under
the Distribution Agreement, except for wilful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.

In the event the operating expenses of the Fund, including all investment
advisory, administration and sub-administration fees, but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, for any fiscal year exceed the most restrictive expense limitation
applicable to the Fund imposed by the securities laws or regulations thereunder
of any state in which the shares of the Fund are qualified for sale, as such
limitations may be raised or lowered from time to time, the Distributor shall
reduce its sub-administration fee with respect to the Fund (which fee is
described below) to the extent of its share of such excess expenses. The amount
of any such reduction to be borne by the Distributor shall be deducted from the
monthly sub-administration fee otherwise payable with respect to the Fund
during such fiscal year; and if such amounts should exceed the monthly fee, the
Distributor shall pay to the Fund its share of such excess expenses no later
than the last day of the first month of the next succeeding fiscal year.

In consideration of the sub-administration services provided by the
Distributor pursuant to the Distribution Agreement, the Distributor receives an
annual fee, payable monthly, of 0.05% of the net assets of

40
<PAGE>

the Fund. The Distributor may voluntarily waive a portion of the fees payable
to it under the Distribution Agreement with respect to the Fund on a
month-to-month basis.

Shareholder Servicing Agents, Transfer Agent and Custodian

The Trust has entered into a shareholder servicing agreement (a "Servicing
Agreement") with each Shareholder Servicing Agent to provide certain services
including but not limited to the following: answer customer inquiries regarding
account status and history, the manner in which purchases and redemptions of
shares may be effected for the Fund as to which the Shareholder Servicing Agent
is so acting and certain other matters pertaining to the Fund; assist
shareholders in designating and changing dividend options, account designations
and addresses; provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; assist in processing purchase and
redemption transactions; arrange for the wiring of funds; transmit and receive
funds in connection with customer orders to purchase or redeem shares; verify
and guarantee shareholder signatures in connection with redemption orders and
transfers and changes in shareholder-designated accounts; furnish (either
separately or on an integrated basis with other reports sent to a shareholder
by a Shareholder Servicing Agent) quarterly and year-end statements and
confirmations of purchases and redemptions; transmit, on behalf of the Fund,
proxy statements, annual reports, updated prospectuses and other communications
to shareholders of the Fund; receive, tabulate and transmit to the Fund proxies
executed by shareholders with respect to meetings of shareholders of the Fund;
and provide such other related services as the Fund or a shareholder may
request. Shareholder servicing agents may be required to register pursuant to
state securities law.

Each Shareholder Servicing Agent may voluntarily agree from time to time
to waive a portion of the fees payable to it under its Servicing Agreement with
respect to the Fund on a month-to-month basis.

The Trust has also entered into a Transfer Agency Agreement with DST
Systems, Inc. ("DST") pursuant to which DST acts as transfer agent for the
Trust. DST's address is 210 West 10th Street, Kansas City, MO 64105.

Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of the Fund and receives such compensation as is from time to time
agreed upon by the Trust and Chase. As custodian, Chase provides oversight and
record keeping for the assets held in the portfolios of the Fund. Chase also
provides fund accounting services for the income, expenses and shares
outstanding for such Funds. Chase is located at 3 Metro- tech Center, Brooklyn,
NY 11245. Investors Bank and Trust Co., One First Canadian Place, Toronto,
Canada M5X 1C8, provides similar services for the International Equity
Portfolio.

41
<PAGE>

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036, independent accountants of the Fund provides the Fund with audit
services, tax return preparation and assistance and consultation with respect
to the preparation of filings with the Securities and Exchange Commission.

CERTAIN REGULATORY MATTERS

Banking laws, including the Glass-Steagall Act as currently interpreted,
prohibit bank holding companies and their affiliates from sponsoring,
organizing, controlling, or distributing shares of, mutual funds, and generally
prohibit banks from issuing, underwriting, selling or distributing securities.
These laws do not prohibit banks or their affiliates from acting as investment
adviser, administrator or custodian to mutual funds or from purchasing mutual
fund shares as agent for a customer. Chase and the Trust believe that Chase
(including its affiliates) may perform the services to be performed by it as
described in the Prospectus and this Statement of Additional Information
without violating such laws. If future changes in these laws or interpretations
required Chase to alter or discontinue any of these services, it is expected
that the Board of Trustees would recommend alternative arrangements and that
investors would not suffer adverse financial consequences. State securities
laws may differ from the interpretations of banking law described above and
banks may be required to register as dealers pursuant to state law.

Chase and its affiliates may have deposit, loan and other commercial
banking relationships with the issuers of securities purchased on behalf of any
of the Funds, including outstanding loans to such issuers which may be repaid
in whole or in part with the proceeds of securities so purchased. Chase and its
affiliates deal, trade and invest for their own accounts in U.S. Government
obligations, municipal obligations and commercial paper and are among the
leading dealers of various types of U.S. Government obligations and municipal
obligations. Chase and its affiliates may sell U.S. Government obligations and
municipal obligations to, and purchase them from, other investment companies
sponsored by the Funds' distributor or affiliates of the distributor. Chase
will not invest any Fund assets in any U.S. Government obligations, municipal
obligations or commercial paper purchased from itself or any affiliate,
although under certain circumstances such securities may be purchased from
other members of an underwriting syndicate in which Chase or an affiliate is a
non-principal member. This restriction my limit the amount or type of U.S.
Government obligations, municipal obligations or commercial paper available to
be purchased by any Fund. Chase has informed the Funds that in making its
investment decision, it does not obtain or use material inside information in
the possession of any other division or department of Chase, including the
division that performs services for the Trust as custodian, or in the
possession of any affiliate of Chase. Shareholders of the Funds should be aware
that, subject to applicable legal or regulatory restrictions, Chase and its
affiliates may exchange among themselves certain information about the
shareholder and his account. Transactions with affiliated broker-dealers will
only be executed on an agency basis in accordance with applicable federal
regulations.

