OCTOBER 31, 2000
Chase Vista
International
Equity Funds
EUROPEAN FUNDS
JAPAN FUNDS
INTERNATIONAL EQUITY
[Chase Logo] CHASE
THE RIGHT RELATIONSHIP IS EVERYTHING(RegTM)
SAIE-2-1200
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Contents
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Chairman's Letter 1
Chase Vista European Fund 2
Fund Commentary
Chase Vista Japan Fund 6
Fund Commentary
Chase Vista International Equity Fund 10
Fund Commentary
Portfolios of Investments 14
Fund Financial Statements 20
International Equity Portfolio 42
Portfolio Financial Statements 46
Highlights
o Market attention shifted towards "old economy" companies during the
reporting period.
o Continental Europe had to contend with a weak Euro.
o Japan's commitment to restructuring contributed to the nation's struggles.
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NOT FDIC INSURED | May lose value / No bank guarantee
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Chase Vista Funds are distributed by Vista Fund Distributors, Inc.
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CHASE VISTA INTERNATIONAL EQUITY FUNDS
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Chairman's Letter
December 4, 2000
Dear Shareholder:
We are pleased to present this annual report for the Chase Vista International
Equity Funds for the year ended October 31, 2000. Inside, you'll find
information on the performance of each Fund along with a report from the
portfolio management team.
Period of Extreme Divergence Favors "New Economy" Sectors
From the beginning of the reporting period through March 10, 2000, the story in
world equity markets was the growing divergence in performance between stocks
in the telecommunications, technology and Internet-related sectors and those of
traditional "old economy" companies. This was as true in Europe and Japan as it
was in the United States. And like most periods of market divergence, this one
began on a logical foundation, one that saw the global economy as being in the
midst of a period of profound change that would disproportionately benefit
companies tied to the technology and communications revolution.
But as valuations in the new economy sectors became stretched to levels never
seen before, the investment landscape changed amid tighter interest rate
conditions in the United States and a recognition that stock prices had gotten
ahead of themselves. The first to crack was the U.S. Nasdaq index, which began
a rolling descent in March. From then on, foreign markets were very sensitive
to the Nasdaq, giving away most of the returns they'd gotten early in the
reporting year. As investors turned away from the previously favored sectors,
more traditional value-oriented "old economy" sectors came back into favor, at
least on a relative basis. This favored countries such as the U.K. and
Switzerland with more traditional economies and larger financial sectors.
Euro Confounds Central Bankers; Japanese Growth Stalls
While the stunning rise and fall of many TMT (technology, media and
telecommunications) stocks and the rising price of oil were the big stories in
global markets, local concerns did play a significant role. In continental
Europe, investors and central bankers alike were focused on the continuing
weakness of the Euro, which had fallen to an all-time low below 85 cents by the
end of the reporting period, down from $1.18 when it was introduced on January
1, 1999. As the period progressed, the European Central Bank was forced to
confront the combined challenges of the weak currency, above-target inflation
and then signs of slowing growth, particularly in Germany.
In Japan, the positive effects of foreign investors bringing their portfolios
up from formerly underweight positions ended and net flows turned negative.
Additionally, many investors began to question the Japanese commitment to
restructuring, and growth remained tepid at best.
It was against this volatile backdrop that your portfolio management team
worked to deliver generally good returns. On behalf of them and everyone at
Chase, we thank you for your continued investment and look forward to serving
your investment needs for many years to come.
Sincerely yours,
/s/ Fergus Reid
Fergus Reid
Chairman
1
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CHASE VISTA EUROPEAN FUND
As of October 31, 2000 (Unaudited)
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How the Fund Performed
Chase Vista European Fund had a total return of 10.13% (Class A Shares, without
sales charges) for the year ended October 31, 2000. This compares to a return
of 1.21% for its benchmark, the MSCI Europe Index.
How the Fund Was Managed
The Fund was well-positioned to capitalize on the market divergence favoring
TMT (technology, media and telecommunications) stocks at the end of 1999 and
into 2000. The Fund was overweight with the large incumbent telecom companies
(France Telecom, Deutsche Telekom) as these issues soared, and it was generally
avoiding financials and other old-economy sectors that investors were ignoring.
However, the same TMT stocks that helped the Fund early in the period began to
hurt performance in the spring as investors bid down valuations. Specific
factors in Europe included the re-rating of Internet stocks and concerns about
the costs of 3rd Generation mobile licenses after investors had already priced
in the promise of wireless data services. The Fund did begin to cut back on TMT
holdings and become more defensive, upping its weighting in consumer staples
and, in general, aligning more closely with its benchmark.
In the summer, a new management team took over the Fund and its strategy of
investing in defensive growth names was helpful. The team continued to
de-emphasize media and telecommunications issues given the negative earnings
momentum and, within the TMT sectors, focused on stocks with visible earnings
growth such as Alcatel.
As the period came to an end, the management team eliminated the defensive bias
in the portfolio and increased its growth profile, led by larger positions in
information technology hardware and software. The Fund was underweight in
telecommunications stocks and overweight in banking issues.
Looking Ahead
Moving ahead, the management team is closely monitoring the overall economic
growth picture in Europe and will adjust the Fund's portfolio accordingly.
European investors are clearly concerned that the European Central Bank will
snuff out Euro-zone economic growth in its effort to keep inflation under
control. The problem seems to be that the combined effect of chronic currency
weakness and rising fuel prices have negated the impact of monetary tightening
on inflation and, as a result, the team expects interest rates to continue to
rise. The short-term outlook in the United Kingdom is better as slowing second-
quarter economic growth increases the likelihood of a future interest rate cut
from the Bank of England, which should be especially helpful to the financials-
heavy London markets; it is expected that banks in the U.K. should gain initial
market leadership from the improving interest rate outlook.
2
<PAGE>
CHASE VISTA EUROPEAN FUND
As of October 31, 2000 (Unaudited)
Average Annual Total Returns+
<TABLE>
<CAPTION>
Since
Inception
1 Year 3 Years (11/2/95)
<S> <C> <C> <C>
Class A Shares
Without Sales Charge 10.13% 14.76% 18.53%
With Sales Charge* 3.78% 12.52% 17.14%
Class B Shares
Without CDSC 9.40% 13.93% 17.69%
With CDSC** 4.40% 13.15% 17.48%
Class C Shares
Without CDSC 9.27% 13.91% 17.68%
With CDSC*** 8.27% 13.91% 17.68%
</TABLE>
Source: Lipper Analytical Services. Past performance is not indicative of
future results. Investment return and principal value will fluctuate, so that
shares, when redeemed, may be worth more or less than their original cost.
The Fund is currently waiving certain fees. This waiver may be terminated,
which would reduce performance.
* Sales charge on Class A Shares is 5.75%.
** Assumes 5% CDSC (contingent deferred sales charge) for the one year period,
3% for the three-year period and a 2% CDSC for the period since inception.
*** Assumes 1% CDSC for the one year period and 0% thereafter.
International investing involves a greater degree of risk and increased
volatility. The fund may be also subject to the additional risk of
non-diversified "regional" fund investing.
+ The Fund commenced operations on 11/2/95. Class B and C Shares were
introduced on 11/3/95 and 11/1/98 respectively. Performance prior to
introduction is based upon historical expenses of the predecessor Class A
Shares, which are lower than the actual expenses of the B and C Shares.
3
<PAGE>
CHASE VISTA EUROPEAN FUND
As of October 31, 2000 (Unaudited)
Percentage of Total Portfolio Investments
[Begin Pie Chart]
United Kingdom (33.0%)
France (13.0%)
Switzerland (8.3%)
Italy (7.6%)
Netherlands (7.4%)
Germany (7.3%)
Denmark (4.1%)
Sweden (3.6%)
Spain (3.4%)
Finland (2.8%)
Norway (2.5%)
Portugal (2.4%)
Ireland (2.3%)
Belgium (2.3%)
[End Pie Chart]
Top Ten Equity Holdings of the Portfolio
1. Barclays PLC (3.1%) Offers commercial and investment banking, insurance,
financial and related services. Its subsidiary, Barclays Bank plc, operates
over 1,900 branches in the United Kingdom. Overall, the Company operates
branches in over 60 countries.
2. BP Amoco PLC (3.1%) An oil and petrochemicals company which explores for and
produces oil and natural gas; refines, markets and supplies petroleum products;
and manufactures and markets chemicals.
3. Total Fina SA, Class B (2.8%) Explores for, produces, refines, transports
and markets oil and natural gas. The Company also operates a chemical division
which produces rubber, paint, ink, adhesives and resins.
4. SmithKline Beecham PLC (2.4%) Discovers, develops, manufactures and markets
pharmaceuticals, vaccines, over-the-counter medicines and health-related
consumer products. Also provides health-care services, including clinical
laboratory testing, disease management and pharmaceutical benefit management.
5. Alcatel SA (2.4%) Develops, produces and distributes telecommunications
equipment and cables and offers telecommunications services. The Company
manufactures and markets mobile telephones, microwave radio systems, switching
equipment and underwater networks, printed circuit boards, inductive components,
converters and optronics and solutions for utilities, cable TV operators and the
Internet.
6. HSBC Holdings (2.1%) An international banking and financial services
organization. Services provided include retail and corporate banking, trade,
trustee, securities, custody and treasury services.
7. Nestle SA (2.0%) Processing food, the Company's subsidiaries produce and
sell beverages, milk products, culinary products, frozen food, chocolate,
ready-to-eat dishes, refrigerated products, food service products, pet food,
pharmaceuticals and cosmetics.
8. Grupo Dragados SA (1.6%) A construction company that builds infrastructure
projects and industrial facilities, constructs and operates toll roads and
offers water management, cleaning, solid waste treatment and parking management
and traffic control services. Dragados operates worldwide.
9. Altana AG (1.5%) Develops and manufactures pharmaceutical, diagnostic and
chemical products. The Company markets prescription and over-the-counter drugs
for respiratory, stomach, cardiovascular and nervous system disorders, as well
as contrast media for imaging and laboratory diagnostic agents. It also
produces chemical additives, coating lacquers and surface coating measuring
equipment.
10. Royal Dutch Petroleum Co. (1.5%) Involved in all phases of the petroleum and
petrochemicals industries from exploration to final processing, delivery and
marketing.
Top 10 equity holdings comprised 22.5% of the Portfolio's market value of
investments. Portfolio holdings are subject to change at any time.
4
<PAGE>
CHASE VISTA EUROPEAN FUND
As of October 31, 2000 (Unaudited)
Life of Fund Performance (11/2/95 to 10/31/00)
[START LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Lipper European
European Fund MSCI Europe Index Funds Index
<S> <C> <C> <C>
10/31/1995 9,425.00 10,000.00 10,000.00
10/31/1996 11,395.88 11,795.83 11.803.84
10/31/1997 14,606.23 14,909.74 14,503.30
10/31/1998 17,340.39 17,591.05 16,726.33
10/31/1999 20,043.87 19,850.02 19,534.51
10/31/2000 22,053 20,090 22,589
</TABLE>
[END LINE CHART]
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
the future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
Shares of Chase Vista European Fund, the Lipper European Funds Index and the
MSCI Europe Index from November 2, 1995 to October 31, 2000. The performance of
the Fund assumes the reinvestment of all dividends and capital gains and
includes a 5.75% sales charge. The performance of the indices does not include
a sales charge and has been adjusted to reflect reinvestment of all dividends
and capital gains on the securities included in the benchmark. The performance
of the benchmarks reflect an initial investment at the end of the month
preceding the Fund's commencement of operations.
The Fund is currently waiving certain fees. This voluntary waiver may be
modified or terminated at any time, which would reduce performance.
The Lipper European Funds Index represents the performance of the 30 largest
European funds. Lipper is an independent mutual fund performance monitor whose
results are based on total return and do not reflect a sales charge.
The MSCI Europe Index is a replica (or model) of the performance of the
European markets. The index is unmanaged and reflects the reinvestment of
dividends. An individual cannot invest directly in the index.
International investing involves a greater degree of risk and increased
volatility. Changes in currency and exchange rates and differences in
accounting and taxation policies outside the U.S. can raise or lower returns.
Also, some overseas markets may not be as politically and economically stable
as the United States and other nations. The Fund may also be subject to the
additional risk of non-diversified "Regional" fund investing.
5
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CHASE VISTA JAPAN FUND
As of October 31, 2000 (Unaudited)
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How the Fund Performed
Chase Vista Japan Fund had a total return of -17.48% (Class A shares, without
sales charges) for the year ended October 31, 2000. This compares to a return
of -11.11% for the MSCI Japan Index.
How the Fund Was Managed
Early in the reporting year, the Fund trailed its index largely because it
avoided overweighting the technology and Internet-related stocks that led the
market higher. However, it did invest in some of these companies and captured
gains in early 2000.
The Fund struggled along with the overall market in April and May as foreign
selling pressure drove equity prices down. However, with the Japanese equity
market remaining very sensitive to the Nasdaq, the Fund recovered in June along
with U.S. equity prices. In the spring, the management team shifted its bias
towards defensive growth names and select technology themes.
In the summer months, the Fund's emphasis on mobile over fixed line
telecommunications companies and its participation in some strong initial
public offerings (IPOs) contributed to performance while exposure to companies
whose performance was highly correlated with the Nasdaq detracted.
As the period ended, the management team was following a growth bias that was
overweight in the technology, telecommunications and services sector where
earnings growth is most evident. The Fund also continued to add to holdings in
companies which should benefit from the upturn in the domestic economy and also
added select value stocks.
Looking Ahead
In the view of the management team, the Japanese Topix Index appears to be
significantly oversold at current levels, and is overdue a technical rally.
