Chase Vista
Select
Growth and Income Fund
Annual Report
October 31, 1999
<PAGE>
Chase Vista Select Growth and Income Fund
Chairman's Letter
November 15, 1999
Dear Shareholder:
We are pleased to present this annual report for the Chase Vista Select Growth
and Income Fund for year ended October 31, 1999.
Buoyant Economy Boosts Equities
Economic conditions that appeared close to perfect led the equity market to
fresh highs. Extremely robust economic growth combined with little evidence of
inflation to produce an ideal environment for both corporate profits and equity
valuations. Equities rose quickly in the first half of the period, although some
doubts emerged in early summer.
The period began with the Federal Reserve Board's decision to cut rates in
November 1998, its third rate cut in as many months. Rates had been cut to
counter the threat that recession and deflation would spread from Asia and
emerging markets. Further, this was judged necessary after the near failure of a
large hedge fund.
As the months progressed, it became clear that the economy remained strong, and
that the three rate cuts - amounting to 75 basis points - had eased financial
liquidity. Equities rallied strongly, and the stock market recorded not only a
double-digit return for the calendar year, but its best consecutive four-year
period in stock market history.
Inflation Concerns Surface In May
While the market continued to post new highs through the first months of 1999,
inflation fears surfaced in early May. Spooked by data suggesting strong
economic growth and tight labor markets might finally be leading to higher
inflation, benchmark 30-year Treasury yields rose to levels not seen since
1997.The Federal Reserve Board reversed much of its 1998 easing - lifting rates
by 25 basis points in both June and August.
Broadly speaking, equities drifted lower in the late summer and early fall. Only
technology and blue chip growth stocks continued to rise. By the end of October,
however, inflation fears had subsided somewhat and the broad-based market
indices looked set for another double-digit year.
Sincerely yours,
Fergus Reid
Chairman
<PAGE>
Chase Vista Select Growth and Income Fund
As of October 29, 1999
(unaudited)
How the Fund Performed
Chase Vista Select Growth & Income Fund, which seeks capital appreciation and
current income by investing primarily in common stocks, provided a total return
of 13.57% for the year ended October 31, 1999. This compares to 11.66% for the
Lipper Multi-Cap Value Average and 19.01% for the S&P/Barra 500 Value Index, the
Fund's benchmark.
How the Fund Was Managed
Buoyed by the rally in equities, the Fund generated a positive return. Market
conditions were most favorable in the first half of the period, when the rally
that followed the Federal Reserve Board's fall 1998 rate cuts boosted many
portfolio holdings. Sectors such as technology, media, consumer cyclicals and
industrial cyclicals boosted the Fund in this period.
During the summer, the Fund's holdings did not perform so well. The market
environment was not so positive, as the Fed reversed much of its monetary easing
of the previous fall. In addition, long bond rates rose. Much of the market
remained mired in a trading range, with worries over valuations and inflation to
the fore.
In this nervous market, companies that disappointed were swiftly punished with
lower stock prices. A number of portfolio constituents fell back sharply in
response to disappointing earnings news. Stocks like Bank One, Health South,
Office Depot and Waste Management fell sharply.
In September and October, the portfolio was repositioned to being it more into
line with its benchmark. A large number of names were added, including DuPont,
Monsanto, International Paper, GE, Exxon, American Express, American
International Group (AIG), Citigroup, Federal National Mortgage Association
(Fannie Mae), Wells Fargo and Morgan Stanley Dean Witter. A number of common
stocks that were believed less attractive were sold, as were some convertible
stocks and REITs.
Where the Fund May Be Headed
While the majority of the repositioning has been accomplished, the manager will
continue to work on bringing the Fund into line with the sector weights of its
benchmark. The manager will seek to outperform through picking companies with
valuations based on earnings over the next two years that are relatively
attractive.
<PAGE>
Chase Vista Select Growth and Income Fund
Statement of Assets and Liabilities October 31,1999
(Amounts in Thousands, Except Per Share Amount)
<TABLE>
<S> <C>
ASSETS:
Investment in Growth and Income Portfolio, at value (Note 1) $ 553,531
Deferred organization costs 15
Other assets 5
-------------
Total Assets 553,551
-------------
LIABILITIES:
Payables:
Fund shares redeemed 795
Accrued liabilities: (Note 2)
Administration fees 42
Other 210
-------------
Total Liabilities 1,047
-------------
NET ASSETS:
Paid in capital 459,453
Accumulated undistributed net investment income 340
Accumulated net realized gain on investment transactions 4,293
Net unrealized appreciation of investments 88,418
-------------
Total Net Assets $ 552,504
=============
Shares of beneficial interest outstanding
($.001 par value; unlimited number of shares authorized) 11,303
Net Asset Value
(maximum offering price and redemption price per share) $48.88
=============
</TABLE>
See notes to financial statements.