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<PAGE>

GENERAL INFORMATION

Description of Shares, Voting Rights and Liabilities

Mutual Fund Group is an open-end, non-diversified management investment
company organized as a Massachusetts business trust under the laws of the
Commonwealth of Massachusetts in 1987. Because the Trust is "non-diversified",
more than 5% of the assets of certain Funds may be invested in the obligations
of any single issuer, which may make the value of the shares in such a Fund
more susceptible to certain risks than shares of a diversified mutual fund.

The Trust currently consists of 18 series of shares of beneficial
interest, par value $.001 per share. With respect to certain Funds, the Trust
may offer more than one class of shares. The Trust has reserved the right to
create and issue additional series or classes. Each share of a series or class
represents an equal proportionate interest in that series or class with each
other share of that series or class. The shares of each series or class
participate equally in the earnings, dividends and assets of the particular
series or class. Expenses of the Trust which are not attributable to a specific
series or class are allocated among all the series in a manner believed by
management of the Trust to be fair and equitable. Shares have no preemptive or
conversion rights. Shares when issued are fully paid and non-assessable, except
as set forth below. Shareholders are entitled to one vote for each share held.
Shares of class generally vote together except when required under federal
securities laws to vote separately on matters that only affect a particular
class, such as the approval of distribution plans for a particular class. With
respect to shares purchased through a Shareholder Servicing Agent and, in the
event written proxy instructions are not received by a Fund or its designated
agent prior to a shareholder meeting at which a proxy is to be voted and the
shareholder does not attend the meeting in person, the Shareholder Servicing
Agent for such shareholder will be authorized pursuant to an applicable
agreement with the shareholder to vote the shareholder's outstanding shares in
the same proportion as the votes cast by other Fund shareholders represented at
the meeting in person or by proxy.

Certain Funds offer Class A and Class B shares. The classes of shares have
several different attributes relating to sales charges and expenses, as
described herein and in the Prospectuses. In addition to such differences,
expenses borne by each class of a Fund may differ slightly because of the
allocation of other class-specific expenses. For example, a higher transfer
agency fee may be imposed on Class B shares than on class A shares. The
relative impact of initial sales charges, contingent deferred sales charges,
and ongoing annual expenses will depend on the length of time a share is held.

Selected dealers and financial consultants may receive different levels of
compensation for selling one particular class of shares rather than another.

The Trust is not required to hold annual meetings of shareholders but will
hold special meetings of shareholders of a series or class when, in the
judgment of the Trustees, it is necessary or desirable to submit matters for a
shareholder vote. Shareholders have, under certain circumstances, the right to
communicate with other shareholders in connection with requesting a meeting of
shareholders for the purpose of removing one or more Trustees. Shareholders
also have, in certain circumstances, the right to remove one or more Trustees
without a meeting. No material amendment may be made to the Trust's Declaration
of Trust without the affirmative vote of the holders of a majority of the
outstanding shares of each series affected by the amendment. The Trust's
Declaration of Trust provides that, at any meeting of shareholders of the Trust
or of any series or class, a Shareholder Servicing Agent may vote any shares as
to which such Shareholder Servicing Agent is the agent of record and which are
not represented in person or by proxy at the meeting, proportionately in
accordance with the votes cast by holders of all shares of that series or class
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements. Shares have no preemptive or conversion
rights. Shares, when issued, are fully paid and non-assessable, except as set
forth below. Any series or class may be terminated (i) upon the merger or
consolidation with, or the sale or disposition of all

43
<PAGE>

or substantially all of its assets to, another entity, if approved by the vote
of the holders of two thirds of its outstanding shares, except that if the
Board of Trustees recommends such merger, consolidation or sale or disposition
of assets, the approval by vote of the holders of a majority of the series' or
class' outstanding shares will be sufficient, or (ii) by the vote of the
holders of a majority of its outstanding shares, or (iii) by the Board of
Trustees by written notice to the series' or class' shareholders. Unless each
series and class is so terminated, the Trust will continue indefinitely.

Stock certificates are issued only upon the written request of a
shareholder, subject to the policies of the investor's Shareholder Servicing
Agent, but the Trust will not issue a stock certificate with respect to shares
that may be redeemed through expedited or automated procedures established by a
Shareholder Servicing Agent. No certificates are issued for Class B shares due
to their conversion feature. No certificates are issued for Institutional
Shares.

Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Trust and
provides for indemnification and reimbursement of expenses out of the Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Trust's Declaration of Trust also provides that the Trust shall
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Trust, its shareholders,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.

The Trust's Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, errors of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against any liability to which he would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.

The Board of Trustees has adopted a code of ethics addressing personal
securities transactions by investment personnel and access persons and other
related matters. The code has been designated to address potential conflicts of
interest that can arise in connection with personal trading activities of such
persons. Persons subject to the code are generally permitted to engage in
personal securities transactions, subject to certain prohibitions,
pre-clearance requirements and blackout periods.