Most of the hype from 1999's extraordinary rally has now evaporated, and
sentiment is unlikely to fall much further given the improving outlook for the
Japanese economy and corporate earnings. The economy is recovering, albeit
slowly, and this should help sentiment, as should a marked improvement in
company profits. On the downside, foreign confidence is unlikely to improve
while corporate restructuring proceeds at its current slow pace, and the merger
activity that was seen in October disappointed with its timidity. The Fund is
positioned to take advantage of the strong earnings of many names in the belief
that the market will ultimately reward earnings.
6
<PAGE>
CHASE VISTA JAPAN FUND
As of October 31, 2000 (Unaudited)
Average Annual Total Returns+
<TABLE>
<CAPTION>
Since
Inception
1 Year 3 Years (11/2/95)
<S> <C> <C> <C>
Class A Shares
Without Sales Charge -17.48% -3.46% -2.59%
With Sales Charge* -22.22% -5.35% -3.74%
Class B Shares
Without CDSC -17.82% -4.02% -3.22%
With CDSC** -21.93% -4.94% -3.58%
</TABLE>
Source: Lipper Analytical Services. Past performance is not indicative of
future results. Investment return and principal value will fluctuate, so that
shares, when redeemed, may be worth more or less than their original cost.
The Fund is currently waiving certain fees. This waiver may be terminated,
which would reduce performance.
* Sales charge on Class A Shares is 5.75%.
** Assumes 5% CDSC (contingent deferred sales charge) for the one year period,
3% for the three-year period and a 2% CDSC for the period since inception.
International investing involves a greater degree of risk and increased
volatility. The fund may be also subject to the additional risk of
non-diversified "regional" fund investing.
+ The Fund commenced operations on 11/2/95. Class B Shares were introduced on
11/3/95. Performance prior to introduction is based upon historical expenses of
the predecessor Class A Shares, which are lower than the actual expenses of the
B Shares.
7
<PAGE>
CHASE VISTA JAPAN FUND
As of October 31, 2000 (Unaudited)
Percentage of Total Portfolio Investments
[Begin Pie Chart]
Technology (31.2%)
Consumer Cyclicals (27.3%)
Utilities (12.9%)
Financial (10.5%)
Health Care (9.6%)
Capital Goods (5.3%)
Basic Materials (1.3%)
Transportation (1.1%)
Real Estate (0.8%)
[End Pie Chart]
Top Ten Equity Holdings of the Portfolio
1. NTT DoCoMo, Inc. (7.6%) Provides various telecommunications services
including cellular phones, car phones, pagers and packet communication
services.
2. Toyota Motor Corp. (5.7%) Produces, sells, leases and repairs passenger
cars, trucks, buses, boats and airplanes in Japan and overseas.
3. Takeda Chemical Industries (5.1%) Produces and sells health-care related
products. It specializes in pharmaceuticals, cosmetics, food supplements,
vitamins, chemicals and environmental materials, which includes pesticides and
other agrochemicals. It researches and develops new drugs using its own
biotechnology.
4. Nippon Telegraph & Telephone Corp (3.9%) Provides a variety of
telecommunication services, including telephone, telegraph, leased circuits,
data communication, terminal equipment sales and related services. The Company
provides both local and long distance telephone services within Japan.
5. Sony Corp. (3.1%) Develops and manufactures consumer and industrial
electronic equipment. The Company's products include audio and video equipment,
televisions, displays, semiconductors, electronic components, computers and
computer peripherals and telecommunication equipment.
6. Canon, Inc. (3.1%) Manufactures office automation, camera and video
equipment. The Company produces electronics such as color laser and high speed
copiers, mid-range copiers, 35 mm cameras and optical devices. The Company also
produces and markets broadcasting lenses, medical instruments and computer
peripherals and aligners for semiconductor manufacturing equipment.
7. Fuji Photo Film Co., LTD (2.9%) Manufactures film for general, medical,
printing, office and movie production uses. The Company also manufactures
photographic paper, audio cassettes, video tapes, floppy disc, cameras, lenses
and chemicals for darkroom use.
8. Bank of Tokyo-Mitsubishi LTD (2.8%) Provides a broad range of financial
services to governments, corporations and individuals in Japan and throughout
the world. The Bank, through its commercial subsidiaries, offers commercial,
investment and trust banking products and services. 9. Honda Motor Co., LTD.
(2.7%) Develops, manufactures and distributes motorcycles, automobiles and power
products such as generators and farm machinery. The Company also operates a
financial credit business. Honda Motor has manufacturing facilities in the
United States, Canada, the United Kingdom, France, Italy and Brazil. 10. Dai
Nippon Printing Co., LTD. (2.4%) Offers printing services for commercial and
industrial use, such as books, periodicals, paper and plastic cards, securities
and business forms. The Company also produces paper containers and other
packaging products.
Top 10 equity holdings comprised 39.3% of the Portfolio's market value of
investments. Portfolio holdings are subject to change at any time.
8
<PAGE>
CHASE VISTA JAPAN FUND
As of October 31, 2000 (Unaudited)
Life of Fund Performance (11/2/95 to 10/31/00)
[START LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Lipper Japan Equity Tokyo SE (Topix) MSCI
Japan Fund Funds Average 1st Section Index Japan Index
<S> <C> <C> <C> <C>
10/31/95 9,425.00 10,000.00 10,000.00 10,000.00
10/31/96 8,878.74 9,933.21 9,877.45 9,930.59
10/31/97 9,187.15 8,952.67 7,911.80 8,139.68
10/31/98 6,525.91 7,837.10 5,908.47 6,980.05
10/31.99 10,018.10 15,103.79 8,516.80 11,075.98
10/31/00 8,266 12,881 7,625 9,804
</TABLE>
[END LINE CHART]
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
the future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
Shares of Chase Vista Japan Fund, the Lipper Japan Equity Funds Average, the
MSCI Japan Index and the Tokyo SE (Topix) 1st Section from November 2, 1995 to
October 31, 2000. The performance of the Fund assumes the reinvestment of all
dividends and capital gains and includes a 5.75% sales charge. The performance
of the average and the indices does not include a sales charge and has been
adjusted to reflect reinvestment of all dividends and capital gains on the
securities included in the benchmark. The performance of the benchmarks reflect
an initial investment at the end of the month preceding the Fund's commencement
of operations.
The Fund is currently waiving fees. This voluntary waiver may be modified or
terminated at any time, which would reduce performance.
The Lipper Japan Equity Funds Average represents the average performance of a
universe of actively managed mutual funds that invest primarily in Japanese
stocks. Lipper is an independent mutual fund performance monitor whose results
are based on total return and do not reflect a sales charge.
The Tokyo SE (Topix) 1st Section Index also known as the Tokyo Price Index, is
an unmanaged capitalization-weighted index of all the companies listed on the
First Section of the Tokyo Stock Exchange. The index is unmanaged and reflects
reinvestment of dividends.
MSCI Japan Index is a replica (or model) of the performance of the Japan Equity
Markets. This index is unmanaged and reflects the reinvestment of dividends. An
individual cannot invest directly in the Index.
International investing involves a greater degree of risk and increased
volatility. Changes in currency exchange rates and differences in accounting
and taxation policies outside the U.S. can raise or lower returns. Also, some
overseas markets may not be as politically and economically stable as the
Unites States and other nations. The Fund may be also subject to the additional
risk of non-diversified "regional" fund investing.
9
<PAGE>
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CHASE VISTA INTERNATIONAL EQUITY FUND
As of October 31, 2000 (Unaudited)
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How the Fund Performed
Chase Vista International Equity Fund had a total return of 1.71% (Class A
Shares, without sales charges) for the year ended October 31, 2000. This
compares to a return of -2.66% for its benchmark, the MSCI Europe, Australia
and Far East Index (EAFE).
How the Fund Was Managed
In the first half of the reporting year, the management team took an overweight
position in the technology, media and telecommunications (TMT) sectors. This
proved highly beneficial to performance as these areas of the market clearly
dominated around the world. Within Europe, the Fund also benefited from a
combination of well-known industry leaders as well as many smaller,
lesser-known new economy names.
As valuations became extreme in some of its favorite holdings, the management
team chose to pare back a bit, reducing its TMT overweight and shifting some
assets from the Pacific Rim to Latin America. Additionally, the Fund's slight
emphasis on Europe was reduced, leading to a more neutral regional and sector
weighting in the second half of the reporting year along with a more
risk-averse bias.
A change in the management team in the summer led to a new strategy, one that
emphasized defensive growth names in Europe. The team continued to reduce
exposure to the technology and telecommunications sectors, but they remained a
drag on performance in the second half of the year, as was an underweight
position in financials as investors began to look to the end of the rising
interest rate cycle.
As the period came to an end, the management team eliminated the defensive bias
in the European portion of the portfolio and increased its growth profile, led
by larger positions in information technology hardware and software. The Fund
was underweight in European telecommunications stocks and overweight in banking
issues. This growth bias was also evident in Japan, where the team has
continued to add to holdings in companies which will benefit from an upturn in
the domestic economy.
Looking Ahead
Three factors were very much on the minds of investors as the reporting period
ended: the price of oil, the persistent weakness of the Euro and corporate
profits, particularly in the U.S. While non-U.S. equities suffered along with
the Nasdaq post-March, Europe did seem to break free of that correlation in
October. A major point to remember is that profits have continued to expand
overseas, helping to create more attractive valuations, especially relative to
global bonds. Should the markets anticipate interest rate cuts in light of
slower global growth, and should the oil crisis wane, equities could rally
strongly. Moving forward, the management team continues to favor the U.K. and,
to a lesser degree, continental Europe, given better growth prospects in the
former.
10
<PAGE>
CHASE VISTA INTERNATIONAL EQUITY FUND
As of October 31, 2000 (Unaudited)
Average Annual Total Returns+
<TABLE>
<CAPTION>
Since
Inception
1 Year 5 Years (12/31/92)
<S> <C> <C> <C>
Class A Shares
Without Sales Charge 1.71% 5.84% 6.30%
With Sales Charge* -4.14% 4.59% 5.50%
Class B Shares
Without CDSC 1.20% 5.34% 5.83%
With CDSC** -3.61% 5.01% 5.83%
</TABLE>
Source: Lipper Analytical Services. Past performance is not indicative of
future results. Investment return and principal value will fluctuate, so that
shares, when redeemed, may be worth more or less than their original cost.
The Fund is currently waiving certain fees. This waiver may be terminated,
which would reduce performance.
* Sales charge for Class A Shares is 5.75%.
** Assumes 5% CDSC (contingent deferred sales charge) for the one year period,
2% CDSC for the five-year period and 0% since inception.
International investing involves a greater degree of risk and increased
volatility. The fund may be also subject to the additional risk of
non-diversified "regional" fund investing.
+ The Fund commenced operations on 12/31/92. Class B shares were introduced on
11/4/93. Performance prior to introduction is based upon historical expenses of
the predecessor Class A Shares, which are lower than the actual expenses of the
Class B Shares.
11
<PAGE>
CHASE VISTA INTERNATIONAL EQUITY FUND
As of October 31, 2000 (Unaudited)
Percentage of Total Portfolio Investments
[Begin Pie Chart]
United Kingdom (26.5%)
Japan (19.7%)
France (11.5%)
Germany (6.7%)
Netherlands (6.5%)
Italy (6.3%)
Switzerland (6.2%)
Sweden (3.5%)
Finland (3.4%)
Australia (2.8%)
Hong Kong (2.5%)
Spain (1.7%)
Other (1.6%)
Belgium (1.1%)
[End Pie Chart]
Top Ten Equity Holdings of the Portfolio
1. Vodafone AirTouch PLC (5.0%) Provides mobile telecommunications services. It
supplies customers with digital and analog cellular telephone, paging and
personal communications services.
2. Nokia OYJ (2.5%) An international telecommunications company which develops
and manufactures mobile phone, networks and systems for cellular and fixed
networks.
3. Total Fina SA, Class B (2.3%) Explores for, produces, refines, transports
and markets oil and natural gas. The Company also operates a chemical division
which produces rubber, paint, ink, adhesives and resins.
4. Telefonaktiebolaget LM Ericson, Class B (2.2%) Develops and produces
advanced systems and products for wired and mobile communications in public and
private networks. Its product line includes digital and analog systems for
telephones and networks, microwave radio links, radar surveillance systems and
business systems.
5. Deutsche Bank AG (2.2%) Provides a broad range of banking, investment, fund
management, securities, credit card, mortgage, leasing and insurance services
worldwide. The Company provides its services to retail and private clients,
corporations and financial institutions and multi-national conglomerates. It
also offers a variety of financial consulting and advisory services.
6. ENI-Ente Nazionale Idrocarburi SPA (2.2%) An integrated oil and gas company.
The Company is based in Italy and has operations in over 70 countries. ENI
explores for, distributes, refines and markets petroleum products. The Company
manufactures petrochemicals, such as ethylene and provides off-shore oil and
gas pipelaying services.
7. AXA (2.1%) Offers life and non-life insurance, reinsurance and asset
management services. The Company operates in Europe, Asia, Africa and the
Americas.
8. Koninklijke Philips Electronics NV (2.1%) Manufactures lighting, consumer
electronics, multimedia devices, domestic appliances and personal care items,
semiconductors, medical devices, communication systems and industrial
electronics. The Company sells its products worldwide.
9. Alcatel SA (2.1%) Develops, produces and distributes telecommunications
equipment and cables and offers telecommunications services. The Company
manufactures and markets mobile telephones, microwave radio systems, switching
equipment and underwater networks, printed circuit boards, inductive
components, converters and optronics and solutions for utilities, cable TV
operators and the Internet.
10. BAE Systems PLC (2.0%) Manufactures products for the military defense
sector, in addition to the civil aircraft market. The Group's military products
include aircraft, submarines and assorted ships, electronics, sensors and
assorted ammunition and weapons systems. Their civil aircraft operations
include the manufacture of various planes, jet wings and various engineering
services.