<PAGE>
Chase Vista Select Growth and Income Fund
Statement of Operations for the year ended October 31,1999
(Amounts in Thousands)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Investment income from Portfolio $ 9,439
Foreign taxes withheld (41)
Expenses from Portfolio (2,633)
------------
Total investment income 6,765
------------
EXPENSES: (Note 2)
Administration fees 564
Accounting fees 16
Printing and postage 42
Professional fees 27
Registration expenses 4
Transfer agent fees 7
Trustees' fees and expenses 17
Other 34
------------
Total expenses 711
------------
Net investment income 6,054
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 29,794
Change in net unrealized appreciation of investments 34,750
------------
Net realized and unrealized gain on investments 64,544
------------
Net increase in net assets from operations $ 70,598
============
</TABLE>
See notes to financial statements.
<PAGE>
Chase Vista Select Growth and Income Fund
Statement of Changes in Net Assets for the periods indicated
(Amounts in Thousands)
<TABLE>
<CAPTION>
Year 01/06/98*
Ended Through
10/31/99 10/31/98
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 6,054 $ 4,711
Net realized gain (loss) on investments 29,794 (36,389)
Change in net unrealized appreciation of investments 34,750 53,668
----------- -----------
Increase in net assets from operations 70,598 21,990
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (6,154) (4,193)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 24,475 544,707
Dividends reinvested 6,154 4,193
Cost of shares redeemed (60,866) (48,400)
----------- -----------
Increase (decrease) from capital share transactions (30,237) 500,500
----------- -----------
Total increase in net assets 34,207 518,297
NET ASSETS:
Beginning of period 518,297 -
----------- -----------
End of period $ 552,504 $ 518,297
=========== ===========
SHARE TRANSACTIONS:
Issued 501 12,943
Reinvested 127 94
Redeemed (1,237) (1,125)
----------- -----------
Change in shares (609) 11,912
=========== ===========
* Commencement of operations
</TABLE>
See notes to financial statements.
<PAGE>
Chase Vista Mutual Funds
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies.
Mutual Fund Group (the "Trust") was organized on May 11, 1987 as a
Massachusetts Business Trust and is registered under the Investment
Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company. Chase Vista Select Growth and Income
Fund ("SGI") or, the "Fund," is a separate series of the Trust.
The Chase Vista Select Growth and Income Fund utilizes the Master
Feeder structure. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Growth and Income
Portfolio (the "Portfolio") which, like the Fund, is an open-end
management investment company having the same investment objectives as
the Fund. As of October 31, 1999, SGI owned 21.10% of the net assets of
the Growth and Income Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included
elsewhere in this report and should be read in conjunction with the
Financial Statements of the Fund.
The following is a summary of significant accounting policies followed
by the Fund:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
A. Valuation of investments - Investments are recorded in the
Portfolio at value. Securities of the Portfolio are recorded
at value as more fully discussed in the notes to those
financial statements.
B. Investment income and expenses - SGI records daily its pro
rata share of the Portfolio's income, expenses, and realized
and unrealized gains and losses. In addition, the Fund accrues
its own expenses daily as incurred. Realized gains/losses and
changes in unrealized appreciation/depreciation represent the
Fund's share of such elements from the Portfolio.
C. Organization costs - Organization and initial registration
costs incurred in connection with establishing the Fund have
been deferred and are being amortized on a straight line basis
over a sixty month period beginning at the commencement of
operations of the Fund.
D. Federal Income Taxes - The Fund is treated as a separate
taxable entity for Federal income tax purposes. The Fund's
policy is to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and
to distribute to shareholders all of its distributable net
investment income, and net realized gain on investments. In
addition, the Fund intends to make distributions as required
to avoid excise taxes. Accordingly, no provisions for Federal
income tax or excise tax are necessary.
E. Distributions to shareholders - Dividends and distributions
paid to shareholders are recorded on the ex-dividend date. The
amount of dividends and distributions from net investment
income and net realized capital gains is determined in
accordance with the Federal income tax regulations, which may
differ from generally accepted accounting principles. To the
extent these "book/tax" differences are permanent in nature
(i.e., that they result from other than timing of recognition
- "temporary differences") such amounts are reclassified
within the capital accounts based on their Federal tax-basis
treatment. The reclassifications for the Fund are as follows:
Paid in capital was decreased by $4,453,167, accumulated
undistributed net investment income decreased by $77,106, and
accumulated net realized loss was increased by $4,530,273, due
primarily to the allocations of realized gains and losses for
tax purposes.
<PAGE>
Chase Vista Mutual Funds
Notes to Financial Statements
- --------------------------------------------------------------------------------
Dividends and distributions which exceed net investment income
or net realized capital gains for financial reporting purposes
but not for tax purposes are reported as distributions in
excess of net investment income or net realized capital gains.
F. Expenses - Expenses directly attributable to the Fund are
charged to the Fund; other expenses are allocated
proportionately among each Fund within the Trust in relation
to the net assets of each Fund or on another reasonable basis.
2. Fees and Other Transactions with Affiliates.
A. Distribution and sub-administration fees - Pursuant to a
Distribution and Sub-Administration Agreement, Vista Fund
Distributors, Inc. (the "Distributor"), a wholly owned
subsidiary of The BISYS Group, Inc., acts as the Trust's
exclusive underwriter and promotes and arranges for the sale
of the Fund's shares. In addition, the Distributor provides
certain sub-administration services to the Trust, including
providing officers, clerical staff, and office space for an
annual fee of 0.05% of the average daily net assets of the
Fund.