Principal Holders

As of September 1, 1997 no person owned of record 5% or more of the
outstanding shares of any class of the Fund.

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<PAGE>

Specimen Computations of Offering Prices Per Share

The Latin American Equity Fund

A Shares:

Net Asset Value and Redemption Price per Share of Beneficial Interest
at an assumed net asset value of $10.00 per share $10.00

Maximum Offering Price per Share (an assumed net asset value of
$10.00 per share divided by .9525)
(reduced on purchases of $100,000 or more) $10.50

B Shares:

Net Asset Value and Redemption Price per Share of Beneficial Interest
at an assumed net asset value of $10.00 per share $10.00

45
<PAGE>

APPENDIX A

DESCRIPTION OF CERTAIN OBLIGATIONS
ISSUED OR GUARANTEED BY U.S. GOVERNMENT AGENCIES
OR INSTRUMENTALITIES

Federal Farm Credit System Notes and Bonds--are bonds issued by a
cooperatively owned nationwide system of banks and associations supervised by
the Farm Credit Administration, an independent agency of the U.S. Government.
These bonds are not guaranteed by the U.S. Government.

Maritime Administration Bonds--are bonds issued and provided by the
Department of Transportation of the U.S. Government and are guaranteed by the
U.S. Government.

FNMA Bonds--are bonds guaranteed by the Federal National Mortgage
Association. These bonds are not guaranteed by the U.S. Government.

FHA Debentures--are debentures issued by the Federal Housing
Administration of the U.S. Government and are guaranteed by the U.S.
Government.

FHA Insured Notes--are bonds issued by the Farmers Home Administration,
the U.S. Government and are guaranteed by the U.S. Government.

GNMA Certificates--are mortgage-backed securities which represent a
partial ownership interest in a pool of mortgage loans issued by lenders such
as mortgage bankers, commercial banks and savings and loan associations. Each
mortgage loan included in the pool is either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration and therefore
guaranteed by the U.S. Government. As a consequence of the fees paid to GNMA
and the issuer of GNMA Certificates, the coupon rate of interest of GNMA
Certificates is lower than the interest paid on the VA-guaranteed or
FHA-insured mortgages underlying the Certificates. The average life of a GNMA
Certificate is likely to be substantially less than the original maturity of
the mortgage pools underlying the securities. Prepayments of principal by
mortgagors and mortgage foreclosures may result in the return of the greater
part of principal invested far in advance of the maturity of the mortgages in
the pool. Foreclosures impose no risk to principal investment because of the
GNMA guarantee. As the prepayment rate of individual mortgage pools will vary
widely, it is not possible to accurately predict the average life of a
particular issue of GNMA Certificates. The yield which will be earned on GNMA
Certificates may vary from their coupon rates for the following reasons: (i)
Certificates may be issued at a premium or discount, rather than at par; (ii)
Certificates may trade in the secondary market at a premium or discount after
issuance; (iii) interest is earned and compounded monthly which has the effect
of raising the effective yield earned on the Certificates; and (iv) the actual
yield of each Certificate is affected by the prepayment of mortgages included
in the mortgage pool underlying the Certificates. Principal which is so prepaid
will be reinvested although possibly at a lower rate. In addition, prepayment
of mortgages included in the mortgage pool underlying a GNMA Certificate
purchased at a premium could result in a loss to a Fund. Due to the large
amount of GNMA Certificates outstanding and active participation in the
secondary market by securities dealers and investors, GNMA Certificates are
highly liquid instruments. Prices of GNMA Certificates are readily available
from securities dealers and depend on, among other things, the level of market
rates, the Certificate's coupon rate and the prepayment experience of the pool
of mortgages backing each Certificate. If agency securities are purchased at a
premium above principal, the premium is not guaranteed by the issuing agency
and a decline in the market value to par may result in a loss of the premium,
which may be particularly likely in the event of a prepayment. When and if
available, U.S. Government obligations may be purchased at a discount from face
value.

FHLMC Certificates and FNMA Certificates--are mortgage-backed bonds issued
by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage
Association, respectively, and are guaranteed by the U.S. Government.

GSA Participation Certificates--are participation certificates issued by
the General Services Administration of the U.S. Government and are guaranteed
by the U.S. Government.

A-1
<PAGE>

New Communities Debentures--are debentures issued in accordance with the
provisions of Title IV of the Housing and Urban Development Act of 1968, as
supplemented and extended by Title VII of the Housing and Urban Development Act
of 1970, the payment of which is guaranteed by the U.S. Government.

Public Housing Bonds--are bonds issued by public housing and urban renewal
agencies in connection with programs administered by the Department of Housing
and Urban Development of the U.S. Government, the payment of which is secured
by the U.S. Government.

Penn Central Transportation Certificates--are certificates issued by Penn
Central Transportation and guaranteed by the U.S. Government.

SBA Debentures--are debentures fully guaranteed as to principal and
interest by the Small Business Administration of the U.S. Government.

Washington Metropolitan Area Transit Authority Bonds--are bonds issued by
the Washington Metropolitan Area Transit Authority. Some of the bonds issued
prior to 1993 are guaranteed by the U.S. Government.