Top 10 equity holdings comprised 24.7% of the Portfolio's market value of
investments. Portfolio holdings are subject to change at any time.
12
<PAGE>
CHASE VISTA INTERNATIONAL EQUITY FUND
As of October 31, 2000 (Unaudited)
Life of Fund Performance (12/31/92 to 10/31/00)
[START LINE CHART]
<TABLE>
<CAPTION>
Chase Vista Lipper International
International Equity Fund Funds Index MSCI EAFE Index
<S> <C> <C> <C>
12/31/92 9,425.00 10,000.00 10,000.00
10/31/93 11,140.87 13,171.77 13,580.78
10/31/94 11,655.32 14,687.38 14,989.93
10/31/95 11,450.02 14,618.46 14,980.53
10/31/96 11,926.75 16,463.29 16,594.66
10/31/97 12,200.16 18,664.80 17,410.08
10/31/98 12,559.85 19,531.27 19,142.67
10/31/99 14,957.90 24,031.84 23,618.08
10/31/00 15,207 24,861 22,991
</TABLE>
[END LINE CHART]
Source: Lipper Analytical Services, Inc. Past performance is not indicative of
the future results. Investment return and principal value will fluctuate with
market conditions. When shares are redeemed, they may be worth more or less
than their original cost.
This chart illustrates comparative performance for $10,000 invested in Class A
Shares of Chase Vista International Equity Fund, the Lipper International Funds
Index and the MSCI EAFE Index from December 31, 1992 to October 31, 2000. The
performance of the Fund assumes reinvestment of all dividends and capital gains
and includes a 5.75% sales charge. The performance of the indices does not
include a sales charge and has been adjusted to reflect reinvestment of all
dividends and capital gains on the securities included in the benchmark.
The Fund is currently waiving fees. This voluntary waiver may be modified or
terminated at any time, which would reduce performance.
The Lipper International Funds Index represents the performance of the 30
largest international stock funds. Lipper is an independent mutual fund
performance monitor whose results are based on total return and do not reflect
a sales charge.
The MSCI EAFE (Europe, Australia, Far East) Index is a replica (or model) of
the performance of the world's equity markets, excluding the U.S. and Canada.
The Index is unmanaged and reflects the reinvestment of dividends. An
individual cannot invest directly in the Index.
International investing involves a greater degree of risk and increased
volatility. Changes in currency exchange rates and differences in accounting
and taxation policies outside the U.S. can raise or lower returns. Also, some
overseas markets may not be as politically and economically stable as the
United States and other nations.
13
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA EUROPEAN FUND
Portfolio of Investments
--------------------------------------------------------------------------------
As of October 31, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- 97.3%
--------------------------------------------------------------------------------
Common Stock -- 97.3%
---------------------
Belgium -- 2.2%
33,100 AGFA-Gevaert NV $ 684,592
8,216 Barco NV 920,673
24,420 Ubizen * 517,487
----------
2,122,752
Denmark -- 4.1%
42,102 GN Store Nord 815,119
4,409 NKT Holding A/S 1,041,903
4,250 Novo-Nordisk A/S 900,267
23,325 Vestas Wind Systems AS 1,261,783
----------
4,019,072
Finland -- 2.8%
37,851 Amer Group LTD 840,606
24,871 Nokia OYJ 1,022,255
21,000 Sampo Insurance Co., LTD 854,426
----------
2,717,287
France -- 13.0%
37,800 Alcatel SA 2,303,744
11,981 Aventis SA 863,228
29,981 CNP Assurances 929,870
6,870 Compagnie Francaise d'Etudes et de Construction SA 878,156
29,290 Credit Lyonnais SA 1,000,797
7,201 Ilog SA * 231,337
2,686 PSA Peugeot Citroen 494,060
26,400 Remy Cointreau 881,686
18,592 Sanofi-Synthelabo SA 977,083
14,843 Societe Generale 841,708
19,274 Total Fina SA, Class B 2,754,502
7,263 Wavecom SA * 614,483
----------
12,770,654
Germany -- 5.2%
12,339 Altana AG 1,495,649
33,800 Commerzbank AG 952,625
4,825 FJA AG 177,501
2,006 Kontron Embedded Computers * 216,288
5,439 Siemens AG 691,551
20,206 Volkswagen AG 1,008,810
16,202 Wella AG 607,022
----------
5,149,446
Ireland -- 2.3%
73,443 Green Property PLC 437,251
14,813 IONA Technologies PLC * 973,955
70,930 Kerry Group PLC 884,415
----------
2,295,621
Italy -- 7.5%
82,193 Autogrill SPA 906,412
88,848 Banca Fideuram SPA 1,364,644
68,915 Banca Popolare di Verona 759,985
482,408 Benetton Group SPA 875,068
75,522 Bulgari SPA 887,899
144,723 ENI-Ente Nazionale Idrocarburi SPA 782,658
</TABLE>
See notes to financial statements.
14
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA EUROPEAN FUND
Portfolio of Investments (Continued)
--------------------------------------------------------------------------------
As of October 31, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Italy -- Continued
101,000 Telecom Italia Mobile SPA $ 857,833
195,305 Unicredito Italiano SPA 993,295
---------
7,427,794
Netherlands -- 7.4%
21,674 Akzo Nobel NV 985,649
41,190 Buhrmann NV 1,124,246
42,940 CSM NV 979,102
14,152 ING Groep NV 970,705
18,352 Numico NV 857,134
20,675 Nutreco Holding NV * 889,974
24,385 Royal Dutch Petroleum Co. 1,444,613
1,446 VersaTel Telecom International NV * 28,191
---------
7,279,614
Norway -- 2.5%
18,554 InFocus Corp. * 798,006
21,605 Norsk Hydro ASA 857,213
30,005 Tandberg ASA * 793,665
---------
2,448,884
Portugal -- 2.4%
43,969 Banco Espirito Santo SA 667,134
109,205 Brisa-Auto Estradas de Portugal SA 843,285
71,398 Novabase SGPS SA * 846,676
---------
2,357,095
Spain -- 3.4%
160,861 Grupo Dragados SA 1,561,241
75,065 NH Hoteles SA 846,258
47,931 Telefonica SA 912,921
---------
3,320,420
Sweden -- 3.6%
34,140 Micronic Laser Systems AB * 1,015,372
96,887 Nordic Baltic Holding AB 725,224
82,610 Skandinaviska Enskilda Banken, Class C 878,067
60,434 Svenska Handelsbanken, Class A 946,949
---------
3,565,612
Switzerland -- 8.2%
940 Baloise Holdings 930,022
329 Compagnie Financiere Richemont, Class A * 914,863
201 Julius Baer Holding AG 994,891
842 Kudelski SA * 1,133,227
946 Nestle SA 1,959,779
624 Novartis AG 946,366
1,974 Sia Abrasives Holding AG * 241,523
498 Swiss Re 981,827
---------
8,102,498
United Kingdom -- 32.7%
134,226 Aggreko PLC 719,216
42,534 Amvescap PLC 951,160
243,254 Anite Group PLC 635,812
92,776 ARM Holdings PLC * 916,096
116,392 BAA PLC 968,443
107,452 Barclays PLC 3,076,932
27,036 Bioglan Pharma PLC 255,183
</TABLE>
See notes to financial statements.
15
<PAGE>
CHASE VISTA EUROPEAN FUND
Portfolio of Investments (Continued)
As of October 31, 2000
<TABLE>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
<S> <C> <C>
United Kingdom -- Continued
356,611 BP Amoco PLC $ 3,026,744
175,242 Bunzl PLC 1,002,607
107,402 Capita Group PLC 818,782
285,416 Centrica PLC 982,252
1 Dixons Group PLC 3
25,976 Fibernet Group PLC * 603,516
257,002 Firstgroup PLC 870,472
44,106 Fitness First PLC * 726,926
143,577 HSBC Holdings PLC 2,047,353
212,048 Iceland Group PLC 1,008,421
65,913 Innovation Group PLC * 995,408
61,706 Johnson Matthey PLC 963,235
430,044 Legal & General Group PLC 1,070,960
77,095 Marconi Electronic Systems PLC 973,962
360,491 Morrison (WM.) Supermarkets 937,009
107,084 Morse Holdings PLC 901,880
8,181 NDS Group PLC * 613,575
150,554 Northern Rock PLC 940,063
582,601 Pilkington PLC 831,190
131,741 Psion PLC 797,725
74,431 Shell Transport & Trading Co., PLC 599,310
180,355 SmithKline Beecham PLC 2,330,852
133,451 Spirent PLC 1,238,281
49,025 Viridian Group PLC 533,919
-----------
32,337,287
-----------
Total Common Stock 95,914,036
(Cost $96,090,548)
-------------------------------------------------------------
Preferred Stock -- 2.0%
-----------------------
Germany -- 2.0%
4,008 Hugo Boss AG 1,012,413
7,018 Marschollek Lautenschlaeger und Partner AG 945,854
-------------------------------------------------------------
Total Preferred Stock 1,958,267
(Cost $1,730,864)
-------------------------------------------------------------
Warrant -- 0.0%
--------------
Germany -- 0.0%
71 Muenchener Rueckversicherungs-Gesellschaft AG,
Expires 06/03/02 6,289
(Cost $0)
Principal
Amount
(DEM)
Convertible Bond -- 0.0%
------------------------
Germany -- 0.0%
6,240 DaimlerChrysler AG, 5.75%, 06/15/02 2,340
(Cost $3,675)
-------------------------------------------------------------
Total Investments -- 99.3% $97,880,932
(Cost $97,825,087)
-------------------------------------------------------------
</TABLE>
See notes to financial statements.
16
<PAGE>
CHASE VISTA EUROPEAN FUND
Portfolio of Investments (Continued)
As of October 31, 2000
Summary of Investments by Industry, October 31, 2000
<TABLE>
<CAPTION>
Industry % of Investment Securities
--------------------------------------------------------
<S> <C>
Banking 15.2%
Telecommunications Equipment 9.1%
Oil & Gas 8.8%
Food/Beverage Products 8.6%
Pharmaceuticals 7.9%
Business Services 4.9%
Insurance 4.8%
Financial Services 4.5%
Electronics/Electrical Equipment 4.3%
Manufacturing 3.5%
Telecommunications 2.5%
Construction 2.5%
Computer Software 2.0%
Other (below 2%) 21.4%
-------------------------------------------------------
Total 100.0%
-------------------------------------------------------
</TABLE>
See notes to financial statements.
17
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA JAPAN FUND
Portfolio of Investments
--------------------------------------------------------------------------------
As of October 31, 2000
<TABLE>
<CAPTION>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- 93.3%
--------------------------------------------------------------------------------
<S> <C> <C>
Common Stock -- 93.3%
---------------------
Automotive -- 9.2%
2,000 Honda Motor Co., LTD $ 69,056
3,700 Toyota Motor Corp. 147,747
5,000 Yamaha Motor Co., LTD 38,879
-------
255,682
Banking -- 4.7%
6,000 Bank of Tokyo-Mitsubishi LTD 71,932
3 Mizuho Holdings, Inc. * 23,052
3,000 Sumitomo Bank LTD 36,406
-------
131,390
Chemicals -- 1.2%
2,000 Kurita Water Industries LTD 32,513
Computer Networks -- 1.8%
2 Future System Consulting Corp. 21,981
1 NET One Systems Co., LTD 29,674
-------
51,655
Computer Software -- 1.7%
500 Trend Micro, Inc. * 47,167
Consumer Products -- 5.5%
6 Japan Tobacco, Inc. 41,214
2,000 KAO Corp. 59,897
4,000 Shiseido Co., LTD 51,655
-------
152,766
Electronics/Electrical Equipment -- 24.2%
300 Fanuc LTD 26,926
2,000 Fujitsu LTD 35,609
100 Keyence Corp. 31,048
2,000 Matsushita Electric Industrial Co., LTD 58,066
5,000 Matsushita Electric Works LTD 58,844
6,000 Minebea Co., LTD 59,898
500 Murata Manufacturing Co., LTD 59,806
2,000 NEC Corp. 38,100
2,000 Omron Corp. 49,274
2,000 Pioneer Corp. 61,913
200 Rohm Co., LTD 50,391
2,000 Sanyo Electric Co., LTD 15,203
1,000 Sony Corp. 79,864
6,000 Toshiba Corp. 42,863
-------
667,805
Entertainment/Leisure -- 2.9%
1,500 Namco LTD 38,741
700 Oriental Land Co., LTD 42,313
-------
81,054
Financial Services -- 4.2%
300 Jafco Co., LTD 31,872
2,000 Nomura Securities Co., LTD 42,404
400 Orix Corp. 41,947
-------
116,223
Health Care/Health Care Services -- 1.2%
400 Hoya Corp. 33,044
</TABLE>
See notes to financial statements.