B. Administration fee - Pursuant to an Administration Agreement,
Chase (the "Administrator") provides certain administration
services to the Trust. For these services and facilities, the
Administrator receives from SGI a fee computed at the annual
rate equal to 0.05% of the Fund's average daily net assets.
C. Other - Certain officers of the Trust are officers of Vista
Fund Distributors, Inc. or of its parent corporation, BISYS.
3. Concentration of Shareholders.
At October 31, 1999, all shares outstanding for the Fund are owned by
the participants in the 401(k) Savings Plan of the Chase Manhattan
Bank.
4. Retirement Plan.
The Fund adopted an unfunded noncontributory defined benefit pension
plan covering all independent Trustees of the Fund who will have served
for at least five years at the time of retirement. Benefits under this
plan are based on compensation and years of service. Pension expenses
of $9,610 for the year ended October 31, 1999 are included in Trustees
fees and expenses in the Statement of Operations, and accrued pension
liability of $17,999 is included in Other Accrued liabilities in the
Statement of Assets and Liabilities.
<PAGE>
Chase Vista Select Growth and Income Fund
Financial Highlights for the periods indicated
<TABLE>
<CAPTION>
Year 01/06/98*
Ended Through
Per Share Operating Performance 10/31/99 10/31/98
----------- -----------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 43.51 $ 42.00
----------- -----------
Income from Investment Operations:
Net investment income 0.53 0.38
Net gains or losses on investments (both realized and unrealized) 5.37 1.47
----------- -----------
Total from Investment Operations 5.90 1.85
----------- -----------
Less Distributions:
Dividends from net investment income 0.53 0.34
Distributions from capital gains - -
----------- -----------
Total Distributions 0.53 0.34
----------- -----------
Net Asset Value, End of Period $ 48.88 $ 43.51
=========== ===========
Total Return 13.57% 4.38%
Ratios/Supplemental Data:
Net Assets, End of Period (millions) $553 $518
Ratios to Average Net Assets: #
Expenses 0.59% 0.61%
Net investment income 1.08% 1.04%
</TABLE>
- -----------------
* Commencement of operations.
# Short periods have been annualized.
See notes to financial statements.
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of
Mutual Fund Select Group
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Chase Vista Select Growth & Income Fund (a separate portfolio of Mutual Fund
Select Group, hereafter referred to as the "Trust") at October 31, 1999, and the
results of its operations for the year then ended, the changes in its net assets
and financial highlights for the year then ended and for the period January 6,
1998 (commencement of operations) through October 31, 1998, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 13, 1999
<PAGE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO
Portfolio of Investments
- --------------------------------------------------------------------------------
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- 95.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Common Stock -- 91.8%
---------------------
Aerospace -- 3.2%
550 AlliedSignal, Inc. $31,315
600 Boeing Co. 27,638
450 General Dynamics Corp. 24,947
-------
83,900
Automotive -- 3.1%
830 Ford Motor Co. 45,546
522 General Motors Corp. 36,692
-------
82,238
Banking -- 7.3%
460 Bank of America Corp. 29,632
1,035 Bank of New York Co., Inc. 43,340
300 Bank One Corp. 11,254
806 Firstar Corp. 23,672
500 Fleet Boston Corp. 21,813
600 UnionBanCal Corp. 26,063
711 Wells Fargo Co. 34,034
-------
189,808
Broadcasting/Cable -- 2.0%
675 CBS Corp. * 32,949
450 Comcast Corp., Class A 18,956
-------
51,905
Chemicals -- 2.6%
115 Dow Chemical Co. 13,634
859 E.I. DuPont de Nemours Co. 55,371
-------
69,005
Computer Software -- 1.2%
550 Computer Associates International, Inc. 31,075
Computers/Computer Hardware -- 2.3%
250 EMC Corp. * 18,250
150 International Business Machines Corp. 14,756
250 Sun Microsystems, Inc.* 26,453
-------
59,459
Construction Materials -- 0.9%
750 Masco Corp. 22,875
Consumer Products -- 1.1%
300 Kimberly-Clark Corp. 18,937
428 Philip Morris Companies, Inc. 10,788
-------
29,725
Diversified -- 0.6%
400 Tyco International LTD (Bermuda) 15,975
Electronics/Electrical Equipment -- 3.7%
180 Motorola, Inc. 17,539
700 Teradyne, Inc.* 26,950
600 Texas Instruments, Inc. 53,850
-------
98,339
Entertainment/Leisure -- 1.2%
2,400 Park Place Entertainment Corp. * 31,500
</TABLE>
96
See notes to financial statements.