FHLMC Bonds--are bonds issued and guaranteed by the Federal Home Loan
Mortgage Corporation. These bonds are not guaranteed by the U.S. Government.

Federal Home Loan Bank Notes and Bonds--are notes and bonds issued by the
Federal Home Loan Bank System and are not guaranteed by the U.S. Government.

Student Loan Marketing Association ("Sallie Mae") Notes and bonds--are
notes and bonds issued by the Student Loan Marketing Association and are not
guaranteed by the U.S. Government.

D.C. Armory Board Bonds--are bonds issued by the District of Columbia
Armory Board and are guaranteed by the U.S. Government.

Export-Import Bank Certificates--are certificates of beneficial interest
and participation certificates issued and guaranteed by the Export-Import Bank
of the U.S. and are guaranteed by the U.S. Government.

In the case of securities not backed by the "full faith and credit" of the
U.S. Government, the investor must look principally to the agency issuing or
guaranteeing the obligation for ultimate repayment, and may not be able to
assert a claim against the U.S. Government itself in the event the agency or
instrumentality does not meet its commitments.

Investments may also be made in obligations of U.S. Government agencies or
instrumentalities other than those listed above.

A-2
<PAGE>

APPENDIX B

DESCRIPTION OF RATINGS

A description of the rating policies of Moody's, S&P and Fitch with respect to
bonds and commercial paper appears below.

Moody's Investors Service's Corporate Bond Ratings

Aaa--Bonds which are rated "Aaa" are judged to be of the best quality and carry
the smallest degree of investment risk. Interest payments are protected by a
large or by an exceptionally stable margin, and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.

Aa--Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

A--Bonds which are rated "A" possess many favorable investment qualities and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa--Bonds which are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba--Bonds which are rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated "B" generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance and
other terms of the contract over any long period of time may be small.

Caa--Bonds which are rated "Caa" are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca--Bonds which are rated "Ca" represent obligations which are speculative
in high degree. Such issues are often in default or have other marked
shortcomings.

C--Bonds which are rated "C" are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers "1", "2", and "3" to certain of its rating
classifications. The modifier "1" indicates that the security ranks in the
higher end of its generic rating category; the modifier "2" indicates a
mid-range ranking; and the modifier "3" indicates that the issue ranks in the
lower end of its generic rating category.

B-1
<PAGE>

Standard & Poor's Ratings Group Corporate Bond Ratings

AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to repay principal and
pay interest.

AA--Bonds rated "AA" also qualify as high quality debt obligations. Capacity to
pay principal and interest is very strong, and differs from "AAA" issues only
in small degree.

A--Bonds rated "A" have a strong capacity to repay principal and pay interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated categories.

BBB--Bonds rated "BBB" are regarded as having an adequate capacity to repay
principal and pay interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to repay principal and pay interest for
bonds in this category than for higher rated categories.

BB-B-CCC-CC-C--Bonds rated "BB", "B", "CCC", "CC" and "C" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the
obligations. BB indicates the lowest degree of speculation and C the highest
degree of speculation. While such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions.

CI--Bonds rated "CI" are income bonds on which no interest is being paid.

D--Bonds rated "D" are in default. The "D" category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has not expired unless S&P believes that such payments
will be made during such grace period. The "D" rating is also used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

The ratings set forth above may be modified by the addition of a plus or minus
to show relative standing within the major rating categories.

Moody's Investors Service's Commercial Paper Ratings

Prime-1--Issuers (or related supporting institutions) rated "Prime-1" have a
superior ability for repayment of senior short-term debt obligations. "Prime-1"
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries, high
rates of return on funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well-established access to a range of financial markets and assured sources of
alternate liquidity.

Prime-2--Issuers (or related supporting institutions) rated "Prime-2" have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.

Prime-3--Issuers (or related supporting institutions) rated "Prime-3" have an
acceptable ability for repayment of senior short-term obligations. The effect
of industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.

B-2
<PAGE>

Not Prime--Issuers rated "Not Prime" do not fall within any of the Prime rating
categories.

Standard & Poor's Ratings Group Commercial Paper Ratings

A S&P commercial paper rating is current assessment of the likelihood of timely
payment of debt having an original maturity of no more than 365 days. Ratings
are graded in several categories, ranging from "A-1" for the highest quality
obligations to "D" for the lowest. The four categories are as follows:

A-1--This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation.

A-2--Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

A-3--Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.

B--Issues rated "B" are regarded as having only speculative capacity for timely
payment.

C--This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.

D--Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.

Fitch Bond Ratings

AAA--Bonds rated AAA by Fitch are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.

AA--Bonds rated AA by Fitch are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issues is generally
rated F-1+ by Fitch.

A--Bonds rated A by Fitch are considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB--Bonds rated BBB by Fitch are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse consequences on
these bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than for
bonds with higher ratings.

BB--Bonds rated BB by Fitch are considered speculative. The obligor's ability
to pay interest or dividends and repay principal may be affected over time by
adverse economic changes. However, business and financial alternatives can be
identified, which could assist the obligor in satisfying its debt service
requirements.

B-3
<PAGE>

B--Bonds rated B by Fitch are considered highly speculative. While securities
in this class are currently meeting debt service requirements, the probability
of continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC--Bonds rated CCC by Fitch have certain identifiable characteristics that,
if not remedied, may lead to default. The ability to meet obligations requires
an advantageous business and economic environment.