18
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA JAPAN FUND
Portfolio of Investments (Continued)
--------------------------------------------------------------------------------
As of October 31, 2000
<TABLE>
<S> <C> <C>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Insurance -- 0.8%
2,000 Tokio Marine & Fire Insurance Co. $ 22,091
Internet Services/Software -- 0.4%
200 Softbank Corp. 11,998
Machinery & Engineering Equipment -- 0.9%
900 Fuji Machine Manufacturing Co., LTD 24,564
Office/Business Equipment -- 4.0%
2,000 Canon, Inc. 79,314
2,000 Ricoh Corp., LTD 30,773
----------
110,087
Pharmaceuticals -- 7.7%
2,000 Kissei Pharmaceutical Co., LTD 36,616
2,000 Takeda Chemical Industries 131,702
1,000 Yamanouchi Pharmaceutical Co., LTD 45,244
----------
213,562
Photographic Equipment -- 4.2%
2,000 Fuji Photo Film Co., LTD 74,185
3,000 Olympus Optical Co., LTD 41,434
----------
115,619
Printing & Publishing -- 2.3%
4,000 Dai Nippon Printing Co., LTD 62,645
Real Estate -- 0.8%
2,000 Mitsubishi Estate Co., LTD 21,248
Retailing -- 1.4%
700 Cawachi LTD * 39,877
Semi-Conductors -- 1.1%
400 Tokyo Electron LTD 31,286
Shipping/Transportation -- 1.0%
5 East Japan Railway Co. 28,712
Telecommunications -- 10.8%
11 Nippon Telegraph & Telephone Corp. 100,040
8 NTT DoCoMo, Inc. 197,094
----------
297,134
Utilities -- 1.3%
1,500 Tokyo Electric Power Co. 36,406
--------------------------------------------------------------------------------
Total Investments -- 93.3% $2,584,528
(Cost $2,816,087)
--------------------------------------------------------------------------------
</TABLE>
Index:
* -- Non-Income producing security.
See notes to financial statements.
19
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
European Japan Equity
Fund Fund Fund
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment securities, at value (Note 1) ......... $97,880,932 $2,584,528 $42,547,372
Cash ............................................. 5,442,080 -- --
Other assets ..................................... 669 15 145
Receivables:
Investment securities sold ...................... 2,366,383 74,229 --
Interest and dividends .......................... 162,525 4,605 --
Open forward foreign currency contracts ......... 1,632 -- --
Fund shares sold ................................ 998,094 183,170 1,364,492
Expense reimbursement from Distributor .......... -- 45,650 --
--------------------------------------------------------------------------------------------
Total Assets .................................. 106,852,315 2,892,197 43,912,009
--------------------------------------------------------------------------------------------
LIABILITIES:
Payables:
To Custodian .................................... -- 72,354 --
Investment securities purchased ................. 7,912,573 8,692 --
Open forward foreign currency contracts ......... 2,505 -- --
Fund shares redeemed ............................ 96,304 20 2,566,656
Accrued liabilities: (Note 2)
Investment advisory fees ........................ 72,776 -- --
Administration fees ............................. 12,129 -- 3,489
Shareholder servicing fees ...................... 4,888 -- 8,724
Distribution fees ............................... 29,992 293 11,540
Custodian fees .................................. 35,398 12,742 --
Other ........................................... 110,060 28,517 187,304
--------------------------------------------------------------------------------------------
Total Liabilities ............................. 8,276,625 122,618 2,777,713
--------------------------------------------------------------------------------------------
NET ASSETS:
Paid in capital .................................. 90,683,276 3,378,350 37,693,967
Accumulated undistributed/(distributions in
excess of) net investment income ................. (3,189) (2,160) (24,413)
Accumulated net realized gain (loss) on
investments and futures .......................... 7,854,189 (375,055) 3,568,287
Net unrealized appreciation (depreciation) of
investments and foreign exchange transactions .... 41,414 (231,556) (103,545)
--------------------------------------------------------------------------------------------
Net Assets .................................... $98,575,690 $2,769,579 $41,134,296
--------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding ($.001
par value; unlimited number of shares authorized):
Class A Shares ................................... 4,242,659 301,498 2,592,849
Class B Shares ................................... 1,067,377 40,580 502,283
Class C Shares ................................... 243,498 -- --
Net Asset Value:
Class A Shares (and redemption price) ............ $ 17.87 $ 8.12 $ 13.34
Class B Shares* .................................. $ 17.38 $ 7.93 $ 13.01
Class C Shares* .................................. $ 17.37 -- --
Class A Maximum Public Offering Price Per Share
(net asset value per share/94.25%) ................ $ 18.96 $ 8.62 $ 14.15
--------------------------------------------------------------------------------------------
Cost of investments ............................... $97,825,087 $2,816,087 $ --
--------------------------------------------------------------------------------------------
</TABLE>
* Redemption price may be reduced by contingent deferred sales charge.
See notes to financial statements.
20
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the year ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
European Japan Equity
Fund Fund Fund
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend ................................. $ 958,268 $ 10,725 $ --
Interest ................................. 160,805 -- --
Investment income from Portfolio ......... -- -- 557,976
Foreign taxes withheld ................... (49,638) (2,246) (70,753)
Expenses from Portfolio after fee
waivers .................................. -- -- (312,512)
--------------------------------------------------------------------------------------
Total investment income ................ 1,069,435 8,479 174,711
--------------------------------------------------------------------------------------
EXPENSES: (Note 2)
Investment advisory fees ................. 933,790 35,177 --
Administration fees ...................... 140,069 5,277 42,676
Shareholder servicing fees ............... 50,913 1,948 106,691
Distribution fees ........................ 335,274 12,691 146,789
Accounting fees .......................... -- -- 41,573
Custodian fees ........................... 160,377 73,689 --
Printing and postage ..................... 49,391 3,307 30,909
Professional fees ........................ 40,230 24,151 11,001
Registration expenses .................... 38,928 11,476 44,940
Transfer agent fees ...................... 220,218 29,478 166,255
Trustees' fees ........................... 4,669 176 1,151
Other .................................... 2,301 -- 23,235
--------------------------------------------------------------------------------------
Total expenses ......................... 1,976,160 197,370 615,220
--------------------------------------------------------------------------------------
Less amounts waived (Note 2E) ............. 189,245 49,248 33,230
Less expense reimbursements (Note 2F) ..... -- 80,098 --
Less earnings credits (Note 2F) ........... 693 89 --
--------------------------------------------------------------------------------------
Net expenses ........................... 1,786,222 67,935 581,990
--------------------------------------------------------------------------------------
Net investment loss ................... (716,787) (59,456) (407,279)
--------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments ............................. 7,988,358 1,006,857 3,730,735
Futures transactions .................... -- (22,836) 235,749
Foreign exchange transactions ........... 61,580 (33,302) (225,961)
Change in net unrealized
appreciation/depreciation of:
Investments ............................. (5,950,029) (1,305,944) (4,081,243)
Futures contracts ....................... -- -- 23,325
Foreign exchange transactions ........... (9,155) 188 100,508
--------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, futures and foreign
exchange transactions ..................... 2,090,754 (355,037) (216,887)
--------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations ........................... $1,373,967 $ (414,493) $ (624,166)
--------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
21
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS For the periods indicated
--------------------------------------------------------------------------------
Statement of Changes in Net Assets For the periods indicated
<TABLE>
<CAPTION>
European Fund
-----------------------------
Year Ended
10/31/00 10/31/99
---------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss ................................................. $ (716,787) $ (303,953)
Net realized gain on investments, futures and foreign
exchange transactions ............................................... 8,049,938 1,736,458
Change in unrealized appreciation/depreciation of
investments, futures contracts and foreign exchange
transactions ........................................................ (5,959,184) 5,751,776
----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations ................. 1,373,967 7,184,281
----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1)
Net investment income ............................................... -- (251,426)
Net realized gain on investment transactions ........................ (1,395,439) (363,917)
----------------------------------------------------------------------------------------------------
Total distributions to shareholders ................................ (1,395,439) (615,343)
----------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 9) ......... 39,340,263 9,487,635
----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................... 39,318,791 16,056,573
NET ASSETS:
Beginning of period ................................................. 59,256,899 43,200,326
----------------------------------------------------------------------------------------------------
End of period ....................................................... $98,575,690 $59,256,899
----------------------------------------------------------------------------------------------------
<CAPTION>
International
Japan Fund Equity Fund
-------------------------------------------
Year Ended Year Ended
10/31/00 10/31/99 10/31/00
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss ................................................. $ (59,456) $ (36,098) $ (407,279)
Net realized gain on investments, futures and foreign
exchange transactions ............................................... 950,719 634,851 3,740,523
Change in unrealized appreciation/depreciation of
investments, futures contracts and foreign exchange
transactions ........................................................ (1,305,756) 985,305 (3,957,410)
------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations ................. (414,493) 1,584,058 (624,166)
------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1)
Net investment income ............................................... -- -- --
Net realized gain on investment transactions ........................ -- -- (1,817,835)
------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders ................................ -- -- (1,817,835)
------------------------------------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 9) ......... (2,164,449) 1,603,523 9,744,944
------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................... (2,578,942) 3,187,581 7,302,943
NET ASSETS:
Beginning of period ................................................. 5,348,521 2,160,940 33,831,353
------------------------------------------------------------------------------------------------------------------
End of period ....................................................... $2,769,579 $5,348,521 $41,134,296
------------------------------------------------------------------------------------------------------------------
<CAPTION>
See notes to financial statements.
International
Equity Fund
--------------
Year Ended
10/31/99
------------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss ................................................. $ (228,439)
Net realized gain on investments, futures and foreign
exchange transactions ............................................... 2,069,876
Change in unrealized appreciation/depreciation of
investments, futures contracts and foreign exchange
transactions ........................................................ 2,887,054
------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations ................. 4,728,491
------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM: (Note 1)
Net investment income ............................................... --
Net realized gain on investment transactions ........................ (1,077,930)
------------------------------------------------------------------------------------
Total distributions to shareholders ................................ (1,077,930)
------------------------------------------------------------------------------------
Increase (decrease) from capital share transactions (Note 9) ......... 4,778,630
------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................... 8,429,191
NET ASSETS:
Beginning of period ................................................. 25,402,162
------------------------------------------------------------------------------------
End of period ....................................................... $33,831,353
------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
22
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA 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. European Fund ("EF"), Japan Fund ("JF") and International Equity Fund
("IEF"), collectively, the "Funds", are three separate series of the Trust. The
Funds (except for EF) each offer two classes of shares. EF offers three classes
of shares. Class A shares generally provide for a front-end sales charge while
Class B and Class C shares provide for a contingent deferred sales charge. All
classes of shares have equal rights as to earnings, assets and voting
privileges except that each class may bear different distribution and
shareholder servicing fees and each class has exclusive voting rights with
respect to its distribution plan.
The following is a summary of significant accounting policies followed by the
Funds:
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. IEF
Since inception, IEF has utilized the Master Feeder Fund Structure. IEF
seeks to achieve its investment objective by investing all of its
investable assets in the International Equity Portfolio (the "Portfolio").
The Portfolio, like the Fund, is an open-end management investment company
having the same investment objectives as the Fund. As of October 31, 2000,
IEF owned 99.99% of the 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.
1. Valuation of Investments -- IEF records its investment in the
Portfolio at value. Securities of the Portfolio are recorded at value as
more fully discussed in the notes to those financial statements.
2. Foreign Currency Translations -- The books and records of the
Portfolio are maintained in U.S. dollars. The foreign currency
translation policy is more fully discussed in the notes to those
financial statements.
3. Investment Income -- IEF records daily its pro-rata share of the
Portfolio's income and expenses, and realized and unrealized gains and
losses. In addition, the Fund accrues its own expenses daily as incurred.
Realized gain/losses and changes in unrealized appreciation/
depreciation represent the Fund's share of such elements allocated from
the Portfolio.
23
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
B. EF and JF
Investments in international markets may involve certain considerations and
risks not typically associated with investments in the United States.
Future economic and political developments in foreign countries could
adversely affect the liquidity or value, or both, of such securities in
which the Fund is invested.
1. Valuation of Investments -- Equity securities, purchased options and
futures contracts are valued at the last sale price on the exchange on
which they are primarily traded, including the NASDAQ National Market.
Securities for which sale prices are not available and other
over-the-counter securities are valued at the last quoted bid price.
Bonds and other fixed income securities (other than short-term
obligations), including listed issues, are valued on the basis of
valuations supplied by pricing services or by matrix pricing systems of a
major dealer in bonds. Short-term debt securities with 61 days or more to
maturity at time of purchase are valued, through the 61st day prior to
maturity, at market value based on quotations obtained from market makers
or other appropriate sources; thereafter, the value on the 61st day is
amortized on a straight-line basis over the remaining number of days to
maturity. Short-term investments with 60 days or less to maturity at time
of purchase are valued at amortized cost, which approximates market.
Portfolio securities for which there are no such quotations or valuations
are valued at fair value as determined in good faith by or at the
direction of the Trustees.
2. Repurchase Agreements -- It is each Fund's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government
Agency securities. All collateral is held by the Fund's custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book
Entry System. In connection with transactions in repurchase agreements,
if the seller defaults and the value of the collateral declines, or if
the seller enters an insolvency proceeding, realization of the collateral
by the Fund may be delayed or limited.
3. Futures Contracts -- When a fund enters into a futures contract, it
makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to
market and the fund makes (or receives) additional cash payments daily to
the broker. Changes in the value of the contract are recorded as
unrealized appreciation/depreciation until the contract is closed or
settled.
The Funds may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
24
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
Index futures contracts are used to control the asset mix of the
portfolios in the most efficient manner, allowing the Funds to adjust
country exposures while incurring minimal transaction costs. Short index
futures contracts are used for hedging purposes, i.e. to reduce the
exposure to equities. Long index futures contracts are used to gain
exposure to equities, when it is anticipated that this will be more
efficient than buying stocks directly. Use of long futures contracts
subjects the Fund to risk of loss up to the amount of the nominal value
of the futures contracts as shown in the Portfolio of Investments. Use of
short futures contracts subject the Fund to unlimited risk.
None of the Funds held open futures contracts as of October 31, 2000.
4. Written Options -- When a fund writes an option on a futures contract,
an equal amount to the premium received by the fund is included in the
fund's Statement of Assets and Liabilities as an asset and corresponding
liability. The amount of the liability is adjusted daily to reflect the
current market value of the written option and the change is recorded in
a corresponding unrealized gain or loss account. When a written option
expires on its stipulated expiration date, or when a closing transaction
is entered into, the related liability is extinguished and the fund
realizes a gain or loss if the cost of the closing transaction exceeds
the premium received when the option was written.