<PAGE>
GROWTH AND INCOME PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- Continued
- --------------------------------------------------------------------------------
<S> <C> <C>
Financial Services -- 9.4%
231 American Express Co. $35,511
575 Associates First Capital Corp., Class A 20,988
1,791 Citigroup, Inc. 96,953
474 Fannie Mae 33,543
500 Freddie Mac 27,031
500 MBNA Corp. 13,813
150 Morgan Stanley Dean Witter & Co. 16,547
-------
244,386
Food/Beverage Products -- 1.4%
250 Anheuser-Busch Companies, Inc. 17,953
280 Quaker Oats Co. 19,593
-------
37,546
Insurance -- 5.8%
401 Allstate Corp. 11,532
831 American International Group 85,499
410 Marsh & McLennan Companies 32,416
550 Reliastar Financial Corp. 23,616
-------
153,063
Machinery & Engineering Equipment -- 0.9%
472 Ingersoll-Rand Co. 24,662
Metals/Mining -- 0.5%
210 Alcoa, Inc. 12,733
Multi-Media -- 2.1%
1,013 The Walt Disney Co. 26,718
150 Time Warner, Inc. 10,453
400 Viacom, Inc., Class B * 17,900
-------
55,071
Oil & Gas -- 12.7%
200 Atlantic Richfield Co. 18,638
603 Chevron Corp. 55,049
781 Coastal Corp. 32,908
450 Diamond Offshore Drilling 14,288
800 EOG Resources, Inc. 16,650
676 Exxon Corp. 50,028
450 Halliburton Co. 16,959
295 Mobil Corp. 28,468
750 Occidental Petroleum Corp. 17,109
1,077 Royal Dutch Petroleum Co., N.Y. Registered Shares
(Netherlands) 64,577
600 Tosco Corp. 15,188
-------
329,862
Paper/Forest Products -- 2.5%
470 International Paper Co. 24,757
400 Weyerhaeuser Co. 23,875
400 Willamette Industries 16,625
-------
65,257
Pharmaceuticals -- 1.8%
441 Pharmacia & Upjohn, Inc. 23,808
475 Schering-Plough Corp. 23,513
-------
47,321
Printing & Publishing -- 0.8%
550 New York Times Co., Class A 22,138
</TABLE>
97
See notes to financial statements.
<PAGE>
GROWTH AND INCOME PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- Continued
- --------------------------------------------------------------------------------
<S> <C> <C>
Restaurants/Food Services -- 1.1%
703 McDonald's Corp. $ 29,003
Retailing -- 3.1%
360 Dayton-Hudson Corp. 23,265
542 Federated Department Stores * 23,137
1,700 Kroger Co. * 35,382
---------
81,784
Semi-Conductors -- 5.8%
750 Altera Corp. * 36,469
462 Fairchild Semiconductor International, Inc., Class A 11,655
325 Intel Corp. 25,167
300 Kla-Tencor Corp. * 23,756
1,200 Vitesse Semiconductor Corp. * 55,051
---------
152,098
Shipping/Transportation -- 0.5%
250 Union Pacific Corp. 13,938
Telecommunications -- 6.9%
398 AT&T Corp. 18,613
400 Bell Atlantic Corp. 25,975
600 BellSouth Corp. 27,000
400 GTE Corp. 30,000
671 MCI WorldCom, Inc. * 57,580
300 Sprint Corp. 22,294
---------
181,462
Telecommunications Equipment -- 2.7%
800 General Instrument Corp. * 43,050
441 Nortel Networks Corp. (Canada) 27,308
---------
70,358
Utilities -- 4.6%
400 DQE, Inc. 15,975
500 FPL Group, Inc. 25,156
575 PECO Energy Co. 21,958
767 Pinnacle West Capital Corp. 28,265
750 Unicom Corp. 28,734
---------
120,088
---------
Total Common Stock 2,406,574
(Cost $1,877,385)
--------------------------------------------------------------------
Preferred Stock -- 0.5%
--------------------------------------------------------------------
Multi-Media -- 0.5%
500 News Corp. LTD, ADR, (Australia) 13,781
(Cost $16,176)
--------------------------------------------------------------------
Convertible Preferred Stock -- 2.1%
--------------------------------------------------------------------
Biotechnology -- 1.3%
950 Monsanto Co., 6.50%, 11/30/01 36,566
Broadcasting/Cable -- 0.2%
80 UnitedGlobalCom, Inc., 7.00%, 12/31/49, #- 4,620
Financial Services -- 0.6%
250 Qwest Trends Trust, 5.75%, 11/17/03, # 14,906
--------------------------------------------------------------------
Total Convertible Preferred Stock 56,092
(Cost $51,430)
--------------------------------------------------------------------
</TABLE>
98
See notes to financial statements.