CC--Bonds rated CC by Fitch are minimally protected. Default in payment of
interest and/or principal seems probable over time.

C--Bonds rated C by Fitch are in imminent default in payment of interest or
principal.

DDD, DD, and D--Bonds rated DDD, DD or D by Fitch are in default on interest
and/or principal payments. Such securities are extremely speculative and should
be valued on the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. DDD represents the highest potential for
recovery on these securities, and D represents the lowest potential for
recovery.

Plus and minus signs are used by Fitch to indicate the relative position of a
credit within a rating category. Plus and minus signs, however, are not used in
the AAA, DDD, DD or D categories.

Fitch Short-Term Ratings

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.

The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

Fitch's short-term ratings are as follows:

F-1+--Issues assigned this rating are regarded as having the strongest degree
of assurance for timely payment.

F-1--Issues assigned this rating reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+.

F-2--Issues assigned this rating have a satisfactory degree of assurance for
timely payment but the margin of safety is not as great as for issues assigned
F-1+ and F-1 ratings.

F-3--Issues assigned this rating have characteristics suggesting that the
degree of assurance for timely payment is adequate, although near-term adverse
changes could cause these securities to be rated below investment grade.

F-5--Issues assigned this rating have characteristics suggesting a minimal
degree of assurance for timely payment and are vulnerable to near-term adverse
changes in financial and economic conditions.

D--Issues assigned this rating are in actual or imminent payment
default.

LOC--The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.

B-4
<PAGE>

Like higher rated bonds, bonds rated in the Baa or BBB categories are
considered to have adequate capacity to pay principal and interest. However,
such bonds may have speculative characteristics, and changes in economic
conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case with higher
grade bonds.

After purchase by the Fund, a security may cease to be rated or its rating may
be reduced below the minimum required for purchase by such Fund. Neither event
will require a sale of such security by the Fund. However, the Fund's
investment manager will consider such event in its determination of whether the
Fund should continue to hold the security. To the extent the ratings given by
Moody's, S&P or Fitch may change as a result of changes in such organizations
or their rating systems, the Fund will attempt to use comparable ratings as
standards for investments in accordance with the investment policies contained
in the Prospectus and in this Statement of Additional Information.

B-5

<PAGE>
PART C

MUTUAL FUND GROUP
PART C. OTHER INFORMATION

ITEM 24. Financial Statements and Exhibits

(a) Financial statements

In Part A: Financial Highlights

In Part B: Financial Statements and the Reports
thereon for the Funds filed herein are
incorporated by reference into Part B
as part of the 1996 Annual Reports to
Shareholders for such Funds as filed with the
Securities and Exchange Commission by Mutual
Fund Group on Form N-30D on January 3, 1997,
accession number 0000950123-97-000025, which
are incorporated into Part B by reference.

In Part C: None.

(b) Exhibits:

Exhibit
Number
- -------
1(a) Declaration of Trust, as amended. (1)
1(b) Certificate of Amendment to Declaration of Trust dated December 14,
1995.(12)
1(c) Certificate of Amendment to Declaration of Trust dated October 19,
1995.(12)
1(d) Certificate of Amendment to Declaration of Trust dated July 25,
1993.(12)
2 By-laws, as amended. (1)
3 None.
4 Specimen share certificate. (1)
5(e) Form of Proposed Investment Advisory Agreement.(12)
5(f) Form of Proposed Sub-Advisory Agreement between The Chase Manhattan
Bank and Chase Asset Management, Inc.(12)
5(g) Form of Administration Agreement.(12)
5(h) Form of Proposed Investment Subadvisory Agreement between The Chase
Manhattan Bank and Van Deventer & Hoch(12).
6(b) Distribution and Sub-Administration Agreement dated August 21,
1995.(12)
7(a) Retirement Plan for Eligible Trustees.(12)
7(b) Deferred Compensation Plan for Eligible Trustees.(12)
8(a) Custodian Agreement. (1)
8(b) Sub-Custodian Agreement. (1)
9(a) Transfer Agency Agreement. (1)
9(b) Administrative Services Plan. (1)
9(c) Shareholder Servicing Agreement of Vista Mutual Funds. (1)
9(d) Form of Shareholder Servicing Agreement of Vista Premier Funds.(1)
9(e) Form of Shareholder Servicing Agreement. (12)

C-1

<PAGE>

9(f) Agreement and Plan of Reorganization and Liquidation.(12)
10 Opinion re: Legality of Securities being Registered.(1)
11 Consent of Price Waterhouse LLP.(13)

12 None.
13 Not Applicable

14 None.
15(a) Rule 12b-1 Distribution Plan of Vista Mutual Funds including
Selected Dealer Agreement and Shareholder Service Agreement. (1)
15(b) Rule 12b-1 Distribution Plan of Vista Premier Funds including
Selected Dealer Agreement and Shareholder Service Agreement. (1)
15(c) Rule 12b-1 Distribution Plan for each of Vista Bond Fund, Vista
Short-Term Bond Fund, Vista Equity Fund and Vista U.S. Government
Money Market Fund including Selected Dealer Agreement and
Shareholder Service Agreement.(3)
15(d) Form of Rule 12b-1 Distribution Plan for Class B shares of the Vista
Prime Money Market Fund.(8)
15(e) Form of Rule 12b-1 Distribution Plan for Vista Asian Oceanic Shares
Fund, Vista Japan Pacific Shares Fund, Vista U.S. Government
Securities Fund and Vista European Shares Fund.(8)
15(f) Form of Rule 12b-1 Distribution Plan for Vista Small Cap Equity
Fund.(9)
15(g) Proposed Rule 12b-1 Distribution Plan - Class A Shares - Vista
American Value Fund (including forms of Selected Dealer Agreement
and Shareholder Servicing Agreement).(12)
15(h) Rule 12b-1 Distribution Plan - Class B Shares (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(12)
16 Schedule for Computation for Each Performance Quotation.(11)
17 Financial Data Schedule.(13)
18 Form of Rule 18f-3 Multi-Class Plan.(12)