The Funds write options on stock index securities futures. These options
are settled for cash and subject the Funds to market risk in excess of
the amounts that are reflected in the Statement of Assets and
Liabilities. The Funds, however, are not subject to credit risk on
written options as the counterparty has already performed its obligation
by paying a premium at the inception of the contract.
As of October 31, 2000, there were no outstanding written options.
5. Foreign Currency Translation -- The books and records of the Funds are
maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at the prevailing exchange rates, or at the mean of the
current bid and asked prices, of such currencies against the U.S. dollar
as quoted by a major bank, on the following basis:
a. Market value of investment securities and other assets and
liabilities: at the rate of exchange at the valuation date.
b. Purchases and sales of investment securities, income and expenses: at
the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Funds are presented at the foreign
exchange rates and market values at the close of the periods, the Funds
do not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of securities held or sold
during the year. Accordingly, such realized foreign currency gains
(losses) are included in the reported net realized gains (losses) on
investment transactions.
25
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
Reported realized foreign currency gains or losses arise from disposition
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Funds' books on the transaction date and the U.S. dollar
equivalent of the amounts actually received or paid. Unrealized foreign
exchange gains and losses arise from changes (due to the changes in the
exchange rate) in the value of foreign currency and other assets and
liabilities denominated in foreign currencies which are held at period
end.
6. Forward Foreign Currency Exchange Contracts -- The Funds may enter
into forward foreign currency contracts (obligations to purchase or sell
foreign currency in the future on a date and price fixed at the time the
contracts are entered into) to hedge the Fund against fluctuations in the
value of its assets or liabilities due to change in the value of foreign
currencies. Each day the forward contract is open, changes in the value
of the contract are recognized as unrealized gains or losses by "marking
to market". When the forward contract is closed, or the delivery of the
currency is made or taken, the Fund records a realized gain or loss equal
to the difference between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract. The Funds are subject
to off-balance sheet risk to the extent of the value of the contracts for
purchases of currency and in an unlimited amount for sales of currency.
At October 31, 2000, EF had outstanding forward foreign currency
contracts as shown in Note 5.
7. Security Transactions and Investment Income -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified
cost basis. Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
8. Bank Borrowings -- The Funds may borrow money for temporary or
emergency purposes. Any borrowings representing more than 5% of a Fund's
total assets must be repaid before the Fund may make additional
investments. The Funds 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 Fund based on its borrowings at
an annual rate equal to the sum of the Federal Funds Rate plus 0.50%. The
Funds also pay a commitment fee of 0.10% 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 Funds had no borrowings outstanding at October 31, 2000 nor at any
time during the year then ended.
26
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
C. General Policies
1. Federal Income Taxes -- Each 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 provision for Federal
income or excise tax is necessary.
2. Distributions to Shareholders -- Dividends paid to shareholders are
recorded on the ex-dividend date. The amount of dividends and
distributions from net investment income and net realized capital gains
is determined in accordance with Federal income tax regulations, which
may differ from generally accepted accounting principles. To the extent
these "book/tax" differences are permanent in nature (i.e., that they
result from other than timing of recognition --
"temporary differences") such amounts are reclassified within the
capital accounts based on their Federal tax-basis treatment.
The following amounts were reclassified within the capital accounts:
<TABLE>
<CAPTION>
Accumulated Accumulated
undistributed/ net realized
Paid-in (overdistributed) gain (loss)
capital net investment income on investements
--------------------------------------------------------------------------------
<S> <C> <C> <C>
EF ............. $ (653,889) $ 715,469 (61,580)
JF ............. (92,646) 71,378 21,268
IEF ............ (225,391) 342,249 (116,858)
</TABLE>
The reclassifications for EF, JF and IEF relate primarily to the
character for tax purposes of current year net operating losses and
foreign currency gains and losses.
Dividends and distributions which exceed net investment income or net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as distributions in excess of net investment income
or net realized capital gains.
3. Expenses -- Expenses of the Trust directly attributable to a Fund are
charged to that Fund; other expenses are allocated proportionately among
each Fund within the trust in relation to the net assets of each Fund or
on another reasonable basis. Expenses directly attributable to a
particular share class are charged directly to that class. In calculating
the net asset value per share of each class, investment income, realized
and unrealized gains and losses and expenses other than class specific
expenses, are allocated daily to each class of shares based upon the
proportion of net assets of each class at the beginning of each day.
2. Fees and Other Transactions with Affiliates
A. Investment Advisory Fee -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Advisor"), acts as
the Investment Advisor to EF and JF. Chase is a direct wholly--
27
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
owned subsidiary of The Chase Manhattan Corporation. As Investment Advisor,
Chase supervises the investments of the Funds and for such services is paid
a fee. The fee is computed daily and paid monthly at an annual rate equal
to 1.00% of the average daily net assets of each Fund. The Advisor
voluntarily waived fees as outlined in Note 2.E below.
Chase Fleming Asset Management (London) Limited ("CFAM (London)"), a
registered investment advisor, is the sub-investment advisor to each Fund,
pursuant to a Sub-Investment Advisory Agreement between CFAM (London) and
Chase. CFAM (London), formerly Chase Asset Management (London) Limited, is
a wholly owned subsidiary of Chase and is entitled to receive a fee,
payable by Chase from its advisory fee, at an annual rate equal to 0.50% of
each Fund's average daily net assets.
B. Shareholder Servicing Fees -- The Trust has adopted an Administrative
Services Plan for the Class B Shares of all of the Funds, the Class A
Shares of IEF and the Class C Shares of EF, which, among other things,
provides that the Trust on behalf of the Funds may obtain the services of
one or more Shareholder Servicing Agents. For its services, the Shareholder
Servicing Agent will receive a fee that is computed daily and paid monthly
at an annual rate equal to 0.25% of the average daily net assets of the
Class B Shares of each Fund, the Class A Shares of IEF and the Class C
Shares of EF. The Shareholder Servicing Agents voluntarily waived fees as
outlined in Note 2.E. below.
Since inception, Chase, and certain affiliates have been the only
Shareholder Servicing Agents of the Funds.
C. Distribution and Sub-Administration Fees -- Pursuant to a Distribution
and Sub-Administration Agreement, Vista Fund Distributors, Inc. (the
"Distributor" or "VFD"), a wholly owned subsidiary of The BISYS Group, Inc.
("BISYS"), is the Trust's exclusive underwriter and promotes and arranges
for the sale of each Fund's shares. In addition, the Distributor provides
certain sub-administration services to the Trust, including providing
officers, clerical staff and office space for an annual fee of 0.05% of the
average daily net assets of each Fund. The Trustees have adopted
Distribution Plans (the "Distribution Plans") for Class A, B and C Shares
of the Funds in accordance with Rule 12b-1 under the 1940 Act. The Class A
Distribution Plans provide that each Fund shall pay distribution fees,
including payments to the Distributor, at annual rates not to exceed 0.25%
of the average daily net assets of the Class A Shares of each Fund for
distribution services. The Class B and Class C Distribution Plans provide
that each Fund shall pay distribution fees, including payments to the
Distributor, at an annual rate not to exceed 0.75% of the average daily net
assets of the Class B and Class C Shares for distribution services.
The Distributor voluntarily waived fees as outlined in Note 2.E. below.
D. Administration Fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trust. For these services and facilities, the Administrator receives a fee
from EF and JF computed at the annual rate equal to 0.10% of the
28
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
respective Fund's average daily net assets, and a fee from IEF at the
annual rate equal to 0.05% of the Fund's average daily net assets. The
Administrator voluntarily waived fees as outlined in Note 2.E. below.
E. Waivers of fees -- For the year ended October 31, 2000, the Fund's
vendors voluntarily waived fees for each of the Funds as follows:
<TABLE>
<CAPTION>
Fee Waivers EF JF IEF
-----------------------------------------------------------------------
<S> <C> <C> <C>
Investment Advisory ........... $189,245 $35,177 $ --
Administration ................ -- 5,277 9,494
Shareholder Servicing.......... -- 1,948 4,784
Distribution .................. -- 6,846 18,952
-------- ------- -------
Total ....................... $189,245 $49,248 $33,230
======== ======= =======
</TABLE>
F. Other -- Certain officers of the Trust are officers of Vista Fund
Distributors, Inc. or of its parent corporation, BISYS.
Chase provides portfolio accounting and custody services for EF and JF.
Compensation for such services is presented in the Statement of Operations
as custodian fees. Custodian fees are subject to reduction by credits
earned by each Fund, based on cash balances held by Chase as custodian.
Such earnings credits are presented separately in the Statement of
Operations. The Funds could have invested the cash balances utilized in
connection with the earnings credit arrangements in income producing assets
if they had not entered into such arrangements.
The Distributor voluntarily reimbursed certain expenses of the Funds in the
amounts as shown on the Statement of Operations.
3. Investment Transactions
For the year ended October 31, 2000, purchases and sales of investments
(excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
EF JF
--------------------------------------------------------------------------------
<S> <C> <C>
Purchases (excluding U.S. Government) ..... $181,597,503 $4,093,923
Sales (excluding U.S. Government) ......... (143,142,679) (6,268,271)
</TABLE>
4. Federal Income Tax Matters
For Federal income tax purposes, the cost and unrealized appreciation
(depreciation) in value of the investment securities at October 31, 2000, are
as follows:
<TABLE>
<CAPTION>
EF JF
-------------------------------------------------------------------------------------
<S> <C> <C>
Aggregate cost ..................................... $ 98,139,509 $2,842,171
------------ ----------
Gross unrealized appreciation ...................... 4,733,520 73,477
Gross unrealized depreciation ...................... (4,992,097) (331,120)
------------ ----------
Net unrealized appreciation (depreciation) ......... $ (258,577) $ (257,643)
============ ==========
</TABLE>
At October 31, 2000, JF had a capital loss carryover of $350,685 which will be
available to offset capital gains until October 31, 2006. To the extent that
any net capital loss carryovers are used to offset future capital gains, it is
probable that the gains so offset will not be distributed to shareholders.
During the year ended October 31, 2000, JF utilized capital loss carryforwards
of $996,357.
29
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
5. Open Forward Foreign Currency Contracts
EF was party to the following open forward foreign currency contracts at
October 31, 2000:
<TABLE>
<CAPTION>
Contract Contract Unrealized
Amount Amount Settlement Gain/(Loss)
Purchased Currency Sold Currency Date USD
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unrealized Gain
---------------
667,857 USD 1,198,937 CHF 11/01/00 $1,072
926,816 USD 1,093,330 EUR 11/02/00 61
151,178 GBP 219,027 USD 11/02/00 499
--------
$1,632
========
Unrealized Loss
---------------
61,000 EUR 51,580 USD 11/01/00 $ (144)
189,519 GBP 276,964 USD 11/01/00 (1,762)
104,500 USD 188,979 CHF 11/02/00 (599)
--------
$ (2,505)
========
</TABLE>
CHF - Swiss Francs
EUR - European Currency Unit
GBP - British Pound Sterling
USD - United States Dollar
6. Concentrations
At October 31, 2000, substantially all of the Funds' net assets consist of
securities of issuers which are denominated in foreign currencies. Changes in
currency exchange rates will affect the value of and investment income from
such securities.
As of October 31, 2000, EF invested approximately 32.7% of its net assets in
issuers in the United Kingdom. JF primarily invested in issuers in Japan. The
issuers' abilities to meet their obligations may be affected by economic or
political developments in the specific region or country.
At October 31, 2000, JF invested 31.2% of its portfolio in securities issued by
technology sector companies, such as computer hardware and software companies,
internet connectivity providers and telecommunications equipment manufacturers.
Valuations of companies in the technology sector are typically subject to
greater volatility than other sectors.
7. Retirement Plans
The Funds have adopted an unfunded noncontributory defined benefit pension plan
covering all independent trustees of the Funds who will have served as
independent trustees for at least five years at the time of retirement.
Benefits under this plan are based on compensation and years of service.
Pension expenses for the year ended October 31, 2000, included in Trustees Fees
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:
30
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
Pension Accrued Pension
Fund Expenses Liability
-----------------------------------------
<S> <C> <C>
EF .......... $1,135 $3,189
JF .......... 86 446
IEF ......... 279 1,539
</TABLE>
8. Subsequent Event
On September 13, 2000, The Chase Manhattan Corporation and J.P. Morgan & Co.
Incorporated announced that they have entered into an agreement and plan of
merger. The transaction is expected to close in December 2000 and is subject to
approval by shareholders of both companies.
31
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
9. Capital Share Transactions
Capital share transactions were as follows for the periods presented:
EUROPEAN FUND
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Class A Class B Class C
------------------------------------------------------------------------------------------------------------------------------------
Amount Shares Amount Shares Amount Shares
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold $152,430,045 7,611,529 $ 13,524,350 648,088 $3,763,724 181,183
Shares issued in reinvestment
of distributions 644,441 32,515 187,697 9,670 26,141 1,347
Shares redeemed (126,511,270) (6,291,220) (4,141,614) (210,469) (583,251) (29,129)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in Fund shares
outstanding $ 26,563,216 1,352,824 $ 9,570,433 447,289 $3,206,614 153,401
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999*
------------------------------------------------------------------------------------------------------------------------------------
Shares sold $ 35,569,006 2,251,966 $ 7,411,851 474,721 $1,725,302 111,256
Shares issued in reinvestment
of distributions 218,038 13,910 81,769 5,314 428 28
Shares redeemed (27,100,315) (1,707,222) (8,088,735) (524,167) (329,709) (21,187)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund
shares outstanding $ 8,686,729 558,654 $ (595,115) (44,132) $1,396,021 90,097
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For Class C shares, from commencement of offering on November 1, 1998.