<PAGE>
GROWTH AND INCOME PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Principal
Amount Issuer Value
- ------------------------------------------------------------------------------------------
Long-Term Investments -- Continued
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Convertible Corporate Notes & Bonds -- 0.8%
-------------------------------------------
Computers/Computer Hardware -- 0.5%
$ 2,000 EMC Corp., 3.25%, 03/15/02, # $ 12,895
Telecommunications -- 0.3%
8,000 Bell Atlantic Financial Services, Inc., 4.25%, 09/15/05, # 8,660
-------------------------------------------------------------------------
Total Convertible Corporate Notes & Bonds 21,555
(Cost $10,000)
- ------------------------------------------------------------------------------------------
Total Long-Term Investments 2,498,002
(Cost $1,954,991)
- ------------------------------------------------------------------------------------------
Short-Term Investments -- 3.8%
- ------------------------------------------------------------------------------------------
Repurchase Agreement -- 3.8%
----------------------------
100,451 Greenwich Capital Markets, Inc., 5.28%, due 11/01/99,
(Dated 10/ 29/99, Proceeds $100,495, Secured by
FHLMC and FNMA, $178,633, 0.02% through 7.50%,
due 01/25/08 through 08/01/29; Market Value $102,460) 100,451
(Cost $100,451)
- ------------------------------------------------------------------------------------------
Total Investments -- 99.0% $2,598,453
(Cost $2,055,442)
- ------------------------------------------------------------------------------------------
</TABLE>
99
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
CAPITAL GROWTH PORTFOLIO
Portfolio of Investments
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Sharess Issuer Value
- ----------------------------------------------------------------------
Long-Term Investments -- 95.4%
- ----------------------------------------------------------------------
<S> <C> <C>
Common Stock -- 95.3%
---------------------
Advertising -- 0.3%
152 Harte-Hanks Communications, Inc. $3,012
------
Aerospace -- 2.5%
300 General Dynamics Corp. 16,632
125 Northrop Grumman Corp. 6,859
------
23,491
Apparel -- 1.2%
350 Jones Apparel Group, Inc. * 11,069
Appliances & Household Durables -- 0.4%
150 York International Corp. 3,534
Automotive -- 0.8%
460 Tower Automotive, Inc. * 7,504
Banking -- 4.8%
200 Cullen/Frost Bankers, Inc. 5,775
200 Southtrust Corp. 8,000
211 TCF Financial Corp. 6,214
427 Zions Bancorp. 25,166
------
45,155
Biotechnology -- 2.9%
200 Biogen, Inc. * 14,825
450 Chiron Corp. * 12,853
------
27,678
Broadcasting/Cable -- 8.3%
1,400 AT&T- Liberty Media Group, Class A * 55,562
400 Comcast Corp., Class A 16,850
150 USA Networks, Inc. * 6,759
------
79,171
Business Services -- 3.0%
400 ACNielsen Corp. * 8,800
150 Affiliated Computer Services, Inc., Class A * 5,700
369 ITT Educational Services, Inc. * 7,294
200 NCR Corp. * 6,625
------
28,419
Chemicals -- 2.6%
200 Cytec Industries, Inc.* 5,163
350 IMC Global, Inc. 4,463
400 Millennium Chemicals, Inc. 7,400
520 Wellman, Inc. 7,835
------
24,861
Computer Software -- 3.9%
448 American Management Systems * 11,591
200 Electronic Arts, Inc. * 16,162
300 Intuit, Inc. * 8,738
------
36,491
Computers/Computer Hardware -- 0.4%
100 Electronics For Imaging * 4,031
Consumer Products -- 1.2%
200 Premark International, Inc. 10,950
</TABLE>
100
See notes to financial statements.
<PAGE>
CAPITAL GROWTH PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- ------------------------------------------------------------------------
Long-Term Investments -- Continued
- ------------------------------------------------------------------------
<S> <C> <C>
Electronics/Electrical Equipment -- 4.6%
70 Johnson Controls, Inc. $4,253
225 Microchip Technology, Inc. * 14,990
200 PerkinElmer, Inc. 8,163
100 Sanmina Corp. * 9,006
275 Vishay Intertechnology, Inc. * 6,720
------
43,132
Entertainment/Leisure -- 5.3%
400 Harrah's Entertainment, Inc. * 11,575
700 Mandalay Resort Group * 13,038
1,394 Park Place Entertainment Corp. * 18,295
275 Station Casinos, Inc. * 6,652
------
49,560
Environmental Services -- 0.7%
513 Republic Services, Inc. * 6,284
Financial Services -- 1.6%
200 Lehman Brothers Holdings, Inc. 14,738
Health Care/Health Care Services -- 1.4%
119 Universal Health Services, Inc., Class B * 3,496
170 Wellpoint Health Networks, Inc. * 9,860
------
13,356
Insurance -- 5.7%
650 AXA Financial, Inc. 20,841
320 Nationwide Financial Services, Class A 12,120
99 Radian Group, Inc. 5,228
350 Reliastar Financial Corp. 15,028
------
53,217
Internet Services/Software -- 0.4%
100 At Home Corp., Class A * 3,738
Manufacturing -- 1.3%
316 Pentair, Inc. 11,890
Metals/Mining -- 2.8%
300 AK Steel Holding Corp. 5,194
670 Freeport-McMoran Copper & Gold, Inc., Class B * 11,180
162 Reynolds Metals Co. 9,791
------
26,165
Oil & Gas -- 7.0%
350 Anadarko Petroleum Corp. 10,784
500 Cooper Cameron Corp. * 19,343
600 Diamond Offshore Drilling 19,050
400 Tosco Corp. 10,125
497 Union Pacific Resources Group 7,208
------
66,510
Paper/Forest Products -- 2.1%
130 Boise Cascade Corp. 4,631
85 Temple-Inland, Inc. 4,941
250 Willamette Industries 10,391
------
19,963
Pharmaceuticals -- 1.9%
175 Biovail Corporation International (Canada) * 9,677
170 Forest Laboratories Inc., Class A * 7,799
------
17,476
</TABLE>
101
See notes to financial statements.