- --------------------
(1) Filed as an exhibit to Amendment No. 6 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) as filed with the
Securities and Exchange Commission on March 23, 1990.
(2) Filed as an exhibit to Amendment No. 11 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) as filed with the
Securities and Exchange Commission on June 8, 1992 to register shares of
the Vista Balanced Fund and IEEE Spectrum Fund series of the Trust.
(3) Filed as an exhibit to Amendment No. 15 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) as filed with the
Securities and Exchange Commission on October 30, 1992.
(4) Filed as an exhibit to Amendment No. 16 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on December 28, 1992.
(5) Filed as an exhibit to Amendment No. 19 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on June 30, 1993.
(6) Filed as an exhibit to Amendment No. 23 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on December 30, 1993.
(7) Filed as an exhibit to Amendment No. 24 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on February 10, 1994.
(8) Filed as an Exhibit to Amendment No. 26 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on June 30, 1994.
(9) Filed as an Exhibit to Amendment No. 27 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on October 3, 1994.
(10) Filed as an Exhibit to Amendment No. 30 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on July 19, 1995.
(11) Filed as an Exhibit to Amendment No. 31 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on November 13, 1995.
(12) Filed as an Exhibit to Amendment No. 32 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on December 28, 1995.
(13) Filed as an Exhibit to Amendment No. 42 to the Registration Statement on
Form N-1A of the Registrant (File No. 33-14196) on February 28, 1997.

ITEM 25. Persons Controlled by or Under Common
Control with Registrant

Not applicable

C-2

<PAGE>

ITEM 26. Number of Holders of Securities
Number of Record Holders
Mutual Fund Group as of August 31, 1997
- ----------------- -----------------------------
A B Institutional
Shares Shares Shares
------ ------ -------------
VISTA U.S. Treasury Income Fund 2,307 680 n/a
VISTA U.S. Government Securities Fund 76 n/a 84
VISTA Balanced Fund 2,011 951 n/a
VISTA Short-Term Bond Fund 155 n/a 60
VISTA Bond Fund 121 87 57
VISTA Large Cap Equity Fund 567 286 184
VISTA American Value Fund 192 n/a n/a
VISTA Equity Income Fund 1,654 843 n/a
VISTA Small Cap Equity Fund 8,824 7,416 11
VISTA Growth and Income Fund 69,365 25,549 8
VISTA Capital Growth Fund 35,021 24,784 12
VISTA International Equity Fund 2,126 1,194 n/a
VISTA Southeast Asian Fund 429 243 n/a
VISTA European Fund 256 217 n/a
VISTA Japan Fund 112 98 n/a
VISTA Select Growth and Income Fund n/a n/a none
VISTA Latin American Equity Fund none none n/a

ITEM 27. Indemnification

Reference is hereby made to Article V of the Registrant's Declaration
of Trust.

The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.

Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such Trustees so directs, by
independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.

Insofar as the conditional advancing of indemnification monies for
actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable

C-3

<PAGE>

insurance or an equivalent form of security which assures that any repayments
may be obtained by the Registrant without delay or litigation, which bond,
insurance or other form of security must be provided by the recipient of the
advance, or (b) a majority of a quorum of the Registrant's disinterested,
non-party Trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of it counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

ITEM 28(a). Business and Other Connections of Investment Adviser

The Chase Manhattan Bank (the "Adviser") is a commercial bank
providing a wide range of banking and investment services.

To the knowledge of the Registrant, none of the Directors or
executive officers of the Adviser, except those described below, are or have
been, at any time during the past two years, engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
Directors and executive officers of the Adviser also hold or have held various
positions with bank and non-bank affiliates of the Adviser, including its
parent, The Chase Manhattan Corporation. Each Director listed below is also a
Director of The Chase Manhattan Corporation.

<TABLE>
<CAPTION>
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ------------- -----------------------------
<S> <C> <C>

Thomas G. Labreque President and Chief Operating Officer Chairman, Chief Executive Officer
and Director and a Director of The Chase
Manhattan Corporation and a Director
of AMAX, Inc.

M. Anthony Burns Director Chairman of the Board, President
and Chief Executive Officer of
Ryder System, Inc.

</TABLE>

C-4

<PAGE>

H. Laurance Fuller Director Chairman, President, Chief
Executive Officer and Director of
Amoco Corporation and Director of
Abbott Laboratories

Paul W. MacAvoy Director Dean of Yale School of
Organization and Management

David T. McLaughlin Director President and Chief Executive
Officer of The Aspen Institute,
Chairman of Standard Fuse
Corporation and a Director of each
of ARCO Chemical Company and
Westinghouse Electric Corporation

Edmund T. Pratt, Jr. Director Chairman Emeritus, formerly
Chairman and Chief Executive
Officer, of Pfizer Inc. and a
Director of each of Pfizer, Inc.,
Celgene Corp., General Motors
Corporation and International Paper
Company

Henry B. Schacht Director Chairman and Chief Executive
Officer of Cummins Engine
Company, Inc. and a Director of
each of American Telephone and
Telegraph Company and CBS Inc.