32
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
JAPAN FUND
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------------------------------------------------------------------------------------------
Amount Shares Amount Shares
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold $ 4,116,044 443,154 $ 858,258 89,593
Shares issued in reinvestment of distributions -- -- -- --
Shares redeemed (5,601,150) (574,334) (1,537,601) (161,845)
------------------------------------------------------------------------------------------------------------------------------------
Net decrease in Fund shares outstanding $ (1,485,106) (131,180) $ (679,343) (72,252)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
Shares sold $ 3,535,327 428,187 $ 545,856 68,871
Shares issued in reinvestment of distributions -- -- -- --
Shares redeemed (2,332,878) (271,810) (144,782) (17,872)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in Fund shares outstanding $ 1,202,449 156,377 $ 401,074 50,999
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
CHASE VISTA FUNDS NOTES TO FINANCIAL STATEMENTS (Continued)
INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Class A Class B
------------------------------------------------------------------------------------------------------------------------------------
Amount Shares Amount Shares
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold $80,719,692 5,402,885 $ 3,007,555 190,262
Shares issued in reinvestment of distributions 1,244,561 81,344 343,302 22,917
Shares redeemed (72,296,668) (4,849,552) (3,273,498) (218,570)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund shares outstanding $ 9,667,585 634,677 $ 77,359 (5,391)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
Shares sold $41,065,896 3,215,748 $ 6,951,949 561,207
Shares issued in reinvestment of distributions 646,590 52,060 292,986 23,956
Shares redeemed (35,456,364) (2,796,866) (8,722,427) (701,350)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Fund shares
outstanding $ 6,256,122 470,942 $(1,477,492) (116,187)
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
--------------------------------------------------------------------------------
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
European Fund
-----------------------
Class A
-----------------------
Year Ended
-----------------------
10/31/00 10/31/99
---------- ----------
<S> <C> <C>
Net asset value, beginning of period ............................. $ 16.52 $ 14.47
--------- ---------
Income from investment operations:
Net investment income ........................................... (0.12)@ (0.06)@
Net gains or losses in securities (both realized and unrealized). 1.83 2.31
--------- ---------
Total from investment operations ............................... 1.71 2.25
--------- ---------
Distributions to shareholders from:
Dividends from net investment income ............................ -- 0.09
Distributions from capital gains ................................ 0.36 0.11
--------- ---------
Total dividends and distributions .............................. 0.36 0.20
--------- ---------
Net asset value, end of period ................................... $ 17.87 $ 16.52
========= =========
Total return (1) ................................................. 10.13% 15.60%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ......................... $75,801 $47,759
Ratios to average net assets #:
Expenses ........................................................ 1.74% 1.74%
Net investment income ........................................... (0.60%) (0.40%)
Expenses without waivers, reimbursements and earnings credits ... 1.95% 2.06%
Net investment income without waivers,
reimbursements and earnings credits ............................. (0.81%) (0.72%)
Portfolio turnover rate .......................................... 161% 149%
--------------------------------------------------------------------------------------------
<CAPTION>
European Fund
-----------------------------------
Class A
-----------------------------------
Year Ended 11/02/95*
--------------------- Through
10/31/98 10/31/97 10/31/96
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period ............................. $ 14.10 $ 11.99 $ 10.00
-------- -------- ---------
Income from investment operations:
Net investment income ........................................... 0.15 0.05 0.15
Net gains or losses in securities (both realized and unrealized) 2.16 3.01 1.93
-------- -------- ---------
Total from investment operations ............................... 2.31 3.06 2.08
-------- -------- ---------
Distributions to shareholders from:
Dividends from net investment income ............................ 0.22 0.10 0.09
Distributions from capital gains ................................ 1.72 0.85 --
-------- -------- ---------
Total dividends and distributions .............................. 1.94 0.95 0.09
-------- -------- ---------
Net asset value, end of period ................................... $ 14.47 $ 14.10 $ 11.99
======== ======== =========
Total return (1) ................................................. 18.71% 28.19% 20.78%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ......................... $33,743 $12,965 $ 6,358
Ratios to average net assets #:
Expenses ........................................................ 1.74% 1.75% 1.75%
Net investment income ........................................... (0.07%) 0.32% 1.44%
Expenses without waivers, reimbursements and earnings credits ... 2.38% 2.84% 3.49%
Net investment income without waivers,
reimbursements and earnings credits ............................. (0.71%) (0.77%) (0.30%)
Portfolio turnover rate .......................................... 183% 170% 186%
---------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
@ Calculated based on average shares outstanding.
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
# Short periods have been annualized.
See notes to financial statements.
35
<PAGE>
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
European Fund
---------------------------------------
Class B
--------------------------------------
Year Ended
--------------------------------------
10/31/00 10/31/99 10/31/98
----------- ---------- ---------
<S> <C> <C> <C>
Net asset value, beginning of period ............ $ 16.18 $ 14.24 $ 13.93
---------- --------- ---------
Income from investment operations:
Net investment income .......................... (0.27)@ (0.18)@ 0.08
Net gains or losses in securities
(both realized and unrealized) ................. 1.83 2.26 2.10
---------- --------- ---------
Total from investment operations .............. 1.56 2.08 2.18
---------- --------- ---------
Distributions to shareholders from:
Dividends from net investment income ........... -- 0.03 0.15
Distributions from capital gains ............... 0.36 0.11 1.72
---------- --------- ---------
Total dividends and distributions ............. 0.36 0.14 1.87
---------- --------- ---------
Net asset value, end of period .................. $ 17.38 $ 16.18 $ 14.24
========== ========= =========
Total return (1) ................................ 9.40% 14.66% 17.89%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ........ $18,546 $10,038 $ 9,457
Ratios to average net assets #:
Expenses ....................................... 2.49% 2.51% 2.50%
Net investment income .......................... (1.35%) (1.12%) (0.75%)
Expenses without waivers, reimbursements and
earnings credits ............................... 2.69% 2.83% 2.91%
Net investment income without waivers,
reimbursements and earnings credits ............ (1.55%) (1.44%) (1.16%)
Portfolio turnover rate ......................... 161% 149% 183%
Class B Class C
------------------------ --------------------------
Year Ended 11/03/95** Year 11/01/98**
---------- Through Ended Through
10/31/97 10/31/96 10/31/00 10/31/99
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............ $ 11.93 $ 9.97 $ 16.19 $ 14.24
--------- ----------- ---------- ----------
Income from investment operations:
Net investment income .......................... 0.04 0.07 (0.26)@ (0.08)@
Net gains or losses in securities
(both realized and unrealized) ................. 2.89 1.96 1.80 2.17
--------- ----------- ---------- ----------
Total from investment operations .............. 2.93 2.03 1.54 2.09
--------- ----------- ---------- ----------
Distributions to shareholders from:
Dividends from net investment income ........... 0.08 0.07 -- 0.03
Distributions from capital gains ............... 0.85 -- 0.36 0.11
--------- ----------- ---------- ----------
Total dividends and distributions ............. 0.93 0.07 0.36 0.14
--------- ----------- ---------- ----------
Net asset value, end of period .................. $ 13.93 $ 11.93 $ 17.37 $ 16.19
========= =========== ========== ==========
Total return (1) ................................ 27.25% 20.35% 9.27% 14.73%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ........ $ 2,218 $ 190 $ 4,229 $ 1,460
Ratios to average net assets #:
Expenses ....................................... 2.51% 2.47% 2.49% 2.51%
Net investment income .......................... (0.30%) 0.80% (1.33%) (0.61%)
Expenses without waivers, reimbursements and
earnings credits ............................... 3.58% 3.83% 2.67% 2.83%
Net investment income without waivers,
reimbursements and earnings credits ............ (1.37%) (0.56%) (1.51%) (0.93%)
Portfolio turnover rate ......................... 170% 186% 161% 149%
</TABLE>
** Commencement of offering of class of shares.
@ Calculated based on average shares outstanding.
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
# Short periods have been annualized.
See notes to financial statements.
36
<PAGE>
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Japan Fund
------------------------
Class A
------------------------
Year Ended
-----------------------
10/31/00 10/31/99
----------- ---------
<S> <C> <C>
Net asset value, beginning of period .............................. $ 9.84 $ 6.41
----------- ---------
Income from investment operations:
Net investment income ............................................ (0.15)@ (0.07)@
Net gains or losses in securities (both realized and unrealized) . (1.57) 3.50
---------- ---------
Total from investment operations ................................ (1.72) 3.43
---------- ---------
Distributions to shareholders from:
Dividends from Net Investment Income ............................. -- --
Distributions from capital gains ................................. -- --
Tax return of capital ............................................ -- --
---------- ---------
Total dividends and distributions ............................... -- --
---------- ---------
Net asset value, end of period .................................... $ 8.12 $ 9.84
========== =========
Total return (1) .................................................. (17.48%) 53.51%
Ratios/supplemental data:
Net assets, end of period (000 omitted) .......................... $ 2,448 $ 4,260
Ratios to average net assets #:
Expenses ......................................................... 1.77% 1.74%
Net investment income ............................................ (1.54%) (0.88%)
Expenses without waivers, reimbursements and earnings credits .... 5.49% 5.44%
Net investment income without waivers, reimbursements and earnings
credits reimbursements ........................................... (5.26%) (4.58%)
Portfolio turnover rate ........................................... 123% 133%
<CAPTION>
Japan Fund
------------------------------------
Class A
------------------------------------
Year Ended 11/02/95*
---------------------- Through
10/31/98 10/31/97 10/31/96
--------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period .............................. $ 9.52 $ 9.42 $ 10.00
--------- --------- --------
Income from investment operations:
Net investment income ............................................ 0.27 0.08 (0.08)
Net gains or losses in securities (both realized and unrealized) . (2.91) 0.24 (0.50)
--------- --------- --------
Total from investment operations ................................ (2.64) 0.32 (0.58)
--------- --------- --------
Distributions to shareholders from:
Dividends from Net Investment Income ............................. 0.26 0.22 --
Distributions from capital gains ................................. -- -- --
Tax return of capital ............................................ 0.21 -- --
--------- --------- --------
Total dividends and distributions ............................... 0.47 0.22 --
-------- --------- --------
Net asset value, end of period .................................... $ 6.41 $ 9.52 $ 9.42
========= ========= ========
Total return (1) .................................................. (28.98%) 3.49% (5.80%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) .......................... $ 1,770 $ 5,008 $ 4,781
Ratios to average net assets #:
Expenses ......................................................... 1.76% 1.75% 1.75%
Net investment income ............................................ (0.56%) (0.30%) (0.91%)
Expenses without waivers, reimbursements and earnings credits .... 3.79% 2.89% 3.60%
Net investment income without waivers, reimbursements and earnings
credits reimbursements ........................................... (2.59%) (1.44%) (2.76%)
Portfolio turnover rate ........................................... 212% 217% 121%
</TABLE>
* Commencement of operations.
@ Calculated based on average shares outstanding.
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
# Short periods have been annualized.
See notes to financial statements.
37
<PAGE>
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
Japan Fund
-----------------------
Class B
-----------------------
Year Ended
-----------------------
10/31/00 10/31/99
-----------------------
<S> <C> <C>
Net asset value, beginning of period .................................. $ 9.65 $ 6.32
--------- ---------
Income from investment operations:
Net investment income ................................................ (0.22)@ (0.13)@
Net gains or losses in securities (both realized and unrealized) ..... (1.50) 3.46
---------- ---------
Total from investment operations .................................... (1.72) 3.33
---------- ---------
Distributions to shareholders from:
Dividends from net investment income ................................. -- --
Distributions from capital gains ..................................... -- --
Tax return of capital ................................................ -- --
---------- ---------
Total dividends and distributions ................................... -- --
---------- ---------
Net asset value, end of period ........................................ $ 7.93 $ 9.65
========== =========
Total return (1) ...................................................... (17.82%) 52.69%
Ratios/supplemental data:
Net assets, end of period (000 omitted) .............................. $ 322 $ 1,089
Ratios to average net assets #:
Expenses ............................................................. 2.52% 2.49%
Net investment income ................................................ (2.29%) (1.67%)
Expenses without waivers, reimbursements and earnings credits ........ 6.14% 6.19%
Net investment income without waivers,
reimbursements and earnings credits .................................. (5.91%) (5.37%)
Portfolio turnover rate ............................................... 123% 133%
<CAPTION>
Japan Fund
------------------------------------
Class B
------------------------------------
Year Ended 11/03/95**
--------------------- Through
10/31/98 10/31/97 10/31/96
--------- --------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period .................................. $ 9.42 $ 9.35 $ 10.00
--------- --------- ----------
Income from investment operations:
Net investment income ................................................ 0.23 (0.05) (0.02)
Net gains or losses in securities (both realized and unrealized) ..... (2.90) 0.30 (0.63)
--------- --------- ----------
Total from investment operations .................................... (2.67) 0.25 (0.65)
--------- --------- ----------
Distributions to shareholders from:
Dividends from net investment income ................................. 0.22 0.18 --
Distributions from capital gains ..................................... -- -- --
Tax return of capital ................................................ 0.21 -- --
--------- --------- ----------
Total dividends and distributions ................................... 0.43 0.18 --
--------- --------- ----------
Net asset value, end of period ........................................ $ 6.32 $ 9.42 $ 9.35
========= ========= ==========
Total return (1) ...................................................... (29.53%) 2.72% (6.50%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) .............................. $ 391 $ 1,893 $ 162
Ratios to average net assets #:
Expenses ............................................................. 2.51% 2.51% 2.52%
Net investment income ................................................ (0.97%) (5.73%) (0.40%)
Expenses without waivers, reimbursements and earnings credits ........ 4.52% 3.66% 4.00%
Net investment income without waivers,
reimbursements and earnings credits .................................. (2.98%) (6.88%) (1.88%)
Portfolio turnover rate ............................................... 212% 217% 121%
</TABLE>
** Commencement of offering of class of shares.
@ Calculated based on average shares outstanding.