<PAGE>
CAPITAL GROWTH PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares Issuer Value
- ---------------------------------------------------------------------
Long-Term Investments -- Continued
- ---------------------------------------------------------------------
<S> <C> <C>
Real Estate Investment Trust -- 1.2%
250 Beacon Capital Partners, Inc. # $ 3,313
11 Beacon Capital Partners, Inc., Voting Trust #- 1,086
300 Public Storage, Inc. 7,237
-------
11,636
Restaurants/Food Services -- 1.5%
350 Brinker International, Inc. * 8,159
300 Darden Restaurants, Inc. 5,719
-------
13,878
Retailing -- 5.5%
450 Ethan Allen Interiors, Inc. 16,003
300 Kroger Co. * 6,244
250 Payless Shoesource, Inc. * 11,453
600 Ross Stores, Inc. 12,375
400 Toys R US, Inc. * 5,650
-------
51,725
Semi-Conductors -- 6.3%
378 Altera Corp. * 18,379
450 Atmel Corp. * 17,381
125 Kla-Tencor Corp. * 9,898
300 Vitesse Semiconductor Corp. * 13,763
-------
59,421
Shipping/Transportation -- 0.5%
153 C.H. Robinson Worldwide, Inc. 5,156
Telecommunications -- 1.3%
200 Nextlink Communications, Class A * 11,963
Telecommunications Equipment -- 5.0%
150 Comverse Technology, Inc. * 17,025
550 General Instrument Corp. * 29,597
-------
46,622
Textiles -- 0.3%
200 Shaw Industries, Inc. 3,088
Toys & Games -- 0.7%
325 Hasbro, Inc. 6,703
Utilities -- 5.9%
225 AGL Resources, Inc. 3,923
135 American Water Works, Inc. 3,952
475 CMS Energy Corp. 17,516
200 Energy East Corp. 5,025
308 Midamerican Energy Holdings Co. 10,370
400 Pinnacle West Capital Corp. 14,750
-------
55,536
----------------------------------------------------------
Total Common Stock 897,123
(Cost $716,311)
----------------------------------------------------------
</TABLE>
102
See notes to financial statements.
<PAGE>
CAPITAL GROWTH PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 1999
(Amounts in Thousands)
<TABLE>
<S> <C> <C>
Principal
Amount Issuer Value
- --------------------------------------------------------------------------------
Long-Term Investments -- Continued
- --------------------------------------------------------------------------------
U.S. Treasury Security -- 0.1%
------------------------------
$ 565 U.S. Treasury Note, 6.88%, due 05/15/06 $ 586
(Cost $569)
- --------------------------------------------------------------------------------
Total Long-Term Investments 897,709
(Cost $716,880)
- --------------------------------------------------------------------------------
Short-Term Investments -- 4.6%
- --------------------------------------------------------------------------------
Repurchase Agreement -- 4.6%
----------------------------
43,562 Greenwich Capital Markets, Inc., 5.28%, due 11/01/99,
(Dated 10/29/99, Proceeds $43,581, Secured by FHLMC
and GNMA, $46,717, 0.00% through 11.875%, due
06/15/13 through 04/15/29; Market Value $44,434) 43,562
(Cost $43,562)
- --------------------------------------------------------------------------------
Total Investments -- 100.0% $941,271
(Cost $760,442)
- --------------------------------------------------------------------------------
</TABLE>
INDEX:
* -- Non-income producing security.
# -- Security may only be sold to qualified institutional buyers.
- - -- Security fair valued by, or at the direction of, the Board of Trustees.
ADR -- American Depositary Receipt.
GNMA -- Government National Mortgage Association.
FHLMC -- Federal Home Loan Mortgage Corporation.
FNMA -- Federal National Mortgage Association.