Donald H. Trautlein Director Retired Chairman and
Chief Executive Officer
of Bethlehem Steel
Corporation

</TABLE>

C-5

<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
James L. Ferguson Director Retired Chairman and Chief
Executive Officer of General Foods
Corporation

William H. Gray III Director President and Chief Executive
Officer of the United Negro College
Fund, Inc.

David T. Kearns Director Retired Chairman and Chief
Executive Officer of the Xerox
Corporation

Delano E. Lewis Director President and Chief Executive
Officer of National Public Radio

John H. McArthur Director Dean of the Harvard Graduate
School of Business Administration

Frank A. Bennack, Jr. Director President and Chief Executive Officer
The Hearst Corporation

Michael C. Bergerac Director Chairman of the Board and
Chief Executive Officer Bergerac & Co., Inc.

Susan V. Berresford Director President, The Ford Foundation

Randolph W. Bromery Director President, Springfield College; President,
Geoscience Engineering Corporation

Charles W. Duncan, Jr. Director Private Investor

Melvin R. Goodes Director Chairman of the Board and Chief Executive
Officer, The Warner-Lambert Company

George V. Grune Director Retired Chairman and Chief Executive
Officer, The Reader's Digest Association,
Inc.; Chairman, The DeWitt Wallace-
Reader's Digest Fund; The Lila-Wallace
Reader's Digest Fund

William B. Harrison, Jr. Vice Chairman of the Board

Harold S. Hook Director Chairman and Chief Executive Officer,
General Corporation

Helen L. Kaplan Director Of Counsel, Skadden, Arps, Slate, Meagher
& Flom

E. Michael Kruse Vice Chairman of the Board

J. Bruce Llewellyn Director Chairman of the Board, The Philadelphia
Coca-Cola Bottling Company, The Coca-
Cola Bottling Company of Wilmington,
Inc., Queen City Broadcasting, Inc.

John P. Mascotte Director Chairman, The Missouri Corporation of
Johnson & Higgins

John F. McGillicuddy Director Retired Chairman of the Board and
Chief Executive Officer

Edward D. Miller Senior Vice Chairman
of the Board

Walter V. Shipley Chairman of the Board and
Chief Executive Officer

Andrew C. Sigler Director Chairman of the Board and Chief
Executive Officer, Champion International
Corporation

Michael I. Sovern Director President, Emeritus and Chancellor Kent,
Professor of Law, Columbia University

John R. Stafford Director Chairman, President and Chief Executive
Officer, American Home Products
Corporation

W. Bruce Thomas Director Private Investor

Marina v. N. Whitman Director Professor of Business Administration and
Public Policy, University of Michigan

Richard D. Wood Director Retired Chairman of the Board, Eli Lilly
and Company
</TABLE>

<PAGE>
Item 28(b)

Chase Asset Management ("CAM") is an Investment Advisor providing investment
services to institutional clients.

To the knowledge of the Registrant, none of the Directors or executive
officers of the CAM, except those described below, are or have been, at any time
during the past two years, engaged in any other business, profession, vocation
or employment of a substantial nature, except that certain Directors and
executive officers of the CAM also hold or have held various positions with bank
and non-bank affiliates of the Advisor, including its parent, The Chase
Manhattan Corporation.

Principal Occupation or Other
Position with Employment of a Substantial
Name the Sub-Advisor Nature During Past Two Years
- ---- --------------- ----------------------------

James Zeigon Chairman and Director Director of Chase
Asset Management
(London) Limited

Steven Prostano Executive Vice President Chief Operating Officer
and Chief Operating Officer and Director of Chase
Asset Management
(London) Limited

Mark Richardson President and Chief Chief Investment Officer
Investment Officer and Director of Chase
Asset Management
(London) Limited

Item 28(c)

Chase Asset Management (London) Limited ("CAM London") is an Investment
Advisor providing investment services to institutional clients.

To the knowledge of the Registrant, none of the Directors or executive
officers of CAM London, except those described below, are or have been, at any
time during the past two years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain Directors
and executive officers of CAM London also hold or have held various positions
with bank and non-bank affiliates of the Advisor, including its parent, The
Chase Manhattan Corporation.

Principal Occupation or Other
Position with Employment of a Substantial
Name the Sub-Advisor Nature During Past Two Years
- ---- --------------- ----------------------------

Michael Browne Director Fund Manager, The Chase Manhattan
Bank, N.A.; Fund Manager, BZW
Investment Management

David Gordon Ross Director Head of Global Fixed Income
Management, Chase Asset Management,
Inc.; Vice President, The Chase
Manhattan Bank, N.A.

Brian Harte Director Investment Manager, The Chase
Manhattan Bank, N.A.

Cornelia L. Kiley Director

James Zeigon Director Chairman and Director of Chase
Asset Management, Inc.