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
# Short periods have been annualized.
See notes to financial statements.
38
<PAGE>
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
International Equity Fund
---------------------------------------------------------------
Class A
---------------------------------------------------------------
Year Ended
---------------------------------------------------------------
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $ 13.77 $ 12.08 $ 12.11 $ 12.38 $ 12.02
-------- ------- ------- ------- -------
Income from investment operations:
Net investment income .......................... (0.11) (0.09) (0.09) (0.05)@ 0.05
Net gains or losses in securities
(both realized and unrealized) ................. 0.44 2.34 0.43 0.33 0.37
-------- ------- ------- ------- -------
Total from investment operations ............... 0.33 2.25 0.34 0.28 0.42
-------- ------- ------- ------- -------
Distributions to shareholders from:
Dividends from net Investment income ............ -- -- 0.07 0.03 0.06
Distributions from capital gains ................ 0.76 0.56 0.30 0.52 --
-------- ------- ------- ------- -------
Total dividends and distributions .............. 0.76 0.56 0.37 0.55 0.06
-------- ------- ------- ------- -------
Net asset value, end of period ................... $ 13.34 $ 13.77 $ 12.08 $ 12.11 $ 12.38
======== ======= ======= ======= -------
Total return (1) 1.71% 19.09% 2.96% 2.27% 3.53%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ......... $ 34,599 $26,973 $ 17,969 $ 23,267 $ 24,904
Ratios to average net assets:
Expenses ........................................ 2.01% 1.99% 2.00% 2.01% 2.00%
Net investment income ........................... (0.86%) (0.73%) (0.47%) (0.36%) (0.03%)
Expenses without waivers and
reimbursements .................................. 2.88% 3.53%* 3.39% 2.08% 2.86%
Net investment income without waivers
and reimbursements .............................. (1.73%) (2.27%)* (1.86%) (0.43%) (0.89%)
</TABLE>
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
@ Calculated based on average shares outstanding.
* Restated.
See notes to financial statements.
39
<PAGE>
CHASE VISTA FUNDS FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
International Equity Fund
----------------------------------------------------------------------
Class B
----------------------------------------------------------------------
Year Ended
----------------------------------------------------------------------
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 13.51 $ 11.92 $ 11.94 $ 12.24 $ 11.89
------- ------- ------- ------- -------
Income from investment operations:
Net investment income ....................... (0.21) (0.18) (0.13) (0.11)@ 0.01
Net gains or losses in securities
(both realized and unrealized) .............. 0.47 2.33 0.42 0.33 0.35
------- ------- ------- ------- -------
Total from investment operations ............ 0.26 2.15 0.29 0.22 0.36
------- ------- ------- ------- -------
Distributions to shareholders from:
Dividends from net Investment income ......... -- -- 0.01 -- --
Distributions from capital gains ............. 0.76 0.56 0.30 0.52 0.01
------- ------- ------- ------- -------
Total dividends and distributions ........... 0.76 0.56 0.31 0.52 0.01
------- ------- ------- ------- -------
Net asset value, end of period ................ $13.01 $ 13.51 $11.92 $11.94 $12.24
======= ======= ======= ======= =======
Total return (1) 1.20% 18.49% 2.56% 1.74% 3.03%
Ratios/supplemental data:
Net assets, end of period (000 omitted) ...... $6,535 $ 6,858 $7,433 $7,989 $7,819
Ratios to average net assets:
Expenses ..................................... $ 2.51% 2.49% 2.50% 2.51% 2.50%
Net investment income ........................ (1.38%) (1.21%) (0.94%) (0.88%) (0.43%)
Expenses without waivers and
reimbursements ............................... 3.39% 4.03%* 3.90% 2.61% 3.36%
Net investment income without waivers and
reimbursements ......................... ..... (2.26%) (2.75%)* (2.34%) (0.98%) (1.29%)
</TABLE>
(1) Total return figures do not include the effect of any front-end or deferred
sales load.
@ Calculated based on average shares outstanding.
* Restated.
See notes to financial statements.
40
<PAGE>
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Trustees and Shareholders of Mutual Fund Group
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments as presented, 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 European Fund, Chase Vista Japan Fund and Chase Vista International
Equity Fund (separate portfolios of Mutual Fund Group, hereafter referred to as
the "Trust") at October 31, 2000, the results of each of their operations for
the year then ended, the changes in each of their net assets for each of the
two years in the period then ended and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. 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 auditing standards
generally accepted in the United States of America, 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, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 11, 2000
41
<PAGE>
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
Portfolio of Investments
--------------------------------------------------------------------------------
As of October 31, 2000
<TABLE>
<CAPTION>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- 95.7%
--------------------------------------------------------------------------------
<S> <C> <C>
Common Stock -- 95.7%
---------------------
Australia -- 2.7%
13,358 Brambles Industries LTD $ 346,338
14,100 Commonwealth Bank of Australia 209,826
24,856 News Corp., LTD 260,001
53,841 Telstra Corp., LTD 175,712
22,124 Woodside Petroleum LTD 161,698
---------
1,153,575
Belgium -- 1.0%
2,910 Dexia * 443,288
Finland -- 3.2%
24,507 Nokia OYJ 1,008,488
16,124 Sonera OYJ 355,227
---------
1,363,715
France -- 11.1%
13,860 Alcatel SA 845,709
7,223 Aventis SA 521,033
6,499 AXA 860,399
4,857 BNP Paribas 418,784
3,115 Cap Gemini SA 496,986
3,006 Compagnie de Saint-Gobain 397,707
2,150 Imerys 212,566
6,577 Total Fina SA, Class B 941,053
---------
4,694,237
Germany -- 6.4%
12,748 Bayer AG 553,371
12,820 Bayerische Motoren Werke AG 424,526
10,899 Deutsche Bank AG 892,386
9,671 Heidelberger Zement AG 459,609
3,079 Siemens AG 392,079
---------
2,721,971
Hong Kong -- 2.3%
43,000 Cheung Kong Holdings LTD 475,541
37,500 China Mobile (Hong Kong) LTD * 241,618
134,000 China Unicom * 268,893
7,500 MTR Corp. * 11,107
---------
997,159
Italy -- 6.0%
17,455 Autogrill SPA 193,016
37,796 Banca Fideuram SPA 582,172
61,514 Enel SPA 226,565
163,507 ENI-Ente Nazionale Idrocarburi SPA 879,740
59,451 Telecom Italia SPA 692,216
---------
2,573,709
Japan -- 18.9%
3,000 Acom Co., LTD 242,838
13,000 Canon, Inc. 516,020
15,000 Chugai Pharmaceutical Co., LTD 254,664
31 DDI Corp. 145,501
18,000 Fujitsu LTD 320,777
2,100 Hirose Electric Co., LTD 242,563
4,400 Hoya Corp. 363,826
</TABLE>
See notes to financial statements.
42
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 2000
<TABLE>
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
<S> <C> <C>
Japan -- Continued
10,000 KAO Corp. $ 299,766
2,900 Kyocera Corp. 377,504
2,700 Mabuchi Motor Co., LTD 288,601
3,000 Murata Manufacturing Co., LTD 359,169
59,000 Nikko Securities Co., LTD 509,493
59 Nippon Telegraph & Telephone Corp. 537,077
29 NTT DoCoMo, Inc. 715,130
1,920 Orix Corp. 201,531
1,700 Rohm Co., LTD 428,721
5,600 Sony Corp. 447,651
20,000 Sumitomo Bank LTD 242,930
30,000 Sumitomo Corp. 264,014
5,000 Takeda Chemical Industries 329,559
2,100 TDK Corp. 211,761
7,300 Terumo Corp. 206,784
2,000 Tokyo Electron LTD 156,575
24,000 Toshiba Corp. 171,609
4,000 Yamanouchi Pharmaceutical Co., LTD 181,143
---------
8,015,207
Netherlands -- 6.2%
19,360 ABN Amro Holding NV 448,535
31,797 Elsevier NV 406,117
8,700 Fortis (NL) NV 265,797
9,692 ING Groep NV 665,576
21,618 Koninklijke Philips Electronics NV 849,609
---------
2,635,634
Portugal -- 0.9%
25,034 Brisa-Auto Estradas de Portugal SA 193,543
16,069 Telecel-Comunicacoes Pessoai * 176,189
---------
369,732
South Korea -- 0.7%
17,800 Pohang Iron & Steel Co., LTD, ADR 280,350
Spain -- 1.6%
21,401 Altadis SA 320,559
12,698 Banco Popular Espanol 379,860
---------
700,419
Sweden -- 3.3%
67,264 Nordic Baltic Holding AB 504,985
68,694 Telefonaktiebolaget LM Ericson, Class B 914,545
---------
1,419,530
Switzerland -- 5.9%
189 Nestle SA 391,636
475 Novartis AG 720,566
60 Roche Holding AG 548,049
3,117 UBS AG 431,749
868 Zurich Financial Services AG 420,082
---------
2,512,082
United Kingdom -- 25.5%
3,502 Autonomy Corp. PLC * 179,869
145,386 BAE Systems PLC 825,832
21,043 Barclays PLC 602,077
27,800 Bass PLC 272,060
</TABLE>
See notes to financial statements.
43
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 2000
<TABLE>
<CAPTION>
Shares Issuer Value
-----------------------------------------------------------------------------------
Long-Term Investments -- Continued
-----------------------------------------------------------------------------------
<S> <C> <C>
United Kingdom -- Continued
108,474 BG Group PLC $ 434,382
69,489 Blue Circle Industries PLC 424,459
10,922 BOC Group PLC 152,129
63,312 BP Amoco PLC 536,918
35,029 British American Tobacco PLC 245,478
51,286 British Land Company PLC 306,573
41,803 CGNU PLC 559,211
31,871 Enterprise Oil PLC 252,017
27,197 Glaxo Wellcome PLC 782,889
42,139 Granada Compass PLC * 363,168
108,474 Lattice Group PLC * 231,356
100,437 Legal & General Group PLC 249,917
20,559 Marconi Electronic Systems PLC 259,513
29,005 Reuters Group PLC 564,759
12,190 Schroders PLC 189,245
2,079 SmithKline Beecham PLC 26,846
158,937 Tesco PLC 605,906
66,233 Unilever PLC 448,054
489,868 Vodafone AirTouch PLC 2,038,075
44,780 Wolseley PLC 247,541
-----------
10,798,274
----------------------------------------------------------------
Total Common Stock 40,678,882
(Cost $40,747,842)
----------------------------------------------------------------
Redeemable Unsecured Loan Stock -- 0.0%
---------------------------------------
Malaysia -- 0.0%
60,000 Sunway Building Technology, BHD, 3.00%, 07/30/01 15,158
(Cost $24,077)
Principal
Amount
(DEM)
Convertible Bond -- 0.0%
------------------------
Germany -- 0.0%
11,440 DaimlerChysler AG, 5.75%, 06/14/02 5,631
(Cost $5,682)
-----------------------------------------------------------------------------------
Total Investments -- 95.7% $40,699,671
(Cost $40,777,601)
-----------------------------------------------------------------------------------
</TABLE>
Index:
* -- Non-Income producing security.
ADR -- American Depositary Receipt.
See notes to financial statements.
44
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Portfolio of Investments (Continued)
As of October 31, 2000
Summary of Investments by Industry, October 31, 2000
<TABLE>
<CAPTION>
Industry % of Investment Securities
--------------------------------------------------------
<S> <C>
Telecommunications 13.2%
Banking 10.3%
Electronics/Electrical Equipment 9.2%
Oil & Gas 8.5%
Pharmaceuticals 8.3%
Telecommunications Equipment 7.4%
Financial Services 6.5%
Insurance 6.2%
Food/Beverage Products 4.2%
Construction Materials 3.1%
Diversified 2.3%
Consumer Products 2.1%
Aerospace 2.0%
Multi-Media 2.0%
Other (below 2%) 14.7%
--------------------------------------------------------
Total 100.0%
--------------------------------------------------------
</TABLE>
See notes to financial statements.
45
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
International
Equity
Portfolio
--------------------------------------------------------------------------------
ASSETS:
Investment securities, at value (Note 1) ........................ $40,699,671
Cash ............................................................ 2,126,034
Foreign cash (Cost $7,368) ...................................... 6,712
Other assets .................................................... 146
Receivables:
Open forward currency contracts ................................ 1,580
Investment securities sold ..................................... 333,759
Interest and dividends ......................................... 54,867
------------------------------------------------------------------------------
Total Assets ................................................. 43,222,769
------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased ................................ 491,699
Open forward currency contracts ................................ 1,292
Accrued liabilities: (Note 2)
Investment advisory fees ....................................... 17,571
Administration fees ............................................ 1,757
Custodian fees ................................................. 15,995
Other .......................................................... 147,083
------------------------------------------------------------------------------
Total Liabilities ............................................ 675,397
------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS ......... $42,547,372
------------------------------------------------------------------------------
Cost of investments .............................................. $40,777,601
------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
46
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the year ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Equity
Portfolio
------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividend ............................................. $ 457,084
Interest ............................................. 100,892
Foreign taxes withheld ............................... (70,753)
------------------------------------------------------------------
Total investment income ............................ 487,223
------------------------------------------------------------------
EXPENSES: (Note 2)
Investment advisory fees ............................. 427,853
Administration fees .................................. 21,393
Accounting fees ...................................... 54,972
Custodian fees ....................................... 71,587
Professional fees .................................... 51,027
Trustees' fees ....................................... 985
Other ................................................ 32,168
------------------------------------------------------------------
Total expenses ..................................... 659,985
------------------------------------------------------------------
Less amounts waived ................................... 347,473
------------------------------------------------------------------
Net expenses ....................................... 312,512
------------------------------------------------------------------
Net investment income ............................. 174,711
------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments ......................................... 3,730,735
Futures transactions ................................ 235,749
Foreign exchange transactions ....................... (225,961)
Change in net unrealized appreciation/depreciation of:
Investments ......................................... (4,081,243)
Futures contracts ................................... 23,325
Foreign exchange transactions ....................... 100,508
------------------------------------------------------------------
Net realized and unrealized loss ..................... (216,887)
------------------------------------------------------------------
Net decrease in net assets from operations ........... $ (42,176)
------------------------------------------------------------------
</TABLE>
See notes to financial statements.