103
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Assets and Liabilities October 31, 1999
- --------------------------------------------------------------------------------
(Amounts in Thousands)
<TABLE>
<S> <C> <C>
Growth and Capital
Income Growth
Portfolio Portfolio
- ---------------------------------------------------------------------------------
ASSETS:
Investment securities, at value (Note 1) ......... $2,598,453 $941,271
Cash ............................................. -- 1
Other assets ..................................... 12 4
Receivables:
Investment securities sold ...................... 58,825 --
Interest and dividends .......................... 2,560 602
- ---------------------------------------------------------------------------------
Total assets ................................... 2,659,850 941,878
- ---------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased ................. 34,850 --
Accrued liabilities: (Note 2)
Investment advisory fees ........................ 804 288
Administration fees ............................. 100 36
Custody fees .................................... 36 17
Other ........................................... 306 241
- ---------------------------------------------------------------------------------
Total Liabilities .............................. 36,096 582
- ---------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
BENEFICIAL INTERESTS .............................. $2,623,754 $941,296
- ---------------------------------------------------------------------------------
Cost of Investments .............................. $2,055,442 $760,442
- ---------------------------------------------------------------------------------
</TABLE>
104
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Operations For the year ended October 31, 1999
- --------------------------------------------------------------------------------
(Amounts in Thousands)
<TABLE>
<S> <C> <C>
Growth and Capital
Income Growth
Portfolio Portfolio
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend ....................................... $ 41,547 $ 6,651
Interest ....................................... 6,044 2,262
Foreign taxes withheld ......................... (209) (6)
- --------------------------------------------------------------------------------
Total investment income ...................... 47,382 8,907
- --------------------------------------------------------------------------------
EXPENSES: (Note 2)
Investment advisory fees ....................... 11,409 4,372
Administration fees ............................ 1,426 546
Custodian fees ................................. 171 87
Accounting fees ................................ 13 20
Professional fees .............................. 95 65
Trustees' fees and expenses .................... 57 22
Other .......................................... 129 41
- --------------------------------------------------------------------------------
Total expenses ............................... 13,300 5,153
- --------------------------------------------------------------------------------
Net investment income ....................... 34,082 3,754
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ............... 426,148 185,113
Change in net unrealized appreciation/
depreciation of investments .................... (86,911) (28,226)
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments 339,237 156,887
- --------------------------------------------------------------------------------
Net increase in net assets from operations ..... $373,319 $160,641
- --------------------------------------------------------------------------------
</TABLE>
105
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Changes in Net Assets For the year ended October 31,
- --------------------------------------------------------------------------------
(Amounts in Thousands)
<TABLE>
<CAPTION>
Growth and Income Capital Growth
Portfolio Portfolio
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income ......... $ 34,082 $ 34,737 $ 3,754 $ 7,562
Net realized gain on
investments ................... 426,148 203,734 185,113 108,711
Change in net unrealized
appreciation (depreciation)
of investments ................ (86,911) 20,045 (28,226) (115,006)
- ----------------------------------------------------------------------------------------------------
Increase in net assets
from operations ............ 373,319 258,516 160,641 1,267
- ----------------------------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS:
Contributions ................. 480,886 1,057,120 877,944 611,367
Withdrawals ................... (982,596) (1,226,801) (1,288,947) (736,449)
- ----------------------------------------------------------------------------------------------------
Net decrease from
transactions in
investors' beneficial
interests ................... (501,710) (169,681) (411,003) (125,082)
- ----------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets ............... (128,391) 88,835 (250,362) (123,815)
NET ASSETS:
Beginning of period ........... 2,752,145 2,663,310 1,191,658 1,315,473
- ----------------------------------------------------------------------------------------------------
End of period ................. $2,623,754 $ 2,752,145 $ 941,296 $1,191,658
- ----------------------------------------------------------------------------------------------------
</TABLE>
106
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Growth and Income Portfolio ("GIP") and Capital Growth Portfolio ("CGP"), (the
"Portfolios") are separately registered under the Investment Company Act of
1940, as amended, as non-diversified, open end management investment companies
organized as trusts under the laws of the State of New York. Each declaration
of trust permits the Trustees to issue beneficial interests in the respective
Portfolios.
The following is a summary of significant accounting policies followed by the
Portfolios:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
A. Valuation of investments -- Equity securities, purchased options and
futures are valued at the last sale price on the exchange on which they are
primarily traded, including the NASDAQ National Market. Securities for
which sale prices are not available and other over-the-counter securities
are valued at the last quoted bid price. Bonds and other fixed income
securities (other than short-term obligations), including listed issues,
are valued on the basis of valuations supplied by pricing services or by
matrix pricing systems of a major dealer in bonds. Short-term debt
securities with 61 days or more to maturity at time of purchase are valued,
through the 61st day prior to maturity, at market value based on quotations
obtained from market makers or other appropriate sources; thereafter, the
value on the 61st day is amortized on a straight-line basis over the
remaining number of days to maturity. Short-term investments with 60 days
or less to maturity at time of purchase are valued at amortized cost, which
approximates market. Portfolio securities for which there are no such
quotations or valuations are valued at fair value as determined in good
faith by or at the direction of the Trustees.
B. Repurchase agreements -- It is the Portfolios' policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Portfolios' custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the
Trusts may be delayed or limited.
C. Futures contracts -- When a Portfolio enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash or
liquid securities. Thereafter, the futures contract is marked to market and
the portfolio makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The Portfolios invested a portion of their liquid assets in long stock
index futures contracts to more fully participate in the market. Use of
107
<PAGE>
PORTFOLIOS
Notes to Financial Statements
long futures contracts subjects the Portfolios to risk of loss up to the
amount of the nominal value of the contract.
The Portfolios may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each futures
transaction, therefore, the Portfolio's credit risk is limited to failure of
the exchange or board of trade.
As of October 31, 1999, the Portfolios had no outstanding futures contracts.
D. Security transactions and investment income -- Investment transactions are
accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified cost
basis. Interest income is accrued as earned. Dividend income is recorded on the
ex-dividend date.