Mark Richardson Chief Investment Director, President and Chief
Officer and Director Operating Officer of Chase Asset
Management, Inc.

Steve Prostano Chief Operating Director, Executive Vice President
Officer and and Chief Operating Officer of Chase
Director Asset Management, Inc.

<PAGE>

ITEM 29. Principal Underwriters

(a) Vista Fund Distributors, Inc., a wholly-owned subsidiary of
The BISYS Group, Inc. is the underwriter for Mutual Fund Group, Mutual Fund
Trust and Mutual Fund Select Trust.

(b) The following are the Directors and officers of Vista Fund
Distributors, Inc. The principal business address of each of these persons, is
listed below.

<TABLE>
<CAPTION>
Position and Offices Position and Offices
Name and Address with Distributor with the Registrant
- ---------------- -------------------- --------------------
<S> <C> <C>

Lynn J. Mangum Chairman None
150 Clove Street
Little Falls, NJ 07424

Robert J. McMullan Director and Exec. Vice President None
150 Clove Street
Little Falls, NJ 07424

Lee W. Schultheis President None
101 Park Avenue, 16th Floor
New York, NY 10178

George O. Martinez Senior Vice President None
3435 Stelzer Road
Columbus, OH 43219

Irimga McKay Vice President None
1230 Columbia Street
5th Floor, Suite 500
San Diego, CA 92101

Michael Burns Vice President/Compliance None
3435 Stelzer Road
Columbus, OH 43219

William Blundin Vice President None
125 West 55th Avenue
11th Floor
New York, NY 10019

Dennis Sheehan Vice President None
150 Clove Street
Little Falls, NJ 07424

Annamaria Porcaro Assistant Secretary None
150 Clove Street
Little Falls, NJ 97424

Robert Tuch Assistant Secretary None
3435 Stelzer Road
Columbus, OH 43219

Stephen Mintos Executive Vice President/COO None
3435 Stelzer Road
Columbus, OH 43219

Dale Smith Vice President/CFO None
3435 Stelzer Road
Columbus, OH 43219

William J. Tomko Vice President None
3435 Stelzer Road
Columbus, OH 43219
</TABLE>

C-6

<PAGE>
ITEM 30. Location of Accounts and Records

The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:

Name Address
---- -------
Vista Fund Distributors, Inc. 101 Park Avenue,
New York, NY 10178

DST Systems, Inc. 210 W. 10th Street,
Kansas City, MO 64105

The Chase Manhattan Bank 270 Park Avenue,
New York, NY 10017

Chase Asset Mangement, Inc. 1211 Avenue of the
Americas,
New York, NY 10036

Chase Asset Management, Ltd. (London) Colvile House
32 Curzon Street
London, England W1Y8AL

The Chase Manhattan Bank One Chase Square,
Rochester, NY 14363

ITEM 31. Management Services

Not applicable

ITEM 32. Undertakings

(1) Registrant undertakes that its trustees shall promptly
call a meeting of shareholders of the Trust for the purpose of voting upon the
question of removal of any such trustee or trustees when requested in writing so
to do by the record holders of not less than 10 per centum of the outstanding
shares of the Trust. In addition, the Registrant shall, in certain
circumstances, give such shareholders assistance in communicating with other
shareholders of a fund as required by Section 16(c) of the Investment Company
Act of 1940.

(2) The Registrant, on behalf of the Funds, undertakes,
provided the information required by Item 5A is contained in the latest annual
report to shareholders, to furnish to each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the Registrant's
latest annual report to shareholders.

(3) Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not be certified,
within four to six months from the date of commencement of investment operations
for Vista Small Cap Opportunities Fund.

(4) Registrant undertakes to file a post-effective amendment,
using reasonably current financial statements which need not be certified,
within four to six months from the date of commencement of investment operations
for Vista Latin American Equity Fund.

C-7

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York and the
State of New York on the 15th day of September, 1997.

MUTUAL FUND GROUP

By /s/ H. Richard Vartabedian
--------------------------
H. Richard Vartabedian
President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

* Chairman and Trustee September 15, 1997
- -------------------------------
Fergus Reid, III

* Trustee September 15, 1997
- -------------------------------
William J. Armstrong

* Trustee September 15, 1997
- -------------------------------
John R.H. Blum

* Trustee September 15, 1997
- -------------------------------
Joseph J. Harkins

* Trustee September 15, 1997
- -------------------------------
Richard E. Ten Haken

* Trustee September 15, 1997
- -------------------------------
Stuart W. Cragin, Jr.

* Trustee September 15, 1997
- -------------------------------
Irv Thode

/s/ H. Richard Vartabedian President September 15, 1997
_______________________________ and Trustee
H. Richard Vartabedian

*
- ------------------------------- Trustee September 15, 1997
W. Perry Neff

*
- ------------------------------- Trustee September 15, 1997
Roland R. Eppley, Jr.

*
- ------------------------------- Trustee September 15, 1997
W.D. MacCallan

C-8

<PAGE>

_______________________________ Trustee September 15, 1997
Leonard M. Spalding, Jr.

_______________________________ Trustee September 15, 1997
Sarah E. Jones

/s/ Martin R. Dean Treasurer and September 15, 1997
_______________________________ Principal Financial
Martin R. Dean Officer

/s/ H. Richard Vartabedian Attorney in September 15, 1997
_______________________________ Fact
H. Richard Vartabedian