47
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS For the periods indicated
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Equity Portfolio
---------------------------------
Year Ended October 31,
2000 1999
-------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income ...................................... $ 174,711 $ 143,228
Net realized gain on investments, futures contracts
and foreign exchange transactions .......................... 3,740,523 2,069,952
Change in net unrealized appreciation/depreciation
of investments, futures contracts and foreign
exchange transactions ...................................... (3,957,410) 2,886,581
-------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations ......... (42,176) 5,099,761
-------------------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS:
Contributions .............................................. 84,084,087 46,633,194
Withdrawals ................................................ (74,062,335) (44,717,716)
-------------------------------------------------------------------------------------------
Net increase from transactions in investors'
beneficial interests ..................................... 10,021,752 1,915,478
-------------------------------------------------------------------------------------------
Net increase in net assets .............................. 9,979,576 7,015,239
NET ASSETS:
Beginning of period ........................................ 32,567,796 25,552,557
-------------------------------------------------------------------------------------------
End of period .............................................. $42,547,372 $32,567,796
-------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
48
<PAGE>
--------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
International Equity Portfolio (the "Portfolio") ("IEP") is separately
registered under the Investment Company Act of 1940, as amended, as a non-
diversified, open end management investment company organized as a trust under
the Laws of the State of New York. The declaration of trust permits the
Trustees to issue beneficial interests in the Portfolio.
The following is a summary of significant accounting policies followed by the
Portfolio:
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.
Investments in international markets may involve certain considerations and
risks not typically associated with investments in the United States. Future
economic and political developments in foreign countries could adversely affect
the liquidity or value, or both, of such securities in which the Portfolio is
invested.
A. Valuation of Investments -- Equity securities, purchased options and
futures contracts 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 Portfolio's policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Portfolio's custodian bank,
subcustodian or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the
Portfolio may be delayed or limited.
C. Forward Foreign Currency Exchange Contracts -- The Portfolio may enter
into forward foreign currency contracts (obligations to purchase or sell
foreign currency in the future on a date and price fixed at the time the
contracts are entered into) to hedge the Portfolio against fluctuations
49
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements (Continued)
in the value of its assets or liabilities due to change in the value of
foreign currencies. Each day the forward contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by
"marking to market". When the forward contract is closed, or the delivery
of the currency is made or taken, the Fund records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract. The Portfolio is subject
to off-balance sheet risk to the extent of the value of the contracts for
purchases of foreign currency and in an unlimited amount for sales of
foreign currency.
At October 31, 2000, the Portfolio had outstanding forward foreign currency
contracts as detailed in Note 5.
D. Foreign Currency Translation -- The books and records of the Portfolio
are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars at the prevailing exchange rates, or at the mean of the
current bid and asked prices, of such currencies against the U.S. dollar as
quoted by a major bank, on the following basis:
1. Market value of investment securities and other assets and
liabilities: at the rate of exchange at the balance sheet date.
2. Purchases and sales of investment securities, income and expenses: at
the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Portfolio are presented at the foreign
exchange rates and market values at the close of the periods, the Portfolio
does not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the market prices of securities held or sold during
the year. Accordingly, such realized foreign currency gains (losses) are
included in the reported net realized losses on security transactions.
Reported realized foreign exchange gains or losses arise from disposition
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded
on the Portfolio's books on the transaction date and the U.S. dollar
equivalent of the amounts actually received or paid. Unrealized foreign
exchange gains and losses arise from changes (due to the changes in the
exchange rate) in the value of foreign currency and other assets and
liabilities denominated in foreign currencies which are held at period end.
E. Futures Contracts -- When the Portfolio enters into a futures contract,
it makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to market
and the Portfolio makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
50
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements (Continued)
Index futures contracts are used to control the asset mix of the Portfolio
in the most efficient manner, allowing the Portfolio to adjust country
exposures while incurring minimal transaction costs. Short index futures
contracts are used for hedging purposes, i.e. to reduce the exposure to
equities. Long index futures contracts are used to gain exposure to
equities, when it is anticipated that this will be more efficient than
buying stocks directly.
Use of long futures contracts subjects the Portfolio to risk of loss up to
the nominal value of the contract, use of short futures contracts subjects
the Portfolio to unlimited losses.
The Portfolio may enter into futures contracts only on exchanges or boards
of trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
As of October 31, 2000, the Portfolio had no outstanding futures contracts.
F. 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.
G. Federal Income Taxes -- The Portfolio intends to continue to qualify as
a partnership and therefore net income and net realized gains are taxed to
the partners. Accordingly, no tax provision is recorded by the Portfolio.
The investors in the Portfolio must take into account their proportionate
share of the Portfolio's income, gains, losses, deductions, credits and tax
preference items in computing their federal income tax liability, without
regard to whether they have received any cash distributions from the
Portfolio. The Portfolio does not intend to distribute to investors its net
investment income or its net realized gains, if any. It is intended that
the Portfolio will be managed in such a way that investors in the Portfolio
will be able to satisfy the requirements of subchapter M of the Internal
Revenue Code to be taxed as regulated investment companies.
2. Fees and Other Transactions with Affiliates
A. Investment Advisory Fee -- Pursuant to an Investment Advisory Agreement,
The Chase Manhattan Bank ("Chase" or the "Advisor") acts as the Investment
Advisor to the Portfolio. Chase is a direct wholly-owned subsidiary of The
Chase Manhattan Corporation. As Investment Advisor, Chase supervises the
investments of the Portfolio and for such services is paid a fee. The fee
is computed daily and paid monthly at an annual rate equal to 1.00% of the
Portfolio's average daily net assets. For the year ended October 31, 2000,
the Advisor voluntarily waived fees of $337,213.
51
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements (Continued)
Chase Fleming Asset Management (London) Limited ("CFAM (London)"), a
registered investment advisor, is the sub-investment advisor to the
Portfolio pursuant to a Sub-Investment Advisory Agreement between CFAM
(London) and Chase. CFAM (London), formerly Chase Asset Management (London)
Limited, is a wholly owned subsidiary of Chase and is entitled to receive a
fee, payable by Chase from its advisory fee, at an annual rate equal to
0.50% of the Portfolio's average daily net assets.
B. Custodial Fees -- Chase, as Custodian, provides safekeeping services for
the Portfolio's securities. Compensation for such services are presented in
the Statement of Operations as custodian fees.
C. Administration Fee -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Portfolio. For these services and facilities, the Administrator receives
from the Portfolio a fee computed at the annual rate equal to 0.05% of the
Portfolio's average daily net assets. For the year ended October 31, 2000,
the Administrator voluntarily waived fees of $10,260.
3. Investment Transactions
For the year ended October 31, 2000, purchases and sales of investments
(excluding short-term investments) were as follows:
Purchases (excluding U.S. Government)............................ $69,727,973
Sales (excluding U.S. Government)................................ 59,094,923
The portfolio turnover rate of IEP for the year ended October 31, 2000, was
149%.
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, 2000, are
as follows (in thousands):
<TABLE>
<CAPTION>
IEP
----------------------------------------------------
<S> <C>
Aggregate cost ......................... $ 40,865
--------
Gross unrealized appreciation .......... $3,139
Gross unrealized depreciation .......... (3,304)
--------
Net unrealized depreciation ............ $ (165)
========
</TABLE>
52
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements (Continued)
5. Open Forward Foreign Currency Contracts
The following forward foreign currency contracts were open at October 31, 2000.
<TABLE>
<CAPTION>
Contract Contract Unrealized
Amount Amount Settlement Gain/(Loss)
Purchased Currency Sold Currency Date USD
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unrealized Gain
---------------
332,817 USD 36,143,940 JPY 11/01/00 $ 1,419
74,848 GPB 108,440 USD 11/02/00 161
--------
$ 1,580
========
Unrealized Loss
---------------
123,347 GPB 180,260 USD 11/01/00 $ (1,292)
========
</TABLE>
GBP - Great Britain Pound
JPY - Japanese Yen
USD - United States Dollar
6. Foreign Cash Positions
<TABLE>
<CAPTION>
Delivery Net
Value Market Unrealized
(Local Cost Value Gain (Loss)
Currency Currency) (USD) (USD) (USD)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EURO ...................... 3,858 $3,203 $ 3,274 $ 71
Indonesian Rupiah.......... 961,005 283 103 (180)
Philippine Peso ........... 154,056 3,566 3,012 (554)
Swedish Krona ............. 3,218 316 323 7
------ ------- -----
$7,368 $ 6,712 $(656)
====== ======= =====
</TABLE>
7. Retirement Plan
The Portfolio has adopted an unfunded noncontributory defined benefit pension
plan covering all independent trustees of the Portfolio who will have served as
independent trustees for at least five years at the time of retirement.
Benefits under this plan are based on compensation and years of service.
Pension expenses for the year ended October 31, 2000, included in Trustees Fees
in the Statement of Operations, and accrued pension liability included in other
accrued liabilities, in the Statement of Assets and Liabilities were $280 and
$1,545, respectively.
8. Bank Borrowings
The Portfolio may borrow money for temporary or emergency purposes. Any
borrowings representing more than 5% of the Portfolio's total assets must be
repaid before the Portfolio may make additional investments. The Portfolio has
entered into an agreement, enabling it 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 the
Portfolio based on its borrowings at an annual rate equal to the sum of the
Federal Funds Rate plus 0.50%. The Portfolio also pays a commitment fee of
0.10% per annum on the average daily amount of the available commitment, which
is allocated, on a pro-rata basis to the
53
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements (Continued)
Portfolio. The commitment fee is included in Other expenses on the Statement of
Operations. Borrowings are payable on demand.
The Portfolio had no borrowings outstanding at October 31, 2000, nor at any
time during the year then ended.
9. Concentrations -- At October 31, 2000, substantially all of the Portfolio's
net assets consist of securities of issuers which are denominated in foreign
currencies. Changes in currency exchange rates will affect the value of and
investment income from such securities.
At October 31, 2000, the Portfolio invested approximately 18.9% and 25.5% of
its net assets in issuers in Japan and the United Kingdom, respectively. The
issuers' abilities to meet their obligations may be affected by economic or
political developments in the specific region.
54
<PAGE>
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Trustees and Beneficial Unit Holders of International Equity Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets present fairly, in all material respects, the financial
position of International Equity Portfolio (the "Portfolio") at October 31,
2000, the results of its operations for the year then ended and the changes in
its net assets for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements are the responsibility of the
Portfolio's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audit of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, 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, 2000 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 11, 2000
55
<PAGE>
--------------------------------------------------------------------------------
TAX LETTER (unaudited)
--------------------------------------------------------------------------------
Chase Vista European Fund (EF)
Chase Vista Japan Fund (JF)
Chase Vista International Equity Fund (IEF)
--------------------------------------------------------------------------------
Certain tax information for the Chase Vista Mutual Funds is required to be
provided to shareholders based upon the Funds' income and distributions for the
taxable year ended October 31, 2000. The information and distributions reported
in this letter may differ from the information and taxable distributions
reported to the shareholders for the calendar year ending December 31, 2000.
The information necessary to complete your income tax returns for the calendar
year ending December 31, 2000 will be received under separate cover.
During the fiscal year ended October 31, 2000, the following long-term capital
gains were distributed by the Funds:
<TABLE>
<CAPTION>
Long-Term
Capital Gains
Distribution Per
Chase Vista Fund Share
--------------------------------------------
<S> <C>
European ..................... $0.12
Japan ........................ --
International Equity ......... 0.42
</TABLE>
56
<PAGE>
[This page intentionally left blank]
<PAGE>
CHASE VISTA INTERNATIONAL EQUITY FUNDS ANNUAL REPORT
INVESTMENT ADVISER,
ADMINISTRATOR,
SHAREHOLDER AND FUND SERVICING
AGENT AND CUSTODIAN
The Chase Manhattan Bank
DISTRIBUTOR
Vista Fund Distributors, Inc.
TRANSFER AGENT
DST Systems, Inc.
LEGAL COUNSEL
Simpson Thacher & Bartlett
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Chase Vista Funds are distributed by
Vista Fund Distributors, Inc., which is
unaffiliated with The Chase Manhattan
Bank, Chase and its respective affiliates
receive compensation from Chase Vista
Funds for providing investment advisory
and other services.
This report is submitted for the
general information of the share-
holders of the funds. It is not autho-
rized for distribution to prospective
investors in the funds unless preceded
or accompanied by a prospectus.
To obtain a prospectus for any
of the Chase Vista Funds, call
1-800-348-4782. The prospectus
contains more complete information,
including charges and expenses.
Please read it carefully before you
invest or send money.
(RegTM)The Chase Manhattan Corporation, 2000. All Rights Reserved. December 2000
[Chase Vista Funds (RegTM) Logo]
Chase Vista Funds Fulfillment Center
393 Manley Street
West Bridgewater, MA 02379-1039