E. Federal income taxes -- The Portfolios intend to continue to qualify as
partnerships and therefore net investment income and net realized gains are
taxed to the partners. Accordingly, no tax provisions are recorded by the
Portfolios. The investors in the Portfolios must take into account their
proportionate share of the Portfolios' income, gains, losses, deductions,
credits and tax preference items in computing their federal income tax
liability, without regard to whether they have received any cash distributions
from the Portfolio. The Portfolios do not intend to distribute to investors
their net investment income or their net realized gains, if any. It is intended
that the Portfolios will be managed in such a way that investors in the
Portfolio will be able to satisfy the requirements of subchapter M of the
Internal Revenue Code to be taxed as regulated investment companies.
F. Expenses -- Expenses directly attributable to a Portfolio are charged to
that Portfolio; other expenses are allocated on another reasonable basis.
2. Fees and Other Transactions with Affiliates
A. Investment advisory fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Advisor") acts as the
Investment Advisor to the Portfolios. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Advisor, Chase
supervises the investments of the Portfolios and for such services is paid
a fee.
The fee is computed daily and paid monthly at an annual rate equal to 0.40%
of each Portfolio's average daily net assets.
Chase Asset Management, Inc. ("CAM"), a registered investment advisor, is
the sub-investment advisor to each of the Portfolios pursuant to a Sub-
Investment Advisory Agreement between CAM and Chase. CAM is a wholly owned
subsidiary of Chase and is entitled to receive a fee, payable by Chase from
its advisory fee, at an annual rate equal to 0.20% of each Portfolio's
average daily net assets.
B. Custodial fees -- Chase, as Custodian, provides safekeeping services for
the Portfolios' securities. Compensation for such services is presented in
the Statement of Operations as custodian fees.
108
<PAGE>
PORTFOLIOS
Notes to Financial Statements
C. Administration fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trusts. For these services and facilities, the Administrator receives from
each Portfolio a fee computed at the annual rate equal to 0.05% of the
respective Portfolio's average daily net assets.
3. Investment Transactions
For the year ended October 31, 1999, purchases and sales of investments
(excluding short-term investments) were as follows (in thousands):
<TABLE>
<S> <C> <C>
GIP CGP
- --------------------------------------------------------------------------------
Purchases (excluding U.S. Government).......... $3,440,771 $ 912,316
Sales (excluding U.S. Government) .............. 3,867,033 1,272,130
</TABLE>
The portfolio turnover rates of GIP and CGP for the year ended October 31,
1999, were 125% and 86% respectively.
4. Federal Income Tax Matters
For Federal income tax purposes, the cost and unrealized appreciation
(depreciation) in value of the investment securities at October 31, 1999, are
as follows (in thousands):
<TABLE>
<S> <C> <C>
GIP CGP
- --------------------------------------------------------------------------------
Aggregate cost ......................... $2,059,132 $ 760,442
---------- ---------
Gross unrealized appreciation.......... $ 568,690 $ 225,421
Gross unrealized depreciation.......... (29,369) (44,592)
---------- ---------
Net unrealized appreciation ............ $ 539,321 $ 180,829
========== =========
</TABLE>
5. Retirement Plan
The Portfolios have adopted an unfunded noncontributory defined benefit pension
plan covering all independent trustees of the Portfolios who will have served
as an independent trustee for at least five years at the time of retirement.
Benefits under this plan are based on compensation and years of service.
Pension expenses for the year ended October 31, 1999, included in Trustees Fees
and Expenses in the Statement of Operations, and accrued pension liability
included in other accrued liabilities, respectively, in the Statement of Assets
and Liabilities were as follows (in thousands):
<TABLE>
<S> <C> <C>
Accrued
Pension Pension
Expenses Liability
- --------------------------------------------------------------------------------
GIP..................................... $25 $102
CGP..................................... 11 48
</TABLE>
109
<PAGE>
PORTFOLIOS
Notes to Financial Statements
6. Bank Borrowings
The Portfolios may borrow money for temporary or emergency purposes. Any
borrowings representing more than 5% of a Portfolio's total assets must be
repaid before the Portfolio may make additional investments. The Portfolios
have entered into an agreement, enabling them to participate with other Chase
Vista Funds in an unsecured line of credit with a syndicate of banks, which
permits borrowings up to $350 million, collectively. Interest is charged to
each Portfolio based on its borrowings at an annual rate equal to the sum of
the Federal Funds Rate plus 0.35%. The Portfolios also pay a commitment fee of
0.075% per annum on the average daily amount of the available commitment, which
is allocated, on a pro-rata basis to the funds. The commitment fee is included
in Other expenses on the Statement of Operations. Borrowings are payable on
demand.
The Portfolios had no borrowings outstanding at October 31, 1999, nor at any
point during the year.
110
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Trustees and Beneficial Unit Holders of
Growth and Income Portfolio and Capital Growth Portfolio
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets present fairly, in all material
respects, the financial position of Growth and Income Portfolio and Capital
Growth Portfolio (the "Portfolios") at October 31, 1999, the results of their
operations for the year then ended and the changes in their net assets for the
two years then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Portfolios' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 13, 1999
111
